________________________________________________________________________________________________________________ Our primary focus is on consumer and antitrust issues where
local action in support of consumers can be relevant
To offer comments, or receive our weekly newsletter, contact the editor donresnikoff@donresnikofflaw.com
________________________________________________________________________________________________________________
local action in support of consumers can be relevant
To offer comments, or receive our weekly newsletter, contact the editor donresnikoff@donresnikofflaw.com
________________________________________________________________________________________________________________
The Effects of Pretrial Detention on Conviction, Future Crime, and Employment: Evidence from Randomly Assigned Judges†
By Will Dobbie, Jacob Goldin, and Crystal S. Yang*
Abstract:
Over 20 percent of prison and jail inmates in the United States are currently awaiting trial, but little is known about the impact of pretrial detention on defendants. This paper uses the detention tendencies of quasi-randomly assigned bail judges to estimate the causal effects of pretrial detention on subsequent defendant outcomes. Using data from administrative court and tax records, we find that pretrial detention significantly increases the probability of conviction, primarily through an increase in guilty pleas. Pretrial detention has no net effect on future crime, but decreases formal sector employment and the receipt of employment- and tax-related government benefits. These results are consistent with (i) pretrial detention weakening defendants’ bargaining positions during plea negotiations and (ii) a criminal conviction lowering defendants’ prospects in the formal labor market.
Full article: https://pubs.aeaweb.org/doi/pdfplus/10.1257/aer.20161503
Zion's busted Nike shoe and inequity for NCAA's unpaid stars --the Alston case
"It [Zion Williamson's on court injury caused by a defective Nike shoe] is a powerful illustration of the fundamental inequity of big-time college sports, underscoring the risks incurred by unsalaried athletes in making millionaires of their coaches and university administrators. And though it is unlikely to impact Judge Claudia Wilken’s decision in the antitrust case known as Alston vs. NCAA — closing arguments were made two months ago; a ruling is due any day — it is sure to have ripples in future litigation, public opinion and as college athletes weigh whether to compete without additional compensation." From https://www.courier-journal.com/story/sports/2019/02/21/zion-williamson-injury-underscores-inequities-ncaa-sports/2937819002/
The following is from a law student's write-up on the Alston case:
A decision in the “mother of all pay-for-play lawsuits” is pending in the Northern District of California.4 Former West Virginia University running back Shawne Alston, the plaintiff in Alston v. NCAA, argued that the NCAA and the major conferences violated federal antitrust law by conspiring to fix the costs of compensation to athletes, and sought to enjoin the NCAA’s cap on grant-in-aid.5 Put simply, Alston contends the NCAA’s rules unreasonably limit the value of his athletic services to the full cost of attendance, while his actual worth to the university may far exceed that amount.6 Alston v. NCAA was combined with numerous other cases; three classes were certified in the consolidated case In Re NCAA Athletic Grant-In-Aid Cap Antitrust Litigation (hereinafter NCAA Grant-in-Aid Cap}.7 Those three certified classes are Division I FBS football players, Division I men’s basketball players, and Division I women’s basketball players.8
To properly understand the players’ legal argument in NCAA Grant-In-Aid Cap, it is imperative to look to O’Bannon v. NCAA, which they strongly relied and expanded upon in bringing the current suit.9 In O’Bannon, current and former college football and men’s basketball players challenged the NCAA’s prohibition of athletes receiving compensation for the use of their name, image, and likeness (NIL).10 There, plaintiffs argued this was an unlawful restraint on trade and thus a violation of Section 1 of the Sherman Act, which invalidates “[e]very contract, combination…or conspiracy, in restraint of trade or commerce.”11 At the time, the scholarships available to athletes were limited to the amount of grant in aid, which was comprised of the cost of tuition, room and board, and required course books.12 Plaintiffs sought to increase the scholarship amount to the full cost of attendance at their respective universities.13 The full cost of attendance includes other miscellaneous expenses that result from attending school such as non-required books, school supplies, and transportation.14 This change in scholarship limitations would increase the amount available to each student-athlete by a few thousand dollars.15 Plaintiffs also sought to receive compensation from the schools for the use of their NILs, and proposed that schools place a portion of their licensing revenues in a trust that would become available to these student athletes upon leaving their school.
16
The NCAA contended in O’Bannon that Section 1 antitrust challenges to their amateurism rules fail as a matter of law because they are presumed valid under the Supreme Court’s decision in NCAA v. Board of Regents.17 However, on appeal, the Ninth Circuit rejected that argument and interpreted the Supreme Court’s decision to mean that the “Rule of Reason” test, as explained below, must be used to analyze the NCAA actions’ competitive effects.18 In essence, the Ninth Circuit affirmed the Northern District of California’s decision that the NCAA is subject to antitrust laws and their unique structure does not exempt them from compliance.19
Based on its interpretation of Regents, the circuit court used the three-step “Rule of Reason” framework in its analysis:“[1] The plaintiff bears the initial burden of showing that the restrain produces significant anticompetitive effects within a relevant market. [2] If the plaintiff meets this burden, the defendant must come forward with evidence of the restraint’s procompetitive effects. [3] The plaintiff must then show that any legitimate objective can be achieved in a substantially less restrictive manner.”20
The Ninth Circuit found by essentially valuing the student-athletes’ NILs at zero, the NCAA unreasonably restrained trade producing an anticompetitive effect.21 They also found the rules furthered the NCAA’s commitment to amateurism, which maintains consumer demand.22 In addition, the rules also protect the integration of athletics and academics.23 At the third step of the analysis, the Ninth Circuit considered the proposed, less-restrictive alternatives.24 The Ninth Circuit affirmed the district court’s finding that the NCAA should increase the scholarships available to student-athletes to cover the full cost of attendance rather than only the full grant-in-aid amount, as a less restrictive alternative that does not compromise the NCAA’s purpose.25
However, the circuit court also reversed the district court’s decision that schools should share the revenues obtained from using the players’ NILs in the form of a trust available to athletes upon leaving school.26 The court found that “offering student-athletes education-related compensation and offering them cash sums untethered to educational expenses is not minor; it is a quantum leap. Once that line is crossed, we see no basis for returning to a rule of amateurism.”27In reversing the district court, the Ninth Circuit relied on the Supreme Court’s statement in Regents that the NCAA must be given “ample latitude” to oversee college athletes, which includes the preservation of amateurism.28 While the NCAA has changed its bylaws since the 2015 O’Bannon decision, to allow financial aid up to the cost of attendance or potentially more if the student also receives a Pell grant, student-athletes have continued to challenge the system.29
NCAA Grant-In-Aid Cap goes one step further than O’Bannon, attacking the restriction on sharing revenue obtained from the use of players’ NILs, as well as contending that the cap on financial aid in general unlawfully restrains trade.30 In addition, plaintiffs argue NCAA rules also fix prices by regulating and prohibiting additional benefits that are related to education while allowing benefits that are incidental to athletic participation.31 For example, the NCAA limits academic tutoring and prohibits reimbursement for items such as computers and science equipment, but at the same time permits some reimbursement for players’ families to travel to games.32
In his ruling on a motion for summary judgment, Judge Wilken of the Northern District of California stated the allegations were sufficiently distinct from those raised in O’Bannon to permit litigation, as the NCAA rules had changed since that decision.33 Judge Wilken also ruled the plaintiffs had met their burden of proving anticompetitive effects in the college athletic market.34 The NCAA must again prove that their rules, which have evolved in the years since O’Bannon continue to advance the NCAA’s procompetitive purposes.35 Specifically, that they preserve consumer demand because interest in college athletics is in part due to their amateur nature and they promote integration between the academic and athletic aspects of university life.36
The student-athletes will try to argue that less restrictive alternatives exist to achieve the same goal.37 Specifically, the plaintiffs argue the individual conferences should provide the expenses that can be provided to student athletes in their own conference rather than the NCAA setting the amount for all its member schools.38 They also propose another alternative that all prohibitions on payments or benefits related to educational expenses or athletic participation should be enjoined.39
In September 2018, the NCAA Grant-In-Aid Cap bench trial was held over the course of ten days in California.40 Each side called numerous economic and industry experts to argue in their favor.41 If the NCAA prevails, little if anything will likely change in the college sports industry.42 However, if Judge Wilken finds the NCAA violated antitrust law, as she did in O’Bannon, it could mark a significant change in the NCAA’s structure.43 It may lead to “super-conferences” in which the larger schools can offer recruits significant compensation to attend their school. It could also bring about several questions regarding how such a system would work, and whether athletes would be paid on a yearly basis. Would that amount be fixed at the time of recruiting or would it change every year depending on the value the athlete brings to the university? Would other aspects of the athletic program be compromised if funds were going to the players rather than the programs as a whole—for example, less money to spend on the facilities or coaching staff? How would this impact the other sports and athletes not certified within this case? This case has the potential to alter the college athletic system as we know it, but until the district court renders its decision, we can only continue to speculate about the NCAA’s future.
Full article: http://www.fordhamiplj.org/2018/12/04/college-athletes-fight-for-compensation-continues-in-alston-v-ncaa/
NYC v. AirB&B owners, operators
An excerpt from the Complaint filed in January:
23. The City brings this action first to stop the public nuisance being maintained by all Defendants at the Subject Buildings, including: (1) the illegal rental of permanent residential dwelling units to numerous transient occupants, without having the more stringent fire and safety features required in buildings legally designed to serve transient occupants; (2) the creation of significant risks in buildings not staffed to handle the security issues associated with transient occupancy, and a degradation in the quiet enjoyment, safety, and comfort of permanent residents in the Subject Buildings and in neighboring buildings caused by noise, filth, and the excessive traffic of unknown and constantly changing individuals entering their homes; and (3) the unlawful reduction of the permanent housing stock available to the residents of New York City at a time when there is a legislatively declared housing emergency. The conditions created by Defendants’ illegal conduct in the Subject Buildings negatively affect the health, safety, security, and general welfare of the residents of the City of New York and its visitors.
24. The City also brings this action because Operator Defendants have been repeatedly committing deceptive trade practices against visitors and tourists seeking short-term accommodations in New York City, implicitly holding themselves out as engaging in a legal business, when in fact they are conducting a business which places consumers in illegal occupancies and exposes them to serious fire safety risks. These practices include advertising and promoting the booking of illegal short-term accommodations in the Subject Buildings, properties in which transient, short-term occupancies of less than 30 days are prohibited by New York State and City laws.
The Complaint is here: https://iapps.courts.state.ny.us/fbem/DocumentDisplayServlet?documentId=9oXwjxhzUZCWNhplGXSoSA==&system=prod
NYT on 5G and the continuing Huawei quandary
Huawei’s fate will hang over the wireless industry’s largest annual trade conference, MWC Barcelona, previously called Mobile World Congress, which starts on Monday. Typically a celebration of new handsets from Samsung, LG, Sony and other brands, this year’s conference in Spain is being overshadowed by less glamorous policy questions about how to safeguard the behind-the-scenes infrastructure that keeps those devices connected to the internet.
“Many operators are now delaying their 5G investments because there is so much uncertainty related to whether they can work with Huawei or not,” said Mikael Rautanen, an industry analyst with Inderes Oy, a research firm. “That affects the whole telecommunications sector.”
5G networks are considered critical to the future global economy, increasing mobile phone speeds by up to 20 times from the current 4G system, while also creating new applications in medicine, augmented reality and manufacturing. Telecom companies are starting to roll out the new systems this year, with wider adoption coming in 2020.
Huawei makes the antennas, base stations, switches and other gear that make the technology work.
The debate over Huawei is particularly intense in Europe, where network operators that have long relied on the company’s equipment are facing potential new regulations. Britain, Germany, France, Poland and the Czech Republic are among those considering new restrictions against Huawei.
British and German authorities have indicated that a complete ban is unlikely, but the United States-led campaign threatens to slow down construction of the new technology in Europe that governments and businesses believe is needed to stay competitive in a digitized economy. The head of T-Mobile in Poland warned this week that new restrictions could disrupt the introduction of 5G technology.
For a year, Trump administration officials have been working on an executive order that would effectively ban Chinese telecom companies, including Huawei, from American 5G networks. The order would block American companies from purchasing equipment from China and other “adversarial powers,” but would not stop purchases of European-made equipment.
The wireless industry’s global trade group, GSM Association, said a ban of Huawei equipment in Europe would disrupt the overall market and increase costs for consumers.
“The effects would be delay the roll out, delay the technology and very probably higher pricing,” said Boris Nemsic, chairman of Delta Partners, an advisory and investment firm focused on the telecommunications market.
Huawei has become a lightning rod in the broader trade war between the United States and China. The Trump administration argues that Huawei is beholden to the Chinese government, and that allowing its equipment into 5G networks will create a grave national security risk — a charge Huawei has vehemently denied.
The increased scrutiny of Huawei would appear to present an opportunity for rivals such as Ericsson and Nokia, but executives at the companies have said it risks creating a broader slowdown.
“All our customers are trying to work out what this means, and that is causing uncertainty,” Borje Ekholm, the chief executive of Ericsson, told The Financial Times this month.
Ericsson and Nokia, which declined to comment, have fallen behind Huawei in market share over the past decade, struggling to match its rival’s lower prices and large investments in 5G and other emerging technology. Many carriers say the Chinese company’s 5G technology is more advanced than that of its Western rivals.
Despite being blocked by the United States, Huawei is the largest seller of telecommunications equipment, accounting for about 28 percent of the global market, according to the Dell’Oro Group, a market research firm. Companies such as Cisco Systems provide equipment like routers used by carriers in other parts of their networks.
The new 5G networks represent a once-in-a-decade opportunity. In Europe, mobile carriers are expected to spend at least $340 billion by 2025 constructing the networks, according to GSMA.
Ericsson and Nokia have been careful not to appear to take advantage of Huawei’s misfortune, perhaps out of concern that China would retaliate against the European companies if new bans against Huawei were introduced.
The two companies each earn around $1.5 billion in revenue each year in China, according to an estimate by Pierre Ferragu, an analyst at New Street Research in New York. By contrast, Huawei earns $3.5 billion a year in Europe, Mr. Ferragu estimates.
Any company forced to replace Huawei equipment will have to shoulder heavy costs. “It would take time for the existing vendors to scale R&D, operations, sales, services and partner agreements to fill the void,” the Dell’Oro Group said in a recent report.
It may be for that reason wireless carriers that have long depended on Huawei are coming to its defense. Mr. Read of Vodafone urged governments to act carefully before imposing new restrictions, because much of the present debate was not “fact based.”
Source: https://www.nytimes.com/2019/02/22/technology/huawei-europe-mwc.html
From Digital Music News
The American Mechanical Licensing Collective (AMLC) Wants Competition And Isn’t Going Away — Here’s Their Full Statement to the Music Industry
Paul Resnikoff
February 21, 2019
2https://www.digitalmusicnews.com/2019/02/21/amlc-american-mechanical-licensing-collective/#comments
The American Mechanical Licensing Collective (AMLC) says they represent the interests of independent songwriters and rights owners. In fact, they feel they’re addressing a bigger group than the major publisher-backed ‘MLC’.
Back in November, we first reported on a new mechanical licensing agency: the American Mechanical Licensing Collective, or AMLC. The group tossed their hat in the ring to administer mechanical licenses for the government-created Mechanical Licensing Collective, or MLC, as outlined by the now-passed Music Modernization Act.
In response, major publishers and other industry heavyweights assembled a broad consortium of industry players to back its own mechanical licensing contender. David Israelite, head of the National Music Publishers’ Association (NMPA), argued that the role of the MLC should not be filled by a competitive process, especially since his group already enjoyed an overwhelming consensus among industry players.
In fact, the NMPA-backed group has already called themselves the ‘MLC’, while also naming themselves the ‘consensus’ mechanical licensing organization. Additionally, Israelite has argued that his group was most responsible for passing the MMA, therefore, they should be the ones implementing its core function.
The AMLC, along with a long list of independent songwriters and producers, have sharply questioned that approach. They say this shouldn’t be a no-bid contract. And more importantly, they feel that they represent the real majority of rights owners, most of whom would be marginalized by the mainline MLC group.
Here’s the AMLC’s official statement on their position.
The Mechanical Licensing Collective will be a non-profit organization charged with the payment of songwriter and music publisher “mechanical” royalties to the rightful songwriter and music publishers. In addition, it must maintain a musical works database, providing blanket licenses to U.S. digital streaming services; hold onto earned but unpaid money; resolve conflicts; and more.
The Register of Copyrights will designate the MLC from submitted applications based on an entity proving itself able to achieve the goals of the MLC, as well as meeting all the legal requirements as stipulated in the MMA.
Last week it was reported in the press that an organization planning to apply to be designated as the MLC prematurely suggested that the competition among entities to become the MLC is all but over.
This suggestion was made despite the Register of Copyright making no such statement and still awaiting receipt of complete applications, which are not due until mid-March. If the suggestion is true, the selection process would at best not have been made — and, at worst, been compromised.
It is possible that the reported public press statement indicating their application is “the only one that meets the statutory definition” is inaccurate or perhaps rests on the role the traditional industry played in the passage of the Music Modernization Act. Although we recognize the role and importance those organizations played in getting the bill drafted and passed, we agree with the Copyright Office’s statement that “[s]ervice on the Board or its committees is not a reward for past actions, but is instead a serious responsibility that must not be underestimated.”
The suggestion that only one entity gets to compete — which, by default, is not a competition — counters the MMA and the Copyright Office’s intentions and requirements.
The suggestion that only one entity gets to compete — which, by default, is not a competition — counters the MMA and the Copyright Office’s intentions and requirements. In fact, to help encourage the needed competition, the Copyright Office publicly stated that “the Office does not read this clause as prohibiting a musical work copyright owner from endorsing multiple prospective MLCs.” The intent of the law is to clearly allow copyright owners to recognize and endorse multiple groups.
As the MLC will work for independent and major music publishers as well as all global music copyright owners, this ties into the MMA provision that clearly states, and logically requires, that the MLC have “substantial support” from “musical copyright owners” who together represent “the greatest percentage of the Licensor Market for uses.”
About 90 percent of the millions of global music copyright creators own and control their own copyrights. Each month alone in the U.S. there are over 500,000 new recordings of new songs from tens of thousands of DIY, self-owning copyright owners being delivered to U.S. music services and made available to stream. In just the last year, hundreds of thousands of DIY copyright owners have created and distributed at least 6 million works. In the past 10 years, estimates place that number closer to millions of copyright owners distributing over 20 million songs to streaming services. The majority of works being written, recorded, distributed and made available to stream overwhelmingly come from this constituency.
It is this constituency of millions of hard-working individuals, with a rising market share, that represents the majority of musical works copyright owners. These global copyright owners, combined with the legacy industry, make up the entire Licensor Market eligible to be streamed in the U.S. Surely the intent of the law is not to make them irrelevant in the process of establishing the MLC, particularly when there is a further important distinction between the two market segments: some of the biggest publishers in the traditional music industry are expected to bypass and not use the MLC due to their direct licensing deals with the digital streaming services, as compared to the millions of global copyright owners whom will rely on the MLC for licensing and payments.
This point further exacerbates the yet-to-be-resolved conflict of interest; that is, board members of the MLC can recommend other copyright owners’ money be liquidated and given to themselves through market share disbursements, all without actually having to use the MLC for their own copyrights. This outcome is most certainly not the intended application of the law.
This speaks as to why competition is needed.
The AMLC (American Mechanical License Collective) is competing to become the MLC. The AMLC’s board members are independent songwriters, technologists, entrepreneurs, music publishers and administrators, legal scholars, and business people who have profound and extensive knowledge in the areas of administration, technology, and identification of royalties without the same conflict of interest as the other.
The AMLC believes it serves all copyright owners including the independent writers and publishers as well as the major music publishers. It believes the companies and individuals of the board members of the MLC should use the MLC whenever possible. In addition, the AMLC directly addresses the importance of serving both the traditional industry as well as the independent writers and publisher, as it is their songs which will generate the vast majority of licenses and royalties flowing through the MLC.
In further contrast, the experience and credentials of the AMLC in the relatively new world of digital streaming are impressive and profound. This can be seen not just by examining the creation of the technology, innovation and success of its board members but also by the fact that many of the AMLC board members were hired by the traditional industry to build the systems
they needed to fix their data, resolve conflicts, audit statements, confirm splits, locate recordings and more (the very same needs of the MLC).
The AMLC has been forthright and has highlighted that its primary goals are to get all copyright owners and songwriters paid what they earned and reducing black box money by ensuring those funds go to its rightful owners and are not liquidated without intense due diligence. Finally, the AMLC is focused on keeping any perceived or actual conflict of interest to the lowest possible minimum and avoiding any activities that might give one group of copyright owners advantages over other groups of owners.
To that end, as we further expand our board, round out our committees and put forth an efficient one of a kind cutting edge technology solution we encourage the spirit and goal of the MMA to create competition, allowing the best entity possible to emerge and serve the world’s songwriters, publishers, and copyright owners under the requirements of the law.
The AMLC
From the Complaint in
THE CITY OF PHILADELPHIA, Plaintiff,
vs.
BANK OF AMERICA CORPORATION, BANK OF AMERICA, N.A., BANC OF AMERICA SECURITIES LLC, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, BARCLAYS BANK PLC, BARCLAYS CAPITAL INC., CITIGROUP, INC., CITIBANK N.A., CITIGROUP GLOBAL MARKETS INC., CITIGROUP GLOBAL MARKETS LIMITED, THE GOLDMAN SACHS GROUP, INC., GOLDMAN SACHS & CO. LLC, JPMORGAN CHASE & CO., JPMORGAN CHASE BANK, N.A., J.P. MORGAN SECURITIES LLC, THE ROYAL BANK OF CANADA, RBC CAPITAL MARKETS LLC, WELLS FARGO & CO., WELLS FARGO BANK, N.A., WACHOVIA BANK, N.A., WELLS FARGO FUNDS MANAGEMENT, LLC, WELLS FARGO SECURITIES LLC, Defendants.
Case No.: 1:19-cv-01608, Southern District of New York
Plaintiff The City of Philadelphia, individually and on behalf of all persons and entities similarly situated, brings this class action under Section 1 of the Sherman Antitrust Act, Sections 4 and 16 of the Clayton Antitrust Act, and certain state laws, for actual damages, treble damages, punitive damages, declaratory and injunctive relief, costs of suit, pre- and post-judgment interest, and other relief, and alleges as follows:
NATURE OF THE ACTION
1. This is an antitrust class action charging the Defendant banks with conspiring to inflate the interest rates for a type of bonds often called “Variable Rate Demand Obligations” or “VRDOs.” 1 The City of Philadelphia (“Philadelphia” or “Plaintiff”) brings this action on behalf of itself and a proposed Class of VRDO issuers—mainly state and local public entities such as municipalities, agencies, public universities, and hospitals—to redress the harm inflicted by Defendants, which likely amounts to billions of dollars class-wide.
2. VRDOs are tax-exempt bonds with interest rates that are reset on a periodic basis, typically weekly. VDROs are issued by public entities to raise money to fund their operations, as well as critically important infrastructure and public services, such as neighborhood schools, water and wastewater systems, public power utilities, and transportation services. VRDOs are also issued by public entities on behalf of tax-exempt 501(c)(3) organizations—including schools, community organizations, and charities—which use the VRDOs to fund their operations and projects.
3. VRDOs allow issuers to borrow money for long periods of time while paying short-term interest rates. Investors find VRDOs attractive because the bonds include a built-in “put” feature that allows investors to redeem the bond at any periodic reset date, thus making VRDOs a low-risk and high-liquidity investment.
4. To manage the bond, VRDO issuers contract with banks—like Defendants here— to act as re-marketing agents (“RMAs”). RMAs have two primary jobs under the remarketing agreements. First, on each reset date, RMAs are required to reset the interest rate of the VRDO at the lowest possible rate that would permit the bonds to trade at par. For the vast majority of VRDOs, the reset date occurs on a weekly basis, typically every Tuesday or Wednesday. Second, when an existing investor exercises the “put” on the bonds and tenders the bond to RMAs, RMAs are required to “remarket” the VRDO to other investors at the lowest possible rate. For these ongoing services, issuers pay RMAs remarketing fees.
5. VRDO issuers are motivated to obtain the lowest interest rates for their debt. The higher the rates that VRDO issuers pay, the more costly it is for them to finance their operations and fund infrastructure projects. If an RMA cannot deliver low rates, issuers have the right to replace that RMA with another one who can. Thus, in a properly functioning market, RMAs would compete against each other for issuers’ business by actively working to set the best (i.e., the lowest) possible rate for their customers.
6. Defendants—which, collectively, served as RMAs for approximately 70% of all VRDOs in the United States from 2008 through 2016—did not work to set the lowest possible VRDO rates for Plaintiff and the Class, however.
7. Since about late 2015, various government authorities have been investigating Defendants’ practices in the market for VRDO remarketing services, based on facts that were first brought to their attention by a whistleblower. Among other things, the whistleblower alleges that RMAs (including Defendants here) were not actively and individually marketing and pricing VRDOs at the lowest possible interest rates, but instead were setting artificially high rates without regard to the individual characteristics of VRDOs, market conditions, or investor demand. The whistleblower also alleges that RMAs (including Defendants here) were improperly coordinating the rates they set for VRDOs. These allegations were based on the whistleblower’s extensive analysis of data available to the whistleblower due to that person’s role in the marketplace.
8. Starting in or about late 2015 and 2016, the whistleblower began to meet and share data and the whistleblower’s analysis of data with federal authorities, including the Antitrust Division of the U.S. Department of Justice (the “DOJ”). The DOJ subsequently opened a preliminary criminal investigation into Defendants’ remarketing practices in connection with VRDOs. That preliminary criminal investigation is ongoing.
9. Plaintiff counsel’s investigation of this matter has confirmed that there exists evidence of direct communications between competing banks concerning VRDO rate-setting. In these communications, senior personnel sitting within Defendants’ Municipal Securities Groups, which housed the Short-Term Products desks on which Defendants ran their VRDO operations, shared competitively sensitive information that was material to the setting and resetting of VRDO rates.
10. As a result of Plaintiff counsel’s investigation, Plaintiff has further learned that, as early as February 2008, Defendants were agreeing among themselves not to compete against each other in the market for remarketing services, and instead to keep VRDO rates artificially high, to the detriment of their customers, including Plaintiff here. Defendants conspired by communicating with each other in person, via telephone, and through electronic communications. In these inter-Defendant communications, they repeatedly shared highly sensitive information about the “base rates” that Defendants used to make initial determinations of the interest rates they set for VRDOs as well as the levels of VRDO inventory Defendants held on their books.
11. Defendants’ overarching objective was to ensure that the cartel members would keep VRDO rates artificially high in order to prevent investors from “putting” the bonds back to Defendants. When investors tender VRDOs back to RMAs, it triggers the RMAs’ obligation to remarket the VRDOs while also forcing the RMAs to carry the bonds in their inventory. By keeping rates high, Defendants ensured that investors would not exercise their put options on the bonds on a widespread basis. This allowed Defendants to continue to collect remarketing fees for doing, essentially, nothing.
12. Economic analysis provides strong support for the existence of this conspiracy. As detailed below, Plaintiff’s preliminary economic analysis demonstrates that VRDO interest rates were artificially inflated for several years starting as early as 2008 and continuing until late 2015 to early 2016. This economic analysis also demonstrates the existence of several historical patterns in VRDO rates that are each indicative of an agreement among Defendants not to compete in the market for VRDO remarketing services that began to break up in late 2015 to early 2016, around the same time that government authorities began investigating Defendants’ practices in the market for VRDO remarketing services.
13. Defendants’ conspiracy restrained competition in the market for VRDO remarketing services and inflicted significant financial harm on Plaintiff and the Class. Plaintiff and the Class paid billions of dollars in inflated interest rates during the Class Period due to Defendants’ conspiracy. By artificially increasing the rates paid by Plaintiff and the Class, Defendants’ conduct necessarily decreased the amount of funding available for critical public projects and services, as well as the operations of 501(c)(3) organizations. At the same time, Defendants banked hundreds of millions of dollars in the form of remarketing fees charged for services that Defendants never provided.
14. Free-market competition is, and has long been, the fundamental economic policy of the United States. As the Supreme Court has explained, this policy is enshrined in the Sherman Act,2 which makes it per se illegal for competitors (like Defendants here) to conspire and coordinate with each other to limit competition. Defendants’ conspiracy offends the very core of the antitrust laws. Defendants were supposed to be aggressively competing with each other for the business of their customers, but they secretly conspired not to compete against each other and instead to work together to keep rates high. Accordingly, Plaintiff brings this class action to hold Defendants accountable for the injuries they have caused.
Full Complaint at https://images.law.com/contrib/content/uploads/documents/402/36507/2019.02.20-Philly-VRDO-complaint.pdf
Editorial from the CPPC: State AGs Must Protect Consumers and Fill The Void to Challenge PBM Misconduct
February 21, 2019
Last fall’s meeting between the Department of Justice and several State Attorneys General reminds us that sound antitrust enforcement is not just a federal affair. While the Department of Justice called the meeting to discuss the antitrust concerns regarding the consolidation of information and data on technology platforms, the State Attorneys Generals turned the focus of the meeting to consumer protection and data privacy issues. Although they did not see eye to eye on all the issues, the states were clear that they will not stand on the sidelines. Indeed, the states appear to be taking the lead and will coordinate a multi-state antitrust and consumer protection inquiry into the practices of the tech platforms.
Many of the seminal antitrust cases including cases creating key principles of monopolization and merger law were brought by state attorneys generals. State Attorneys Generals have used the power under federal and their own state statutes to protect consumers against anticompetitive and fraudulent conduct in credit card, pharmaceutical, computer and many other markets crucial to consumers.
Much of the recent attention to escalating drug prices has focused on Pharmacy Benefit Managers (“PBMs”), the drug middlemen, who are driving up drug prices and reducing consumer choice. Appropriately the President’s May 2018 Blueprint to Reduce Drug Prices is focusing attention on how the lack of PBM competition and transparency permits PBMs to use their market power to drive up drug prices. In many cases, PBM customers such as states, health plans and employers do not receive the full benefit of these rebates because PBMs do not always classify certain fees as rebates.
Unfortunately, federal antitrust enforcement has simply dropped the ball on PBM competition. The recent approval of the CVS/Aetna deal makes that crystal clear. Over the past decade, the PBM industry has gotten stronger as it has undergone significant horizontal and vertical consolidation, leaving the market with just three large participants – Express Scripts, CVS Health, and OptumRx – that cover more than 85 percent of the PBM market. And the FTC has opposed efforts by states to adopt sensible regulations.
PBM rebate schemes also interfere in the relationship between doctors and their patients. PBMs often prevent consumers from getting the drugs they need or force consumers to switch drugs so they can secure higher rebates. Consumers lose through higher prices, less choice and threatened health care.
In short, the current system is broken, federal enforcers are passive and we need strong enforcement by state attorneys generals to protect competition and consumers.
States have significant advantages over federal enforcers. They are closer to the market and recognize the direct harm to consumers. They have the ability to secure monetary damages. States are often customers and victims of anticompetitive schemes. State enforcers can bring combined antitrust and consumer protection cases. And although each state has limited antitrust and consumer protection resources, states increasingly are using multistate task forces to investigate and prosecute unlawful conduct.
The strategic advantages of State Attorneys General are substantial. They have the authority to investigate and challenge mergers as well as the practices of PBMs under various federal and state laws including the False Claims Act (most states have enacted analogous false claims acts), state law deceptive trade practices acts, and the antitrust laws.
The states have begun to take matters into their own hands. In 2018, over 80 bills related to PBM regulation were introduced in state legislatures across the country and dozens of them were signed into law. Some of this legislation relates to requiring PBMs to have a fiduciary duty to its health plans, prohibiting gag clauses or PBM contract provisions that limit a pharmacist’s ability to inform customers about the least expensive way for customers to purchase prescription drugs; prohibiting a PBM from setting patient copays at a higher level than the health plan’s cost of the drug; requiring rebate transparency; and limiting PBM requirements on independent pharmacies.
There are clear precedents for state action. In the past decade a coalition of over 20 State Attorneys General brought a series of cases against the three major PBMs for manipulating the rebate process – switching patients to less safe, more expensive drugs in order to secure greater rebates. Thousands of consumers were prevented from using the drugs they needed and that worked. Ultimately the state cases were settled with penalties and damages of over $370 million.
The orders in these cases have expired and it seems that the PBMs have returned to their playbooks of misleading consumers and preventing them from getting the drugs they need. State AGs can obtain huge healthcare fraud settlements and judgments, which can provide an additional source of revenue for the states. As PBMs are increasingly scrutinized by the federal and state authorities, State AG investigations and complaints are likely to increase.
While historically State AGs typically coordinate with the federal government, they can certainly act alone or along with other states. Some State AGs with active enforcement agendas have sought to elevate their enforcement levels during periods when they have anticipated or perceived a reduction in federal enforcement. The DOJ and FTC have had a light hand in terms of scrutinizing PBM conduct so State AGs seem to be filling the void. Such an uptick in state level PBM enforcement is now in play and PBMs should take note of the resulting enhanced risk.
Indeed, Ohio and other states are increasing their enforcement activities due to the slow progress by the federal government. In July, then Ohio Attorney General and current Ohio Governor Mike DeWine put “PBMs on notice that their conduct is being heavily scrutinized, and any action that can be taken and proven in court will be filed to protect Ohio taxpayers and the millions of Ohioans who rely on the pharmacy benefits provided.” Ohio’s investigation began at the end of 2017.
And just this week, the new Ohio Attorney General Dave Yost announced he is seeking repayment of nearly $16 million paid to the OptumRx by the Bureau of Workers’ Compensation. A report found that the PBM overcharged the state and violated its contract by failing to adhere to agreed discounts on generic drugs. Yost will take OptumRx to nonbinding mediation, and that fails, the dispute will be taken to court. He has also promised further action against PBMs, saying “they took our money.”
In February 2018, Arkansas Attorney General Leslie Rutledge opened an investigation into CVS Caremark’s reimbursement practices after reviewing complaints of plummeting prescription medication reimbursement rates paid to local pharmacies. She is concerned that the PBM’s “reimbursements do not cover the actual cost of the medications.” If the local pharmacies’ prescription reimbursement rates are lower than their costs to purchase the drugs, they may eventually have to close their doors, which in turn, harms patients.
Fortunately, state AGs are there to protect consumers and competition and they have tremendous interest in controlling drug spending. States are clearly victims of these PBM schemes as significant drug price increases take a substantial amount out of state budgets. State AGs have the tools and need to use their enforcement powers to stop the egregious practices that are currently harming consumers. They are essential to protecting consumers and making the market work. Other State AGs should follow the examples of Arkansas and Ohio, and launch investigations and enforcement actions to stop abuses and ensure that PBMs are actually lowering drug costs.
From:https://www.thecppc.com/single-post/2019/02/21/State-AGs-Must-Protect-Consumers-and-Fill-The-Void-to-Challenge-PBM-Misconduct?utm_campaign=4f29d95c-84d4-42a2-9746-c5c44d551d91&utm_source=so
Rebecca Sandefur on access to justice. Her article: “Access to What?”https://www.mitpressjournals.org/doi/full/10.1162/daed_a_00534
Journalists tend to focus on Rebecca Sandefur’s observation that people seeking solutions to civil justice problems may do just as well on their own as with the help of a lawyer. See https://www.nytimes.com/2019/02/13/opinion/legal-issues.html
Sandefur does start her recent article with the point that “resolving justice problems lawfully does not always require lawyer assistance. . . .” But Sandefur’s main point is deeper, and thought provoking. It is that justice is about just resolutions, not necessarily about access to legal services. A broader understanding of what just resolutions entail will help lawyers to work with problem solvers who are not lawyers to craft an array of approaches to achieving just results.
Civil justice problems Sandefur has in mind for solution include a broad array: wage theft, eviction, debt collection, bankruptcy, domestic violence, foreclosure, access to medical treatment, and care and custody of children and dependent adults.
Following is an excerpt from Sandefur’s article (citations omitted):
When a system is broken, the solution is systemic reform. Consider consumer debt. Today, small-claims and lower-civil-court dockets are flooded with debt claims against consumers. These claims have usually been sold by the original debtor, such as a credit-card company, to a third-party debt buyer in a bundle of hundreds or thousands of debts. Such claims against consumers are often based on “bad paper,” insufficient documentation to sustain the debt owners’ claim to the amount demanded. Courts spend scarce time and money processing hundreds of thousands of baseless claims. This situation persists because, in most states, courts do not require creditor-plaintiffs to show that they have documentation of ownership for the debt when they file lawsuits; individual debtors must appear in court and contest the documentation for each debt. In 2014, New York State's then–Chief Judge Jonathan Lippman issued an order requiring debt-owners to produce documentation of the amount claimed at the time of filing. The number of debt lawsuits against New York consumers dropped dramatically.
These are just a few examples from growing evidence that the current course of focusing narrowly on lawyers’ services is wrong, whether the goal is understanding the access problem or taking action to fix it. Looking only at the civil justice activity processed by lawyers or the court system misses most of the action. Focusing on existing programs that deliver legal services and on court cases will never provide a picture of all of the other civil justice activity that never makes it to the justice system–and that is the majority of civil justice activity. Practically speaking, it would be impossible for the nation's existing courts, administrative agencies, and other forums that resolve disputes to process the estimated more than one hundred million justice problems that Americans experience every year. There is no reason to want them to. The rule of law means that most people can rely on most others to be basically compliant with legal norms most of the time, with a fair and accessible legal system as backup.
The access-to-justice crisis is a crisis of exclusion and inequality, for which legal services will sometimes provide a solution. At other times, lawyers’ services will be too expensive and much more than necessary. At other times still, systemic reforms will be the right solution, not providing costly and inefficient assistance to individuals. Lawyers and social scientists have a limited understanding of how to determine which justice problems of the public need lawyers’ services and which do not.
From Paul Levy:
Consumer Warning: Copyright Trolling by Higbee and Associates
Excerpt:
Over the past few years, the law firm Higbee and Associates (based in Los Angeles, although it pretentiously labels itself a "National Law Firm") has become identified with a pattern of making aggressive and, in many cases, unsupportable demands for the payment of significant sums of money by individuals and nonprofits whose web sites feature copyrighted graphics, and especially photographs, that they saw online but have never tried to license. The firm’s principal, Mathew Higbee, revels in his reputation for aggressive enforcement. (The interview linked above, for example, is featured on his own firm’s web site.)
Either in concert with a specialized search firm or using his own firm’s software, this firm patrols the Internet looking for graphics (especially photographs) that have been copied improperly from online sources. The firm then sends a demand letter bearing Higbee's signature, threatening to seek up to $150,000 in statutory damages as well as attorney fees unless the target of the letter promptly agrees to pay a specified amount. Deploying a tactic that is all too familiar from the depredations of Evan Stone and Prenda Law, the specified amount is low enough – usually in the low four figures, but I have seen high three figures as well —that it is not likely to be cost-effective for the target to hire a knowledgeable copyright lawyer to litigate an infringement lawsuit, even if the claim is bunk or, at least, if there is good reason to believe that the claim can easily be defended. The letter encloses a document identifying the allegedly infringing use as well as the online location where the work was found; another document that purports to authorize the firm to represent the copyright holder in seeking damages in connection with the work; a proposed “settlement agreement”; and a credit card payment form. If the target of the letter does not respond, or responds without agreeing to pay, then the Higbee firm increases the pressure: a non-lawyer who calls herself a “claim resolution specialist” sends an email warning that the claim is going to be “escalated to the attorneys,” at which point “[t]claim gets more stressful and expensive,” and an assurance that “my goal is to not let that happen to you.”
The documents linked above all relate to a single Higbee demand to a single target, but I have seen a number of other demand letters and ensuing emails from this firm, and spoken to several other copyright lawyers who have helped clients respond to Higbee’s blustering and threats, and it appears to me that these are pretty standard exemplars. Indeed, when I was reaching out to some other copyright lawyers to try to get their sense of some of the documents I was reviewing, a number of them guessed that it was Higbee based only on what I said I wanted to ask about, based on work they had done for their clients trying to address his threats against them. Plainly, this is a copyright troll with an outsized reputation.
The Demand to Homeless United for Friendship and Freedom (“HUFF”)
As it happens, I had heard recently from colleagues in the copyright law community about threats that Higbee was making to nonprofits when I was contacted by Thomas Leavitt, a former client in a free speech case, about a Higbee demand to Homeless United for Friendship and Freedom (“HUFF”). HUFF is a loose-knit activist group in Santa Cruz, California, that addresses issues of poverty, with specific reference to homelessness. It maintains a blog which, among other things, shows media coverage related to homelessness. On August 6, 2012, the blog reposted an article from the New York Times about a mass detention of migrants in Greece. That article featured a photograph showing an immigrant in the hands of the Greek police. The photograph could be seen in the HUFF blog post, along with the photo credit “Angelos Tzortzinis/Agence France-Presse — Getty Images.” but although the text of the Times article was placed directly on the blog, the photograph appeared only by virtue of deep-linking to the graphic as it appeared on the Times’ own web site, at this address.
More than six years later, on January 2, 2019, Mathew Higbee sent HUFF his demand letter, accompanied by the other documents described above. Several things jumped out at me. First, instead of reciting that the copyright in the photograph had been registered, and either attaching the registration or at least citing the registration number, the letter recited the photo’s “PicRights Claim Number” – a matter of utterly no consequence for the recipient of the demand. The registration number, by contrast, is far more significant in this context, because, for most copyrighted works (the exception is discussed below), a copyright holder cannot bring suit for infringement until the copyright has been registered, and regardless of the exception, a copyright holder cannot seek statutory damages or attorney fees for infringements that take place before registration, or even for infringements that continue after registration unless the copyright was registered promptly after the work was first published. Because this photograph appeared in the New York Times within a day after the photo was taken, and more than six years before the demand letter was sent, a failure to register would have meant that the letter’s warning about statutory damages and attorney fees was an empty bluff meant to intimidate.
Second, the letter was plainly a boilerplate form, containing somewhat stilted language that was poorly adapted to the specifics of HUFF’s claimed infringement. For example, the letter varies back and forth between referring to the recipient in the second and third person singular, suggests that HUFF might have its wages garnished, warns of action against “the business owner,” and refers to “the attached exhibits” even though only one exhibit was attached. Indeed, the “representation agreement” that was provided along with the demand letter, purporting to show that Agence France-Presse, PicRights and a European version of PicRights had authorized Higbee to pursue claims on its behalf about HUFF’s alleged infringement with respect to this specific photograph, did not identify the photograph but simply indicated that Higbee was handling “a copyright infringement matter.”
Third, the exhibit revealed Higbee’s recognition that the “infringing location” for the copyrighted work was not HUFF’s own web site but rather the web site of the New York Times which, presumably had licensed the photograph (I was able to confirm that assumption by contacting the Times’ legal department). And the Court of Appeals for the Ninth Circuit has decided, in Perfect 10 v. Amazon, that Google does not infringe a photographer’s copyright by including images in its search results, because American copyright law does not prevent the “framing” of deep-linked images that actually sit on the server of a party that is entitled to display the photograph and serve copies of the image to visiting viewers; it is only displaying and distributing from the defendant’s own server that violates the copyright laws (the “server test”).
Higbee Retreats Rapidly When Challenged by a Lawyer
Consequently, I wrote back to Higbee, asking directly whether the copyright in the image had been registered, and pointing out some of the legal flaws in his demand letter as well as the bullying email that had been sent as a followup by his "claims resolution specialist," Rebecca Alvarado. I told him that he needed to issue a prompt retraction of the demand, else we would be seeking a declaratory judgment of non-infringement.
For the complete article, go to https://pubcit.typepad.com/clpblog/2019/02/consumer-warning-copyright-trolling-by-higbee-and-associates.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+ConsumerLawPolicyBlog+%28Consumer+Law+%26+Policy+Blog%29
Press Release, House Committee on Financial Services:
Waters and Green request documents from Consumer Bureau on recent settlements that do not require companies that have violated the law to provide redress to consumers who have been harmed.
Washington DC, February 7, 2019
Tags: CFPBToday, Congresswoman Maxine Waters (D-CA), Chairwoman of the House Committee on Financial Services, and Congressman Al Green (D-TX), Chairman of the Subcommittee on Oversight and Investigations, wrote to Consumer Financial Protection Bureau Director Kathy Kraninger to request documents relating to recent settlements that do not require companies that have violated the law to provide redress to consumers who have been harmed.
“The Consumer Financial Protection Bureau (“Consumer Bureau”) has recently announced several settlements against entities for engaging in unlawful practices without requiring the payment of redress to consumers harmed by the illegal conduct,” the lawmakers wrote. “This stands in stark contrast to the Consumer Bureau’s practice under the leadership of former Director Cordray. During Director Cordray’s tenure, the Consumer Bureau recovered nearly $12 billion in relief for harmed consumers over its first six years.[1] American consumers deserve a Consumer Bureau that will fight to recover their hard-earned money when they are cheated.”
In the letter, the lawmakers requested documents regarding recent Consumer Bureau settlements with Sterling Jewelers Inc., Enova International, Inc, and NDG Financial Corp. et al.
See below for the full letter. [https://financialservices.house.gov/uploadedfiles/letter_to_cfpb_re_settlements_020719.pdf]
The Honorable Kathy Kraninger
Director
Consumer Financial Protection Bureau
1700 G Street, NW
Washington, D.C. 20552
Dear Director Kraninger:
The Consumer Financial Protection Bureau (“Consumer Bureau”) has recently announced several settlements against entities for engaging in unlawful practices without requiring the payment of redress to consumers harmed by the illegal conduct. This stands in stark contrast to the Consumer Bureau’s practice under the leadership of former Director Cordray. During Director Cordray’s tenure, the Consumer Bureau recovered nearly $12 billion in relief for harmed consumers over its first six years.[1] American consumers deserve a Consumer Bureau that will fight to recover their hard-earned money when they are cheated.
On January 16, 2019, the Consumer Bureau announced it had reached a settlement with Sterling Jewelers Inc. (“Sterling”) for numerous claims, including that the company engaged in unfair practices by enrolling consumers who had a Sterling credit card in payment protection insurance without their consent.[2] Under the terms of the settlement, Sterling is required to pay a penalty to the Consumer Bureau of $10 million, but does not have to refund consumers any of the money paid for payment protection insurance.[3] According to the Consumer Bureau’s complaint against Sterling, payment protection insurance generated $60 million in revenue in 2016 alone.[4] The Consumer Bureau has previously required payments to consumers in similar cases where it found that consumers were enrolled in payment protection products without their consent.[5] The Committee is deeply troubled that the Consumer Bureau would allow a company to keep the profits they made from their illegal sales practices.
On January 25, 2019, the Consumer Bureau announced a settlement with Enova International, Inc. (“Enova”), an online lender, for engaging in unfair practices by debiting consumers’ bank accounts without authorization.[6] The settlement requires Enova to pay a $3.2 million civil money penalty to the Consumer Bureau, but contains no provision for paying redress to consumers.[7] The factual findings in the administrative consent order indicates that Enova debited payments on thousands of consumers’ outstanding loans where it did not have authorization and “extracted millions of dollars in unauthorized debits from consumers’ accounts.”[8]
On February 1, 2019, the Consumer Bureau announced a settlement with NDG Financial Corporation and other Defendants (“NDG Financial”) that did not require them to pay either a penalty or restitution to consumers.[9] The Consumer Bureau initiated its action against NDG Financial when the agency was still led by former Director Cordray. In its December 2015 amended complaint, the Consumer Bureau alleged that NDG Financial engaged in unfair, deceptive, and abusive practices by collecting on payday loans that were made in violation of state law.[10]The amended complaint specifically sought “damages and other monetary relief as the Court finds necessary to redress injury to consumers resulting from [NDG Financial’s] violations of federal consumer protection laws including but not limited to restitution and the refund of monies paid.”[11] Yet, the settlement agreement seeks no such relief for the wronged consumers.
Section 1055 of the Consumer Financial Protection Act of 2010 (“CFPA”) explicitly authorizes the Consumer Bureau to obtain relief for consumers, including the refund of money, restitution, or the payment of damages or other monetary relief. 12 U.S.C. § 5565(a)(1)(2).
The Committee has serious concerns about how the Consumer Bureau is exercising its enforcement authority, especially how it is determining whether to require companies to pay redress to consumers that have been harmed. The fact that two of the three settlements involve online lending raises serious questions about the Consumer Bureau’s commitment to protecting America’s consumers from predatory online lending practices.
As part of the Committee’s oversight over the Consumer Bureau,[12] please provide the following records by no later than March 5, 2019:
Sincerely,
MAXINE WATERS
CHAIRWOMAN
AL GREEN
CHAIRMAN
Subcommittee on Oversight and Investigations
cc: The Honorable Patrick McHenry, Ranking Member
Why The Sprint-T-Mobile Merger Epitomizes What Has Gone Wrong With U.S. Merger Enforcement
Diana Moss, President, American Antitrust Institute
Excerpt:
As Sprint and T-Mobile continue to hawk their proposed merger to antitrust enforcers, Congress, and the public, they face a growing tsunami of opposition from consumers, workers, and smaller competitors. This week, the companies go before another congressional committee to attempt to justify a deal that would combine the third and fourth wireless largest telecommunications carriers in the U.S.
The reality of a Sprint-T-Mobile merger is the elimination of the two "disruptive" competitors that have kept the big guys, AT&T and Verizon, on their toes. Worse, it would leave U.S. consumers with a cozy trio of national wireless carriers with strong incentives to collude rather than compete. The deal would virtually guarantee higher prices, less quality, and slower innovation for wireless services for millions of U.S. consumers.
So what is the justification for a combination that would fundamentally restructure the U.S. wireless industry? The deal will purportedly enable Sprint and T-Mobile to roll out 5G networks better and faster than if they did not combine forces. The companies have continued to dangle this enticing but elusive benefit before antitrust enforcers, Congress, and the public, even though both carriers are on record as ready, able, and willing to roll out 5G before they proposed to merge in early 2018.
The Sprint-T-Mobile story boils down to a fallacy that everyone can and should understand. That is, accepting significant harms to competition, consumers, and workers on the claim that the companies can deliver a benefit that both could achieve without the merger. We should not forget that it is the very competition between the existing four wireless carriers that drove Sprint and T-Mobile to begin rolling out 5G as independent wireless rivals.
The specter of Sprint and T-Mobile succeeding in justifying their merger should make every U.S. consumer hot under the collar. It prompted the American Antitrust Institute (AAI) to issue a commentary in June 2018, "Why the Sprint-T-Mobile Merger Should be DOA at the DOJ." AAI's piece laid out the facts: mergers that leave three competitors in a market are demonstrably some of the most virulently anticompetitive and anti-consumer deals because they create incentives to collude and weaken incentives to compete.
Full statement: https://www.antitrustinstitute.org/work-product/why-the-sprint-t-mobile-merger-epitomizes-what-has-gone-wrong-with-u-s-merger-enforcement/
9th Circuit to reconsider decision on openly carrying guns in Hawaii
The 9th US Circuit Court of Appeals will re-examine a case concerning the open carrying of firearms in Hawaii. Last year, a panel of the court held that Hawaii violated a man's constitutional rights by denying him a permit to openly carry a firearm for self-defense in public.
https://www.reuters.com/article/us-usa-guns-court/us-appeals-court-to-revisit-open-carrying-of-guns-idUSKCN1PX2A9
From DMN:
Live Nation Acquires Neste, Forming a New Live Joint Venture — Neste Live!
Daniel Sanchez
February 14, 2019
Neste marks the fourth acquisition Live Nation has made so far this year.
Live Nation Entertainment has made another important acquisition.
The live entertainment giant has acquired a majority stake in Neste, a full-service event marketing agency.
Live Nation plans to combine Neste’s expertise with its own extensive resources to launch Neste Live! The live joint venture will focus on talent buying and event production for US music festivals, fairs, and corporate clients.
With Neste Live!, Live Nation will service these markets combining Neste’s artist matching process with its own talent pool. The live joint venture will also combine event production expertise from both companies.
Neste Event Marketing first launched in 1995 as a corporate sponsorship and event marketing agency. The company first serviced the music festival marketplace. Neste eventually added talent buying and event production elements to its services. The event marketing agency has spearheaded and supported over 500 events. Its corporate clientele has included Jack Links, Jockey, Kansas City Life Insurance, Advisors Excel, and the NCAA College World Series.
Speaking about the majority acquisition and the new live joint venture, Gil Cunningham, President of Neste, said,
“We are looking forward to seeing the way Neste Live! unfolds and changes the talent buying process for clients of all kinds.”
Bob Roux, President of US Concerts at Live Nation, explained the live joint venture will help both companies work with even more events and clients in the live entertainment market.
“Gil and the team at Neste are amazing at what they do and make the perfect partners for this new endeavor.”
Based out of Tennessee, the Neste Live! team will report directly to Cunningham.
Neste marks Live Nation’s fourth acquisition so far this year. Last month, the live entertainment giant acquired One Production, a promoter in Singapore. This month, the company acquired Embrace Presents, a Canadian promoter, and Latin promoter Planet Events.
Source: https://www.digitalmusicnews.com/2019/02/14/live-nation-acquisition-neste-live/
From DMN:
Sprint Is Suing AT&T Over ‘Fake’ 5G Advertising Claims
Ashley King
February 8, 2019
Sprint has filed a lawsuit against AT&T for its 5G Evolution branding.AT&T rolled out the branding on phones that still use 4G LTE Advanced technology, which is not true 5G.
Both T-Mobile and Verizon have mocked the branding through social media, but Sprint is the first to respond with litigation. In federal court filings, Sprint is seeking an injunction against AT&T to prevent them from using 5GE tags on devices or in advertising.
The claim filed by Sprint says the network performed a survey and found people believed 5G Evolution was the same thing as actual 5G.
54% of respondents believed 5GE networks were the same or better than true 5G. 43% of people said they believed that buying an AT&T phone in 2019 would be 5G capable.
Sprint argues that AT&T is damaging the reputation of true 5G, which is many times faster than 4G LTE.
AT&T says they will fight the lawsuit while continuing to deploy more 5G Evolution areas across the United States.
They see no problem with the advertising because — according to AT&T — most customers don’t see a problem with it. Sprint proved as much with their consumer survey, AT&T claims.
AT&T clapped back at the lawsuit in a statement to Engadget [ https://www.engadget.com/2019/02/08/att-5g-sprint-lawsuit/ ], mentioning the potential merger with T-Mobile and the reliance on their 5G network.
“Sprint will have to reconcile its arguments to the FCC that it cannot deploy a widespread 5G network without T-Mobile while simultaneously claiming in this suit to be launching ‘legitimate 5G technology imminently’.”
When 4G technology was the new kid on the block, both AT&T and T-Mobile were branding HSPA+ technology as 4G. It’s not surprising to see them doing the same with 5G, though it will be interesting to see how this lawsuit turns out.
See https://www.digitalmusicnews.com/2019/02/08/sprint-att-fake-5g/ where a copy of the complaint filed in court can be found
District of Columbia gun control
(By DAR) D.C.’s current gun control regulations can be found at https://mpdc.dc.gov/firearms Qualifying adults may register rifles, shotguns,revolvers, or handguns. In general, carrying a firearm in the District is prohibited.
At an earlier time the District of Columbia had a firearm regulatory scheme that more broadly prohibited the possession of firearms, including possesion of an operable handgun in a home. In 2008 in the case of District of Columbia v. Heller, 128 S.Ct. 2783 (2008), a 5 to 4 majority of the Supreme Court, in an opinion written by Justice Scalia, declared DC’s firearm regulatory scheme unconstitutional to the extent that it prohibited possession of an operable handgun in a home for self-defense purposes.
In an article criticizing the Heller decision, Anthony Picadio points out that the U.S. Supreme has been reluctant to review lower court decisions putting restrictions on gun ownership, including restrictions analogous to those now applicable in the District of Columbia. Following is an excerpt from Mr. Picadio’s article, with footnotes omitted:
Since Heller was decided, and as of October 18, 2018, there have been over 1,310
Second Amendment cases nationwide, challenging restrictive gun laws, with the
overwhelming majority (93%) upholding these restrictions.37 The Supreme Court
was petitioned to accept an appeal in 88 of those cases and in each case the Court
declined to hear the appeal.
Among the cases left standing by the Supreme Court are the following:
Peruta v. California, in which the Ninth Circuit Court of Appeals held that the
Second Amendment does not protect the right to carry concealed firearms in
public;
United States v. Mahin, in which the Fourth Circuit Court of Appeals upheld a
federal law prohibiting persons subject to domestic violence restraining order
from possessing firearms;
Kolbe v. Hogan, in which the Fourth Circuit Court of Appeals held that assault
weapons and large capacity magazines are not protected by the Second
Amendment;
Justice v. Town of Cicero, in which the Seventh Circuit Court of Appeals upheld a
local law requiring registration of all firearms.
These are only a few of the many restrictive Second Amendment decisions the
Supreme Court has left stand after the Heller decision.
The history of the Second Amendment in the courts since the Heller decision does
in fact support Justice Thomas’ lament [in a case dissent] that the courts have failed to afford the Second Amendment “the respect due an enumerated constitutional right.” Perhaps one of the reasons that the Amendment has been so disfavored by the courts is a growing recognition that it was never intended by those who drafted and adopted it to grant any rights to own or use a firearm unconnected to membership in a militia.
Mr. Picadio’s article appears in the PENNSYLVANIA BAR ASSOCIATION QUARTERLY | January 2019
A copy of the article accompanies a newspaper op-ed at https://www.post-gazette.com/opinion/brian-oneill/2019/02/10/Brian-O-Neill-Slavery-root-of-the-Second-Amendment/stories/201902100107
FROM PBS WEEKEND NEWSHOUR: the Consumer Financial Protection Bureau is proposing changes to regulations that previously protected borrowers from being trapped in long-term debt
In a major win for the payday lending industry which gives quick loans at exorbitant interest rates, the Consumer Financial Protection Bureau is proposing changes to regulations that protect borrowers from being trapped in long-term debt. Kevin Sweet, Associated Press’ business reporter, joins Hari Sreenivasan for more.
Go to https://www.pbs.org/newshour/show/consumers-may-lose-protections-in-proposed-payday-lending-changes#audio
Abusive litigator and patent troll Shipping and Transit LLC files for bankruptcy
(By DAR) A complex legal system makes it possible for some companies and lawyers to misuse the legal process to make money. In a recent case involving Shipping and Transit LLC the Judge explained that:
"Plaintiff [Shipping and Transit LLC] 's business model involves filing hundreds of patent infringement lawsuits, mostly against small companies, and leveraging the high cost of litigation to extract settlements for amounts less than $50,000. These tactics present a compelling need for deterrence and to discourage exploitative litigation by patentees who have no intention of testing the merits of their claims. Based on the totality of the circumstances, the Court finds that this [a case by a Defendant who fought back and asked for attorney's fees] is an “exceptional” case. . . . Defendant’s Motion for Attorney Fees and Costs is GRANTED. The Court rules that Defendant is the prevailing party, that Defendant is entitled to recover its costs to the extent taxable under L.R. 54-3, and that Defendant is entitled to recover its reasonable attorney fees under 35 U.S.C. § 285, including fees associated with its motion for attorney fees and costs."
The case report is at https://www.eff.org/files/2017/07/07/shipping_transit_llc_v_hall_-_fee_order.pdf
Daniel Nazer of the Electronic Frontier Foundation reports that Shipping & Transit LLC, formerly known as Arrivalstar, was one of the most prolific patent trolls ever. It filed more than 500 lawsuits alleging patent infringement. Despite having filed so many cases, it never had a court rule on the validity of its patents. In recent years, Shipping & Transit’s usual practice was to dismiss its claims as soon as a defendant spends resources to fight back. A district court in California issued an order this week [see above] ordering Shipping & Transit to pay a defendant's attorney's fees. The court found that Shipping & Transit has engaged in a pattern of “exploitative litigation.” The fee award is from a case called Shipping & Transit LLC v. Hall Enterprises, Inc. After getting sued, Hall told Shipping & Transit that it should dismiss its claims because its patents are invalid under Alice v. CLS Bank. Shipping & Transit refused. Hall then went to the expense of preparing and filing a motion for judgment on the pleadings (PDF at https://www.eff.org/files/2017/07/07/shipping_transit_v_hall_-_motion_for_judgment_on_the_pleadings.pdf) arguing that Shipping & Transit’s patents are invalid. In response, Shipping & Transit voluntarily dismissed its claims. Hall then filed its successful motion for attorney’s fees.
Subsequently Shipping and Transit filed for bankruptcy, declaring the value of its patents to be $1. See https://www.techdirt.com/blog/?company=shipping+%26+transit+llc
Warren questions Fed resolve on mergers after BB&T-SunTrust deal
ByExcerpt:
WASHINGTON — After the proposed merger of BB&T and SunTrust Banks announced this week, Sen. Elizabeth Warren, D-Mass., said she is concerned about the Federal Reserve’s scrutiny of merger and acquisition applications.
“The board's record of summarily approving mergers raises doubts about whether it will serve as a meaningful check on this consolidation that creates a new too big to fail bank and has the potential to hurt consumers,” Warren said in a letter to Fed Chair Jerome Powell on Thursday, the same day the deal was announced.
Warren’s concerns about the merger come less than a year after she questioned the Fed and the Justice Department about how they have reviewed past bank mergers and how they intend to preserve competition and financial stability. She warned in April 2018 that a regulatory relief bill, which she and many other progressive Democrats opposed and which was signed into law in May, would lead to a “wave” of bank mergers
From https://www.americanbanker.com/news/elizabeth-warren-questions-fed-resolve-on-mergers-after-bb-t-suntrust-deal
Open Markets Press Release: The Podcast Market is Working and We Must Protect It
February 7, 2019
Spotify yesterday announced plans to buy podcast producer and network Gimlet Media for $230 million as well as podcast recording startup Anchor, two of the most important platforms in the podcast industry. The Open Markets Institute calls for the Federal Trade Commission and European enforcers to block the deals. The market for podcasts is one of the few news media markets that is growing, diverse, and successful, and antitrust enforcers should head off efforts by platform monopolists to take control over the industry.
The podcast market today includes a wide range of truly independent voices able to finance their operations with advertising revenue. Listeners, meanwhile, are able to download podcasts with little interference or personalized tracking by third-party software or advertising monopolists. And this old-school, open market system works. In 2017, US podcast ad revenues was $314 million dollars, and is forecast to hit $659 million by 2020.
This early stage market is, however, highly vulnerable to enclosure. Spotify CEO Daniel Ek has said he plans to spend some $500 million total to buy podcasts and podcast platforms just this year. Such a position would enable Spotify to begin to capture a significant amount of the advertising revenue that now goes straight to podcasters.
A takeover of Anchor, in particular, could also prove to be especially harmful to the industry. Anchor has provided a platform for start-up podcasters to produce, host, and sell advertising for their podcasts. If Spotify plans to change Anchor’s model, it may stifle new players, or lock them into a Spotify controlled system.
The present diversity in the Podcast industry is directly tied to market structure. There is vertical separation between the layers of the market, with software, production, and advertising done independently of one another. There is limited or no data collection, so there is no user-centric behavioral targeting or privacy breaches. This means podcast producers can still profit in a fair market for advertising sponsorships and compete fairly for an audience.
It is vital that the Federal Trade Commission and European anti-monopoly enforcers not only move to protect the podcast market, they should also study it closely for lessons to apply to other news media markets. The podcast market is a glowing example of what an open market looks like in America and the abundance it brings to both creators and listeners, and the political and civic dialogue it enables among citizens.
For media inquiries please contact Stella Roque, Communications Director at roque@openmarketsinstitute.org.
From Bloomberg: Pilgrim’s Pride Sued Over ‘Natural’ Chicken Marketing: The litigation follows a complaint filed in December with the Federal Trade Commission about its “humane” animal treatment claims.
By Lydia Mulvany
and Deena Shanker
February 7, 2019,
American consumers willingly pay more for foods advertised as “natural,” “organic” or “humane.” Food companies took notice long ago, adding such pledges to all manner of products. But it can be challenging for shoppers to figure out whether those promises are real or empty branding.
A lawsuit against chicken giant Pilgrim’s Pride Corp., filed by advocacy groups Food & Water Watch Inc. and Organic Consumers Association, turns on this very question. And they filed it in what’s arguably one of the most consumer-friendly courts in America.
At issue is the Greeley, Colorado-based company’s marketing claims that its birds are fed “only natural ingredients,” treated humanely and produced in an environmentally responsible way, according to a complaint filed on Wednesday in the Superior Court of the District of Columbia in Washington.
The company’s practices don’t live up to those claims, the plaintiffs alleged. The birds live in crowded, unsanitary warehouses, are abused by employees and have debilitating health conditions due to their breed, which was developed to grow fast, according to court papers. They’re raised with the help of routine use of antibiotics to promote growth and fed genetically modified organisms, the advocacy groups alleged in the filing.
“Contrary to Pilgrim’s Pride’s representations, the chickens who become these products are, as a matter of standard business practices, treated in unnatural, cruel, and inhumane manners, from hatching through slaughter,” according to the complaint. The plaintiffs, represented by Richman Law Group and Animal Equality, are seeking an injunction and corrective advertising.
“We strongly disagree with these allegations and look forward to defending our approach to animal welfare and sustainability,” said Misty Barnes, a spokeswoman for Pilgrim’s Pride.
“It’s a tough position that the company finds itself in.”
Pilgrim’s Pride now faces challenges about its marketing on multiple fronts. In December the company was the subject of a complaint filed by the Humane Society of the United States with the Federal Trade Commission, which said Pilgrim’s Pride was “scalding fully conscious chickens” as a result of its methods for slaughter, yet stating on its website at the time that its birds were being produced “as humanely as possible. ”
At the time, Cameron Bruett, a spokesman for Pilgrim’s Pride, a subsidiary of Brazilian meat processing giant JBS SA, rejected the Humane Society’s allegations.
“Pilgrim’s is committed to the well-being of the poultry under our care,” Bruett wrote in an email. “We welcome the opportunity to defend our approach to animal welfare against these false allegations.”
The language cited by the Humane Society subsequently disappeared from multiple places on the company’s website. Pilgrim’s Pride said at the time that the change in language was part of a long-planned update.
“It’s a tough position that the company finds itself in,” said attorney John E. Villafranco, who practices advertising law at Kelley Drye & Warren LLP. The district where the lawsuit was filed has “maybe the most permissive consumer protection statute in the country.”
https://www.bloomberg.com/news/articles/2019-02-07/pilgrim-s-pride-sued-over-natural-chicken-labels?
From DMN: Five Artists File Two Class-Action Lawsuits Against Sony Music and UMG
Daniel Sanchez, February 6, 2019
Will Sony Music and Universal Music Group willingly return copyrights to artists?
Two major labels have now come under fire in a New York courtroom.
Five musicians have filed two separate class-action lawsuits against Sony Music Entertainment and Universal Music Group (UMG) at the US District Court in the Southern District of New York.
he New York Dolls’ David Johansen along with John Lyon and Paul Collins filed the lawsuit against Sony Music. John Waite and Joe Ely are taking UMG to court.
According to both lawsuits, Sony and UMG have violated Section 203 of the Copyright Act, better known as the ’35-Year-Law.’ The termination law states that creators who assign their copyright to a company or person have the right to reclaim their rights after 35 years.
In violation of that law, enacted in 1976, both major labels have allegedly refused to acknowledge Notices of Termination sent by the artists.
The actions, if successful, could seriously impact the catalog cash-cows enjoyed by the major recording labels.
Evan S. Cohen, an LA music attorney representing the artists, explained,
“Our copyright law provides recording artists and songwriters with a valuable, once-in-a-lifetime chance to terminate old deals and regain their creative works after 35 years. This ‘second chance’ has always been a part of our copyright law.
“Sony and UMG have refused to acknowledge the validity of any of the Notices, and have completely disregarded the artists’ ownership rights by continuing to exploit those recordings and infringing upon our clients’ copyrights.
“This behavior must stop. The legal issues in these class action suits have never been decided by a court, and are of paramount importance to the music industry.”
Cohen also represents over one hundred recording artists who have sent major labels similar Notices of Termination along with Maryann R. Marzano, the LA attorney who successfully brought class-action lawsuits against SiriusXM and Spotify. In addition, Blank Rome LLP’s Gregory M. Bordo, David C. Kistler, and David M. Perry will represent the artists against the major labels. Reportedly Delayed Until February or March
The lawsuit court filings are posted with the DMN article
https://www.digitalmusicnews.com/2019/02/06/sony-music-umg-class-action-lawsuits/
Opinion: How to Stop Facebook’s Dangerous App Integration Ploy
Its plan to combine Instagram, WhatsApp and Facebook Messenger entrenches its monopoly power, and the F.T.C. should step in.
By Sally Hubbard
Ms. Hubbard is an editor at The Capitol Forum.
Feb. 5, 2019
In response to calls that Facebook be forced to divest itself of WhatsApp and Instagram, Mark Zuckerberg has instead made a strategic power grab: He intends to put Instagram, WhatsApp and Facebook Messenger onto a unified technical infrastructure. The integrated apps are to be encrypted to protect users from hackers. But who’s going to protect users from Facebook?
Ideally, that would be the Federal Trade Commission, the agency charged with enforcing the antitrust laws and protecting consumers from unfair business practices. But the F.T.C. has looked the other way for far too long, failing to enforce its own 2011 consent decree under which Facebook was ordered to stop deceiving users about its privacy claims. The F.T.C. has also allowed Facebook to gobble up any company that could possibly compete against it, including Instagram and WhatsApp.
Not that blocking these acquisitions would have been easy for the agency under the current state of antitrust law. Courts require antitrust enforcers to prove that a merger will raise prices or reduce production of a particular product or service. But proving that prices will increase is nearly impossible in a digital world where consumers pay not with money but with their personal data and by viewing ads.
The integration Mr. Zuckerberg plans would immunize Facebook’s monopoly power from attack. It would make breaking Instagram and WhatsApp off as independent and viable competitors much harder, and thus demands speedy action by the government before it’s too late to take the pieces apart. Mr. Zuckerberg might be betting that he can integrate these three applications faster than any antitrust case could proceed — and he would be right, because antitrust cases take years.
https://www.nytimes.com/2019/02/05/opinion/facebook-integration.html?action=click&module=Opinion&pgtype=Homepage
Heavy local pushback to AMAZON hq in NYC
Company executives have bristled at the intense criticism and, last week at a City Council hearing, seemed to float the notion that Amazon could reconsider its commitment to New York.
The ability of a local legislator to block the deal to bring a major new Amazon campus to Long Island City was exactly what Mr. Cuomo and Mayor Bill de Blasio had tried to avoid when they decided to use a state development process and to bypass more onerous city rules. Opposition, while vocal, seemed futile.
But now, with the insistence of Senate Democrats on appointing Mr. Gianaris to the little-known Public Authorities Control Board, those who want to stop Amazon from coming to Queens have gotten their most tangible boost yet. The board will have to decide on the development plan for Amazon, Mr. Cuomo has said, and could veto it.
From: https://www.nytimes.com/2019/02/04/nyregion/amazon-hq2-board-veto.html?action=click&module=Well&pgtype=Homepage§ion=New%20York
Baltimore State’s Attorney Marilyn Mosby announces that her office will no longer prosecute arrests for marijuana possession
MARILYN MOSBY: As an office, I’ve instructed my attorneys that we will no longer be prosecuting the possession of marijuana, regardless of weight, and regardless of criminal history.
TAYA GRAHAM: Which is why Baltimore State’s Attorney Marilyn Mosby has decided to do something about it. This week she announced her office would no longer prosecute arrests for marijuana possession–a sweeping policy change that would apply to possession of unlimited amounts.
MARILYN MOSBY: We are going to continue to proceed upon possession with intent to distribute and distribution charges if there is an articulation of evidence which would indicate some sort of indicia of distribution.
TAYA GRAHAM: And aligns Mosby with progressive prosecutors across the country who have made similar commitments to not prosecute marijuana crimes. Mosby cited the same statistics, that marijuana arrests target people of color.
One of the reasons why we came to the conclusion that we were ultimately not going to prosecute possession of marijuana is because of the statistics and the disparate sort of enforcement of these laws on communities of color, and not the disparate use. The statistics, the data shows that the use among black and white people are the same. Yet in the city of Baltimore it has been an extreme problem, and for a very long time. In 2010 the ACLU put out a report in which, you know, nationally, if you are a black person, you were four times more likely to be arrested for mere possession of marijuana. In the city of Baltimore you were six times more likely to be arrested for possession of marijuana.
Excerpt is from therealnews.com/stories/prosecutor-refuses-to-try-pot-cases-but-police-pledge-to-continue-to-arrest See also foxbaltimore.com/news/local/mosby-to-stop-prosecuting-marijuana-possession-in-baltimore
Editor’s note: The article below tells an interesting story of the use of default judgments by RIAA lawyers against remote actors as an aspect of copyright enforcement in the music industry. It reflects the view of the Digital Music News author and others that the RIAA lawyers abuse litigation procedures when they use default judgments to enhance client rights. It may be that many lawyers would be less offended, and some might feel that securing default judgments against remote bad actors advances good public copyright policy, but the critical view of a number of music industry experts seems worth noting.
A copy of the relevant court opinion is here: https://torrentfreak.com/images/ripperdismiss.pdf
Don Allen Resnikoff, Editor
From Digital Music News: RIAA Lawyers Botched a Big One Against FLVTO.biz — So What’s Next?
by Paul Resnikoff
January 25, 2019
The RIAA received a stunning defeat at the hands of Russian stream-ripper, FLVTO.biz. The decision could have far-reaching implications for US-based music, film, TV, fashion, and other IP-focused industries.
This was sort of like the Los Angeles Rams losing 45-0 to the Arizona Cardinals. Not impossible, of course. Just very unlikely — unless the Rams showed up hungover and skipped practice all week.
Which brings us to the Recording Industry Association of America (RIAA), which represents major label goliaths Sony Music Entertainment, Warner Music Group, and Universal Music Group. In its latest battle, the well-funded RIAA squared off against a little-known site operator from Russia, and prepared for an easy victory.
The RIAA, aside from its own highly-paid executives and attorneys, contracted the pricey services of law firm Jenner & Block, a self-described ‘litigation powerhouse‘. The collective legal army went to war against tiny FLVTO.biz, as well as 2conv.com, both sites apparently owned by a guy living in Russia, Tofig Kurbanov.
Who?
At first, the RIAA and Jenner weren’t even sure that Kurbanov was a real person. Apparently that’s the name the RIAA’s lawyers found on some DNS registrations, and that seemed to be the extent of the investigation. The legal team filed against the shadowy operator — along with some mysterious ‘John Does’ — in the U.S. District Court for the Eastern District of Virginia.
The court is conveniently located a few miles away from the RIAA’s F Street offices in downtown Washington, D.C.
According to filings, it looked like the RIAA was trying to serve Mr. Kurbanov by email, instead of actually chasing him down. The whole thing seems a little half-baked, until you realize the strategy at play. Instead of hunting down Kurbanov, or whomever was actually operating these sites, the RIAA was [it seems to the author] actually hoping that nobody would respond.
Why?
Without a response, the RIAA would have scored a quick, default judgment against their overseas John Doe defendant. Decisive decision in hand, the trade group could then force site blocks from ISPs, DNS providers, and search engines, and even recruit assistance from federal agencies like the FBI and Department of Homeland Security.
The resulting decision could then be used to intimidate other YouTube stream-rippers, many of whom are also operating overseas.
This isn’t a brand-new legal tactic. Far from it. And the results are glorious — at least from the perspective of the RIAA. In effect, the plaintiff — in this case the major labels — get pretty much everything they ask for from a federal judge.
Mitch Stoltz, an attorney with the Electronic Frontier Foundation, described the strategy this way:
“These sites, run from outside the U.S., don’t bother appearing in U.S. court to defend themselves—and the labels know this. When one party doesn’t show up to court and the other wins by default, judges often grant the winning party everything they ask for. Record labels, along with luxury brands and other frequent filers of copyright and trademark suits, have been using this tactic to write sweeping orders that claim to bind every kind of Internet intermediary: hosting providers, DNS registrars and registries, CDNs, Internet service providers, and more. Some of these requested orders claim to cover payment providers, search engines, and even Web browsers. Judges often sign these orders without much scrutiny.”
But what if the ‘John Doe’ defendant actually responds?
That would never happen — or so the RIAA and Jenner attorneys [apparently] thought. After all, is a shadowy individual (or group) in Russia (or wherever) really going to fight back, much less show up in a US-based courtroom?
Of course not.
Unless, of course, they do. Which is essentially what happened with FLVTO.biz (technically, Mr. Kurbanov never appeared in person, because he doesn’t have a visa to travel to the United States).
It turns out that Tofig Kurbanov is not only a real person living in Rostov-on-Don, Russia. He was also keenly aware of the legal action against him. Despite the obvious jurisdictional issues — or maybe because of them — Kurbanov decided to respond.
And he responded in full force. Kurbanov did his research, and ultimately hired three different law firms. That included Val Gurvits of Boston Law Group, PC, who started scrappily fighting this case against the polished pros at Jenner.
Gurvitz, along with a team that included Virginia-based Sands Anderson PC and Boston-based Ciampa Fray-Witzer, LLP, immediately started going for the jugular. They argued that this case was filed in the wrong jurisdiction, given that FLVTO and 2conv are based in Russia.
Virginia’s a nice state, but it’s connection to FLVTO is tenuous, at best, according to the defense.
Gurvitz’s team quickly moved to toss the case, suggesting that perhaps California would be the better venue given its proximity to YouTube and the music industry’s nerve center. Jenner & Block fought back, arguing that somehow Virginia was an important market for Kurbanov, and beyond that, targeted by Kurbanov’s sites.
It was a stretch. And it didn’t work.
Not only was Kurbanov ‘showing up,’ he came out swinging. And the RIAA got knocked out in the first round.
Earlier this week, Eastern District Court of Virginia judge Claude M. Hilton ruled that the case simply lacked jurisdiction. But Hilton not only tossed the case from the District Court of Virginia, he also disqualified it from being refiled anywhere else in the United States — California or otherwise.
“Due to the Court’s finding that personal jurisdiction is absent… the Court need not address whether transfer to the Central District of California would be appropriate as that venue would also be without jurisdiction,” Hilton opined.
The RIAA was stunned. The group’s PR person, Jonathan Lamy, was still on vacation. Another exec, Cara Duckworth, told us that the organization hadn’t decided their next step. She was just digesting the decision herself.
Gurvitz said he expects the trade group to appeal. But instead of a slam dunk, the RIAA is now battling to protect a major litigation weapon against alleged copyright infringers. The decision not only dims the RIAA’s hopes of defeating FLVTO.biz, it also raises serious questions about whether other industries can use the same absentee tactic.
That includes the film, TV, gaming, adult, fashion, or any other IP-related industry facing copyright infringement threats from shadowy overseas operators.
“All too often, plaintiffs file actions in US courts against foreign defendants that have no connections with the US – and all too often foreign defendants are subjected to default judgments for failure to appear in a US court,” Gurvitz told us. “We are happy we were able to defend our client from having to defend this action in a US court thousands of miles away from where the relevant business activities take place.”
In the short term, Kurbanov is now free to operate FLVTO.biz and 2conv.com with impunity in the United States, and pretty much anywhere else in the world. But the RIAA’s expected appeal is now far more important than a pair of YouTube stream-rippers, thanks to an extremely inconvenient jurisdictional precedent.
Aside from the ethical qualms, the problem with the RIAA’s legal tactic is that there was a small chance that the shadowy Kurbanov would fight back.
Now, that little miscalculation could change the face of anti-copyright litigation forever.
Does Starbucks rip off coffee farmers?
Some reports suggests that the answer is yes, and has been for years. In contrast, the Starbucks website describes its policies as supportive of the economic interests of farmers. Following is an excerpt from an article at https://www.dailysabah.com/economy/2017/01/18/ethiopias-coffee-farmers-eye-more-fair-trade-amid-rising-share-in-global-market
For every kilogram of coffee beans an Ethiopian farmer sells for $3, it is estimated that people up in the supply chain make around $200.
There are an estimated 15 million farmers who produce 270,000 tons (297,600 tons) of coffee in Ethiopia, the fifth-largest producer in the world after Brazil, Vietnam, Columbia and Indonesia.
Around 95 percent of the coffee is produced by small farmers like 68-year-old Selkamo Kemissa, who work in their own farms and sell their produce to middlemen. These intermediaries are widely suspected of short changing them on the huge profit margins.
Kemissa told Anadolu Agency the Arabica coffee produced on his farm near the small town of Shebedino Woreda - located around 315 kilometers (196 miles) southeast of capital Addis Ababa - ends up in multinational chains like Starbucks, where a single cup of coffee could cost as much as what he gets for a kilogram or even more.
The FDA may be backsliding on quality control just as it’s approving more generics
The FDA approved a record 971 generic drugs in the fiscal year ending Sept. 30, according to a report from the accounting firm PricewaterhouseCoopers. That was a 94 percent increase over fiscal 2014, when 500 were approved.
Yet the number of so-called surveillance inspections done globally by the FDA—meant to ensure existing drug-making plants meet U.S. standards—dropped 11 percent, to 1,471, in fiscal 2018 from fiscal 2017. Those inspection numbers also decreased in fiscal 2017, which included Gottlieb’s first few months in office, falling 13 percent from the prior year. The figures were obtained through a public-records request.
Surveillance inspections of just U.S. drug factories declined 11 percent, to 693, from fiscal 2017 to fiscal 2018, the lowest going back for at least a decade, the data show. Such inspections have been falling since 2011, as the agency began focusing more on foreign manufacturers.
Meanwhile, from fiscal 2017 to fiscal 2018, surveillance inspections of foreign factories fell 10 percent, to 778. This was the second year-over-year decline, after surveillance inspections of foreign factories dropped 9 percent from fiscal 2016 to fiscal 2017, reversing a trend of rising inspections over most of the previous decade.
Excerpt from https://www.bloomberg.com/news/features/2019-01-29/america-s-love-affair-with-cheap-drugs-has-a-hidden-cost?cmpid=BBD020119_WKND&utm_medium=email&utm_source=newsletter&utm_term=190201&utm_campaign=weekendreading
From Brookings: UPCOMING EVENT
WEBINAR – The Flint water crisis: Lessons learned
Tuesday, Feb 05, 2019 1:00 PM-2:30 PM EST
Online only
REGISTER FOR WEBCAST here: https://attendee.gotowebinar.com/register/7825849173049604365
The Flint water crisis, involving lead contamination of the city’s drinking water and an outbreak of Legionnaires’ disease, has been on the national radar for years—but there are still unanswered questions. What happened, and how? What are the health, political, and economic implications for the city and its people? How widespread is the lead problem in America’s water supplies? How are water utilities and governments responding? What are the possible solutions to address this public health problem?
Join us on Tuesday, February 5, 1:00-2:30 pm EST for a webinar on these topics. We’ll begin with presentations by Anna Clark (Author, Poisoned City: Flint’s Water and the American Urban Tragedy) on Flint and Douglas Farquhar (Program Director, Environmental Health, National Conference of State Legislatures) on what’s happening in other communities.
The presentations will be followed by a discussion with webinar participants.
Phil the dog’s answer to Punxatawny Phil the groundhog’s spring weather forecast
Phil the dog believes in the science of global warming. He believes that shifting seasons are directly linked to warmer global temperatures. A slight change in temperature is enough to push the spring thaw earlier, and delay the first frost until later in the fall. These environmental changes will cause many trees and spring wildflowers to bloom earlier than in the past. As a result, winter will be shorter, spring earlier, summer longer, and fall arrives later.
Phil the dog relies on EPA data discussed at http://climatechange.lta.org/climate-impacts/shifting-seasons
Tim Wu disccusses his "Curse of Bigness" book on PBS NewsHour
https://www.pbs.org/newshour/show/why-tech-industry-monopolies-could-be-a-curse-for-society
Competition issues in Health Information Technology
In 2014, Katherine Jones and I wrote about competition policy issues affecting health information technology (HIT) businesses, particularly issues involving difficulties in sharing of electronic patient information among systems of competing companies. Seehttps://www.ftc.gov/system/files/documents/public_comments/2014/03/00020-88806.pdf
A business relevant to such competition issues is Epic Systems, an industry leader in health information technology. The company has been criticized for using proprietary software that puts competitors at a disadvantage because it obstructs sharing of patient data. An effect of reduced competition can be higher prices for users of HIT, such as large hospitals.
Sharing of patient data may be relatively simple among hospitals if they all use Epic proprietary software, but more difficult if one of the hospitals uses different proprietary software of a competitor.
In our earlier article we pointed out that in the past companies using proprietary technologies in other so-called “platform” markets such as computer software have achieved and maintained a dominant position in a developing market by limiting competitor access to their proprietary technology. The U.S. government’s action against Microsoft made such allegations of exclusionary conduct.
We pointed out that exclusionary conduct may be addressed through antitrust enforcement after the fact, as it was in the Microsoft case. But we suggested that a preferable approach is proactive government engagement that avoids the antitrust problem by facilitating and encouraging interoperability among products of competitors in the health information technology (HIT) markets. By “interoperability” we meant the extent to which HIT systems of different manufacturers can exchange data, and interpret that shared data.
To the extent that HIT systems are interoperable, so that HIT systems of different manufacturers can easily exchange data, there is less danger that network effects will lead to the dominance of the market by a single large firm. The consequences include lower prices for consumers of HIT, such as hospitals.
Interoperability in HIT markets has been an important component of announced federal healthcare policy. The U.S. Government has been actively involved in both promoting the use of HIT and encouraging the interoperability of HIT products. The use of HIT has been incentivized by federal legislation and reimbursement policies. A goal of the legislation has been to foster the “development of a nationwide health information technology infrastructure” to promote “a more effective marketplace, greater competition . . . [and] increased consumer choice.”
Federal legislation called on the Secretary of Health and Human Services (“HHS”) to invest in and take an active role in: “(1) Health information technology architecture that will support the nationwide electronic exchange and use of health information in a secure, private, and accurate manner. . . .” and “(5) Promotion of the interoperability of clinical data repositories or registries.”
So, what has happened since 2014?
A review of trade press suggests that the U.S. government has not taken strong steps to promote interoperability standards. The CEO of Epic Systems, Judy Faulkner, recently gave a speech in which she promoted Epic’s role in facilitating interoperability standards. She pointed out that her company’s role in promoting standards filled a gap left by lack of government action. There are no public indications of government antitrust scrutiny.
A recent trade press article by Margaret Rouse discusses the business of today’s Epic Systems in a helpful way. See https://searchhealthit.techtarget.com/definition/Epic-Systems-Corp?vgnextfmt=print
Ms. Rouse explains that Epic Systems remains one of the largest providers of health information technology, used primarily by large U.S. hospitals and health systems to access, organize, store and share electronic medical records. The company has a reputation as both a technological leader and one that comes with an expensive price -- sometimes more than $1 billion -- for its products and related installations.
Ms. Rouse says that since the federal government established electronic health record incentive programs in 2009 to promote the adoption of electronic health records through meaningful use of the technology, Epic has seen its client base grow. In 2017, the Milwaukee Journal Sentinel reported that Epic employed 9,700 people and earned revenue of $2.5 billion in 2016. Epic states that 190 million people across the world use its technology. Meanwhile, Forbes has estimated that at least 40% of the U.S. population has medical data stored on an Epic electronic health records (EHR) system, and Epic's clients include some of the biggest names in healthcare.
KLAS Research concluded in 2017 that Epic had the largest EHR market share in acute care hospitals at 25.8%. Epic's top competitor, Cerner Corp., took 24.6% of the market, showing the close tug of war between the two companies for customers. Other competitors include Allscripts (which in 2017 bought McKesson Corp.'s EHR technology), Meditech and AthenaHealth.
Ms. Rouse tells us that “Due to its influence, product costs and, in some cases, practices, the company is often criticized. One of the chief complaints, historically, has been against its EHR systems' lack of interoperability with other vendors' products. Epic seems to have recognized this problem and is taking steps to change.” Also,”The company was also not as fast as smaller EHR vendors to embrace cloud-based medical records systems.”
A recent American Hospital Association report complains about the continuing need to improve interoperability among HIT systems. See https://www.aha.org/system/files/2019-01/Report01_18_19-Sharing-Data-Saving-Lives_FINAL.pdf
The Report suggests, among other things, there needs to be improvement in “consistent use of standards, common vocabulary and 'rules of the road' to connect information-sharing networks. . . .” That improvement will also “improve the ability to distribute information within and across settings, between providers of care, with individuals and within the marketplace. . . .The end goal is complete data sharing via a non-proprietary, vendor-neutral data exchange platform, similar to how the country is served by cable technology.
According to the Report, “The current standards supporting our information sharing infrastructure are incomplete, implemented inconsistently, and may differ between systems. They may not be up to the task of seamless sharing of information. There is an urgent need to coalesce around improved standards that overcome the significant gaps making communication difficult between systems.”
So, in 2019 is there a continued need for government involvement in setting interoperability standards for HIT systems, despite some industry initiatives that have occurred? Is there a need for continuing antitrust scrutiny? Probably yes. The reasons include the goal of bringing down the costs of HIT to users, such as hospitals, and to the end users -- patients.
This posting is by Don Allen Resnikoff, who takes full responsibility for its content.
From The New York Times: Mentally Ill Prisoners Are Held Past Release Dates, Lawsuit Claims
New York keeps mentally ill people in prison after they have finished their sentences because of a lack of supportive housing for them, a lawsuit filed on their behalf argues.
https://www.nytimes.com/2019/01/23/nyregion/prisoners-mentally-ill-lawsuit.html
DC's Bread for the City Opens Its Doors to Furloughed Federal Employees and Contractors
January 10, 2019 by BFC in BFC Updates In the Community https://breadforthecity.org/blog-cat/bfc-updates
For nearly 45 years, Bread for the City has shown up for D.C., and D.C. has shown up for us. With help from our community, we assist tens of thousands of D.C. residents living with low income each and every year. As the government shutdown enters its third week, it’s time for us to show up again. We want furloughed workers to know that Bread for the City is here for you, too.
Beginning Monday, January 14, if you are a District of Columbia resident and are a furloughed federal worker or federal contractor currently out of work because of the furlough, you can visit our NW or SE Centers for a five day supply of groceries. In addition, our medical clinic, located in our NW Center is currently accepting new patients. Visit our services page for more information including hours of operation and documents we will need you to bring in.
To current clients: Bread for the City will continue to be here for you too.
But I also need to say something to our federal elected officials — and one in particular. At the heart of what we do is our sense of equity. When we have economic downturns or man-made crises such as this shutdown, people living with low incomes suffer most. One of the reasons this game of chicken is easy for the powers that be is that those in charge don’t suffer. The people who suffer most are the ones who already struggling to get by.
When our leaders make these kinds of decisions, it impacts everyday people. The ripple effect extends far beyond talking points and news cycles. This bickering over billions for a border wall is now threatening food stamps, housing subsidies and more.
But even in these stressful times, there are glimmers of hope, and our hope is always YOU.
To our donors and volunteers: When the government does not meet its obligations to the people, organizations like ours are all the more important. If this shutdown continues and more people have no choice but to seek help from organizations like Bread for the City, our existing resources — particularly the food program — may be pushed to their limit. In these trying times for so many, if you’re able to give just a little more to help your neighbors, please do. Visit https://www.breadforthecity.org/govshutdown.
And if you’re a furloughed worker looking for something positive to do in the midst of this crisis, we’re always looking for volunteers. Visit https://breadforthecity.org/volunteer/ to find out how you can help.
Rising Drug Prices Linked to Older Products, Not Just Newer, Better Medications
PITTSBURGH (Jan. 7, 2019) – It’s no secret that drug prices are increasing, but to what extent are rising costs explained by the advent of newer, better drugs? A study from the University of Pittsburgh and the UPMC Center for High-Value Health Care found that new drugs entering the market do drive up prices, but drug companies are also hiking prices on older drugs.
The paper, published in the January issue of Health Affairs, shows that for specialty and generic drugs, new product entry accounted for most of the rising costs, whereas for brand-name drugs, existing products explained most of the cost increases.
“It makes sense to pay more for new drugs because sometimes new drugs are more effective, safer or treat a new disease you didn’t have a treatment for. Sometimes new drugs do bring more value,” said lead author Inmaculada Hernandez, Ph.D., assistant professor at the Pitt School of Pharmacy. “But the high year-over-year increases in costs of existing products do not reflect improved value.”
The researchers examined the list price of tens of thousands of drug codes from a national database between 2005 and 2016 and UPMC Health Plan pharmacy claims over the same time period. Drugs were considered “new” for the first three years they were available, or in the case of generics, the first three years after patent expiration.
What they saw was that each year the price of brand-name oral medications increased by about 9 percent – nearly five times the rate of general inflation over the same time period – and the price of brand-name injectables increased by 15 percent. In both cases, soaring prices were overwhelmingly attributable to existing drugs.
For instance, the list price for Sanofi’s Lantus brand insulin increased by 49 percent in 2014. Lantus had been on the market for more than a decade.
“These types of insulin have been around for a while,” Hernandez said. “Whereas the original patent for Lantus expired in 2015, dozens of secondary patents prevent competition, and it is this lack of competition that allows manufacturers to keep increasing prices much faster than inflation.”
Excerpt from: https://www.upmchealthplan.com/pdf/ReleasePdf/2019_01_07.html
Justice Department’s Reversal on Online Gambling Tracked Memo From Adelson Lobbyists
“The legal reasoning behind the Justice Department’s unusual reversal this week of an opinion that paved the way for online gambling hewed closely to arguments made by lobbyists for casino magnate and top Republican donor Sheldon Adelson. In April 2017, one of the lobbyists sent a memo to top officials in the Justice Department, arguing that a 2011 opinion that benefited online gambling was wrong.
“Officials in the department’s Criminal Division, in turn, forwarded it to the Office of Legal Counsel, which had issued the opinion, and asked attorneys there to re-examine their stance that a law on the books for decades didn’t prohibit online gambling, according to documents and interviews with people familiar with the matter. ... The department’s new position was a victory for Mr. Adelson, who has poured millions into a multiyear lobbying campaign on the matter.”
WSJ https://www.wsj.com/articles/justice-departments-reversal-on-online-gambling-tracked-memo-from-adelson-lobbyists-11547854137?mod=hp_lead_pos4 (paywall) WSJ’S BYRON TAU in D.C. and ALEXANDRA BERZON in Los Angeles:
Anatomy of a big- payout class action:
$2.3M Fee Award in $6.9M Citigroup ERISA Class Action
January 7, 2019 | Posted in : Class Action, Expenses / Costs, Fee Award
A recent Law 360 story by Emily Brill, “Attys Get $2.3M Fee for $6.9M Citigroup ERISA Class Deal,” reports that a New York federal judge has awarded $2.3 million to the attorneys for a class of over 300,000 Citigroup Inc. 401(k) plan participants who negotiated a $6.9 million settlement in a long-running Employee Retirement Income Security Act suit in August. U.S. District Judge Sidney Stein granted final approval to the settlement and fee award closing the book on claims that a Citigroup committee stuffed the company’s 401(k) plan with Citigroup-affiliated funds even though other funds charged lower fees.
The case has been pending since 2007, and its closure came as a relief to class attorney James A. Moore of McTigue Law LLP. “The case was hard-fought for over a decade, and we think the result is an excellent one for plan participants,” Moore said. “Citigroup stopped offering through its 401(k) plan the high cost proprietary funds that were the subject of the lawsuit.” Moore added that he thinks the nearly $7 million recovery “sends a message to other employers that, under the law, they must manage retirement plans in the best interest of employees.”
The Citigroup 401(k) Plan Investment Committee and the class — a group of current and former Citigroup employees — told Judge Stein in August that they had reached a deal to end the case. Soon, Citigroup workers, former workers and retirees who invested in certain funds in the 401(k) plan between Oct. 18, 2001, and Dec. 1, 2005, will be notified of the money headed their way. Judge Stein signed off on the settlement notice.
He also signed an order awarding $2.3 million to the plaintiffs’ attorneys and $15,000 to each of the two class representatives. The order also approved devoting $374,100 of the settlement to case-related expenses, leaving roughly $4.2 million left for the class after all the deductions — attorneys’ fees, class representative fees and expenses — are made.
The settlement notice tells Citigroup workers that the class’s three attorneys and two representatives “have devoted many hours to investigating the claims, bringing this case, and pursuing it for almost 11 years” and that the attorneys “have not been paid for their time and expenses while the case has been pending.”
The class sued Citigroup and its 401(k) plan committee in October 2007, accusing them of putting the bank’s interests ahead of workers’ when stocking the employee retirement plan. The company and plan committee allegedly failed to remove or replace subpar, expensive Citigroup funds from the 401(k) plan’s lineup, allowing Citigroup to reap “substantial revenues” at plan participants’ expense while violating the Employee Retirement Income Security Act, which requires fiduciaries to make decisions in participants’ best interests, according to the complaint.
Citigroup was dropped as a defendant in 2010, leaving the 401(k) investment committee, another committee called the Benefit Plans Investment Committee of Citigroup Inc. and various individual committee members and officers to defend the suit. The class won certification in November 2017. Moore said Monday that the class has more than 300,000 members.
The case is Leber et al. v. The Citigroup 401(k) Plan Investment Committee et al., case number 1:07-cv-09329, in the U.S. District Court for the Southern District of New York.
Article source: http://www.thenalfa.org/blog/2-3m-fee-award-in-6-9m-citigroup-erisa-class-action/
Question To what extent is pharmaceutical industry marketing of opioids to physicians associated with subsequent mortality from prescription opioid overdoses?
Findings In this population-based, cross-sectional study, $39.7 million in opioid marketing was targeted to 67 507 physicians across 2208 US counties between August 1, 2013, and December 31, 2015. Increased county-level opioid marketing was associated with elevated overdose mortality 1 year later, an association mediated by opioid prescribing rates; per capita, the number of marketing interactions with physicians demonstrated a stronger association with mortality than the dollar value of marketing.
Meaning The potential role of pharmaceutical industry marketing in contributing to opioid prescribing and mortality from overdoses merits ongoing examination.
For full report: https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2720914
from Public Citizen Consumer Law & Policy Blog
CFPB and NY settle with Sterling Jewelers over enrolling customers in credit cards without the customers' consent
Posted: 17 Jan 2019 01:05 PM PST
The State of New York and the Consumer Financial Protection Bureau (which is not shut down) yesterday settled claims against Sterling Jewelers, based on findings that that the company violated the Consumer Financial Protection Act of 2010 by opening store credit-card accounts without customer consent; enrolling customers in payment-protection insurance without their consent; and misrepresenting to consumers the financing terms associated with the credit-card accounts. The CFPB also found Truth in Lending Act violations, based on Sterling signing customers up for credit-card accounts without having received an oral or written request or application from them.
Under the settlement, the company will pay a $10 million civil money penalty to the CFPB and a $1 million civil money penalty to New York. The settlement also includes injunctive relief designed to prevent the continuation of the wrongdoing.
The consent order is here. https://s3.amazonaws.com/files.consumerfinance.gov/f/documents/bcfp_sterling-jewelers_proposed-consent-order.pdf
So apparently Wells Fargo is not the only company to sign people up for accounts without consent. The scope of wrongdoing by Wells Fargo, and the penalty, were of course much larger.
Source: https://pubcit.typepad.com/clpblog/2019/01/cfpb-and-ny-settle-with-sterling-jewelers-over-enrolling-customers-in-credit-cards-without-the-custo.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+ConsumerLawPolicyBlog+%28Consumer+Law+%26+Policy+Blog%29
Attorney General nominee William Barr testifies on antitrust
Excerpt from article By TED JOHNSON
WASHINGTON — William Barr, President Donald Trump’s nominee for the next attorney general, said that it was “more important” that the Department of Justice get involved in questions of how effective antitrust enforcers have been in protecting competition amid the growth of tech giants.
“I would like to weigh in on some of these issues,” Barr said at his confirmation hearing on Tuesday, adding that privacy and data gathering were other areas of concern.
Earlier in the day, Barr said he is “sort of interested in stepping back and reassessing or learning more about how the Antitrust Division has been functioning and what their priorities are.”
“I don’t think big is necessarily bad, but I think a lot of people wonder how such huge behemoths that now exist in Silicon Valley have taken shape under the nose of antitrust enforcers.”
He added that there was a way “to win in that marketplace without violating antitrust laws, but I want to find out more about that dynamic.”
Barr expressed his concerns amid increased scrutiny in Washington over the growth of tech companies like Facebook, Google, and Amazon. The Federal Trade Commission has been examining the effectiveness of antitrust laws in a series of hearings, but it is unclear if that will ultimately lead to any changes in legislation.
Barr also said that he would “absolutely” recuse himself from the Justice Department’s antitrust lawsuit against the AT&T-Time Warner merger. A three-judge panel is considering the the DOJ’s appeal.
Sen. Amy Klobuchar (D-Minn.) asked Barr about his prior criticism of the Justice Department’s decision to try to block the transaction. When he was a board member of Time Warner, Barr wrote an affidavit in support of AT&T-Time Warner’s contention that the merger was politically motivated. He wrote in the affidavit that cited Trump’s “prior public animus toward this merger” as a reason many would view the lawsuit as political motivated.
But at the confirmation hearing, Barr toned down his criticsm. He said that his affidavit “speaks for itself,” and that he was expressing concern that the Antitrust Division “wasn’t engaging in some of our arguments…I am not sure why they acted the way they did.”
Makan Delrahim, the chief of the DOJ’s Antitrust Division, has denied that the White House influenced the decision to challenge the merger.
from https://variety.com/2019/politics/news/william-barr-antitrust-impact-tech-giants-1203108418/
The NTEU lawsuit on behalf of unpaid federal workers--cite to Complaint
Excerpt from filed Complaint:
This is a collective action lawsuit, brought by Eleazar Avalos and James Davis, on behalf of themselves and all similarly situated individuals. The complaint makes two central allegations. First, it alleges that the government’s failure to timely pay overtime wages earned on December 22, 2018, to Fair Labor Standards Act (FLSA) nonexempt employees like Mr. Avalos and Mr. Davis is illegal. Second, the complaint further alleges an FLSA violation based upon the expected government failure to pay a minimum wage and overtime wages earned for the pay period beginning December 23, 2018 and ending on January 5, 2019. They seek payment of the owed wages, an equal amount of liquidated damages, and other appropriate remedies.
The Complaint is here: https://www.nteu.org/~/media/Files/nteu/docs/public/letters/2018/nteu-shutdown-flsa-complaint.pdf?la=en
NYT opinion: Opinion
Can States Fix the Disaster of American Health Care?
The governor of California has proposed some big ideas. Who knows whether he can pull them off, but there’s reason for hope.
By Elisabeth Rosenthal
See the Op-Ed at Opinion https://www.nytimes.com/pages/opinion/index.html
From USDOJ:
Reconsidering Whether the Wire Act Applies to Non-Sports Gambling
This [USDOJ] Office concluded in 2011 that the prohibitions of the Wire Act in 18 U.S.C. § 1084(a) are limited to sports gambling. Having been asked to reconsider, we now conclude that the statutory prohibitions are not uniformly limited to gambling on sporting events or contests. Only the second prohibition of the first clause of section 1084(a), which criminalizes transmitting “information assisting in the placing of bets or wagers on any sporting event or contest,” is so limited. The other prohibitions apply to non-sportsrelated betting or wagering that satisfy the other elements of section 1084(a)
Full USDOJ Statement: https://www.justice.gov/olc/file/1121531 [the URL is there at the bottom of the page, despite the shut down warning]
THE FTC THINKS YOU PAY TOO MUCH FOR SMARTPHONES. THEY BLAME QUALCOMM
Excerpt from: https://www.wired.com/story/ftc-thinks-you-pay-too-much-smartphones-heres-why/?
Qualcomm CEO Steven Mollenkopf told a federal court Friday that the company requires buyers of its chips to also license its patents, but it argued that it does so for legitimate business reasons.
THE FEDERAL TRADE Commission thinks you're paying too much for smartphones. But it doesn’t blame handset makers like Apple and Samsung or wireless carriers. Instead, the agency blames Qualcomm, which owns key wireless technology patents and makes chips that can be found in most high-end Android phones and many iPhones.
Qualcomm charges companies like Apple a set percentage of the total price of a phone in exchange for the right to use its technology, according to the antitrust suit filed by the FTC. The percentages vary, but Qualcomm generally charges 5 percent of the value of a device, up to a maximum of about $20 per device, according to a legal brief filed by Qualcomm.
Phone makers like Apple and Huawei argue that Qualcomm demands a larger cut of each phone sale than is fair, but that they pay because Qualcomm essentially threatens to cut off their supply of important wireless chips if they don’t. The FTC describes this as a "tax" on cellular phones that drives up prices and hurts competition.
In court Friday, Apple executive Tony Blevins accused the chipmaker of strong-arm tactics. Blevins said that during negotiations in 2013, Qualcomm president Cristiano Amon told him, "I'm your only choice, and I know Apple can afford to pay it,” CNET reports.
You pay $4 for a cup of coffee, but farmers earn less than a cent a cup
* A crisis is brewing after green coffee prices slide
* Calls for more value to be added in producing countries
Excerpts from article by Aaron Maasho, Nigel Hunt
Now, a slump in global coffee prices to their lowest in nearly 13 years in September is raising questions about whether it’s worth growing beans at all in some of the traditional coffee heartlands of Central America, Colombia and Ethiopia.
The industry has seen a wave of acquisitions as companies such as Nestle, JAB Holding and Coca-Cola spend billions to boost their market share.
For struggling farmers, though, times are tough. Growers around the world have warned coffee company executives in the West of a growing “social catastrophe”, unless they can help to raise farmers’ incomes.
In a letter last year to chief executives at companies such as Starbucks, Jacobs Douwe Egberts (JDE) and Nestle, a group representing growers in more than 30 countries said there was a risk farms would be abandoned, fuelling social and political unrest as well as more illegal migration.
Some companies are responding. Starbucks, for example, has committed $20 million to help smallholders they do business with in Central America until coffee prices rise above their cost of production. “For us that is an initial step, acknowledging we need to do something helpful in the near term in the countries that need it most,” said Michelle Burns, head of coffee at Starbucks, which buys about 3 percent of the world’s coffee.
One problem for Ethiopian farmers is that most of their coffee is exported in bulk as green, unroasted beans, with most of the processes that add the greatest value taking place afterwards in the countries that consume the coffee.
“There hasn’t been a really significant change in how coffee has been transported, purchased or produced in many decades. It has always just been extracted from the country,” said Rob Terenzi, co-founder of Vega Coffee in the United States.
Fair Trade arrangements for farmers are seen by Terenzi and some other observers as insufficient.
See article at https://www.reuters.com/article/coffee-farmers/coffee-price-slump-leaves-farmers-earning-less-than-a-cent-a-cup-idUSL8N1YJ4D2?te=1&nl=dealbook&emc=edit_dk_20190115
A Pennsylvania federal judge issued a nationwide injunction last Monday blocking Trump administration carve-outs to the Affordable Care Act's birth control mandate from taking effect
From the Opinion:
Plaintiffs, the Commonwealth of Pennsylvania and the State of New Jersey (collectively “the States”), have sued the United States of America, President Donald J. Trump, the United States Secretary of Health and Human Services Alex M. Azar II, the United States Secretary of the Treasury Steven T. Mnuchin, and the United States Secretary of Labor Rene Alexander Acosta in their official capacities, as well as each of their agencies (collectively “Defendants”), seeking to enjoin enforcement of two Final Rules that grant exemptions to the Affordable Care Act’s requirement that health plans cover women’s preventive services. The Final Rules “finalize” two Interim Final Rules, which Defendants issued in October 2017 and which this Court enjoined soon thereafter, see Pennsylvania v. Trump, 281 F. Supp.3d 553, 585 (E.D. Pa. 2017). On November 15, 2018, while their appeal of that preliminary injunction was pending, Defendants promulgated the Final Rules currently before the Court. The States move to enjoin enforcement of the Final Rules arguing that, like the IFRs before them, the Final Rules violate a variety of constitutional and statutory provisions. For the reasons set forth below, Plaintiffs’ Case 2:17-cv-04540-WB Document 136 Filed 01/14/19 Page 2 of 65 3 Second Motion for a Preliminary Injunction shall be granted.
From the Order:
ORDERED that Defendants Alex M. Azar II, as Secretary of the United States Department of Health and Human Service; the United States Department of Health Case 2:17-cv-04540-WB Document 135 Filed 01/14/19 Page 1 of 2 2 and Human Services; Steven T. Mnuchin, as Secretary of the United States Department of Treasury; the United States Department of Treasury; Rene Alexander Acosta, as Secretary of the United States Department of Labor; and the United States Department of Labor;1 and their officers, agents, servants, employees, attorneys, designees, and subordinates, as well as any person acting in concert or participation with them, are hereby ENJOINED from enforcing the following Final Rules across the Nation, pending further order of this Court: 1. Religious Exemptions and Accommodations for Coverage of Certain Preventive Services Under the Affordable Care Act, 83 Fed. Reg. 57,536 (Nov. 15, 2018); and 2. Moral Exemptions and Accommodations for Coverage of Certain Preventive Services Under the Affordable Care Act, 83 Fed. Reg. 57,592 (Nov. 15, 2018).
The Order and Opinion are here:
https://www.attorneygeneral.gov/wp-content/uploads/2019/01/2019-01-14-Order.pdf
https://www.courthousenews.com/wp-content/uploads/2019/01/injunction-opinion.pdf
NYT: Gavin Newsom dives into the highly charged debate over prescription drug prices in his first week as California’s governor
His idea: Find strength in numbers. Within hours of taking office on Monday, Mr. Newsom signed an executive order proposing a plan that would allow California to directly negotiate with drug manufacturers.
The state would bring to the bargaining table not just the 13 million beneficiaries of Medi-Cal (California’s version of Medicaid), but also other state agencies that purchase drugs, including coverage for state workers and prisoners. Down the road, the plan could possibly allow private insurers and employers to join in the savings.
“We think this is a significant step forward,” Mr. Newsom said in a video address. “It’s the right thing to do, and I recognize deeply the anxiety so many of you feel around the issues related to the cost of prescription drugs, and I hope California’s efforts here can lead the way for other states to consider the same.”
https://www.nytimes.com/2019/01/11/health/drug-prices-california.html
The Supreme Court has declined to hear an appeal from ExxonMobil regarding Massachusetts Attorney General Maura Healey’s climate change investigation
The Court’s decision requiring production of documents could have implications beyond the state of Massachusetts as Exxon is forced to hand over documents detailing what it knew about climate change and when.
Healey isn't alone in investigating ExxonMobil. In October, former Democratic New York Attorney General Barbara Underwood announced a lawsuit against Exxon Mobil alleging the company misled investors regarding the risk that climate change regulations posed to its business. The probe had been initiated by her predecessor, former Democratic New York Attorney General Eric Schneiderman.
Other States are potential litigants against ExxonMobil.
To find court filings and documents related to the Mass. AGO's investigation of Exxon Mobil: https://www.mass.gov/lists/attorney-generals-office-exxon-investigation
From Elizabeth Warren's letter to Comerica on direct deposit fraud issues:
I am writing to seek information regarding security breaches in Comerica's Direct Express debit card program which led to hundreds of Americans becoming victims of fraud when their Social Security, disability, or other federal benefit payments were stolen. This program was managed by Comerica via the now discontinued Direct Express Cardless Benefit Access Service.
Complaints from my constituents, confirmed by detailed reporting in the American Banker, described your company's security vulnerabilities, your mismanaged responses to data breaches, and your misleading and cruel customer service tactics when harmed consumers sought help. I am particularly concerned about the lack of transparency about the security breaches and subsequent fraud schemes that compromised Americans' federal benefits.
The Department of Treasury partners with Comerica and other financial agents to distribute monthly federal benefit payments on behalf of the Social Security Administration, the VA, and at least five other federal agencies. 1 Comerica has administered the Direct Express program since 2008 and provides prepaid debit cards that allow recipients without bank accounts to electronically access Social Security, and other federal benefits, without relying on physical checks. But according to reports "criminals .... stole Direct Express card numbers, addresses and three-digit card identifiers, enabling them to make fraudulent online purchases. In some cases, criminals also called Direct Express to report cards as lost or stolen, or to have PIN numbers changed, and had payments routed to MoneyGram locations where they could pick up a check and cash it."
The letter is at https://www.warren.senate.gov/imo/media/doc/2018.10.16%20Letter%20to%20Comerica%20Bank%20re%20Direct%20Express.pdf
Hospice care and "Do not resuscitate" orders for people with advanced dementia?
Advances in health care can mean an increase in the number of older people suffering from dementia. It may not be obvious that advanced dementia is a terminal illness, but some medical people see it that way. The issue that follows from that point of view is whether a “do not resuscitate” policy and hospice care are appropriate for people with advanced dementia. The issue can be controversial. Some will see the withholding of medical care from a person with advanced dementia as cruel, or even immoral. Others will think that withholding of care is humans, allowing the patient to die with dignity. An NIH article at https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4396757/
helpfully reviews the issues. It discusses care options for patients with advanced dementia, including family counseling issues.
Posting by Don Allen Resnikoff
From DMN:
RCA Records Faces Heavy Pressure to Drop R. Kelly — So Far, No Response
In the wake of the #MeToo movement, pressure continues to build around R. Kelly.
In the past week, Lifetime has aired a six-part documentary featuring women describing sexual misconduct from the singer. The damning biopic, Surviving R. Kelly, chronicles numerous issues involving allegations of sexual assault involving multiple women.
After that documentary aired, the Rape, Abuse and Incest National Network’s sexual crisis hotline received 20% more calls. RAINN president Scott Berkowitz says this is common after high-profile cases.
The story continues here. https://www.digitalmusicnews.com/2019/01/09/rca-records-faces-heavy-pressure-to-drop-r-kelly-no-response-yet/
From Public Citizen
The Growing Rise of Megacompanies Hurts Consumers and Damages Our Democracy
REMINGTON A. GREGG --Consumer & Worker Safeguards--, -Antitrust & Competition Laws-
This month, Apple became the first publicly-traded American company to reach $1 trillion in market value. It is now one of the most powerful companies in the world both in revenue and in the share of the market that it holds. In 2017, Apple took home 79% of the global profit share for smartphones. What does this milestone mean for American consumers?
Megacompany monopolization is not unique to Apple, or even the tech industry. Five banks control half of all assets in the American financial system. Thirty publicly traded companies collect half of the profits produced by all publicly traded companies in the market. According to Business Insider, the difference between how much it costs American companies to make products and how much they make selling products—a mechanism that experts use to measure how much power companies have in the marketplace—is at the highest level since 1950.
When companies consolidate, it makes it harder for plucky startups to gain a foothold as a competitor. As a result, consumers have fewer options, which can drive prices up and innovation down.
Apple has spent decades fostering a consumer-invested ecosystem where users become so familiar and comfortable with its products that it’s difficult to switch another company. This ecosystem is so strong that other companies struggle to create similar systems, effectively allowing Apple to monopolize the market. However, Apple is not the only tech titan set to monopolize the market. Only about 1% of smartphone consumers use an operating system that is not made by Apple or Google.
In industries where corporate consolidation is rampant, such as the tech field, workers’ share of the overall pie is shrinking because these merged companies are focused on efficiency and need fewer workers to perform the necessary jobs, which means fewer people employed in quality, high paying jobs. This leads to an overall decline of the share of the nation’s wealth that goes to workers. In addition, while Apple’s valuation soared to new heights this week, it is aggressively outsourcing its workforce out of the country, taking advantage of poorly-paid workers in other countries and robbing Americans of good jobs.
U.S. Supreme Court Justice Louis Brandeis long ago warned against the “curse of bigness” in corporate power. During the Progressive Era of the 1910s and 1920s, American trustbusters sought to rein-in excessive corporate power by enacting bold laws such as the Clayton and Sherman Act, and the Federal Trade Commission Act, which created the Federal Trade Commission (FTC), to protect competition. However federal antitrust enforcement, the Department of Justice and the FTC, have not used their enforcement powers robustly to curb excessive concentration. Market commentators may argue that stopping companies like Apple, Google, and Amazon from driving out their competitors from the marketplace is impossible. But they are wrong. Congress can fix our antitrust laws to stop companies from growing so big that they stamp out all competition, and Public Citizen will continue to advocate for strong antitrust laws and enforcement that protects consumers against corporate monopolies.
https://citizenvox.org/2018/08/15/the-growing-rise-of-megacompanies-hurts-consumers-and-damages-our-democracy/
Ocasio-Cortez reportedly in line for banking post, and that could be bad news for Wall Street
See https://www.cnbc.com/2019/01/11/ocasio-cortez-in-line-for-banking-post-and-that-could-be-bad-news-for-wall-street.html
Big Vaping Companies v. regulators:
F.D.A. Accuses Juul and Altria of Backing Off Plan to Stop Youth Vaping
By Sheila Kaplan
Jan. 4, 2019
WASHINGTON — The Food and Drug Administration is accusing Juul and Altria of reneging on promises they made to the government to keep e-cigarettes away from minors.
Dr. Scott Gottlieb, the agency’s commissioner, is drafting letters to both companies that will criticize them for publicly pledging to remove nicotine flavor pods from store shelves, while secretly negotiating a financial partnership that seems to do the opposite. He plans to summon top executives of the companies to F.D.A. headquarters to explain how they will stick to their agreements given their new arrangement.
Dr. Gottlieb was disconcerted by the commitments the companies made in the deal announced Dec. 19, under which Altria, the nation’s largest maker of traditional cigarettes, agreed to purchase a 35 percent — $13 billion — stake in Juul, the rapidly growing e-cigarette start-up whose products have become hugely popular with teenagers. Public health officials, as well as teachers and parents, fear that e-cigarettes have created a new generation of nicotine addicts.
“Juul and Altria made very specific assertions in their letters and statements to the F.D.A. about the drivers of the youth epidemic,” Dr. Gottlieb said in an interview. “Their recent actions and statements appear to be inconsistent with those commitments.”
In October, after meeting with Dr. Gottlieb, Altria had agreed to stop selling pod-based e-cigarettes until it received F.D.A. permission or until the youth problem was otherwise addressed. In doing so, Howard A. Willard III, Altria’s chief executive, sent the F.D.A. a letter agreeing that pod-based products significantly contribute to the rise in youth vaping.
But the new deal commits the tobacco giant to dramatically expanding the reach of precisely those types of products, by giving Juul access to shelf space in 230,000 retail outlets where Marlboro cigarettes and other Altria tobacco products are sold. (Juul currently sells in 90,000 stores.)
It is a development that startled the F.D.A., which in September had threatened to pull e-cigarettes off the market if companies could not prove within 60 days that they could keep the products away from minors. Altria, Juul and three tobacco companies sent the detailed plans spelling out how they would comply with the agency’s request. Now, those plans appear in jeopardy, Dr. Gottlieb said.
“I’m reaching out to both companies to ask them to come in and explain to me why they seem to be deviating from the representation that they already made to the agency about steps they are taking to restrict their products in a way that will decrease access to kids,” Dr. Gottlieb said.
Dr. Scott Gottlieb, the F.D.A. commissioner, has accused both companies of negotiating with him in bad faith. It is possible that the F.D.A. will pressure Altria to keep Juul flavor pods off its shelf space, but the tobacco company is not likely to consent.
https://www.nytimes.com/2019/01/04/health/fda-juul-altria-youth-vaping.html
About shooting deer in Rock Creek Park
My 11 year old granddaughter was upset by a bright pink sign near the Rock Creek Park Nature Center announcing planned sharpshooting of deer. My granddaughter complained that birth control by sterilizing deer would be the more humane approach.
Several organized groups support birth control for deer as a way to control population. They have the same view as my granddaughter: they believe that sterilization is more humane than shooting deer. The groups include the Humane Society, In Defense of Animals, and the National Parks Conservation Association.
I’ve told my granddaughter that I applaud her taking a stand in opposition to shooting deer, and I encouraged her to support the Human Society, In Defense of Animals, and the National Parks Conservation Association as they encourage sterilization rather than shooting.
Pasted in below is part of an article published by people at the National Parks Conservation Association. Among other things, It discusses an unsuccessful law suit against the Park Service brought a few years ago:
The move [to shoot deer] has upset those who prefer birth control over bullets. They want deer to live out their normal lifespans in places where hunting is off limits. Sometimes they sue to prevent the cull.
This happened to Rock Creek Park when a handful of private D.C. citizens, and In Defense of Animals, a national animal-protection nonprofit, filed a lawsuit in 2012. They alleged that the Park Service is cherry-picking its science, and that the park’s plan is inhumane and unnecessary because successful reproductive control exists.
“We love both the deer and the national park, but the decision to kill the deer has affected the public’s ability to enjoy the park and has ruined the Park Service’s reputation here,” says Carol Grunewald, a plaintiff whose property is near the park. “Our scientists show that Rock Creek Park can easily support 300 deer. But regardless of the numbers, the public will no longer stand for the routine, mass extermination of animals.”
Their legal petition included a scientific analysis by Oswald Schmitz, a professor at Yale’s School of Forestry and Environmental Studies, stating that deer don’t have an adverse impact on the park’s vegetation because forests are self-thinning. That is, seedlings compete for sunlight and other resources, most die, and in the end, a thousand seedlings in an area, for example, may produce only 20 trees with or without deer present.
Their action delayed the park’s cull by a year, but ultimately a court dismissed the case on the grounds that Congress granted the Park Service the authority to act in Rock Creek Park’s interest.
Although not a plaintiff in the lawsuit, the Humane Society of the United States (HSUS) also criticized the park’s plan during the public comment period, championing the nonlethal solution of using a fertility-control vaccine on the herd as an alternative.
“We think Rock Creek’s plan is a wasteful killing program and a lost opportunity to repress the growth rate,” says Stephanie Boyles Griffin, senior director of innovative wildlife management and services at HSUS. The group offered to pay 50 percent of the cost of sterilizing the park’s deer. “We asked park officials to give fertility control a chance, to show they had explored and exhausted all methods before resorting to lethal control,” she says. “The problem wasn’t created overnight, so why does it have to be solved overnight?”
This posting is by Don Allen Resnikoff, who takes full responsibility for its content
From Public Citizen:
CFPB Complaint Database Scores Win for Times Columnist
Posted: 04 Jan 2019 12:21 PM PST
by Jeff Sovern
The CFPB's former acting director, Mick Mulvaney, compared the Bureau's public database to Yelp and threatened to take it private, though he never did so. Director Kraninger has not made public her plans for the database, to the best of my knowledge, and so public access to the complaints may still be at risk. We have reported before how the database has helped even a consumer law expert. Now Pulitzer-Prize winning NY Times columnist Michelle Goldberg reports how the database helped her secure an $11,000 refund after her own efforts to work things out with her bank had failed:
I’d been signed up for a dubious program that purported to protect users’ credit in certain emergency situations. My bank had been accused of fraudulent practices in connection with it and fined $700 million by the Consumer Financial Protection Bureau, * * * I tried, maddeningly, to seek redress from the bank — cycling through phone trees, screaming at automated operators. No one could tell me how I’d been enrolled in the program, or for how long.
Eventually, I turned to the C.F.P.B. itself, filling out a simple form on its website. A few weeks later, I was notified that the bank had been deducting money from my account for years, and I was being refunded more than $11,000.
I wonder how many consumers have a similar story to tell. House Financial Services Chair Maxine Waters has said she will focus on the Bureau. This seems like one of many topics worth congressional attention.
From the Minnesota AG press release (October 2018) on its litigation against drug companies concerning insulin pricing
Press ReleaseTuesday, October 16, 2018
Attorney General Lori Swanson Files Lawsuit Against Pharmaceutical Companies Over Deceptive Price Spikes For Insulin
Price Hikes More Than Doubled the Cost Of Diabetes Medication
Minnesota Attorney General Lori Swanson today filed a lawsuit against the nation’s three major manufacturers of insulin used to treat diabetes after prices more than doubled in recent years. The lawsuit alleges that the drug companies—Sanofi-Aventis U.S. LLC, Novo Nordisk, Inc., and Eli Lilly and Co.—deceptively raised the list prices of insulin, making it less affordable to patients in high deductible health plans, the uninsured, and senior citizens on Medicare.
“Insulin is a life-or-death drug for people with diabetes. Many people can’t afford the price hikes but can’t afford to stop taking the medication either,” said Attorney General Swanson.
The list price of some insulin products has more than doubled since 2011 and tripled since 2002. For example, the cost of Levemir increased from $120.64 for 100 units/ml vial in 2012 to $293.75 in 2018; HumaLog increased from $122.60 for 100 units/ml vial in 2011 to $274.70 in 2017; and Lantus increased from $99.35 in 2010 when it first entered the market to $269.54 in 2018.
The lawsuit alleges that the drug companies fraudulently set an artificially high “list” price for their insulin products but then negotiated a lower actual price by paying rebates to pharmacy benefit managers (PBMs). A PBM is a company retained by a health plan to negotiate prices with drug companies and develop “formularies” of approved drugs that policyholders may take. Drug companies want their drugs to be on the formulary because if a drug is not on the formulary, it is not covered by the health plan or costs more. Pharmaceutical companies obtain favorable placement of their products on PBM formularies by artificially raising their list prices and then offering rebates to the PBM in exchange for favorable formulary placements.
PBMs normally get paid in part based on the “spread” between the list price of a drug and the net price paid by the health plan after the rebates (i.e. the greater the “spread,” the higher the compensation.) Because drug companies want their drugs to be on the formulary, they raise list prices so they can offer higher “rebates” or “spreads” to PBMs than their competitors. This causes the “list price” of the drugs to spiral upward. Health insurers receive a portion of the rebates from the PBM and do not pay the list price. Patients who are in high deductible health plans, who are uninsured, or who are on Medicare, however, may end up paying the artificial list price because they do not get the rebates.
Thus, the drug companies establish two prices for their insulin products: a higher artificial list price and the much lower, secret net price that insurance companies pay, which is confidential. PBMs and manufacturers do not disclose the rebates paid for favorable formulary placement, claiming this information is a “trade secret.” In most industries, competitors normally compete with one another to offer lower prices but here, the drug companies compete with each other by raising their prices so they can give larger rebates to the PBMs who are responsible for the placement of their products.
The “spread” between the list and net prices paid by PBMs has increased dramatically in recent years. For example, Lantus’s spread increased seven-fold between 2009 and 2015; HumaLog’s spread nearly tripled between 2009 and 2015; and Levemir’s spread nearly doubled between 2011 and 2014.
The lawsuit alleges that the list prices the drug companies set are so far from their net prices that they are not an accurate approximation of the true cost of insulin and are deceptive and misleading.
Underinsured and uninsured patients who purchase insulin at a pharmacy are unaware of the product’s net price and do not benefit from the rebates or discounts negotiated by PBMs, but instead make payments based on the deceptive list price published by the manufacturers. There are currently nearly 350,000 Minnesotans without health coverage.
The products included in the lawsuit include Sanofi’s Lantus, Novo Nordisk’s NovoLog, and Eli Lilly’s HumaLog, among others.
See https://www.ag.state.mn.us/Office/PressRelease/20181016_InsulinPriceHikes.asp
WSJ: CVS, UnitedHealth, Humana and other health insurers’ bids to manage Part D prescription-drug plans for seniors have been consistently off in ways that benefit the companies at the expense of taxpayers
1
Joseph Walker and
Christopher Weaver
January 4, 2019
Excerpts from https://www.wsj.com/articles/the-9-billion-upcharge-how-insurers-kept-extra-cash-from-medicare-11546617082?mod=hp_lead_pos1 (Paywall)
Each June, health insurers send the government detailed cost forecasts for providing prescription-drug benefits to more than 40 million people on Medicare.
Year after year, most of those estimates have turned out to be wrong in the particular way that, thanks to Medicare’s arcane payment rules, results in more revenue for the health insurers, a Wall Street Journal investigation has found. As a consequence, the insurers kept $9.1 billion more in taxpayer funds than they would have had their estimates been accurate from 2006 to 2015, according to Medicare data obtained by the Journal.
Those payments have largely been hidden from view since Medicare’s prescription-drug program was launched more than a decade ago, and are an example of how the secrecy of the $3.5 trillion U.S. health-care system promotes and obscures higher spending.
Overdoing ItHealth insurers reaped $9 billion in additional revenue from 2006 to 2015 byoverestimating drug costs to Medicare and keeping a share of the extra money.Extra revenue kept by insurersSource: Centers for Medicare and Medicaid Services
.billion2006’07’08’09’10’11’12’13’14’150.00.20.40.60.81.01.21.4$1.62009x$1.08 billion
Medicare’s prescription-drug benefit, called Part D, was designed to help hold down drug costs by having insurers manage the coverage efficiently. Instead, Part D spending has accelerated faster than all other components of Medicare in recent years, rising 49% from $62.9 billion in 2010 to $93.8 billion in 2017. Medicare experts say the program’s design is contributing to that increase. Total spending for Part D from 2006-15 was about $652 billion.
The cornerstone of Part D is a system in which private insurers such as CVS Health Corp. , UnitedHealth Group Inc. and Humana Inc.submit “bids” estimating how much it will cost them to provide the benefit. The bids include their own profits and administrative costs for each plan. Then Medicare uses the estimates to make monthly payments to the plans.
After the year ends, Medicare compares the plans’ bids to the actual spending. If the insurer overestimated its costs, it pockets a chunk of the extra money it received from Medicare—sometimes all of it—and this can often translate into more profit for the insurer, in addition to the profit built into the approved bid. If the extra money is greater than 5% of the insurer’s original bid, it has to pay some of it back to Medicare.
For instance, in 2015, insurers overestimated costs by about $2.2 billion, and kept about $1.06 billion of it after paying back $1.1 billion to the government, according to the data reviewed by the Journal.
FDA on fraudulent diet medications
We checked the FDA web site for advice on fraudulent diet drugs after a reader sent us a suspicious looking ad.
The main point of the FDA video and text posting below is that many dietary supplements that promise weight loss contain hidden and dangerous ingredients. The FDA ability to regulate dietary supplements is limited.
See https://www.fda.gov/drugs/resourcesforyou/consumers/buyingusingmedicinesafely/medicationhealthfraud/ucm234592.htm
Cardless ATMs expand despite security risks
Jan. 3, 2019
Cardless ATMs are on the rise, driven partially by the perception that they are safer to use than physical debit cards for withdrawing cash, according to bankrate.com. Besides allowing for faster cash withdrawals, cardless ATMs, combined with mobile wallets, could make cash unnecessary.
Last year, Chase and Fifth Third allowed card-free ATM access, while PNC followed suit at select terminals. In addition, 3,500 credit unions allowed members to use cardless ATMs via the Co-op Financial Services network.
Cardless ATMs remove the risk of card skimming, the biggest type of fraud afflicting ATMs, but they are not immune to theft, according to the report.
Fraudsters reportedly stole more than $106,000 through a phishing scam from Fifth Third Bank customers after it began offering cardless ATM access. The fraudsters sent a text message to customers and tricked them into visiting a fake website where they provided personal information, which allowed the thieves to initiate cardless ATM transactions.
One Chase Bank customer was robbed after her password and username were stolen. Thieves added a phone number to her account and used a cardless ATM to withdraw funds which they had transferred from her savings account to her checking account.
Mike Byrnes, a product marketing manager at Entust Datacard, said the security aspect of cardless ATMs has not been fully thought through.
Credit: https://www.atmmarketplace.com/news/cardless-atms-expand-despite-security-risks/?utm_source=AMC&utm_medium=email&utm_campaign=Week+In+Review&utm_content=2019-01-04
Los Angeles Sues the Weather Channel
January 4, 2019CNS
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TLOS ANGELES (CN) — Los Angeles’ city attorney sued The Weather Channel on Thursday, claiming it fraudulently and deceptively uses its Weather Channel App “to amass its users’ private, personal geolocation data,” not, as advertised — “to provide them with ‘personalized local weather data’”— but to monetize the information by selling it to third parties.
Suing on behalf of the People of California, City Attorney Michael Feuer asked the superior court to enjoin the deceptive and unfair business practices, and fine the company $2,500 for each violation, doubled if committed against elderly or disabled people.
Defendant TWC Product and Technology LLC owns and operates The Weather Channel App, which can be downloaded on Apple and Android products. TWC is a subsidiary of IBM.
Excerpt from https://www.courthousenews.com/los-angeles-sues-the-weather-channel%EF%BB%BF/
AZ Police have responded to dozens of calls regarding people threatening and harassing self-driving Waymo vans.
The Indian government announced new regulations that appear to limit Walmart and Amazon bundling of its platform business with sales promotion
The regulation will block the companies from selling products supplied by affiliated companies, and also precludes offering their customers special discounts or exclusive products.
The steps taken by India appear to reflect suggestions of some for structural limitations or break-up of Amazon, such as Stacy Mitchel, the co-director of Institute for Local Self-Reliance. Earlier this year she wrote an article for The Nation called, “Amazon doesn’t just want to dominate the market — it wants to become the market.” In the Podcast below from public radio station WNYC, Mitchell describes the history of regulation of corporate concentration. She then explains why she thinks that the government should forcibly separate Amazon's platform business from its other businesses.
This Podcast is at https://www.wnycstudios.org/story/making-america-antitrust-again
Posting by Don Allen Resnikoff, who is responsible for its content
Revisiting two influential books on big business and agriculture: Reposting of an earlier review from 2014
The Meat Racket: The Secret Takeover of America's Food Business
By Christopher Leonard
Simon & Schuster, 2014
Foodopoly: The Battle Over the Future of Food and Farming in America
By Wenonah Hauter
The New Press, 2012
Review by Don Allen Resnikoff
The Meat Racket author Christopher Leonard and Foodopoly author Wenonah Hauter both describe a scenario of American agriculture where large wholesale and retail companies bully farmers and misuse consumers while the government stands by and does little to help. They advocate for stronger government action against big companies to help small farmers and consumers. Both authors emphasize the need for policy reform to increase the number of competitors in the business of distributing farm products. Both believe that current antitrust enforcement and relevant legislative mechanisms work poorly.
Their books are addressed to broad audiences, not expert economists or antitrust lawyers, and the reason is plain: The authors hope that informing the masses will lead to public pressure for government action, and that pressure will turn the tide against big companies and improve the future of food and farming in America.
In The Meat Racket, Leonard offers clear and forceful reform recommendations that support the interests of small farmers, although much of the book’s space is devoted to stories of the growth of Tyson Foods, Inc. and other giant wholesale agribusiness companies that act as middlemen between farmers and consumers. Often the companies started as small family businesses, developing innovative, efficient, and often cruel-to-animals factory farming techniques as they grew. As these agribusinesses expanded, their exploitation of farmers also increased.
Leonard’s bottom line on public policy reform is that the government, including antitrust enforcers, needs to better protect farmers as well as the consuming public from the clutches of huge, vertically integrated agribusiness companies. The executive branch of government should, among other things, more vigorously enforce antitrust laws, and Congress should take effective legislative action.
Leonard tells us that large wholesale-level agribusinesses use their great market power to bully farmers into contracts that allow the companies to decree the price of animals, making competitive wholesale market pricing of chicken, pork, and beef virtually irrelevant. The result is impoverished farmers. Farmers have little bargaining power, are hardly entrepreneurs, and are reduced to “a state of indebted servitude, living like modern-day sharecroppers on the ragged edge of bankruptcy.” In past years there were small wholesale meat buyers that competed on price, allowing farmers to bargain on price and make some money, but those wholesalers mainly are now gone.
While large companies like Tyson Foods benefit financially from contract farming arrangements that cause poverty to farmers, the benefits to consumers are dubious. Threshold concerns are the ethical and human health issues of factory-style farming being promoted by companies like Cargill, ConAgra Foods, JBS, Smithfield Foods, and Tyson Foods. Further, large agribusinesses can use their market power to limit supply to and raise prices on consumers without worrying about significant competitive constraints. There are some powerful buyers like McDonalds and Walmart, but Leonard sees them as incidental to the main story of the stranglehold of big agribusiness over ordinary consumers.
Since Leonard’s story is about the extraordinary market power of large agribusiness companies, a reader may wonder why antitrust remedies haven’t been effective. Leonard is judicious in addressing the failures of antitrust enforcement. He recognizes that recent antitrust enforcement is restrained and timid, and that government is unlikely to pursue strong action. Leonard wishes for a more vigorous government response, but he accepts that in the world of real politics, it is not going to happen.
Similarly, if farmers and consumers are being misused by a few big companies, and antitrust enforcement is not working to fix the problem, why hasn’t Congress stepped in yet? Again, Leonard recognizes how things work in the political world.
Leonard tells us the back stories about the political realities that explain the Obama administration’s or Congress’s action, or lack of it. He writes that the transition from the Bush presidency to the Obama presidency in 2008 promised important political change for farmers. Many politically engaged farmer advocates had hoped that an Obama administration would bring tougher antitrust enforcement and congressional action. When Barack Obama campaigned in Democratic primaries against Hillary Clinton in states like Iowa, he rallied great support among farmers who did not follow the urban-based notion that rural people don’t recognize or assert their political interests. Farmers often do. Leonard reports that farmers were impressed by Obama’s push for farm policy reform and unimpressed by Clinton’s apparent lack of interest, as well as by her political ties to Arkansas agribusiness, particularly Tyson Foods. Leonard quotes an Iowa Democratic Party operative as saying about Clinton, “I don’t know a single farmer who would vote for her!”
The Iowa caucus left Clinton in third place, and put Obama first, which some saw as a turning point in his successful quest for nomination and, ultimately, the presidency.
Initially, the new Obama presidency promised important reforms in U.S. agricultural policy. Obama appointed former Iowa governor Tom Vilsack as secretary of agriculture. As governor, Vilsack had been a leading advocate for farmers in his state, and many expected him to successfully continue that advocacy at the national level.
Obama also appointed Christine Varney as head of the Antitrust Division of the U.S. Department of Justice. She quickly became known for her strong rhetoric, promising a new day for antitrust enforcement generally, including helping farmers and food consumers. Varney complained that antitrust enforcement had been all but abandoned, and she vowed to change that under her watch. “[T]here is no adequate substitute for a competitive market, particularly during times of economic distress. . . . [V]igorous antitrust enforcement must play a significant role in the government’s response to economic crises to ensure that markets remain competitive,” Varney said in 2009.
In 2010 the Justice Department’s Antitrust Division and the U.S. Department of Agriculture joined to sponsor a series of hearings around the country on the state of competition in the agriculture sector. It is interesting to reach beyond the Leonard book and into the transcripts and summary report of the hearings, which bring us the comments of people with feet-on-the-ground knowledge of agricultural markets in the United States. The 2012 report is titled “Competition and Agriculture: Voices From the Workshops on Agriculture and Antitrust Enforcement in Our 21st Century Economy and Thoughts on the Way Forward.”
The government report presents testimony by producers of cattle, hogs, poultry, and dairy, as well as growers of fruits and vegetables, about problems of concentration in wholesale food processing and retail. Many who testified specifically raised the issue of monopsony power—market power on the buying side of a market as opposed to the selling side. For example, in Iowa one panelist expressed concern that “larger companies are able to exert more buyer power . . . over farmers.”
Some testified that existing antitrust laws are inattentive to a persistent monopsony problem. During a hearing in Washington, D.C., a farmer remarked that “it’s the monopsony power of these concentrated purchases of farm goods that are stressing the people and the natural systems that are producing food,” and that “[r]ight now antitrust jurisprudence isn’t solving the problem.” Similarly, at a hearing held in Alabama, a union member argued that “[i]n competition we all know the word monopoly. . . . But I want us to learn a new word today. It’s monopsony.”
While the hearings allowed farmers and their supporters to speak out, follow-up action by the government was weak. Promises of reform by the Obama administration faded away when they faced political opposition. The consequence is that today large agribusinesses continue to hold great power over farmers and consumers, and are largely unaffected by antitrust enforcement.
The 2012 report includes language explaining the Obama administration’s lack of action. Leonard points out that while the report enumerates problems and abuses in agricultural markets, including an unprecedented level of market concentration caused by a wave of company mergers, it also says that not much can be done about it. In its concluding analysis, the report mostly focuses on why the Justice Department can’t do much to solve the problems. The report says that antitrust laws weren’t made to solve many of the problems identified during the hearings. It also did not point to any major antitrust case filed by the Obama administration. At a public conference where Leonard’s book was being discussed, Bert Foer, president of the American Antitrust Institute, agreed that antitrust enforcement has failed to meet the challenges of agricultural markets.
While there has been some congressional legislation to improve the lot of farmers, it has been much weaker than originally offered by the Obama administration. Leonard explains that while new coalitions of interest groups have formed to press for legislation favorable to farmers, the pro-farmer interest groups have been outmatched and outmaneuvered by industry lobbyists in Washington. The White House has backed off its initially aggressive stance, and the odds of Congress passing new legislation seem increasingly remote at this point.
The stories Leonard tells in his book reflect the skills of a practiced writer who simply and directly explains agricultural markets and the market power of big companies. He takes us on a straight line, from the fascinating stories of agribusiness industry development to powerful arguments of antitrust and legislative policy.
In contrast, the organizational structure of Hauter’s book is more diffuse, partly because it is a loose cobbling together of her short writings on a number of different topics. Hauter is a political activist who supports an array of causes and groups that are linked only loosely by conventional notions of antitrust and related policy. She offers discussions of diverse topics such as the importance of small family farms, local food sourcing, the undermining of organic farming principles by Whole Foods Market, and grassroots opposition to retailer Walmart for a number of behaviors, including low worker pay. What brings these topics together is that they are all relevant to broad issues of social and political policy linked to big companies.
As mentioned earlier, Hauter’s book focuses on retailers like Walmart and Whole Foods as particular sources of harm, which makes her emphasis different than Leonard’s. Hauter sees giant retailers, particularly Walmart, as pernicious, influencing behavior throughout the supply chain and using great market power to force suppliers to compromise on quality and production standards.
Hauter’s loosely associated points fit with her views about grassroots political action against giant companies like Walmart. It is plain to see from the subtitle of her book that the battle she has in mind is political in a broad sense, and not a battle that accepts the constraints of conventional politics or policy.
Hauter’s book is optimistic in tone, upbeat about the prospect that the reforms she advocates for will be adopted. But it is difficult for a reader to conclude that the political struggle Hauter contemplates is going very well thus far. A striking aspect of both the government hearings about agriculture at the national level and the local political battles against Walmart over low wages is the extent to which Walmart, like other large companies, is able to successfully defend itself and avoid regulation or antitrust enforcement. Big company strategies include very public reasoned rebuttals against a broad array of “big is bad” arguments.
Walmart has launched a counter-campaign to the issues raised in Foodopoly: market power, promotion of highly processed junk food, Tyson Foods-style, corporate-dominated factory farms, low wages, and harm to local businesses. Foodopoly proffers a formidable indictment of Walmart, but the retailer uses skilled public relations techniques and excellent media access to convey its well-honed messages. It points out that it helps the disadvantaged by charging low prices and by providing employment. It claims that it promotes and popularizes organic food and healthy eating. Walmart presents these and other arguments to the public through mass media in a manner intended to develop broad support. Mass media, on the other hand, tends to present the views of Walmart opponents as mere counterpoints, suggesting two evenly balanced sides of an argument.
I see little indication that the government will soon adopt enforcement proposals discussed by Leonard or Hauter and those who agree with them. It seems unlikely, for example, that Tyson Foods or Walmart will soon be dismantled by government enforcers. (The Justice Department’s response to Tyson Foods’ recent plan to buy rival Hillshire Brands was to file a complaint and settle it the same day, August 27, 2014, based on Tyson’s selling its sow purchasing division to a third party.)
But that is not a reason to criticize the efforts of Leonard and Hauter to reach out to a wider audience, nor to demean Hauter’s vision of a multifaceted struggle of mobilizing people against large companies like Walmart or Tyson Foods. On the contrary, big companies may be winning now, but what antitrust and other business regulation will look like decades from now depends a great deal on what the public wants it to be. What the public wants may be influenced by messages like Hauter’s or Leonard’s. The idea of democracy includes political visionaries who reach out and successfully catch the attention of the public, and make a difference.
This positing is by Don Allen Resnikoff who takes full responsibility for its content.
California Court of Appeals' first Muslim judge
Published on Dec 30, 2018
Justice Halim Dhanidina was recently elevated to California’s Courts of Appeal, making him the state’s most senior judge of Muslim faith. The PBS NewsHour Weekend Edition offers an interesting piece with Special Correspondent David Tereshchuk talking with Dhanidina about engaging with supporters and critics alike, and setting an example for what it looks like to be a "Muslim judge" in the United States. The Judge believes in acceptance for people of all religions, and would like to educate those who imagine, without a basis, that he will apply Sharia law. (13 States have passed legislation banning Sharia law, solving what some would say is a non-problem. Other States are considering such legislation.)
The video is at: https://www.youtube.com/watch?reload=9&v=27m2iEdfYv0
Cannabis-related bank reform legislation falls short in Senate
Dec. 27, 2018
A new attempt to give cannabis firms access to legal banking services has failed in the U.S. Senate, according to a new report.https://www.fool.com/investing/2018/12/22/mitch-mcconnell-blocks-marijuana-banking-reform-am.aspx
Sen. Cory Gardner last week reintroduced the States Act, which called for an easing of laws in the cannabis business, in a bid to make sure financial institutions could offer banking services to these firms without being liable for drug trafficking. The act, which was reintroduced as an amendment to the First Step Act, a criminal justice reform bill, failed in the Senate.
If passed, the legislation would free legal cannabis states to directly address creating legal financial services for cannabis industry companies.
Big tobacco companies are reportedly interested in cannabis as a business, so banking issues are a problem for the tobacco companies.
Credit: Motley Fool
From DMN:
A Fed Up Musician Demands That YouTube Fix Its Broken Content ID System. More Than 100,000 People Have Signed His Petition.
YouTube’s Content ID has a major copyright infringement problem. Now, people have urged Google to fix it.
As part of the video platform’s large-scale protest against the EU’s Copyright Directive, YouTube has pointed to its Content ID as an existing viable solution.
According to YouTube CEO Susan Wojcicki and YouTube Music chief Lyor Cohen, Content ID already does enough to protect owners.
The story continues here. https://www.digitalmusicnews.com/2018/12/27/christian-buettner-thefatrat-youtube-content-id-petition/
Federal regs on added coloring will delay supermarket sales of "bloody" uncooked vegetarian burgers
Impossible Foods, the Silicon Valley-based maker of the eponymous burger, uses genetically modified yeast to mass produce its central ingredient, soy leghemoglobin, or “heme.” It’s heme that gives the Impossible Burger its essential meat-like flavor, the company said. The substance was ready to break out this summer after the U.S. Food and Drug Administration, following years of back-and-forth, declined to challenge findings voluntarily presented by the company that the cooked product is “Generally Recognized as Safe,” or GRAS. Such a “no questions” letter means the FDA found the information provided to be sufficient.
Heme is “responsible for the flavor of blood,” Impossible Foods CEO Patrick Brown said in an interview earlier this year. “It catalyzes reactions in your mouth that generate these very potent odor molecules that smell bloody and metallic.”
It’s how the burger looks that’s now at issue, though. An FDA spokesman said heme, which is red in hue, needs to be formally approved as a color additive before individual consumers can purchase the uncooked product.
“If the firm wishes to sell the uncooked, red-colored ground beef analogue to consumers, pre-market approval of the soy leghemoglobin as a color additive is required,” FDA spokesman Peter Cassell told Bloomberg in a Dec. 17 email. Impossible Foods filed a petition Nov. 5 seeking heme’s formal approval as a color additive, the FDA said. The agency has 90 days to respond, and the timeline can be extended.
Impossible Foods says heme isn’t a color additive as currently used in cooked Impossible Burgers sold in restaurants. However, other future uses might qualify as a color additive, company spokeswoman Rachel Konrad said in an email. The company submitted the FDA petition to retain “maximum flexibility as our products and business continue to evolve.” Konrad declined to say whether uncooked heme-containing products to be sold in supermarkets were one of those contemplated future uses.
Excerpt from: https://www.bloomberg.com/news/articles/2018-12-26/why-the-bloody-impossible-burger-faces-another-fda-hurdle?cmpid=BBD122618_BIZ&utm_medium=email&utm_source=newsletter&utm_term=181226&utm_campaign=bloombergdaily
Huawei Rivals Nokia and Ericsson Struggle to Capitalize on U.S. Scrutiny
Nokia and Ericsson have been slow to release telecom equipment as advanced as Huawei’s, major wireless providers say
By
Stu Woo
Updated Dec. 31, 2018 10:17 a.m. ET
U.S.-led scrutiny of Huawei Technologies Co. should have been good news for its two biggest competitors in the telecommunications-equipment business, Finland’s Nokia Corp. NOK -0.43% and EricssonERIC +0.79% AB of Sweden.
It isn’t turning out to be so simple.
Major European wireless providers—big customers of all three—say Nokia and Ericsson have been slow to release equipment that is as advanced as Huawei’s.
Nokia and Ericsson also face a new, deep-pocketed challenger inSamsung Electronics Co . , the South Korean smartphone giant that is aiming to quickly grow its nascent cellular-infrastructure business.
And there is another big pitfall for the two: Both Nokia and Ericsson fear that if they are seen trying to take advantage, Beijing could retaliate by cutting off access to the massive Chinese market, people familiar with the matter said.
In recent years, Huawei has surpassed the Nordic companies to become the world’s biggest maker of cellular-tower hardware, internet routers and related telecom equipment. For the first three quarters of 2018, Huawei had a 28% share of the global telecom-equipment market, Nokia had 17% and Ericsson 13.4%, according to research-firm Dell’Oro Group. That compares with market shares in 2017 of 27.1% for Huawei, 16.8% for Nokia and 13.2% for Ericsson.
Huawei has dominated the world-wide industry despite being essentially barred from the U.S. over concerns that Beijing could order Huawei to spy on or disable communications networks. Recently, the U.S. has been urging allies to enact similar bans.
Excerpt from WSJ (paywall): https://www.wsj.com/articles/huawei-rivals-nokia-and-ericsson-struggle-to-capitalize-on-u-s-scrutiny-11546252247?mod=hp_lead_pos4
NYT editorial: State AGs have gone light on big pharma and opioids
Public officials and plaintiffs’ lawyers, by failing to use lawsuits to hold the opioid industry to account, have allowed a containable crisis to mushroom into catastrophe. Repeatedly, they ended lawsuits quickly for the sake of political and financial expediency rather than digging out information that would have alerted the public to the dangers of these drugs.
Consider the case of Florida, which in 2001 became one of the first states to investigate Purdue Pharma. Its attorney general at the time, Robert Butterworth, pointing to a growing number of overdose deaths, declared that he would discover when Purdue Pharma first knew about OxyContin’s abuse.
That never happened. Instead, state investigators interviewed only a single former OxyContin sales representative, and Mr. Butterworth, who was running for a State Senate seat, ended the case soon after it was filed.
He lost his election and the case’s settlement proved empty. While Purdue Pharma agreed to pay $2 million to fund a system that would monitor how Florida doctors prescribed opioids, state legislators blocked its creation. David Aronberg, the state attorney for Palm Beach County, told me that nearly all of the $2 million was returned to the drug company and Florida went on become a major center of the opioid crisis.
The decision by Justice Department officials in 2007 to forgo felony charges against the executives of Purdue Pharma also resulted in the loss of a critical chance to slow the epidemic’s trajectory. Without a public trial, doctors remained unaware about the extent of Purdue Pharma’s deceptions and increasingly prescribe opioids. During the five years that followed the Justice Department settlement, 80,000 people died from overdoses involving pain pills, federal data shows.
Also, in striking these settlements, government officials have agreed to demands by drug companies that information gathered during legal discovery about corporate practices be sealed. Three years after Kentucky settled its lawsuit against Purdue Pharma, a media organization that covers health care, STAT, won a court order this month that will result in the release of records from that case. Those records include the pretrial testimony of Richard Sackler, the son of a founder of Purdue Pharma and the company’s president when the abuse of OxyContin was becoming rampant.
Excerpt from https://www.nytimes.com/2018/12/26/opinion/opioids-lawsuits-purdue-pharma.html?action=click&module=Opinion&pgtype=Homepage
Barry Lynn's end-of-year list of best anti-monopoly books
The early days of winter are a great time to catch up on your anti-monopoly studies. The days are cold and drear, and the nights dark and long, which make smoldering anger and fiery prose a welcome addition to the home of any true believer in liberty and democracy. A few of our favorites:
The Curse of Bigness: Antitrust in the New Gilded Age, Columbia Global Reports, Tim Wu
An elegant primer for all to understand the thinking that underlays America’s anti-monopoly traditions and the many dangers of concentrated corporate power.
The Myth of Capitalism: Monopolies and the Death of Competition, Wiley, Jonathan Tepper with Denise Hearn
Tepper and Hearn use the growing body of social science research, indicating that America’s economy is structured to favor fewer and fewer corporations, to show how monopolies and oligopolies exacerbate inequality, cut growth and wages, and hurt entrepreneurs.
Globalists: The End of Empire and the Birth of Neoliberalism, Harvard University Press, Quinn Slobodian
A strong history of neoliberalism, including a chronicle of the post-World War I origins of the Geneva School of neoliberal thought. Slobodian details how the ultimate goal of neoliberalism is not to establish market relations and market logic, but to shield markets and private property from democracy.
The Age of Surveillance Capitalism: The Fight for a Human Future at the New Frontier of Power, PublicAffairs, Shoshana Zuboff (January 15, 2019)
Zuboff coined the term "surveillance capitalism" and in this book she details how platform monopolists use their systems to control and exploit an extensive range of human behavior, information, and experience for private gain.
Winners Take All: The Elite Charade of Changing the World, Alfred A. Knopf, Anand Giridharadas
A powerful critique of elite “thought leaders” who spend their professional careers consolidating power and control in the hands of the few, then pretend to make the world a better place through extracurricular activities like philanthropy.
From: https://outlook.live.com/mail/inbox/id/AQMkADAwATM3ZmYAZS04MTcxLTJmMjgtMDACLTAwCgBGAAADRnoWw%2B1oGkecPn377%2FL9tQcA97M33DyMxEGb7MCV%2BuIrtgAAAgEMAAAA97M33DyMxEGb7MCV%2BuIrtgACGgVq4gAAAA%3D%3D
Rent-A-Center, perennial Christmas grinch
In a current California class-action lawsuit against Rent-A-Center, lawyers argue that the company’s customers, a disproportionate number of whom are people of color, are charged prices that violate the state’s rent-to-own pricing laws. The legal documents say that a Rent-A-Center in Northern California ultimately charged, after installments, $1,379.54 for an Xbox that normally retails at $299.99, and $2,834.19 for a television that sells for $717.60.
The docket and Court filings are at https://dockets.justia.com/docket/california/candce/3:2017cv02335/310704
The FTC and State AGs have been active concerning the company's pricing a credit practices. See https://www.nerdwallet.com/blog/finance/rent-a-center-complaints-lawsuits/The Complaint recently filed by DC AG Racine against Facebook is here :
http://oag.dc.gov/sites/default/files/2018-12/Facebook-Complaint.pdf
“Facebook failed to protect the privacy of its users and deceived them about who had access to their data and how it was used,” AG Racine said in a statement.
New York City council members railed against Amazon in a December 12 hearing
From article By Shirin Ghaffary Dec 12, 2018
Members of a New York City council committee denounced terms of the recent Amazon HQ2 deal in the first of three public hearings being held about the plans.
“We are not in the business of corporate welfare here at the city council,” said City Council Speaker Corey Johnson, referencing the up to $3 billion in government subsidiesthe company will receive. Johnson, one of the fiercest critics of the deal, spoke at the council’s Committee on Economic Development hearing on Wednesday at City Hall.
Amazon says the move will bring at least 25,000 jobs to the city over the next decade and $27.5 billion in state and city revenue in the next 25 years. Johnson contested these numbers at the hearing, saying they warrant an outside independent verification beyond the report the state commissioned.
Johnson and other council members were upset about being denied oversight of the plan — but that wasn’t on Amazon alone. Both New York City Mayor Bill de Blasio and New York Governor Andrew Cuomo worked together with Amazon to bypass the standard review processes that would have given the city council a chance to veto or even review the deal. The hearing was the first opportunity council members had to publicly and directly vent their frustrations to key people behind the negotiations.
While city council members have threatened to throw a wrench in the process, they’re limited in what they can do. A five-member state board is expected to vote on some aspects of the deal in the new year. Some council members are hoping they can influence new appointees to the board to vote against the plan, but it’s not clear how realistic that outcome is.
One leader from the city’s Economic Development Corporation, James Patchett, who helped work on the deal, took the brunt of the tough questions.
From https://www.recode.net/2018/12/12/18137488/new-york-amazon-hq2-deal-hearing
Is the Altria acquisition of an interest in Juul an antitrust issue?
There are press reports, particularly from Financial Times, that the recent Altria cigarette company's acquisition of some of e-gigarette company Juul's stock includes a standstill provision blocking further acquisition of Juul stock until antitrust issues are cleared with government.
Why the antitrust concern?
Perhaps because, as the FDA's head has explained (see below), five e-cigarette manufacturers represent more than 97 percent of the current market for e-cigs — JUUL, Vuse, MarkTen, Blu, and Logic. As the Huffington Post/Healthline reported last year, large cigarette companies have big interests in e-cigarettes, a rapidly growing market. E-cigarette brand VUSE is owned by R.J. Reynolds Vapor Company, a subsidiary of the tobacco giant Reynolds America. British American Tobacco (BAT), the largest tobacco company in the Europe, owns e-cigarette brand Vype. Blu e-cigarette is owned by Imperial Tobacco, and Altria (formerly Phillip Morris) already owns MarkTen.
So, the acquisition of Juul stock by Altria increases market concentration in e-cigarettes,. But it is not clear whether for antitrust enforcement purposes e-cigarettes are a relevant market and whether the increase in concentration within that market (or a broader market for all tobacco products, or even a possible future market) is significant to antitrust agencies.
But regulatory concern about the consequences of big-company influence on e-cigarette use is not limited to the intellectual silo of antitrust enforcement. Recent FDA information requests about consumer use of e-cigarettes have focused on five large manufacturers, and reflect concerns about the market influence of large companies that are familiar to antitrust enforcers. The FDA, like federal bank regulators, operate on the idea that the largest industry players deserve the closest regulatory scrutiny.
A speech by the FDA head reflects the focus on large manufacturers:
Today, we sent letters to five e-cigarette manufacturers whose products were sold to kids during the enforcement blitz and that, collectively, represent more than 97 percent of the current market for e-cigs — JUUL, Vuse, MarkTen, blu e-cigs, and Logic. These brands will be the initial focus of our attention when it comes to protecting kids. They’re now on notice by the FDA of how their products are being used by youth at disturbing rates. Given the magnitude of the problem, we’re requesting that the manufacturers of these brands and products come back to the FDA in 60 days with robust plans on how they’ll convincingly address the widespread use of their products by minors, or we’ll revisit the FDA’s exercise of enforcement discretion for products currently on the market.
See https://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm620185.htm
Posted by Don Allen Resnikoff
From the WSJ: The Food and Drug Administration is backing off a proposal that would have opened up generic companies to possible product-liability lawsuits over drug safety.The FDA had proposed a new federal rule in 2013 that would have allowed people to hold generic-drug companies legally liable for the side effects of medicines. Thursday’s action by the agency withdrew the proposed rule, and keeps generic companies largely impervious to lawsuits.
At issue in the complex matter is whether generic-drug companies are allowed, like brand-name drug companies, to change their drug labels to reflect new safety concerns. Currently, generic-drug companies must follow the labels written by the brand-name companies.
The otherwise arcane issue of drug labels became a major practical issue beginning with a 2011 Supreme Court decision that an injured person can’t bring a claim against generic makers over failure to warn about a drug’s adverse side effects. The court reasoned that generic companies—unlike brand-name companies—shouldn’t be liable because they have no authority to modify their labels.
In 2013, the FDA proposed the rule that would have allowed generic makers to change labels, a step the generic industry largely opposed. Thursday the agency dropped its plans to pursue the new rule.
FDA Commissioner Scott Gottlieb and the FDA’s drug-center director Janet Woodcock said in a statement, “We heard from manufacturers that they believed this change would have imposed on them significant new burdens and liabilities” and that the measure “might have raised the price of generic drugs to patients.”
Excerpt from https://www.wsj.com/articles/fda-withdraws-proposed-rule-that-would-have-exposed-generic-drug-makers-to-liability-11544726478 (paywall)
You think real estate dealings in the US can be rough? Here are real estate sales fraud stories from Russia, told by NYT:
In one common scheme, agents collude with property owners to sell homes and then race to petition judges that the sale should be invalidated because the seller was temporarily insane. Buyers lose their cash, sellers keep the homes and sales agents — and judges who may be in on the scheme — pocket millions of rubles. Buyers may sue to reclaim their money, but the asset that may be the most lucrative for recompense is the apartment, and that is out of reach. Laws routinely protect homeowners in these kind of disputes.
This fraud is prevalent enough that nearly all of the roughly 140,000 transactions annually in Moscow have required sellers to show certificates of sanity in recent years, real estate agents say.
Most fraud involves buildings that are still under construction, where builders offer discounts for prepurchases but often steal the money and declare bankruptcy. The Ministry of Construction reported in August that it has 34,085 open complaints from such transactions.
https://www.nytimes.com/2018/12/25/business/moscow-russia-real-estate.html
In the spirit of the holiday season in the USA, 2018:
President Trump questions the existence of Santa Claus, creating doubt about the practice of leaving out milk and cookies on Christmas eve :
https://www.cnn.com/2018/12/25/politics/trump-santa-phone-call/index.html
Some somber seasonal music from Handel's Messiah:
https://www.youtube.com/watch?v=H5-yTzY1dn4
Is the decision of the Texas judge who struck down the ACA a partisan decision?
The New York Times says yes:
https://www.nytimes.com/2018/12/15/opinion/obamacare-unconstitutional-texas-judge.html?action=click&module=Opinion&pgtype=Homepage
The Trump administration, which has long sought to repeal the ACA, applauded Friday’s ruling.
“Wow, but not surprisingly, ObamaCare was just ruled UNCONSTITUTIONAL by a highly respected judge in Texas. Great news for America!” President Trump wrote on Twitter. In a statement, the White House elaborated, saying, “Once again, the President calls on Congress to replace Obamacare and act to protect people with preexisting conditions and provide Americans with quality affordable healthcare.”
The Georgia State AG agrees with the Trump Administration opinion:
https://www.ajc.com/news/opinion/opinion-lawsuit-rule-aca-unconstitutional-will-aid-georgia/1PP6RcRlTNHRGDjDKF0S0J/
The Texas Court's opinion and Order is here:
https://www.documentcloud.org/documents/5629711-Texas-v-US-Partial-Summary-Judgment.html
Simon Johnson on the political power of U.S. banks
Simon Johnson is a leader in bringing competition issues in banking to the attention of the American people. He argues to diverse audiences that banking is controlled by a small number of banks that have outsized political influence. He would like to see big banks controlled by aggressive antitrust enforcement as well as regulatory constraints.
Johnson has an impressive resume. Currently, he is a professor at the MIT Sloan School of Management and a senior fellow at the Peterson Institute for International Economics. He is a cofounder of the BaselineScenario.com, and a member of the FDIC’s Systemic Resolution Advisory Committee. In 2012, he became a member of the private sector systemic risk council founded by Sheila Bair. In July 2014, he joined the Financial Research Advisory Committee of the US Treasury’s Office of Financial Research (OFR). Also, he served as member of the Congressional Budget Office’s Panel of Economic Advisers from April 2009-April 2015.
Johnson was active in opposing the regulatory rollback that occurred in May, 2018, when Congress rolled back some of the restraints imposed on banks after the 2007-2009 global financial crisis. The rollback included reducing federal oversight of banks with between $50 billion and $250 billion in assets.
Johnson testified in opposition to regulatory rollback legislation. He said that $50 billion, as earlier defined under the Dodd-Frank financial reform legislation, is a sensible threshold at which the Federal Reserve should pay more attention to financial institutions.
Johnson’s recent testimony is illustrative of his broader concerns about the structure of our financial system. As part of earlier testimony to Congress in 2016 [https://financialservices.house.gov/uploadedfiles/hhrg-114-ba19-wstate-sjohnson-20161207.pdf] Johnson argued that the nature and structure of our financial system led to the deep crisis of 2008 and 2009, and still poses real risks to our collective economic future. He argued for overall strengthening rather than weakening financial regulation, with a particular focus on capital requirements. He said:
We should be attempting to strengthen the safeguards in the Dodd-Frank financial reform legislation. Repealing or rolling back that legislation poses a major fiscal risk. . . . [A] financial system with dangerously low capital levels – hence prone to major collapses – creates a nontransparent contingent liability for the federal budget in the United States.
Simon Johnson is author of several influential books. An important book concerning the power of bank and bankers to coopt legislators and regulators, written with co-author Jame Kwak, is 13 Bankers – The Wall Street Takeover and the Next Financial Meltdown.
The Johnson/Kwak book offers an excellent discussion of the run-up to the 2008 financial crisis and government efforts to resolve it, emphasizing problems caused by banks that grew to be very big.
The authors invoke the spirit of U.S. antitrust enforcement of the early 1900s, and urge government regulatory policies that limit bank assets.
Johnson and Kwak argue in their book that U.S. government regulatory policy affecting financial institutions has effectively been captured and controlled by people associated with large banks. Government regulators are portrayed as enablers of the country’s 2008 financial crisis. “The U.S. financial elite . . . constituted an oligarchy – a group that gained political power because of its economic power. . . .[T]he major banks engineered a regulatory climate that allowed them to embark on an orgy of product innovation and risk-taking that would create the largest bubble in modern economic history . . . .”
Johnson and Kwak tell us in 13 Bankers that just a few very large banks dominate the U.S. financial system – hence the book title. When CEOs of the largest U.S. banks were called to Washington in March of 2009 to meet with President Obama and senior government officials to discuss the financial meltdown, there were just thirteen. We learn that at the time of the meeting Bank of America’s assets were 16.4 percent of gross domestic product; J.P. Morgan Chase had 14.7; Citigroup 12.9. As of the end of the third quarter of 2010 Johnson and Kwak believed there were six banks that together have assets in excess of 64% of U.S. GDP.
The authors complain that in the dark days of 2008 and 2009 the government chose to rescue the financial system “by extending a blank check to the largest, most powerful banks in their moment of greatest need. The government chose not to impose conditions [on bail-outs] that could reform the industry or even to replace the management of large failed banks.”
Much has happened since 2010, including passage of Dodd-Frank bank reform legislation – elements of which have been under attack in 2018. It is clear, however, that Simon Johnson continues to be concerned about the continuing great size and political power of U.S. Banks.
This posting is by Don Allen Resnikoff, who takes full responsibility for its content
Regulation shortfall for dementia care
Assisted living facilities were originally designed for people who were largely independent but required help bathing, eating or other daily tasks. Unlike nursing homes, the facilities generally do not provide skilled medical care or therapy, and stays are not paid for by Medicare or Medicaid.
Dementia care is the fastest-growing segment of assisted living. But as these residences market themselves to people with Alzheimer’s and other types of dementia, facilities across the country are straining to deliver on their promises of security and attentive care, according to a Kaiser Health News analysis of inspection records in the three most populous states.
In California, 45 percent of assisted living facilities have violated one or more state dementia regulations during the last five years. Three of the 12 most common California citations in 2017 were related to dementia care.
In Florida, one in every 11 assisted living facilities has been cited since 2013 for not meeting state rules designed to prevent residents from wandering away.
And in Texas, nearly a quarter of the facilities that accept residents with Alzheimer’s have violated one or more state rules related to dementia care, such as tailoring a plan for each resident upon admission or ensuring that staff members have completed special training, according to nearly six years of records.
“There is a belief in our office that many facilities do not staff to the level” necessary to meet the unanticipated “needs of residents, especially medical needs,” said Fred Steele, Oregon’s long-term-care ombudsman. “Many of these are for-profit entities. They are setting staffing ratios that maybe aren’t being set because of the care needs of the residents but are more about the bottom line of their profits.”
Uneven Regulation
These concerns, though particularly acute for people with dementia, apply to all assisted living residents. They are older and frailer than assisted living residents were a generation ago. Within a year, one in five has a fall, one in eight has an emergency room visit and one in 12 has an overnight hospital stay, according to the Centers for Disease Control and Prevention. Half are over 85.
“Assisted living was created to be an alternative to nursing homes, but if you walk into some of the big assisted living facilities, they sure feel like a nursing home,” said Doug Pace, director for mission partnerships with the Alzheimer’s Association.
Yet the rules for assisted living remain looser than for nursing homes. The federal government does not license or oversee assisted living facilities, and states set minimal rules.
From https://www.nytimes.com/2018/12/13/business/assisted-living-violations-dementia-alzheimers.html
Lina Khan on Radical Antitrust and the Consumer Welfare Standard
Lina Khan spoke at "Charles River Associate's Annual Brussels Conference: Economic Developments in Competition Policy, 2018" on a panel which asked "Do We Need a 'Radical Antitrust' Answer to 'Populist Antitrust?'" Khan discussed some criticisms of the consumer welfare standard, how competition policy extends beyond antitrust law, and how the legal structure of antitrust enforcement could benefit from more active competition rulemaking from the FTC.
See https://www.youtube.com/watch?v=GVw6HR5duPk&feature=youtu.be
Jack Bogle’s warning about dominant index funds
Bogle, who founded The Vanguard Group in 1974, wrote Thursday in The Wall Street Journal [https://www.wsj.com/articles/bogle-sounds-a-warning-on-index-funds-1543504551] that if current trends continue, index funds will soon own half of all U.S. stocks. He thinks that could lead to a dangerous vacuum in corporate governance – with nobody to effectively police the corporate executives who run America’s largest companies.
“Public policy cannot ignore this growing dominance, and consider its impact on the financial markets, corporate governance, and regulation,” he wrote. “These will be major issues in the coming era.”
Over the past few decades indexing’s popularity has soared. Holdings have trended steadily upwards, from 4.5% of total U.S. stock market value in 2002 to 9% by 2009. Stock index fund assets now total $4.6 trillion, and their overall percentage of total stock market value has almost doubled again in the last decade to 17%.
Index funds’ growth has had some unintended consequences. As Bogle points out, there are three index fund managers who dominate the field: Vanguard has a 51% share of the market, followed by BlackRock with 21%, and State Street Global with 9%.
There are significant obstacles to becoming a major player, however, so it’s not likely any new competitors will reduce the huge concentration enjoyed by these big powerhouses.
While most economists expect the share of corporate ownership by index funds to increase further over the next decade, index mutual funds will no doubt rise above 50% of total market value – between 2021 and 2024, according to Moody’s. [https://www.reuters.com/article/us-funds-passive/index-funds-to-surpass-active-fund-assets-in-u-s-by-2024-moodys-idUSKBN15H1PN ] That means the so-called ‘Big Three’ would own over 30% of the U.S. stock market, which Bogle says gives them effective control. “I do not believe that such concentration would serve the national interest.”
If historical patterns hold, index funds’ popularity could soon become a problem, Bogle argues. “A handful of giant institutional investors will one day hold voting control of virtually every large U.S. corporation.”
That might leave a power vacuum, leaving corporate chieftains unaccountable. CEOs who run companies supposed to answer to boards of directors, who are in turn elected by shareholders. Index funds are the biggest shareholders at most companies though. In theory, funds are supposed to vote their shares on behalf of their own investors – everyday workers who own fund shares in a 401(k) or IRA account. But there’s a wrinkle: Index funds’ investing strategy revolves around passively buying every stock in the market, while holding cost down as low as possible. The upshot is that they have little wherewithal or incentive to keep tabs on CEOs or other corporate managers.
Excerpts above are from: http://time.com/money/5468239/jack-bogle-index-funds-problem/
Thanks to Newsletter reader Gary Sunden for pointing out the WSJ article. DR
Einer Elhauge:
HOW HORIZONTAL SHAREHOLDING HARMS OUR ECONOMY—AND WHY ANTITRUST LAW CAN FIX IT
When the leading shareholders of horizontal competitors overlap, horizontal shareholding exists. In Elhauge’s earlier Harvard Law Review article on horizontal shareholding, he argued that economic theory and two industry studies indicated that high levels of horizontal shareholding in concentrated product markets can have anticompetitive effects, even when each individual horizontal shareholder has a minority stake.
Elhauge argued that those anticompetitive effects could help explain high executive compensation rewards executives despite lack of performance, and the historic increase in the gap between corporate profits and investment, and the recent rise in economic inequality.
He also argued that when horizontal shareholding has likely anticompetitive effects, it can be remedied under Clayton Act §7. He recommended that antitrust agencies should investigate any horizontal stock acquisitions that result in high product market concentration.
In a new article, Elhauge argues that new proofs and empirical evidence strongly confirm his earlier claims.
The new article can be found at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3293822
Note from Editor Don Allen Resnikoff: Following is the first of several posts reviewing books by advocates for antitrust enforcement reform who were leaders in a movement to bring the political significance of antitrust enforcement to the attention of the general public
Cornered – the New Monopoly Capitalism and the Economics of Destruction ,
Barry Lynn, John Wiley & Sons, Inc., 2010, 311 pages
Lynn’s background is as a business journalist who is comfortable speaking to a broad audience, clearly and persuasively. He studies industries with a journalist’s eye for detail, but is not bound by conventional wisdom of antitrust lawyers and economists. Currently he directs the Open Markets Institute, and is active researching and writing about big company power. Lynn’s work has gotten much public attention. His work has been profiled on CBS and in the New York Times, and his articles have appeared in publications including Harper’s, the Financial Times, Harvard Business Review, and Foreign Policy. He frequently addresses public forums.
In his 2010 Cornered book Lynn presents a theme that he has since forcefully pressed: concentrated power of big companies in the U.S. economy is causing great harm. The harm he sees ranges from the broadly political – loss of individual liberties -- to physical injury of consumers. He advocates drastic reform of antitrust enforcement, and broad political reform.
Lynn’s book includes many points of continuing relevance. Lynn addresses the entrenched consumer welfare oriented view of antitrust enforcement litigation that focuses on efficiency and prices to consumers. He argues for a return to antitrust enforcement based on social and political values.
Barry Lynn would like to see antitrust enforcement revised, but he wants more. He also would like broad reform of politics in the United States, because “our political economy is run by a compact elite that is able to fuse the power of our public government with the power of private corporate governments . . . .”
Cornered supports Franklin Roosevelt era New Deal reforms: “In instance after instance, the reforms aimed not to lower prices for consumers but to fortify systems of checks and balances, create systems of personal and local ownership, and force large governmental institutions, both public and private, to compete.” New Deal reformers worked to create “a political framework that successfully protected the individual citizen from being crushed” by concentrated industrial forces. A key is a political system organized around “open markets.”
But, Lynn explains, the New Deal reform efforts have been largely squelched. Power is “concentrated once more in the capitalist alone, who is the one actor . . . served . . . by reducing the number of workers . . . and by stripping out the various forms of wealth . . . .” Control over important property interests is “shared among an immensely powerful class [of people] that has largely communalized all its holdings . . . [T]he interest remains only to maximize capital and hence power, even if this means tossing another factory or two full of perfectly necessary machines on the scrap heap.” The author tells us that a financier class holds great power and doesn't care much about preserving domestic factory production.
Lynn worried about concentration in various industries that remain a problem today, even if some details have changed.
One problematic industry is poultry production. Lynn was concerned that in poultry farming, as in pig, dairy, and some other areas of farming, a few large companies effectively control the business of the farmers that provide the relevant product. In addition, Lynn said that the giant poultry companies respect each other’s market territories and avoid competition with each other.
Health insurance is another industry that concerned Lynn: “A 2006 study revealed that in 166 of the top 294 metropolitan areas, a single insurer controls more than half of the HMO and preferred provider business.”
Lynn also complained about mergers of large financial institutions, the “too big to fail,” banks that led to the financial crisis of 2008. Lynn complains that even following the financial “meltdown” of 2008 the U.S. government “responded to the collapse of our financial system in most instances by accelerating consolidation. . . .” Government money was used “to broker and subsidize such whopping mergers as the Wells Fargo takeover of Wachovia, the JPMorgan Chase acquisition of Washington Mutual and Bear Stearns, and Bank of America’s absorption of Countrywide Financial and Merrill Lynch . . . .”
Cornered presents some unconventional approaches to antitrust and political policy. Lynn worries that U.S. industry is not only highly monopolized, but dangerously reliant on systems involving extensive outsourcing and fragile supply chains. The Cornered book explains that fragile supply chains result in products of unpredictable availability and poor quality.
The author explains that even as much industrial production shifts away from the United States to China and other places, some American companies may control the bottleneck of supplying U.S. and other consumers. These companies may sit atop a hierarchy of power, in the manner Lynn ascribed to Wal-Mart: Wal-Mart “sits atop the entire system [of product distribution], where it determines . . . who shall make what and how much they shall earn, and who shall buy what and how much they shall pay.”
The Cornered book tells us that some other U.S. companies, including manufacturers, import products that they “snap together” or otherwise organize for resale. For example, Boeing has applied an import and assemble manufacturing philosophy in construction of passenger aircraft.
Some industry facts have changed since 2010, such as the rise of Amazon. But Lynn’s factual observations concerning outsourcing and fragile supply chains continue to challenge antitrust enforcers to take a fresh look at how modern industries work. His observations about industry systems suggest that antitrust enforcers need to examine the relationships among companies at different levels in the distribution chain. In examining the competitive impact of Wal-Mart conduct, for example, its relations with suppliers can be important.
Some antitrust analysts have discussed outsourcing and supply chain issues like those presented in Cornered. Their comments often tend to suggest that the supply chain issues Lynn identifies are not within the scope of antitrust enforcement. But Bert Foer wrote an article some years ago that takes Lynn’s supply chain points seriously. The article is called Mr. Magoo Visits Wal-Mart: Finding the Right Lens for Antitrust. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1103609
Foer’s article explains that “Wal-Mart is the leading example of a firm whose scale and strategy give it the ability to exercise extraordinary influence over its supply chain.” The article asks “to what extent are the criticized actions [of Wal-Mart] susceptible to treatment under the antitrust laws?” Referring to material in Lynn’s book End of the Line, Foer says that “The transformation of supply lines that Lynn describes can be seen as part of a movement toward tighter and relatively more closed systems which is rapidly changing the way business is done. It should lead antitrust experts to question whether the tools that were developed during a long era of more independent companies acting competitively rather than as integrated segments of large networks, are still adequate.” See also Bert Foer’s comments at URL https://www.ftc.gov/policy/public-comments/2018/08/19/comment-ftc-2018-0054-d-0007 (“The evidence and analysis of monopsony power, including but not limited to, in labor markets”)
Lynn closes his Cornered book with an upbeat if general suggestion that the American people have the ability to reverse the consolidation of power he describes, and “retake control of our political economy.” While It is not clear precisely what actions he expects his audience to take, he does invite us to look at competition issues from outside of the Chicago-Harvard consumer welfare, efficiency, price-oriented enforcement consensus. He asks us to embrace the idea that antitrust enforcement properly has social and political goals. He invites us to study closely the facts of industries, and politics, and encourages us to work to fix what he sees as broken.
In 2010 Lynn worried about a lack of public awareness of much recent industry concentration: “The making of monopoly . . . is once again the business of business in America. Increasingly, it seems, everyone knows this except the American people.” It is fair to say that since then Barry Lynn is one of the people who has done much to increase public awareness.
This posting is by Don Allen Resnikoff, who takes full responsibility for its content
Tweets about CFPB, retweeted by Jeff Sovern
Christopher Peterson, @PetersonLawProf
Today @CFPB settled a case against State Farm Bank for illegal credit report practices. Instead of holding the bank accountable, @CFPB imposed no fines or restitution at all. ZERO. The multi-billion dollar bank paid less than a parking ticket.
Ed Mierzwinski, @edmpirg
We [at USPIRG]anticipated @senatemajldr would force a vote to make the unqualified @KathyKraninger the @CFPB director so we have a new report offering ideas for states, counties and cities to fill the #ProtectConsumers gap.
Tim Wu: Antitrust’s 10 Most Wanted
Excerpts from Medium.com article (URL below)
An increasing number of industries are dominated by oligopolies and monopolies. Compiled here are firms or industries that are ripe for investigation.
1. Amazon
Amazon has taken a dominant share of online retail in part through the acquisition of competitors. Its practice of aggressively copying successful marketplace products has similarly raised questions as has its bullying of smaller brands, its efforts to control pricing on competing platforms through “most favored nation” contracts, and aggressive use of 18-month noncompete agreements.
2. AT&T/WarnerMedia
AT&T, the one-time telephone monopolist broken up in the 1980s, has moved into television. Since acquiring Time Warner and HBO for $85.4 billion this year, AT&T has begun using HBO as a club against Dish and Dish Sling.
3. Big Agriculture
Over the last five years, the agricultural seed, fertilizer, and chemical industry has consolidated into four global giants: BASF, Bayer, DowDuPont, and ChemChina. According to the U.S. Department of Agriculture, seed prices have tripled since the 1990s, and since the mergers, fertilizer prices are up as well.
4. Big Pharma
The pharmaceutical industry has a long track record of anticompetitive and extortionary practices, including the abuse of patent rights for anticompetitive purposes and various forms of price gouging.
Can something be done about pharmaceutical price gouging on drugs that are out of patent or, perhaps more broadly, the extortionate increases in the prices of prescription drugs?
5. Facebook
Should the Instagram and WhatsApp mergers be retroactively dissolved (effectively breaking up the company)? Did Facebook use its market power and control of Instagram and Instagram Stories to illegally diminish Snapchat from 2016–2018?
6. Google
On its way to becoming the search monopoly, Google acquired advertising competitors iMob and DoubleClick along with rival Waze and other potential competitors. Has Google anticompetitively excluded its rivals?
7. Ticketmaster/Live Nation
Has Live Nation used its power as a promoter to protect Ticketmaster’s monopoly on sales? Was Songkick the victim of an illegal exclusion campaign? Should the Ticketmaster/Live Nation union be dissolved?
8. T-Mobile/Sprint
In what appears to be a straightforward anticompetitive merger, the two carriers are attempting to merge to reduce the wireless market to three major firms (AT&T, Verizon, and Sprint/T-Mobile).
9. U.S. Airline Industry Over the 2010s, the agencies allowed it to consolidate to three major players (four airlines control 85% of the industry), yielding tiny seats, packed cabins, regular overbooking, higher fees, and other well-known unpleasantries?
10. U.S. HospitalsAfter years of consolidation, the number of independent hospitals in most cities and towns has decreased significantly. A series of retrospective studies have found that post-merger, prices increased while the quality of service, measured by mortality rate, decreased.
The preceding excerpts are from the article: https://medium.com/s/story/antitrusts-most-wanted-6c05388bdfb7 (paywall)
Advocate Marcia Bernbaum reports progress on implementation of DC public toilets proposal
On Tuesday, December 4 the DC City Council, as part of a Consent Agenda (packaging proposed legislation with which the attending Council members had no problems) voted 12 - 0 in favor of Bill 22 -223, Public Restroom Facilities & Installation Act of 2018 [https://pffcdc.org/wp-content/uploads/2018/12/B22-223-Public-Restroom-Facilities-Installation-Act-of-2018-Com.-on-Health..pdf]
On Tuesday, December 18 there is a second vote. Assuming that at a minimum 7 of the 13 Council Members vote in favor the Bill will be passed.
Next steps:
This Bill, and any others passed by the DC Council on Dec. 18 will next go to Congress for a 30 day period. Assuming there are no objections on the Hill the Bill goes to the Mayor to be signed.
The Executive will implement the guidelines included in the Bill, including two pilots included in the Bill:
The Kojo Show on NPR recently interviewed public toilet advocates: See The plan to bring public restrooms to DC[https://thekojonnamdishow.org/shows/2018-12-03/the-plan-to-bring-public-restrooms-to-d-c] runs 28 minutes.
From DigitalMusicNews
As litigation pressure mounts, FCC chairman Ajit Pai has admitted that Russians interfered with the agency’s open commenting process related to the repeal of net neutrality.
An extremely contentious battle over net neutrality in the United States has a familiar interloper: Russia. Earlier this week, Federal Communications Commission (FCC) chairman Ajit Pai flatly admitted that Russian operatives were actively attempting to persuade the agency to repeal net neutrality, with the agency’s open commenting period gamed with thousands of fake comments from Russian accounts.
In a court filing issued this week, Pai admitted that it was a “fact” that a “half-million comments [were] submitted from Russian e-mail addresses and… nearly eight million comments [were] filed by e-mail addresses from e-mail domains associated with FakeMailGenerator.com…”
(The full statement from Pai is here).
The admission marks a strong shift for Pai, who previously denied or negated the importance of fake comments during the FCC’s open commenting period.
The filing itself is part of a broader lawsuit against the FCC by The New York Times and Buzzfeed, both of whom are seeking access to FCC documents under the Freedom of Information Act (FOIA). The FCC, led by Pai, has pushed back on those requests, arguing that the release of sensitive internal documents could open the agency to security threats.
An earlier report found that nearly 100 percent of verified comments from actual citizens were in favor of preserving net neutrality.
Separately, FCC chairwoman Jessica Rosenworcel has sharply criticized her own agency, while calling for the release of the documents in question. She also pointed to extreme spamming of the FCC’s comment system, with Russian interference a major contributing factor.
“As many as nine and a half million people had their identities stolen and used to file fake comments, which is a crime under both federal and state laws,” Rosenworcel declared. “Nearly eight million comments were filed from e-mail domains associated with FakeMailGenerator.com. On top of this, roughly half a million comments were filed from Russian e-mail addresses.
“Something here is rotten — and it’s time for the FCC to come clean.”
The open commenting period occurred in 2017, ahead of the FCC’s momentous rollback of net neutrality rules.Since that point, a number of U.S. states have fiercely fought back against the FCC’s decision, with California leading the charge. Earlier this year, California passed a strong net neutrality protection law, setting the stage for a major showdown against the FCC and the U.S. Department of Justice.
Within moments of passing its neutrality-protecting SB 822, the U.S. Department of Justice filed a lawsuit. Soon thereafter, several major ISPs filed their own lawsuits.
Just recently, California agreed to stay the implementation of its neutrality protection law, pending a ruling by the D.C. Circuit Court in early 2019. The FCC’s rollback prohibits any “state or local measures that would effectively impose rules or requirements that we have repealed,” though California legislators argue that the FCC lacks jurisdiction to enforce its provisions.
The DOJ’s lawsuit, perhaps symbolically, has been filed as United States v. State of California.
Credit: https://www.digitalmusicnews.com/2018/12/05/fcc-ajit-pai-russia-net-neutrality/
Documents released in a British parliamentary committee inquiry suggests that Facebook and CEO Mark Zuckerberg may have given select developers special access to user data and deliberated on whether to sell that data.
A WSJ video (behind a paywall) is interesting in that it shows the documents:
https://www.wsj.com/articles/u-k-releases-internal-facebook-emails-deliberating-data-access-1544022496?mod=cx_picks&cx_navSource=cx_picks&cx_tag=video&cx_artPos=1#cxrecs_s
Bloomberg: Exchange-traded funds are making stock markets dumber -- and more expensive.
That’s the finding of researchers at Stanford University, Emory University and the Interdisciplinary Center of Herzliya in Israel. They’ve uncovered evidence that higher ownership of individual stocks by ETFs widens the bid-ask spreads in those shares, making them more expensive to trade and therefore less attractive.
This phenomenon eventually turns stocks into drones that move in lockstep with their industry. It makes life harder for traders seeking informational edges by offering fewer opportunities to capitalize on insights into earnings and other signals.
The study is the latest to point out signs of diminished efficiency in markets increasingly overrun by the funds.
Excerpt from https://www.bloomberg.com/news/articles/2017-04-19/etfs-seen-creating-market-that-s-both-mindless-and-too-expensive
Gerrymandering in Wisconsin
Recent news reports discuss whether the legislature in Wisconsin remains dominated by Republicans despite a majority Democratic party vote in the state, arguably because of gerrymandering. Without expressing any opinion on that issue, here is Scotusblog's history of litigation on the gerrymandering issue in Wisconsin:
Gill v. Whitford (U.S. Supreme Court)
Docket No.Op. Below16-1161W.D. Wis. Oct 3, 2017
Tr.Aud.Jun 18, 2018- Roberts OT 2017Holding: Plaintiffs -- Wisconsin Democratic voters who rested their claim of unconstitutional partisan gerrymandering on statewide injury -- have failed to demonstrate Article III standing.
Judgment: Vacated and remanded, 9-0, in an opinion by Chief Justice Roberts on June 18, 2018. Thomas and Gorsuch joined the opinion except as to Part III. Justice Kagan filed a concurring opinion, in which Justices Ginsburg, Breyer, and Sotomayor joined. Justice Thomas filed an opinion concurring in part and concurring in the judgment, in which Justice Gorsuch joined.
Excerpt of SCOTUSblog Coverage:
Symposium: The Supremes put off deciding whether politics violates the Constitution (Hans von Spakovsky)
Symposium: The elections clause as a structural constraint on partisan gerrymandering of Congress (Richard Pildes)
Symposium: Back to the drawing board for political gerrymandering plaintiffs (John Phillippe)
Posting by Don Allen Resnikoff
A brief book review by Don Allen Resnikoff:
The Curse of Bigness: Antitrust in the New Gilded Age
by Tim Wu, Columbia Global Reports, RRP, 170 pages.
Tim Wu’s short new book argues for a return to a more aggressive style of antitrust law enforcement in the U.S.
Wu makes his argument in a way that is accessible to a broad array of people, not just antitrust litigators and scholars. His book has drawn a lot of attention in popular media.
What has gone wrong with antitrust law? Wu explains in his introductory chapter that the law is suffering from the ideas of Robert Bork and the Chicago School of thinking: “Bork contended, implausibly, that the Congress of 1890 exclusively intended the antitrust law to deal with one very narrow type of harm: higher prices to consumers. That theory, the ‘consumer welfare’ approach, has enfeebled the law.”
An example of enfeeblement is abandonment by the government of big monopolization cases like those pursued in the past. In the distant past the Teddy Roosevelt, William Howard Taft, and Woodrow Wilson Administrations pressed monopolization cases against Standard Oil, Morgan banking interests, and others. More recently, federal and state governments have pressed monopolization cases against IBM, AT&T, and Microsoft.
The IBM, AT&T, and Microsoft cases focused on exclusionary and other anti-competitive conduct, and Wu praises them as doing some good in promoting competition. The prosecution of each case was disabled to some extent by wavering support from government. The Reagan Administration dismissed the U.S. v. IBM prosecution as “without merit.” The Bush Administration agreed to a consent decree for the U.S. Microsoft case that many found to be too mild. The Microsoft decree did have some important provisions that aided competition, such as requiring Microsoft to share information that permits competitor’s products to successfully interface with Microsoft products. The AT&T decree was strong in breaking up AT&T when it was entered in 1982, but the government has since permitted mergers which have in effect largely put the AT&T Humpty-Dumpty back together again.
Despite the disabilities of the recent monopolization cases, Wu describes what followed in recent years as much worse. Some examples: The government permission for reassembly of the AT&T monopoly; merger of airlines to just a few players; consolidation of the cable and pharmaceutical industries, and an array of permitted mergers in beer, seed and pesticides (Monsanto/Bayer), and other industries.
Perhaps most concerning to Wu is the emergence of dominant tech firms like Google, Ebay, Facebook, and Amazon. These companies, once disruptive upstarts, have become defensive behemoths that discourage new disruptive upstart companies, often by simply merging with them. Government enforcers have done little to discourage the mergers.
Wu has suggestions for reform of antitrust enforcement. He would like to see more vigorous merger enforcement. He would also like to see a return to government prosecution of big monopoly cases in the style of the cases against IBM, AT&T, and Microsoft, but with strong remedies like the break-up remedy initially used for AT&T. He would like more proactive government investigations into companies that have long-lasting dominant market power.
And, Wu would like to see the jettisoning of government prosecutor’s reliance on the “consumer welfare” standard for antitrust enforcement and its preoccupation with avoiding high consumer prices. Instead, he believes prosecutors and courts should focus on finding antitrust violations based on whether the targeted conduct is that which “promotes competition or whether it is such as may suppress or even destroy competition”—the standard prescribed by Justice Brandeis in his Chicago Board of Trade opinion of 1918.
Wu explains that a Brandeisian “protection of competition” test has the advantage of being focused on conduct and a process, as opposed to an abstract value such as maximization of consumer welfare. He argues that a protection of competition test will be practical and predictable, contrary to the complaints of critics. His analysis of recent big monopolization cases supports his argument. In those cases defendants like Microsoft beat down rivals in products like the web browser by pressing coercive arrangements on the industry. Deciding that such arrangements are anti-competitive need not turn on whether the prosecutor can prove what the price of browsers would be in a but-for world where browser rivals are not forced out of business.
I admire Wu’s ability to explain his points about reforming antitrust enforcement in a way that is understandable for a non-technical audience. But I think it is fair to say that Wu oversimplifies a bit for his non-technical book audience.
Some of the complexity of discussion about antitrust enforcement standards was on display at a recent FTC panel discussion on the consumer welfare standard, in which Wu participated. The session can be seen at https://www.ftc.gov/news-events/audio-video/video/ftc-hearing-5-nov-1-alternatives-consumer-welfare-standard-consumer
Some FTC panelists argued that the consumer welfare standard can be used in a flexible way, as it was in the Microsoft litigation. There the main focus was on anti-competitive behavior by Microsoft executives, not on consumer prices in a but-for world. Part of Tim Wu’s response to the argument that the consumer welfare standard can be used flexibly is his observation that frequently courts are using the consumer welfare standard in a narrow and inflexible way. That has led to many unfortunate case decisions that permit anti-competitive outcomes.
Some panelists at the FTC discussion raised questions about the relationship between Tim Wu’s reform proposals and political activism. One panelist referred to Tim Wu’s views as “left-wing.” I don’t think that suggestion is fair, at least in relation to the Gilded Age book, for reasons Wu explained at a recent book-store talk (at the Politics & Prose shop in D.C.). He explained that his core goal is to reinvigorate antitrust enforcement and broaden the goal of prosecutions so that they encompass traditional antitrust goals of protecting competition. The book does not address broader political reform proposals.
The discussion in Tim Wu’s Gilded Age book of the political corruption caused by large companies is so compelling that the reader is left hoping that there are political reform solutions bigger and broader than fixing the standards for antitrust investigations and prosecutions. A critical comment is possible about the limited scope of Wu’s suggestions for reform of a sort that Wu refers to in another context as “external.” It is like criticizing the Star Wars movie because it fails to explain the science of intergalactic travel. Similarly, it is true that Wu’s Gilded Age book does not suggest a broad political program for curing the political corruption caused by large and powerful companies, but that is not what the book is about.
This review is by Don Allen Resnikoff, who takes full responsibility for its content
Bloomberg reports:
A federal judge in Washington warned CVS Health Corp. and Aetna Inc. not to integrate operations after learning CVS closed its acquisition of the health insurer before obtaining court approval of an antitrust settlement the companies reached with the government.
U.S. District Judge Richard Leon blasted the companies and the Justice Department at a court hearing Thursday for treating him like a “rubber stamp.” He complained he was “being kept in the dark, kind of like a mushroom.”
“You need to slow this down,” Leon told Justice Department lawyer Jay Owen. “You’re like a freight train out of control. And you’re operating as if this is just some rubber-stamp operation. It is not, and it will not be.”
(Related: CVS Health Now Owns Aetna -- https://www.thinkadvisor.com/2018/11/28/cvs-health-now-owns-aetna/?slreturn=20181101133907)
CVS closed the $68 billion Aetna acquisition on Wednesday after receiving final regulatory approvals. The combination will create a health care giant with a hand in insurance, prescription-drug benefits and drugstores across the U.S.
The Justice Department cleared the deal in October after requiring the sale of Aetna’s Medicare prescription-drug plans to WellCare Health Plans Inc. The sale is intended to address the government’s concerns that the merger would otherwise harm competition between CVS and Aetna.
DOJ Consent
CVS, based in Woonsocket, Rhode Island, said in a statement the closing of the deal was done with the “full knowledge and consent” of the Justice Department and was in compliance with the federal law governing court approvals of merger settlements, known as the Tunney Act.
Merger settlements negotiated between the Justice Department and companies require court approval. The process can take months, and it’s routine for merging companies to close their deals before a judge signs off.
Nonetheless, the move irked Leon, who has previously taken issue with companies that treat their merger as a fait accompli. He said he probably won’t consider final approval to the settlement until the summer, at which point the companies will be far along in their integration. That will make it difficult to unwind the merger if he doesn’t approve the settlement, he said.
“The risk is on the public that I can unwind it and that we can recoup whatever negative consequences there were on the public in that interim seven months, and that’s going to be a big problem for me, if it should come out that way,” he said.
It’s not the first time the Justice Department’s antitrust division has faced Leon’s wrath. Leon oversaw the division’s unsuccessful challenge to AT&T Inc.’s takeover of Time Warner. During the trial, he criticized the government’s lawyers for their handling of the case.
From: https://www.thinkadvisor.com/2018/11/30/cvs-aetna-closed-their-deal-a-judge-is-not-happy/
From DigitalMusicNews 11/20/18
Multiple AMLC Board Members Quit as a Post-MMA Turf War Breaks Out
Donald Trump signed the Music Modernization Act at on October 11th.
Last week, DMN first reported on the formation of the American Music Licensing Collective, or AMLC, which is focused on fulfilling the duties the the MMA’s Mechanical Licensing Collective (MLC).
Now, that group has quickly lost a pair of board members, for reasons that remain suspicious. Others are also rumored to be departing.
The AMLC was the first to declare its intentions of handling the responsibilities of the Mechanical Licensing Collective, or MLC, which is a collective mandated by the now-passed Music Modernization Act (MMA). Interestingly, the AMLC beat a consortium of major publishers to the punch, a group that was largely expected to assume the MLC’s responsibilities with no competition.
But at least two AMLC heavy-hitters have contracted a quick case of cold feet, according to details confirmed by Digital Music News.Among the quickly-departed are George Howard and Larry Mestel, with neither offering a reason for their exits.
Both are extremely qualified to help manage the MLC’s charter of administering digital mechanical licenses. George Howard is the cofounder of both Music Audience Exchange and TuneCore, and CIO of Riptide Publishing. Mestel is the founder of independent publishing and entertainment company Primary Wave.
But earlier this week, the profiles of both Howard and Mestel were removed from the AMLC site with no explanation. Howard didn’t respond to an email sent on Monday, and the AMLC did not offer a reason for the departures.
Other names were also floated as either exiting or opting not to sign onto the AMLC at the last minute. We’ll report more departures as we confirm them.
Separately, a source close to the AMLC claimed that the departures were directly tied to threats by major publishers, with the National Music Publishers’ Association (NMPA) and at least one highly-influential publishing executive cited.
That group may be unhappy to be battling an MLC contender, though government-created agencies and contracts typically involve bidding processes. In fact, ‘no bid contracts’ are often regarded as an unfair, and a sign of corruption.
We reached out to NMPA president David Israelite on Monday morning to discuss the allegations, but have yet to receive a response.
Separately, AMLC cofounder Jeff Price confirmed to DMN that threats had been issued, but declined to name names. Price, who cofounded TuneCore and more recently founded Audiam, remains a board member of the AMLC but noted that he has “received threats that I recuse myself from the board or suffer repercussions to my career.”
Beyond that, Price was uncertain if other board members had received similar threats, but strongly suggested the possibility. “If there is a coordinated effort, and a colluded or orchestrated effort occurring to remove people from the AMLC, the question is why?”
“Is there something with the core mission statement they want to change? Otherwise what could it possibly be?”
That ‘core mission’ is likely a contentious one to the NMPA, which has been accused — by Price and others — of creating an MLC structure that unfairly enriches major publishers at the expense of independent songwriters.
Indeed, the formation of the AMLC appears to be motivated by issues related to MLC conflicts of interest, specifically those tied to the treatment of ‘unallocated funds’.
According to the MMA’s language, mechanical licenses that remain unclaimed after just one year will be largely mopped up by major publishers according to marketshare, an arrangement that has drawn protest. The value of the initial unclaimed tranche of funds has been estimated to be as high as $1.5 billion, at least according to a report by Variety.
But at least one other AMLC member says that there haven’t been threats — and the rest are remaining with the organization.
That includes AMLC board member Benji Rogers, who says he’s received largely positive feedback. “I intend to stay and have had no pressure to leave,” Rogers emailed DMN.
“Actually the opposite. People seem to be excited about it.”
Ricardo Ordoñez, who aims to rectify longstanding problems with international mechanical licensing payment flows via the AMLC, also said he’s staying put. “I am still on the board and not planning to leave,” Ordoñez told us on Monday.
Prodigious multi-platinum songwriter Rick Carnes is also remaining on the board: “Yes I will be remaining on the AMLC board….” Carnes emailed. “It is important that ALL of the potential MLC boards have qualified and dedicated Songwriter board members. It is in that interest that I agreed to serve on the AMLC.”
Also staying put is Stewart Copeland, former drummer of The Police and the highest-profile AMLC member.
Separately, there’s been no MLC-related announcement from the NMPA or its members.
That group, which helped to mastermind the passage of the Music Modernization Act through Congress, has been rumored to have pre-selected SoundExchange to oversee MLC mechanical administration. Prominent members of that group are expected to include Sony/ATV, Warner/Chappell, and Universal Music Publishing Group (UMPG), among others.
Rapper/business mogul Jay-Z (Shawn Carter) asks NY Court to block arbitration because of lack of arbitrator panel racial diversity
Excerpts from the filed Complaint:
he AAA’s lack of African-American arbitrators came as a surprise to Petitioners,
in part because of the AAA’s advertising touting its diversity. This blatant failure of the AAA to
ensure a diverse slate of arbitrators is particularly shocking given the prevalence of mandatory
arbitration provisions in commercial contracts across nearly all industries. It would stand to
reason that prospective litigants—which undoubtedly include minority owned and operated
businesses—expect there to be the possibility that the person who stands in the shoes of both
judge and jury reflects the diverse population.
By virtue of the increasing prevalence of arbitrations in commercial contracts,
arbitrators have gained unprecedented power to oversee and make decisions regarding significant
business disputes. The AAA’s arbitration procedures, and specifically its roster of neutrals for
large and complex cases in New York, deprive Mr. Carter and his companies of the equal
protection of the laws, equal access to public accommodations, and mislead consumers into
believing that they will receive a fair and impartial adjudication.
When a contract violates New York law, New York courts do not hesitate to
invalidate that contract provision as void as against public policy, notwithstanding the fact that
the parties willingly agreed to the provision. The AAA’s failure to provide a venire of arbitrators
that includes more than a token number of African-Americans renders the arbitration provision
in the contract void as against public policy. Accordingly, Petitioners seek a preliminary
injunction staying the pending arbitration under CPLR 7503(b) for a minimum of ninety days, so
that Petitioners may work with AAA to include sufficient African-American arbitrators from
which the parties may choose.
FILED: NEW YORK COUNTY CLERK 11/28/2018 10:32 AM
INDEX NO. 655894/2018
NYSCEF DOC. NO. 1
URL: https://dlbjbjzgnk95t.cloudfront.net/1105000/1105807/655894_2018_shawn_c_carter_et_al_v_shawn_c_carter_et_al_petition_1.pdf
Part of GM's recent product announcement suggests that the electric hybrid car may be on its way out, to be replaced by the electric-only car
In GM’s recent announcement “unallocating” a number of GM car plants, this sentence appears: ” GM now intends to prioritize future vehicle investments in its next-generation battery-electric architectures.”
Industry analysts suggest that the day of the hybrid electric car is over, and the future belongs to all-electric cars. Following is an excerpt from an article in Quartz: https://qz.com/1474677/gm-kills-the-chevrolet-volt-as-plug-in-hybrids-lose-market-share/
Plug-in hybrid cars, originally designed to be the transition between conventional cars and their electric successors, are looking more like a dead-end in automotive evolution. Likely, they won’t be missed.
The latest line in their epitaph was written by General Motors today (Nov. 26) when the automaker announced it was killing off its Chevrolet Volt, which arrived in 2011, along with five other models. The company is shuttering seven factories worldwide and shedding more than 14,000 salaried staff and factory jobs by the end of 2019 as the company retools for the future. “GM now intends to prioritize future vehicle investments in its next-generation battery-electric architectures,” GM Chairman and CEO Mary Barra said in a statement. The company will still build its popular all-electric Bolt sedan.
GM’s decision marks the latest transition in automobiles from combustion engines to electric. This quarter the sales of battery electric (BEV) and plug-in hybrid vehicles, which have tracked each other closely since 2014, finally diverged. The sales of battery electric cars soared 120%, outselling plug-in hybrids 3-to-1 in the third quarter, reports (paywall) Bloomberg New Energy Finance. BEV sales hit more than 77,000, thanks to Tesla’s red-hot Model 3, compared 29,000 plug-in hybrids, a 6% decline from a year earlier.
What happened? Plug-in hybrids tried to be everything to everyone. Electric drive and gasoline range? Check. Recharge at home, work or while driving? Covered. But they were always a compromise because they’re dragging around two drivetrains, rather than optimizing for one. As a result, they tended to have slightly higher prices (the Volt is $5,000 more than the all-electric Nissan Leaf) without the full high-octane performance or cachet of their all-electric cousins. While buyers claimed they want a hybrid option, just as they might pick a car with a sunroof, it seems many would rather plug-in, or fill up, but not both.
Before car companies committed to electric vehicles, almost all were waiting until batteries had improved, and buyers demanded electric vehicles (only 1.2% of US car sales were EVs last year). Well, batteries have improved and Tesla has proved you can make one of the most popular cars on the market powered only on batteries.
Since 2014, lithium-ion battery prices have fallen more than 50% while the median EV range now exceeds 100 miles, enough to cover the vast majority of drivers’ needs. After accounting for the reduced cost in fuel and maintenance, BEVs are winning over those who might have once favored the plug-in hybrid middle-ground.
In first for the organization Housing Rights Initiative, two NYC landlord lawsuits achieve class certification
The Upper Manhattan and Bronx J-51 cases are the group's first to reach the milestone
From: https://therealdeal.com/2018/10/08/in-first-for-housing-rights-initiative-two-landlord-lawsuits-achieve-class-certification/
By Will Parker | October 08, 2018 12:31PM
It’s been a slow march in the state courts, but as of last week, two class action lawsuits generated by the Housing Rights Initiative achieved class certification — the first of the group’s cases to reach this milestone.
Over the last two years HRI has organized more than 40 lawsuits against landlords, most alleging “schemes” to up rents more than prevailing laws allow.
The first of the two landlords in the class actions, Scharfman Organization, is alleged to have defrauded tenants of 260 Convent Avenue in Hamilton Heights. In the second, Richard Albert is similarly accused by his tenants at 3045 Godwin Terrace in the Bronx.
Both lawsuits allege the landlords’ companies broke the law by accepting the J-51 property tax benefit while deregulating rent-stabilized apartments. Keeping apartments rent-stabilized is a required condition of tax program, according to state law.
Should they win their cases, the more than 100 current and former tenants of both buildings could receive rent overcharge refunds and damages.
“My constituents living at 3045 Godwin Terrace deserve better!” Bronx City Council member Andrew Cohen said in a statement. “They deserve to have their rent-stabilized leases rightfully restored to their apartments.”
Albert was not reachable by phone and Mark Scharfman declined to comment. This is the ninth complaint HRI has helped put together against Scharfman’s companies.
Apart from J-51 cases, HRI has ventured into less tested waters by filing class actions against landlords alleged to have overcharged on rent by exaggerating the cost of apartment renovations, or “Individual Apartment Improvements.” A couple of these cases were dismissed by lower courts and then refiled. One, against Harlem property owner Big City Realty, faced an appeals court panel in July. The majority of the panel decided the complaint should have survived a motion to dismiss so that discovery could first be granted to the tenant plaintiffs to help prove their claims.
What is the law on genetic modifications of babies?
None in China, where media reports a recent unprecedented use of gene modification technology on human babies.
In the US, two crucial sentences inside a federal spending bill in 2015 (https://www.congress.gov/bill/114th-congress/house-bill/2029/text), the U.S. Congress effectively banned the human testing of gene-editing techniques that could produce genetically modified babies.
The language in the bill is a clear reference to the use of techniques like CRISPR to modify the human germline (see “Engineering the Perfect Baby”). Most scientists agree that testing germline editing in humans is irresponsible at this point. But regulators have decided that the description also fits mitochondrial replacement therapy, which entails removing the nucleus from a human egg and transplanting it into one from a different person to prevent the transmission of debilitating or even deadly mitochondrial disorders to children.
See https://www.technologyreview.com/s/602219/the-unintended-consequence-of-congresss-ban-on-designer-babies/ for more detail, and for the argument that the U.S. ban is too broad.
Gas Stations Shouldn't Delay Card Swipe Fee Deal, Court Told
By Christopher Cole
Excerpt from Law360 (paywall) https://www.law360.com/articles/1104678?ta_id=758500&utm_source=targeted-alerts&utm_medium=email&utm_campaign=case-article-alert
-- A tentative deal to end a class action over credit card swipe fees shouldn’t get delayed because brand gasoline retailers are locked in disputes with the oil companies whose fuel they sell, class lawyers have told a New York federal judge.
Merchants that are suing banks and major credit card issuers including Visa and Mastercard are trying to gain court approval to seal a $900 million addition to roughly $5.3 billion already set aside to pay out claims that the retailers were overcharged fees that they pay when they run credit cards. The class action claims the card issuers set up network rules that led to higher fees than merchants would pay in a competitive market.
But so-called “branded operators” — primarily gas stations and convenience stores that sell fuel from oil companies like Shell — are objectingto the settlement (https://www.law360.com/articles/1104187) , saying they are concerned that retailers will be counted as class members in name only and get left out of any financial claims. The class attorneys said those disputes are with the oil companies and the settlement should be approved before the disputes are resolved.
The Robins, Kaplan letter defending the settlement is here: https://dlbjbjzgnk95t.cloudfront.net/1104000/1104678/https-ecf-nyed-uscourts-gov-doc1-123114910718.pdf
How to use IRS data to evaluate charities
There are many excellent tools and organizations to help you determine which organizations might be putting your money to good uses vs. spending your money on administrative overhead. One organization that can help you is CharityWatch (https://www.charitywatch.org/home) a nonprofit charity watchdog and information service. In rating charities they try and help you maximize the effectiveness of every dollar you contribute to a charity by providing donors with the information they need to make more informed giving decisions.
If you want to do some investigating on your own, most charities must file a 990 tax return with the IRS. These forms contain a wealth of information about charities, but like most tax forms, they can be difficult to digest. But you only need to focus on a few pages. The first page will give you a summary of the organization’s revenue and expenses during the most recent two years. Charities are required to make their 990 forms available through their websites or by calling.
Page 7 gives you a list of the organization’s officers, directors, key employees, highest compensated employees and independent contractors (though only those receiving more than $100,000 from the organization). Page 9 and 10 are important. Page 9 tells you the source of the organization's revenue. Page 10 breaks down the organization’s expenses, in two ways. First it lists amounts spent on different types of expenses, such as program, salaries and wages, office expenses, information technology, travel, etc. Second it divides up each of these expenses according to whether it was a program-service expense, management expense or fundraising expense.
By focusing on line 25 (Total Functional Expenses) you can figure out the percentage of its revenue that a charity spends on its services vs. its fundraising and management (overhead). You can use a simple formula to figure out overhead:
Line 25C (management) plus 25D (fundraising) divided by line 25A (total expenses).
For a more complete description of how to read a 990 see: https://www.charitychoices.com/page/how-read-charity-990-tax-form
Thanks to Betsy Carrier for this information
Comment by Don Allen Resnikoff:
Tim Wu on US v. IBM
In his short book The Curse of Bigness: Antitrust in the New Gilded Age, Columbia Global Reports, RRP, 170 pages, Tim Wu argues for a return to an earlier and more aggressive interpretation of U.S. antitrust law. Tim Wu would like antitrust enforcement to focus on reducing the economic and political power of large companies. He argues vehemently for reviving the kind of big anti-monopoly cases the USDOJ pursued in the past.
At one point in his book Tim Wu focuses on the last series of monopoly cases pursued by the federal government, including the cases against IBM, Microsoft, and AT&T.
Wu’s focus on the US v. IBM case is particularly interesting to me. He is one of relatively few commenters who describe the case as having merit, and doing some good.
I worked on the US. v. IBM case during its last few years before the Reagan administration dismissed the case in 1982. My agreement with Wu is based on that experience. I participated in the moot-court like inquiry that USDOJ antitrust chief William Baxter conducted before he decided to abandon the case. As first assistant to the US v. IBM trial chief I was the senior trial staff person on hand in New York when the phone call came in from one of Baxter’s assistants in Washington directing me to hotfoot it over to the nearby Cravath, Swaine, & Moore offices and meet with IBM’s lawyer Tom Barr. My chore was to deal with papers terminating the litigation. The papers described the case as “without merit.” I recall walking over to the Cravath offices very slowly, after talking with the staff.
Wu believes that the US v IBM case was important for holding a regulatory gun to the head of IBM for many years, even if at the end the Reagan administration dropped the case. Wu attributes the success of then upstarts Microsoft and Apple to the restraints IBM placed on itself to avoid government action. For example, IBM dropped its practice of tying (“bundling”) hardware and software, which facilitated an independent software industry, and development of personal computers. Wu promises a deeper dive into the IBM case in a forthcoming article called “Tech Dominance and the Policeman at the Elbow.”
I hope that Wu’s new article will go into more detail on the merits of the US v. IBM case. The allegations and proofs in the government’s case support Wu’s focus on the concern that companies like IBM and Microsoft may seek to squelch competitors by creating barriers to entry. The barriers can be effective and anti-competitive whether or not they are viewed that way by “Chicago school” critics.
With regard to the allegations and proofs in the US v. IBM case, a brief but fair summary can be found in a USDOJ brief filed in 1995 in connection with a tangentially related IBM court action. See https://www.justice.gov/atr/case-document/united-states-memorandum-1969-case
The 1995 USDOJ summary explains that the US v. IBM action that ended in 1982 alleged that IBM had undertaken exclusionary and predatory conduct with the aim and effect of eliminating competition so that IBM could maintain its monopoly position in general purpose digital computers. Specifically, the Government contended that IBM engaged in anticompetitive practices "for the purpose or with the effect of restraining or attempting to restrain actual or potential competitors from entering" the relevant markets.
The Government alleged that IBM's bundling of software with "related computer hardware equipment" for a single price was anti-competitive. A related allegation addressed the IBM practice of insisting on proprietary rather than industry standard interfaces between elements of the computer systems, and then arbitrarily shifting the standards in a way that created barriers for competitors.
Another allegation was that IBM predatorily priced and preannounced specialized computer systems that the Government termed "fighting machines." IBM allegedly introduced the specialized computer systems "knowing [the products] had unusually low profit expectations." Allegedly, IBM "developed and announced" the products "primarily for the purpose or with the effect of discouraging actual and potential customers from acquiring [competing products] " A goal was to discourage successful manufacturers of specialized computer systems from expanding into the general purpose systems that were IBM’s core business.
Also, in an effort to deter entry and injure competition, IBM allegedly "announced future production and marketing [of certain products] when it believed or had reason to believe that it was unlikely to be able to produce and market such products within the announced time frame . . . ."
To remedy these alleged violations, the Government sought, inter alia, divestiture.
The decision to dismiss the US v. IBM case was made in 1982 by USDOJ’s new antitrust chief, William Baxter. It is clear that the Reagan administration gave Baxter the job of antitrust chief with the expectation that he would rigorously apply Chicago School antitrust principles to USDOJ enforcement. He did that. The goal-posts set by Baxter for evaluating the US v. IBM case were narrow.
Baxter’s reasons for dismissal did include case management problems: the case went on for 13 years, and was not concisely presented. But the reasons for dismissal went far beyond that. From a narrow Chicago School point of view the allegations of IBM conduct creating barriers to competition did not pass muster. Baxter appeared to agree with Robert Bork’s often-quoted assessment that “There was no sensible explanation for IBM’s dominance . . . other than superior efficiency . . .”
But arguably IBM’s conduct would be found to be effectively anti-competitive if more assertive standards for antitrust illegality were applied. It is instructive that in August of 1984 the European Commission reached a settlement agreement with IBM that required IBM to facilitate interchangeability of complementary computer system products. For example, IBM was required to reveal hardware and software interface specifications to allow rivals to achieve compatibility. Also, IBM was required to cooperate with a European agency working to establish standardized interface standards.
The later USDOJ settlement in the US v. Microsoft case addressed similar concerns. In US v. Microsoft, for example, a focus was on computer code used to integrate the Internet Explorer with Windows. The government’s concern was about “middleware,” software that fits in the middle between applications and an operating system. The worry was that Microsoft integrated code in a way that was opaque to rivals, so that removing Microsoft middleware and substituting rival middleware would cause Windows to crash.
The US cases against IBM and Microsoft reinforce a basic point of Tim Wu’s Curse of Bigness book: A goal for the prosecutor and Court in a monopolization case is to maintain an open mind and carefully examine the facts to determine whether the main effect of product design and marketing practices of a monopolist is to block competitors and thereby deprive customers of choice.
This posting is by Don Allen Resnikoff, who is wholly responsible for the views expressed.
Sackler family members face mass litigation and criminal investigations over Purdue conduct and opioids crisis:
Suffolk county in Long Island has sued several family members, and Connecticut and New York are considering criminal fraud and racketeering charges against leading family members
Joanna Walters in New York
@Joannawalters13
Members of the multibillionaire philanthropic Sackler family that owns the maker of prescription painkiller OxyContin are facing mass litigation and likely criminal investigation over the opioids crisis still ravaging America.
Some of the Sacklers wholly own Connecticut-based Purdue Pharma, the company that created and sells the legal narcotic OxyContin, a drug at the center of the opioid epidemic that now kills almost 200 people a day across the US.
Suffolk county on Long Island, New York, recently sued several family members personally over the overdose deaths and painkiller addiction blighting local communities. Now lawyers warn that action will be a catalyst for hundreds of other US cities, counties and states to follow suit.
At the same time, prosecutors in Connecticut and New York are understood to be considering criminal fraud and racketeering charges against leading family members over the way OxyContin has allegedly been dangerouslyoverprescribed and deceptively marketed to doctors and the public over the years, legal sources told the Guardian last week.
“This is essentially a crime family … drug dealers in nice suits and dresses,” said Paul Hanly, a New York city lawyer who represents Suffolk county and is also a lead attorney in a huge civil action playing out in federal court in Cleveland, Ohio, involving opioid manufacturers and distributors.
Source: Excerpt is from https://www.theguardian.com/us-news/2018/nov/19/sackler-family-members-face-mass-litigation-criminal-investigations-over-opioids-crisis
AAI Asks First Circuit to Preserve Pharma Antitrust Class Actions Targeting Generic Exclusion (In re Asacol Antitrust Litigation)
AAI filed an amicus brief in the First Circuit Court of Appeals warning that unreasonable class action standards threaten to harm competition and consumers in the critically important pharmaceutical sector.
In In re Asacol Antitrust Litig., a class of indirect purchasers challenged an alleged "product hopping" scheme whereby brand-drug manufacturer Warner Chilcott pulled an ulcerative colitis drug from the market just as its patent was set to expire, only to substitute a replacement, patented drug and thereby stave off generic entry that would have benefitted consumers.
Read More https://www.antitrustinstitute.org/work-product/aai-asks-first-circuit-to-preserve-pharma-antitrust-class-actions-targeting-generic-exclusion-in-re-asacol-antitrust-litigation/
Facebook on Thanksgiving eve took responsibility for hiring a Washington-based lobbying company, Definers Public Affairs, that pushed negative stories about Facebook’s critics, including the philanthropist George Soros.
Facebook’s communications and policy chief, Elliot Schrage, said in a memo posted Wednesday that he was responsible for hiring the group, and had done so to help protect the company’s image and conduct research about high-profile individuals who spoke critically about the social media platform. Mr. Schrage will be leaving the company, a move planned before the memo was released.
Facebook fired Definers last week, after a New York Times investigation published on Nov. 14.
“Did we ask them to do work on George Soros?” Mr. Schrage wrote in the memo, a draft of which had circulated online earlier in the week. “Yes.”
***
The Shrage memo is here: https://newsroom.fb.com/news/2018/11/elliot-schrage-on-definers/
Source: https://www.nytimes.com/2018/11/22/business/on-thanksgiving-eve-facebook-acknowledges-details-of-times-investigation.html?action=click&module=Latest&pgtype=Homepage
The total value of the incentive package New York is using to lure Amazon could top $2.8 billion.
Amazon announced Tuesday that it would build new headquarters in New York City and Washington D.C.’s Virginia suburbs, each of which would host around 25,000 workers.
The New York City headquarters, built on the East River waterfront in Queens, would vault Amazon into the ranks of the city’s top private-sector employers while transforming a site now mostly occupied by industrial buildings and parking lots.
Snagging the online retailer, though, comes at a cost.
In addition to nearly $1.53 billion in tax credits and grants offered by the state, Amazon would also qualify for two big tax breaks from the city.
If it creates 25,000 jobs, as promised, Amazon would qualify for a city corporate income tax credit worth nearly $900 million over 12 years. On top of that, it would get a 15-year property-tax abatement worth an estimated $386 million.
Those city tax credits aren’t unique to the Amazon deal. They have long been available to other companies, too, as a way of incentivizing growth and development outside Manhattan’s crowded business districts.
Gov. Andrew Cuomo and New York City Mayor Bill de Blasio said they expect to more than recoup that amount in the form of personal income taxes paid by Amazon’s employees, sales tax and economic activity generated by the company’s presence.
Cuomo on Tuesday predicted that the project would eventually bring in $27.5 billion in new state revenue over the next 25 years, though that figure would depend on Amazon creating 40,000 new jobs in New York City — far more than the initial 25,000 it has promised. State budget director Robert Mujica said that calculation also includes an assumption that other businesses not connected to Amazon will have to hire as many as 67,000 workers to serve the needs of the company and its employees.
Some experts say that revenue projection, which includes ancillary jobs like a food vendor who sells sandwiches to Amazon workers, may overestimate the company’s impact.
“I’m not a big fan of counting the indirect jobs,” said Nicole Gelinas, a senior fellow at the Manhattan Institute. She said vendors would likely sell to someone else if Amazon weren’t there.
Source: https://www.washingtonpost.com/business/incentives-to-amazon-could-top-28-billion-in-nyc/2018/11/14/86ecfc8a-e85a-11e8-8449-1ff263609a31_story.html?utm_term=.283684e6726c
Democrats have captured state AG offices from Republicans in four states — Colorado, Michigan, Nevada and Wisconsin — while maintaining control of AG seats in New York, California, Illinois, Maryland, and eight other states, plus the District of Columbia.
Combined with the eight states where current Democratic AGs were not up for election and the two states where Democrats have been or will likely soon be appointed as AGs, those results mean that a Democrat will soon be the top prosecutor in a majority of U.S. states — including Iowa, Massachusetts and Maryland, where Republicans will control the governors’ mansions.
“Compared to the last few cycles, this was a resurgence on the Democratic attorney general side,” said Joe Jacquot, a Foley & Lardner LLPpartner and former chief deputy attorney general of Florida. “I think those AGs — not only the ones that won in significant states, like Michigan, Wisconsin and Nevada, but also as a whole — feel a new motivation, and I think you’re going to see them press that in enforcement actions.”
The increased enforcement could include banking and financial issues.
Credit: Joe Hill, Law 360 (paywall)
Posting by Don Allen Resnikoff, who is responsible for the content
A Brief Book Review, by Don Allen Resnikoff:
THE FIXER: MY ADVENTURES SAVING STARTUPS FROM DEATH BY POLITICS,
by Bradley Tusk (Portfolio/Penguin, 2018)
Bradley Tusk’s short book reads like a promotional piece for his business. He is a consultant for businesses that need to fight political battles to survive. Successful clients have included the taxi app company, Uber, a fantasy sports company, FanDuel, and on-line insurer Lemonade.
Tusk wants you to know that he is pragmatic about politics, and tough minded. He describes politicians as motivated largely by self interest and the wishes of “pay-to-play” money donors. Politicians seldom do what is right for their broader constituency simply because it is the right thing to do.
Tusk’s book is worth reading for its war stories. The stories convey insights about the realities of interactions between competition and local politics.
Tusk’s stories have a common thread. The new businesses Tusk represents are disruptive, typically depending on modern internet technology. The new businesses challenge large commercial interests that are protected by favorable regulation. The businesses challenged by Tusk’s clients are well-connected politically, because they make large money contributions to politicians. For that reason the entrenched businesses are in a good position to preserve regulations that protect them.
Tusk’s strategy for his clients is to develop a campaign that puts pressure on politicians to dismantle the regulations that favor entrenched market players. That will clear a path for his clients.
Tusk’s first big client was Uber. When Tusk represented Uber it was a disruptive upstart, not the 800 pound gorilla it has become. Uber had not yet compromised its ability to charm the public. Uber’s innovative app-based business model challenged local government regulated and protected “yellow cabs.” Local governments regulated the cabs, but not necessarily in a way that made them cheap or efficient. Local governments often limited taxi competition by limiting the number of licenses, called “medallions,” that issued.
Local yellow cab interests were politically important in holding on to protective regulation, although the cab industry story differs from the FanDuel and Lemonade stories in that many yellow cab drivers are individual or otherwise small enterprises.
Tusk’s strategies for Uber involved mobilizing Uber customers to complain to legislators, and using lobbying firms to persuade regulators. A public relations campaign was launched as well. A key to Uber’s success was that customers disliked the traditional yellow cabs, but liked Uber.
Early victories for Uber were achieved in the District of Columbia and New York City, where regulations that blocked Uber were dismantled. The New York City victory marked a turning point for Uber. Here is an excerpt from the book outlining the New York strategy:
A memo I wrote [Uber’s] Travis in mid-2011 laying out my initial thoughts on how Uber should deal with its New York City problem ended up encompassing many of the same tactics we’d use over the next five years to fight the taxi industry: In every jurisdiction, make taxi’s opposition all about their own corrupt, entrenched needs, and not about the good of drivers or riders; align Uber with any elected official who really cared about technology and innovation; draw attention to taxi’s long and ugly history of racism; posit Uber as a way to fundamentally change that; and demonstrate that Uber drivers were all individual small businesses and this was a new and different type of opportunity for them. Taxi’s strength was their political influence. We needed to make it their weakness.
For the purposes of this brief review we will not explore in detail Tusk’s additional strategies for Uber, Fanduel, and Lemonade. They are, of course, available in Tusk’s book.
Like Tusk, the FTC and USDOJ have engaged in challenges to local regulations that favor particular entrenched businesses. But that is regulatory action that is tangential to Tusk’s business activity, which involves a lot of grass-roots effort and lobbying of politicians. Tusk’s approach is mostly about political campaigns that involve customer support and action, in addition to employing lobbyists. Tusk’s activity for his clients carries the spirit of street fighting.
The Tusk stories are useful in a way that is reminiscent of the industry studies economists have traditionally done to provide insight into particular markets. The stories help us understand app based taxi service, fantasy sports, and on-line insurance, all of which rely on the internet. Knowledge about particular markets is obviously a useful predicate for considering the need for market regulation.
This posting is by Don Allen Resnikoff, who takes full responsibility for its content.
DAR Commentary: Deltrahim tells CNBC he ignores the President’s opinions on Antitrust –
From https://www.investorideas.com/news/2018/main/11133CNBC-MakanDelrahim.asp
Interview excerpt:
FABER: But when the president writes, and this is from this summer, "In my opinion, The Washington Post is nothing more than an expensive lobbyist for Amazon as it uses protection against anti-trust claims, which many feel should be brought." Again, as the man who runs enforcement for the anti-trust division, when you hear something like that from the executive, is there a response that you have?
DELRAHIM: Well, we hear that from executive and legislative. I mean, by the way, these types of concerns raised about Amazon are bipartisan. And Senators raise them, the president has raised it. It's -- again, I think it's great that we have such a debate about free markets and the anti-trust laws there to protect the free markets. As far as what we do in our enforcement, you know, we need the evidence, we need the economics, we go to court. And politics, you know, that goes on between various aspects of the government don't affect our decisions to make these cases.
Could that be true? Is it consistent with past USDOJ deference to Presidential opinion?
Teddy Roosevelt famously was an active participant in antitrust enforcement. Writers Johnson and Kwak tell us that:
In late February 1902, J.P. Morgan, the leading financier of his day, went to the White House to meet with President Theodore Roosevelt and Attorney General Philander Knox. The government had just announced an antitrust suit -- the first of its kind -- against Morgan's recently formed railroad monopoly, Northern Securities, and this was a tense moment for the stock market. Morgan argued strongly that his industrial trusts were essential to American prosperity and competitiveness.
The banker wanted a deal. "If we have done anything wrong, send your man to my man and they can fix it up," he offered. But the president was blunt: "That can't be done." And Knox succinctly summarized Roosevelt's philosophy. "We don't want to fix it up," he told Morgan, "we want to stop it."
Johnson and Kwak make it clear that, more recently, Barack Obama was much more than a passive commenter on USDOJ enforcement. When leading bankers visited the White House in 2008, at the height on the banking crisis, the President was not shy in expressing himself:
"My administration is the only thing between you and the pitchforks," he famously told the bankers.
Johnson and Kwak complain that the enforcement that followed the Obama statement was weak, but that is not because President Obama was not engaged in the process of enforcement (or lack of it).
Perhaps Delrahim’s characterization of President Trump as a political commenter on USDOJ policy without much effect is less than fully persuasive.
Posted by Don Allen Resnikoff, who takes full responsibility for the content.
Stacy Mitchell advocates break-up of Amazon
Mitchell is the co-director of Institute for Local Self-Reliance. Earlier this year she wrote an article for The Nation called, “Amazon doesn’t just want to dominate the market — it wants to become the market.” In the Podcast below from public radio station WNYC, Mitchell describes the history of regulation of corporate concentration in a manner reminiscent of Tim Wu. She then explains why she thinks that the government should forcibly separate Amazon's platform business from its other businesses.
This Podcast is at https://www.wnycstudios.org/story/making-america-antitrust-again
AAI Files Comments in FTC Competition Hearings
On November 15, the AAI submitted comments in response to the Federal Trade Commission's request for public comments for Hearing #2 On Competition and Consumer Protection in the 21st Century. The FTC sought feedback on eleven wide-ranging topics, including the propriety of the consumer welfare standard, how antitrust law should account for public policy concerns, evidence of increasing concentration and changing price-cost margins, reform priorities, international convergence, error costs, out-of-market benefits, and monopsony and buyer power.
Read More - https://www.antitrustinstitute.org/work-product/aai-files-comments-in-ftc-competition-hearings/
Tim Wu: Competition policy as politics
Tim Wu’s Op-ed in Sunday’s NY Times anticipates his forthcoming book “The Curse of Bigness: Antitrust in the New Gilded Age.” Wu presents competition policy as a political issue. The dominance of big companies leads to totalitarianism. Former FTC Commissioner Robert Pitofsky warned in 1979 that “massively concentrated economic power, or state intervention induced by that level of concentration, is incompatible with liberal, constitutional democracy.” Antitrust has more than an economic goal. It is a check against the political dangers of unaccountable private power.
Tim Wu’s book, which will be available shortly (I do not have access to a preview copy), is likely to discuss details of how government should enforce the antitrust laws. In earlier writing, Wu has argued for antitrust enforcement that reaches beyond the current “consumer welfare” standard. He argues for post-consumer welfare antitrust that will be practical and predictable. (See https://www.competitionpolicyinternational.com/wp-content/uploads/2018/04/CPI-Wu.pdf)
Wu’s new book comes at a moment when it has become plain that the political importance of antitrust is known not only to devotees of Brandeis and Pitofsky, but also to Donald Trump.
President Donald Trump recently said that his administration is looking into antitrust violations by Amazon, Facebook and Google parent Alphabet.
In a video interview with Axios' Jonathan Swan and Jim VandeHei, Trump said he's "not looking to hurt" the U.S. tech giants but is considering action.
"We are looking at [antitrust] very seriously," Trump said. "Look, that doesn't mean we're doing it, but we're certainly looking and I think most people surmise that, I would imagine."
Trump says administration is looking into antitrust violations by Amazon, other tech giants
Berkeley Lovelace Jr. | @BerkeleyJr
Published 7:02 AM ET Mon, 5 Nov 2018 Updated 2:20 PM ET Mon, 5 Nov 2018 CNBC.com
Rex Curry | Reuters
Jeff Bezos, Chairman and CEO of Amazon, speaks at the George W. Bush Presidential Center's Forum on Leadership in Dallas, Texas, U.S., April 20, 2018.
President Donald Trump said his administration is looking into antitrust violations by Amazon, Facebook and Google parent Alphabet.
In a video interview with Axios' Jonathan Swan and Jim VandeHei that aired on Sunday, Trump said he's "not looking to hurt" the U.S. tech giants but is considering action.
"We are looking at [antitrust] very seriously," Trump said. "Look, that doesn't mean we're doing it, but we're certainly looking and I think most people surmise that, I would imagine."
Trump said others have also considered action against tech companies but a "previous administration" stopped that. "They were talking about this years ago. You know they were actually talking about this same subject — monopoly."
Shares of the three tech companies were essentially flat in premarket trading on Monday.
The president has repeatedly attacked Amazon, saying without evidence that package deliveries by the U.S. Postal Service for Amazon were costing the service money.
Trump has also been critical of Amazon CEO Jeff Bezos, who owns The Washington Post.
Mike Allen, co-founder and executive editor of Axios, told CNBC on Monday he thinks Trump was being serious about this inquiry into big tech.
"The president has been talking about this for a long time," Allen said in a "Squawk Box" interview. He also mentioned Trump's "obsession" with Amazon.
Tech companies have been under the microscope in Washington recently on efforts to prevent foreign meddling in U.S. elections.
Source: https://www.cnbc.com/2018/11/05/trump-looking-into-antitrust-violations-against-amazon-other-tech-giants.html
Watch: CNBC's Is Google a monopoly?
Is Google a monopoly? https://www.cnbc.com/video/2018/11/01/is-google-a-monopoly.html
Tim Wu's "told you so" on AT&T --Time Warner
From his NYT Op-Ed:
Last week, HBO went dark for both DISH and DISH-Sling, the main competitors to DirecTV and DirecTV Now, AT&T’s television services. This brazenly anticompetitive strategy does not portend a happy future for the viewing public, or for HBO itself.
At the risk of saying “we told you so,” it was widely predicted before the merger that AT&T would use HBO and other Time Warner media properties in just this way. When the Justice Department sued (unsuccessfully) to block the merger last year, its case was premised on the idea that AT&T would use its ownership of such properties to hurt its rivals in telecommunications. And now it is doing so.
Post-merger, AT&T has the means and the incentive to raise prices on valuable content (like HBO or the coverage of the N.C.A.A. “March Madness” basketball tournament) for cheaper, “unintegrated” telecom competitors that have been saving consumers money. If its rivals refuse to pay up, it can withhold the content entirely, diminishing them as competitors.
Full Op-ed: https://www.nytimes.com/2018/11/07/opinion/att-hbo-antitrust.html?action=click&module=Opinion&pgtype=Homepagewww.nytimes.com/2018/11/07/opinion/att-hbo-antitrust.html?action=click&module=Opinion&pgtype=Homepage
Concentration in Cardiology Markets Associated with Higher Prices and Lower Quality of Care
Study by: Thomas Koch, Brett Wendling, and Nathan E. Wilson
In recent years local markets for physician services have become increasingly concentrated. A new study uses Medicare claims and enrollment data to examine the effect of cardiology market structure on utilization and health outcomes for four patient populations—those treated for hypertension, a chronic cardiac condition, an acute cardiac condition, or an acute myocardial infarction (AMI). The study found that higher market concentration is associated with higher total expenditures and worse health outcomes. In three of the sample populations, patients residing in a zip code at the 75th percentile of cardiology market concentration were found to have a 5 to 7 percent greater chance of risk-adjusted mortality as compared with identical patients in a zip code at the 25th percentile of market concentration.
Researchers also found that there was a 7 to 11 percent increase in expenditures when moving from the 25th percentile to the 75th percentile of market concentration. The negative correlation between concentration and quality of care found in this study indicates that antitrust agencies have reason to be concerned about the effects of consolidation in physician markets on the price and quality of healthcare services.
Full study here. http://www.hsr.org/hsr/abstract.jsp?aid=53913902447
NYT: A strike by antiquarian booksellers against Amazon succeedsIt was a rare concerted uprising against any part of Amazon by any of its millions of suppliers, leading to an even rarer capitulation. Even the book dealers said they were surprised at the sudden reversal by AbeBooks, the company’s secondhand and rare bookselling network.
The uprising, which involved nearly 600 booksellers in 27 countries removing about four million books, was set off by the retailer’s decision to cut off stores in five countries: the Czech Republic, Poland, Hungary, South Korea and Russia. AbeBooks never explained its actions beyond saying it was related to payment processing.
“[Amazon sub] AbeBooks was saying entire countries were expendable to its plans,” said Scott Brown, a Eureka, Calif., bookseller who was an organizer of the strike. “Booksellers everywhere felt they might be next.”
The matter was apparently resolved when Sally Burdon, an Australian bookseller who is president of the International League of Antiquarian Booksellers, spoke with Arkady Vitrouk, chief executive of AbeBooks. In a Wednesday email to her members after their talk, Ms. Burdon said Mr. Vitrouk apologized for the platform’s behavior “a number of times” and said booksellers in the affected countries would not be dropped as scheduled on Nov. 30.
From: https://www.nytimes.com/2018/11/07/technology/amazon-bookseller-protest-strike.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=stream&module=stream_unit&version=latest&contentPlacement=9&pgtype=sectionfront
After mid-terms, MD Consumer Rights Coalition is cautiously optimistic about what the future holds in both Maryland and in Congress.
From a recent email letter to supporters:
In Congress, a number of candidates who support economic rights, affordable healthcare, and consumer protections won their elections. Deb Haaland, a Native American woman, was elected to Congress from New Mexico on a platform of economic fairness and immigration rights. Haaland and Sharice Davids (D-KS) are the first two Native American women elected to Congress. Ilhan Omar, the first Somali-American woman (and one of the first Muslim women) elected to Congress, won her race in Minnesota on a detailed economic rights platform including a federal jobs guarantee and increasing taxes on the wealthy. Alexandria Ocasio-Cortez (D-NY) became the youngest woman elected to Congress and ran a strong campaign centered on strong proposals for economic equity.
Shared themes of economic justice, Medicare for All, debt-free college,and reducing income inequality and the racial wealth gap vaulted Rashida Talib (D-MI), a Muslim woman, Ayanna Pressely (D-MA), an African-American former City Councilwoman, and Veronica Escobar (D-TX), a Latina former county judge, to Congress.
In January, there will be 223 Democrats and 197 Republicans in the House of Representatives. As Democrats ascend to leadership in House Congressional committees, several economic rights and consumer protection champions will chair committees including Maxine Waters (D-CA), who will chair the House Financial Services Committee, and Maryland’s own Elijah Cummings (D-MD), who will helm the House Oversight Committee. This means that it will be far more difficult for Members of Congress who oppose economic rights and consumer protections to attempt to overturn Obama-era regulations.
In the U.S. Senate, there will be 51 Republicans and 46 Democrats. This means that there may be strong differences between the Senate and House as they work towards passage of consumer protection legislation.
The Maryland Consumer Rights Coalition believes that consumer protection is a bipartisan issue: regulations help businesses and consumers both know the rules and operate from the same rule book in the marketplace. We look forward to working with members of Congress on both sides of the aisle to pass strong consumer protection legislation.
In Maryland, Governor Larry Hogan was re-elected, becoming only the second Republican governor to win a second term in Maryland. In the State House, Democrats held onto a super-majority in the House and Senate-meaning they can override a veto by the Governor. A number of new legislators elected to both the House and Senate ran on campaigns highlighting economic equity and inclusion issues.
Governor Hogan has already laid out his agenda highlighting tax cuts and greater accountability and oversight of schools, among other issues. What does these policies mean for public education and for low-income and working families?
What do these elections mean for us – and for the issues we care about – in Congress and in Annapolis? How can we take the energy and enthusiasm that so many individuals demonstrated in their work around the midterm elections and translate that momentum into the legislative session and federal advocacy?
Step one: join us at our Economic Summit & Consumer Celebration on November 15th when Congressman Jamie Raskin will share his thoughts on are his thoughts on how we should move forward and articulate, expand, and deepen the movement for economic rights in Maryland and Congress in this new political landscape. Congressman Raskin is one of the nation’s strongest progressive voices and strategists, and we’re delighted to present him with our Federal Champion of the Year award. You can buy tickets by clicking here.
Grass-roots campaigner Desmond Meade on the successful Florida ballot initiative on ex-felons' right to vote
For those engaged in local campaigns concerning consumer and other citizen rights, there is encouragement in the success of the grass roots campaign to restore voting rights to ex-felons in the state of Florida. At least 1.4 million people have regained the right to vote in Florida, following the passage of Amendment 4, a statewide initiative to re-enfranchise people with felony convictions who have completed their sentences, excluding people convicted of murder or sex offenses. The amendment passed with 64.5 percent of the vote. It needed 60 percent to pass.
There has been a lot of media coverage, but left-leaning Democracy Now's reporting includes a touching video interview with Desmond Meade, a convicted felon who spearheaded the fight for Amendment 4. Desmond Meade is the president of the Florida Rights Restoration Coalition. He’s also chair of Floridians for a Fair Democracy. DAR
The Democracy Now video, including the interview with Desmond Meade, is here: https://www.democracynow.org/2018/11/7/love_prevails_floridians_celebrate_massive_restoration
Posting by Don Allen Resnikoff, who is responsible for the content
Medicaid expansion scores election wins and losses across the country
By Harris Meyer | November 7, 2018
Updated at 2:40 a.m. ET
From the Rocky Mountains to the Great Plains to New England, Medicaid expansion got a big boost Tuesday from ballot initiatives that appeared headed for passage and from gubernatorial victories by Democrats in several states who made expansion a central issue.
Vvoters in Nebraska and Utah approved mandatory ballot initiatives to extend Medicaid coverage under the Affordable Care Act to adults with incomes under 138% of the federal poverty level. Republican governors and lawmakers in those states had repeatedly refused to pass it.
Democratic gubernatorial candidates who campaigned on expansion won contests in Kansas and Maine, both states where Republican governors have rejected it. Those victories made expansion much more likely.
On the other hand, a Republican who either oppose expansion or favor imposing limits on eligibility, such as work requirements, won in Florida, and a Republican may win in Georgia. Their Democratic opponents had made Medicaid expansion central to their campaigns.
In Michigan, a state that already expanded Medicaid, the Democratic gubernatorial candidate prevailed against a GOP opponent who favored work requirements. Gretchen Whitmer now will have to convince GOP lawmakers not to move forward with those eligibility limits, which likely would reduce enrollment.
But in Ohio, former U.S. Senator and current Attorney General Mike DeWine, who supported work requirements for the state's expansion program, beat the Democrat, Richard Cordray, who opposed a work mandate.
From: https://www.modernhealthcare.com/article/20181107/NEWS/181109942?utm_source=modernhealthcare&utm_campaign=am&utm_medium=email&utm_content=20181107-NEWS-181109942
DAR comment: The outcome of Tuesday's Medicaid ballot initiatives and some of the governor and Senate races underlines the obvious point that health care and other consumer advocacy points require buy-in of voters; there are many voters who would seem to be helped by expanded government support for health care and other government benefits who vote against because of other issues, such as those emphacized in the rhetoric of Donald Trump. Obviously, consumer benefit policy advocacy and political advocacy are linked.
Policy as politics: McCaskill's focus on health care and wage issues did not carry the day in Missouri
McCaskill's campaign focused primarily on pocketbook issues, like health care. She backed a ballot initiative raising Missouri's minimum wage and a union-led referendum on the Republican-backed right to work law passed by the Missouri General Assembly.
In Kansas City, voters turned out overwhelmingly for McCaskill, but it wasn't enough to carry her to victory. And while Greene County, which contains Springfield, turned out for Hawley, McCaskill fared better than Hillary Clinton did in the 2016 presidential election.
While McCaskill insisted she's a moderate, Hawley sought to tie her to national Democratic leaders, including U.S. Senate Minority Leader Chuck Schumer, D-N.Y., and House Minority Leader Nancy Pelosi, D-Calif.
During the campaign, McCaskill said she supported increased border security and she touted an endorsement by the union that represents Border Patrol agents, while Hawley accused her of supporting a "radical" immigration bill. The bill McCaskill is co-sponsoring would halt family separations at the border.
McCaskill tried to focus the race on protecting parts of former President Barack Obama's Affordable Care Act -- the same one Trump campaigned on repealing. Hawley is part of a Republican lawsuit that would undo the health care law.
Hawley, in response, said he supported a stand-alone law requiring that insurance companies provide coverage for those with pre-existing conditions. His campaign released an ad featuring his son, who he said has a rare chronic bone condition.
https://www.msn.com/en-us/news/politics/republican-hawley-beats-mccaskill-to-capture-us-senate-seat-in-missouri/ar-BBPqKtI?ocid=spartandhp
"Trump Administration Spares Corporate Wrongdoers Billions in Penalties"
The New York Times reports:
Across the corporate landscape, the Trump administration has presided over a sharp decline in financial penalties against banks and big companies accused of malfeasance, according to analyses of government data and interviews with more than 60 former and current federal officials. The approach mirrors the administration’s aggressive deregulatory agenda throughout the federal government.
The New York Times and outside experts tallied enforcement activity at the S.E.C. and the Justice Department, the two most powerful agencies policing the corporate and financial sectors. Comparing cases filed during the first 20 months of the Trump presidency with the final 20 months of the Obama administration, the review found:
• A 62 percent drop in penalties imposed and illicit profits ordered returned by the S.E.C., to $1.9 billion under the Trump administration from $5 billion under the Obama administration;
• A 72 percent decline in corporate penalties from the Justice Department’s criminal prosecutions, to $3.93 billion from $14.15 billion, and a similar percent drop in civil penalties against financial institutions, to $7.4 billion;
• A lighter touch toward the banking industry, with the S.E.C. ordering banks to pay $1.7 billion during the Obama period, nearly four times as much as in the Trump era, and Mr. Trump’s Justice Department bringing 17 such cases, compared with 71.
The full article is here. https://www.nytimes.com/2018/11/03/us/trump-sec-doj-corporate-penalties.html
AAI Asks Seventh Circuit for Better Monopolization Standards (Viamedia v. Comcast)
The American Antitrust Institute (AAI) and Public Knowledge have filed an amicus brief in the Seventh Circuit Court of Appeals(Link: https://www.antitrustinstitute.org/wp-content/uploads/2018/11/Viamedia-v.-Comcast-11.1.18.pdf) urging the court to reverse a district court's dismissal of refusal-to-deal and tying claims based on overly demanding monopolization standards.
Among other things, the brief argues that the district court improperly extended the defendant-friendly Trinko decision to mean that a refusal-to-deal claim can only be brought if a plaintiff shows that the monopolist's conduct had no potential rational purpose. And it improperly extended the defendant-friendly Masushita decision to mean that a plaintiff cannot avoid summary judgment unless it presents evidence that "tends to exclude" the possibility that the monopolist's conduct was lawful.
Read More - URL https://www.antitrustinstitute.org/work-product/aai-asks-seventh-circuit-for-better-monopolization-standards-viamedia-v-comcast/
20 minutes of John Oliver on State Attorneys General
Many State AGs are elected, and if that is true in your state then John Oliver wants you to do some research and vote. Many State AGs, Republican and Democrat are highly partisan, and spend great effort challenging the federal government, for better or worse. Oliver seems able to focus on worse.
The YouTube video URL follows. WARNING: Oliver uses profanity, and jokes.
https://www.youtube.com/watch?v=UpdMYOtAmKY
From NYT:
Letitia James and Keith H. Wofford faced off on Tuesday in their only debate for New York attorney general
Mr. Wofford, a Republican, had called for multiple debates, but Ms. James, a Democrat who is handily leading in public polls, agreed to just this debate at the Manhattan studios of Spectrum NY1 — and it nearly did not happen.
The New York attorney general’s office currently has dozens of actions against Mr. Trump and his administration, including a lawsuit against the president’s charitable foundation and another challenging efforts to ask a citizenship question on the census.
Ms. James has vowed to continue the efforts against Mr. Trump and his policies, and she continued to embrace that role on Tuesday. “Attorneys general across this country have been the firmest pillars of our democracy,” she said.
Her one question to Mr. Wofford was why he had voted for Mr. Trump for president in 2016.
From: https://www.nytimes.com/2018/10/31/nyregion/letitia-james-keith-wofford-debate.html?fallback=0&recId=1CLKskjlCJ60b6AUG479Co1il2n&locked=0&geoContinent=NA&geoRegion=DC&recAlloc=contextual-bandit-home-geo&geoCountry=US&blockId=midterm-elections&imp_id=267963940&action=click&module=Election%202018&pgtype=Homepage
Christy McDonald of Detroit Public Television shares a look at a close Attorney General race in Michigan, where Democratic candidate Dana Nessel is running against Republican candidate Tom Leonard.
The video is here: https://www.youtube.com/watch?v=uhCb11aq3RI
Pence speech suggests full bore US government conflict with China -- so resolution of trade and tariff issues affecting US consumers may be difficult
Vice President Mike Pence's speech blasting China was a "wake up call," according to CNBC's Jim Cramer.
Pence's Oct. 4 address at Washington's Hudson Institute accused China of "malign" efforts to undermine President Donald Trump and sway the November midterm elections from Republicans — a charge China has denied.
Cramer described the tone of the Pence speech as not just hawkish but a "declaration of economic war."
Cramer said: "It was a recognition that it's a communist country" and not really an ally of the U.S. because it "has none of the protections that democracies afford," he added.The U.S. and China are currently locked in a trade war that's seen each side imposing tariffs on each other's products.
However, Cramer said the divide between the world's two largest economic superpowers is bigger than trade.
Source: https://www.cnbc.com/2018/10/24/cramer-pence-speech-on-china-most-important-of-trump-administration.html
The Pence speech is here: https://www.whitehouse.gov/briefings-statements/remarks-vice-president-pence-administrations-policy-toward-china/
Excerpt from Pence speech:
But I come before you today because the American people deserve to know that, as we speak, Beijing is employing a whole-of-government approach, using political, economic, and military tools, as well as propaganda, to advance its influence and benefit its interests in the United States.
China is also applying this power in more proactive ways than ever before, to exert influence and interfere in the domestic policy and politics of this country.
Under President Trump’s leadership, the United States has taken decisive action to respond to China with American action, applying the principles and the policies long advocated in these halls.
In our National Security Strategy that the President Trump released last December, he described a new era of “great power competition.” Foreign nations have begun to, as we wrote, “reassert their influence regionally and globally,” and they are “contesting [America’s] geopolitical advantages and trying [in essence] to change the international order in their favor.”
NY Judge says fantasy sports is gambling
The opinion is here:
https://dlbjbjzgnk95t.cloudfront.net/1096000/1096870/fantasyruling-2-29.pdf
White, et al. v. Cuomo
IndexNo.: 5851-16
Excerpt:
Accordingly, it is hereby
ORDERED,ADJUDGED AND DECLARED that Plaintiff's motion for Summary Judgment is granted herein (and Defendant's cross-motion denied) as follows: that Chapter 237 of the Laws of the State of N ew York, to the extent that it authorizes and regulates IFS within the State of New York, is found null arid void as in violation of Article I, §9 of the New York State Constitution; and it is further
ORDERED, ADIDDGED and DECLARED that Defendant's cross-motion for summary judgment granting dismissal of the within action is granted herein (and plaintiffs motion denied) as follows; Chapter 237 of the Laws of the State of New York, to the extent that it excludes IFS from the scope of the New York State Penal Law definition of "gambling" at Article 225, is not in violation of Article I, §9 of the New York State Constitution,
Following is the study that is the source for many media articles:
Advertising in Young Children's Apps: A Content Analysis
Meyer, Marisa*; Adkins, Victoria, MSW†; Yuan, Nalingna, MS*; Weeks, Heidi M., PhD‡; Chang, Yung-Ju, PhD§; Radesky, Jenny, MD*
Journal of Developmental & Behavioral Pediatrics: October 26, 2018 - Volume Publish Ahead of Print - Issue - p
Objective: Young children use mobile devices on average 1 hour/day, but no studies have examined the prevalence of advertising in children's apps. The objective of this study was to describe the advertising content of popular children's apps.
Methods: To create a coding scheme, we downloaded and played 39 apps played by children aged 12 months to 5 years in a pilot study of a mobile sensing app; 2 researchers played each app, took detailed notes on the design of advertisements, and iteratively refined the codebook (interrater reliability 0.96). Codes were then applied to the 96 most downloaded free and paid apps in the 5 And Under category on the Google Play app store.
Results: Of the 135 apps reviewed, 129 (95%) contained at least 1 type of advertising. These included use of commercial characters (42%); full-app teasers (46%); advertising videos interrupting play (e.g., pop-ups [35%] or to unlock play items [16%]); in-app purchases (30%); prompts to rate the app (28%) or share on social media (14%); distracting ads such as banners across the screen (17%) or hidden ads with misleading symbols such as “$” or camouflaged as gameplay items (7%). Advertising was significantly more prevalent in free apps (100% vs 88% of paid apps), but occurred at similar rates in apps labeled as “educational” versus other categories.
Conclusion: In this exploratory study, we found high rates of mobile advertising through manipulative and disruptive methods. These results have implications for advertising regulation, parent media choices, and apps' educational value.
NYT: Rural Hospitals are closing: State Medicaid expansion choices have an effect
In its June report to Congress, the Medicare Payment Advisory Commission found that of the 67 rural hospitals that closed since 2013, about one-third were more than 20 miles from the next closest hospital.
A study published last year in Health Affairs by researchers from the University of Minnesota found that over half of rural counties now lack obstetric services. Another study, published in Health Services Research, showed that such closures increase the distance pregnant women must travel for delivery.
And another published earlier this year in JAMA found that higher-risk, preterm births are more likely in counties without obstetric units. (Some hospitals close obstetric units without closing the entire hospital.)
Ms. Kozhimannil, a co-author of all three studies, said, “What’s left are maternity care deserts in some of the most vulnerable communities, putting pregnant women and their babies at risk.”
Many factors can underlie the financial decision to close a hospital. Rural populations are shrinking, and the trend of hospital mergers and acquisitions can contribute to closures as services are consolidated.
Another factor: Over the long term, we are using less hospital care as more services are shifted to outpatient settings and as inpatient care is performed more rapidly. In 1960, an average appendectomy required over six days in the hospital; today one to two days is the norm.
Part of the story is political: the decision by many red states not to take advantage of federal funding to expand Medicaid as part of the Affordable Care Act. Some states cited fiscal concerns for their decisions, but ideological opposition to Obamacare was another factor.
In rural areas, lower incomes and higher rates of uninsured people contribute to higher levels of uncompensated hospital care — meaning many people are unable to pay their hospital bills. Uncompensated care became less of a problem in hospitals in states that expanded Medicaid.
In a Commonwealth Fund Issue Brief, researchers from Northwestern Kellogg School of Management found that hospitals in Medicaid expansion states saved $6.2 billion in uncompensated care, with the largest reductions in states with the highest proportion of low-income and uninsured patients. Consistent with these findings, the vast majority of recent hospital closings have been in states that have not expanded Medicaid.
Richard Lindrooth, a professor at the University of Colorado School of Public Health, led a study in Health Affairs on the relationship between Medicaid expansion and hospitals’ financial health. Hospitals in nonexpansion states took a financial hit and were far more likely to close. In the continuing battle within some states about whether or not to expand Medicaid, “hospitals’ futures hang in the balance,” he said.
Excerpts are from: https://www.nytimes.com/2018/10/29/upshot/a-sense-of-alarm-as-rural-hospitals-keep-closing.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=rank&module=package&version=highlights&contentPlacement=6&pgtype=sectionfront
Objecting class members' counsel's petition to U.S. Supreme Court in opposition to "cy pres" remedies; Public Citizen response
The introduction of the Petition follows:
INTRODUCTION
Petitioners, as class members, challenge an $8.5 million class settlement negotiated between class counsel and the defendant that pays the class no money, but instead directs millions to class counsel and funnels the remainder to third parties, including class counsel's alma maters and nonprofits to which the defendant already contributes. This is a clear abuse and must be curtailed.
This Court has long recognized that Rule 23(b)(3) opt-out class actions are an "adventuresome" innova tion fraught with potential conflicts. E.g., Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 614, 625-26 (1997). Rule 23 must be "applied with the interests of absent class members in close view." Id. at 629. The Court has consistently rejected the use of proce dural tactics by plaintiffs or defendants to game class actions. E.g., China Agritech, Inc. v. Resh, 138 S. Ct. 1800 (2018); Microsoft Corp. v. Baker, 137 S. Ct. 1702 (2017); Campbell-Ewald Co. v. Gomez, 136 S. Ct. 663 (2016); Standard Fire Ins. Co. v. Knowles, 568 U.S. 588 (2013).
Because of conflicts of interest inherent in the class-action process-especially with regard to settlements-careful judicial scrutiny is necessary lest class counsel and the defendant bargain away the rights of the class members on terms that minimize payoff by the defendant, maximize benefit to class counsel, and leave injured class members out in the cold. Yet the Ninth Circuit below took the opposite approach, declaring that close scrutiny of the terms of a cy pres settlement would be "an intrusion into the private parties' negotiations" and therefore "improper and disruptive to the settlement process." Pet. App. 15.
The majority of class actions that survive motions to dismiss are resolved by settlement. As one court has noted, "Inequitable settlements are an unfortunate recurring bug in our system of class litigation." Pearson v. Target Corp., - F.3d -, 2018 WL 3117848, at *1 (7th Cir. Jun. 26, 2018) (Wood, C.J.) ("Pearson II"). In the absence oflegal rules providing proper incentives, the negotiating parties' preferences readily achieved even in the absence of explicit collusion-are to structure a settlement that maximizes the class attorneys' share of the settlement value of the case while minimizing cost to the defendant, all at the expense of absent class members. In re Dry Max Pampers Litig., 724 F.3d 713, 717-18 (6th Cir. 2013) (Kethledge, J.); see generally Howard M. Erichson, Aggregation as Disempowerment: Red Flags in Class Action Settlements, 92 Notre Dame L. Rev. 859, 874-903 (2016) ("Erichson"). Parties structure settlements to hide the economic reality, create the appearance of a larger recovery, and thus support a larger claim for attorneys' fees. This case involves one of the most notorious devices used to create the "illusion of compensation," so-called cy pres recovery. Martin H. Redish et al., Cy Pres Relief and the Pathologies of the Modern Class Action: A Normative and Empirical Analysis, 62 Fla. L. Rev. 617 (2010) ("Redish").
The Ninth Circuit treated the cy pres arrangement here as equivalent to a class settlement paying $8.5 million to class members. In fact they got zero. All the money went to class counsel and to favored non profit organizations affiliated with class counsel and the defendant. It is not fair or reasonable under Rule 23(e) for class attorneys to arrogate millions for themselves and nothing for their clients. In ratifying the district court's approval of this settlement, the Ninth Circuit adopted several holdings that create perverse incentives that encourage both gamesman ship at the expense of absent class members and meritless class actions designed to benefit only attor neys. If this Court affirms the Ninth Circuit's approach, cy pres settlements like this one, previously substantially deterred by other appellate courts' re fusal to endorse them, will become dramatically more common, even supplanting settlements that currently directly pay class members tens of millions of dollars. The Court should reverse the judgment below, thereby making clear that class counsel has a fiduciary duty to class members, and that Rule 23(e) requires courts to align the interests of class counsel with the interests of their clients.
From https://www.supremecourt.gov/DocketPDF/17/17-961/52594/20180709130345481_17-961BriefForPetitioners.pdf
Public Citizen's brief is here:
Following is a Case Description posted by Public Citizen:
The plaintiffs in this case brought a class action against Google for violating users’ privacy by disclosing their Internet search terms to third-party websites. The complaint alleged claims for violation of the Stored Communications Act and several state-law causes of action. The class includes approximately 129 million people. Following mediation, the parties entered into a settlement providing for injunctive relief, an $8.5 million settlement fund, and attorney’s fees. Because distribution to the individual class members was infeasible, the settlement provided for cy pres distribution of the fund to organizations dedicated to protecting Internet privacy. In accordance with federal Rule of Civl Procedure 23(e), the district court then evaluated the settlement to assess whether it was fair, reasonable, and adequate, and held that it was. Two objectors to the settlement appealed and, after losing the appeal, petitioned for Supreme Court review. The Court accepted the case to consider whether distributing the settlement fund as cy pres rather than directly to class members complies with Rule 23(e).
Public Citizen filed an amicus brief in support of the settling parties. The brief explained that, to allow appropriate use of cy pres settlements while preventing their misuse, the federal appellate courts have articulated a consistent set of standards to assess cy pres awards. The courts allow settlements involving cy pres payments when distributions to individual class members are impracticable or when class members to whom distributions are practicable have been fully compensated for their losses. And the courts agree that proposed cy pres awards must be carefully scrutinized to ensure that they adequately benefit class members in ways that have a sufficient relationship to the claims asserted by the class.
In this case, the courts properly applied these broadly accepted standards. The brief also explained that, contrary to the suggestion in the amicus brief of the Solicitor General, Article III neither limits the ability of parties to settle a case nor addresses the form of distribution of compensatory relief.
California Net Neutrality Law Put on Hold Until Federal Lawsuit Is ResolvedBy Ted Johnson
WASHINGTON — California’s net neutrality law, signed last month by Gov. Jerry Brown, will be put on hold until federal litigation over the FCC’s role is resolved.
The state’s attorney general, Xavier Becerra, agreed to pause the implementation of the law, which includes the strongest net neutralityprotections of any state measure that has passed recently. The same day that Brown signed the law, the Justice Department sued to stop it, arguing that only the federal government can regulate interstate commerce.
California’s passage of the law was in response to the FCC’s decision late last year to repeal many of the net neutrality rules it had in place, including ones that ban internet providers from blocking or throttling traffic, or engaging in paid privatization.
After that action, a number of public interest groups and state attorneys general sued to challenge the FCC’s action, including a provision to preempt any state-level attempts to implement their own net neutrality rules. Oral arguments in the D.C. Circuit Court of Appeals case are scheduled for Feb. 1.
FCC chairman Ajit Pai called California’s agreement to pause its law a “substantial concession” that “reflects the strength of the case made by the United States earlier this month. It also demonstrates, contrary to the claims of the law’s supporters, that there is no urgent problem that these regulations are needed to address.”
State Sen. Scott Wiener, who authored California’s law, said, “of course, I very much want to see California’s net neutrality law go into effect immediately, in order to protect access to the internet. Yet I also understand and support the Attorney General’s rationale for allowing the DC circuit appeal to be resolved before we move forward to defend our net neutrality law in court.”
California’s law was due to go into effect on Jan. 1.
From: https://variety.com/2018/politics/politics/california-net-neutrality-law-on-hold-1202999031/
NYT: Service providers drop Gab
Pittsburgh shooter Bowers’s affiliation with Gab has already cost the company dearly. On Saturday, the company’s web hosting provider, Joyent, said it would stop hosting the site, according to an email posted by Gab on Twitter. Gab’s website went offline Sunday night and was replaced with a statement saying that its service would be temporarily inaccessible while it switched to a new hosting provider.
In addition, GoDaddy, the domain name provider, told Gab it had 24 hours to move its domain name to another service, after finding content on the site that promoted violence.
The payment processing platform Stripe, which Gab has used to receive fees for its paid Gab Pro membership level, and which froze Gab’s account this month for violating its terms of service, said it was suspending transfers to the company’s bank account pending an investigation, according to another email posted to Twitter by Gab. PayPal, another payment processor, canceled Gab’s account, saying it had been closely monitoring the site even before Saturday’s massacre.
Source: https://www.nytimes.com/2018/10/28/us/gab-robert-bowers-pittsburgh-synagogue-shootings.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=rank&module=package&version=highlights&contentPlacement=2&pgtype=sectionfront
Kavanaugh, Gorsuch, and Thomas v FDR New Deal style regulation?
The early phase of the Congressional hearings for Justice Kavanaugh involved some focus on his views about the power of administrative agencies. Democratic Senators in particular worried that Kavanaugh's judicial opinions were restrictive of the power of administrative agencies that carry out various government regulatory functions. Op-ed writer Eric Posner shares that concern, worrying that a conservative U.S. Supreme Court could bring us back to the kind of judicial thinking that prevailed prior to the FDR New Deal.
We recall that antipathy to regulations intended to protect workers and consumers dates back to at least 1905. Lochner v. New York was a 1905 Supreme Court case that blocked legislation limiting working hours for bakers. The theory of the Court involved support for freedom of contract. The years 1905 to 1936 have been called the “Lochner era,” ending with a partisan battle by Democrat President Franklin Delano Roosevelt.
Roosevelt wanted to stop the U.S. Supreme Court from blocking his regulatory efforts, so he threatened to use his popularity and power with Congress to increase the number of Justices. Such “court packing” would give Roosevelt the power to appoint sympathetic judges and change case decision outcomes. Faced with that challenge, the nine sitting Justices became more inclined to see things Roosevelt’s way. Case decisions on regulatory issues began to go Roosevelt’s way, and court packing was not pursued.
But Eric Posner is worried that a new Lochner era may soon be upon us. Following is an excerpt from his Op-Ed. DAR
The conservative assault on the administrative state has four elements.
First, Justices Gorsuch and Thomas want to revive a discredited legal rule that was invoked by the Supreme Court in 1935 and then abandoned. The “nondelegation doctrine” says that Congress may not “delegate” its legislative power to administrative agencies — in other words, authorize agencies to make policy through regulation. That doctrine is at issue again in the Gundy case, where the challengers argue that Congress gave the attorney general too much discretion to set the rules for sex offenders.
Second, Justices Gorsuch, Kavanaugh and Thomas want to undermine a rule called the Chevron doctrine, after a 1984 Supreme Court case. That rule says that when an agency regulation is based on a reasonable interpretation of a statute, courts should “defer” to the agency. The Chevron rule codified existing judicial recognition of the core idea of the administrative state. Specialists — in environmental hazards, in credit markets, in workplace safety — should regulate. Generalist judges, who end up disagreeing with one another and causing administrative confusion, should keep their hands off. The Chevron doctrine is at issue in the Nielsen case, where the challengers have urged the court not to defer to the government’s interpretation of the immigration statute.
Third, the conservative justices dislike the principle of agency autonomy and have looked askance at job protections for agency officials.
Fourth, the conservative justices have endorsed a novel interpretation of the First Amendment that protects businesses from regulation — from campaign finance regulation, labor regulation and even regulations that require them to disclose information to consumers.
What is the basis for this radical change in the law? Justices Kavanaugh, Gorsuch and Thomas claim to be “originalists,” who believe that the court should strike down laws that violate the original understanding of the Constitution. But the founders did not bar Congress from creating administrative agencies or think that the First Amendment protected businesses from commercial regulation.
Many liberals think that the conservative justices are cat’s paws of business. But their claims to the contrary, businesses do not oppose regulation. Businesses constantly beseech the agencies to regulate — not themselves, but the other businesses that they compete with or depend on, and are harmed by. The new conservative jurisprudence may help some businesses in the short run but ultimately will undermine the legal structure in which they flourish.
The answer is both obvious and depressing. The modern conservative jurisprudence is an exercise in nostalgia, a yearning for pre-New Deal America when, supposedly, government was less oppressive and people were freer than they are today. You can see this nostalgia in the homilies to olden times in Justices Gorsuch’s and Kavanaugh’s lectures — and their insistence that answers to today’s challenges can be found in a theory of government invented in the 18th century by men wearing breeches and powdered wigs.
https://www.nytimes.com/2018/10/23/opinion/supreme-court-brett-kavanaugh-trump-.html?action=click&module=Opinion&pgtype=Homepage
From Public Citizen
Sant'Ambrogio: Federal government filed only eight consumer protection cases in federal court in a recent year (click title for Public Citizen website)
Posted: 27 Oct 2018 09:58 AM PDT
by Jeff Sovern
According to Private Enforcement in Administrative Courts, 72 Vanderbilt Law Review, (Forthcoming), [https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3246738] by Michael Sant'Ambrogio of Michigan State, in the year ending March 31, 2017, the government filed only eight consumer protection cases in federal court, which contrasts with the 9,706 cases filed by private plaintiffs. Sometimes we see the argument that we don't need private enforcement of consumer laws because public enforcement is sufficient. If the numbers Sant'Ambrogio reports are accurate, they make that claim harder to make; indeed, they make it ludicrous. To be sure, many government cases are resolved short of filing in federal court, some government cases are resolved in internal administrative proceedings, and state agencies--especially AG's offices--also file consumer protection cases, but those categories are unlikely to come close to solving underenforcement problems.
Opinion: Patent Thickets Blocks More Affordable Drugs: The Case of Humira
October 23, 2018
From: https://www.thecppc.com/single-post/2018/10/23/How-Patent-Thickets-Blocks-More-Affordable-Drugs-The-Case-of-Humira?utm_campaign=06332353-a8ee-4aba-b739-ad057a76f56a&utm_source=so
The drug manufacturer AbbieVie Inc. has thrown up a formidable shield of patents around its drug Humira, preventing cheaper versions of the medicine from coming to market. This patent abuse should not be allowed to stand, and Congress, the Department of Health and Human Services, and the Food and Drug Administration should stop this manipulation and enact reforms to combat further abuses.
Humira has been around for over fifteen years and is one of the world's best selling drugs, with over $18 billion in global sales. It is used to treat inflammatory diseases-everything from rheumatoid arthritis to gut disorders-and it is extremely expensive, with a list price of over $50,000 per patient. Humira is also a biologic medicine, meaning it is made from living cells in a process similar to brewing. It accounts for over 60% of AbbieVie's revenue.
The main patent for Humira (which gives the drug manufacturer a monopoly on the drug) expired in 2016, so you would think that consumers could now benefit from biosimilars (cheaper versions of this medicine analogous to generic drugs). But AbbieVie has obtained over one hundred additional patents for Humira, an incredibly number for a single drug, and these patents extend into the 2020s and 2030s. They have 22 patents for various treatments, 14 patents for the drug's formulation, 24 patents on its manufacturing practices, and 15 other patents. Moreover, the company has filed suit to block two biosimilar versions approved by the FDA.
This is a prime example of what FDA Commissioner Scott Gottlieb criticized as "patent thickets" that block biosimilars and generic drugs and thwart competition, making consumers pay much higher prices. The biosimilar versions of Humira would sell at a 10% to 25% discount, which could help a lot of people struggling to afford their medicines.
As a result, AbbieVie still has a monopoly on Humira, and its price has risen to over $60,000 annually for some patients, and that earns over $12 billion in sales in the United States. And they are not the only company doing this. The drug company Johnson & Johnson has also created a thicket of over 100 patents around the anti-inflammatory drug Remicade to block cheaper generic drugs and increase its profits. Evidence shows that patent abuse, where companies file many different patents and make small changes to drugs to extend their exclusivity, is a serious and growing problem.
In Europe, where the legal environment is more friendly to patent challenges, over 20 biosimilar drugs have been approved since 2006, with immense benefits for patients. In the United States, these "patent thickets" have choked off much of the market, and only five versions are available.
One way to reduce patent abuse would be to pass the CREATES Act, a bipartisan bill that would make it easier for medicines whose patents have expired to be sold as cheaper generic versions. It allows generic drug companies to sue patented drug companies to compel them to provide samples they need to make these cheaper versions.
Patents should be used to reward substantive research and real innovation, not to maintain a monopoly and force consumers to pay skyrocketing prices.
From The ABA
DoNotPay app aims to help users sue anyone in small claims court--without a lawyer
By Jason Tashea
A new update to an existing chatbot app promises to allow users to "sue anyone in small claims court for up to $25,000 without the help of a lawyer," though early users warn of technical bugs and legal and ethical concerns.
Launched Wednesday, new updates to DoNotPay, a company that first made a splash by automating challenges to parking tickets in court without an attorney, will allow a user to sue anyone in small claims court in any county in all 50 states—without the need for retaining a lawyer. Previously only a web tool, the new product is also available for iPhone and will also include new features allowing users to find deals on prescription and over-the-counter drugs; make an appointment at the California Department of Motor Vehicles; and see if they are eligible to opt-in to various class-action settlements. The app also aims to fight unfair bank fees; earn refunds from ride-hailing companies; fix errors in a credit report; and dispute bank transactions.
An Android version is in the works.
“I want people to be addicted to fighting for their rights,” says Josh Browder, CEO of DoNotPay, who hopes his revamped app will be a one-stop shop for consumer protection issues.
The idea for the new app was born out of a project the company released last year, which helped people sue Equifax for up to $25,000 after the credit company’s 2017 data breach affecting 143 million people.
“Although lots of lawyers said it wasn’t possible,” said Browder in a statement reported by Yahoo Finance, “I was shocked when people won $9,000, $10,000 and $11,000 judgments. Even when Equifax appealed, the average person still prevailed.”
The new small claims suit feature, which Browder demoed at the Clio Cloud Conference last week in New Orleans, asks a user for their name and address and what the claim size is to determine whether it complies with a state’s limit, among other factors. It then generates a demand letter, creates a filing, helps serve notice of the suit and provides other support to usher users through the trial process. The app even generates suggested scripts and questions pro se litigants can use when they go to court. Parties are often not represented by an attorney in a small claim proceeding because it is either not permitted by law or because the amount in controversy is too low to justify the cost of an attorney.
Browder says the new application has three goals: Getting users what’s owed, fighting corporations and fighting bureaucracy.
Not just a small claims app, DoNotPay acquired Visabot to assist in the application of green cards and other visa applications. Previously, Visabot charged for many of its services (a green card application was $150, for example). All features on DoNotPay, including immigration, are free to users.
This isn’t to say that the new app won’t make money. While the revenue model is still a work in progress, Browder sees a future where after helping someone challenge a cellphone bill, they offer deals to switch carriers and take a commission based on conversions. While the app will require extensive user data to function, Browder says the venture-backed DoNotPay will not store or sell user data.
Of course, many of these features raise the specter of the unlicensed practice of law, a criminal offense in California, where Browder is based.
For his part, Browder is “a bit worried” about potential challenges. However, he believes that he can avoid some of these issues since his product is free to users. Further, he argues that the app is a free speech issue because its underlying code is speech. Code has been found to be speech on issues as broad as publishing encryption source code to the sharing of digital blueprints of 3-D printed guns.
“If you can 3-D print a gun,” he says, “you should be able to print a few documents.”
The legal profession is only one possible group to take issue with the new tool—the other are the users themselves. While the automated process was set up with the assistance of lawyers and paralegals, there’s no lawyer oversight of the app’s final products.
Asked how users should manage their dissatisfaction towards the product, Browder says it’s easy. “They can sue us with the app.”
In the day after the app’s release, several Twitter users took issue with technical and legal aspects of the tool. Nicole Bradick, a 2012 ABA Journal Legal Rebel, noted that the tool did not work properly. Gabriel Teninbaum, director of Suffolk University Law School’s Institute on Legal Innovation & Technology in Boston, said that he was given bad, inaccurate advice on Massachusetts law. Chase Hertel, counsel and deputy director for the ABA Center for Innovation, expressed concerns that the immigration feature did not fully inform people of various ongoing and evolving issues.
For his part, Browder says DoNotPay has pushed numerous updates to handle some of the technical issues.
Regarding the immigration feature, Browder defends it as the same tool it was before acquisition, which had “extremely positive reviews.” He adds that “we not only plan to maintain it, but also expand it.”
“While I can understand the skepticism of the legal establishment, I worked with public defenders in [Massachusetts] in detail to ensure it’s accurate,” says Browder over email regarding criticisms coming from Massachusetts. “Accuracy is an objective term and not opinion. Unless they can point to a precise and specific contradiction between the demand letter [DoNotPay] provides and [Massachusetts] law, it is false and defamatory to suggest it’s inaccurate.”
Updated on Oct. 11 after the app’s launch to add details about the issues users were reporting and Browder’s response.
Source: http://www.abajournal.com/news/article/file_a_smalls_claims_suit_anywhere_in_the_country_through_an_app
Restaurants, food allergies, and the law
For some, food allergies can mean that a take-out restaurant meal is a killer. Web-MD advises that people with serious food allergies should pick large corporate restaurants that are systematic about choosing food ingredients and providing information to customers. Small mom-and-pop operations have legal responsibilities to be careful, but are less likely to be systematic about knowing their ingredients and communicating with vulnerable customers. A recent prosecution for criminal negligence in the UK illustrates the problem. Owners of a small Indian-food carry out were convicted of criminally negligent manslaughter after the tragic death of a 15 year old customer with a serious peanut allergy.
Sources:
https://www.webmd.com/allergies/features/food-allergies-tips-for-eating-out#4
https://nam02.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.itv.com%2Fnews%2F2018-10-26%2Ftakeaway-bosses-guilty-of-manslaughter-by-gross-negligence-after-nut-allergy-death-of-15-year-old-megan-lee%2F&data=02%7C01%7C%7C589861fef4f44c85de5f08d63cc610ce%7C84df9e7fe9f640afb435aaaaaaaaaaaa%7C1%7C0%7C636763218705484378&sdata=oFXNuFG8U9aqiobR8Ct7g3yBRBaUfnTu1ZJVL8n90Hk%3D&reserved=0
Posted by Don Allen Resnikoff
David Boies, attorney for Elizabeth Holmes and her company Theranos: information on aggressive lawyering that you won’t learn in a law school
In his book Bad Blood: Secrets and Lies in a Silicon Valley Startup (Knopf), Wall Street Journal reporter John Carreyrou reviews his investigative reporting about the bad behavior of Elizabeth Holmes and her company Theranos. It was Carreyrou who broke the story in the Wall Street Journal that Theranos was essentially a scam, falsely promising new technology that yielded valuable analytical results from a pin prick of blood. In fact the new technique was not reliable. Elizabeth Holmes ended up being charged by the SEC with defrauding investors.
Theranos board members included some famous people, such as Henry Kissinger and George Shultz. When Theranos needed legal counsel, Elizabeth Holmes hired the well known firm of Boies, Schiller, and Flexner, led by David Boies.
An interesting aspect of the Carreyrou book is its focus on the tactics of David Boies and his firm. Author Carreyrou, who apparently is not a lawyer himself, expresses surprise and dismay about aggressive tactics used by the Boies firm.
What Carreyrou seems to find most upsetting is the Boies firm’s aggressive behavior toward whistle-blowers who exposed Theranos, including Tyler Shultz, the grandson of George Shultz. Tyler was an important early source for Carreyrou’s investigative reporting.
In a book chapter called “The Ambush,” Carreyrou recounts how Tyler visited his grandfather to discuss the grandfather’s concern that Tyler was speaking to the press and saying unflattering things about Theranos. Tyler had specifically asked that no lawyers be present for the meeting, but grandfather George Shultz had two Boies partners waiting out of sight in an upstairs room.
After some conversation with Tyler that George Shultz found unsatisfactory, the grandfather brought the lawyers downstairs. The lawyers told Tyler that they had identified him as the person who had leaked Theranos information to the Wall Street Journal. The lawyers handed Tyler a temporary restraining order, a notice to appear in court, and a letter saying that Theranos believed Tyler had violated confidentiality obligations. The lawyers communicated that Theranos was prepared to file a law suit.
The next day Tyler met again with a Boies firm lawyer, who asked Tyler to sign an affidavit swearing he had not spoken to a reporter, and to name anyone he knew who did. Tyler did not sign. Instead he ended the meeting and consulted with a lawyer of his own.
Tyler then engaged in some days of lawyer-led negotiations. The topics were the affidavit the Boies firm asked for, and the threats of litigation. Tyler eventually agreed to sign an affidavit saying he had spoken to the press, but he refused to include any information about other press sources.
What happened next, says Carreyrou, is that Boies Schiller resorted to the “bare-knuckles tactics it had become notorious for. Brille [the Boies firm attorney] let it be known that if Tyler didn’t sign the affidavit and name the Journal’s sources, the firm would make sure to bankrupt his entire family when it took him to court. Tyler also received a tip that he was being surveilled by private investigators.”
Boies Schiller also put pressure on other sources for Carreyrou’s reporting about Theranos: “Boies Schiller’s Mike Brille sent a letter to Rochelle Gibbons threatening to sue her if she didn’t cease making what he termed ‘false and defamatory’ statements” about Theranos.
The Wall Street Journal itself was the target of legal hardball. The Journal received a formal letter from David Boies: “Citing several California statutes, the letter sternly demanded that the Journal 'destroy or return all Theranos trade secrets and confidential information in its possession.’” That was followed a few days later by a 23 page letter from Boies to the Journal threatening a lawsuit.
The day came when David Boies met with Wall Street Journal people in an effort to squelch publication of Carreyrou’s investigative article about Theranos. The Boies effort was unsuccessful. The Carreyrou article on Theranos’ bad behavior ran on October 15, 2015.
For Tyler Shultz, the price for being a whistle blower included $400,000 in legal bills, estrangement from his famous grandfather, and much personal anguish.
What lessons can be drawn from Carreyrou’s description of the Boies firm’s practices? Not that Boies or his firm’s lawyers necessarily did anything illegal or unethical. The Carreyrou book does not provide enough information to justify that conclusion. It may be, for example, that David Boies and his firm had great faith in Theranos technology.
But even in the absence of clear evidence of illegality or unethical lawyer behavior there is significance in Carreyrou’s sense of outrage. Careyrou feels that “bare-knuckles” lawyering was used on behalf of Theranos in an effort to suppress information from Tyler Shultz and Carreyrou’s other sources of information. Also, that aggressive lawyering was used in an effort to squelch publication of his reporting. A main element of the bare-knuckles lawyering described by Carreyrou is the threat of legal liability and litigation expense.
Even where it is legal and ethical, such aggressive lawyer behavior should be examined further by those interested in legal policy. The behavior suggests a problem: that the complexity of laws and legal proceedings may have the unintended side effect of facilitating bullying by parties with deep legal resources. The targets of such bullying may be individuals like Tyler Shultz, or small companies. Bullying based on unmatched deep resources can occur, for example, in the context of landlord-tenant disputes involving small commercial tenants, and franchisor-franchisee disputes where the franchisees have limited resources.
Bare-knuckles bullying by lawyers that is within the bounds of legality and permissible ethics is nevertheless concerning. Among other bad effects, bullying may result in information about wrongdoing being suppressed, inappropriate financial burdens being imposed on targets of bullying, and failure to fairly resolve disputes among parties.
This posting is by Don Allen Resnikoff, who takes full responsibility for its contents
Theodore Frank, professional class action settlement objector
On October 31, attorney Theodore Frank will argue his own case before the U.S. Supreme Court. The case concerns objection by Mr. Frank and the non-profit he heads, Center for Class Action Fairness, to a class action settlement involving Google as Defendant.
The Google class action settlement is one of many class action settlements Mr. Frank has objected to. Objecting to class action settlements is Mr. Frank’s profession.
Mr. Frank’s Google class action settlement case arises from an $8.5 million settlement between Google and class action lawyers. The class action complaint says that Google violated users’ privacy rights.
Under the settlement, the lawyers are to be paid more than $2 million, but members of the class they represented get nothing. Instead Google agreed to make contributions to institutions concerned with privacy on the internet, including centers at Harvard, Stanford and Chicago-Kent College of Law.
A divided three-judge panel of the United States Court of Appeals for the Ninth Circuit, in San Francisco, upheld the settlement. The opinion can be found at http://www.scotusblog.com/wp-content/uploads/2018/04/17-961-opinion-below.pdf In dissent, Judge J.Clifford Wallace expressed concerns about the payments.
Google’s position is that while class action settlements can be bad, the particular settlement is good. The Google brief on the Writ of Certiorari to the Supreme Court is at https://www.supremecourt.gov/DocketPDF/17/17-961/61166/20180829194522714_17-961%20bs.pdf
The story of Mr. Frank as objector to the Google settlement draws attention to the role that professional class action settlement objectors play as class action spoilers. Not surprisingly, there are those who are highly critical of the objectors’ spoiler role, and others who see at least some objectors as a force for good, limiting class actions that lack social value.
Commenters have observed that there is a cottage industry of professional objectors: attorneys who earn a livelihood by opposing settlements on behalf of unnamed class members. Professional objectors may threaten to file meritless appeals of final judgments merely to extract a payoff. Class attorneys have a strong incentive to pay objectors to withdraw their appeal to avoid the cost of delay.
Professional objectors are widely unpopular, “perhaps the least popular parties in the history of civil procedure,” according to one observer. A judge has observed that “[f]ederal courts are increasingly weary of professional objectors.”
Theodore Frank’s legal practice is unusual in that he and the non-profit he heads do not take payments from Plaintiffs’ counsel. A Bloomberg-BNA article explains that he does not accept “green mail,” a name for payments demanded by, and made to, an objector to drop an objection to a settlement.
“That’s always been the position of the Center for Class Action Fairness,” Frank said to Bloomberg-BNA about his organization. “Not only is that the position, but we’re looking for opportunities for courts to order divestments of green mail payments.”
“We lose money on every objection,” Frank told Bloomberg BNA. “If we weren’t doing it as a non-profit, we couldn’t do it. And if we didn’t have generous donors, and attorneys taking 50-, 60- and 70-percent pay cuts, we couldn’t do what we do.”
The bottom line point is that there can be great value in legitimate and well grounded objections to class action settlements made in good faith. It polices the settlement process. The policy challenge is to allow such beneficial objections while suppressing extortionate green mail objections made in bad faith.
Credits: Much of the content of this comment is drawn from The New York Times story at https://www.nytimes.com/2018/10/15/us/politics/theodore-frank-supreme-court.html Also, the article by Lopatka-Smith, which is at https://judicialstudies.duke.edu/sites/default/files/centers/judicialstudies/class-action_objectors_0.pdf Also, The Bloomberg-BNA article at https://www.bna.com/ted-frank-lightning-n57982069046/
This comment is posted by Don Allen Resnikoff, who takes full responsibility for its content
An Interview with Diana Moss (American Antitrust Institute)
by Jon Baker (American University)
Ahead of the inaugural conference on Challenges to Antitrust in a Changing Economy, at Harvard Law School on November 9th, CPI reached out to Jon Baker (Professor, American University) and Diana Moss (President, American Antitrust Institute). They will participate in “The Consumer Welfare Standard” panel, together with Rob Atkinson (President, Information Technology and Innovation Foundation), Renata Hesse (Partner, Sullivan & Cromwell), and Einer Elhauge (Professor, Harvard Law School).
In this exclusive interview, Diana Moss has responded to three questions asked by Professor Baker on the consumer welfare standard and its current application in US antitrust law.
This conference is co-organized by CPI and CCIA. To see the full program and register free, please click here.
Following is Q and A # 1. For the other 2, see
https://www.competitionpolicyinternational.com/cpi-talks-on-the-consumer-welfare-standard/?utm_source=CPI+Subscribers&utm_campaign=b47147cbd9-EMAIL_CAMPAIGN_2018_10_20_07_01&utm_medium=email&utm_term=0_0ea61134a5-b47147cbd9-236508653
Some progressives say that antitrust rules pay insufficient attention to harms to suppliers, including workers; harms along competitive dimensions other than price and output, such as quality or innovation; and the ways that the exercise of market power may undermine non-economic values, as by creating anti-democratic political pressures or limiting the opportunity of small businesses to compete. To what extent are these concerns justified?
Today’s debate over the role of antitrust has generated a lot of blue sky thinking about the state of U.S. antitrust. I think of this debate as a very different process from that of crafting constructive reform proposals. Actual reform requires knowledge of how the laws and standard have been and can be applied by enforcers and the courts. For example, we know that the consumer welfare standard can address the price and non-price dimensions (e.g., quality and innovation) of competition. The standard also reaches to the harms resulting from the exercise of market power anywhere along the supply chain (e.g., consumers and workers). The control of economic power serves to limit barriers to entry and exclusionary conduct that targets smaller innovative rivals and in stemming the growth of political power.
In sum, if enforcers and courts used the full scope of the law and standard, antitrust would today be more effective in defending and promoting our markets. The reality has been different, namely, a narrow interpretation of the consumer welfare standard under the conservative ideology has held sway for decades. In response to this, some proposals advocate for wholesale reforms that would essentially do away with any standard. This risks reforms that divert the antitrust laws to purposes for which they are not designed and could exacerbate the current state of under-enforcement.
As a progressive (as I will articulate more in my panel remarks), I think of constructive reform as including a more nuanced approach through a package of complementary proposals. These include: (1) legislative clarification of the full scope of the law and increased appropriations for the agencies for enforcement; (2) guidance from the agencies that articulates a “dynamic and symmetric” consumer welfare standard (describes in #2 below) and requirements for implementing it; and (3) efforts to strengthen or introduce presumptions of illegality in mergers and some forms of conduct.
DC public restrooms legislation proposed
Marcy Bernbaum, a retired USAID official, and a D.C. resident, has a mission of providing help to the most disadvantaged citizens. A particular campaign she has focused on is providing access to public toilets in the District of Columbia.
Her efforts, and the efforts of many others, have now resulted in a legislative proposal: D.C. Council Bill 22-0223 has the goal of installing and maintaining clean, safe, and available public restrooms. Support has come from churches, advocacy organizations, community associations and others.
Here is an excerpt from Marcy Bernbaum’s op-ed in the Washington Post. https://www.washingtonpost.com/opinions/why-does-dc-have-so-few-public-restrooms/2017/12/15/951e3fde-cfcf-11e7-9d3a-bcbe2af58c3a_story.html?utm_term=.33069c2c8867
We did an inventory of restrooms in private facilities in five D.C. neighborhoods: Gallery Place, Dupont Circle, Georgetown, the K Street corridor and Columbia Heights. And we carried out a comprehensive search to identify public restrooms open during the day as well as those open 24/7.
To our amazement, we found that there are only three public restrooms in all of the District that are open 24/7: those at Union Station, the Lincoln Memorial and the Jefferson Memorial — and there are no signs telling you how to get to them. Imagine it is late at night. You are walking down the street and urgently have to go to the bathroom. If you can't make it and experience the misfortune of having no choice but to "go" outside and are caught by a police officer, you risk receiving a fine of up to $500, up to 90 days in jail or both. During the day, off the Mall there are only six public restrooms in downtown Washington, their hours are limited, and there are no signs to tell you where they are.
The situation isn't much better when it comes to finding private facilities with restroom access. Forty-two of the 85 private facilities we visited in early 2015 permitted people who weren't patrons to use their restrooms. When we visited the same facilities in early 2016, the number had dwindled to 28. And when we returned to the same facilities in mid-2017, only 11 (or 13 percent) permitted entry to non-patrons.
In April, D.C. Council members Brianne K. Nadeau (D-Ward 1), David Grosso (I-At Large), Elissa Silverman (I-At Large) and Robert C. White Jr. (D-At Large) introduced Bill 22-0223, the Public Restroom Facilities Installation and Promotion Act of 2017.
The bill would work toward creating public restrooms and establish an incentive for private businesses to make their restrooms available to the public.
A business tax measure to fund homelessness services
is on the ballot for San Francisco voters in San Francisco County, California, on November 6, 2018.
A yes vote is a vote in favor of authorizing the city and county of San Francisco to fund housing and homelessness services by taxing certain businesses at the following rates:
A no vote is a vote against authorizing the city and county of San Francisco to tax businesses at the above rates to fund housing and homelessness services.
Credit: balletopedia.org
Not all businesses support the San Francisco tax proposal. See https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=6&cad=rja&uact=8&ved=2ahUKEwiClq2V9pPeAhXSwFkKHfoWCqEQFjAFegQIBRAB&url=https%3A%2F%2Fwww.businessinsider.com%2Fmarc-benioff-and-jack-dorsey-clash-over-san-francisco-homeless-measure-prop-c-2018-10&usg=AOvVaw0j7wtU1oE5T-AnRBnwaD3Q
Regulators have been cracking down on abusive rent-to-own deals
offered by operators of manufactured home communities, otherwise known as trailer parks, in which people shell out thousands of dollars for run-down homes that they never actually get to buy
The New York attorney general’s office is expected to announce a settlement that could give hundreds of people who signed rent-to-own leases with a trailer park the right to tear up those deals and recoup any deposits they paid, according to two people briefed on the matter who were not authorized to speak publicly.
The settlement is with eight trailer park operators, including two publicly traded “real estate investment trusts,” that run more than 100 parks from Long Island to upstate New York. The settlement would end a yearlong investigation by the attorney general’s office, which had received dozens of complaints from renters about misleading sales pitches by park operators, the people said.
Private equity firms and large real estate investors have been looking to buy trailer parks and combine them into larger companies. They are attractive investments because prefabricated homes are relatively cheap to produce and maintain. New manufactured homes often sell for as little as $70,000.
One of the companies settling with New York is Sun Communities, which has a market value of $9 billion and whose shares have soared nearly a thousand percent in the last decade. Sun operates more than 300 parks for manufactured homes and recreational vehicles.
Sun representatives didn’t respond to a phone message seeking comment.
The contracts, which typically last seven to 10 years, sometimes referred to rent payments as “mortgage payments,” even though the tenants would take possession of the property only if they made a large payment at the end of the contract.
The state negotiated some of the settlement terms with the New York Housing Association, which represents manufactured home parks in New York. Mark Glaser, a lawyer for the association, said the group had “cooperated with the attorney general’s office and was pleased to help facilitate a resolution of the issues under review.”
The terms are similar to ones that led a number of state attorneys general, including those in Wisconsin and Pennsylvania, to sue rent-to-own housing firms. Regulators in those states have said the rent-to-own contracts were deceptive.
From https://www.nytimes.com/2018/10/18/business/trailer-park-rent-settlement.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=rank&module=package&version=highlights&contentPlacement=2&pgtype=sectionfront
The campaign for Proposition 10, a ballot initiative that would loosen California state restraints on local rent control laws.
The effort has stoked a battle that has already consumed close to $60 million in political spending, a sizable figure even in a state known for heavily funded campaigns.
Depending on which side is talking, Proposition 10 is either a much-needed tool to help cities solve a housing crisis or a radically misguided idea that will only make things worse. Specifically, it would repeal the Costa-Hawkins Rental Housing Act, which prevents cities from applying rent control laws to single-family homes and apartments built after 1995.
The initiative drive builds on the growing momentum of local efforts to expand tenant protections.
From: https://www.nytimes.com/2018/10/12/business/economy/california-rent-control-tenants.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=rank&module=package&version=highlights&contentPlacement=2&pgtype=sectionfront
Washington Post says dark money from both left and right groups participated in Kavanaugh public advocacy campaigns
From the Post article:
Judicial Crisis Network is a 501(c)(4) advocacy organization — a “dark money” group that is not required to disclose the sources of its funding, regardless of the industry groups or individual donors behind them. It poured at least $5.3 million into its pro-Kavanaugh advertising campaign, much of it targeting vulnerable Senate Democrats in red and swing states. At least $1.5 million of that was spent defending Kavanaugh after Christine Blasey Ford went public with her allegation of sexual assault against him.
A liberal group of a similar stripe, Demand Justice, spent at least $700,000 of a planned $5 million campaign trying to scuttle Kavanaugh’s nomination.
https://www.msn.com/en-us/news/politics/collins-blasted-‘dark-money’-groups-in-kavanaugh-fight-one-just-paid-to-thank-her-for-her-vote/ar-BBOkLwr?ocid=spartandhp
From DC AG Racine: OAG's "Cure the Streets" program
Earlier this summer, the District saw a tragic spike in violence where 13 people were shot in 11 separate incidents over Memorial Day weekend. In response, the Council gave OAG funds to set up a pilot program for violence interruption. In just four months, OAG has launched “Cure the Streets” in the District and it’s already showing some signs of progress.
Cure the Streets is operating in two pilot sites in Wards 5 and 8, which have some of the highest rates of gun violence in the city. This pilot program uses a proven, public-health approach to treat violence as a disease, focusing on three main actions:
Interrupt: Interrupt potentially violent conflicts by preventing retaliation and mediating simmering disputes;
Although Cure the Streets is just getting started, it’s already making a positive difference in these communities. We must continue investing in these data-driven, proven solutions to stop violence before it happens and save lives in the District.
Karl A. Racine
Attorney General
AAI Statement: DOJ's Approval of CVS-Aetna Merger Imperils Competition and Consumers in Critical Parts of Healthcare Supply Chain
Today [10/10/2018] , the U.S. Department of Justice (DOJ) approved the vertical merger of leading retail pharmacy and pharmacy benefits manager (PBM) CVS with major health insurer Aetna. "While the DOJ obtained divestitures to address the horizontal overlap in CVS's and Aetna's Medicare Part D individual prescription drug plans, it did nothing to address the significant vertical competitive problems raised by the combination," said AAI President Diana Moss.
The approval of CVS-Aetna comes on the heels of the DOJ's recent approval of a similar vertical merger of PBM Express Scripts and heath insurer Cigna.
"Within a short period of time, antitrust enforcers have green-lighted a fundamental restructuring of important segments of the healthcare industry in the U.S.," said Moss. "Competition now depends almost entirely on having 'enough' rivalry between integrated PBM-insurers. This 'roll-the-dice' model of competition stands in stark contrast to a model of standalone PBMs competing hard to gain insurers' drug plan business and insurers aggressively seeking out competitive PBM services."
In a March 26, 2018 letter to the DOJ, AAI raised serious concerns about the competitive effects of the proposed merger. The deal creates a large, vertically integrated PBM-insurer that operates in upstream and downstream markets featuring only a few rivals. AAI also provided testimony at the California Department of Insurance hearings on the proposed merger.
"We are disappointed that the DOJ did not address a merged CVS-Aetna's enhanced incentives to use their market positions to disadvantage rival PBMs, independent pharmacies, and rival health insurers," said Moss. "Competition will undoubtedly suffer, as will consumers through higher prices, lower quality, less innovation, and less choice," Moss added, noting that any efficiencies claims would have to be monumentally large to overcome significant competitive concerns. AAI says the DOJ's decision highlights the need for new guidelines on vertical mergers.
AAI's advocacy against the CVS-Aetna merger explains that giant PBM-insurer organizations created by the recent swath of merger approvals will make it harder for companies with more innovative business models to enter markets. Because of widespread vertical integration, new entrants will be forced to enter at both the PBM and insurer levels to be viable competitors.
"If ever there were a vertical merger that should have been challenged by antitrust enforcers, this would be it," said Moss. High levels of concentration in the PBM and insurer markets, demonstrated exclusionary conduct by one of the merging parties, and past enforcement actions involving consolidation in these important markets are all powerful indicators that the deal should have been deemed illegal.
Wash Post Op-Ed on Pay to Protest
By Mara Verheyden-Hilliard and
Carl Messineo
September 11
Mara Verheyden-Hilliard is executive director of the Partnership for Civil Justice Fund. Carl Messineo is the group’s legal director.
For the first time, the U.S. government wants demonstrators to pay to use our parks, sidewalks and streets to engage in free speech in the nation’s capital. This should be called what it is: a protest tax.
This is a bold effort by the Trump administration to burden and restrict access to public spaces for First Amendment activities in Washington. If enacted, it would fundamentally alter participatory democracy in the United States.
Last month, Interior Secretary Ryan Zinke announced the administration’s radical, anti-democratic rewriting of regulations governing free speech and demonstrations on public lands under federal jurisdiction in Washington. Under the proposal, which is open to public comment, the National Park Service (NPS) would charge protesters “event management” costs. This would include the cost of barricades and fencing erected at the discretion of police, the salaries of personnel deployed to monitor the protest, trash removal and sanitation charges, permit application charges and costs assessed on “harm to turf” — the effects of engaging in free speech on grass, as if our public green spaces are for ornamental viewing.
And it goes beyond just the Mall. Want to protest in front of the Trump hotel on Pennsylvania Avenue? Under this proposal, you’ll have to take out your checkbook, because the NPS maintains control over the broad sidewalks of Pennsylvania Avenue. In addition to the upfront costs to even request a permit, you may be billed for the cost of barricades erected around the hotel — fencing you didn’t ask for but that the hotel wants.
Such a “pay to protest” plan will probably be challenged in court. The right to petition the government for a redress of grievances cannot be burdened by such charges. And discretionary fees or measures that can serve as a proxy for content-based discrimination are unconstitutional.
This is just one element of a larger initiative to close off public space to silence dissent by both financial and physical restriction. The NPS has, at the same time, quietly sneaked into its new regulatory proposal a plan to essentially close the iconic White House sidewalk to protest, leaving only five feet for a narrow pedestrian walkway.
During the Vietnam War, the Nixon White House was surrounded by buses to block protesters from approaching the sidewalk. Now, the government seeks to remove the protests by taking the public spaces out from under our feet. What’s next, closing Lafayette Square?
The NPS describes our democratic rights as too costly for our democracy. An NPS spokeswoman justified the measure as cost recovery, pointing to last year’s Women’s March as having imposed “a pretty heavy cost” on the government.
Free speech is not a cost. It is a value. It is a fundamental pillar of democracy.
For the full op-ed, see https://www.washingtonpost.com/opinions/the-trump-administration-wants-to-tax-protests-what-happened-to-free-speech/2018/09/11/70f08bfa-b5e1-11e8-b79f-f6e31e555258_story.html?noredirect=on&utm_term=.8d0af0c6ddc1
A second look at The Case Against the Supreme Court, the 2014 book by Erwin Chemerinsky
This seems like a good moment to take down from the bookshelf Erwin Chemerinsky’s 2014 book, The Case Against the Supreme Court (Viking, 386 pages).
The book argues that over time the U.S. Supreme Court’s decisions have frequently been wrong. The wrong case decisions are often a product of the ideology of the Justices who decide the cases. For Chemerinsky, ideology means the “values, views, and prejudices” of the Justices. Those values, views and prejudices are not necessarily the same as those of a particular political party, but often overlap. There have been some moments when the Court’s wrong decisions were partisan in the sense of favoring a particular political party’s agenda.
The author’s suggestions for structural reform of the Court are mild. He does not, for example, advocate doing away with the Court's power to review laws for their constitutionality. He would have Congress impose term limits, perhaps 18 years, so that the prevailing ideologies of a particular moment in history are less likely to persist for decades.
But Chemerinsky would like to see Justices appointed who share his own strongly felt ideological views, which he is not reluctant to express. He believes, for example, that the Justices should permit latitude so the government can use regulations to aid workers and consumers. He believes the Justices should allow the government to protect ethnic minorities. He opposes “originalist” approaches to construing the Constitution.
Chemerinsky is not recommending that operatives for a particular political party he favors be appointed as Justices – very few people have that point. But it seems likely that he would subscribe to the popular observation that elections matter.
Turning to some of the history recounted by the author, one point of ideology that has caused harm concerns race. The “separate but equal” doctrine justifying racial separation was the law of the land for many decades. The doctrine was abandoned by the U.S. Supreme Court only in 1954, in Brown v. Board of Education, which Chemerinsky hails as a high point of good Supreme Court decision making. But it took the Court a long time to get there -- decades. And Chemerinsky finds the Court’s follow-up on the Brown decision to be less than perfect.
And, Chemerinsky points out, the ideology of the judges deciding Brown was crucial. The deciding judges believed in racial equality and were not “originalists.” They did not limit interpretation of the Constitution to what the framers originally intended. Recall that framer Thomas Jefferson (who wrote "all men are created equal") owned slaves, and engaged in sexual predation.
Among other points of ideology that have caused harm is hostility to ethnic minorities such as the Japanese. In Korematsu v. United States, the Court, in a 6-3 decision, upheld evacuation and internment of Japanese-American citizens. Chemerinsky points out that the decision was highly offensive in its reliance on ethnicity alone to decide who is a threat to national security.
Another important point of ideology is antipathy to regulations intended to protect workers and consumers. Lochner v. New York was a 1905 Supreme Court case that blocked legislation limiting working hours for bakers. The theory of the Court involved support for freedom of contract. The years 1905 to 1936 have been called the “Lochner era,” ending with a partisan battle by Democrat President Franklin Delano Roosevelt.
Roosevelt wanted to stop the U.S. Supreme Court from blocking his regulatory efforts, so he threatened to use his popularity and power with Congress to increase the number of Justices. Such “court packing” would give Roosevelt the power to appoint sympathetic judges and change case decision outcomes. Faced with that challenge, the nine sitting Justices became more inclined to see things Roosevelt’s way. Case decisions on regulatory issues began to go Roosevelt’s way, and court packing was not pursued.
This article is posted by Don Allen Resnikoff, who takes entire responsibility for the views expressed.
From: DMN:
Ticketmaster Is Now In the Crosshairs of the U.S. Federal Trade Commission
Weeks after an explosive undercover report revealed that Ticketmaster works closely with scalpers to sell their second-hand tickets; the FTC has announced a workshop to investigate how online ticketing is handled.
Ticketmaster parent company Live Nation witnessed its stock price drop as much as 5.5% after the report of the workshop. But a little damage control helped to recover some of those losses.
So what’s the FTC doing, exactly?
The story continues here. -- https://www.digitalmusicnews.com/2018/10/05/ticketmaster-scalper-federal-trade-commission-ftc/
Chinese ride-share company Didi is at the center of the ride-hailing web that it and its investor SoftBank have spun.
Truces and alliances between regional players may follow.
Didi has invested in Lyft, Uber through the deal they cut in August 2016, Southeast Asia’s Grab, India’s Ola, and the Middle East’s Careem. It put $100 million into and later acquired Brazil’s 99. Didi was last valued at $57 billion during its $4.6 billion financing in December 2017, and is reportedly in talks with South Korea’s Mirae Asset Financial Group to raise an additional $263 million.
SoftBank also has a stake in most of these ride-hailing companies, positioning it to broker truces and alliances between regional players, like Uber’s recent sale of its Southeast Asia operations to Grab. According to data from industry research firm PitchBook, SoftBank has invested five times in Ola, four times in Didi, four times in Grab, once in Uber, and once in 99. It’s unclear how much these investments total, but they are well into the billions. SoftBank is playing the ride-hailing version of Risk, but it also owns a piece of all the players. So long as a single company controls a country or region, so that it’s not burning money to compete, SoftBank seems likely to be happy with the outcome.
That said, insofar as SoftBank has picked a single winner, it seems like Didi. It’s notable that Didi has continued to expand globally even as Uber has now repeatedly withdrawn from key international markets, first in China, then Russia and most recently in Southeast Asia. SoftBank has also not-so-subtly hinted that it would like to see Uber retreat. Rajeev Misra, a SoftBank board director who also sits on Uber’s board, told the Financial Times in January that Uber should focus on its core markets, which he identified as the US, Europe, Latin America, and Australia. Uber CEO Dara Khosrowshahi said Uber would “invest aggressively” in the Southeast Asia business about a month before it sold to Grab.
From https://qz.com/1261177/softbanks-winner-in-ride-hailing-is-chinas-didi-chuxing-not-uber/
States Urge Justices To Flip Illinois Brick In Apple Case -- See briefs below:
Brief for states:
https://dlbjbjzgnk95t.cloudfront.net/1088000/1088314/states.pdf
Excerpt:
This case presents a rare opportunity to revisit the controversial holding in Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977). The Court can overrule its precedents based on briefing by amici, and it has done so before. The Court should do so again here.
I. Section 4 of the Clayton Act directs that “any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefor . . . and shall recover threefold the damages by him sustained.” 15 U.S.C. § 15(a). It is widely accepted that consumers can be injured when manufacturers take concerted action to fix supracompetitive prices and distributors of the overpriced products pass on some or all of the overcharges to end users.
Before 1977, when this Court decided Illinois Brick, lower courts generally allowed consumers who purchased goods made by an antitrust violator to prove that they had been harmed by overcharges passed on to them by intermediaries in the distribution chain. Illinois Brick, however, held that an “indirect purchaser” is categorically forbidden from attempting to prove damages from an antitrust violation. 431 U.S. at 726. Instead, “the overcharged direct purchaser should be deemed for purposes of section 4 to have suffered the full injury from the overcharge.” Id.
The Court admitted that this conclusive presumption “denies recovery to those indirect purchasers who may have been actually injured by antitrust violations.” Id. at 746. The Court did not identify any statutory text denying recovery to “any person who shall be injured,” 15 U.S.C. § 15(a), by an antitrust violation. Instead, the Court reasoned that “the legislative purpose” of “encouraging vigorous private enforcement of the antitrust laws” was “better served” by a ban on “attempting to apportion the overcharge among all that may have absorbed a part of it.” Ill. Brick, 431 U.S. at 745-46.
Brief for AAI:
https://dlbjbjzgnk95t.cloudfront.net/1088000/1088314/americanantitrust.pdf
Brief for Open Markets:
https://dlbjbjzgnk95t.cloudfront.net/1088000/1088314/http-www-supremecourt-gov-docketpdf-17-17-204-65344-20181001145735965_17-204-20amicus-20bom-pdfa-pdf.pdf
Could you be seated next to someone's service horse on your next Alaska Airlines flight?
Alaska Airlines News release
SEATTLE, Aug. 30, 2018 /PRNewswire/ -- Alaska Airlines is updating its support animal policy, limiting the number and type of emotional support animals and type of service animals a customer can travel with on all aircraft.
The updated policy aligns with recent airline industry changes and provides clear guidance and a consistent and safe travel experience for guests and employees. This change is being made to protect the health and safety of passengers and crew while maintaining a safe and orderly operation.
Summary of the new policy, which goes into effect for all travel occurring on or after Oct. 1, 2018, regardless of when booked:
Customers traveling with one or more emotional support animals after Oct. 1 have the option to limit their travel to only one emotional support animal, to travel without their animal, or to receive a full refund if they no longer wish to travel.
Learn more about the support animal policy at alaskaair.com.
CONTACT: Media Relations, (206) 304-0008, newsroom@alaskaair.com
URL: https://newsroom.alaskaair.com/news-releases?item=123851
September 13, 2018
URL: 10.1377/hblog20180907.685440
Limited access to reliable transportation causes millions of Americans to forgo important medical care every year. Transportation barriers are most prominent among the poor, elderly, and chronically ill—populations for whom routine access to ambulatory and preventive care is most important.
Payers that focus on vulnerable populations have taken steps to address transportation barriers by providing non-emergency medical transportation (NEMT) benefits to select beneficiaries. A majority of Medicare Advantage (MA) plans and state Medicaid programs currently provide NEMT benefits.
NEMT benefits are typically administered by specialized brokers that coordinate and dispatch private cars, taxis, or specialized vehicles to bring patients to medical appointments. Multiple reports have highlighted challenges with traditional approaches to NEMT delivery, including poor customer service, inadequate responsiveness, and fraud and abuse. In the face of these challenges, payers and health care delivery organizations have been experimenting with new strategies for delivering NEMT.
An approach that has attracted considerable attention is the use of transportation network companies (TNCs)—such as Uber or Lyft—to provide NEMT services. NEMT brokers such as such as American Logistics Corporation, National MedTrans, American Medical Response, and Access2Careare all now piloting TNC-based rides. New companies, such as Circulation and RoundTrip, have emerged to help hospitals and health plans offer TNC-based rides. And both Lyft and Uber are contracting directly with health plans and delivery organizations to provide NEMT services.
Despite the proliferation of these programs, there is scant data regarding their impact. Here we report the results from a large-scale, system-wide implementation of Lyft-based NEMT services at CareMore Health.
As is typical for MA plans, CareMore contracts with brokers to administer its NEMT benefits. Historically, these NEMT brokers arranged for rides using private car services. In 2016, CareMore launched a pilot program to evaluate the impact of Lyft-based C2C rides on patient experience and costs. The pilot ran for two months at select CareMore locations in Southern California, during which a total of 479 rides were provided. Resultswere encouraging: wait times decreased by 30 percent and per-ride costs decreased by 32 percent, and satisfaction rates were 80 percent.
California just passed its net neutrality law. The DOJ is already suing
https://money.cnn.com/2018/09/30/technology/california-net-neutrality-law/index.html
by Heather Kelly @heatherkellySeptember 30, 2018: 11:58 PM ET
The Department of Justice said it is filing a lawsuit against the state of California over its new net neutrality protections, hours after Gov. Jerry Brown signed the bill into law on Sunday.The California law would be the strictest net neutrality protections in the country, and could serve as a blueprint for other states. Under the law, internet service providers will not be allowed to block or slow specific types of content or applications, or charge apps or companies fees for faster access to customers.
The Department of Justice says the California law is illegal and that the state is "attempting to subvert the Federal Government's deregulatory approach" to the internet.
"Under the Constitution, states do not regulate interstate commerce—the federal government does," Attorney General Jeff Sessions said in a statement. "Once again the California legislature has enacted an extreme and illegal state law attempting to frustrate federal policy. The Justice Department should not have to spend valuable time and resources to file this suit today, but we have a duty to defend the prerogatives of the federal government and protect our Constitutional order."
As the largest economy in the United States and the fifth largest economy in the world, California has significant influence over how other states regulate businesses and even federal laws and regulations. That power is being tested under the Trump administration, which is currently battling the state in court over multiple issues, including emissions standards, immigration laws and the sale of federal lands..
"It's critically important for states to step in," state senator Scott Wiener, who co-authored the bill, told CNNMoney. "What California does definitely impacts the national conversation. I do believe that this bill ... will move us in a positive direction nationally on net neutrality."
For that to happen, the law will likely have to survive a legal battle. In addition to the lawsuit from the Department of Justice, ISPs may sue California over the bill. Major broadband companies, including AT&T and Comcast, have lobbied heavily against the California bill. (AT&T is the parent company of CNN.) They say the new rules will result in higher prices for consumers.
Jonathan Spalter, president of USTelecom -- a trade group representing broadband providers -- said while the group supports "strong and enforceable net neutrality protections for every American," the bill was "neither the way to get there nor will it help advance the promise and potential of California's innovation DNA."
"Rather than 50 states stepping in with their own conflicting open internet solutions, we need Congress to step up with a national framework for the whole internet ecosystem and resolve this issue once and for all," Spalter said.
Broadband providers lobbied against the California law, but were also for the repeal of the most recent federal regulations.
"The broadband providers say they don't want state laws, they want federal laws," said Gigi Sohn, a fellow at the Georgetown Law Institute for Technology and a former lawyer at the FCC, in an interview. "But they were the driving force behind the federal rules being repealed ... The federal solution they want is nothing, or extremely weak."
The FCC is fighting California over a pre-exemption clause included in its 2017 order repealing net neutrality protections. The FCC holds that it can preempt state-level laws because broadband service crosses state lines. Legal experts are split over whether or not the FCC can challenge a state net neutrality law, but Wiener believes the clause is unenforceable.
"We don't think the FCC has the power to preempt state action," said Wiener. "We are prepared to defend this law. We believe that California has the power to protect the internet and to protect our residents and businesses."
Barbara van Schewick, a professor at Stanford Law School, says the California bill is on solid legal ground and that California is within its legal rights.
"An agency that has no power to regulate has no power to preempt the states, according to case law. When the FCC repealed the 2015 Open Internet Order, it said it had no power to regulate broadband internet access providers. That means the FCC cannot prevent the states from adopting net neutrality protections because the FCC's repeal order removed its authority to adopt such protections," said van Schewick.
The bill was approved by lawmakers in early September, but it had been unclear if Brown would veto or approve the comprehensive measure, even though it had broad support from state Democrats.
California is the third state to pass its own net neutrality regulations, following Washington and Oregon. However, it is the first to match the thorough level of protections that had been provided by the Obama-era federal net neutrality regulations repealed by the Federal Communications Commission in June. At least some other states are expected to model future net neutrality laws on California's.
The original FCC rules included a two page summary and more than 300 additional pages with additional protections and clarifications on how they worked. While other states mostly replicated the two-page summary, California took longer crafting its law in order to match the details in the hundreds of supporting pages, said van Schewick.
"Most people don't understand how hard it is to do a solid net neutrality law," said van Schewick. "What's so special about California is that it includes not just two pages of rules, but all of the important protections from the text of the order and as a result closes the loopholes."
Loopholes addressed in California's new law include a prohibition on "zero rating," which allows carriers to exempt content from certain companies (like their own streaming services) from counting against a customer's data usage. The prohibition would not apply if a carrier wanted to exempt an entire category of content, like all streaming services. It also bans interconnection fees, which are charges a company pays when its data enters the internet provider's network.
The FCC says those rules will hurt consumers.
"The law prohibits many free-data plans, which allow consumers to stream video, music, and the like exempt from any data limits. They have proven enormously popular in the marketplace, especially among lower-income Americans. But notwithstanding the consumer benefits, this state law bans them," said Ajit Pai, chairman of the FCC, in a statement.
The authors of the bill did have support from consumer and labor groups, grassroots activists, and small and mid-sized tech companies including Twilio, Etsy and Sonos. Larger technology companies, like Apple, Google, and Facebook, have stayed quietly on the sidelines.
Sohn and van Schewick believe states with legislatures controlled by Democrats are the ones most likely to pass strong net neutrality protections. Other states have already started working on similar bills, including New York and New Mexico.
From DMN:
California Passes Its Strict Net Neutrality Bill Into Law
— Setting the Stage for a Fight Against Trump’s FCC
California’s tough net neutrality bill is now state law, thanks to a signature from governor Jerry Brown on Sunday (September 30th).
It’s easily the toughest net neutrality measure in the nation. Now, it’s the law in the country’s most populous and economically powerful state, thanks to a signature from governor Jerry Brown.
The ratification happened late Sunday (September 30th), with Brown approving SB 822, which was simply titled ‘Communications: broadband Internet access service.’ The bill, which places strict limitations on ISPs like Verizon, AT&T, and Comcast, was led by California Senator Scott Wiener (D-San Francisco).
The story continues here: https://www.digitalmusicnews.com/2018/09/30/california-net-neutrality-law/
Nobel Prize-winning economist Joseph Stiglitz says it’s time for the US to update its antitrust laws
Nobel Prize-winning economist Joseph Stiglitz says it’s time for the US to update its antitrust laws
By Richard Feloni & Andy Kiersz
There are plenty of companies that may feel too big to you, whether it’s trillion-dollar monoliths Apple and Amazon, or even the cable company you’re forced to deal with every day.
But the question of whether they’ve got so much power that they’re harming the economy is the subject of a debate in the spotlight once again.
For Nobel Prize-winning economist Joseph Stiglitz of Columbia University, there is indeed a monopoly and monopsony problem in the United States, and it’s high time to address it with new antitrust laws.
At a recent Federal Trade Commission hearing on the subject, Stiglitz said, “The point is, if our standard competitive analysis tools don’t show that there is a problem, it suggests something may be wrong with the tools themselves.”
The bedrock of America’s antitrust law was primarily built in the late 19th and early 20th century, during the democratic and reform-minded Progressive Era that followed the Gilded Age’s reign of robber barons and progression of inequality.
Even Adam Smith, the father of capitalism himself, warned in “The Wealth of Nations” against the consolidation of market power in the hands of a few. This is represented on the selling side by monopoly and on the buying side by monopsony, a term coined in the 20th century that refers to firms using their size to push down suppliers’ prices (Walmart is arguably an example).
Years of economic research has found that when market power is highly concentrated, barriers to entry prevent new competitors from building businesses, consumers have fewer options, and employees receive lower wages. This in turn slows overall economic growth.
Even before data on market power was routinely gathered, the federal government established the definition for an illegal monopoly and an illegal merger with the Sherman Act of 1890 and the Clayton Act of 1914. It also created the FTC in 1914 to enforce these rules.
Continue reading…https://www.businessinsider.com/economist-joseph-stiglitz-us-must-update-antitrust-laws-2018-9
Website USAReally is based in Moscow and has received funding from the Federal News Agency, a Russian media conglomerate with ties to the Internet Research Agency, the “troll farm” whose employees were indicted by the special counsel, Robert S. Mueller III, for interfering in the 2016 presidential election.
Caught flat-footed by the influence campaigns of 2016, intelligence agencies and tech companies in the United States have spent months looking for hidden Russian footprints ahead of the midterm elections.
USAReally’s website, which began publishing in May, does not advertise its Russian roots. But in many ways, it is operating in plain sight.
Its founder, Alexander Malkevich, is a Russian journalist with little previous experience in American media. Its domain was registered through a Russian company, and its formation was announced in a news release on the Federal News Agency’s website. The project, originally known as “USAReally, Wake Up Americans,” was intended to promote “information and problems that are hushed up by major American publications controlled by the political elite of the United States,” according to the release.
Today, USAReally’s website depicts the United States as a democracy in decline, riddled with crime and divided by partisan rancor.
Full article: https://www.nytimes.com/2018/09/25/technology/usareally-russian-news-site-propaganda.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=rank&module=package&version=highlights&contentPlacement=2&pgtype=sectionfront
Russia-sponsored US TV
Clandestine Russian government efforts to spread disruptive information in the US have gotten great attention, but other Russian government sponsored efforts are in plain sight. One example is website USAReally, as discussed in the NY Times article above. The NY Times says that USAReally’s website depicts the United States as a democracy in decline, riddled with crime and divided by partisan rancor.
Another Russian government sponsored media outlet in plain site is RT. Wikipedia says that RT is a Russian international television network funded by the Russian government. It operates cable and satellite television channels directed to audiences outside of Russia, as well as providing Internet content in English, Spanish, French, German, Arabic and Russian.
Here is an interesting example of RT content, a segment explaining how US voting machines can be hacked. See https://www.youtube.com/watch?v=fmM2xkeyPI0
In some ways the RT segment resembles the NY Times discussion of vulnerable US voting machines that appears below, but the RT piece is different. It is more alarmist in tone, and arguably exaggerates the likelihood of people physically engaging with voting machines to insert compromising devices.
The RT voting machine story reflects a propaganda strategy of some interest and complexity. The story suggests that the US government is fumbling in its efforts to protect voting rights, which has the ring of a Russian propaganda point. But the story is not stupid, working from concerns that have a basis in a reality of voting machine problems, as discussed by the New York Times article that follows.
Posting by Don Allen Resnikoff, who is entirely responsible for the content
NYT: Vulnerable US voting machines
There are roughly 350,000 voting machines in use in the country today, all of which fall into one of two categories: optical-scan machines or direct-recording electronic machines. Each of them suffers from significant security problems.
With optical-scan machines, voters fill out paper ballots and feed them into a scanner, which stores a digital image of the ballot and records the votes on a removable memory card. The paper ballot, in theory, provides an audit trail that can be used to verify digital tallies. But not all states perform audits, and many that do simply run the paper ballots through a scanner a second time. Fewer than half the states do manual audits, and they typically examine ballots from randomly chosen precincts in a county, instead of a percentage of ballots from all precincts. If the randomly chosen precincts aren’t ones where hacking occurred or where machines failed to accurately record votes, an audit won’t reveal anything — nor will it always catch problems with early-voting, overseas or absentee ballots, all of which are often scanned in county election offices, not in precincts.
Direct-recording electronic machines, or D.R.E.s, present even more auditing problems. Voters use touch screens or other input devices to make selections on digital-only ballots, and votes are stored electronically. Many D.R.E.s have printers that produce what’s known as a voter-verifiable paper audit trail — a scroll of paper, behind a window, that voters can review before casting their ballots. But the paper trail doesn’t provide the same integrity as full-size ballots and optical-scan machines, because a hacker could conceivably rig the machine to print a voter’s selections correctly on the paper while recording something else on the memory card. About 80 percent of voters today cast ballots either on D.R.E.s that produce a paper trail or on scanned paper ballots. But five states still use paperless D.R.E.s exclusively, and an additional 10 states use paperless D.R.E.s in some jurisdictions.
The voting-machine industry — an estimated $300-million-a-year business — has long been as troubling as the machines it makes, known for its secrecy, close political ties (overwhelmingly to the Republican Party) and a revolving door between vendors and election offices. More than a dozen companies currently sell voting equipment, but a majority of machines used today come from just four — Diebold Election Systems, Election Systems & Software (ES&S), Hart InterCivic and Sequoia Voting Systems. Diebold (later renamed Premier) and Sequoia are now out of business. Diebold’s machines and customer contracts were sold to ES&S and a Canadian company called Dominion, and Dominion also acquired Sequoia. This means that more than 80 percent of the machines in use today are under the purview of three companies — Dominion, ES&S and Hart InterCivic.
Many of the products they make have documented vulnerabilities and can be subverted in multiple ways. Hackers can access voting machines via the cellular modems used to transmit unofficial results at the end of an election, or subvert back-end election-management systems — used to program the voting machines and tally votes — and spread malicious code to voting machines through them. Attackers could design their code to bypass pre-election testing and kick in only at the end of an election or under specific conditions — say, when a certain candidate appears to be losing — and erase itself afterward to avoid detection. And they could make it produce election results with wide margins to avoid triggering automatic manual recounts in states that require them when results are close.
From: https://www.nytimes.com/2018/09/26/magazine/election-security-crisis-midterms.html?action=click&module=Top%20Stories&pgtype=Homepage
Low price association health plans spark tussle between state regulators, business groups
By Harris Meyer | September 27, 2018
Some business associations and insurers are plunging ahead in launching a cheaper type of health plan newly permitted by the Trump administration, while others are holding back due to big regulatory and legal uncertainties about the future of these products.
Since the U.S. Department of Labor issued a final rule in June allowing small employers and self-employers to band together across state lines and form to association health plans (AHPs), there have been intensive discussions between business groups, state insurance commissioners and Labor Department officials about how states can regulate these plans.
Pennsylvania Insurance Commissioner Jessica Altman has taken the position that AHPs must comply with state laws and Affordable Care Act provisions governing individual and small group plans. The Labor Department wrote to Altman last month to say the rule "does not modify the states' existing authority to regulate AHPs under state insurance laws."
She and other state insurance regulators fret that the growth of AHPs will destabilize their ACA-regulated individual and small-group markets, leave consumers uncovered for healthcare services they need and lead to a spike in insurance fraud and insolvencies associated with lightly regulated AHPs in the past.
But a coalition of 10 business associations, including the National Federation of Independent Business, argue that federal law does not allow states to bar groups of employers from forming association health plans together.
Association plans are deemed large-group plans exempt from state regulation under the federal Employee Retirement Income Security Act.
Earlier this month, the Nebraska Farm Bureau and Medica announced they were teaming up to offer a menu of association health plans in 2019 for individual farmers, ranchers and small agriculture-related businesses. The plans will have essentially the same benefits as ACA market plans with premium savings of up to 25%, they say. Rates will vary based on age, geographic location, and type of business.
"We hear stories every day about how farmers and ranchers are struggling to provide affordable coverage for their families," said Steve Nelson, president of the Nebraska Farm Bureau. "That's what drove us to put this together."
The Nebraska Department of Insurance said other business groups also have applied to start AHPs.
In August, three chambers of commerce in Nevada announced they would offer an association health plan through UnitedHealth Group that will aggregate small firms into one large-group plan, though they initially aren't making it available to sole proprietor businesses.
But other associations say they're taking a wait-and-see stance, citing resistance to the AHP rule from many state insurance commissioners, combined with a federal lawsuit filed in July by 12 Democratic attorneys general to block the rule.
"We wanted to jump on it fast, and then the states sued," said Chris Paulitz, senior vice president of membership and marketing for the Financial Services Institute, an association representing nearly 30,000 self-employed individual financial advisers. "There's too much up in the air from a legal standpoint."
Since the rule was issued, a number of state insurance departments have issued emergency rules and bulletins limiting AHPs or highlighting existing state laws that prohibit key features of plans allowed under the new federal rule.
Several states, including Connecticut, Massachusetts, New York, Oregon and Pennsylvania, have said they will look at the small employers and individuals signing up for AHPs and apply state and ACA rules for small-group and individual coverage to them, essentially nullifying the AHP structure.
In a Sept. 10 bulletin, the Oregon Division of Financial Regulation said it would follow more demanding federal guidelines issued in 2011 for determining bona fide association plans that qualify for an ERISA exemption from state insurance requirements.
Regulators in Connecticut, Maryland, Massachusetts and New York are taking an even harder line. They say their state laws permit no exception for bona fide association plans, meaning that none qualify for an ERISA exemption.
In contrast, the Nebraska Department of Insurance fully recognizes the Trump administration's new AHP rule, including allowing sole proprietors to join association plans. Its officials say they aren't worried about AHPs drawing younger and healthier people out of the Affordable Care Act market and driving up premiums because the new plans likely will attract mostly consumers who already have dropped out of the ACA market due to high premiums.
Laura Arp, the department's life and health administrator, noted that consumer protection provisions in the Affordable Care Act and state law still apply to AHPs, including rules prohibiting annual and lifetime benefit caps and discrimination against people with pre-existing medical conditions.
From: http://www.modernhealthcare.com/article/20180927/NEWS/180929912?utm_source=modernhealthcare&utm_medium=email&utm_content=20180927-NEWS-180929912&utm_campaign=am
From: Department of Justice
U.S. Attorney’s Office
Eastern District of New York
FOR IMMEDIATE RELEASE
Tuesday, September 25, 2018
Queens Attorney and Second Individual Indicted For Scheme to Bribe a Witness in Double Homicide Trial on Long Island
A superseding indictment was unsealed today in federal court in Brooklyn charging Queens-based criminal defense attorney John Scarpa, Jr., and Charles Gallman, also known as “T.A.,” with violating the Travel Act by bribing a witness who testified in a double-homicide trial in Suffolk County Supreme Court. Scarpa was arrested earlier today and will be arraigned this afternoon in federal court in Brooklyn before United States Magistrate Judge Steven L. Tiscione. Gallman will be arraigned at a later date.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Richard A. Brown, District Attorney of Queens County, announced the charges.
“As alleged, the defendants bribed a witness to commit perjury in an effort to help Scarpa’s client, who had committed two execution-style murders, escape justice,” stated United States Attorney Donoghue. “This Office and our law enforcement partners will never tolerate the rigging of a trial and will vigorously prosecute attorneys or anyone else who seeks to undermine the integrity of the judicial process by witness tampering.” Mr. Donoghue also expressed his grateful appreciation to the Office of the Suffolk County District Attorney for its assistance during the investigation.
“Defense attorneys do all they can to help their clients fight criminal charges, which is everyone’s right by law,” stated FBI Assistant Director-in-Charge Sweeney. “However, Mr. Scarpa allegedly broke the law trying to get his client off the hook for murder charges by bribing a witness. Everyone accused deserves the best defense, but attorneys cannot use illegal methods to win in court.”
“We will continue to work with our federal partners to root out corruption in the criminal justice system wherever it is found,” stated Queens District Attorney Brown. “I will say again that integrity is the foundation of our criminal justice system. These allegations go to the core of that foundation and are prejudicial to the administration of justice. The charges today send a strong message to those who would undermine that integrity that they will be held accountable. I commend the United States Attorney’s Office for the Eastern District and the Federal Bureau of Investigation, the Suffolk County District Attorney’s Office and my Rackets, Special Victims and District Attorney’s Detective Bureaus for their vigorous pursuit of justice in this matter.”
As alleged in the indictment and detailed in court filings, the charges stem from an investigation conducted by the Queens County District Attorney’s Office. Court-authorized intercepted communication between Scarpa and Gallman showed how the two men plotted to bribe a witness, Luis Cherry, in a Suffolk County criminal trial against Reginald Ross. Scarpa represented Ross, who was ultimately convicted of the unrelated murders of two men: Raymond Hirt, a road crew flagman killed at his jobsite in May 2010 because Ross was upset about traffic, and John Williams, whom he shot to death in October 2010 as Williams was going to work, mistaking Williams for his brother. Cherry participated in the Williams murder, and had pleaded guilty to that murder as well as another.
On January 13, 2015, Gallman visited Cherry at Downstate Correctional Facility and spoke to him about testifying at Ross’s trial. Thereafter, Gallman reported to Scarpa: “Anything we need, he’s willing. Whichever way you wanna play it, he’s willing.” Later in the conversation Scarpa asked, “So this guy is willing to do whatever?” And Gallman confirmed, “Whatever you need, John. Whatever you need.” Gallman added that there was a “bunch of stuff I wrote down that [Cherry] wants.”
Scarpa called Cherry as a defense witness at trial and led Cherry through perjurious testimony relevant to the Williams murder. For example, Cherry claimed that he had committed the murder alone after he crawled from the driver’s seat and exited through the passenger side of his vehicle with firearms in both hands despite physical evidence that clearly indicated two gunmen were involved. When asked on cross-examination about meeting Gallman, Cherry falsely denied that they had talked about the murder case.
The charges in the superseding indictment are allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted, Scarpa and Gallman face up to five years’ imprisonment on each count.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Lindsay K. Gerdes and Andrey Spektor are in charge of the prosecution.
from https://www.justice.gov/usao-edny/pr/queens-attorney-and-second-individual-indicted-scheme-bribe-witness-double-homicide
Proposal to Limit the Anti-Competitive Power of Institutional Investors
Last revised: 1 Nov 2017
Eric A. Posner University of Chicago - Law School
Fiona M. Scott Morton Yale School of Management; National Bureau of Economic Research (NBER)
E. Glen Weyl Microsoft Research New York City; Princeton University - Julis Rabinowitz Center for Public Policy and Finance
Abstract
Recent scholarship has shown that institutional investors may cause softer competition among product market rivals because of their significant ownership stakes in competing firms in concentrated industries. However, while calls for litigation against them under Section 7 of the Clayton Act are understandable, private or indiscriminate government litigation could also cause significant disruption to equity markets because of its inherent unpredictability and would fail to eliminate most of the harms from common ownership.
To minimize this disruption while achieving competitive conditions in oligopolistic markets, the Department of Justice and the Federal Trade Commission should take the lead by adopting a public enforcement policy of the Clayton Act against institutional investors. Investors in firms in well-defined oligopolistic industries would benefit from a safe harbor from government enforcement of the Clayton Act if they either limit their holdings of an industry to a small stake (no more than 1% of the total size of the industry) or hold the shares of only a single “effective firm” per industry. Free-standing index funds that commit to pure passivity would not be limited in size.
Using simulations based on empirical evidence, we show that under broad assumptions this policy would generate many times larger competitive gains than harms to diversification and other values. The policy would also improve corporate governance by institutional investors.
Citation:
Posner, Eric A. and Scott Morton, Fiona M. and Weyl, E. Glen, A Proposal to Limit the Anti-Competitive Power of Institutional Investors (March 22, 2017). Antitrust Law Journal, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2872754 or http://dx.doi.org/10.2139/ssrn.2872754
Do Institutional Investors Suppress Competition?
By Vito J. Racanelli
Can institutional investing have anticompetitive effects? I’m still not convinced.
The idea, known as the common-ownership theory, received another airing at a panel debate at the Harvard Club Monday. As Barron’s recently wrote, the model is based on studies of airlines and banks that suggest when groups of big investors such as index or mutual funds hold material equity stakes in several companies in the same industry, they can foster behavior such as consumer price increases that improves the profits of the companies they own.
Panelist Douglas H. Ginsburg, a judge on the District of Columbia US Court of Appeals and a well-known critic of the theory, said that those who argue common ownership runs afoul of antitrust regulation are “opportunistically naïve” to believe laws such as the Sherman Ant-Trust Act and the Clayton Act are aimed at ownership by large asset managers. Those who argue the contrary, he said, aren’t interpreting the law consistently with what it intends.
Continue reading…https://www.barrons.com/articles/do-big-investors-push-the-antitrust-envelope-1537220418
From NYT and ProPublica:
Sloan Kettering’s Cozy Deal With Start-Up
At Memorial Sloan Kettering Cancer Center in Manhattan, doctors and staff objected to a for-profit venture that could be lucrative for a few leading researchers and board members
The company, Paige.AI, is one in a burgeoning field of start-ups that are applying artificial intelligence to health care, yet it has an advantage over many competitors: The company has an exclusive deal to use the cancer center’s vast archive of 25 million patient tissue slides, along with decades of work by its world-renowned pathologists.
Memorial Sloan Kettering holds an equity stake in Paige.AI, as does a member of the cancer center’s executive board, the chairman of its pathology department and the head of one of its research laboratories. Three other board members are investors.
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The arrangement has sparked considerable turmoil among doctors and scientists at Memorial Sloan Kettering, which has intensified in the wake of an investigation by ProPublica and The New York Times into the failures of its chief medical officer, Dr. José Baselga, to disclose some of his financial ties to the health and drug industries in dozens of research articles. He resigned last week, and Memorial Sloan Kettering’s chief executive, Dr. Craig B. Thompson, announced a new task force on Monday to review the center’s conflict-of-interest policies.
Article at https://www.nytimes.com/2018/09/20/health/memorial-sloan-kettering-cancer-paige-ai.html?action=click&module=Top%20Stories&pgtype=Homepage
The EU is checking how Amazon gathers information on sales made by competitors on Amazon Marketplace
The concern is that the information gives Amazon an edge when it sells to customers, EU Competition Commissioner Margrethe Vestager told reporters at a press conference in Brussels.
While she stressed that the EU investigation of Amazon is at a very early stage, she said her team is “trying to understand this issue in full."
“The question here is about the data” Amazon collects from smaller merchants on its site, Vestager said. “Do you then also use this data to do your own calculations, as to what is the new big thing, what is it that people want, what kind of offers do they like to receive, what makes them buy things? That has made us start a preliminary” investigation, she said.
From https://www.bloomberg.com/news/articles/2018-09-19/amazon-probed-by-eu-on-data-collection-from-rival-retailers
From DMN:
Ticketmaster Is Working Hand-In-Hand With Scalpers, Undercover Investigation Reveals
A new undercover investigation from CBC News and the Toronto Star has revealed what customers have long-suspected: Ticketmaster is working hand-in-hand with scalpers.
Back in July, the CBC sent reporters undercover to Ticket Summit 2018 in Las Vegas, which is a convention designed for live entertainment industry executives. The reporters posed as scalpers with hidden cameras attached to their bodies while recording themselves being pitched on Ticketmaster’s professional reseller program.
That members-only program is called TradeDesk, billed as ‘The Most Power Ticket Sales Tool. Ever.”
The story continues here: .https://www.digitalmusicnews.com/2018/09/19/ticketmaster-supports-scalpers/
Statement of the Department of Justice Antitrust Division on the Closing of Its Investigation of the Cigna–Express Scripts Merger
September 17, 2018
Assistant Attorney General Makan Delrahim of the Antitrust Division of the U.S. Department of Justice issued the following statement today in connection with the closing of the Division’s investigation into Cigna Corporation’s $67 billion proposed acquisition of Express Scripts Holding Co. (“ESI”):
“Quality healthcare and competitive pricing for healthcare services and pharmaceutical drugs is critical to U.S. consumers. After a thorough review of the proposed transaction, the Antitrust Division has determined that the combination of Cigna, a health insurance company, and ESI, a pharmacy benefit management (“PBM”) company, is unlikely to result in harm to competition or consumers.”
During the Antitrust Division’s comprehensive, six-month investigation, it received over two million documents, analyzed transactional data from the merging companies and other industry firms, and interviewed over 100 knowledgeable industry participants.
In particular, the Division analyzed whether the merger would: (1) substantially lessen competition in the sale of PBM services or (2) raise the cost of PBM services to Cigna’s health insurance rivals. PBM services are sold to employers and health insurance companies to manage their pharmacy benefits, which can include designing formularies, processing prescription claims, and providing access to pharmacy networks and pharmaceutical rebates.
The merger is unlikely to lessen competition substantially in the sale of PBM services because Cigna’s PBM business nationwide is small. The Division also determined that the proposed transaction is unlikely to lessen competition substantially in markets for customers because at least two other large PBM companies and several smaller PBM companies will remain in the market post-merger.
In evaluating whether the merger may harm competition for the sale of PBM services, the Division understands that Cigna intends to use ESI for PBM services and that Cigna’s current PBM services provider, UnitedHealthcare’s subsidiary Optum, will be free to compete for PBM customers that purchase medical insurance from Cigna upon closing of the transaction.
The Division also considered how the merger would affect ESI’s incentives to provide competitive PBM services to Cigna’s health insurance rivals. ESI currently sells PBM services to some of Cigna’s rivals. The merger is unlikely to enable Cigna to increase costs to Cigna’s health insurance rivals due to competition from vertically-integrated and other PBMs. The merger is unlikely to lead ESI to raise PBM prices to Cigna’s rivals because that likely would result in the merged company losing PBM customers and not result in Cigna’s gaining a sufficient volume of additional health insurance business to offset the loss of PBM customers.
Updated September 17, 2018
https://www.justice.gov/atr/closing-statement
What makes a monopoly in the age of Amazon?
By Lydia DePillis
It’s not often that a government agency decides to do a wholesale rethink of how to do its job. But that’s what’s happening at the Federal Trade Commission.
On Thursday, the federal watchdog tasked with protecting consumers from fraud and anti-competitive behavior kicked off a months-long series of hearings. The goal: Figuring out whether regulators need to be tougher on companies that have staked out ever-larger chunks of the markets they serve.
+ READ MORE at https://nam03.safelinks.protection.outlook.com/?url=https%3A%2F%2Fcompetitionpolicyinternational.us2.list-manage.com%2Ftrack%2Fclick%3Fu%3D66710f1b2f6afb55512135556%26id%3D620bb40a4f%26e%3Dc9725fdc15&data=02%7C01%7C%7C00eb2b99a2af4b41a8ca08d61c8f0e41%7C84df9e7fe9f640afb435aaaaaaaaaaaa%7C1%7C0%7C636727798071942816&sdata=3Oz8xE%2B0X8d1FIb2IbSWJrlHgWu1SS8xjsbaCN9r2lE%3D&reserved=0
Investor expert Ray Dalio traces connection between government policies to fix the 2008 financial crash and resulting wealth disparities and political unrest that will complicate government strategies for future debt crises
In an interesting interview for Bloomberg TV, Dalio explains that recovery from the 2008 crisis involved such government policies as low interest rates and "quantitative easing," asset buying, that increase wealth disparities between rich and poor, and create political discord. That discord may interfere with government efforts to deal with a future economic crisis. Needless to say, not all experts agree with Dalio's analysis, but it is thought provoking. The URL for the interview follows.
Posted by Don Allen Resnikoff
https://www.bloomberg.com/view/articles/2018-09-12/ray-dalio-spells-out-america-s-worst-nightmare
The FTC is holding hearings of great interest to antitrust and consumer advocates. Here is what the FTC says it is interested in:
The Commission is especially interested in new empirical research that indicates (or contraindicates) a causal relationship with respect to any of the topics identified for comment. Upon review and consideration of a public comment highlighting such research, the Commission may request the voluntary sharing of the data and models underlying the comment, in accordance with general principles of peer review of social scientific inquiry, and consistent with confidentiality or other limitations on the sharing of such data.
Commenters are invited to address one or more of the following topics generally, or with respect to a specific industry, such as the health care,5 high-tech6, or energy7 industries.
1) The state of antitrust and consumer protection law and enforcement, and their development, since the Pitofsky hearings. Of particular interest to the Commission: (a) the continued viability of the consumer welfare standard for antitrust law enforcement and policy; (b) economic analysis and evidence on market competitiveness, enforcement policy, and the effects of past FTC enforcement decisions; (c) the identification of new developments in markets and in business-to-business or business-to-consumer relationships; (d) the benefits and costs associated with the growth of international competition and consumer protection enforcement regimes; and (e) the advisory and advocacy role of the FTC regarding enforcement efforts by competition and consumer protection
agencies outside the United States, when such efforts have a direct effect on important U.S. interests. Comments filed in electronic form should be submitted using this link.
2) Competition and consumer protection issues in communication, information, and media technology networks. FTC staff’s 1996 Competition Policy in the New High-Tech Global Marketplace report8 discussed the competitive analysis of both unilateral and joint conduct in industries subject to network effects; and FTC staff’s 2007 Broadband Connectivity and Competition Policy report9 addressed similar issues in the broadband internet access service market. Of particular interest to the Commission: (a) whether contemporary industry practices in networked industries continue to present competition and consumer protection concerns like those discussed in the prior reports; (b) the welfare effects of regulatory intervention to promote standardization and interoperability; (c) the application of the FTC’s Section 5 authority to the broadband internet access service business; and (d) unique competition and consumer protection issues associated with internet and online commerce. Comments filed in electronic form should be submitted using this link.
3) The identification and measurement of market power and entry barriers, and the evaluation of collusive, exclusionary, or predatory conduct or conduct that violates the consumer protection statutes enforced by the FTC, in markets featuring “platform” businesses.10 Of particular interest to the Commission: (a) whether the platform business model has unique implications for antitrust and consumer protection law enforcement and policy; and (b) whether and how the presence of “network effects” should affect the Commission’s analysis of competition and consumer protection issues in these markets. Comments filed in electronic form should be submitted using this link.
4) The intersection between privacy, big data, and competition.11 Of particular interest to the Commission: (a) data as a dimension of competition, and/or as an impediment to entry into or expansion within a relevant market; (b) competition on privacy and data security attributes (between, for example, social media companies or app developers), and the importance of this competition to consumers and users; (c) whether consumers prefer free/ad-supported products to products offering similar services or capabilities but that are neither free nor adsupported; (d) the benefits and costs of privacy laws and regulations, including the effect of such regulations on innovation, product offerings, and other dimensions of competition and consumer protection; (e) the benefits and costs of varying state, federal and international privacy laws and regulations, including the conflicts associated with those standards; and (f) competition and consumer protection implications of use and location tracking mechanisms. Comments filed in electronic form should be submitted using this link.
5) The Commission’s remedial authority to deter unfair and deceptive conduct in privacy and data security matters. Of particular interest to the Commission: (a) the efficacy of the Commission’s use of its current remedial authority; and (b) the identification of any additional tools or authorities the Commission may need to adequately deter unfair and deceptive conduct related to privacy and data security. Comments filed in electronic form should be submitted using this link.
6) Evaluating the competitive effects of corporate acquisitions and mergers. Of particular interest to the Commission: (a) the economic and legal analysis of vertical and conglomerate mergers; (b) whether the doctrine of potential competition is sufficient to identify and analyze the competitive effects (if any) associated with the acquisition of a firm that may be a nascent competitive threat; (c) the analysis of acquisitions and holding of a non-controlling ownership interest in competing companies; (d) the identification and evaluation of the exercise of monopsony power and buyer-power as arising from consolidation; (e) the identification and evaluation of differentiated but potentially competing technologies, and of disruptive or generational changes in technology, and how such technologies affect competitive effects analysis; and (f) empirical validation of the analytical tools used to evaluate acquisitions and mergers (e.g., models of upward pricing pressure, gross upward pricing pressure, net innovation pressure, critical loss analysis, compensating marginal cost reduction, merger simulation, natural experiments, and empirical estimation of demand systems). Comments filed in electronic form should be submitted using this link.
7) The evidence and analysis of monopsony power, including but not limited to, in labor markets. Of particular interest to the Commission: (a) the analytic framework applied to conduct and transactions that negatively or positively affect competition between employers as buyers in labor markets; (b) evidence regarding the existence and exercise of buyer monopsony or market power in properly defined markets, including by employers in labor markets; (c) the exercise of monopsony power through collusion, including in labor markets through employer collusion; and (d) the use of non-competition agreements and the conditions under which their use may be inconsistent with the antitrust laws. Comments filed in electronic form should be submitted using this link.
8) The role of intellectual property and competition policy in promoting innovation. The Commission has taken a dual-pronged approach to issues arising at the intersection of intellectual property and antitrust law: (1) antitrust enforcement against harmful business conduct involving intellectual property; and (2) competition advocacy regarding the development of intellectual property law. The Commission has articulated its enforcement positions in a number of public documents, including the joint Commission and Department of Justice 2017 Antitrust Guidelines for the Licensing of Intellectual Property12 and 2007 Antitrust Enforcement and Intellectual Property Rights report.13 The Commission has engaged in substantial competition advocacy with respect to the legal and policy regime related to intellectual property rights, including its three “IP” reports: the 2003 To Promote Innovation14 report, the 2011 Evolving IP Marketplace15 report, and the 2016 Patent Assertion Entity Activity16 report. Of particular interest to the Commission: (a) the adoption and utilization of novel business practices (beyond those addressed in the Commission’s prior guidance and actions)17 with respect to obtaining or enforcing intellectual property rights, where such practices may be inconsistent with the antitrust laws; (b) identification of contemporary patent doctrine that substantially affects innovation and raises the greatest challenges for competition policy; (c) evaluation of intellectual property litigation in competitive effects analysis; and (d) evaluation of efficiencies and entry considerations in technology markets in merger analysis. Comments filed in electronic form should be submitted using this link.
9) The consumer welfare implications associated with the use of algorithmic decision tools, artificial intelligence, and predictive analytics. Of particular interest to the Commission: (a) the welfare effects and privacy implications associated with the application of these technologies to consumer advertising and marketing campaigns; (b) the welfare implications associated with use of these technologies in the determination of a firm’s pricing and output decisions; and (c) whether restrictions on the use of computer and machine learning and data analytics affect innovation or consumer rights and opportunities in existing or future markets, or in the development of new business models. Comments filed in electronic form should be submitted using this link.
10) The interpretation and harmonization of state and federal statutes and regulations that prohibit unfair and deceptive acts and practices. Of particular interest to the Commission: (a) whether and to what extent other enforcement entities authorized to prosecute unfair or deceptive acts and practices apply FTC precedent in their enforcement efforts; and (b) whether the Commission can, and to what extent it should, take steps to promote harmonization between the FTC Act and similar statutes. Comments filed in electronic form should be submitted using this link.
11) The agency’s investigation, enforcement and remedial processes. Of particular interest to the Commission: (a) whether the agency’s investigative process can be improved without diminishing the ability of the Commission to identify and prosecute prohibited conduct; (b) the extent to which the Commission’s Part 3 process facilitates timely and efficient administrative litigation; (c) the efficacy of the Commission’s current use of its remedial authority; and (d) willingness of affected parties to cooperate with the Commission in conducting postinvestigation and enforcement retrospectives. Comments filed in electronic form should be submitted using this link.
From:https://www.ftc.gov/system/files/attachments/hearings-competition-consumer-protection-21st-century/hearings-announcement_0.pdf
Broadcast email from DC AG Racine: student loan litigation
Last year, I sued the U.S. Department of Education for delaying a rule that would make it easier for students to get their loans forgiven when their school is proven to have defrauded students. This week, a federal judge ruled that the Trump administration’s move to delay this student protection was illegal.
This ruling is a victory for student borrowers, especially here in the District which has the highest student debts in the nation. On average, District borrowers owe more than $46,000 in federal student loans and more than 1-in-4 student borrowers owe over $80,000. With soaring debt here and across the nation, our struggling borrowers need robust protections against predatory schools that try to cheat them.
To preserve another critical student borrower protection, I’m also suing the Department of Education for delaying the Gainful Employment Rule. This rule would require for-profit schools to disclose to students the costs, average debt load, and job prospects of their programs. Enacting this rule is important because predatory schools commonly exaggerate job placement rates to prospective students.
When the federal government fails to do its job, I believe we have a responsibility to step up to protect our residents. I won’t stand idly by while the Trump Administration slashes student borrower protections.
Karl A. Racine
Attorney General
Prosecutors from the US Department of Justice (DOJ) have asked a California judge to delay a grocery wholesaler's lawsuit against former Bumble Bee Foods CEO Chris Lischewski over concerns that it could complicate the criminal case against him.
Lischewski, who was indicted on criminal price-fixing charges in May 2018 and subsequently stepped down to focus on his defense, is also the defendant in a civil lawsuit from Associated Wholesale Grocers (AWG) that claims the company was harmed by the tuna canner's price-fixing.
Prosecutor Leslie Wulff wrote in a filing that allowing the AWG lawsuit to proceed, which could involve depositions of witnesses including Lischewski, could potentially interfere with the prosecution and run the risk of violating the former CEO's fifth amendment right prohibiting self-incrimination.
From the filing:
"The government’s proposed stay balances the government’s interest in protecting the integrity of the criminal proceedings, Mr. Lischewski’s fifth amendment rights, and the victims’ interest in conducting discovery and seeking restitution for the price-fixing scheme."
From: https://www.undercurrentnews.com/2018/09/10/prosecutors-want-suit-against-lischewski-stalled-due-to-criminal-case/
A bill, introduced by Rep. Darrell Issa, proposes dividing the Ninth Circuit into three regionally based divisions
—The text of the bill is at https://judiciary.house.gov/wp-content/uploads/2018/09/HR-6730.pdf
The three divisions would be a Northern Division composed of the district courts in Alaska, Idaho, Montana, Oregon and Washington’s Eastern and Western districts of Washington; a Middle Division made up of the courts in Guam, Hawaii, Nevada and the Northern Mariana Islands, as well as California’s Eastern and Northern districts; and a Southern Division including Arizona and the Southern and Central districts of California.
Ross Todd of Law.com's Recorder periodical reports that Brian Fitzpatrick of Vanderbilt University Law School, who advocated splitting the Ninth Circuit at a subcommittee hearing chaired by Issa last year [see https://www.law.com/therecorder/almID/1202781463210/house-panel-restarts-debate-on-splitting-ninth-circuit/], said that he wasn’t sure that the representative’s proposal would address his central concern—that the size of the circuit leads to three-judge panels that are more likely to be made up of ideological outliers: “I think we would expect fewer outliers within each of the three regional divisions relative to the makeup of the divisions because each division will have only 11 judges,” he said. “I am not sure if that conclusion carries over to the ‘circuit’ division, however,” said Fitzpatrick, noting that the ratio of judges on the circuit division compared to the court’s total—13 of 24—closely mirrors the makeup of current Ninth Circuit en banc panels—11 of the court’s 29 current active judges.
Todd's full article is at https://www.law.com/therecorder/2018/09/12/house-committee-to-take-up-measure-to-reconfigure-the-ninth-circuit/?kw=House%20Committee%20to%20Take%20Up%20Measure%20to%20Reconfigure%20the%20Ninth%20Circuit&et=editorial&bu=TheRecorder&cn=20180912&src=EMC-Email&pt=AfternoonUpdate
The DCist: These Are Some Of The Areas Most Susceptible To Flooding In D.C.
While it may be that the worst effects of Hurricane Florence will have stayed south of D.C., the storm provided an occasion for reporter by Natalie Delgadillo to review areas in DC most susceptible to flooding. Here are some excerpts from her suggestions:
The National Mall
Areas around the National Mall are some of the lowest points in the city. Flooding from the Potomac River in 1936 and 1942 overwhelmed the National Mall, stranding the Jefferson Memorial like an island. In 2006, persistent rain flooded the National Archives building, the Internal Revenue Service, the Commerce Department, the Justice Department, and several museums on the mall.
That's why the Army Corp of Engineers installed a levee across 17th Street in 2014. It's meant to keep all of downtown D.C. safe from flooding off the Potomac—though it wouldn't be much help if, as in the 2006 storm, the rainwater just became too much for the city's storm drains to bear.
The Wharf
The new businesses on the Wharf have been there open for less than a year, and already they're facing the test of floods. Back in 2003, when rains from Hurricane Isabel hit the District, the Southwest waterfront was inundated.
The Capitol Riverfront/Yards Park
Hurricane Isabel also caused major tidal flooding in Navy Yard in 2003, and too much water this weekend could cause flooding again.
Georgetown Harbour
In 2011, Georgetown Harbour officials failed to deploy a levee to protect the area from flooding, and the boardwalk area was inundated. Restaurants and businesses had to be evacuated, the gas and water turned off.
Rock Creek Park
Here's one everybody knows: Rock Creek Park is always flooding. The trails running along the creek often become unusable for bikers during heavy or persistent rains.
Alexandria
Alexandria has already been dealing with a lot of flooding this week from high tide conditions and lots of rain.
The city has been giving out sand bags since Monday.
DAR comment: It seems an obvious question whether global warming and rising sea levels are relevant to hurricane Florence and the flooding travails of DC, as is also true in Miami and other near sea level cities, although that isn't discussed in the DCist story.
Expert Marshall Shepherd recently addressed that point in an article that appears in The Verge:
We do have higher sea level because of climate change. So whenever we have these types of storms, you’re probably dealing with a more significant storm surge because of that than you would perhaps 100 years ago. The literature certainly suggests that on a global, average sense, we would start to see more intense storms because of the warming oceans perhaps, and changing upper level wind patterns. The jury is still out on whether you’re going to see more or less of them.
In fact, most of the literature I have seen has suggested that you might not see them as frequently — but when you do they’ll be stronger. Yes there’s likely some connection between climate change and hurricanes, but I think it’s irresponsible to conclusively start linking individual storms to climate change, particularly as the storm is unfolding. I’m more concerned about the immediate impacts of the hazard.
See https://www.theverge.com/2018/9/10/17844258/hurricane-florence-atlantic-storm-category-four-intensity-unusual
Posting by Don Allen Resnikoff
Four national healthcare organizations sue HHS over delay of its final rule on price ceilings in the 340B drug discount program.
The 340B program is intended to help hospitals to provide pharmaceuticals to needy patients. The expected rule would set price ceilings and impose civil penalties on pharmaceutical companies that knowingly overcharge hospitals in the program. The Department of Health and Human Services delayed the rule for a fifth time in June, [see https://www.fiercehealthcare.com/payer/for-fifth-time-hhs-delays-340b-drug-ceiling-prices-and-penalitiesafter it was initially issued in January 2017.]
The American Hospital Association, America’s Essential Hospitals, 340B Health and the Association of American Medical Colleges are signed on to the lawsuit (PDF). The lawsuit Complaint can be viewed at https://www.aha.org/system/files/2018-09/180911-340b-delay-suit-complaint.pdf In it, they argue that the nearly two-year delay is unlawful under the Administration Procedure Act.
The Economics Of Amateurism: Breaking Down The Latest Lawsuit Against The NCAA
By Thomas Baker In what could prove to be a battle of economic experts, the NCAA is back in court and must once again defend its amateurism regulations from its own student-athletes. The current case is In Re: Grant-in-Aid Cap Antitrust Litigation and was initiated in the United States District Court for the Northern District of California by former NCAA student-athletes Shawne Alston and Justine Hartman.
Read the article at
https://competitionpolicyinternational.us2.list-manage.com/track/click?u=66710f1b2f6afb55512135556&id=0a7c194709&e=b23ef9e519
FTC Commissioner proposes FTC rule making as supplement to antitrust litigation
From: https://www.ftc.gov/system/files/documents/public_statements/1408196/chopra_-_comment_to_hearing_1_9-6-18.pdf
Excerpt of statement by FTC Commissioner Chopra, who credits Lina Kahn for her help
I see three major benefits to the FTC engaging in rulemaking under “unfair methods of competition,” even if the conduct could be condemned under predecessor antitrust laws. As I describe above, the current approach generates ambiguity, is unduly burdensome, and suffers from a democratic participation deficit. Rulemaking can create value for the marketplace and benefit the public on all of these fronts.
First, rulemaking would enable the Commission to issue clear rules to give market participants sufficient notice about what the law is and is not, helping ensure that enforcement is predictable.30 The APA requires agencies engaging in rulemaking to provide the public with adequate notice of a proposed rule. The notice must include the substance of the rule, the legal authority under which the agency has proposed the rule, and the date the rule will come into effect.31 An agency must publish the final rule in the Federal Register, at least 30 days before the rule becomes effective.
These procedural requirements promote clear rules and clear notice. As the Supreme Court has stated, a “fundamental principle” in our legal system is that “laws which regulate persons or entities must give fair notice of conduct that is forbidden or required.”32 Clear rules also help deliver consistent enforcement and predictable results. Reducing ambiguity about what the law is will enable market participants to channel their resources and behavior more productively, and will allow market entrants and entrepreneurs to compete on more of a level playing field. Second, establishing rules could help relieve antitrust enforcement of steep costs and prolonged trials. Establishing through rulemaking that certain conduct constitutes an “unfair method of competition” would obviate the need to establish the same through adjudication. Targeting conduct through rulemaking, rather than adjudication, might lessen the burden of expert fees or protracted litigation, potentially saving significant resources on a present-value basis.33 Moreover, establishing a rule through APA rulemaking can be faster than litigating multiple cases on a similar subject matter. For taxpayers and market participants, the present value of net benefits through the promulgation of a clear rule that reduces the need for litigation is higher than pursuing multiple, protracted matters through litigation.
At the same time, rulemaking is not
so fast that it surprises market participants. Establishing a rule through participatory rulemaking can often be far more efficient. This is particularly important in the context of declining government enforcement relative to economic activity, as documented by the American Bar Association.34
And third, rulemaking would enable the Commission to establish rules through a transparent and participatory process, ensuring that everyone who may be affected by a new rule has the opportunity to weigh in on it. APA procedures require that an agency provide the public with meaningful opportunity to comment on the rule’s content through the submission of written “data, views, or arguments.”35 The agency must then consider and address all submitted comments before issuing the final rule. If an agency adopts a rule without observing these procedures, a court may strike down the rule.36
This process is far more participatory than adjudication. Unlike judges, who are confined to the trial record when developing precedent-setting rules and standards, the Commission can put forth rules after considering a comprehensive set of information and analysis.37 Notably, this would also allow the FTC to draw on its own informational advantage – namely, its ability to collect and aggregate information and to study market trends and industry practices over the long term and outside the context of litigation.38 Drawing on this expertise to develop standards will help antitrust enforcement and policymaking better reflect empirical realities and better keep pace with evolving business practices.
The New York Times:
Amazon’s Antitrust Antagonist Has a Breakthrough Idea
By David Streitfeld
The dead books are on the top floor of Southern Methodist University’s law library.
“Antitrust Dilemma.” “The Antitrust Impulse.” “Antitrust in an Expanding Economy.” Shelf after shelf of volumes ignored for decades. There are a dozen fat tomes with transcripts of the congressional hearings on monopoly power in 1949, when the world was in ruins and the Soviets on the march. Lawmakers believed economic concentration would make America more vulnerable.
At the end of the antitrust stacks is a table near the window. “This is my command post,” said Lina Khan.
It’s nothing, really. A few books are piled up haphazardly next to a bottle with water and another with tea. Ms. Khan was in Dallas quite a bit over the last year, refining an argument about monopoly power that takes aim at one of the most admired, secretive and feared companies of our era: Amazon.
The retailer overwhelmingly dominates online commerce, employs more than half a million people and powers much of the internet itself through its cloud computing division. On Tuesday, it briefly became the second company to be worth a trillion dollars.
If competitors tremble at Amazon’s ambitions, consumers are mostly delighted by its speedy delivery and low prices. They stream its Oscar-winning movies and clamor for the company to build a second headquarters in their hometowns. Few of Amazon’s customers, it is safe to say, spend much time thinking they need to be protected from it.
But then, until recently, no one worried about Facebook, Google or Twitter either. Now politicians, the media, academics and regulators are kicking around ideas that would, metaphorically or literally, cut them down to size. Members of Congress grilled social media executives on Wednesday in yet another round of hearings on Capitol Hill. Not since the Department of Justice took on Microsoft in the mid-1990s has Big Tech been scrutinized like this.
Amazon has more revenue than Facebook, Google and Twitter put together, but it has largely escaped sustained examination. That is beginning to change, and one significant reason is Ms. Khan.
In early 2017, when she was an unknown law student, Ms. Khan published “Amazon’s Antitrust Paradox” in the Yale Law Journal. Her argument went against a consensus in antitrust circles that dates back to the 1970s — the moment when regulation was redefined to focus on consumer welfare, which is to say price. Since Amazon is renowned for its cut-rate deals, it would seem safe from federal intervention.
Continue reading…https://www.nytimes.com/2018/09/07/technology/monopoly-antitrust-lina-khan-amazon.html
Klobuchar questions Kavanaugh on antitrust
By CPI on September 6, 2018No Comment
Senator Amy Klobuchar (D – MN) joined fellow Democrats Wednesday in grilling Supreme Court nominee Brett Kavanaugh over his views on antitrust issues.
Klobuchar, ranking member on the Senate Judiciary Antitrust Subcommittee, said that Supreme Court decisions on antitrust issues in recent years, including the decisions in Ohio v. American Express, Leegin Creative Leather Products v. PSKS and Bell Atlantic v. Twombly, have made it harder to enforce our antitrust laws.
Klobuchar: “Senator Lee and I run the Antitrust Subcommittee…and in recent years…the Supreme Court has made it harder to enforce our antitrust laws in cases like Trinco, Twombly, Leegin, and most recently Ohio v. American Express. This could not be happening at a more troubling time. We’re experiencing a wave of industry consolidation. Annual merger filings increased by more than 50% between 2010 and 2016. I’m concerned that the Court, the Roberts Court, is going down the wrong path and your major antitrust opinions would have rejected challenges to mergers that majorities found to be anticompetitive. I’m afraid you’re going to move it even further down the path. Starting with 2008, in the Whole Foods case, where Whole Foods attempted to buy Wild Oats Market. Very complicated. I’m going to go to the guts of it from my opinion. The majority of courts and…what happened is the Republican majority FTC challenges a deal, and you dissent and you apply your own pricing test to the merger. My simple question is: where did you get this pricing test?”
Kavanaugh: “I would have affirmed the decision by the district judge in that case which allowed the merger and the district judge is Judge Friedman, an appointee of President Clinton’s to the district court. I was following his analysis of the merger. The case is very fact specific…it really turns on whether the larger supermarket sells organic food or not.”
Klobuchar: “Where did you get the pricing test…? You used different tests. I’m trying to figure that out. What legal authority actually requires a government to satisfy your standard to block a merger? …I remember in our discussion you cited these non-binding horizontal merger guidelines that you used to come up with this test.”
Kavanaugh: “You’re looking at the effect on competition and what the Supreme Court has told us, at least from the late 1970s, is to look at the effect on consumers and what’s the effect on the prices for consumers and the theory of the district court and Judge Friedman in this case was that the merger would not cause an increase in prices because they were competing in a broader market that included larger supermarkets that also sold organic food. The question is whether there an organic food market solely or a broader supermarket market.”
Klobuchar also asked Kavanaugh questions about net neutrality, consumer regulation and other issues. She suggested that the public may be focused more on economic issues than the Supreme Court, but “it’s our case to make that it does matter.”
Klobuchar: “Or in another case you wrote a dissent against the rules [that] protect net neutrality, rules that help all citizens, and small businesses have an even playing field when it comes to accessing the Internet. Another example that seems mired in legalese, but is critical for Americans, antitrust law. In recent years the conservative majority on the Supreme Court has made it harder and harder to enforce the nation’s antitrust laws, ruling in favor of consolidation and market dominance. Yet two of Judge Kavanaugh’s major antitrust opinions suggest that he would push the court even further down this pro-merger path. We should have more competition and not less.”
From: https://www.competitionpolicyinternational.com/us-sen-klobuchar-questions-kavanaugh-on-antitrust/?utm_source=CPI+Subscribers&utm_campaign=ac38616102-EMAIL_CAMPAIGN_2018_09_07_06_39&utm_medium=email&utm_term=0_0ea61134a5-ac38616102-236474137
U.S. is expected to let lapse $600 million in funding to combat global disease outbreaks
From: http://centerforpolicyimpact.org/2018/02/09/penny-wise-pandemic-foolish/
The money was appropriated in 2014 at the height of a catastrophic Ebola outbreak in West Africa. Yet there is considerable evidence that this emergency funding worked. In West Africa and other parts of the world, the CDC has trained disease detectives to diagnose, prevent and contain outbreaks.
When Ebola again began to spread in the Democratic Republic of the Congo last year, health officials, including those trained and supported by the CDC, were able to act swiftly to contain the virus, saving lives and preventing what could have been a massive disaster.
To end this funding now would be like a homeowner, having just been spared from a fire by a smoke alarm, deciding to disconnect the alarm.
We’ve made this mistake before. It’s relatively easy to garner support to fight infectious diseases when they are rampant and capturing our attention, but too often the motivation to sustain funding wanes when the infection appears to be under control. Peter Sands, executive director of The Global Fund, argues that our approach to fighting infections is characterized by “cycles of panic followed by neglect.”
Global health history is full of such examples. In a study that I co-authored, we found 75 episodes of malaria resurgence, where in most cases countries had successfully controlled malaria, only to have it come roaring back once they cut their malaria programs.
This is why the findings by Summers and colleagues are so urgent. When economic losses from a pandemic are expected to exceed $500 billon per year, penny-pinching on our funding to prevent outbreaks is glaringly short-sighted.
Perhaps most curious is the CDC’s reported plan to deal with dwindling resources by downscaling efforts in 39 of the 49 countries where this funding is currently deployed. Most pandemics begin with a spark — a pathogen jumps from domesticated or wild animals to humans. And yet the CDC plans to lessen its vigilance in some of the most likely places in the world for that spark to occur, countries such as China, Pakistan, Haiti, Rwanda and the Congo.
Pandemics know no boundaries. That is especially true now, when factors such as international travel, climate change, deforestation and human-animal interactions are accelerating the spread of infectious diseases. In our modern age, when an outbreak in a far-off land can quickly reach our backyard, there is no room for territorial thinking. Like ships on an ocean, we rise and fall together.
We cannot make the world safe from pandemic diseases by looking away after an emergency fades, nor by hoping that infectious diseases stay within the borders of far-away nations. It is time for us to end the cycles of panic and neglect and invest reasonably and rationally in outbreak preparedness every day and everywhere. The human and economic costs of inaction are intolerable.
Creating Effective Health Care Markets
September 7, 2018
by David Blumenthal, M.D.
Toplines:
The conditions underlying the effective functioning of market economies do not currently exist in health care
Supporters of market-based approaches to health care should seek to promote competition and develop better information on provider prices and quality
Article intro:
Disagreement about the role of markets lies at the root of many of our fiercest health care controversies. One side believes that unleashing market forces will rescue our health care system. From this viewpoint, government involvement is inherently destructive, except in rare circumstances. Many opponents of the Affordable Care Act share this opinion.
The other side believes that health care markets are deeply flawed and that government must play a major role in achieving a higher-performing health system. These people point out that markets make no claim to ensuring equity in the use of health care resources, only improved efficiency. Supporters of the ACA tend to hold this view.
Given this fundamental divide, it’s worth considering the conditions underlying the effective functioning of market economies, whether those conditions currently prevail in health care and, if not, what changes would be required to establish them.
www.commonwealthfund.org/blog/2018/creating-effective-health-care-markets?omnicid
What can the Trump Administration do to rein in Google, Twitter, and Facebook?
Wired has some ideas. It asked some antitrust experts for their thoughts. A main theme is that the government's options are limited, but antitrust enforcers could do more to stop mergers with anti-competitive potential. DR
https://www.wired.com/story/how-to-curb-silicon-valley-power-even-with-weak-antitrust-laws/
Is Apple-Shazam an example of a tech merger that should be blocked? Did the EU get it wrong?Or are the findings of no likely harm to competition well founded?
European Commission - Press release
http://europa.eu/rapid/press-release_IP-18-5662_en.htm
Mergers: Commission clears Apple's acquisition of ShazamBrussels, 6 September 2018
The European Commission has approved under the EU Merger Regulation the proposed acquisition of Shazam by Apple. The Commission concluded that the merger would not adversely affect competition in the European Economic Area or any substantial part of it.
Commissioner Margrethe Vestager, in charge of competition policy, said: "Data is key in the digital economy. We must therefore carefully review transactions which lead to the acquisition of important sets of data, including potentially commercially sensitive ones, to ensure they do not restrict competition. After thoroughly analysing Shazam's user and music data, we found that their acquisition by Apple would not reduce competition in the digital music streaming market."
Today's decision follows an in-depth [http://europa.eu/rapid/press-release_IP-18-3505_en.htm] investigation of Apple's proposed acquisition of Shazam. Apple operates "Apple Music", which is the second largest music streaming service in Europe, after Spotify. Shazam offers a leading music recognition application ("app") in the European Economic Area (EEA) and worldwide.
The Commission's investigation
Apple and Shazam mainly offer complementary services and do not compete with each other. The Commission opened an in-depth investigation to assess:
The Commission found that:
Companies and products
Apple is a US based global technology company which designs, manufactures and sells mobile communication, media devices, portable digital music players and personal computers. It also sells and delivers digital content online and offers the music and video streaming service ''Apple Music''.
Shazam is a UK based developer and distributor of music recognition applications for smartphones, tablets and PCs. It mainly generates revenues from online advertising, and commissions earned on referrals of users to digital music streaming and download services, such as Apple Music, Spotify and Deezer.
__._,_.___
9th Circuit: "We consider whether the Eighth Amendment’s prohibition on cruel and unusual punishment bars a city from prosecuting people criminally for sleeping outside on public property when those people have no home or other shelter to go to. We conclude that it does."
http://cdn.ca9.uscourts.gov/datastore/opinions/2018/09/04/15-35845.pdf
NYT: The Government’s New Strategy to Crack Down on ‘Stock Trader Spoofing’
The Justice Department charged two former Deutsche Bank traders late last month with wire fraud for placing and quickly canceling orders to move markets.
By Peter J. Henning
The Justice Department has tried to crack down on traders who try to move markets by entering and quickly canceling orders, conduct that goes by the catchy moniker “spoofing.”
But the government’s early prosecution of the crime has faced a big setback. In just the second trial for spoofing, which the Dodd-Frank Act outlawed, a Connecticut jury acquitted a former trader at UBS of spoofing this spring. That raised questions about whether prosecutors can pursue these cases.
Late July the Justice Department took a new tack. Rather than use the spoofing law, prosecutors charged two former Deutsche Bank traders, James Vorley and Cedric Chanu, with wire fraud. The government claims the pair placed and quickly canceled orders for precious metals futures contracts to create the impression that there was greater supply or demand.
https://www.nytimes.com/2018/09/04/business/dealbook/government-strategy-crack-down-on-spoofing.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=stream&module=stream_unit&version=latest&contentPlacement=4&pgtype=sectionfront
President Trump says tech firms may be in a “very antitrust situation”
Referring to Google, Amazon, and Facebook, he repeatedly said he can’t comment publicly on whether they should be broken up.
“I won’t comment on the breaking up, of whether it’s that or Amazon or Facebook,” Trump said in an Oval Office interview Thursday with Bloomberg News. “As you know, many people think it is a very antitrust situation, the three of them [including Google]. But I just, I won’t comment on that.”
Note: Our angry comment translator is unavailable to explain Trump's antitrust thinking. DR
https://www.bloomberg.com/news/articles/2018-08-30/google-under-fire-again-on-search-as-hatch-calls-for-ftc-probe
California abolishes cash bail, aiming to treat rich and poor defendants equally
SMARTINEZ, Calif. —California has abolished bail as a condition of pretrial release, a controversial move to address inequities in the justice system that have often allowed those with personal wealth to walk free while poor defendants, unable to pay, have been incarcerated.
The measure, signed into law by Gov. Jerry Brown (D) on Tuesday, puts California at the head of a small group of states that have made bail reform a priority amid rising incarceration rates and increasing concerns about the justice system’s economic and racial biases.
From https://www.msn.com/en-us/news/crime/california-abolishes-cash-bail-aiming-to-treat-rich-and-poor-defendants-equally/ar-BBMDdn3?ocid=spartandhp
DMN: California’s ‘Gold Standard’ Net Neutrality Bill Moves Towards a Final Vote
California’s stringent net neutrality bill, SB 822, has been overwhelmingly approved by the State Assembly.
The California State Assembly has overwhelmingly passed net neutrality bill SB 822, 58-17. The lopsided decision, issued Thursday (August 30th), will send the tough provision to the California Senate before it hits the desk of state governor Jerry Brown.
Both are widely expected to pass the measure.
The story continues here. https://www.digitalmusicnews.com/2018/08/30/california-net-neutrality-final-vote/
Copy of Statement of Arbitrator -- Kaepernick:
The Justice Department's filed "statement of interest" that sides with a group of students rejected for admission by Harvard University who allege the school discriminates against Asian-American applicants.
The URL for the filing appears below. In the "statement of interest" the Justice Department says that Harvard can't show it is following legal restrictions established to limit how race is used as a factor in admissions, essentially agreeing with the plaintiffs in the case, Students for Fair Admissions.
https://www.justice.gov/opa/press-release/file/1090856/download?utm_medium=email&utm_source=govdelivery
The University responded Thursday.
"We are deeply disappointed that the Department of Justice has taken the side of Edward Blum and Students for Fair Admissions, recycling the same misleading and hollow arguments that prove nothing more than the emptiness of the case against Harvard. This decision is not surprising given the highly irregular investigation the DOJ has engaged in thus far, and its recent action to repeal Obama-era guidelines on the consideration of race in admission," the Harvard statement said.
"Harvard does not discriminate against applicants from any group, and will continue to vigorously defend the legal right of every college and university to consider race as one factor among many in college admissions, which the Supreme Court has consistently upheld for more than 40 years. Colleges and universities must have the freedom and flexibility to create the diverse communities that are vital to the learning experience of every student, and Harvard is proud to stand with the many organizations and individuals who are filing briefs in support of this position today," the statement continued.
The URL for Harvard's 8/27/2018 filed Reply is here: https://admissionscase.harvard.edu/files/adm-case/files/harvards_reply_brief_iso_summary_judgment.pdf
A number of amicus briefs have been filed in support of Harvard. URLs can be found at https://admissionscase.harvard.edu/supporting-documents
The initial Kaepernick grievance filing by the Geragos firm is here: http://a.espncdn.com/pdf/2017/1015/KaepernickGrievance_r.pdf
From DC AG Racine's recent newsletter-- short term residential rentals (like Air BnB):
Last week, I demanded landlords at 33 apartment buildings detail how their commercial short-term rentals work. This action was in response to residents who claim they were not informed about hotel-like businesses operating in their apartment buildings and worry that the rowdy guests pose safety concerns. Under the law, landlords must disclose their operation of these hotel-like units to their residents. These requests for information will help us determine if the landlords misled their long-standing residents about the short-term rentals and if they violated District consumer protection or rent control laws.
I will continue to use all the tools at my disposal to ensure that commercialized short-term apartment rentals do not endanger District residents or our supply of affordable housing.
In July The New York City Council voted in favor of a new law requiring Airbnb and similar home-share companies to share data on their users with NYC government
The law was characterized by the council as one that would “provide the City with an additional tool to enforce the laws against illegal short term rentals.” “This bill is about transparency and bringing accountability to billion-dollar companies who are not being good neighbors,” explained NYC Councilwoman Carlina Rivera.
You can read the text here --legistar.council.nyc.gov/ViewReport.ashx?M=R&N=Text&GID=61&ID=3143400&GUID=AB36F650-AAE2-444B-A300-8CF56C056E99&Title=Legislation+Text
Three editorials (pointed out by Consumer Law and Policy Blog)
The Washington Post, addressing the current work of the CFPB and the Department of Education, had editorials yesterday and today pertinent to student loans and higher education: Read "The Trump administration’s scandalous handling of student loans," here. Read "How Betsy DeVos could trigger another financial meltdown," here.
The New York Times, addressing proposed changes by the Office of the Comptroller of the Currency to the rules for banks compliance with the Community Reinvestment Act, writes "A Green Light for Banks to Start ‘Redlining’ Again," here.
Email from Solar United Neighbors (excerpt): As part of a settlement agreement with Solar United Neighbors, the DC government, Pepco, and other stakeholders, last week the DC Public Service Commission (PSC) rejected Pepco’s proposal to increase residential demand charges in our electric bills.
Residential demand charges are a particularly unfair, confusing, and unpredictable rate increase because of how they are calculated and how they can impact your bill for the rest of the year. Typically, demand charges have been applied to large commercial operations, where the impact of the energy use—say to run a factory full of equipment—would materially impact the amount of energy the grid needed to supply. Residential demand charges, on the other hand, make no sense and are punitive to those who try to lower their bills by using less energy and installing solar panels on their roofs.One of the important factors in the settlement was the strong public outcry against the rate increase.
A U.S. federal judge authorizes the seizure of Citgo Petroleum Corp. to satisfy a Venezuelan government debt
The ruling that could set off a scramble among Venezuela’s many unpaid creditors to wrest control of its only obviously seizable U.S. asset.
Judge Leonard P. Stark of the U.S. District Court in Wilmington, Del., issued the ruling.
The court order raises the likelihood that Venezuela’s state oil company, Petróleos de Venezuela SA, will lose control of a valuable external asset amid the country’s deepening economic and political crisis. The decision could still be appealed to a higher, federal court.
Excerpts from https://www.wsj.com/articles/u-s-judge-authorizes-seizure-of-venezuelas-citgo-1533853734 (paywall)
What is the effect on US automobile consumers of the Trump Administration's new trade deal with Mexico? Not much, according to Bloomberg -- Washington selling tweaks to existing treaties as historic victories
By
David Fickling
and
Anjani Trivedi
August 28, 2018, 3:20 AM
A car can look like a fantastic bargain on the lot, only to reveal itself as a lemon when you drive it away. It’s not so different with trade agreements.
Take the deal hammered out Monday between the U.S. and Mexico on automotive imports, which the two countries hope to extend to Canada, the third member of the North American Free Trade Agreement.
The key elements certainly look dramatic: lifting rules-of-origin requirements to 75 percent to avoid import tariffs, and a separate rule that 40 percent to 45 percent of content come from factories paying more than $16 an hour. The wage rule in particular is about twice what Mexican assembly-line workers make, and four times the average at parts companies there.
When you take a look under the hood, though, there’s a lot less than meets the eye.
Take those rules-of-origin requirments. These specify the share of a car’s content that must be made within Nafta, and have been at 62.5 percent for 16 years. Usefully, the National Highway Traffic Safety Administration already produces data on rules of origin so that U.S. consumers can buy local, and these show which cars would be affected by the change.
Big Deal
Just three Mexican-made cars that don't currently attract Nafta tariffs will do so under the revised agreement, according to NHTSA data
Based on the NHTSA’s data, there are just three models made in Mexico that are currently exempt but would attract tariffs under the new regime: Nissan Motor Co.’s Versa Sedan, Audi AG’s SQ5, and Fiat Chrysler Automobiles NV’s Fiat 500. Of these, only the Versa sells more than a handful of models in the U.S., with 106,772 vehicles shipped in 2017.
The wage rules are likely to be tougher, though even there the devil is in the detail. Almost all non-Nafta content in Mexican-made cars sold in the U.S. comes from Germany, Japan or South Korea, where total compensation typically takes pay well above $16 an hour. So unless the requirement relates solely to Nafta workers earning at least $16 per hour (full details haven’t been released yet), the rules will only really affect vehicles that are at least 55 percent made in Mexico.
That’s a similarly small group. Excluding Ford Motor Co.’s Fusion and Fiesta, General Motors Co.’s Chevrolet City Express, and Mazda Motor Corp.’s Mazda2 — which are already off the U.S. market or heading that way — they sold a collective 658,640 units in 2017, according to our calculations. That compares with total imports from Mexico of about 2.44 million cars.
There’s still likely to be some pain at the margins. The impact of the rules on parts supply chains could reduce earnings at Mazda and Nissan by 5 billion yen ($45 million) and 15 billion yen, respectively, or 4 percent and 2 percent of operating profits, according to Nomura Holdings Inc.’s estimates. With automakers continuing to battle rising costs from President Donald Trump’s other tariffs, any additional pressure won’t help.
Still, the small list of affected vehicles chimes with the equanimity with which the agreement is being greeted in Mexico.
About 70 percent of the country’s light-vehicle exports to the U.S. would be compliant under the new rules, with the remaining 30 percent getting a five-year phase-in period running through 2024, Economy Minister Ildefonso Guajardo told a press conference Monday. Even those that fall short would only receive the usual tariff of 2.5 percent for cars and 25 percent for trucks — levels that Volkswagen AG, Hyundai Motor Co., Kia Motors Corp. and others consider worth paying on swathes of models in return for Mexico’s drastically cheaper labor costs.
It’s likely to be a similar story with Canada, which shouldn’t be affected at all by the wage rules. “Canada should find it relatively simple to join the U.S.-Mexico consensus” and the agreement is a “fundamentally positive development” that should reduce perceptions of risks around Nafta, Brett House, deputy chief economist at Bank of Nova Scotia, wrote in a note after the announcement.
The Honda CR-V and two-door Civic, the Ford Flex, and three Lincoln and Cadillac models are the only Canada-produced cars that would be swept up in an extended version of the U.S-Mexico deal
It shouldn’t be all that surprising that this deal is more limited than it first appears. Mexico is scarcely going to agree to devastate its domestic industry to please President Trump.
Indeed, its modest nature should be considered a virtue, and global equity markets are quite right to be rallying in relief that this element of uncertainty has been lifted.
If Washington can sell tweaks to existing treaties as historic victories that merit a ratcheting-down of global tensions, that’s good news for the other seemingly intractable trade disputes rumbling around the world.
https://www.bloomberg.com/view/articles/2018-08-28/trump-s-mexico-trade-deal-looks-like-a-lemon?cmpid=BBD082818_BIZ&utm_medium=email&utm_source=newsletter&utm_term=180828&utm_campaign=bloombergdaily
A slightly different take on trade deal and auto prices from CBS News:
Maybe higher wage requirements and higher local content requirements (aluminum and steel) will cause auto prices to rise
https://www.msn.com/en-us/money/markets/if-trump-slaps-auto-tariffs-on-canada-heres-what-itll-cost-the-us/ar-BBMDZO3?ocid=spartandhp
WSJ Editors worry that "Half-Nafta" means higher auto prices
Excerpt:
The deal also imposes new red tape and costs on the auto industry to punish
imports. The deal says that to get tariff-free treatment cars sold in North
America must have 75% of their content made here, up from 62.5%, and at
least 40% of the content must be made with workers who earn $16 an hour.
This is politically managed trade, and its economic logic is the opposite of Mr.
Trump’s domestic deregulation agenda. Ford and GM seem to have made
their peace with this intrusion into their management, but car makers with
assembly plants in Tennessee, Alabama and other GOP-leaning U.S. states
could suffer if they import more than 25% of their parts.
This auto gambit is part of the Trump-Lighthizer strategy to blow up global
supply chains, and it is a political strategy to get a revised deal through
Congress. That also explains the deal’s new labor provisions that go far to
imposing U.S.-style labor laws on Mexico. The details still aren’t clear, but Mr.
Lighthizer said Monday those rules will be “enforceable” on Mexico as part of
the new deal.
https://www.wsj.com/articles/half-a-nafta-1535413208?mod=searchresults&page=1&pos=9 (pay wall)
Is Judge Kavanaugh a Fan of Antitrust Laws?
By CPI on August 27, 2018
Posted by The Legal Intelligencer
By Carl W. Hittinger and Tyson Y. Herrold
We know Judge Brett Kavanaugh is a fan of the Washington Nationals. But is he also a fan of the antitrust laws? On July 9, 2018, President Donald Trump nominated Kavanaugh, who currently sits on the U.S. Court of Appeals for the District of Columbia Circuit, to replace retiring justice and long-time swing voter Anthony Kennedy. Judge Kavanaugh is sure to be the subject of exacting congressional scrutiny on any number of topics. But the Senate Judiciary Committee should not overlook Kavanuagh’s antitrust jurisprudence. As of this writing, Kavanaugh’s Senate Judiciary Committee hearing is scheduled to begin on Sept. 4.
Unlike Justice Neil Gorsuch, who practiced antitrust law in the private sector and authored three unanimous antitrust opinions while on the U.S. Court of Appeals for the Tenth Circuit, Judge Kavanaugh has no private antitrust experience. Kavanaugh has authored two antitrust dissents while on the D.C. Circuit, both of which drew sharp criticism from fellow judicial panel members. Despite his limited antitrust experience, these dissents shed some light on Kavanaugh’s antitrust and economic persuasion and provide fertile ground for congressional examination.
‘FTC v. Whole Foods Market’
In the 2008 case of FTC v. Whole Foods, the FTC filed a motion for preliminary injunction challenging Whole Foods’ merger with Wild Oats, which the district court denied. The ensuing appeal to the D.C. Circuit turned on the appropriate definition of the relevant product market. The FTC defined the market as “premium, natural, and organic supermarkets,” called “PNOS” for short. According to the FTC, these stores “focus on high-quality perishables,” “generally have high levels of customer services,” “target affluent and well educated customers,” and “emphasi[ze] … social and environmental responsibility.”
D.C. Circuit Judge Janice Brown, with Judge David Tatel concurring in the judgement, agreed with the FTC’s narrow PNOS market definition and rejected Whole Foods’ proposed alternative market, which included so-called “conventional” supermarkets. In support, Judge Brown pointed to evidence of lower profits on “high-quality perishables” where Whole Foods and Wild Oats competed, compared to where they did not. Further economic data from the FTC showed that, although PNOSs competed with conventional supermarkets for “dry grocery” goods, conventional supermarkets had little to no effect on margins for the “high-quality perishables” sold by PNOSs. Judge Brown also relied on Whole Foods’ proprietary “internal projections” that a majority of Wild Oats’ consumers would switch to Whole Foods if the former chain closed, as well as “pseudonymous blog postings” by Whole Foods’ CEO that conventional supermarkets were “unable to compete” with PNOSs.
Dissenting, Kavanaugh branded the FTC’s case “weak” and, by extension, the court’s decision to preliminarily enjoin the merger (according to him), “a relic of a bygone era when antitrust law was divorced from basic economic principles.”
First, Kavanaugh criticized the court for “diluting the standard for preliminary injunction relief.” He argued that its purportedly lenient application of that standard allowed the “FTC to just snap its fingers and temporarily block a merger.” Citing Robert Bork’s famous (or infamous) book “The Antitrust Paradox,” Kavanaugh explained, “the FTC’s position … calls to mind the bad old days when mergers were viewed with suspicion regardless of their economic benefits.”
In turn, in his concurrence, Judge Tatel called Kavanaugh’s criticism “baffling” and noted that the court “scrupulously followed … the likelihood of success standard.” He rebuked Kavanaugh for his “zeal to reach the merits and preempt the FTC” and reminded him that the preliminary injunction standard was designed by Congress to maintain the status quo pending the FTC’s administrative review of mergers within its jurisdiction.
Second, throwing binding case authority to the winds (not to mention stare decisis), Kavanaugh criticized the court for relying too heavily on the Supreme Court’s Brown Shoe v. United States decision, which framed “practical indicia,” or factors, used to identify discrete product submarkets in merger cases. He called that binding decision “free-wheeling,” and commented that it “has not stood the test of time.” Kavanaugh again approvingly quoted a passage from Bork’s “Antitrust Paradox,” contending that, while it would be “overhasty to say that the Brown Shoe opinion is the worst antitrust essay ever written, … [it] has considerable claim to the title.”
Third, Kavanaugh rejected the court’s PNOS product market, citing Whole Foods’ economic expert. Kavanaugh applauded that expert for relying on “all-but-dispositive price evidence” that prices were uniform across Whole Foods’ stores, regardless of whether there was a competing PNOS like Wild Oats in the area. This observation drew further sharp criticism from Judge Tatel who, calling Kavanaugh’s “all-but-dispositive” price evidence “all-but-meaningless,” pointed out that Whole Foods’ expert testimony only showed pricing on a single day and only after “Whole Foods announced its intent to acquire Wild Oats.” This made the data susceptible, according to Judge Tatel, to “manipulation” and “gave Whole Foods every incentive to eliminate any price differences that may have previously existed between its stores … not only to avoid antitrust liability, but also because the company was no longer competing with Wild Oats.”
Continue reading…https://www.law.com/thelegalintelligencer/2018/08/24/is-judge-kavanaugh-a-fan-of-antitrust-laws-lets-take-a-look/
NYT: Central bankers are wrestling with the idea that how companies compete and exert power affects the overall well-being of the economy.
From the NYT: While these topics more commonly show up in debates around antitrust policy or how the labor market is regulated, it may have implications for the work of central banks as well. For example, if concentrated corporate power is depressing wage growth, the Fed may be able to keep interest rates lower for longer without inflation breaking out. If online retail makes prices jump around more than they once did, policymakers should be more reluctant to make abrupt policy changes based on short-term swings in consumer prices.
Alan Krueger, a Princeton economist, argues that monopsony power is most likely part of the apparent puzzle of why wage growth is low. By his estimates, wages should be rising 1 to 1.5 percentage points faster than they are, given recent inflation levels and the unemployment rate. His paper is at https://www.kansascityfed.org/~/media/files/publicat/sympos/2018/papersandhandouts/824180824kruegerremarks.pdf?la=en
Nicolas Crouzet and Janice Eberly of Northwestern University presented a paper pointing out that more of the investment of modern corporations takes the form of intangible capital, like software and patents, rather than machines and other physical goods. That may be a reason low interest rate policies by central banks over the past decade didn’t prompt more capital spending. Banks are generally disinclined to treat intellectual property or other intangible items as collateral against loans, which could mean interest rate cuts by a central bank have less power to generate increased investment spending. The Crouzet-Eberly paper is at https://www.kansascityfed.org/~/media/files/publicat/sympos/2018/papersandhandouts/824180810eberlycrouzetpaper.pdf?la=enwww.kansascityfed.org/~/media/files/publicat/sympos/2018/papersandhandouts/824180810eberlycrouzetpaper.pdf?la=en
The NYT article is at https://www.nytimes.com/2018/08/25/upshot/big-corporations-influence-economy-central-bank.html?action=click&module=Well&pgtype=Homepage§ion=The%20Upshot
Companies and advocacy groups file amicus brief asking appeals court to review the FCC decision to end net neutrality rules.
Software developer Mozilla Corp., video-sharing service Vimeo LLC, and e-commerce site Etsy Inc., and other technology advocacy groups and media companies filed the brief Monday in the U.S. Court of Appeals for the District of Columbia Circuit [#18-1051], joining a petition by attorneys general of 22 states and D.C. against the FCC order ending net neutrality.
The brief is at https://blog.mozilla.org/wp-content/uploads/2018/08/As-filed-Initial-NG-Petitioners-Brief-Mozilla-v-FCC-20Aug2018-1.pdf
PBS Newshour segment suggests that stock buybacks artificially limit supply and raise price of stocks
www.pbs.org/newshour/show/why-recent-stock-market-gains-might-not-benefit-the-economy
Excerpt:
Irene Tung:
By buying back a company’s stock, the company is removing from the open market a number of shares, creating an artificial scarcity of shares, which then temporarily drives up the price.
From NYT: Opinion about negative effects of stock buybacks
By William Lazonick and Ken Jacobson
Excerpt:
In 2003, the S.E.C. revealed that it was aware of the use of buybacks to manipulate the stock market. The agency acknowledged, in amending Rule 10b-18 to include block trades, that “during the late 1990s, it was reported that many companies were spending more than half their net income on massive buyback programs that were intended to boost share prices — often supporting their share price at levels far above where they would otherwise trade.” But its 2003 amendment was hardly a solution.
From 2003 to 2007, the value of buybacks by companies in the S.&P. 500 Index quadrupled, reaching almost $600 billion in 2007. With their cash reserves depleted by this orgy of buyback activity, these companies were more vulnerable when the downturn came. Having wasted billions on buybacks, many of them incurred huge losses and required mass layoffs to avoid bankruptcy.
After plummeting in 2008 and 2009, buybacks have again soared: A record $800 billion in buybacks by S.&P. 500 companies is predicted for this year.
Democrats have argued that the Republican tax cuts have funded increased buybacks. While this is true, the damage done by corporate stock buybacks over the past decades has been systemic.
Short of a Congressional ban on buybacks, as Ms. Baldwin proposes, the S.E.C. should immediately rescind Rule 10b-18, and confront the reality of stock market manipulation that open market repurchases entail. If Congress and regulators do not take action to rein in buybacks, the rampant economic inequality that already afflicts the United States will only get worse.
www.nytimes.com/2018/08/23/opinion/ban-stock-buybacks.html?action=click&module=Opinion&pgtype=Homepage
Nearly a decade after the crisis, the country's biggest banks are starting to raise their Washington profile.
from Bloomberg News article:
A prime example: the push for the Federal Reserve to reconsider its capital surcharge for global systemically important banks, an additional capital requirement for the country’s eight largest banks.
While Fed officials have not indicated that they have any immediate plans to recalibrate the surcharge, the fight is one that solely affects the industry’s largest institutions — a constituency that has garnered little traction in policymaking circles in recent years.
It’s a sign, observers say, that the biggest banks are starting to reassert themselves, after absorbing much of the blame for the financial crisis a decade ago. While moving legislation through Congress is likely to remain an uphill battle given ongoing suspicion of Wall Street on both sides of the aisle, the banks are now raising the profile of key issues they would like President Trump’s regulators to tackle at the banking agencies.
“They’ve come out of the shadows,” said Camden Fine, president and chief executive of Calvert Advisors and the former head of the Independent Community Bankers of America. “They’re becoming more vocal, more aggressive, more strident about the issues that are top priorities to them.”
Legislation to benefit the biggest banks would likely still prove difficult. But in some notable cases even lawmakers are starting to feel more comfortable supporting initiatives to help Wall Street institutions — especially now that regulatory relief for smaller institutions has passed Congress. Republican lawmakers in the House and Senate have both recently sent letters to the Fed asking it to reconsider the capital surcharge, a move backed by the industry. And just last week, seven Republican senators asked the Fed to consider further tailoring prudential standards for those above the $250 billion asset threshold as well as for those with assets between $100 billion and $250 billion.
The shift can also be seen in the fight over the Volcker Rule, a ban on proprietary trading that mostly affects the biggest institutions. As reported by The Wall Street Journal, representatives from more than half a dozen of the biggest banks have raised alarms about the Fed’s proposed revision to the rule, which they argue could make compliance even harder. The biggest banks have largely opposed the Volcker Rule since its creation under the Dodd-Frank Act.
As larger banks seek to re-enter the public debate, they’re bolstered by the support of two industry groups that have recently been revamped: The Financial Services Forum, which now represents eight major banks, is under new leadership, and the Bank Policy Institute, which speaks for large and regional institutions, is the byproduct of a merger between The Clearing House Association and the Financial Services Roundtable. The two groups recently collaborated on a joint blog post about the capital surcharge.
“There is a desire to have more of a voice in the conversation,” said Barbara Hagenbaugh, executive vice president and head of communications for the Financial Services Forum. “We think it is important and appropriate to address the issues of unique importance to our members and to convey the vital role they play in the economy.”
Opinion from DMN:
You Can’t ‘Remaster’ a Brand-New Copyright, U.S. Court of Appeals Rules
August 21, 2018
Remastered oldies sound better. But they’re ultimately technical improvements that don’t constitute a brand-new copyright, the 9th Circuit Court of Appeals just ruled.The complexity of U.S. Copyright Law is now becoming outright absurd, especially as it relates to ‘pre-1972’ oldies recordings. For those just tuning in, federal copyright law in the United States only covers recorded works released after February 15th, 1972, with earlier works defaulting to a patchwork of state laws.
That, of course, has created a giant gray area for rights owners, as well as licensees. Unfortunately, those gray areas have translated into years of expensive litigation and confusion. And, some frankly absurd results.
A reversal of an earlier absurdity just happened in Pasadena, California, where the 9th Circuit Court of Appeals ruled that a remastered song doesn’t create a new copyright.
Why would a remastering create a brand-new copyright, you ask? Well, back in 2016, a lower court ruled that a remastering introduces substantially new elements into the recording, making it a brand-new work. That argument was cleverly posited by CBS Radio, which is fending off a lawsuit alleging that it should pay royalties for pre-1972 recordings.
The lawsuit was lodged by ABS Entertainment, which owns the recording copyrights of Al Green and other ‘oldies’ performers.
In a nutshell, CBS argued that it technically was never playing the old vinyl LPs of pre-1972 tracks. Instead, the station played digitally remastered CDs and digital files, which were released after 1972. Therefore, they should only be liable for post-1972 statutory rates under federal law, which are much lower.
The lower District Court agreed, opening up a number of strange possibilities. Read literally, the ruling meant that any recording copyright could theoretically be extended forever, as long as it was remixed before its expiration date. Other theoretical possibilities were equally hair-raising, though the 9th Circuit ruling has now slammed the door on a myriad of remastering loopholes.
Instead, the 9th Circuit has rejected the idea that a remaster is a substantially unique work deserving for new protections.“It should be evident that a remastered sound recording is not eligible for independent copyright protection as a derivative work unless its essential character and identity reflect a level of independent sound recording authorship that makes it a variation distinguishable from the underlying work,” 9th Circuit Court judge Richard Linn opined.
“That is so even if the digital version would be perceived by a listener to be a brighter or cleaner rendition.”
Accordingly, this case is now headed back to the lower District Court for reconsideration — and perhaps a more sane ruling.
The strange ruling is rooted in arcane U.S. Copyright Law, and this particular wrinkle isn’t quite getting fixed by the Music Modernization Act.Sadly, the Music Modernization Act (MMA) is threatening to further complicate oldies copyrights, in different ways. Under the CLASSICS sub-bill, pre-1972 oldies recordings would enjoy longer copyright terms and broader protections, but also be subject to a patchwork of state laws. That would give copyright owners the greatest level of protection and royalties, simply because states often carry stronger laws and payment requirements for pre-1972 works.
Perhaps predictably, CLASSICS has drawn a counter-proposal in the form of a competing bill. The ACCESS to Recordings Act, introduced by Oregon Democratic Senator Ron Wyden, would place pre-1972 recordings on the same copyright footing as every other recording, pre- or post-1972, a structure that would vastly simplify recording copyright in the US.
At this stage, it’s unclear if ACCESS will hamper the MMA’s chances of passage in the Senate (and ultimately into law).
Here’s the 9th Circuit Court Appeals ruling in ABS Entertainment Inc. v. CBS Corp. et al. [https://www.digitalmusicnews.com/wp-content/uploads/2011/07/9th_circuit_pre_1972_remaster.pdf]
See https://www.digitalmusicnews.com/2018/08/21/remaster-copyright-district-court-appeals/
Court decides: Constitution does not require State to require access to minimum level of education by which the child can attain literacy
The decision is here:http://mediad.publicbroadcasting.net/p/michigan/files/opinion_-_gary_b_vs_richard_snyder__16-13292.pdf [UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION ]
Language from the opinion:
The conditions and outcomes of Plaintiffs' schools, as alleged, are nothing short of devastating. When a child who could be taught to read goes untaught, the child suffers a lasting injury—and so does society. But the Court is faced with a discrete question: does the Due Process Clause demand that a State affirmatively provide each child with a minimum level of education by which the child can attain literacy? Based on the foregoing analysis, the answer to the question is no.
The Trump Administration's National Park Service proposes fees for free speech demonstrations on federal land
A DCist article explains that NPS released a list of 14 proposed rule changes to the permitting process. One of the new rules under consideration is a requirement for permit applicants to pay fees for free speech demonstrations, to help NPS recover some of the costs of managing the events and providing security. NPS already requires people to pay for special event permits.
“The federal government and taxpayers shouldn’t be required to underwrite the cost of somebody’s special event, whether it’s a concert, wedding, or gathering of some sort,” said NPS spokesman Mike Litterst. “We’re just asking the question,” he said of the proposal to apply the same reasoning to demonstrations. He said there has been no discussion yet of what the fees would be.
The Park Service said the “volume and complexity” of permit requests for the National Mall and White House have increased over the years. NPS issues around 750 permits for First Amendment demonstrations and an additional 1,500 permits for special events in and around D.C. each year.
The NPS proposal URL is https://www.nps.gov/nama/learn/news/upload/TPM-Proposed-Rule-Regs-Draft-08-06-18.pdf
One proposal is: "Consider requiring permit applicants to pay fees to allow the NPS to recover some of the costs of administering permitted activities that contain protected speech."
Ninth Circuit Says Remastered Songs Not Original in Win for Pre-1972 Artists
Even if engineers make the sound brighter or cleaner, they do not alter the expressive character and identity of the original recording. The decision wipes away a creative defense mounted by broadcasting companies.
https://www.law.com/therecorder/2018/08/20/ninth-circuit-says-remastered-songs-not-original-in-win-for-pre-1972-artists/?kw=Ninth%20Circuit%20Says%20Remastered%20Songs%20Not%20Original%20in%20Win%20for%20Pre-1972%20Artists
Who knew? There is a theme song for those who don't like competition: The Too Much Competition Blues
https://www.youtube.com/watch?v=VR717pSC5Kc
Grunes and Stucke on terminating ASCAP and BMI decrees
In their article at https://www.competitionpolicyinternational.com/potential-legal-issues-in-terminating-the-ascap-and-bmi-decrees/?utm_source=CPI+Subscribers&utm_campaign=afe405147d-EMAIL_CAMPAIGN_2018_08_17_03_46&utm_medium=email&utm_term=0_0ea61134a5-afe405147d-236508653
Grunes and Stucke point out, among other things, that the decrees have played an important role in mitigating the antitrust risks from ASCAP and BMI while promoting the efficiencies from collective licensing; and that it is a problem that if the ASCAP and BMI consent decrees were terminated, the duopoly would remain, and licensees and consumers would bear the risk of unduly restrictive anticompetitive practices.
A related problem pointed out by the authors is the difficulty the DOJ would likely face in convincing the court that terminating the decrees would benefit the public, given that it reached the opposite conclusion a couple of years ago. Moreover, the concerns the DOJ heard during its review process from licensees, such as Netflix, Pandora, and religious broadcasters, would undercut the argument that the public would somehow benefit from the decrees’ termination.
NYT: NY State's ethical horrors
A NYT editorial on an AG candidate mentions in passing that "Albany has long been a chamber of ethical horrors." It then provides the following litany:
n March, Gov. Andrew Cuomo’s former senior aide Joseph Percoco was convicted on corruption charges.
In May, former Assembly Speaker Sheldon Silver, a Democrat, was also convicted of corruption.
In July, the former Republican Senate majority leader, Dean Skelos, was convicted of bribery, extortion and conspiracy. Prosecutors said he used his office to pressure businesses to pay his son $300,000 for no-show jobs.
The same month, Alain Kaloyeros, a key figure behind Mr. Cuomo’s “Buffalo Billion” economic initiative, was convicted in a bid-rigging scheme.
And: Not to be forgotten are the allegations against former Attorney General Eric Schneiderman, who resigned in disgrace earlier this year after women who dated him accused him of choking them and beating them up.
See https://www.nytimes.com/2018/08/19/opinion/zephyr-teachout-new-york-attorney-general.html?action=click&pgtype=Homepage&clickSource=story-heading&module=opinion-c-col-left-region®ion=opinion-c-col-left-region&WT.nav=opinion-c-col-left-region
NYT: To fight shoplifting, some big retail companies are employing aggressive legal tactics — sometimes against people who didn’t do anything wrong.
But those strategies disproportionately harm low-income shoppers, who say they’re unmatched in the legal fight against the world’s largest retailers.
See NYT at https:// www.nytimes.com/2018/08/17/business/falsely-accused-of-shoplifting-but-retailers-demand-they-pay.html?WT.nav=top-news&action=click&=&=&=&=&=&=&clickSource=story-heading&emc=edit_ne_20180817&hp=&module=second-column-region&nl=evening-briefing&nlid=67075843ng-briefing&pgtype=Homepage®ion=top-news&te=1
Does Airbnb suppress some bad reviews by renters? Some customers complain that their negative reviews are suppressed and never appear publicly.
An acquaintance says she recently complained to Airbnb about a rental that was misdescribed as to condition, size, and convenience. She received a partial refund, but her critical review was never published. The property listing shows only the positive reviews my acquaintance relied on when booking.
The Airbnb website says “To promote trust and transparency in our community, we won't delete reviews unless they violate our content policy.”
That may be true, but some on-line bloggers have a different impression.
One wrote:
“I recently concluded my second stay in two months, and for the second time, my review has not appeared on my host's page, nor have I received any feedback.”
Another wrote:
“Same thing here. Only can see my review in My reviews column but it is not publish on the host page and can't even contact the Airbnb helpline or their email.”
Yet another:
“I have the same problem and cant contact Airbnb! One of my reviews for a host does not appear on their page ( it was there for only 2 days) it was not a bad review at all, quite the contrery. However, i did deduct stars due to bad communication on the day of check in and problems accessing their property (Our host did not communicate with us and did not reply to our message the day before or on the day of check in and we couldn't get into her house. even so, I did not make this public but only told her in the private feedback) . I have noticed that this host has full stars and my review is now not on her page, which makes me feel that hosts can manipulate their ratings. Im trying to get answers to this as it makes me very weary to trust airbnb reviews in the future.”
Yet another:
“I am wondering the same thing. Are negative reviews not published? I didn't post any feelings in my review, only facts. Therefore I believe it's important for others to know how terrible this host was. Despite me calling AirBandB for help with the matter, nothing was resolved. And now, the only recourse I have is to review the place and it won't publish.”
DAR comment: I can’t vouch for any of these complaints, except for the first cited above. What is your experience? It does seem that it is misleading if a property has negative reviews that are not disclosed to prospective renters.
Posted by Don Allen Resnikoff
A lesson to politicians everywhere: Italy’s governing right wing party wrote off safety fears about the motorway bridge that collapsed in Genoa as a children’s “fairy story”
The "fairy tale" jibe at the regional president and other officials was on the party’s website, but is now deleted
The Five Star Movement (M5S), which has been leading the country’s government since earlier this year, has made political capital out of opposing major construction and infrastructure projects, which often draw opposition in Italy because they can be disruptive to local residents.
In 2013 a statement on the party’s website described warnings of “the imminent collapse of the Morandi Bridge” as a “favoletta”, an Italian word meaning a children’s fantasy tale or fairy story. The bridge collapsed on Tuesday killing at least 39 people and severing the country’s A10 motorway.
The statement has since been deleted from the party’s website, but a cached version is still visible online. It was drawn up in opposition to the “Gronda di Genova”, a major infrastructure project to improve the motorways in the city region that included work on the now collapsed bridge.
Some architects and engineers had warned that the bridge, built by Italian civil engineer Riccardo Morandi in the 1960s, suffered from fatal design flaws; reinforcement work was carried out on it in 2016 in an attempt to shore it up. A complete rebuild was not carried out to avoid disruption, however.
The statement on the M5S website accuses the regional president who backed the reinforcement work of not having read a public inquiry report into the state of the bridge, and says the party “asks ourselves what credibility those who support the great works can still have”.
Other infrastructure projects opposed by the M5S include a new high-speed rail line from Turin to the south France, which was also the subject of protests and which has been put under review by the incoming transport ministry and similarly described as a waste of money.
Improvements to the bridge were also included by the M5S on a list of infrastructure projects which could be scrapped subject to a review of the costs and benefits.
Bridges designed by the late civil engineer Mr Morandi tend to be unusual because the planner used reinforced concrete instead of steel cables for the stays of the bridge, and used relatively few cables compared to most other designs.
The story is from https://www.independent.co.uk/news/world/europe/genoa-bridge-collapse-safety-issues-italy-government-five-star-movement-league-populists-a8492201.html
Twitter CEO Jack Dorsey interviewed about Alex Jones "time out" decision
Dors
D Dorsey addresses the company’s decision to give Alex Jones, the controversial conspiracy theorist and radio host, a “timeout,” removing his ability to tweet for seven days. conspiracy theorist and radio host, a “timeout,” removing his ability to tweet for seven days. to tweet for seven days.
https://www.nbcnews.com/nightly-news/video/exclusive-twitter-ceo-jack-dorsey-addresses-alex-jones-timeout-decision-1299834435689
ConAgra seeks US Supreme Court cert of lead-paint judgment it says is "retroactively imposing massive liability based on a defendant’s nearly century-old promotion of its then-lawful products without requiring proof of reliance thereon or injury therefrom. . . ."
The cert petition is here: http://www.leadlawsuits.com/wp-content/uploads/2018/07/ConAgra-cert-petition.pdf
The cert petition statement of questions presented:
Petitioners (or their predecessors) are two of the dozens of companies that promoted lead pigments for use in house paints from the late-nineteenth to midtwentieth centuries, when interior residential use of lead paint was both lawful and widespread. Now, decades later, the decision below has deemed those lawful activities a “public nuisance,” and has ordered petitioners to pay hundreds of millions of dollars to remedy the continued existence of lead paint inside residences constructed before 1951 in ten of the most populous counties in California.
This massive judgment was not imposed because petitioners’ paint was traced to any such residence. Instead, the linchpin for imposing this massive liability was petitioners’ speech, not their paint. Yet plaintiffs were expressly relieved of any need to demonstrate that anyone relied on the speech for which petitioners were held liable. In fact, plaintiffs stipulated that they had no proof of reliance, and the trial court expressly held that no such proof was required. Instead, under the legal ruling below, it was enough that petitioners (or their predecessors) promoted lead paint for interior residential use during the first half of the twentieth century. In short, petitioners were ordered to pay hundreds of millions of dollars to remediate a decades-old problem that plaintiffs were not required to trace to either petitioners’ paint or their speech.
The questions presented are:
1. Whether imposing massive and retroactive “public nuisance” liability without requiring proof that the defendant’s nearly century-old conduct caused any ii individual plaintiff any injury violates the Due Process Clause.
2. Whether retroactively imposing massive liability based on a defendant’s nearly century-old promotion of its then-lawful products without requiring proof of reliance thereon or injury therefrom violates the First Amendment.
Santa Clara county provides its summary of the case history in April, at https://www.sccgov.org/sites/cco/leadpaint/Documents/Fact%20Sheet%20Re%20Lawsuit.pdf
The Santa Clara summary follows:
In 2000, the County of Santa Clara filed this landmark case to hold former lead paint manufacturers responsible for promoting lead paint for use in homes despite their knowledge that the product was highly toxic. Young children are especially vulnerable to lead poisoning, and lead paint is the predominance source of lead poisoning. There is no known level of exposure to lead that is considered safe, and the effects of lead poisoning are irreversible. Lower level exposure can result in reduced IQ and attention, and high level exposure can result in coma, convulsions and death.
Nine other California cities and counties joined the lawsuit, with the County of Santa Clara taking the lead role in prosecuting the case on behalf of the People of the State of California. The other cities and counties involved are the City and County of San Francisco, the Cities of Oakland and San Diego, and the Counties of Alameda, Los Angeles, Monterey, San Mateo, Solano, and Ventura.
In 2014, the Santa Clara County Superior Court issued a lengthy decision holding The SherwinWilliams Company, ConAgra Grocery Products Company, and NL Industries, Inc. (collectively, “Manufacturers”) accountable for creating a public nuisance in the ten cities and counties involved in the lawsuit. The public nuisance created by these Manufacturers consists of the collective presence of lead paint in the interiors of homes in the ten cities and counties.1 The 1 Notably, the court did not find that lead paint on any individual property is a public nuisance.
Manufacturers were ordered to pay $1.15 billion to fund (1) inspection for, and abatement of, lead paint and lead-contaminated dust from the interiors of homes and lead-contaminated soil around homes built in 1980 or earlier in the ten cities and counties, (2) remediation of any structural deficiencies in the homes that would cause the lead control measures to fail, and (3) public education and outreach necessary for the program. The ten cities and counties were designated to oversee the lead inspection and abatement program in their respective jurisdictions. Property owners’ participation would be entirely voluntary, and any unspent funds after four years would revert back to the Manufacturers.
In 2017, the Court of Appeal upheld the Superior Court’s determination that the Manufacturers were liable for creating a public nuisance in the ten cities and counties. (People v. ConAgra Grocery Products Co. (2017) 17 Cal.App.5th 51.) However, the Court of Appeal limited their responsibility to homes built before 1951 in the ten jurisdictions. In February 2018, the California Superior Court announced that it would not review the Court of Appeal’s decision. The Manufacturers plan to further appeal the decision to the U.S. Supreme Court. In the meantime, however, the case is returning to the Superior Court to (1) calculate the amount that the Manufacturers must pay for pre-1951 homes only and (2) decide on a receiver to administer the fund and distribute.
Opinion from Sanchez of DMN:
If Sony’s acquisition for EMI Music Publishing goes through, will it really harm the music market?
The Independent Music Companies Association (IMPALA) has filed two complaints with the European Commission. The organization, which represents the indie music community in Europe, fears Sony will eclipse the competition in the European digital music space.
IMPALA’s complaints come as Sony has prepared the process for lawmakers to approve its acquisition bid of EMI Music Publishing.
Sony, which already held a 30% EMI stake, completed its ownership across two transactions. First, it agreed to purchase 60% of EMI from a consortium led primarily by Mubadala for $2.3 billion earlier this year. Then, it acquired the remaining 10% stake from the Michael Jackson Estate for $287.5 million.
According to IMPALA, the number of songs the company controls would double from 2.16 million to 4.21 million. This would make Sony “the biggest and most formidable music company in the world.”
In addition, the independent organization argues that the Commission had previously approved Sony’s initial stake in EMI, but on a partial basis. The European Commission ruled the company couldn’t combine EMI with its own current publishing and recording operations.
IMPALA explains,
“When Sony became a shareholder in the consortium structure which acquired EMI Music Publishing in 2012, the European Commission said Sony would control too much music and insisted on divestments. It only approved the transaction on the basis that EMI would be run separately and would not be combined with Sony’s own publishing or recording operations. This was reconfirmed in 2016, when the Commission allowed [the company] to buy out the proportion of Sony/ATV that it did not already own.”
Railing against the potential acquisition, Helen Smith, Executive Chair of IMPALA, argues,
“It cannot be overemphasized that this is completely different to an ordinary change from joint to sole control. It’s like seeking to merge two majors. That would never be allowed and neither should this. Sony’s latest financial results confirm that ‘EMI will become a wholly-owned subsidiary…’”
But has IMPALA simply exaggerated Sony’s potential market reach with EMI?
For starters, Sony’s acquisition of EMI Music Publishing wouldn’t create the largest music company in the world. That would still be Universal Music Group. Though strictly on a publishing basis, Smith is correct: Sony+EMI would become the largest music publisher in the world.
Sony already negotiates on behalf of EMI Music Publishing as its administrator. In fact, some of EMI’s staff already serve at Sony/ATV.
Billboard notes the music company currently uses “the combined clout to strike deals with digital services.” Sony/ATV staff also “run the two catalogs as one portfolio.” That structure may contradict Smith’s worst-case scenario.
Yet, she continues on.
“If permitted, this transaction would also harm collecting societies, songwriters and composers, and consumers who would face higher charges for music services.”
But, has it really?
Smith adds,
“Our view is that the transaction has to be blocked. EMI would have a better future as a stand-alone operation or combined with another smaller music company to make a more effective competitor to the majors.”
So, what’s next?
First, Sony has to file the necessary paperwork for approval. The European Commission will then review the transaction. The independent organization writes the company’s competitors and other market participants will receive questionnaires to answer.
The European Commission will finally assess the transaction and decide whether it would lead to a ‘significant impediment.’
If so, it would decide whether to block the transaction or stipulate certain acquisition conditions.
Source: https://www.digitalmusicnews.com/2018/08/14/sony-emi-music-publishing-acquisition-impala/
Harvard study on water pollution across the US -- PFAs
A two year old but still relevant study of levels of a widely used class of industrial chemicals linked with cancer and other health problems—polyfluoroalkyl and perfluoroalkyl substances (PFASs)—shows federally recommended safety levels exceeded in public drinking water supplies for six million people in the U.S. The study was led by researchers from Harvard T.H. Chan School of Public Health and the Harvard John A. Paulson School of Engineering and Applied Sciences (SEAS).
The study is published in Environmental Science & Technology Letters. http://pubs.acs.org/doi/pdf/10.1021/acs.estlett.6b00260
“For many years, chemicals with unknown toxicities, such as PFASs, were allowed to be used and released to the environment, and we now have to face the severe consequences,” said lead author Xindi Hu, a doctoral student in the Department of Environmental Health at Harvard Chan School and Environmental Science and Engineering at SEAS. “In addition, the actual number of people exposed may be even higher than our study found, because government data for levels of these compounds in drinking water is lacking for almost a third of the U.S. population—about 100 million people.”
PFASs have been used over the past 60 years in industrial and commercial products ranging from food wrappers to clothing to pots and pans. They have been linked with cancer, hormone disruption, high cholesterol, and obesity. Although several major manufacturers have discontinued the use of some PFASs, the chemicals continue to persist in people and wildlife. Drinking water is one of the main routes through which people can be exposed.
The researchers looked at concentrations of six types of PFASs in drinking water supplies, using data from more than 36,000 water samples collected nationwide by the U.S. Environmental Protection Agency (EPA) from 2013–2015. They also looked at industrial sites that manufacture or use PFASs; at military fire training sites and civilian airports where fire-fighting foam containing PFASs is used; and at wastewater treatment plants. Discharges from these plants—which are unable to remove PFASs from wastewater by standard treatment methods—could contaminate groundwater. So could the sludge that the plants generate and which is frequently used as fertilizer.
Source: https://www.hsph.harvard.edu/news/press-releases/toxic-chemicals-drinking-water/
California jury awards $289 million to man who claimed Monsanto's Roundup pesticide caused cancer
www.latimes.com/business/la-fi-roundup-verdict-20180810-story.html
A civil jury in San Francisco granted a $289 judgment to a groundskeeper who said his lymphoma resulted from years of applying Monsanto's
Roundup pesticide. From the LA Times article:
Scott Partridge, Monsanto’s vice president of global strategy: “Today’s decision does not change the fact that more than 800 scientific studies and reviews — and conclusions by the U.S. Environmental Protection Agency, the U.S. National Institutes of Health and regulatory authorities around the world — support the fact that glyphosate does not cause cancer, and did not cause Mr. Johnson’s cancer.”
****
Having inherited a company long vilified by environmental activists as “Monsatan,” Bayer faces high potential liabilities from hundreds of similar lawsuits, along with a battle over adding a cancer warning label on products sold in California.
A U.S. District Court judge earlier this year temporarily halted moves by California to require a cancer warning label under Proposition 65, the Safe Drinking Water and Toxic Enforcement Act, passed by voters in 1986.
California’s decision to include [Rounndup ingredient] glyphosate on its list of chemicals linked to cancer followed a 2015 ruling by the Europe-based International Agency for Research on Cancer that the chemical is a “probable” carcinogen.
The U.S. EPA as well as its counterpart agencies in the European Union have disagreed with the conclusion reached by that panel, which is part of the World Health Organization. Last December, the U.S. EPA ruled that glyphosate was “not likely” to cause cancer.
DAR comment: It is striking that the jury declined to follow the views of federal government agencies, the EPA and NIH
"District Dig" blog reports on allegations that lobbyists were influential in DCRA’s sign regulation enforcement effort against the Digi company
www.districtdig.com/2018/08/07/inside-game/
The publiication reports AG Racines's response, which includes the following: “I hold our attorneys at the Office of the Attorney General to very high professional standards. While the actions of the DCRA lawyer fell short of professional obligations, no one alleged—nor did the Court find—that any attorney employed by OAG acted improperly."
Posting by Don Allen Resnikoff
From David Balto: PBM 101
My testimony makes the following points:
PBMs are one of the least regulated sectors of the health care system. There is no federal regulation and only a modest level of state regulation.
The PBM market lacks the essential elements for a competitive market: (1) transparency, (2) choice and (3) a lack of conflicts of interest.
The lack of enforcement, regulation, and competition has created a witches brew in which PBMs reign free to engage in anticompetitive, deceptive and fraudulent conduct that harms consumers, employers and unions, and pharmacists. The profits of the major PBMs are increasing at a rapid pace, exceeding $6 billion annually. As drug prices increase rapidly, PBMs are not adequately fulfilling their function in controlling costs
– indeed PBM profits are increasing at the same time drug costs increase because they secure higher rebates from these cost increases. Plan sponsors (employers and unions) cannot attack this problem because PBMs fail to provide adequate transparency.
See http://www.dcantitrustlaw.com/assets/content/documents/testimony/PBM%20Testimony.Balto.pdf
New NewsHour video: Michael Carrier explains PBM pricing -- video
https://www.youtube.com/watch?v=_4_WNFPnmO8
Source documents on NYC crackdown on Uber
The legislative package: One will stop the TLC from issuing new licenses for FHVs for one year, with the exception of wheelchair-accessible vehicles, while the city studies how the services impact traffic. http://legistar.council.nyc.gov/LegislationDetail.aspx?ID=3331789&GUID=6647E630-2992-461F-B3E3-F5103DED0653&Options=ID%7cText%7c&Search=144
Another will enact new regulations on high-volume FHV services like Uber and Lyft, requiring them to provide data on usage and charges, as well as impose a fine of $10,000 for those who do not comply.http://legistar.council.nyc.gov/LegislationDetail.aspx?ID=3479666&GUID=01C67FF7-C56D-474A-BA53-E83A23173FA7&Options=ID%7cText%7c&Search=838
Geographic restrictions, as well as a minimum wage for FHV drivers, will also be implemented through other measures. http://legistar.council.nyc.gov/LegislationDetail.aspx?ID=3487613&GUID=E47BF280-2CAC-45AE-800F-ED5BE846EFF4&Options=&Search=
Members of the City Council also support “driver assistance centers” that would help struggling cab drivers. http://www.nydailynews.com/news/politics/ny-pol-taxi-bills-20180806-story.html
Graying of U.S.-- Bankruptcy: Fallout from Life in a Risk Society
Deborah ThorneUniversity of Idaho
Pamela FooheyIndiana University Maurer School of Law
Robert M. LawlessUniversity of Illinois College of Law
Katherine M. PorterUniversity of California - Irvine School of Law
Date Written: August 5, 2018
Abstract:
The social safety net for older Americans has been shrinking for the past couple decades. The risks associated with aging, reduced income, and increased healthcare costs, have been off-loaded onto older individuals. At the same time, older Americans are increasingly likely to file consumer bankruptcy, and their representation among those in bankruptcy has never been higher. Using data from the Consumer Bankruptcy Project, we find more than a two-fold increase in the rate at which older Americans (age 65 and over) file for bankruptcy and an almost five-fold increase in the percentage of older persons in the U.S. bankruptcy system. The magnitude of growth in older Americans in bankruptcy is so large that the broader trend of an aging U.S. population can explain only a small portion of the effect. In our data, older Americans report they are struggling with increased financial risks, namely inadequate income and unmanageable costs of healthcare, as they try to deal with reductions to their social safety net. As a result of these increased financial burdens, the median senior bankruptcy filer enters bankruptcy with negative wealth of $17,390 as compared to more than $250,000 for their non-bankrupt peers. For an increasing number of older Americans, their golden years are fraught with economic risks, the result of which is often bankruptcy.
Citation:
Thorne, Deborah and Foohey, Pamela and Lawless, Robert M. and Porter, Katherine M., Graying of U.S. Bankruptcy: Fallout from Life in a Risk Society (August 5, 2018). Available at SSRN: https://ssrn.com/abstract=3226574
From Public Citizen Consumer Blog
Will the OCC Try to Preempt State Consumer Protection Rules in FinTech, as It Once Did for Predatory Lending?
by Jeff Sovern
That's the question David Dayen raises in an important essay in InTheseTimes, Trump Appointees Are Pushing a Deregulation Plan That Could Dramatically Erode Consumer Protections. As Dayen points out, in the run-up to the Great Recession, the OCC proclaimed that state anti-predatory lending laws were preempted as to national banks. We know how that ended. Now the OCC has announced that it will accept national bank charters from FinTech companies. When states try to regulate FinTech, will the OCC attempt to preempt their efforts too? For example, will the OCC enable nationally-chartered FinTech companies to skirt state limits on payday lending? That would be an ironic twist from lawmakers usually quick to claim the mantle of states' rights, and any such effort is likely to be subject to court challenges, but we could be headed there. Under the Dodd-Frank Act, section 1044, it is probably going to depend on whether the state "law prevents or significantly interferes with the exercise by the national bank of its powers." I haven't looked into that issue enough to know whether this would qualify. But if, as seems likely for the next five or so years, we can't count on the CFPB to protect consumers, and state efforts to protect them can be preempted, consumers could be in trouble when it comes to predatory lending.
Posted by Jeff Sovern on Saturday, August 04, 2018 at 04:33 PM in Predatory Lending | Permalink
NYT:Steel Giants With Ties to Trump Officials Block Tariff Relief for Hundreds of Firms
Nucor and United States Steel have exercised veto power, so far without fail, over other companies, forcing them to buy their products instead of steel from abroad.
https://www.nytimes.com/2018/08/05/us/politics/nucor-us-steel-tariff-exemptions.html?rref=collection%2Fsectioncollection%2Fbusiness
From the International Steel Institute's litigation challenging the Constitutionality of the President's imposition of tariffs
MEMORANDUM IN SUPPORT OF PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT: INTRODUCTION AND SUMMARY OF ARGUMENT
This is an action seeking a declaratory judgment and an injunction against the enforcement of section 232 of the Trade Expansion Act of 1962, as amended, 19 U.S.C. § 1862 (“section 232”), on the ground that it constitutes an improper delegation of legislative authority to the President, in violation of Article I, section 1 of the Constitution and the doctrine of separation of powers and the system of checks and balances that the Constitution protects. The specific claim before this Court arises from the actions of the President, through proclamations issued under section 232, in which he imposed a 25% ad valorem tariff on steel products imported into the United States from most, but not all, countries (“the 25% tariff”).
As a facial challenge to section 232, this case should be decided on cross-motions for summary judgment. To demonstrate the injuries caused them by section 232 and the 25% tariff, Plaintiffs have submitted the declarations of Richard Chriss, President of Plaintiff American Institute for International Steel, Inc. (“AIIS”); John Foster, President of Plaintiff Kurt Orban Case 1:18-cv-00152-N/A Document 20 Filed 07/19/18 Page 10 of 54 2 Partners, LLC (“Orban”); and Charles Scianna, President of Plaintiff Sim-Tex, LP (“Sim-Tex”).
In further support of their motion, Plaintiffs cite to the four proclamations of the President that imposed the 25% tariff and then modified the countries whose steel products are subject to it, as well as to the procedures that the Secretary of Commerce (the “Secretary”) issued to respond to individual requests by U.S. companies for product-specific exclusions from the 25% tariff.
Finally, this memorandum includes citations to the Steel Report prepared by the Secretary in support of his finding for the President that steel imports may threaten to impair the national security, as that term is broadly defined in section 232. Included as an appendix to the Steel Report are the written statements submitted by 37 witnesses who testified before the Department of Commerce (“Commerce”) on May 24, 2017. The Steel Report also contains a link to the written statements submitted by more than 200 other interested persons to the Secretary for his consideration, some of which will also be cited herein. The citations to these statements are not to establish the truth of what they assert, but to establish the many ways that those who rely on imported steel in their businesses informed Commerce that the tariffs would affect them. Those statements are significant because they are the kind of effects that a 25% steel tariff would be expected to produce, and yet, most pertinent to this challenge, section 232 does not (a) require the President to take them into account in selecting the means to respond to the perceived threat that imported steel products may impair the national security, (b) forbid him from taking them into account, (c) forbid him to take some into account, but not others; or most importantly (d) provide him with any guidance on whether and how to take these factors into account. Case 1:18-cv-00152-N/A Document 20 Filed 07/19/18 Page 11 of 54 3
This case challenges the constitutionality of section 232 because Congress has essentially turned over to the President the constitutional authority “[t]o lay and collect [t]axes, [d]uties, [i]mposts and [e]xcises,” expressly given in Article I, section 8 of the Constitution to Congress. U.S. CONST., art. 1, § 8, cl. 1. Section 232 does that without providing the kind of “intelligible principle” required by the Supreme Court in J.W. Hampton, Jr., & Co. v. United States, 276 U.S. 394, 409 (1928), to satisfy the nondelegation doctrine and the mandate of Article I that the legislature, not the President, make the laws.
Section 232, like most statutes challenged on nondelegation grounds, has two components, each of which must contain an intelligible principle to guide its application. First, there is a trigger, which is the finding needed to make the statute operative, in this case a conclusion that imports may “threaten to impair the national security.” 19 U.S.C. § 1862(b)(3)(A). Second, once the trigger has been found, the statute gives the designated official the authority to select the remedies (or means of implementation).
Specifically, section 232 allows the President, in his unbridled discretion, to “determine the nature and duration of the action that, in the judgment of the President, must be taken to adjust the imports of the [imported] article and its derivatives so that such imports will not threaten to impair the national security.” 19 U.S.C. § 1862(c)(1)(A)(ii). As we describe below, section 232 provides no restraints that limit the President’s invoking the trigger or in his choice of remedies—tariffs, quotas, or something else—in what amounts, as applied to which products, and to which countries.
In essence, in section 232 Congress has transferred to the President the ability to make the essential policy choices that the Constitution assigns to Congress and Congress is required to retain under our Constitution and the principles of separation of powers that animate it. For that Case 1:18-cv-00152-N/A Document 20 Filed 07/19/18 Page 12 of 54 4 reason, section 232 is like the Line Item Veto Act, which was condemned by the Supreme Court in Clinton v. City of New York, 524 U.S. 417 (1998), because that Act purported to permit the President to use the “cancellation” process in that Act to reject the policy choices made by Congress in the parts of a law that he “canceled.”
To be sure, the Court in Clinton did not rely on the nondelegation doctrine on which Plaintiffs rely here, but the structural flaw of presidential versus congressional lawmaking is present in both. There is another aspect of section 232 that reinforces the conclusion that it is unconstitutional. When today so much of the power to implement the laws has been assigned to the President or administrative agencies, Congress has provided important checks on their use of those powers to assure that the laws are carried out as Congress provided. But section 232 contains none of the procedural safeguards found in rulemakings governed by the Administrative Procedure Act.
Moreover, section 232 has no provision for judicial review, and because discretionary decisions like that imposing the 25% tariff here are made by the President, they are not subject to judicial review under the Administrative Procedure Act. The result is that Congress created an unconstitutional regime in section 232, in which there are essentially no limits or guidelines on the trigger or the remedies available to the President, and no alternative protections to assure that the President stays within the law, instead of making the law himself.
The motion papers are at http://www.aiis.org/wp-content/uploads/2018/07/2018.07.19-Plaintiffs-Motion-Proposed-Order-Memo-for-Summary-Judgment-MMM-from-docket.pdf
The WSJ's Greg Ip explains Donald Trump's policy of picking industry winners and losers
Greg Ip says that President Donald Trump is steering U.S. economic policy in a radically new direction. From trying to revive steelmakers with tariffs to vetoing Chinese technology investments, he is using the federal government to direct which industries prosper and which don’t.
Ip explains that many countries have long tilted the playing field toward favored companies and industries, a practice economists call industrial policy. American presidents have traditionally resisted this as “picking winners.”
The president has broken with that tradition, unveiling a series of actions on trade, foreign investment and energy he hopes will revive favored industries and beat back the competitive challenge of other countries—but which risk creating domestic losers.
Ip's point is that whether it is imposing tariffs to protect the steel industry at the expense of industries that use steel, propping up the dying coal industry or seeking to raise postal rates on Amazon, Trump has become a practitioner of industrial policy of the type conservatives traditionally have shunned. DAR
Drawn from https://www.wsj.com/articles/trumps-emerging-economic-policy-picking-winners-and-losers-1532100935# (paywall)
From Open Markets Institute:
As Independent Grocery Stores Wane and Amazon Looms, Wholesale Middlemen Merge
DAR comment: This article focuses on the supply chain issues relevant to independent groceries. Supply seems crucial to survival of independent groceries, whether their goal is healthy food or providing alternatives in poor neighborhood food deserts.
Last week, organic and natural foods distributor, United Natural Foods Inc. (UNFI) announced plans to buy the largest publicly traded grocery wholesaler, Supervalu, for just under $3 billion. The deal is largely a defensive move by UNFI after Amazon bought their largest customer, Whole Foods.
The takeover is the latest step in a larger trend of grocery consolidation that has greatly reduced the ranks of independent regional groceries and the wholesalers that supply them. As supermarkets and wholesalers try to “get big or get out,” producers at the end of the supply chain feel the squeeze from fewer and bigger buyers.
Between 1992 and 2013, the market share of America’s top twenty grocery stores increased from 39 percent to 64 percent, while the share of just the top four chains more than doubled, from 17 percent to 36 percent. This shifted the majority of the grocery business from smaller regional chains to increasingly large national brands. Today, independent grocers represent only 25 percent of all grocery sales.
The larger a grocer becomes, the more likely they are to cut out the middleman. “Once you get to a certain level it’s easier to have your own warehouses and be self-supplied,” explains grocery analyst David Livingston of DJL Research. WalMart, Kroger, Costco, and Publix are among the chains that increasingly rely on in-house distribution networks.
“There are fewer big wholesalers left today,” says Neil Stern, Senior Partner for retail analysts, McMillan Doolittle. Indeed, between 1997 and 2000 alone, there were 105 grocery wholesaler mergers and acquisitions. In ten years, the market share of the four largest independent grocery wholesalers went from 52 percent in 1997 to 87 percent in 2007. This consolidation has continued. In just the past two years, Supervalu acquired regional wholesalers Central Grocers, Associated Grocers of Florida, and Unified Grocers.
Even though Supervalu bought many of its rivals, the wholesaler’s customer base continued to shrink. “Supervalu’s customers include small- to mid-sized supermarket chains,” Stern says. These are precisely the grocers that have lost the most market share over the past three decades.
To compensate, Supervalu began to vertically integrate into retail in the 1970s, through the buying of regional grocery chains. In 2006, Supervalu briefly became the third largest grocery retailer in the US, when it bought national grocery leader, Albertson’s, taking in their network of 2,150 stores.
But this takeover strategy left Supervalu heavily burdened by debt, and after just seven years the wholesaler sold Albertson’s and started divesting the rest of its retail business. The company ended up with over $1.5 billion in debt and lost 90 percent of its stock value in the process.
UNFI, meanwhile, since 2000 has acquired 19 distributors, manufacturers, and private label suppliers, and their sales have grown at a compounded rate of 12.9 percent each year. They primarily supply organic and natural foods to conventional supermarkets and independent natural chains. But, like Supervalu, in recent years UNFI has come under more pressure as their customer base has consolidated.
In the case of UNFI’s largest customer, Whole Foods, the corporation started to consolidate the organic grocery market in 1988, acquiring thirteen natural grocery chains in 20 years. Today, Whole Foods has 487 locations and accounts for a third of UNFI’s revenue. UNFI’s reliance on Whole Foods was not a major liability until the e-commerce goliath, Amazon, absorbed the chain. Some analysts believe Amazon may soon move to cut UNFI out of the business, much the way other major grocery chains have done.
“They’ve gotten a huge threat from Amazon,” explains Livingston. “They’re probably going to develop their own ways of distribution and kick UNFI to the curb.”
As UNFI and Supervalu combine their supply chains some suppliers, from packaged food companies to produce aggregators, stand to lose. “There might be some overlap in suppliers,” Stern explains, and redundant suppliers could lose contracts. But because UNFI and Supervalu generally fill different niches, Stern argues that many suppliers may benefit from access to new markets. “More scale and size…, could allow suppliers to expand their business,” Stern says.
In general, studies show that as the number of food buyers shrinks, suppliers face greater price pressure. As early as 2000, agricultural economists at UC Davis reported that growing concentration in grocery retail and wholesale created “fewer but larger buyers” for produce growers and shippers, and argued that such big “buyers may enjoy an unfair advantage in bargaining with suppliers.”
If UNFI’s big bet fails, the playing field could shrink further still. “What they’re taking on is risky,” says Livingston, “it’s not a simple acquisition.”
Can voter gerrymandering be fixed by ballot initiative and State constitutional amendment?
The Michigan Voters Not Politicians group thinks so. Here is material from their website: https://www.votersnotpoliticians.com/thesolution:
Let's end Gerrymandering in Michigan
Michigan voters can end gerrymandering in Michigan before 2021 when the next election maps are redrawn.
Voters Not Politicians’ mission is to end gerrymandering by 2018 through a citizen led ballot initiative. We have collected the required 315,654 valid signatures in 180 days, that will secure a spot in the November 6, 2018 election as a ballot measure. With a simple majority vote from the voters of Michigan, we will amend Michigan’s constitution to place an Independent Citizens Redistricting Commissionin charge of redistricting, ensuring that voters will choose their politicians, not the other way around.
The proposal to end gerrymandering in Michigan
Instead of giving politicians the power to draw our voting districts - who ultimately stand to benefit from their decisions - we propose an Independent Citizens Redistricting Commission of registered Michigan voters to draw voting districts using guidelines that ensure fairness to all. We believe that the voters of Michigan - not politicians - should be entrusted with this important and monumental task.
Our proposal will eliminate political influence and bias in the redistricting process through a fair, transparent, and nonpartisan solution. Here’s how:
The proposal takes redistricting out of the backroom and ends the conflict of interest that festers when politicians have the power to choose their voters. The Independent Citizens Redistricting Commission will ensure voters choose their politicians, instead of the other way around, so that Michigan votes count and Michiganders’ voices are heard.
Amending Michigan’s constitution
In order to adopt the Independent Citizens Redistricting Commission, we must pass a constitutional amendment through a ballot initiative. Here’s how we do it:
Take Action
People across Michigan who value their votes are taking action to reform redistricting rules. If you're ready, find out how you can get involved.
The D.C. Palisades Citizens Association on Airplane Noise Updates
Updated April 10, 2018
Editorial note by DAR: When citizens have a complaint about private or government action, they may first try complaining, and if that fails they may turn to litigation. The available litigation procedures should be transparent, fair, and expedient. It is plain from the following report that the writers find the litigation procedures to be none of those things. DR
To file a noise complaint, click here.
Click here to see Pierre Oury's slides from his recent presentation at the library, A Pilot's Perspective
DC Fair Skies - AIRCRAFT NOISE LEGAL FIGHT UPDATE:
Unfortunately, the Court did not reach the merits of the case and dismissed the Petition for Review as untimely. Despite the lack of notice to any elected DC Government Official and the efforts by the FAA to ensure no one in DC was aware of the plan to make the LAZIR route the flight path for all northbound departures, the Court found that two small adds in the Washington Post of the intent to do an EA [Environmental Assessment] of the entire DC Metroplex and the fact that one had been completed were adequate notice. The only support for that decision is an old Supreme Court Clean Water case which sanctioned publication as a means of providing notice but did not state that it was sufficient to satisfy NEPA’s [National Environmental Policy Act] requirements that agencies make “diligent efforts to involve the public”. In this case the FAA made diligent efforts to ensure no one in DC was aware of the new flight path we challenged until it was an accomplished fact. We need to consider what if any steps we need to consider taking at this point, but pursuing our Administrative Petition with the FAA is one possible alternative to further litigation. The Opinion is found here.
Click here for the latest summary on our involvement in the Fair Skies Coalition.
Click here to listen to the Oral Argument in DC Fair Skies vs FAA that look place in the Federal Court of Appeals on January 11, 2018.
Neighborhood associations file reply brief. The Reply Brief lambasts the FAA over increased aircraft noise created by the new northern departure flight path.Click here to read it.
New report says noise complaints are up at National, Dulles airports. Click here to read the recent The Washington Post article.
Click here to read about the brief filed to challenge disruptive new aircraft noise created by the FAA’s new northern departure flight path. The brief filed represents many weeks of working through the record to find the holes in the FAA’s argument. Fair Skies then had to prepare motions to expand the record to include materials it wanted included, create statutory addendums to the brief required by the Court, and provide case and record citations for its arguments-all of which took many hours of his time.
Check out this story on jet noise that aired on WAMU in October 2016.
From: http://www.palisadesdc.org/
Steve Calkins on: How Might A Justice Kavanaugh Impact Antitrust Jurisprudence?
Posted on July 20, 2018 by Stephen Calkins on pro-arket.org
Throughout his judicial career, the US president’s latest nominee to the Supreme Court, Brett Kavanaugh, has written three antitrust opinions. Here, Stephen Calkins of Wayne State University Law School reviews the trends that emerge from those opinions.
'A Justice Kavanaugh—this comment simply assumes that he will be confirmed—would become the second Trump-appointed aggressively conservative, pro-business justice. Nominated at age 53, he could be expected to serve for decades.
This commentary reviews Judge Kavanaugh’s antitrust opinions.1) He has dissented from two D.C. Circuit decisions that acceded to government requests to block mergers: United States v. Anthem, Inc.;2) and FTC v. Whole Foods Market, Inc.3)The first, preventing a 4-3 merger of health insurance carriers, turned largely on arguable efficiencies. The second, objecting to the merger of the two largest “premium, natural, and organic supermarkets,” turned principally on market definition. Judge Kavanaugh also addressed antitrust in his concurring opinion in Comcast Cable Communications, LLC v. FCC,4) in which the Court rebuffed the FCC’s order requiring Comcast to carry the Tennis Channel on equal terms with comparable Comcast-owned offerings. The Court reached this result on narrow grounds. Judge Kavanaugh separately wrote a sweeping opinion disagreeing with the FCC and saying that statutory language authorizing regulations to prevent conduct that “unreasonably restrain[s]” a rival from “compet[ing] fairly by discriminating . . . on the basis of affiliation or nonaffiliation” (a) must have meant (no citation of Chevron) to allow only duplication of antitrust law, and (b) must have meant that all vertical restraints are per se protected at least absent proof of market power – which he concluded that Comcast did not have — and (c) that’s a good thing, because the First Amendment protects Comcast’s “editorial discretion” about whether to carry the Tennis Chanel.
Several themes emerge from the three opinions:
Bid rigging at public foreclosure auctions: A Too Familiar DOJ Press Release with a Sad Detail
By Robert E. Connolly
The DOJ issued a standard press release yesterday announcing yet another individual guilty plea in its long running real estate foreclosure auction collusion investigation: Seventh Mississippi Real Estate Investor Pleads Guilty to Conspiring to Rig Bids at Public Foreclosure Auctions. According to the press release to date there have been “convictions of well over 100 other individuals who rigged foreclosure auctions all across the country.” Many of those convicted have been sentenced to prison.
What jumped out at me about the press release was that the individual is pleading guilty to rigging auctions “from at least as early as August 20, 2009 through at least as late as December 14, 2016.” In other words, while the DOJ investigation, prosecution and sentencing of others to prison, this defendant continued to collude at auctions. And you can’t collude by yourself, so others were still joining in. I suppose it is more sad than surprising. [People still rob banks.] The temptation for a quick (and illegal) buck by colluding at auctions is too great for some to pass up. After all, this the real estate foreclosure auction investigation is by no means the first widespread auction collusion investigation the Antitrust Division has had with large numbers of criminal prosecutions. When I was the Chief of the Philadelphia office we prosecuted auction “rings” in antiques, jewelry, various types of commercial equipment and Department of Defense surplus auctions. In every investigation we learned was that collusion at auctions was a “way of life” in that business. The individuals prosecuted had excuses for their behavior: “it’s the only way to make money” “there were still other bidders we had to compete against” “the auctioneers pulled phantom bids” “it was a cloudy day” “it was a sunny day” and on and on. But, each person I dealt with understood that what they were doing was a fraud. One guy even remarked in answer to a question about the collusion: “You mean the combination?” I remember that many years later because I had never heard the Sherman Act term “combination” actually used by someone who was in one. [Auction conspirators frequently use the term “the ring.”]
Like many white-collar criminals, auction collusion defendants have not had previous encounters with the law. The entire lengthy process of the investigation, prosecution, and jail sentence if there is one, is usually an absolutely devastating experience to the individuals’ business, family life and self. It can be tempting get involved in an auction ring if you compete against the same individuals/businesses time after time. But, in my experience, auctions rings were by far the easiest bid rigging crime to prosecute. The payoffs to the ring members leave a detailed road map of who was involved and what the scam was.
I don’t know who reads Cartel Capers. Probably not many in the auction business. But, if you are and you are invited into an auction ring, RUN. Be conspicuous that you are not part of the group. If you are in an auction ring, GET OUT. You may want to speak with an attorney and consider the Antitrust Division’s Leniency Program. If it’s the only way to make money, find another line of work. (But don’t rob banks.)
Thanks for reading. Bob Connolly
This post originally appeared on the Cartel Capers blog. https://wklawbusiness.us6.list-manage.com/track/click?u=752026a04d2007135a2ab4662&id=88fe73100b&e=84837a780d
AG Racine on Enhancing Safety through Justice Reformfrom Karl Racine:
Across the country, reform-minded prosecutors are simultaneously making our communities safer and rehabilitating young offenders through evidence-based, age-sensitive solutions. In a recent article in USA Today, I highlight how prosecutors are implementing reforms tailored to juveniles, such as developing youth-centered facilities that keep young people out of jail and raising the age at which someone can be tried as an adult. These reforms have succeeded in increasing public safety, keeping youth out of the justice system, and saving taxpayers money.
Recently, in partnership with Fair and Just Prosecution and Georgetown University’s Center for Juvenile Justice Reform, I convened prosecutors from across the country to share ideas that can help reform the juvenile justice system. I highlighted two OAG programs that have shown early success in the District: (1) the Alternatives to Court Experience (ACE) Diversion program which provides support services for offenders as an alternative to incarceration and (2) a first-in-the-nation Restorative Justice program which uses mediated conferences between victims and offenders to repair the victim’s harm instead of traditional prosecution. Both programs have shown similar success with approximately 80 percent of participants not being re-arrested after completing either program.
Prosecutors are gatekeepers to the justice system and I strongly believe we can use our positions to change practices and advocate for evidence-based juvenile justice reforms. At OAG, I will continue to implement and advocate for strategies that keep our communities safe, make financial sense, and give young people a shot at a brighter future.
Sincerely,
Karl A. Racine
Attorney General
Lina Khan, a critic of Amazon on antitrust grounds, joins the FTC
One of Amazon's most prominent critics on antitrust grounds, Lina Khan, has been hired at the Federal Trade Commission. The FTC will hold hearings on competition and consumer protection this fall. "Ms. Khan is one of the leading proponents of the idea that conventional antitrust enforcement needs to be rethought in the era of giant tech platforms like Amazon," reports Priya Anand of The Information.
From Open Markets Institute: Colluding Pork Packers Accused of Pigging Out On Fixed Prices
Since roughly 2009, Americans may have been paying too much for their pork chops, barbeque, hams, and trotters.
That’s the claim of two law firms that filed separate class action suits on behalf of consumers and food distributors charging eight major pork packers and an industry data sharing service, Agri Stats, with colluding to manipulate prices.
The case comes more than a year after dominant chicken packers were charged with an identical crime. In both cases, the suits argue that Agri Stats’ detailed, company-specific, and forward-looking data made it possible for pork processing companies to coordinate the supply of pork, and critically, monitor one another’s behavior to ensure no one in the cartel deviated from their conspiracy.
Hormel and Smithfield have denied the price-fixing allegations. A representative from Tyson, also a defendant in the poultry case, said in an email, “We intend to vigorously defend against the allegations in court.” Other defendants have not commented.
The suits allege that collusion began around 2008 when Agri Stats started to market pork “benchmarking” reports, which compare data from pork meat packers on everything from total profits and hogs slaughtered, to farm-level data about feed ratios, mortality rates, piglet weaning costs, and so on. By 2016, Agri Stats benchmarking reports collected and internally audited information from over 90 percent of the pork industry.
“Once Agri Stats got everyone in the pork industry to put their card on the table, there was no competition,” said Steve Berman, managing partner at Hagens Berman, one of the firms suing pork producers, in a public statement.
Pork production stagnated and prices increased almost immediately after pork corporations began using Agri Stats benchmarking data. Between 1998 and 2009 the year average price per hundredweight of pork was never more than $50. But from 2009 to 2014, prices rose over 50 percent to $76.30. This was true even though the price of other agricultural commodities started to fall around 2012 and 2013. Annual pork production fell in 2009, 2010, and again in 2013 (with another dip in 2014 due to disease).
The plaintiffs argue that pork corporations coordinated changes in production with the help of Agri Stats. However, this claim raises the question, what makes Agri Stats different from other industry data service companies or market information provided by the USDA?
Darren Tristano, the CEO of a foodservice and hospitality data research service, CHD Expert, says market reports with un-aggregated, company-level information are “very rare.” Indeed, the pork suit claims that “Agri Stats’ reports are unlike those of other lawful industry reports,” in that they provide “current and forward-looking sensitive information” broken down by company and even farm. All of this data is anonymous, but the suit contends that Agri Stats reports contain “the keys to deciphering which data belongs to which producers.”
This key difference, in turn, could allow conspirators to tie specific data back to individual companies and identify any one who tried to cheat the others by not adhering to their price-fixing plan. Without frequent, audited, and disaggregated data from Agri Stats, the suits argue, large pork companies could not be sure that all conspirators were cooperating.
Furthermore, in a decentralized market of many independent pork producers, collusion on the scale in question would be almost impossible to coordinate, even with the help of an especially detailed data service. Yet today, four companies sell just under 70 percent of all pork, making collusion comparatively easy.
Pork packers also have unprecedented ownership over all steps in the supply chain, from breeding to feed production and slaughter, while individual farmers take on the risk of raising hogs on contract for large corporations.
While the new suits focus on the impact of the conspiracy on pork buyers, Agri Stats data-sharing also raises questions about potential harms to hog growers. A 2017 lawsuit filed on behalf of poultry growers claims that poultry processors used Agri Stats to share data on farmer compensation. The suit argues that poultry processors worked together to “[depress] Grower compensation below competitive levels.”
Such a suit has not been filed on behalf of hog farmers, and neither of the current pork price-fixing suits makes mention of Agri Stats providing data on hog grower compensation.
The pork suits do argue that hog farmers bore the brunt of price variations over the course of the alleged conspiracy. Hog farmer earnings plummeted in 2014, and have since failed to bounce back to 2010-2013 levels. Meanwhile, pork packer earnings grew precipitously from 2012 onward, with only a slight dip this past year.
Intentional wage suppression or not, these cases highlight the immense power that a handful of vertically integrated meat companies have to force farmers to assume all the risk, to increase prices for consumers, and to hog the benefits for themselves.
Transcript: Dan Coats warns the lights are 'blinking red' on Russian cyberattacks - including attacks on infrastructure crucial to consumers
NPR July 19, 2018 5:57 a.m.
Director of National Intelligence Dan Coats warned a think tank last week that cyberattacks from Russia and others are ongoing: "The warning lights are blinking red again."
The director of National Intelligence spoke before the Hudson Institute, a D.C.-based conservative think tank, on July 13. Transcript provided by the Hudson Institute.
Excerpts:
Every day, foreign actors — the worst offenders being Russia, China, Iran and North Korea — are penetrating our digital infrastructure and conducting a range of cyber intrusions and attacks against targets in the United States. The targets range from U.S. businesses to the federal government (including our military), to state and local governments, to academic and financial institutions and elements of our critical infrastructure — just to name a few. The attacks come in different forms. Some are tailored to achieve very tactical goals while others are implemented for strategic purpose, including the possibility of a crippling cyberattack against our critical infrastructure.
All of these disparate efforts share a common purpose: to exploit America’s openness in order to undermine our long-term competitive advantage.
* * *
But focusing on the potential impact of these actions on our midterm elections misses the more important point: these actions are persistent, they are pervasive, and they are meant to undermine America’s democracy on a daily basis, regardless of whether it is election time or not. Russian actors and others are exploring vulnerabilities in our critical infrastructure as well. The DHS and FBI — in coordination with international partners — have detected Russian government actors targeting government and businesses in the energy, nuclear, water, aviation and critical manufacturing sectors.
The warning signs are there, the system is blinking, and that is why I believe we are at a critical point. Today, unlike the status of our intelligence community in 2001, we’re much more integrated and much better at sharing information between agencies. But the evolving cyber threat is illuminating new daily challenges in how we treat information. We are dealing with information silos of a different kind, including between the public and private sector.
* * *
In many ways, the nature of the cyber threat requires that we — the national security community — treat the private sector and American people as intelligence customers. And that is why you will see us talking about this threat more vocally, and why you will continue to see us publish unclassified assessments and statements to inform the American people.
Full transcript: https://www.opb.org/news/article/npr-transcript-dan-coats-warning-on-continuing-russian-cyberattacks/
WSJ: Counterfeit products of Amazon
Excerpts:
Amazon.com Inc. AMZN -1.16% has made it easy for small brands to sell their products to large numbers of customers, but that has also enabled some counterfeiters to cut into their business.
Counterfeiters, though, have been able to exploit Amazon’s drive to increase the site’s selection and offer lower prices. The company has made the process to list products on its website simple—sellers can register with little more than a business name, email and address, phone number, credit card, ID and bank account—but that also has allowed impostors to create ersatz versions of hot-selling items, according to small brands and seller consultants.
WSJ article at https://www.wsj.com/articles/on-amazon-fake-products-plague-smaller-brands-1532001601?mod=hp_lead_pos4 (pay wall)
The Center For Automotive Research says US car and car parts manufacturers will not benefit from tariffs
Produced By: Industry, Labor, & Economics Group
Categories: Economic Contribution Analysis, Employment, Forecasts, Trade
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Full Description:
The U.S. Department of Commerce is currently investigating whether U.S. automobiles and automotive parts constitute a national security threat under Section 232 of the Trade Expansion Act of 1962, as amended. The Center for Automotive Research (CAR) estimates that consumers will see the price of all new vehicles rise by $455 to $6,875 depending on the level of tariff or quota, where the vehicle was assembled, and whether the policy provides exemptions for automotive trade with Canada and Mexico. Used vehicle prices will also rise due to heightened demand and constricted supply, and higher automotive parts prices will drive up the price of vehicle maintenance and repair, so even holding on to an existing vehicle will become more expensive.
U.S. automotive and automotive parts manufacturers would not benefit from tariff or quota protection since all vehicles produced in the United States rely on imported content and a substantial share of U.S.-produced automotive parts and components are exported for assembly in vehicles built in other countries. CAR estimates that automotive demand will fall by between 493,600 to 2 million vehicles as a result of the implementation of tariffs or quotas. Declining demand is associated with employment losses ranging from over 82,000 to nearly 715,000 jobs and a $6.4 billion to $62.2 billion hit to U.S. Gross Domestic Product (GDP).
This briefing covers the economic, trade, employment, output, and price impacts of the potential Section 232 tariffs or quotas at a range of levels and levied against all trading partners or all non-NAFTA trading parnters.
Download at https://www.cargroup.org/wp-content/uploads/2018/07/NADA-Consumer-Impact-of-Auto-and-Parts-Tariffs-and-Quotas_July-2018.pdf
The EU press release on the Google fine:
http://europa.eu/rapid/press-release_IP-18-4581_en.htm
Excerpt:
Brussels, 18 July 2018
The European Commission has fined Google €4.34 billion for breaching EU antitrust rules. Since 2011, Google has imposed illegal restrictions on Android device manufacturers and mobile network operators to cement its dominant position in general internet search.
Google must now bring the conduct effectively to an end within 90 days or face penalty payments of up to 5% of the average daily worldwide turnover of Alphabet, Google's parent company.
Commissioner Margrethe Vestager, in charge of competition policy, said: "Today, mobile internet makes up more than half of global internet traffic. It has changed the lives of millions of Europeans. Our case is about three types of restrictions that Google has imposed on Android device manufacturers and network operators to ensure that traffic on Android devices goes to the Google search engine. In this way, Google has used Android as a vehicle to cement the dominance of its search engine. These practices have denied rivals the chance to innovate and compete on the merits. They have denied European consumers the benefits of effective competition in the important mobile sphere. This is illegal under EU antitrust rules."
In particular, Google:
Google obtains the vast majority of its revenues via its flagship product, the Google search engine. The company understood early on that the shift from desktop PCs to mobile internet, which started in the mid-2000s, would be a fundamental change for Google Search. So, Google developed a strategy to anticipate the effects of this shift, and to make sure that users would continue to use Google Search also on their mobile devices.
In 2005, Google bought the original developer of the Android mobile operating system and has continued to develop Android ever since. Today, about 80% of smart mobile devices in Europe, and worldwide, run on Android.
When Google develops a new version of Android it publishes the source code online. This in principle allows third parties to download and modify this code to create Android forks. The openly accessible Android source code covers basic features of a smart mobile operating system but not Google's proprietary Android apps and services. Device manufacturers who wish to obtain Google's proprietary Android apps and services need to enter into contracts with Google, as part of which Google imposes a number of restrictions. Google also entered into contracts and applied some of these restrictions to certain large mobile network operators, who can also determine which apps and services are installed on devices sold to end users.
The Commission decision concerns three specific types of contractual restrictions that Google has imposed on device manufacturers and mobile network operators. These have enabled Google to use Android as a vehicle to cement the dominance of its search engine. In other words, the Commission decision does not question the open source model or the Android operating system as such.
Insight into government subsidies to farmers: peanuts and peanut butter
Peanut growers where first financially helped by the government with the 1933 Agricultural Adjustment Act. Through federal policies, it increased overall income for peanut growers. However, consumers felt the hit as they were paying more for their everyday bag of peanuts. The Act later went through a bunch of changes; modifications were made in years 1937, 1941, 1948, and 1949 to justify poverty alleviation incentives.
In 2002, a quota system was introduced into the mix. This allowed peanut growers to obtain funds from US taxpayers versus from consumers. This also meant an increase in the price of consumer-oriented products, such as peanut butter. Around this time, lobbyists justified keeping the subsidies flowing based on the fact that the government had been providing them for so long, it would be unfair to suddenly take them away.
A couple of years later, peanuts were threatened to be kicked off of the 2014 Farm Bill. But, lobbyists fought back for favorable treatment made in a new Price Loss Coverage Program (PLC), which allows them protection from adverse market changes.
With these subsidies in place and the government having a strong control on market price with quotas, the unlikely consequence is huge stockpiles. This year, it is projected that American farmers will harvest 6.1 billion pounds of peanuts with 2.9 billion pounds in leftover. While stockpiles last, consumers will find themselves paying a bit less for their favorite peanut butter brands. However, taxpayers are expected to cover the $2 billion in subsidy payments by the government to farmers.
As mentioned, peanuts are now a lower price based on the stockpiles and the government's quotas for harvest. However, consumers pay for these "lowered prices" through taxes.
When peanut butter is made and marketed, it's sold at a lower price versus other nut spreads. The ingredients of a conventional jar of peanut butter do contain peanuts, but they may also contain other subsidized ingredients such as corn, soy, or sugar (this also ties into the reason of why a fast food salad is going to be more expensive than a cheeseburger). The more subsidized ingredients a product contains, the less it's going to cost. This is also why all-natural peanut butter will be more expensive than one with added sugars and preservatives.
Recently, there has been a big push to reduce the number of subsidies given to farmers. The current presidential administration has even proposed a $4.8 billion annual cut to the $23 billion currently given to farmers in hopes of fixing the issue. What will the future look like for the prices of peanut butter? It will certainly be one to keep an eye out for in the news- and the grocery shelves.
Excerpt from: https://www.msn.com/en-us/foodanddrink/foodnews/peanut-butter-is-subsidized-by-the-government-and-heres-what-that-means-for-you/ar-AAAhBOD?ocid=spartandhp
Montenegro as a tourist destination
Montenegro has recently been in the news only as a place with an easily pushed aside prime minister, unimportant to the US Administration's NATO defense strategy. But it is an actual, not imaginary place. You might want to visit there as a tourist, while you still can. So, for perspective, here is what the country's tourist agency has to say:
The sea, the lakes, the canyons or the mountains enable everyone to decide on the best way to enjoy a quality vacation. In one day, the curious traveler can have a coffee on one of the numerous beaches of the Budva Riviera, eat lunch with the song of the birds on Skardar Lake and dine next to a fireplace on the slopes of the Durmitor Mountain. These are all characteristics of Montenegro as a tourist destination that has a lot to offer.
The turbulent history of this small country has left behind an invaluable treasure in numerous historic monuments throughout this proud country. The blue sea with endless beaches, restless waters of the clear rivers and beautiful mountain massifs, mixed with the spirit of the old times, have given Montenegro everything one needs for an unforgettable vacation.
Montenegro is an ecological state. This fact grants it one of the primary posts on the tourist maps. A large number of sunny days in summer and a large quantity of snow in winter determine the two most developed forms of tourism in Montenegro: the coastal one- in summer and the ski recreational one – in winter.
Montenegrin towns are rich in architecture, from various periods that take the breath away and bring one back to the time when the structures were created. Through the numerous event and festivals, the tourist gets the opportunity to learn more about the traditions and customs of this country.
In recent times, following the global trends, Montenegro is developing extreme sports that the tourists can enjoy, as well.
From: https://www.visit-montenegro.com/tourism/tourism-in-montenegro/
Shades of Barry Lynn: The Trump trade wars will be affected by need for rare metals supplied almost solely by China
From NYT: And in one of its more strategic weapons, Beijing could use its dominance [in rare metals] to cut off key parts of the global supply chain. China is the major supplier of a number of mundane but crucial materials and components needed to keep the world’s factories humming. They include obscure materials like arsenic metals, used to make semiconductors; cadmium, found in rechargeable batteries; and tungsten, found in light bulbs and heating elements.
See https://www.nytimes.com/2018/07/11/business/china-trade-war-rare-earths-lynas.html?
Barry Lynn argued in 2016 that the US leaves itself vulnerable when China is a sole source of supply, althouth the material he used to illustrate the point was ascorbic acid, not rare metals:
But to understand the full extent of the danger posed by the radical shift in trade policy in the mid 1990s we must also look at the structure of supply chains. We should study what exactly is made in China, and how much of any vital good comes from China. Looking at supply chains is what allows us to see the full extent of our vulnerabilities in a time of conflict, and a way to judge whether the Pivot to Asia was well designed. Twenty years ago the United States depended on China for nothing that we needed day to day. But the radical changes in U.S. trade policy in the 1990s freed China – often in alliance with large U.S. corporations – to use trade power to consolidate control over many assembly activities and industrial components. This includes the basic ingredients for some of the nation’s most important drugs, including antibiotics, and some of the most vital inputs in our industrial food system, such as ascorbic acid.
See https://docs.house.gov/meetings/FA/FA05/20161206/105445/HHRG-114-FA05-Wstate-LynnB-20161206.pdf
Posting by Don Allen Resnikoff
Just what did Judge Kavanaugh opine about the CFPB?
That the CFPB single director structure is unconstitutional, but the remedy is simply to delete the "for cause" limitation on removable, so the President can remove the director at will. An exceprt from the Kavanaugh opinion follows: DR
The CFPB’s concentration of enormous executive power in a single, unaccountable, unchecked Director not only departs from settled historical practice, but also poses a far greater risk of arbitrary decisionmaking and abuse of power, and a far greater threat to individual liberty, than does a multi-member independent agency. The overarching constitutional concern with independent agencies is that the agencies are unchecked by the President, the official who is accountable to the people and who is responsible under Article II for the exercise of executive power. Recognizing the broad and unaccountable power wielded by independent agencies, Congresses and Presidents of both political parties have therefore long endeavored to keep independent agencies in check through other statutory means. In particular, to check independent agencies, Congress has traditionally required multi-member bodies at the helm of every independent agency. In lieu of Presidential control, the multi-member structure of independent agencies acts as a critical substitute check on the excesses of any individual independent agency head – a check that helps to prevent arbitrary decisionmaking and thereby to protect individual liberty.
This new agency, the CFPB, lacks that critical check and structural constitutional protection, yet wields vast power over the U.S. economy. So “this wolf comes as a wolf.” Morrison v. Olson, 487 U.S. at 699 (Scalia, J., dissenting).
In light of the consistent historical practice under which independent agencies have been headed by multiple commissioners or board members, and in light of the threat to individual liberty posed by a single-Director independent agency, we conclude that Humphrey’s Executor cannot be
stretched to cover this novel agency structure. We therefore hold that the CFPB is unconstitutionally structured. [emphasis added by DR]
What is the remedy for that constitutional flaw? PHH contends that the constitutional flaw means that we must shut down the entire CFPB (if not invalidate the entire Dodd-Frank Act) until Congress, if it chooses, passes new legislation fixing the constitutional flaw. But Supreme Court precedent dictates a narrower remedy. To remedy the constitutional flaw, we follow the Supreme Court’s precedents, including Free Enterprise Fund, and simply sever the statute’s unconstitutional for-cause provision from the remainder of the statute. Here, that targeted remedy will not affect the ongoing operations of the CFPB. With the for-cause provision severed, the President now will have the power to remove the Director at will, and to supervise and direct the Director. The CFPB therefore will continue to operate and to perform its many duties, but will do so as an executive agency akin to other executive agencies headed by a single person, such as the Department of Justice and the Department of the Treasury. [emphasis added by DR]
Those executive agencies have traditionally been headed by a single person precisely because the agency head operates within the Executive Branch chain of command under the supervision and direction of the President. The President is a check on and accountable for the actions of those executive agencies, and the President now will be a check on and accountable for the actions of the CFPB as well.
Because the CFPB as remedied will continue operating, we must also address the statutory issues raised by PHH in its challenge to the $109 million order against it.
* * *
With apologies for the length of this opinion, we now turn to our detailed explanation and analysis of these important issues.
See the opinion at https://www.cadc.uscourts.gov/internet/opinions.nsf/AAC6BFFC4C42614C852580490053C38B/$file/15-1177-1640101.pdf
DC Council majority backs repeal of ballot measure approved by voters -- initiative 77 -- forcing a higher minimum wage for hourly workers who rely on tips
A majority of the D.C. Council on Tuesday backed repeal of a ballot measure approved by voters last month that would force businesses to pay more to servers, bartenders, bellhops and other hourly workers who depend on tips.
Seven of the council’s 13 members co-introduced a bill that would overturn Initiative 77, which was passed by 56 percent of District voters in June’s primary election.
The initiative would stop businesses from counting the tips received by employees toward the minimum wage they must earn under law. The District’s minimum hourly wage is now $13.25 and is on track to reach $15 by 2020. Currently, employers are allowed to pay tipped workers just $3.89 per hour if tips make up the difference.
Initiative 77 was backed by liberal activists and some workers who argued that some workers did not receive enough in tips to earn the minimum wage and that their employers failed to fill the gap.
See: https://www.washingtonpost.com/local/dc-politics/majority-of-dc-council-moves-to-overturn-tipped-wage-ballot-measure/2018/07/10/5320f156-8458-11e8-9e80-403a221946a7_story.html?utm_term=.fa36efadc101
Question for readers: Should the Council follow the wishes of the voters? Is it OK for the Council to force a contrary approach?
The EU v. Google
For those who feel that US competition policy enforcement is too narrow and too meek in addressing use of economic power by big companies, the EU "abuse of dominant position" approach suggests an alternative. Currently (July, 2018) the media reports action by the EU against Google. Following is an earlier statement directly from the EU that explains some of the EU's analysis:
From: http://europa.eu/rapid/press-release_IP-16-1492_en.htm
Antitrust: Commission sends Statement of Objections to Google on Android operating system and applications Brussels, 20 April 2016
The European Commission has informed Google of its preliminary view that the company has, in breach of EU antitrust rules, abused its dominant position by imposing restrictions on Android device manufacturers and mobile network operators. The Commission's preliminary view is that Google has implemented a strategy on mobile devices to preserve and strengthen its dominance in general internet search.
First, the practices mean that Google Search is pre-installed and set as the default, or exclusive, search service on most Android devices sold in Europe.
Second, the practices appear to close off ways for rival search engines to access the market, via competing mobile browsers and operating systems.
In addition, they also seem to harm consumers by stifling competition and restricting innovation in the wider mobile space. The Commission's concerns are outlined in a Statement of Objections addressed to Google and its parent company, Alphabet. Sending a Statement of Objections does not prejudge the outcome of the investigation.
Commissioner Margrethe Vestager, in charge of competition policy, said: "A competitive mobile internet sector is increasingly important for consumers and businesses in Europe. Based on our investigation thus far, we believe that Google's behaviour denies consumers a wider choice of mobile apps and services and stands in the way of innovation by other players, in breach of EU antitrust rules. These rules apply to all companies active in Europe. Google now has the opportunity to reply to the Commission's concerns."
Smartphones and tablets account for more than half of global internet traffic, and are expected to account for even more in the future. About 80% of smart mobile devices in Europe and in the world run on Android, the mobile operating system developed by Google. Google licenses its Android mobile operating system to third party manufacturers of mobile devices.
The Commission opened proceedings in April 2015 concerning Google's conduct as regards the Android operating system and applications. At this stage, the Commission considers that Google is dominant in the markets for general internet search services, licensable smart mobile operating systems and app stores for the Android mobile operating system. Google generally holds market shares of more than 90% in each of these markets in the European Economic Area (EEA).
In today's Statement of Objections, the Commission alleges that Google has breached EU antitrust rules by: requiring manufacturers to pre-install Google Search and Google's Chrome browser and requiring them to set Google Search as default search service on their devices, as a condition to license certain Google proprietary apps; preventing manufacturers from selling smart mobile devices running on competing operating systems based on the Android open source code; giving financial incentives to manufacturers and mobile network operators on condition that they exclusively pre-install Google Search on their devices.
The Commission believes that these business practices may lead to a further consolidation of the dominant position of Google Search in general internet search services. It is also concerned that these practices affect the ability of competing mobile browsers to compete with Google Chrome, and that they hinder the development of operating systems based on the Android open source code and the opportunities they would offer for the development of new apps and services. In the Commission's preliminary view, this conduct ultimately harms consumers because they are not given as wide a choice as possible and because it stifles innovation.
State inquiry letter on employee "no-poach" by fast food chains; targets promptly settle
from https://ag.ny.gov/sites/default/files/npnh_letter_redacted.pdf
Re: Request for Information Regarding Franchise Agreements
Dear ,
Our Offices have learned that certain franchise agreements used in our States and the District of Columbia (hereinafter collectively referred to as “States”) may contain provisions that impact some employees’ ability to obtain higher paying or more attractive positions with a different franchisee. These provisions are known by many terms, including “employee non-competition,” “no solicitation,” “no poach,” “no hire,” or “no switching” agreements (hereinafter referred to collectively as “No Poach Agreements”). As their names suggest, these agreements restrict a franchisee’s ability to recruit or hire employees of and other franchisees of . We have reason to believe that may be including such provisions in its franchise agreements.
As State Attorneys General, we have a common interest in the economic health of our residents and the communities in which they live. Many of us enforce laws that ensure basic worker protections, such as minimum wage, overtime, and anti-discrimination laws, in addition to consumer protection and antitrust laws. Given these roles, we are concerned about the use of No Poach Agreements among franchisees and the harmful impact that such agreements may have on employees in our States and our state economies generally.1 By limiting potential job opportunities, these agreements may restrict employees’ ability to improve their earning potential and the economic security of their families. These provisions also deprive other franchisees of the opportunity to benefit from the skills of workers covered by a No Poach Agreement whom
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1 “Non-compete Contracts: Economic Effects and Policy Implications,” report issued by the Office of Economic Policy, U.S. Department of the Treasury, March 2016. Available at: https://www.treasury.gov/resource-center/economic-policy/Documents/UST%20Noncompetes%20Report.pdf; and Alan B. Krueger and Orley Ashenfelter, Theory and Evidence on Employer Collusion in the Franchise Sector, (July 18, 2017) found that 80 percent of quick service restaurant franchise contracts (i.e., 32 out of 40) contained no poach provisions.
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they would otherwise wish to hire. When taken in the aggregate and replicated across our States, the economic consequences of these restrictions may be significant.
Given these potentially harmful impacts, we would like to gather information relating to the purpose and effects of No Poach Agreements. To that end, we request that you provide the following information and documents:
For the purposes of the below Request for Information and Request for Documents, the term “No Poach Agreement” refers to any and all language contained within franchise agreements or any other document which restricts or prevents franchisees from hiring or soliciting employees of and/or other franchisees for employment. Such language includes, but is not limited to, any “employee non-competition,” “no solicitation,” and/or “no hire” provisions. In addition, all requests for information and documents shall encompass the time period from January 1, 2015 to the present (“Relevant Period”).
Requests for Information
1. At any point during the Relevant Period, have franchise agreements included any language restricting employee hiring between franchise locations? If yes, when did first start including such language in its franchise agreements? Does this practice continue to the present? If this practice does not continue, when did stop the practice and why was it stopped?
2. What categories of employees have been subject to No Poach Agreements? Please provide in your response information about the types of positions (including job titles), whether full-time or part-time employees, as well as the hourly wage and salary ranges for such workers.
3. Have employees who are subject to No Poach Agreements been informed of this restriction on their mobility? If yes, when and how have they been informed?
4. What is the temporal scope of No Poach Agreements? What is the geographic scope?
5. Please identify the franchise locations currently subject to No Poach Agreements, the number and percentage of your franchises to which No Poach Agreements apply, and an estimate of the number of workers currently subject to such agreements in each of the following States: California, Illinois, Massachusetts, Maryland, Minnesota, New Jersey, New York, Oregon, Pennsylvania, Rhode Island and the District of Columbia.
6. Has or any of its franchisees been a party to litigation or binding arbitration involving No Poach Agreements? If yes, please provide the case name, case number, and a summary of the case status as well as resolution (if applicable).
Requests for Documents
1. A copy of any and all franchise or other agreements used by that include No Poach Agreements. Please provide sample franchise agreements or other documents containing the No Poach Agreements that have been used during the Relevant Period. If the terms or language of the No Poach Agreements have changed over the course of the Relevant Period, provide a copy of each version of the No Poach Agreements that have been used.
2. Any and all communications, including emails, correspondence and text messages, with franchisees, separate and apart from the franchise agreement, regarding No Poach Agreements, including any practices, rules, requirements, or contract provisions used within the past three years. This request includes, but is not limited to any and all documents related to training provided to franchisees or store management regarding No Poach Agreements.
3. Any and all documents demonstrating the business rationale and operational need for the No Poach Agreements.
4. Any and all communications, including emails, correspondence and text messages, by and between , employees, and/or franchisees relating to enforcement of the No Poach Agreements, such as for any employee subject to No Poach Agreements who requested a transfer from one franchisee to another, or a new job with a franchisee while employed at another franchisee, whether that request was granted or denied, and the reasoning for such a decision.
5. Any and all communications, including emails, correspondence and text messages, with other franchisors concerning No Poach Agreements, or related practices, policies, rules, requirements or provisions.
We request that you provide your responses on or before August 6, 2018. Please send all written communications via email to Cynthia.Mark@state.ma.us and provide all responsive documents in an electronic format according to the delivery standards separately attached to this communication to Cynthia Mark at the address listed below.
Let us know if you have any questions, and thank you in advance for your prompt attention.
Sincerely,
Cynthia Mark, Chief, Fair Labor Division Massachusetts Office of the Attorney General One Ashburton Place Boston, MA 02108 (617) 963-2626 Cynthia.Mark@state.ma.us
Satoshi Yanai Supervising Deputy Attorney General Underground Economy Unit California Department of Justice Office of the Attorney General 300 S. Spring Street, Suite 1702 Los Angeles, CA 90013 (213) 269-6400
Jane H. Lewis Section Chief, Office of Housing and Community Justice Office of the Attorney General for the District of Columbia 441 4th Street, Suite 630S Washington, DC 20001 Phone: (202) 727-1038 Jane.Lewis@dc.gov
Jane R. Flanagan Chief, Workplace Rights Bureau Office of the Illinois Attorney General 100 W. Randolph Street, 11th Floor Chicago, IL 60601 (312) 814-4720
Leah J. Tulin Special Assistant to the Attorney General Office of the Attorney General State of Maryland 200 Saint Paul Place Baltimore, Maryland 21202 410-576-6962
Jacob Campion Assistant Attorney General Solicitor General’s Division Minnesota Attorney General’s Office 445 Minnesota Street, Suite 1100 St. Paul, Minnesota 55101-2128 (651) 757-1459
Jeremy M. Feigenbaum, Assistant Attorney General Counsel to the Attorney General Office of the New Jersey Attorney General Richard J. Hughes Justice Complex 25 Market Street, 8th Floor, West Wing Trenton, New Jersey 08625-0080 Desk: (609) 376-2690 | Cell: (609) 414-0197 Jeremy.Feigenbaum@njoag.gov
ReNika Moore Labor Bureau Chief New York State Office of the Attorney General 28 Liberty Street New York, NY 10005 (212) 416-6280
Tim Nord, Special Counsel Oregon Department of Justice 1162 Court Street NE Salem, OR 97301 Tel: (503) 934-4400 Fax: (503) 373-7067 Tim.D.Nord@doj.state.or.us
Nancy A. Walker, Chief Deputy Attorney General Fair Labor Section Pennsylvania Office of the Attorney General Strawberry Square Harrisburg, PA17120
Adam D. Roach Special Assistant Attorney General Rhode Island Attorney General’s Office 150 South Main Street Providence, RI 02903 (401) 274-4409, ext. 2490
Follow-up: Under agreements with Washington State announced on Thursday, the companies pledged to remove so-called no-poach clauses from their contracts with franchisees. Auntie Anne’s, Buffalo Wild Wings and Cinnabon also agreed to drop the clauses.
The provisions prohibit workers at, for example, one Carl’s Jr. franchise from going to another Carl’s Jr. They do not stop those workers from taking jobs at restaurants run by a different chain.
In addition to stripping the clauses from existing franchise contracts in Washington, the seven chains have also vowed not to enforce them nationwide. The clauses cannot be included in new and renewed contracts either.
Update from: https://www.nytimes.com/2018/07/12/business/fast-food-wages-no-poach-deal.html?
Are the poorest US citizens deprived of human rights? The UN says yes; the US government says no
More than three million Americans live in “extreme poverty,” according to a report from the United Nations, which ranked poverty in the U.S. alongside some of the poorest areas in the world, and argued the human rights are at stake. The US government vehemently disagrees.
The UN Special Rapporteur for Extreme Poverty paid a visit to the U.S. last year, drawing worldwide attention to his findings.
NewsHour Weekend Special Correspondent Simon Ostrovsky followed in his footsteps to report from Lowndes County, Alabama.
The PBS report is at https://www.pbs.org/newshour/show/the-story-of-american-poverty-as-told-by-one-alabama-county
The vehement US response is reported at https://www.theguardian.com/world/2018/jun/21/nikki-haley-un-poverty-report-misleading-politically-motivated
From WaPo: CFPB drops "kickback" action against Zillow
By Ken Harney July 3
Excerpts from Washington Post article:
Zillow said in a statement that “we are pleased the [Consumer Financial Protection Bureau] has concluded their inquiry into our co-marketing program.”
Early last year, Zillow was informed by the CFPB that the bureau was considering legal action because of possible violations of the Real Estate Settlement Procedures Act (RESPA) and federal rules on unfair and deceptive practices. (Scott Eells/BLOOMBERG)
In a move with potentially significant implications for consumers, realty agents and lenders, the Trump administration has decided not to take legal action against online realty giant Zillow under federal anti-kickback and deceptive-practices rules.
The decision represents a departure from the direction the Consumer Financial Protection Bureau appeared to be headed under its previous director, Richard Cordray, an Obama appointee who resigned last November to run for governor of Ohio.
***
The focus of the bureau’s concerns was Zillow’s “co-marketing” plan, under which “premium” realty agents have portions of their advertising bills on Zillow sites paid for by mortgage lenders. (Some quick background here: When buyers visit Zillow’s website, which includes millions of home listings, they frequently see “premium” agents featured prominently, along with a photo and contact information.)
“Premium” agents often are not the listing agent for the property, nor are they necessarily among the most active or successful in the neighborhood. Instead, they are advertisers, paying Zillow hundreds, sometimes thousands of dollars per month for the placement, hoping that shoppers will contact them. Given these high costs for leads, Zillow instituted a “co-marketing” plan that allows mortgage lenders to be featured on the same page as the agent, along with contact information. In exchange for the placement, lenders pay as much as half of the realty agent’s Zillow bill. As with premium agents, “premium” lenders do not necessarily offer the best financial deal or the lowest interest rates to the shopper; they pay money to reduce the realty agent’s monthly expenses and market their own mortgages.
Among the key issues in the CFPB’s investigation, according to legal experts familiar with the case, was whether the Zillow plan violates federal prohibitions against paying compensation for referrals of business — kickbacks. RESPA bans “giving or receiving” anything of value in exchange for referrals of business related to real estate settlements. The rationale is that referral payments are anti-consumer: They add to overall costs, they frequently are unknown to the consumer, and they discourage shopping for the best available services or prices. Zillow insists its co-marketing plan does not entail referrals or endorsements, but on its website in an area designated for realty agents it touts the program as a way to “promote your favorite lenders to customers on Zillow.”
The full Washington Post article is at https://www.washingtonpost.com/realestate/consumer-agency-will-not-take-action-against-zillow/2018/07/02/d3eedaa8-7e15-11e8-b660-4d0f9f0351f1_story.html?noredirect=on&utm_term=.e16c29e973a9
Perspectives on Poverty Law from the Bench: DC Superior Court
From Washington Council of Lawyers:
Trial-court judges with busy dockets must treat each litigant fairly, give each person a chance to be heard, and still keep cases moving apace. Doing all three things is challenging, especially given how many cases most judges have and the number of parties who don't have lawyers.
It's a lot to juggle, and we'll find out how judges do it—and still try to deliver justice—at Perspectives on Poverty Law from the Bench: DC Superior Court. This brown-bag lunch and panel takes place on Tuesday, July 10, from noon to 1:30 at DLA Piper (500 8th Street NW).
The event is free, but space is limited. Register here. [ https://wclawyers.wildapricot.org/EmailTracker/LinkTracker.ashx?linkAndRecipientCode=UF9WJHIWLqH3bsV4TH0gAlMt3qmHEr3cID7O%2bBfBrUYtV5rm%2beGX%2bDyCvM8XEs6srLme594vR56IDDKxpwGk4TYdt2g1NvPxQygf%2fSWvdB0%3d]
Our panel includes D.C. Superior Court Associate Judges Robert Okun and Anita Josey-Herring and Magistrate Judge Noel Johnson. Associate Judge Julie Becker will moderate.
Bring your lunch and feel free to bring a friend; we'll supply drinks, desserts, and a lively, candid discussion.
Nancy Lopez (@NancyLopezWCL)
Executive Director, Washington Council of Lawyers
The role of the States in monopolization cases
Some years ago I wrote about the role of the States in monopolization cases. My main point was that the States had played a role of significance to businesses and consumers. That demonstrated that States could do it again. Review of past and more recent State enforcement efforts provides a useful reminder of what the States can do in the future.
State Enforcement Activities Against Microsoft
The active role of States in the litigation against Microsoft is well known. It has now become an old story, but a useful reminder of the potential of the States. Briefly, in 1998 a group of States joined with the DOJ in filing a complaint against Microsoft alleging monopolization, and two years later Microsoft was found liable for maintaining an illegal monopoly in personal computer operating systems.
Following an appeal and several additional court hearings, the U.S. District Court for the District of Columbia issued judgments in 2002 prohibiting Microsoft from continuing certain unlawful conduct. In testimony before the Antitrust Modernization Commission, Steve Houck and Kevin O’Connor, the attorneys who represented plaintiff States at the Microsoft liability trial, emphasized the independent and aggressive role taken by States. They said that the States had decided to file a complaint against Microsoft before the DOJ did and were prepared to proceed without the DOJ. They said that after consolidation of the State and federal actions against Microsoft, the States made important contributions to the trial, and acted independently and assertively in pursuing settlement negotiations.
Some of the States that participated in the liability trial against Microsoft agreed to settlement in 2001, but not all. Non-settling States filed in court for additional relief. The results of their efforts were meager, as the litigated decree added little to the consent decree. Both the consent and litigated decrees provided for termination five years after entry, subject to the court later ordering an extension.
In October 2007, some States filed motions to extend the termination dates of the Final Judgments. Despite opposition by the DOJ, Judge Kollar-Kotelly partially granted the motions. The DOJ argued in part that “the California Movants do not provide any evidence that the goals of the expiring provisions of the Final Judgments have not been achieved.” Judge Kollar-Kotelly reached a different conclusion: Based upon the extreme and unforeseen delay in the availability of complete, accurate, and useable technical documentation, the Court required Microsoft to make such information available to licensees under the Final Judgments.
As a consequence of the court’s granting the States’ motion, significant portions of the Final Judgment were enforced by the States alone.
Recent State Enforcement
States have continued to be aggressive in initiating monopolization challenges in other industries, such as pharmaceuticals.
For example, in 2017 the states of Alaska, Maryland, New York, Texas and Washington joined in the FTC’s complaint and a $100 million settlement with Mallinckrodt ARD Inc.
The Complaint alleged that Mallinckrodt ARD Inc., formerly known as Questcor, violated the antitrust laws when Questcor acquired the rights to a drug that threatened its monopoly in the U.S. market for adrenocorticotropic hormone (ACTH) drugs. Acthar is a specialty drug used as a treatment for infantile spasms, a rare seizure disorder afflicting infants, as well a drug of last resort used to treat other serious medical conditions.
The Complaint alleges that, while benefitting from an existing monopoly over the only U.S. ACTH drug, Acthar, Questcor illegally acquired the U.S. rights to develop a competing drug, Synacthen Depot. The acquisition stifled competition by preventing any other company from using the Synacthen assets to develop a synthetic ACTH drug, preserving Questcor’s monopoly and allowing it to maintain extremely high prices for Acthar.
These stories suggest continuing reasons to believe that vigorous State prosecutors will in the future pursue monopolization cases based on a pragmatic and sometimes aggressive view of specific facts, and be independent about it if necessary. They can do it.
By Don Allen Resnikoff
When Scott Pruitt was Oklahoma’s Attorney General
Scott Pruitt has famously failed to survive ethical scrutiny as a big fish in national waters. But what was he like when he was Attorney General in the more local waters of Oklahoma? That is of interest to those of us interested in local law enforcement. Several publications, including the New York Times, have offered articles suggesting that his behavior then was similar. Here is an excerpt from an article in Mother Jones:
As attorney general of Oklahoma from 2011 to 2017, Pruitt fostered close ties with industry interests, including Koch-funded groups, oil and gas, and agriculture. He used his position as attorney general to advance these interests, copying their language to use against Barack Obama’s EPA, while he benefited from their political support and campaign donations. He targeted the Humane Society’s nonprofit tax status, which the group’s President Wayne Pascell said was motivated by its feud with the Oklahoma Farm Bureau, a Pruitt ally. The AG’s office was slow to release emails that detailed the full extent of Pruitt’s close ties with industry, only making some emails public after a court order that was issued the same day he was confirmed by the US Senate for the EPA.
* * *
At his Senate confirmation hearing last year, Sen. Cory Booker (D-N.J.) asked Pruitt if he used a private email as attorney general. Pruitt answered he did not. Shortly after, Oklahoma reporter Phil Cross found that Pruitt had used a non-government email address in publicly released records. On top of the private email, groups such as the Oklahoma chapter of the American Civil Liberties Union are still fighting for the remainder of Pruitt’s emails with industry groups like Devon Energy. An earlier batch of emails revealed that Pruitt’s Oklahoma office thanked a Devon staffer with messages like, “You are so amazingly helpful!!!” while adopting much of Devon’s language as its own for a letter opposing Obama’s attempt to rein in methane leaks from drilling operations.
Full article: https://www.motherjones.com/environment/2018/04/scott-pruitt-was-always-an-ethical-nightmare/
Here is an excerpt from an article in the New York Times:
During his six years as attorney general, Mr. Pruitt blazed a path of spending that holds new meaning now that his E.P.A. expenditures are the subject of investigations and growing political outrage.
[Photo caption] Early into Mr. Pruitt’s term as state attorney general, he and his wife paid $1.18 million for a 5,518-square-foot home in Tulsa.
Mr. Pruitt moved the attorney general’s outpost in Tulsa to a prime suite in the Bank of America tower, an almost $12,000-a-month space that quadrupled the annual rent. He required his staff to regularly drive him between Tulsa and Oklahoma City, according to several people familiar with his time as attorney general.
And he channeled state contracts to Mr. Wagner’s law firm, which was already doing business with the state.
From 2011 to 2017, state records show, the attorney general’s office awarded more than $600,000 in contracts to Mr. Wagner’s Tulsa-based law firm, Latham, Wagner Steele & Lehman — greatly increasing work with the firm, which had gotten a total of about $100,000 over the four years before that. These contracts are not competitively bid. The additional expenditures reflected an approach, contentious even among some fellow Republicans, to hire private lawyers for state business, often for cases challenging federal regulations.
“He said that these people had special expertise that his agency didn’t have,” said Paul Wesselhoft, a Republican former state representative. “He has an army of lawyers with expertise. He didn’t have to spend that extra tax money to hire another law firm. It didn’t seem frugal.”
Mr. Pruitt used the Bank of America building as a base for his growing political ambitions. Oklahoma Strong Leadership, a political action committee he formed in 2015 to help finance fellow Republicans’ campaigns, operated out of the building. The group shared a suite with another PAC tied to Mr. Pruitt, Liberty 2.0, as well as his campaign office.
Oklahoma Strong Leadership, funded by private donors and corporations, also appeared to support lavish travel and entertainment.
An analysis of expenditure disclosures by the Campaign Legal Center, a nonprofit that pushes for stricter rules governing money in politics, shows that just 9 percent of the PAC’s spending was devoted to other candidates. The group found that the PAC had disbursed more than $7,000 for trips to Hawaii in summer 2015 and 2016, $2,180 of which was spent at a Ritz-Carlton. The PAC also put $4,000 toward dining, including a $661 meal at the Cafe Pacific, a high-end seafood restaurant in Dallas.
The NYT article: https://www.nytimes.com/2018/04/21/us/politics/scott-pruitt-oklahoma-epa.html
Posting by Don Resnikoff
Declaration filings from 18 state AG lawsuit challenging Trump administration immigrant family separation policies
From Washington State AG press release:
AG FERGUSON ASKS COURT TO ACCELERATE FAMILY SEPARATION CASE
Jul 2 2018AG’s motion includes declarations from families affected by separation policy
SEATTLE -- Attorney General Bob Ferguson today asked a federal judge to order the federal government to provide details about and access to victims of the Trump Administration’s family separation policy on an expedited schedule. Last week, Attorney General Ferguson led a coalition of 18 attorneys general in filing a lawsuit in Seattle seeking to end the family separation policy permanently.
The motion for expedited discovery is necessary because hundreds of separated parents are in federal custody and the Administration can move them to other facilities at any time without notice. The motion asks the court to order the federal government to cooperate in facilitating access to detained parents and to report to the court on the progress of such efforts.
In support of the motion, the states included declarations from parents and interviews with children [ https://agportal-s3bucket.s3.amazonaws.com/uploadedfiles/Another/News/Press_Releases/motion%20declarations%201-33.pdf ] separated by immigration officials as a result of the policy. The states also filed other declarations from immigration rights workers, elected officials and medical experts. The motion includes 99 declarations in all, and they can be found here [ https://agportal-s3bucket.s3.amazonaws.com/uploadedfiles/Another/News/Press_Releases/motion%20declarations%201-33.pdf ], here [ https://agportal-s3bucket.s3.amazonaws.com/uploadedfiles/Another/News/Press_Releases/motion%20declarations%2034-66.pdf ] and here [ https://agportal-s3bucket.s3.amazonaws.com/uploadedfiles/Another/News/Press_Releases/motion%20declarations%2067-99.pdf ].
One migrant mother said her 14-month-old son was "full of dirt and lice" after being separated from his family for months by the Trump administration.
Another mother who fled Honduras after receiving death threats, currently held in Washington, described the experience of being separated from her 6-year-old son shortly after crossing the border: “From there, my son Jelsin and I were separated. I was not told where he was being taken. They only told me he would be a ward of the state. To calm my son down, I told him it would only be for three days, although I really did not know. We had never been apart.”
She was not able to speak to her son for almost a month. When she did contact him, she said, “He was only able to say a few words. He was just crying. … I cannot express the pain I have felt being apart from him.”
“The Trump Administration’s family separation policy is not over – it continues to harm thousands of parents and children,” said Ferguson. “The gut-wrenching stories we have heard from families demonstrate just how much it violates basic decency and fundamental American values. The policy also violates the Constitution, and I will continue to fight to put an end to it.”
"The federal government has an obligation to reunite children with their parents immediately, and an obligation to cease any and all policies that ignore the due process rights of families seeking asylum or refuge at any of our borders," Governor Jay Inslee said. "Washington will not cease nor desist until justice and fairness for every impacted child and parent in Washington state is restored."
The motion for expedited discovery [https://agportal-s3bucket.s3.amazonaws.com/uploadedfiles/Another/News/Press_Releases/motion%207-2-18.pdf ], filed in the U.S. District Court for the Western District of Washington, requests that Judge Marsha Pechman order several actions to ensure that the Attorney General’s Office can collect information in a timely fashion.
If the judge grants the motion, it will require the federal government to respond to the states’ requests for information on an accelerated timeline and to cooperate with state requests to interview parents in federal detention. Some states have faced procedural difficulties or been denied access to federal detention centers and other federal locations that house affected immigrants.
Ferguson also requests weekly status conferences with the court during the period of expedited discovery.
Victims’ stories from Washington
In addition to the filing, the attorneys general included 99 declarations. Some declarations, given by experts in developmental psychology and public health, discuss the dangers of separating families and housing immigrant families together in barracks housing. Other declarations include those given directly by parents separated from their children and interviews with separated children.
Interviews and testimonies by parents and children voiced the sadness, distress and frustration the family separation policy has caused.
A 13-year-old girl was not able to say goodbye to her father when immigration officials separated them. The investigator wrote that the girl “reported that the guards threatened the people that they detained with separating them and sending them back home, she overheard them telling others they would be jailed for about 10 or 15 years, which scared her. The younger children were crying.”
In attempting to recount her experiences, the girl “had a hard time talking during most of the interview, was visibly upset and broke down in tears frequently.”
A 15-year-old girl identified as G and fleeing threats from a member of a criminal association in her home country, told the investigator “[Immigration officials] told her mother that G would be taken to another place where she would be able to visit her. G and her mother said goodbye to each other while crying, but G’s mother comforted her, saying she was going to visit her wherever she was going. Only later did G realize this was not true. As she recounted this moment, G was sobbing and visibly distraught.”
G also described seeing a 4-year-old girl crying inconsolably, and watching as an immigration official reprimanded the girl and turned her away.
Another girl in Washington is working with a therapist because she has nightmares. Immigration officials also separated her from her father shortly after she arrived in the United States.
Immigration officials took one mother’s children as she was in court. Upon returning and realizing this, she said, “I became physically unwell when I found out that my little boys had been taken away.”
Most parents related the difficulty they had had in contacting their children, and not receiving information on how to find their children from immigration officials. More than one parent relayed that after asking for weeks, their home country’s embassy was able to provide them with the location of their children.
A mother, fleeing death threats to her and her family, described the relief she had at finally contacting her daughter, but her daughter was unable to speak “because of how strongly she was sobbing.”
Though many families were seeking asylum, a number reported that immigration officials had never asked them why they sought refuge in the United States.
The motion includes costs the policy has imposed on states involved in the lawsuit, as well.
Ferguson and the states request that Judge Pechman consider their motion by July 13.
Ferguson leads a coalition of 17 states in the lawsuit: Massachusetts, California, Delaware, Iowa, Illinois, Maryland, Minnesota, New Jersey, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, and the District of Columbia.
The Office of the Attorney General is the chief legal office for the state of Washington with attorneys and staff in 27 divisions across the state providing legal services to roughly 200 state agencies, boards and commissions. Visit www.atg.wa.gov to learn more.
Contacts:
Brionna Aho, Communications Director, (360) 753-2727; brionna.aho@atg.wa.gov
The California Supreme Court rules that Yelp did not need to remove negative comments posted by a user
In a 4-to-3 opinion, the court said that federal law protected internet companies from liability for statements written by others. The decision to remove posts is at the company’s discretion, the court said.
The Court's opinion is here: http://www.courts.ca.gov/opinions/documents/S235968.PDF
Excerpt from opinion:
In this case, we consider the validity of a court order, entered upon a default judgment in a defamation case, insofar as it directs appellant Yelp Inc. (Yelp) to remove certain consumer reviews posted on its website. Yelp was not named as a defendant in the underlying lawsuit, brought by plaintiffs Dawn Hassell and the Hassell Law Group, and did not participate in the judicial proceedings that led to the default judgment. Instead, Yelp became involved in this litigation only after being served with a copy of the aforementioned judgment and order. Yelp argues that, to the extent the removal order would impose upon it a duty to remove these reviews, the directive violates its right to due process under the federal and state Constitutions because it was issued without proper notice and an opportunity to be heard. Yelp also asserts that this aspect of the order is invalid under the Communications Decency Act of 1996, relevant provisions of which (found at 47 U.S.C. § 230, hereinafter referred to as section 230) relate, “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider” (§ 230(c)(1)), and “No cause of action may be brought and no liability may be imposed under any State or local law that is inconsistent with this section” (§ 230(e)(3)). The Court of Appeal rejected Yelp’s arguments. We reverse. The Court of Appeal erred in regarding the order to Yelp as beyond the scope of section 230. That court reasoned that the judicial command to purge the challenged reviews does not impose liability on Yelp. But as explained below, the Court of Appeal adopted too narrow a construction of section 230.
In directing Yelp to remove the challenged reviews from its website, the removal order improperly treats Yelp as “the publisher or speaker of . . . information provided by another information content provider.” (§ 230(c)(1).) The order therefore must be revised to comply with section 230. I
GM's comments to the Commerce Department on the adverse effect of tariffs are here:
https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rJBrNbApznVU/v0
Excerpt:
Overly Broad and Steep Import Tariffs Undermine Our Ability to Compete
If import tariffs on automobiles are not tailored to specifically advance the objectives of the economic and national security goals of the United States, increased import tariffs could lead to a smaller GM, a reduced presence at home and abroad for this iconic American company, and risk less—not more—U.S. jobs. The threat of steep tariffs on vehicle and auto component imports risks undermining GM’s competitiveness against foreign auto producers by erecting broad brush trade barriers that increase our global costs, remove a key means of competing with manufacturers in lower-wage countries, and promote a trade environment in which we could be retaliated against in other markets. The penalties we could incur from tariffs and increased costs will be detrimental to the future industrial strength and readiness of manufacturing operations in the United States, and could lead to negative consequences for our company and U.S. economic security.
Combined with the other trade actions currently being pursued by the U.S. Government—namely the 232 Steel and Aluminum tariffs and the Section 301 tariffs against Chinese imports—the threat of additional tariffs on automobile imports could be detrimental to our company. At some point, this tariff impact will be felt by customers. Based on historical experience, if cost is passed on to the consumer via higher vehicle prices, demand for new vehicles could be impacted. Moreover, it is likely that some of the vehicles that will be hardest hit by tariff-driven price increases—in the thousands of dollars—are often purchased by customers who can least afford to absorb a higher vehicle price point. The correlation between a decline in vehicle sales in the United States and the negative impact on our workforce here, which, in turn threatens jobs in the supply base and surrounding communities, cannot be ignored. Alternatively, if prices are not increased and we opt to bear the burden of tariffs or plant moves, this could still lead to less investment, fewer jobs, and lower wages for our employees. The carry-on effect of less investment and a smaller workforce could delay breakthrough technologies and threaten U.S. leadership in the next generation of automotive technology.
DC AG Racine's aggressive action against house-flippers that do shoddy renovations and rip off buyers.
From the report House flip couple to pay $1.6 Million in restitution - https://www.wusa9.com/article/news/local/house-flip-couple-to-pay-16-million-in-restitution/65-237254061
Virginia couple agrees to settle lawsuit filed by DC's Office of Attorney General
The AG's actions occurred some months ago, but reflect ongoing consumer protection issues. It seems that consumers often go into house purchases without realizing or dealing with risks from shoddy renovations. One ongoing consumer protection issue is education. Home buyers are not necessarily real estate experts, and may not know questions to ask and documents to demand.
Another ongoing issue is whether there should be a legal requirement that sellers provide disclosures to buyers when there has been recent renovation. Required disclosures might include whether the renovations were inspected by the City as being up to Code, and whether the work was done by properly licensed people.
Posted by Don Resnikoff
NYT editorial says USDOJ approval of Fox-Disney deal looks political
Excerpts:
[I]t was stunning when the department announced on Wednesday — just six months after the deal was announced — that it had approved Disney’s $71 billion purchase of the entertainment assets of 21st Century Fox, one of Disney’s top rivals.
***
Mr. Trump and his aides have publicly criticized the AT&T-Time Warner deal — the president said last November that it’s “not good for the country.” And he regularly lambastes CNN, the news network owned by Time Warner.
But he’s all praise when it comes to 21st Century Fox and its executive chairman, Rupert Murdoch. In December, the White House press secretary, Sarah Huckabee Sanders, told reporters that the president congratulated Mr. Murdoch on the impending Disney deal. In addition, Mr. Trump praises Fox News and its hosts every chance he gets — and they regularly return the favor. While Disney will not acquire Fox News or the Fox network and stations as part of this deal, the acquisition will make the Murdoch family the largest individual shareholders in Disney, increasing their wealth by billions of dollars.
The Justice Department’s antitrust chief, Makan Delrahim, will surely argue that the president’s feelings about CNN and Fox News have no bearing on his decisions. But it is mystifying why Mr. Delrahim took such a hard line against AT&T-Time Warner, which legal experts argued would be a difficult case to bring because of the nature of the merger, while going so easy on Disney-Fox.
Full editorial: https://www.nytimes.com/2018/07/01/opinion/disney-fox-deal.html?action=click&pgtype=Homepage&clickSource=story-heading&module=region®ion=region&WT.nav=region
DC Mayor Bowser on the DC Violence Interrupter program
We know that policing alone will not end violence in our communities,” said Mayor Bowser. “The organizations we selected have already done so much to strengthen our community, and these partnerships will serve as critical tools for engaging residents, preventing senseless violence, providing the supports and resources our most vulnerable neighbors need to succeed, and building a safer, stronger DC.
”The violence interruption program will cover all eight wards, with Training Grounds providing interruption services in Wards 6 and 7 and the Far Southeast Family Strengthening Collaborative providing services in Ward 8. Training Grounds is a District-based non-profit organization founded in 2005 with a mission to assist youth and adults with personal, career, and leadership development through neighborhood-based services. The Far Southeast Family Strengthening Collaborative, also District-based, is guided by its mission to act as a catalyst to develop, nurture, and sustain partnerships of residents, agencies, and institutions in the Southeast community and to create a healthy socioeconomic environment. The community partner serving Wards 1-5 will be announced tomorrow.
When choosing the providers, the Safer Stronger DC Office of Neighborhood Safety and Engagement sought providers that would be able to:
See also https://www.nbcwashington.com/news/local/DC-Using-Violence-Interrupters-to-Stop-Crime_Washington-DC-486501761.html
From PBS: Stockton's young mayor giving city’s youth more opportunities
Jun 30, 2018 4:54 PM EDT
By --Ivette Feliciano Ivette Feliciano --Zachary Green Zachary Green
Stockton, California has come a long way since 2012, when it became the largest U.S. city to declare bankruptcy. Now that it’s solvent, Mayor Michael Tubbs, who was sworn in as the youngest and first-ever black mayor last year, says that using philanthropy and other resources to fight inequality could help secure the city’s financial status.
Excerpt from video:
WSJ on the connection between US sanctions on Iran and local gasoline prices
Oil’s recent rally has been undeterred by the prospect of higher production. Prices have gained 11% since OPEC gathered Friday and agreed to raise output. On Wednesday, U.S. oil futures rose to their highest level since November 2014, settling at $72.76 a barrel.
The shift in sentiment stems from a drop-off in Venezuelan production and concerns that harsher-than-anticipated U.S. sanctions on Iran could curb the country’s oil exports and exacerbate supply disruptions.
“If the administration is going to take as hard a line on Iranian exports as their statements would suggest, consumers are going to pay higher prices at the pump, even if OPEC and other countries produce as much as they can," said Jason Bordoff, director of Columbia University's Center on Global Energy Policy.
OPEC has faced pressure to increase supply as oil prices have soared, but analysts say major producers like Saudi Arabia and Russia may not be able to fill the gap left by other exporters.
"Saudi Arabia can't save you from an oil price spike if you sanction Iran,” said Bob McNally, president of Rapidan Energy Group, a consulting firm. “That’s what the market is telling you.”
Excerpt from WSJ article by Stephanie Yang. (paywall)
Quotation of the day: Judge Richard Posner on a politicized judiciary:
“We have a very crappy judicial system. That’s the long and short of it. And that contaminates much of government,” said Posner. “In England, judges up to the level of the Supreme Court are appointed by commissions which are composed of judges and professors, not politicians or Parliament. Our federal courts are instead appointed by politicians and the president, and confirmed by the Senate. Those politicians do not care about quality, beyond a very low minimum. They care about other things: tokens, political and religious leanings. So you end up with mediocre courts that are highly politicized."
URL: https://promarket.org/richard-posner-real-corruption-ownership-congress-rich/
Editorial comment: We take no position on Posner's observations, but offer them to provoke discussion. DAR
From SCOTUS BLOG: Beth Farmer, a very able reporter, summarizes the recent US Supreme Court decision in the Amex case:
Opinion analysis:
Divided court defines credit-card networks as single two-sided market, rejecting antitrust challenge to anti-steering provision
Posted Mon, June 25th, 2018 6:12 pm by Beth Farmer http://www.scotusblog.com/2018/06/opinion-analysis-divided-court-defines-credit-card-networks-as-single-two-sided-market-rejecting-antitrust-challenge-to-anti-steering-provision/
Today, the Supreme Court ruled that American Express’ anti-steering provisions do not violate the federal antitrust laws. In a 5-4 decision, Justice Clarence Thomas wrote that credit networks such as Amex provide services to cardholders and merchants in a “special type of two-sided platform known as a ‘transaction platform,’” and that this platform is a relevant market for the purposes of antitrust analysis in this vertical-restraints case.
According to the majority, the district court did not define the relevant market properly and the plaintiffs below, Ohio and 10 other states, failed to meet their burden of proving that the challenged anti-steering provision caused competitive harm in a properly defined market. Thomas was joined by Chief Justice John Roberts and Justices Anthony Kennedy, Samuel Alito and Neil Gorsuch. Justice Stephen Breyer, joined by Justices Ruth Bader Ginsburg, Sonia Sotomayor and Elena Kagan, dissented.
The case arose from a Sherman Act Section 1 complaint filed by the U.S. Department of Justice and 17 states that challenged provisions in contracts between American Express and merchants that accept Amex credit cards.
In credit-card transactions, a platform such as the one operated by Amex effectively connects cardholder buyers and merchant sellers, allowing the buyers to obtain the product or service immediately and pay later, and the merchant to receive prompt, guaranteed payment. Amex charges a fee to merchants for each transaction with an Amex card. Merchant fees can vary and the district court found in this case that the Amex merchant fees were historically higher than the fees of other networks. Because the price a buyer pays for the item does not change depending on the particular credit card used, merchants prefer to accept credit cards with lower merchant fees. The Amex anti-steering contract provision prohibited merchants from steering customers to use another credit card or means of payment at the moment of the purchase.
The issue in the case was whether Amex’s anti-steering contract provision was an unreasonable restraint of trade prohibited by the Sherman Act. As I explained in my preview, vertical price and non-price agreements are judged under the rule of reason, which provides that business practices only violate the antitrust law when their effect is to restrain trade unreasonably. Traditionally, plaintiffs have the burden of identifying and describing the challenged conduct and showing that it causes harm to competition. If they meet that burden, the burden shifts to the defendants to establish procompetitive benefits from the conduct. The district court found that the plaintiffs had met their burden, establishing a prima facie case by showing that there was an actual harm to competition in the market for cardholder services for merchants. The 2nd Circuit reversed, holding that the relevant market was the entire two-sided market, consisting of both merchants and cardholders, and that the plaintiffs had failed to show actual or predicted harm in that market. Today, the Supreme Court accepted the 2nd Circuit’s market definition for this particular type of market, and held that the plaintiffs had not proved that the anti-steering provision adversely affected competition.
The majority and dissent agreed on the burden-shifting structure of an antitrust rule of reason case, but little else. Citing a number of scholarly articles, Thomas described modern credit-card transactions as part of a “special type” of two-sided platform called “transaction” platforms. Two-sided markets in general involve sales of products or services to two different sets of buyers. For the majority, a transaction platform requires a simultaneous sale to both sides of the market — that is, the consumer cardholder and the merchant — facilitated by the credit-card platform. These two-sided platforms involve “indirect network effects” because the value of each side of the platform depends on the other side of the platform – the more consumers that use Amex cards, the more merchants are likely to accept Amex cards for payment. In a footnote, Thomas stated that, in competitive markets, these indirect network effects “encourage” firms to increase prices and profits on one side of the platform and divert them to the other side to increase the number of participants on that side of the market.
With that as background, the majority sketched out areas of agreement between the parties: The challenged anti-steering provisions are vertical agreements, the proper antitrust analysis involves a three-step burden-shifting rule of reason, and the plaintiff must prove a substantial anticompetitive effect to shift the burden of going forward with the evidence to the defendant. There was also agreement that the anticompetitive effects can be shown directly by actual harm to competition or by proof of market power and “some evidence” of harm. At this stage, the government is relying on direct evidence of competitive harm. However, the majority stated that market definition is required, even when plaintiffs assert direct evidence of actual anticompetitive effects. Distinguishing Federal Trade Commission v. Indiana Federation of Dentists because it involved horizontal agreements, the court stated that “vertical restraints are different” because there is usually no risk to competition absent market power, so the market and the defendant’s market shares must be identified.
Markets are usually defined by starting with the product at issue and then identifying reasonable substitutes from the buyers’ point of view. However, the majority stated, “commercial realities” may require inclusion of different products or services in a single market, citing United States v. Grinnell Corp. (1966) and Brown Shoe Company Inc. v. United States (1962). Accordingly, the majority wrote that price increases on the merchant side of the two-sided credit card platforms may not reflect either market power or competitive harm. Therefore, both sides of the platform must be included in credit-card markets. The majority took care to limit this rule, noting that “two-sided transaction platforms, like the credit-card market, are different,” so not every two-sided market constitutes a relevant market for antitrust purposes. The key distinction is that a credit-card platform is a transaction platform that facilitates a single, simultaneous transaction.
Having defined the relevant market, the majority stated that the competitive effects must include both the merchant side and the consumer/buyer side of the credit-card transaction. Credit card firms sell transactions, the majority stressed, so plaintiffs must prove that the anti-steering provision increased the cost of transactions or reduced the number of transactions as compared to competitive markets. In this case, they failed to do so. Higher merchant fees were not sufficient proof and, in any case, might indicate a competitive market in which the consumer side of the market was receiving benefits, such as rebates or airline miles. Finally, the majority observed that the credit-card market has expanded, offering a larger variety of cards to diverse consumers and more credit cards overall.
In dissent, Breyer began with a short history of the antitrust rule of reason. He noted that everyone agrees that step one of the analysis requires plaintiffs to show the fact or likelihood of anticompetitive effects and that the issue in this case is how to apply step one. Then the dissent diverged from the majority almost completely. Relying on Indiana Federation of Dentists, Breyer emphasized that market definition is not always required because it is merely a surrogate for actual competitive effects.
The dissent went on to fault the majority’s market definition for incorrectly conflating complementary products rather than using substitutes to define a relevant product market. Complementary products, Breyer argued, are those that function in tandem so that output likely increases together — for example, gasoline and car tires, tennis balls and tennis rackets, and so forth. Breyer found no support in antitrust law for treating customer- or buyer-related services and merchant-related services as a single market. Accordingly, using consumer substitution or, as in Grinnell, producer substitution, as the test, he argued that the market is merchant-related credit-card services, at least as part of step one of the rule of reason.
Breyer found no support in case law or economic literature for the majority’s definition of a market for “two-sided transaction platforms” that include four elements: different products or services, different groups of customers, connection by the platform and simultaneous transactions. Characterizing the definition as “novel,” the dissent failed to find adequate justification for a special rule of market definition, and concluded that traditional principles of market definition should apply to this industry.
Pointing to footnote 7 in the majority opinion, Breyer also noted that the majority “seems categorically to exempt vertical restraints from the ordinary ‘rule of reason’ analysis that has applied to them since the Sherman Act’s enactment in 1890.” He asserted that this would be a new development, because, although the majority cites Leegin Creative Leather Products Inc. v. PSKS Inc. in support, that case did not create such a “novel exemption.”
Finally, Breyer maintained that the government had proved its prima facie case even under the market definition employed by the 2nd Circuit and the majority. He concluded that the “majority’s decision in this case is contrary to basic principles of antitrust law, and it ignores and contradicts the District Court’s detailed factual findings, which were based on an extensive trial record.”
The case is important for the announcement of a new requirement of proof of market definition and market power at step one of the rule of reason in vertical-restraints cases, even when plaintiffs seek to prove competitive harm by direct evidence. It also appears to announce a new relevant market for transaction platforms, which may be distinguishable from other two-sided markets. From now on, plaintiffs may be required to prove total competitive harm summing both sides of the market at step one of a rule of reason case.
[Disclosure: Goldstein & Russell, P.C., whose attorneys contribute to this blog in various capacities, is among the counsel on an amicus brief in support of the petitioners in this case. The author of this post is not affiliated with the firm.]
Appellate Court vacates "fiduciary rule."
The opinion is here: https://www.ca5.uscourts.gov/opinions/pub/17/17-10238-CV0.pdf
Excerpt from opinion:
Three business groups filed suits challenging the “Fiduciary Rule” promulgated by the Department of Labor (DOL) in April 2016. The Fiduciary Rule is a package of seven different rules that broadly reinterpret the term “investment advice fiduciary” and redefine exemptions to provisions concerning fiduciaries that appear in the Employee Retirement Income Security Act of 1974, Pub. L. No. 93-406, 88 Stat. 829 (ERISA), codified as amended at 29 U.S.C. § 1001 et seq, and the Internal Revenue Code, 26 U.S.C. § 4975. The stated purpose of the new rules is to regulate in an entirely new way hundreds of thousands of financial service providers and insurance companies in the trillion dollar markets for ERISA plans and individual retirement accounts (IRAs). The business groups’ challenge proceeds on multiple grounds, including (a) the Rule’s inconsistency with the governing statutes, (b) DOL’s overreaching to regulate services and providers beyond its authority, (c) DOL’s imposition of legally unauthorized contract terms to enforce the new regulations, (d) First Amendment violations, and (e) the Rule’s arbitrary and capricious treatment of variable and fixed indexed annuities. The district court rejected all of these challenges. Finding merit in several of these objections, we VACATE the Rule.
What happened with the US trade war with Chinese phone company ZTE?
Excerpt from Jeff Spross article in THE WEEK -- URL http://theweek.com/articles/779687/trump-senates-cold-war-over-zte-about-turn-hot
Earlier this month, Commerce Secretary Wilbur Ross said an agreement had been reached with ZTE: In exchange for allowing the company to trade with America again, ZTE would pay a $1 billion fine, replace its management, and allow U.S. officials to conduct oversight of its operations.
This is where things get interesting.
Reaction to the deal from politicians on both sides of the aisle was angry and immediate. And it was the Senate, normally a staid and sober institution, that reacted the most forcefully: Sens. Chris Van Hollen (D-Md.) and Tom Cotton (R-Ark.), along with Senate Minority Leader Chuck Schumer (D-N.Y.), got an amendment added to the National Defense Authorization Act (NDAA) that would scuttle Commerce's deal and resurrect the ban on doing business with ZTE. It would require Trump to certify that ZTE is in compliance for a full year before lifting the bans. Cotton's involvement is especially noteworthy since he's been a long-time Trump ally. The senators also have support from other conservative stalwarts, like Sen. Marco Rubio (R-Fla.) and Sen. John Cornyn (R-Texas), the Republicans' second-in-command in the chamber.
In fact, they went further. The amendment not only went after ZTE, it also banned the U.S. government from doing any business with or giving loans to an even bigger Chinese telecommunications firm called Huawei. The latter is the world's third-largest supplier of smartphones, it brought in over $90 billion in 2017, and it employs 180,000 people. For years, suspicions have swirled that heavy American reliance on Huawei's products could allow the Chinese to spy on U.S. communications. The government hasn't nailed down evidence of misbehavior by the company the same way it has with ZTE, but previous reports at least raised concerns from industry experts and former Huawei employees that it's falling afoul of various U.S. laws.
The Senate passed the NDAA with the amendment Monday night.
Of course, support for the amendment is not universal in the Senate or the House, so it's conceivable the language could get watered down or eliminated in conference before it reaches Trump's desk. But the NDAA bill is considered must-pass legislation, which shows how serious the senators are about cracking down on both ZTE and Huawei: Should the amendment turn into a sticking point, or if the White House threatens to veto the NDAA over the amendment, the controversy would force a massive funding bill for U.S. defense back to the drawing board. "I talked to my colleagues on the Intelligence Committee and they are pretty dug in on this," said Sen. Bob Corker (R-Tenn.).
Ross went to Congress to lobby against the amendment. But it's unclear if the White House would actually go to the mat and threaten a veto over it. "I don't think the president cares about ZTE. Someone told me that he gave them a wink and a nod and told them he didn't care," Corker added. "I think [Trump] did what he did for the Chinese leader but doesn't really care what Congress does."
Nationalism has always played a big role in Republican politics. But cutting taxes and regulations for corporations is equally, if not more, important. The GOP has generally shied away from expressing nationalism through aggressive U.S. trade policies, and has instead focused on national security issues. That's certainly where the Republican senators amassed against ZTE and Huawei are coming from.
Trump, on the other hand, has been happy to deploy economic policy in defense of nationalism as well. Indeed, to the extent he's used laws meant for national security to slap tariffs on China and other countries, it's been a rather obvious pretext for starting trade fights in the name of jobs. But he also wants to be seen as America's dealmaker-in-chief, so if he ultimately forces other countries to the bargaining table — as seemed to happen with China on ZTE, initially — he's fine with that too.
All of which is how we've arrived at the odd impasse of the normally laissez-faire Senate trying to pick a trade fight with China, while the Trump administration pushes for comity and the cessation of hostilities.
AAI Issues Part II in New White Paper Series on Competition in the Delivery and Payment of Healthcare Services — Experts Tim Greaney And Barak Richman Discuss Promoting Competition in Healthcare Enforcement And Policy: Framing an Active Competition Agenda
Jun 18 2018
Health and Pharma
Today, the AAI released the second part of its new White Paper series on Competition in the Delivery and Payment of Healthcare Services. Part II of this important and comprehensive analysis addresses “Promoting Competition in Healthcare Enforcement and Policy: Framing an Active Competition Agenda. The White Papers are co-authored by two of AAI's Advisory Board competition experts: Thomas Greaney, Visiting Professor at the University of California Hastings College of Law and Chester A. Myers Professor Emeritus at Saint Louis University School of Law; and Barak Richman, the Edgar P. & Elizabeth C. Bartlett Professor of Law and Business Administration at Duke University.
The policy community, albeit belatedly, now fully recognizes the economic dangers of highly concentrated healthcare markets. The Federal Trade Commission (FTC) and states continue to closely scrutinize hospital mergers. Recent successes by the U.S. Department of Justice (DOJ) in challenging mergers of health insurers are additional indications of invigorated enforcement in the healthcare payment sector. In addition, the FTC, DOJ, and State Attorneys General (AGs) have appropriately dedicated substantial resources to healthcare antitrust enforcement and have achieved significant victories in litigation.
Traditional merger review, however, will be inadequate to compensate for the policy failures of the past. In large part because failed antitrust interventions, overwhelmed enforcers, or mistaken beliefs that market dynamics or negotiated settlements will preserve market competition, both provider and insurer markets across the country are highly concentrated, and dominant providers currently enjoy enormous pricing power. To create the market dynamics that consumers desire, policymakers will need to pursue proactive approaches in healthcare markets that confront extant market power and aim to limit its damage. It will also require exploring innovative paths to stimulate lost or impeded competition. Over the past several years, the FTC has enhanced its advisory and advocacy efforts on healthcare competition issues in numerous forums, and its leadership will need to continue exploring its influence outside its traditional purview.
Antitrust policy, like many other policy areas, will have to be farsighted and proactive to maintain and enhance sorely needed competition in healthcare markets. While traditional antitrust measures can prevent the agglomeration of additional harmful market power, less traditional and more creative policies are necessary to police the harmful market power many healthcare entities have already amassed. Federal and state entities should therefore pursue an active competition agenda by deploying sufficient resources to both prevent the consummation of additional anticompetitive consolidation that enhances or entrenches monopoly power and to pursue multipronged policies to facilitate efficient, competitive markets in healthcare markets. These issues are complicated by the healthcare sector’s long history of state and federal regulatory interventions that impede rivalry, discourage entry and innovation, and advance professional and corporate interests over those of consumers, but they also present multiple opportunities to correct problematic policies and inject competition into previously insulated markets.
In addition, responsibilities and opportunities to promote pro-competition policies must stretch beyond traditional antitrust enforcers, as regulators across government have the capacity to promote competition in healthcare markets. Close attention to regulatory interventions is also important because the distinction between public and private healthcare is vanishing. Government-financed health services, including Medicare and Medicaid, are increasingly relying on privately managed care to provide services. Without robustly competitive markets, these changes will not achieve the goals of controlling costs and improving quality. Likewise, proposals to replace Medicare’s guaranteed benefits with premium support payments, block grant Medicaid, or force downward budgetary pressures on national healthcare spending are also highly dependent on competition between providers and between insurers.
Part I of the AAI White Paper series Competition in the Delivery and Payment of Healthcare Services provided an in-depth examination of the competition concerns and priorities in provider and insurer consolidation—both horizontal and vertical--that is sweeping the industry. Part II of the AAI White Paper Series advances the discussion to identify and define the policy responses needed to address extant market power and prospective issues raised by consolidated markets. These issues include employing antitrust and other measures to stem monopolistic provider practices, encouraging federal agencies to advocate in correcting anticompetitive state policies, and seeking alternative strategies to promote competition in healthcare provider and payer markets. We emphasize a growing need for advocacy in state policymaking, payment reform, and transparency, including issues such as scrutiny of state medical boards, state efforts to improve price and quality transparency, and encouraging precompetitive policies at the Center for Medicare & Medicaid Services (CMS). The final section concludes with policy recommendations.
America has chosen, wisely we think, to rely on competition to spur innovation, assure quality of care, and control costs in the healthcare sector. Where markets have been allowed to function under competitive conditions—free of anticompetitive regulations, cartels, and monopolies—competition has done its job. Much of the revolutionary change occurring today is designed to improve the function of healthcare markets and deal with problems of market failure and excessive regulation. In many areas however, problems persist. Many markets remain controlled by monopolies, constrained by outdated regulation, and foreclosed to new entrants and ideas from anticompetitive strategies from incumbents. We therefore believe the role of the federal antitrust agencies in making healthcare policy is a vital one, and they should be given the fullest support by Congress, the Executive branch and the States. In light of these observations, we offer a number of takeaways from the analysis that would help frame an active competition policy agenda that complements vigorous antitrust enforcement in healthcare. These include:
From The Nation: "The AT&T-Time Warner Merger Ruling Is Bad for the Country"
An excerpt from the Nation article by David Dayen follows the editorial comment.
Editorial comment (DAR): Dayen is an advocate of what is sometimes called "big is bad" antitrust. He complains that the Justice Department needed to make its case in the AT&T-Time Warner litigation while bound in the "straitjacket" of the traditional "consumer welfare" litigation standard: "Derived during the Reagan administration and now infecting virtually the entire judiciary, the consumer welfare standard puts antitrust law in the province of economists and models and dueling sets of numbers, when common sense clearly demonstrates the dangers of concentration." Dayen holds the consumer welfare litigation approach to blame for the government's reliance on economic witness Carl Shapiro's economic model unpersuasively showing consumer harm from the AT&T-Time Warner merger of less than a dollar a month for the average customer.
I personally have no problem with advocates like David Dayen who argue that "big is bad." On the contrary, I applaud advocates who reach out to the broad public to point out the economic and political problems caused by particular large companies. I would like advocates of "big is bad" thinking to get along well with courtroom advocates like the Justice Department Antitrust Division lawyers, who should be applauded for taking the AT&T-Time Warner merger to court. The DOJ lawyers certainly knew that they were fighting an uphill battle, and that it would be difficult to present facts that would persuade Judge Leon to depart from a judicial tradition of skepticism toward vertical merger challenges. USDOJ leaders showed great determination is pressing forward with a difficult but important case.
Is there a way to bridge the gap between David Dayen's advocacy of "common sense" and the antitrust law's current reliance on the consumer welfare standard in litigation? That gap could be narrowed somewhat by expanding the consumer welfare standard, or perhaps by using different litigation standards. But in American jurisprudence the tradition is that the standards for antitrust prosecution, somewhat like standards in ordinary criminal prosecutions, need to be reasonably precise and understandable to the potential targets of the prosecution. The requirements for litigation standards that will work well in the courtroom can be rigorous, but we can hope for constructive dialog between "big is bad" advocates and courtroom litigators on how standards for antitrust prosecutions can evolve.
Don Allen Resnikoff
It’s hard to over-emphasize the impact of this ruling. First, the deal itself brings together one of America’s largest telecom and cable companies with a suite of valuable programming to distribute on those networks. HBO, TNT, CNN, Cartoon Network, Warner Brothers Studios, a stake in Hulu and much more will now be held by the owners of DirecTV, U-verse, AT&T mobile and broadband, Cricket wireless, and more. AT&T has already started bundling HBO for free for wireless users; the entire idea is to leverage things people want to watch by forcing them to watch it on AT&T services.
The Justice Department argued this would allow AT&T to raise the cost of Time Warner programming, whether for rival cable companies, online pay-TV services, or consumers. The trial mostly didn’t address other concerns, like narrowing the channels for artists to get their work out, concentrating the power to distribute news and information in too few self-interested hands, or stunting innovation by creating a barrier to competition. That’s because modern antitrust jurisprudence operates under the consumer welfare standard, a constrained method that only looks at costs to consumers to determine whether a merger should be granted.
In other words, the Justice Department needed to make its case while bound in a straitjacket. Derived during the Reagan administration and now infecting virtually the entire judiciary, the consumer welfare standard puts antitrust law in the province of economists and models and dueling sets of numbers, when common sense clearly demonstrates the dangers of concentration. UC Berkeley economics professor and Obama administration veteran Carl Shapiro put together a model for the government to prove consumer harm; it ended up showing less than a dollar a month for the average customer, and AT&T’s attorneys poked numerous holes in it (predictably so, as it was an inherently complex rendering of an uncertain future).
But we know that monopoly is the entire point of this merger. During the trial, the Justice Department revealed an internal document where an executive from Turner Broadcasting, now part of AT&T, stated outright that “Time Warner would be a weapon for AT&T because AT&T’s competitors need Time Warner programming.” But instead of recognizing that this desire to screw rivals obviously may “substantially lessen competition,” as the antitrust statute states, judges require economists to act as wizards and predict precise percentages of the market and markups in price.
So the courts can overlook very clear statements from executives running these companies that they need this merger to secure market power. The desire to monopolize is crystal clear, but as long as you can spin a theoretical model showing a pretense of consumer benefits, then market power is no hurdle.
***
Comcast will announce a bidding war for coveted Fox TV and movie assets, already pledged to Disney, as early as Wednesday. That’s just the first domino in a likely rush to close deals. Amazon could buy a movie studio like Lion’s Gate. Apple, Facebook and Google are dipping into producing video and can acquire more assets for that endeavor. Sprint has already announced a deal with T-Mobile, which has a partnership with Netflix. Sinclair Broadcasting, with an assist from the FCC, is morphing into an indomitable giant at the local news level. Verizon, the other big distribution network, waits in the wings. The media business is already deeply consolidated, and this merger will ramp that up.
The entire point of these mergers—indeed, a stated goal of AT&T’s deal—is to compete with the tech platforms in a war for your attention, enabling the sale of targeted ads using your personal data. Time Warner wants more of your information so they can keep your eyeballs glued to your screen as they serve up more ads. This is nothing less than a surveillance tax on every man, woman, and child: an endless sea of using your every waking thought to bombard you with corporate pitches. Targeted advertising serves no useful purpose, facilitates monopoly and magnifies the potential for abuse of consumers and our democracy. It ought to be banned; instead it will further entrench itself.
The ruling will also give a green light for more vertical deals—those between companies that don’t technically compete with one another. That was never actually true in this case; HBO had a distribution network for its programming that will now almost certainly be folded into AT&T’s offerings. But modern antitrust law has taken a hands-off approach to vertical mergers, despite the ability to use leverage in one market to stifle competition further down the supply chain (like using Time Warner content as a weapon against AT&T’s rival distributors, you know, like Time Warner executives said explicitly that AT&T would do). Judge Leon so thoroughly smacked down the government in this case, that vertical deals will likely be too hot to handle for a few years.
The full article is at https://www.thenation.com/article/att-time-warner-merger-ruling-bad-country/
AT&T, Time Warner, and the Future of Health Care
June 21, 2018
David Blumenthal, M.D.
The recent federal district court ruling allowing the merger of AT&T and Time Warner — a case of so-called vertical integration — will likely encourage similar unions throughout the U.S. economy, including in health care. Nevertheless, a close look at the court’s decision, and at the wide variety of vertical health care mergers under way, suggests that policymakers and private actors should not interpret the court’s ruling as an unconditional green light for vertical integration in health care, or any other sector.
***
Some antitrust experts question whether the analogy between manufactured products and health care delivery is accurate. Independent physicians, for example, often work within hospitals and help to produce their “products.” Nevertheless, there are clear differences between mergers across the same types of health care organizations, like hospitals, and those between different types of providers, like physicians and hospitals.
***
Evidence on the effects of horizontal health care mergers has grown considerably in recent years, and generally shows that they increase prices. But studies of vertical health care mergers are much less common. Perhaps the most relevant experience concerns long-standing integrated health systems, such as Kaiser Permanente, Intermountain, Geisinger, and a handful of similar organizations.
Full article: https://www.commonwealthfund.org/blog/2018/att-time-warner-and-future-health-care?omnicid=EALERT%25%25jobid%25%25&mid=%25%25emailaddr%25%25
FTC Announces Hearings On Competition and Consumer Protection in the 21st Century
The Federal Trade Commission announced that the agency will hold a series of public hearings on whether broad-based changes in the economy, evolving business practices, new technologies, or international developments might require adjustments to competition and consumer protection enforcement law, enforcement priorities, and policy. The multi-day, multi-part hearings, which will take place this fall and winter, will be similar in form and structure to the FTC’s 1995 “Global Competition and Innovation Hearings” under the leadership of then-Chairman Robert Pitofsky.
“The FTC has always been committed to self-examination and critical thinking, to ensure that our enforcement and policy efforts keep pace with changes in the economy,” FTC Chairman Joe Simons commented today. “When the FTC periodically engages in serious reflection and evaluation, we are better able to promote competition and innovation, protect consumers, and shape the law, so that free markets continue to thrive.”
The hearings and public comment process will provide opportunities for FTC staff and leadership to listen to interested persons and outside experts representing a broad and diverse range of viewpoints. Additionally, the hearings will stimulate thoughtful internal and external evaluation of the FTC’s near- and long-term law enforcement and policy agenda. The hearings may identify areas for enforcement and policy guidance, including improvements to the agency’s investigation and law enforcement processes, as well as areas that warrant additional study.
In advance of these hearings, public comments on any of the following topics may be submitted to the FTC:
The Commission will invite public comment in stages throughout the term of the hearings.
Public comments may address one or more of the above topics generally, or may address them with respect to a specific industry, such as the health care, high-tech, or energy industries. Any additional topics for comment will be identified in later notices.
The hearings will begin in September 2018 and are expected to continue through January 2019, and will consist of 15 to 20 public sessions. All hearings will be webcast, transcribed, and placed on the public record. A dedicated website for information about the hearings including the schedule as it evolves can be found at www.ftc.gov/ftc-hearings.
Public Comments: Interested parties are invited to submit written comments on the topics listed above to the FTC, either electronically at www.ftc.gov/ftc-hearings or in paper form. FTC staff may use these comments in any subsequent reports or policy papers. Comments should refer to “Competition and Consumer Protection in the 21st Century Hearings, Project Number P181201.” If an interested party wishes to comment on multiple topics, we encourage filing a separate comment for each topic. If an interested party wishes to make general comments about the hearings, we encourage filing a comment in response to Topic 1. For this stage of the public comment process, comments will be accepted until August 20, 2018.
If you prefer to file a comment in hard copy, write ‘‘Competition and Consumer Protection in the 21st Century Hearing, Project Number P181201,” on your comment and on the envelope and mail your comment to the following address: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW., Suite CC–5610 (Annex C), Washington, DC 20580, or deliver your comment to the following address: Federal Trade Commission, Office of the Secretary, Constitution Center, 400 7th Street SW., 5th Floor, Suite 5610 (Annex C), Washington, DC 20024.
The FTC Act and other laws that the Commission administers permit the collection of public comments. More information, including routine uses permitted by the Privacy Act, may be found in the FTC’s privacy policy, available at ftc.gov/site-information/privacy-policy.
For Further Information Contact: Derek Moore, Office of Policy Planning, 202-326-3367, John Dubiansky, Office of Policy Planning, 202-326-2182 or email us at CCPhearings@ftc.gov (link sends e-mail).
The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topicsand file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357). Like the FTC on Facebook (link is external), follow us on Twitter(link is external), read our blogs and subscribe to press releases for the latest FTC news and resources.
Contact InformationFTC Media Contact
Peter Kaplan (link sends e-mail)
Office of Public Affairs
202-326-2334
From NYT: Koch brothers affiliated group, Americans for Prosperity, focuses on local issues, opposes mass transit
Excerpt:
Last year Americans for Prosperity spent $711,000 on lobbying for various issues, a near 1,000-fold increase since 2011, when it spent $856. Overall, the group has spent almost $4 million on state-level lobbying the past seven years, according to disclosures compiled by the National Institute on Money in State Politics, a nonpartisan nonprofit that tracks political spending.
Broadly speaking, Americans for Prosperity campaigns against big government, but many of its initiatives target public transit. In Indiana, it marshaled opposition to a 2017 Republican gas-tax plan meant to raise roughly a billion dollars to invest in local buses and other projects. In New Jersey, the group ran an ad against a proposed gas-tax increase in 2016 that showed a father giving away his baby’s milk bottle, and also Sparky the family dog, to pay for transit improvements among other things. “Save Sparky,” the ad implores.
In Nashville, Americans for Prosperity played a major role: organizing door-to-door canvassing teams using iPads running the i360 software. Those in-kind contributions can be difficult to measure. According to A.F.P.’s campaign finance disclosure, the group made only one contribution, of $4,744, to the campaign for “canvassing expenses.”
Instead, a local group, NoTax4Tracks, led the Nashville fund-raising. Nearly three-quarters of the $1.1 million it raised came from a single nonprofit, Nashville Smart Inc., which is not required to disclose donors. The rest of the contributions to NoTax4Tracks came from wealthy local donors, including a local auto dealer.
Both NoTax4Tracks and Nashville Smart declined to fully disclose their funding.
Note: In Nashville, the anti-transit campaign succeeded -- voters failed to approve the City's mass transit plan
https://www.nytimes.com/2018/06/19/climate/koch-brothers-public-transit.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region®ion=top-news&WT.nav=top-news
Here is a blog post from a Koch bothers ally attacking the concept of mass transit for most urban areas:
https://www.cato.org/blog/nine-reasons-few-americans-use-transit
Local DC area mass transit advocacy group launches Purple Line Newsletter
The Koch brothers may be supporting local advocacy against mass transit, but in the DC area there is an advocacy group that supports mass transit, particularly the new Purple line. The Purple Line NOW group has launched a newsletter. Their announcement follows. DAR
Welcome to the Debut of the Purple Line NOW Bi-weekly Newsletter!
We’re fast approaching the 1-year anniversary of the groundbreaking of the Purple Line and you may have noticed that construction activity is beginning to pick up across the corridor. The first year of construction has largely consisted of preparatory work such as tree clearing, utility relocation, staging areas, and demolition, but you’ll begin to see more visible signs of progress and changes to the built environment starting this month.
For that reason, we’ve decided to launch a new bi-weekly newsletter to keep the community up-to-date on the latest construction news and how it will impact getting around town, as well as important events, and general Purple Line information. Going forward, you can expect a new edition of this newsletter in your inbox every other Wednesday, provided, of course, that there is news to report.
See the full announcement at http://www.purplelinenow.com/
Here is language from the site's "Who we are" section:
Who We ArePurple Line NOW! is a coalition of business, labor, environment, neighborhood, and civic organizations that works with local, state, and federal government officials in pursuit of our mission to build the Purple Line.
"Our mission is ensure the completion of the light rail purple line from Bethesda to New Carrollton, integrated with a hiker/biker trail between Bethesda & Silver Spring."
Our Vision: The Purple Line will energize Maryland suburbs of the national capital region by integrating transportation systems including existing Metro and MARC lines and improved bycycle and pedestrian connections.
Our Board: PLN is governed by a Board of Directors with balanced representation from the environmental, civic, business and labor support for the Purple Line. The strength of our organization is in its diversity and we continue to work to expand our base of support. PLN Executive Director Christine Scott works at the direction of the Board to assist in coordinating the PLN advocacy efforts. Ms. Scott can be contacted at cscott@purplelinenow.com.
From CBS News: Lobbyists pay for access to state attorneys general at fancy resorts
A CBS video reports that State attorneys general, are playing an increasingly bigger role – and lobbyists are noticing. CBS News got an inside look at one lavish retreat at Kiawah Island, South Carolina, where businesses and trade groups paid for access. Some of the companies are under investigation by state attorneys general, but still give large donations so they can get one-on-one access to AGs to state their case.
The video is here:
https://www.msn.com/en-us/video/n/inside-a-lavish-retreat-where-lobbyists-pay-for-access-to-state-attorneys-general/vp-AAyQKhA
DC proposition 77 and the tipped minimum wage issue
My wife and I recently joined friends at an upscale DC restaurant with lots of style, high prices, and weak fast-food quality menu offerings, where we chatted with the waitress about proposition 77. That is the proposal on the DC ballot that would change the current system where tips go to the wait staff, and the minimum wage for tipped wait staff is lower than for non-tipped workers. The waitress feels strongly about preserving the current tipping arrangement, and recommended that we consult Washington City Paper to learn more. DAR
Here is an excerpt from Washingtion City Paper:
On June 19, D.C. voters will decide whether the city should eliminate its two-tiered wage system. Tipped employees currently earn $3.33 an hour compared to the standard minimum wage of $12.50. All but seven states in the U.S. have this so-called “tip credit” that restaurateurs rely on to staff a robust team of employees and tame prices for customers.
Even with this tip credit, all workers in D.C. are entitled to the standard minimum wage. If a worker fails to reach $12.50 per hour with their base wage plus tips, the employer is required to make up the difference.
If 77 passes, the tipped minimum wage will go up eight increments until it equals the standard minimum wage in 2026. The standard minimum wage will reach $15 in 2020. Increases after that would be tied to inflation. If 77 doesn’t pass, the tipped minimum wage will still increase to $3.89 in July, $4.45 in 2019, and $5 in 2020.
Diners may have noticed servers and bartenders sporting “Save Our Tips” buttons that ask D.C. residents to vote no on 77. The initiative committee by the same name is one of several being bankrolled by industry leaders, operators, employees, and trade associations. National groups like Restaurant Workers of America (RWA) have also joined the local fight against 77.
Restaurant Opportunities Center United (ROC) is the national nonprofit that’s bringing 77 to the table. They advocate for workers rights and the elimination of the tip credit in favor of “One Fair Wage.” ROC tried and failed to do away with the tip credit when the D.C. Council approved increasing the standard minimum wage to $15 in June 2016, but after jumping a few more hurdles, including gathering enough signatures from voters, ROC succeeded in getting 77 on the ballot two years later. Now this monumental decision is in the hands of the voters, and early local and national polling suggests D.C. residents will vote yes on 77.
Full article at https://www.washingtoncitypaper.com/food/young-hungry/article/21004275/fear-mounts-in-restaurant-industry-as-dc-prepares-to-vote-on-the-tipped-minimum-wage
Court filing from lawsuit charging Harvard with systematically discriminating against Asian-Americans
See https://int.nyt.com/data/documenthelper/43-sffa-memo-for-summary-judgement/1a7a4880cb6a662b3b51/optimized/full.pdf#page=1
The suit says that Harvard imposes what is in effect a soft quota of “racial balancing.” This keeps the numbers of Asian-Americans artificially low, while advancing less qualified white, black and Hispanic applicants, the plaintiffs contend.
Tim Wu's Brandeisian "big is bad" antitrust v. "Chicago School" limited antitrust
Responding to Judge Lean's decision in the AT&T/Time Warner merger matter, Tim Wu writes:
Judge Leon’s decision shows just how far the law has wandered from congressional intent. The law has become a license for near-uncontrolled consolidation and concentration in almost every sector of economy. Whether involving airlines, hospitals, the pharmaceutical industry, cable television or the major tech platforms, mergers leading to oligopolies or monopolies have become commonplace.
Reading Judge Leon’s opinion makes it clear how this has happened. The decision barely touches on Congress’s concerns about excessive concentration of economic power or other guiding principles or values. Instead, the opinion is mostly a tedious dissection of whether customers might end up paying an extra 45 cents per month for pay-TV service.
***
The public cares about the aggregation of wealth in the top echelons, the suppression of wages and the shrinking of the middle class, all of which are linked to industry concentration. That’s why Congress, in the wake of repeated affirmations that the anti-merger laws no longer work, needs to act. It should reassert that Congress in 1950 really did intend to preserve a competitive economy — one that is free, if possible, from what the Supreme Court Justice Louis Brandeis once called the “curse of bigness.”
[NYT URL: https://www.nytimes.com/2018/06/14/opinion/time-warner-att-merger.html?action=click&pgtype=Homepage&clickSource=story-heading&module=region®ion=region&WT.nav=region]
Judge Leon's opinion has been widely criticized (another accessible critique is at https://www.washingtonpost.com/amphtml/news/wonk/wp/2018/06/15/how-judge-leon-blew-it-with-u-s-v-att/), but it seems fair to say that Judge Leon's opinion reflects a decades old judicial tradition that treats "vertical" mergers -- joining companies at different levels of distribution -- as unlikely to be an antitrust problem.
There is obviously a clash between the judicial tradition that is permissive to vertical mergers and the Brandeisian view urged by Tim Wu. Because of that clash, Tim Wu suggests that reconciliation requires Congressional action.
But it seems unlikely that a Congress that doesn't do much will take up Tim Wu's action proposal any time soon.
In the meanwhile, there are issues to wrestle with for lawyers and economists who earn their living as courtroom antitrust advocates. First, should courtroom advocates join Tim Wu in in supporting broad legal restraints against "aggregation of wealth in the top echelons." Many do not. To the extent that courtroom advocates agree with Tim Wu, they would need to deal with his observation that the courts generally get vertical cases wrong. To Tim Wu, getting it wrong may mean rejecting broad legal restraints against corporate behemoths. Court precedent broadly approving vertical mergers reduces the leeway for advocates successfully arguing against vertical mergers in court.
Can Tim Wu's "big is bad" thinking ever be reconciled with courtroom legal precedent in vertical cases, without recourse to Congress? Maybe yes, to some extent, if antitrust advocates can argue within the leeway allowed by legal precedent for judicially manageable legal standards that are less permissive toward vertical mergers.
--Don Allen Resnikoff
The text of the NY AG lawsuit against the Trump Foundation is here:
https://int.nyt.com/data/documenthelper/38-lawsuit-against-the-trump-foundation/5e54a6bfd23e7b94fbad/optimized/full.pdf#page=1
The AG's concern about the Foundation and its Board includes extensive
political activity, repeated and willful self-dealing transactions, and failure to follow basic
fiduciary obligations or to implement even elementary corporate formalities required by law.
DAR
Excerpt from the Complaint:
PRELIMINARY STATEMENT
1. For more than a decade, the Donald J. Trump Foundation has operated in
persistent violation of state and federal law governing New York State charities. This pattern of
illegal conduct by the Foundation and its board members includes improper and extensive
political activity, repeated and willful self-dealing transactions, and failure to follow basic
fiduciary obligations or to implement even elementary corporate formalities required by law.
The Attorney General therefore brings this special proceeding to dissolve the Foundation for its
persistently illegal conduct, enjoin its board members from future service as a director of any
not-for-profit authorized by New York law, to obtain restitution and penalties, and to direct the
Foundation to cooperate with the Attorney General in the lawful distribution of its remaining
assets to qualified charitable entities.
2. In June 2016, the Attorney General began an investigation (the "Investigation") of
the Donald J. Trump Foundation (the "Foundation") "Foundation"
pursuant to the New York Not-for Profit Corporation Law ("N-PCL"), the New York Estates, Powers and Trusts Law ("EPTL"), the New
York Executive Law, and other applicable law governing New York State charities. The
Investigation found that the Foundation operated without any oversight by a functioning board of
directors. Decisions concerning the administration of the charitable assets entrusted to the care
of the Foundation were made without adequate consideration or oversight, and resulted in the
misuse of charitable assets for the benefit of Donald J. Trump ("Mr. Trump"
and his personal, political and/or business interests. In sum, the Investigation revealed that the Foundation was
little more than a checkbook for payments to not-for-profits from Mr. Trump or the Trump
Organization. This resulted in multiple violations of state and federal law because payments
were made using Foundation money regardless of the purpose of the payment. Mr. Trump used
charitable assets to pay off the legal obligations of entities he controlled, to promote Trump
hotels, to purchase personal items, and to support his presidential election campaign.
3. As set forth below, the Foundation and its directors and officers violated multiple
sections of the N-PCL, the EPTL, and the Executive Law, including provisions that prohibit
foundations from making false statements in filings with the Attorney General, engaging in self
dealing, wasting charitable assets, or violating the Internal Revenue Code by, among other
things, making expenditures to influence the outcome of an election. The Foundation's directors
failed to meet basic fiduciary duties and abdicated all responsibility for ensuring that the
Foundation's assets were used in compliance with the law. The violations that resulted were
significant and not only ran afoul of the applicable provisions of the N-PCL, the EPTL, and the
Executive Law, but also resulted in the Foundation failing to comply with the terms of its own
certificate of incorporation.
4. As a result of these persistent violations of law by the Respondents, the Attomey
General brings this special proceeding to dissolve the Foundation pursuant to Article 11 of the
N-PCL and New York Civil Practice Law and Rules ("CPLR") Article 4. In addition, pursuant
to the N-PCL, EPTL, Executive Law and CPLR Article 4, the Attorney General seeks an order
(i) directing Mr. Trump, Donald J. Trump, Jr., Ivanka Trump, and Eric Trump (together, the
"Individual Respondents") to make restitution and pay all penalties resulting from the breach of
fiduciary duties and their misuse of charitable assets for the benefit of Mr. Trump and his
interests; (ii) enjoining Mr. Trump from future service as an officer, director or trustee, or in any
other capacity as a fiduciary of any not-for-profit or charitable organization incorporated or
authorized to conduct business in the State of New York, or which solicits charitable donations
in the State of New York for a period of ten years, and enjoining the remaining Individual
Respondents from future service as an officer, director or trustee, or in any other capacity as a
fiduciary of any not-for-profit or charitable organization incorporated or authorized to conduct
business in the State of New York, or which solicits charitable donations in the State of New
York for a period of one year, subject to suspension in the event the remaining Individual
Respondents undergo adequate training on the fiduciary duties of directors of not-for-profit
corporations; (iii) directing Mr. Trump to pay an amount up to double the amount of benefits
improperly obtained through related party transactions entered into after July 1, 2014; (iv)
declaring that the Foundation has conducted its business in a persistently illegal manner and has
abused its powers contrary to the public policy of this state; (v) directing the Foundation to
cooperate with the Attorney General in the distribution of remaining assets to qualified charities;
(vi) restraining the Foundation, except by permission of the court, from exercising any corporate
powers; (vii) dissolving the Foundation; and (viii) granting such other and further relief as the
Court may deem just and proper.
FILED: NEW YORK COUNTY CLERK 06/14/2018 09:58 AM INDEX NO. 451130/2018 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 06/14/2018
3 of 41
From the NYT: Have patients been misled about the dangers of LASIK surgery?
Nearly half of all people who had healthy eyes before Lasik developed visual aberrations for the first time after the procedure, a recent FDA trial found. Nearly one-third developed dry eyes, a complication that can cause serious discomfort, for the first time.
The authors wrote that “patients undergoing Lasik surgery should be adequately counseled about the possibility of developing new visual symptoms after surgery before undergoing this elective procedure.”
Lack of precise information about complications is a problem that plagues many medical devices, which are tested by manufacturers and often gain F.D.A. approval before long-term outcomes are known, said Diana Zuckerman, president of the nonprofit National Center for Health Research in Washington.
Patients’ vision may regress after surgery, and they may need to use eyeglasses at times, some concede. But most Lasik surgeons maintain that soreness, dry eyes, double vision and other visual aberrations like those suffered by Mr. Ramirez subside within months for most patients.
Surgeons frequently point to the procedure’s popularity as evidence of its success: Lasik was performed on some 700,000 eyes last year, up from 628,724 in 2016, according to Market Scope, a market research company that focuses on the ophthalmic industry.
Dr. Donnenfeld wrote a frequently cited 2016 review paper that reported the vast majority of Lasik patients were satisfied. He counsels patients that symptoms like halos and excessive glare may get worse in the short term but improve over time, except in the “rare patient.”
Yet few studies have followed patients for more than a few months or a year, and many are authored by surgeons with financial ties to manufacturers that make the lasers.
One such study, written by the global medical director for a large laser eye-surgery provider, reported high satisfaction rates among patients five years after Lasik.
But the study also found that even after all those years, nearly half had dry eyes at least some of the time. Twenty percent had painful or sore eyes, 40 percent were sensitive to light, and one-third had difficulty driving at night or doing work that required seeing well up close.
A similar percentage experienced “severe or worse” glare, halos and problems driving at night.
Lasik surgeons say the procedure has improved over time, and one surgeon’s 2017 analysis of more recent data submitted to the F.D.A. by manufacturers concluded that for many patients, visual problems eventually resolved.
Still, a year after surgery, the percentage of the roughly 350 patients who had mild difficulties driving at night had increased slightly to 20 percent, while the percentage with mild glare and halos had more than doubled to about 20 percent in each category. The percentage with mild dryness more than doubled to 40 percent.
Now a vocal cadre of patient advocates is demanding the agency issue strong public warnings about Lasik.
The group is led by Morris Waxler, a retired senior F.D.A. official who regrets the role he played in Lasik’s approval over 20 years ago, and Paula Cofer, a patient-turned-advocate who says Lasik destroyed her eyesight and left her with chronic pain.
Ms. Cofer now runs a website, lasikcomplications.com, that features blog posts like “Top 10 Reasons Not to Have Lasik Surgery” and is dedicated to two men who committed suicide after suffering Lasik complications, including Max Burleson Cronin, a 27-year-old veteran.
The preceding is a series of excerpts from the full article, which is at https://www.nytimes.com/2018/06/11/well/lasik-complications-vision.html
The SEC's fraud complaint against Theranos principals is here:
https://www.sec.gov/litigation/complaints/2018/comp-pr2018-41-theranos-holmes.pdf
Excerpt:
Plaintiff Securities and Exchange Commission (the “Commission”) alleges:
SUMMARY OF THE ACTION
1. This case involves the fraudulent offer and sale of securities by Theranos, Inc. (“Theranos”), a California company that aimed to revolutionize the diagnostics industry, its Chairman and Chief Executive Officer Elizabeth Holmes, and its former President and Chief Operating Officer, Ramesh “Sunny” Balwani. The Commission has filed a separate action against Balwani.
2. Holmes, Balwani, and Theranos raised more than $700 million from late 2013 to 2015 while deceiving investors by making it appear as if Theranos had successfully developed a commercially-ready portable blood analyzer that could perform a full range of laboratory tests from a small sample of blood. They deceived investors by, among other things, making false and misleading statements to the media, hosting misleading technology demonstrations, and overstating the extent of Theranos’ relationships with commercial partners and government entities, to whom they had also made misrepresentations.
3. Holmes, Balwani, and Theranos also made false or misleading statements to investors about many aspects of Theranos’ business, including the capabilities of its proprietary analyzers, its commercial relationships, its relationship with the Department of Defense (“DOD”), its regulatory status with the U.S. Food and Drug Administration (“FDA”), and its financial condition. These statements were made with the intent to deceive or with reckless disregard for the truth.
4. Investors believed, based on these representations, that Theranos had successfully developed a proprietary analyzer that was capable of conducting a comprehensive set of blood tests from a few drops of blood from a finger. From Holmes’ and Balwani’s representations, investors understood Theranos offered a suite of technologies to (1) collect and transport a fingerstick sample of blood, (2) place the sample on a special cartridge which could be inserted into (3) Theranos’ proprietary analyzer, which would generate the results that Theranos could transmit to the patient or care provider. According to Holmes and Balwani, Theranos’ technology could provide blood testing that was faster, cheaper, and more accurate than existing blood testing laboratories, all in one analyzer that could be used outside traditional laboratory settings.
5. At all times, however, Holmes, Balwani, and Theranos were aware that, in its clinical laboratory, Theranos’ proprietary analyzer performed only approximately 12 tests of the over 200 tests on Theranos’ published patient testing menu, and Theranos used third-party
commercially available analyzers, some of which Theranos had modified to analyze fingerstick samples, to process the remainder of its patient tests.
6. In this action, the Commission seeks an order enjoining Holmes and Theranos from future violations of the securities laws, requiring Holmes to pay a civil monetary penalty, prohibiting Holmes from acting as an officer or director of any publicly-listed company, requiring Holmes to return all of the shares she obtained during this period, requiring Holmes to relinquish super-majority voting shares she obtained during this period, and providing other appropriate relief.
Karl A. Racine's May 12, 2017 Washington Post writing on violence in DC
Karl A. Racine is the D.C. attorney general.
With the District’s coffers brimming with excess revenue, our officials and community leaders must devise, fund and competently implement a comprehensive strategy to treat the trauma that hurts our city’s most vulnerable young residents and breeds the violence that affects us all — violence described in the April 23 front-page article “‘Did your father die?.’ ” That article depicted the experiences of 8-year-old Tyshaun McPhatter and heartbreakingly described parts of the nation’s capital as places where children live in fear.
At the Office of the Attorney General, we come into contact with kids such as Tyshaun every day. Based on that experience, there are three steps we can take quickly.
First, we must invest in proven, data-based methods to interrupt violence and address it as a public-health crisis. Shootings and other violence cause long-term damage to whole communities, hampering prospects of economic development, traumatizing children and trapping families inside their homes out of fear. While heightened law enforcement is necessary, it is not sufficient to turn around high-crime communities.
Models such as Cure Violence are proven. This model has three main components.
● Detect and interrupt potentially violent conflicts by preventing retaliation and mediating simmering disputes.
● Identify and treat individuals at the highest risk for conflict by providing services and changing behavior.
● Engage communities in changing norms around violence (for instance, organize community responses to every shooting to counter normalization).
Multiple studies have shown that, where implemented, Cure Violence results in reductions in shootings and violent confrontations. New Orleans went 200 days without a murder in its Cure Violence sites; Philadelphia saw significant reductions in shootings in Cure Violence areas compared with similar districts; and Baltimore’s Cure Violence sites saw fewer homicides. We must fund a Cure Violence-based program in the District.
Second, the District must invest in strategies to reduce and prevent childhood trauma at home. Ongoing trauma puts a child’s brain in a constant fight-or-flight state, making it hard for other parts of the brain to develop properly. Children experience difficulty paying attention. Untreated trauma can lead to school failure, higher dropout rates, and aggression and other risky behavior. According to the National Kids Count Data Center, for children in the District, rates of abuse and neglect — major contributors to childhood trauma — are higher than the national average. In neighborhoods such as Tyshaun’s, they are dramatically higher.
The District should invest in evidence-based parenting programs that have been proved to reduce rates of child abuse and neglect, such as Triple P (for “Positive Parenting Program”). Triple P draws on extensive social science research to help parents and has the strongest evidence base of any such program in the country. For instance, a Centers for Disease Control and Prevention-funded randomized study showed a reduction in child-abuse and foster-care rates in counties using Triple P compared with control locations. This is the kind of support that should be available to every District family that needs it.
Third, the District must invest more resources in programs and services that treat the effects of trauma before children make contact with the court system. Therapeutic early interventions, when instituted in a comprehensive manner, have improved public safety. For instance, since I took office, we have increased the rate at which we divert low-level juvenile offenders into the D.C. Department of Human Services’ Alternatives to the Court Experience (ACE) program. This program offers intensive services for six months, tailored to an individual child’s needs. Of the approximately 1,000 kids who have completed the ACE program, more than 80 percent have not been rearrested. That’s an extraordinary success rate in juvenile justice.
The same approach should be used to provide quality psychiatric services for children, increase trauma-informed practices for schools and provide other supports to children before they find themselves in trouble.
My colleagues and I do not pretend to have all the answers. But we owe it to our young people to give them what they need to become resilient, thriving, contributing members of our community. We must focus our resources to meet the crisis facing our children. No child in this city should have to face the fear that young Tyshaun and his peers face every day.
***
Editor's comment: AG Racine's comment reflects the view that violence is much more than a police problem -- an array of social interventions is required. DAR
Massachusetts joins ranks of states guaranteeing counsel in fees/fines cases
Massachusetts now provides a right to counsel in fees and fines cases thanks to SB 2371, which was signed by the Governor in April. This provision added ALM GL ch. 127, § 145(b), which specifies that “A court shall not commit a person to a correctional facility for non-payment of money owed if such a person is not represented by counsel for the commitment proceeding, unless such person has waived counsel. A person deemed indigent for the purpose of being offered counsel and who is assigned counsel for the commitment portion of a proceeding solely for the nonpayment of money owed shall not be assessed a fee for such counsel.” This is a big win on the fees/fines front, and we expect to see other similar bills in the coming years.
Credit: The National Coalition for a Civil Right to Counsel. The Coalition " is an association of individuals and organizations committed to ensuring meaningful access to the courts for all. Our mission is to encourage, support and coordinate advocacy to expand recognition and implementation of a right to counsel in civil cases."
--From AAI:
AAI SAYS THE PROPOSED SPRINT-T-MOBILE MERGER SHOULD BE "DOA AT THE DOJ"
JUNE 05 2018
DIANA MOSS
WHITE PAPERS
DOJ, IP AND INNOVATION, TECHNOLOGY AND COMMUNICATIONSNew analysis from the American Antitrust Institute (AAI) concludes that the proposed merger of U.S. wireless carriers Sprint and T-Mobile should not survive a first look by the U.S. Department of Justice (DOJ). AAI says the government should move to block the deal to protect competition and consumers.
In less than a decade, consolidation has restructured the national U.S. wireless market. In 2002, the market featured seven major wireless carriers. By 2009, the number of significant national rivals fell to four. A Sprint-T-Mobile deal would further reduce the number of rivals from four to three, stoking even higher concentration in the national U.S. wireless market and contributing to growing concerns over a broader systemic decline in competition, market entry, and equality in the U.S. economy.
If approved, the Sprint-T-Mobile merger deal would complete the roll-up of the national U.S. wireless market. The 4-3 merger would create an oligopoly that would promote the market “stabilization” that is coveted by large players that grow tired of the rough and tumble of competition and the disruptive rivals that pressure them to compete. At the same time, the deal would eliminate important head-to-head competition between Sprint and T-Mobile, the two disruptive wireless carriers in the U.S. Either way, the competition eliminated by the merger would likely result in higher prices, less choice, lower quality, and slower innovation—to the detriment of U.S. wireless subscribers.
AAI’s analysis explains that a government complaint seeking to enjoin the merger should be based on five straightforward arguments:
Download AAI Spring-T-Mobile Analysis -- http://www.antitrustinstitute.org/sites/default/files/AAI_Sprint-T-Mobile.pdf
The NYC "Right to Counsel" Bill for Landlord-Tenant Court
The New York Times recently ran a series focusing on lack of access to justice in NYC courts dealing with landlord-tenant issues: The Eviction Machine Churning Through New York City-- https://www.nytimes.com/interactive/2018/05/20/nyregion/nyc-affordable-housing.html
In a letter to the NYT editor, a writer said:
While the article mentions the right to counsel, it misses the strength and potential of this law that the tenant movement won. It is so much more than funding for free attorneys; the law emboldens tenants to organize and fight for their rights as the threat of eviction becomes less powerful. The knowledge that tenants have a right to an attorney will be a deterrent to landlords who would otherwise harass tenants, deny services and repairs or charge illegal rents.
What is the law the letter writer refers to? Here's language from an article that explains it:
The "Right to Counsel" bill, passed by the City Council in July [2017, signed into law in August], funds housing court lawyers for New Yorkers facing eviction or foreclosure who earn up to double the federal poverty line — $49,200 annually for a family of four.
Higher-income people will also get legal consultation, but will not be represented in court.
In 2015, almost 22,000 New Yorkers were evicted, according to City Councilman Mark Levine's office. Only about 20 percent of people facing eviction are represented by an attorney. The law aims to level the playing field in housing courts, which have long been criticized for exacerbating inequities between landlords and tenants.
"For too long unscrupulous landlords have used housing court as a weapon to push out tenants by hauling them into court, often on the flimsiest of eviction grounds, knowing that the other side would not have an attorney," said Levine, who co-sponsored the bill.
"The era of any New Yorker losing their home because they simply didn't have an attorney ends today, for tenants in private housing and tenants in public housing as well."
Prior to the passing of the law, [Mayor] de Blasio said, low-income tenants facing of evictions were defenseless and would end up in shelters costing the city money.
"For a long time when that eviction notice came it felt like the ballgame was over," de Blasio said, adding that people felt "powerless." That, he said, was about to change.
"God forbid anyone gets that notice. The next thing they're gonna do is they're gonna reach for their phone and they're gonna call 3-1-1 and they're gonna get a lawyer to defend them. It's gonna be as simple as that," de Blasio said.
Levine said New York leading is the way for similar legislation in other cities, including Washington, D.C., Chicago and Philadelphia. De Blasio said the bill will impact hundreds of thousands of people.
Article cite: https://www.dnainfo.com/new-york/20170811/concourse/right-to-counsel-bill-law/
Good News for Consumers: Free Credit Freezes - Consumer Reports
see https://www.consumerreports.org/credit-protection.../credit-freezes-are-now-free/
Article excerpts:
Credit reporting companies such as Equifax, Experian, and TransUnion will soon be required to let consumers freeze and unfreeze their credit files free of charge.
The provision is part of a bipartisan bill signed Thursday by President Donald Trump that rolls back certain Dodd-Frank financial rules that Congress approved after the 2008 financial crisis.
Currently, consumers could pay up to $10 to freeze their credit reports, depending on where they live. The new rules take effect in 120 days.
Along with the free credit freezes are some other benefits. Consumers now have the right to place a fraud alert on their credit file at no cost for one year—up from 90 days currently.
If you do that, businesses will be required to take steps to verify your identity before extending new credit, providing you with extra protection but possibly delaying the amount of time it takes for you to get a new credit card, say, or be approved for a mortgage. In addition, victims of identity theft are entitled to an extended fraud alert lasting seven years.
Each credit reporting agency will also be required to create a web page that allows consumers to request security freezes and fraud alerts, and opt out of the use of their information by companies marketing credit or insurance products.
“The new law has strengths and weaknesses regarding credit freezes,” says Anna Laitin, director of financial policy at Consumers Union, the advocacy division of Consumer Reports. “It would enable individuals across the country to freeze and unfreeze their credit at no cost, a right that consumers in only a few states now have. However, it also preempts the ability of states to provide greater protections to consumers. States have been the innovators on credit freezes, and this legislation would stop that innovation in its tracks.”
Laitin points to recent legislation in California that would make it so that if a consumer freezes his or her credit report at one of the main credit reporting agencies, it would be frozen at the others as well, creating a one-stop shop for consumers seeking to implement a credit freeze.
The DC judiciary on access to justice for all
The District of Columbia is fortunate that the DC Bar and DC’s judiciary are dedicated to the goal of access to justice for all. That includes the poor. But there will always be challenges to achieving that goal. The DC Court’s website says:
The Courts have a responsibility to eliminate barriers to meaningful participation in the judicial process and to accessing court services. Such barriers may include a lack of legal representation, limited literacy or limited English language skills, limited financial resources, and physical or mental disability. In collaboration with justice and community partners, the Courts will work to ensure full access to the justice system and court services.
With regard to legal assistance, the Court’s site says:
The Courts provide legal representation for eligible indigent defendants in criminal cases at the trial and appellate levels and to parents in child abuse and neglect matters. There is an urgent need for legal assistance for parties in our Courts who cannot afford legal representation for many types of civil disputes or appeals. In 2017, the Courts sought and received legislative authority to raise the monetary limit for matters that can be brought to small claims court, from $5,000 to $10,000, which will bring some needed relief to these residents. In addition, the Courts will continue to partner with the DC Bar, law firms and other local organizations to identify unmet needs for legal assistance and to expand the availability of free, pro bono or low-cost civil legal assistance in the District.
With regard to unrepresented litigants, the Court’s site says:
Many of the District’s residents who cannot afford an attorney must represent themselves in court, often against an opposing party with legal representation. Additionally, an increasing number of individuals who may be able to afford counsel are choosing to represent themselves. In partnership with the DC Bar, legal services providers and organizations, the Courts have created self-help centers where such litigants can obtain information and assistance in representing themselves. The Courts will continue to expand the availability of assistance and information at the self-help centers and resource centers. The Courts will expand the electronic filing program to enable self-represented litigants to file cases and documents online, saving time and costs incurred to visit the courthouse. The Courts will also develop informational videos and self-guided materials on key court processes and post them on the Courts’ website and electronic monitors in court buildings. Continuing efforts will be made to ensure that all court forms and documents are in plain language.
The Court recognizes the challenges of bringing justice to people of limited means. These challenges affect many lawyers, not just those who provide legal services to the poor. For example, attorneys in litigation where the opposing party is unrepresented may be challenged by an adversary who is ill-prepared for litigation but very angry. Of course, the unpresented litigant can be a challenge to the presiding judge.
The relevant DC Court website URL is https://www.dccourts.gov/about/organizational-performance/goal1
Posting by Don Allen Resnikoff
Oncotype DX, a genetic test first marketed in 2004, will now be used to spare "intermediate risk" breast cancer patients from chemotherapy
Oncotype DX [URL http://www.oncotypeiq.com/en-US] first hit the market in 2004. The genomic test measures the expression of 21 genes in tumor tissue removed at the time of surgery and predicts risk of recurrence on a scale of 0 to 100.
Earlier research [URL https://www.nejm.org/doi/full/10.1056/NEJMoa1510764?query=recirc_curatedRelated_article] found that a patient with a high-risk case, or score of 26-100, would benefit from chemotherapy, while a patient at the lower end with a score of 10 and under would not. This left a lot of women, an estimated 65,000 in the U.S. each year, in a gray zone, unsure if they would benefit from chemo.
A new study, published Sunday in the New England Journal of Medicine,[URL http://dx.doi.org/10.1056/NEJMoa1804710] finds that patients who fall in the intermediate risk zone do as well with hormone therapy alone as with chemo plus hormone therapy after surgery. "[The findings] are both important and significant, and also practice-changing," says, Dr. José Baselga, a medical oncologist and physician in chief at Memorial Sloan Kettering Cancer Center in New York, who was not involved with this research. "Basically, it's going to spare a lot of unnecessary chemotherapy in patients with breast cancer."
Source: https://www.npr.org/sections/health-shots/2018/06/03/616298863/for-some-breast-cancer-patients-the-chemo-decision-just-got-easier
The Trump Administration's leaked memo preserving unprofitable coal and nuclear power plants-- see it here: https://www.documentcloud.org/documents/4491203-Grid-Memo.html
The rationale is that coal and nuclear power plants are more stable than natural gas plants, because the fuel source is on site. That aids national security.
Pending and recent federal and state government investigations and actions regarding for-profit colleges
Compiled by David Halperin, Attorney, Washington DC
UPDATED 05-23-18
This is a list of pending and recent significant federal and state civil and criminal law enforcement investigations of, and actions against, for-profit colleges. It also includes some major investigations and disciplinary actions by the U.S. Department of Education and Department of Defense. It does not include investigations or disciplinary actions by state education oversight boards. It also does not include (except for False Claims Act cases that resulted in payments to the United States) lawsuits prosecuted only by private parties — students, staff, etc.
To date, 37 state attorneys general [link: http://migration.kentucky.gov/newsroom/ag/conwaydurbin.htm ] are participating in a joint working group examining for-profit colleges. Many of those are actively investigating specific for-profit colleges in their states.
Some of the most-investigated for-profit colleges have now converted to non-profit status or are in the process of doing so, often through troubling transactions and arrangements. Schools will remain on this list, for-profit or not, if they have engaged in troubling behavior.
Please send corrections, additions, updates, and comments to tips@RepublicReport.org
Mr. Halperin's list is here: https://www.republicreport.org/2014/law-enforcement-for-profit-colleges/
Trump orders facilitating firing of federal employess are a threat to democracy, union says.
White House directives aim to strip federal workers of right to representation
NEWS PROVIDED BY
American Federation of Government Employees May 25, 2018, 16:49 ET
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"This is more than union busting – it's democracy busting," AFGE National President J. David Cox Sr.said. "These executive orders are a direct assault on the legal rights and protections that Congress has specifically guaranteed to the 2 million public-sector employees across the country who work for the federal government."
"Our government is built on a system of checks and balances to prevent any one person from having too much influence. President Trump's executive orders will undo all of that. This administration seems hellbent on replacing a civil service that works for all taxpayers with a political service that serves at its whim."
"Federal employees swear an oath to serve this country. The American people rightly expect that federal employees go to work every day and do the jobs they were hired to do – whether it's ensuring our food is safe to eat, caring for veterans who were injured while serving their country, preventing illegal weapons and drugs from crossing our borders, or helping communities recover from hurricanes and other disasters."
"President Trump's executive orders do nothing to help federal workers do their jobs better. In fact, they do the opposite by depriving workers of their rights to address and resolve workplace issues such as sexual harassment, racial discrimination, retaliation against whistleblowers, improving workplace health and safety, enforcing reasonable accommodations for workers with disabilities, and so much more."
"These executive orders strip agencies of their right to bargain terms and conditions of employment and replace it with a politically charged scheme to fire employees without due process," Cox said.
AFGE representatives have used official time in myriad ways that benefit taxpayers, including to:
"It's a policy that has saved taxpayers in the long run because it helps resolve isolated conflicts that arise in the workplace before they become costly, agency-wide problems. And contrary to some reports, official time is never used to conduct union-specific business, solicit members, hold internal union meetings, elect union officers, or engage in partisan political activities."
"By preventing problem solving, these executive orders will create inefficiencies and hinder the ability of dedicated federal employees to effectively deliver services to the American public."
The American Federation of Government Employees (AFGE) is the largest federal employee union, representing 700,000 workers in the federal government and the government of the District of Columbia.
For the latest AFGE news and information, visit the AFGE Media Center. Follow us on Facebook, Twitter, and YouTube.
SOURCE American Federation of Government Employees
Related Linkshttp://www.afge.org
From the federal indictment concerning bribes and fraud in distribution of opioid Fentanyl:
"Beginning in or about May 2012 and continuing until in or about December 2015, the Company, KAPOOR, BABICH, BURLAKOFF, GURRY, SIMON, LEE, and ROWAN, the co-conspirator practitioners, . . .the co-conspirator pharmacies, and other persons and entities known and unknown to the Grand Jury, conspired with one another to profit from the illicit distribution of the Fentanyl Spray, by using bribes and fraud."
A copy of the unsealed federal indictment is here: https://www.scribd.com/document/362727686/Unsealed-Indictment-vs-Insys-Founder-John-Kapoor-others
The current NYT magazine article on the story is here: https://www.nytimes.com/interactive/2018/05/02/magazine/money-issue-insys-opioids-kickbacks.html
NYT explains zoning practices in lava land
“Many people are willing to risk living next to a volcano because the living is cheap.”
When developers were carving up Puna back in the 1960s and 70s, many investors on the mainland bought lots in the lava lands sight unseen.
In some cases, public officials leveraged their power into cobbling together real estate deals on the Big Island from which they could benefit.
At the time, basic infrastructure — things like paved roads, sewage systems, running water and electricity — was lacking. Subdivisions such as Leilani now have some of those services, but many residents still rely on rain catchment tanks for water. Just a few miles away, many homeowners live entirely off the grid, on even cheaper land parcels.
In some parts of Puna, newcomers are building nearly directly on fields of hardened lava from eruptions that destroyed other communities. For instance, an eruption of Kilauea in 1990 destroyed about 100 homes in the community of Kalapana. Less than 30 years later, dozens of homes now stand atop the flow field that swallowed Kalapana. The homes, some built without heed to code, lack ties to the electricity grid and sewage systems. Residents collect water in catchment tanks.
Often, banks won’t issue a traditional mortgage on such properties, but those determined to come here have found other ways to finance their ventures.
DAR comment: Go figure.
From https://www.nytimes.com/2018/05/25/us/hawaii-volcano-housing.html?emc=edit_ne_20180525&nl=evening-briefing&nlid=6707584320180525&te=1
From DMN:
The newly launched YouTube Music's ’s payouts to artists are a tiny fraction of what Spotify delivers, thanks to clever loopholes in existing copyright law.
Just recently, Elon Musk blasted streaming music platforms for delivering ‘crazy low payouts,’ while presenting a depressing breakdown from Statista of what those payouts are. But on the ‘crazy low’ spectrum, perhaps YouTube would qualify as ‘psychotically bottom-scraping’.
The story continues here. [ https://www.digitalmusicnews.com/2018/05/23/youtube-music-threat-artist-livelihood/ ]
Comment of the DCConsumerRightsCoalition.org filed with the CFPB regarding limiting or reducing the CFPB's public consumer complaint database:
The mission of the Consumer Financial Protection Bureau (CFPB) is to identify dangerous and unfair financial practices, educate consumers about these practices, and regulate the financial institutions that perpetuate them.
To accomplish these goals, the CFPB created the public Consumer Complaint Database. The database tracks complaints made by consumers to the CFPB and how they are resolved. As USPIRG and others have pointed out, the database enables the CFPB to identify financial practices that threaten to harm consumers and enables the public to evaluate both the performance of the financial industry and of the CFPB. More importantly, a database which is also publicly available, also assist consumers in making choices. By reviewing complaints, and the responses, consumers can vet potential businesses and choose companies based on real track records rather than puffery and advertising.
If CFPB were to limit or reduce the public Consumer Complaint Database, that would impede the public's ability to evaluate the performance of financial industry participants and of the CFPB. For that reason we believe the public Consumer Database should be maintained in essentially the same manner as in the recent past.
The recent US Supreme Court decision in Murphy v. NCAA opens the door to State policies permitting gambling. There are many questions that follow about the evolution of gambling as a business in the future. Which companies will play an important role? Will it be fantasy sports companies like Fanduel and DraftKings? Casino companies? What will be the reaction of the National Collegiate Athletic Association and others responsible for events and athletes likely to be the targets for gambling? How will issues of legality and ethics be dealt with? The statement recently issued by four State gambling regulators briefly suggests that State regulators can handle it. --DAR
FOUR STATE GAMBLING REGULATORS ISSUE STATEMENT IN DEFENSE OF STATE REGULATION
André Wilsenach Executive Director, International Center for Gaming Regulation, UNLV1MAY 22, 2018
This statement is issued by gaming regulatory leaders from four state gambling jurisdictions in response to the recent U.S. Supreme Court ruling to confirm and assert that states and tribal gaming regulatory agencies have the capacity, resources, and ability to oversee the regulation of legalized sports betting.
Sports betting in Nevada has already been regulated with integrity and success, and gaming jurisdictions across the United States, including tribal jurisdictions, have demonstrated their ability to oversee gaming of all sorts while adhering to the highest standards.
Since the opinion in Murphy v. National Collegiate Athletic Association was released last week, there has been an overwhelming response by the various interested parties, including states, leagues, federal congressional representatives, responsible gambling organizations, sports betting consumers, and gambling industry operators and affiliates. As we expect the dialogue to continue with substantial actions to be undertaken rapidly, it is important to assert and confirm our support for a rational, state-based and tribal government approach to an expansion of legal, regulated sports wagering in the United States.
For nearly two years, leading regulators from key state commercial gambling jurisdictions have been meeting under the auspices of the University of Nevada, Las Vegas’s International Center for Gaming Regulation (ICGR), to dialogue about current issues affecting the gambling industry and to further best regulatory practices.
As experienced gaming regulators who are part of the U.S. State Gaming Regulators Forum, we would encourage jurisdictions to establish and implement regulatory models that are not only adaptive and successful, but that remain flexible enough to be sturdy, yet encourage innovation.
This group looks forward to continuing to collaborate together while serving as a resource as the various states and tribal governments begin implementing sports betting in their jurisdictions. Nevada, having both the depth and experience with legalized, regulated sports wagering, serves as a leader to help guide us and other jurisdictions through this historical time.
As the regulators in different gambling jurisdictions, we have jointly concluded that the following simple guidelines will help with an initial approach to sports betting regulation. While we cannot personally commit our respective jurisdictions to any specific position or practice, we support all of these positions individually, will support them throughout our regulatory agencies, and will help provide guidance to other jurisdictions as to how these guidelines can be implemented.
1. Coordinated action among jurisdictions offering sports betting against illegal bookmaking, illegal gambling activities, and any unsuitable and unlawful associations, along with strong support from federal-level enforcement agencies, is the best way to eradicate illegal activities.
2. Another critical element of legalized sports betting is the establishment of structures and processes that will ensure a high level of integrity in all sports. Therefore, all of our jurisdictions and others that legalize and regulate sports wagering should aim to share real-time betting information, in an effort to detect, prevent, and eliminate match fixing.
3. Measures for responsible gambling in sports betting are important to help protect and maintain the credibility of the activity.
4. The history of legalized sports betting in both Nevada and the United Kingdom indicates that it is a very low-margin business compared to other forms of gambling. Reasonable tax rates and fees are essential for legal sports betting to be competitive until illegal providers can be eradicated.
5. Additional fees, including the so-called “integrity fee,” increase the costs of legal sports betting, siphon much needed tax revenues away from state coffers, and increase state regulatory burdens.
We encourage state legislatures that elect to legalize sports betting to consider these guidelines in order to promote a coherent regulatory environment.
We, as members of the U.S. State Gaming Regulators Forum, will look to immediately develop a Memorandum of Understanding between our jurisdictions to acknowledge support for implementation of these principles. We welcome other jurisdictions’ regulatory bodies sharing these values to join with us.
Becky Harris, Chairwoman, Nevada Gaming Control Board
Stephen P. Crosby, Chairman, Massachusetts Gaming Commission
Ronnie Jones, Chairman, Louisiana Gaming Control Board
Rick Kalm, Executive Director, Michigan Gaming Control Board
For further media inquiries, contact Jennifer Roberts, Associate Director of UNLV International Center for Gaming Regulation, at jennifer.roberts@unlv.edu or 702-895-2653.
Law.com provides copy of Complaint by Sandy Hook victims against conspiracy theorist Alex Jones
Law.com reports that trial lawyers from Bridgeport, Connecticut-based Koskoff Koskoff & Bieder filed suit Wednesday against media personality Alex Jones on behalf of an FBI agent and the families of six victims of the deadly Sandy Hook Elementary School shooting. The Complaint cites a campaign of inflammatory statements by Jones. Jones claims that the shooting was a fake. The Complaint says that:
“Time and again, Jones has accused Sandy Hook families, who are readily identifiable, of faking their loved ones’ deaths, and insisted that the children killed that day are actually alive.” The premise of the litigation is that the First Amendment does not protect such lies.
The Law.com article provides a copy of the Complaint
The Law.com article is at https://www.law.com/ctlawtribune/2018/05/23/connecticut-lawyers-sue-conspiracy-theorist-alex-jones-for-sandy-hook-families-fbi-agent/
Court decision refusing to dismiss the NY AG's suit charged internet service provider Spectrum-TWC with false advertising of internet speeds
The decision is here: https://iapps.courts.state.ny.us/nyscef/ViewDocument?docIndex=dJY_PLUS_yretXYSY8msX1l3vXQ=='
A brief excerpt follows:
According to the complaint, Spectrum-TWC did not deliver the promised level of service (id., ¶¶ 75-76, 80-83, 178-241). For many customers, the promised Internet speeds were impossible to attain because of technological bottlenecks for which Spectrum-TWC was responsible.
First, in early 2013, defendants determined (as a result of Internet speed tests conducted by the FCC) that the older generation modems they leased to many of their subscribers were incapable of reliably achieving Internet speeds of even 20 Mbps per second (id., ¶¶ 9, 76, 101-177) (the Modem Failures). These failures date back to early in the Covered Period, and intensified when Spectrum-TWC began to promise New York City subscribers faster speeds in connection with its MAXX upgrade, which was launched in 2014 (id., 5 78). These failures were not resolved by the company's modem "replacement" program, which was designed to result in many subscribers continuing to pay for promised speeds beyond the technical capabilities of their Spectrum-TWC-provided modems (id., ¶¶ 121, 146, 151, 159).
Plaintiff alleges that, in fact, Spectrum-TWC knew that the modems it leased to many subscribers were "non-compliant," or incapable of delivering the speeds promised (id., ¶¶ 76, 110-113, 169). Plaintiff alleges this failure affected 900,000 subscribers (id., ¶ 102).
Second, Spectrum-TWC also failed to maintain its network as necessary to deliver the promised speeds (id., 55 178-200) (the Network Failures).
Plaintiff alleges that, although Spectrum-TWC knew the precise levels of network congestion at which customers would be prevented from achieving the promised speeds, it deliberately hid and exceeded those congestion levels to save itself money (id., ¶¶ 184-193).
Third, plaintiff alleges that, due to older or slower wireless routers it provided, and other technological limitations, Spectrum-TWC knew that its subscribers could not achieve the same speeds wirelessly as through a wired connection (id., ¶¶ 221-241) (the Wireless Failures). Plaintiff asserts that Spectrum-TWC's failure to deliver its promised Internet speeds is confirmed by the results of at least three independent tests of Internet speed: (1) a test used by the FCC to generate its annual "Measuring Broadband America" report; (2) a test used by Spectrum-TWC to monitor speeds on its last miles of service; and (3) a test recommended by Spectrum-TWC to its subscribers for testing Internet speeds (Complaint, ¶¶ 196-213).
National Women’s Law Center announcement: launch of the TIME’S UP Legal Defense Fund.
From https://nwlc.org/times-up-legal-defense-fund/
The sexual harassment that has been reported in the last few months has been both horrific and illuminating. We stand with the brave individuals who have come forward, at great risk to themselves, to protect others from similar behavior.
The National Women’s Law Center is excited to announce the launch of the TIME’S UP Legal Defense Fund. The TIME’S UP Legal Defense Fund, which is housed at and administered by the National Women’s Law Center, connects those who experience sexual misconduct including assault, harassment, abuse and related retaliation in the workplace or in trying to advance their careers with legal and public relations assistance. The Fund will help defray legal and public relations costs in select cases based on criteria and availability of funds. Donations to the TIME’S UP Legal Defense Fund are tax deductible through the Direct Impact Fund, a 501(c)(3) nonprofit organization or through the National Women’s Law Center, a 501(c)(3) nonprofit organization. The initiative was spearheaded by actors and others in the entertainment industry, attorneys Tina Tchen and Roberta Kaplan, and top public relations professionals. Women in Hollywood came together around their own experience of harassment and assault, and were moved by the outpouring of support and solidarity against sexual harassment from women across sectors. This inspired them to help create a Fund to help survivors of sexual harassment and retaliation in all industries—especially low-income women and people of color. They worked together in an historic first to design a structure that would be both inclusive and effective. The Fund will be housed and administered by the National Women’s Law Center and the participating attorneys will be working with the Center’s Legal Network for Gender Equity. Access to prompt and comprehensive legal and communications help will empower individuals and help fuel long-term systemic change.
This Fund will enable more individuals to come forward and be connected with lawyers — regardless of industry, rank or role. Countless activists, celebrities, and other donors want to see an end to a culture that allows sexual harassment and retaliation of those who courageously step forward to go unpunished. This effort is not just to support women in Hollywood, but others in need – the factory worker, the waitress, the teacher, the office worker, and others subjected to this unacceptable behavior. Now is the time to finally stop the sexual harassment and retaliation that has often gone unchecked.
The text of the US Supreme Court decision permitting workplace arbitration clauses precluding class actions:
https://www.supremecourt.gov/opinions/17pdf/16-285_q8l1.pdf
Federal student loans to be made more expensive by Congress
Federal student loan rates are a few percent higher than benchmark rates like the interest rate on 10 year federal bonds. As those bond rates move up closer to 3%, student loan rates will go up in tandem. In addition, new "PROSPER" legislation in planned that -- surprise-- make student loans more expensive and students less prosperous. The legislation would eliminate variations among student loans and eliminate federal subsidies. The Forbes article, an excerpt of which appears below, provides more detail. -- DAR
From https://www.forbes.com/sites/andrewjosuweit/2018/01/17/student-loan-changes-you-need-to-know-for-2018-and-beyond/#11d9ebe6ba51 :
As we head into 2018, changes could be coming to student loans that could impact your borrowing beyond the coming year. Here’s what to watch out for:
Student Loan Rates Could Rise Again
In December, the Federal Reserve raised its Funds rate, and three rate hikes are expected in 2018. On top of that, the London Interbank Offered Rate (LIBOR), on which most private student loan interest rates are based, continues its rise. The LIBOR ended 2016 just under 1.00%, and as of December 15, 2017, the rate was at 1.61%.
Private student loans follow what’s happening with the Federal Reserve’s benchmark rate and LIBOR. On top of that, when setting federal student loan rates, members of Congress rely, in part, on what’s happening in the market and with 10-year Treasuries, which are also adding upward pressure on interest rates.
Even though they just raised rates for the 2017-18 academic year, there’s a possibility that our representatives will give them a bit of a further boost for 2018-2019. And, of course, continued increases in market rates means heftier interest rates on private student loans.
The Prosper Act Could Impact Student Loans In 2019 And Beyond
What you really have to watch for, though, is the passage of the Promoting Real Opportunity, Success and Prosperity through Education Reform (PROSPER) Act.
Unlike many of the pieces of student loan legislation that often languish and die in committee, the PROSPER Act has a chance of being passed, thanks to the fact the bill also includes long-awaited reform of the Higher Education Act (HEA) of 1965, which hasn’t been reauthorized since 2008.
If not reauthorized, the HEA is automatically extended for a year. Work has been done on the issue, but nothing has managed to pass both the House of Representatives and the Senate in a decade. If the PROSPER Act does clear Congress in 2018 (as currently written), here are some of the changes you can expect to see, starting in 2019:
Taking The “Subsidized” Out Of Subsidized Federal Loans
Right now, the government pays the interest on some federal loans while borrowers are in school, during the grace period (usually the first six months after graduation), or during certain deferments. This program is based on need. However, if the PROSPER Act passes, no federal loans — no matter the need of the student — will be subsidized.
A Catholic Church report discusses Credit Default Swaps -- as in "The Big Short"
The recent report from the Catholic Church is consistent with recent comments from the Pope: Banking is not necessarily immoral, but ethical standards are relevant. Government engagement is required to avoid ethical abuses. The Catholic Church report does not mention Barry Lynn, Tim Wu, or Simon Johnson by name, or explicitly refer to the book "The Big Short." But there is some similarity among them in opposing unregulated greed by financial industry people as a source of economic and social harm. DAR
Excerpt from “‘Oeconomicae et pecuniariae quaestiones’. Considerations for an ethical discernment regarding some aspects of the present economic-financial system” of the Congregation for the Doctrine of the Faith and the Dicastery for Promoting Integral Human Development, 17.05.2018,
found at http://press.vatican.va/content/salastampa/en/bollettino/pubblico/2018/05/17/180517a.html
26. Some financial products, among which the so called “derivatives”, are created for the purpose of guaranteeing an insurance on the inherent risks of certain operations often containing a gamble made on the basis of the presumed value attributed to those risks. At the foundation of such financial instruments lay contracts in which the parties are still able to reasonably evaluate the fundamental risk on which they want to insure.
However, in some types of derivatives (in the particular the so-called securitizations) it is noted that, starting with the original structures, and linked to identifiable financial investments, more and more complex structures were built (securitizations of securitizations) in which it is increasingly difficult, and after many of these transactions almost impossible, to stabilize in a reasonable and fair manner their fundamental value. This means that every passage in the trade of these shares, beyond the will of the parties, effects in fact a distortion of the actual value of the risk from that which the instrument must defend. All these have encouraged the rising of speculative bubbles, which have been the important contributive cause of the recent financial crisis.
It is obvious that the uncertainty surrounding these products, such as the steady decline of the transparency of that which is assured, still not appearing in the original operation, makes them continuously less acceptable from the perspective of ethics respectful of the truth and the common good, because it transforms them into a ticking time bomb ready sooner or later to explode, poisoning the health of the markets. It is noted that there is an ethical void which becomes more serious as these products are negotiated on the so-called markets with less regulation (over the counter) and are exposed more to the markets regulated by chance, if not by fraud, and thus take away vital life-lines and investments to the real economy.
A similar ethical assessment can be also applied for those uses of credit default swap (CDS: they are particular insurance contracts for the risk of bankruptcy) that permit gambling at the risk of the bankruptcy of a third party, even to those who haven’t taken any such risk of credit earlier, and really to repeat such operations on the same event, which is absolutely not consented to by the normal pact or insurance.
The market of CDS, in the wake of the economic crisis of 2007, was imposing enough to represent almost the equivalent of the GDP of the entire world. The spread of such a kind of contract without proper limits has encouraged the growth of a finance of chance, and of gambling on the failure of others, which is unacceptable from the ethical point of view.
In fact, the process of acquiring these instruments, by those who do not have any risk of credit already in existence, creates a unique case in which persons start to nurture interests for the ruin of other economic entities, and can even resolve themselves to do so.
It is evident that such a possibility, if, on the one hand, shapes an event particularly deplorable from the moral perspective, because the one who acts does so in view of a kind of economic cannibalism, and, on the other hand, ends up undermining that necessary basic trust without which the economic system would end up blocking itself. In this case, also, we can notice how a negative event, from the ethical point of view, also harms the healthy functioning of the economic system.
Therefore, it must be noted, that when from such gambling can derive enormous damage for entire nations and millions of families, we are faced with extremely immoral actions, it seems necessary to extend deterrents, already present in some nations, for such types of operations, sanctioning the infractions with maximum severity.
Uber press release: No more forced arbitration in sexual misconduct cases
Perhaps the most offensive use of forced arbitration and confidentiality requirements involves sexual misconduct actions. Uber has responded to public campaigns on these topics by changing its announced policies. DAR
Excerpt:
First, we will no longer require mandatory arbitration for individual claims of sexual assault or sexual harassment by Uber riders, drivers or employees.
Arbitration has an important role in the American justice system and includes many benefits for individuals and companies alike. Arbitration is not a settlement (cases are decided on their merits), and, unless the parties agree to keep the process confidential, it does not prevent survivors from speaking out about their experience.
But we have learned it’s important to give sexual assault and harassment survivors control of how they pursue their claims. So moving forward, survivors will be free to choose to resolve their individual claims in the venue they prefer: in a mediation where they can choose confidentiality; in arbitration, where they can choose to maintain their privacy while pursuing their case; or in open court. Whatever they decide, they will be free to tell their story wherever and however they see fit.
Second, survivors will now have the option to settle their claims with Uber without a confidentiality provision that prevents them from speaking about the facts of the sexual assault or sexual harassment they suffered.
Confidentiality provisions in settlement agreements also have an appropriate role in resolving legal disputes. Often they help expedite resolution because they give both sides comfort that certain information (such as the settlement amount) will remain confidential. And frequently, survivors insist on broad confidentiality in order to preserve their privacy.
But divulging the details of what happened in a sexual assault or harassment should be up to the survivor, not us. So we’re making it clear that Uber will not require confidentiality provisions or non-disclosure agreements to prevent survivors from talking about the facts of what happened to them. Whether to find closure, seek treatment, or become advocates for change themselves, survivors will be in control of whether to share their stories. Enabling survivors to make this choice will help to end the culture of silence that surrounds sexual violence.
Third, we commit to publishing a safety transparency report that will include data on sexual assaults and other incidents that occur on the Uber platform.
We believe transparency fosters accountability. But truthfully, this was a decision we struggled to make, in part because data on safety and sexual assaults is sparse and inconsistent. In fact, there is no data to reliably or accurately compare reports against Uber drivers versus taxi drivers or limo drivers, or Uber versus buses, subways, airplanes or trains. And when it comes to categorizing this data for public release, no uniform industry standard for reporting exists today.
Making things even more complicated, sexual assault is a vastly underreported crime, with two out of three assaults going unreported to police.
But we decided we can’t let all of that hold us back. That’s why we’ve met more than 80 women’s groups and recruited advisors like Ebony Tucker of the National Alliance to End Sexual Violence, Cindy Southworth of the National Network to End Domestic Violence and Tina Tchen, one of the founders of the Time’s Up Legal Defense Fund and partner at Buckley Sandler LLP to advise us on these issues.
We’re working with experts in the field to develop a taxonomy to categorize the incidents that are reported to us. We hope to open-source this methodology so we can encourage others in the ridesharing, transportation and travel industries, both private and public, to join us in taking this step. We know that a project of this magnitude will take some time, but we pledge to keep you updated along the way.
Dara recently said that sexual predators often look for a dark corner. Our message to the world is that we need to turn the lights on. It starts with improving our product and policies, but it requires so much more, and we’re in it for the long haul. Together, we can make meaningful progress towards ending sexual violence. Our commitment to you is that when we say we stand for safety, we mean it.
Press release at https://www.uber.com/newsroom/turning-the-lights-on/
There there are just two relevant smartphone platforms left .
Devices running Android (85.9%) and iOS (14%) accounted for 99.9% of global smartphone sales to end users in 2017, according to market research firm Gartner. All other platforms, including former market leaders BlackBerry and Microsoft’s Windows Phone have been rendered completely irrelevant.See https://www.gartner.com/newsroom/id/3859963 (table 3)
Does that lack of competition raise competition/antitrust concerns? Of course. -- DAR
Internet connect speeds much slower than your carrier promised? Maybe your State AG can help: NY AG v. Charter Communications
NY's State AG sued carrier Charter Communications for failing to deliver promised internet communication speeds. In a recent slip opinion the Court allowed the suit to go forward. Here is an excerpt from the opinion:
Spectrum-TWC advertised specific Internet speeds, available in tiers ranging from 20 to 300 megabits per second (Mbps), and promised its subscribers that it would deliver such speeds in exchange for a fee, with higher fees for faster-speed tiers (id., ~~ 79-84). Spectrum-TWC assured subscribers not only that they could achieve the advertised speeds, but that subscribers were guaranteed "reliable Internet speeds," delivered "consistently," "without slowdowns," and otherwise without interruption (id., ~ ~ 83, 85-86). Spectrum-TWC assured subscribers that the promised speeds would be delivered anywhere in their homes, at any time, and on any number of devices, regardless of whether the subscriber connected by wire or wirelessly (see id.,~~ 74, 83, 89, 94-95)
According to the complaint, Spectrurn-TWC did not deliver the promised level of service (id., ,.rn 75-76, 80-83, 178-241 ). For many customers, the promised Internet speeds were impossible to attain because of technological bottlenecks for which Spectrurn-TWC was responsible. First, in early 2013, defendants determined (as a result of Internet speed tests conducted by the FCC) that the older generation moderns they leased to many of their subscribers were incapable of reliably achieving Internet speeds of even 20 Mbps per second (id., ,-r ,-r 9, 76, 101-177) (the Modern Failures). These failures date back to early in the Covered Period, and intensified when Spectrurn-TWC began to promise New York City subscribers faster speeds in connection with its MAXX upgrade, which was launched in 2014 (id., ,-r 78). These failures were not resolved by the company's modern "replacement" program, which was designed to result in many subscribers continuing to pay for promised speeds beyond the technical capabilities of their Spectrurn-TWC-provided moderns (id., ,-r ,-r 121, 146, 151, 159). Plaintiff alleges that, in fact, Spectrurn-TWC knew that the moderns it leased to many subscribers were "non-compliant," or incapable of delivering the speeds promised (id., ,-r,-r 76, 110-113, 169). Plaintiff alleges this failure affected 900,000 subscribers (id., ,-r 102).
Second, Spectrurn-TWC also failed to maintain its network as necessary to deliver the promised speeds (id., ,-r,-r 178-200) (the Network Failures). Plaintiff alleges that, although Spectrurn-TWC knew the precise levels of network congestion at which customers would be prevented from achieving the promised speeds, it deliberately hid and exceeded those congestion levels to save itself money (id., ,-r,-r 184-193).
Third, plaintiff alleges that, due to older or slower wireless routers it provided, and other technological limitations, Spectrurn-TWC knew that its subscribers could not achieve the same speeds wirelessly as through a wired connection (id., ,-r,-r 221-241) (the Wireless Failures).
Plaintiff asserts that Spectrurn-TWC's failure to deliver its promised Internet speeds is confirmed by the results of at least three independent tests of Internet speed: (1) a test used by the FCC to generate its annual "Measuring Broadband America" report; (2) a test used by Spectrurn-TWC to monitor speeds on its last miles of service; and (3) a test recommended by Spectrurn-TWC to its subscribers for testing Internet speeds (Complaint, ,-r,-r 196-213).
The slip opinion is here: https://cases.justia.com/new-york/other-courts/2018-2018-ny-slip-op-30253-u.pdf?ts=1519251428
The NY AG initial pleading is here: https://ag.ny.gov/sites/default/files/summons_and_complaint.pdf
Washington, DC has one of the highest per capita 911 calls for Emergency Medical Services (EMS) in the country, but a new program hopes to change that.
On April 19th, Washington, DC's EMS Department rolled out a new pilot program for handling non-emergency 911 calls. The goal of this program is to alleviate emergency room crowding and improve patient care. The “Right Care, Right Now” program will filter out non-emergency calls by redirecting them to a nurse triage line to assess the caller's symptoms. The hope is that the program will decrease the burden on the Emergency Medical system and reduce some of the overcrowding in local emergency rooms. This approach was adopted from some other jurisdictions' attempts to deal with the problem of how to handle non-emergency calls.
The medical director for Washington, DC EMS' system, Dr. Holman, explained, “About 25-percent of callers turn out to have lower acuity calls which could be better handled in an outpatient setting rather than an emergency department.” The nurse triage line will be tested for six months and is expected to route to a nurse 64 out of an estimated 500 emergency calls received daily.
DC Fire & EMS Chief Gregory Dean said that some non-emergency Medicaid callers will have appointments made for them at a clinic for treatment and would also be eligible for round-trip Lyft transportation in non-life-threatening situations.
The District has high hopes that the pilot program will work to improve care across the board, though some are skeptical of this new process as it is sometimes difficult to detect an emergency situation over the phone.
See https://www.washingtonpost.com/local/public-safety/nurses-will-be-in-dcs-911-center-in-latest-attempt-to-cut-emergency-call-volume/2018/04/18/6b40764c-4288-11e8-8569-26fda6b404c7_story.html?noredirect=on
NY Times pickup of lack of zoning restrictions in Hawaii lava flow risk areas: There have been three lava flows in the Leilani Estates area since 1790.
From the NYT article:
The most recent eruption near the Leilani Estates area was in 1955, before subdivisions were built in the area. The volcano had long been dormant, until its eruption forced villagers in the area to flee.
Lava flow after1790 eruption: [graphic showing lava flows in Leilani Estates area omitted]: 1840, 1955, 2018
Source: Historic lava flows from the United States Geological Survey | Note: Lava areas for 2018 are through May 10
The construction of Leilani Estates was approved in 1960, according to Daryn Arai, deputy planning director at the Hawaii County Planning Department, and about 1,600 people live in the neighborhood today. It’s a rural neighborhood that has offered relatively affordable homes, in contrast with Hawaii’s more expensive real estate on Oahu and Maui.
Despite the neighborhood’s position in an area where lava flows are most likely to occur on the island, there are no building restrictions, Mr. Arai said.
https://www.nytimes.com/interactive/2018/05/12/us/kilauea-volcano-lava-leilani-estates-hawaii.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=photo-spot-region®ion=top-news&WT.nav=top-news
Does Microsoft resist product repairs in order to promote product replacements that boost its sales?
Microsoft faces questions about how it handled the case of Eric Lundgren, facing 15 months in prison for duplicating freely available MS Windows restore software.
U.S. PIRG and iFixit noted the tough environment for repair and Microsoft’s role in other repair disputes, and called for Microsoft to come to the table to move repair forward.
Los Angeles – Microsoft is facing widespread criticism for the way it handled a dispute with recycling entrepreneur Eric Lundgren. Among the criticisms are that the company presented misleading testimony about the function of the software in question to increase the penalties—which is provided for free and can only be used to repair a computer with a valid Windows license. Microsoft’s testimony was the basis for the sentence.
The U.S. Public Interest Research Group (U.S. PIRG), a national advocacy organization which works to cut waste and advocate for repair, and iFixit, the world’s leading online repair manual, spoke out, noting other issues around with repair with Microsoft and other large tech companies, and calling for Microsoft to meet with advocates and discuss how repair can continue to move forward.
“Electronic waste is a rapidly growing problem and by far the best solution we have is repair and reuse,” said Nathan Proctor, Director of U.S. PIRG’s Right to Repair campaign. “Repair saves people money, extends the life of electronics and keep things off the scrap heap. Some 70 percent of the toxic waste produced now is electronic waste. But we face significant barriers to repair from a wide-range of large manufacturing companies, and that adds to how much waste we produce. Microsoft has a role to play in coming up with solutions, as one of the leading tech companies in the world.”
“I have a lot of friends at Microsoft, and know many people who have put in significant effort regarding their environmental record, but this was a setback,” said Kyle Wiens, CEO of iFixit.com. “We tried to broker a peace before this got out of hand. I like Microsoft and have a lot of respect for Satya Nadella, but their actions in this case were very discouraging. Across the board, recyclers are innovative and resourceful people who find that they can make more money repurposing hardware than shredding it. But they frequently run headlong into copyright issues. I’ve never seen tactics like those used by Microsoft in this case.”
The case against Mr. Lundgren is not the only example of Microsoft resisting repair. Microsoft lobbies against “Right to Repair” reforms which would give consumers and independent businesses access to tools, parts, manuals and diagnostics needed for repair.
Through the Entertainment Software Association, Microsoft and other gaming companies argue against changes to federal Copyright law to protect repair and address barriers to repair. And while some of their products are designed for serviceability, their Surface line is notorious for being almost impossible to repair.
The Surface’s glued-in battery design is so egregious that consumer protection legislators in Microsoft’s home state of Washington have discussed banning the practice altogether. iFixit recently awarded the Surface Laptop their lowest serviceability score ever, a 0 out of 10, for its completely unrepairable (and likely unrecyclable) design that both glues and welds the battery into the frame.
Furthermore, Microsoft has been one of the biggest offenders using illegal void if removed warranty stickers to prevent consumer repair. They were one of six companies that received letters from the FTC last month warning them to change the language in their warranties. Failure to comply could win them charges for “unfair or deceptive acts”.
“Companies have gotten too aggressive at pushing us to throw things away and buy new things. What we should be doing instead is reusing more, repairing more, and recycling the rest — ideas that Eric Lundgren has been pioneering,” added Proctor. “Microsoft has a chance to show they can be part of the solution, but they need to step up.”
“We welcome the chance to meet with Microsoft,” added Wiens.
U.S. PIRG has launched a petition calling for Microsoft to apologize and pledge to work with repair advocates moving forward.
From: https://ifixit.org/blog/10010/microsoft-eric-lundgren/
The District of Columbia prevailed before the DC Court of Appeals in its case against ExxonMobil, Capitol Petroleum Group, et al.; In February, 2018 the Court docket shows "Filed Stipulation To Dismiss Appeal and withdrawal of petition for rehearing en banc (Appellee Exxonmobil Oil Corporation)"
Excerpts from the Court's docket:
11/09/2016 Filed Argued before Associate Judge Thompson, Associate Judge Easterly, and Senior Judge Reid. (Catherine A. Jackson, Esq. for appellant District of Columbia) (Alphonse M. Alfano, Esq. for appellee Capitol Petroleum Group LLC, Anacostia Reality LLC, Springfield Petroleum Realty LLC) (Robert M. Loeb, Esq. for appellee Exxonmobil Oil Corporation, et al)
11/02/2017 Filed Reversed And Remanded by OPINION
11/13/2017 Filed Motion For Extension Of Time to File petition for rehearing en banc. (Appellee Exxonmobil Oil Corporation)
.
11/15/2017 Filed Motion For Extension Of Time to File petition for rehearing en banc (Appellee Anacostia Reality LLC, Appellee Capitol Petroleum Group LLC, Appellee Springfield Petroleum Realty LLC)Granted
11/21/2017 Filed Order Granting Appellees's Motion For Extension Of Time to File petition for rehearing en banc to November 30, 2017. (Appellee Anacostia Reality LLC, Appellee Capitol Petroleum Group LLC, Appellee Springfield Petroleum Realty LLC)
11/30/2017 Filed Petition For Rehearing En Banc (Appellee Exxonmobil Oil Corporation)
12/21/2017 Filed ORDERED that appellant, within 14 days from the date of this order, shall file a response thereto.
01/04/2018 Filed Motion For Extension Of Time to File response to the petition for rehearing en banc (Appellant)Granted
01/18/2018 Filed Motion For Extension Of Time to File Response to petition for rehearing en banc. (Appellant)Granted
01/26/2018 Filed Order Granting Appellant's Motions For Extensions Of Time to File a Response to appellees' petition for rehearing en banc to February 20, 2018.
02/14/2018 Filed Stipulation To Dismiss Appeal and withdrawal of petition for rehearing en banc (Appellee Exxonmobil Oil Corporation)
* * * *
Following is some explanatory language from the Appellate Court's opinion:
According to the District — and this is the gravamen of its complaint — “[t]he dealer franchise agreements, and later versions of these agreements” unlawfully “compel the independent retail dealers operating these stations to buy their Exxon-branded gasoline exclusively from – and at prices set by” Anacostia or Springfield or CPG. The complaint further alleges that Exxon continues to enforce the unlawful exclusive-supply requirement through its distribution agreements with Anacostia and Springfield, which “allow only one supplier to supply [Exxon-branded] gasoline to each Exxon-branded gasoline station in D.C.” As a result of the dealer-franchise and distribution agreements, the complaint alleges, the defendants/appellees “set the wholesale price[ ] paid for Exxon-branded gasoline in D.C.,” depriving retail dealers who sell Exxon-branded gasoline and “many thousands of consumers in D.C.” who purchase Exxon-branded gasoline in D.C. of “the benefits of competition in the wholesale supply of Exxon-branded gasoline.” The complaint asserts that independent retail Exxon stations cannot “purchase Exxon-branded gasoline at prices below the prices charged by” the Distributors. The complaint further asserts that of the thirty-one Exxon-branded gasoline stations in the District, all of which are owned by Anacostia or Springfield, twenty-seven are operated by independent retail dealer franchisees, all of which are subject to and restricted by the allegedly unlawful dealer-franchise and distribution agreements. According to the complaint, these independent franchisee-operated retail stations comprise about 25% of the gasoline stations in the District.
The complaint charges that the dealer-franchise agreements between the Distributors and independent retail service stations and the distribution agreements between Exxon and the Distributors (all of which the District asserts constitute “marketing agreements” as that term is defined in the RSSA) violate two provisions of Subchapter III of the RSSA: D.C. Code § 36-303.01 (a)(6) and (11). D.C. Code § 36-303.01 (a)(6) states that:
[No marketing agreement shall ․] [p]rohibit a retail dealer from purchasing or accepting delivery of, on consignment or otherwise, any motor fuels, petroleum products, automotive products, or other products from any person who is not a party to the marketing agreement or prohibit a retail dealer from selling such motor fuels or products, provided that if the marketing agreement permits the retail dealer to use the distributor's trademark, the marketing agreement may require such motor fuels, petroleum products, and automotive products to be of a reasonably similar quality to those of the distributor, and provided further that the retail dealer shall neither represent such motor fuels or products as having been procured from the distributor nor sell such motor fuels or products under the distributor's trademark[.]
D.C. Code § 36-303.01 (a)(11) states that “no marketing agreement shall” “[c]ontain any term or condition which, directly or indirectly, violates this subchapter.” The complaint asks for a declaration that defendants'/appellees' marketing agreements violate these provisions of District of Columbia law and for an injunction prohibiting enforcement of the agreements.
Is it wise to buy a Hawaiian house in Zone 1 for volcano risk?
It hasn't worked out well for some who live in Leilani Estates, one of the areas evacuated recently because of volcanic eruption. That includes a man interviewed on TV who said he moved to Hawaii from California to avoid fires.
It turns out that the US Geological Survey categorizes areas by volcano lava riskiness. Apparently government regulations permit people to buy into high risk areas, and people are attracted to buy because home prices are lower where risk is higher. On the other hand, its harder to get insurance or financing in high risk areas. Luckily for people who need financing to buy a high risk home, the Federal government apparently does offer a lending program through Rural Housing development. A local real estate broker posting explains it [see: http://www.koarealty.com/buying-property/lava-zones/ ] -- DAR
Lava hazard zones:
Here on the island of Hawaii Lava hazards are a real part of the journey. Hawaii island is comprised of active volcanoes and as that is a real fact there are important issues to consider when looking at purchasing real estate in areas that are at higher risk of the flow of lava. The United States Geological Survey has broken up the island in 9 zones commonly known as lava hazard zones, and labeled them 1-9. Zone 1 is considered the highest risk zone based upon and according to the degree of the risk of hazard, historical flows, and the geographical lay of the land. Zone 2 is also a high-risk zone based upon the same criteria. As the hazard zone number increases in number the degree of risk decreases. In such lava zone 9 is considered a zone of least risk.
When it comes to purchasing real estate in these high risk areas one needs to be aware of the risks that come with owning in these areas as well as the costs associated on a level related to lending and insurance, as well as to the actual physical risk factor associated.
When choosing to purchase real estate here on the island, many buyer’s are attracted to lava zones 1 and 2. This is in part due to the weather and scenic beauty but along with this we cannot deny the affordable prices. It is true, land located in the lava hazard zones 1 & 2 is typically less expensive than any other areas on Hawaii island. In fact, the district of Puna and the district of Kau; both areas designated with lava hazard zones 1 & 2; offer some of the most affordable land in ALL of the island chain. When making a decision to purchase in these areas one must be aware and consider these variables:
1. Limited insurers for homeowners insurance and hazard insurance.
Currently there is the Hawaii Property insurance Association that offers insurance on homes up to a value of $350,000.00. Any replacement value amount above and beyond $350,000.00 would be provided by Lloyds of London. Typically insurance premiums are higher than what one would see on a property outside of these high-risk zones.
2. Limited financing for residential purchases or construction loans.
In recent times many lending institutions have completely eliminated programs that they once had for financing in these risk zones. At current, the Federal government does offer a program through Rural Housing development.
As for conventional financing, most institutions are requiring a minimum of 20% down in order to lend on a property in either of these two high-risk zones.
Which subdivisions are in each lava hazard zone?East side, covering Hilo to the district of Puna the following are
District of PUNA:
Lava Zone 1
Where can YOU get more information?
Go to the experts by following this site.
http://hvo.wr.usgs.gov/hazards/lavazones/main.html
CRISPR gene-editing technology IP battles
CRISPR is a recent break-through technology that allows genes to be edited is a way that may potentially cure many illnesses with a genetic component. For example, blindness caused by retinitis pigmentosa might be curable by using CRISPR technology to fix the relevant genetic defect. It seems unfortunate that patent battles have developed which could cause scientists to compete in a commercial sense rather than coordinating research to accelerate scientific progress. The patent battles are going on now, but the article I've picked for your attention is an older one that provides a useful overview. What you see below is a brief excerpt, with a link to the original article. DAR
The battle to own the CRISPR–Cas9 gene-editing toolApril 2017
By Catherine Jewell, Communications Division, WIPO, and Vijay Shankar Balakrishnan, Science and Health Journalist
Millions suffer from devastating genetic disorders like cancer, muscular dystrophy, cystic fibrosis, sickle cell anaemia, Huntington’s disease and many others. Imagine the pain and suffering that could be avoided (not to mention the healthcare costs) if we could cure these diseases simply by rewriting the genetic code of patients. This is the promise of the CRISPR-Cas9 gene-editing technology.
Billed as the most exciting breakthrough in biomedical research since the dawn of genetic engineering in the 1970s, the CRISPR-Cas9 gene editing tool has huge scope to improve understanding of human and animal disease and its treatment (photo: iStock.com/cosmin4000).Billed as the most exciting breakthrough in biomedical research since the dawn of genetic engineering in the 1970s, the CRISPR-Cas9 gene-editing tool has huge scope to improve understanding of human and animal disease and its treatment. It has the potential to revolutionize medicine and agricultural research. The race to develop commercial applications of CRISPR-Cas9 in healthcare, agriculture and industry, however, has thrust the technology, its pioneers, the institutions they work for and a clutch of startups in which they are involved into a high-stakes legal battle over who actually invented it and when. The outcome will determine who controls the technology and where the highly lucrative economic benefits it promises to generate will flow.
The technology and how it came about:
Ever since Watson and Crick identified the DNA double helix, scientists have been searching for ways to better understand the role that DNA plays in the genetic make-up of living organisms. The CRISPR tool is a huge step forward. Compared to existing research tools, it offers a relatively quick, easy, reliable and cheap way to target and edit specific genetic sequences.
CRISPR stands for Clustered Regularly Interspaced Short Palindromic Repeats. It is a natural defence mechanism that allows bacterial cells to detect and destroy the viruses that attack them.
The CRISPR mechanism was first identified as a “general purpose gene-editing tool” in a scientific paper published by scientists Erik Sontheimer and Luciano Marrafinni from Northwestern University, Evanston, Illinois, USA in 2008. The scientists filed for a patent but their application was rejected because they were unable to reduce it to any practical application, Science’s Jon Cohen writes.
But CRISPR really began to create a buzz, with the publication in June 2012, of a scientific paper by Emmanuelle Charpentier, a French microbiologist then working at the University of Vienna and now at the Max Planck Institute for Infection Biology, Germany and Umeå University, Sweden, and Jennifer Doudna at the University of California, Berkeley, USA. Their paper outlined how CRISPR, with the help of an enzyme called Cas9, can be transformed into a tool to edit genes. Specifically, how CRISPR-Cas9 can be used to cut DNA in a test tube. They filed their first CRISPR-related patent application in May 2012. It is still under review.
Six months later, in January 2013, scientists at the Broad Institute of the Massachusetts Institute of Technology (MIT) and Harvard University, led by Feng Zhang, reported that they had found a way to use CRISPR-Cas9 to edit the cells of mammals, further fuelling interest in its potential to generate new and more effective medical treatments. The Broad researchers filed their first CRISPR-related patent application in December 2012 and paid for a fast-track review process. Eleven additional patent applications were filed to bolster the claim that they were the first to invent a CRISPR system to edit mammalian cells, Jon Cohen notes. In April 2014, the United States Patent and Trademark Office (USPTO) granted the Broad team a patent on their CRISPR technology.
Jennifer Doudna (top left) at the University of California, Berkeley, USA, and Feng Zhang (top right) at the Broad Institute of the Massachusetts Institute of Technology (MIT) and Harvard University, have each undertaken pioneering work in relation to CRISPR-Cas9. They and others are currently embroiled in a legal firestorm over who owns commercial or IP rights in the technology. (Photos: Keegan Houser/UC Berkeley and Justin Knight Photography).The battle for ownershipThe grant of the patent to the Broad team triggered a legal firestorm. Professor Jake Sherkow of the New York Law School characterizes it as “an absolutely humungous biotech patent dispute”.
The stakes are clearly very high. Whoever owns the commercial or IP rights to CRISPR-Cas9 has the potential to generate huge financial returns and to decide who gets to use it.
Each of the pioneering researchers and their respective institutions has a stake in a handful of start-ups which have attracted millions of investment dollars to translate CRISPR-Cas9 systems into new treatments for a broad range of genetic diseases. They include Intellia Therapeutics (UC Berkeley), Caribou Sciences (J. Doudna), CRISPR Therapeutics and ERS Genomics (E. Charpentier) and Editas Medicine (Broad Institute).
An analysis of the CRISPR-Cas9 commercial landscape by Science’s Jon Cohen reveals that a web of often overlapping licenses have already been granted by CRISPR startups for many applications in medicine, agriculture and industry.
Full article:http://www.wipo.int/wipo_magazine/en/2017/02/article_0005.html
AAI 19th Annual Conference "Antitrust at a Crossroads - Plotting the Course for the Next Decade"
DATE: JUNE 21, 2018
LOCATION: NATIONAL PRESS CLUB, WASHINGTON DCOn Thursday June 21, 2018, the American Antitrust Institute will host its 19th Annual Conference “Antitrust at a Crossroads: Plotting the Policy Course for the Next Decade.” Experts from law, economics, and policy will offer insight via four panels:
Registration Fees:
Early Bird (until May 18): $450
Government and Academic Rate: $15
AAI letter opposing "Smarter" Act modifying agency jurisdiction
AAI issued a letter opposing the SMARTER Act to the Ranking Member of the House Judiciary Committee, Jerry Nadler, and Ranking Member of the House Subcommittee on Regulatory Reform, Commercial and Antitrust Law, David Cicilline. The SMARTER Act proposes “[t]o amend the Clayton Act and the Federal Trade Commission Act to provide that the Federal Trade Commission shall exercise authority with respect to mergers only under the Clayton Act and only in the same procedural manner as the Attorney General exercises such authority.” AAI reviewed workload statistics compiled by the U.S. Department of Justice and Federal Trade Commission to examine whether the premise of the SMARTER Act is sound. The review indicates that the concerns of the bill’s sponsors are without foundation and that the SMARTER Act would not serve the interests of competition or consumers. The letter summarizes AAI’s analysis and findings.
Download AAI Letter Opposing SMARTER Act [ http://www.antitrustinstitute.org/sites/default/files/AAI%20Letter%20for%20Record_H.R.%205645_5.2.18.pdf ]
Bloomberg on exploitation of the elderly
Excerpt:
The total number of victims is increasing as baby boomers retire and their ability to manage trillions of dollars in personal assets diminishes. One financial services firm estimates seniors lose as much as $36.5 billion a year. But assessments like that are “grossly underestimated,” according to a 2016 study by New York State’s Office of Children and Family Services. For every case reported to authorities, as many as 44 are not. The study found losses in New York alone could be as high as $1.5 billion.
The U.S. Centers for Disease Control and Prevention drew attention to elder exploitation as a public health problem in a 2016 report, citing groundbreaking research two decades earlier by Mark Lachs. Now co-chief of the Division of Geriatrics and Palliative Medicine at Weill Cornell Medicine and New York-Presbyterian Hospital, Lachs says elder abuse victims—including those who suffer financial exploitation--die at a rate three times faster than those who haven’t been abused. It’s a “public health crisis,” he warns.
“I knew these crimes were killing people,” says Elizabeth Loewy, who directed the elder abuse unit at the Manhattan District Attorney’s Office. As her exploitation cases steadily rose to hundreds per year, she says, “so many family members told me, ‘I can’t prove it, but this killed him.’”
Full article: https://www.bloomberg.com/news/features/2018-05-03/america-s-elderly-are-losing-37-billion-a-year-to-fraud
California's press release: California and States Representing Over 40 Percent of U.S. Car Market Sue to Defend National Clean Car Rules
May 1, 2018
See https://oag.ca.gov/news/press-releases/california-and-states-representing-over-40-percent-us-car-market-sue-defend
Excerpt:
SACRAMENTO – Moving to curb toxic air pollution and improve car gas mileage, California Attorney General Xavier Becerra, California Governor Edmund G. Brown Jr. and the California Air Resources Board today announced that they are leading a coalition of 17 states and the District of Columbia in suing the U.S. Environmental Protection Agency to preserve the nation’s single vehicle emission standard.
“The evidence is irrefutable: today’s clean car standards are achievable, science-based and a boon for hardworking American families. But the EPA and Administrator Scott Pruitt refuse to do their job and enforce these standards,” said Attorney General Becerra. “Enough is enough. We’re not looking to pick a fight with the Trump Administration, but when the stakes are this high for our families’ health and our economic prosperity, we have a responsibility to do what is necessary to defend them.”
“The states joining today’s lawsuit represent 140 million people who simply want cleaner and more efficient cars,” said Governor Brown. “This phalanx of states will defend the nation’s clean car standards to boost gas mileage and curb toxic air pollution.”
Financial problems of new technology proton radiation medical treatment systems suggest that the market doesn't always correctly allocate resources
For years, health systems rushed enthusiastically into expensive medical technologies such as proton beam centers, robotic surgery devices and laser scalpels — potential cash cows in the one economic sector that was reliably growing. Developers got easy financing to purchase the latest multimillion-dollar machine, confident of generous reimbursement.
There are now 27 proton beam units in the U.S., up from about half a dozen a decade ago. More than 20 more are either under construction or in development.
But now that employers, insurers and government seem determined to curb growth in health care spending and to combat overcharges and wasteful procedures, such bets are less of a sure thing.
The problem is that the rollicking business of new medical machines often ignored or outpaced the science: Little research has shown that proton beam therapy reduces side effects or improves survival for common cancers compared with much cheaper, traditional treatment.
If the dot-com bubble and the housing bubble marked previous decades, something of a medical-equipment bubble may be showing itself now. And proton beam machines could become the first casualty.
“The biggest problem these guys have is extra capacity. They don’t have enough patients to fill the rooms” at many proton centers, said Dr. Peter Johnstone, who was CEO of a proton facility at Indiana University before it closed in 2014 and has published research on the industry. At that operation, he said, “we began to see that simply having a proton center didn’t mean people would come.”
Sometimes occupying as much space as a Walmart store and costing enough money to build a dozen elementary schools, the facilities zap cancer with beams of subatomic proton particles instead of conventional radiation. The treatment, which can cost $48,000 or more, affects surrounding tissue less than traditional radiation does because its beams stop at a tumor rather than passing through. But evidence is sparse that this matters.
And so, except in cases of childhood cancer or tumors near sensitive organs such as eyes, commercial insurers have largely balked at paying for proton therapy.
“Something that gets you the same clinical outcomes at a higher price is called inefficient,” said Dr. Ezekiel Emanuel, a health policy professor at the University of Pennsylvania and a longtime critic of the proton-center boom. “If investors have tried to make money off the inefficiency, I don’t think we should be upset that they’re losing money on it.”
Investors backing a surge of new facilities starting in 2009 counted on insurers approving proton therapy not just for children, but also for common adult tumors, especially prostate cancer. In many cases, nonprofit health systems such as Maryland’s partnered with for-profit investors seeking high returns.
Companies marketed proton machines under the assumption that advertising, doctors and insurers would ensure steady business involving patients with a wide variety of cancers. But the dollars haven’t flowed in as expected.
Indiana University’s center became the first proton-therapy facility to close following the investment boom, in 2014. An abandoned proton project in Dallas is in bankruptcy court.
California Protons, formerly associated with Scripps Health in San Diego, landed in bankruptcy last year.
A number of others, including Maryland’s, have missed financial targets or are hemorrhaging money, according to industry analysts, financial documents and interviews with executives.
From https://khn.org/news/as-proton-centers-struggle-a-sign-of-a-health-care-bubble/?utm_campaign=KHN%3A%20First%20Edition&utm_source=hs_email&utm_medium=email&utm_content=62610060&_hsenc=p2ANqtz-__oPaRRQbRgimaO9tY0aAr0CXq4FUiDbftmnl6HOdmdxv43-WsRmzkvSPvfIzsJktuXQIabIKJqEYahL5t1zNyp5-euQ&_hsmi=62610060
DCCRC Joins 132 Groups Urging SEC Not to Facilitate Forced Arbitration
133 organizations including DCCRC, sent a letter [ https://secureoursavings.com/wp-content/uploads/2018/04/SEC-Sign-on-Letter-Forced-Arbitration.pdf] urging the U.S. Securities and Exchange Commission (SEC) to stand by its mission and longstanding policy of empowering and protecting American investors, including retired servicemembers, first responders, and teachers, by safeguarding their right to join together to hold law-breaking corporations publicly accountable in a court of law.
In recent months, Chairman Clayton has fueled speculation about a dramatic policy shift at the SEC that would threaten the security of hardworking Americans’ retirement savings and gut their legal rights by allowing publicly traded corporations to use forced arbitration clauses against their investors. These “rip-off clauses” would force investors to give up their most effective tool to fight back against securities fraud that could decimate their savings – class action lawsuits.
The letter reads in part:
“Investors rely on the SEC to promote market integrity and deter and detect fraud. But the SEC cannot fulfill this role on its own. Private shareholder lawsuits serve as an essential supplement to Commission action…Recent high-profile examples of securities fraud illustrate the devastating effect this would have. In enforcement actions against Enron, WorldCom, Tyco, Bank of America and Global Crossing, for example, the SEC recovered penalties and fees totaling $1.8 billion, while private securities class actions were able to recover $19.4 billion for defrauded shareholders – more than ten times as much.”
In addition to the letter, more than 40 national and state-based organizations, led by the Consumer Federation of America, Public Justice, and the American Association for Justice, have joined together to form the Secure Our Savings (SOS) Coalition to keep up pressure on SEC leadership.
Susan Crawford on the problems of a T-Mobile/Sprint merger
Excerpt from article in Wired:
The problem is not just that we’d have three instead of four wireless giants in the US, though that’s certainly a major issue. An even bigger threat to the consumer is what would happen next. As I see it, a Sprint/T-Mobile combination would inevitably end up being a wholesale partner for our giant cable companies (Comcast and Spectrum). The resulting business deals would allow those behemoths to neatly control many segments—wired, wireless, prepaid, post-paid—of the stagnant and expensive connectivity marketplace in America. That isn’t a future we should want.
Full article: https://www.wired.com/story/the-case-against-the-t-mobile-sprint-merger/
Philip Marsden on "Hipster" antitrust -- a European perspective
Marsden is Professor of Competition Law and Economics at the College of Europe, Bruges and Senior Director for Case Decision Groups at the Competition & Markets Authority, London.
Here is an excerpt from the concluding part of Marsden's article:
In many fast-moving and high tech markets, consumer engagement and data are key. It thus makes sense to divert loud but vague populist calls for action into joined-up assessments of how these markets work. Consumer law plays a crucial role here. So often we see consumer enforcement complementing competition enforcement, and vice versa. The complement is natural, since in both we are making sure that consumers can trust markets and helping them know that what they’re seeing is what they’re getting.
Online reviews, for example, bolster competition as people can make more informed choices, but this only works if reviews are trustworthy. Making sure that businesses abide by consumer protection law, that they treat their customers fairly, and in ways that engender trust, helps to create a more competitive marketplace. Firms have to work harder to offer better products, across all the competitive variables.
A CALL FOR EVIDENCE: Competition authorities can adapt further too. Competition laws are designed to adapt – but this doesn’t necessarily mean entirely new rules are required. The evolutionary process starts with deepening our understanding of how markets work. Can authorities stimulate this understanding, rather than always being on the back foot, or being presumed to be defending our corner from hipster and political intrusion?
As evidence-based authorities, is there not something blindingly obvious we could contribute to the calls for us to do more? Two things come to mind: a call for evidence, and at the same time, an enhancement of the tools we have to analyze evidence. This year, at the CMA, we are encouraging more fundamental research into trust in markets. This would likely be highly interdisciplinary in nature and would seek to identify which market practices are most likely to be considered unfair and to undermine trust in markets. We could, for example, test perceptions of the fairness of a range of practices, including those that are not transparent or where the consumer does not feel in control; practices that require undue effort or transactions costs to secure a good deal or practices that involve extreme forms of price discrimination. We want to understand the drivers of trust and mistrust in markets and improve our understanding of the challenges facing vulnerable groups of customers who are at high risk of experiencing poor outcomes in markets.
This could all be with a view to informing case selection, diagnosis of problems and the development of remedies. At the same time, we need to improve our ability to assess the evidence we will receive. All competition authorities need highly skilled economics and remedies teams to understand and examine markets and business models. To address the knowledge gaps regarding the use of data, though the CMA is creating a Data and Digital Insights team to help us understand better how online markets work, the importance of data in these markets, what are the barriers to entry, what drives consumer behavior, and when the transparent nature of the Internet might increase the scope for dominance to become entrenched.
This should enhance our understanding of the digital economy and make sure our interventions and capabilities keep pace with the evolution of business models and practices. This welcoming of new evidence and the ability to assess it will of course influence a range of thinking within authorities, on markets, consumer work, mergers or even antitrust. Until then though, I will close with some arguments about why I feel it is incredibly important to hold the line and not let wooly, non-evidence based, populist influences affect antitrust law enforcement itself.
The full article is at https://www.competitionpolicyinternational.com/wp-content/uploads/2018/04/CPI-Marsden.pdf
This Start-Up Says It Wants to Fight Poverty. A Food Stamp Giant Is Blocking It
April 23, 2018. From https://www.nytimes.com/2018/04/23/technology/start-up-fight-poverty-food-stamp-giant-blocking-it.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=stream&module=stream_unit&version=latest&contentPlacement=8&pgtype=sectionfront Author Steve Lohr
Four years ago, Jimmy Chen left a lucrative perch as a product manager at Facebook to found Propel, what he calls an “anti-poverty software company.”
In 2016, the Brooklyn start-up released a smartphone app that lets food stamp recipients easily look up how much money was left in their accounts, rather than call an 800 number or keep paper receipts. Today, one million food stamp participants use Propel’s app, and the start-up has added features like links to food coupons, healthy recipes, budgeting tools and job opportunities.
But in the last few months, the Propel app has been hobbled or become unavailable in many states, sometimes for weeks. Behind the slowdown is a big government contractor, Conduent, which runs the food stamp networks in 25 states, including New York, California and Pennsylvania. In those states, where 60 percent of Propel’s users live, Conduent maintains the database that Propel’s app uses to let people check their accounts.
The Propel-Conduent conflict offers a textbook case of a digital newcomer running into resistance from the old order.
Ford to cede sedan market to foreign imports
Protectionist efforts by the US government appear not to have saved Ford's sedan automobile business. Industry rumors suggest that Chevrolet will also abandon sedans.
Ford's recent financial report is at https://media.ford.com/content/dam/fordmedia/North%20America/US/2018/04/25/1q18-financials.pdf
The report includes the following language describing its strategy:
• Building a winning portfolio and focusing on products and markets where Ford can win. For example, by 2020, almost 90 percent of the Ford portfolio in North America will be trucks, utilities and commercial vehicles. Given declining consumer demand and product profitability, the company will not invest in next generations of traditional Ford sedans for North America. Over the next few years, the Ford car portfolio in North America will transition to two vehicles – the best-selling Mustang and the all-new Focus Active crossover coming out next year. The company is also exploring new “white space” vehicle silhouettes that combine the best attributes of cars and utilities, such as higher ride height, space and versatility.
In Walmart’s home town
By Don Allen Resnikoff
Recently I visited Walmart’s home town, Bentonville, Arkamsas. It is where Sam Walton operated a small five and dime store that was the forerunner of his enormous Walmart retail chain.
The Walton legacy in Bentonville is a strong one, and there are many who will admiringly tell you the story of Sam Walton as a humble and innovative entrepreneur who succeeded because of ingenuity, hard work, and good ability to work with people.
Sam’s autobiography was on the bookshelf of the Bentonville bed and breakfast where my wife and I stayed. It reinforces the very American story of Sam Walton’s success achieved from humble beginnings.
The autobiography, written with a professional co-author shortly before Sam Walton’s death (Sam Walton:Made in America:My Story, 1992, Doubleday), includes some rebuttal of complaints about Walmart as a bad corporate citizen. Part of the defense is that Walmart disrupted the retail business in the same positive way that A&P once disupted the grocery business: It brought large scale efficiencies to a business that had been small scale and inefficient. The result benefited consumers.
The autobiography argues that Walmart did not have the advantage of artificial barriers to competition, so competitors have been free to challenge Walmart. Kmart, Sears, and others have been serious competitors, but fell by the wayside because of self-inflicted management problems.
The autobiography is written in a popular style and addressed to a largely admiring audience, so the rebuttal of complaints about Walmart is limited. Of course it does not address more recent complaints of critics like Barry Lynn, who point to the low wages paid by Walmart to employees, as well as low wages paid to employees by Walmart suppliers. Barry Lynn argues that Walmart causes an array of problems, including use of market power to degrade the quality of products provided by Walmart suppliers.
Whatever the complaints made about Walmart, the Sam Walton legacy includes transforming Bentonville from a rural backwater to a model of small town living. Many middle class people live in the Bentonville area, some of whom are either Walmart employees or employees of suppliers that work with Walmart and do business in Bentonville. In 1950 Bentonville was a shabby small town, but now its small town square is almost Disneyland perfect, surrounded by prosperous businesses and attractive residences, many in spruced-up vintage buildings. We had dinner at a restaurant on the square that offered an interesting menu at prices just a bit lower than similar upscale Washington, D.C. restaurants.
The town adjoins the Crystal Bridges development, an extensive park-like area of great beauty that contains the Crystal Bridges Art Museum. Walton largesse allows the museum admission to be free. Exhibits are beautifully curated in a manner reminiscent of the National Galleries in Washington DC, and tend to be grouped by socially relevant themes. For example, an exhibit shown in cooperation with the Tate Museum focuses on art by black artists relevant to black political issues.
The elegance of the architecture of the Bentonville town-park-museum complex sponsored by the Walton family stands out in comparison with nearby areas like Springdale, where Tyson operates its chicken plants. Springdale is close to areas of great natural beauty, but the Bentonville level of integration of town and open space and attractive visiting spots is lacking. Interestingly, because of Tyson there are substantial areas in Springdale where nearly all residents are Spanish speaking and primarily of Mexican descent. Points of interest in Springdale include the Tyson’s company store, and some great small Mexican food stands and restaurants.
Further reading: A 201l article about Crystal Bridges Museum and the Walton heir who is the museum’s moving force: https://www.newyorker.com/magazine/2011/06/27/alices-wonderland
PS: By way of full disclosure, I made several purchases at the Walmart Neighborhood Store on the main square in Bentonville. Purchases included a bottle of wine, a roasted half chicken for a picnic, and a few other items. I paid by credit card. On the last stay of my stay in Bentonville I received an email from Walmart inviting me to be an occasional paid secret shopper for the company and provide reports about store conditions. I have not accepted.
Posted by Don Allen Resnikoff
Southwest Airlines sought more time last year to inspect jet-engine fan blades like the one that snapped off during one of its flights Tuesday in an accident that left a passenger dead.
The airline opposed a recommendation by the engine manufacturer to require ultrasonic inspections of certain fan blades within 12 months. Southwest said it needed more time, and it raised concern over the number of engines it would need to inspect. Other airlines also voiced objections.
It wasn't until after Tuesday's accident that the Federal Aviation Administration announced that it will soon make the inspections mandatory. It is unclear how many planes will be affected by the FAA order. Airlines including Southwest say they have begun inspections anyway.
From http://www.omaha.com/news/nation/southwest-airlines-sought-more-time-for-engine-inspections/article_383c4093-b2c7-5b1d-ba1a-be5e90442e36.html
FCC opens process to step up offensive on Chinese companies Huawei, ZTE
18 APR 2018
The Federal Communications Commission (FCC) launched a consultation process on a proposal to block smaller operators from using government funds to purchase equipment and services from vendors deemed a national security risk.
The move, announced in a statement, comes after FCC chairman Ajit Pai confirmed in a briefing last month [ https://www.mobileworldlive.com/featured-content/home-banner/fcc-moves-to-ban-vendors-deemed-security-threats/ ] that the regulator had prepared a draft document outlining laws to restrict operators from using money in the FCC’s $8 billion Universal Service Fund (USF) to purchase equipment from vendors on a ban list.
Such a move forms part of a wider offensive instigated by the US government, stepping up regulations against Chinese vendors Huawei and ZTE. This week, the US Department of Commerce banned US companies from selling components to ZTE [ https://www.mobileworldlive.com/featured-content/top-three/us-clamps-down-on-zte/ ], while Huawei’s efforts to establish a foothold in the US have also been thwarted.
Operators accessing the USF tend to be the country’s tier two and three operators, which target rural parts of the US. The country’s big four operators (AT&T, Verizon, Sprint and T-Mobile US) are already barred from using ZTE and Huawei equipment.
Feedback
The FCC said it is now seeking comment on the proposal to prohibit the use of government funds, stating it “alone cannot safeguard our networks from these threats”.
Comments are being sought on “a number of issues”, including: how best to implement the proposal going forward; what types of equipment and services should be covered by the rule; how the FCC can identify, and USF recipients learn, which suppliers are covered by the proposed rule; and the cost and benefits of the move.
FCC commissioner Jessica Rosenworcel said in a statement that she would vote to approve the proposal as it supports Congress’ concerns “about the potential for supply chain vulnerability to undermine national security”.
She added communications networks also face “other security threats that we cannot continue to ignore”.
Credit:https://www.mobileworldlive.com/featured-content/home-banner/fcc-opens-process-to-step-up-offensive-on-huawei-zte/
A looming trade war between the United States and China has put Qualcomm, one of America’s largest technology companies, squarely in the middle of the battlefield.
A major supplier in both China and the United States, the San Diego-based chip maker has long managed to play the trading relationship between the world’s two largest economies to its advantage. But an escalating trade battle over which country will dominate the technologies of the future is now threatening Qualcomm’s business and its growth.
On Monday, Qualcomm lost the ability to export semiconductors [ https://www.nytimes.com/2018/04/16/technology/chinese-tech-company-blocked-from-buying-american-components.html ] to one of its biggest customers after the United States banned Chinese telecom equipment maker ZTE Corporation from purchasing American technology for seven years.
In China, Qualcomm’s plan to acquire NXP Semiconductors, a critical part of its growth strategy, has been stalled by a prolonged antitrust review, a move critics see as Chinese retaliation for President Trump’s aggressive trade moves.
The White House, which has already threatened tariffs on more than $150 billion in Chinese goods, is preparing new restrictions on Chinese investments in the United States and could limit American partnerships with Chinese firms abroad. Such a move could place further restraints on American companies with advanced technology, like Qualcomm, General Electric and Boeing, as they seek to form overseas partnerships. It would also likely incite more retaliation from the Chinese.
On Tuesday, the administration advanced a new rule
[ https://www.nytimes.com/2018/04/17/technology/china-huawei-washington.html ] that would limit the ability of Chinese telecommunications companies, including Huawei, one of Qualcomm’s competitors and a customer, to sell their products in America.
Credit: https://www.nytimes.com/2018/04/18/us/politics/qualcomm-us-china-trade-war.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=rank&module=package&version=highlights&contentPlacement=1&pgtype=sectionfront
Short-term dockless rental bikes may be a public nuisance, and they may also be unprofitable
See http://www.sandiegouniontribune.com/business/energy-green/sd-fi-dockless-profitable-20180415-story.html#nws=true
The San Diego Journal article shows a a picture that may be worth a thousand words. It shows a big pile of dockless bikes on a street in Beijng China, where dockless bikes have been around for a while. DR
Mirosoft forces obsolescence of Office 2007
Microsoft may not be dominant in many things as it was 20 years ago, but it is still a major force in word processing and related MS Office Suite products, and some others. That is simply because the applications are in common use. Other cheaper software offerings offer similar capabilities, like Apache Open Office, which is free. But Open Office word processing is not so convenient when colleagues are using Word.
As I recently discovered when trying to make an old laptop useful, in late 2017 Microsoft used its market position to make Office 2007 applications obsolete, or at least much less useful. No matter that Word 2007 and other applications work quite well, and that people around the world use them. Microsoft wishes you to switch to newer alternatives, which are not cheap. Following is a media piece from October 2017 describing the MS policy. DR
* * *
Microsoft is urging customers still on Outlook 2007 and Office 2007 to upgrade as each of the products ran out of extended support on Tuesday.
That means no more security updates, feature updates, support or technical notes for the products, which Microsoft has supported for the past decade.
Microsoft wants customers on Office 2007 to plan to migrate to Office 365 in the cloud or to upgrade to Office 2016.
Office 2007 introduced Microsoft's "ribbon" interface that brought a series of tabbed toolbars with each ribbon containing related buttons.
For customers that have already use Office 365 that still use Outlook 2007, it will be important to upgrade by the end of October [2017], after which the product won't allow users to access Exchange Online mailboxes though the Office 365 portal.
"Customers who use Office 365 will have noted that there is a change to the supported client connectivity methods. Outlook Anywhere is being replaced with MAPI/HTTP. Outlook 2007 does not support MAPI/HTTP, and as such will be unable to connect," Microsoft highlights in a send-off note for the email client.
Come October 31, Microsoft will drop support for the RPC over HTTP protocol, also known as Outlook Anywhere, for accessing mail data from Exchange Online. The new protocol, MAPI over HTTP, is sturdier and supports multi-factor authentication for Office 365, according to Microsoft.
Microsoft didn't backport the protocol to Outlook 2007 as it would be past its extended support date by the time it cut off Outlook Anywhere.
Microsoft has a full list of Office 2007 products and their exact cut off dates here and Outlook 2007 here.
Unlike previous years Microsoft is not offering enterprise customers extended support for Office 2007 through its custom support contracts. The same goes for its other Office products, including Exchange Server; Office Suites; SharePoint Server; Office Communications Server; Lync Server; Skype for Business Server; Project Server and Visio.
Microsoft said demand for custom support has declined with greater adoption of Office 365.
See https://www.zdnet.com/article/microsoft-just-ended-support-for-office-2007-and-outlook-2007/
FDA's Gottlieb warns drug companies: don't game the generics system
From the speech at https://www.fda.gov/NewsEvents/Speeches/ucm584195.htm:
One of the practices that concerns me the most is when branded firms “game” the system: taking advantage of certain rules, or exploiting loopholes in our system, to delay generic approval – and thereby extend a drug’s monopoly beyond what Congress intended.
I see this clearly, for example, in steps branded companies sometimes take to make it hard, or altogether impossible, for generic firms to get access to the doses of the branded drug needed in order to complete bioequivalence studies that FDA requires for a generic approval.
Consider this: FDA requires generic firms to complete certain bioequivalence and bioavailability studies as a condition of the approval of a generic drug. To do these studies, they need to purchase doses of the branded drug that they seek to copy, to prove that the generic copy performs the same way original medicine.
The generic companies are willing to go into the market and buy these branded doses at full market price. They’re not asking for a discount.
They’re just asking for the right to be able to buy the drug at its retail price, just like a pharmacy or a hospital can make these legal purchases.
But we know that branded companies sometimes adopt tactics to make it nearly impossible for the generic firms to accumulate the doses they need to run their studies. That’s a real concern of mine.
We have a system that relies on, and requires, the ability of generic firms to conduct certain studies for approval.
When drug manufacturers game the system in ways such as this, they upend the generic drug framework created by Hatch Waxman.
The effects of this gaming do not end within FDA or drug manufacturers. Medicare relies on this process working to help make sure its beneficiaries can get access to the benefits of low cost generics.
Patients depend on this system. So does innovation. I’ll say this plainly:
Our economic model, which rewards highly innovative drugs with the opportunity to hold monopolies for a limited period of time through patents and exclusivities, and to freely price their products to a measure of the value that a transformative drug offers, also depends on the generic approval process working as intended.
It depends on the ability to have vigorous competition once those patents and exclusivities have lapsed.
Our system would not have functioned so well for so long without this carefully crafted balance between access and innovation.
If innovators want the current structure to continue to work, but they actively prevent certain parts of the system from functioning as Congress intended, then at some point, they’ll find more advocacy for moving away from this incentive based model.
When the NHTSA tracked user compliance with auto safety recalls through Vehicle Identification Numbers (VIN), they found that just 61 percent of recalled vehicles get repaired.
Recall notices are typically sent out multiple times for a single recall over the course of 18 months.
“The results suggest a discrepancy between the good intentions of automobile owners and what they actually do when they receive a recall notice,” said Wayne Mitchell, Stericycle's Director of Automotive Solutions.
Traditional outreach methods may be failing when it comes to recalls. Only 46 percent of respondents stated they'd gotten between one and four auto recall notices, while 37 percent claim to have never received any.
“This is another example where communication techniques come into play,” said one commenterl. “A multichannel approach – including emails, text messages, and outbound calls – has been proven to raise repair rates, and it may be even more beneficial among millennials.”
From https://www.autocreditexpress.com/blog/new-survey-suggests-car-owners-don-t-act-on-recall-notices/
Editor's note: GM recently pointed out that State inspection systems could require inspections on cars subject to safety recalls, but that most States don't do it.
From foodtruckoperators.com: DC food truck owners object to new system for assigning prime city locations
April 13, 2018
The D.C., Maryland and Virginia Food Truck Association has sent a letter to the Department of Consumer and Regulatory Affairs in Washington, D.C., stating its opposition to a change in the way the department decides which trucks get the best spots in the city.
The new policy limits every food truck business — no matter how many trucks it operates — to one lottery entry to win the prime locations.
When some of those businesses called DCRA to find out why policy change was made, they were informed that the regulations were changed this month to prevent multitruck businesses from entering more than one truck in the lottery, according to the letter.
The association claims the policy discourages growth in the food truck segment. It also claims that the policy discriminates against one group of small businesses in favor of another group; that there are better ways for the department to address the problems it has identified; and that the manner in which the policy was implemented violates the Administrative Procedure Act.
From American Antitrust Institute
Class Action Issues Update April 2018
The American Antitrust Institute seeks to preserve the effectiveness of antitrust class actions as a central component of ensuring the vitality of private antitrust enforcement. As part of its efforts, AAI issues periodic updates on developments in the courts and elsewhere that may affect this important device for protecting competition and consumers. This update covers developments since our Fall 2017 update.
Read More [http://r20.rs6.net/tn.jsp?f=001SBHRRBBZpuze4VAFXhDTWGToZVNxfRtPrB4pRm0s0Medt3gF_B2_RPZ65esmwohl5lsWX1y4C3sH8um18xz8XlQDZU3t6SYyKlsRa8uQER1EJh-igsLO9mdUBf_4MqVtQV18uHch_UU4nN5mBqmzBsxXcqGBnRPNMmIMoPcJu4XsEuxyvI3uqOYXddIzP9Ay104ZoYkbP6vngKOeo_aGmMA4Pdem9wCU_QKuIumWEQ6ieIZ-zCtT3Q==&c=icU7QXSchHojBit5pWmgYayxIngHWmvvmeDqB_CNfDtaBAglFjPzZw==&ch=ueZhcgcTX3ii2Ygr7EPlkjzNrMCxSGCCq0r8VyrEq5aHBltJtwnjDw== ]
AAI Highlights Need to Realign Merger Remedies With the Goals of Antitrust
In a white paper released today "Realigning Merger Remedies with the Goals of Antitrust," [ http://r20.rs6.net/tn.jsp?f=001SBHRRBBZpuze4VAFXhDTWGToZVNxfRtPrB4pRm0s0Medt3gF_B2_RPZ65esmwohlSTZdBtBcPItEGaYw3O-ViC6Swe0Rp8BJd3tmBMIXc1Cb5-f58ZoCafawGvVv8QLANi4Sjrr7YIien3vw9I2a4OnpDLRvDRtyBu1oKaPlku2GXL5tuD-VI9cIEQte9DyuY0LXtxVduiD93NiBS3TmCZ6IIxJQP6xaEQkimrLx7_lTVtzbCbz5NiEbcWxzaYFWDjroRjR-_ZlKmdixqc0VQA==&c=icU7QXSchHojBit5pWmgYayxIngHWmvvmeDqB_CNfDtaBAglFjPzZw==&ch=ueZhcgcTX3ii2Ygr7EPlkjzNrMCxSGCCq0r8VyrEq5aHBltJtwnjDw== ] the American Antitrust Institute makes the case for why remedies policy may be at an important inflection point. The paper notes that we do not yet know the full extent to which rising concentration, slowing rates of startups, and widening inequality gaps are the product of the lax antitrust enforcement that has prevailed in U.S. for three decades. But as the story continues to unfold, it remains clear that merger enforcement should be high on the antitrust agenda.
Read More [ http://r20.rs6.net/tn.jsp?f=001SBHRRBBZpuze4VAFXhDTWGToZVNxfRtPrB4pRm0s0Medt3gF_B2_RPZ65esmwohlSTZdBtBcPItEGaYw3O-ViC6Swe0Rp8BJd3tmBMIXc1Cb5-f58ZoCafawGvVv8QLANi4Sjrr7YIien3vw9I2a4OnpDLRvDRtyBu1oKaPlku2GXL5tuD-VI9cIEQte9DyuY0LXtxVduiD93NiBS3TmCZ6IIxJQP6xaEQkimrLx7_lTVtzbCbz5NiEbcWxzaYFWDjroRjR-_ZlKmdixqc0VQA==&c=icU7QXSchHojBit5pWmgYayxIngHWmvvmeDqB_CNfDtaBAglFjPzZw==&ch=ueZhcgcTX3ii2Ygr7EPlkjzNrMCxSGCCq0r8VyrEq5aHBltJtwnjDw== ]
The text of Zuckerberg's Facebook mea culpa testimony to Congress is here:
https://www.politico.com/story/2018/04/09/transcript-mark-zuckerberg-testimony-to-congress-on-cambridge-analytica-509978
Towns cracking down on GPS app shortcuts; do apps risk legal liability when shortcuts cause harm?
- UPI.comhttps://www.upi.com/Towns-cracking-down-on-GPS-app.../4341517446997/
From the article:
When larger thoroughfares clog with heavy traffic, GPS apps like Waze, Google Maps and Apple Maps often will reroute drivers.
In the town of Leonia, N.J., a town with a population of just under 10,000 about a quarter-mile from the George Washington Bridge, a new ordinance went into effect there in January leveling a $200 fine against non-resident drivers who use the town as a shortcut.
"They should stay on the highway," resident Carlos Gomez told WCBS-TV in New York. "Why bother us?" Leonia Mayor Judah Zeigler said he hopes the legislation will inspire the app makers to remove the city's side streets from their rerouting algorithms.
"They will do that once this legislation takes effect," he said.
But with Google Maps, at least, those roads won't be removed from the apps so much as restrictions will be factored in.
"Municipalities and agencies responsible for managing roads and reducing traffic are free to take measures according to their individual needs (e.g. speed humps, changing speed limits, adding traffic lights)," a Google representative told UPI. "Google Maps will then strive to reflect that reality completely and accurately in our map model. And our automated routing optimization algorithm will inherently take those parameters into account in every route created in Google Maps."
Editor note: Does Google Maps and Wayz (now owned by Google) risk legal liability when the suggested shortcuts are dangerous and cause damage? See the report at https://www.cbsnews.com/news/los-angeles-baxter-street-accidents-waze-traffic/ showing accidents and damage caused by GPS induced shortcuts
From Open Markets Institute: Amazon poses many grave threats to the wellbeing of the American people
Editor's note: In the discussion and reading list that follows, OMI presents arguments that Amazon is a monopolist. The OMI discussion and many of the items on the reading list are controversial for some experienced antitrust enforcers. Some experienced antitrust enforcers feel it is painting with too broad a brush to say that the solution to Google, Facebook, and Amazon market power is a return to the politically popular antitrust enforcement spirit of an earlier day. Some enforcers take exception to antitrust approaches they see as more political than practical. They see politically oriented antitrust as ignoring antitrust enforcement principles that have won important cases in the Courts. For example, much recent antitrust enforcement has focused on concepts of "consumer welfare," with good results. My own opinion (for which I take full responsibility) is that there is room for OMI style politically oriented or popular antitrust to coexist with the more traditional sort of analysis that the USDOJ or private enforcers must use when they take cases to court. I see OMI as a force for good in the spirit of Barry Lynn, educating the public to the problems often caused by too-big companies. DR
The corporation was built to monopolize multiple markets vital to the functioning of our society and democracy. It uses its power in ways that harm the interests of workers, entrepreneurs, authors, musicians, and innovators, as well the public at large and communities from coast to coast. At Open Markets we began to shine a light on Amazon’s power a decade ago. As the following list of articles by our team and close allies details, over those years we helped Americans better understand the structure of Amazon and the nature of its power.
A steadily growing list of political leaders is speaking out against Amazon and its monopolies. This includes senators Elizabeth Warren (D-MA), Marco Rubio (S-FL), Bernie Sanders (D-VT), Cory Booker (D-NJ), and Orrin Hatch (R-UT). It also includes Representatives Keith Ellison (D-MN), Ro Khanna (D-CA) and many other members of Congress. Unfortunately, in recent years, antitrust law enforcers in the Department of Justice and the Federal Trade Commission not only ignored the pressing need to act, they sometimes used their power in ways that actually made Amazon more powerful.
During the last presidential campaign, then-candidate Donald Trump also began to target Amazon’s monopoly. He usually did so while also targeting the Washington Post, which has provided vitally important oversight of his candidacy and Administration, and which is personally owned by Amazon CEO Jeff Bezos. Until last week, the President’s comments had little practical effect. But when he began to threaten to use his power to raise the postal rates Amazon pays to deliver its packages, the corporation’s stock price fell suddenly and sharply.
At OMI we condemn the President’s targeting of specific newspapers and corporations in the strongest terms. Such comments are a threat to the rule of law. They are a threat to the freedom of the press. They have no place in the United States.
By the same reasoning, it is also vital that law enforcers and policymakers across America – at both the Federal and state levels – continue to move swiftly to address the clear and present threats posed by Amazon. To choose to ignore Amazon’s great and fast-growing threat to the American economy and the wellbeing of the American people – because Donald Trump verbally overstepped his constitutional bounds – obviously also amounts to a threat to the rule of law.
At OMI, we believe it is time for leaders in Congress to step up and fulfill their constitutional duty to provide a clear check on this Administration and thereby protect the integrity of America’s antimonopoly law enforcement regimes.
Recommended Articles for Understanding Amazon
California lawsuit says Toyota Prius cars have defects in the intelligent power modules (IPMs)
By David A. Wood
, CarComplaints.com February 5, 2018 — A Toyota Prius intelligent power module (IPM) recall and warranty extension weren't good enough for a California driver who filed a lawsuit against the automaker.
According to the lawsuit, 2010-2016 Toyota Prius cars have defects in the hybrid systems that cause the cars to stall, including while traveling at highway speeds.
The lawsuit references a 2014 Toyota warranty extension (ZE3) for about 711,000 model year 2010-2014 Prius cars nationwide. The extension involves the intelligent power module (IPM) located inside the inverter assembly and covers failure of the IPM and other internal inverter components potentially damaged by IPM failure.
This condition is indicated by diagnostic trouble codes P0A94, P324E, P3004 or P0A1A.
If any of those codes exist, Toyota says various warning lights will illuminate and the car will enter fail-safe mode, also called limp-home mode.
To qualify for the warranty extension, Prius owners must have had repairs made under a 2014 IPM recall.
Toyota recalled nearly 700,000 model year 2010-2014 Prius cars in 2014 because of the intelligent power modules (IPMs) with sensors that can become damaged by high temperatures.
As mentioned in the warranty extension, the recall described warning lights activating and the Prius going into limp-home mode. Toyota also said the hybrid system could completely shut down and cause the Prius to stall.
The recall, which began in March 2014, saw Toyota dealers update software for the motor/generator control and hybrid electronic control units. For a vehicle that had already experienced a failure of the inverter before the software update, the dealer replaced the inverter assembly.
The plaintiff says Toyota's previous actions didn't solve the IPM problems because the automaker wanted to save money on parts, and the software Toyota used allegedly did nothing but cause more problems.
According to the plaintiff, the software update affected the ability of the cars to accelerate properly. Calling the Toyota Prius recall a "sham," the plaintiff says drivers, occupants and others on the roads are at risk because the automaker took the cheap way out.
The California lawsuit also alleges replacing the IPM can cost thousands of dollars and replacing one bad module with another faulty IPM does nothing to help the car.
Included in the proposed class-action are current and former California owners and lessees of 2010-2016 Prius cars who paid their own money related to the intelligent power modules.
The Toyota Prius IPM lawsuit was filed in the Los Angeles County Superior Court of California - Jevdet Rexhepi, et al., v. Toyota Motor Sales USA Inc.
The plaintiff is represented by Beasley, Allen, Crow, Methvin, Portis, & Miles PC, Cuneo Gilbert & LaDuca LLP, DiCello Levitt & Casey, and Fazio Micheletti LLP.
CarComplaints.com has complaints submitted by owners of the Toyota Prius cars named in the IPM lawsuit.
Analysts criticize Apple Pay nag, call it ‘antitrust behavior’
Excerpt from CPI on April 3, 2018, from WSJ article [https://www.competitionpolicyinternational.com/author/nancy-2/ ]
Apple is prompting users of its iPhone to enroll in Apple Pay. Critics said the strategy may give rivals some opportunity against the tech giant. Analysts and user-interface experts are criticizing this describing it as as “antitrust behavior.”
The prompts to enroll in Apple Pay are tied to the iPhone’s most recent operating system update. Users who do not enter their credit card information for Apple Pay upon setting up their phones will see a red circle that denotes incomplete setup. Some users also get notifications that stop only after entering the data.
Roger Kay, an analyst with Endpoint Technologies Associates, compared Apple Pay setup badges and notifications to Microsoft, bundling its Internet Explorer browser with Windows in the 1990s—a strategy the Justice Department successfully sued to stop on antitrust grounds saying it hurt rivals. “They used to have actual behavioral remedies and say you can’t do this,” Mr. Kay said.
The WSJ said only 34% of iPhone users link their cards to Apple Pay upon setup, with 18% having used the function in the past 90 days.
[DAR comment: the analogy to MS bundling is interesting, but arguably a stretch.]
Walmart's press release on new MoneyGram wire transfer service
Walmart Changes the Game Again with New Global Wire ServiceWalmart2World Offers Low Flat Fees to Send Money Anywhere in the World – Fast
BENTONVILLE, Ark. – WEBWIRE – Tuesday, April 3, 2018
Four years ago, Walmart changed the money transfer game with the introduction of Walmart2Walmart – a domestic money transfer service that offered dramatically lower costs that has since saved customers nearly $700 million in fees. Now, with MoneyGram International, Walmart is bringing its game-changing model to the global wire service market, with the launch of Walmart2World.
“We think sending money should cost the same regardless of where you send it; that’s why we’ve designed a brand new global wire service to send money to 200 countries with a consistently low fee,” said Kirsty Ward, vice president, Walmart Services. “There are millions of people sending money around the world to help loved ones with everyday needs or in times of emergency. Walmart2World, Powered by Moneygram helps customers get money to family and friends across the world in minutes, and the new low fees mean more of their hard-earned cash goes where it’s needed most.”
Scheduled to launch in all of Walmart’s 4,700 U.S. stores this month, three key features differentiate Walmart2World from other global wire service offerings:
In addition to saving money, customers using Walmart2World can also save time by using Mobile Express Money Services in the Walmart App. After a quick, one-time set-up, customers initiate their transfer from the Walmart App, and once at the store, fast-track through the Mobile Express Lane to quickly complete their transaction. Receipts and transaction details are saved electronically, helping to make future transactions even faster and easier.
Trump tweet seen as boost for Sinclair deal
By MARGARET HARDING MCGILL and JOHN HENDEL | 04/02/2018 05:47 PM EDT 4/5/2018
From - POLITICO https://www.politico.com/story/2018/04/02/trump-sinclair-merger-tweet-453014 3/7
President Donald Trump's tweet in support of Sinclair Broadcast Group leaves little question his administration will approve the conservative TV empire's bid for Tribune Media, according to the company's critics. Trump came to the broadcaster's defense after a viral video showing dozens of TV anchors at Sinclair-owned stations reciting the same Trump-like script bashing the media for spreading "fake news."
While the president didn't mention Sinclair's pending $3.9 billion acquisition of Tribune, opponents of the deal say Trump's comments send a message to regulators now reviewing the transaction. “If anybody didn’t understand that the green light was on for the Sinclair deal, I think it’s crystal clear now,” said Michael Copps, a former Democratic FCC commissioner who now serves as an adviser to public interest group Common Cause.
The Justice Department and the Federal Communications Commission are reviewing Sinclair’s bid to buy Tribune's stations, which would allow the company, known for injecting must-run conservative segments into local stations' programming, to reach nearly three out of every four households in the U.S.
US Chamber of Commerce criticizes White House attack on Amazon
By CPI on April 4, 2018 -- Full Content: PYMNTS [ https://www.pymnts.com/amazon/2018/chamber-of-commerce-criticizes-u-s-government-attack-amazon-trump-tweets/ ]
After President Donald Trump’s recent Twitter rants against eCommerce giant Amazon, the US Chamber of Commerce has criticized government officials for their attacks against American companies.
“It’s inappropriate for government officials to use their position to attack an American company,” said Neil Bradley, executive vice president and chief policy officer for the Chamber of Commerce, according to Reuters. “The U.S. economy is the world’s most powerful because it embraces the free enterprise system and the rule of law, whereby policy matters are handled through recognized policymaking processes. The record is clear: Deviating from those processes undermines economic growth and job creation.”
Trump criticized Amazon via Twitter on March 29, writing, “I have stated my concerns with Amazon long before the Election. Unlike others, they pay little or no taxes to state & local governments, use our Postal System as their Delivery Boy (causing tremendous loss to the U.S.), and are putting many thousands of retailers out of business!”
He followed up those comments a few days later, tweeting, “While we are on the subject, it is reported that the U.S. Post Office will lose $1.50 on average for each package it delivers for Amazon. That amounts to Billions of Dollars.”
Trump’s comments come after an Axios report revealed that the president is apparently “obsessed” with Amazon and has wondered out loud if the government could go after the company from an antitrust or competition standpoint.
NYT: Trump's public demeaning undermines US companies
Excerpt from https://www.nytimes.com/2018/04/03/us/politics/trump-amazon.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region®ion=top-news&WT.nav=top-news
President Trump once accused Verizon of making “a STUPID deal” for AOL. He ridiculed Coca-Cola as “garbage” — but said he would keep drinking it. He called both H&R Block and Nordstrom “terrible.” He said Sony had “really stupid leadership” and described executives at S&P Global, a financial firm, as “losers.”
Before and after he became president, Mr. Trump attacked tech firms, military contractors, carmakers, cellphone companies, financial firms, drug companies, air-conditioner makers, sports leagues, Wall Street giants — and many, many media companies, which he has labeled “shameful,” “dishonest,” “true garbage,” “really dumb,” “phony,” “failing” and, broadly, “the enemy of the American people.”
Lately, Mr. Trump’s antibusiness rants have become particularly menacing and caused the stocks of some companies to plunge. His Twitter posts have carried with them the threat, sometimes explicit, that he is prepared to use the power of the presidency to undermine the companies that anger him.
The U.S. Chamber of Commerce, long a booster of Republican presidents, is not happy. “It’s inappropriate for government officials to use their position to attack an American company,” said Neil Bradley, the executive vice president and chief policy officer of the chamber. Mr. Bradley, who did not specifically name Mr. Trump, added that criticism of companies from politicians “undermines economic growth and job creation.”
Protect Democracy files amicus brief on political interference in law enforcement https://protectdemocracy.org/update/amicus-political-interference-law-enforcement/
From the Protect Democract statement:
Protect Democracy filed an amicus brief [https://www.scribd.com/document/373358295/US-vs-AT-T-BRIEF-OF-FORMER-DEPARTMENT-OF-JUSTICE-OFFICIALS-AS-AMICI-CURIAE-IN-SUPPORT-OF-NEITHER-PARTY ] in the USDOJ antitrust suit to block the AT&T/Time Warner merger. The brief was filed on behalf of a bipartisan group of former high-ranking DOJ officials, including former Nixon White House Counsel John Dean, former U.S. Attorneys Preet Bharara, Joyce Vance, and John McKay, and other former DOJ officials. Heidi Przybyla and Pete Williams at NBC reported on the brief late last night here [ https://www.nbcnews.com/politics/justice-department/top-attorneys-try-help-t-challenge-potential-trump-interference-n855036 ].
The brief is filed on behalf of neither party and takes no position on the underlying merits of the antitrust case. Rather, it explains that White House interference in law enforcement is likely unconstitutional in most circumstances. This principle applies generally, “President Trump’s claim to be able to direct federal law enforcement against specific parties is inconsistent with the Constitution.”
In the specific case of the AT&T/Time Warner merger, President Trump’s repeated attacks on CNN for perceived unfavorable coverage and his pledge, made when he was a candidate for president, to block the merger has created a perception—at least by some—that DOJ brought this case at the behest of President Trump in order to punish CNN. If so, that would amount to a constitutional violation of the highest order. The amicus brief asks the Court to allow further inquiry into the issue and, if it turns out that the president did intervene in the matter, to remedy the resulting constitutional violation.
We are also releasing a White Paper (along with an executive summary) [ https://protectdemocracy.org/independent-law-enforcement/grounded-in-the-constitution/ ]that describes the constitutional principles that prohibit political interference in law enforcement. As detailed in the white paper — and a related post on Lawfare — with the exception of certain narrow types of circumstances, it will likely conflict with the Constitution for the White House to intervene in the Justice Department’s handling of an enforcement matter involving specific parties. And if the White House intervention is based on personal or corrupted interests, such interventions will always be unconstitutional. So for example, it would be unconstitutional for the President or the White House to interfere with the Mueller investigation or to pressure the Justice Department to prosecute a political opponent.
Protect Democracy is also releasing a list of examples of White House political interference in law enforcement here.
This is part of Protect Democracy’s project to Protect Independent Law Enforcement.
President Harry Truman and limits on Presidential power to control the behavior of businesses
As people over the age of 85 may clearly recall, President Harry S Truman ordered the Secretary of Commerce on April 8, 1952, to seize and operate most of the country’s steel mills for the ostensible purpose of maintaining production of critical munitions. The Korean War required it, in the President's view.
Owners of the seized properties obtained a court injunction against the seizure, and an appeal of that injunction to the U.S. Supreme Court gave rise to one of the “great cases” in constitutional law, Youngstown Sheet & Tube Co. et al. v. Sawyer. (language drawn from Robert Higgs at http://www.independent.org/publications/article.asp?id=1394) The U.S. Supreme Court opinion is on line at https://supreme.justia.com/cases/federal/us/343/579/case.html#587
From the Youngstown opinion:
Nor can the seizure order be sustained because of the several constitutional provisions that grant executive power to the President. In the framework of our Constitution, the President's power to see that the laws are faithfully executed refutes the idea that he is to be a lawmaker. The Constitution limits his functions in the lawmaking process to the recommending of laws he thinks wise and the vetoing of laws he thinks bad. And the Constitution is neither silent nor equivocal about who shall make laws which the President is to execute. The first section of the first article says that "All legislative Powers herein granted shall be vested in a Congress of the United States. . . ." After granting many powers to the Congress, Article I goes on to provide that Congress may "make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof."
The President's order does not direct that a congressional policy be executed in a manner prescribed by Congress -- it directs that a presidential policy be executed in a manner prescribed by the President. The preamble of the order itself, like that of many statutes, sets out reasons why the President believes certain policies should be adopted, proclaims these policies as rules of conduct to be followed, and again, like a statute, authorizes a government official to promulgate additional rules and regulations consistent with the policy proclaimed and needed to carry that policy into execution. The power of Congress to adopt such public policies as those proclaimed by the order is beyond question. It can authorize the taking of private property for public use. It can make laws regulating the relationships between employers and employees, prescribing rules designed to settle labor disputes, and fixing wages and working conditions in certain fields of our economy. The Constitution does not subject this lawmaking power of Congress to presidential or military supervision or control.
It is said that other Presidents, without congressional authority, have taken possession of private business enterprises in order to settle labor disputes. But even if this be true, Congress has not thereby lost its exclusive constitutional authority to make laws necessary and proper to carry out the powers vested by the Constitution "in the Government of the United States, or any Department or Officer thereof."
The Founders of this Nation entrusted the lawmaking power to the Congress alone in both good and bad times. It would do no good to recall the historical events, the fears of power, and the hopes for freedom that lay behind their choice. Such a review would but confirm our holding that this seizure order cannot stand.
Here is part of what the Protect Democracy amicus brief in the AT&T/Times-Warner antitrust case [see prior posting] says about the Youngstowncase:
The Take Care Clause [of the Constitution] subjects the president to the rule of law. See Youngstown Sheet &Tube Co. v. Sawyer, 343 U.S. 579 (1952). In Youngstown, the Supreme Court held that the president lacked the power to effectively enact his own laws by taking over the nation’s steelmills during the Korean War. Justice Black began with the premise that “[t]he president’s power . . . must stem either from an act of Congress or from the Constitution itself.” 343 U.S. at585. Rather than taking care that the laws be faithfully executed, the president had become a law unto himself—and, as Justice Black explained, that conduct summoned up all “the fears of power and the hopes for freedom that lay behind” the decision to “entrust the law making power to theCongress alone in both good and bad times.” Id. at 589.
Justice Jackson’s famous Youngstown concurrence further bolsters the view that the Take Care Clause imposes constraints on presidential power. Justice Jackson rejected the argument that Article II’s Vesting Clause constitutes “a grant of all the executive powers of which the Government is capable.’” 343 U.S. at 640 (Jackson, J., concurring). . . . Justice Jackson further explained that any authority conferred by the Take Care Clause“ must be matched against words of the Fifth Amendment that ‘No person shall be . . . deprived of life, liberty, or property, without due process of law . . . .’ One gives a governmental authority that reaches so far as there is law, the other gives a private right that authority shall go no farther.” Id . at 646 (alterations in original). This approach envisions a president constrained by law and doubly checked by the right of private citizens to enforce the requirements of due process. These two provisions, Justice Jackson added, “signify . . . that ours is a government of laws, not of men,” and that “we submit ourselves to rulers only if under rules.” Id.
This posting is by Don Allen Resnikoff, who takes full responsibility for its content.
Hospitals fear that the potential merger between Walmart and Humana could significantly hurt their bottom lines.
Sources told The Wall Street Journal last week that Walmart, the nation's largest employer and retail giant, was in talks to purchase Humana. Walmart has dipped its toes into healthcare in the past, opening a series of primary care clinics in its stores.
A merger with Humana would accelerate the corporation's entry into the healthcare space, a prospect that's worrying to providers, according to an article from the WSJ. [ https://www.wsj.com/articles/hospitals-fear-competitive-threat-from-potential-walmart-humana-deal-1522587600 ] The deal "should be a concern to everybody in healthcare," Randy Oostra, CEO of Ohio-based health system ProMedica, told the publication.
Oostra said Walmart would likely join the retail healthcare options that are pulling patients away from outpatient care provided by traditional hospitals—which often helps cover the cost of more expensive inpatient services.
"What worries us is death by a thousand cuts," Oostra said. "Another deal and another deal."
The mega-merger between CVS and Aetna rang similar alarm bells for providers. If the deal goes through, CVS intends to expand its MinuteClinics to become a one-stop shop for patient needs including primary care, pharmacy services and vision care.
Hospitals haven't lowered costs enough to meet the prices offered by these retail clinics, which can make them a less attractive option for patients.
Retail healthcare is also a major threat to primary care providers, leading some PCPs to open their own walk-in clinics to stay competitive.
Another wrinkle in the potential Walmart-Humana deal that could worry providers is how Walmart currently operates its employee benefits, according to the WSJ. It has increasingly formed direct contacts with specific hospitals.
This practice, combined with Humana's infrastructure, could lead the combined entity to build employer health plans with narrow networks that leave many hospitals out in the cold. Geisinger Health System, for example, currently contracts with Walmart and is paid notably lower rates—but it attracts potential patients it might not otherwise, according to the article.
The CVS-Aetna merger and a similar deal planned between Cigna and Express Scripts have faced criticism
that they would be anticompetitive, and both are under scrutiny from lawmakers and the Department of Justice.
From: https://www.fiercehealthcare.com/hospitals-health-systems/walmart-humana-merger-hospital-finances-retail-healthcare-outpatient-care?mkt_tok=eyJpIjoiWkdVd1pHUmtZamd3WXpRMyIsInQiOiIxS2ZqSFNjXC9TNUlSRDc2Y01KZlRtTllmaTRPbGtjeFZ5Q1oyakNlRXRWMjYzVE1GcFdRS0tGYWxyMmdRSUVneE80Z1BuMVQ3b3I0d1RYVjlcL3RVK0d5cWd0TXJaeFVUMlwvTGNXUk9cL2lNUG9PNG9qM0Ywc3V4UHhIT0tGMVR5MDUifQ%3D%3D&mrkid=730008
Reporting from the NYT on the aftermath of the 2010 merger of Live Nation-Ticketmaster merger
The report highlights the limitations of behavioral remedies in vertical mergers.
https://www.nytimes.com/2018/04/01/arts/music/live-nation-ticketmaster.html
The Royal Opera House Gets Sued By Its Own Viola Player — for Hearing Damage
No, this isn’t an early April joke, but the editorial comment that the case is frivolous is owned by DMN, the source of the article. We don't offer an editorial comment, although your editor plays in amateur orchestras and has used ear stopples, particularly when sitting just behind the French horns. DR
Viola player Chris Goldscheider has successfully sued the Royal Opera House (ROH) in a case that takes frivolity to new heights. Goldscheider accused the venue of being liable for the hearing damage he sustained during a rehearsal six years ago.
Goldscheider cited the responsibility of ROH under UK Noise Regulations. He claimed to have suffered from “acoustic shock” while rehearsing Wagner’s ‘Die Walkure’ in 2012. This after sound levels of the performance reached 130 decibels.
Read the rest here.
When is regulation appropriate? Deaths linked to a common paint stripper chemical go back decades ...https://www.ecowatch.com/methylene-chloride-epa-health-risks-2553228197.html
Excerpt:
By Jamie Smith Hopkins
It might be surprising to learn that simply removing paint could be fatal, but the key ingredient in many paint-stripping products has felled dozens of people engaged in this run-of-the-mill task. In the waning days of the Obama administration, the U.S. Environmental Protection Agency (EPA) proposed to largely ban paint strippers containing the chemical methylene chloride so they would no longer sit on store shelves, widely available for anyone to buy.
What's happened since should be no shock to close observers of the Trump administration's pattern of regulatory rollbacks. The EPA, after hearing from both Americans in support of a ban and companies opposed to it, pushed back its timeline for finishing the rule to an unspecified date, saying it needed more time to weigh the issue.
Federal Judge pressures local Orange County CA officials to provide for homeless people
An agreement brokered by a federal judge to provide motel rooms to the 400 homeless people estimated to still be living next to the Santa Ana River received its final approval with unanimous votes from the county Board of Supervisors to ratify and implement the agreement. [The Court filing is at http://bit.ly/2EGLZDV ]
The agreement was the result of two straight days of morning-to-night pressure from U.S. District Judge David O. Carter for the county and attorneys for homeless people to quickly find a solution, after years of slow action in dealing with the growing number of homeless living along the riverbed.
Carter acted in response to a lawsuit challenging the county’s evictions of homeless people from the riverbed. He temporarily halted the evictions, and told the county he would allow them to clear the riverbed starting Tuesday morning – but only if they worked with the homeless people’s attorneys to find shelter for the people living there.
Under the agreement, the county will provide motel rooms for at least 30 days to those now living along the riverbed. People at the riverbed will have a choice of moving to a motel, leaving the riverbed, or facing arrest if they stay after the 9 a.m. Tuesday deadline.
Additionally, as part of the court-brokered deal, the county is working to add separate shelter for 300 to 400 people by erecting tents or other structures on county land and adding beds at existing shelters. The new space potentially could house people after their 30 days in motels
See https://voiceofoc.org/2018/02/plan-to-move-riverbed-homeless-to-motels-approved-by-oc-supervisors/
* * *
Subsequent articles note strong opposition to resettlement of the Orange County homeless people from local residents
See: https://www.wsj.com/articles/orange-county-was-set-to-house-the-homeless-and-there-was-a-popular-revolt-1522324800
How not to do antitrust policy:
Amazon shares fall after report Trump wants to curb its power
According to Reuters, Amazon.com Inc (AMZN.O) shares fell almost 5 percent on Wednesday, wiping more than $30 billion off its market value, after news website Axios reported that U.S. President Donald Trump is obsessed with the world’s largest online retailer and wants to rein in its growing power.
On Easter Sunday Trump tweeted hostile views about Jeff Bezos and Amazon.
The issue of Trump's personal intervention on antitrust or regulatory issues came up recently concerning AT&T/Time Warner:
As NBC News reported [ see https://www.nbcnews.com/politics/justice-department/top-attorneys-try-help-t-challenge-potential-trump-interference-n855036], Trump’s outspoken criticism of CNN and its coverage of his campaign and White House sparked concerns about potential White House influence on the AT&T/Time Warner deal. During a 2016 campaign rally, Trump said any AT&T-Time Warner deal is “a deal we will not approve in my administration.”
The DOJ says it brought the case through its antitrust division because it believes the deal will harm consumers and that it has nothing to do with the president’s personal griping about CNN.
A group of former USDOJ officials recently wrote that “President Trump’s claim to be able to direct federal law enforcement against specific parties is inconsistent with the Constitution.”
Late last month, a federal judge denied AT&T’s request for communications between the White House and the DOJ to determine if there was any inappropriate influence. The the former USDOJ attorneys quoted above insist the judge got it wrong, and have submitted a brief they hope will inform the AT&T/Time Warner trial.
This posting is by Don Allen Resnikoff, who takes full responsibility for its content.
Maurice Stucke says a few big tech companies holding our data is bad, and antitrust enforcement is the remedy:
Here Are All the Reasons It’s a Bad Idea to Let a Few Tech Companies Monopolize Our Data
MARCH 27, 2018
“It’s no good fighting an election campaign on the facts,” Cambridge Analytica’s managing director told an undercover reporter, “because actually it’s all about emotion.” To target U.S. voters and appeal to their hopes, neuroses, and fears, the political consulting firm needed to train its algorithm to predict and map personality traits. That required lots of personal data. So, to build these psychographic profiles, Cambridge Analytica enlisted a Cambridge University professor, whose app collected data on about 50 million Facebook users and their friends. Facebook, at that time, allowed app developers to collect this personal data. Facebook argued that Cambridge Analytica and the professor violated its data polices. But this was not the first time its policies were violated. Nor is it likely to be the last.
This scandal came on the heels of Russia’s using Facebook, Google, and Twitter “to sow discord in the U.S. political system, including the 2016 U.S. presidential election.” It heightened concerns over today’s tech giants and the influence they have.
That influence comes in part from data. Facebook, Google, Amazon, and similar companies are “data-opolies.” By that I mean companies that control a key platform which, like a coral reef, attracts to its ecosystem users, sellers, advertisers, software developers, apps, and accessory makers. Apple and Google, for example, each control a popular mobile phone operating system platform (and key apps on that platform), Amazon controls the largest online merchant platform, and Facebook controls the largest social network platform. Through their leading platforms, a significant volume and variety of personal data flows. The velocity in acquiring and exploiting this personal data can help these companies obtain significant market power.
Is it OK for a few firms to possess so much data and thereby wield so much power? In the U.S., at least, antitrust officials so far seem ambivalent about these data-opolies. They’re free, the thinking goes, so what’s the harm? But that reasoning is misguided. Data-opolies pose tremendous risks, for consumers, workers, competition, and the overall health of our democracy. Here’s why.
Why U.S. Antitrust Isn’t Worried About Data-opoliesThe European competition authorities have recently brought actions against four data-opolies: Google, Apple, Facebook, and Amazon (or GAFA for short). The European Commission, for example, fined Google a record €2.42 billion for leveraging its monopoly in search to advance its comparative shopping service. The Commission also preliminarily found Google to have abused its dominant position with both its Android mobile operating system and with AdSense. Facebook, Germany’s competition agency preliminarily found, abused its dominant position “by making the use of its social network conditional on its being allowed to limitlessly amass every kind of data generated by using third-party websites and merge it with the user’s Facebook account.”
We will likely see more fines and other remedies in the next few years from the Europeans. But in the U.S., the data-opolies have largely escaped antitrust scrutiny, under both the Obama and Bush administrations. Notably, while the European Commission found Google’s search bias to be anticompetitive, the U.S. Federal Trade Commission did not. From 2000 onward, the Department of Justice brought only one monopolization case in total, against anyone. (In contrast, the DOJ, between 1970 and 1972, brought 39 civil and 3 criminal cases against monopolies and oligopolies.)
The current head of the DOJ’s Antitrust Division recognized the enforcement gap between the U.S. and Europe. He noted his agency’s “particular concerns in digital markets.” But absent “demonstrable harm to competition and consumers,” the DOJ is “reluctant to impose special duties on digital platforms, out of [its] concern that special duties might stifle the very innovation that has created dynamic competition for the benefit of consumers.”
So, the divergence in antitrust enforcement may reflect differences over these data-opolies’ perceived harms.
Full article: https://hbr.org/2018/03/here-are-all-the-reasons-its-a-bad-idea-to-let-a-few-tech-companies-monopolize-our-data
States face challenge in curbing premiums after stabilization package fails
By Susannah Luthi | March 23, 2018
This week, Congress left states holding the baton in a lonely sprint to curb 2019 Obamacare premiums, with just a couple of months to get creative with legislation, waiver requests, and regulations before insurers file their rate requests.
After opposing Republican efforts to expand federal abortion funding prohibitions to Affordable Care Act cost-sharing reduction payments and other measures, Senate Democrats opposed the GOP-led stabilization package with its funding for CSRs and a $30 billion reinsurance pool. Without Democratic support, the measure was dropped this week from the $1.3 trillion omnibus spending bill, the last must-pass legislation of the year. To insurers' dismay, it isn't likely to come back.
Although their time and options are limited, state officials and policy analysts agree the best immediate opportunity to stem 2019 rate hikes lies in states seeking ACA Section 1332 waivers to set up reinsurance funds. Otherwise, premiums for ACA-compliant individual-market plans are expected to rise by about 30%.
But for the states, the challenge lies in the details as they race against the calendar. Carriers will begin filing their proposed rates as soon as May, and most state legislatures that remain in session have to wrap up their legislative business in April. The 1332 waiver required for a reinsurance fund must be approved by state legislatures.
Excerpt from http://www.modernhealthcare.com/article/20180323/NEWS/180329946?utm_source=modernhealthcare&utm_medium=email&utm_content=20180323-NEWS-180329946&utm_campaign=am
Tim Wu discusses Facebook as a regulatory recidivist
VC Roger McNamee says:
"Google, Facebook, Amazon are increasingly just super-monopolies, especially Google and Facebook. The share of the markets they operate in is literally on the same scale that Standard Oil had ... more than 100 years ago — with the big differences that their reach is now global, not just within a single country," he said on "Squawk Alley." https://www.cnbc.com/squawk-alley/
The New York Times editorial writers say:
"We must demand that legislators and regulators get tougher. They should go after Facebook on antitrust grounds. Facebook is by far the dominant social platform in the United States, with 68 percent of American adults using it, according to the Pew Research Center. That means Facebook can gobble up potential competitors, as it already has with Instagram, and crowd out upstarts in fields such as artificial intelligence and virtual reality. The Department of Justice should consider severing WhatsApp, Instagram and Messenger from Facebook, much as it broke up AT&T in 1982. That breakup unleashed creativity, improved phone service and lowered prices. It also limited the political power of AT&T." https://www.nytimes.com/2018/03/24/opinion/sunday/delete-facebook-does-not-fix-problem.html?action=click
Comments like these upset some experienced antitrust enforcers. The upset is caused by broad-brush suggestions that the solution to the size and behavior of Google, Facebook, and Amazon is a return to the antitrust enforcement spirit of the Teddy Roosevelt era. To some enforcers such broad-brush comments look more poliical than practical. The commenters ignore antitrust enforcement principles that have won important cases in the Courts. For example, much recent antitrust enforcement has focused on concepts of "consumer welfare," with good results.
It may be that there is no one-size-fits-all solution to problems that may be caused by the Google, Facebook, and Amazon giants. It may be that what is needed from law enforcers is the approach of a scientist studying the characteristics of a previously unknown creature. As a 20th century poet once pointed out, the right way to start a study of the biology of a previously unknown species of animal is to carefully study a specimen of the animal. The wrong way is to believe, like the medieval scholar Pliny, that general principles of animalism will lead to useful conclusions. (Pliny reasoned that since there were animals in Africa with two horns, and others with none, therefore there must also be one-horned Unicorns.)
Tim Wu seems to be in the school of studying particular industry specimens before suggesting regulatory solutions, if some of his comments about Facebook are an indicator.
Here is what he wrote about Facebook in 2015 in the New Yorker ( https://www.newyorker.com/business/currency/facebook-should-pay-all-of-us ):
Businesses we are paying with attention or data are conflicted. We are their customers, but we are also their products, ultimately resold to others. We are unlikely to stop loving free stuff. But we always pay in the end—and it is worth asking how.
When Tim Wu appeared on the PBS News Hour a few days ago, he said that the FTC has imposed a tailored regulatory solution on Facebook addressing privacy issues some years ago, and that the problem was in lack of Facebook compliance. He suggested that the relevance of Facebook's great size and scope of operations is simply that lack of compliance -- recidivism --- carries a high cost for the public.
See more of Wu's comments at https://www.pbs.org/.../mark-zuckerberg-promises-change-but-facebook-has- failed-to-follow-through-in-the-past
With regard to Tim Wu's point that Facebook is a recidivist in failing to comply with the 2011 FTC order, the following article provides a number of source documents concerning the FTC order:
https://epic.org/privacy/ftc/facebook/
This posting is by Don Allen Resnikoff, who takes full responsibility for its content
Increased privacy requirements looming for Facebook?
In interviews, Mr. Zuckerberg and Sheryl Sandberg, Facebook’s chief operating officer, seemed to accept the possibility of increased privacy regulation. See video at https://www.cnn.com/videos/cnnmoney/2018/03/22/zuckerberg-facebook-data-regulation-ac-sot.cnn
Zuckerberg: " I'm not sure we shouldn't be regulated . . . . The question is, what is the right regulation?"
It is not clear that Zuckerberg or Sandberg will like the regulation to come in the EU.In May, the European Union is instituting a comprehensive new privacy law, called the General Data Protection Regulation. The new rules treat personal data as proprietary, owned by an individual, and any use of that data must be accompanied by permission — opting in rather than opting out — after receiving a request written in clear language, not legalese. See https://www.eugdpr.org/key-changes.html A brief excerpt follows:
The aim of the GDPR is to protect all EU citizens from privacy and data breaches in an increasingly data-driven world that is vastly different from the time in which the 1995 directive was established. Although the key principles of data privacy still hold true to the previous directive, many changes have been proposed to the regulatory policies; the key points of the GDPR as well as information on the impacts it will have on business can be found below.
***
Consent
The conditions for consent have been strengthened, and companies will no longer be able to use long illegible terms and conditions full of legalese, as the request for consent must be given in an intelligible and easily accessible form, with the purpose for data processing attached to that consent. Consent must be clear and distinguishable from other matters and provided in an intelligible and easily accessible form, using clear and plain language. It must be as easy to withdraw consent as it is to give it.
Does the internet fringe teach some people that Jews control the weather?
A few days ago the Washington Post reported on a A D.C. lawmaker who responded to a brief snowfall by publishing a video in which he espoused a conspiracy theory that Jewish financiers control the climate. See https://www.washingtonpost.com/local/dc-politics/dc-lawmaker-says-recent-snowfall-caused-byrothschilds-controlling-the-climate/2018/03/18/daeb0eae-2ae0-11e8-911f-ca7f68bff0fc_story.html
The Post article on this bizarre incident (most politicians would be more politic) points out that the internet can infect people's thinking with weird conspiracy theories.
An article in the Examiner put it this way:
It is unclear what White, currently the youngest representative on the 13-member D.C. Council, meant by "climate control," or where he picked up this narrative. But as the Washington Post, which was the first to report the video, points out, fringe Internet users have falsely linked the Rothschilds to weather changes.
Established by another dynastic family, the Rockefeller Foundation runs an initiative called 100 Resilient Cities to help cities adapt to major challenges. Conspiracies have also centered around the Rockefellers.
White has reportedly mused aloud about supposed connections between the Rothschilds and climate change before. At a February working breakfast between the D.C. Council and Mayor Muriel Bowser, he asked the Bowser administration about links between the Rothschilds, the Rockefellers, the World Bank, and D.C.'s recently created Office of Resilience, according to a District official who was present.
Weird and offensive conspiracy theories preceded the internet, but it seems that fringe internet users help spread them around.
This posting is by Don Allen Resnikoff, who takes full responsibility for its content
Regulatory controversy over what makes a chicken egg organic
The U.S. Department of Agriculture finalized a plan under the Obama administration that required chickens laying organic eggs to have access to soil, not just porch enclosures attached to hen houses. But before the rule could be implemented under the Trump administration it was reversed, raising regulatory controversy, and litigation, over the legal meaning of "organic."
https://www.pbs.org/newshour/show/what-makes-eggs-organic-it-depends-on-who-you-ask
Mass. AG Healey announces investigation into Cambridge Analytica, the data
firm used by Trump campaign
- From The Boston Globe
https://www.bostonglobe.com/metro/2018/03/17/maura-healey-announces-investigation-into-data-firm-used-trump-campaign/Njq4PGzF1IQC3ahtVCW… 1/2
By Eric Moskowitz
Responding to reports that a data firm employed by the Trump presidential campaign improperly harvested information on 50 million Facebook users, Massachusetts Attorney General Maura Healey on Saturday launched a state investigation into the matter.
Citing a New York Times investigation into Cambridge Analytica — a British data-analysis outfit funded by New York billionaire Robert Mercer, a major underwriter of right-wing candidates and campaigns — Healey retweeted the story and announced the investigation Saturday afternoon.
“Massachusetts residents deserve answers immediately from Facebook and Cambridge Analytica,” Healey wrote on Twitter, leading it with the “#BREAKING” hashtag. “We are launching an investigation.”
The attorney general’s office confirmed by e-mail Saturday evening that they were opening acivil investigation and had been in touch with Facebook already to inform the social-media giant.
State investigators intend to learn more about what happened, when it happened, and whether Massachusetts residents were affected, Healey spokeswoman Emily Snyder said in the e-mail. The attorney general’s office will examine whether the reported breach violated Facebook policies while evaluating possible legal implications as well, she said.
Should CFIUS (Committee on Foreign Investment in the United States) be reformed?
The U.S. Government's Committee on Foreign Investment in the United State (CFIUS) reviews acquisitions, mergers and other foreign investments in the United States for national security risks. It recently and famously squelched the idea of a Qualcomm/Broadcom merger. It has taken similarly aggressive actions in the past. Reasons include protecting American technology companies like Qualcomm from aggressive competition from Chinese companies like Huawei.
There is a reason for CFIUS. Press reports indicate that the Chinese government keeps a tight reign on its companies. In February, the Chinese government seized Anbang Insurance, the owner of New York's Waldorf Astoria and other properties around the world. Chinese oil company CEFC is reportedly being constrained by the Chinese government because of its borrowing for foreign investments. The reasons for Chinese government constraints are not the point. The point is that Chinese companies appear to be subject to tight control by the Chinese Government.
CFIUS proceedings tend to be quick and lacking in transparency. The CFIUS process does not involve court review.
CFIUS market analysis can be superficial, as suggested by a recent Treasury letter to Qualcomm. The letter focuses on Qualcomm's role as a national champion and resource for the U.S. Government. The letter explains that “Qualcomm is a global leader in the development and commercialization of foundational technologies and products used in mobile devices and other wireless products. . . .” Further, that experience has “positioned Qualcomm as the current leading company in 5G technology development and standard setting.” The letter says that any diminishing of that role is a potential opening for China and, specifically, Huawei Technologies Co., a Chinese telecommunications-equipment maker that is also a big force in 5G. (The Wall Street Journal points out that Chinese companies, including Huawei, have increased their engagement in 5G standardization working groups as part of their efforts to build out a 5G technology, and that Huawei and Samsung are the main companies with 5G cell phone offerings.)
One reform suggested by Bert Foer in a paper he will present to a Waseda University conference in Japan is that CFIUS should allow USDOJ to complete its antitrust review before stepping in to consider national security issues. If, for example, USDOJ had been allowed to complete its review and blocked the merger of Qualcomm and Broadcom -- which seems quite possible--then CFIUS would need to take no further action. If USDOJ approved a merger, CFIUS could step in and have the benefit of a thorough antitrust oriented investigation and a factual record that could be relatively transparent. In Bert Foer's words:
Other countries have their own methods for bringing national security concerns into what would otherwise be antitrust investigations, assuring that, for better or worse, more than traditional microeconomic effects will be taken into account. The lack of transparency in these national security contexts can open the door for unfortunate decisions. One might suggest that it would be better policy to have the antitrust authority carry out a normal investigation and only utilize CFIUS if the authority has concluded there is no antitrust reason to stop it.
There is an underlying question about the relationship between CFIUS protectionist policies said to advance national security interests and usual considerations of competition policy, including antitrust. One view is that policies of national security and encouragement of domestic industry are very different from and entirely trump and preclude usual competition and antitrust policy concerns. A reason for that view is that competition policy may prefer international competition when national security concerns suggest protecting U.S. companies.
I prefer the view that competition policy is a relevant and useful complement to national security policy, and that antitrust expertise could be usefully brought to bear, as Bert Foer suggests, by having the USDOJ carry out the usual antitrust review before CFIUS steps in.
This posting is by Don Allen Resnikoff, who takes full responsibility for its content.
Competition policy concerns and the US move to a protectionist industrial policy for American tech companies like Qualcomm
Currently developing U.S. government policy linked to national security seeks to protect established American technology companies like Qualcomm from aggressive competition from Chinese companies like Huawei. For example, U.S. officials reportedly pressed AT&T not to distribute Huawei 5G cell phones, and AT&T complied. Huawei and and Samsung are identified by the Wall Street Journal as the principal
companies developing 5G technology for cell phones.
The Committee on Foreign Investment in the United State (CFIUS) reviews acquisitions, mergers and other foreign investments in the United States for national security risks. It recently and famously squelched the idea of a Qualcomm/Broadcom merger, and has taken similarly aggressive actions in the past. Reasons include protecting American technology companies like Qualcomm from aggressive competition from Chinese companies like Huawei.
Proposed legislation with bi-partisan support proposes expanding the jurisdiction of CFIUS. The legislation would give CFIUS jurisdiction over non-passive, minority position investments by a foreign person; also over joint ventures involving technology transfers in a foreign entity.
The CFIUS process does not involve court review. It does involve evaluation of competition in markets, as addressed in a recent Treasury letter to Qualcomm. As pointed out in a Wall Street Journal article, the letter says that “Qualcomm is a global leader in the development and commercialization of foundational technologies and products used in mobile devices and other wireless products, including network equipment, broadband gateway equipment, and consumer electronic devices.” Also, that experience has “positioned Qualcomm as the current leading company in 5G technology development and standard setting.” The letter says further that iQualcomm’s leadership role in the development of leading edge 5G technology is good for national security: “Qualcomm has become well-known to, and trusted by, the U.S. government. Having a well-known and trusted company hold the dominant role that Qualcomm does in the U.S. telecommunications infrastructure provides significant confidence in the integrity of such infrastructure as it relates to national security.” The letter says that any diminishing of that role is a potential opening for China and, specifically, Huawei Technologies Co., a Chinese telecommunications-equipment maker that is also a big force in 5G. The Wall Street Journal points out that Chinese companies, including Huawei, have increased their engagement in 5G standardization working groups as part of their efforts to build out a 5G technology.
A point that has gotten little public comment is the relationship between protectionist policies said to advance national security interests and usual considerations of competition policy, including antitrust. National security and encouragement of domestic industry may be seen as trumping competition and antitrust policy interests, but it does not follow that competition policy is irrelevant or that application of antitrust expertise would not be useful.
There is some analogy to U.S government policy toward banks following the 2008 financial markets. Banks were pressured by the government to merge, and thereafter were regulated with scant attention to competition policy or antitrust expertise. It may be reasonably argued that even in a financial crisis competition policy considerations and antitrust expertise should have been brought to bear. Similarly, today's strong concerns about national security and protection of domestic industry should not foreclose consideration of competition policy considerations and antitrust expertise.
Generally, competition policy concerns will push for encouraging healthy international competition, and encouraging domestic industry through R & D and other support, rather than attempting to discourage rivals.
****
Following is a Treasury letter that presaged the U.S. Government decision to block the Qualcomm/Broadcom merger, and describes the relevant competition between U.S. and Chinese companies:
https://www.qcomvalue.com/wp-content/uploads/2018/03/Letter-from-Treasury-Department-to-Broadcom-and-Qualcomm-regarding-CFIUS.pdf
Following is part of a discussion from the Reed-Smith law form web site of proposed legislation to expand U.S. government review of foreign financial invests in the interests of national security:
Proposed Legislation Would Expand CFIUS Jurisdiction Over Foreign Investment
Authors: Michael J. Lowell Jill Ottenberg Paula A. Salamoun
On November 8, 2017, a bipartisan bill was proposed in the Senate to “modernize and strengthen the process by which the Committee on Foreign Investment in the United State (CFIUS) reviews acquisitions, mergers and other foreign investments in the United States for national security risks.”1 Co-sponsored by Senators John Cornyn (R-TX), Dianne Feinstein (D-CA) and Richard Burr (R-NC), the Foreign Investment Risk Review Modernization Act (FIRRMA) is intended to “provide CFIUS with updated tools to address present and future security needs . . . [and] strengthen CFIUS by expanding its jurisdiction and moderniz[ing] its processes.” The legislative proposal follows a Senate hearing held in September before the Banking, Housing and Urban Affairs Committee, which sought to examine the CFIUS process and scope.
FIRRMA has been proposed as a means to address the “gaps in the current process [that] have allowed foreign adversaries to weaponize their investment in U.S. companies and transfer sensitive dual-use U.S. technologies, many of which have potential military applications.” FIRRMA comes at a time when there has been growing concern amongst Congress, the intelligence community, as well as the Trump administration, that the CFIUS process is outdated and in need of reform. Similar to Senator Cornyn’s concern, Secretary of Defense Jim Mattis has called the CFIUS process “outdated and overburdened”. The reform proposed by FIRRMA would serve to significantly alter the CFIUS process in a number of meaningful ways.
Background
CFIUS is an interagency organization that reviews inbound foreign investments for national security concerns, and advises the President on appropriate actions that may be necessary to suspend or prohibit foreign acquisitions, mergers, or takeovers which threaten to impair the national security of the United States. CFIUS has the authority to review all “covered transactions” for potential national security concerns. “Covered transaction” is a term of art defined by statute, and applies to any transaction that will result in “foreign control” of a U.S. business. A transaction will be found to result in foreign control of a U.S. business if the transaction will result in a foreign person or business having “power, direct or indirect, through the ownership of a majority or a dominant minority of the total outstanding voting interest in an entity, board representation, proxy voting, a special share, contractual arrangements, formal or informal arrangements to act in concert, or other means, to determine, direct, or decide important matters affecting an entity . . .” Under the current statutory construction governing CFIUS, a foreign person does not control an entity if it holds 10% or less of the voting interest in the entity and it holds that interest solely for the purpose of a passive investment.6 While the statute covering CFIUS does not define what constitutes a “national security concern,” it does include a list of factors that would contribute to a finding that a covered transaction has national security implications. These factors include, but are not limited to, whether the transaction will affect: national defense requirements; U.S. technological leadership in areas affecting national security; or U.S. critical technologies and infrastructure.
Under the current CFIUS process, parties to a covered transaction make a voluntary filing to begin CFIUS review of the transaction. CFIUS may also compel filings if it is determined that the transaction may pose a risk to national security. Following the filing of the initial notice, CFIUS will conduct an initial 30-day review, followed by an additional 45-day investigation period if it is determined that such an investigation is warranted. After the 45-day investigation, CFIUS may refer the transaction for a 15-day presidential review. The President makes the ultimate determination of whether to suspend or prohibit the transaction from proceeding. Even if CFIUS does not refer the transaction for presidential review, if it is determined that the transaction presents national security risks, CFIUS may impose mitigation measures as a condition of clearance.
FIRRMA Modifications to the CFIUS Process
If passed, FIRRMA will expand the scope of transactions that CFIUS has the authority to review, as well as alter the nature of the review process itself.
Expanding CFIUS’s Jurisdiction
FIRRMA would expand the definition of “covered transactions” to include a broader range of transactions that would be subject to CFIUS jurisdiction. Under FIRRMA, “covered transactions” would include:
FIRRMA would also expand the definition of “critical technology” to include “[o]ther emerging technologies that could be essential for maintaining or increasing the technological advantage of the United States over countries of special concern with respect to national defense, intelligence, or other areas of national security, or gaining such an advantage over such countries in areas where such an advantage may not currently exist.”
This posting is by Don Allen Resnikoff, who takes full responsibility for its content
J
Six top US intelligence chiefs caution against buying Huawei and other Chinese phones
Sara Salinas | @saracsalinas
Published 12:22 PM ET Tue, 13 Feb 2018 Updated 11:03 AM ET Thu, 15 Feb 2018CNBC.com
Six top U.S. intelligence chiefs told the Senate Intelligence Committee in February that they would not advise Americans to use products or services from Chinese smartphone maker Huawei.
The six — including the heads of the CIA, FBI, NSA and the director of national intelligence — first expressed their distrust of Apple-rival Huawei and fellow Chinese telecom company ZTE in reference to public servants and state agencies.
When prompted during the hearing, all six indicated they would not recommend private citizens use products from the Chinese companies.
"We're deeply concerned about the risks of allowing any company or entity that is beholden to foreign governments that don't share our values to gain positions of power inside our telecommunications networks," FBI Director Chris Wray testified.
"That provides the capacity to exert pressure or control over our telecommunications infrastructure," Wray said. "It provides the capacity to maliciously modify or steal information. And it provides the capacity to conduct undetected espionage."
In a response, Huawei said that it "poses no greater cybersecurity risk than any ICT vendor."
A spokesman said in a statement: "Huawei is aware of a range of U.S. government activities seemingly aimed at inhibiting Huawei's business in the U.S. market. Huawei is trusted by governments and customers in 170 countries worldwide and poses no greater cybersecurity risk than any ICT vendor, sharing as we do common global supply chains and production capabilities."
Huawei has been trying to enter the U.S. market, first through a partnership with AT&T that was ultimately called off. At the time, Huawei said its products would still launch on American markets.
Last month, Huawei CEO Richard Yu raged against American carriers, accusing them of depriving customers of choice. Reports said U.S. lawmakers urged AT&T to pull out of the deal.
ZTE said in a statement it "takes cybersecurity and privacy seriously" and that it remains a "trusted partner" to US suppliers and customers.
"As a publicly traded company, we are committed to adhering to all applicable laws and regulations of the United States, work with carriers to pass strict testing protocols, and adhere to the highest business standards," a ZTE spokesperson said.
At the hearing, the intelligence chiefs commended American telecom companies for their measured resistance to the Chinese companies.
"This is a challenge I think that is only going to increase, not lessen over time for us," said Adm. Michael Rogers, the NSA's director. "You need to look long and hard at companies like this."
https://www.cnbc.com/2018/02/13/chinas-hauwei-top-us-intelligence-chiefs-caution-americans-away.html
Another view: The WSJ editorializes, suggesting that the real reason for US government opposition to Huwei's 5G technology is fear that Huwei's technology advances will swamp less innovative US companies
3/9/2018 Why Washington Is So Obsessed With China’s Huawei - WSJ
Excerpts from WSJ article:
The world’s top cellular-equipment maker and a leading smartphone brand, Huawei in the past
three months has been the subject of a series of interventions, or attempted interventions, by
the Trump administration and Congress across the telecommunications industry.
***
5G is the next-generation mobile-network technology that the industry is preparing to roll out
around the world. American officials and some Western telecom companies worry that if China
gains widespread 5G before the U.S. does, it could have a head start in technologies that the new
networks’ speed and capacity are expected to kick-start, like self-driving cars.
Some Washington policy makers and industry executives have suggested a deeper worry that,
with Huawei’s help, China could displace Silicon Valley as the world’s innovation center and
lure top engineers there. Another concern: If Huawei extends its lead in the telecom-equipment
industry, these officials believe, American wireless carriers might have no choice but to use
Huawei gear in the future.
***
The extent to which the U.S. government shares that fear was laid bare in unusual clarity in the
CFIUS letter. The committee said it would probe whether a Broadcom-Qualcomm tie-up would
“leave an opening for China to expand its influence on the 5G standard setting process.” It cited
specifically Huawei’s 5G “engagement.”
***
Concern over Huawei isn’t new. Congress effectively barred major carriers from using the
company, after a 2012 report concluded Beijing could force Huawei to use knowledge of how its
own equipment is designed to spy or disable telecom networks.
***
Late last year, congressional pressure mounted on AT&T to drop plans to sell Huawei
smartphones in the U.S. In a surprise reversal, the company did just that in January; it declined
to cite a reason.
***
in December, President Donald Trump signed a defense-spending bill that will ban
equipment from Huawei and China’s ZTE Corp. from the Defense Department’s nuclear-weapon
infrastructure. Lawmakers in the House and Senate have also introduced separate bills to bar
the U.S. government and its contractors from using Huawei and ZTE equipment.
https://www.wsj.com/articles/why-washington-is-so-obsessed-with-chinas-huawei-1520373341
NYT explains CFIUS and its ability to quash mergers on national security grounds
Qualcomm, one of the world’s largest chip makers, has spent the last four months fending off a hostile takeover from Broadcom, a Singaporean rival. The fate of the proposed takeover may now be in jeopardy because of a little-known committee of top administration officials who meet in secret, wielding power to kill the biggest multibillion-dollar global deals.
The Committee on Foreign Investment in the United States, or Cfius (pronounced Sif-e-us), investigates mergers that could result in control of an American business by a foreign individual or company, judging whether deals could threaten national interests. In a letter on Monday, the committee said that a deal for Qualcomm, whose semiconductors will be used in the next generation of ultrafast wireless networks known as 5G, could pose a risk to national security.
It appears to be the first time the committee has intervened on a deal before it has been finalized, a signal that Cfius may play a more prominent role in the Trump administration’s America First policymaking.
Cfius is the ‘ultimate regulatory bazooka’
The committee is made up of members of the State, Defense, Justice, Commerce, Energy and Homeland Security departments, and is led by the treasury secretary. These days, that means Steven Mnuchin.
When Cfius reviews a possible deal, the committee does not publicly disclose any information provided to it — nor does it even acknowledge that a party to a merger has submitted a deal to review. It also has the authority to intervene and review pending or completed transactions, without being asked by any of the companies involved, if members of the committee think a deal that could raise national security concerns.
The committee’s findings, which are not publicly announced, are sent to the president, who may suspend or prohibit the deal.
But cases do not often get that far: The rejection of a deal by the committee is usually enough to kill it.
Cfius “is the No. 1 weapon in the Trump administration’s protectionist arsenal, the ultimate regulatory bazooka,” said Hernan Cristerna, co-head of global mergers and acquisitions at JPMorgan Chase.
* * *
Cfius was empowered with reviewing mergers for potential threats.
China is a frequent element in the deals Cfius reviewsCfius reviews deals across a variety of industries and companies from dozens of different countries. It has often set its sites on deals involving Chinese companies, as the country’s economic might has grown in recent years. From 2013 to 2015, the latest years for which the committee has made data public, about 20 percent of the deals that Cfius reviewed involved investors from China.
Among the notable recent reviews were:
MONEYGRAM — ANT FINANCIAL Ant Financial, a Chinese electronic payments company, wanted to purchase MoneyGram, a money transfer company based in Dallas, for $1.2 billion. But the deal collapsed in January after both sides said Cfius refused to approve it. The collapse came despite a charm offensive by Jack Ma, the Chinese tycoon who controls Ant Financial, who had visited President-elect Donald Trump at Trump Tower and pledged to create one million American jobs. But he could not overcome the Trump administration’s concerns about Chinese acquisition of American know-how.
CANYON BRIDGE CAPITAL — LATTICE Canyon Bridge Capital, a private equity firm, wanted to acquire Lattice, a chip maker based in Portland, Ore. Canyon Bridge received investment from a group that included China Venture Capital Fund Corporation, which is owned by Chinese government-backed organizations. Lattice said Cfius objected to the deal, and the company tried to appeal to the president, offering to resolve national security concerns. But Mr. Trump formally blocked the deal in September 2017, prompting China’s commerce ministry to issue a statement saying countries should not push protectionism through security reviews.
GO SCALE — PHILIPS In 2015, the Dutch electronics giant Philips had an agreement to sell a controlling stake in its automotive and LED business for as much as $2.9 billion to GO Scale, an investment fund sponsored by GSR Ventures of China and Oak Investment Partners. Philips canceled the deal after it could not resolve Cfius’s concerns, and in December 2016 announced it would sell the unit to Apollo Global Management for $1.5 billion, almost half the amount of the earlier deal.
The Broadcom-Qualcomm deal does not involve China-based companies. But there has been concern that the acquisition could undermine the ability of the United States to compete with China in the race for telecommunications supremacy. Members of Cfius pointed to Broadcom’s statements that it would take a “‘private equity’-style” approach if it acquired Qualcomm, suggesting to the committee that Broadcom could reduce long-term investment on research and development in favor of focusing on short-term profits.
While the United States has remained a standard-bearer in mobile technology, the committee noted, “China would likely compete robustly to fill any void left by Qualcomm as a result of this hostile takeover.”
Lawmakers want to expand Cfius’s jurisdiction
A bipartisan group in Congress has proposed legislation that would greatly expand the number of deals reviewed by Cfius. In November, Senator John Cornyn, Republican of Texas, and Senator Dianne Feinstein, Democrat of California, introduced a bill that could add thousands of companies with foreign ties to the list of those reviewed each year by Cfius and provide more funding to deal with that increase. A similar House bill was also introduced by Representative Robert Pittenger, Republican of North Carolina. The measure would expand Cfius’s jurisdiction to include joint ventures, sales of minority stakes and real estate deals for property near military bases and other sensitive facilities.
“By exploiting gaps in the existing Cfius review process,” said Mr. Cornyn, “potential adversaries, such as China, have been effectively degrading our country’s military technological edge by acquiring, and otherwise investing in U.S. companies.”
The proposal has drawn objections from some businesses. IBM said the changes would limit “the ability of American firms to do business abroad while empowering foreign competitors to capture global markets.”
https://www.nytimes.com/2018/03/05/business/what-is-cfius.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=rank&module=package&version=highlights&contentPlacement=1&pgtype=sectionfront
From Better Markets:Protecting Investors From Rip-Offs Must Be Priority for SECMarch 16, 2018
FOR IMMEDIATE RELEASE
Friday, March 16, 2018
Contact: Nick Jacobs, 202-618-6430 or njacobs@bettermarkets.com
Washington, D.C. – The executive directors of Public Citizen and Better Markets, two of the nation’s leading organizations protecting investors, called on U.S. Securities and Exchange Commission (SEC) Chair Jay Clayton to reject any proposals that would allow publicly traded companies to force their investors into mandatory arbitration, through obscure clauses in initial public offering (IPO) documents or otherwise. Such action would deprive investors of their right to access the justice system if they are scammed or cheated and would allow companies to pocket their ill-gotten gains, sometimes amounting to hundreds of millions of dollars.
“Corporations have invested a decade in a campaign to convince the SEC to permit them to slip forced arbitration clauses into IPOs, precisely because they know that only a tiny few will pursue cases on their own, before arbiters,” said Robert Weissman, president of Public Citizen.
Forced arbitration clauses, which use fine-print “take-it-or-leave it” agreements to rig the system, have become ubiquitous in modern society. These clauses deprive people of their day in court when they are harmed by violations of the law. Instead, people are forced into industry-biased, secretive arbitration proceedings with little right to appeal if arbitrators ignore the law or facts.
“Arbitration proceedings are like kangaroo courts where everything is stacked against the investor and the industry almost always wins. That’s why the industry has to force it on investors, who will be doubly victimized. First, when they are ripped off and, second, when they can’t get a fair hearing to recover their losses. Adding insult to injury, the company that rips them off will get to pocket a windfall of ill-gotten gains, often tens of millions of dollars. The SEC must not allow this,” stated Dennis M. Kelleher, president and CEO of Better Markets.
Industry and its allies, including at the regulatory agencies that are supposed to protect investors first and foremost, increasingly are pushing for this dramatic policy change.
Advocates for investors are resisting these attempts. Last month, U.S. Sen. Elizabeth Warren (D-Mass.) questioned Chairman Clayton on whether the SEC was prepared to allow companies to insert forced arbitration clauses into IPO documents. Also last month, SEC Commissioner Robert J. Jackson, Jr., and SEC Investor Advocate Rick Fleming both strongly and publicly cautioned the SEC against taking actions that would allow companies to force investors into arbitration.
The full letter to Clayton can be read here and here.
A California district attorney’s hiring of outside law firms on a contingency basis did not violate a defendant’s rights to due process, according to the first federal circuit court to address the issue.
In an opinion on Thursday, the U.S. Court of Appeals for the Ninth Circuit upheld the dismissal of a case that American Bankers Management Co. Inc. brought against the district attorney of Trinity County. The district attorney hired three law firms on contingency to pursue injunctive relief and civil penalties against the company under California consumer protection laws. The panel disagreed with American Bankers’ contention that the hiring of the law firms violated its due process rights under the Fourteenth Amendment.
The opinion is here:
https://images.law.com/contrib/content/uploads/documents/403/12061/Contingency-Ruling-3-16.pdf
Excerpt from The Recorder, Law.com
From DMN: Mayors from 12 U.S. Cities Will Refuse Business from Any Company Opposed to Net Neutrality
“We will not do business with any vendor that does not honor net neutrality.”
— Bill de Blasio, mayor of New York City.
Now, there’s another front in the net neutrality rebellion: mayors from major U.S. cities. Already, twelve different mayors from some of the largest U.S. cities in America have vowed to sever business ties with any company that refuses to honor net neutrality provisions.
The just-formed Mayors for Net Neutrality Coalition already includes New York City mayor Bill de Blasio, San Francisco mayor Mark Farrell, Portland mayor Ted Wheeler, and San Jose mayor Sam Liccardo. The group just announced their existence at SXSW Interactive in Austin, drawing another layer of resistance for embattled Trump FCC chairman Ajit Pai.
The group is even talking about building certified ‘Net Neutrality Cities,’ and encouraging other mayors to sign their Cities Open Internet Pledge. That Pledge requires anyone doing business within the respective city to adhere to net neutrality principles — or take their business elsewhere. The end result is a net neutrality safe zone.
Read the rest here.
A brief primer on bitcoin, blockchain, and banks
by Aziz Bin Zainuddin, founder and chief crypto officer, Master The Crypto
Some have dismissed blockchain and cryptocurrency as a fad that spells too much trouble for governments to become a mainstay in our everyday lives. Others believe it presents too many advantages for businesses and consumers for it to disappear.
Either way, the technology is too revolutionary for banks to ignore.
Here is a roundup of how blockchain works and how banks might utilize it in the future.
A brief history
Bitcoin is a borderless decentralized digital currency that was invented in 2008. Its founder, known only by the pseudonym Satoshi Nakamoto, cultivated it partly in response to the global financial crisis that unfolded in the same year.
One of Nakamoto's primary goals was to create a currency with a value that couldn't be affected by quantitative easing. To this end, he created an automated mining system that ensures there will only ever be 21 million bitcoins in existence. This means that the value of bitcoin will always be based on supply and demand.
Bitcoin transactions are stored in an immutable decentralized ledger called the blockchain. Instead of existing on a single server, it exists on every computer that can connect to the internet.
The decentralized nature of blockchain makes it more secure and reliable than traditional banking databases, as there is no single database that could to be compromised by hackers or suffer from system failure.
Blockchain transactions are pseudonymous and there is no central authority that can ban anyone from making bitcoin transactions.
The advantages of bitcoin over fiat currency have driven its remarkable growth in value since its creation.
The beauty of blockchain
Blockchain technology was invented simply as a ledger for bitcoin transactions. Eventually, though, it became clear that its decentralized, immutable, pseudonymous nature could be put to use in innumerable other industries.
The invention of Ethereum in 2015 was a historic moment for blockchain technology. This open-source platform allows developers to create any type of software on blockchain without limits.
Revolutionary blockchain technologies such as smart contracts and decentralized autonomous organizations seem to be poised to disrupt the banking industry in a major way.
How banks benefit
It is likely to be difficult for retail banks to ignore technology that is undeniably more secure and reliable than their current databases.
Firstly, its pseudonymous nature could help end identity fraud. Secondly, the decentralized nature of blockchain could help introduce faster payments than two centralized systems could ever manage.
While some blockchains (most notably bitcoin's) are notoriously slow, others that are lightning fast. Ripple, the second most-valuable cryptocurrency by market capitalization, can handle 1,500 transactions per second.
The use of smart contracts could improve the efficiency of banking transactions further still. Banks rely on contracts for all of their products, from credit cards to mortgages to checking and savings accounts.
Smart contracts can be applied to all of the processes detailed in these documents and, it is believed, massively reduce processing costs for banks. Indeed, smart contracts are expected to replace to replace the clunky and inefficient Know Your Customer identity management process soon rather than later.
Wasting no time
Several start-ups have received venture capital to develop the projects discussed above, but the majority of them are still just ideas at this stage.
However, several major banks have already moved to invest in and develop blockchain technology. A group of financial institutions led by Swiss bank UBS has agreed to use Ethereum to improve the quality of their reference data. Instead of entrusting it to a third party to review, they are happy to rely solely on blockchain.
Meanwhile, Santander will use Ripple to power its new mobile app and it has been widely predicted that central banks will hold bitcoin and Ether cryptocurrencies in their reserves for the first time this year.
The long view
Perhaps unsurprisingly, many central governments are doing their best to limit the growth of cryptocurrency on their shores.
This might be enough to halt the growth of bitcoin as the world's first truly global currency. It must overcome other hurdles as well, not least slow transaction times and wild fluctuations in value.
Whatever happens with bitcoin, though, it's difficult to dispute the advantages that blockchain is likely to bring to retail banking.
Aziz Bin Zainuddin is a blockchain expert and the founder and chief crypto officer of Master The Crypto (MasterTheCrypto.com), a knowledge hub and resource center for cryptocurrency investing and all things blockchain. In addition, Aziz runs C.M. Fund, a Singapore-based crypto hedge fund based that invests in cryptos with solid fundamentals and game-changing technology.
Credit: https://www.atmmarketplace.com/articles/could-bitcoin-and-blockchain-blow-up-banking-as-we-know-it/?utm_source=AMC&utm_medium=email&utm_campaign=EMNA&utm_content=2018-03-08%3Fstyle%3Dprint
An elaborate system involving non-disclosure agreements has developed to silence women who level accusations against powerful men. One of those women is Stephanie Clifford, a pornographic actress who claims to have had an affair with Donald J. Trump.
On the NYT podcast (see URL below)
• Jim Rutenberg, The New York Times’s media columnist.
Background reading:
• President Trump’s lawyer secretly obtained a temporary restraining order to prevent a pornographic film actress from speaking out about her alleged affair with Mr. Trump.
• Beyond facilitating a $130,000 payment intended to silence Ms. Clifford, the lawyer, Michael D. Cohen, spent years making aggressive behind-the-scenes efforts to protect Mr. Trump.
Find the podcast here:
www.nytimes.com/2018/03/09/podcasts/the-daily/stormy-daniels-trump.html?rref=collection%2Fbyline%2Fjim-rutenberg&action=click&contentCollection=undefined®ion=stream&module=stream_unit&version=latest&contentPlacement=1&pgtype=collection
From Public Citizen:
The problem of judges substituting their own opinions for facts
by Stephen Gardner
On February 27, the Northern District of California issued an opinion on a motion to dismiss in Becerra v. The Coca-Cola Company. The court got the law right, but then ruled based on incorrect conclusions on disputed facts.
There are two parts to the opinion. First, the court analyzed Coke’s various attempts to avoid liability under state law, based on preemption and safe harbor, and rejected each attempt. So far, so good.
But then the court turned to Rule 9(b). Here, too, the court was generally correct on the law, but ruled based on its own beliefs of what a reasonable consumer would think.
For example, the court said that “a reasonable consumer would simply not look at the brand name Diet Coke and assume that consuming it, absent any lifestyle change, would lead to weight loss.”
The court is wrong. Diet Coke’s name itself indeed suggests (really, outright says) that it’s part of a diet, and many consumers do not know that reduced calories alone will not likely lead to weight loss. Consumers are not nutrition scientists, and often turn (wrongly, but encouraged by companies like Coke) to quick fixes. The FTC’s many weight loss cases are evidence of this.
The court is expert on law, but not on consumer behavior, and it erred in substituting its opinion of the facts—at the motion to dismiss stage—for a disputed merits question.
The court compounded its error with the unsupported statement that “Reasonable consumers would understand that Diet Coke merely deletes the calories usually present in regular Coke, and that the caloric reduction will lead to weight loss only as part of an overall sensible diet and exercise regimen dependent on individual metabolism.”
Again, the court wrongfully draws its own conclusions as to how consumers reasonably behave. The court is also wrong on the facts—Diet Coke did not “merely delete[] the calories usually present in regular Coke.” It also added aspartame, which is an artificial non-nutritive sweetener.
Consumers are chary of artificial sweeteners, with good reason. The Center for Science in the Public Interest says, “Three key studies funded by an independent lab (rather than by a maker of aspartame) found that the sweetener caused lymphomas, leukemias, kidney, and other cancers in rats and mice. That should be reason enough for the Food and Drug Administration to ban aspartame from the food supply, says CSPI. In addition, aspartame might cause headaches or other neurological symptoms in a small number of people.” (For a longer discussion of risks, see this article from CSPI's excellent magazine Nutrition Action Healthletter.)
The court concluded, “In order to overcome the otherwise sensible view of reasonable consumers that Diet Coke consumption alone will not lead to weight loss, the complaint would need to cite far more powerful evidence than is now provided to make a claim of fraud plausible.”
The court gave plaintiff the chance to file an amended complaint, saying that “Plaintiff must plead her best case.”
Let’s hope she does.
Posted by Steve Gardner on Monday, March 05, 2018 at 04:45 PM Illustration of the problem of judges substituting their own opinions of factsby Stephen Gardner
http://pubcit.typepad.com/clpblog/2018/03/illustration-of-the-problem-of-judges-substituting-their-own-opinions-of-facts.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+ConsumerLawPolicyBlog+%28Consumer+Law+%26+Policy+Blog%29
From DMN: Washington has now become the first state in the nation to pass a law protecting net neutrality. Other states, including California and Oregon, are expected to follow suit.
In a bold statement against the Trump-led FCC, the State of Washington has officially passed a law protecting net neutrality. The bill, HB2282, received a lopsided 95-3 vote in the House earlier this month. Late today (Tuesday, Feb. 27th), the bill received a 35-14 vote in the state’s Senate.
Rep. Drew Hanson (D-Bainbridge Island), the bill’s prime sponsor, shared the development. “Today’s vote guarantees the net neutrality rules
that have protected a free and open internet will continue to remain in place in Washington state,” Hanson emailed. “Net neutrality is important to everyone – our constituents, small business owners, teachers, entrepreneurs, everyone. This is a cause with overwhelming bipartisan support; it’s always nice to see something where Democrats and Republicans can work together to maintain common-sense consumer protections.”
Hanson stressed that the bill was a bipartisan effort. Indeed, Republican Rep. Norma Smith (R-Clinton) was the bill’s co-sponsor.
Specifically, the bill makes it illegal for any ISP to:
Any ISP found violating any of those core tenets will face serious fines and penalties. Continued violations may result in a revocation of an ISP’s license to conduct business in the state.
Of course, those three tenets are expressly permitted by the FCC’s recent repeal of net neutrality. All of which sets the stage for a serious battle between Washington State and the FCC. In its rollback, the FCC attempted to make state laws protecting net neutrality null and void, though any ISP testing that power is likely to lose its business in Washington.
(Here’s the FCC’s Official 284-Page Order Repealing Net Neutrality — It’s Titled ‘Restoring Internet Freedom’)
Importantly, the Washington State law closely follows the FCC’s official submission of its net neutrality repeal into the Federal Register. That triggers a 60-day approval window before the rollback becomes federal law.
Meanwhile, Washington’s strong statement is likely to be followed by other powerful U.S. states. That includes California, whose House has already passed a net neutrality bill with passage likely from the Senate. In Oregon, a similar bill has also passed the lower House. Elsewhere, Nebraska recently introduced a bill, potentially making it the first red state to push back.
The developments in Washington are being cheered by the state’s considerable tech industry. “Today, Washington took a stand for internet freedoms and preserving an equal playing field for consumers and entrepreneurs,” remarked Sarah Bird, CEO of Seattle-based search engine optimization company MOZ. “Our internet economy is the envy of the world; Washington lawmakers are helping make sure that remains true.”
Governor Jay Inslee is expected to officially sign HB2282 this week.
A copy of the bill can be found here.
The DMN article is here: https://www.digitalmusicnews.com/2018/02/27/washington-state-law-net-neutrality/
5G Cell Service Is Coming. Who Decides Where It Goes?
There is a heated fight about when, where and how the next generation of cell service gets delivered. ... The prospect of their installation has many communities and their officials, from Woodbury, N.Y., to Olympia, Wash., insisting that local governments control the placement and look of the new equipment, not the federal government.
https://www.nytimes.com/2018/03/02/technology/5g-cellular-service.html (click title for link)
D.C. Administration seeks to limit litigation opposing real estate development
From the Washington Post:
Activists seeking to thwart the breakneck speed of development across the District have turned with greater frequency to the city’s highest court, filing legal challenges that have delayed more than two dozen projects in the past two years and driven up their costs.
Now the Bowser administration wants to curtail those challenges, proposing to amend District policies in ways to reduce those avenues for protest.
District officials say that the changes would end nuisance legal challenges, reduce the cost of doing business in Washington, and expedite the construction of housing units that the city needs.
“We have thousands of new homes that are hung up in court, including hundreds of affordable homes,” said Cheryl Cort, policy director for the Coalition For Smarter Growth. “The courts seem much more willing to second-guess the process, and it has thrown everything into uncertainty.”
But activists counter that the city is making it more difficult to stave off gentrification. They say their ability to turn to the D.C. Court of Appeals is necessary to prevent District officials from violating their own policies to accommodate luxury projects that drive up housing prices in exchange for minimal benefits for neighborhoods.
“It’s the most basic part of our checks and review,” said Kirby Vining, an activist who successfully appealed the city’s approval of a project in his neighborhood. “Without it, we would have been stuck.” He called the administration’s proposals a “Christmas present for developers.”
The full article:
https://www.washingtonpost.com/local/dc-politics/dc-mayor-seeking-to-stop-costly-legal-delays-to-development-projects/2018/02/28/29855a06-1b14-11e8-b2d9-08e748f892c0_story.html?utm_term=.31ced0d73465
Can CVS-Aetna merger squeeze hospitals by forcing customers to accept cheaper non-hospital care alternatives?
That is the premise of a Moody's study reported in a Modern Healthcare article titled: Hospitals pressured as insurers pursue more vertical integration
An article excerpt follows:
The artBy Alex Kacik | February 24, 2018
Hospitals that don't adapt could get squeezed out of the care continuum as insurers grow and direct more care to lower-cost settings, according to an analysis from Moody's Investors Service.
Both not-for-profit and for-profit hospitals are feeling the pressure of falling inpatient volumes and reimbursement levels from government payers along with rising drug costs and labor expenses, as well as regulatory changes to policies like the 340B drug discount program.
Those downward pressures on margins will continue if insurers' plans to vertically integrate with providers come to fruition, the ratings agency said. The Medicare Payment Advisory Commission estimated that hospital margins could sink to negative 10% in 2017, a drop from negative 7.1% in 2015.
Insurers have had to get creative since regulators blocked recent attempts to grow horizontally, including the thwarted mergers between Aetna and Humana, and Anthem and Cigna Corp. They now look to align with providers through proposed combinations between CVS Health and Aetna, UnitedHealth Group's Optum and DaVita Medical Group, and Humana and Kindred Healthcare—partnerships designed to prevent hospital visits through regular primary-care checkups and home healthcare.
Since they don't have to carry the hefty overhead of full-service hospitals, insurers that combine with physician groups and non-acute-care service providers can offer similar preventive, outpatient and post-acute care to their members at lower costs. Scale will also give them an upper hand in rate negotiations, denting providers' bottom lines.
The proposed deals could give insurers the power to direct care rather than doctors, said Juan Morado Jr., of counsel at law firm Benesch. But limiting patient choice is a risky proposition, he added.
As insurers grow their physician networks, they will be better able to carve out "high-cost" hospitals or certain services from contracts, which will mean lower volume and revenue for hospitals, Moody's said. Optum, which has been on a physician-acquisition binge, could funnel more care to cheaper, risk-bearing hospitals. Also, Anthem's policy to limit coverage of emergency visits in certain states will mean fewer patient visits, lower revenue and higher bad-debt rates for hospitals, the report said.
Full article: http://www.modernhealthcare.com/article/20180224/NEWS/180229944?utm_source=modernhealthcare&utm_medium=email&utm_content=20180224-NEWS-180229944&utm_campaign=am
_____________________________________________________
A related topic:
As Surgery Centers Boom, Patients Are Paying With Their LivesSIMPLE SURGERIES. TRAGIC RESULTSBy Christina Jewett, Kaiser Health News and Mark Alesia, USA TODAY Network
MARCH 2, 2018
This story also ran on USA Today. This story is at https://khn.org/news/medicare-certified-surgery-centers-are-expanding-but-deaths-question-safety/view/republish/
Excerpt:
The surgery went fine. Her doctors left for the day. Four hours later, Paulina Tam started gasping for air.
Internal bleeding was cutting off her windpipe, a well-known complication of the spine surgery she had undergone.
But a Medicare inspection report describing the event says that nobody who remained on duty that evening at the Northern California surgery center knew what to do.
How a push to cut costs and boost profits at surgery centers led to a trail of death.
A team of journalists based in California, Indiana, New Jersey, Florida, Washington, D.C., and Virginia worked to tell this story in a partnership between Kaiser Health News and USA TODAY Network.
Christina Jewett is a senior correspondent for Kaiser Health News. Mark Alesia is an investigative reporter for the Indianapolis Star.
Reporters pored through thousands of pages of court records and crisscrossed the U.S. to talk to injured patients or families of the deceased.
For more than a year, using federal and state open-records laws, reporters gathered more than 12,000 inspection records and 1,500 complaint reports, as well as autopsies and EMS documents and medical records, together forming the foundation for this report.
In desperation, a nurse did something that would not happen in a hospital.
She dialed 911.
By the time an ambulance delivered Tam to the emergency room, the 58-year-old mother of three was lifeless, according to the report.
If Tam had been operated on at a hospital, a few simple steps could have saved her life.
But like hundreds of thousands of other patients each year, Tam went to one of the nation’s 5,600-plus surgery centers.
Such centers started nearly 50 years ago as low-cost alternatives for minor surgeries. They now outnumber hospitals as federal regulators have signed off on an ever-widening array of outpatient procedures in an effort to cut federal health care costs.
Thousands of times each year, these centers call 911 as patients experience complications ranging from minor to fatal. Yet no one knows how many people die as a result, because no national authority tracks the tragic outcomes. An investigation by Kaiser Health News and the USA TODAY Network has discovered that more than 260 patients have died since 2013 after in-and-out procedures at surgery centers across the country. Dozens — some as young as 2 — have perished after routine operations, such as colonoscopies and tonsillectomies.
Reporters examined autopsy records, legal filings and more than 12,000 state and Medicare inspection records, and interviewed dozens of doctors, health policy experts and patients throughout the industry, in the most extensive examination of these records to date.
The investigation revealed:
Most operations done in surgery centers go off without a hitch. And surgery carries risk, no matter where it’s done. Some centers have state-of-the-art equipment and highly trained staff that are better prepared to handle emergencies.
But Kaiser Health News and the USA TODAY Network found more than a dozen cases where the absence of trained staff or emergency equipment appears to have put patients in peril.
Data breach class action with small individual recoveries, many attorneys, and big fees = irritated judge
By Daniel R. Stoller - Bloomberg Law
February 6, 2018
• Federal judge orders more oversight of $37.95 million attorneys’ fees request
• Case grew out of 2015 Anthem breach that exposed 78.8 million consumers’ data
Anthem Inc. can’t dispose of consumer class claims stemming from a 2015 data breach for now, after a federal judge raised concerns about nearly $38 million in proposed attorneys’ fees.
A class counsel request for $37.95 million in attorneys’ fees, out of a $115 million settlement, is getting an extra layer of oversight, Judge Lucy Koh of the U.S. District Court for the Northern District of California wrote in a Feb. 2 order.
The court is concerned with the attorneys’ fee request because the class counsel assigned tasks “across 53 law firms and 331 billers,” wrote Koh, who granted a motion to appoint a special master to oversee the attorneys’ fees award.
Such billing could be “duplicative or inefficient,” Koh wrote. James Kleinberg, a retired California state judge, will likely be named special master to review the fee request because the parties didn’t object to his possible appointment, Koh said in her order. Although the settlement is beneficial to the class, Koh refused to give final approval before the special master’s decision on attorneys’ fees.
The case stems from a hacking attack in 2015 where cybercriminals were able to obtain data on 78.8 million Anthem customers, including Social Security numbers, birth dates, and health-care data. Anthem settled with consumers June 23 but didn’t acknowledge any wrongdoing.
After the settlement, plaintiffs filed a motion for the attorneys’ fees. But Jan. 4, class member objector Adam Shulman filed a motion to appoint a special master to oversee the fees award.
The special master will review “the extensive billing in the case” because the current attorneys’ fees and expenses request would account for 45 percent of the settlement class—higher than the 33 percent generally awarded, Koh wrote.
Hogan Lovells represents Anthem. Altshuler Berzon LLP and Cohen Milstein Sellers & Told Pllc are class counsel.
The case is In Re Anthem, Inc. Data Breach Litig., N.D. Cal., No. 15-md-02617, motion granted 2/2/18, link address http://www.bloomberglaw.com/public/document/In_re_Anthem_Inc_Data_Breach_Litigation_Docket_No_515md02617_ND_C/3?doc_id=X1Q6NUUSFT82
To contact the reporter on
Private Equity Meets Antitrust….Complications Ensue
By CPI on February 27, 2018
Posted by Social Science Research Network
Private Equity Meets Antitrust….Complications Ensue
By Kent Bernard
Private Equity is simply a way in which an investment company is structured. What the term usually means, however, is an entity that seeks to make an investment, quickly make changes in the company, and then sell out. Antitrust gets involved to determine whether the acquisition of stock or assets leads to a lessening of competition in any market. As part of that process, potential acquirers must give notice to the antitrust agencies and observe a waiting period. The private equity business model seeks to minimize, or avoid, such waiting. The approaches taken by private equity investors, and the agencies’ responses, have created an interesting legal landscape.
Continue Reading…https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3123183
From the U.S. Office of Government Ethics: A Refresher on the Impartiality Rule
January 25, 2017
On January 1, 2017, new government ethics training regulations went into effect. These regulations now require agencies to train more employees than in the past. They also place a new emphasis on four core topics: conflicts of interest, impartiality, misuse of position, and gifts. Earlier “Director’s Notes” have discussed conflicts of interest, misuse of position, and gifts. To round out the set, this Director’s note focuses on the impartiality rule.
As explained in my most recent note, executive branch employees are subject to an important set of ethics rules contained in the Standards of Ethical Conduct for Employees of the Executive Branch. Underlying these rules is a principle that employees must avoid even the appearance of impropriety. The impartiality rule breathes life into this principle.
Under the primary conflict of interest law, an employee must not participate in any particular matter affecting the employee’s financial interests, and the impartiality rule goes even further by focusing on appearance issues. This rule applies even when the employee is free of financial conflicts of interest.
Briefly stated, the impartiality rule requires an employee to consider appearance concerns before participating in a particular matter if someone close to the employee is involved as a party to that matter. This requirement to refrain from participating (or “recuse”) is designed to avoid the appearance of favoritism in government decision-making.
The rule is not implicated by everyone the employee knows, for example, mere friends and neighbors. Instead, the rule focuses on professional and family relationships. Among others, the rule arises based on the employee’s relationship with any member of the employee’s household, an outside employer, a spouse’s employer, any relative with whom the employee has a close personal relationship, or an outside organization in which the employee is an “active” member. The rule is also triggered by the employee’s relationship with individuals, clients, and organizations the employee has served professionally as an employee, attorney, contractor, etc., in the past year.
The duty to recuse comes up if one of these individuals and organizations is involved and if a reasonable person with knowledge of the relevant facts would be concerned about the employee’s impartiality. Because the rule is somewhat technical, employees should attend required ethics training to ensure that they understand how to make impartial decisions when performing their government jobs. Employees should also contact their agency ethics officials for assistance in applying the rule in specific cases.
See https://www.oge.gov/web/oge.nsf/Resources/A+Refresher+on+the+Impartiality+Rule
Editor's note: For a long-time federal employee, there is some poignancy in this reminder. A line attorney with a federal agency would risk serious jeopardy by participating in review of a bank merger involving a bank with which the employee had significant business dealings. For a long-time federal employee, it seems obvious that at least the same standard should apply to high level federal executives. Perhaps that will happen. DR
Takata airbags settlement: After the array of legal proceedings and prodigious enforcement efforts that followed the bad behavior of auto makers and Takata: criminal proceedings, National Highway Traffic Safety Administration agreement, "darn good" class action settlements, and the State AG actions, were consumers well served?
Press reports, including one in the New York Times, indicate that State AGs that sued Takata over auto airbag defects have reached a settlement involved $650 million dollars and behavioral restraints.
Takata, which became the auto airbag supplier of choice for many car makers, has been the topic of a number of legal proceedings.
As part of a criminal plea agreement with the U.S. Justice Department, Takata agreed to pay $125 million to victims and $850 million in restitution to automakers who bought its inflaters and were stuck with recall and litigation costs.
Conduct restraints were included in an agreement by Takata with the National Highway Traffic Safety Administration.
In 2017 Japanese automaker Honda agreed to a $605 million class-action settlement covering economic losses suffered by the U.S. owners of vehicles fitted with Takata air bags. Particular Honda owners reportedly received a promise to be paid $500 each. The deal was similar to agreements between Takata air bag vehicle owners and Nissan, Toyota, BMW, Mazda and Subaru.
“It's a darn good settlement,” lead class counsel Peter Prieto of Podhurst Orseck PA said at the time about the class action deals reached with Toyota Motor Corp., BMW of North America LLC, Subaru of America Inc. and Mazda North American Operations, during the final fairness hearing in Miami. $166 million was to be reserved to pay the class attorneys, 22 percent of the total value.
Takata has been through a bankruptcy proceeding. Under a restructuring plan, Takata will sell most of its assets unrelated to airbags to a Chinese-owned rival for $1.6 billion.
The recent press release issued by the lead state AG, Alan Wilson of South Carolina, says, in part:
TK Holdings, Inc. has also agreed to reimburse the multistate for its investigative costs, and for the entry of stipulated civil penalty in the amount of 650 million dollars. Since the company has filed for bankruptcy protection and cannot pay its debts, the multistate agreed not to collect this civil penalty in order to maximize the recovery available to consumers who were the victims of this airbag defect.
http://www.scag.gov/archives/34760
At the end of this story is a question: After the array of legal proceedings and prodigious enforcement efforts that followed the bad behavior of auto makers and Takata: criminal proceedings, National Highway Traffic Safety Administration agreement, "darn good" class action settlements, and the State AG actions, were consumers well served?
Posted by Don Allen Resnikoff, who takes responsibility for the content.
See Judge Leon's opinion blocking AT&T's assertion of selective merger enforcement
From the opinion:
Defendants have fallen far short of establishing that this enforcement action was selective, that is, that there exist persons similarly situated who have not been prosecuted. . . . It is . . . difficult to even conceptualize how a selective enforcement claim applies in the antitrust context, where each merger must be functionally viewed in the context of its particular industry and in light of a variety of factors including the transaction's size, structure, and potential to generate efficiencies or enable evasion of rate regulation, are relevant in determining whether a transaction is likely to lessen competition.
See the full opinion here: https://www.nytimes.com/interactive/2018/02/20/technology/document-Court-Order-Re-TWX-T-Motion-Re-Political.html
Make rock music great again? Changing music tastes appear to be driving iconic Gibson Guitar toward bankruptcy
Only a few years ago Gibson and Fender were dominant as guitar manufacturers, and the FTC was concerned about price fixing in the musical instrument market place.
In 2010 Gibson was listed in 30 lawsuits and had been the subject of a Federal Trade Commission investigation involving Fender Musical Instruments Corp., the Guitar Center and the International Music Products Association, known as NAMM.
The FTC investigation spun off of a previous probe of NAMM, which the FTC accused of organizing meetings where various retailers worked out pricing strategies.
That investigation ended with NAMM admitting no wrongdoing, but being prohibited from working with retailers in any anti-competitive fashion.
At that time Gibson stated: "The allegation that Gibson participated in any scheme to artificially inflate or fix prices is wholly without merit."
But now Gibson may be going the way of the leather sole Hanover Shoe, and becoming obsolete as musical tastes turn away from guitar based music, and guitar sales decline.
For more details on the declining fortunes of Gibson, see
https://www.digitalmusicnews.com/2018/02/16/gibson-guitar-bankruptcy/
From Maryland Consumer Rights Coalition: de facto debtor prisons
Media contact: Marceline White, 410-624-8980
Maryland has created a system of de facto debtors prisons. Maryland's Constitution says that "no person shall be imprisoned for debt," but each month, the Maryland District Court issues about 130 arrest warrants for consumers who are being sued for debt.
The arrest warrant, or body attachment, is an order for law enforcement to arrest the person in question and bring him or her in front of a court or commissioner in order to address the debt for which they are being sued.
The average underlying debt in these cases is less than $4,400. However, the addition of attorneys’ fees (78% of the time), interest (56% of the time) and court costs add, on average one-fifth to the amount of the original debt. When arrested, defendants may be required to pay bail or a bond which ranges from $200 to $3,000. In one case, bail was set at $5,000 for a $2,800 debt. In another case, bail was set at $10,000. If a defendant cannot pay this bail, he or she can end up languishing in prison for days or weeks until she or he can arrange to pay the bail bond set in the case.
Today [2-21-2018], the House Judiciary and Senate Judicial Proceedings committees will hear HB 1081 and SB 1050, bills that would ensure low-income Marylanders are treated with respect and fairness within the debt collection process, while still allowing creditors to obtain the information they need to collect the debt.
Under this proposal, when Marylanders are picked up, they complete the required forms and are released. No one is jailed for debt. This reduces the burden on the sheriffs’ departments, jails, taxpayers, and judges and creates a more fundamentally fair process for indigent consumers.
Because many of the Marylanders who are being sued for debt never received court summons, which is a causal factor in body attachments, we are recommending amending HB 1081/ SB 1050 to strengthen the service requirements.
We need you to tell your Delegates and Senators: No Prison for Poverty. Click here, to check if your elected officials serve on the Judiciary or Judicial Proceedings committees, and shoot them a note telling them to support the bill and the amendment.
These de facto debtors prisons criminalize poverty and create a two-tiered system of justice: those who can afford to pay do not go to jail, while those who can’t afford to pay remain in jail. Jailing someone for an underlying debt serves no constructive purpose: the individual is not violent nor a danger to the community, will be harmed-possibly losing their job if they are incarcerated, thereby making it more difficult to repay a debt, has no need for rehabilitation nor for punishment.
Take three minutes today to make sure your representatives know you oppose debtor’s prisons, and support HB 1081 and SB 1050 with our amendments!
Best,
Marceline
PBS News hour on modern real estate loan redlining in Philadelphia and elsewhere
From PBS: Ten years since the economic recession, lending has returned for many Americans. Yet the gap between white and black homeownership is wider now than it was in 1960, with signs of modern-day redlining showing up across the country. Special correspondent Aaron Glantz reports as part of a year-long investigation by Reveal from The Center for Investigative Reporting.
Excerpt from the News hour report:
Go to: https://www.pbs.org/newshour/show/struggle-for-black-and-latino-mortgage-applicants-suggests-modern-day-redlining
Warren Buffett's real investment strategy: own companies with great power to charge high prices
From article in the Nation:
“The single most important decision in evaluating a business is pricing power,” Buffett said. “If you’ve got the power to raise prices without losing business to a competitor, you’ve got a very good business.” The “big three” rating agencies—Moody’s, Standard & Poor’s, and Fitch--controlled 95 percent of the rating-agency market, an insurmountable advantage over would-be competitors. “If you’ve got a good enough business, if you have a monopoly newspaper or if you have a network television station,” Buffett concluded, “your idiot nephew could run it.”
For the article, and a podcast by the author: https://www.thenation.com/article/special-investigation-the-dirty-secret-behind-warren-buffetts-billions/
Student Outcry on Guns; the Emma Gonzalez video
Students used Twitter, the news media and a courthouse rally to pressure lawmakers for gun control after a deadly shooting at a Florida high school.
Feb. 18, 2018FORT LAUDERDALE, Fla. — They shouted into a microphone until their voices became hoarse. They waved handmade signs. They chanted.
At the federal courthouse here on Saturday, students — including many of the very people who had to endure the trauma of a shooting on campus — continued to speak out about guns. Since Wednesday, when a gunman killed 14 students and three staff members at Marjory Stoneman Douglas High School in Parkland, Fla., their youthful voices have resonated where those of longtime politicians have largely fallen flat.
And on Saturday, another young woman’s words captivated the nation.
Speaking publicly at the rally, Emma González, a senior, pledged that her school would be the site of the nation’s last mass shooting. How could she know? Because, she said, she and her peers would take it upon themselves to “change the law.”
“The people in the government who are voted into power are lying to us,” she said. “And us kids seem to be the only ones who notice and are prepared to call B.S.”
“They say that tougher gun laws do not decrease gun violence — we call B.S.!” she continued as a chorus of supporters echoed her. “They say a good guy with a gun stops a bad guy with a gun — we call B.S.! They say guns are just tools like knives and are as dangerous as cars — we call B.S.! They say that no laws could have been able to prevent the hundreds of senseless tragedies that have occurred — we call B.S.! That us kids don’t know what we’re talking about, that we’re too young to understand how the government works — we call B.S.!”
She wiped her eyes aggressively. Then, she urged the people in the crowd to register to vote — and to give their elected officials “a piece of your mind.”
Just hours later, one video of the speech had been viewed more than 100,000 times.
The video is here: youtu.be/ZxD3o-9H1lY
NYT article: https://www.nytimes.com/2018/02/18/us/emma-gonzalez-florida-shooting.html?action=click&module=RelatedCoverage&pgtype=Article®ion=Footer&contentCollection=Related
New York’s top regulator is planning to investigate insurance companies after a bombshell report showed that gay men were being denied life insurance coverage because they were taking HIV prevention medications
Dr. Philip J. Cheng, a Harvard-educated urologist, said he was denied a life insurance policy and was offered a five-year policy instead after telling his insurer that he used Truvada, a drug that prevents the transmission of HIV, according to the New York Times. [https://www.nytimes.com/2018/02/12/health/truvada-hiv-insurance.html]
The treatments, referred to as PrEP (short for pre-exposure prophylaxis), are nearly 100 percent effective, studies have shown — but that wasn’t good enough for some insurers.
Maria T. Vullo, superintendent of the state’s Department of Financial Services, said that the practice amounts to discrimination.
“Insurers cannot choose to deny life and disability insurance coverage based on discriminatory reasons,” she said.
“This is tantamount to penalizing applicants based on sexual orientation. DFS will not tolerate discriminatory treatment in the approval or denial of life, long-term care and disability insurance policies and will hold companies that discriminate accountable,” she added
FTC press release:
FTC Sues Dental Products Distributors for Alleged Conspiracy Not to Provide Discounts to a Customer Segment
Complaint names nation’s three largest dental suppliers: Benco Dental Supply Company, Henry Schein, Inc. and Patterson Companies, Inc.
The Federal Trade Commission filed a complaint against the nation’s three largest dental supply companies, a public version of which will be linked to this news release shortly, alleging that they violated U.S. antitrust laws by conspiring to refuse to provide discounts to or otherwise serve buying groups representing dental practitioners. These buying groups sought lower prices for dental supplies and equipment on behalf of solo and small-group dental practices seeking to gain discounts by aggregating and leveraging the collective purchasing power and bargaining skills of the individual practices. The complaint also alleges an FTC Act Section 5 violation against Benco for inviting a fourth competing distributor to join the conspiracy.
The alleged agreement among Benco, Henry Schein and Patterson deprived independent dentists of the benefits of participating in buying groups that purchase dental supplies from national, full-service distributors. As full-service dental distributors, Benco, Henry Schein and Patterson offer gloves, cements, sterilization products and a range of other consumable supplies, as well as equipment, such as dental chairs and lights. Collectively, the big three control more than 85 percent of all distributor sales of dental products and services nationwide. The U.S. market for dental products is valued at approximately $10 billion. The dental practices that would have benefited from the discounts achieved by these buying groups were small businesses comprised of solo or small groups of dentists.
Benco and Henry Schein allegedly entered into an agreement refusing to provide discounts to or compete for the business of buying groups. The complaint details communications between executives of the two companies evidencing the agreement, as well as attempts to monitor and ensure compliance with the agreement. The complaint also asserts that Patterson joined the agreement. The complaint charges Benco, Henry Schein and Patterson of conspiring in violation of Section 5 of the FTC Act.
The complaint also alleges that on multiple occasions, Benco invited Burkhart Dental Supply – a regional distributor and the fourth largest full-service distributor in the United States – to refuse to provide discounts to buying groups. As a result of this conduct, the complaint separately charges Benco with a Section 5 invitation to collude count.
Based on the agreement among the distributors, the complaint contends that Benco, Henry Schein and Patterson unreasonably restrained price competition for dental products in the United States; distorted prices and undermined the ability of independent dentists to obtain lower prices and discounts for dental products; deprived independent dentists of the benefits of vigorous price and service competition among full-service, national dental distributors; unreasonably reduced output of dental products to dental buying groups; and eliminated or reduced the competitive bidding process for sales to these buying groups. This case reflects the Commission’s ongoing efforts to ensure competition in the healthcare industry.
The Commission vote to issue the administrative complaint was 2-0. The administrative trial is scheduled to begin on Oct. 16, 2018.
https://www.ftc.gov/news-events/press-releases/2018/02/ftc-sues-dental-products-distributors-alleged-conspiracy-not
Two states are scrutinizing Aetna's processes for approving or denying payment for medical care
The scrutiny cpmes after a former Aetna medical director admitted he never reviewed patient medical records when deciding whether to authorize treatment.
The states' inquiries and the medical director's admission, which drew scorn from the medical community, are a public relations nightmare for Hartford, Conn.-based Aetna, and puts a microscope on the insurance industry's pre-authorization and appeals processes. It could also hamper the national insurer's ability to merge with pharmacy giant CVS Health.
California Insurance Commissioner Dave Jones on Monday confirmed he is launching an investigation into Aetna's processes in denying claims and requests for prior authorization for care, as well as its utilization review process. Later that day, Colorado's insurance department said it would be asking questions about Aetna's compliance with state law regarding consumers' rights to appeal a coverage decision.
The two insurance departments were reacting to an October 2016 deposition of Dr. Jay Iinuma, who worked as Aetna's medical director for Southern California from 2012 to 2015, in a lawsuit concerning Aetna's denial of coverage for treatment of a patient's autoimmune disease in 2014.
In the deposition, Iinuma said that although he was responsible for overseeing the preauthorization of care, he never looked at patients' medical records during his tenure. Instead, he relied on nurses employed by Aetna to review the medical records and feed him pertinent information, such as lab values.
The deposition was first reported by Kaiser Health News in June 2017, but spurred an investigation after CNN showed the deposition to Jones.
"I wouldn't look at the medical records. I'd look at what the nurse provided, the information that the nurse provided," Iinuma said in his deposition. He also said Aetna trained him to make pre-authorization decisions this way.
In a statement, Aetna said its medical directors "review all necessary available medical information for cases that they are asked to evaluate. That is how they are trained, as physicians and as Aetna employees. In fact, adherence to those guidelines, which are based on health outcomes and not financial considerations, is an integral part of their yearly review process."
But state insurance departments worry that Aetna's pre-authorization and appeals processes could harm patients.
"If a health insurer is making decisions to deny coverage without a physician ever reviewing medical records that is a significant concern and could be a violation of the law," Jones said in a statement.
Iinuma's deposition drew scorn from the medical community, and the states' investigations into Aetna's internal processes are bad optics for a company hoping to merge with CVS Health. The U.S. Justice Department is now reviewing the proposed $69 billion merger.
http://www.modernhealthcare.com/article/20180213/NEWS/180219975?utm_source=modernhealthcare&utm_medium=email&utm_content=20180213-NEWS-180219975&utm_campaign=am
http://www.modernhealthcare.com/article/20180213/NEWS/180219975?utm_source=modernhealthcare&utm_medium=email&utm_content=20180213-NEWS-180219975&utm_campaign=am
NYT on the decline of EPA enforcement under Trump
Excerpt:
The data from the E.P.A. represented activity during the government’s 2017 fiscal year, which ended on Sept. 30, meaning the totals included the final three and half months of the Obama administration, when some of the E.P.A.’s biggest cases were settled. The data also reflected cases that were resolved during the Trump administration but had been initiated and largely handled under President Obama.
The New York Times in December did its own analysis of the E.P.A.’s civil enforcement action initiated in the first nine months under Scott Pruitt, the administrator appointed by President Trump. During that time frame, the agency sought civil penalties of about $50.4 million from polluters, which, adjusted for inflation, was about 39 percent of what the Obama administration sought in the same time period under its first E.P.A. director and about 70 percent of what the Bush administration sought in the same period.
The tally released Thursday showed a total of $1.6 billion in civil judicial and administrative penalties — money paid to punish polluters — the second largest amount in the last decade, with the single biggest amount of that coming from Volkswagen, which agreed to pay a $1.45 billion penalty at the end of the Obama administration. The prior peak was in fiscal year 2016, when BP agreed to pay $5.7 billion in penalties for the 2010 Deepwater Horizon disaster in the Gulf of Mexico.
In her statement, Ms. Bodine, who became enforcement director in December, said that the agency had focused its enforcement efforts during fiscal 2017 on speeding up the cleanup of contaminated sites, “deterring noncompliance” as well as a philosophy of “cooperative federalism,” which has meant turning over enforcement responsibilities to states.
The $20 billion in commitments by polluters to correct problems was up from $14 billion in 2016, the E.P.A. said.
But the analysis by The Times showed that during the first nine months of Mr. Pruitt’s tenure, demands for such fixes dropped sharply. The agency sought about $1.2 billion worth of fixes, known as injunctive relief, in civil cases initiated during that period. Adjusted for inflation, that was about 12 percent of what was sought under Mr. Obama and 48 percent under Mr. Bush. Overall, The Times’s analysis said, cases started under Mr. Pruitt’s leadership dropped significantly from both of the previous administrations.
Cynthia Giles, who was the assistant administrator for the E.P.A.’s enforcement office during the Obama administration, said the data released Thursday should not be interpreted as the Trump administration being tough on polluters.
“Nearly all of the large cases included in E.P.A.’s annual enforcement report were essentially over before the new administration arrived at E.P.A.,” said Ms. Giles, who had reviewed The Times’s analysis. “Without an unprecedented disavowal of an already negotiated and public agreement, there is nothing Administrator Pruitt’s team could have done to change the outcome. In no sense do these cases reflect the intentions or actions of the new administration.”
https://www.nytimes.com/2018/02/08/business/epa-penalties-polluters.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=stream&module=stream_unit&version=latest&contentPlacement=16&pgtype=sectionfront
Trump Council of Economic Advisors on lowering pharma prices
oThe Report is here: https://www.whitehouse.gov/wp-content/uploads/2017/11/CEA-Rx-White-Paper-Final2.pdf
The following excerpt discusses Medicaid and Medicare Policy:
To promote patient welfare, government policy should induce price competition. In the two primary U.S. insurance programs, Medicaid and Medicare, current policies dampen price competition, thereby artificially raising prices.
Medicaid Manufacturers that choose to enter the Medicaid Drug Rebate Program are required to offer state Medicaid programs their prescription medications at a price that either includes a minimum rebate of 23.1 percent of the average manufacturer price (AMP – the average price paid to manufacturers by wholesalers and retail pharmacies that buy direct net of prompt pay discounts) for brand drugs or, if lower, the “best price” the manufacturers offer to any other purchaser (“Medicaid Drug Rebate Program”). In exchange for these discounted rates, states are then required to cover the manufacturer's drugs in their Medicaid programs.
In fiscal year 2014, Medicaid programs spent $42 billion on prescription drugs and collected about $20 billion back in rebates so that net expenditures equaled about $22 billion (Baghdadi et al. 2017). The practice of mimicking public relative prices to private relative prices is partly beneficial because it allows the private market rather than bureaucrats to determine relative prices based on patient value.
While this basic approach of using market prices is sound, as currently implemented, the Medicaid Best Price program can create artificially high prices in the private sector under certain conditions. If a large share of a given drug’s market is enrolled in Medicaid (e.g., for HIV or mental health drugs), a pharmaceutical firm has an incentive to inflate prices in the private sector so that it can collect higher post-rebate prices from its large Medicaid customer base. Similarly, the mandated price discrimination implicit in this program prevents price discounts to lower-income patients in the private sector. Lower-income, private patient populations cannot be charged low prices as that jeopardizes the Medicaid price.
Reforms could help prevent the inflated private sector prices the program induces while at the same time allowing the government to use pricing information from the private sector to determine value. While CMS rules require that best prices be determined on a unit basis, Medicaid statutes do not (42 C.F.R. 477.506(e)(2)) (Sachs et al. 2017). CMS could revise rules to specify how manufacturers calculate best prices determined after the sale and the patient’s recovery. This may encourage competition and lower prices. It would also incentivize better adherence regimens and lower the risk to the government that it pays money for something that turns out to be less effective than expected. CMS could also provide more guidance on how value-based contracts and price reporting would affect other price regulations. This would encourage drug purchasers to negotiate, thus increasing competition and lowering prices.
Medicare Medicare Part B Physician Administered Drugs Medicare Part B drugs are those administered by physicians in their outpatient clinics to Medicare recipients. From 2006 through 2013, twenty-eight percent of this spending was for newly approved drugs that were concentrated among a small number of conditions, such as cancer, blood diseases, and ophthalmology (GAO 2015). According to the GAO, over time, expensive specialty drugs and biologics approved through expedited pathways have come to represent a higher proportion of newly approved drugs that are administered by physicians.
In the Medicare Part B program, through which many specialty drugs are reimbursed, drugs administered in physicians’ offices and hospital outpatient departments are reimbursed based on a 6 percent markup (now 4.3 percent due to the sequester) above the Average Sales Price (ASP), that manufacturers receive net of any price discounts. For example, with a 6 percent markup above ASP the doctor receives $600 for administering a $10,000 drug and $60 for a $1,000 drug. As is true in any cost-plus reimbursement environment, this leads to a lack of incentive to control costs and instead an incentive to raise costs. The current policy mutes the incentives for doctors to prescribe cheaper drugs and therefore for manufacturers to engage in price competition.
While there may be larger costs to providers for prescribing more expensive drugs, such as storing expensive drugs and the lower probability of collecting reimbursement or copays, these costs are routinely handled in other healthcare markets without resorting to distorted cost-plus reimbursements. While some private payers have responded to this type of perverse incentive problem through alternative reimbursement procedures for drugs delivered in clinics, similar reforms have not been made for the Medicare Part B program. The Medicare Payment Advisory Commission (MedPAC), the Government Accountability Office (GAO), the Department of Health and Human Services (HHS) Office of the Inspector General (OIG), and others have all proposed solutions for how Medicare could remove perverse incentives for prescribing higher-priced drugs and instead provide an incentive for doctors to prescribe cheaper drugs, putting competitive pressure on manufacturers to reduce their prices.
Options for reform include: i. Introducing physician reimbursement that is not tied to drug prices, ii. Moving Medicare Part B drug coverage into Medicare Part D, where price-competition over drug prices is better structured, and iii. Changing how pricing data is reported to increase transparency. By moving Part B coverage into Part D, the 71 percent of Medicare beneficiaries who participate in Part D would receive prescriptions that they would fill and their physicians would administer, thereby removing any economic incentive from prescribing decisions.
There are additional reforms to consider that increase price transparency and reduce incentives for more spending.
First, require better and more accurate sales data from drugs that are older than six months since launch. This is important because drug makers have an incentive to exclude discount prices from the sales price they report, since the higher the average sales price, the more they are paid.
Second, for new drugs that do not have much sales data, cut the doctor’s payment. This removes the incentive of prescribing a high-priced drug when physicians write prescriptions, and elevates clinical competition as a decision-making factor.
Medicare Part D Outpatient Drugs Medicare Part D reimburses outpatient drugs, and the program has several provisions that artificially raise costs for patients. The Social Security Act requires Medicare Part D plan formularies to include drugs within each category and class of covered drugs. CMS has previously interpreted the Social Security Act’s requirement to include drugs within each therapeutic category and class to mean the inclusion of at least two non-therapeutically equivalent drugs. This requirement eliminates the ability of Part D sponsors to negotiate for lower prices when there are only two drugs on the market since drug manufacturers know that CMS must cover both. The two-drug requirement leads to more spending.
Another problem resulting from Medicare Part D is the overpricing of low value drugs. The Social Security Act §1860D-14A stipulates cost-sharing amounts for low-income subsidy enrollees that vary by income and are adjusted by projected program cost growth. The use of formulary tier-based cost-sharing is prohibited, which eliminates the ability of sponsor plans to price and discount drugs according to value for patients. Low-income subsidy enrollees and sponsor plans should have incentives to use high value drugs. The Medicare Payment Advisory Commission (MedPAC 2016) has highlighted this problem by reporting that 17.3 percent of lowincome subsidy enrollees are high-cost compared to just 2.8 percent of other enrollees. The Medicare Part D Coverage Gap Discount Program requires drug manufacturers to provide a 50 percent discount to enrollees while in the coverage gap. The 50 percent discount is then counted toward the calculation of an enrollee’s true out-of-pocket cost, accelerating them through the coverage gap into the catastrophic phase of benefit where Medicare pays 80 percent of all drug costs and the sponsor and enrollee are responsible for the remaining 15 and 5 percent, respectively. With such discounts, enrollees may have an incentive to use brand drugs and reference biologics when less expensive generics and biosimilars are available, since the large discounted payment counts toward the true out-of-pocket cost. The overall Part D benefit structure creates perverse incentives for plan sponsors and pharmacy benefit managers (PBMs) to generate formularies that favor high-price, high-rebate drugs that speeds patients through the early phases of the benefit structure where plans are most liable for costs.
The Medicare Part D program has unintended consequences that have resulted in higher drug prices for consumers. MedPAC and OIG, among others, have each produced various policy CEA • Reforming Biopharmaceutical Pricing at Home and Abroad 9 options to address these misaligned incentives within the program. Solutions to overcome these problems could include:
i. Requiring plans to share drug manufacturer discounts with patients.;
ii. Allowing plans to manage formularies to negotiate better prices for patients;
iii. Lowering co-pays for generic drugs for patients; and
iv. Discouraging plan formulary design that speeds patients to the catastrophic coverage phase of benefit and increases overall spending.
From Publtic Citizen: Jeff Sovern on the new CFPB and payday lending
How Mulvaney Can Sabotage the CFPB's Payday Lending Ruleby Jeff Sovern
Last month, Interim Director Mulvaney announced that the Bureau may reconsider the Bureau's payday lending rule. But he can't just rescind it. That would require a full notice-and-comment rulemaking, and that would take longer than Mulvaney will be at the CFPB (under the Vacancies Act, he is limited to 210 days). True, Mulvaney could start that process and a successor could finish it. But even then, the Bureau would have to to meet the requirements of the APA and not appear to be acting arbitrarily and capriciously, which would be hard to do after it already promulgated a rule on the subject.
But according to a Kate Berry article in the American Banker, Mulvaney can’t just kill CFPB payday rule, but here’s what he can do, Mulvaney could delay implementation of the existing rule and then a successor could amend the rule to make it less protective of consumers. One scenario would shift the rule from prohibiting a payday lender from making certain loans unless the lender verified that the consumer could repay the loan to a rule that obliged lenders to provide disclosures.
The problem with that approach is that consumers all too often ignore disclosures, as Omri Ben-Shahar and Carl E. Schneider demonstrated in their book, More Than You Wanted to Know: The Failure of Mandated Disclosure. For example, a study by Marianne Bertrand and Adair Morse, both of Chicago's Booth School of Business, Information Disclosure, Cognitive Biases and Payday Borrowing and Payday Borrowing, that displayed the image below to payday borrowers, found that it reduced payday borrowing by 11% in later pay cycles and the amount borrowed by 23%. That doesn't seem like much when you look at some of the comparisons below, such as that a three-month credit card loan would cost $15, versus $270 for a payday loan. So the difference between regulation and disclosure for some--perhaps many--consumers is the difference between being caught in a debt trap, or not.
[see original for graphic]
Posted by Jeff Sovern on Saturday, February 10, 2018 at 04:45 PM in Consumer Financial Protection Bureau, Predatory Lending |Permalink
The LA Times on what the Mick Mulvaney CFPB will do, and not do
Excerpt:
Between the bevy of recent moves by the bureau and the launch of a wide-ranging review of its practices ordered by Mulvaney, a picture is emerging of what a Trump-era CFPB will look like — and it appears it will not the resemble the agency that developed a pugnacious reputation over the last six years.
Mulvaney outlined his view in a memo [http://www.documentcloud.org/documents/4357880-Mulvaney-Memo.html], obtained by news site ProPublica, criticizing the bureau for being overly aggressive under Cordray and saying it would now serve not only consumers but the financial-services companies it was created to regulate.
"We don't just work for the government, we work for the people. And that means everyone: those who use credit cards and those who provide those cards; those who take loans and those who make them; those who buy cards and whose who sell them," wrote Mulvaney, a free-market advocate who once called the CFPB a "sad, sick joke."
For Lauren Saunders, associate director of the National Consumer Law Center, such a mission statement simply means unwinding consumer protections.
"I think we'll see a lot of rollbacks," she said.
For now, the practical implications of the pullback appear to be limited to the agency's more aggressive interpretations of consumer-protection law.
The lawsuit against Golden Valley Lending and other firms owned by the Habematolel Pomo of Upper Lake tribe is an example.
In that case and others, the agency relied on what industry attorneys have described as a novel argument: that lenders broke federal consumer protection laws that forbid unfair, deceptive or abusive practices by collecting on loans that carried interest rates higher than state laws allow, in some cases as high as 950%. In other words, the argument goes, the bureau piggybacked on state laws to allege a violation of federal laws.
Saunders said dropping the case looks to her like a clear sign that Mulvaney, who accepted contributions from high-interest lenders while serving in the House of Representatives, plans to go easy on players in that industry. Mulvaney in 2016 was one of a group of House members who argued in a 2016 letter to Cordray that federal regulation of the payday loan industry ignored states' rights and would cut off access to credit for many Americans.
http://www.latimes.com/business/la-fi-cfpb-overhaul-20180205-story.html
The federal government lacks even basic information about the quality of assisted living services provided to low-income people on Medicaid, according to the Government Accountability Office
From the NYT:
.
Billions of dollars in government spending is flowing to the industry even as it operates under a patchwork of vague standards and limited supervision by federal and state authorities. States reported spending more than $10 billion a year in federal and state funds for assisted living services for more than 330,000 Medicaid beneficiaries, an average of more than $30,000 a person, the Government Accountability Office found in a survey of states.
States are supposed to keep track of cases involving the abuse, neglect, exploitation or unexplained death of Medicaid beneficiaries in assisted living facilities. But, the report said, more than half of the states were unable to provide information on the number or nature of such cases.
Just 22 states were able to provide data on “critical incidents — cases of potential or actual harm.” In one year, those states reported a total of more than 22,900 incidents, including the physical, emotional or sexual abuse of residents.
Many of those people are “particularly vulnerable,” the report said, like older adults and people with physical or intellectual disabilities. More than a third of residents are believed to have Alzheimer’s or other forms of dementia.
The report provides the most detailed look to date at the role of assisted living in Medicaid, one of the nation’s largest health care programs. Titled “Improved Federal Oversight of Beneficiary Health and Welfare Is Needed,” it grew out of a two-year study requested by a bipartisan group of four senators.
Assisted living communities are intended to be a bridge between living at home and living in a nursing home. Residents can live in apartments or houses, with a high degree of independence, but can still receive help managing their medications and performing daily activities like bathing, dressing and eating.
Nothing in the report disputes the fact that some assisted living facilities provide high-quality, compassionate care.
The National Center for Assisted Living, a trade group for providers, said states already had “a robust oversight system” to ensure proper care for residents. In the last two years, it said, several states, including California, Oregon, Rhode Island and Virginia, have adopted laws to enhance licensing requirements and penalties for poor performance.
Continue reading the NYT story at https://www.nytimes.com/2018/02/03/us/politics/assisted-living-gaps.html#story-continues-3
Federal Reserve documents on Wells Fargo
Press Release February 02, 2018
Responding to recent and widespread consumer abuses and other compliance breakdowns by Wells Fargo, the Federal Reserve Board on Friday announced that it would restrict the growth of the firm until it sufficiently improves its governance and controls. Concurrently with the Board's action, Wells Fargo will replace three current board members by April and a fourth board member by the end of the year.
In addition to the growth restriction, the Board's consent cease and desist order with Wells Fargo requires the firm to improve its governance and risk management processes, including strengthening the effectiveness of oversight by its board of directors. Until the firm makes sufficient improvements, it will be restricted from growing any larger than its total asset size as of the end of 2017. The Board required each current director to sign the cease and desist order.
"We cannot tolerate pervasive and persistent misconduct at any bank and the consumers harmed by Wells Fargo expect that robust and comprehensive reforms will be put in place to make certain that the abuses do not occur again," Chair Janet L. Yellen said. "The enforcement action we are taking today will ensure that Wells Fargo will not expand until it is able to do so safely and with the protections needed to manage all of its risks and protect its customers."
In recent years, Wells Fargo pursued a business strategy that prioritized its overall growth without ensuring appropriate management of all key risks. The firm did not have an effective firm-wide risk management framework in place that covered all key risks. This prevented the proper escalation of serious compliance breakdowns to the board of directors.
The Board's action will restrict Wells Fargo's growth until its governance and risk management sufficiently improves but will not require the firm to cease current activities, including accepting customer deposits or making consumer loans.
Emphasizing the need for improved director oversight of the firm, the Board has sent letters to each current Wells Fargo board member confirming that the firm's board of directors, during the period of compliance breakdowns, did not meet supervisory expectations. Letters were also sent to former Chairman and Chief Executive Officer John Stumpf and past lead independent director Stephen Sanger stating that their performance in those roles, in particular, did not meet the Federal Reserve's expectations.
See https://www.federalreserve.gov/newsevents/pressreleases/enforcement20180202a.htm
The consent cease and desist order and Fed letters are available at the same URL WTF Independent repair geek rants on the planned obsolescence of Apple products
Louis Rossmann is an independent service technician in New York City who has repaired Apple products for years.
In this video, Rossman uses passionate and remarkably profane language to argue that Apple withholds crucial repair information from independent repair technicians, and refuses to do repairs itself, thereby forcing product replacement rather than repair. He points out that auto manufacturers face government regulations that discourage withholding of repair information. He then goes on to explain in great detail (maybe a lot more than you want) how he is able to effect particular repairs that Apple refuses to do -- notably, he can fix a common faulty sensor problem with $2 worth of parts, a repair that Apple charges $750 for (Rossman charges less than half of that, and in cheaper markets, you can get it done for as little as $75).
Rossman has testified to lawmakers in support of "right to repair" legislation. See https://repair.org/legislation/ for a description of the legislative proposals.
The video is at https://boingboing.net/2017/04/17/right-to-repair.html
This posting is by Don Allen Resnikoff, who takes responsibility for the content.
A Geek guide to the technology and economics supporting disinformation on the internet:
#DigitalDeceit: The Technologies Behind Precision Propaganda on the Internet
By Dipayan Ghosh, Shorenstein Fellow, and Ben Scott, Senior Advisor to the Open Technology Institute at New America. Co-published by the New America Foundation and the Shorenstein Center.
See https://shorensteincenter.org/digital-deceit-precision-propaganda/
The introduction to the piece:
Over the past year, there has been rising pressure on Facebook, Google and Twitter to account for how bad actors are exploiting their platforms. The catalyst of this so-called “tech-lash” was the revelation in summer 2017 that agents of the Russian government engaged in disinformation operations using these services to influence the 2016 presidential campaigns.
The investigation into the Russian operation pulled back the curtain on a modern Internet marketplace that enables widespread disinformation over online channels. Questionable digital advertisements, social media bots, and viral internet memes carrying toxic messages have featured heavily in the news. But we have only begun to scratch the surface of a much larger ecosystem of digital advertising and marketing technologies. To truly address the specter of future nefarious interventions in the American political process, we need to broaden the lens and assess all of the tools available to online commercial advertisers. Disinformation operators in the future will replicate all of these techniques, using the full suite of platforms and technologies. These tools grow more powerful all the time as new advances in algorithmic technologies and artificial intelligence are integrated into the marketplace for digital marketing and advertising.
The central problem of disinformation corrupting American political culture is not Russian spies or a particular social media platform. The central problem is that the entire industry is built to leverage sophisticated technology to aggregate user attention and sell advertising. There is an alignment of interests between advertisers and the platforms. And disinformation operators are typically indistinguishable from any other advertiser. Any viable policy solutions must start here.
To inform and support this important public debate, this paper analyzes the technologies of digital advertising and marketing in order to deepen our understanding of precision propaganda.
From Public Citizen Consumer Law & Policy Blog
CFPB Has No Update on Enforcement Freeze After Not Announcing Enforcement Action in More Than 2 MonthsPosted: 24 Jan 2018 11:45 AM PST
by Jeff Sovern
In response to my inquiry, a CFPB representative, Brenda Muniz, informed me today that "There are no updates with respect to the freeze on enforcement actions or the issuance of CIDs," and that the CFPB has not announced an enforcement action since its November 21 announcement about Citibank. Though the Bureau's press releases say that it is “consistently enforcing federal consumer financial law," and Mr. Mulvaney released a statement yesterday, which Allison linked to, in which he said the Bureau would enforce consumer laws on his watch, it's hard to find evidence of it, unless he means that the Bureau will continue to litigate cases Mulvaney's predecessor commenced, though even that is not always happening. Meanwhile, today the Bureau issued the promised Request for Information Regarding Bureau Civil Investigative Demands and Associated Processes.
The Post's View
Opinion
A D.C. statute bars redeveloping land with a gas station on it. That’s absurd.
By Editorial Board January 21
SELF-GOVERNMENT, alas, does not guarantee sensible government. Exhibit A: the District’s strange statute that effectively prohibits the redevelopment of any land containing a full-service gas station. If you own the ground under one of the city’s roughly four dozen such establishments, you’re stuck: You can’t tear the garage down and put up condos; you really can’t even reduce it to a leaner “gas-and-go” operation. Ostensibly intended to protect an urban amenity for car owners, the ban can be waived, case by case, by the mayor — but only with the prior approval of the Gas Station Advisory Board. Alas, this august body has no members. In fact, a succession of mayors has declined to appoint any for the past 11 years.
John C. Formant is tired of this Catch-22. He owns the site of a full-service Shell station at a major intersection in booming Petworth. He would like to sell the land for construction of a residential-commercial building, including 57 condos, and even has permission from a different part of the District bureaucracy for the plan. Unless and until he can get out from under the gas-station conversion ban, however, his plans are not worth the paper they’re printed on — and his land’s market value may be suffering, too. On Jan. 2, Mr. Formant filed a lawsuit asking the U.S. District Court for the District of Columbia to declare D.C.’s law unconstitutional, as an uncompensated “taking” of his property and a form of involuntary servitude, to boot.
Those are sweeping claims, regarding which we would not hazard a legal analysis. On the essential absurdity of the District’s law, however, Mr. Formant appears to have an open-and-shut case. There’s a long history to the D.C. Council’s micromanagement of the city’s gas stations, some of it reflecting council members’ well-intentioned but exaggerated concerns about preserving a balanced commercial landscape — and a lot of it involving petty political rivalries and rent-seeking business interests too arcane to enumerate.
Complete editorial: https://www.washingtonpost.com/opinions/a-dc-statute-bars-redeveloping-land-with-a-gas-station-on-it-thats-insensible/2018/01/21/ac496ef2-fc7c-11e7-a46b-a3614530bd87_story.html?utm_term=.dbec22d78342
A copy of the lawsuit Complaint is here: https://www.scribd.com/document/368429732/Gas-Station-Lawsuit
The Supreme Court rules that D.C. police officers acted reasonably in arresting 21 people at a late-night house party a decade ago in a case that featured women in garter belts stuffed with cash and a mystery hostess named “Peaches.”
The court ruled unanimously that the officers could not be held liable for making the arrests after they came upon a scene of “utter Bacchanalia,” as Justice Clarence Thomas described it in announcing the decision, at a house party where the homeowner was not present and it was unclear whether the guests had been invited.
“Based on the vagueness and implausibility of the partygoers’ stories, the officers could have reasonably inferred that they were lying and that their lies suggested a guilty mind,” Thomas wrote in his decision for the court. At any rate, the officers had qualified immunity for their actions, the court said.
From U.S. Supreme Court opinion syllabus:
District of Columbia police officers responded to a complaint about loud music and illegal activities in a vacant house. Inside, they found the house nearly barren and in disarray. The officers smelled marijuana and observed beer bottles and cups of liquor on the floor, which was dirty. They found a make-shift strip club in the living room, and a naked woman and several men in an upstairs bedroom. Many partygoers scattered when they saw the uniformed officers, and some hid. The officers questioned everyone and got inconsistent stories. Two women identified “Peaches” as the house’s tenant and said that she had given the partygoers permission to have the party. But Peaches was not there. When the officers spoke by phone to Peaches, she was nervous, agitated, and evasive. At first, she claimed that she was renting the house and had given the partygoers permission to have the party, but she eventually admitted that she did not have permission to use the house. The owner confirmed that he had not given anyone permission to be there. The officers then arrested the partygoers for unlawful entry. Several partygoers sued for false arrest under the Fourth Amendment and District law. The District Court concluded that the officers lacked probable cause to arrest the partygoers for unlawful entry and that two of the officers, petitioners here, were not entitled to qualified immunity. A divided panel of the D. C. Circuit affirmed.
Held: 1. The officers had probable cause to arrest the partygoers.
The U.S. Supreme Court decision is here: https://www.supremecourt.gov/opinions/17pdf/15-1485_1qm2.pdf
The Washington Post story is here: https://www.washingtonpost.com/local/public-safety/supreme-court-rules-for-police-officers-in-dc-house-party-case-that-involved-mystery-hostess-called-peaches/2018/01/22/87e5eb4a-fed3-11e7-bb03-722769454f82_story.html?hpid=hp_local-news_court-1050a%3Ahomepage%2Fstory&utm_term=.a30451c8eedb
WSJ's Greg Ip on the future prospects of antitrust enforcement against Google and other similar companies
Greg Ip's front page Wall Street Journal article is remarkable for several reasons. One is that it is good journalism: The introductory paragraphs offer some of the flavor of the piece:
Standard Oil and Co. and American Telephone and Telegraph Co. were the technological titans of their day, commanding more than 80% of their markets.
Today's tech giants are just as dominant: In the U.S., Alphabet Inc.'s Google drives 89% of internet search; 95% of young adults on the internet use a Facebook Inc. product; and Amazon.com Inc. now accounts for 75% of electronic book sales. Those firms that aren't monopolists are duopolists: Google and Facebook absorbed 63% of online ad spending last year; Google and Apple Inc. provide 99% of mobile phone operating systems; while Apple and Microsoft Corp. supply 95% of desktop operating systems.
A growing number of critics think these tech giants need to be broken up or regulated as Standard Oil and AT&T once were. Their alleged sins run the gamut from disseminating fake news and fostering addiction to laying waste to small towns' shopping districts. But antitrust regulators have a narrow test: Does their size leave consumers worse off?
That may not be true in the future: if market dominance means fewer competitors and less innovation, consumers will be worse off than if those companies had been restrained. "The impact on innovation can be the most important competitive effect" in an antitrust case, says Fiona Scott Morton, a Yale University economist who served in the Justice Department's antitrust division under Barack Obama.
The Ip article can be found behind a paywall at https://www.wsj.com/articles/the-antitrust-case-against-facebook-google-amazon-and-apple-1516121561
The article is available without a subscription at http://www.foxbusiness.com/features/2018/01/16/antitrust-case-against-facebook-google-2.html
Greg Ip has made several TV appearances to discuss his article. A video of his appearance on Fox News is here:
https://eblnews.com/video/antitrust-action-looms-over-techs-biggest-names-307425
The Greg Ip article is remarkable for another reason. It demonstrates that competition policy arguments raising concerns about Google and similar companies are no longer evangelical exhortations of a few. The idea that Google and Facebook can be harmful in a manner analogous to Standard Oil and AT&T in the past and be targets for future regulation has become mainstream, at least for those who would read the Wall Street Journal or watch Fox Business News.
The mainstream attention to market power issues concerning tech companies with product prices of zero is a reminder to antitrust insiders that antitrust law is not just something chiseled in stone in Chicago some time ago, or just the ideas that practicing lawyers can take to court today. Market power issues are public policy, and have a political dimension. What the public thinks about competition policy issues will influence future government action.
Some may think that discussions that touch on aspects of competition policy and antitrust with political overtones are "claptrap," either because they prefer that antitrust be static rather than dynamic, or they believe that antitrust and competition policy should exist in separate worlds. The Greg Ip article suggests that such retrograde views will not stop the progress of public debate of competition policy issues.
Posted by Don Allen Resnikoff, who takes personal responsibility for the content.
AAI Digital Platforms Roundtable
DATE: MARCH 22, 2018
LOCATION: NATIONAL PRESS CLUB, WASHINGTON DC
Questions about the efficacy of the antitrust laws in overseeing large technology platforms are a prominent theme in public policy discourse. Many advocates contend that the antitrust laws are fully able to handle anticompetitive conduct or mergers that may arise in digital markets. Others question whether the existing laws and the prevailing consumer welfare standard are up to this important task.
AAI’s Digital Platforms Roundtable will address the growth of digital platforms and advance the state of thinking about competition in this important domain. The Roundtable will explore the central question: What does an analysis of digital platforms under the antitrust laws look like?
The Roundtable will bring together experts in competition law from government, industry, academia, and the public interest community. They will participate in discussions about the elements of antitrust approaches to mergers and strategic competitive conduct and advance the debate on the applicability of the antitrust laws to digital platforms. The half-day program will include opening remarks, two panels, and a roundtable discussion.
More information: http://www.antitrustinstitute.org/events/aai-digital-platforms-roundtable
From DMN: 117 Colorado Cities & Counties Have Voted In Favor of Locally-Owned ISPs
Paul Resnikoff
January 17, 2018
Tech giants, Democrats in Congress, and more than 22 states are fighting the FCC to protect net neutrality. But the most powerful weapon could be municipal governments themselves. The FCC has been criticized for gutting net neutrality despite overwhelming demand to protect it. Even worse, FCC commissioner Ajit Pai has been assailed by accusations of cronyism and corruption, especially given his strong ties to mega-ISP Verizon.
But what if ISPs weren’t so easily controlled by the FCC?
Enter the State of Colorado, which could become ground zero for the net neutrality resistance. Earlier this month, the municipality of Fort Collins, CO approved a $150 million budget to initiate a homegrown, locally-controlled ISP network. That homegrown ISP, in turn, would determine rules like net neutrality, not to mention fees charged to its citizens.
But that looks like the tip of the iceberg.
Fort Collins is just one of dozens of municipalities in Colorado that voted to protect their ability to create a local ISP.
Amazingly, municipal internet networks are illegal in Colorado. Back in 2005, Senate Bill 152 was passed. It made it illegal to use taxpayer dollars to construct a local broadband network. Of course, that bill was largely created by the lobbying efforts of major ISPs like Comcast and CenturyLink, both entrenched Colorado broadband providers.
Now, a total of 117 communities within Colorado have successfully voted against Senate Bill 152. As a result, they have protected their ability to develop their own broadband networks.
Last November, as the FCC prepared to gut net neutrality, another 19 joined the group. Fort Collins is simply one of the first communities to seriously act on that right.
According to the Institute for Local Self-Reliance, the latest batch of votes were a landslide. More than 83 percent of voters wanted out of Senate Bill 152 in the November round. “These cities and counties recognize that they cannot count on Comcast and CenturyLink alone to meet local needs, which is why you see overwhelming support even in an off-year election,” said Christopher Mitchell, director of the Community Broadband Networks initiative at the Institute for Local Self-Reliance.
All of which spells a major problem for entrenched ISPs — in Colorado and beyond. Instead of enjoying outright monopolies and elevated rates, the presence of a local ‘utility ISP’ spells serious competition.
The biggest reason is that a municipally-created ISP is designed to meet the needs of its citizens, both in terms of service and price. That means that if a local community wants net neutrality and affordable speeds, then the locally-created network will strive to deliver just that.
It also means that citizens less capable of paying for internet access have a greater chance of receiving it.
Actually, there’s another Colorado municipality that offers its own broadband. Back in 2011, the town of Longmont started offering a high-speed, 1 gigabyte/second service for $49.95. That crushed the next competitor, which offers a 20Mbps connection.
As of last summer, the Longmont service had 90,000 takers. That’s more than half of all residents, according to the city.
So who’s next?
Importantly, voting against Senate Bill 152 merely gives cities and counties the right to build their own networks. But given enough outcry over issues like net neutrality, bad service, and high prices, it’s likely a few other homegrown ISPs will appear in the coming months and years.
Source: https://www.digitalmusicnews.com/2018/01/17/colorado-municipalities-net-neutrality/
New York and Connecticut sue EPA in New York federal court for failing to meet a Clean Air Act deadline for curbing smog pollution from other states
States Complaint: https://www.law360.com/articles/1002928/attachments/0
Law 360 article (paywall): https://www.law360.com/energy/articles/1002928/ny-conn-sue-epa-over-lax-upwind-smog-enforcement?nl_pk=9fa8806b-1d9f-4443-911f-ca2a2f4a32a7&utm_source=newsletter&utm_medium=email&utm_campaign=energy
States, environmental groups asked the D.C. Circuit to restart litigation over Government Clean Power Plan
EPA asks to hold case in suspense.
States brief:
https://www.law360.com/articles/1002846/attachments/0
Environmental organizations brief:
https://www.law360.com/articles/1002846/attachments/1
Law 360 article (paywall) at https://www.law360.com/energy/articles/1002846/states-oppose-epa-bid-for-time-in-clean-power-plan-row?nl_pk=9fa8806b-1d9f-4443-911f-ca2a2f4a32a7&utm_source=newsletter&utm_medium=email&utm_campaign=energy
The legal fight against the Federal Communications Commission’s recent repeal of so-called net neutrality regulations began on Tuesday [1/16], with a flurry of lawsuits filed to block the agency’s action
One suit, filed by 21 state attorneys general, said the agency’s actions broke federal law. The commission’s rollback of net neutrality rules were “arbitrary and capricious,” the attorneys general said, and a reversal of the agency’s longstanding policy to prevent internet service providers from blocking or charging websites for faster delivery of content to consumers.
Mozilla, the nonprofit organization behind the Firefox web browser, said the new F.C.C. rules would harm internet entrepreneurs who could be forced to pay fees for faster delivery of their content and services to consumers. A similar argument was made by another group that filed a suit, the Open Technology Institute, a part of a liberal think tank, the New America Foundation.
Suits were also filed on Tuesday by Free Press and Public Knowledge, two public interest groups. Four of the suits were filed in the United States Court of Appeals for the District of Columbia Circuit. The Free Press suit was filed in the United States Court of Appeals for the First Circuit.
From https://www.nytimes.com/2018/01/16/technology/net-neutrality-lawsuit-attorneys-general.html?dlbk=&emc=edit_dk_20180117&nl=dealbook&nlid=67075843&te=1&_r=0
From Wolters-Kluwer AntitrustConnect Blog:
Three Antitrust Cases To Be Heard by High Court
(CLICK TITLE FOR LINK)
JEFFREY MAY
January 15, 2018
It’s shaping up to be a busy term for antitrust issues at the U.S. Supreme Court. The Court on January 12 decided to review a third antitrust case.
In the context of a price fixing action against foreign vitamin C manufacturers, the Court will consider “whether a court may exercise independent review of an appearing foreign sovereign’s interpretation of its domestic law” or must defer to the foreign government’s legal statement. Earlier this term, the justices agreed to weigh in on the appealability of a denial of state action immunity, and consider a joint state effort to challenge so-called “anti-steering” rules that prohibited merchants who accepted American Express cards from directing customers to alternative credit card brands.
Foreign compulsion, comity. The most recent issue to be taken up by the Court involves a Second Circuit decision that vacated a district court judgment against Chinese vitamin C manufacturers for fixing prices. Animal Science Products and other U.S. purchasers of vitamin C alleged that Hebei Welcome Pharmaceutical and other Chinese manufacturers and exporters of vitamin C conspired to fix the price and supply of vitamin C sold to U.S. companies on the international market in violation of the Sherman Act. The federal district court in New York City rejected the defendants’ motion for judgment as a matter of law, ruling that that the doctrines of act of state and international comity did not bar plaintiffs’ suit. After a jury trial, the court entered judgment, awarding the plaintiffs approximately $147 million in damages and enjoining the defendants from engaging in future anticompetitive behavior.
In September 2016, the U.S. Court of Appeals in New York City vacated the judgment and reversed the order denying the manufacturers’ motion to dismiss. It said that the case presented the question of what laws and standards control when U.S. antitrust laws are violated by foreign companies that claim to be acting at the express direction or mandate of a foreign government. The appellate court addressed how a federal court should respond when a foreign government, through its official agencies, appears before that court and represents that it has compelled an action that resulted in the violation of U.S. antitrust laws.
The Second Circuit concluded, that because the Chinese government had filed a formal statement in the district court asserting that Chinese law required the defendants to set prices and reduce quantities of vitamin C sold abroad and because the manufacturers could not simultaneously comply with Chinese law and U.S. antitrust laws, the principles of international comity required the district court to abstain from exercising jurisdiction in this case.
Animal Science petitioned the Supreme Court for review, arguing that the Chinese government had mischaracterized its own law in asserting that the Chinese companies’ anti-competitive behavior was required by Chinese law. The petitioners pointed to statements that the manufacturers’ anti-competitive agreement was self-regulated and voluntarily adopted without government intervention.
The petition presented three questions for the Supreme Court: (1) whether the Second Circuit, in conflict with decisions of three courts of appeals, erred in exercising jurisdiction under 28 U.S.C. §1291 over a pre-trial order denying a motion to dismiss following a full trial on the merits; (2) whether a court may exercise independent review of an appearing foreign sovereign’s interpretation of its domestic law (as held by the Fifth, Sixth, Seventh, Eleventh, and D.C. Circuits), or whether a court is “bound to defer” to a foreign government’s legal statement, as a matter of international comity, whenever the foreign government appears before the court (as held by the opinion below in accord with the Ninth Circuit); and (3) whether a court may abstain from exercising jurisdiction on a case-by-case basis, as a matter of discretionary international comity, over an otherwise valid Sherman Antitrust Act claim involving purely domestic injury.
The Court said that it would consider the second question presented. The U.S. Solicitor General filed an amicus brief in November 2017, arguing that the Court should grant the petition solely on the question of whether a federal court determining foreign law under Fed. R. Civ. P. 44.1 is required to treat as conclusive a submission from the foreign government characterizing its own law. The Solicitor General argued that a foreign government’s characterization of its own law is entitled to substantial weight, but was not conclusive. The government said that the case raised an important and recurring issue (Animal Science Products, Inc. v. Hebei Welcome Pharmaceutical Co. Ltd., Dkt. 16-1220).
State action immunity. The Supreme Court also agreed to review of a decision of the U.S. Court of Appeals in San Francisco rejecting an interlocutory appeal of a federal district court order denying a motion to dismiss monopolization charges on state action immunity grounds
because the collateral order doctrine did not allow immediate appeal of such an order as it was not considered a final decision.
The petition for certiorari asks whether orders denying state action immunity to public entities are immediately appealable under the collateral-order doctrine and highlights a split among the circuits on this issue. The Fifth and Eleventh Circuits have held that state action immunity is an immunity against suit rather than a mere defense against liability, and concluded that if a denial of state action immunity cannot be appealed immediately, then in effect it cannot be appealed at all. The Fourth and Sixth Circuits, and the Ninth Circuit in this case, have held that the interlocutory denial of state action immunity to a public entity is not immediately appealable (SolarCity Corp. v. Salt River Project Agricultural Improvement and Power District, Dkt. 17-368).
Anti-steering rules. In October 2017, the Court granted a petition brought by 11 states seeking a review of a Second Circuit ruling that the Department of Justice and the states failed to prove that “anti-steering” rules that prohibited merchants who accepted American Express cards from directing customers to alternative credit card brands violated Section 1 of the Sherman Act.
In 2010, the Justice Department and 17 states filed suit against the country’s three largest credit and charge card transaction networks. A February 2015 decision of the federal district court in Brooklyn, New York, in favor of the Justice Department and the states, and an order prohibiting American Express (AmEx) from enforcing these nondiscriminatory provisions (NDPs) in contracts with merchants, were reversed and remanded by the Second Circuit in September 2016, with instructions to enter judgment in favor of AmEx.
The petition asked: “Under the ‘rule of reason,’ did the government’s showing that AmEx’s anti-steering provisions stifled price competition on the merchant side of the credit-card platform suffice to prove anticompetitive effects and thereby shift the burden of establishing any procompetitive benefits from the provisions?”
The Justice Department declined to participate in the appeal and initially asked the Supreme Court to reject the states’ petition, arguing that the case does not satisfy the Court’s traditional certiorari standards. While the Justice Department agreed with the states that the district court’s findings established a prima facie case that the anti-steering rules unreasonably restrain trade, and that the Second Circuit had erred in holding otherwise, it nevertheless argued against the Supreme Court taking the cases. Specifically, the Justice Department argued that the decision was based almost entirely on the “two-sided” nature of the credit-card industry, and neither the Supreme Court nor any other circuit had squarely considered the application of the antitrust laws to two-sided platforms, as such.
After the Court agreed to hear the case, the Justice Department filed a brief, contending that the Court should vacate the judgment holding that the government failed to establish a prima facie case. On remand, the appellate court could consider any challenges that Amex properly preserved to the district court’s holding that Amex failed to establish
sufficient procompetitive justifications for the anti-steering rules, according to the Justice Department.
The case is set for argument on February 26, 2018 (State of Ohio v. American ExpressCompany, Dkt. 16-1454).
French prosecutor launches probe into Apple planned obsolescence: judicial source
Reuters Staff
PARIS (Reuters) - A French prosecutor has launched a preliminary investigation of U.S. tech giant Apple (AAPL.O) over alleged deception and planned obsolescence of its products following a complaint by a consumer organization, a judicial source said on Monday.
The investigation, opened on Friday, will be led by French consumer fraud watchdog DGCCRF, part of the Economy Ministry, the source said.
Apple acknowledged last month that it takes some measures to reduce power demands - which can have the effect of slowing the processor - in some older iPhone models when a phone’s battery is having trouble supplying the peak current that the processor demands.
The French watchdog’s preliminary investigation could take months, and depending on its findings, the case could be dropped or handed to a judge for an in-depth investigation.
Under French law, companies risk fines of up to 5 percent of their annual sales for deliberately shortening the life of their products to spur demand to replace them.
An Apple spokeswoman in the United States declined to comment on the French investigation, pointing to a Dec. 28 statement in which the company apologized over its handling of the battery issue and said it would never do anything to intentionally shorten the life of any Apple product.
An Apple spokesman in France could not immediately be reached for comment.
* * * *
A French consumer association called “HOP” -- standing for “Stop Planned Obsolescence” -- filed a legal complaint against Apple.
Apple already faces lawsuits in the United States over accusations of defrauding iPhone users by slowing down devices without warning to compensate for poor battery performance.
Apple also said on Dec. 28 it was slashing prices for battery replacements and would change its software to show users whether their phone battery was good.
Reporting by Yann Le Guernigou; Additional reporting by Stephen Nellis in San Francisco; Writing by Bate Felix; Editing by Adrian Croft
From: https://www.reuters.com/article/us-apple-france-investigation/french-prosecutor-launches-probe-into-apple-planned-obsolescence-judicial-source-idUSKBN1EX27V
Sally Hubbard on the connection between market power issues and fake news problems
Excerpt:
I. INTRODUCTION
The public and political outcry over fake news — and what to do about it — has generated abundant commentary. Yet few commentators have focused on how concentrated market power in online platforms contributes to the crisis. This essay expands on my view, originally set forth in Washington Bytes in January, that fake news is, in part, an antitrust problem.2
Fake news can be challenging to define. In this essay, fake news means stories that are simply made up for profit or propaganda without using trained journalists, conducting research or expending resources. Articles written according to journalistic practices from a particular political perspective or containing factual errors do not meet the definition of fake news used here.
This essay will explore two primary reasons why fake news is an antitrust problem.
First, Facebook and Google compete against legitimate news publishers for user attention, data and advertising dollars. The tech platforms’ business incentives run counter to the interests of legitimate news publishers, and the platforms pull technological levers that harm publishers’ business models and advantage their own. Such levers keep users within Facebook’s and Google’s digital walls and reduce traffic to news publishers’ properties, depriving publishers of the revenue essential to fund legitimate journalism and to counter fake news.
Second, Facebook and Google lack meaningful competition in their primary spheres of social media and online search, respectively. As a result, their algorithms have an outsized impact on the flow of information, and fake news purveyors can deceive hundreds of millions of users simply by gaming a single algorithm. Weak competition in social media platforms means Facebook can tailor its news feed to serve its financial interests, prioritizing engagement on the platform over veracity. Lack of competition in online search means Google does not face competitive pressure to drastically change its algorithm to stem the spread of fake news. Consumers and advertisers unhappy about the spread of fake news on Facebook and Google, or publishers dissatisfied with the two platforms’ terms of dealing, have limited options for taking their business elsewhere. If eliminating fake news were necessary to keep users, advertisers and content creators from defecting to competitive platforms – if profits were at stake – Facebook and Google would find a way to truly fix the problem.3
Facebook and Google, like all corporations, have fiduciary duties to maximize profits for their shareholders. Distinguishing content based on quality or veracity runs counter to the platforms’ profit motives because any content they cannot advertise around is a lost revenue opportunity. And because fake news is more likely to gain attention and foster engagement, it better serves both platforms’ advertising-based business models. The problem is not that Facebook and Google are bad corporations, as corporations are designed to place profits over socio-political concerns, even democracy. The problem rather is that the normal checks and balances of a free, competitive market do not constrain Facebook and Google from pursuing profits.
The full article is at https://www.competitionpolicyinternational.com/wp-content/uploads/2017/12/CPI-Hubbard.pdf
Industry complaints about Intel chips followed by class action filings
Meltdown and Spectre exploit an architectural flaw with the way processors handle speculative execution, a technique that most modern CPUs use to increase speed. Both classes of vulnerability could expose protected kernel memory, potentially allowing hackers to gain access to the inner workings of any unpatched system or penetrate security measures. The flaw can’t be fixed with a microcode update, meaning that developers for major OSes and platforms have had to devise workarounds that could seriously hurt performance.
In an email to a Linux list this week, Torvalds questioned the competence of Intel engineers and suggested that they were knowingly selling flawed products to the public. He also seemed particularly irritated that users could expect a five to 30 percent projected performance hit from the fixes.
“I think somebody inside of Intel needs to really take a long hard look at their CPU’s, and actually admit that they have issues instead of writing PR blurbs that say that everything works as designed,” Torvalds wrote. “.. and that really means that all these mitigation patches should be written with ‘not all CPU’s are crap’ in mind.”
“Or is Intel basically saying ‘we are committed to selling you shit forever and ever, and never fixing anything’?” he added. “Because if that’s the case, maybe we should start looking towards the ARM64 people more.”
“Please talk to management,” Torvalds concluded. “Because I really see exactly two possibibilities:—Intel never intends to fix anything OR—these workarounds should have a way to disable them. Which of the two is it?”
As Business Insider noted, as the person in charge of the open-source Linux kernel, Torvalds may be freer to share his opinion on Intel’s explanation for the issue than engineers working for the company’s business partners. Intel is currently being hit by a series of class action lawsuits citing the flaws and its handling of the security disclosure.
From: https://gizmodo.com/linus-torvalds-is-not-happy-about-intels-meltdown-and-s-1821845198
A copy of a California class action filing complaining about recent Intel CPU chip defects is here: https://images.law.com/contrib/content/uploads/documents/403/8058/GarciavIntel.pdf
Washington, DC -- Internet Association President & CEO Michael Beckerman issued the following statement on the publication of the “Restoring Internet Freedom Order” that will gut net neutrality protections for consumers, startups, and other stakeholders:
“The final version of Chairman Pai’s rule, as expected, dismantles popular net neutrality protections for consumers. This rule defies the will of a bipartisan majority of Americans and fails to preserve a free and open internet. IA intends to act as an intervenor in judicial action against this order and, along with our member companies, will continue our push to restore strong, enforceable net neutrality protections through a legislative solution.”
A longer statement of the Internet Association position is here:
https://internetassociation.org/reports/an-empirical-investigation-of-the-impacts-of-net-neutrality/
A judge has given preliminary approval of a class-action settlement with Southwest Airlines for $15 million and “significant cooperation” in proving a cartel case against co-defendants American, Delta and United airlines
The Court order is here, through ABA Journal: www.abajournal.com/images/main_images/Preliminary_Settlement.pdf
The lawsuit alleges that the nation’s top four carriers “participated in an unlawful conspiracy” to artificially hold down passenger capacity to increase fare prices.
Southwest was the first defendant to settle in this case, which was consolidated from 103 actions from around the country, according to a court order from December 2015, and is being heard in the U.S. District Court for the District of Columbia.
From Public Citizen Consumer Law & Policy Blog:
Bank Trade Group Fears Industry Will Capture CFPB
Posted: 05 Jan 2018 11:22 AM PST
by Jeff Sovern
Camden R. Fine is the president and CEO of the Independent Community Bankers of America, a trade group for community bankers. The American Banker recently published his op-ed, Don’t let a credit union regulator run the CFPB, opposing the candidacy of National Credit Union Administration Chairman J. Mark McWatters to head the CFPB. Here's an excerpt:
[A]mid concerns that the CFPB lacks sufficient checks on its regulatory authority, the NCUA’s willingness to flout Congress in its rulemakings makes its chairman suspect for leading the bureau. McWatters and others at the NCUA have been strident advocates for expanding the credit union charter far beyond what Congress intended when it established the industry in the 1930s.
* * *
The CFPB should not be led by the head of an agency that has acted as a cheerleader for the industry under its oversight.
* * *
if Washington is willing to settle for single-director governance at the CFPB, then let’s advance a director with meaningful experience in the full range of regulations for which the CFPB is responsible. And let’s choose a leader not with a track record of cheerleading for the industry he is charged with overseeing and regulating, but rather a commitment to the laws by which our agencies are established by Congress.
Mr. Fine should be commended for pointing out that regulatory capture is a problem, especially when it comes to the CFPB (Mr. Fine's position appears to be rooted in the fact that credit unions compete with community banks). Regulatory capture has been endemic among banking regulators, most notably at the OCC. Indeed, it was the fear of regulatory capture that prompted Congress to structure the CFPB the way it did. It would be great if the next CFPB director, whomever that person may be, avoids regulatory capture, not only by credit unions, but also by banks and other financial institutions. One place the president could look for a director who would be unlikely to be captured by the industry, of course, would be among consumer advocates. Yes, I know, but a person's reach should exceed his grasp, or what's a heaven for?
The American Law Institute is engaged in a project to draft a Restatement of Consumer Contracts that takes arguably limited views related to unconscionability
From an advocacy letter to the ALI signed by a number of consumer groups, including DCCRC:
We are writing to express our deep concerns regarding the current Council Draft of this proposed Restatement. If followed by courts, it would tilt the marketplace dramatically toward businesses at the expense of consumers. Instead of respecting precedent, it undermines the well-accepted factors that courts and legislatures have developed to determine whether contract terms are procedurally unconscionable, and replaces them with a theory spun out in a law review article that cites not a single judicial decision in its support.
We write as organizations that work to protect consumers from unfairness in the marketplace every day. We have a keen on-the-ground feel for how some businesses treat consumers fairly and reasonably and how other businesses do not. We are also painfully aware of the dearth of legal resources available to consumers to defend themselves from mistreatment by businesses. The combined legal resources available to assist consumers are very limited and are able to help very few people.
We have a number of concerns about the assent, addition of new terms, and modification of terms provisions (Sections 2-4). These sections take an extremely loose view of the terms to which the consumer has agreed. Moreover, the Draft would allow a business to insert new terms after the fact as long as the consumer was told beforehand that it might do so, and the consumer has an opportunity to review the new terms and either continue under the existing terms or terminate the contract. Notably, the consumer is not given the same right to impose new terms upon the business.
The Draft justifies these lenient standards for courts to construct consumer assent on the ground that the doctrines of unconscionability and deception will act as a counterbalance to predatory terms, abuse, and overreaching by businesses. The entire premise of this proposed Restatement is that the unconscionability and deception doctrines are essential to “police” the market in light of the permissive assent rules found throughout. However, Sections 5 and 6 of the Draft undermine rather than strengthen these doctrines.
There are four primary problems with the Draft’s approach: (1) the definitions of procedural and substantive unconscionability are too restrictive; (2) the Draft fails to state that unconscionability and deception can be raised affirmatively to challenge the specific terms or the contract as a whole; (3) the Draft severely limits the remedies available once a court finds a term or contract to be unconscionable or that the business engaged in deception; and 4) the Draft places the burden of proof on consumers even though only businesses have access to most of that proof. In sum, the proposed Restatement embodies an expressly preferential treatment of businesses over consumers.
I. The Draft Undermines the Critically Important Doctrine of Unconscionability
Restatements consist of three parts: the “black letter,” which is intended to be the essential law on the subject; the Comments, which are regarded as an integral part of the section to which they belong and are consulted in order to understand the background and rationale of the black letter and the details of its application; and the Reporters’ Notes, which are regarded as the product of the Reporters (not the Institute) and discuss the legal and other sources they relied upon in formulating the black letter and the comments.
The black letter of the current Draft states that a term is procedurally unconscionable—i.e. that consumer’s agreement to the term was obtained in an unconscionable way—when it causes unfair surprise or results from the lack of meaningful choice of the part of the consumer.
Section 5(b)(2).
We do not object to this general statement. However, the Restatement also proposes to abandon—or drastically recast—the well-accepted set of factors that courts use to determine procedural unconscionability: (1) the consumer’s lack of financial sophistication (including cognitive biases); (2) the business’s exploitation of consumer disadvantages; (3) unequal bargaining power; (4) the use of incomprehensible language; (5) high pressure tactics and misrepresentations; and (5) whether economic, social, or practical duress compelled a party to execute the contract.
Comment 6 and the Reporters’ Notes seek to replace this set of factors with a new concept, “salience.”
The Reporters’ Notes define a contract term as salient “if it can affect the contracting decisions of a substantial number of consumers,” and then take the remarkable position that, if a term can affect the contracting decisions of a substantial number of consumers, then the market will police the term and the courts need not evaluate whether it was imposed on the consumer in an unconscionable way. The Reporters, however, do not cite any judicial decisions that define or apply the concept of “salience” in the unconscionability context, and there is not one reported or unreported decision on Westlaw that takes this approach. Instead, the Reporters’ Comments appear to rely entirely on a law review article that spins out this theory, again without citing any judicial decisions that support it.
This attempt to inject an entirely new approach contravenes the methodology that ALI claims to follow of ascertaining the majority and minority rules, determining which rule is the better one, and providing the rationale for choosing it. But of greater concern is its unfounded reliance on the marketplace to prevent overreaching and unfairness toward consumers. Recent history, including the vast wave of irresponsible lending that caused the mortgage meltdown ten years ago, demonstrates that overreaching and unfairness flourish in the marketplace.
The Draft also expresses an overly restrictive standard for whether a contract term is substantively unconscionable. While Section 5(b)(1) states that a term is substantively unconscionable if it is “fundamentally unfair” or “unreasonably one-sided,” the Comments state that: “the doctrine is to be used only when the one-sidedness of a term in the contract is extreme.” This test sets an overly high standard. Many fine print terms in consumer contracts today are unreasonable and unfair, but might not be viewed as “unconscionable” under this definition. For example, a fine print $35 charge might not seem “fundamentally” unfair in isolation. But when a $35 charge is repeatedly imposed, is high when compared to the cost of the contract, exceeds the cost to the business that the charge is intended to offset, or is imposed repeatedly, the fee should be declared unreasonable and unfair even though a court might not find it “extreme.”
Moreover, non-mutual enforcement clauses—clauses that deny the consumer the right to a remedy that the business is allowed to invoke—were not added to the list of contract terms that are prima facie unconscionable in the text of Section 5. It is common for businesses to place non-mutual clauses in consumer contracts that allow the business to sue the consumer in court, but relegate the consumer to mandatory binding arbitration. Although court decisions are split on whether “one-sided” or “non-mutual” enforcement clauses are unconscionable in the arbitration context, the better rule is that they are prima facie substantively unconscionable. The role of a Restatement is to “propose the better rule and provide the rationale for choosing it.” The Draft’s failure to apply the presumption of substantive unconscionability to such clauses, whether or not they involve mandatory arbitration, also undermines the critical role that the unconscionability doctrine is supposed to contribute to the success of the Restatement’s approach.
II. The Draft Cripples the Enforcement of Unconscionability and Deception
Our second concern about the Draft’s approach to the unconscionability doctrine is the failure to provide for robust consumer enforcement. The unconscionability doctrine will provide little or no counterweight to the permissive assent rules if consumers can raise it only as defense to a lawsuit to enforce the contract. Traditionally, common law unconscionability could be raised only as a defense to an action brought against a consumer. A court could permit a suit seeking a declaration that a term or the contract is unconscionable if the suit does not seek damages or other affirmative relief. The black letter of this Draft does not address the limited enforcement options available to consumers. Neither the Comments nor Reporters’ Notes discuss any judicial rulings on this point. Enforcement of the doctrine of deception suffers the same fate.
In the context of state and federal statutory protections, optimal policing of marketplace behavior occurs when state, federal, and private attorneys are acting as cops on the beat. In the context of the common law, however, there is little or no governmental enforcement, leaving consumers and their attorneys to bear this burden. Consumers should not be put in the position of having to default on the contract and subject themselves to negative credit reporting in order to raise unconscionability or deception. Moreover, the threat of enforcement is insignificant and will not significantly affect market behavior if only a small percentage of consumers (those who default and are sued) can raise the issue. Businesses will be well aware that they have little to fear from consumers.
In light of these practical and legal restrictions to private enforcement found in this Draft, the pivotal roles that unconscionability and deception are called upon to play in policing the marketplace are severely undermined. To remedy this, the black letter of Sections 5 and 6 must include a provision stating that a consumer can raise unconscionability affirmatively and defensively by seeking a declaration that the contract is void in part or in its entirety, providing for restitution for the costs incurred by virtue of the void provisions, and allowing class action relief.
The current Draft addresses this critical question just in Comment 12 to Section 5 and Comment 7 to Section 6, not in the black letter. And the two Comments are entirely inadequate. They reject the use of these doctrines affirmatively except in the limited circumstance where the consumer paid an unconscionable fee and seeks to recover it.
III. The Draft Severely Limits Remedies Related to Unconscionability and Deception
The only remedies available in this Draft in the event of a finding of unconscionability or deception are found in Section 9. This Section instructs the courts to refuse to enforce the offending term or the contract or replace the offending provisions with other terms. These provisions, without more, do not realistically deter business overreaching at contract inception or police the marketplace after the fact. These remedies are especially feeble when considered in conjunction with the lack of affirmative enforcement, the burdens of proof imposed on consumers, and silence regarding standards of proof.
IV. The Drafts Fails to Address Burdens of Proof and Standards of Proof
The allocation of burdens of proof and the level of evidence the consumer must present to prove unconscionability and deception also reduce the effectiveness of the roles that these doctrines are supposed to play. According to the Draft, the consumer bears the initial burden of proving the elements of unconscionability. Businesses, however, have access to nearly all of the relevant evidence. For example, only businesses are “recording this call to for quality assurance,” and therefore control the recordings which would show that telemarketers pressure and deceive consumers into agreeing to bad deals. Only businesses draft the contracts and only they know “the commercial setting, purpose, and effect” of the terms they impose on consumers.
Regarding procedural unconscionability related to a contract term, the Draft takes the position that a consumer must show that the term did not affect the contracting decisions of a substantial group of consumers, i.e., the term is not salient. To meet this burden a consumer would have to commission a study of consumers—an unrealistic task for a consumer to perform given the cost involved. Such a study lacks validity in any event because, if conducted by consumers once unconscionability has become an issue, the study would take place well after consummation of the contract, rather than at the time of contracting. A prior draft added a Comment to Section 5 that placed the burden on the business to prove that the standard contract terms were presented in a way that affected consumers’ contracting decisions to rebut a finding of procedural unconscionability. It also addressed burdens related to substantive unconscionability. Council Draft No. 4 removed that Comment, taking a big step backwards.
Neither Section 5 nor Section 6 address the standard of proof a court should apply in cases raising these claims. In both contexts, the black letter should state that the standard of proof is preponderance of the evidence. The application of a stricter standard reduces the deterrence and policing role of these doctrines. This is especially so where the remedy is limited to unenforceability and replacement with a substitute term and deterrence damages are not available for business deception, as would be the case with common law fraud.
IV. Conclusion
Unfortunately, this Draft unnecessarily restricts the scope of procedural and substantive unconscionability, fails to provide that unconscionability and deception can be raised affirmatively, circumscribes the remedies available for violations of these doctrines well beyond what the general common law otherwise provides, and fails to address burdens and standards of proof. As a result, the Restatement collapses under the weight of “freedom to contract” due to the lack of any meaningful consumer protections.
For these reasons, we urge the Council to not approve this Draft. Thank you for your consideration.
Editor's note: The ALI proposal, if followed by the courts, would undermine protections of local law, including the law of the District of Columbia. We will explore articulating that concern in greater detail. DR
The Geek explanation of design flaw (what the British media calls a "cockup") in Intel chips
From: https://www.theregister.co.uk/2018/01/02/intel_cpu_design_flaw/
DAR summary: Intel CPU chips have a serious design flaw not shared by rival AMD. Intel CPUs speculatively execute code potentially without performing security checks. AMD CPUs do not --they do not have the Intel design flaw.
The bug is present in modern Intel processors produced in the past decade. It allows normal user programs – from database applications to JavaScript in web browsers – to discern to some extent the layout or contents of protected kernel memory areas.
The fix is to separate the kernel's memory completely from user processes using what's called Kernel Page Table Isolation, or KPTI. At one point, Forcefully Unmap Complete Kernel With Interrupt Trampolines, aka FUCKWIT, was mulled by the Linux kernel team, giving you an idea of how annoying this has been for the developers.
Whenever a running program needs to do anything useful – such as write to a file or open a network connection – it has to temporarily hand control of the processor to the kernel to carry out the job. To make the transition from user mode to kernel mode and back to user mode as fast and efficient as possible, the kernel is present in all processes' virtual memory address spaces, although it is invisible to these programs. When the kernel is needed, the program makes a system call, the processor switches to kernel mode and enters the kernel. When it is done, the CPU is told to switch back to user mode, and reenter the process. While in user mode, the kernel's code and data remains out of sight but present in the process's page tables.
Think of the kernel as God sitting on a cloud, looking down on Earth. It's there, and no normal being can see it, yet they can pray to it.
* * *
In an email to the Linux kernel mailing list over Christmas, AMD said it is not affected. The wording of that message, though, rather gives the game away as to what the underlying cockup is:
AMD processors are not subject to the types of attacks that the kernel page table isolation feature protects against. The AMD microarchitecture does not allow memory references, including speculative references, that access higher privileged data when running in a lesser privileged mode when that access would result in a page fault.
A key word here is "speculative." Modern processors, like Intel's, perform speculative execution. In order to keep their internal pipelines primed with instructions to obey, the CPU cores try their best to guess what code is going to be run next, fetch it, and execute it.
It appears, from what AMD software engineer Tom Lendacky was suggesting above, that Intel's CPUs speculatively execute code potentially without performing security checks.
* * *
Here is the email from AMD:
FromTom Lendacky <>
Subject[PATCH] x86/cpu, x86/pti: Do not enable PTI on AMD processors
DateTue, 26 Dec 2017 23:43:54 -0600· share 0
· share 2k
AMD processors are not subject to the types of attacks that the kernel
page table isolation feature protects against. The AMD microarchitecture
does not allow memory references, including speculative references, that
access higher privileged data when running in a lesser privileged mode
when that access would result in a page fault.
Disable page table isolation by default on AMD processors by not setting
the X86_BUG_CPU_INSECURE feature, which controls whether X86_FEATURE_PTI
is set.
Signed-off-by: Tom Lendacky <thomas.lendacky@amd.com>
---
arch/x86/kernel/cpu/common.c | 4 ++--
1 file changed, 2 insertions(+), 2 deletions(-)
diff --git a/arch/x86/kernel/cpu/common.c b/arch/x86/kernel/cpu/common.c
index c47de4e..7d9e3b0 100644
--- a/arch/x86/kernel/cpu/common.c
+++ b/arch/x86/kernel/cpu/common.c
@@ -923,8 +923,8 @@ static void __init early_identify_cpu(struct cpuinfo_x86 *c)
setup_force_cpu_cap(X86_FEATURE_ALWAYS);
- /* Assume for now that ALL x86 CPUs are insecure */
- setup_force_cpu_bug(X86_BUG_CPU_INSECURE);
+ if (c->x86_vendor != X86_VENDOR_AMD)
+ setup_force_cpu_bug(X86_BUG_CPU_INSECURE);
fpu__init_system(c);
A Message from People for Fairness Coalition, sponsor of a campaign supporting public restrooms in DC:
Support Bill 22-0223 Public Restroom Facilities Installation & Promotion Act of 2017
Let members of the DC City Council know that you are in favor of:
CLEAN, SAFE, AVAILABLE PUBLIC RESTROOMS FOR EVERYONE in needed areas of DC
A DC Council hearing on Bill 22-0223 is scheduled for January 10 2018
Bill 22-0223 was introduced April of this year by Council Members Nadeau, Grosso, Silverman, and R White. It is inspired by lessons learned and best practices from cities in the US and elsewhere that have successfully installed clean, safe, available public restrooms for everyone.
The Bill:
Proposes the establishment of a working group consisting of DC Water, DDOT, DGS, DHS, DPR, and DPW. They will be responsible for:
It is very hard, when you have to go, to find a clean, safe restrooms in Washington DC:
See https://actionnetwork.org/letters/support-bill-22-0223-public-restroom-facilities-installation-promotion-act-of-2017?source=direct_link
FTC "has gone dark" on fighting hidden resort fees, D.C. attorney general says
An attempted crackdown on hidden hotel charges now faces a potential roadblock in Washington, as a growing number of travelers complain that resort, urban or facility fees can add up to $50 to your bill. Even lower-priced hotels are adding the fees to room charges. One watchdog says the number of hotels charging extra fees has grown 26 percent year-over-year. The size of the fees has risen 12 percent.
District of Columbia Attorney General Karl Racine is helping lead an investigation, along with the attorneys general in 47 states, into a dozen major hotel chains.
"What these lodging companies do is they hook the would-be buyer with a lower rate … then spring the additional charge on them," Racine said.
We found one Las Vegas hotel charging a room rate of $26 with a "resort fee" of $34. One San Francisco hotel adds a $20 "urban facility fee" and another hotel in Arizona listed its resort fee of $50 underneath taxes.
"What's illegal about it is that it misleads consumers as to what the actual price of a hotel room is," Racine said.
Even properties with a certain famous name make money off resort fees. We found three Trump hotels in Florida and Las Vegas charge resort fees of $35, $20 and $24 for a potential $66,000 in charges per day.
The American Hotel and Lodging Association told CBS News, "The hotel industry provides guests full disclosure for mandatory resort fees charged up front" and said the hotels wanted to "provide consumers with the best value by grouping amenity fees into one cost" following the FTC's guidance.
But in January this year, the FTC found charging resort fees separately without first disclosing the total hotel price likely harms consumers. Racine said the FTC was working with the states on their investigation – at least, he said, until the Trump administration came in.
"The FTC in a way has gone dark and I think that to be honest, that has given some confidence to the hospitality industry perhaps they're going to be able to wait out or otherwise evade the efforts of the 47 states because the FTC is no longer our partner," Racine said.
"You're saying the FTC backed off?" Werner asked.
"That is the case," Racine said.
Backed off, he claimed, during a crucial time in negotiations with the hotel chains.
"We were headed towards what I thought would be a pretty fair settlement... The election hit and then all of a sudden, the hospitality industry sort of dug in against our position," Racine said.
We asked the FTC about Racine's allegations. Officials responded with a statement saying the agency was "never a co-plaintiff" with the attorneys general but "has worked with the industry and state AGs to try improve disclosures about resort fees." We asked the Trump Organization and the White House if they had any comments but did not receive any response.
Excerpts are from https://www.cbsnews.com/news/resort-fee-investigation-ftc-allegedly-backing-off-trump-administration/
A federal judge on Friday allowed the CMS to move forward with its planned $1.6 billion cut to a federal drug discount program.
U.S. District Judge Rudolph Contreras ruled that the American Hospital Association, Association of American Medical Colleges, America's Essential Hospitals and three hospitals prematurely sued the CMS, since the proposed 340B program cuts have not gone into effect yet.
Starting Jan. 1, providers participating in 340B are scheduled to begin receiving smaller reimbursements for purchased drugs. Under the old calculation, providers received 6% on top of the average sales price of the drug. Starting next week, the CMS will pay approximately $65,000 for a drug that costs $84,000.
The hospital associations sued the HHS in November, shortly after the CMS issued its final rule changing the 340B payment calculations.
The groups said Friday that they will continue to pursue their lawsuit, noting that Contreras did not rule on the merits of the case. They will have the opportunity to refile their complaint after the reimbursement cuts go into effect.
"Making cuts to the program, like those CMS has put forward, will dramatically threaten access to healthcare for many communities with vulnerable patients," AHA president and CEO Rick Pollack said in a statement. "We are disappointed in this decision from the court and will continue our efforts in the courts and the Congress to reverse these significant cuts to the 340B program."
HHS has said it is well within its authority to make the 340B changes, calling the final rule a redistribution of funds to all hospitals that received reimbursement under Medicare's outpatient fee schedule rather than a cut to 340B.
Although Judge Contreras said last week during a hearing that it would be difficult to "unscramble eggs" after the cuts go into effect, he determined that the associations' and hospitals' comments on the proposed rule weren't enough to give them standing to sue. They will have to have to cite specific reimbursement claims in order for a renewed suit to move forward.
"Plaintiffs' failure to present any concrete claim for reimbursement to the (HHS) secretary for a final decision is a fundamental jurisdictional impediment to judicial review," the judge wrote.
From http://www.modernhealthcare.com/article/20171229/NEWS/171229919?utm_source=modernhealthcare&utm_medium=email&utm_content=20171229-NEWS-171229919&utm_campaign=mh-alert
From the Office of the Inspector General: The Food and Drug Administration's Food-Recall Process Did Not Always Ensure the Safety of the Nation's Food Supply
Prior Office of Inspector General (OIG) reviews focused on U.S. Food and Drug Administration (FDA) oversight of food recalls. Food recalls are the most effective means of protecting public health when a widely consumed food product is either defective or potentially harmful. At the time of those OIG reviews, FDA did not have statutory authority to require food manufacturers to initiate recalls of most foods.
After those reviews, enactment of the FDA Food Safety Modernization Act gave FDA new authority to order a mandatory recall and require firms to recall certain harmful foods. We conducted this review to determine whether FDA is fulfilling its responsibility in safeguarding the Nation's food supply now that it has mandatory recall authority.
Our objective was to determine whether FDA had an efficient and effective food-recall process that ensured the safety of the Nation's food supply. Specifically, we focused on FDA's (1) oversight of firms' initiation of food recalls, (2) monitoring of firm-initiated recalls, and (3) maintenance of food-recall data in the electronic recall data system.
We reviewed documentation for 30 voluntary food recalls judgmentally selected from the 1,557 food recalls reported to FDA between October 1, 2012, and May 4, 2015.
FDA did not always have an efficient and effective food-recall process that ensured the safety of the Nation's food supply. We identified deficiencies in FDA's oversight of recall initiation, monitoring of recalls, and the recall information captured and maintained in FDA's electronic recall data system, the Recall Enterprise System (RES). Specifically, we found that FDA could not always ensure that firms initiated recalls promptly and that FDA did not always (1) evaluate health hazards in a timely manner, (2) issue audit check assignments at the appropriate level, (3) complete audit checks in accordance with its procedures, (4) collect timely and complete status reports from firms that have issued recalls, (5) track key recall data in the RES, and (6) maintain accurate recall data in the RES.
Recalls were not always initiated promptly because FDA does not have adequate procedures to ensure that firms take prompt and effective action in initiating voluntary food recalls. FDA's monitoring of recalls was not always adequate because FDA staff had insufficient oversight to ensure that the assignment was at the appropriate level, and FDA obtained incomplete or inaccurate consignee information from firms initiating recalls. Additionally, FDA lacked adequate procedures to collect timely and complete status reports from these firms because the procedures did not require staff to request status reports at the time the recall was initiated. Lastly, the RES contained deficient recall information because it did not track all information necessary for FDA to effectively monitor recall activities and assess the timeliness of recalls; the RES also contained inaccurate data.
We recommended that FDA use its Strategic Coordinated Oversight of Recall Execution (SCORE) initiative to establish set timeframes, expedite decision-making and move recall cases forward, and improve electronic recall data. We also made other procedural recommendations, which are listed in the report.
FDA agreed with our conclusion that it needs to help ensure that recalls are initiated promptly in all circumstances and said that it will consider the results of our review as it "continues to operate the SCORE team." FDA also described other actions it has taken in response to our early alert, issued June 8, 2016, and draft report including initiating a new quality system audit process and a plan to provide early notice to the public and more guidance to staff.
Copies can also be obtained by contacting the Office of Public Affairs at Public.Affairs@oig.hhs.gov.
Download the complete report or the Report in Brief.
USDOJ retracts guidance letter limiting imprisonment for failure to pay fines
The withdrawn guidance letter was issued in March 2016. It was addressed to chief judges and court administrators in states, and urged them to abandon policies that could trap poor people in cycles of fines, debt and prison.
Suggesting that such policies were unconstitutional and illegal, it said arrest warrants should not be used as a way to collect fees, that courts were obligated to consider whether defendants were able to pay their fines and that judges should not use driver’s license suspensions as a punishment for missed payments.
The letter echoed the conclusions of the department’s investigation into the police and courts in Ferguson, Mo., which portrayed the legal system there as a moneymaking venture preying on poor and minority residents.
Vanita Gupta, the president of the Leadership Conference on Civil and Human Rights, who served as the head of the Justice Department’s Civil Rights Division in the Obama administration and issued the fines and fees letter, said it came about because states and cities around the country wanted guidance after the department’s Ferguson report about what federal civil rights and constitutional law required.
She maintained it did not articulate any new principles, but simply explained and clarified existing law, citing a landmark 1983 Supreme Court ruling that held that local governments cannot imprison people for failing to pay fines they could not afford.
“The retraction of this guidance doesn’t change the existing legal framework,” Ms. Gupta said. “He can retract the guidance, but he can’t change what the law says.”
From NYT article at https://www.nytimes.com/2017/12/21/us/politics/justice-dept-guidance-documents.html
A federal appeals court is ordering the Environmental Protection Agency (EPA) to take action within 90 days to revise standards meant to protect children from lead-based paint.
The San Francisco-based Court of Appeals for the 9th Circuit ruledWednesday that the EPA has taken too long to act on a 2009 petition from health and environmental groups who want the agency to further restrict lead paint limitations.
The judges issued a “writ of mandamus,” a rare edict from a federal court that requires a litigant to take action.
The EPA told the court that it would take another six years to develop a lead paint rule, which the judges did not accept.
“EPA fails to identify a single case where a court has upheld an eight year delay as reasonable, let alone a fourteen year delay, if we take into account the six more years EPA asserts it needs to take action,” Judge Mary Schroeder, nominated by former President Carter, wrote on behalf of herself and Judge Randy Smith, a George W. Bush nominee.
The judges said the EPA also has an unambiguous duty to act. Scientific studies point toward a higher danger to children from lead paint than when Congress developed standards in the 1990s, studies that the EPA did not dispute.
“Under the [Toxic Substances Control Act] and the Paint Hazard Act, Congress set EPA a task, authorized EPA to engage in rulemaking to accomplish that task, and set up a framework for EPA to amend initial rules and standards in light of new information,” the judges said.
“The new information is clear in this record: the current standards for dust-lead hazard and lead-based paint hazard are insufficient to accomplish Congress’s goal.”
from http://thehill.com/policy/energy-environment/366598-court-orders-epa-to-take-quick-action-on-lead-paint
Case to watch in 2018: FTC v D-Link
From The Recorder:
Earlier this year, the Federal Trade Commission brought a potentially groundbreaking case alleging that selling connected devices like routers and video cameras with known security weaknesses was an unfair and deceptive business practice.
In filing the suit against Taiwanese device manufacturer D-Link Systems Inc., the regulator was grabbing hold of an emerging theory in litigation that makes tech companies tremble: that manufacturers can be held liable if their products don’t provide a minimum level of security.
That theory took a bit of a beating in Court.
In an order this past year partially granting D-Link’s motion to dismiss, U.S. District Judge James Donato of the Northern District of California wrote that the mere existence of a known security flaw is not enough to prove injury under the Federal Trade Commission Act:
The FTC does not identify a single incident where a consumer’s financial, medical or other sensitive personal information has been accessed, exposed or misused in any way [...] The absence of any concrete facts makes it just as possible that DLS’s devices are not likely to substantially harm consumers, and the FTC cannot rely on wholly conclusory allegations about potential injury to tilt the balance in its favor.
That part of Donato’s ruling wiped out the agency’s unfair practices claim—although he allowed the FTC to amend its complaint. At the same time, he allowed claims to move forward alleging that D-Link deceived consumers by marketing its devices as having “the latest wireless security features to help prevent unauthorized access,” among other safeguards.
See https://www.law.com/therecorder/sites/therecorder/2017/09/22/d-link-ruling-may-help-device-makers-but-isnt-a-total-win/?back=law
A message from Diana Moss of AAI
I have been asked how growing concerns about the health of competition in the U.S. economy and the fading fortunes of the consumer and worker affect AAI's research, education, and advocacy mission. My response is that recent developments reaffirm the importance of AAI's work and provide an opportunity for AAI to have an even greater impact than it has over the last 20 years.
The importance of antitrust is now at the center of a vibrant debate. The policy spectrum has recently expanded to include additional perspectives. As our work reveals, AAI promotes the fundamental durability of the antitrust laws and their relevance to both traditional and modern markets. AAI also believes the consumer welfare standard to be capable of addressing the price and non-price dimensions of competition such as choice, quality, and innovation. The existing framework can effectively protect all markets, consumers, and workers.
In contrast to conservatives that promote lax enforcement and populists that seek to use the laws for purposes for which they were not designed, AAI will continue to push for more vigorous enforcement under current standards. As we have testified in Congress, the necessary tools are in the antitrust toolkit, but we need enforcers, courts, and legislators that promote a more aggressive approach. This applies to not only specific issues and cases, but also to judicial appointments, legislation, and complementary sector regulation.
Guided by the priorities outlined in our National Competition Policy statement, and through our amicus briefs, white papers, letters, filings, and other research, education, and advocacy, AAI will point the way toward effective and coherent competition enforcement and policy.
Our mission is more important than ever. Please help us continue to promote competition that protects consumers, businesses, and society. We cannot do this without your support.
Sincerely,
Diana Moss
President
The American Antitrust Institute is a 501(c)(3) not-for-profit organization.
Tax ID #52-2093834
Source: AAI
Three major cities have filed a lawsuit against the Defense Department for its failure to report many criminal convictions in the military justice system to the Federal Bureau of Investigation and its national gun background-check database
The Pentagon has for years run afoul of federal laws intended to keep guns out of the hands of felons and domestic abusers by not transmitting to the F.B.I. the names of service members convicted of crimes that disqualify gun ownership.
This is what allowed Devin P. Kelley, who was convicted of domestic assault in the Air Force, to buy at a store the rifle he used to kill 25 people, including a pregnant woman whose fetus also died, at a Texas church in November.
Now, after two decades of serious lapses — and one of the worst mass shootings in American history — officials from New York, Philadelphia and San Francisco are trying to force a change. Their suit would require the Pentagon to submit to federal court monitoring of its compliance with the reporting laws it has broken time and again.
“This failure on behalf of the Department of Defense has led to the loss of innocent lives by putting guns in the hands of criminals and those who wish to cause immeasurable harm,” Mayor Bill de Blasio of New York said.
The cities say they are suing because their police departments regularly access the federal background-check database and rely on it to provide accurate information about who should be prevented from buying guns.
The Pentagon has repeatedly been chided since the 1990s by its own inspector general for woefully failing to comply with the law. In a 2015 report — and another one issued just a few weeks ago — investigators said that nearly one in three court-martial convictions that should have barred defendants from gun purchases had gone unreported by the military.
Having a federal court oversee compliance, the cities in the lawsuit say, would reduce the chance that a tragedy like the massacre in Sutherland Springs, Tex., happens again.
If the lawsuit is successful and the military fails to adhere to a court order to demonstrate compliance with the law, a federal judge could hold the defendants in contempt, lawyers for the plaintiffs say. The lawsuit names as defendants the Defense Department and its secretary, James N. Mattis; the Departments of the Air Force, Army and Navy and their respective secretaries; the directors of the military’s criminal investigative organizations; and the commander of the Navy’s personnel command.
From: https://www.nytimes.com/2017/12/26/us/gun-background-checks-military.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region®ion=top-news&WT.nav=top-news&_r=0
Florida Attorney General Pam Bondi News Release:
Court Orders Tobacco Company to Honor Florida’s Historic Tobacco Settlement
TALLAHASSEE, Fla.—Attorney General Pam Bondi today announced a major ruling in a case involving Florida’s historic tobacco settlement agreement. The litigation centers around R.J. Reynolds Tobacco Company’s sale of three iconic cigarette brands, Winston, Kool and Salem, along with a legacy Lorillard Tobacco Company brand, Maverick, to Imperial Tobacco Group in June 2015 for $7 billion.
From the time of the tobacco settlement in 1997 through 2015, RJR paid the state tens of millions of dollars annually for these cigarette brands in compliance with the historic settlement. After the June 2015 sale, RJR stopped making payments on these brands, costing the state an estimated $30 million a year in perpetuity.
“Today’s ruling will ensure Florida’s landmark tobacco settlement is honored and our state receives the money it is owed,” said Attorney General Bondi. “My office is committed to pursuing all appropriate remedies when companies try to evade their monetary obligations to the State of Florida.”
RJR’s refusal to pay the agreed to settlement money led to Attorney General Bondi filing an enforcement motion on Jan. 18, 2017. The enforcement motion was the subject of a three-day bench trial before the Honorable Jeffrey Dana Gillen on Dec. 18-20. Judge Gillen today ruled that “Reynolds is still obligated to make the payments pursuant to the Florida Agreement.”
After the entry of the order requiring RJR to make all of the payments to Florida for the past and future sales of these cigarettes, the next step in the lawsuit will involve RJR and ITG providing the necessary information to accurately calculate the amounts owed pursuant to reporting requirements under the settlement agreement.
To view a copy of the trial court’s order granting the enforcement motion, click here.
The historic 1997 settlement resolved Florida’s landmark 1995 lawsuit against RJR and the other major tobacco companies seeking relief from decades of past unlawful actions relating to the marketing and sale of cigarettes. The annual, perpetual payments compensate Florida for the past and future public health care expenses from its citizens’ consumption of the settling defendants’ cigarettes.
Happy New Year and no net neutrality for Comcast and Cox and other ISPs: At least three major ISPs have already announced significant price hikes for 2018. News of the increases comes just days after the FCC voted to roll back net neutrality protections.
From: https://www.digitalmusicnews.com/2017/12/19/comcast-cox-frontier-net-neutrality/ Additional credit: Karl Bode of DSLReports
The timing of this couldn’t be worse. But maybe that’s not a concern for major ISPs. Accordingly, at least three major ISPs have now announced rate hikes for 2018.
That is, January, 2018. So customers have very little time to react, modify their plans, or even cancel their accounts.
Recently, Karl Bode of DSLReports caught wind of numerous increases at mega-ISP Comcast. But that is simply the latest in a string of planned increases by the likes of Cox, Frontier, and even DirecTV and Dish Network.
In all cases, these are increases for essentially the same services, with Bode noting that American will be stuck paying ‘significantly more money for the same service in the new year’. In many cases, the changes are padded into existing bills, with most consumers failing to see the changes.
In the case of Comcast, increases are happening across the board.
That includes rates for conventional cable TV, but also a range of internet and internet-based services. “Even Comcast’s streaming TV service Instant TV, barely a year old, is seeing price hikes,” Bode noted.
“Users that subscribe to this service can expect to pay $3 to $3.50 more per month in the new year.”
Additionally, Comcast is jacking up its modem rental fees by 10%. “Modem rental fees will be bumped $1 to $11 per month, while missed payment fees are also being increased fifty cents to $10,” the report continues.
That’s likely the beginning of far broader increases.
Another major ISP, Cox, is increasing the rates for all of its internet service packages.Here’s a quick rundown of those increases, based on a notice sent to Cox subscribers.
Starter will change from $34.99 to $36.99.
Essential will change from $52.99 to $55.99.
Preferred will change from $67.99 to $71.99.
Preferred 100 will change from $72.99 to $76.99.
Premier will change from $79.99 to $82.99.
That’s on top of a range of other increases affecting Cox’s cable TV packages, and are effective as of January, 2018. The rates were officially announced on December 9th, just days before net neutrality provisions were officially scrapped.
Similarly, Frontier Communications is tacking on a sneaky surcharge for internet customers.
Specifically, Frontier is wedging a $2 ‘Internet Infrastructure Surcharge’ onto most accounts. That includes promotional deals, which are advertised as being cheaper, but leave out a lot of hidden fees. “Beginning with this bill, customers not on an Internet Service term agreement, price protection plan or subject to other exclusions will be assessed a $1.99 per month Internet Infrastructure surcharge,” a Frontier notice states.
Other shoes dropping soon.
Both DirecTV and Dish are enacting heavy increases for most packages in 2018. At this stage, we’re not sure if packaged internet deals are getting affected (at least for 2018). Eventually, we’re betting they will.
We haven’t seen any (recent) changes from Charter, Verizon, and AT&T’s U-verse. But maybe they’re waiting until after Christmas.
Author credit: Paul Resnikoff
SEAFOOD IMPORT bEZOS wALTON
See Court opinion: La. Not Bound By Flonase Antitrust Settlement: 3rd Circ.
The Third Circuit finds that a class action antitrust settlement GlaxoSmithKline involving efforts to stymie generic competition for Flonase nasal spray did not bar the state of Louisiana from pursuing its own claims over the drug.
While GSK argued that the federal courts had authority to require Louisiana’s attorney general to abide by the $150 million settlement, which included a release of future claims over its activity, a three-judge panel found that such a holding would violate the state’s sovereign immunity under the 11th Amendment.
“In approving the settlement agreement, the district court lacked jurisdiction over the state because the Eleventh Amendment applies to the primary case and because Louisiana did not waive its sovereign immunity in that case,” the opinion said.
Credit: Law360
The opinion is here:
http://www2.ca3.uscourts.gov/opinarch/161124p.pdf
From the Watertown newspaper in upstate New York: Locals seek to save failing local mall with local retail businesses and local crafts
The North Country Showcase Inc., store has opened at the Massena mall.
The store is the first attempt by local investors pooling money to create an entity to help sell the products of vendors throughout the north country region.
Karen M. St. Hilaire, president of the venture, said the long-term goal is to enhance and create other small business opportunities using the same model of community ownership, in an effort to build a stronger and more diversified economy.
“I have to say it is incredible to me how we have been able to put together this business that has products from 32 vendors from across a huge geographic region, and we have been able to do it in one year and on less than $10,000,” Ms. St. Hilaire said.
Opening a brick-and-mortar store is just the first step in expanding the effort across the north country, according to Ms. St. Hilaire. She said Northern New York has always been rich in human and natural resources, and that organizing a way to showcase what the region has to offer has always been needed.
“This business, the one we are opening today, we see it as a vehicle to help other small businesses, and in particular to help those people who produce things here in a seven county region of New York state,” Ms. St. Hilaire said. “So our goal is to help be the marketer, if you will, of 32-plus businesses and to help them to sell their products, to produce more sales and hopefully spur new businesses to join in.”
Ms. St. Hilaire said she and others are now working to create a well-structured online presence to push sales outside the region.
“Within six months we hope to have a very robust e-commerce branch, aimed at doing whatever it is we can do to push sales,” she said. “And quite frankly, I think it is going to be much bigger than sales we will have here in the bricks and mortar storefront. But we need both.”
In addition to promoting entrepreneurship, the efforts of the RIOT group in creating North Country Showcase Inc. have sparked fresh hope for a revitalized St. Lawrence Centre mall. The struggling retail facility, built in 1990, was recently purchased by the Shapiro Group of Montreal and is being operated by its subsidiary, St. Lawrence Centre Group.
Erika A. Leonard, manager of the mall, said the new owners are making plans to turn the mall’s hockey arena into a year-round indoor turf field and athletic facility, and are working to find new anchor stores and other retailers.
She said the North Country Showcase store’s opening represents the fresh start the new mall owners envision.
“It’s very exciting because this is the first store that we’ve had a grand opening for, so this is going to show the community that we’re here, we’re open for business and we are working on getting the retailers in here as well as the entertainment to get more traffic through the mall,” Ms. Leonard said.
Ms. Leonard said other plans call for opening a 12-theater cinema complex at the mall.
“Like most mall restructurings nowadays, the vision is to make this an entertainment-slash-retail mall,” she said.
Massena Town Supervisor Joseph D. Gray and Village Mayor Timothy Currier both said that the opening of the North Country Showcase store is more proof that the community continues to reinvent itself and remains a vibrant and resilient part of the region.
“This is another good sign we have been seeing,” Mr. Currier said. “We are seeing monthly increases in traffic at the [Canadian] border crossing, the housing market has improved, and we are seeing some new businesses in the community.”
Mr. Gray agreed, pointing out that in his opinion, improvements at the mall and the early success of those involved in the North Country Showcase project, stand in sharp contrast to those naysayers in the region who talk of Massena’s decline.
“We can’t rely on the big three any more, because they ain’t here,” Mr. Gray said in reference to the community’s mostly shuttered industries. “We need to figure out what we are going to do and this is a good step in the direction we need. We need to determine our own best interests, rather than relying on someone from the outside to come in and save us, we need to save ourselves and we’re doing that.”
Credit: http://www.watertowndailytimes.com/news05/north-country-showcase-prompts-talk-of-regions-resurgence-20170709
Editor's note: Merry Christmas, and a Happy New Year to the residents of New York's north country, and my their business ventures prosper. A.G. Schneiderman: I Will Sue To Stop Illegal Rollback Of Net Neutrality
A.G. Schneiderman Will Lead Multistate Lawsuit:
AG’s Investigation into 2 Million Comments that Stole Real Americans’ Identities Also Continues
Click Here for Video of AG Schneiderman Discussing the Vote and His Intent to Sue
Today, New York Attorney General Eric T. Schneiderman released the following statement upon the Federal Communications Commission’s vote, announcing that he will lead a multistate lawsuit to stop the rollback of net neutrality:
“The FCC’s vote to rip apart net neutrality is a blow to New York consumers, and to everyone who cares about a free and open internet. The FCC just gave Big Telecom an early Christmas present, by giving internet service providers yet another way to put corporate profits over consumers. Today’s rollback will give ISPs new ways to control what we see, what we do, and what we say online. That’s a threat to the free exchange of ideas that’s made the Internet a valuable asset in our democratic process.
Today’s new rule would enable ISPs to charge consumers more to access sites like Facebook and Twitter and give them the leverage to degrade high quality of video streaming until and unless somebody pays them more money. Even worse, today’s vote would enable ISPs to favor certain viewpoints over others.
New Yorkers deserve the right to a free and open Internet. That’s why we will sue to stop the FCC’s illegal rollback of net neutrality.
Today’s vote also follows a public comment process that was deeply corrupted, including two million comments that stole the identities of real people. This is a crime under New York law – and the FCC’s decision to go ahead with the vote makes a mockery of government integrity and rewards the very perpetrators who scammed the system to advance their own agenda.
This is not just an attack on the future of our internet. It’s an attack on all New Yorkers, and on the integrity of every American's voice in government – and we will fight back.”
For seven months, Attorney General Schneiderman has been investigating the flood of fake comments submitted during the net neutrality comment process. The Attorney General’s latest analysis shows that two million comments stole the identities of real Americans – including over 100,000 comments per state from New York, Florida, Texas, and California. Yet the FCC has repeatedly refused to cooperate with the Attorney General’s investigation, despite widespread evidence that the public comment process was corrupted.
SEE ag.ny.gov/press-release/ag-schneiderman-i-will-sue-stop-illegal-rollback-net-neutrality
Bloomberg's quick take on net neutrality debate:
from https://www.bloomberg.com/quicktake/net-neutrality
By Gerry Smith
Updated on December 14, 2017, 7:24 AM EST
The internet is a set of pipes. It’s also a set of values. Whose? The people who consider it a great social equalizer, a playing field that has to be level? Or the ones who own the network and consider themselves best qualified to manage it? It’s a philosophical contest fought under the banner of “net neutrality,” a slogan that inspires rhetorical devotion but eludes precise definition. Broadly, it means everything on the internet should be equally accessible — that the internet should be a place where great ideas compete on equal terms with big money. Even in the contentious arena of net neutrality, that’s a principle everybody claims to honor. But the U.S. is preparing to do a big U-turn on how to interpret it.
The Situation
At the start of his presidency, Donald Trump picked Ajit Pai, a Republican member of the U.S. Federal Communications Commission and longtime foe of net neutrality regulation, to head the agency. In November, Pai proposed to vacate net neutrality rules that had been enacted under Democratic President Barack Obama. The FCC is voting on the change Dec. 14. The 2015 rules had imposed increased government oversight of broadband traffic. Internet service providers became treated as public utilities and were forbidden from blocking or slowing rivals’ content. The rules also applied open-internet protections to wireless services for tablets and smartphones. After Pai first proposed the idea of gutting net neutrality rules back in May, websites and internet organizations promoted a “day of action” to save net neutrality. Reddit, the social news and discussion site, made its point with a pop-up message that slowly typed out letter by letter: “The internet’s less fun when your favorite sites load slowly, isn’t it?” Both the Obama administration and internet service providers, which had fought the rules, said they wanted an open internet and “net neutrality,” an idea also embraced by other countries with widely varying definitions of the principle.
The Background
The term “network neutrality” was coined in 2002 by Tim Wu, a law professor and author. He argued that no authority should be able to decide what kind of information was and wasn’t allowed on the internet. But Wu also recognized the expense of maintaining network hardware, so he proposed that providers should be allowed to charge based on usage. People would pay for more bandwidth, not for access to certain sites. In 2005, the FCC released a statement turning Wu’s principles into policies. When Comcast interfered with access to web networks that used a lot of bandwidth and enabled trading of pirated content, the FCC balked in 2008. Comcast sued, and won. The FCC set new rules and Verizon then challenged them, winning in a U.S. court in early 2014. This started the process for what became the 2015 rules.
The Argument
Supporters say that with internet use and related costs rising fast, the FCC needed net neutrality power to force a shrinking handful of powerful internet service providers to treat all web traffic equally. Small startup companies argue that without strong net neutrality rules, internet providers could slow their content or charge them for unimpeded access to their audience. Supporters also note that the regulation survived a federal appeals court challenge from broadband providers in 2016. Many Republicans have sided with internet providers who said that more regulation deters investment in a better internet. In announcing the proposed rules change in November, FCC Chairman Pai said he was looking forward to returning to a “light-touch, market-based framework.” Opponents of the rules had also challenged the FCC’s legal right to upend the old regulatory framework that was in place as companies spent billions of dollars to build high-speed internet networks. Beneath the legal and policy questions lies a philosophical one: Who owns the internet? Providers who pay to maintain it? Consumers who pay to connect to it? Content companies whose services depend on it? Who balances their competing interests?
The Reference Shelf
From PBS news hour: EPA v States on drinking water pollutants
See:
https://www.pbs.org/newshour/show/long-island-residents-worry-their-tap-water-is-unsafe
Local consumer advocates worry that the EPA is too slow to provide protection against newly identified pollutants. In the absence of EPA action it falls to local authorities to consider possible precautions. The precautions can be expensive, and are controversial.
Cape Fear Public Utility Authority (“CFPUA”), sues Chemours and DuPont for chemical dumping affecting water supplies.
The Complaint alleges that for over three decades DuPont and later Chemours have been manufacturing and/or using perfluoroalkyl and polyfluoroalkyl substances (“PFASs”), and quietly releasing or discharging PFASs and associated wastes contaminated by those chemicals (collectively “Fluoropollutants”) at their Fayetteville Works Facility. During that time, Defendants withheld from state regulators and the public information regarding both the identity of the Fluoropollutants being discharged and information related to the safety of those Fluoropollutants. . Moreover, Defendants have deliberately evaded accountability for, and scrutiny of, their releases of toxic Fluoropollutants.
Facing multiple lawsuits and EPA pressure over its use and releases of one PFAS, perfluorooctanoic acid (“PFOA”), DuPont publicly discontinued its manufacture and use of that PFAS, but privately replaced it with “GenX”—a set of 2 structurally and functionally similar PFASs, with similar harmful effects—that Defendants could then release into the environment without public notice. Defendants’ strategy amounts to a toxic chemical shell game, played at the expense of the lower Cape Fear River and those who use it for potable water.
The Complaint is here: http:/wwwcache.wral.com/asset/news/state/2017/10/17/17022284/CFPUA_v._Chemours__DuPont-DMID1-5cgv0c9v6.pdf
The Consumer Reports article on the CVS-Aetna proposed merger
The article says this:
[S]ome consumer advocates and antitrust experts are skeptical that consumers will reap any cost savings from this merger and say that continued consolidation in the healthcare marketplace only hurts consumers.
“The health insurance and retail pharmacy markets are already highly concentrated, with just a few big insurers and pharmacies dominating,” says George Slover, senior policy counsel for Consumers Union, the policy and mobilization division of Consumer Reports. He says the combination could lead to fewer choices for consumers. . . .
Big mergers have a poor track record of delivering lower prices to customers, says Diana Moss, president of the American Antitrust Institute, a nonprofit that does research and advocacy on antitrust issues. “There are no guarantees that any cost savings realized will be passed onto consumers.”
The comments from George Slover and Diana Moss suggest where to look for consumer harm from a merger. (Of course, the discussion can be complex, and any suggestions incorrectly drawn from their comments is this writer's responsibility, not theirs.) An Aetna customer for self-administered prescription medicines, for example, may lose choices of which pharmacies to use, and be pushed to use CVS retail pharmacy services. That will enhance CVS's already strong position in retail sales of self-administered prescription medicines. The customer may be faced with higher prices because of that enhanced position of CVS as a retailer, and her loss of the ability to select a rival pharmacy. Also, CVS, which is one of a few very powerful players in the market for pharmacy benefit manager (PBM) services, with many insurance company customers, may use merger-enhanced power to favor Aetna with regard to PBM services in negotiating lower prices from manufacturers for prescription drugs, thereby raising costs for Aetna's rivals in the relevant health insurance markets.
To the extent CVS can use its PBM services to obtain lower manufacturer prices for prescription drugs, there is little reason to think savings will be passed on to consumers. PBMs already have a history of complaints that savings the obtain are not passed on. As Diana Moss says, big mergers have a poor record of delivering lower prices to consumers.
The Consumer Reports article is here: https://www.consumerreports.org/health-insurance/how-big-healthcare-mergers-like-cvs-and-aetna-could-affect-you/
From AAI:
Diana Moss to Testify on Antitrust and the Consumer Welfare Standard
AAI President Diana Moss will testify before the U.S. Senate Committee on the Judiciary, Subcommittee on Antitrust, Competition and Consumer Rights on December 13, 2017. The subject of the hearing is "Consumer Welfare Standard in Antitrust: Outdated or a Harbor In a Sea of Doubt?" The hearing can be streamed live.
Moss's testimony, available here, addresses three major issues: One is "climate change" around antitrust and important context for the debate over competition enforcement. A second is the adequacy of the existing approach to antitrust enforcement, the consumer welfare standard, and the vital importance of vigorous enforcement. Moss concludes by identifying priorities for addressing the challenges facing antitrust enforcement and competition policy moving forward.
AAI Applauds Move to Block AT&T-Time Warner Merger, Sets Record Straight on Vertical Merger Enforcement
AAI issued a commentary on the U.S. Department of Justice's (DOJ's) recent move to block the proposed merger of AT&T and Time Warner. AAI applauds the government's decision. It reflects sound enforcement of Section 7 of the Clayton Act in an area of merger control that has been of concern to many policymakers for years. The government has laid out a strong case for how the merger could potentially harm the competitive process and consumers. And contrary to some claims, the DOJ's move to block the merger is supported by a long-standing record of enforcement on vertical mergers.
Read More
AAI Warns USTR Against Import Restrictions on Washing Machines That Would Stand Competition Policy on Its Head
AAI has filed has filed comments with the Office of the U.S. Trade Representative opposing the imposition of "safeguard restrictions" on the import of Large Residential Washers (LRWs) under Section 201 of the Trade Act.
Read More
AAI's Bert Foer's words of wisdom on antitrust advocacy, from a 2015 article:
As the attacks by big businesses and their advocates mount against class actions and as the courts clamp down on antitrust processes in favor of defendants, it becomes increasingly difficult for victims of anticompetitive conduct to gain fair compensation. This undermines the deterrent force of the antitrust laws, as well as the potential for broad civil society support of the antitrust enterprise. For example, recent judicial decisions have forced plaintiffs to defend their economic case much earlier in the process, often before substantial discovery, which raises the risks and costs of bringing a case. In a field that depends on contingent fee funding, as the costs go up and other trends contribute to a reduced likelihood of success,47 the result appears to be that many valid claims for recovery will necessarily go unrepresented. Thus, protection of the antitrust class action, even while supporting legitimate efforts to make it work more efficiently, will be critical to AAI’s mission.
The largest risk going forward is political. Unless legislators see more value in antitrust, erosion of private remedies will continue, and public enforcement will suffer from inadequate funding as well as the narrowing rulings of courts that generally do not like antitrust or simply do not like to handle complex antitrust cases. The education of judges and legislators is therefore going to be more important and probably more difficult than ever.
The primary gatekeepers to the public and, therefore, to the politicians are the media. Reporters must present antitrust developments clearly and in a way that highlights their importance, if the citizenry is to support antitrust in a political process where large contributors, bearing the benefits of corporate personhood under prevailing interpretations of the First Amendment, will have the advantage.48 Meanwhile, antitrust-knowledgeable journalists are disappearing behind electronic paywalls, such that only those willing to pay large subscription fees (i.e., investors, arbitrageurs, and law firms and their clients with much at stake, as compared to average citizens) will know what is going on with sufficient detail and precision to effectively influence the outcome. The enforcement agencies and the AAI need to work more creatively to help public-facing journalists understand and communicate the antitrust story.
Antitrust is faced with a particular political challenge because it represents a middle ground between heavy state intervention and laissez faire. Will the libertarian ideologies that disdain government prevail? Will the politics of economically unsophisticated populism prevail? Or can the antitrust intermediary continue to serve, while moving up or down the playing field between the forty yard lines, as a balancing and integrative force? Whether the center can hold goes beyond antitrust, but is crucial to antitrust’s future.
Antitrust must be viewed as part of a political system. It rests on the conception not only that competition is usually a good thing, but that change (we like to call it progress) is a good thing. It is fundamental to recognize that as better mousetraps are invented, there will be winners and losers. The prospect of becoming a loser—which must be faced even by the most successful businesses and their top management—creates deep social anxiety. Here is the paradox of modern capitalism: unless the political system can deal with that anxiety, the fear of losing out in a competitive regime, it is hard to believe that either a competition-based economy or its necessary control element, antitrust, will long survive.
The middle way demands a social welfare net that is widely perceived to be working, requiring liberals and conservatives to compromise in creative reforms that the current political standoff may not be able to produce. A tragedy of our times has been that the country has turned against government at the same time it has turned toward ever-freer markets—the libertarian equation. Markets are not a natural phenomenon, however. Their creation, maintenance, and efflorescence depend on government in numerous ways.49 Yes, government can act in anticompetitive ways, and this reality must always be a high concern for antitrust. In addition to direct regulation that unduly hampers market activity, there are many other ways in which government can be unnecessarily interventionist, ranging from tax policy to trade, intellectual property rights, and consumer protection. Getting the balance right is crucial. It is a task of politics in a democracy. At the center of this task is the role of antitrust.
The full article is at http://journals.sagepub.com/stoken/rbtfl/Kkz6kqJrOWK0c/full
The grass-roots campaign for public restroom facilities in DC
From a Washington Post article by Marcia Bernbaum:
Nearly three years ago, the People for Fairness Coalition launched the Downtown DC Public Restroom Initiative. We carried out a feasibility study to identify lessons learned and best practices from U.S. cities that in recent years have been successful in installing clean, safe, available public restrooms. We did an inventory of restrooms in private facilities in five D.C. neighborhoods: Gallery Place, Dupont Circle, Georgetown, the K Street corridor and Columbia Heights. And we carried out a comprehensive search to identify public restrooms open during the day as well as those open 24/7.
To our amazement, we found that there are only three public restrooms in all of the District that are open 24/7: those at Union Station, the Lincoln Memorial and the Jefferson Memorial — and there are no signs telling you how to get to them. Imagine it is late at night. You are walking down the street and urgently have to go to the bathroom. If you can’t make it and experience the misfortune of having no choice but to “go” outside and are caught by a police officer, you risk receiving a fine of up to $500, up to 90 days in jail or both. During the day, off the Mall there are only six public restrooms in downtown Washington, their hours are limited, and there are no signs to tell you where they are.
The situation isn’t much better when it comes to finding private facilities with restroom access. Forty-two of the 85 private facilities we visited in early 2015 permitted people who weren’t patrons to use their restrooms. When we visited the same facilities in early 2016, the number had dwindled to 28. And when we returned to the same facilities in mid-2017, only 11 (or 13 percent) permitted entry to non-patrons.
In April, D.C. Council members Brianne K. Nadeau (D-Ward 1), David Grosso (I-At Large), Elissa Silverman (I-At Large) and Robert C. White Jr. (D-At Large) introduced Bill 22-0223, the Public Restroom Facilities Installation and Promotion Act of 2017.
The bill would work toward creating public restrooms and establish an incentive for private businesses to make their restrooms available to the public. A public hearing on the bill is scheduled for Jan. 10.
The article is at https://www.washingtonpost.com/opinions/why-does-dc-have-so-few-public-restrooms/2017/12/15/951e3fde-cfcf-11e7-9d3a-bcbe2af58c3a_story.html?utm_term=.0c4ee853f14e
Kojo NNambi explores the new push for more clean and safe public restroom accommodations for all on his radio show. Listen at https://thekojonnamdishow.org/shows/2017-03-16/the-push-for-public-restrooms-in-d-c.
Guests
17 AGs To President Trump: Mulvaney's Attacks On CFPB Should Disqualify Him From Leading Agency
Coalition of 17 AGs Make Clear They’ll Redouble Efforts to Enforce Consumer Protection Laws, Even if CFPB Leadership Won’t
A coalition of 17 state Attorneys General have written President Trump to express unwavering support for the mission of the Consumer Financial Protection Bureau (CFPB), and made clear that state Attorneys General would continue to vigorously enforce consumer protection laws regardless of changes to the Bureau’s leadership or agenda.
“The CFPB has been a critical partner in protecting American consumers and holding fraudsters accountable. It deserves a leader who actually believes in its mission,” the letter said. “However, Attorneys General won’t hesitate to protect those we serve – with or without a partner in Washington.”
Joining New York Attorney General Schneiderman on the letter are the Attorney Generals of California, Connecticut, District of Columbia, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Minnesota, New Mexico, North Carolina, Oregon, Vermont, Virginia, and Washington State.
Click here to read the full letter.
US: FCC and FTC agree to collaborate on monitoring Open Internet
The Federal Communications Commission (FCC) and Federal Trade Commission (FTC) have drafted a memorandum of understanding (MOU) on how they will divvy up enforcement of internet service providers’ (ISPs) promises and disclosures about their business practices and network management practices after the FCC eliminates most network neutrality rules.
After the rule rollback becomes official—it is scheduled to be voted on–and FCC Chairman Ajit Pai has said will be approved—December 14, the FCC will investigate and take actions against any violations of the order’s transparency requirements, under which ISPs have to disclose any blocking, throttling, paid prioritization or congestion management. That means if they don’t disclose what they are doing, the FCC’s Enforcement Bureau will handle it.
Under the agreement, the FTC will investigate ISPs for any divergence from what they say they are, or are not, doing, as well as any other practices the FTC deems unfair or deceptive. That unfairness could include anticompetitive blocking or throttling or paid prioritization.
“The Memorandum of Understanding will be a critical benefit for online consumers because it outlines the robust process by which the FCC and FTC will safeguard the public interest,” said FCC Chairman Ajit Pai in a statement. “Instead of saddling the Internet with heavy-handed regulations, we will work together to take targeted action against bad actors. This approach protected a free and open Internet for many years prior to the FCC’s 2015 Title II Order and it will once again following the adoption of the Restoring Internet Freedom Order.”
Rollback of the Net Neutrality rules is a controversial topic that is opposed by advocacy groups and Silicon Valley incumbent firms.
Full Content: Federal Trade Commission & Public Knowledge
From Public Citizen Consumer Law & Policy Blog:
Ninth Circuit rejects First Amendment petition clause challenge to arbitration agreement, saying that private party's conduct is not attributable to the state (for purposes of the "state action" doctrine)
Posted: 11 Dec 2017 07:30 PM PST
Take a look at the Ninth Circuit's decision in Roberts v. AT&T Mobility. Here's the court's description of the dispute:
Plaintiffs—AT&T customers and putative class representatives—contracted with AT&T for wireless data service plans. Their contracts included arbitration agreements. Plaintiffs allege AT&T falsely advertised that its mobile service customers could use “unlimited data,” but actually “throttled”—intentionally slowed down—customers’ data speeds once reaching “secret data usage caps” between two and five gigabytes. Plaintiffs claim a phone’s key functions, such as streaming video or browsing webpages, are useless at “throttled” speeds.
Plaintiffs filed a putative class action, alleging statutory and common law consumer protection and false advertising claims under California and Alabama law. AT&T moved to compel arbitration in light of the Supreme Court’s ruling in AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011),“that the FAA preempts state law deeming AT&T’s arbitration provision to be unconscionable.” Plaintiffs opposed the motion on First Amendment grounds. They argued that an order forcing arbitration would violate the Petition Clause, as they “did not knowingly and voluntarily give up their right to have a court adjudicate their claims... .”
The Ninth Circuit nixed the argument without getting to the merits, holding that
There is no state action here. First, AT&T’s conduct must be fairly attributable to the state, and Denver Area [Educational Telecommunications Consortium, Inc. v. FCC, 518 U.S. 727 (1996)] did not hold otherwise. Second, AT&T is not a state actor under the “encouragement” test. The FAA merely gives AT&T the private choice to arbitrate, and does not “encourage” arbitration such that AT&T’s conduct is attributable to the state.
(Click title for link to Public Citizen)
A holiday season plug for the DC Bar's advice and referral clinic
The D.C. Bar web site explains:
The Bar's Pro Bono Center Advice & Referral Clinic offers pro se individuals the opportunity to discuss with volunteer attorneys certain kinds of matters governed by D.C. or federal law, including bankruptcy/debt collection, consumer law, employment law, family law, health law, housing law, personal injury, probate, public benefits, and tax law. All services are provided free of charge.
The clinic is limited to providing general information, advice, and brief services, and does not provide representation.
Providing "brief services" may not always be achievable by the end of the clinic session. For example, calling a third party or government agency to ascertain information about a client's matter, writing a demand letter to a landlord or a judgment–proof letter to a creditor, or reviewing a contract or settlement agreement may require some of the volunteer attorney’s time after the clinic. However, clinic volunteers do not appear in court or otherwise establish an extended attorney–client relationship unless they wish to do so.
If brief service is not enough to resolve the problem or if a different type of service is required, clinic volunteers attempt to refer individuals to, or provide information about, a legal or social service provider appropriately suited to handle the case.
Local legal service providers also benefit from the Advice & Referral Clinic, since it lessens the number of individuals walking into their organizations, allowing those practitioners to spend more of their resources representing clients instead of providing general information, advice, and brief services.
For more information, please contact Managing Attorney Nakia Matthews at NMatthews@dcbar.org.
Volunteering
Advice & Referral Clinic volunteers must be associated with a participating organization. Please refer to the list of clinic participants. If you are associated with a clinic participant, please contact that organization’s pro bono or volunteer coordinator to arrange to volunteer for the clinic. If you are not an employee or member of a participating organization, ask your employer, Bar section, voluntary bar association, or other organization to become a clinic participant.
What Volunteers Need to Know
On the second Saturday of every month from 10 a.m. until 12 p.m., the Advice & Referral Clinic operates out of two locations: Bread for the City’s Northwest Center at 1525 7th Street NW, and Bread for the City’s Southeast Center at 1640 Good Hope Road, SE. Parking is available at both locations.
Volunteers should arrive at the clinic by 9:30 a.m. for a brief orientation of clinic operations. Bagels and juice will be served. Dress is casual. Volunteers should be prepared to stay until the last client is served (usually around 1:00 p.m.).
Although it is impossible to predict, most individuals have basic questions. Volunteers are not expected to be familiar with every area of the law. Mentors are available onsite and reference materials are provided.
News reports suggest that an aspect of the CVS/Aetna proposed merger that can raise antitrust questions concerns horizontal overlap involving Medicare Part D
The WSJ explains:
One area where CVS and Aetna do compete directly is in Medicare drug plans. CVS is the biggest provider of these so-called Part D plans, with about 5.5 million members, according to figures compiled by analysts at Wells Fargo. Aetna ranks fifth, with around 2.1 million enrollees. Antitrust enforcers “will look at anything and everything where there’s overlap,” said Martin Gaynor, a professor at Carnegie Mellon University.
But analysts said that even if the Justice Department requires divestitures related to the Part D business, that isn’t likely to be a major impediment to the deal, since stand-alone Medicare drug plans aren’t generally a major source of profits.
See (paywall) https://www.wsj.com/articles/will-cvs-health-deal-to-buy-aetna-hold-up-to-antitrust-scrutiny-1512343663#
So, what is Medicare part D? Here is an answer from Medicare.gov:
Medicare offers prescription drug coverage to everyone with Medicare. . . . To get Medicare drug coverage, you must join a plan run by an insurance company or other private company approved by Medicare. Each plan can vary in cost and drugs covered.
2 ways to get drug coverage:
Here is further insight from the Galen Institute concerning aspects of part D competition:
Many MA plans also cover prescription drugs as part of the benefit, while other seniors opt for free-standing Medicare Part D prescription drug plans. Either way, private plans negotiate fiercely to get the best prices from physicians, hospitals, and drug companies
so they can offer the lowest prices on plans and attract the greatest number of members. This model has been highly successful, saving both seniors and taxpayers money. The Part D program has been particularly successful.
See the article by Grace-Marie Turner at http://galen.org/2016/competition-in-medicare-advantage-part-d-and-extra-help-working-together-for-seniors-and-taxpayers/
Comment: WORLD WITHOUT MIND, The Existential Threat of Big Tech, By Franklin Foer, Penguin Press. 257 pp. $27
The headline for Jon Gertner's Washington Post book review is "Are tech giants robbing us of our decision-making and our individuality?" Based on my reading of the Foer book I think that is a fair headline.
Gertner explains that Foer’s book aims to expose the dangers that four technology giants — Google, Apple, Facebook and Amazon, and companies like them — pose to our culture and careers. In their methods of consumer observation and data gathering, and in their intention to replace human decision-making with merciless algorithms, these companies, Foer says, “are shredding the principles that protect individuality.”
Gertner agrees with Foer that the four corporations have lulled us into a sense of dependency as they influence our thinking and activities. Gertner summarizes: Far more powerful than the elite “gatekeeping” institutions of the past — the major television networks, for example, or the leading newspapers — this fearsome four, as Foer characterizes them, are the new arbiters of media, economy, politics and the arts. By making their services cheap and indispensable, and by tailoring their complex algorithms to our data profiles, they can gently push us toward products they want us to buy or, say, YouTube videos they want us to watch. Yet the methods by which we get such recommendations — for news, consumer goods, movies, music, friends and the like — remain opaque. Facebook’s acceptance of thousands of Russian ads during the recent election may be a case in point. As Foer reminds us, through an algorithmic dispersal of misinformation, the social-media giant possibly helped elect to the presidency of the United States a frequently bankrupt real estate developer without any political experience whatsoever.
Gertner focuses on Foer's point that the companies that dominate the world’s technology ecosystem have assumed the roles of monopolists.
Gertner is accurate, in my opinion, in seeing Foer as focused on the broad political challenges posed by the new powerful companies, invoking broad antitrust and political thinking of people like Justice Brandeis. Foer is not focused so much on particular immediate technical antitrust reforms. Foer wishes government to face the new realities of monopoly behavior by the likes of Google, Apple, Facebook, and Amazon in the spirit of argumentation and experimentation that carried Brandeis and later Thurman Arnold during the Roosevelt New Deal period.
Foer does not suggest a series of fixes to current antitrust enforcement, but others do.
For example, Lina Khan, writing in the Yale Law Jounal, suggests replacing the consumer welfare framework of current antitrust enforcement with an approach oriented around preserving a competitive process and market structure: "Applying this idea involves, for example, assessing whether a company’s structure creates anticompetitive conflicts of interest; whether it can cross-leverage market advantages across distinct lines of business; and whether the economics of online platform markets incentivizes predatory conduct and capital markets permit it. More specifically, restoring traditional antitrust principles to create a presumption of predation and to ban vertical integration by dominant platforms could help maintain competition in these markets. If, instead, we accept dominant online platforms as natural monopolies or oligopolies, then applying elements of a public utility regime or essential facilities obligations would maintain the benefits of scale while limiting the ability of dominant platforms to abuse the power that comes with it. See Ms. Khan's article at https://www.yalelawjournal.org/note/amazons-antitrust-paradox Ms. Khan can be seen in an Open Markets program speaking on related points at http://openmarketsinstitute.org/events/are-tech-giants-too-big-for-democracy-with-senator-al-franken/ at approximately hour 2:05.
Commenters Ezrachi and Stucke advise that "Ultimately, the super-platforms–in harming both the content providers upstream and consumers downstream–can undermine our economic well-being and democracy. Competition law has at its origins the protection of society from the misuse of economic and political power. Thus, our competition authorities must step up. Failing to challenge the super-platforms’ anticompetitive practices will only embolden these (and aspiring) gatekeepers. When the enforcer only looks down, upstream competition, innovation, and the livelihood of many market participants, who deserve a competitive marketplace, will be hindered. See their writing https://www.authorsguild.org/industry-advocacy/law-profs-antitrust-enforcers-rein-super-platforms-look-upstream/
Posted by Don Allen Resnikoff, who is responsible for the content
Opinion from The Hill: A lawsuit in San Juan by the Aurelius hedge fund has the potential to be one of the most significant in sovereign debt history. This lawsuit could not only derail Puerto Rico’s current debt restructuring attempts, but it could also call into question the constitutionality of its status as an “unincorporated” U.S. territory.
Editor note: As Puerto Rican citizens struggle to recover from devastating storm damage, an important legal challenge to the legal and financial stability of Puerto Rico looms in the background. The following article from The Hill tells the story. DR
Rarely does a case that is nominally about debt so squarely involve the question of what it means to be sovereign.
In 2016, Congress passed the Puerto Rico Oversight, Management and Economic Stability Act, or Promesa, which among other things established a control board with broad powers to run Puerto Rico’s finances until it can be returned to fiscal stability. To quote the title of one of the academic articles that inspired the control board idea, it is a “dictatorship for democracy” in the form of a temporary, undemocratic institution designed to restore order.
Unsurprisingly, the board has faced strong opposition. Critics allege that it fails to address the island’s underlying economic problems, and also that it fails even the most basic tests of democratic accountability. Some union leaders, environmental groups, and left-wing political parties see the board as a tool of vulture capitalists working in cahoots with the federal government to reimpose colonial rule.
This makes it all the more striking that their most powerful ally against the board might well be an infamous New York hedge fund, whose lawsuit could bring the control board crashing down, and perhaps even alter Puerto Rico’s territorial status. The hedge fund, Aurelius, has a straightforward claim: The members of the Promesa board were unconstitutionally appointed, and therefore the steps toward a debt restructuring that the control board has taken and plans to take (which would likely force Aurelius to take a haircut on the nearly half a billion dollars of Puerto Rican debt it holds) are invalid.
The basis for this claim lies in the appointments clause of the Constitution, which specifies that principal federal officers must be appointed by the president, with the advice and consent of the Senate. Although the case law is not crystal clear, principal federal officers tend to be those who exercise significant authority pursuant to federal law and who have the president as their only boss. If the appointment of a seven-member control board with carte blanche to run the finances of the country’s biggest territory is not the appointment of primary federal officers, what is?
But the board members have an answer. Puerto Rico is, according to century-old Supreme Court precedents, an “unincorporated territory.” That means that the board members are territorial officers under the territorial clause of the Constitution, not federal officers subject to the appointments clause. The former clause gives Congress the power to “make all needful rules and regulations respecting the territory or other property belonging to the United States.” A plenary authority is not subject to the usual constraints of the separation of powers.
That those Supreme Court precedents, the much-reviled Insular Cases, are still part of American law is an embarrassment. They were written by the same basic lineup of justices who penned Plessy v. Ferguson, and are tainted by a stunningly racist and colonial mindset. Plessy v. Ferguson is the infamous case that held that “separate but equal” was constitutional, and it was explicitly overturned by Brown v. Board of Education. The Insular Cases, by contrast, remain good law and are still the basis of Puerto Rico’s form of sovereign limbo.
The federal district court in San Juan is therefore presented not simply with an aggrieved creditor, but with a claim that goes right to the heart of Puerto Rico’s legal status. The core question, in a way, is whether Puerto Rico, more than a century after it was acquired through conquest, remains still a distant colony, as the Insular Cases held, or has truly become part of the United States. For the millions of American citizens in Puerto Rico, the island’s legal status has been of paramount importance long before the debt crisis or the impact of Hurricane Maria.
For decades now, Puerto Ricans have debated whether and how to become the 51st state, become an independent nation, or remain a territory with no voting representation in Congress. Many have concluded that their preferences will be ignored on the mainland, which might help explain why only a quarter of eligible voters showed up for a June referendum on the island’s status. In the words of one U.S. congressman of Puerto Rican descent, “Congress won’t do anything.” Maybe. But Aurelius is not going away, and it has a war chest, a brilliant legal team, and a tenacity that will force the federal government to take note.
This is, after all, one of the same hedge funds that, in the infamous “pari passu” litigation, brought the Argentine government to its knees just a few years ago. The Aurelius managers did not set out to lead a constitutional crusade from their Fifth Avenue penthouses. They simply want to avoid having to take pennies on the dollar for their bonds (which is what the board will probably do in order to get Puerto Rico back to sustainability). But in fighting against the board, Aurelius has already proven willing to smash away at the foundations of Puerto Rico’s legal status.
A century ago, economic disputes over things like sugar tariffs led to the Insular Cases, which established Puerto Rico’s status as an “unincorporated territory.” The financial dispute currently playing out in that quiet federal district court in San Juan might just unwind it.
http://thehill.com/opinion/finance/361775-puerto-ricos-colonial-status-hinges-on-a-new-york-hedge-funds-greed#bottom-story-socials
Rat Control in the District of Columbia
Are there any government programs that libertarian conservatives and liberal progressives can agree are useful, and should be supported by tax revenues? The answer is probably yes, and rat control in public areas may be an example. DC Government has tried many approaches, including exhortations to citizens to dispose of garbage in a rodent-resistant way, and organizing stray cats to chase rats (really). Here is an earlier description of the DC government's efforts:
https://www.nbcwashington.com/news/local/Rats-DC-Announces-Steps-to-Control-Rat-Problem-as-Resident-Complaints-Rise-430231833.html
Posted by Don Resnikoff
Mulvaney curtails CFPB collection of consumer data
The Wall Street Journal (paywall) reports that Mick Mulvaney has exercised his authority at the CFPB to freeze collection of consumer data from credit cards and mortgages. The WSJ explains:
Critics of the CFPB have long complained about the bureau’s efforts to collect consumer data on credit cards and mortgages through its disclosure rules, consumer complaint database and enforcement actions. They say such actions threaten privacy and information security. CFPB officials have in the past said such data help the agency identify discrimination and other industry misconduct, and can serve as a basis for writing rules.
https://www.wsj.com/articles/new-cfpb-chief-curbs-data-collection-citing-cybersecurity-worries-1512429736?te=1&nl=dealbook&emc=edit_dk_20171205&mg=prod/accounts-wsj#
Editorial comment: consumer law advocacy in the time of tax law changes in aid of large corporations
We do consumer law and policy here. But as a blogger on Public Citizen's consumer law and policy blog suggested recently, that doesn't mean we should be oblivious to larger political issues. That includes the ways in which the new federal tax law recently passed by the Senate and sent to Congressional conference may affect the ordinary citizens we seek to protect as consumers, and the character of the political forces that caused the law to pass.
It may be that the benefits promised to ordinary citizens by supporters of the tax bill may materialize. Or, as I think is more likely, the New York Times editorial board has it right when it suggests that "the Senate passed a tax bill confirming that the Republican leaders’ primary goal is to enrich the country’s elite at the expense of everybody else, including future generations who will end up bearing the cost. . . . The bill is expected to add more than $1.4 trillion to the federal deficit over the next decade [the CBO analysis is at https://www.cbo.gov/system/files/115th-congress-2017-2018/costestimate/53362-summarysenatereconciliation.pdf], a debt that will be paid by the poor and middle class in future tax increases and spending cuts to Medicare, Social Security and other government programs. Its modest tax cuts for the middle class disappear after eight years. And up to 13 million people stand to lose their health insurance because the bill makes a big change to the Affordable Care Act. Yet Republicans somehow found a way to give a giant and permanent tax cut to corporations like Apple, General Electric and Goldman Sachs, saving those businesses tens of billions of dollars."
The New York Times editorial board view on the tax bill winners and losers and the role of big business political donors as supporters of the tax bill suggests a need for political engagement by citizens of a broad sort, but it does not at all suggest that our focusing on consumer law and policy issues is unimportant.
The contrary is the case. Consumer advocates do something important when we fight for institutional fairness and access to the courts, as by fighting against compelled arbitration that deprives consumers of fair court access for their grievances. Consumer advocates work in other important ways to provide procedural and substantive fairness for consumers. Supporting the currently challenged work of the CFPB is just one example.
Particular consumer-oriented campaigns for procedural and substantive fairness are of a piece with broader political campaigns, such as the broader campaign to reduce the role of big business political donations on electoral politics and democracy in the United States. We should not be discouraged in our pursuit of consumer law initiatives.
Posting by Don Allen Resnikoff, who is responsible for the views expressed
Will antitrust agencies block CVS from buying Aetna?
Commenters generally agree that the agencies are faced with the same sort of questions raised by the ATT/Times-Warner merger: Can a powerful vertically integrated market player effectively limit market access for an input provider? In the case of ATT/Times Warner the concern is about restricted opportunities for program providers.
In the Economist article excerpted below, the author discusses the vertical foreclosure concern in the context of the CVS/Aetna deal in simple terms, and suggests that the extent of vertical foreclosure will be mild. Other commenters can be expected to see a more complex market power story and suggest greater negative consequences:
Excerpts from Economist article:
The CVS-Aetna deal is an example of “vertical integration”, in which separate bits of a supply chain are brought together under one roof. This tie-up would reach across three distinct layers of the health-care industry: the retail pharmacies for which CVS is famous; the pharmacy-benefit managers (PBM), intermediaries which negotiate drug prices on behalf of medical plans and whose number again includes CVS; and the insurers, like Aetna.
Supporters of the deal argue that aligning the interests of insurers and pharmacies would reduce costs and improve life for consumers. An insurer that could send patients to walk-in clinics of the sort CVS owns would be better placed to monitor and improve results.
In the case of CVS-Aetna, the incentive for the pharmacy-benefit manager to fatten its profits would disappear. The question then is would that benefit accrue to the consumer? That depends on whether firms are dominant in their respective markets. The benefits to consumers of a vertical merger disappear if one of the parties has a monopoly. The proposed deal between AT&T and Time Warner, for instance, fails this test. The monopoly that AT&T wields as a broadband provider in many parts of America means that rivals to Time Warner have no simple options for getting their content distributed there. Uncontested markets would have a similar impact on the CVS-Aetna deal: a combined entity would be free to restrict insured customers to CVS medications and clinics, for example, if it had no rivals to fear.
That seems unlikely. CVS has about 23% of the pharmacy market, and 24% of the PBM market; Aetna has about 6% of the insurance market. And more competition may be on the way in the pharmacy business: the prospective entry of Amazon lies behind CVS’s hunt for Aetna. But the deal would require close scrutiny and may need conditions attached. A proposed agreement with Anthem, another insurer, which would give CVS an even bigger slice of the PBM pie would need to be ditched. And the local picture matters. In the median American state, for example, the two largest health insurers have 66% of the market. Trustbusters might need to insist on the sale of some local assets to smaller rivals before approving a tie-up.
The Economist article is at https://www.economist.com/news/leaders/21730882-proposed-health-care-merger-raises-difficult-antitrust-questions-should-regulators-block-cvs
From Public Citizen Blog: Professor Chris Peterson's study on why the republican version of the CFPB -- contained in the Financial Choice Act of 2017 -- would be bad for consumers
If you want to learn what the CFPB would look like if republican plans to defang it were enacted, law prof Chris Peterson has done a study for you: Choosing Corporations Over Consumers: The Financial Choice Act of 2017 and the CFPB. Here is the abstract:
The Consumer Financial Protection Bureau (CFPB) is the U.S. Government’s primary regulator and civil law enforcement agency governing consumer lending, payment systems, debt collection, and other consumer financial services. Created in the wake of the financial crisis, Congress tasked the agency with stopping deceptive, unfair, and abusive consumer finance. However, Congress is currently considering legislation which would significantly change the CFPB’s law enforcement authorities. This Article analyzes the proposed Financial Choice Act of 2017 which would rename the CFPB, and eliminate many of the CFPB’s law enforcement powers. If the Financial Choice Act were the law of the United States from 2012 to 2016, how would the CFPB’s enforcement track record have changed? Drawing upon pleadings, consent orders, settlement agreements, press releases, and other public documents, this Article presents an empirical study of every publicly announced CFPB enforcement case to determine what law enforcement cases and awards would have been eliminated had the bill been law. Among the study’s findings, had the Financial Choice Act had been adopted in 2012 it would have eliminated:
• Over 91 percent of consumer restitution for illegal home mortgage lending practices, amounting to $2.7 billion dollars;
• Over 94 percent of consumer restitution for illegal credit card practices amounting to $6.8 billion dollars; and
• Every single case addressing illegal practices in the “payday” and car title lending industry.
The study concludes that the Financial Choice Act of 2017 will, if enacted, seriously weaken the CFPB’s law enforcement program.
On Thursday, November 30, a High Court judge in London handed a win to Visa, ruling in a long-running case brought by Sainsbury’s Supermarkets Ltd. that the credit card company did not set its interchange fees at an unlawful level that restricted competition
In 2013 a group of high street retailers launched legal proceedings in the UK, claiming that Visa’s UK and cross-border European interchange fees were contrary to competition law.
The card giant is now claiming victory after a high court ruling that its UK fees are lawful and is looking to put the matter to bed, urging merchants to work with it to “create the future of digital commerce.”
In an open letter, Visa said, “We hope the Court’s decision will accelerate the collaboration between retailers and Visa and will allow us to address the greatest disruption – and potentially the greatest opportunity – facing the merchant community in Europe today: the digitisation of commerce.”
A Sainsbury’s spokeswoman said, “This claim concerned the damage Sainsbury’s maintains was caused by Visa’s breach of UK and EU competition laws in its setting of interchange fees.
“Sainsbury’s is disappointed by the decision of the High Court in finding that Visa had not infringed competition law.
“Sainsbury’s is now considering its position.” It is expected to launch an appeal.
Sainsbury’s won a separate court case last summer, with a £68 million (US$91.9 million) award from Mastercard.
Full Content: AOL & Law 360
The ACLU brief in US v Carpenter, the recently argued US Supreme Court case on warrantless use of cellphone location data
From the brief:
Simply by using cell phones, the government maintains, the populace gives law enforcement constitutionally unchecked authority to collect a detailed record of every person’s historical whereabouts — without probable cause, a warrant, or any Fourth Amendment protection whatsoever.
This cannot be right.
The brief is at https://www.aclu.org/legal-document/united-states-v-carpenter-reply-brief-petitioner
The Supreme Court seemed ready at oral argument to interpret a federal law protecting whistle-blowers narrowly, barring many retaliation suits from people who say they were fired for reporting wrongdoing.
The plain words of the law, part of the Dodd-Frank Act, required that conclusion, justices across the ideological spectrum said.
“How much clearer could Congress have been?” Justice Neil M. Gorsuch asked.
The question for the justices was who qualified as a whistle-blower entitled to protection from retaliation. Most of the justices seemed ready to rely on the definition in the law itself, which defines “whistle-blower” to mean “an individual who provides information relating to a violation of the securities laws” to the Securities and Exchange Commission.
The definition seemed to exclude people who merely reported wrongdoing to their employers, and some justices said that could have been a drafting oversight.
The transcript of the oral argument before the US Supreme Court is here: https://www.supremecourt.gov/oral_arguments/argument_transcripts/2017/16-1276_i426.pdf
See NYT article: https://www.nytimes.com/2017/11/28/business/29dc-bizcourt.html
CVS Health could announce an acquisition of insurer Aetna for more than US$66 billion as early as Monday, December 4
The talks are advanced and would likely see Aetna valued at between US$200 and US$205 a share offered mainly in cash.
Aetna shares rose about 1% on the news. CVS shares rose more than 2% on the report.
Full Content: Wall Street Journal
Leandra English's lawsuit defending her right to head the CFPB is here:
https://assets.documentcloud.org/documents/4310647/English-Complaint-CFPB.pdf …
From the Complaint:
Effective at midnight on November 24, 2017, the Bureau’s first Director, Richard Cordray, resigned his post. At that point, plaintiff Leandra English, the Bureau’s Deputy Director, became the agency’s Acting Director by operation of law. The Dodd-Frank Act is clear on this point: It mandates that the Deputy Director “shall . . . serve as the acting Director in the absence or unavailability of the Director.” 12 U.S.C. § 5491(b)(5)(B). By statute, she serves in that capacity until such time as the President appoints and the Senate confirms a new Director. See 12 U.S.C. § 5491(b)(2). Case 1:17-cv-02534 Document 1 Filed 11/26/17 Page 1 of 9 2
Disregarding this statutory language, President Trump issued a press release on the evening of November 24 indicating his desire to install defendant Mulvaney, the Director of the White House Office of Management and Budget, as the Bureau’s Acting Director. Under this scenario, Mr. Mulvaney would seek to serve indefinitely as the interim head of a statutorily “independent” agency while simultaneously occupying his current White House post.
The President apparently believes that he has authority to appoint Mr. Mulvaney under the Federal Vacancies Reform Act of 1988, 5 U.S.C. § 3345(a)(2). But the Vacancies Act, by its own terms, does not apply where another statute “expressly . . . designates an officer or employee to perform the functions and duties of a specified office temporarily in an acting capacity,” 5 U.S.C. § 3347(a)(1)(B)—which is exactly what the Dodd-Frank Act does.
The Trump administration late Friday set up a clash over the leadership of the Consumer Financial Protection Bureau, installing an acting director hours after Richard Cordray told the agency his chief of staff would assume the role at the moment of his departure
Cordray named Leandra English as deputy director, setting her up to become acting director after Cordray’s departure. Cordray sent out his resignation letter to staff on Friday, moving up his planned departure a week. His resignation is effective midnight on Friday.
Cordray said in a separate letter to the CFPB on Friday: “In considering how to ensure an orderly succession for this independent agency, I determined that it would be best to avoid leaving this key position filled only in an acting capacity. In consultation over the past few days, I have also come to recognize that appointing the current chief of staff to the deputy director position would minimize operational disruption and provide for a smooth transition given her operational expertise.”
Hours after Cordray’s announcement, President Donald Trump said Mick Mulvaney, director of the Office of Management and Budget, would
serve as acting director of the CFPB.
The White House said in a statement: “The president looks forward to seeing Director Mulvaney take a common sense approach to leading the CFPB’s dedicated staff, an approach that will empower consumers to make their own financial decisions and facilitate investment in our communities. Director Mulvaney will serve as Acting Director until a permanent director is nominated and confirmed.”
The move set up a clash over the leadership of the agency.
Sen. Elizabeth Warren, D-Massachusetts, an architect of the CFPB, tweeted on Friday:
View image on Twitter
Elizabeth Warren
✔@SenWarren
The Dodd-Frank Act is clear: if there is a @CFPB Director vacancy, the Deputy Director becomes Acting Director. @realDonaldTrump can’t override that.
“If there ends up being a dispute about who’s the rightful head of the CFPB, the final say will rest with the courts. And if the courts follow the text, structure, and history of Dodd-Frank, it’s clear what they should say: Leandra English is currently the acting Director of the CFPB,” Brianne Gorod, chief counsel to the Constitutional Accountability Center, wrote late Friday at the blog Take Care.
Full article at https://www.law.com/nationallawjournal/sites/nationallawjournal/2017/11/24/read-consumer-bureau-director-richard-cordrays-resignation-letter/?slreturn=20171025081145
Cerner deal as another sign Amazon has big plans for healthcare
by Mark Brohan | Nov 24, 2017 (click title for link to full article)
Reportedly, the two companies will announce a business development and technology integration deal whereby Amazon Web Services would provide cloud computing services for HealtheIntent, Cerner’s population health management product series.New reports have Amazon.com Inc. via its Amazon Web Services unit, moving further into digital healthcare with a new partnership with electronic health records vendor Cerner Corp.
If that is indeed the case the move makes lots of sense and opens new potential for both companies, says R.W. Baird senior research analyst Matthew Gilmore who follows healthcare stocks.
CNBC has reported that next week Amazon Web Services, the online retailer’s cloud computing arm, will announce a major new alliance with Cerner at its annual user group meeting. Reportedly, the two companies will announce a business development and technology integration deal whereby Amazon Web Services would provide cloud computing services for HealtheIntent, Cerner’s population health management product series. Amazon and Cerner have yet to talk publicly about the proposed deal.
The expanded relationship will also leverage AWS's analytics capabilities and global data.
Population Health Management is the aggregation of patient data from many sources into a single electronic patient record. HealtheIntent is a cloud-based, population health management system that Cerner says can receive data from any electronic health record, existing healthcare information technology system and other data sources, such as pharmacy benefits managers or insurance claims.
Big health systems such as Carolinas HealthCare in Charlotte, NC, are using HealtheIntent to better manage more than 12 million patient records says.
Cerner already utilizes Amazon Web Services for storage services, but it is reportedly set to use AWS for a broader range of cloud computing services to support HealtheIntent. If that is case, Cerner be able to offer better cloud computing services to major hospital clients at time when many are looking to replace outdated legacy systems with cloud-based software.
In return Amazon, via Amazon Web Services, gets broader access to the mainstream health systems and hospital information technology market, says Gilmore. “We believe Cerner’s population health platform, HealtheIntent, already uses Amazon AWS for storage and other services, but the expanded relationship will also leverage AWS’s analytics capabilities and global data,” Gilmore writes in a new research note.
With Amazon reportedly weighing a broader move into healthcare, the deal with Cerner gives the e-commerce giant new ways to sell to hospitals, Gilmore says.
* * * *
Editor's note: A writing by Don Resnikoff and Katherine Jones described the dominance of Epic, the leading company in the health care records space. The Amazon/Cerner alliance is potentially a threat to Epic's dominance. See http://www.scribd.com/doc/211776613/DC-ConsumerRightsCoalition-Comments-for-FTC-Public-Workshop-3-10-14 Following is an excerpt from the Resnikoff-Jones writing describing the Health Information Technology (HIT) industry:
Avoiding another “Microsoft” Situation
Experienced antitrust observers have counseled about the danger that HIT companies may follow
in the footsteps of other technology companies, such as Microsoft, that attracted antitrust law
enforcement. Microsoft’s behavior raised competitive concerns when the company achieved a
strong market presence early in the development of particular software markets, and then sought
to protect its dominant position in those markets by withholding access to its proprietary
technologies from competitors and potential competitors.7 Microsoft achieved its dominant
position in the marketplace in large part by offering a product that consumers valued. But its
behavior raised competition concerns when it began to appear to make strategic decisions with
an eye towards thwarting competition, instead of competing by simply continuing to improve its
technology in ways that would benefit consumers.
HIT has network characteristics that could all too easily tip markets toward settling on the use of
one particular proprietary technology and abandoning other technologies. In the absence of
interoperability, such a development might have the effect of foreclosing competitors to a
dominant firm from being able to enter a market and offer competition. It might also create
difficulties for health care providers in seeking access to information needed to effectively offer
their services to consumers. And finally, it might open the door to strategic use of proprietary
technology in ways that cause competitive harm. Such use of proprietary technology can be
especially anticompetitive when the cost of switching to another software vender is high. In the
case of Microsoft, the problematic strategic behavior was Microsoft’s effort to hold on to market
ascendency by protecting its proprietary platform technology in a manner perceived by
government enforcers as improperly foreclosing competition. Blocking competition in HIT
markets through strategic use of proprietary standards is, of course, the opposite of facilitating
interoperability.
The State of Current HIT Markets
Currently, companies providing HIT products already exist that have a strong market position
that may have resulted, at least in part, through reliance on proprietary standards and network
effects. One company that has drawn attention because of its strong market position is Epic
Systems. Some have suggested that about 40% of the U.S. population has its medical
information stored in an Epic EHR system. Other data suggests that Epic market shares in
various segments of the EHR market vary from about 15% to 30%, substantially less than the
market shares of Microsoft when it aroused strong government antitrust concerns. Some federal
data suggests that Epic has the most customers receiving federal electronic health record system
incentive payments in a key category, complete EHRs. Of 2,950 hospitals receiving federal
payments for using complete EHRs in the inpatient environment, Epic has 578, a 19.6% market
share, in this segment. It appears that for large physician practices and hospitals, Epic is
currently the company with the greatest market presence. Evidence of this presence can be
found in, among other sources, the result of annual year-end rankings published by the research
firm KLAS. Epic has long been a very large player in EHR for “jumbo” group practices. One
industry expert suggests that Epic dominates inpatient EHR among large hospitals and health
systems, and increasingly, physician practices: "Even if physicians prefer another vendor, they're
forced to go on the hospital's system."
Epic Systems is not without competitors in various segments of the EHR market. They include
Meditech, Computer Programs and Systems, Cerner, HCA Information & Technology Services,
and Athenahealth. Some competitors arguably have superior technology which could increase
their market position in the future.
Is your new electric bicycle subject to regulation as a motorcycle? The National Council of State Legislators explains
State legislatures have begun to grapple with how to differentiate and define e-bikes and regulate their operation and equipment standards on roadways and trails in their respective states. One challenge is the distinction between other motorized vehicles such as scooters and mopeds, and the burgeoning market and interest in e-bikes as a cost-effective and environmentally friendly transportation option.
Electronic Bicycle: An e-bike that meets the federal definition of an electric bicycle and is subject to product safety standards for bicycles.
See http://www.ncsl.org/research/transportation/state-electric-bicycle-laws-a-legislative-primer.aspx
The text of the recent FCC statement moving away from net neutrality:
http://transition.fcc.gov/Daily_Releases/Daily_Business/2017/db1121/DOC-347868A1.pdf
Paul Alan Levy on "bogus" Homeland Security summons seeking to identify the owners of a Twitter account hostile to the government agency
Posted: 21 Nov 2017
By Paul Alan Levy
Last spring, Twitter received a fair amount of attention for fighting a patently bogus attempt by the Department of Homeland Security to abuse its statutory authority to investigate the importation of goods as the basis for to issuing an administrative summons seeking to identify the owners of a Twitter account hostile to the new leadership of the U.S. Citizenship and Immigration Service. Twitter sued to block the summons, and the government withdrew it, mooting the litigation.
In response to a senatorial inquiry, the responsible agency (Customs and Border Protection) apparently tried to hide behind the DHS Inspector General, implying that the summons related to an OIG investigation of whether CPB staff were undermining their new president. The DHS Inspector General publicly repudiated that move, noting archly that OIG carefully considers First Amendment ramifications ("we strive . . . to ensure that our work does not have a chilling effect on individuals’ free speech rights"), but saying that the office was reviewing the question whether CBP had misbehaved in issuing the summons.
Late last week, the DHS OIG released a report condemning the summons as being impermissible under the statute. The report indicates that, in retrospect, Customs and Border Protection admitted that its staff have been taking an overbroad view of how they can use the summons procedure, and agreed to issue a new manual, to institute a new review process, and to provide training to ensure that such abuses are not repeated.
From: http://pubcit.typepad.com/clpblog/2017/11/homeland-security-inspector-general-pegs-back-misuse-of-importation-summons-authority.html?
Walmart pulls back on aggressive online pricing, reducing competitive pressure on Amazon
Press reports suggest that Walmart has retreated from aggressive online pricing against major rival Amazon.
Walmart has worked hard to gain a position in on-line sales that rivals Amazon. In October, industry observer Nat Levy wrote that "Walmart has dropped some serious cash on deals to help grow the company’s online presence. It started with Jet.com, which Walmart bought for $3.3 billion. . . .Walmart has invested heavily in logistics and delivery as one of the primary fronts in its battle against Amazon. At the end of January, Walmart introduced free two-day shipping on millions of items for orders over $35." https://www.geekwire.com/2017/walmart-acquires-new-york-based-parcel-take-amazon-rapid-package-delivery/
2016 online sales were was reportedly strong for Walmart. "In its fourth quarter and year-end earnings report, Walmart said online sales increased 29 percent in the U.S. and 15.5 percent globally. Walmart does not release dollar figures for e-commerce sales." https://www.geekwire.com/2017/look-out-amazon-walmarts-3-3b-jet-com-deal-starts-to-pay-off-with-big-growth-in-online-sales/
According to the Geekwire article, Jet.com’s Founder and CEO Marc Lore, who is leading Walmart’s U.S. e-commerce effort, commented earlier this year that “We’re moving with speed to become more of a digital enterprise and better serve customers.”
Doug McMillon, president and CEO of Walmart, said in an earlier statement that Walmart has become the second largest online retailer by revenue and among the top three by traffic.
But recently the Wall Street Journal reported that Walmart is experimenting with a new system, which has at times resulted in higher web prices for goods that would otherwise be unprofitable to ship.
In some cases, product listings on walmart.com show an “online” and “in the store” price. Often the online price is now higher than the in store price and matches Amazon. Formerly, online and in store prices were generally the same.
“We always work to offer the best price online relative to other sites,” a Wal-Mart spokeswoman said to the Wall Street Journal. https://www.wsj.com/articles/now-featured-on-wal-marts-website-higher-prices-1510517219
Different comparison shoppers may disagree on whether Walmart was previously competing aggressively with Amazon on online prices, but some commenters found aggressive competition: "In this price comparison, Walmart.com offered the lowest price eight times, and Amazon was the best bargain in two cases. The retailers surprisingly had the same price on one-third of the products I compared. When I added up the total for all 15 items in my shopping cart, Walmart was the big winner: 17% cheaper than Amazon!" http://clark.com/shopping-retail/amazon-walmart-price-compare/
So what explains the Walmart decision to raise prices and be a less aggressive competitor to Amazon in the realm of on-line pricing? The frequently stated Walmart explanation is that it wants to drive customers to its brick and mortar stores.
Another idea may be suggested by Tim Wu's brief New Yorker article published a few years ago, which talks about the need for renewed antitrust attention for industries with a relatively few large players that coordinate in ways that have anticompetitive effects, but escape usual enforcement approaches.
Tim Wu authored a companion scholarly article written with Scott Hemphill. The New Yorker article is at http://www.newyorker.com/online/blogs/elements/2013/04/tmobile-verizon-monopoly-oligopoly-business-practices.html The scholarly paper, called “Parallel Exclusion,” can be found at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1986407 It discusses in greater detail some cases where a few large companies act in ways that are cooperative and anticompetitive, but without the explicit contractual offer and acceptance to pursue a conspiracy that facilitates a court finding of antitrust wrongdoing.
Of course, the Walmart/Amazon story can be looked at as simply about price. We might ask whether we are seeing tacit collusion on price, and whether, as Tim Wu and others have suggested, an antitrust problem should be found despite lack of explicit contractual offer and acceptance to pursue a conspiracy that facilitates a court finding of antitrust wrongdoing. Judge Posner threw cold water on litigation raising antitrust concerns about tacit collusion on price when he wrote in a 2015 opinion that "We can . . . expect competing firms to keep close track of each other’s pricing and other market behavior and often to find it in their self-interest to imitate that behavior rather than try to undermine it—the latter being a risky strategy, prone to invite retaliation. [That behavior is] consistent with independent parallel behavior. . . . [and] does not violate section 1 of the Sherman Act. Collusion is illegal only when based on agreement." IN RE: TEXT MESSAGING ANTITRUST LITIGATION. Aircraft Check Services Co., et al., individually and on behalf of all others similarly situated, Plaintiffs–Appellants, v. Verizon Wireless, et al., Defendants–Appellees. 782 F.3d 867 (7 Cir, 2015) Find on-line at https://h2o.law.harvard.edu/cases/5429
This comment is posted by Don Allen Resnikoff, who is solely responsible for its content
FROM COVINGTON & BURLING LLP
FTC Seeks Comment on Petition to Modify 2009 Sears Order Concerning Online Browsing Tracking
By Calvin Cohen on November 14, 2017
The Federal Trade Commission (“FTC”) is soliciting public comments on a petition filed by Sears Holdings Management (“Sears”) to reopen and modify a 2009 FTC order regarding the tracking of personal information on their software apps. The petition is notable for a number of reasons. First, the Sears consent order was a seminal order in the development of the FTC’s privacy jurisdiction, standing for the proposition that a company cannot “bury” disclosures that consumers would not expect in long privacy notices. Second, the concept of modifying 20-year consent orders is an important one in light of changes over time. Third, the petition seeks to correct the unintended consequences that a consent order can have on future technologies when such an order regulates present ones.
In the 2009 FTC order, Sears settled charges that it failed to disclose adequately the scope of consumers’ personal information it collected via a downloadable software app. As part of that 20-year consent order, Sears agreed to make certain disclosures and obtain consent in connection with its downloadable software app and future ones that “monitor, record, or transmit information.” The petition argues that the 2009 FTC order should be modified to update its existing definition of “tracking application,” presently defined as:
any software program or application . . . that is capable of being installed on consumers’ computers and used . . . to monitor, record, or transmit information about activities occurring on computers on which it is installed, or about data that is stored on, created on, transmitted from or transmitted to the computers on which it is installed.
The petition seeks to modify this definition to exempt information about “(a) the configuration of the software program or application itself; (b) information regarding whether the program or application is functioning as represented; or (c) information regarding consumers’ use of the program or application itself.”
The petition argues that this modification is necessary for three reasons. First, changed circumstances in the mobile app arena have rendered the 2009 FTC order’s broad definition of “tracking application” impracticable. The FTC’s original administrative complaint targeted Sears’ desktop software application, which could track users’ activities outside of its boundaries. Since then, software distribution has overwhelmingly shifted from desktop to mobile apps, which are distributed through two main online marketplaces (Apple’s App Store and Google Play). These marketplaces control “the manner and form” of disclosures to consumers relating to apps and impose restrictions on the collection of information from consumers, in concert with the FTC’s goals. According to Sears, the desktop software that led to the 2009 FTC order “would be impermissible under the rules of the two dominant mobile app stores,” but the additional disclosure requirements imposed on Sears by the order are onerous given that the app stores have a “standardized workflow” to allow consumers to review the app provider’s data collection, use, and sharing policies before downloading the apps.
Second, Sears argues that modifying the 2009 FTC order is in the public interest. Sears argues that while the order was “intended to protect consumers from undisclosed and invasive tracking of consumers outside of” its software, the obligations it imposes upon Sears “are poorly adapted to today’s mobile app ecosystem.” Under the 2009 FTC order, a user of multiple Sears apps must read and consent to nearly identical disclosures in each of those apps, and “no other competitor uses a similarly disruptive approach to mobile app disclosures.” Similarly, modification of the order’s definition would reflect the commonplace practices of data collection and intra-app activity sharing in today’s marketplace. Sears’ mobile apps share data with remote servers to fulfill consumer requests and collect data to support app security. Such practices, the petition asserts, are consistent with the FTC’s 2012 privacy report.
Third, the petition argues that the requested modification is consistent with more recent FTC precedent and priorities. The petition cites two FTC orders from 2012 and 2013 that exempted the specific types of information collection enumerated above. Modifying the 2009 FTC order to exempt tracking that is “necessary for the basic operation of mobile apps” would be consistent with consumer expectations and recent FTC guidance and regulations. Indeed, the petition claims that modifying the definition of “tracking application” would leave intact the order’s “core continuing mandate—to provide notice to consumers when software applications engage in potentially invasive tracking.”
The petition will be subject to public comment through December 8, 2017. After that time, the Commission will decide whether to approve Sears’ petition to modify the definition of “tracking application” in the 2009 FTC order.
See https://www.ftc.gov/news-events/press-releases/2017/11/ftc-seeks-public-comment-sears-holdings-management-corporation?utm_source=govdelivery
C&B notes at https://www.insideprivacy.com/united-states/federal-trade-commission/ftc-seeks-comment-on-petition-to-modify-2009-sears-order-concerning-online-browsing-tracking/
CBS News reports that Ford is now offering free repairs to deal with reports of carbon monoxide seeping into Ford Explorers
Excerpts from CBS news:
Affecting models from 2011 to 2017, 1.3 million owners of the popular SUV will begin receiving notices beginning November 23, 2017.
But the automaker is stopping short of recalling the Explorer. The watchdog group, Center for Auto Safety, says anything short of a recall is not enough.
Nearly 1,300 people have filed complaints with the regulator. Ford acknowledged getting more than 2,000 reports as of August last year. In the letter to customers, Ford insists Explorers "are safe" and its "investigation has not found carbon monoxide levels that exceed what people are exposed to every day."
NTHSA said it's found no actual evidence of carbon monoxide poisoning. That's despite documented cases.
NHTSA isn't commenting on the timeline for its investigation, but said it is very concerned about this potential safety problem, adding, "this action by Ford does not bring closure to the issue." The agency recommends call your dealer if you get the letter.
See https://www.cbsnews.com/news/ford-explorer-carbon-monoxide-free-repairs/
From the Center for Auto Safety: "The Center for Auto Safety, the nation’s leading independent non-profit organization providing consumers a voice for auto safety, quality, and fuel economy, today [October 13] called on Ford and NHTSA to recall all Ford Explorers from 2011-2017 because of a risk of Carbon Monoxide poisoning to the drivers and occupants of more than 1.3 million vehicles.
https://www.autosafety.org/center-auto-safety-calls-ford-recall-explorers-carbon-monoxide-exposure-inside-1-3-million-vehicles/
We have not yet found the text of the Ford letter. DR
The Missouri AG goes where the USDOJ and FTC have not: The Missouri AG has subpoenaed Google.
The AG's press release explains the focus: "Google’s collection, use, and disclosure of information about Google users . . . misappropriation of online content from the websites of its competitors; and Google’s alleged manipulation of search results. . .
See https://www.ago.mo.gov/home/breaking-news/ag-hawley-issues-investigative-demands-to-google-inc-www.ago.mo.gov/home/breaking-news/ag-hawley-issues-investigative-demands-to-google-inc-
Public Citizen's Paul Alan Levy: DC Superior Court Ruling on the Facebook Search Warrant: The Good, the Bad, and the Ugly
Excerpt from Levy posting:
D.C. Superior Court Chief Judge Robert Morin has issued his ruling on the pending objections to search warrants served on Facebook by Federal prosecutors seeking the entire contents of the Facebook accounts for the DisruptJ20 Facebook page as well as the personal accounts of two individuals, Lacey MacAuley and Legba Carrefour, who served as press contacts for the DisruptJ20 organizing effort. His decision represents something of a mixture of good and bad. The judge insisted on strong protections are provided for the identities of the anonymous third-parties who communicated with the page and the accounts, the client group whom I have been representing as a Public Citizen litigator, and good protections for the owner of the DisruptJ20 page. But he accorded fewer protections to the individual account holders – ironically, the very people who are likely to be the most in need of privacy protections. And the judge closes with an odd ruling on intervention.
The full Levy posting is at http://pubcit.typepad.com/clpblog/2017/11/dc-superior-court-ruling-on-the-facebook-search-warrant-the-good-the-bad-and-the-ugly.html?pubcit.typepad.com/clpblog/2017/11/dc-superior-court-ruling-on-the-facebook-search-warrant-the-good-the-bad-and-the-ugly.html?
Watch the video of the recent Open Markets Institute program featuring Senator Al Franken: Are tech giants too big for American Democracy?
The video is at http://openmarketsinstitute.org/
Wired reviews Franken speech to Open Markets Institute on dangers of big tech - - Google, Facebook, Amazon, etc.
SENATOR AL FRANKEN (D-Minnesota) delivered some of the sharpest criticism yet about the dangers of tech giants like Facebook, Google, and Amazon during a speech on Wednesday, encouraging regulators, as well as lawmakers in both parties, to better police the market power of dominant online platforms.
“Everyone is rightfully focused on Russian manipulation of social media, but as lawmakers it is incumbent on us to ask the broader questions: How did big tech come to control so many aspects of our lives?” Franken asked in a speech to a Washington think tank. A handful of companies decide what Americans “see, read, and buy,” dominating access to information and facilitating the spread of disinformation, he added.
“Last week’s hearings demonstrate that these companies might not be up to the challenge they created for themselves,” Franken said.
* * *
Franken has not shied away from voicing concerns about tech’s encroachments on privacy and competition in the past, but Wednesday’s criticism was unusually sweeping, tying together a revised narrative about Silicon Valley that only emerged in glimpses during the Russia hearings. Franken argued that the same control over consumers that facilitated the spread of Russian propaganda on social media also helps Facebook and Google siphon advertising revenue from other publishers and helps Amazon dictate terms to content creators and smaller sellers. Tech giants are incentivized to disregard consumer privacy, Franken noted. “Accumulating massive troves of information isn’t just a side project for them. It’s their whole business model,” he said. “We are not their customers, we are their product.”
Franken’s speech kicked off an event hosted by Open Markets Institute, a think tank devoted to fighting monopoly power. The group is led by former journalist Barry Lynn, who gained fame when his group was asked to leave New America, a left-leaning think tank that counts Google among its financial backers, after Lynn praised a harsh European antitrust ruling against Google. Senator Elizabeth Warren (D-Massachusetts) offered a similar critique of tech at an Open Markets conference last year.
See https://www.wired.com/story/al-franken-just-gave-the-speech-big-tech-has-been-dreading/
About the Democratic "Better Deal"
The brief four page document brief outlining a Democratic view of competition policy is at https://www.democraticleader.gov/wp-content/uploads/2017/07/A-Better-Deal-on-Competition-and-Costs.pdf
The Democratic statement has been criticized as too aggressive in recommending a "big-is-bad" approach to competition policy. It may also be criticized as too brief and general to provide useful guidance on remedies to competition issues. Be that as it may, an interesting aspect of the Democratic statement is its brief recital of current industry-specific problem areas: An excerpt follows:
Airlines:
Despite a rapid decline in the cost of fuel, ticket prices continue to rise while the quality of service declines. This is the result of a lack of competition in air travel; over the last two decades, regulators allowed mergers that reduced ten major U.S. airlines to four megacarriers.
Currently, those four carriers serve 80 percent of the market. As a result, consolidated airlines have mirrored each other in their attempts to reduce benefits and services, imposing egregious traveling fees, eliminating certain service lines, and downgrading amenities and consumer choice. Recently, we have seen those effects firsthand, with a United Airlines overbooking policy that led to the brutal assault of an airline passenger, shrinking airline seats, fees for using the overhead bin, and other similar policy changes that have hurt consumers.
Cable/Telecom:
Access to cable and internet services are critical for American consumers, workers, and small businesses to communicate and compete in today’s economy. Yet today, the market for those services is so concentrated that consumers rarely have any meaningful choice of provider, and prices are high enough to be prohibitive for many. In over 50 million households, Americans have no choice at all for internet provider; they are forced to pay the exorbitant price their single carrier requires, if they get service at all. In fact, some reports have determined that Americans pay far more for high-speed internet access, cable television, and home phone lines than people in many other advanced countries – even though the services they receive are not any better. And the largest companies rank the lowest on customer satisfaction rankings – they don’t need to improve their service because there is no competition. Consolidation in the telecommunications is not just between cable or phone providers;
increasingly, large firms are trying to buy up content providers. Currently, AT&T is trying to buy Time Warner. If AT&T succeeds in this deal, it will have more power to restrict the content access of its 135 million wireless and 25.5 million pay-TV subscribers. This will only enable the resulting behemoths to promote their own programming, unfairly discriminate against other 4 distributers and their ability to offer highly desired content, and further restrict small businesses from successfully competing in the market.
Beer Industry:
As of 2016, five breweries controlled over 50 percent of global beer production compared to ten companies in 2004. Although there is a burgeoning craft brewery industry, these small businesses are under threat from large legacy brewers that are acquiring their craft competitors or trying to block craft brewers’ access to the marketplace.
In the last year, InBev which owns Anheuser-Busch and is the world’s largest beer company, struck a deal to purchase SABMiller, the second largest. The companies have already announced that jobs will be cut as a result of the merger, and the resulting conglomerate will make it even harder for small, local breweries to compete.
Food Prices:
The consolidation of six agricultural giants is set to threaten the safety of food and agriculture in America. The merger of Dow with DuPont, Monsanto with Bayer AG, and Syngenta with ChemChina, will result in the control of more than 61 percent of commercial seed sales and 80 percent of the U.S. corn seed market. These mergers take place as countless farmers in rural America struggle to adapt to a declining farm economy. This corporate takeover of the farm industry will not only hurt small-town, family operated farms, who will have to pay more for seeds, but it will also raise food prices – vastly limiting consumer choice.
Eyeglasses:
With more than 200 million Americans affected by vision loss, eyeglass affordability has become a critical consumer issue that affects the entire nation [CDC]. Eyeglasses are a necessity for many Americans, but due to consolidation and concentration in the supply chain, they are increasingly difficult to afford. In fact, the current average price of eyeglasses is now at $400, a cost in line with an iPad, and is steadily rising [Consumer Reports]. The current eyeglass industry, both in the U.S. and abroad, is largely dominated by one company – Luxottica – which owns and manufactures most of the top eyewear and sunglass brands, such as Oakley, Ray-Ban, and Persol, in addition to luxury designer brands. It also owns most of major distribution chains like LensCrafters, Pearle Vision, Sears and Target Optical, and vision insurance company EyeMed Vision Care. If Essilor, which controls 45 percent of the global market share for lenses, successfully acquires Luxottica, the nearly $50 billion merger is set to control the entire supply chain of eyeglasses [Financial Times]. I
Posting by Don Allen Resnikoff, whi is responsible for its content
Comment: Does the law, and the legal process, conspire to facilitate sexual harassment in the corporate workplace?
Here are a few reasons why the answer might be yes, the law and legal process can conspire to facilitate or even encourage sexual harassment in the corporate workplace.
-- employment contracts may contain arbitration provisions. Arbitration proceedings can move the dispute about whether sexual harassment occurred out of a public courtroom and into a non-judicial and possibly secret proceeding. The courts, and the Congress, have tended to supportive of arbitration as an alternative to courtroom litigation. (Of course, potential plaintiffs should determine whether in a particular situation there are ways to avoid arbitration.)
-- Out of court settlements of sexual harassment claims are commonplace, and facilitate keeping secret the occurrence of sexual harassment. Settlement agreements may resolve sexual harassment claims in return for substantial amounts of money. But the agreements are often secret and contain provisions that would impose a severe money penalty on complainants who break secrecy and speak publicly about the sexual harassment.
-- The confidentiality provisions of sexual harassment out of court settlements deserve special mention. It does not appear that sexual harassment settlements with confidentiality provisions are currently considered to be against public policy, or unethical for lawyers to facilitate. But perhaps that permissiveness is wrong, since current news about Harvey Weinstein and others suggest that secret settlements facilitate continuation of offensive behavior without punishment.
Comment posted by Don Allen Resnikoff, who is individually responsible for its content.
NYT: Local governments lobby legislators on plastic for water infrastructure
The American Chemistry Council, a deep-pocketed trade association that lobbies for the plastics industry, has backed bills in at least five states — Michigan, Ohio, South Carolina, Indiana and Arkansas — that would require local governments to open up bids for municipal water projects to all suitable materials, including plastic. A council spokesman, Scott Openshaw, criticized the current bidding process in many localities as “virtual monopolies which waste taxpayer money, drive up costs and ultimately make it harder for states and municipalities to complete critical water infrastructure upgrades.”
Opponents of the industry-backed bills, including many municipal engineers, say they are a thinly veiled effort by the plastics industry to muscle aside traditional pipe suppliers.
“It’s simply catering to an industry that is trying to use legislation to gain market share,” Stephen Pangori of the American Council of Engineering Companies testified this year before a Michigan Senate committee.
To more directly reach towns and counties across the country, the plastics industry is also leaning on the American City County Exchange, a new group that gives corporations extraordinary capacity to influence public policy at the city and county levels. The group operates under the auspices of the American Legislative Exchange Council, a wider effort funded by the petrochemicals billionaires Charles G. and David H. Koch that has drawn scrutiny for helping corporations and local politicians write legislation behind closed doors.
Full article: https://www.nytimes.com/2017/11/10/climate/water-pipes-plastic-lead.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=stream&module=stream_unit&version=latest&contentPlacement=17&pgtype=sectionfront&_r=0
The Century Foundation analyzes government data on loan fraud by colleges
From PCJF: It has been established that the GSA project manager communicated with the Trump Organization in discussions over the Trump Hotel development, using a private non-governmental email account to maintain those government records.
While the manager also possessed a GSA account, substantial communication, including directly with the Trump Organization, appears to have taken place solely using the private email and without cc’ing to the GSA email network.
“Transparency, and the law, demand the release of these records to the public,” stated Mara Verheyden-Hilliard, Executive Director of the PCJF.
Details of the PCJF litigation, other details, and a request for financial backing, are at http://www.justiceonline.org/news
About being a lawyer, from the New Yorker: The contract between a private security firm and one of Harvey Weinstein’s lawyers, David Boies
On July 11, 2017, Harvey Weinstein’s attorney David Boies, of the law firm Boies Schiller Flexner, LLP, signed a contract with Black Cube, an Israeli private-intelligence agency operated by former members of Israel’s Mossad intelligence service. The contract describes Black Cube’s tactics and goals in its work for the client, identified in other documents as Weinstein. The firm’s first objective, as stated in the contract, was to uncover information that would help stop the publication of a new, negative newspaper story, which sources said was a New York Times story focussed on sexual-misconduct allegations against Weinstein. Its second objective was to obtain a manuscript of a book that sources identified as the memoir of the actress Rose McGowan, who had accused Weinstein of rape.
The contract with Black Cube is here: https://www.newyorker.com/sections/news/read-the-contract-between-a-private-security-firm-and-one-of-harvey-weinsteins-lawyers
AAI Weighs In On State Occupational Licensing Reform Debate
The American Antitrust Institute (AAI) has issued a new white paper discussing the role of federal antitrust law in an ongoing reform movement aimed at reducing burdens created by state occupational licensing laws. The white paper is titled State Occupational Licensing Reform and the Federal Antitrust Laws: Making Sense of the Post-Dental Examiners Landscape. [ http://www.antitrustinstitute.org/sites/default/files/Occupational%20Licensing%20White%20Paper.11.6.17.pdf ]
Appellate Court upholds standing of DC AG to sue ExxonMobil for violating statute prohibiting exclusive dealing that facilitates ExxonMobil price control
Opinion at: https://www.scribd.com/document/363361380/DC-AG-ExxonMobil-Appellate-Decision-14-CV-633-1
DAR comment:
The Washington Post reported some time ago that in 2013, then District Attorney General Irvin B. Nathan sued ExxonMobil, Capitol Petroleum and others for allegedly manipulating prices at the pumps in the District. Exxon’s oil-refining subsidiaries had struck exclusive supply deals with about 60 percent of the city’s gas stations, including almost all of the Exxon, Shell and Valero stations, effectively shutting out competition and allowing them to set retail prices as high as they’d like, the suit argued. The D.C. Superior Court granted ExxonMobil’s motion to dismiss the case in 2014. (That is the dismissal that the recent Court of Appeals decision reverses.) ExxonMobil argued that under the District’s Retail Service Station Act, the attorney general had “neither expressed nor implied statutory authority” to investigate gas prices.
The Washington Post reporting oversimplified the litigation story to some extent, but catches an important point about the litigation: the DC AG's Complaint alleges that ExxonMobil conduct causes serious harm to DC consumers.
As Tracy Rezvani and I wrote in an earlier article, The D.C. Attorney General alleged that high local D.C. gasoline prices are caused by anticompetitive exclusive dealing restrictions imposed on retailers by dominant distributors. In recent years, the District of Columbia has had a reputation for high retail gasoline prices. Experts like John Townsend of the AAA and antitrust expert David Balto have publicly pointed out that a duopoly of local gasoline distributors has used exclusive dealing contracts with gasoline retailers that keep prices artificially high. Townsend has said of the larger distributor in the duopoly, Eyob Mamo, that “He is overcharging gas station owners.”
The reason that dominant distributors can successfully use exclusive dealing requirements to keep prices high is that the exclusivity requirement locks in the retailer and prevents the retailer from shopping for a lower wholesale price. Retailers forced to pay high wholesale prices have little choice but to pass on the high price to consumers. If consumers in particular neighborhoods have limited ability to avoid the locked-in retailers, then those consumers are likely to share the experience of high prices being passed on to them.
The legal complaint filed by the District of Columbia’s Attorney General Irving Nathan in the DC Superior Court against ExxonMobil and local gasoline distributors (often called “jobbers”) is intended to blocked the anticompetitive exclusive dealing contracts by distributors, and to reduce gasoline prices in the District of Columbia.
The Attorney General’s Complaint charges violation of a local statute with limited proof requirements, the Retail Service Station Act, D.C. Code §§ 36-301.01 et seq. (the “RSSA”), which prohibits distributors from enforcing exclusive dealing contracts with gasoline retailers. The action was dismissed by Superior Court Judge Craig Iscoe on May 6, 2014. You can see the opinion at http://www.scribd.com/doc/222728637./DC-Exxon-5-6-2014-Order-Granting-MTDs-1. Judge Iscoe did not dismiss the AG's action on the merits. Instead, Judge Iscoe ruled that the Attorney General lacked standing under the relevant Subchapter of the RSSA. Judge Iscoe wrote: “Until such time as the [DC] Council changes its position, the Court finds that the Attorney General has no standing to bring actions under that Subchapter of III of the RSSA, more specifically, D.C. Code § 36-303.01(a)(6) and (a)(11)." The judge concluded that the RSSA statute permits only actions by particular affected dealers.
Judge Iscoe’s opinion includes a footnote telling ExxonMobil that it could indeed be held liable under the RSSA for the alleged conduct, but for the standing issue. Consequently, there is good reason to believe that if Judge Iscoe had reached the antitrust merits, the District would have prevailed, and a trial on the merits would have been allowed.
The appellate court has now overruled Judge Iscoe and decided that the District may go forward and litigate its Complaint. We believe that trial on the merits will serve the interests of the consuming public as well as gasoline retailers. Various publicly available court filings and other documents report in some detail the facts that support an enforcement action. Former D.C. Attorney General Irv Nathan explained the local gasoline market’s dysfunction in a letter published by the Washington Post on September 6, 2013. His letter (which is available at http://www.washingtonpost.com/opinions/exclusive-supply-agreements-for-fuel-drive-prices-in-the-district/2013/09/06/7f164ce2-1591-11e3-961c-f22d3aaf19ab_story.html) rebutted a Washington Post editorial criticizing the Attorney General's suit against ExxonMobil and local distributors. (The Post reiterated its criticism at http://www.washingtonpost.com/opinions/the-districts-crusade-against-gas-station-magnate-joe-mamo-is-running-on-fumes/2014/05/23/962f6b6a-e297-11e3-810f-764fe508b82d_story.html.)
The facts outlined in the the Nathan letter are straightforward. Vertical exclusive dealing restraints against gasoline retailers are imposed by dominant wholesalers in the District of Columbia and are harmful because they raise wholesale and retail gasoline prices: "Vertically imposed supply restrictions, while perhaps 'benign' in a truly competitive market, have great potential to harm competition and raise consumer prices in one dominated by a single large supplier. The unusually high prices at many D.C. pumps should surprise no one. The District’s lawsuit challenging exclusive supply agreements is brought against a single, large gasoline wholesaler that supplies about 60 percent of the city’s stations, including almost all of the Exxon, Shell and Valero brand stations."
Mr. Nathan’s points sound in traditional antitrust: exclusive dealing conduct by dominant distributors, supported by major oil companies, raises prices to station owners and consumers.
The recent Court of Appeals decision allowing the District's case to go forward does not rely on factual allegations of harm to DC citizens in the AG's Complaint. The appellate decision explains:
"The District‘s complaint alleges on its face that appellees have in place marketing agreements that violate District of Columbia law, specifically, prohibitions set out in the RSSA. Those allegations by the District were sufficient to satisfy the injury-in-fact element of Article III-type standing on the District."
The Court of Appeals found it unnecessary to reach factual issues of harm associated with the District's "quasi-sovereign-interest" theory of standing -- the idea that standing turns on harm to DC citizens. However, as the Court of Appeals pointed out in a footnote, "Whether appellees‘ marketing agreements actually cause the type of concrete injury the trial court believed must be alleged to establish standing will be
a relevant consideration if the District succeeds on its claim that the agreements violate § 36-303.01 (a) [of the RSSA statute] and the court goes on to consider whether to issue a permanent injunction enjoining implementation of the offending terms of the agreements."
I congratulate the DC AG's office on winning the ability to go forward with litigation of its Complaint.
Note: The opinions expressed are the personal responsibility of Don Allen Resnikoff
Illinois AG press release:
ATTORNEY GENERAL MADIGAN OPPOSES TRIBUNE-SINCLAIR MEDIA MERGER
Madigan Leads Attorneys General in Urging FCC to Reject Massive Merger that Will Decrease Consumer Choices and Diverse Media Voices
Chicago — Attorney General Lisa Madigan today led a multistate group of attorneys general in filing comments with the Federal Communications Commission (FCC) opposing the proposed merger between the Tribune Media Company (Tribune) and Sinclair Broadcast Group Inc. (Sinclair). Madigan and the other attorneys general argue the potential merger fails to further the public interest by allowing for increased consolidation that will decrease consumer choices and a diversity of voices in the media marketplace.
The Tribune/Sinclair merger would create the largest television broadcast company in the country. The merged company would own or operate over 200 stations nationwide with the ability to reach 72 percent of U.S. television households, far above the statutory 39 percent limit.
"To ensure people have access to a diverse landscape of perspectives, services and stations, the FCC should reject the proposed Tribune-Sinclair media merger," Madigan said. "People throughout Illinois depend on their local broadcast stations for diverse viewpoints and this merger threatens that long-held practice."
In addition, Madigan and the other attorneys general point out that the proposed merger inappropriately relies on an outdated method known as the UHF Discount Rule for calculating national audience reach that does not reflect the reality of today's technology, understating the audience reach of a UHF station by 50 percent.
The attorneys general argue that, at a minimum, the FCC should delay consideration of the merger until the D.C. Circuit Court completes its rule of the UHF Discount, which is underway.
Joining Madigan in filing today's comments are the attorneys general of Maryland, Massachusetts and Rhode Island.
A copy of the comments can be found here. http://www.illinoisattorneygeneral.gov/pressroom/2017_11/FCC_MB_DocketNo17-179CommentofStateAttorneysGeneral.pdf
State AGs multistate settlement of the LIBOR investigation of Deutschebank
The California AG's press release is at https://oag.ca.gov/news/press-releases/attorney-general-becerra-announces-220-million-multistate-settlement-deutsche
From the press release:
California Attorney General Xavier Becerra today announced a $220 million multistate settlement with Deutsche Bank for fraudulent conduct involving the manipulation of the London Interbank Offered Rate (LIBOR). LIBOR is the rate at which banks lend money to one another. It is a key financial tool that determines interest rates for many financing mechanisms, including government and corporate bonds. Deutsche Bank colluded with other banks to skew borrowing rates in its favor, illegally profiting on contracts with municipalities linked to LIBOR. This unlawful strategy resulted in a sharp increase in profits for Deutsche Bank at the expense of government entities and non-profit organizations in California and throughout the country. Through the settlement announced today, California governmental and non-profit entities that invested with Deutsche Bank will receive approximately $29 million.
“During the financial crisis, Deutsche Bank was consumed with increasing its profits at the expense of Californians,” said Attorney General Becerra. “They manipulated interest rates hoping to turn a quick profit. In the process, they left government entities and non-profits in California hanging out to dry. This conduct is unacceptable and it is illegal. Banks and financial institutions do not get to play fast and loose with the law.”
The investigation was led by the attorneys general of California and New York and conducted by a working group of 43 other attorneys general: Alabama, Alaska, Arizona, Arkansas, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, Virginia, Washington, West Virginia, Wisconsin, and Wyoming.
The settlement agreement is at https://oag.ca.gov/system/files/attachments/press_releases/Settlement.pdf The key factual allegations of the plaintiff states are at are at paragraphs 14 to 69.
The FEMA statement on the no-bid Whitefish contract for Puerto Rico
Facing withering criticism from members of Congress and the Federal Emergency Management Agency, the governor of Puerto Rico moved on Sunday to cancel a $300 million contract awarded to a small Montana company to rebuild part of the island’s battered power grid.
The 10-27 FEMA statement on the contract is here: https://www.fema.gov/news-release/2017/10/27/updated-fema-statement-puerto-rico-electric-power-authoritys-contract
Here is an excerpt from the FEMA statement:
FEMA has not provided any reimbursement to Puerto Rico to date for the PREPA contract with Whitefish Energy. Regardless, FEMA will verify that the applicant (in this case PREPA) has, in fact, followed applicable regulations to ensure that federal money is properly spent.
Based on initial review and information from PREPA, FEMA has significant concerns with how PREPA procured this contract and has not confirmed whether the contract prices are reasonable. FEMA is presently engaged with PREPA and its legal counsel to obtain information about the contract and contracting process, including how the contract was procured and how PREPA determined the contract prices were reasonable.
See also https://www.nytimes.com/2017/10/29/us/whitefish-cancel-puerto-rico.html?_r=0
The NYT reports the Senate shoe dropping on the CFPB
Senate Republicans voted on Tuesday to strike down a sweeping new rule that would have allowed millions of Americans to band together in class-action lawsuits against financial institutions.
The overturning of the rule, with Vice President Mike Pence breaking a 50-to-50 tie, will further loosen regulation of Wall Street as the Trump administration and Republicans move to roll back Obama-era policies enacted in the wake of the 2008 economic crisis. By defeating the rule, Republicans are dismantling a major effort of the Consumer Financial Protection Bureau, the watchdog created by Congress in the aftermath of the mortgage mess.
The rule, five years in the making, would have dealt a serious blow to financial firms, potentially exposing them to a flood of costly lawsuits over questionable business practices.
For decades, credit card companies and banks have inserted arbitration clauses into the fine print of financial contracts to circumvent the courts and bar people from pooling their resources in class-action lawsuits. By forcing people into private arbitration, the clauses effectively take away one of the few tools that individuals have to fight predatory and deceptive business practices. Arbitration clauses have derailed claims of financial gouging, discrimination in car sales and unfair fees.
The new rule written by the consumer bureau, which was set to take effect in 2019, would have restored the right of individuals to sue in court. It was part of a spate of actions by the bureau, which has cracked down on debt collectors, the student loan industry and payday lenders.
The arbitration rule has sparked a political battle that has taken on broader significance in the new administration. Republicans latched on to the rule as a way to cast the agency as a player in the regulatory regime that was impeding business and the economy. Shortly after the rule was adopted in July, the U.S. Chamber of Commerce pointed to it as a “prime example of an agency gone rogue.”
In recent months, financial firms and their Republican allies in Congress mobilized to defeat the rule. Some credit unions and community banks also weighed in, lodging calls to lawmakers in their home states.
Under the Congressional Review Act, Republicans had roughly 60 legislative days to overturn the rule. The House passed its own resolution in July.
Wrangling the votes in the Senate was trickier. In the weeks leading up to the vote, Senator Lindsey Graham, Republican of South Carolina, who sponsored legislation to protect military members from being forced into arbitration, said he would not support a repeal of the rule.
Looking to head off a repeal, Democrats and consumer advocates branded the effort as a gift to financial institutions like Wells Fargo and Equifax. Both companies, in the face of corporate scandals, used arbitration clauses to try to quash legal challenges from customers.
The rule, Democrats argued, was precisely what was needed to protect the rights of vulnerable borrowers. Regulators and judges, including some appointed by Republican presidents, have also backed the position.
Class actions, they argue, are not just about the size of the payouts, which are typically spread out among a large group of people. They are also about pushing companies to change their practices. Large banks, for example, had to pay more than $1 billion to settle class actions beginning in 2009 that accused them of tweaking checking account policies to increase the amount of overdraft fees that they could charge customers.
“Tonight’s vote is a giant setback for every consumer in this country,” Richard Cordray, the director of the consumer bureau, said in a statement. “As a result, companies like Wells Fargo and Equifax remain free to break the law without fear of legal blowback from their customers.”
https://www.nytimes.com/2017/10/24/business/senate-vote-wall-street-regulation.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=rank&module=package&version=highlights&contentPlacement=7&pgtype=sectionfront#story-continues-2
The Consumerist on House anti-CFPB vote:
House Votes To Strip Bank & Credit Card Customers Of Constitutional Right To A Day In CourtIMAGE COURTESY OF (J.G. PARK)7.25.175:09 PM EDTBy Chris Morran@themorrancave
GET OUT OF JAIL FREE FORCED ARBITRATION CFPB MANDATORY BINDING ARBITRATIONLAWSUITS CONSUMER FINANCIAL PRODUCTION BUREAUCONGRESSIONAL REVIEW ACT
Because the Sixth and Seventh Amendments of the U.S. Constitution are apparently less important than making sure that banks, credit card companies, student loan companies, and other financial services be allowed to behave badly with impunity, the House of Representatives has voted to overturn a new federal regulation that would have helped American consumers hold these companies accountable through the legal system.
In a largely party-line 231-190 vote this afternoon, the House passed a Congressional Review Act resolution that, if also adopted by the Senate and signed by the President, would overturn recently finalized rules from the Consumer Financial Protection Bureau.
Those rules seek to curb the use of “forced arbitration” in many consumers’ financial contracts. These arbitration clauses dictate that any legal dispute between the customer and the bank must be resolved outside of the legal system. Instead, these matters — no matter the scope of the allegation — must go through a closed-door arbitration process, where the results are often confidential, so there is no public record of the alleged wrongdoing.
Additionally, most arbitration clauses include a ban on class actions — even through arbitration. So a bank could, for example, open millions of fake, unauthorized accounts in customers’ names, but then try to block all of those customers from moving forward as a plaintiff class. Rather, each of the millions of wronged customers is required to go through arbitration on their own. As a result, very, very few people ever enter into the arbitration process.
READ MORE: CFPB’s Finalized Arbitration Rule Takes Away Banks’ ‘Get Out Of Jail Free Card’
The Consumer Financial Protection Bureau’s new rule doesn’t bar affected companies from using arbitration clauses, but it severely limits their ability to use class action bans.
Last week, a group of heavily bank-backed lawmakers in both the House and Senate introduced Review Act resolutions to roll back the rule.
READ MORE: Lawmakers Who Want To Hand ‘Get Out Of Jail Free’ Card To Banks Made Millions From Financial Sector Last Year
During debate in advance of today’s vote, GOP representatives repeatedly attempted to claim that arbitration is superior to class actions because the typical payout of an arbitration dispute is significantly higher (around $5,000) than in a class action (around $32).
Rep. Dave Trott of Michigan belittled class actions, pointing to a $3.99 settlement he recently received. What the congressman didn’t mention is that he was likely one of thousands — potentially millions — of people who received that $3.99 settlement. To him, it was the price of a latte, but to the company that had to pay that settlement, it was a large financial spanking.
Democratic representatives responded to this repeated criticism by noting that arbitration cases tend to involve small numbers of customers with high-dollar disputes, whereas class actions often involve large numbers of wronged customers with small-dollar issues.
Rep. David Cicilline of Rhode Island mocked the GOP contention that forced arbitration is pro-consumer.
“If these provisions were so beneficial, why do you have to sneak them into the contracts?,” asked Cicilline.
Maryland Rep. John Sarbanes questioned the GOP’s reason for trying to undo these protections.
“Who back home is asking for this?” asked Sarbanes. “Who is coming to the town hall and asking for you to repeal this?”
In the end, only one Republican — Walter Jones of North Carolina — voted against repealing the CFPB rule. No Democrats strayed across the aisle to vote in favor of repeal.
What Choice?
In his closing remarks before the vote, Rep. Jeb Hensarling (TX) — whose campaign received nearly $2 million from financial services companies last year — made the dubious claim that arbitration clauses provide consumers with a “choice” between arbitration and the court system.
The problem is, that this is not at all true in practice. Arbitration clauses generally say that either party in the contract can elect to enter into arbitration, and that the other party must abide by that decision. So yes, if a customer chooses arbitration, they get arbitration, but if a company wants arbitration, the customer has no “choice” to speak of. While this might seem harsh, the Supreme Court has repeatedly upheld that aspect of arbitration clauses.
What Now?
Even though these resolutions to overturn the CFPB rules face huge opposition from consumer advocates, there was little hope that the Republican-dominated House would vote against passing the bill. The Senate resolution may face a tougher fight, as the GOP can only afford to lose two votes to the opposition.
“House Republicans have turned their backs on their constituents for Wall Street’s benefit,” said Christine Hines, legislative director at the National Association of Consumer Advocates. “Instead of supporting a reasonable rule that helps consumers get back their day in court, the U.S. House sided with big banks, which for too long have used their fine-print contracts to take Americans’ rights away.”
“By voting to overturn the CFPB’s arbitration rule, Republicans in Congress are siding with predatory banks, payday lenders, credit card companies and the financial industry against Main Street Americans, and are choosing to be on the wrong side of history,” adds Lisa Gilbert, Vice President of Legislative Affairs, Public Citizen. “Big banks, the financial industry and their allies in Congress are trying to overturn the CFPB’s rule because it will deprive them of a means to rip off consumers.”
“Consumers shouldn’t be forced to give up their legal rights when they sign up for a loan or open a bank account,” says our colleague George Slover, senior policy counsel for Consumers Union. “The CFPB’s rule ensures they can join with others and have their day in court if they’ve been harmed by their bank or credit card company. Repealing the forced arbitration rule will make it harder for consumers to hold financial firms accountable for breaking the law or treating their customers unfairly.”
Article is at https://consumerist.com/2017/07/25/house-votes-to-strip-bank-credit-card-customers-of-constitutional-right-to-a-day-in-court/
Courts have been allowing States to provide special support to nuclear power suppliers like Exelon
Several months ago a federal judge ruled that New York's plan to subsidize nuclear power plants “is constitutional” and “of legitimate state concern.”
The decision helped nuclear power provider Exelon, which has been struggling financially. Nuclear plants are notoriously expensive to run.
The ruling was one of several federal court rulings supporting States’ authority to favor muclear power providers.
Plaintiffs in New York were energy supply competitors who argued that subsidies for the state’s nuclear power plants violate federal market rules and put out-of-state generators at a disadvantage.
District Judge Valerie Caproni e ruled that New York’s zero-emissions credit (ZEC) program which aided nuclear providers does not intrude on the Federal Energy Regulatory Commission's jurisdiction over wholesale electricity markets.
“The ZEC program is plainly related to a matter of legitimate state concern: the production of clean energy and the reduction of carbon emissions from the production of other energy,” Caproni wrote in her decision.
Caproni’s ruling came shortly after a federal judge in Illinois threw out a nearly identical challenge to the State’s ZEC program. A couple of weeks prior, the Second Circuit Court of Appeals upheld a Connecticut district court decision to dismiss arguments against the state’s renewable energy procurement program.
Credit: https://www.greentechmedia.com/articles/read/nuclear-subsidies-court-new-york-illinois-renewable-energy -- which takes the view that victories today for Exelon and provision of nuclear energy will benefit other renewable suppliers in the future. Other commenters argue that state support for nuclear should be withheld in favor of immediate support for other and greener renewables.
Ralph Nader on Trump's anti-consumer agenda
As a candidate, Donald Trump promised regular people, “I will be your voice,” and attacked the drug industry for “getting away with murder” in setting high prices for lifesaving medications. But as president, he has declared war on regulatory programs protecting the health, safety and economic rights of consumers. He has done so in disregard of evidence that such protections help the economy and financial well-being of the working-class voters he claims to champion.
Already his aggressive actions exceed those of the Reagan administration in returning the country to the “Let the buyer beware” days of the 1950s.
Though Mr. Trump is brazen in his opposition to consumer protections, many of his most damaging attacks are occurring in corners of the bureaucracy that receive minimal news coverage. His administration, for instance, wants to strip the elderly of their right to challenge nursing home abuses in court by allowing arbitration clauses in nursing home contracts. The Federal Motor Carrier Safety Administration has announced that it is canceling a proposed rule intended to reduce the risk of sleep apnea-related accidents among truck drivers and railway workers.
And the Environmental Protection Agency is busy weakening, repealing and under-enforcing protections, including for children, from toxic exposure. Scott Pruitt, the director, went against his agency’s scientists to jettison an imminent ban on the use of chlorpyrifos, an insecticide widely used on vegetables and fruits. Long-accumulated evidence shows that the chemical is poisoning the drinking water of farm workers and their families.
This assault began with Mr. Trump choosing agency chiefs who are tested corporate loyalists driven to undermine the lifesaving, income-protecting institutions whose laws they have sworn to uphold.
At the Food and Drug Administration, Mr. Trump has installed Dr. Scott Gottlieb, a former pharmaceutical industry consultant, who supports weakening drug and medical device safety standards and has shown no real commitment to reducing sky-high drug prices. At the Department of Education, Betsy DeVos, a billionaire investor in for-profit colleges, has weakened enforcement policy on that predatory industry, hiring industry insiders and abandoning protections for students and taxpayers.
Mr. Pruitt, as the attorney general of Oklahoma, filed suits against the E.P.A. He has hired former lobbyists for the fossil fuel and chemical industries. Mr. Trump’s aides and Republicans in Congress are pushing to restrict access to state courts by plaintiffs who seek to hold polluters accountable.
The administration is even threatening to dismantle the Consumer Financial Protection Bureau and fire its director, Richard Cordray, who was installed after Wall Street’s 2008 crash. Their sins: They returned over $12 billion to defrauded consumers and plan to issue regulations dealing with payday debt traps and compulsory arbitration clauses that deny aggrieved consumers their day in court. (The Senate is now considering legislation to gut the arbitration rule.)
Draconian budget cuts, new restrictions on health insurance, diminished privacy protections and denying climate change while putting off fuel-efficiency deadlines and auto safety standards will hurt all Americans, including Mr. Trump’s most die-hard supporters.
Mr. Trump’s deregulation crowd argues that they are freeing markets to grow. But preventing casualties and protecting consumers are, in fact, good for the economy. Nicholas Ashford, a professor of technology at M.I.T., has shown how safety regulation has fostered innovation. Markets grow in humane and efficient ways when workers make airbags, products to detect contaminants in food and water, and recycling equipment. Fraud prosecutions leave consumers with more money, generating sales, jobs and a higher standard of living.
When courts grant compensation for wrongful injuries, they not only help victims pay their bills but also lessen the burden on public insurance programs like Medicare. Fuel-efficiency standards save consumers money, improve air quality and reduce dependence on foreign oil. The Department of Energy itself says that over five years, a 30-m.p.g. vehicle will save $3,125 if driven 15,000 miles annually.
Mr. Trump’s regulatory abolitionists should know they will face litigation. In the 1980s, the Reagan administration’s repeal of the rule requiring airbags in cars was challenged by the insurance industry and consumer groups. The Supreme Court unanimously required the rule to be reinstated. Labor, consumer and environmental groups are mobilizing to fight efforts to sap health and safety protections. Citizens are rediscovering the benefits of focusing on members of Congress at town halls and other gatherings.
Smashing safety and consumer safeguards will lead to deaths, injuries and diseases that provoke intense news coverage. Demands to hold the profit-obsessed Trump team accountable for conflicts of interest will intensify. And civil servants, blocked from enforcing laws, will respect established procedures or become whistle-blowers, with legal protections.
The administration’s corrosive polices should be a clarion call to Democrats not to mimic Republicans in pursuing special interest campaign dollars and instead devise a powerful consumer protection message for voters left, right and center — voters who can be injured or defrauded regardless of their political views.
Championing a consumer agenda should be a good way to win elections.
Article from NYT: https://www.nytimes.com/2017/10/23/opinion/ralph-nader-trump-consumers.html?action=click&pgtype=Homepage&clickSource=story-heading&module=opinion-c-col-left-region®ion=opinion-c-col-left-region&WT.nav=opinion-c-col-left-region&_r=0
Trump Treasury Department report attacks CFPB s arbitration rule
From the report:
“An agency implementing such a drastic shift in policy should typically subject its rulemaking to the rigors of cost-benefit analysis and require incremental efficiency justification for more stringent regulations. The bureau’s analysis fell short of these standards for agency rulemaking, as well as its own statutory command to determine that the rule serves the public and consumer interests.”
The Treasury Department report is here: https://www.treasury.gov/press-center/press-releases/Documents/10-23-17%20Analysis%20of%20CFPB%20arbitration%20rule.pdf
Editor's note: We support the CFPB rule as protecting consumer's litigation rights.
A Congressional vote to repeal of the CFPB arbitration rule is reported to be imminent as of October 24
We join others is opposing S.J. Res. 47. We believe that the CFPB rule provides important protections to consumers who wish to assert State and Federal rights in court. Here is a video featuring "Mr. Monopoly:"
video ( https://www.facebook.com/indivisibleguide/videos/331938930603316/ )
U.S. Supreme Court has accepted cert in the Amex antitrust case in which the lower court requires assessment of two-sided market elements. From SCOTUSblog, here are some amicus briefs:
.
Jul 06 2017Brief amici curiae of Former Federal Antitrust Officials filed.
Jul 06 2017Brief amicus curiae of United States Public Interest Research Group Education Fund, Inc. filed.
Jul 06 2017Brief amici curiae of 25 Professors of Antitrust law filed.
Aug 07 2017Brief of respondent United States in opposition filed.
Aug 21 2017Brief of respondent American Express Company in opposition filed.
Sep 05 2017Reply of petitioner Ohio, et al. filed. (Distributed)
From the Former Federal Officials brief:
INTRODUCTION AND
SUMMARY OF ARGUMENT
This petition involves an antitrust issue of exceptional importance to the modern economy: the application of
the rule of reason to industries that function as two-sided platforms. “In a two-sided platform,” a firm “sells different
products or services to two separate yet interrelated groups of customers”—like merchants and consumers in
the credit-card industry. Pet. App. 77a.
The district court and court of appeals disagreed on what burden of proof antitrust plaintiffs must bear in such circumstances.
Clarity about this key element of the antitrust enforcement regime is necessary for the law to “evolve to
meet the dynamics of present economic conditions.” Leegin Creative Leather Prods., Inc. v. PSKS, Inc., 551
U.S. 877, 899 (2007).
And this Court’s central role in shaping the common law of antitrust makes its review of this discrete legal issue both timely and appropriate in this case, especially because this Court has had few opportunities to weigh in on cases brought by government antitrust authorities over the last forty years.
The Acting Solicitor General’s failure to join this petition—at a time when both the Antitrust Division and the Solicitor General’s office lack Senate-confirmed leadership—does not diminish the importance of clarifying the proper burden of proof in two-sided platform antitrust cases. The government plaintiffs are ably represented by eleven sovereign states. And, of course, the federal government’s voice need not go unheard. The Court may call for the views of the Solicitor General, both as to this petition and on the merits.
Here is a website that helps students avoid scam schools and scam student loans:
https://www.knowb4youenroll.com/
From the website:
Predatory for-profit schools make it their business to trick students into attending high-cost programs that don't lead to well-paying jobs. That's why we've created tip sheets to help you detect if a school you're considering is not working in your best interest.
The Sierra Club has sued the US EPA
The suit alleges that the EPA failed to update Congress on the environmental impacts of the Renewable Fuel Standard program, and failed to study whether increased ethanol use has adversely impacted air quality.
The Complaint is here: https://dlbjbjzgnk95t.cloudfront.net/0976000/976399/https-ecf-dcd-uscourts-gov-doc1-04516269427.pdf
Morgenstern of NYT reports: Freddie Mac has decided to allow Equifax to ban dozens of rival credit-reporting companies from one part of its automated system.
From the NYT article:
Here’s the background. Both Freddie Mac and the other government-sponsored mortgage finance company, Fannie Mae, have automated underwriting systems that are meant to make their loan guarantee or purchasing processes work smoothly and quickly. Mortgage lenders rely on them heavily.
A borrower’s credit standing is a crucial piece of the information that flows into these systems. While Equifax and the other big credit-reporting agencies dominate, a group of about 40 other firms also provide lenders with credit information. In addition to supplying merged credit reports as Equifax does, these firms often provide more detailed information, including verification of a borrower’s employment, and past payments to utilities, phone companies and landlords.
That these independent companies can still operate in a world that Equifax dominates may be an indication that they provide superior customer service such as quickly correcting errors or outdated information in a report. Equifax can supply the same information, but its customer service is not so stellar. The internet abounds with consumer complaints about the company, and since the data breach, many consumers have said they have been unable to reach the company.
That is what comes of having little or no competition. Which is why it is troubling that Freddie Mac has decided to allow Equifax to ban dozens of rival credit-reporting companies from one part of its automated system.
Freddie Mac recently developed Loan Quality Advisor, a new part of that system. It was, according to the company’s website, a “risk and eligibility assessment tool that evaluates loan data to help lenders determine if a loan is eligible for sale to Freddie Mac.”
Naturally, a borrower’s credit history goes into this system. But Freddie Mac assigned gatekeeper status to Equifax, essentially allowing it to bar an array of competing firms from providing credit information during the process.
This change hurts competitors by ensuring that what could be their business goes to Equifax instead. But it may also harm certain borrowers. Because of the more efficient services the other firms often provide, preventing them from participating could make it more difficult for borrowers with errors on their credit histories to correct them in time to secure a mortgage.
(Fannie Mae has taken a different approach with its automated loan-underwriting system. Its structure is more open, allowing independent credit-information providers to participate at multiple levels)
Interestingly, an internal Freddie Mac email indicates that Equifax drove the decision to keep independent companies, known as technical affiliates, out of the system.
Article: https://www.nytimes.com/2017/10/13/business/equifax-freddie-mac.html?_r=0
California, New York and 16 other states on Friday 10/13 sued the Trump administration to force federal regulators to continue paying billions of dollars in cost-sharing insurance subsidies under the Affordable Care Act.
President Donald Trump announced Thursday he would end federal payments that help qualifying residents purchase insurance plans. More than one million Californians buy coverage through the Affordable Care Act's health care exchanges.
The U.S. Department of Justice on Friday told the U.S. Court of Appeals for the D.C. Circuit, where the health care law's cost-sharing subsidies are being challenged, that the federal government does not intend to make the next scheduled payment on Oct. 18.
California Attorney General Xavier Becerra on Friday called the president’s decision “sabotage, plain and simple.” A coalition of attorneys general—18 states and the District of Columbia--filed the suit- see it at https://assets.documentcloud.org/documents/4108324/California-v-Trump-20171013.pdf ] --Friday in the U.S. District Court for the Northern District of California.
Becerra was joined on a media call by Massachusetts Attorney General Maura Healey, Connecticut Attorney General George Jepsen and Kentucky Attorney General Andy Beshear. New York Attorney General Eric Schneiderman joined the lawsuit filed in California.
Credit: http://www.therecorder.com/id=1202800402342/Calling-Trumps-Health-Care-Move-Sabotage-Becerra-Teams-Up-for-New-Suit?kw=Calling%20Trump%27s%20Health%20Care%20Move%20%27Sabotage%2C%27%20Becerra%20Teams%20Up%20for%20New%20Suit&et=editorial&bu=The%20Recorder&cn=20171013&src=EMC-Email&pt=Afternoon%20Update#!
CBS and WashPost report that Drug Enforcement Agency's efforts to crack down on the opioid epidemic were derailed by lobbying efforts of pharma distributors like McKesson and Cardinal, and Congress
Illegal diversion of prescription opiods was not properly prosecuted by DEA, according to the reports. Pharma distributors and Congress are blamed for holding back DEA efforts.
Washington Post's investigative reporters Scott Higham and Lenny Bernstein will appear Sunday, Oct. 15 in The Washington Post and on 60 Minutes at 7:30 p.m. ET and 7 p.m. PT. The 60 Minutes segment includes an interview with the highest-ranking DEA agent ever to turn whistleblower, former Deputy Assistant Administrator Joe Rannazzisi.
See: https://www.cbsnews.com/news/how-the-dea-efforts-to-crack-down-on-the-opioid-epidemic-were-derailed/
P.S. This is a problem that a group of State AGs are investigating. See http://www.cnn.com/2017/09/19/health/state-ag-investigation-opioids-subpoenas/index.html
The next big thing in cashless payments, possibly with no Visa or MasterCard or other credit card required -- the QR code on your cellphone
Excerpts condensed from Bloomberg article:
Around the developing world, QR codes are beating out Apple Pay and other brand-name payment services for consumers and businesses keen to go cashless. China offers a useful model for that transformation -- and a standard that others may soon be emulating.
The QR code may seem like an unlikely candidate to foster a financial revolution. It was developed in the 1990s by Japan's Denso Corp.
By the time Tencent Holdings Ltd. released the social media app WeChat, in 2011, it was clear that QR codes had a lot more potential. WeChat offered users personalized codes that could be used to exchange contact information. When combined with the app's built-in wallet, they could also be used for payments. Sending money through the app has since become a way of life: During this year's Chinese New Year holiday, WeChat users sent 46 billion cash gifts via virtual "red envelopes."
That success shows why QR code payments are likely to take off in emerging markets. For one thing, they don't require credit cards [emphasis added], which few people in poorer countries have. Apple Pay and other such services, which use Near Field Communication technology, are uneconomical for many of these consumers. (Apple Pay's market share in China is in the single digits, despite a recent marketing push.) And the small-scale merchants that predominate in the developing world -- restaurants, corner markets, buskers -- have little reason to invest in expensive payment terminals for the equivalent of $0.50 transactions.
WeChat Pay, by contrast, allows just about anyone with a bank account and a smartphone to make electronic payments. All a Shanghai noodle shop or a Shenzhen busker needs to accept payments is a free WeChat account and a printout of a QR code. Much of China has become a QR first economy, where codes are now found next to nearly every cash register. WeChat's share of China's mobile payments market has grown from 3.3 percent in 2013 to 40 percent today.
Other developing countries are starting to see the potential. Last year, MasterCard Inc. rolled out a QR code system in Africa that has already attracted 100,000 Nigerian traders. In February, the Indian government launched IndiaQR, its latest effort to spur a cashless society. Thailand is similarly enthusiastic.
But perhaps the most ambitious step is a new industry standard published last week by EMVCo, a global payments consortium that includes MasterCard, Visa Inc. and the state-backed China UnionPay Co. The effort, spearheaded by UnionPay, would effectively extend China's payment standard globally, helping to ensure that QR-mediated transactions can flow seamlessly between banks and card companies, while also making them more secure.
That should make the technology more attractive to consumers, merchants and governments around the world. It could help fill the digital tip jars of subway buskers from Shenzhen to Lagos. And it just might make the cashless society a reality far sooner than anyone had predicted.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
The author of this story:
Adam Minter at aminter@bloomberg.net
The article is at:
https://www.bloomberg.com/view/articles/2017-07-19/china-s-cashless-revolution
Will Visa and MasterCard manage globalization of the new QR cashless mobile phone app? From
South China Morning Post:
QR code takes a baby step in world conquest as group adopts global cashless payment format
PUBLISHED : Sunday, 16 July, 2017,
Daniel Ren in Shanghai
A version of the QR code, the ubiquitous data-storage format that dominates daily life in the internet age in mainland China, is taking a significant step abroad, after a global organisation that supports unified payment systems adopted and published the specifications for transactions using the code.
EMVCo, a consortium for smart payments that’s collectively owned by American Express, Visa, Mastercard and UnionPay, on Saturday published the first version of QR code specifications, or the industry standard for the payment format, a year after UnionPay proposed a safe and open global system.
“UnionPay played an active and leading role in the preparations for the issuance of the standard,” said Zhou Jinjia, a UnionPay executive in charge of the QR code promotion. “It was UnionPay, the leader in the EMVCo working group, that helped provide the final technical solution.”
The move is a giant leap in the evolution of the black and white squiggles first created in 1994 by Denso for the Japanese automotive industry. Known as the Quick Response codes, the format comprised random patterns of black squares on white background, capable of holding 300 times more data than traditional bar codes.
Embraced in China, nine of 10 of the world’s QR code users are in the country, according to an estimate by the People’s Daily newspaper. QR codes are now an integral part of the social media-enabled, mobile internet age by more than 700 million smartphone owners, where the data is used in everything from identification to cashless payments to online shopping. Even roadside peddlers and beggars have been seen providing their QR codes to accept cashless payments.
China’s consumers made 38 trillion yuan (US$5.6 trillion) of payments through mobile devices in 2016, more than half of the country’s total economic output, according to iResearch.
“Given the fast growth of the country’s internet-related businesses, it’s safe to say that some of the new technological applications in China have the potential to become world leaders,” said Zhang Ming, a managing director with Flag Leader information, which focuses on online-to-offline businesses. “But China has yet to be a true locomotive in driving global innovations, since the technology was developed and widely used here, but not invented” in China, he said.
Tencent Holdings and Alibaba Group Holdings have been the biggest drivers of the QR code, where their Wechat Pay and Alipay cashless payment platforms use the data format for storing and deciphering data. Alibaba owns the South China Morning Post.
Last year, the Payment & Clearing Association of China, an industry consortium overseen by the central bank, drew up rules governing QR code payment, marking a milestone in China’s drive to promote the new payment method at home and abroad.
UnionPay International, a subsidiary of UnionPay that handles the group’s businesses outside the mainland, has been actively expanding QR code services abroad, launching the services in Hong Kong and Singapore recently.
Analysts expected the rising penetration of QR code to eventually lure more new players including the big-name foreign payment service providers into the market.
Article at http://www.scmp.com/print/business/banking-finance/article/2102855/qr-code-takes-baby-step-world-conquest-group-adopts-global
Don't bother to call George Forman and InventHelp to say that you've invented an ATM machine that uses QR codes to access bank accounts and bypasses Visa and MasterCard and their expensive fees. You are years too late:
SMART ATM USES QR CODES INSTEAD OF CARDS TO DISPENSE CASH By Mike Flacy -- Posted on June 16, 2012 11:40 am
Developed by the NCR Corporation, the payments group within the company has created a way to withdraw cash from an ATM without having to pull an ATM card out of a purse or wallet. Assuming that a bank customer has an Android or iOS smartphone with a built-in camera, the customer approaches an ATM and launches the NCR application. After the app loads, the customer enters the four digit PIN number tied to their bank account on the smartphone touchscreen. When the pin is accepted, the app brings up all bank accounts related to the customer’s account.
At this point, the customer can choose if they want to withdraw money from their checking or savings account. After picking an account, the customer chooses a dollar figure on the smartphone touchscreen. In the NCR example, there are preset dollar figures in addition to a custom option to withdraw a specific amount of cash.
Once the dollar figure is picked, the customer taps the scan button to launch the camera on the smartphone. The customer simply scans the QR code on the ATM screen with the camera application. At this point, the transaction is confirmed and cash is dispensed. The customer gets an electronic receipt on the smartphone screen as well.
According NCR management, the entire process takes about ten seconds to complete. In addition, someone waiting in line at an ATM could hypothetically run through all the first steps on the smartphone and would be ready to scan the QR code immediately when they reached the front of the line. From the bank’s perspective, there’s no new hardware to purchase since the ATM software would only have to display the QR code on the ATM screen. The company argues that this technology also improves safety as thieves can’t utilize ATM skimming devices to collect debit card numbers since the customer has no need for an ATM card anymore.
Article: https://www.digitaltrends.com/cool-tech/smart-atm-uses-qr-codes-instead-of-cards-to-dispense-cash/
Here are the EMVCo specifications for the QR codes
EMVCo QR Code Specification for Payment Systems: Merchant-Presented Mode
https://www.emvco.com/wp-content/plugins/pmpro-customizations/oy-getfile.php?u=/wp-content/uploads/documents/EMVCo-Merchant-Presented-QR-Specification-v1_0.pdf
EMVCo QR Code Specification for Payment Systems: Consumer Presented Mode
https://www.emvco.com/wp-content/plugins/pmpro-customizations/oy-getfile.php?u=/wp-content/uploads/documents/EMVCo-Consumer-Presented-QR-Specification-v1.pdf
Following is the "Overview" from the "Merchant-Presented Mode"
Overview to EMV® QR Code Payment
An EMV Merchant-Presented QR Code payment transaction enables consumers to make purchases using a merchant generated and displayed QR Code based on the merchant’s details. For example, it can be used for a transfer of funds to a Merchant account designated by the Merchant Account Information over a payment network in exchange for goods and services provided by the Merchant.
Consumers are issued a mobile application that has the capability to scan an EMV Merchant-Presented QR Code and initiate a payment transaction. This mobile application may be an existing mobile banking app offered by the Issuer or a third party. In both cases, the request to process the payment transaction is ultimately directed to the Issuer managing the account from which the funds will be withdrawn.
The Issuer receives the initial payment transaction, and secures or withdraws the transaction amount from the consumer's account.
Upon receiving the payment transaction, the Acquirer checks the validity of the Merchant Account Information and other merchant credentials and, when valid, credits the payment transaction amount to the account associated with the Merchant Account Information.
The Merchant awaits notification of a successful transaction response before delivering the goods and services to the Consumer.
The Issuer also provides a notification to the Consumer (typically to their mobile application).
Figure 2.1 illustrates the EMV Merchant-Presented QR Code transaction flow. Different message flows are possible between the entities involved, depending on type of wallet (Issuer wallet or third-party wallet) and the infrastructure supported by the payment network. In Figure 2.1, the combination of entities involved and the various message flows is jointly referred to as the 'Network'. Note that the specifics of this message flow from the mobile to the Network is out of EMVCo's scope.
Figure 2.1: Merchant-Presented Mode Transaction Flow [schematic omitted here]
[1] Merchant generates and displays QR Code based on merchant details.
[2] Consumer scans QR Code using a mobile application to initiate the transaction, with CDCVM if required.
[3] Mobile application sends the transaction initiation request to the Network.
[4] The Network processes the transaction and informs the Merchant and the Consumer of the transaction outcome.
DAR Comment: My impression (subject to correction) is that the "Network" referred to in steps [3] and [4] need not be the networks of Visa, MasterCard, or other credit card network participants in EMVCo, the proponent of the specification for the industry. It could, perhaps, be a Google network, for example, although Visa, MasterCard, or other credit card network participants in EMVCo may be the ones most ready with networks when QR technology is introduced in countries like the USA.
The US Treasury Report that advocates undermining Dodd-Frank regulation of banking:
US Treasury Second Report On The Administration’s Core Principles Of Financial Regulation
The 10/6/2017 press release:
WASHINGTON – Today the U.S. Department of the Treasury released a report detailing how to streamline and reform the U.S. regulatory system for the capital markets. Treasury’s evaluation of current capital market regulations found that there are significant reforms that can be undertaken to promote growth and vibrant financial markets while maintaining strong investor protections. The report issued today was in response to Executive Order 13772 issued by President Trump on February 3rd, which calls on Treasury to identify laws and regulations that are inconsistent with a set of Core Principles of financial regulation.
“The U.S. has experienced slow economic growth for far too long. In this report, we examined the capital markets system to identify regulations that are standing in the way of economic growth and capital formation,” said Treasury Secretary Steven T. Mnuchin. “By streamlining the regulatory system, we can make the U.S. capital markets a true source of economic growth which will harness American ingenuity and allow small businesses to grow.”
Over the last 20 years, the United States has seen a nearly 50 percent decline in the number of publicly traded companies. The capital markets are a source of liquidity for small businesses as they grow, invest, and hire. In the report, Treasury identifies numerous ways to reduce the burden on companies that are looking to go public or stay public, while maintaining strong investor protections, including:
Additional recommendations in the report include:
To view the fact sheet click here
Chatting corporate greed with Mr. Monopoly, hero of the Equifax Senate hearing ...
Click title for link: https://techcrunch.com/.../the-monopoly-man-interview-equifax-forced-arbitration/
From the article:
TechCrunch spoke to the mysterious Monopoly man, now identified as Amanda Werner of advocacy group Public Citizen, about the cause behind the Senate appearance. (As the author I must disclose that Werner is in fact a friend and honestly this is the best thing I’ve ever seen.)
The argument that regulation won't fix credit reporting agencies, but antitrust enforcement will
Sep. 18, 2017 6:26 PM ET
By Karen Webster
Author's Summary
We don't need more regulation.
What we need is competition.
We have the pieces and players in place to create a competitive playing field, we just need policymakers to let them play.
Excerpts:
Nowhere is outrage more deafening than the halls of Congress, where member after member now demands that executive heads at Equifax be placed on chopping blocks and massive regulatory changes across the credit reporting industry be made. Senator Elizabeth Warren (D - Mass.) has strongly hinted that the agency she birthed in 2008 and opened for business in 2011 - the Consumer Financial Protection Bureau (CFPB) - should be given the authority to do even more. The credit bureaus were included in the CFPB's scope of oversight in 2012, and she's asked the agency to let her know what additional power it might need to better regulate the credit reporting agenciesgoing forward.
But why now, just this week, is everyone so outraged and so willing to talk tough about the credit reporting agencies in the name of consumer harm?
Here's a theory.
Consumers have been complaining bitterly about credit reporting agency practices for decades. More recently, their complaints have been made more transparent, thanks to the CFPB's consumer complaint database. But as consumer complaints about those agencies have escalated over the years, policymakers have seemed happy to let the Big Three run fast and loose. Government agencies, like the FHA, Fannie Mae and Freddie Mac require a minimum FICO score to qualify for a loan, and 90 percent of mortgage lendersuse FICO scores to do the same. FICO scores are based on a credit scoring model using data from one of The Big Three agencies - Equifax, TransUnionand Experian.
As a consequence, we have three credit reporting agencies operating today which are largely free to do whatever they want with the data they have - consumer complaint database be damned.
The Big Three sell that data to anyone who'll pay for it, adding to their multibillion-dollar annual revenue streams.
They keep how they collect all the data they have on consumers a secret, locked inside an opaque black box that consumers have to pay to open if they want to see inside more than once a year.
And, in the case of Equifax, they make that consumer data vulnerable to compromise - an egregious lapse in security for a company that is, above all, an information and data repository.
All of this happened because the Big Three operate in an environment with political barriers to entry so steep - given the many agency requirements to use a FICO score and how reliant most lenders are on using it - that it's largely impossible for viable competition to emerge, challenge them and get scale.
There aren't many markets where consumers actually have little to no other choice, but this is one of them.
***
[A]mendments to the FCRA gave consumers the right to get their credit report for free once a year, to remove inaccurate and certain derogatory information and to limit who can access their data.
The credit score itself, the FICO score, was an innovation brought to market in 1989 by the Fair Isaac Corporation. Their software models created each score based on the data that the credit reporting agencies reported to them. Credit reporting agencies got their data from lenders. FICO's innovation was to use software and algorithms to create a standard and consistently calculated measure of creditworthiness so that lenders could more reliably make decisions about the creditworthiness of each potential borrower.
So, What's the Problem?
Given the changes in regulatory oversight, in theory, one might think that consumers should all be living happily ever after today.
They are not.
Since 2012, the CFPB's consumer complaint database has collected 1.1 million complaints across a wide variety of financial services issues. Its February 2017 report, posted on its website, highlighted credit reporting complaints.
That report noted that of the 1.1 million complaints it's received, 185,717 of them were about credit reporting agency practices - about 18 percent of all consumer complaints. Another 12 percent of complaints had to do with debt collection agency practices.
Maybe you think that doesn't sound so bad. Not even 20 percent of consumers have a beef with the Big Three. Peeling back that onion tells a different story, however.
The CFPB reported that the average number of monthly complaints received about credit reporting issues was 3,523. In February 2017, that number was up 24 percent to 4,620. Only complaints about mortgages (4,193) and debt collectors (6,904) topped it that month. They also reported that complaints about credit reporting agencies and debt collectors were consistently ranked in the top three, month after month.
The CFPB's complaint database also tracked the companies with the highest number of complaints. The February report showed Wells Fargo (NYSE:WFC) in the lead, followed by Equifax, TransUnion and Experian in that order. Equifax and the other credit reporting agencies were consistently among the top five.
Roughly 143,000 of the consumer complaints about the credit reporting agencies - or 77 percent - were about inaccurate data showing up on their credit reports. That inaccurate data ran the gamut from data that was wrong, wasn't expunged, corrected or updated as requested, data about other consumers that wasn't supposed to be on their reports and requests to access their credit reports from companies they didn't recognize.
The rest of the complaints were related to customer service issues, including excessive wait times to speak with a customer service representative, not having updated information corrected in a timely fashion and difficulty understanding what was needed to correct an error on their report that the agencies had made.
Listening with Only Half an Ear
In January of 2017, the CFPB fined TransUnion and Equifax $23 million over marketing schemes that lured consumers into paying monthly subscription fees for access to their credit reports. In Equifax's case, that included giving consumers "free" access to their data only after they watched an ad (for which Equifax was being paid money by an advertiser). The fine was mostly consumer restitution, with a small piece paid in penalties to the CFPB.
In March of 2013, Experian was fined $3 million for a variation on that same theme.
All fines levied and all of the complaints logged were over practices that the FCRA prohibited The Big Three from doing: making it hard for consumers to access their credit reports and making it difficult for consumers to correct information that the credit reporting agencies had wrong.
Not getting that information right has consequences that are far greater to consumers than the fines the credit reporting agencies have to pay. Bad data can make getting credit impossible or extremely costly for consumers. An FTC study reports that one in five consumers has an error on a report, and those errors will cost one in 20 of those consumers in the form of higher interest and carrying costs on their loans.
Meanwhile, the Big Three credit reporting agencies have little incentive to care.
Why should they work hard to satisfy the consumer when they have a virtual lock on the data that stands between a consumer and her loan, as long as a FICO score is required to get it? Why make their process transparent to consumers or bust a gut to get things corrected when there's no competitor operating at or near scale nipping at their heels to force them to step up their game?
And, it's a drop in the bucket for these multibillion-dollar monopolists to get a superficial slap on the wrist and microscopic fines when there's no existential reason for them to change their business practices.
The great irony here is that consumers have been complaining about credit reporting agencies for decades.
It was their complaints 50-plus years ago that led to the creation of the FCRA in 1970 - after 10 years of consumer advocates raising alarm bells.
And it's been transparent to policymakers since 2012, when there became a source of truth called the CFPB consumer complaint database, that credit reporting agencies are one of the top three places that consumers say they consistently feel the most pain.
Instead, policymakers have doubled down on advocating wholesale changes in how prepaid cards, payday lending and arbitration rules work today - topics that are consistently lower on the list of consumer pain points.
***
But here we are - the most horrific breach of highly sensitive consumer data ever recorded in the U.S., the OPM hack notwithstanding - with policymakers focused on how to regulate these three monopolists within an inch of their lives instead of focusing on the much bigger problem.
We don't need more regulation. After all, the Big Three were regulated by the CFPB and the FTC, and look where that got us.
What we need is competition.
Figuring out how to make credit reporting competitive - where consumers actually have a voice to discipline credit reporting agencies that provide bad service, no innovation and risky behavior - and giving lenders options that would foster a more dynamic marketplace won't be easy, but that's what policymakers, and others, should be working to solve.
We have the pieces and players in place to create a competitive playing field, we just need policymakers to let them play.
The full article is at https://seekingalpha.com/article/4107777-regulation-fix-credit-reporting-agencies?page=2 (free registration required)
Don Allen Resnikoff Editor's comment: In a reseller's suit against Equifax alleging overcharging, an appellate court pointed out that federal regulation can provide a defense:
[T]o the extent that CBC alleges an impact on the Mortgage Lender Market, the federal regulations are the more likely basis for any putative injury, and not any specifically anticompetitive conduct on the part of Equifax. No cognizable antitrust injury exists where the alleged injury is a “byproduct of the regulatory scheme” or federal law rather than of the defendant's business practices. RSA Media, Inc. v. AK Media Group, Inc., 260 F.3d 10, 13, 15 (1st Cir.2001); see Standfacts Credit Servs. v. Experian Info. Solutions, Inc., 294 Fed.Appx. 271, 272 (9th Cir.2008) (holding that even where the NCRA defendants held “monopoly power in the wholesale market,” plaintiff resellers could not succeed on their antitrust claims where the monopoly power derived from federal requirements and not anticompetitive conduct).
United States Court of Appeals,Sixth Circuit. CBC COMPANIES, INC.; CBC Innovis, Inc., Plaintiffs-Appellants, v. EQUIFAX, INC.; Equifax Information Services LLC, Defendants-Appellees. No. 08-3261. Decided: April 02, 2009. Available on line at http://caselaw.findlaw.com/us-6th-circuit/1073757.html
As of October 4, what is the lead story on the website of NRA-ILA (National Rifle Association Institute for Legislative Action)? This is it, a screed for knocking out Maryland's law banning detachable magazine fed semi-automatic rifles, and large capacity magazines -- you know, the kind used on October 1 in Las Vegas:
NRA, Others Urge Supreme Court to Review “Assault Weapon,” Magazine Ban - FRIDAY, SEPTEMBER 29, 2017
This month, the United States Supreme Court commenced its October sitting. Among the cases that the Court may decide to review is Kolbe v. Hogan, No. 17-127. The case arises out of a challenge to Maryland’s Firearm Safety Act of 2013, a law banning so-called “assault weapons” like AR-15s and other detachable magazine-fed semi-automatic rifles, and the sale and transfer of magazines capable of holding more than ten rounds.
A three-judge panel of the U.S. Court of Appeals for the Fourth Circuit had initially struck down the law, finding it was “beyond dispute” that the banned firearms and magazines were commonly owned and in common use by law-abiding citizens and thus, based on District of Columbia v. Heller, clearly within the scope of Second Amendment protection. The case was subsequently reargued before a larger panel (an “en banc” appeal).
In a ruling early this year, that panel reversed and upheld Maryland’s law, using an “out-of-context parsing of the Supreme Court’s statement in Heller” that had been rejected as inappropriate by the earlier decision. Citing language in Heller on “dangerous and unusual weapons” (“weapons that are most useful in military service—M-16 rifles and the like”), the en banc court crafted a new constitutional test that is unsupported both legally and factually: that the banned semi-automatic rifles and large-capacity magazines are “like” M-16 rifles and other military weapons, and as such, are not constitutionally protected at all.
Maryland Attorney General Brian E. Frosh, who wrote and ensured the passage of the challenged law as part of his continuing campaign for ever more stringent gun control in the state, applauded this new ruling, commenting that it “is unthinkable that these weapons of war …would be protected by the 2nd Amendment.”
The NRA has filed an amicus brief in support of the plaintiffs’ petition seeking the Supreme Court’s review of the case. The brief contends that the decision not only contradicts Heller – that arms in common use for lawful purposes are protected by the Second Amendment and cannot be subject to an outright ban – but that the factual underpinnings of the ruling are fundamentally incorrect.
Heller’s standard for identifying the “arms” protected by the Second Amendment excludes those “not typically possessed by law-abiding citizens for lawful purposes” and “highly unusual in society at large.” In this analysis, it is the choices of citizens that are determinative, and not those of legislatures or government officials. “Millions of Americans own millions of” these banned firearms and magazines.
A standard manufacturer-supplied magazine generally holds more than ten rounds, and Americans own approximately 75 million “large capacity” magazines, representing about half of all magazines owned in the United States.
The AR-15 banned under the law is the “most popular centerfire semiautomatic rifle in the United States.” Under Heller, that is all that is needed for citizens to keep such firearms under the Second Amendment.
Further, equating these typical arms to military weapons, those “that are unquestionably most useful in military service,” is demonstrably wrong. Earlier Supreme Court precedent recognized the AR-15 rifle, “the paradigmatic type of firearm that Maryland seeks to ban,” is a “civilian” rifle distinct from an M-16. More generally, as another brief notes, the “semiautomatic rifles banned by Maryland are not the main military rifle of any country on earth.” Such guns are neither functionally equivalent to M-16s, nor more lethal or dangerous.
The inherent folly of the Fourth Circuit’s decision is that it not only subverts the Second Amendment, the test it imposes (“like” M-16s or “useful in military service”) is staggeringly overbroad: any firearm that fires a projectile from a barrel by the action of an explosive stands to be banned because it is “like” a military rifle or “useful” in warfare.
The brief mentions a greater concern, the urgent need to address the cumulative effect of decisions like this one. In the almost ten years since Heller was decided, lower courts continue to distort or disregard Supreme Court precedents on the Second Amendment to the detriment of law-abiding gun owners. “The result is a steady erosion of the fundamental right to keep and bear arms. … In no other context would such a widespread, overt, and severe entrenchment upon constitutional rights be tolerated.”
Besides the NRA, a diverse range of other interested parties have filed briefs asking the Court to take up this appeal and invalidate the Maryland decision, among them 21 state Attorneys General, over 30 national and international law enforcement groups and local firearm rights groups, and many others.
In order for the U.S. Supreme Court to hear a case, four out of nine justices must agree that the case merits an appeal. The Court has not yet decided on whether to hear the appeal in this important case, but your NRA-ILA will post updates on this case as they occur.
Posted by Don Allen Resnikoff with this editorial comment: The NRA-ILA should be ashamed, but they are not. The 21 State AGs that filed on the side of the NRA include Nevada. Maybe they should reconsider.
From "Rules at Risk" --
Forced Arbitration Is a ‘Get-Out-of-Jail-Free’ Card for Banks That Cheat Customers
Public Citizen, Americans for Financial Reform and Allies Deliver Monopoly-Inspired ‘Community Cheat’ Card to All 100 Senate Offices -- Oct. 3, 2017
Public Citizen, Americans for Financial Reform and their allies are defending limits on forced arbitration from congressional attack with a special delivery to all 100 U.S. Senate offices: a mock “Get-Out-of-Jail-Free” card for the banks inspired by the board game Monopoly. An activist dressed as the billionaire Monopoly Man led the delivery.
The Senate leadership is pushing to roll back the U.S. Consumer Financial Protection Bureau’s arbitration rule using the Congressional Review Act’s (CRA) expedited process and has until early November to act. The rule allows consumers to join together in class actions to challenge wrongdoing in court. Widespread wrongdoing and negligence at Wells Fargo and Equifax and their attempts to evade legal accountability using forced arbitration “rip-off” clauses have transformed the issue from an obscure regulatory debate into a leading national story.
Forced arbitration clauses buried in the fine print of take-it-or-leave-it contracts may be the single most important tool that predatory banks, payday lenders, credit card companies and other financial institutions have used to escape accountability for cheating and defrauding consumers. These clauses push disputes into secretive arbitration proceedings rigged to favor financial companies and conceal wrongdoing from regulatory authorities. The average consumer forced into arbitration ends up paying more than $7,700 to the bank or lender, according to the Economic Policy Institute.
“Forced arbitration gives companies like Wells Fargo and Equifax a monopoly over our system of justice by blocking consumers’ access to the courts,” said Robert Weissman, president of Public Citizen. “The CRA resolution striking down the arbitration rule is a virtual get-out-of-jail-free card for companies engaged in financial scams. It should not pass go.”
“The CFPB has restored people’s right to take Wall Street banks, payday lenders and other bad financial actors to court if they rip people off and break the law,” said Lisa Donner, executive director of Americans for Financial Reform. “Overturning it would be handing companies like Wells Fargo and Equifax a tall stack of get-out-of-jail-free cards – for use whenever they want.”
“Make no mistake: Arbitration is a rigged game, one that the bank nearly always wins,” said Amanda Werner, arbitration campaign manager for Public Citizen and Americans for Financial Reform. “Shockingly, the average consumer forced to arbitrate with Wells Fargo was ordered to pay the bank nearly $11,000. Bank lobbyists and their allies in Congress are trying to overturn the CFPB’s rule so they can continue to rip off consumers with impunity.”
AAI, FWW, and NFU Say Monsanto-Bayer Merger Raises Competitive Concerns Over Traits-Seeds-Chemicals Platforms, Digital Farming, and Strategic Competitive Use of Farm Data
AAI, FWW, and NFU sent a joint letter to the U.S. Department of Justice regarding the proposed merger of Monsanto and Bayer. The joint letter is an addendum to a letter submitted by the three organizations on July 26th. It discusses the merger's potential to enhance the ability and incentive for Monsanto and Bayer to integrate traits, seeds, and chemicals into proprietary systems or platforms that are closed to competition. The companies' combined digital farming capabilities will likely facilitate such integration. Together with strengthened incentives for the appropriation and strategic competitive use of vast stores of farm data, these merger- related concerns have potentially adverse implications for competition, farmers, and consumers.
Media Contact:
Diana L. Moss
President, American Antitrust Institute
dmoss@antitrustinstitute.org
The California debate about Bar exam pass/fail standards: who is in charge?
Actually, the California Supreme Court has made it clear that it is in charge, and that the State Bar's role is advisory.
The ABA Journal reports that traditionally, the cut score on the Bar's admission exam is set by the state’s bar exam committee, but in July the California Supreme Court amended the rule, asserting its own authority to determine the score, and directed the state bar, which is the administrative arm of the court, to study the issue. Rather than take a position on the issue, the bar’s board of trustees on Sept. 6 voted 6-5 to send the court three options—keep the score at 1440, where it’s been since 1986, lower the score to 1414 or lower it to 1390.The California Supreme Court's decision on pass/fail Bar exam standards is thought to be imminent.
The California Supreme Court's assertion of its authority over Bar exam test scores sets a precedent for its taking authority over other issues where the State Bar is perceived as pursuing goals that do not serve the general public's interests.
Posting by Don Allen Resnikoff
Text of financial industry lawsuit Complaint in Texas federal court challenging the Consumer Financial Protection Bureau’s final arbitration rule
The U.S. Chamber of Commerce, American Bankers Association, the Consumer Bankers Association, Financial Services Roundtable, American Financial Services Association, Texas Association of Business, Texas Bankers Association, and nine chambers of commerce located throughout Texas today filed a lawsuit in Texas federal court challenging the Consumer Financial Protection Bureau’s final arbitration rule.
The lawsuit seeks to stay implementation of the arbitration rule, a declaration that it is unlawful and other relief. The case has been assigned to Judge Sidney A. Fitzwater, U.S. District Court for the Northern District of Texas (Dallas).
The Complaint can be seen at https://www.consumerfinancemonitor.com/wp-content/uploads/sites/14/2017/09/Complaint-for-Declaratory-and-Injunctive-Relief-Chamber-of-Commerce-v-CF....pdf
Credit: Ballard Spahr news
Klobuchar Legislation to Modernize Antitrust Enforcement
On September 14, Ranking Member of the Senate Judiciary Antitrust Subcommittee, Klobuchar introduced the Merger Enforcement Improvement Act to update and strengthen important merger enforcement tools
From the press release: Antitrust enforcement agencies need adequate tools and resources to address the threat of economic concentration, promote competition, and protect consumers. The Merger Enforcement Improvement Act would update those existing laws to reflect the current economy and provide agencies with better information post-merger to ensure that merger enforcement is meeting its goals.
To see the press release click the title or go to: https://www.klobuchar.senate.gov/public/index.cfm/news-releases?ID=7F1EC9A3-5D28-4757-9F60-8CEAD9111971
Death by Stun Gun: A Reuters series finds a high number of deaths are caused by police use of supposedly non-lethal Tazer stun guns
In the most detailed study ever of fatalities and litigation involving police use of stun guns, Reuters finds more than 150 autopsy reports citing Tasers as a cause or contributor to deaths across America. Behind the fatalities is a sobering reality: Many who die are among society’s vulnerable – unarmed, in psychological distress and seeking help.
See https://www.reuters.com/investigates/special-report/usa-taser-911/
A PBS Weekend Newshour interview of an author of the Reuters series is here: http://www.pbs.org/newshour/bb/police-killed-1000-people-tasers-since-2000/
More from Public Citizen's Paul Alan Levy on litigation over the search warrant to DreamHost concerning anonymous internet protesters:
Response to Trump Prosecutors’ Effort to Attack Peaceful Protests
Posted: 22 Sep 2017 04:26 PM PDT
by Paul Alan Levy
In my blog post yesterday about developments in the litigation over the search warrant to DreamHost, I recounted the encouraging signs from DC Superior Court Chief Judge Morin’s written order and colloquys with counsel during oral argument at a hearing this week about his determination to protect the privacy rights of anonymous Internet users who communicated with the Trump inauguration protest web site, or who provided their names to activists so that they could receive updates from that web site. At the hearing, as readers can see from the hearing transcript that I linked from the blog post, the lawyer who appeared for the Government at that hearing assured the judge that he understood what the judge was demanding and that the Government would comply with the judge’s conditions in a new proposed order.
Just as I was ready to press “publish” on that blog post, the Government submitted its promised proposed order enforcing the warrant. I confess that I was horrified: that proposal was so far from what Judge Morin said he wanted, and so far from what Government counsel said he would deliver, that I was left wondering whether the problem is that the Trump Administration is represented in this case by a disingenuous lawyer, or whether the problem is that the new proposed order was prepared by other lawyers who were not at the hearing and also did not review the transcript of the hearing (which was not ready until very late yesterday afternoon). The proposed order is unsigned.
Today, meeting the judge's timetable that responses be filed within twenty-four hours, we submitted our response on behalf of the intervenors, including both a brief explaining what parts of the government’s proposal we dispute, and how we would revise that proposal, as well as a markup of the proposed order that attempts to be true to Judge Morin’s rulings, even ones with which we disagreed (although at the same time we ask the judge to revisit one very significant issue). DreamHost has also filed a response to the Government’s proposal.
Given the lateness of the hour, I leave it to readers to review the papers submitted by both sides and see whether they share our concern at the continued efforts of the Trump Administration to invade the political discussions of the vast majority of Trump opponents whose response to his election remained entirely peaceful, basically taking advantage of the foolishness of a small number of individuals who carried out a riot during the inauguration and, according to an undercover police officer, deliberately planned to riot.
This is a president who has no tolerance for dissent, and we shall all have to be on our guard against the misuse of the judicial process to oppress his opponents. We must hope that Judge Morin will persist in holding the prosecutors to the First Amendment protections that he has enunciated to date.
The Globe and Mail Reviews Franklin Foer's book "World Without Mind"
Excerpt: [Foer] makes the trenchant point that, while our antitrust laws are thought of as saving the public from monopolies that would worsen the consumer experience, "some of the biggest corporations in America now give their products away for free … " and so we begin to think that monopolies don't need to be broken apart any more. (Foer points out that the Obama administration brought forward only two cases against existing monopolies.) We need a new approach to antitrust law, one with a different end in mind: a mission of preserving a competitive thought economy where new ideas, strategies and approaches are allowed to have their day. The alternative, argues Foer, is an Orwellian morass controlled by a handful of thought authorities.
See: https://beta.theglobeandmail.com/arts/books-and-media/book-reviews/review-franklin-foers-world-without-mind-explores-the-dangers-of-tech-monopolies/article36363670/?ref=http://www.theglobeandmail.com&
Don Allen Resnikoff comment: Foer is the latest in a series of authors who reach out to a broad popular audience with an appeal for antitrust reform. Earlier champions include, for example, Johnson and Kwak "13 Bankers," Wenonahi Hauter "Foodopoly," Barry Lynn "Cornered," among others. These authors deserve credit for keeping alive a public debate of antitrust issues. But heavy lifting remains to accomplish antitrust reform, hopefully including participation from people with antitrust enforcement experience and expertise. DAR
Gab sues Google for antitrust violations
Gab, has filed a lawsuit in a federal court accusing Google of abusing its power after the search giant removed the upstart from its app store.
See http://competitionpolicyinternational.us2.list-manage.com/track/click?u=66710f1b2f6afb55512135556&id=d25d98efc2&e=c9725fdc15
From Maryland Consumer Rights Coalition: The result of using non-driving related factors to price auto insurance? Economic discrimination.
MCRC’s research, as well as that of national partners including the Consumer Federation of America and Consumer Reports, has found that the use of non-driving related factors results in perverse outcomes including:
CFPB can pursue Maryland lawsuit over sale of settlement payments - ruling
by Dena Aubin
The Consumer Financial Protection Bureau can proceed with a lawsuit against Access Funding, a Maryland company accused of misleading consumers into signing away legal settlement payments in exchange for marked-down lump sums, a federal judge ruled.
In a decision on Wednesday, U.S. District Judge Frederick Motz rejected a motion to dismiss claims that Access Funding violated the Consumer Financial Protection Act (CFPA), saying the CFPB adequately alleged that the company engaged in abusive practices to cash in on consumers’ income streams.
To read the full story on Westlaw Practitioner Insights, click here: bit.ly/2juTPX
On big oil refiner control of retail prices
A case decided by the United States District Court for the District of New Jersey in 2016 refused dismissal of a dealer action against ExxonMobil based on alleged ExxonMobil control over retail pricing. Relevant law includes the the New Jersey Franchise Practices Act and the federal Robinson-Patman Act. South Gas, Inc. v. Exxonmobil Oil Corp., 2016 WL 816748 (D.N.J. February 29, 2016). The case decision can be found online at http://cases.justia.com/federal/district-courts/new-jersey/njdce/2:2009cv06236/235720/134/0.pdf?ts=1456860389
An article by New Jersey attorney Jeffrey Goldstone explains that the plaintiff franchisees’ claims in the case focused primarily on Exxon’s pricing practices. The pricing pivoted off of a discriminatory pricing program known as zone pricing. Exxon’s zone pricing scheme divided New Jersey into approximately 100 zones and charged franchisee's retail gas stations different wholesale prices for gas depending on the station’s zone placement. Because Exxon’s zone pricing scheme favored certain stations and disfavored other stations, including the plaintiffs, the franchisees claimed they were forced to charge higher retail prices to cover their operating expenses.
The New Jersey Court's opinion reviews the contracts between ExxonMobil and its franchisees, and catalogues some of the additional ways plaintiffs allege that Exxon exercised price control: "For one, Exxon manipulated delivery load times to benefit from price fluctuations. . . .Prior to drops in price Exxon delivered gas to franchisees, increasing their inventory whether they needed it or not. . . .The complaint also alleges that Exxon exerted control by requiring plaintiffs to purchase and sell volumes of gas that were above the historical averages of gas sold at those stations. . . .The complaint points to a number of provisions of the Agreements that demonstrate Exxon’s control over their businesses. . . ."
The New Jersey decision against ExxonMobil varies from the usual legal analysis which tends to afford any individual company like ExxonMobil great leeway in practices affecting dealers that may affect retail prices. That is true even though it is well understood that zone pricing indicates an ability by the refiner to set higher wholesale prices in some geographic zones even though costs to ExxonMobil or other large refiners are the same as in a lower priced contiguous zone. The FTC explained the point in 1999 while analyzing the then proposed Exxon-Mobil merger:
Exxon, Mobil and their principal competitors (Motiva, BP Amoco, and Sunoco) use delivered pricing and price zones to set DTW prices based on the level of competition in the immediately surrounding area. These DTW prices generally are unrelated to the cost of hauling fuel from the terminal to the retail store. . . . [B]randed companies can and do adjust their DTW prices in order to take advantage of higher prices in some neighborhoods, without having to raise prices throughout a metropolitan area as a whole.
The use of price zones in the manner described above indicates that these competitors set their prices on the basis of their competitors' prices, rather than on the basis of their own costs. This is an earmark of oligopolistic market behavior. . . . The effects of oligopolistic market structures (where firms base their pricing decisions on their rivals' prices, and recognize that their prices affect their sales volume) have been recognized in this industry. . . .We recognize that such interdependent pricing may often produce economic consequences that are comparable to those of classic cartels.
See https://www.federalregister.gov/documents/2000/01/18/00-570/exxon-corp-et-al-analysis-to-aid-public-comment-and-commissioner-statements
Critics of standard antitrust enforcement like Tim Wu think it is high time that oligopoly pricing behavior be prosecuted. Tim Wu has written that it is important to reëxamine how antitrust enforcers and regulators think about concentrated industries. Tim Wu's proposal: "when members of a concentrated industry act in parallel, their conduct should be treated like that of a hypothetical monopoly. . . . [A]busive or anticompetitive conduct shouldn’t get a free pass just because there are three companies involved instead of one." See https://www.newyorker.com/tech/elements/the-oligopoly-problem; also https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1986407
But antitrust prosecution of oil refiner pricing practices like zone pricing is mainly absent, based on the conventional wisdom that in the absence of multi-company collusion it is difficult to challenge as anti-competitive the pricing practices of any particular company.
California has an interesting history of multiple government antitrust investigations of large oil refiners, prompted in part by the fact that unique state-imposed fuel requirements make the California gasoline market one that is in many ways distinct. But frequent California state investigations have never led to a prosecution based on refiner zone-pricing or other similar pricing practices that arguably constrain franchisees from charging low prices. Consumer Watchdog and other consumer groups have complained a lot about the lack of prosecution, but to no avail, as discussed in the article at http://www.sandiegouniontribune.com/business/sdut-california-investigates-oil-industry-price-fixing-2016jul06-story.html
Posting by Don Allen Resnikoff, who takes full responsibility for any expressed opinions
Were you affected by the Equifax data breach? One click could cost you your rights in court
NYT editorial on Treasury efforts to gut bank regulation
Excerpt:
The Treasury Department is about to release the second in a series of reports on Dodd-Frank. The first one called for weakening constraints on banks, including loosening restrictions on their traders and backing off how much loss-absorbing capital banks are required to hold.
The next report is expected to propose lighter regulation for financial firms other than banks, by restricting the government’s ability to designate insurance companies, corporate lending subsidiaries and other firms as too big to fail, a label that subjects a company to additional rules and higher capital requirements.
The rollback would be blind to history. Non-banks proved as unstable as banks in the crisis.
To read the editorial in full: https://www.nytimes.com/2017/09/08/opinion/why-the-return-of-bigger-banks-means-bigger-risks-for-everyone-else.html?action=click&pgtype=Homepage&clickSource=story-heading&module=opinion-c-col-left-region®ion=opinion-c-col-left-region&WT.nav=opinion-c-col-left-region&_r=0#story-continues-2
In surprise twist, CFPB arbitration rule racks up allies from the right
By Lorraine Woellert
A group of conservatives is breaking ranks with right-leaning groups to endorse a CFPB rule that prohibits financial companies from forcing customers into arbitration to settle disputes.
The rally from the right could be enough to tip the scales in the Senate, which is weighing S.J. Res. 47 (115) to overturn the bureau rule using the Congressional Review Act. While the House acted swiftly to nullify the CFPB rule, a Senate vote remains too close to call.
A poll released today by the American Future Fund, a super PAC established to support Mitt Romney's bid for president, shows broad support for the arbitration ban in states where moderate Republicans could decide the future of the rule.
In Ohio and Alaska, more than two-thirds of people polled supported the bureau's rule, including a majority of Republicans and people who described themselves as "very conservative," the survey found.
In Louisiana, support for the rule neared 70 percent. In Maine, where Republican Susan Collins boasts strong favorability from liberals and moderates, 65 percent of those polled backed the arbitration rule.
Collins, along with Republicans Lisa Murkowski of Alaska, John Kennedy of Louisiana and Rob Portman of Ohio, hasn't staked out a position on the resolution to overturn the rule.
"The message for Republican senators is be very careful," said Nick Ryan, founder of American Future Fund. "The people are against what the Republican majority did in the House, and they're against it by pretty clear majorities."
The poll was conducted in mid-August by American Viewpoint.
The U.S. Chamber of Commerce is leading a campaign to overturn the rule, which businesses say would line the pockets of trial lawyers while doing little to help consumers. The Chamber's allies include a coalition of small-government conservatives such as Americans for Tax Reform and Heritage Action.
With the poll, American Future Fund joins a number of conservative voices speaking out against the Chamber, including Tea Party Nation founder Judd Phillips; Dean Clancy, former vice president for public policy at FreedomWorks; Colin Hanna of Let Freedom Ring USA; and the American Legion.
In editorials and statements, they've singled out big business as a threat to liberty and the Constitution's Seventh Amendment, which guarantees the right to a jury trial.
"This issue is one that tilts the scales in favor of big banks. It has a big-business-versus-the-common-man feel to it," Ryan said. "It's really a populist issue for us. We shouldn't be doing the bidding of big banks."
To view online:
https://www.politicopro.com/financial-services/story/2017/09/in-surprise-twist-cfpb-arbitration-rule-racks-up-allies-from-the-right-161564
Trump FTC pick Delrahim promises to avoid political interference from Trump administration
Senator Elizabeth Warren, a Democrat from Massachusetts, met on Wednesday with President Donald Trump's pick to run the Justice Department's Antitrust Division, where she pressed him on political interference in antitrust and lobbying, according to a source familiar with the discussions.
The source did not say if the meeting was sufficient to convince Warren to support Makan Delrahim. She has reportedly put a "hold" on his confirmation to be assistant attorney general.
Delrahim declined comment on the discussions.
At the meeting, Warren pressed Delrahim on how he would respond to any effort by the White House to influence an antitrust decision. As a candidate, Trump said he would oppose AT&T's proposed $85 billion acquisition of Time Warner, owner of CNN and one of the country's largest film and television companies.
Delrahim said in his confirmation hearing in May that on his watch the division's reviews would be free from any political influence
Credit: http://fortune.com/2017/09/06/elizabeth-warren-trump-antitrust-pick/
Blue States Begin Suing Trump Administration Over Repeal of DACA
POSTED 7:25 AM, SEPTEMBER 6, 2017, BY CNN WIRE
Conservative states may have boxed President Donald Trump into announcing an end for the Deferred Action for Childhood Arrivals program — but Democratic state attorneys general are already fighting back.
New York Attorney General Eric Schneiderman and Washington state Attorney General Bob Ferguson will announce multi-state legal action on Wednesday, according to separate releases from their offices. On Tuesday, California Attorney General Xavier Becerra also announced he was prepared to sue the Trump administration over DACA.
The backlash was expected. In July, all three officials were part of a 20-state coalition of Democratic or non-affiliated attorneys general that wrote to Trump urging him to preserve DACA, outlining why they believed the program was constitutional and saying they stood ready to defend the program.
The states were responding to an opposite letter from 10 states led by Texas Attorney General Ken Paxton sent in late June, threatening Trump that they’d sue in an unfriendly court if the President didn’t sunset the program by September 5. Tennessee announced last week that it would no longer pursue the lawsuit, but the other nine states remained committed.
Do mandatory arbitration clauses lower the price of consumer financial services and products?
From an article at http://harvardlpr.com/wp-content/uploads/2015/07/9.2_2_Barnes.pdf:
Encouraging the CFPB to study whether mandatory arbitration clauses lower the price of consumer financial services and products, the U.S. Chamber of Commerce wrote “businesses can avoid the higher litigation costs associated with defending claims in court. That enables them to eliminate costs that otherwise would inflate the prices of their products or services” and argued that companies with these clauses “produce savings that they may pass on to consumers through lower prices.” . . . Class action settlements [in 2015] over consumer credit cards provided a unique case study for the agency to look at precisely this issue. In Ross v. Bank of America, consumers sued multiple credit card companies alleging the issuers colluded to include mandatory arbitration clauses and class action bans in their contracts. Four defendants agreed to stop using the arbitration clauses for at least three-and-a-half years as part of a settlement of the case while three non-settling defendants continued using the clauses. The CFPB found no statistically significant evidence that the consumer credit card services prices increased after the Ross settlers jettisoned the arbitration clauses or that companies pass to consumers any supposed savings from the use of mandatory arbitration clauses.
Bank of America has not been using mandatory arbitration clauses (i'm not sure whether that is a direct effect of the Ross case), and has been defendant in a number of class actions. One is the subject of an article by Paul Bland at: http://bit.ly/2wBlw42 Paul Bland reports that there has just been a large settlement against Bank of America which cheated members of the armed forces, in violation of the Serviceman’s Civil Relief Act. The settlement gets direct payments (checks mailed out, no claims process) of about $30 million (AFTER all fees and expenses) to over 100,000 members of the armed services.
The case supports arguments that it is better for cheated members of the military to have been permitted to enforce their rights through class actions, rather than being deprived of those rights.
Posted by Don Allen Resnikoff
Advocacy from DC Sun: TELL THE PSC TO MOVE FORWARD ON IMPROVING OUR ELECTRIC SYSTEM
The D.C. Public Service Commission is engaged in a process, known as MEDSIS, to develop rules to improve electric service in the District. If done correctly, this will create a lower cost, reliable, and renewable electric grid for all District residents. Unfortunately, the Public Service Commission is dragging its feet. We need to show them the public is watching.
The PSC has failed to make any meaningful progress. The commission has not developed clear objectives, work groups, and or plans to move the proceeding forward. The Commission has done nothing to create meaningful community or ratepayer engagement about an issue that impacts everyone in D.C.
Also, the Commission is sitting on $32 million dollars it obtained as part of the wrongly approved Exelon takeover of Pepco. This money was meant to support Commission-approved pilot projects that would improve electricity service in the District and support energy efficiency and energy conservation initiatives that would primarily benefit low-income residential ratepayers.
Tell the PSC to move this proceeding forward and allow D.C. ratepayers to benefit from a low-cost, reliable, and renewable energy system
For more: See http://www.dcsun.org/tell-the-psc-to-move-forward-on-improving-our-electric-system/
Washington State AGFerguson sues CHI Franciscan over price-fixing and anticompetitive Kitsap deals
OLYMPIA — Attorney General Bob Ferguson filed a federal lawsuit today against CHI Franciscan, The Doctors Clinic and WestSound Orthopaedics seeking to undo two unlawful agreements that have raised prices and decreased competition for healthcare on the Kitsap Peninsula.
Read more...
States Take On Battle Over Regulating the Gig Economy
Credit: Erin Mulvaney, The National Law Journal. Full article at http://www.nationallawjournal.com/id=1202784752208/States-Take-On-Battle-Over-Regulating-the-Gig-EconomyApril 27, 2017
Florida lawmakers will likely pass a measure that classifies drivers for companies such as Uber and Lyft as independent contractors rather than employees, marking the latest state to attempt to regulate the rapidly growing and litigious ride-hailing workforce.
The bill, now on the governor’s desk after the Legislature passed it this month, has the potential to limit the number of lawsuits against companies in which the drivers sue over workers' compensation insurance and unemployment benefits, as employees have more rights in wage-and-hour disputes. It also creates statewide protections for both the drivers and consumers.
While it’s unclear how much teeth the Florida law would have in the courts, this is the latest example of a state responding to pressure from lawsuits, the companies’ lobbying efforts and the consequences of the growing gig economy. Critics fear any carve-outs for companies will limit the ability of drivers to sue for their rights and supporters say a framework is needed to create uniform regulations to help boost the new businesses.
“The patchwork of regulations—city by city, state by state, even judge by judge—is difficult,” said Richard Meneghello of Fisher Phillips, a Portland-based attorney who helps lead the firm’s new gig economy practice. “The courts are having a hard time because we are trying to address a 21st century problem with 20th century laws.”
In response to prolific court battles, states in recent years have passed measures that regulate ride-hailing companies that include a framework for insurance requirements, recordkeeping, inspections and background checks, among other standards.
Florida would be one of the first states to delve into the distinction between contractor and employee. Several other states have made the distinction, including Arkansas, West Virginia and Colorado, said Doug Shinkle, transportation program director at the National Conference of State Legislatures.
“In general, states have steered clear of getting into that,” Shinkle said. “Going forward that is likely to change, as there continues to be pressure and awareness about further strains on the social safety net and how these cases play out in the courts.”
[Shannon_Liss-Riordan-Vert-201704271732.jpg]
Yet, this is not necessarily a new battle. Companies that hire workers such as cleaners, truckers and call center employees have fought for decades over contractor versus employee status, said Shannon Liss-Riordan, who has represented employees in several high-profile cases against Uber. The so-called sharing economy is just the latest iteration.
“By classifying drivers as contractors, the companies avoid all the responsibility of being an employer and shift the cost of doing business in hopes of avoiding liability for unemployment or workers’ compensation,” she said.
Such laws could have broader implication for the emerging sharing economy and create a larger precedent for other companies. At least 45 states, including California, Georgia and Texas, as well as D.C., have established some sort of regulatory framework for such companies, according to the National Conference of State Legislatures.
State legislatures are increasingly tackling these issues to either refine existing laws or create new ones. A California bill introduced last year would have enabled contractors to collectively organize and bargain. Illinois is debating a bill that would give these drivers a tax credit to purchase or repair their vehicle.
Spirit and Frontier moderate airline ticket costs
Excerpted from NYT:
Even as a wave of mergers has cut the number of major carriers to four and significantly reduced competition, lower-cost airlines continue to play a role in moderating ticket costs.
The low-cost carriers such as Spirit and Frontier force the big airlines to figure out a way to draw the most price-sensitive fliers in any given market — those who scour the internet for the cheapest tickets possible. Those customers make up a significant portion of travelers, meaning the major carrier cannot just ignore them.
“Those passengers certainly are important,” said David Weingart, an economist at the aviation consultant GRA. “The larger airlines have proven that in how they’ve reacted, in how they’ve tried to capture or recapture those passengers.”
Delta, American and United Airlines have all rolled out “basic economy” fares. Such tickets are priced competitively against Spirit and Frontier, but do not offer the amenities that most consumers have come to expect on a flight, like receiving a seat assignment ahead of a flight or obtaining a refund for a ticket.
Full article: https://www.nytimes.com/2017/09/01/business/budget-airlines-ticket-prices.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=rank&module=package&version=highlights&contentPlacement=1&pgtype=sectionfront&_r=0
The now famous New America think-tank statement supporting EU fines for Google
This is the statement that Barry Lynn reports is the reason he was fired.
See it here: https://www.newamerica.org/open-markets/press-releases/open-markets-applauds-european-commissions-finding-against-google-abuse-dominance/
The Maker of the Infamous $400 Juicer Is Shutting Down
Credit: Fortune, Beth Kowitt
Sep 01, 2017
Juicero has run out of juice.The San Francisco-based maker of counter-top cold-press juicers said today that it is shutting down operations and suspending the sale of its presses and produce packs immediately.
The announcement on the company’s website comes after the startup said in July that it was undergoing a “strategic shift” to more quickly lower the cost of its $399 juicers and $5-7 juice packs filled with raw fruits and vegetables. As part of the shift, the company said then that it would lay off about a quarter of its staff.
At the time, Juicero CEO Jeff Dunn wrote in a letter to employees obtained by Fortune that the current prices were “not a realistic way for us to fulfill our mission at the scale to which we aspire.”
But Juicero realized it couldn't bring down the cost of its products as a standalone company. It was too small to achieve the required economies of scale on its own. The company will now focus on finding a buyer, it wrote in Friday's blog post.
A source familiar with the situation said employees are being given 60 days notice and that the company is notifying all customers via email that they can request a refund for the machine for up 90 days.
Before today’s news, Juicero had said it would focus on building a second generation machine that would cost in the $200 range—versus its initial launch price 16 months ago of $699.
Juicero fell under heightened scrutiny after a Bloomberg article in April reported on how consumers could use their hands to squeeze the juice packs without the aid of the Juicero machine.
As Fortune reported earlier this month, Dunn addressed the Bloomberg hand-squeezing issue in a Medium post and again in the letter to employees obtained by Fortune, in which he wrote that “it was frustrating to read that something we always knew about, and that our customers simply aren’t interested in doing, was somehow new and relevant.”
The hand-squeezing dustup inflamed some of the criticism Juicero has gotten since bringing its juicer to market. "Some held up the countertop appliance as a symbol of all that was wrong with Silicon Valley: a $699 connected device that solved a problem most people didn’t even have the luxury of affording—how to get fresh juice on demand at home," Fortune wrote in January.
The Bloomberg article described Juicero as "one of the most lavishly funded gadget startups in Silicon Valley" and founder Doug Evans once said he planned to do for juicing what Steve Jobs did for computers.
It's not easy to run a hospital-Anthem says it will no longer pay for MRIs and CT scans delivered on an outpatient basis at hospitals
MRI and CT scans can often cost several times more than the same services at a freestanding imaging center.MRIs and CT scans can vary from $350 to $2,000, depending on the region and type of facility, Anthem said.
In a note to health providers, Anthem said it will require hospitals to submit precertification requests for MRIs and CT scans for patients.
“If it is NOT medically necessary for the member to receive the service in a hospital setting, the request for authorization will be denied as not medically necessary for that site of care,” according to a Q&A on Anthem’s website.
Anthem is the largest health insurer in Indiana, and its policy is sure to take a hit on hospitals' bottom line. The new policy went into effect July 1 in Indiana, Kentucky, Missouri and Wisconsin. It will go into effect Sept. 1 in Ohio.
The policy does not apply to members enrolled in Medicare Advantage, BlueCard, Medicaid or Medicare Supplement.
The Indiana Hospital Association said requiring busy physicians to get a precertification approval while trying to diagnose a patient creates an unfair burden.
Excerpt from https://www.ibj.com/blogs/17-the-dose/post/65184-anthem-to-hospitals-no-more-mris-ct-scans-for-outpatients-without-preapproval
Court Grants Motion to Compel DreamHost to Obey Warrant, but Restricts Search Process and Use of Data
by Paul Alan Levy
In a decision issued late Thursday morning, DC Superior Court Chief Judge Robert Morin said that he was ready to order DreamHost to comply with the federal prosecutors’ scaled-down search warrant, but enunciated strict procedural restrictions that he said were intended to reflect a balance between allowing the Government to pursue a facially legitimate criminal investigation and protecting the free speech rights of innocent users of the web site who were engaged in protected political speech. It appears that the precise terms of the order are still under discussion. Still, I have grave qualms about the precedent for searching anti-Trump web sites set here at the outset of the Trump Administration.
Full article:http://pubcit.typepad.com/clpblog/2017/08/court-grants-motion-to-compel-dreamhost-to-obey-warrant-but-restricts-search-process-and-use-of-data.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+ConsumerLawPolicyBlog+%28Consumer+Law+%26+Policy+Blog%29
UPCOMING NACA PROGRAM:Debt Collection Issues and other updates from the FTC
September 19, 2017 2:00 p.m. ET–3:00 p.m. ET
Registration Information
Members: $0
Nonmembers: $0 (If you have not already been vetted to attend webinars, please email Rebecca at rebecca@consumeradvocates.org (link sends e-mail)to register.)
Join us to hear about some of the recent issues the Federal Trade Commission has been seeing in debt collection matters. These issues include phantom debt, unlawful third-party communications, collectors not disclosing their identity, and other misrepresentations regarding the nature of the debt.
Staff from the FTC will talk about recent cases involving violations of the FTC Act and the Fair Debt Collection Practices Act (FDCPA). Staff will also discuss how to spot violations of the FDCPA, and what consumers can do to protect themselves from debt collection scams. The webinar will also cover the Credit Practices Rule and provide other updates of initiatives coming out of the Federal Trade Commission.
This session will be a great introduction for those new to these issues and are looking to get a good update and for those who may be more knowledgeable, but interested in the Federal Trade Commission’s work.
What You Will Learn
• Current problematic practices seen by the FTC
• The Credit Practices Rule
• Other updates from the FTC
Speakers
Rebecca Unruh, Attorney, Division of Financial Practices, Bureau of Consumer Protection, Federal Trade Commission
Quinn Martin, Attorney, Division of Financial Practices, Bureau of Consumer Protection, Federal Trade Commission
Patti Poss, Attorney, Division of Marketing Practices, Bureau of Consumer Protection, Federal Trade Commission
CLE Credit Interested in receiving CLE credit for this webinar? NACA webinars have been CLE approved in a number of states. While NACA does not seek CLE approval for each webinar in each individual state, individual attorneys can generally apply for and receive CLE credit in their own respective states. For more information and a comprehensive guide to the process of applying for CLE approval as an individual attorney, email Rebecca Smolar at rebecca@consumeradvocates.org(link sends e-mail).
Why You Should Register Even If You Can’t Attend the Live Webinar: For each webinar you register for, regardless of whether you attend live, you will automatically receive an email inviting you to view a recording of the webinar and also containing attachments of the Power Point presentation and any other supplemental materials within two business days of the live webinar. This way, if you have a time conflict, you will be able to listen to the webinar and study the course materials at your convenience. If you have any questions, please contact Rebecca Smolar, Manager of Education, at rebecca@consumeradvocates.org(link sends e-mail).
Seventh Circuit holds that unaccepted pre-litigation offer does not deprive plaintiff of standing in later-filed suit
From Public Citizen, Posted: 22 Aug 2017 12:03 PM PDT
The unanimous decision, by Chief Judge Wood, is Laurens v. Volvo Cars of N. America. Here's the beginning of the opinion, which sums things up quite nicely:
The idea of a theme and variations is a common one in music. It should be in law, too. Here we return to the familiar theme of a defense effort to pretermit a proposed class action by picking off the named plaintiff’s claim. Several variations on that theme have been tried and have failed. See Campbell‐Ewald Co. v. Gomez, 136 S. Ct. 663 (2016). (Rule 68 offers of judgment); Fulton Dental, LLC v. Bisco, Inc.,860 F.3d 541 (7th Cir. 2017) (Rule 67 payments to court registry). Undeterred, the defendant in the case now before us asserts that an unaccepted offer of relief before a putative plaintiff files a lawsuit deprives that plaintiff of standing. We see no reason why the timing of the offer has such a powerful effect. Black‐letter contract law states that offers do not bind recipients until they are accepted. See, e.g., ALI Restatement (Second) of Contracts § 17 (1981). Hence while the legal effect of every variation on the strategic‐mooting theme has not yet been explored, we are satisfied that an unaccepted pre‐litigation offer does not deprive a plaintiff of her day in court.
It's worth reading the whole thing.
"Under Trump Rule, Nursing Home Residents May Not Be Able To Sue After Abuse"
From Public Citizen, Posted: 22 Aug 2017 05:54 AM PDT
NPR reports on the Trump Administration proposed rule to allow nursing homes to require new residents to agree to arbitration as a condition of admission.
A rule issue under the Obama Administration barred nursing homes forced arbitration agreements for nursing homes, leaving it to the two sides to decide whether they preferred court or arbitration after a dispute arose. The Trump administration rule, NPR reports, "could make it almost impossible for nursing home residents to get their day in court."
The NPR story is here. The proposed regulation is here.
CFPB director Cordray's op-ed in the NY Times
From Public Citizen, Posted: 22 Aug 2017 05:42 AM PDT
Consumer Financial Protection Bureau Director Richard Cordray has an op-ed in the New York Times, explaining the importance of the CFPB rule barring class-action bans in forced arbitration provisions.His conclusion: "A cherished tenet of our justice system is that nobody should escape accountability for breaking the law. Our rule restores consumers’ legal right to stand up for themselves and have their day in court without having to wait on the government to act."
The piece is here.
Maryland’s Purple Line will receive a $900 million federal full funding agreement from the Trump administration
This is a critical step forward for the oft-delayed project.
The breakthrough came after “very productive, high-level conversations” on Friday and Monday between Gov. Larry Hogan (R) and Transportation Secretary Elaine Chao, Hogan spokesman Doug Mayer said.
A Department of Transportation spokesman confirmed the deal, and said it is expected to be signed next week.
Construction of the 16-mile light-rail line linking Montgomery and Prince George’s counties will begin within weeks after the deal is formalized.
From: https://www.washingtonpost.com/local/trafficandcommuting/maryland-to-get-full-federal-funding-agreement-for-purple-line/2017/08/21/dc7f7dda-86b8-11e7-a50f-e0d4e6ec070a_story.html?utm_campaign=08-22-17%20Email&utm_medium=email&utm_source=August%2022%20Update&utm_term=.653658ebf773
The "Save the Trail" group responded with a promise to pursue its litigation, described at http://savethetrail.org/wp-content/uploads/2015/03/Fact-sheet-about-citizen-lawsuit-Nov-2015.pdf
The ACLU litigated to protect "Unite the Right" protest in Charlottesville; but after the protest ACLU says it will no longer litigate for protesters who carry firearms
Virginia Gov. Terry McAuliffe who told NPR that Charlottesville officials “asked for [the rally] to be moved out of downtown Charlottesville to a park about a mile and a half away — a lot of open fields. That was the place that it should’ve been. We were, unfortunately, sued by the ACLU. And the judge ruled against us. The McAuliffe NPR interview is at http://www.npr.org/2017/08/14/543358169/incident-in-charlottesville-will-make-us-stronger-gov-mcauliffe-says
Charlottesville officials originally denied organizer Jason Kessler a permit for a march protesting the removal of a Robert E. Lee Confederate statue from a local park. In response, the ACLU filed a lawsuit against the city, citing the national organization’s long-held belief to uphold the rights of free speech for all. The lawsuit complaint can be found at https://acluva.org/wp-content/uploads/2017/08/KesslerComplaint20170810.pdf
But after the “Unite the Right” rally in Charlottesville, Virginia, ACLU executive director Anthony Romero told The Wall Street Journal that the group will review legal requests from white supremacist groups on a case-by-case basis, assessing more closely whether their protests would have the potential to be violent.
“The events of Charlottesville require any judge, any police chief and any legal group to look at the facts of any white-supremacy protests with a much finer comb,” Romero told the Journal. “If a protest group insists, ‘No, we want to be able to carry loaded firearms,’ well, we don’t have to represent them. They can find someone else,” he added.
ACLU’s Virginia branch previously responded to the criticism over its decision, saying in a statement: “… Let’s be clear: our lawsuit challenging the city to act constitutionally did not cause violence nor did it in any way address the question whether demonstrators could carry sticks or other weapons at the events.” The Virginia branch ACLU statement is here: https://acluva.org/20108/aclu-of-virginia-response-to-governors-allegations-that-aclu-is-responsible-for-violence-in-charlottesville/
Posting by Don Allen Resnikoff
Treasury Secretary Steven Mnuchin released a defense of President Trump on Saturday; will continue his focus on the Trump Administration's financial agenda
In a written statement, Mnuchin responded to a letter co-signed by nearly 300 of his former Yale classmates calling on him to leave the administration. For the Yale letter: http://lettertostevemnuchin.com/
The letter from his Yale classmates was posted to the site Lettertostevemnuchin.com, and said Mnuchin has a "moral obligation" to resign in protest over Trump's widely criticized response to a white supremacist and neo-Nazi rally in Virginia last weekend.
"We call upon you, as our friend, our classmate, and as a fellow American, to resign in protest of President Trump's support of Nazism and white supremacy. We know you are better than this, and we are counting on you to do the right thing," the letter reads.
"I believe that your letter and these comments raise several important issues and misconceptions that I am prepared to address," Mnuchin wrote on Saturday.
Mnuchin's full statement is here:
2nd Circuit reverses District Court decision that Uber could not force a customer to arbitrate price-fixing accusations -- says rider Spencer Meyer was given adequate notice
Read decision here: dlbjbjzgnk95t.cloudfront.net/0955000/955188/16-2752_documents.pdf
Public Citizen letter says the SEC should ban mandatory arbitration clauses that companies want to put in their covenants with shareholders as a way to limit lawsuits
The letter is here: letter http://go.politicoemail.com/?qs=4c8b0277b42fe76f915fff3f3ddd75096c0ef08206e7a5c70b14cbd86ea1058eb9b60b33d895b0f661e166873e6f5b9d668045aef7e5cc0b
Excerpt from the letter:
On behalf of Public Citizen, a non-profit membership organization with more than 400,000 members and supporters nationwide, we are greatly distressed by recent comments of Commissioner Michael Piwowar, in which he offered his support for including forced arbitration clauses in initial public offering (IPO) documents. 1 We strongly urge that you immediately begin the process of prohibiting forced arbitration clauses by entities governed by the SEC. The SEC should protect investors by banning forced arbitration clauses and bans on class actions (“forced arbitration clauses”) because it is difficult for investors to vindicate their rights under federal securities law absent the ability to bring a class action. The SEC’s powers to enforce prohibitions on manipulative practices and to enforce the anti-waiver provisions in federal securities law confer ample authority on the SEC to ban these insidious provisions.
Three pension plans sue Goldman Sachs and five other investment banks for conspiring to control the more than $1 trillion market for lending stocks
The complaint claims the banks are blocking a shift to all-electronic system for matching lenders and borrowers of shares, so they can continue to profit from each transaction. In a short sale, traders sell borrowed stock, anticipating the price will drop so they can profit by buying back the shares at a lower price.
“Major investment banks are conspiring to preserve their profits at the expense of everyday investors,” plaintiffs’ attorney Michael Eisenkraft of Washington-based Cohen Milstein Sellers & Toll said in a statement Thursday. The investors are seeking unspecified damages in the class-action antitrust case, which could be tripled under federal law.
The URL for the Complaint is here:
www.almcms.com/contrib/content/uploads/sites/292/2017/08/Complaint.pdf
Can the U.S. Government Seize an Anti-Trump Website's Visitor Logs?
The Department of Justice is seeking the 1.3 million IP addresses that accessed a website advertising Inauguration Day protests.fighters arrive as police stand guard in front of a limousine which was set ablaze during a protest against President Donald Trump on January 20, 2017, in Washington, D.C
It will take you to the website of Disrupt J20, which organized some of the “direct action” protests on the day of President Donald Trump’s
inauguration in Washington, D.C. The site contains general information about civil disobedience and political protests, and it advertises several Washington-specific events.
Some of the protests on Inauguration Day turned violent, and the U.S. government has since charged more than 200 people with felony rioting r destruction of property in connection to events on January 20. It alleges that some of the suspects were connected to the Disrupt J20 effort.
Yet if you clicked that link above—even if you were nowhere near Washington on Inauguration Day—the government is now allegedly interested
in you.
The U.S. Department of Justice is attempting to seize the visitor logs and IP addresses of anyone who has visited DisruptJ20.org, as well as any email addresses, user logs, and photos collected by the website, according to DreamHost, a Los Angeles–based web host and domain-name registrar.
This data encompasses more than 1.3 million IP addresses, as well as the email addresses and photos of thousands of people, the company said. DreamHost is not politically connected to DisruptJ20, but it provided paid web-hosting services for the group.
DreamHost has so far refused to comply with the government’s search warrant, arguing that it constitutes “investigatory overreach and a clear abuse of government authority.”
“That information could be used to identify any individuals who used this site to exercise and express political speech protected under the Constitution’s First Amendment. That should be enough to set alarm bells off in anyone’s mind,” said a blog post published to the company’s website on Monday.
* * *
“No plausible explanation exists for a search warrant of this breadth, other than to cast a digital dragnet as broadly as possible,” said Mark Rumold, a senior staff attorney at the Electronic Frontier Foundation, in a blog post. The EFF is assisting DreamHost in its opposition to the warrant.
Excerpts from https://www.theatlantic.com/technology/archive/2017/08/department-of-justice-dreamhost-trump-visitor-logs-million-ip/536886/
See the USDOJ search warrant to DreamHost here: https://www.dreamhost.com/blog/wp-content/uploads/2017/08/DH-Search-Warrant.pdf
D.C. regulators recently ordered United Medical Center, the only full-service hospital in Southeast Washington to stop delivering babies
[Read the regulator's letter obtained by The Washington Post here]
Statement from United Medical Center Regarding Department of Health Notice of Restricted License:
On August 7, 2017 the District of Columbia Department of Health (DOH) issued a notice to United Medical Center (UMC) restricting the hospital’s license for obstetric and related newborn services.
The restricted license, which applies only to obstetrical patients and their newborns, will be in place for a period of 90 days, during which UMC will be able to address the cited deficiencies. These include three separate cases involving deficiencies in screening, clinical assessment and delivery protocols. HIPAA regulations preclude sharing specific details of these cases, however, UMC is taking immediate action to address these deficiencies.
UMC had already initiated the process of transitioning from a Level III neonatal intensive care center and we will be working to ensure that all physicians and nursing staff have appropriate training in policy and procedures. Until that process is complete, UMC will coordinate alternative services through Emergency Medical Services (EMS) and local hospital partners to care for our current obstetric patients.
Members of the public requiring emergency obstetric treatment are urged to use other D.C. facilities, with Providence Hospital recommended as the most accessible for Ward 7 and Ward 8 patients. Additional regional facilities with obstetrical capabilities include: MedStar Washington Hospital Center, George Washington University Hospital, MedStar Georgetown University Hospital, Howard University Hospital, Sibley Memorial Hospital, Prince Georges Hospital Center, and Southern Maryland Hospital. Based on DOH’s Health Systems Plan, the District currently is well below capacity with regard to hospital beds and should be more than capable of accommodating UMC patients in the interim at these other facilities.
As a long-standing and integral part of the community, United Medical Center looks forward to continuing to provide vital healthcare services to residents of Wards 7 and 8 as well as surrounding Prince George’s County, Maryland.
For further information, contact:
Jennifer Devlin
703-876-1714
From CA AG suit against Pruitt/EPA for withholding documents
Plaintiff [California] sent a written request to EPA on April 7, 2017, seeking, pursuant to FOIA, specified records concerning (a) the process EPA has undertaken to ensure that Administrator E. Scott Pruitt is in compliance with federal ethics regulations and obligations; and (b) EPA’s policies and procedures for determining who (if anyone) can assume the powers of the Administrator if he is recused or disqualified from participating in a matter.
EPA has failed to comply with FOIA. EPA did not provide Plaintiff with a determination on the scope of the documents it would produce and the exemptions it would claim within 20 working days of receiving the request. 5 U.S.C. § 552(a)(6)(A)(i).
URL for the Complaint: https://dlbjbjzgnk95t.cloudfront.net/0953000/953666/california%20v%20epa%20filed%20foia%20complaint%2017-1626.pdf
The ACLU sues the Metro system in Washington, D.C. for rejection of public service advertisements
The ACLU claims violation of the First Amendment.
The ads rejected by the Washington Metropolitan Area Transit Authority, which runs mass transit services in and around the nation’s capital, included one for an abortion pill, another promoting a new book by the right-wing provocateur Milo Yiannopoulos, and yet another urging consumers to reject animal cruelty. A fourth, submitted by the A.C.L.U. itself, consisted of little more than transcripts of the First Amendment of the United States Constitution in English, Spanish and Arabic.
Since 2015, the Metro agency has prohibited advertisements that aim to “influence public policy,” or to “influence members of the public regarding an issue on which there are varying opinions,” according to its guidelines.
The lawsuit, [URL https://www.aclu.org/legal-document/aclu-v-wmata-complaint, click United States District Court for the District of Columbia] -, seeks to to overturn the Metro agency’s policy. Ms. Rowland said it became clear how subjective that policy was when Mr. Yiannopoulos’s ads, which were accepted by the Metro earlier this year, were taken down after about 10 days, following commuter complaints. The A.C.L.U. also filed a motion for preliminary injunction, URL https://www.aclu.org/legal-document/aclu-v-wmata-motion-preliminary-injunction [click highlighted words] calling for those ads to be reinstated.
Excerpts are from NYT
NYT EDITORIAL
Closing the Courthouse Doors By THE EDITORIAL BOARD
AUGUST 10, 2017
The Trump administration is moving to deny Americans their day in court when they have been wronged.
The Centers for Medicare and Medicaid Services want to reverse an Obama-era regulation that bars most nursing homes from forcing residents to agree to resolve disputes in private arbitration, instead of in court. The Department of Education recently announced that it was working to reverse an Obama-era rule that prevents most for-profit colleges and other schools from enforcing arbitration agreements when resolving loan disputes by students.
Now, congressional Republicans are getting into the act by attacking a new rule, issued by the Consumer Financial Protection Bureau, that will let Americans bring class-action lawsuits against banks instead of being forced into arbitration. Without the rule, which is scheduled to apply to transactions next year, banks could continue to profit from abusive products and practices without ever facing a court challenge, and aggrieved customers would continue to be shunted into arbitration. Class-action lawsuits are often the only way to hold corporations to account for wrongdoing in which thousands or millions of customers lose amounts that may be meaningful for each customer, though not enough to warrant an individual fighting a corporation. Arbitration, in contrast, is so clearly stacked against customers that most people don’t even bother. And yet, arbitration has been the only recourse even in cases where customers were defrauded, like those caught up in the still-unfolding scandals at Wells Fargo who could not sue because of the bank’s mandatory arbitration requirement.
The first attempt to derail the rule failedrecently, but it underscored the administration’s support for industry arguments. Keith Noreika, a bank lawyer appointed by President Trump to oversee national banks until a Senate-confirmed regulator is in place, asked the financial protection bureau to delay the rule on the ground that more time was needed to determine if it would destabilize the banking system. The bureau refused, for good reason. The rule — which will cost banks about $1 billion a year out of more than $171 billion in profits, according to analysis by the bureau — does not threaten the banks’ survival; it only threatens their impunity. Moreover, neither the agency that Mr. Noreika temporarily heads, the Office of the Comptroller of the Currency, nor other financial regulators raised safety-and-soundness concerns during the long rule-making process.
Congressional Republicans continue to threaten the rule. Before their summer break began, House Republicans passed legislation to scrap it, using the fast-track procedures of the Congressional Review Act. Companion legislation has been introduced in the Senate. Before this year, the review act’s procedures had been used only once, by the Republican-controlled Congress of 2001, to invalidate a workplace safety rule from the Clinton administration. This year, Republicans have used it to roll back 14 rules finalized near the end of the Obama years, including labor and environmental protections. The difference this time is that they want to repeal a rule from Mr. Trump’s watch, albeit by an Obama-appointed regulator of the financial protection bureau, an agency Republicans love to loathe.
If Senate Republicans, once again blinded by their antipathy to President Barack Obama, vote to repeal this rule, they will join their House colleagues and the Trump administration in closing the courthouse door to vulnerable, victimized and defrauded Americans.
http://nyti.ms/2us4RlH
Last month, the federal government signaled its intention to roll back protections critical to the health, safety and welfare of vulnerable nursing home residents. The rule they want to eliminate bans the use of pre-dispute arbitration agreements.
These agreements require older adults, people with disabilities and their families to waive their rights to the judicial system before a dispute even arises. Then, any dispute, even abuse or neglect, and regardless of how egregiously they’ve been harmed, is forced into secretive arbitration proceedings.
Typical nursing home claims involve injuries such as pressure sores that lead to infection; amputated limbs; suffocation on bedrails and other restraints; choking;; sexual assault; renal failure and other conditions caused by dehydration; malnutrition; severe burns; gangrene; and painful, immobilizing muscle and joint problems resulting from long-term inactivity. All of these are avoidable conditions that are the result of negligence or even willful misconduct by long-term care facilities.
These forced arbitration agreements are presented to prospective residents and their families during the admission process, an extremely difficult and stressful time. Individuals typically feel compelled to sign because they are under extreme pressure to be admitted and the implied message is they must agree or be refused care. To make matters worse, under the recent government proposal, this message would no longer be implied. Nursing homes could refuse admission to a resident whose family, acting on their behalf, is unwilling to sign away their rights. This holds residents hostage – they must agree to give up their rights in order to have essential care and a place to live.
Author Robyn Grant is Director of Public Policy and Advocacy at The National Consumer Voice for Quality Long-Term Care and author Remington A. Gregg is Counsel for Civil Justice and Consumer Rights at Public Citizen.
Excerpt if from http://www.huffingtonpost.com/entry/protecting-our-vulnerable-from-abuse-and-neglect-the_us_5980c269e4b0d187a59690a0?section=us_contributor
DCCRC supports Public Citizen's recent week of action against the effort to jeopardize the health and safety of those living in assisted living and nursing homes by requiring pre-admission waivers of litigation rights
The waivers make it harder for seniors to expose neglect and abuse by nursing homes.
Almost a year ago, the Centers for Medicare and Medicaid Services (CMS) forced nursing homes to stop requiring residents to sign admission’s contracts that waived their legal right to go to court if harmed. This was an important step forward in the fight against forced arbitration as it gave power back to the residents if they were mistreated or harassed in their nursing home.
The Trump administration is trying to strip this common-sense reform. The administration approach would subject residents to forced arbitration clauses, an unfair and secretive process which can be used by nursing homes to cover up abuse.
The right to litigate and not be subject to forced pre-dispute arbitration is important to protect our seniors from being taken advantage of by the abuse and mistreatment by long-term care facilities.
Drafting credit: Peter Sheriff
Anthem restrictions on coverage for emergency room visits
Providers worry that the policy could cause patients with potentially life-threatening conditions to avoid care—and that the hard-line approach could violate federal law.
Anthem has deployed a reduced ER coverage policy in several of its state subsidiaries in regions that include Indiana and Missouri. The insurer said it will deny claims for minor injuries or conditions, like cuts and bruises, swimmer’s ear or athlete’s foot, that bring people to the emergency department, reports the Indianapolis Business Journal.
But physicians in those states worry that patients with potential dangerous symptoms, such as chest pain, may avoid care because they fear higher bills. Missouri provider groups, including the Missouri Hospital Association, the Missouri College of Emergency Physicians and the Missouri State Medical Association filed a letter (PDF) urging the state’s insurance commissioner to take a look at the policy.
“We see the Anthem policy as a cost-shifting tactic that will have a dangerous chilling effect on patients,” they wrote. “When policyholders learn that they might be held financially responsible for emergency department care, we worry some will delay or altogether forgo seeking vitally important and life-saving care at a time when they are most critically ill and vulnerable.”
http://www.fiercehealthcare.com/healthcare/providers-warn-anthem-s-new-er-policy-may-violate-federal-law
The Center for Food Safety and other groups ongoing suit against the F.D.A. over a self-affirmation process for food ingredients
“The exemption [from FDA ingredient approval] was meant to cover ingredients that had long been used in the food supply, so that companies didn’t have to come in every time they made a new product,” said Tom Neltner, chemicals policy director at the Environmental Defense Fund, an advocacy group that is one of the plaintiffs in the lawsuit. “It wasn’t meant to allow companies to simply bypass the F.D.A."
A study by the Pew Charitable Trusts found in 2013 that the F.D.A. was unaware of roughly 1,000 of some 10,000 ingredients used in food because companies had used the self-affirmation process.
Credit: NYT For the CFS litigation details see: http://www.centerforfoodsafety.org/press-releases/4956/groups-sue-fda-to-protect-food-safety
NYT: When big pharma does drug trials not for scientific discovery, but to validate proprietary copy-cat drugs
And these drugs often are not so different from one another.
Immunotherapy drugs that attack a protein known as PD-1 are approved for treatment of lung cancer, renal cell cancer, bladder cancer and Hodgkin’s disease, noted Dr. Richard Pazdur, director of the F.D.A.’s Oncology Center of Excellence.
Yet many pharmaceutical companies want their own anti-PD-1. Companies are hoping to combine immunotherapy drugs with other cancer drugs for added effect, and many do not want to have to rely on a competitor’s anti-PD-1 drug along with their own secondary drugs.
So in new trials, additional anti-PD-1 drugs are being tested all over again against the same cancers — a me-too business strategy taken to multibillion-dollar extremes.
“How many PD-1 antibodies does Planet Earth need?” wondered Dr. Roy Baynes, a senior vice president at Merck, which received approval for its first such drug in 2014.
Immunotherapy trials have proliferated so quickly that major medical centers are declining to furnish patients to them. The Yale Cancer Center participates in fewer than 10 percent of the immunotherapy trials it is asked to join.
The problem is that many of the trials are uninteresting from a scientific view, said Dr. Roy Herbst, the center’s chief of medical oncology. The companies sponsoring these trials are not addressing new research questions, he said; they are trying to get proprietary drugs approved.
https://www.nytimes.com/2017/08/12/health/cancer-drug-trials-encounter-a-problem-too-few-patients.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=second-column-region®ion=top-news&WT.nav=top-news&_r=0www.nytimes.com/2017/08/12/health/cancer-drug-trials-encounter-a-problem-too-few-patients.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=second-column-region®ion=top-news&WT.nav=top-news&_r=0
AARP Foundation-backs age discrimination in employment litigation:DONETTA RAYMOND, et al., Plaintiffs, v. SPIRIT AEROSYSTEMS HOLDINGS, INC., and SPIRIT AEROSYSTEMS, INC., Defendants.
United States District Court, D. Kansas.
Applicable Law: 28 U.S.C. § 451
Cause: 28 U.S.C. § 451 Employment Discrimination
Nature of Suit: 442 Civil Rights: Jobs
From June, 2017 court opinion:
Plaintiffs filed this collective action in July 2016, claiming Defendants wrongfully terminated their employment and/or later failed to consider them for new job openings because of their age and, in some cases, the older employees' (or family members') medical conditions and related medical expenses. In addition to the collective action claims under the Age Discrimination in Employment Act4 ("ADEA"), some Plaintiffs also assert individual ADEA claims, while other Plaintiffs claim their termination violated the Americans with Disabilities Act5 ("ADA") and/or the Family and Medical Leave Act6 ("FMLA").
http://www.leagle.com/decision/InFDCO20170703A86/Raymond%20v.%20Spirit%20AeroSystems%20Holdings,%20Inc.
Investment expert Jeremy Grantham says current great corporate power makes corporation profits high and stable
Excerpt from article at URL https://www.gmo.com/docs/default-source/public-commentary/gmo-quarterly-letter.pdf:
Corporate profitability is the key difference in higher pricing [of corporate stock] . . . . With higher margins, of course the market is going to sell at higher prices. So how permanent are these higher margins? . . . Here are some of the influences on margins (in thinking about them, consider not only the possibilities for change back to the old conditions, but also the likely speed of such change):
■ Increased globalization has no doubt increased the value of brands, and the US has much more than its fair share of both the old established brands of the Coca-Cola and J&J variety and the new ones like Apple, Amazon, and Facebook. Even much more modest domestic brands – wakeboard distributors would be a suitable example – have allowed for returns on required capital to handsomely improve by moving the capital intensive production to China and retaining only the brand management in the US. Impeding global trade today would decrease the advantages that have accrued to US corporations, but we can readily agree that any setback would be slow and reluctant, capitalism being what it is, compared to the steady gains of the last 20 years (particularly noticeable after China joined the WTO).
■ Steadily increasing corporate power over the last 40 years has been, I think it’s fair to say, the defining feature of the US government and politics in general. This has probably been a slight but growing negative for GDP growth and job creation, but has been good for corporate profit margins. And not evenly so, but skewed toward the larger and more politically savvy corporations. So that as new regulations proliferated, they tended to protect the large, established companies and hinder new entrants.
The durability of corporate power and resulting profitability is a good thing for investors over the next period of years, according to Grantham, but it is bad for productivity, bad for workers, and in the long run bad for the US economy. Charlie Rose recently quizzed Grantham on these points in an interview that can be found here:
https://charlierose.com/videos/30816
Posted by Don Allen Resnikoff
States Can Join ACA Subsidies Case: DC Circ.
The D.C. Circuit ruled late Tuesday that 17 states and the District of Columbia to join litigation over Affordable Care Act subsidies. The litigation goal is to derail efforts by the Trump administration to halt the payments and weaken regional insurance markets.
Excerpts from the States' Motion:
In this litigation, the House of Representatives attacks a critical feature of the Patient Protection and Affordable Care Act—landmark federal legislation that has made affordable health insurance coverage available to nearly 20 million Americans, many for the first time. If successful, the suit could—to use the President’s expression—“explode” the entire Act.
Until recently, States and their residents could rely on the Executive Branch to respond to this attack. Now, events and statements, including from the President himself, have made clear that any such reliance is misplaced. The States of California, New York, Connecticut, Delaware, Hawaii, Illinois, Iowa, Kentucky, Maryland, Massachusetts, Minnesota, New Mexico, Pennsylvania, Vermont, and Washington, and the District of Columbia move to intervene to ensure an effective defense against the claims made in this case and to protect the interests of millions of state residents affected by this appeal.
* * *
The district court’s ruling would destroy this design by eliminating the permanent appropriation Congress intended for cost-sharing reduction payments. Payments would cease immediately in the absence of a specific appropriation; and any future payments would be subject to the unpredictability of the appropriations process. That would directly subvert the ACA, injuring States, consumers, and the entire healthcare system. The States thus have a vital interest in seeking reversal or vacatur of the district court’s decision.
See the Court's Order: https://dlbjbjzgnk95t.cloudfront.net/0897000/897941/document.pdf
See the States' Motion: https://dlbjbjzgnk95t.cloudfront.net/0897000/897941/document%20(1).pdf
NYT: How Trump can undermine ACA
What Trump can do:
o Weaken enforcement of the individual mandate.
o Impose work requirements for Medicaid recipients.
o Fail to do advertising or outreach.
o Make tax credits for premiums less generous.
o Defund subsidies that help people pay out-of-pocket costs.
o Redefine essential health benefits.
See https://www.nytimes.com/interactive/2017/07/19/us/what-trump-can-do-to-let-obamacare-fail.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region®ion=top-news&WT.nav=top-news&_r=0NOT IN PROGRES
Public Citizen Group Letter in Opposition to Proposed Revisions to CMS Arbitration Rule
August 7, 2017
Honorable Seema Verma
U.S. Centers for Medicare & Medicaid Services
Administrator
7500 Security Boulevard
Baltimore, MD 21244
Re: CMS—3342-P, Comments Opposing Changes to Strip Legal Rights from Vulnerable Residents in Long-Term Care Facilities
The undersigned organizations dedicated to protecting the health, safety, and welfare of individuals, including seniors, condemn in the strongest possible terms proposed changes to strip legal rights from vulnerable residents in long-term care (LTC) facilities. This cruel proposed rule would repeal current Centers for Medicare & Medicaid Services (CMS) regulations, finalized less than a year ago, prohibiting nursing homes and other LTC facilities from forcing patients into signing pre-dispute arbitration clauses. Moreover, the new proposal would allow these facilities to require a signed forced arbitration agreement as a condition of residing there, which is expressly prohibited by the current rule. Placing a parent or loved one in a nursing home is already one of the most difficult things anyone will ever have to do in life. But forcing the patient or family member to then sign something that violates the resident’s legal rights should they suffer future abuse or serious neglect is a horrific thing to do to families. This proposed rule is a disturbing new direction for CMS, which should be protecting patients, not making it easier for facilities to harm them and cover it up.
In October 2016, CMS finalized a rule banning forced arbitration agreements in nursing home and long-term care contracts, ensuring residents who were harmed would have access to the courts, and that facilities would be properly held accountable for abuse, serious neglect, sexual assault, or other harms. When CMS wisely finalized its 2016 rule, it did so after examining years of evidence and studies showing increasing abuse and neglect at nursing homes and the need for more accountability. During the comment period for the 2016 rule, CMS said that forced arbitration was supported by industry alone, and that “members of the public, advocates, and members of the legal community, predominantly wanted a prohibition on ‘pre-dispute’ arbitration agreements.” In addition, 34 senators and 16 state attorneys general urged CMS to prohibit forced arbitration agreements because of the coercive nature of the process during admissions, the lack of a neutral arbitrator, and the secretive nature of the proceedings.
Indeed, no amount of “transparency” can make these contracts fair or voluntary. Forced arbitration is a private, secretive rigged system controlled by the at-fault facility. Residents have limited access to important documents that may help their claim. Nursing home arbitration companies have a financial incentive to side with repeat players who generate most of the cases they handle. There is no public record to inform industry practice or to notify the public or regulators. If cases are heard in arbitration, dangerous facilities can prolong misconduct and suppress information about harmful conditions and practices for years.
Forced arbitration agreements are never “voluntary” for the resident. Families cannot refuse what a nursing home is presenting to them, no matter how “visible” or understandable the provision is. During any admission process, families are experiencing enormous stress and pressure to get their loved one into a LTC. Indeed, even the court that granted last year’s injunction against the 2016 rule conceded that “the practice of executing arbitration contracts during the nursing home admissions process raises valid concerns, on a public policy level, since many residents and their relatives are ‘at wit’s end’ and prepared to sign anything to gain admission.” This coercion would be made even worse under the new proposed rule, which appallingly would allow nursing homes to make signing such a form a condition of admission. Providing a senior or other LTC resident with a “plainly written” document means little when one is coerced into signing it or be denied admission or kicked out of their nursing home.
In 2016, CMS finalized a sensible and fully-supported rule banning forced arbitration clauses in LTC contracts. There is absolutely no reason to undo the agency’s careful work to develop this final rule. We urge you to protect the health and safety of seniors, other LTC residents, and the public, reverse your decision to eliminate these important protections, and reject this extraordinarily-misguided new proposed rule.
Sincerely,
Public Citizen
Letter from Consumers Union On CFPB Rule Concerning Forced Arbitration
July 21, 2017
Dear Representative:
Consumers Union, the policy and mobilization arm of Consumer Reports, urges you to support the new Consumer Financial Protection Bureau’s rule to restore the rights of consumers to hold payday lenders, credit card companies, and other financial companies accountable under the law when they commit widespread wrongdoing, such as the fraud perpetrated by Wells Fargo on millions of its unsuspecting customers. This important, long-awaited rule stops lenders from forcing consumers to take their claims individually to private arbitration when they would prefer to join together in a class action in court under established legal procedures.
Contrary to what many opponents of this rule are claiming, this rule is a measured and thoroughly considered response to the growing problem of forced arbitration, in which consumers sign away their legal rights just by signing up for a loan or financial service – often unknowingly agreeing to a paragraph hidden in the fine print, and always without having any choice in the matter.
The CFPB’s rule targets one particularly harmful aspect of forced arbitration, when it shields financial companies from accountability for widespread wrongdoing. This is an area where the CFPB found the evidence most clear and compelling.
As is explained in the CFPB’s description and analysis accompanying the rule, the cumulative harm from widespread fraud or other unlawful misconduct – and the unjust enrichment to the wrongdoer – can be enormous, but the amount of money at stake for an individual victim is quite often too small to pay for the cost of arbitration. The only practical way for consumers to hold a lender accountable under the law is by joining together in a class action. In fact, that is one of the key purposes for which the class action procedure was created in our legal system.
Another reason the class action procedure was created is to help companies facing legal action by numerous consumers for the same alleged wrongful conduct. Dealing with those claims all at once is far more efficient, and less costly to the company, than dealing with them individually. Unless, that is, the claims cannot be economically pursued individually. In that case, blocking the class action amounts to shielding the company from legal accountability. That is unfortunately what has resulted from the use of forced arbitration.
In issuing this rule, the CFPB is acting at the express statutory direction of Congress in the Dodd-Frank Act, the law creating the CFPB. The rule is based on a thorough three-year examination of the use of forced arbitration agreements in consumer financial services, in which the CFPB asked for and considered input from the full range of stakeholders who could potentially be affected. Based on that examination, the CFPB issued an extensive report, then asked for further input from all concerned. The proposed rule was published more than a year ago, after which there was yet another extended opportunity to give input.
Importantly, and also contrary to what many opponents of the rule are claiming, the rule in no way restricts the freedom of a lender and a consumer to agree to use arbitration as an alternative means for resolving a dispute – as long as they make that agreement after the dispute arises, when the consumer knows what is at stake and can decide whether the alternative being offered is fair and workable. Giving the consumer a genuine choice also means the lender has the incentive to make sure the alternative is fair and workable, so informed consumers will have a reason to choose it.
In contrast, allowing lenders to unilaterally impose arbitration on all consumers, at the time they sign up for the loan or credit card or other service, in the fine print of the paperwork or electronic terms of service, is no choice. Forced arbitration means that the lender and its lawyers are free to construct an arbitration process that is unfairly slanted in favor of the lender. The consumer is utterly at the mercy of the lender.
Arbitration proceedings and their outcomes are generally required to be kept secret. Whoever designs the process also dictates what the rules are. Established law can be disregarded entirely. There is no right of appeal. It’s one thing if the two sides both agree on using arbitration, after taking a close look and satisfying themselves that the process they are agreeing to is fair and workable. It’s another thing entirely if the side with all the power forces it on the other side.
The 2015 CFPB report sets forth the basis for this rulemaking clearly and compellingly. And the description and analysis accompanying the final rule explain in great detail the CFPB’s careful assessment of the input and concerns and alternatives presented during the multi-year rulemaking process, and how and why the CFPB arrived at the final rule.
We urge you to support this important rule, and to allow it to take effect so that consumers have the right and ability to protect themselves and hold lenders accountable for widespread unlawful conduct.
Respectfully,
/s/
George P. Slover
Senior Policy Counsel
Consumers Union
Democrats open debate: Cracking Down on Corporate Monopolies and the Abuse of Economic and Political Power
Excerpt:
Over the past thirty years, growing corporate influence and consolidation has led to reductions in competition, choice for consumers, and bargaining power for workers. The extensive concentration of power in the hands of a few corporations hurts wages, undermines job growth, and threatens to squeeze out small businesses, suppliers, and new, innovative competitors. It means higher prices and less choice for the things the American people buy every day.
Vigorous, free, and fair competition is a pro-business, pro-consumer, pro-worker approach. The American people deserve a Better Deal that lowers the costs of everyday expenses, putting economic and political power back in their hands and giving them more choices. Over the last thirty years, courts and permissive regulators have allowed large companies to get larger, resulting in higher prices and limited consumer choice in daily expenses such as travel, cable, and food and beverages. And because concentrated market power leads to concentrated political power, these companies deploy armies of lobbyists to increase their stranglehold on Washington.
A Better Deal on competition means that we will revisit our antitrust laws to ensure that the economic freedom of all Americans—consumers, workers, and small businesses—come before big corporations that are getting even bigger. Specifically, the Better Deal plan will:
Prevent big mergers that would harm consumers, workers, and competition.
Require regulators to review mergers after completion to ensure they continue to promote competition.
Create a 21st century ‘Trust Buster’ to stop abusive corporate conduct and the exploitation of market power where it already exists.
Full Democratic statement: http://www.democraticleader.gov/wp-content/uploads/2017/07/A-Better-Deal-on-Competition-and-Costs.pdf
The Trump Treasury Report and "too big" banks
In its recent 149-page report on regulation of financial institutions the Trump Treasury mainly recommends reducing oversight of large financial institutions, providing an array of measures offering regulatory relief. The key Trump Treasury Report thought on the problem of “too big” banks seems to be this:
Excessive regulation imposes costs on institutions that can create incentives for institutions to grow larger than conditions would otherwise require. To the extent regulatory costs can be spread over a large number of customers, regulation can create a barrier to entry for smaller firms and confer competitive advantages on the largest institutions. Tailoring regulation therefore is essential to ensure that regulation does not play a role in fostering too-big-to-fail institutions.
Nellie Liang of Brookings is sympathetic to proposals that reduce regulation of small banks, but worries about Report “proposals that would effectively relax capital requirements for the largest, most complex financial institutions [that] would make the system more prone to another financial crisis with significant risks to the economy.” See https://www.brookings.edu/blog/up-front/2017/06/13/what-treasurys-financial-regulation-report-gets-right-and-where-it-goes-too-far/
The Treasury Report seems consistent with Treasury chief Steven Mnuchin’s testimony to Congress in May, when he distanced the Trump Administration from a populist push to break up the nation's biggest banks. During a Senate hearing where Sen. Elizabeth Warren (D-Mass.) pressed Mnuchin on Administration policy, Mnuchin said splitting up the banks "would be a huge mistake."
Posted by Don Allen Resnikoff
Missing paperwork could wipe out billions in private student loan debt
POSTED JUL 18, 2017 09:58 AM CDT
BY DEBRA CASSENS WEISS
One of the largest owners of private student loans is struggling to show it has the necessary paperwork to prove ownership of loans that have gone into collection.
Tens of thousands of people whose loans are held by National Collegiate Student Loan Trusts could have their debts wiped out because of the missing paperwork, the New York Times DealBook blog reports.
The troubled loans that have gone into default total at least $5 billion. Most borrowers who are sued either default or reach settlements. But some cases that are being fought by lawyers have revealed the problems.
Judges throughout the country have already tossed dozens of collection lawsuits filed against borrowers because of missing documents. According to DealBook’s review of court records, “many other collection cases are deeply flawed, with incomplete ownership records and mass-produced documentation.”
The paperwork documenting the chain of loan ownership disappeared as the bank loans were bundled together and sold to investors through the securitization process. The debt collector who typically sues, Transworld Systems, usually swears to the accuracy of loan records in its court papers.
Credit: http://www.abajournal.com/news/article/missing_paperwork_could_wipe_out_private_student_loan_debt_for_tens_of_thou/?utm_source=maestro&utm_medium=email&utm_campaign=weekly_email
2nd Circuit explanation of why it voided LIBOR convictions
In the United States Court of Appeals for the Second Circuit DECIDED: JULY 19, 2017
This case—the first criminal appeal related to the London Interbank Offered Rate (“LIBOR”) to reach this (or an:y) Court of Appeals—presents the question, among others, whether testimony given by an individual involuntarily under the legal compulsion of a foreign power may be used against that individual in a criminal case in an American court. As employees in the London office of Coöperatieve Centrale Raiffeisen‐Boerenleenbank B.A. in the 2000s, defendants‐appellants Anthony Allen and Anthony Conti (“Defendants”) played roles in that bank’s LIBOR submission process during the now‐well‐documented heyday of the rate’s manipulation.
Defendants, each a resident and citizen of the United Kingdom, and both of whom had earlier given compelled testimony in that country, were tried and convicted in the United States before the United States District Court for the Southern District of New York (Jed S. Rakoff, Judge) for wire fraud and conspiracy to commit wire fraud and bank fraud. While this appeal raises a number of substantial issues, we address only the Fifth Amendment issue, and conclude as follows.
First, the Fifth Amendment’s prohibition on the use of compelled testimony in American criminal proceedings applies even when a foreign sovereign has compelled the testimony.
Second, when the government makes use of a witness who had substantial exposure to a defendant’s compelled testimony, it is required under Kastigar v. United States, 406 U.S. 441 (1972), to prove, 3 at a minimum, that the witness’s review of the compelled testimony did not shape, alter, or affect the evidence used by the government.
Third, a bare, generalized denial of taint from a witness who has materially altered his or her testimony after being substantially exposed to a defendant’s compelled testimony is insufficient as a matter of law to sustain the prosecution’s burden of proof.
Fourth, in this prosecution, Defendants’ compelled testimony was “used” against them, and this impermissible use before the petit and grand juries was not harmless beyond a reasonable doubt. Accordingly, we REVERSE the judgments of conviction and hereby DISMISS the indictment.
Full opinion: http://www.ca2.uscourts.gov/decisions/isysquery/14823406-b96d-48c1-97dc-f19ed4cd84a0/1/doc/16-898_opn.pdf#xml=http://www.ca2.uscourts.gov/decisions/isysquery/14823406-b96d-48c1-97dc-f19ed4cd84a0/1/hilite/
Newspapers to bid for antitrust exemption to tackle Google and Facebook
From CPI
The news industry is banding together to seek a limited antitrust exemption from Congress in an effort to fend off growing competition from Facebook and Google.
Traditional competitors including The Washington Post, The Wall Street Journal and The New York Times, as well as a host of smaller print and online publications, will temporarily set aside their differences this week and appeal to federal lawmakers to let them negotiate collectively with the technology giants to safeguard the industry.
Antitrust laws traditionally prevent companies from forming such an alliance which could see them becoming over-dominant in a particular sector. However, the media companies are hoping that Congress will look favorably on a temporary exemption, particularly given the recent clampdown on the technology industry which saw Google slapped with a US$2.7 billion antitrust fine.
The campaign is led by newspaper industry trade group News Media Alliance and it is intended to help the industry collaborate in order to regain market share from Facebook and Google, which have been swooping in on newspapers’ distribution and advertising revenues.
The two companies currently command 70% of the US$73 billion digital advertising industry in the US, according to new research from the Pew Research Centre. Meanwhile, US newspaper ad revenue in 2016 was US$18 billion from US$50 billion a decade ago.
The News Media Alliance argue that, despite their growing dominance in news distribution, Facebook and Google lack the resources and ability to guarantee the accuracy of reporting upheld by reputable news associations. Facebook in particular came under fire during the 2016 US presidential election when it failed to suitably monitor the news content on its platform and was seen to host unverified articles.
“(Facebook and Google) don’t employ reporters: They don’t dig through public records to uncover corruption, send correspondents into war zones, or attend last night’s game to get the highlights. They expect an economically squeezed news industry to do that costly work for them,” David Chavern, president and chief executive of the News Media Alliance, wrote in an opinion piece published Sunday in the Wall Street Journal.
Full Content: Wall Street Journal (pay wall)
From Friends of the Capital Crescent Trail (and not friends of a Purple MTA line)
Excerpt of email:
On June 26, Judge Leon denied MTA's request to move forward with construction of the Purple Line even though MTA has not undertaken the required Supplemental Environmental Impact Statement (SEIS).
Our [Friends] filing, amply supported with detailed expert declarations, demonstrated to the Court why moving ahead with Purple Line construction would not be in the public interest and is not supported by the law.
We have also filed a 59e motion asking Federal Judge Leon for clarification or reconsideration on two very important issues he did not address in detail- air and noise pollution and their effects on pedestrians, cyclists, schools, residents, and parks and historic sites, which are especially protected by Federal Transportation law.
Meanwhile, MTA continues to seek to litigate its way out of its obligations and to move the case to the US Court of Appeals!
In our vigorous response filing with the US Court of Appeals, on July 3, 2017, we opposed Maryland's motion to "stay", or reverse the District Court's suspension of the Purple Line. We demonstrated that such a request has no merit, would not be in the public interest, and should be denied.
The battle of the motions and briefs continues as Maryland's expensive law firm Perkins Coie and its attorneys send barrage after barrage of motions into both courts. But in this fight for fiscal accountability, common sense solutions, green space, and the rule of law, we are the ones who stand on strong ground.
Customers of Jessica Alba’s Honest Co. alleging it falsely marketed its products as “all natural” asked a New York federal judge on Friday for preliminary approval of a $7.35 million settlement that would end four proposed class actions.
The application to the Court for settlement approval is here:
https://dlbjbjzgnk95t.cloudfront.net/0940000/940560/https-ecf-nysd-uscourts-gov-doc1-127120560288.pdf
From: Consumer Law & Policy Blog
Fortune Commentary on the CFPB's Arbitration Rule: How This New Rule Prevents Your Bank From Ripping You Off
Posted: 13 Jul 2017 01:14 PM PDT
by Jeff Sovern
My [Jeff's] latest, here. Excerpt:
The Wells Fargo case shows the difference between arbitration and class actions: the difference between getting nothing and getting something. * * *
Critics of the rule claim that class actions are just giveaways to lawyers. It’s true that not all class actions work as well as the Wells Fargo one, but the remedy for bad class actions is no more to eliminate them than the remedy for bank misconduct is to eliminate banks. Rather, the remedy is to make sure courts live up to their obligation to approve class action settlements only if they are “fair, reasonable, and adequate.”
When is an old judge too old, and forced to retire?
Richard Posner: I believe there should be mandatory retirement for all judges at a fixed age, probably 80.
Jed Rakoff: Life tenure is what guarantees federal judges their independence, enabling them to speak their minds freely, administer justice without fear or favor, and provide necessary checks on the other branches of government. Any tampering with this is likely to devolve into politics, with whichever party is in power trying to reduce the retirement age ever lower, so as to replace judges appointed by the now out-of-power party with those of the now in-power party. The recent defeat of the New York referendum that Joel references above is a good example: Even though there was widespread “good government” support for increasing the retirement age to 80, the referendum was successfully opposed by Gov. Andrew Cuomo, who wanted to replace Republican-appointed judges with judges he could personally select (as he subsequently did). The result was that several of the most experienced, most knowledgeable, and most respected judges on the highest New York court—such as Robert S. Smith, a Republican appointee who commanded bipartisan respect for his brilliance and fairness—were forced to retire at the height of their powers.
The list of federal judges who have served with great distinction into their 80s includes, among many others, some of the greatest Supreme Court justices ever, such as Louis Brandeis (82), William J. Brennan Jr. (84), Hugo Black (85), and Oliver Wendell Holmes Jr. (90). The greatest Supreme Court justice of all, John Marshall, who single-handedly provided the foundation for most of the basic principles that still govern the relationship between the federal judiciary and the other branches of government, served until he was 79, which, by modern standards, would be the equivalent of something like 95 or more. And, contrary to Joel’s hypothesis that elderly judges “become too dug in to their beliefs,” the number of Supreme Court justices (as well as lower court federal judges) whose views have evolved as they got older and served longer is very large and includes, just in the past few decades, such influential justices as Harry Blackmun, John Paul Stevens, and David Souter.
As for those (relatively few) federal judges who develop significant mental infirmities with increasing age, they typically receive a visit from the chief judges of their courts, who politely suggest that they retire—which they almost always do.
Entire dialogue: http://www.slate.com/articles/news_and_politics/jurisprudence/2017/07/should_there_be_age_limits_for_federal_judges.html
Microsoft proposes a $10 billion program to bring broadband internet to the rural U.S.
The plan, which calls for corporate and government cash, relies on nascent television “white-space” technology, which sends internet data over unused broadcast frequencies set aside for television channels.
This is technology the company helped develop as a cornerstone of an effort to connect the 23.4 million Americans in rural areas who lack high-speed internet access.
“One thing we’ve concluded is just how important broadband is for all kinds of things,” Microsoft President Brad Smith said in an interview.
Article: http://www.seattletimes.com/business/microsoft/microsoft-proposing-10b-program-to-bring-broadband-internet-to-rural-america/
President Trump has named regulation skeptic Randal K. Quarles to serve as the Federal Reserve’s top watchdog overseeing Wall Street
He is an opponent of bank regulation, and expected to play a leading role in the administration’s plans to reduce financial regulation.
Article: https://www.nytimes.com/2017/07/10/us/politics/trump-nominates-randal-quarles-to-oversee-wall-street-banks.html?rref=collection%2Ftimestopic%2FFinancial%20Legal%2FRegulatory&action=click&contentCollection=timestopics®ion=stream&module=stream_unit&version=latest&contentPlacement=1&pgtype=collection
FROM THE CFPB:
CFPB Issues Rule to Ban Companies From Using Arbitration Clauses to Deny Groups of People Their Day in CourtFinancial Companies Can No Longer Block Consumers From Joining Together to Sue Over Wrongdoing
JUL 10, 2017
WASHINGTON, D.C. — The Consumer Financial Protection Bureau (CFPB) today announced a new rule to ban companies from using mandatory arbitration clauses to deny groups of people their day in court. Many consumer financial products like credit cards and bank accounts have arbitration clauses in their contracts that prevent consumers from joining together to sue their bank or financial company for wrongdoing. By forcing consumers to give up or go it alone – usually over small amounts – companies can sidestep the court system, avoid big refunds, and continue harmful practices. The CFPB’s new rule will deter wrongdoing by restoring consumers’ right to join together to pursue justice and relief through group lawsuits.
"Arbitration clauses in contracts for products like bank accounts and credit cards make it nearly impossible for people to take companies to court when things go wrong," said CFPB Director Richard Cordray. "These clauses allow companies to avoid accountability by blocking group lawsuits and forcing people to go it alone or give up. Our new rule will stop companies from sidestepping the courts and ensure that people who are harmed together can take action together."
Hundreds of millions of contracts for consumer financial products and services have included mandatory arbitration clauses. These clauses typically state that either the company or the consumer can require that disputes between them be resolved by privately appointed individuals (arbitrators) except for individual cases brought in small claims court. While these clauses can block any lawsuit, companies almost exclusively use them to block group lawsuits, which are also known as “class action” lawsuits. With group lawsuits, a few consumers can pursue relief on behalf of everyone who has been harmed by a company’s practices. Almost all mandatory arbitration clauses force each harmed consumer to pursue individual claims against the company, no matter how many consumers are injured by the same conduct. However, consumers almost never spend the time or money to pursue formal claims when the amounts at stake are small.
The Dodd-Frank Wall Street Reform and Consumer Protection Act required the CFPB to study the use of mandatory arbitration clauses in consumer financial markets. Congress also authorized the Bureau to issue regulations that are in the public interest, that are for the protection of consumers, and which are based on findings that are consistent with the Bureau’s study of arbitration. Released in March 2015, the study showed that credit card issuers representing more than half of all credit card debt and banks representing 44 percent of insured deposits used mandatory arbitration clauses. Yet three out of four consumers the Bureau surveyed did not know whether their credit card agreement had an arbitration clause. These clauses are not only common and unknown; they are also bad for consumers. By blocking group lawsuits, companies are able to:
CFPB Arbitration RuleThe CFPB rule restores consumers’ right to file or join group lawsuits. By so doing, the rule also deters companies from violating the law. When companies know they are more likely to be held accountable by consumers for any misconduct, they are less likely to engage in unlawful practices that can cause harm. Further, public attention on the practices of one company can more broadly influence their business practices and those of other companies. Under the rule, companies can still include arbitration clauses in their contracts. But companies subject to the rule may not use arbitration clauses to stop consumers from being part of a group action. The rule includes specific language that companies will need to use if they include an arbitration clause in a new contract.
The rule also makes the individual arbitration process more transparent by requiring companies to submit to the CFPB certain records, including initial claims and counterclaims, answers to these claims and counterclaims, and awards issued in arbitration. The Bureau will collect correspondence companies receive from arbitration administrators regarding a company’s non-payment of arbitration fees and its failure to follow the arbitrator’s fairness standards. Gathering these materials will enable the CFPB to better understand and monitor arbitration, including whether the process itself is fair. The materials must be submitted with appropriate redactions of personal information. The Bureau intends to publish these redacted materials on its website beginning in July 2019.
The new CFPB rule applies to the major markets for consumer financial products and services overseen by the Bureau, including those that lend money, store money, and move or exchange money. Congress already prohibits arbitration agreements in the largest market that the Bureau oversees – the residential mortgage market. In the Military Lending Act, Congress also has prohibited such agreements in many forms of credit extended to servicemembers and their families. The rule’s exemptions include employers when offering consumer financial products or services for employees as an employee benefit; entities regulated by the Securities and Exchange Commission or the Commodity Futures Trading Commission, which have their own arbitration rules; broker dealers and investment advisers overseen by state regulators; and state and tribal governments that have sovereign immunity from private lawsuits.
In October 2015, the Bureau published an outline of the proposals under consideration and convened a Small Business Review Panel to gather feedback from small companies. Besides consulting with small business representatives, the Bureau sought comments from the public, consumer groups, industry, and other interested parties before continuing with the rulemaking. In May 2016, the Bureau issued a proposed rule that included a request for public comment. The Bureau received more than 110,000 comments.
The rule’s effective date is 60 days following publication in the Federal Register and applies to contracts entered into more than 180 days after that.
More information about the CFPB’s arbitration rule is available at: https://www.consumerfinance.gov/arbitration-rule/
The text of the arbitration rule is available at: http://files.consumerfinance.gov/f/documents/201707_cfpb_Arbitration-Agreements-Rule.pdf
A CFPB video explaining the arbitration rule is available at: https://youtu.be/boQ2tRW_AwE
NYT: Utilities lobby against rooftop solar
Utilities argue that rules allowing private solar customers to sell excess power back to the grid at the retail price — a practice known as net metering — can be unfair to homeowners who do not want or cannot afford their own solar installations.
Their effort has met with considerable success, dimming the prospects for renewable energy across the United States.
Click here for full article: Continue reading the story
More about Google and the EU: New regulatory thinking needed
Antitrust, the underpinnings of which are based on industrial-age economic theories, needs new thinking in the digital age to ensure that antitrust policies continue to remain effective guardians of consumer welfare without inadvertently impeding economic progress.
But as important as today’s antitrust questions are, regulators shouldn’t lose sight of the bigger picture. The coming battle in antitrust will not be about controlling markets in the traditional sense. It will be about the battle for control over consumers’ information. The tech titans are currently in a race to see which of them can build a better digital replica of their consumers, which means finding a way to not just collect user data but also make it harder for competitors to do so. Tomorrow’s monopolies won’t be able to be measured just by how much they sell us. They’ll be based on how much they know about us and how much better they can predict our behavior than competitors.
From: https://hbr.org/2017/07/the-next-battle-in-antitrust-will-be-about-whether-one-company-knows-everything-about-you
The States' petition asking the U.S. Supreme Court to review the Second Circuit's decision for American Express Co. in an antitrust suit over the company’s merchant rules
The U.S. Department of Justice declined to join the States.
In their petition the 11 state petitioners s contend that the Second Circuit’s ruling that the district court neglected to account for how the rules affected the entirety of the two-sided credit card market conflicts with Supreme Court precedent. The credit card industry’s services to merchants and cardholders are not interchangeable and therefore should not be collapsed into a single market, the states said. "Simply because the same company, by virtue of its business model, provides different services to different customers does not mean that those services are somehow in the same relevant market.”
From the States' petition:
QUESTION PRESENTED
This case asks how Section 1 of the Sherman Act, which bans unreasonable restraints of trade, applies to “two-sided” platforms that unite distinct customer groups. Such platforms are ubiquitous, ranging from eBay (serving buyers and sellers), to newspapers (serving readers and advertisers). Here, credit-card networks bring cardholder customers together with merchant customers for ordinary transactions. When doing so, Respondents American Express Company and American Express Travel Related Services Company (“Amex”) contractually bar merchant customers from steering cardholder customers to credit cards that charge merchants lower prices.
Applying the “rule of reason,” the district court held that: (1) the Government proved that Amex’s anti-steering provisions were anticompetitive because they stifled competition among credit-card companies for the prices charged to merchants, and (2) Amex failed to establish any procompetitive benefits.
The Second Circuit reversed. It held that, to prove that the anti-steering provisions were anticompetitive (and so to transfer the burden of establishing procompetitive benefits to Amex), the Government bore the burden to show not just that the provisions had anticompetitive pricing effects on the merchant side, but also that those anticompetitive effects outweighed any benefits on the cardholder side.
The question presented is: Under the “rule of reason,” did the Government’s showing that Amex’s anti-steering provisions stifled price competition on the merchant side of the creditcard platform suffice to prove anticompetitive effects and thereby shift to Amex the burden of establishing any procompetitive benefits from the provisions?
The States' Petition to US Supreme Court can be found at https://dlbjbjzgnk95t.cloudfront.net/0909000/909780/amex%20cert%20petition.pdf
Over-the-Counter Hearing Aid Act of 2017, would deregulate an industry that currently restricts hearing aid sales to audiology practices
Instead, hearing aids could be sold over the counter, and audiologist services obtained separately. (Audiologists test for characteristics of hearing loss, and are skilled at adjusting hearing aids to work well with variations in hearing loss.)
Text of bill, sponsored by Elizabeth Warren:
https://www.congress.gov/bill/115th-congress/senate-bill/670/text?q=%7B%22search%22%3A%5B%22Over+the+Counter+Hearing+Aid+Act+of+2017%22%5D%7D&r=2
From the NYT: The Medicaid that our representatives in Washington are aiming to cut right now ought to matter plenty to everyone who hopes to grow old and is not certain that their savings could last for decades.
While many people don’t realize it until well into old age, it is Medicaid, not Medicare, that pays for most nursing home and community or home-based care for older adults who run out of money.
A dozen or so years into retirement, Rita Sherman had plenty going for her financially.
Recently widowed, she had a net worth of roughly $600,000 as of 1998. Her health was excellent, and she dutifully purchased a long-term care insurance policy that would cover three years of nursing home costs should she ever need help. Watching over it all was her daughter, a medical social worker, and her son-in-law, a financial planner.
By the time she died at the age of 94 last year, however, all of the money was gone after a diagnosis of dementia and five and a half years in a nursing home [probably at more than $500 a day.] Like so many people who never see it coming, she’d gone from being financially comfortable to qualifying for Medicaid.
NYT article is at https://www.nytimes.com/2017/07/07/your-money/one-womans-slide-from-the-upper-middle-class-to-medicaid.html?ribbon-ad-idx=3&src=trending&module=Ribbon&version=context®ion=Header&action=click&contentCollection=Trending&pgtype=article
S.C. hospital to pay $1.3 million for not properly treating emergency psych patients
By Harris Meyer | July 5, 2017
AnMed Health in South Carolina has agreed to pay the largest-ever settlement in a case brought under the federal law requiring hospitals to stabilize and treat patients in emergency situations.
The not-for-profit, three-hospital AnMed system will pay nearly $1.3 million to settle federal allegations that in 2012 and 2013 it held patients with unstable psychiatric conditions in its emergency department without providing appropriate psychiatric treatment in 36 incidents. AnMed, based in Anderson, S.C., serves upstate South Carolina and northeast Georgia.
"Instead of being examined and treated by on-call psychiatrists, patients were involuntarily committed, treated by ED physicians and kept in AnMed's ED for days or weeks instead of being admitted to AnMed's psychiatric unit for stabilizing treatment," according to the settlement finalized on June 2 with the HHS Office of Inspector General.
The patients — most of whom were suicidal and/or homicidal and suffered from serious mental illness — were held in the ED from six to 38 days. In each of these incidents, AnMed had on-call psychiatrists and beds available in its psychiatric unit to evaluate and stabilize the patients. But it but did not provide examination or treatment by a psychiatrist, according to the settlement agreement.
The HHS OIG's office said that violated the section of the Emergency Medical Treatment and Labor Act requiring Medicare-participating hospitals with an ED to provide appropriate medical screening and treatment to stabilize the patient's condition.
Full article: http://www.modernhealthcare.com/article/20170705/NEWS/170709977?utm_source=modernhealthcare&utm_medium=email&utm_content=20170705-NEWS-170709977&utm_campaign=am
How Uber’s Tax Calculation May Have Cost Drivers Hundreds of Millions
By NOAM SCHEIBER (NYTimes)
Drivers’ trip receipts contain signs that the ride-hailing service deducted hundreds of millions of dollars from drivers’ earnings in New York to pay state taxes
Click title for article
Brookings Program: Manufacturing under the Trump administrationThursday, July 13, 2017, 9:00 a.m. to 12:00 p.m. EDT
n the wake of the 2016 presidential election, much attention has been paid to the fate of America’s once-prosperous manufacturing communities, where residents are now facing the effects of rapidly evolving technology, increased automation, and a growing Chinese manufacturing sector.
On July 13, Brookings will host a half-day conference to discuss the future of manufacturing policy under the Trump administration, whether the president's campaign promises can be fulfilled, the effect of changes in international markets, and what it all means for American workers and the economy.
Register to attend | Register to watch the live webcast
Worldpay Group, a British payments processing company, has received preliminary takeover approaches from Vantiv, an American rival, and JPMorgan Chase.
Worldpay accounts for about 42 percent of all transactions in Britain and provides processing services in 146 countries. But it faces growing competition from services like PayPal, Square and Stripe.
Payments currently run through links between banks, card networks and payments acquirers like Worldpay. But new payments services will be able to bypass this network and to charge less for each transaction.
JPMorgan has been trying to build its payments infrastructure so that it can be involved from start to finish, fighting over smartphone payments and online purchases with peer-to-peer services like PayPal’s Venmo. Buying Worldpay would help its defenses as the payments field becomes more competitive.
http://www.nytimes.com/newsletters/2017/07/05/dealbook?nlid=67075843
Novel forms of corporate control can raise novel antitrust issues
Here are three relevant articles, from CPI [click titles to access]
Active and Passive Institutional Investors and New Antitrust Challenges: Is EU Competition Law Ready?
By Marco Claudio Corradi & Anna Tzanaki
This essay aims to disentangle the complex issues surrounding common ownership by institutional investors, and suggest a holistic approach that brings together the corporate with the competition law aspects of the problem.
The New Mandate Owners: Passive Asset Managers and The Decoupling of Corporate Ownership
By Carmel Shenkar, Eelke M. Heemskerk & Jan Fichtner
A major shift toward passively managed index funds in recent years has led to the re-concentration of corporate ownership in the hands of just three large asset management firms, the Big Three: BlackRock, Vanguard and State Street.
Why Common Ownership Causes Antitrust Risks
By José Azar, Martin Schmalz & Isabel Tecu
This article illustrates the extent of present-day common ownership and discusses the economic logic of why common ownership leads to reduced incentives to compete and may cause anticompetitive outcomes.
Social media companies operating in Germany face big fines if they do not delete illegal, racist or slanderous comments and posts within 24 hours under a new law
The law reinforces Germany’s position as one of the most aggressive countries in the Western world at forcing companies like Facebook, Google and Twitter to crack down on hate speech and other extremist messaging on their digital platforms.
But the new rules have also raised questions about freedom of expression. Digital and human rights groups, as well as the companies themselves, opposed the law on the grounds that it placed limits on individuals’ right to free expression. Critics also said the legislation shifted the burden of responsibility to the providers from the courts, leading to last-minute changes in its wording.
See: https://www.nytimes.com/2017/06/30/business/germany-facebook-google-twitter.html?ref=business
Uber Technologies Inc. used software to evade hostile law enforcement and public officials
he practice was used in cities where the company faced opposition from regulators, The New York Times reported. Legal ethics professionals raised concerns.
While the program may not be illegal, ethics professionals said, it does appear to skirt ethical standards. And if in-house counsel approved the program knowing that Uber would use it to break the law, then disbarment could be in store for the lawyers who signed off on it, they said. The New York Times report said Uber’s legal department, led by general counsel Salle Yoo, approved use of the program.
Manhattan District Attorney Cyrus R. Vance, Jr., announces new justice reform initiatives that will end the criminal prosecution of approximately 20,000 low-level offenses annually
Beginning in September 2017, the Manhattan District Attorney’s Office will no longer prosecute the overwhelming majority of individuals charged with Theft of Services for subway-related offenses, unless there is a demonstrated public safety reason to do so.
Building on the success of the Manhattan Summons Initiative launched by District Attorney Vance and the NYPD in March 2016 – which was subsequently replicated citywide – the policies being announced today will:
“Since 2010, my Office has worked with the NYPD and the Mayor’s Office of Criminal Justice to end the criminal prosecution of tens of thousands of low-level cases that needlessly bog down our Criminal Court and swell our City’s jail population. In Manhattan, we are embracing the role that District Attorneys must play to achieve the closure of Rikers Island, and proving that New York can safely reduce crime and incarceration at the same time.”
See http://manhattanda.org/press-release/district-attorney-vance-end-criminal-prosecution-approximately-20000-low-level-non-vio
From USDOJ: FOR IMMEDIATE RELEASE
Wednesday, June 28, 2017
Former Packaged Seafood Executive Pleads Guilty to Price Fixing
A former senior vice president of sales for a packaged seafood company pleaded guilty for his role in a conspiracy to fix the price of packaged seafood, such as canned tuna, sold in the United States, the Department of Justice announced today.
According to documents filed in this case, Stephen Hodge and his co-conspirators agreed to fix the prices of packaged seafood from as early as 2011 through 2013. He pleaded guilty to a one-count criminal information filed on May 30, 2017, in U.S. District Court for the Northern District of California in San Francisco. Hodge has agreed to pay a criminal fine and cooperate with the Antitrust Division’s ongoing investigation. He will be sentenced by the court at a later date.
Excerpt from https://www.justice.gov/opa/pr/former-packaged-seafood-executive-pleads-guilty-price-fixing
From Friends of the Capital Crescent Trail:
On Thursday Judge Richard Leon heard oral arguments on the State's motion requesting that he "stay" (suspend) his ruling so that MTA could move forward with the project as they appealed his ruling to the Circuit Court.
A stay would have allowed them to clear cut the Trail before they appealed to the Circuit Court for approval of the federal funding. But the Judge wasn't having any of it.
His reaction was that of a parent scolding an obstinate teenager - in this case, scolding the Maryland government for its appalling mismanagement of public funds in signing an irresponsible Purple Line P3 contract.
The headlines in the Washington Post and Bethesda Magazine understate the Judge's tongue lashing he gave Maryland's hired gun from the law firm Perkins Coie.
The criteria are very high for a stay.
In response to State's claim of being financially harmed, the Judge commented:
"So why should the Court in this situation here bail you out of the gamble that you took?...No one forced the State of Maryland to enter into the [P3 Purple Line] contract..."
Our attorney, Eric Glitzenstein, reinforced the ridiculousness of their financial harm claim: "Even after...the August 2016 ruling, the [Secretary of Transportation] Rahn declaration says, point blank, we continue to spend state money on this project with the expectation and assumption that we would get reimbursed by the federal government. That is self-inflicted injury..."
At the end of the hearing the Judge summed it up: "It is pretty obvious...what they're doing, they want a ruling out of this Court as fast as possible so they can get the Court of Appeals to grant the stay. That's what is going on here."
Whole Foods v. Wall Street: an interesting article provides background on the Amazon acquisition of Whole Foods
Excerpt:
Mackey [the Whole Foods founder], to a large degree, is a victim of his own success. He has, from the beginning, been willing to compromise his ideals to grow his company, but he has his limits. And now they’re being tested. Turning Whole Foods into more of a mainstream grocer would be a form of defeat in his eyes, and that’s what he sees as the outcome if the company were to be sold. But paradoxically, staying independent and not growing the company aggressively enough could lead to his ouster—another form of defeat. His options are narrow and not obvious.
Full article: http://features.texasmonthly.com/editorial/shelf-life-john-mackey/
Excerpt from Recorder article:
Glassdoor Inc., the operator of the anonymous online job review site, has asked the U.S. Court of Appeals for the Ninth Circuit to block an attempt by federal prosecutors to unmask reviewers as part of a grand jury investigation.
In a case unsealed on Tuesday, Glassdoor was ordered by U.S. District Judge Diane Humetewa for the District of Arizona to divulge the identities of eight people who posted anonymous reviewers about a federal contractor under investigation for fraud.
Glassdoor has refused to comply with the order, arguing on the reviewers' behalf that they have a First Amendment right to speak anonymously and to associate freely on the online platform. The company filed its sealed notice of appeal from a contempt order on June 7.
In a blog post on Friday, Glassdoor general counsel Brad Serwin wrote the district court "applied the wrong standard in placing the interests of government ahead of Americans' protected free speech rights under the First Amendment." He added: "We hope to persuade the U.S. Ninth Circuit Court of Appeals to require a higher standard for these requests."
Glassdoor is being represented in the litigation by Todd Hinnen, a Perkins Coie litigator in Seattle who previously served as acting assistant attorney general for national security at the U.S. Department of Justice. Hinnen has also represented companies such as Google Inc. in fighting warrants for user data in areas where the law is murky.
Full article: http://www.therecorder.com/id=1202790288127/Glassdoor-Resists-Feds-Bid-to-Unmask-Reviewers?kw=Glassdoor%20Resists%20Feds%27%20Bid%20to%20Unmask%20Reviewers&et=editorial&bu=The%20Recorder&cn=20170616&src=EMC-Email&pt=Afternoon%20Update
Solar panel provider Solar City's challenge to utility rate setting stays alive, despite state-action defense
From the 9th Circuit opinion:
FRIEDLAND, Circuit Judge: Solar-panel supplier SolarCity Corporation filed a federal antitrust lawsuit against the Salt River Project Agricultural Improvement and Power District (the Power District), alleging that the Power District had attempted to entrench its monopoly by setting prices that disfavored solarpower providers. The Power District moved to dismiss the complaint based on the state-action immunity doctrine. That doctrine insulates states, and in some instances their subdivisions, from federal antitrust liability when they regulate prices in a local industry or otherwise limit competition, as long as they are acting as states in doing so. See, e.g., N.C. State Bd. of Dental Exam’rs v. FTC, 135 S. Ct. 1101, 1109 (2015); FTC v. Phoebe Putney Health Sys., Inc., 133 S. Ct. 1003, 1007 (2013); Parker v. Brown, 317 U.S. 341, 352 (1943). 4 SOLARCITY V. SALT RIVER PROJECT The district court denied the motion, and the Power District appealed. We must decide whether we can consider the appeal immediately under the collateral-order doctrine, or whether any appeal based on state-action immunity must await final judgment.1 We join the Fourth and Sixth Circuits in holding that the collateral-order doctrine does not allow an immediate appeal of an order denying a dismissal motion based on state-action immunity.
See opinion: http://cdn.ca9.uscourts.gov/datastore/opinions/2017/06/12/15-17302.pdf
Can a class action be certified without an allegation that all class members have been injured?
By Danyll Foix
Excerpt:
Ten years into litigation, a hospital has moved to decertify a class of plaintiffs who claim the hospital’s merger caused them to overpay for medical services. Arguing there is insufficient proof that class members were harmed, the hospital’s motion invites the court to jump into the fray about whether classes may be certified when they include members who were not actually injured.
Defendant NorthShore University HealthSystem and Highland Park Hospital, both located near Chicago, merged in 2000. After the Federal Trade Commission pursued a post-merger challenge in 2004 for alleged violations of Section 7 of the Clayton Act, a putative class of hospital patients filed suit in 2008 claiming the merger caused them to pay inflated prices for inpatient and outpatient hospital services. The District Court initially denied a motion to certify a class of patients who had paid for NorthShore’s services, but the Seventh Circuit vacated that denial in 2012 – see Messner v. NorthShore Univ. HealthSystem, 669 F.3d 802 (7th Cir. 2012) – and on remand the District Court then certified the class in 2013.
In its current challenge to certification, NorthShore primarily argues that the class should be decertified because the plaintiffs’ expert analysis relies on average prices and they cannot show that Rule 23’s “predominance” factor is satisfied. Like most class actions, this case was brought pursuant to Rule 23(b)(3), which requires that courts find “questions of law or fact common to class members predominate over any questions affecting only individual members.” This predominance inquiry is designed to ensure that class members’ claims are sufficiently similar in order to justify class treatment. When a proposed class includes persons who have not been injured by the challenged conduct, as NorthShore argues here, individual issues may preclude establishing that common issues predominate as required by Rule 23(b)(3).
In arguing there is insufficient proof that all class members were harmed, NorthShore invites the District Court to weigh in on a developing rift over whether classes may be certified when they include members who have not been injured. Some circuit courts have explained that classes cannot be certified when they include uninjured members. See, e.g., In re Rail Freight Fuel Surcharge Antitrust Litig., 725 F.3d 244, 252 (D.C. Cir. 2013) (“plaintiffs must also show that they can prove, through common evidence, that all class members were in fact injured by the alleged conspiracy”); Denney v. Deutsche Bank AG, 443 F.3d 253, 263-64 (2d Cir. 2006) (“no class may be certified that contains members lacking Article III standing”); and New Motor Vehicles Canadian Export Litig., 522 F.3d 6, 28 (1st Cir. 2008) (holding certification required proof that “each member of the class was in fact injured”).
In contrast, other circuit courts have held that a class may be certified even though some members are not injured. See, e.g., Torres v. Mercer Canyons Inc., 835 F. 3d 1125, 1136 (9th Cir. 2016) (“a well-defined class may inevitably contain some individuals who have suffered no harm as a result of a defendant’s unlawful conduct”); In re Nexium Antitrust Litig., 777 F.3d 9, 14 (1st Cir. 2015) (“We conclude that class certification is permissible even if the class includes a de minimis number of uninjured parties”); and Suchanek v. Sturm Foods, Inc., 764 F.3d 750, 757 (7th Cir. 2014) (“If the court thought that no class can be certified until proof exists that every member has been harmed, it was wrong”).
Full article: https://www.antitrustadvocate.com/2017/06/13/hospital-seeks-second-opinion-on-certifying-class-with-uninjured-members/?utm_source=BakerHostetler+-+Antitrust+Advocate&utm_campaign=6420db9d35-RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_a95f379648-6420db9d35-70980973
Maryland and DC AGs to put imprimatur on non-government Constitutional emoluments clause litigation against Trump
The Maryland and DC AGs have filed litigation against Donald Trump based on the Constitution's emoluments clause. A copy of the complaint is here:
https://www.nytimes.com/interactive/2017/06/12/us/politics/document-dc-maryland-trump-complaint.html
The litigation follows in the footsteps of non-government emoluments clause litigation. A copy of the earlier Complaint filed by the Citizens for Responsibility and Ethics in Government group and others is here: https://s3.amazonaws.com/storage.citizensforethics.org/wp-content/uploads/2017/04/18115942/File-Stamped-First-Amended-Complaint.pdf
The Amended Citizens Complaint says as part of its opening segment that:
Defendant has committed and will commit violations of both the Foreign Emoluments Clause and the Domestic Emoluments Clause, involving at least:
(a) leases held by foreign-governmentowned entities in New York’s Trump Tower;
(b) room reservations, restaurant purchases, the use of facilities, and the purchase of other services and goods by foreign governments and diplomats, state governments, and federal agencies, at Defendant’s Washington, D.C. hotel and restaurant;
(c) hotel stays, property leases, restaurant purchases, and other business transactions tied to foreign governments, state governments, and federal agencies at other domestic and international establishments owned, operated, or licensed by Defendant;
(d) property interests or other business dealings tied to foreign governments in numerous other countries;
(e) payments from foreign-government-owned broadcasters related to rebroadcasts and foreign versions of the television program “The Apprentice” and its spinoffs; and
(f) continuation of the General Services Administration lease for Defendant’s Washington, D.C. hotel despite Defendant’s breach, and potential provision of federal tax credits in connection with the same property.
The litigations offer interesting examplea of litigation strategies available to government and non-government organizations.
Similar litigation by Democratic federal legislators has been announced.
An issue that has been raised about all of the Emolument Clause litigations concerns standing to sue. Commenters suggest that the Maryland and DC AGs are in a relatively better position on standing issues as co-equal sovereigns.
A relevant article on the broader issue of standing to sue on public policy issues discusses standing to sue on environmental issues. See https://www.americanbar.org/content/dam/aba/images/public_education/06_apr08_standingsueenvironment_martin.pdf
Posted by Don Allen Resnikoff
Without DOJ Backing, States Pursue AmEx Antitrust Appeal
Article excerpts:
Eleven states are doing what the Justice Department declined to do — asking the U.S. Supreme Court to review an appeals court win for American Express Co. that allows it to continue telling merchants not to steer customers to cheaper credit cards.
But the DOJ’s decision not to appeal its antitrust loss, its first in more than a decade, could narrow the chances of the high court taking up the case because the federal government is no longer involved, antitrust practitioners told Bloomberg BNA.
* * *
On June 2, the DOJ declined to ask the Supreme Court to review its suit challenging AmEx’s rules preventing merchants from asking customers to use lower priced credit cards. But 11 states that initially joined the DOJ’s suit pressed on and filed their own petition for a writ of certiorari.
* * *
The case was brought in 2010 by antitrust officials in the Obama administration, and it involves legal questions that haven’t been widely explored by the courts. Siding with the government, a district court in 2015 found that American Express’s rules constituted an unreasonable restraint on trade and resulted in higher prices for consumers.
But in September, the Second Circuit said the district court got it wrong by only considering the interests of merchants, which are just one side of a two-sided market that also includes card holders. The DOJ had argued that it was sufficient to examine the market generally. The lower court judge in the case, Nicholas Garaufis, has had only 11.1 percent of his decisions reversed, according to a Bloomberg Law’s Litigation Analytics.
* * *
“My hat is off to the states for carrying on even after the DOJ walked away,” [Professor Stephen] Calkins said. “It will be fascinating to see whether the court invites the views of the [Justice Department’s] solicitor general, and, if so, how the solicitor general will phrase opposition to certiorari. But it seems very unlikely that certiorari will be granted.”
The states’ decision to pursue the case is reminiscent of a divergence of antitrust thought in the Reagan era, when states had to take the lead in antitrust enforcement because of “the weakness of federal enforcement,” Peter Carstensen, a professor at University of Wisconsin Law School, told Bloomberg BNA.
“Getting the court to take a case is always a challenge,” Carstensen said. “Without the U.S. as a party, this will increase the difficulty of getting the court to review the decision.”
Some of the nation’s largest merchants, such as United Airlines Inc., Marriott International Inc., and Target Corp, supported the government’s case. They said in court filings that AmEx’s rules prevent price competition for credit card network services.
“We are delighted that the states appealed and will wholeheartedly support them in this undertaking,” Retail Litigation Center President Deborah White said in a statement provided to Bloomberg BNA. The legal advocacy group for the retail industry filed a brief with the Second Circuit in support of the DOJ’s case.
States’ Arguments
The states argued in their appeal that the Supreme Court should review the AmEx case because of an increasing need for guidance on the “rule of reason” antitrust legal standard and because the Second Circuit’s decision conflicts with past cases.
The Second Circuit panel analyzed the case under the “rule of reason” doctrine, which often requires extensive analysis of a certain conduct’s impacts on a relevant market, as opposed to the “quick look” or “per se” theory of liability to anticompetitive conduct.
None of the Supreme Court’s recent cases explain how the rule of reason should operate in practice once it is determined the case isn’t a “per se” violation. The court has “offered only generalities,” the brief said.
Before the AmEx decision, the Second Circuit had ruled that the credit card industry contains more than one market for antitrust purposes, the states said. That view guided a discovery period that lasted several years and a lengthy trial.
“Only after this costly litigation did the government learn from the Second Circuit that it had allegedly focused on the wrong market,” the appeal says. “Years of litigation that were financed through taxpayer dollars were wasted by the rule of reason’s uncertainties.”
The Second Circuit’s insistence that enforcers must view each side of a two-sided market separately is a departure from the test the appeals court has “long used” to identify antitrust markets, the states said.
“Rather than apply the established market-definition test, the Second Circuit adopted a new one,” the appeal stated.
https://bol.bna.com/without-doj-backing-states-pursue-amex-antitrust-appeal/
Antitrust Watchdogs Eye Big Tech's Monopoly On Your Data
Article excerpt:
“When more and more services are ‘free,’ you can see how that really renders antitrust feeble,” says Khan. After the rapid expansion in social networking and online search, it’s clear that financial power lies in data, not just price. “The Europeans hit on this,” says [Maurice] Stucke. “Data is the new lingua franca. That is the currency, and [tech platforms] can translate that data into dollars.”
This is evident in the European Union's intensified scrutiny of how Silicon Valley tech platforms operate. Germany’s antitrust agency is investigating Facebook. The EU conducted an antitrust probe into Amazon’s e-books business deals (the company agreed to change its contract with publishers in May). Days before the Oxford conference, the EU fined Facebook $122 million for making misleading privacy statements to the EU when it acquired WhatsApp for $19 billion in 2014 about the ability to match Facebook and WhatsApp accounts. (The merger of the popular texting apps raised concerns that Facebook’s online advertising business could gain an unfair advantage.) Days before that, watchdogs in the Netherlands and France slapped Facebook on the wrist for privacy violations.
- https://www.wired.com/2017/06/ntitrust-watchdogs-eye-big-techs-monopoly-data/?mbid=synd_digg" via Digg
Dueling filings in NY State AG battle with EXXON over climate change accounting
ExxonMobil defended itself in court documents Friday following claims by New York Attorney General Eric Schneiderman that the company used two sets of books in evaluating climate risk, one set of numbers for describing the risks to investors and the other for business decisions. Schneiderman had described the practice as a "sham" perpetrated by the oil giant while Rex Tillerson was its chief executive.
Exxon's lawyers wrote that the company had "truthfully and consistently" told the public that it "addresses potential impacts of future climate-related policies." They also accused Schneiderman of playing to the media and of disclosing confidential and proprietary records that were attached as exhibits to his brief filed last week in New York Supreme Court.
See https://www.documentcloud.org/documents/3861753-Exxon-Responds-to-Double-Numbers-6-9-17.html
The AG's filing is here: https://www.documentcloud.org/documents/3860667-Document-168-NYAG-Opposition-to-Exxon-Motion-to.html
Credit: InsideClimateNews. See https://insideclimatenews.org/news/09062017/exxon-climate-accounting-court-document
Is California's Bar pass score too high?
In February the deans of 20 California law schools sent a letter to the state Supreme Court asking study of whether the bar exam’s minimum passing score is unjustifiably high. See Dean's letter on Bar pass rate.
Discussion of the request continues.
The Deans' request came after the pass rate for the summer 2016 test plummeted to 43 percent, the lowest figure for a July sitting in 32 years. First-time test-takers among American Bar Association-accredited schools in California did better—62 percent passed—but still lagged significantly behind their counterparts in other states, including New York, Texas and Ohio.
The deans blame California’s “atypically high” passing score, or cut score, of 144 for the multistate bar exam portion of the test. Only Delaware requires a higher score on its exam. And yet those who took the California exam scored almost three points higher on the multistate bar exam than the national average.
“California graduates of ABA-accredited schools are performing better than average, and yet many of them—graduates of our law schools who would have passed the bar with similar performance in virtually any other state—are failing it in our great state, simply because of where California has decided to draw the line between passing and failing,” the deans wrote in their letter.
David Samson sentenced to just one year home confinement after his plea to bribery charges for shaking down United Airlines to get a more direct flight out of N.J. to his vacation home in South Carolina.
BY TED SHERMAN
tsherman@njadvancemedia.com,
NJ Advance Media for NJ.com
NEWARK -- Facing two years in prison for the shakedown of United Airlines in a bizarre scheme to get a more convenient direct flight to his South Carolina getaway home, former Port Authority chairman David Samson found a soft landing when he was sentenced a few months ago.
U.S. District Judge Jose Linares stunned federal prosecutors by sentencing Samson to a year of home confinement, four years of probation and 3,600 hours of community service in his admitted strong-arming of the airline.
The 77-year-old former New Jersey attorney general will also be required to pay a $100,000 fine and wear a location-monitoring device.
"I did something wrong. I violated the law. I deeply regret it. I am trying to live my life to the highest moral standards," Samson said in court, apologizing to his family his friends and the public. "I violated the law. I deeply regret it."
Full article: http://www.nj.com/news/index.ssf/2017/03/david_samson_sentenced_to_probation_in_united_airl.html
Report from abetterbalance.org: “Pointing Out: How Walmart Unlawfully Punishes Workers for Medical Absences”
Executive Summary:
Walmart is proud of its heritage as a family-founded company. Ironically, while the Walton family touts its family values, Walmart’s absence control program punishes workers who need to be there for their own families. Walmart disciplines workers for occasional absences due to caring for sick or disabled family members and for needing to take time off for their own illnesses or disabilities. Although this system is supposed to be “neutral,” and punish all absences equally, along the lines of a “three strikes and you’re out” policy, in reality such a system is brutally unfair. It punishes workers for things they cannot control and disproportionately harms the most vulnerable workers.
Punishing workers for absences related to illness or disability is not only unfair, it’s often against the law. Based on our conversations with Walmart employees as well as survey results of over 1,000 current and former Walmart workers who have struggled due to Walmart’s absence control program, Walmart may regularly be violating the federal Family and Medical Leave Act (FMLA) by failing to give adequate notice to its employees about when absences might be protected by the FMLA and by giving its employees disciplinary points for taking time to care for themselves, their children, their spouses or their parents even though that time is covered by the FMLA.
Similarly, we allege that Walmart’s policies and practices of refusing to consider doctors’ notes and giving disciplinary points for disability-related absences is a violation of the Americans with Disabilities Act (ADA). The ADA protects workers with disabilities from being disciplined or fired because of their disabilities. It also requires employers to engage in a good faith interactive process to determine an appropriate accommodation for workers with disabilities. Unfortunately, as detailed in this report, this is too often not Walmart’s practice. Other federal, state and local laws such as pregnancy accommodation protections, and sick time laws, could also be at play. Walmart’s policies and practices are not in compliance with many of these laws.
Simply put: Giving a worker a disciplinary “point” for being absent due to a disability or for taking care of themselves or a loved one with a serious medical condition is not only unfair, in many instances, it runs afoul of federal, state and local law.
We call on Walmart not only to follow the law, but to work with its employees who have occasional absences related to health and disability. Walmart can do better, and Walmart must do better. Workers and the advocates standing with them will not stop pushing until Walmart treats its workers fairly.
Read our press release here.
Trump wants to partner with States on infrastructure financing; will open infrastructure initiative with air traffic control plans
Donald Trump next week will send Congress a proposal to hand over control of the U.S. air-traffic control system to a non-profit corporation, part of a week-long push for his infrastructure plan, said Gary Cohn, the president’s chief economic adviser.
The proposal, which Trump will release on Monday in an Oval Office ceremony and Rose Garden event, will kick off what Cohn, director of the National Economic Council, called the formal launch of the president’s infrastructure initiative. Later in the week, Trump plans to travel to Ohio to garner support for his plan -- a key campaign promise -- to channel $1 trillion into the nation’s roads, bridges, inland waterways and other public facilities.
“We know that in many of these areas we’re falling behind, and the falling behind is affecting economic growth in the United States,’’ Cohn said on a call with reporters. “The president wants to fix the problems, and he doesn’t want to push these liabilities into the future.’’
ump’s actions come after an initial outline of his infrastructure plan and his proposed budget sparked criticism from state and city leaders of both parties, who said they’d be left with too much of the financial burden.
For the $1 trillion plan, Trump has proposed $200 billion in federal spending on “targeted federal investments’’ in rural areas and for projects with regional or national priority, as well as for “self-help” incentives to spur states, localities and private entities to generate more of their own revenues for projects.
Congressional Democrats, who Trump is counting on to help get his plan through Congress, have also blasted the plan – as well as proposed 2018 budget cuts to transportation programs – and have said that significantly more direct federal funding is needed.
https://www.bloomberg.com/politics/articles/2017-06-03/trump-to-kick-off-infrastructure-drive-with-air-traffic-proposal
Hersh Shefrin on financial instability and China
The late economist Hyman Minsky laid out the general warning signs in a framework he called the financial instability hypothesis (FIH). However, most ignored Minsky’s messages until it was too late. It was only after the global financial crisis erupted that the phrase “Minsky moment” became fashionable.
Coverage of Moody’s downgrade by The Wall Street Journal and The New York Times has nicely conveyed the key facts of what led Moody’s to downgrade China’s debt. But the coverage could do more by linking those facts to the FIH, in order to help readers connect the dots of how the worrisome pieces of the China puzzle fit together.
The key features of the FIH can be boiled down to six types of crisis warning signs, two signs that a crisis is erupting, and four types of policies for mitigating the magnitude of a crisis. The specific warning signs are not arbitrary, but instead characterize the evolution of systemic risk as the financial system moves towards the red zone during the latter phase of an economic expansion. In this regard, China's economy expanded at an official rate of 10.6 percent in 2010, but its more recent growth rate has been lower, 6.7 percent in 2016. Moody’s forecasts that over the next five years, the rate will continue to decline, falling to 5 percent.
What follows is a short FIH-based rundown on China, organized around the six warning signs. This rundown takes the key points in the media coverage of Moody’s China downgrade, and matches these points to Minsky’s perspective. In making the match, I hope to encourage journalists to organize their ideas so as to present the discussion in the context of the bigger picture, and thereby present their readers with a coherent view of what the facts mean for overall financial stability.
From: https://www.forbes.com/sites/hershshefrin/2017/05/28/the-lesson-from-moodys-overdue-downgrade-of-chinas-debt/#3febbcba65ef
Pricing algorithms and antitrust
Excerpt from article by Sophie Lawrance (Bristows LLP) in Kluwer Competition Law Blog.
However, to the extent that actions by companies using pricing algorithms fall outside the current competition law framework (i.e. if a company implementing discriminatory pricing isn’t dominant, or companies using pricing algorithms have not entered into any agreements or concerted practices to do so), arguably the competition authorities should not try and stretch the existing law to cover these kinds of situations.
Instead, this could be more of a challenge for legislatures. It’s a question of policy: does the competition law framework need re-working to cover these sorts of issues?
To some extent this is already happening. Germany has already introduced significant changes to its antitrust laws to make it easier for the Bundeskartellamt to define markets and assess market power in the digital sector (see here and here), particularly where services are offered for ‘free’ and where multi-sided markets are involved. Commissioner Vestager has recently proposed a new directive designed to make national competition authorities more effective enforcers, ensuring for example that all national competition authorities have the power to search mobile phones, laptops, and tablets for evidence.
Differential (if not personal) pricing is also under the spotlight in relation to geo-blocking – where companies and online retailers apply barriers or impose restrictions on consumers on the basis of their nationality or place of residence. At present, such conduct can be examined under the competition rules only if it results from an agreement between separate undertakings or if the company holds a dominant position. The Commission has proposed a regulation designed end the enforcement gap in this area.
However, there is little concrete evidence of any action against the main issue identified in this article – namely, the potential anti-competitive effects arising from the independent use of pricing algorithms. Any change to the competition law framework designed to cover this would involve a significant (quite possibly unpalatable to many) change to the way competition law currently works around the world.
Perhaps competition law isn’t, or shouldn’t be, the solution. In their book Virtual Competition, Professors Ezrachi and Stucke offer some other suggestions. For example, the government could promote market entry by companies with different economic incentives, for example consumer-owned co-operatives that redistribute profits via rebates. It could provide subsidies to companies using algorithms that actually promote customers’ interests, or sponsor ‘maverick’ firms that offer disruptive technologies or that are more likely to take the lead in cutting prices.
Perhaps no changes will be needed at all. As Professor Salil Mehra points out (here, p.52-53) the effective use of algorithms and big data have the potential to make businesses vastly more efficient and reduce their costs. This could ultimately result in lower prices for consumers, even if tacit collusion is occurring.
Either way, the pace of technological development is always likely to outstrip the pace of legislative change. It will be very interesting to see how these issues play out in the future.
This post originally appeared in the Kluwer Competition Law Blog.
Maryland Screwed Its Craft Brewing Industry in Favor of Guinness
By Jim Vorel | April 14, 2017
Excerpt:
It’s only natural that the state’s legislators would probably want to cater to the likes of Diageo, makers of Guinness Stout, as a potential new employer and tourist attraction.
The only problem? In order to do so, they just decided to unilaterally hamstring every small production brewery trying to get its doors open in Maryland. In the blind pursuit of corporate business, Maryland is screwing its local beer industry, forcing new breweries to live by an entirely different set of laws than established ones. It’s a shockingly, patently unfair new hurdle for small businesses to clear, and one that came about by rather dubious means when it was railroaded through the Maryland legislature last week [first week of April].
Although the amount of beer a production brewery can sell from its taproom was increased to 2,000 barrels per year, if they want to sell any more, they’ll have to buy that beer back from their own distributor first. That means those kegs or bottles will physically have to leave the brewery, travel to the distributorship, “come to rest” and then be brought back and sold to the brewery that made it. Is it stupid? Of course it is.
Then there’s the matter of hours of operation. Under the amended bill, existing breweries will be grandfathered in and given the same rights as the planned Guinness brewery, with hours determined by their local licensing districts. Some of those are as late as midnight, and others can legally remain open as late as 2 a.m. New breweries in Maryland, on the other hand, will be required to close their taprooms as early as 9 p.m., Sunday through Thursday and 10 p.m. at latest, Friday and Saturdays. In effect, it strips the taprooms of all future production breweries from being able to operate as all-night hangouts for their customers, encouraging people to take their business elsewhere. It creates an unequal playing field, and the injustice should be obvious to anyone watching.
Matt Humbard is one of those brewery owners who stands to be directly affected by the new legislation. The owner of Handsome Beer Co. in the Washington DC metro area, Humbard’s beer is contract brewed off-site and served in his taproom. Following his dream to open up a brewery of his own, he had been planning a physical brewing operation to be based in Maryland. But after the passage of House Bill 1283, even after the amendments, he’s no longer sure this idea makes any sense.
Humbard’s company, Handsome Beer Co.
“Maryland is just completely on the wrong side of this,” says Humbard. “It’s counter to the culture of the whole craft beer industry, which is very collaborative in nature, to allow this kind of grandfathering to happen. Although I’m sure specific companies are happy they get to keep their hours, it’s completely unfair that new breweries will be on a different playing field than existing ones. How can you justify limiting one business differently than another business?”
What Maryland has done is a classic example of putting interest in big business over the very homegrown companies that the state legislators are supposed to be representing. Surely, the likes of AB InBev and MillerCoors are watching this situation and looking into ways they can take advantage of similar scenarios.
Full article: https://www.pastemagazine.com/articles/2017/04/maryland-just-screwed-its-craft-brewing-industry-i.html
Warren Grimes: Why Small Firms Thrive in the Beer & Wine Industries
and how government enforcers can help them
A relatively open distribution system can be critical for new entry and entrepreneurial choice. The beer and wine industries provide a compelling example. Both of these industries involve a creative component (and winemakers, like farmers, are often growers). Small craft brewers and winemakers have enjoyed a strong resurgence. Antitrust enforcement, however, may have had little to do with protecting the opportunities of new entrants in these industries. The 21st amendment to the Constitution repealed prohibition and gave each state control over the production and sale of alcoholic beverages. At that time, many states adopted a mandatory three tier system, prohibiting vertical integration of producers, distributors, and retailers. Maintaining independently owned distributors makes it more difficult for powerful producers to lock up distribution.
There may be other advantages to localized wine or beer production that explain the growth and survival of small producers, but the open availability of distribution channels is an important part of this story. While distribution was not open in all states, the three tier system was sufficiently rooted to enable the craft beer resurgence over the past two decades. Oligopolistic firms dominate beer production in the United States. . . . .Despite this concentration, the last few decades have seen a healthy resurgence in small and regional breweries (microbreweries),which now have roughly 14% of the U.S. market by volume.
Unlike farmers or ranchers, microbrewers typically do not grow or raise their own ingredients, but exercise their craft as processors. To have a chance to distribute efficiently, such brewers require access to an effective distribution mechanism, particularly when a brewer hopes to reach a market beyond its home state. Even in states in which dominant brewers cannot own distributors, a dominant brewer may pressure independent distributors to exclude or disfavor smaller rival brewers. In permitting Anheuser Busch InBev’s acquisition of Miller Brewing, the Antitrust Division imposed a divestiture remedy to address horizontal concentration and a conduct remedy designed to protect microbrewers’ access to independent beer distributors. The decree prohibits InBev from engaging in certain loyalty or discount programs that discourage independent beer distributors from doing business with other brewers and requires InBev not to acquire other brewers or distributors without allowing for advance review by the Antitrust Division. The sensitivity the Division showed to distribution issues affecting microbrewers was constructive but insufficient. Whether the conduct remedy will be effective in preventing the large firm’s future exclusionary treatment toward smaller rivals is an open question.
he real lesson from the InBev/Miller acquisition may be a failure in past merger enforcement. Consider an industry in which, instead of a 70% dominance by two firms, there are eight firms that share roughly 80% of the U.S. market. In such an industry, issues of vertical integration are far less troublesome. If one or more of these eight firms decided to acquire its own distributors, there is much less risk that the firm would use its control of a distributor strategically to injure a micro brewer. To the contrary, with a share of 20% or less of the market, the firm is more likely to reach out to other brewers to offer them distribution, in this manner profiting from a greater share in the distribution market. Under these more competitive conditions, the market is more likely to self-regulate, and do so in a more effective manner than through merger conditions imposed on a powerful oligopolist.
The wine industry in the United States also benefits from the independent distribution system that grew out of the 21st Amendment. The largest three wine firms control roughly 46% of the US market, but the industry is relatively unconcentrated, with at least one winery in each of the fifty states and a steady growth in the number of firms (an average increase of 7% per year in the ten years ending in 2012). While large firms dominate the low price market, small and boutique firms have a large presence in the mid and high priced categories. . . . .
Given the problems in maintaining open distribution, the Department would have been justified in prohibiting any further acquisition of a craft brewer for a substantial period of years. Kwoka found conduct remedies were largely ineffective in preventing price increases by the merged firm. While some smaller wine makers sell their wine directly to retailers or end consumers, 90 percent of all wine flows through distributors. The largest 20 distributors have 75% of the market, with several hundred smaller distributors sharing the remainder. Although price competition seems to discipline the low-end market, for mid and high price segments, conditions of monopolistic competition prevail: each distinctive brand enjoys substantial pricing freedom. These conditions complement the availability of independent distributors and make it possible for new entrants to succeed and consumers to choose among an increasing number of local brands. These benefits will continue as long as merger policy (and antitrust enforcement more generally) preserves the availability of independent distribution for small wineries.
The beer and wine industries are examples of creative mid-level processing that can be efficiently performed by individual entrepreneurs or small firms. What is needed is lower thresholds for horizontal concentration among processors. To the extent that these thresholds have already been exceeded, strict rules on vertical integration are required to maintain open entry for small processors.
Full article: http://competitionpolicyinternational.us2.list-manage1.com/track/click?u=66710f1b2f6afb55512135556&id=df80077e3b&e=b23ef9e519
ALGORITHMS, ARTIFICIAL INTELLIGENCE, JOINT CONDUCT, AND PRICE STABILITY
The ability of algorithms and artificial intelligence to monitor and set prices is increasing in sophistication, effectiveness and independence from human involvement at an exponential rate. The growth in this area, which is seen simultaneously across a range of AI applications, is such that no one — even its creators — is likely to fully appreciate AI’s capabilities until sometime after they have been realized.
ricing “bots” are already capable of engaging in behavior that we would not hesitate to call “parallel conduct” if it were performed by humans, and they will only get better at it. Indeed, the day may not be so far off when the pricing bot of one firm is fully capable of colluding — in every meaningful sense — with the pricing bot of a competing firm. At that point, we may have “conspiracy” cases under Section 1 of the Sherman Act that look very much like the cases we have today, except that the parts now played by humans are played by robots.
The few existing antitrust cases involving pricing algorithms have not crossed this Rubicon, or really even approached it. They do not involve joint conduct by bots, in any sense. Instead, these cases involve human beings reaching familiar price-fixing agreements and then implementing them algorithmically. While these cases may create special problems of detection and proof, at least for the moment they do not seem to require any shift in the conceptual apparatus we use to solve antitrust problems. There is reason to think such a shift may be coming, however.
Joint conduct by robots is likely to be different — harder to detect, more effective, more stable and persistent — than traditional joint conduct by humans. For example, one of the basic precepts of the Sherman Act is that “unilateral” conduct by firms in the same market is not unlawful under Section 1, even if the conduct is closely interdependent and predictably yields supracompetitive prices that would be per se unlawful if achieved by agreement. An unspoken premise of this time-honored rule is that such interdependent conduct is likely to be relatively unstable in the absence of an agreement, and therefore, with any luck, the supracompetitive effects generally will be shorter lived and less pernicious than if they were achieved through true joint conduct.
But this premise may have less force in a world of bots, who can interpret and respond to the actions of their competitors with far more precision, agility and consistency than their human counterparts. By simply allowing these bots to go to work, it is easy to imagine an effectively permanent pricing stasis settling over many markets, and not always with procompetitive effects. How will enforcers approach such conduct, much less disrupt or prevent it? What duties should we impose on human beings to ensure their bots behave, and what culpability should they have when their bots go astray? The next ten years will begin to provide the answers, but the technology is already well ahead of the law, and the growing pains are likely to be immense.
Full article: https://www.competitionpolicyinternational.com/wp-content/uploads/2017/05/CPI-Ballard-Naik.pdf
Bloomberg lists 10 best paid executives. NY Times says such executives often meet with President Trump and typically press issues like rollback of financial regulation
Here are the top 3:
1
Marc Lore CEO, U.S. e-commerce, Wal-Mart Stores Inc.
$236,896,191
2
Tim Cook CEO Apple Inc.
$150,036,907
3
John S. Weinberg Executive Chairman, Evercore Partners Inc.
$123,991,055
For the rest of the 10 see https://www.bloomberg.com/graphics/2017-highest-paid-ceos/
The New York Times points out that President Trump has made a
pageantry of meetings with C.E.O.s at the White House or at his Mar-a-Lago resort in Florida, which he has dubbed the southern White House, a priority during his first few months in office. The visits have become an opportunity for the president to trumpet the progress he says his administration is making in creating jobs and reducing regulations.
But Mr. Trump may be getting a one-sided perspective on policy recommendations by spending so much time with a large swath of highly paid executives — at least 307 since Inauguration Day — whose views on taxes and economic inequality tend to differ from those of average Americans.
“If you hang around with executives, you adopt a certain view of the world, and it’s a view of the world that seems to be informing his policies,” said Lawrence Mishel, president of the Economic Policy Institute, a liberal-leaning advocacy group in Washington. “It takes a lot to think cutting corporate taxes is central to tax policy when corporate profits are near historic highs.”
The Times article points out that reducing financial industry regulations are often the subject of conversations between wealthy executives and the President
Full Times article at https://www.nytimes.com/2017/05/26/business/ceo-compensation-pay-president-donald-trump.html?src=me
NYT: Schools generally agree not to sweeten financial incentives to student who have committed to other schools -- although that may be an antitrust law violation
This year, however, scores of teenagers had something unexpected happen: During the first week in May, they received text messages or emails from schools that had accepted them but had not heard back. The messages all hinted at a particular question: Might a larger discount prompt you to come here after all?
Hampshire College, Elizabethtown College, Washington & Jefferson College and Ursinus College, all private liberal arts schools, did this sort of outreach in recent weeks, as did Lawrence University, and perhaps others. For some students, such notes can be a dream come true if they make their first-choice college more affordable.
These invitations raise ethical questions in higher education: Schools are not supposed to dangle discounts in front of people who have committed to other institutions. Liberal arts colleges with flexible discounting policies may be tempted to skirt that line, given that families might worry about the value of their programs in the workplace. But late communications to applicants about financial aid, even without mentioning dollar amounts, can seem like flat-out poaching to the schools that have already admitted those students.
DAR comment: Many antitrust scholars suggest that colleges' agreement not to compete on pricing to students is an antitrust law violation.
Continue reading the Times story
tps://www.nytimes.com/2017/05/24/your-money/when-colleges-dangle-money-to-lure-students-who-ignored-them.html?ref=todayspaper&_r=0
Illinois home sellers sue Zillow for allegedly too-low home value "Zestimates"
The NY Times reports: Barbara Andersen bought a home in Glenview, Ill., in 2009 with a view of a golf course, paying about $630,000. She wants to sell the home for about that amount, but the Zestimate on it is now about $536,000, which she believes is too low and has deterred buyers.
Ms. Andersen, a real estate lawyer, filed a lawsuit [click to see it] against Zillow this year, accusing the company of conducting stealth home appraisals without a state license. In recent days, she has represented several plaintiffs in a similar lawsuit [click to see it] filed in Cook County Circuit Court. (Full article at https://www.nytimes.com/2017/05/24/upshot/angry-over-zillows-home-prices-a-prize-is-offered-for-improving-them.html?ref=business)
Language from the lawsuit: "Upon information and belief, Zillow is not a licensed Illinois appraiser. Further, upon information and belief, Zillow had never appraised Andersen's home. Moreover, Andersen has never requested or authorized Zillow to conduct an appraisal of Andersen's home. . . . Illinois law prohibits the preparation of appraisals without a license: . . ."
“If it’s not reliable, you shouldn’t put it out there,” she said in a phone interview, referring to Zestimates.
From the April Newsletter of SaveMiWater, a local Michigan advocacy group
For a cost of $200 a year Nestle was asking for 210 million gallons of public water, at the same time as Detroit and Flint residents were being shut off for minor bills or charged high rates for poisoned water.
* * *
Since October 31 we have been mounting the campaign to deny this latest permit request. The request was to go from 150 gallons per minute to 400 at one well. In other words, we were right back where we started in the year 2000 when Nestle was drawing down a stream and several lakes in Mecosta County.
We have spent the winter examining the permit and finding its flaws, documenting the damage already done to two cold-water trout streams and the Muskegon River, meeting with residents and the press, and generating a large number of comments. We are also building alliances with other organizations concerned about the privatization of water and the lack of public input in the permitting process.
MCWC has been providing the grassroots, on the ground leadership in this campaign to stop the taking of any more water for private profit and stop the damage to the ecosystem involved.
The legal precedent established during the original battle with Nestle still stands. A withdrawal of 400 gallons per minute is damaging to the ecosystem and cannot be sustained. Nestle may have gone 20 miles down the road from Mecosta to increase their production, but the same rules apply, and the same strong grassroots group is opposing them once more.
None of this resistance would be possible without the active support of our members. Your letters, membership renewals, on the ground presence, donations, have made the work of the organization possible. We have been able to launch the new and up to date website (saveMIwater.org), develop a Rapid Response email list, put out brochures and informational displays, increase our speaking opportunities, engage legal support, fund the work of our committees, hold public events, contribute our share to coalition efforts, and extend our work to save water far beyond the Nestle battle.
http://www.savemiwater.org/wp-content/uploads/2017/04/NewsletterApril-Final-for-web.pdf
The federal government has filed a lawsuit against Fiat Chrysler Automobiles accusing it of using illegal engine-control software to enable its diesel-powered vehicles to pass emissions tests.
The filing occurred days after Fiat Chrysler proposed a modification to the software to ensure correct test results in hopes of resolving the issue.
In a statement, the automaker said it was disappointed by the action and would defend itself against any claims that its software represents a “deliberate scheme to install defeat devices to cheat U.S. emissions tests.”
The Environmental Protection Agency accused Fiat Chrysler in January of installing the software on about 104,000 Ram pickup trucks and Jeep Grand Cherokee sport utility vehicles sold from 2014 through 2016.
https://www.nytimes.com/2017/05/23/business/fiat-chrysler-diesel-emissions-lawsuit.html
DAR comment: can consumer class actions be far behind, similar to class actions against VW?
Is Dodd-Frank’s failure resolution regime failing?
Program scheduled for Tuesday, Jun 06, 2017 9:30 AM-11:00 AM EDT
Brookings Institution
Falk Auditorium
1775 Massachusetts Avenue N.W.
Washington, DC
20036
REGISTER TO ATTEND REGISTER FOR WEBCAST
The recent financial crisis exposed a major gap in the regulatory system: the inability for the government to safely wind down a failing financial firm that was not a commercial bank, such as Lehman Brothers or AIG. The Dodd-Frank law attempted to fix this by empowering regulators with new tools including a new Orderly Liquidation Authority (OLA) under which the Federal Deposit Insurance Corp would liquidate and wind-up a failing institution. Although never used, OLA is controversial. Some Congressional Republicans would do away with it, and the Trump Administration has undertaken its review.
On June 6, Brookings’s Center on Regulation and Markets and Hutchins Center on Fiscal and Monetary Policy will bring together four experts—including former Federal Reserve Chairman Ben Bernanke—with differing views on preserving or modifying OLA.
After the session, panelists will take audience questions.
Join the conversation on Twitter using #DoddFrankOLA
AGENDA
Introduction
Aaron Klein
Fellow - Economic Studies,Center on Regulation and Markets
Policy Director, Center on Regulation and Markets
AaronDKlein
Panel Discussion
MODERATOR
David Wessel
Director - The Hutchins Center on Fiscal and Monetary Policy
Senior Fellow - Economic Studies
davidmwessel
Ben S. Bernanke
Distinguished Fellow in Residence - Economic Studies
BenBernanke
David Skeel
S. Samuel Arsht Professor Corporate Law - University of Pennsylvania Law School
Hester Peirce
Director, Financial Markets Working Group and Senior Research Fellow - Mercatus Center at George Mason University
H. Rodgin Cohen
Senior Chairman - Sullivan & Cromwell LLP
States seek to advocate for low-cost insurance in lawsuit
New York and California attorneys general are leading a 16-state charge to intervene in a lawsuit that would threaten compensation to insurers who provide for poorer people.
New York Attorney General Eric Schneiderman and California Attorney General Xavier Becerra Thursday moved to intervene in the appeal of a lawsuit that challenges cost-sharing reduction payments allowed under the Affordable Care Act.
The payments are made to insurers to offset costs of lower price insurance plans. House Republicans sued the Obama administration in 2014 arguing the payments are illegal because they’re not authorized by Congress. The Obama administration appealed, but the Trump administration has threatened to drop the appeal.
The motion to intervene argues that the states have a concrete interest in continuing the payments to protect low-income residents.
From article at http://www.dailynews.com/health/20170519/states-seek-to-advocate-for-low-cost-insurance-in-lawsuit
24 hour electricity from rooftop solar panels? New batteries may permit it
Mercedes-Benz is taking a direct shot at Tesla's solar push and battery business.
The luxury carmaker announced on Thursday it would partner with Vivint Solar to sell a smart solar ecosystem to California residents, aiming to challenge Tesla's new solar-roof rollout on its turf.
As part of the partnership, Mercedes will introduce its at-home battery to the US market for the first time, while Vivint will provide solar-panel installation.
From article at http://www.businessinsider.com/mercedes-vivint-partner-on-solar-storage-solution-to-take-on-tesla-2017-5
Business gentrification: Upscaling Bethesda downtown loses funky or simply traditional old businesses
As Bethesda evolved into a high-end district of condos, restaurants and boutiques, cherished neighborhood places were swept away — by development, changing tastes or owners deciding it was time.
The 1980s saw the demise of the Psyche Delly, the sandwich-shop-turned-progressive-rock-club, and its countercultural soul mate, WHFS-FM. The Hot Shoppes, home of the double-decked Mighty Mo burger and the Orange Freeze milkshake, and Lowen’s, the toy emporium, closed in the 1990s. The Bethesda location for O’Donnells Seafood Restaurant made it to 2001.
Harry Eaton, who's been coming to the market since the 1950s, shows a picture of himself and his mother at her stand inside of Bethesda Farm Women's Market. (Jason Andrew/For The Washington Post)Now the clock may be running out on three other local institutions: the Tastee Diner, the Bethesda Farm Women’s Marketand Barnes & Noble on Bethesda Row. The issues facing each business are different. One is a landlord-tenant relationship gone sour. The others involve aging owners and the skyrocketing value of their land.
From article: https://www.washingtonpost.com/local/md-politics/the-future-ghosts-of-downtown-bethesda/2017/05/13/aa73db5e-310b-11e7-9dec-764dc781686f_story.html?utm_term=.1567fa5eefc7
MORGAN LEWIS WEBINAR ON AUTOMOTIVE CYBERSECURITY
The multitude of devices and systems in cars creates an array of ever-evolving privacy and cybersecurity issues. Our panel discussion will provide an overview of recent developments and evolving questions pertaining to “connected” and, in some cases, autonomous vehicles.
TOPICS WILL INCLUDE:
Privacy disclosures provided to car owners
and drivers
The current reasonable expectation of privacy
(or lack thereof)
What the various US government bodies’
expectations are regarding access to information stored on a vehicle
What measures the US government and state governments expect companies to take regarding automotive cybersecurity and protection from hacking
WHEN
Tuesday, May 23, 2017
11:00 am–12:00 pm PT
2:00–3:00 pm ET
PRESENTERS
Ronald Del Sesto, Partner
Mark Krotoski, Partner
Daniel Savrin, Partner
Robert Brundage, Of Counsel
Register at https://morganlewis.webex.com/mw3100/mywebex/default.do?nomenu=true&siteurl=morganlewis&service=6&rnd=0.6766680149048838&main_url=https%3A%2F%2Fmorganlewis.webex.com%2Fec3100%2Feventcenter%2Fevent%2FeventAction.do%3FtheAction%3Ddetail%26%26%26EMK%3D4832534b0000000473136c1462e882655caf280646ed9e36d41ee174515852cecd20d0fc3e12a40e%26siteurl%3Dmorganlewis%26confViewID%3D1759874369%26encryptTicket%3DSDJTSwAAAASnozNuAAYpZFP6OnN4cpHdsMVAogj5YUGlD0u2girP-g2%26
EU: Spotify, others complain about data “gatekeepers”
In a letter sent to the European Union’s antitrust body, the chief executives of Spotify, streaming music firm Deezer, startup investor Rocket Internet and other Europe-based companies claim dominant internet platforms” can and do abuse their privileged position,” reports the Financial Times.
The European companies complain some mobile operating systems, app stores and search engines abuse their commanding marketshare to act as “gatekeepers” to consumer choice, thus impeding segment rivals attempting to market products that compete with first-party services, the letter says.
While not named in the letter, Apple and Google are clearly targets of the complaint. Together, Apple’s iOS and Google’s Android control more than 90 percent of the mobile operating system market and maintain a set of terms and conditions that third-party apps must follow in order to market their wares on the respective app stores.
In particular, internet companies argue they are not able to access analytics data when customers sign up for service through app store portals. Further, app store owners allegedly promote their own products ahead of third-party offerings. For example, Apple often publishes App Store banners advertising Apple Music, a competitor to Spotify and Deezer.
Full Content: Apple Insider
From Congressman Cummings letter to Vision on "rent to own" financing practices
Dear Mr. Szkaradek:
I write today to seek details about the properties offered through rent-to-own and other seller-financed transactions by Vision Property Management and its subsidiaries.
According to Vision's website, your company targets "individualsand families that may not currently qualify for conventional property purchases due to various employment, health, divorce or other financial reasons" for "Lease-to-Own prope11y opp011unities." 1
Recent media reports have detailed financial and physical harms that your business model - which reportedly is structured to churn unsuspecting tenants through ever-deepening money pits- has inflicted on families with limited means.
According to a New York Times article, Vision' s rent-to-own contracts place substantial risks on tenants that traditional property rental or sales contracts do not. Vision offers each home on an "as is" basis. Under these contracts, Vision may not disclose the extensive repairs a prope11yneeds but will " require a tenant to pay for any repairs, no matter how big." If tenants fail to make the required repairs within a few months, they may be evicted-forfeiting all expenditures they have already made on the home.
https://democrats-oversight.house.gov/sites/democrats.oversight.house.gov/files/documents/2017-01-18.EEC%20to%20Vision%20Property%20Management.pdf
"Money in Politics: Prospects for Reform in the District of Columbia"
presented by The Ward 3 Democratic Committee
& UDC David A. Clarke School of Law
A panel discussion on current campaign reform efforts before the DC Council featuring
D.C. Attorney General Karl Racine
At-Large Councilmember Elissa Silverman
Darrin Sobin, Director, Board of Ethics & Government Accountability (BEGA)
Thursday, May 18 at 7pm
UDC David A. Clarke School of Law Moot Courtroom
4340 Connecticut Ave NW (5th Floor)
Free & open to the public. Registration requested HERE
You know about Trump and Comey, but do you know about the 2009 case of Lau v. U.S. Postal Service?
From a posting by the law firm of Eric L. Pines, LLC, whose practice specializes in defending against pretextual firings of federal employees:
In Lau v. U.S. Postal Service, two disabled Flat Sorter Machine Clerks had their hours reduced from eight hours a week to six, but their non-disabled coworkers did not. The Postal Service claimed their hours were reduced because of low mail volume.
Here’s how they succeeded in showing the Postal Service’s explanation was just a pretext and won their case:
First, the employees were not given the “low mail volume” reason for their reduced work hours until five months after their hours were reduced. Even worse, the agency only gave the low mail volume explanation in the context of a formal mediation, showing a lack of credibility. Waiting five months to give an explanation is suspicious, and waiting until the employees are far enough into the complaint process that they and the agency are in a formal mediation is even more suspicious.
See http://www.pinesfederal.com/blog/2017/february/pretext-part-2-shifting-explanations-and-unbelie/
Posted by Don Allen Resnikoff
Digital Music News on the effects of music industry deregulation:
Under Trump, the chances of a deregulation of decades-old publishing rules and consent decrees has never had a better chance of happening.
Which also means that every publisher, big and small, is going to start behaving like major (and indie) labels once all the regulations are lifted. Suddenly, the publishers will have to ability to withhold their IP (songs and lyrics) and effectively shut down platforms like Spotify until they get their outrageous (and unrealistic) terms.
But even if they don’t pull massive amounts of catalog, they will effectively impose unworkable licensing costs on services like Spotify. And that means that Spotify will have an even harder time convincing Wall Street and investors that these businesses can scale.
And that goes for Pandora and SoundCloud as well, both extremely over-leveraged long-terms plays that rely on licensing (and investors to cover the losses). Because right now, these companies can’t properly scale, thanks to variable and extremely high recording licensing demands. Layer in variable and extremely high publishing demands, and the goose is cooked.
Sure, it’s not fair to publishers. History screwed you guys, sorry. The labels always had the free market on their side. The music industry doesn’t need an expensive, complicated Washington babysitter anymore.
But doing what’s right means destroying the music industry’s ‘comeback’ of the past few years. And destroying a pie that’s just starting to grow again.
http://www.digitalmusicnews.com/2017/05/09/deregulation-destroy-spotify-music-industry/
Customer dissatisfaction with Spirit Air scheduling problems leads to airport terminal riots
Article and Video: http://www.cbsnews.com/news/passengers-rowdy-florida-airport-9-spirit-airlines-flights-canceled/
Washington Post: Sinclair Broadcast Group, the family-controlled TV station company headquartered outside Baltimore, wants to go from big to gigantic. The DC experience shows what that can mean
With its $3.9 billion bid for Tribune Media on Monday, Sinclair aims to add dozens of big-city stations — in Chicago, Los Angeles and Dallas, among other cities — to an already bulging portfolio that includes 173 mostly small-city stations.
What to expect when, or if, Sinclair finally swallows Tribune?
Sinclair showed what might happen the last time it took over a station in a large metropolitan area — WJLA, the ABC affiliate in Washington. In 2014, Sinclair completed its $985 million purchase of eight stations owned by Allbritton Communications, including WJLA-TV, which is now the largest Sinclair owns.
Sinclair has effectively remade WJLA in its own image, which is to say it continues to cover local and national news but with a distinctively conservative flavor.
Sinclair has been criticized for using its many stations to push Republican presidential candidates since at least 2004 when it announced it would air a documentary critical of Democratic candidate John F. Kerry but backed down amid pressure. It drew criticism from Democrats on the eve of the 2012 election when its stations in several battleground states aired a half-hour news “special” that faulted President Obama for his handling of the economy, his signature health-care law and the terrorist attack on a U.S. installation in Benghazi, Libya.
www.washingtonpost.com/lifestyle/style/heres-what-happened-the-last-time-sinclair-bought-a-big-city-station/2017/05/08/92433126-33f7-11e7-b4ee-434b6d506b37_story.html?utm_term=.2db864624325
The International Refugee Assistance Project (IRAP)
IRAP advertises that it "organizes law students and lawyers to develop and enforce a set of legal and human rights for refugees and displaced persons. Mobilizing direct legal aid and systemic policy advocacy, IRAP serves the world’s most persecuted individuals and empowers the next generation of human rights leaders.The International Refugee Assistance Project (IRAP) organizes law students and lawyers to develop and enforce a set of legal and human rights for refugees and displaced persons. Mobilizing direct legal aid and systemic policy advocacy, IRAP serves the world’s most persecuted individuals and empowers the next generation of human rights leaders."
A profile of the group and its leader is at https://www.nytimes.com/2017/05/07/us/travel-ban-lawyer.html?ref=business
The Campbell v Chadbourne law firm gender discrimination case
The complaint alleges, in part:
Plaintiff Kerrie Campbell, by her attorneys Sanford Heisler, LLP, brings this action in her individual capacity and on behalf of a class of current and former female Partners (“the Class”) of Chadbourne & Parke LLP (“Chadbourne,” “the Firm” or “Defendant”) to redress the Firm’s systematic gender discrimination.
The case is the subject of continuing media attention. The Complaint is here: http hr.cch.com/ELD/CampbellComplaint.pdf
Fate of Purple Line light rail in Maryland suburbs of DC remains iffy
Construction has been delayed on the light rail since August when U.S. District Judge Richard Leon ruled in favor of Purple Line opponents and ordered the project be put on hold so the state could recalculate ridership projections in light of Metro's falling numbers. In December, the Federal Transit Administration told Leon the line would have sufficient ridership despite Metro's woes, which Maryland officials argued should be enough for him to allow the project to proceed. The federal budget deal reached this week included the necessary $125M annual Purple Line payment, contingent on the full $900M funding agreement being signed by September, which would need Leon's go-ahead to occur.
Maryland Attorney General Brian Frosh had asked Leon to rule by April 28, saying the delay was costing taxpayers money, but Leon has yet to make a ruling. Montgomery County Executive Ike Leggett and Prince George's County Executive Rushern Baker held a rally Tuesday calling on Leon to issue a ruling. The rail had been expected to open in 2022, but as of now its fate remains uncertain
Read more at: https://www.bisnow.com/washington-dc/news/neighborhood/carr-jbg-developments-at-future-bethesda-purple-line-terminus-moving-forward-despite-rail-delay-74116?rt=41064?utm_source=CopyShare&utm_medium=Browser
Direct-from-China retail purchases and the threat to Walmart and other US retailers
https://www.nytimes.com/2017/05/03/magazine/the-online-marketplace-thats-a-portal-to-the-future-of-capitalism.html?ref=business
Brookings podcast on the House passage of the AHCA and the future of health care:
https://www.brookings.edu/podcast-episode/on-the-ahca-vote-and-the-future-of-american-health-care/?utm_campaign=Brookings%20Brief&utm_source=hs_email&utm_medium=email&utm_content=51558722
NACA on legislation affected the CFPB:
The Financial CHOICE Act-aims to undermine CFPB's authority in significant ways, including by eliminating the bureau's ability to stop forced arbitration.
NACA wrote a letter in strong opposition to this bill: www.consumeradvocates.org/resources/legislative-issue/...
An advocacy piece in opposition is at www.consumeradvocates.org/advocacy/take-action/...
A shorter write-up featuring 11 issues with the bill is at medium.com/@NACAdvocate/...
The Economist on algorithmic tacit collusion
Free exchange Price-bots can collude against consumers:
Trustbusters might have to fight algorithms with algorithms
MARTHA’S VINEYARD, an island off the coast of Massachusetts, is a favourite summer retreat for well-to-do Americans. A few years ago, visitors noticed that petrol prices were considerably higher than in nearby Cape Cod. Even those with deep pockets hate to be ripped off. A price-fixing suit was brought against four of the island’s petrol stations. The judges found no evidence of a conspiracy to raise prices, but they did note that the market was conducive to “tacit collusion” between retailers. In such circumstances, rival firms tend to come to an implicit understanding that boosts profits at the expense of consumers.
No one went to jail. Whereas explicit collusion over prices is illegal, tacit collusion is not—though trustbusters attempt to forestall it by, for instance, blocking mergers that leave markets at the mercy of a handful of suppliers. But what if the conditions that foster such tacit collusion were to become widespread? A recent book* by Ariel Ezrachi and Maurice Stucke, two experts on competition policy, argues this is all too likely. As more and more purchases are made online, sellers rely increasingly on sophisticated algorithms to set prices. And algorithmic pricing, they argue, is a recipe for tacit collusion of the kind found on Martha’s Vineyard.
Consider the conditions that allow for tacit collusion. First, the market is concentrated and hard for others to enter. The petrol stations on the Vineyard were cut off from the mainland. Second, prices are transparent in a way that renders any attempt to steal business by lowering prices self-defeating. A price cut posted outside one petrol station will soon be matched by the others. And if one station raises prices, it can always cut them again if the others do not follow. Third, the product is a small-ticket and frequent purchase, such as petrol. Markets for such items are especially prone to tacit collusion, because the potential profits from “cheating” on an unspoken deal, before others can respond, are small.
Now imagine what happens when prices are set by computer software. In principle, the launch of, say, a smartphone app that compares prices at petrol stations ought to be a boon to consumers. It saves them the bother of driving around for the best price. But such an app also makes it easy for retailers to monitor and match each others’ prices. Any one retailer would have little incentive to cut prices, since robo-sellers would respond at once to ensure that any advantage is fleeting. The rapid reaction afforded by algorithmic pricing means sellers can co-ordinate price rises more quickly. Price-bots can test the market, going over many rounds of price changes, without any one supplier being at risk of losing customers. Companies might need only seconds, and not days, to settle on a higher price, note Messrs Ezrachi and Stucke.
Their concerns have empirical backing. In a new paper**, the authors outline three case studies where well-intentioned efforts to help consumers compare prices backfired. In one such instance, the profit margins of petrol stations in Chile rose by 10% following the introduction of a regulation that required pump prices to be displayed promptly on a government website. This case underlines how mindful trustbusters must be about unintended consequences. The legal headache for them in such cases is establishing sinister intent. An algorithm set up to mimic the prices of rival price-bots is carrying out a strategy that any firm might reasonably follow if it wants to survive in a fast-moving market. Online sellers’ growing use of self-teaching algorithms powered by artificial intelligence makes it even harder for trustbusters to point the finger. A cabal of AI-enhanced price-bots might plausibly hatch a method of colluding that even their handlers could not understand, let alone be held fully responsible for.
Since legal challenges are tricky, argue Messrs Ezrachi and Stucke, it might be better to direct efforts at finding ways to subvert collusion. Trustbusters could start by testing price-bots in a “collusion incubator” to see how market conditions might be tweaked to make a price-fixing deal less likely or less stable. A “maverick” firm, with different incentives to the incumbents, might have a lasting impact; an algorithm programmed to build market share, for instance, might help break an informal cartel.
Regulators might also explore whether bots that are forced to deal directly with consumers—say, through an app that sends an automatic request to retailers when a petrol tank needs filling—could be enticed to undercut rivals. Or they might test to see if imposing speed limits on responses to changes in rivals’ prices hampers collusion. It may be that batching purchases into bulky orders might thwart a collusive pay-off by making it more profitable for robo-sellers to undercut rivals.
Never knowingly undersold
The way online markets work calls for new tools and unfamiliar tactics. But remedies have to be carefully tested and calibrated—a fix for one blem might give rise to new ones. For instance, the more consumers are pushed to deal directly with price-bots (to thwart the transparency that allows rival sellers to collude), the more the algorithms will learn about the characteristics of individual customers. That opens the door to prices tailored to each customer’s willingness to pay, a profitable strategy for sellers.
Still, there is one old-school policy to lean on: merger control. There is growing evidence in old-economy America that trustbusters have been lax in blocking tie-ups between firms. A market with many and diverse competitors, human or algorithmic, is less likely to reach an effortless, cosy consensus about what is the “right” price for sellers, and the wrong price for consumers.
* “Virtual Competition: the Promise and Perils of the Algorithm-driven Economy”, Harvard University Press (2016)
** “Two Artificial Neural Networks Meet in an Online Hub and Change the Future (of Competition, Market Dynamics and Society)” (April 2017)
This article appeared in the Finance and economics section of the print edition under the headline "Algorithms and antitrust" — http://www.economist.com/news/finance-and-economics/21721648-trustbusters-might-have-fight-algorithms-algorithms-price-bots-can-collude
Top 10 highlights in new AHCA bill
By Modern Healthcare
May 4, 2017
The bill eliminates provisions of the Affordable Care Act. The nonpartisan Congressional Budget Office estimates that the legislation will result in 24 million people losing their health insurance by 2026.
Here are key elements of the bill:
http://www.modernhealthcare.com/article/20170504/NEWS/170509949?utm_source=modernhealthcare&utm_medium=email&utm_content=20170504-NEWS-170509949&utm_campaign=am
FROM PUBLIC CITIZEN: Should the Financial Choice Act (Concerning the CFPB) be Called the Accountability to Lobbyists Act?
by Jeff Sovern
During hearings on the CFPB and the Choice Act, I kept hearing critics of the CFPB saying they want to increase its accountability (I haven't started listening to the markups yet, but it's probably a recurring theme there too).
In fact, the CFPB is accountable. But assume it isn't for the moment. CFPB critics argue that one way it should be made more accountable is by subjecting it to the congressional appropriations process. While that sounds good in theory, the problem is that the voices of lobbyists are much louder at appropriations committee proceedings than the voices of consumers. Corporate lobbyists have the resources to pay attention to the inside baseball of appropriations while ordinary consumers busy making a living and providing for their families don't.
The result of such "accountability" in the past has been that lobbyists urge members of Congress to starve regulators of funds if the regulators don't play ball with the lobbyists--and that in turn leads to regulatory capture. That is exactly what happened with Fannie and Freddie's former regulator, which was a disaster. Critics of the Choice Act have been calling it the Wrong Choice Act, but they could also call it the Accountability to Lobbyists Act, because that's what it would create.
Posted by Jeff Sovern on Wednesday, May 03, 2017 at 02:07 PM in Consumer Financial Protection Bureau, Consumer Legislative Policy
EXPLOITATION AND ABUSE AT AN OHIO CHICKEN PLANT--Case Farms built its business by recruiting immigrant workers from Guatemala, who endure conditions few Americans would put up with.
By Michael Grabell (New Yorker Magazine)
Excerpt:
Case Farms plants are among the most dangerous workplaces in America. In 2015 alone, federal workplace-safety inspectors fined the company nearly two million dollars, and in the past seven years it has been cited for two hundred and forty violations. That’s more than any other company in the poultry industry except Tyson Foods, which has more than thirty times as many employees. David Michaels, the former head of the Occupational Safety and Health Administration (osha), called Case Farms “an outrageously dangerous place to work.” Four years before Osiel lost his leg, Michaels’s inspectors had seen Case Farms employees standing on top of machines to sanitize them and warned the company that someone would get hurt. Just a week before Osiel’s accident, an inspector noted in a report that Case Farms had repeatedly taken advantage of loopholes in the law and given the agency false information. “The company has a twenty-five-year track record of failing to comply with federal workplace-safety standards,” Michaels said.
Case Farms has built its business by recruiting some of the world’s most vulnerable immigrants, who endure harsh and at times illegal conditions that few Americans would put up with. When these workers have fought for higher pay and better conditions, the company has used their immigration status to get rid of vocal workers, avoid paying for injuries, and quash dissent. Thirty years ago, Congress passed an immigration law mandating fines and even jail time for employers who hire unauthorized workers, but trivial penalties and weak enforcement have allowed employers to evade responsibility. Under President Obama, Immigration and Customs Enforcement agreed not to investigate workers during labor disputes. Advocates worry that President Trump, whose Administration has targeted unauthorized immigrants, will scrap those agreements, emboldening employers to simply call ice anytime workers complain.
full article: www.newyorker.com/magazine/2017/05/08/exploitation-and-abuse-at-the-chicken-plant?mbid=nl_TNY%20Template%20-%20With%20Photo%20(164)&CNDID=41308812&spMailingID=10944405&spUserID=MTMzMTg0ODkyNDczS0&spJobID=1160270606&spReportId=MTE2MDI3MDYwNgS2
The United States Department of Justice announces major settlements in two lawsuits with healthcare systems
In one case, Partners Healthcare and Brigham and Women’s Hospital (BWH) will pay $10 million to resolve a suit that involves allegedly fraudulent grant funding. The other case involves an $18 million civil settlement by Indiana University Health Inc. and HealthNet Inc. to resolve alleged violations of the False Claims Act. [Click highlighted words for USDOJ material.]
The BWH case involved a stem cell research lab run by Piero Anversa, M.D., that allegedly obtained grants from the National Institutes of Health via the submission of falsified data. “Individuals and institutions that receive research funding from NIH have an obligation to conduct their research honestly and not to alter results to conform with unproven hypotheses,” said Acting U.S. Attorney William D. Weinreb in the announcement. He commended BWH for self-reporting the fraud, which he termed a waste of scarce government resources.
A BWH spokesperson told the Boston Business Journal the institution “has made significant enhancements to research integrity compliance protocols as a result of this event.” The settlement announcement came out on the same day BWH released news of buyout packages offered to
1,600 employees.
In the Indiana University case, a whistleblower filed a federal lawsuit claiming IU Health and HealthNet had violated federal anti-kickback laws by fraudulently billing Medicaid for services they said were provided by doctors when those services were allegedly provided by nurse midwives instead. Neither HealthNet nor IU Health admitted wrongdoing in the settlement, according to an article in the Indianapolis Business Journal.
Both HealthNet and IU Health claimed they agreed to the settlement in order to avoid protracted litigation. “There is no merit in [the] allegations of inappropriate patient care, referrals or billing practices,” added IU Health in a statement.
Both organizations will pay approximately $5.1 million to the United States and $3.9 million to the State of Indiana, according to the Department of Justice.
From: http://www.fiercehealthcare.com/healthcare/department-justice-announces-settlements-two-major-healthcare-suits?utm_medium=nl&utm_source=internal&mrkid=730008&mkt_tok=eyJpIjoiT0RjelkySTJNR0ZpTldZMiIsInQiOiJwY1VoSXZINlRrb0JCdUJ5ZmxKWGxlbEpGV1U4ZXdGc1NsV1hpWHRuQVJET1YxNVd1MEgrZGRQYWtxejJlM05tZ3M4SGlORk5Bekx1YXpxK2FYeVdBMmFQdzYyOXQ5UHBCWDJ5V3Urc1NlV1NCUkJhTU1HOUxVdm1xV0RQV3NYWCJ9
From Bloomberg: Mylan Tried to ‘Squelch’ EpiPen Rival, Sanofi Says in Lawsuit
-- Sanofi accuses Mylan of seeking to protect EpiPen monopoly
Mylan NV engaged in a campaign to squash a rival to its EpiPen allergy treatment and artificially inflate the price of the drug to maintain a market monopoly, French drugmaker Sanofi said in a lawsuit filed Monday.
Mylan, which once controlled more than 90 percent of the market for epinephrine allergy injectors, is already under scrutiny over the skyrocketing prices of its EpiPen product. The company is facing a U.S. antitrust probe of whether it improperly thwarted competition to the blockbuster product. Sanofi claims in its lawsuit that Mylan’s conduct is harming consumers.
“To preserve the monopoly position of their $1 billion crown jewel branded drug product, Mylan engaged in illegal conduct to squelch this nascent competition, harming both Sanofi and U.S. consumers,” Sanofi’s lawyers said in the complaint filed in federal court in New Jersey.
Mylan executives offered ‘unprecedented’ price rebates to persuade government officials, insurance companies and pharmaceutical benefit managers not to reimburse patients for Sanofi’s competing Auvi-Q allergy treatment. Mylan also allegedly ran misleading ads to convince doctors to avoid prescribing Auvi-Q and required schools to certify they would use EpiPen exclusively in order to access discounts, Sanofi said.
Full article: https://www.bloomberg.com/news/articles/2017-04-24/mylan-tried-to-squelch-epipen-rival-sanofi-says-in-lawsuit
From the DC Circuit decision upholding district court’s decision and order permanently enjoining the merger of Anthem and Cigna:
"Anthem and Cigna (hereinafter, Anthem) challenge the district court’s decision and order permanently enjoining the merger on the principal ground that the court improperly declined to consider the claimed billions of dollars in medical savings. See Appellant Br. 10. Specifically, Anthem maintains 1 the district court improperly rejected a consumer welfare standard — what it calls “the benchmark of modern antitrust law,” id. — and generally abdicated its responsibility to balance likely benefits against any potential harm. According to Anthem, the merger’s efficiencies would benefit customers directly by reducing the costs of customer medical claims through lower provider rates, without harm to the providers.
* * *
Anthem’s appeal focuses principally on factual disputes concerning the claimed medical cost savings, which the government maintains were not verified, not specific to the merger, and not even real efficiencies. For the following reasons, we hold that the district court did not abuse its discretion in enjoining the merger based on Anthem’s failure to show the kind of extraordinary efficiencies necessary to offset the conceded anticompetitive effect of the merger in the fourteen Anthem states: the loss of Cigna, an innovative competitor in a highly concentrated market.
Additionally, we hold that the district court did not abuse its discretion in enjoining the merger based on its separate and independent determination that the merger would have a substantial anticompetitive effect in the Richmond, Virginia large group employer market. Accordingly, we affirm the issuance of the permanent injunction on alternative and independent grounds. [footnotes omitted]
The full opinion is here: https://dlbjbjzgnk95t.cloudfront.net/0909000/909103/document%20(47).pdf
Note The AAI, by David Balto, and others submitted amicus briefs that appear to have been influential.
Elizabeth Rosenthal's new book on the health care industry, An American Sickness
Health care is a trillion-dollar industry in America, but are we getting what we pay for? Dr. Elisabeth Rosenthal, a medical journalist who formerly worked as a medical doctor, warns that the existing system too often focuses on financial incentives over health or science.
"We've trusted a lot of our health care to for-profit businesses and it's their job, frankly, to make profit," Rosenthal says. "You can't expect them to act like Mother Teresas."
Rosenthal's new book, An American Sickness, examines the deeply rooted problems of the existing health-care system and also offers suggestions for a way forward. She notes that under the current system, it's far more lucrative to provide a lifetime of treatments than a cure.
"One expert in the book joked to me ... that if we relied on the current medical market to deal with polio, we would never have a polio vaccine," Rosenthal says. "Instead we would have iron lungs in seven colors with iPhone apps."
For Elisabeth Rosenthal's interview with Terry Gross on NPR: www.npr.org/programs/fresh-air/2017/04/10/523279708/fresh-air-for-april-10-2017
NYT editorial: F.C.C. Invokes Internet Freedom While Trying to Kill It
Excerpt:
Here we go again. The Federal Communications Commission, now led by an anti-regulation ideologue appointed by President Trump, wants to gut the net neutrality rules that keep powerful broadband companies from calling the shots on the internet, at the expense of consumers.
Under the cynical guise of “restoring internet freedom,” the new F.C.C. chairman, Ajit Pai, wants to give big telecom companies carte blanche to treat the content of their subsidiaries and partners more favorably than information from other companies — a practice that AT&T, Comcast and Verizon are already starting to employ. They would also be able to demand fees from companies like Netflix and YouTube to deliver videos and other content to customers.
If the commission, which has a 2-to-1 Republican majority, approves Mr. Pai’s proposal, there will be little stopping the broadband industry from squelching competition, limiting consumer choice and raising prices.
Click here to read the entire editorial
What Jonathan Rubin said in 2015 about net neutrality and the logic of classifying internet providers as Title II common carriers
Blog excerpt: The Vail Compromise, reached in 1910 and named after long-time AT&T President Theodore Vail, allowed the Bell System to retain the many independent telephone companies it had aggressively acquired in exchange for federal price regulation. Then, in a 1912 version of net neutrality known as the Kingsbury Commitment, an AT&T Vice President wrote a letter settling a Department of Justice antitrust case against AT&T. Kingsbury committed the network to connecting all incoming calls, even those initiated by independent telephone companies.
Now, a century later, the medium is broadband and the same kind of compromise is taking shape. Title II regulation of broadband is only one side of a grand bargain, whereby a new, near-national broadband network created by the merger of Comcast and Time Warner Cable is allowed to emerge in exchange for a federal regulatory regime legally authorized to impose common carrier principles of access and fairness.
This basic arrangement has served the nation well in telephony and other monopolistic, regulated industries. There is no reason why it should not work just as well for broadband services.
See: https://rubinpllc.wordpress.com/2015/01/31/net-neutrality-old-wine-in-new-bottles/
Wired magazine explains FCC net neutrality developments:
THE GOP-LED FEDERAL Communications Commission this week released the first details of its long-anticipated plan to roll-back Obama-era net neutrality protections. . . . At issue is the Open Internet Order, a sweeping set of policies passed back in 2015 aimed at ensuring net neutrality, the idea that internet service providers should treat all traffic equally. The rules ban your home broadband provider from degrading your Netflix streams to encourage you to buy cable television instead, and prohibit your mobile carrier fromblocking Skype. It also reclassified internet providers as “Title II” common carriers, much like telephone companies, a designation that gave the FCC legal authority over their business practices.
Full article: https://www.wired.com/2017/04/heres-comes-next-fight-save-net-neutrality/
FCC Chair Pai on reviving "light touch" internet regulation:
Earlier today, I shared with my fellow Commissioners a proposal to reverse the mistake of Title II and return to the light-touch regulatory framework that served our nation so well during the Clinton Administration, the Bush Administration, and the first six years of the Obama Administration.
The document that we will be voting on at the Commission’s May meeting is called a Notice of Proposed Rulemaking. If it is adopted, the FCC will seek public input on this proposal. In other words, this will be the beginning of the discussion, not the end.
Now, some have called on the FCC to reverse Title II immediately, through what is known as a Declaratory Ruling. But I don’t believe that is the right path forward. This decision should be made through an open and transparent process in which every American can share his or her views.
So what are the basic elements of this Notice of Proposed Rulemaking?
First, we are proposing to return the classification of broadband service from a Title II telecommunications service to a Title I information service—that is, light-touch regulation drawn from the Clinton Administration. As I mentioned earlier, this Title I classification was expressly upheld by the Supreme Court in 2005, and it’s more consistent with the facts and the law.
Second, we are proposing to eliminate the so-called Internet conduct standard. This 2015 rule gives the FCC a roving mandate to micromanage the Internet. Immediately following the FCC’s vote adopting the Title II Order, my predecessor was asked what the Internet conduct standard meant. His answer was that “we don’t really know” what it means and that “we don’t know where things go next.” I’ve never heard a better definition of regulatory uncertainty.
Later, of course, we saw where things were headed, and it wasn’t good for consumers. The FCC used the Internet conduct standard to launch a wide-ranging investigation of free-data programs. Under these programs, wireless companies offer their customers the ability to stream music, video, and the like free from any data limits. They are very popular among consumers, particularly lower-income Americans. But no—the prior FCC had met the enemy, and it was consumers getting something for free from their wireless providers. Following the presidential election, we terminated this investigation before the FCC was able to take any formal action. But we shouldn’t leave the Internet conduct standard on the books for a future Commission to make mischief.
And third, we are seeking comment on how we should approach the so-called bright-line rules adopted in 2015.
Excerpt from talk at https://www.fcc.gov/document/chairman-pai-speech-future-internet-regulation
Regulating the Financial System During the Trump Administration
Upcoming event from Bipartisan Policy Center: Regulating the Financial System During the Trump Administration
Thursday, May 25, 2017
10:00 a.m. - 11:30 a.m. ET
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Bipartisan Policy Center
1225 Eye Street NW, Suite 1000
Washington, D.C. 20005
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Can't join us in person? The event will be webcast.
Kenneth E. Bentsen, Jr. | President and CEO, SIFMA
Michael S. Barr | Roy F. and Jean Humphrey Proffitt Professor of Law, University of Michigan Law School; former Assistant Secretary for Financial Institutions, Treasury Department
*Rescheduled due to the March 14 snow storm
More than six years after the passage of the Dodd-Frank Act, the future of the post-crisis financial regulatory structure may be in line for substantial changes. In February, President Trump signed a new executive order laying out seven “core principles” for regulating the financial system and directing the Treasury Department to issue a report on whether current financial regulation meets those principles.
Join us on May 25 for a discussion of such questions as: are we moving in the right direction with financial regulation? Is current policy serving the economy and consumers while ensuring financial stability? What other changes to financial regulatory policy are needed to better achieve these goals? What approach should the United States take with other countries with respect to financial regulation and global agreements?
Jonathan Taplin's Op-Ed: Is It Time to Break Up Google?
In his April 22, 2017 New York Times Op-Ed titled “Is It Time to Break Up Google?” Jonathan Taplin complains that the American economy is dominated by giant corporations. He writes:
In just 10 years, the world’s five largest companies by market capitalization have all changed, save for one: Microsoft. Exxon Mobil, General Electric, Citigroup and Shell Oil are out and Apple, Alphabet (the parent company of Google), Amazon and Facebook have taken their place.
They’re all tech companies, and each dominates its corner of the industry: Google has an 88 percent market share in search advertising, Facebook (and its subsidiaries Instagram, WhatsApp and Messenger) owns 77 percent of mobile social traffic and Amazon has a 74 percent share in the e-book market. In classic economic terms, all three are monopolies.
We have been transported back to the early 20th century, when arguments about “the curse of bigness” were advanced by President Woodrow Wilson’s counselor, Louis Brandeis, before Wilson appointed him to the Supreme Court. Brandeis wanted to eliminate monopolies, because (in the words of his biographer Melvin Urofsky) “in a democratic society the existence of large centers of private power is dangerous to the continuing vitality of a free people.” We need look no further than the conduct of the largest banks in the 2008 financial crisis or the role that Facebook and Google play in the “fake news” business to know that Brandeis was right.
See https://www.nytimes.com/2017/04/22/opinion/sunday/is-it-time-to-break-up-google.html?ref=opinion
An obvious question is how government might address the problem Taplin describes. The answer is: not easily within existing legal frameworks. The most conventional remedy Taplin suggests is merger enforcement. He says:
There are a few obvious regulations to start with. Monopoly is made by acquisition — Google buying AdMob and DoubleClick, Facebook buying Instagram and WhatsApp, Amazon buying, to name just a few, Audible, Twitch, Zappos and Alexa. At a minimum, these companies should not be allowed to acquire other major firms, like Spotify or Snapchat.
The other remedies Taplin mentions are less conventional:
The second alternative is to regulate a company like Google as a public utility, requiring it to license out patents, for a nominal fee, for its search algorithms, advertising exchanges and other key innovations.
The third alternative is to remove the “safe harbor” clause in the 1998 Digital Millennium Copyright Act, which allows companies like Facebook and Google’s YouTube to free ride on the content produced by others.
An alternative Taplin does not mention is regulatory action by the Federal Trade Commission using Section 5 of the FTC Act. Possible limitations of FTC action were discussed by authors Rubin and Lande in a 2012 article called “How the FTC Could Beat Google,” available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2163053 In their opening paragraph Rubin and Lande explain:
The U.S. Federal Trade Commission (“FTC”) is rumored to be deciding whether to bring a “pure Section 5” case against Google as a result of complaints that the company unfairly favors its own offerings over those of its rivals in its search results. If successful, the case could do more than improve competition in the crucial multi-billion dollar online marketplace. It also could revitalize Section 5 of the FTC Act and solidify the agency’s authority to prevent the “unfair methods of competition” or “unfair or deceptive acts or practices” that do not violate the other Antitrust or Consumer Protection statutes. But the case will fail miserably at the hands of a reviewing court and the agency will be confined to relatively non-controversial enforcement violations if the FTC fails to impose upon itself a tightly bounded and constrained legal framework that contains clear limiting principles.
There is a difference between Taplin’s op-ed approach and Lande and Rubin’s scholarly approach that is not trivial. Lande and Rubin focus in an expert manner on how courts are likely to respond to a broad assertion of regulatory authority over Google and, by extension, other large and powerful companies. Taplin does discuss regulatory alternatives in a lawyer-like way, but his comments are tailored for a broad audience of newspaper readers, and he suggests a political action context similar to the one that faced Teddy Roosevelt in the early days of “trust-busting.”
Taplin is an advocate for reform and improvement of competition and trade regulation law, coming at a time when competition and trade regulation enforcement in the United States faces existential threats.
Posted by Don Resnikoff
Video of Jonathan Taplin speaking on April 20 on Have Internet Giants Taken Over Creative Culture?
The New America Foundation web-site introduction explains:
The beginning of the 21st century brought with it the emergence of three fledgling businesses that would soon redefine America’s notion of a decentralized internet. Over the last fifteen years, Facebook, Google, and Amazon have created powerful monopolies that now control the economic success of the journalism, music, video, and book industries. These monopolies have allowed Facebook, Google, and Amazon to experience an unprecedented amount of revenue growth, while their content creators have seen an equally dramatic decrease in earnings. In Move Fast and Break Things: How Facebook, Google, and Amazon Cornered Culture and Undermined Democracy, Jonathan Taplin uses his own extensive experience as a music and film producer to explore the real consequences average consumers stand to face if this monopolistic activity goes unchecked and to recommend potential solutions.
Jonathan Taplin is Director Emeritus of the Annenberg Innovation Lab at the University of Southern California. He began his entertainment career in 1969 as Tour Manager for Bob Dylan and The Band. In 1973 he produced Martin Scorsese’s first feature film, Mean Streets, which was selected for the Cannes Film Festival. An expert in digital media entertainment, Taplin is a member of the Academy Of Motion Picture Arts and Sciences and sits on the California Broadband Task Force and Los Angeles Mayor Eric Garcetti’s Council on Technology and Innovation.
*****
The video is available on YouTube -- click the title above -- or
https://www.newamerica.org/open-markets/events/who-controls-creative-culture/
Note: because of a technological glitch the talk does not begin until about minute 14 of the video.
Editorial Comment: Competition policy in the age of Trump
We have previously commented on the tendency of the Trump administration to ad hoc participation in competition policy.
We expressed concern when in January the potential merger partners Werner Baumann, Bayer CEO, and Hugh Grant, Monsanto CEO, had what Monsanto said was “a productive meeting with President-Elect Trump and his team to share their views on the future of the agriculture industry and its need for innovation."
Later, after Mr. Trump became President, we expressed concern about New York Times reports of meetings with the White House economics team by Sprint’s parent company Softbank. The meetings coincided with Sprint and Softbank consideration of a “mega-merger,” possibly with T-Mobile, Comcast, or others. The New York Times reported that Tokyo-based SoftBank met with members of the White House economics team, talking up the need for consolidation. The Times, citing sources briefed on the matter, reported that the presentations claimed that a lack of advanced digital investments has put the US economy at risk. The companies argued that risk could be mitigated if telecommunications and wireless companies merged.
Recent comment by Adam Gopnik in the New Yorker Magazine discusses the bigger political concerns raised by the prospect of continued ad hoc policy making. He wrote:
A healthy polity lifts public life into a world of reasonable administration and procedural reliability . . . . In the April 1st issue of The Economist . . . one finds [that], “In 2016, Mr. Trump said Mr. Bezos was using the Post to attack him because Amazon has a ‘huge antitrust problem.’ If Mr. Trump believes that—or even if he doesn’t—his administration might favour action.” Stop and think about those sentences for a moment . . .: there is a presumption that it is perfectly possible that Donald Trump will act against a private company in order to take revenge against it for opposing him in print. . . . It is the kind of thing that is perfectly normal in an autocratic state, as in Russia, where one cannot mock the boss without fear of the police. Suddenly, that abuse is taken for granted here.
No law is broken when a President or close advisors are personally engaged in vetting the terms and conditions of a merger or other competition policy issue, but it is a dramatic departure from past practice, and a worrying one.
When Republican Ronald Reagan became President in 1982 he wanted change in a conservative direction for competition policy, but his cautious approach was a sharp contrast to what may be a more ad hoc approach of the Trump Administration. Reagan appointed a widely respected Stanford University scholar, William Baxter, to head the USDOJ’s Antitrust Division. Baxter was a “Chicago School” enforcement conservative, but his idea of change was reflected in his efforts to update the written Merger Guidelines followed by federal enforcement agencies -- hardly an ad hoc approach.
When Baxter and the Reagan administration famously withdrew the nearly completed USDOJ monopolization litigation against IBM, it had been clear for some time that Baxter opposed the Government prosecution of IBM (he traveled to Europe to lobby the EU authorities against pursuing a case), but he diligently presided over a form of moot court for the U.S. Department of Justice trial staff, with staffers presenting their best evidence and arguments for pursuing the case. At the end of the review process Baxter issued a quasi-judicial written opinion explaining why he thought the case was not worth pursuing. For example, he found predatory pricing allegations to be strong, but so dated as not to be worth pursuing.
It could be argued that there is little consequential difference between the formalistic respect for precedent and institutional procedures of the Reagan/Baxter approach to competition policy change and the Trump administrations' recent tendencies toward a more personal and ad hoc approach. I think the difference is big, and worrying.
Law as we know it today in the United States began with the idea of regularized and predictable rules and procedures. That was the idea of the English “law merchant,” a system where merchant disputes on issues like liability for deliveries of spoiled fruit could be addressed using regularized rules and procedures rather than ad hoc resolutions. The idea of regularized rules and procedures is a crucial part of modern U.S. law, including competition policy.
One problem among many that derives from ad hoc Presidential participation in competition policy is crony capitalism, where competition policy appears to be what powerful business oligarchs can work out in informal conversations on particular cases with political leaders whose interests are aligned with business oligarchs. The William Baxter idea of carefully crafted and transparent Merger Guidelines and reasoned bases for Government decisions on particular cases is a better approach, even if the Guidelines follow narrow “Chicago School” precepts, and cases are dismissed that many pro-plaintiff advocates believe should not be.
Of course, we can hope that President Trump will encourage the USDOJ Antitrust Division and the FTC to staff follow Agency Merger Guidelines and otherwise respect controlling legal precedent, and that the President and close advisors will not weigh in on particular mergers or other competition issues on an ad hoc basis. It is also reasonable to hope that that Antitrust Division and FTC decisions on cases will be made on a reasoned and articulated basis that respects legal precedent. That would be far better than ad hoc and personal Presidential involvement in the daily work of the agencies of the kind suggested by meetings by President Trump and advisors with executives with competition policy axes to grind.
By Don Allen Resnikoff
New Mexico Becomes 48th State with Data Breach Notification Law; Tennessee Restores Exemption for Encrypted Data
By Caleb Skeath on April 14, 2017 POSTED IN DATA BREACHES
Last week, New Mexico and Tennessee both passed legislation updating each state’s requirements for notifying residents following a data breach. New Mexico’s new law, H.B. 15, makes it the 48th U.S. state to enact a state data breach notification law, leaving Alabama and South Dakota as the only states that have not enacted similar laws. Tennessee’s bill, S.B. 547, amended its Identity Theft Deterrence Act of 1999 to exempt certain encrypted data from triggering notification requirements.
New Mexico’s breach notification law is similar to that of other states, with a few notable differences.
Entire article: https://www.insideprivacy.com/data-security/data-breaches/new-mexico-becomes-48th-state-with-data-breach-notification-law-tennessee-restores-exemption-for-encrypted-data/
Anals of local bid-rigging: Well-known Oakland CA contractors conspired to cheat government
By MALAIKA FRALEY | mfraley@bayareanewsgroup.com |
PUBLISHED: April 7, 2017 at 3:13 pm | UPDATED: April 10, 2017 at 5:44 amSAN FRANCISCO — The founders of a well-known Oakland construction company, the son of an Oakland councilman, a former state Veterans Affairs official and other Bay Area contractors have been indicted by the federal government in construction bid-rigging schemes.
Federal prosecutors said Friday that two founders of Turner Group Construction — CFO Len Turner and COO Lance Turner — and Oakland City Councilman Larry Reid’s son Taj Reid conspired to defraud the Department of Energy on a Lawrence Berkeley Lab renovation project in 2013. The Turner Group has worked on a number of high-profile construction projects in Oakland, including restoration of the historic Fox Theater, the Alameda County Family Justice Center, and a number of public school and BART projects.
Lance Turner, 57, of Oakland, and Len Turner, 56, of San Leandro, and Reid, 46, of Oakland, did not return calls for comment on Friday.
Prosecutors said the indictments arose out of the 2012-2014 public corruption investigation of then-state Sen. Leland Yee, San Francisco political consultant Keith Jackson, and San Francisco mob boss Raymond “Shrimp Boy” Chow, and involved the same “FBI source” who went undercover as a developer to obtain the most recent indictments. Jackson introduced the “developer” to three of the men indicted Thursday, according to prosecutors.
The U.S. attorney’s office also obtained an indictment against Pleasant Hill resident Eric Worthen, a former official with the California Department of Veterans Affairs, who is accused of working with Reid to take $12,000 worth of bribes from the undercover “developer.” It’s unclear if Reid was working under anyone’s employ during the alleged schemes.
Prosecutors say Worthen, 45, was working for the CalVet homes for the veterans division when he and Reid offered the undercover FBI employee the “inside advantage” on the construction of two CalVet projects, a veterans’ home in Ventura and a home remodel in West Los Angeles, by circumventing the normal bidding process.
“For both construction projects, the ‘developer’ to whom Worthen and Reid were providing an inside track on the CalVet contracts was, in actuality, a source working for the FBI. The source was posing as a developer willing to pay bribes in order to obtain contracts with public agencies,” the U.S. attorney’s office said in a news release.
Reid and the Turners are accused of offering to submit a high bid to a Lawrence Berkeley Lab modernization project in 2013 so that the “developer” could win the project.
Reid is charged with two counts of bribery and two counts of conspiracy; Worthen is charged with three bribery counts; and the Turners are each charged with one conspiracy count.
The Turner Group has longtime political ties in Oakland. Council members Desley Brooks and Larry Reid were accused by the city auditor in 2013 of illegally directing city staffers to award a $2 million demolition project at the Oakland Army Base to the company. Another developer won the project after the city administrator ordered a competitive bidding process.
Also indicted on Thursday were four other Bay Area contractors accused of conspiring to rig the bidding process for the Lawrence Berkeley Lab renovation in 2013. Derf Butler, 53, of Vallejo, president of Butler Enterprise Group, LLC in San Francisco, is charged with conspiracy and making a false statement. Anton Kalafati, 33, of San Francisco, president of San Francisco-based B Side, Inc., is charged with conspiracy and two counts of making false statements. Clifton Burch, 49, of San Lorenzo, president of Empire Engineering and Construction Inc, in Oakland and San Francisco, and Peter McKean, 48, of San Mateo, vice president of Townsend Management Inc. in San Francisco, are each charged with one conspiracy count.
All of the men are scheduled to be arraigned in federal court on April 17 and are not in custody. A conviction for conspiracy to defraud the federal government is punishable by up to five years in prison and a $250,000 fine. Receiving a bribe by an agent of an organization receiving federal funds is punishable by up to 10 years in prison and a $250,000 fine.
Staff writer David DeBolt contributed to this report.
http://www.eastbaytimes.com/2017/04/07/feds-bay-area-developers-including-well-known-oakland-contractors-conspired-to-cheat-government/
Thirty-three states, the District of Columbia and Puerto Rico addressed financial exploitation of the elderly and vulnerable adults in their 2016 legislative session.
Alabama enacted the Protection of Vulnerable Adults from Financial Exploitation Act, requiring qualified individuals who reasonably believe that financial exploitation of a vulnerable adult may have occurred, been attempted, or is being attempted, to notify promptly the Department of Human Resources and the Alabama Securities Commission. Arizona now provides an exception to the confidentiality of the mediation process when disclosure is made by a court-appointed mediator who reasonably believes that a minor or vulnerable adult is or has been a victim of abuse, child abuse, neglect, exploitation, physical injury or a reportable offense. California enacted legislation requiring the state Department of Justice to develop and distribute an informational notice that warns the public about elder and dependent adult fraud, provides information regarding how and where to file complaints and requires the notice to be made available on the website of the attorney general. Connecticut broadens the circumstances when the Department of Social Services commissioner must disclose the results of an investigation into suspected elderly abuse, neglect, exploitation, or abandonment, but limits the type of information that may be disclosed.
Delaware adopted a reolution recognizing June 15, 2016, as Delaware Elder Abuse Awareness Day, encouraging all of Delaware’s citizens to learn about how to protect and nurture elderly citizens. Idaho amended existing law to revise the definition of neglect to include exploitation. Illinois enacted legislation providing that a prosecution for financial exploitation of an elderly person or a person with a disability may be commenced within seven years of the last act committed in furtherance of the crime.
New Hampshire changed the term "incapacitated" adult to "vulnerable" adult in the laws governing protective services to such adults. New Jersey established the New Jersey Task Force on Abuse of Persons who are Elderly or Disabled. Tennessee adopted a resolution directing the Tennessee Commission on Aging and Disability to conduct a study on the financial exploitation of vulnerable adults. Vermont enacted legislation directing financial institutions in Vermont to make a vulnerable adult’s financial information available to an adult protective services investigator upon receipt of a court order or the investigator’s written request.
The NCSL website allows you to conduct a full text search or use the dropdown menu option to select a state and search relevant laws: http://www.ncsl.org/research/financial-services-and-commerce/financial-crimes-against-the-elderly-2016-legislation.aspx
Neel Kashkari responds to Jamie Dimon on "too big to fail"
4/6/17 at 7:07 pm
quote:
On April 4, JPMorgan Chase Chairman and CEO Jamie Dimon published his annual shareholder letter, much of which focused on public policy and financial regulation. At 46 pages, Mr. Dimon’s letter includes a lot of interesting commentary. In this essay, I am going to respond to two of his main points because I strongly disagree with them. First, Mr. Dimon asserts that “essentially, Too Big to Fail has been solved?—?taxpayers will not pay if a bank fails.” Second, Mr. Dimon asserts that “it is clear that the banks have too much capital.” Both of these assertions are demonstrably false.
To see the entire essay, go to http://www.tigerdroppings.com/rant/money/neel-kashkari-responds-to-jamie-dimons-shareholder-letter/69533054/
Trump support for separating banks' consumer-lending businesses from their investment banks?
In a private meeting with lawmakers, White House economic adviser Gary Cohn said he supports a policy that could radically reshape Wall Street’s biggest firms by separating their consumer-lending businesses from their investment banks, said people with direct knowledge of the matter.
Cohn, the ex-Goldman Sachs Group Inc. executive who is now advising President Donald Trump, said he generally favors banking going back to how it was when firms like Goldman focused on trading and underwriting securities, and companies such as Citigroup Inc. primarily issued loans, according to the people, who heard his comments.
The remarks surprised some senators and congressional aides who attended the Wednesday meeting, as they didn’t expect a former top Wall Street executive to speak favorably of proposals that would force banks to dramatically rethink how they do business.
Yet Cohn’s comments echo what Trump and Republican lawmakers have previously said about wanting to bring back some version of the Glass-Steagall Act, the Depression-era law that kept bricks-and-mortar lending separate from investment banking for more than six decades.
https://www.bloomberg.com/news/articles/2017-04-06/cohn-said-to-back-wall-street-split-of-lending-investment-banks
Many brokers exit HealthCare.gov as high-end plan commissions go unpaid
More insurance companies around the country are refusing to pay brokers commissions on higher-tier exchange plans or special enrollment sales as the companies face financial losses on the federal marketplace, according to Ronnell Nolan, CEO of Health Agents for America, which represents independent insurance brokers.
“It's the Wild West out here, and companies are doing what they can to survive,” Nolan said. “They're not paying commissions on platinum plans, and they are not paying them for special enrollment plans which cover some of the sickest patients.”
That policy has led to an exodus of brokers from the federal marketplace, which could undermine enrollment efforts since brokers historically sign up at least 50% of exchange enrollees, according to Kevin Counihan, the former CEO of HealthCare.gov under President Barack Obama.
Brokers help consumers navigate coverage options.
http://www.modernhealthcare.com/article/20170405/NEWS/170409972?utm_source=modernhealthcare&utm_medium=email&utm_content=20170405-NEWS-170409972&utm_campaign=am
Suppliers raise market abuse complaints with the European Commission over bundling of Defender security software with Windows
Security technology suppliers have complained to European Union officials over Microsoft’s alleged abuse of its dominant market position in Europe, according to official EU sources.
A high-level EU official from the European Commission competition directorate said at least three security software companies had “met several times” with the EC to raise alleged market abuses by Microsoft.
The complaints centre on Microsoft’s free security software add-on, Defender, included by default in the Windows 10 operating system. Security companies claim the tactic is shrinking the market for competing security software.
Full Content: EU Observer
New days for the EPA: Pruitt supports use of pesticide chlorpyrifos despite advice from agency experts
Advocacy organizations seeking to ban a pesticide linked to developmental disorders in children asked the courts Wednesday to intervene and order the Environmental Protection Agency to ban the pesticide from food within 30 days and from all uses within 60 days if it cannot prove it is safe.
The head of the E.P.A., Scott Pruitt, last week denied the petition to outlaw chlorpyrifos, a pesticide often used on apples, oranges and other crops, even though the agency’s own safety experts concluded that the chemical should be outlawed. Mr. Pruitt did not present any new evidence that it is safe, and said the agency could not be forced to complete a review of chlorpyrifos until 2022, when there is a deadline for re-evaluating it.
The E.P.A. had been under a court order to respond by the end of March to a 10-year-old petition to ban the chemical, originally filed in 2007 by the Natural Resources Defense Council and Pesticide Action Network.
From: https://www.nytimes.com/2017/04/05/well/advocacy-groups-ask-for-ban-on-common-pesticide.html?ref=business&_r=0
Bloomberg: Here’s How They Play Monopoly in America, and Who Wins
Market concentration in the U.S. has reached a three-decade high,
while the government has opened fewer antitrust cases. Competition in the marketplace is a good thing. Lower prices. More innovation. Better goods and services.
Now we may have too little of that good thing, as big corporations gobble up the economic pie. Market concentration has reached a three-decade high and, since the late 1990s, has increased in more than 75 percent of U.S. industries, according to a working paper given last week at the University of Chicago's Booth School of Business. Market concentration is how much of a market, such as the wireless or automobile market, the leaders in that industry control, by revenue.
At the same time, the federal government has brought significantly fewer antitrust cases, according to the paper, titled “Is There a Concentration Problem in America?” In 2014, the Department of Justice didn't open any cases against monopolies at all, and opened just three in 2015. That compares to 22 cases in 1994.
Gustavo Grullon, a finance professor at Rice University's business school and one of the paper's three authors, acknowledged they can’t infer a causal relationship between the increased market concentration and the decline in the number of antitrust cases, but said he thinks the correlation is strong enough to require “serious attention from regulators.” The other two authors are also business school professors, from Cornell University, and York University, in Canada. Their research was cited by a recent Wall Street Journal investing column.
In the most recent draft of the working paper, the researchers, who had already found increasing market concentration, set out to determine what's driving the trend. The data they discovered led them to reject several of their hypotheses, including that the uptick was a result of consolidation of companies in unprofitable or distressed industries, such as publishing and textiles. The data did suggest, aside from antitrust enforcement, that patents are serving as “technological barriers to entry,” keeping out potential competitors.
“It is an important aspect of the economy, and it’s the responsibility of agencies to figure out if this is an issue or not,” Grullon said.
Full article: https://www.bloomberg.com/news/articles/2017-04-05/here-s-how-they-play-monopoly-in-america-and-who-wins
Is the liquidation of insurer Penn Treaty the result of a failure of regulation?
The NY Times reports that a large long term care insurer, Penn Treaty of Allentown, Pa., has been ordered to liquidate and wind down its affairs. Its long-term-care insurance was purchased by families to avoid crushing nursing home costs.
“Liquidation is rare, but it does happen in bunches sometimes,” said Robert Hunter, director of insurance for the Consumer Federation of America. The organization has been warning about problems with long-term-care insurance since the early 1990s. See the NY Times story here: read the Times story
In 2012 the judge handling the case declined to allow liquidation, complaining that the Pennsyvania insurance commissioner caused the problem by denying a justifiable rate increase. The judge wrote, in part, that:
The Insurance Commissioner, wearing his hat as a regulator of the Pennsylvania insurance industry, refused to approve the Companies' actuarially justified rate increase filings in the amount requested, both before and after rehabilitation. The Commissioner has even discouraged other state regulators from approving rate increases. Now the Commissioner seeks to liquidate the Companies because their premium rates are inadequate.
The full 164 page 2012 page opinion is at http://www.penntreatyamerican.com/downloads/20120503-ruling.pdf the entire record in the case can be found at http://www.penntreatyamerican.com/investornews.asp
US Supreme Court: Does a retailer have a Free Speech right to separately post a credit card surcharge?
The US Supreme Court has decided a case, Expressions Hair Design v. Schneiderman, that relates to the long-running dispute between Visa and MasterCard and merchants who want to avoid fees charged by credit card companies by stating surcharge fees separately and thereby steering customers toward cash. That undermines the credit card companies desire to make the fees invisible to consumers.
The decision was a victory for plaintiff businesses that wish to tell their customers that they impose a surcharge for using credit cards. But the Supreme Court decided only that the law regulated their speech rather than conduct, and it left it to an appeals court to determine whether the law violated the First Amendment.
See EXPRESSIONS HAIR DESIGN v. SCHNEIDERMAN Opinion of the Court at https://www.supremecourt.gov/opinions/16pdf/15-1391_g31i.pdf
From the opinion: "Section 518 is different. The law tells merchants nothing about the amount they are allowed to collect from a cash or credit card payer. Sellers are free to charge $10 for cash and $9.70, $10, $10.30, or any other amount for credit. What the law does regulate is how sellers may communicate their prices. A merchant who wants to charge $10 for cash and $10.30 for credit may not convey that price any way he pleases. He is not free to say “$10, with a 3% credit card surcharge” or “$10, plus $0.30 for credit” because both of those displays identify a single sticker price—$10—that is less than the amount credit card users will be charged. Instead, if the merchant wishes to post a single sticker price, he must display $10.30 as his sticker price. Accordingly, while we agree with the Court of Appeals that §518 regulates a relationship between a sticker price and the price charged to credit card users, we cannot accept its conclusion that §518 is nothing more than a mine-run price regulation. In regulating the communication of prices rather than prices themselves, §518 regulates speech."
The majority opinion is unusual in its focus on Free Speech. However, it relates to a broader policy issue of whether and to what extent suppliers should be allowed to dictate pricing policies of retailers concerning the suppliers' products.
From Public Citizen:
The Hill Reports Bill to Weaken CFPB Could be Marked Up in April While Politico Makes it Seem As it Might Not Move
Here is The Hill's Report. Excerpt:
Republicans on the House Financial Services Committee are eyeing April markups for Dodd-Frank legislation, meaning Democrats have just about a month to settle on a strategy to defend the CFPB.
Some Democrats think working with Republicans on some changes to the CFPB could be sound policy.
Several House Financial Services Committee Democrats say backing a coalition, for example, could protect the agency from withering under a Trump appointee.
“I’ve been warning my party for a long time that at some point you’re going to have a Republican president,” said Rep. Brad Sherman (D-Calif.). “I prefer a bipartisan commission.”
And here is Politico's:
What did the health care meltdown mean for Republicans’ hopes of dismantling President Barack Obama’s other legislative legacy, Dodd-Frank?
It certainly didn't help. While tax reform appears to be moving to the frontburner, sources on the Hill and downtown saw no similar opening for “doing a big number” on Democrats’ landmark Wall Street legislation, as President Donald Trump once promised.
If anything, sources said Friday's episode underscored the risk that Republicans haven’t fully identified their internal political fault lines, including when it comes to undoing Dodd-Frank, and that Democrats will be emboldened to fight back.
So don't expect House Financial Services Chairman Jeb Hensarling's Dodd-Frank alternative, known as the Financial CHOICE Act, to hit the House floor in the near future, unless Trump or his team — which includes a small army of Goldman Sachs alums — take a strong interest.
Treasury Secretary Steven Mnuchin is conducting a wide-ranging review of financial regulations for a report that’s not due until June.
“If Dodd-Frank reform is a big priority for the White House and Steven Mnuchin, you could see it potentially move up the sequence of events. But, short of that, I don’t really know if it changes that much,” an aide to a senior House Republican said. “We’d have to get a lot of people up to speed [on the Financial CHOICE Act] who aren't really up to speed on it.”
Congress completes its overturning of the nation’s strongest internet privacy protections for individuals
The action is a victory for telecommunications companies, which can track and sell a customer’s online information with greater ease.
In a 215-to-205 vote largely along party lines, House Republicans moved to dismantle rules created by the Federal Communications Commission in October. Those rules, which had been slated to go into effect later this year, had required broadband providers to receive permission before collecting data on a user’s online activities.
The action, which follows a similar vote in the Senate last week, will next be brought to President Trump, who is expected to sign the bill into law. A swift repeal may be a prelude to further deregulation of the telecommunications industry.
See https://www.nytimes.com/2017/03/28/technology/congress-votes-to-overturn-obama-era-online-privacy-rules.html?ref=business
From Public Citizen: Legal clash with FTC on marketing of used cars
Posted: 27 Mar 2017 06:10 AM PDT
FairWarning reports:
Can a used car be marketed as “safe” or “certified” even if it has defective air bags, a faulty ignition switch or other potentially lethal problems?
Yes, so long as the used car dealer discloses that the vehicle may be subject to a pending safety recall.
That stance, taken by the Federal Trade Commission, is at the heart of a recent legal settlement with General Motors and two used car dealers over deceptive advertising practices. But it is now being put to the test in a federal court in Washington, DC, by auto safety activists.
The safety groups contended in legal papers filed Friday that the settlement places unaware car buyers, their passengers and others at “the risk of injury or death caused by the defective vehicles.” In essence, the concern is that buyers will have a false sense of security if a car is described as safe and won’t take care of the defect that prompted the recall.
The full article is here.
One year after the Panama Papers: Progress on anonymous corporate ownership?
March 30, 2017, 2:00 — 4:00 p.m. EST
The Brookings Institution, Falk Auditorium, 1775 Massachusetts Avenue, N.W
Washington, DC 20036
One year after the Panama Papers exposed the offshore banking activities of the clients of the Panamanian firm Mossack Fonseca, it is still legal and permissible for corporations in America to be anonymously owned. This practice continues to draw criticism in the face of mounting requirements for financial institutions to ‘know their customers,’ and among foreign policy experts who fear a growing kleptocracy. What is the proper policy response to an area where financial regulation, national security, foreign policy, and global business converge?
On March 30, the Center on Regulation and Markets at Brookings will host Senator Sheldon Whitehouse (D-R.I.) as a sponsor of recently introduced legislation aimed at ending the use of anonymously owned corporations. A panel of experts and regulators will follow his keynote remarks. Participants will take questions from the audience.
This event will be webcast live. Join the conversation on Twitter at #PostPanama.
Opening remarks
Aaron Klein, Fellow and Policy Director, Center on Regulation and Markets, The Brookings Institution
Panel
Moderator: Kevin Hall, Chief Economics Correspondent and Senior Investigator, McClatchy Newspapers
Charles Davidson, Executive Director, Kleptocracy Initiative, The Hudson Institute
Norm Eisen, Fellow, Governance Studies, The Brookings Institution
Matthew L. Ekberg, Senior Policy Advisor, Institute of International Finance
Brian P. O'Shea, Senior Director, Center for Capital Markets Competitiveness
Keynote
The Hon. Sheldon Whitehouse (D-R.I.), Ranking Member, Judiciary Subcommittee on Crime and Terrorism and EPW Subcommittee on Oversight, U.S. Senate
Click here to Register to attend this event » Click here to Register for the live webcast »
From Joe Libertelli at UDC
Join 158 US law deans to urge the protection of Legal Services!
The deans' LETTER was signed by our alums, the Hon. Penny Willrich, ‘82, dean of Arizona Summit Law School, UDC-DCSL Dean Shelley Broderick, MAT '82 and Andrea Lyons, ’76, dean of Valparaiso University School of Law, and 155 other US law school deans. The letter is addressed to two US House Committee Chairs and two US Senate Committee Chairs. It urges continued bi-partisan support of the Legal Services Corporation, which funds local, vitally important, legal services offices nationwide.
The UDC School of Law urges all friends, alumni and others who understand the importance of continued access to justice for low-income people to take action by contacting their own members of Congress!
Write a short letter: take Action HERE
Thank you!!
Breaking news:
EU Antitrust Regulators Clear $130 Billion Dow, DuPont Merger
By REUTERS MARCH 27, 2017, 6:48 A.M. E.D.T.
Chemical and DuPont gained conditional EU antitrust approval on Monday, March 27, 2017, for their $130 billion (103.24 billion pounds) merger by agreeing to significant asset sales, one of a trio of mega mergers that will redraw the agrochemicals industry.
The European Commission had been concerned that the merger of two of the biggest and oldest U.S. chemical producers would have few incentives to produce new herbicides and pesticides in the future.
See https://www.nytimes.com/reuters/2017/03/27/business/27reuters-du-pont-m-a-dow-eu.html?src=busln
LIVE STREAMED CONFERENCE: IS THERE A CONCENTRATION PROBLEM IN AMERICA?
MARCH 27-29, 2017
About the Conference:
The Stigler Center will host a three-day conference in Chicago in March 2017, bringing together academics, regulators, and public intellectuals to discuss one of the most interesting questions of our time: is there a concentration problem in the United States? The conference will cast a wide net, in an attempt to provide multidisciplinary perspective on the issues. It will particularly emphasize the following seven themes:
Watch Live: The conference will be live-streamed. For details see https://research.chicagobooth.edu/stigler/events/single-events/march-27-2017
House overwhelmingly passes repeal of the McCarran-Ferguson antitrust exemption for insurance companies: Competitive Health Insurance Reform Act
By Jennifer Garvin (for the American Dental Association)
Washington — The House of Representatives on March 22 voted 416-7 in favor of repealing the McCarran-Ferguson antitrust exemption for health insurance companies by passing H.R. 372, the Competitive Health Insurance Reform Act of 2017.
The ADA has advocated for repeal of the 1945 McCarran-Ferguson Act antitrust exemption for the insurance industry for more than 20 years. The Association strongly supported H.R. 372, which was introduced Jan. 10 by Rep. Paul Gosar, R-Ariz., and would authorize the Federal Trade Commission and the Justice Department to "enforce the federal antitrust laws against health insurance companies engaged in anticompetitive conduct."
"Today, a bipartisan majority in the House joined me in taking a historic step to begin rebuilding America's health care market," said Rep. Gosar, a dentist and ADA member. "As a dentist for over 25 years, I know first-hand that restoring the application of federal antitrust laws to the business of health insurance is the key to unlocking greater competition in the marketplace. Making health insurance companies compete in a free-market will result in huge benefits for hospitals, doctors and most importantly, patients."
"Free market competition leads to lower costs, greater innovation and variety in the insurance marketplace," said Dr. Gary Roberts, ADA president. "I have long appreciated Paul Gosar for his steadfast commitment to patient advocacy, and I thank him for his work on reforming the McCarran-Ferguson Act. Further, I want to thank every one of the 416 members of Congress who voted for H.R. 372 today."
This victory in the House caps a flurry of advocacy efforts by the ADA in 2017. On Feb. 16, the Association submitted written testimony to a House subcommittee hearing on Regulatory Reform, Commercial and Antitrust Law, asking for support of the bill. That was followed by the Organized Dentistry Coalition's Feb. 27 letter to the House Judiciary Committee, which unanimously voted in favor of H.R. 372.
"History has always shown us that when we put the patient first and demand that health insurance companies compete for their business, premiums go down while quality improves," Rep. Gosar said. "I'm proud to have led this effort in the House and call on Senate leaders to take up this bipartisan legislation in a timely matter."
To keep track on all the Association's insurance reform activities, visit ADA.org/McF.
Big Bank Defendants Avoid Currency Buyers' Forex-Rigging Suit
Foreign currency buyers alleging they were charged falsely inflated prices as a result of a massive, ongoing price-fixing conspiracy by the world’s largest banks saw their latest complaint tossed out Friday by a New York federal judge, who said they failed to show how they suffered any antitrust injury.
From opinion at https://dlbjbjzgnk95t.cloudfront.net/0906000/906115/https-ecf-nysd-uscourts-gov-doc1-127119961339.pdf:
"Plaintiffs allege that they paid inflated foreign currency exchange rates caused by Defendants’ alleged conspiracy to fix prices in the foreign exchange (“FX”) or foreign currency market. Defendants move to dismiss the Second Amended Complaint (the “Complaint”) pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). For the reasons stated below, Defendants’ motion to dismiss is granted. "
Google and the EU: Vestager warns against using algorithms for price collusion
By CPI
Europe’s antitrust chief warned companies against using algorithms to block rivals or form cartels, saying she may slap heftier fines on them if they use such software to commit wrongdoing.
European Competition Commissioner Margrethe Vestager, who is poised to fine US technology giant Google in the coming months for using its algorithm to unfairly demote rival shopping services in internet search results, said she was vigilant to such illegal practices.
“I don’t think competition enforcers need to be suspicious of everyone who uses an automated system for pricing. But we do need to be alert,” Vestager said at a conference organised by the German cartel office Bundeskartellamt.
She pointed to the challenge of tackling sophisticated cartels which use software to fix prices and allocate markets among themselves to the detriment of customers and the economy, saying sanctions should reflect and deter this new tool used by companies.
Full Content: Wall Street Journal
Maryland legislator proposes law to regulate "rent to own" homesellers; Congress investigates
In Maryland, a state legislator introduced a measure to better regulate rent-to-own landlords to make sure they are renting habitable homes and not trying to pass off major repairs onto their tenants. The measure did not get out of the committee but Delegate Samuel Rosenberg said he intends to re-introduce it in the next session. Mr. Rosenberg said he drafted the proposal after reading an article in The New York Times about problems with rent-to-own landlords, including a nationwide firm that owns homes in Baltimore. What follows is a copy of his proposed legislation and some letters in support, including one from the office of Maryland's attorney general.
The proposal is here: https://www.nytimes.com/interactive/2017/03/13/business/dealbook/document-Rent-to-Own-Bill.html
A investigative letter from Congress to a rent-to-own company is here:
https://democrats-oversight.house.gov/sites/democrats.oversight.house.gov/files/documents/2017-01-18.EEC%20to%20Vision%20Property%20Management.pdf
Can Companies Behind Health Savings Accounts Bank On Big Profits Under GOP Plan?
http://khn.org/news/companies-behind-health-savings-accounts-could-bank-on-big-profits-under-gop-plan/?utm_campaign=KHN%3A%20Daily%20Health%20Policy%20Report&utm_source=hs_email&utm_medium=email&utm_content=45223467&_hsenc=p2ANqtz-_suW9EYanORyKPQzToQRh-zGPDwOsfaJ8t-mIQO_wADugkmzyEeoKe_Njfr0SETQBpWN46LwMYtMT8QMUvoh934izaxQ&_hsmi=45223467
Many states withdraw financial support for electric cars
From NYT article:
Today, the economic incentives that have helped electric vehicles gain a toehold in America are under attack, state by state. In some states, there is a move to repeal tax credits for battery-powered vehicles or to let them expire. And in at least nine states, including liberal-leaning ones like Illinois and conservative-leaning ones like Indiana, lawmakers have introduced bills that would levy new fees on those who own electric cars.
The state actions could put the business of electric vehicles, already rocky, on even more precarious footing. That is particularly true as gas prices stay low, and as the Trump administration appears set to give the nascent market much less of a hand.
Full article: https://www.nytimes.com/2017/03/11/business/energy-environment/electric-cars-hybrid-tax-credits.html?ref=business
On March 7, the State of Hawaii moved for leave to file an Amended Complaint that details their allegations against the new Executive Order on Immigration
Here, courtesy of the Hogan Lovells law firm, is the motion and proposed complaint. The latter document details the Plaintiffs’ grievances with respect to President Trump’s 3/6/17 Travel Ban.
In yet another apparent departure from traditional antitrust review protocols, Sprint is reportedly talking directly to the White House about a possible merger
In recent weeks, President Trump has repeatedly mentioned promised investments and jobs from Sprint and its parent company Softbank. Now the wireless provider is reportedly hoping to eventually turn that goodwill — and the Trump administration’s light-touch approach to regulation — into a mega merger, possibly with T-Mobile, Comcast, or others.
New wireless industry mergers are currently on hold until the government-sponsored wireless spectrum auction ends later this spring, but the New York Times reports that Tokyo-based SoftBank has met with members of the White House economics team, talking up the need for consolidation.
SoftBank executives and members of President Trump’s economic team recently addressed the future of mergers broadly. The Times, citing sources briefed on the matter, reports that the presentations claimed that a lack of advanced digital investments has put the US economy at risk. This risk could be mitigated if telecommunications and wireless companies merged.
Credit: CPI Full Content: New York Times
The new executive order on immigration of President Trump is here:
https://www.whitehouse.gov/the-press-office/2017/03/06/executive-order-protecting-nation-foreign-terrorist-entry-united-states
An interesting and well-informed video debate on the new order is here, beginning at minute 12:09:
http://www.pbs.org/newshour/episode/pbs-newshour-full-episode-march-6-2017/
Disturbing New Facts About American Capitalism from the Wall Street Journal
When winners are taking all, it's often time to buy the winners
By
Jason Zweig
“Let your winners run” is one of the oldest adages in investing. One of the newest ideas is that the winners may be running away with everything.
Modern capitalism is built on the idea that as companies get big, they become fat and happy, opening themselves up to lean and hungry competitors who can underprice and overtake them. That cycle of creative destruction may be changing in ways that help explain the seemingly unstoppable rise of the stock market.
New research by economists Gustavo Grullon of Rice University, Yelena Larkin of York University and Roni Michaely of Cornell University argues that U.S. companies are moving toward a winner-take-all system in which giants get stronger, not weaker, as they grow.
That’s the latest among several recent studies by economists working independently, all arriving at similar findings: A few “superstar firms” have grown to dominate their industries, crowding out competitors and controlling markets to a degree not seen in many decades.
Let’s look beyond such obvious winner-take-all examples as Apple or Alphabet, the parent of Google.
Consider real-estate services. In 1997, according to Profs. Grullon, Larkin and Michaely, that sector had 42 publicly traded companies; the four largest generated 49% of the group’s total revenues. By 2014, only 20 public firms were left, and the top four — CBRE Group, Jones Lang LaSalle, Realogy Holdings and Wyndham Worldwide — commanded 78% of the group’s combined revenues.
Or look at supermarkets. In 1997, there were 36 publicly traded companies in that industry, with the top four accounting for more than half of their total sales. By 2014, only 11 were left. The top four — Kroger, Supervalu, Whole Foods Market and Roundy’s (since acquired by Kroger) — held 89% of the pie.
The U.S. had more than 7,000 public companies 20 years ago, the professors say; nowadays, fewer than 4,000.
The winners are also grabbing most of the profits, according to the Leuthold Group, an investment-research and asset-management firm in Minneapolis.
At the end of 1996, the 25 companies in the S&P 500 with the highest net profit margins — income as a percentage of revenues — earned a median of just under 21 cents on every dollar of sales. Last year, the top 25 such companies earned a median of 39 cents on the dollar.
Two decades ago, the median net margin among all S&P 500 members was 6.7%. By the end of 2016, that had increased to 9.7%.
So while companies as a whole grew more profitable over the past 20 years, the winners become vastly more profitable — nearly doubling the gains they got on each dollar of sales.
Among the 25 companies with the highest margins last year were eBay, Altria Group, Baxter International, Gilead Sciences, Corning, Visa, Mastercard, Facebook, Amgen and Biogen.
“I’m disappointed in capitalism,” jokes Doug Ramsey, Leuthold’s chief investment officer. “It seems that the big ones are just slowly pulling away.”
Why might it be easier now for winners to take all? Prof. Michaely suggests two theories. Declining enforcement of antitrust rules has led to bigger mergers, less competition and higher profits. The other is technology. “If you want to compete with Google or Amazon,” he says, “you’ll have to invest not just billions, but tens of billions of dollars.”
He and his colleagues have found that if you had invested in industries where the top companies were growing more dominant, while betting against sectors whose top firms were becoming weaker, you would have outperformed the overall stock market by an average of roughly nine percentage points annually between 2001 and 2014.
To do that, you would count the public companies in a given industry each year and use the sales figures from their annual reports to calculate what’s known as a Herfindahl-Hirschman Index.
If the number of companies is trending down, and the HHI is going up, then the winners are taking all — and you should buy.
Maybe that’s what many stock investors have been doing lately, even if they’re going on their gut rather than statistical evidence. And with the winners having driven weaker companies out of business, too much money is chasing too few stocks.
Still, history offers a warning. Many times in the past, winners have taken all — but seldom for long.
Perhaps the laws of creative destruction finally have been repealed once and for all. But sooner or later, capitalism has always been able to turn yesterday’s unstoppable winners into the also-rans of today and tomorrow.
You could look it up — preferably on a BlackBerry, if you can find someone who still uses one.
Write to Jason Zweig at intelligentinvestor@wsj.com, and follow him on Twitter at @jasonzweigwsj.
Another view of Gorsuch on antitrust:
The Antitrust Jurisprudence of Neil Gorsuch, by John M. Newman, University of Memphis - Cecil C. Humphreys School of Law
March 6, 2017
From the Abstract: In January 2017, President Donald Trump nominated Judge Neil M. Gorsuch to serve on the U.S. Supreme Court. Like Justice Stevens before him, Gorsuch’s primary area of expertise is antitrust law. Like Stevens, Gorsuch both practiced and taught in the area before joining the bench. As a Tenth Circuit judge, Gorsuch penned multiple substantive antitrust opinions.
In light of Gorsuch’s unique antitrust expertise, examination of those opinions can shed unique light on his judicial proclivities. This essay provides the first in-depth prescriptive and descriptive analysis of Gorsuch’s antitrust jurisprudence. While it reveals (perhaps unsurprisingly) a great deal of sophistication vis-à-vis antitrust doctrine, it also identifies several areas for improvement.
This essay explains that as a Tenth Circuit judge, Gorsuch effectively expanded upon—even rewrote—existing precedent, including Justice Scalia’s memorable opinion for the majority in Trinko. For normative force, Gorsuch’s antitrust jurisprudence at times rests upon logical fallacies and an unduly one-sided error-cost framework. This essay critiques that reasoning.
See https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2928414
Two views of Gorsuch on antitrust issues
Law professor Zephyr Teachout’s recent op-ed in the Washington Post accused Supreme Court nomineee Gorsuch of a “preference for concentrated wealth and power” and consistent friendliness toward “big business and monopolies at the expense of competition and open markets,”
See https://www.washingtonpost.com/posteverything/wp/2017/02/21/neil-gorsuch-always-sides-with-big-business-big-donors-and-big-bosses/?utm_term=.1d31d4cf8e9f
Antitrust experts Rubin and Mogin suggest that critique is overblown, based on their reading of Gorsuch cases. See
http://www.nationalreview.com/bench-memos/445475/neil-gorsuch-antitrust-law-zephyr-teachout-washington-post-opinion-wrong
Republican legislators in at least 16 states have filed bills intended to make protests more orderly or to toughen penalties against ones that go awry
. Republicans in two other states, Massachusetts and North Carolina, have said they will file protest-related bills.
Those numbers include only bills whose sponsors have specifically linked them to protests, said Jonathan Griffin, a policy analyst who tracks the measures at the National Conference of State Legislatures. How many will be enacted is unclear; a few already have been pronounced dead in committee.
Some sociologists and legal experts say the bills are in line with a general trend toward tougher treatment of protesters in the wake of especially disruptive demonstrations like the Occupy Wall Street movement in Manhattan and the 2014 violence in Ferguson, Mo.
But interviews and news reports suggest that some of the measures are either backed by supporters of President Trump or are responses to demonstrations against him and his policies. After a Nashville motorist struck safety workers who were escorting anti-Trump protesters at a crosswalk, a Tennessee state representative introduced legislation that would relieve motorists of any liability should they accidentally hit someone deliberately blocking a street.
Continue reading the full NYT story
Uber targeted by 14 more Boston cab companies
By CPI on March 1, 2017
Uber faces new foes, this time in Boston. Fourteen Boston area cab companies have filed a complaint against the ride share platform.
The complains allege that Uber violates state laws and city ordinances. It also claims that it deceives costumers about the safety of its vehicles and drives.
“Uber’s business plan and activity illegally undermine critical safety provisions of the municipal Taxi Rules,” the complaint states. “Uber’s UberX transportation system preys parasitically on established taxi services without paying for them and without obeying the laws designed to protect taxi passengers.”
The taxi drivers claim that Uber now controls a monopoly with 80% of the low-cost, on-demand ride-shares on the area.
This is the lates complaint of six in civil cases filed against the company in federal court in the month of February alone.
Full Content: The Register
Larry Summers defends Dodd-Frank and other financial and consumer protection regulation
The talk was part of a Charlie Rose show interview. See the URL below. The Dodd-Frank and regulation discussion begins at about minute 7:40.
https://charlierose.com/episodes/30031?autoplay=true
Health insurers optimistic about post-ACA world after meeting with Trump
By Shelby Livingston | February 27, 2017
After meeting with President Donald Trump at the White House early Monday, the CEOs of several large health insurers were optimistic about the future of the health insurance industry if the Affordable Care Act is repealed and replaced. The executives discussed plans to stabilize the individual insurance market.
CEOs of Aetna, Anthem, Cigna Corp., Humana, UnitedHealth, Kaiser Permanente and several Blue Cross Blue Shield companies attended the meeting. Industry lobbying group America's Health Insurance Plans, was also in attendance.
Full article: http://www.modernhealthcare.com/article/20170227/NEWS/170229927?utm_source=modernhealthcare&utm_medium=email&utm_content=20170227-NEWS-170229927&utm_campaign=am
Former U.S. antitrust chief joins Sullivan & Cromwell, "strengthening our world-class antitrust practice"
Renata B. Hesse, who was head of the Antitrust Division at the Justice Department, is joining Sullivan & Cromwell as a partner in its Washington office, the law firm announced on Monday.
The hiring of Ms. Hesse, 52, is unusual because premier firms like Sullivan & Cromwell rarely hire partners from outside. Typically, they engage newly graduated lawyers who are trained and promoted inside the firm rather than outside its confines.
The hiring comes as many major firms gear up for an increase in complex, cross-border mergers, which are a specialty of Sullivan & Cromwell. Such firms are seeking to become “one-stop shops” for every aspect of mergers in a wide range of industries, including health care, technology, energy, and banking and financial services.
“Renata brings to S.&C. deep and highly relevant government experience, further strengthening our world-class antitrust practice,” said Joseph C. Shenker, chairman of the firm, which has 875 lawyers in New York and elsewhere around the globe. Among its clients are Bayer of Germany in its planned $66 billion acquisition of the American agriculture behemoth Monsanto.
Ms. Hesse, considered a pre-eminent high-technology antitrust attorney, was acting assistant attorney general in charge of the Justice Department’s Antitrust Division until January. She served twice in that position, and she also was deputy assistant attorney general of that division for four years. She was involved in the proposed Comcast and Time Warner Cable merger as well as the merger of US Airways and American Airlines. She also had oversight of the Antitrust Division’s criminal program.
Full Content: Wall Street Journal (paywall)
Copy of class action complaint against Takata (auto airbags) and auto makers
A copy is at: https://www.nytimes.com/interactive/2017/02/27/business/document-Plaintiffs-Court-Filing-in-Takata-Case.html
MD Consumer Rights Coalition on affordable auto insurance
This week, the [Maryland] Senate Finance and House Economic Matters committees heard two critical bills that will make auto insurance more fundamentally fair and more affordable. SB 533/HB 1295 and SB 534/HB 916 were sponsored by Senator Joanne Benson in the Senate, and Delegates Ben Brooks and Charles Sydnor in the House. Both bills provide critical pathways towards more fair and affordable insurance.
Act now and tell your state Senator and Delegates to pass these bills to create a more fair and affordable auto insurance system in Maryland. The Issue:
Affordability. Maryland law requires that all drivers carry at least limited liability car insurance. Auto insurance in Maryland is extremely expensive, which means the cost of purchasing and maintaining costly premiums is a financial strain on low-and-moderate income families.
Maryland’s average insurance premiums of $1,103 a year are the ninth highest in the nation.
The high cost of auto insurance is one important reason why 15% of drivers in Maryland remain uninsured.
Fundamental Fairness. In addition, current law allows insurance companies to use a number of non-driving related factors to price each premium. Some of these factors include credit score, zip code, occupation, education, sex, and marital status. The use of these non-driving related factors drive up the cost of insurance and discriminate against women and low-income drivers in struggling communities and communities of color.
Why is Car Insurance So Costly?
Why Should I Care?
Affordability. The high costs of basic coverage means that many workforce development and low-income workers pay 12-17% of their disposable income on car insurance (read more HERE). The Federal Insurance Office’s study on auto insurance affordability assessed the cost of auto insurance in underserved communities throughout the nation. FIO found that over 330,000 people live in zip codes in Maryland where auto insurance is currently unaffordable.
Fundamental Fairness. MCRC’s 2017 study found that women are charged as much as 39% more than men for a basic car insurance policy, and that women who are single are penalized with a24% increase in cost based on their marital status, while men who are single frequently receive a discount (read our new report).
MCRC’s 2017 statistical analysis has found the more African-Americans that live in a zip code, the higher the cost of insurance (at a statistically significant level). The analysis also found that the wealthier the neighborhood, the less the residents of the neighborhood would pay in insurance (statistically significant).
US Supreme Court Finds for Whistle Blowers Against Wells-Fargo
The Supreme Court essentially confirmed that some courts have been using too narrow a legal standard when weighing whistle-blower suits under the False Claims Act, which is meant to punish those who defraud the government.
By highlighting a more expansive standard for what constitutes a false claim under the act, the court’s ruling is likely to open the door to more whistle-blower cases, according to lawyers who represent plaintiffs in these matters.
See https://www.nytimes.com/2017/02/24/business/score-one-for-the-bank-whistle-blowers.html
Copy of the Court's Summary Disposition Order:
(ORDER LIST: 580 U.S.)
TUESDAY, FEBRUARY 21, 2017
CERTIORARI -- SUMMARY DISPOSITION 16-578
BISHOP, PAUL, ET AL. V. WELLS FARGO & CO., ET AL. The petition for a writ of certiorari is granted. The judgment is vacated, and the case is remanded to the United States Court of Appeals for the Second Circuit for further consideration in light of Universal Health Services, Inc. v. United States ex rel. Escobar, 579 U. S. ___ (2016).
Copy of Waymo’s Complaint as filed Against Uber
The self-driving car company spun out from Google accused the ride-hailing service of advancing its own autonomous vehicle push by using intellectual property stolen by one of Google’s former project leaders.
The complaint is at:
https://www.nytimes.com/interactive/2017/02/23/technology/document-waymo-uber-complaint.html
Jeff Sovern on the CFPB
CFPB Critics Make Unpersuasive Arguments that Business as Usual at the CFPB Is Not Good for Consumers (click for link)
Posted: 23 Feb 2017 11:44 AM PST
by Jeff Sovern
At Real Clear Politics, by George Masonites Hester Pierce and Vera Soliman. The arguments (with my editorializing on some points) are that the Bureau's payday lending rule would put some such lenders out of business (would those be the lenders that ensnare consumers in a never-ending debt trap?), that the Bureau collects too much information about consumers (would that be the information that the companies that deal with consumers have?), that the Bureau is trying to stop lenders who finance car loans from buying car loans (would those be discriminatory loans?), that the Bureau is exceeding its powers by trying to collect information about for-profit colleges engaging in unlawful acts, that the Bureau violated due process by retroactively changing its interpretation of the law and applying its view to PHH's conduct, that the Bureau politicized consumer protection, that the Bureau was too slow to stop Wells Fargo (perhaps the Bureau should have acted faster but if it had, and if it had made a mistake, wouldn't we now be hearing about that mistake?). I look forward to hearing Bureau critics saying whether the millions of consumers who have been paid billions of dollars in redress because of the Bureau should give that money back and what will happen to such consumers in the future if the Bureau is abolished or neutered. Not to mention the other consumers who won't need redress because financial institutions behave better because of the Bureau's past interventions.
What is Department of Homeland Security Doing? See the Trump Administration's explanation at the DHS website: https://www.dhs.gov/executive-orders-protecting-homeland
Executive Orders
Implementation Memos
Fact Sheets
Pop performer attempts DIY attack on ticket scalpers: legal confusion follows
From DMN http://www.digitalmusicnews.com/2017/02/22/eric-church-lawsuit-scalper/
Eric Church’s war on scalpers could have serious legal consequences, including from fans themselves.
Eric Church is declaring war on scalpers. And this was his offensive. Just yesterday, the singer took an extreme step by invalidating 25,000 tickets purchased by scalpers. Or, more likely, purchased by auto-buying ‘bots’ controlled by scalpers.
Church has long complained that scalpers use bots to remove tickets from the market, usually seconds after they go on sale. That auto-buying frenzy forces tickets into the ‘secondary market,’ which includes places like StubHub. There, scalpers can negotiate with buyers directly, and drive prices sky-high.
“It drives me ****ing crazy,” Eric Church told Rolling Stone back in 2014. “The problem I have is that scalpers have a bazillion people working for them. And they have those bots that scan. So it’s not fair.”
Not fair. But, is it illegal to forcibly invalidate a purchase, just because it doesn’t seem ‘fair’?And, how can Church be sure that all of those 25,000 tickets were purchased by price-gouging scalpers?
Those questions could be critical in the coming weeks. Church’s management says that a proprietary program was used to identify which tickets were scalped. But here’s one major problem with that: some of those tickets may have already been re-sold, leaving Church fans with voided tickets.
Even worse, some of those fans may end up going to the venue, only to realize the tickets are duds. Even worse, Eric Church forcibly refunded the scalpers, but not the secondary buyers.
All of which means buyers on Stubhub have (a) a cancelled ticket and (b) no way to get their money back.“Ticket scalpers got their money back, and we would expect that scalpers would in turn refund their customers,” Eric Church told CMT. “But with ticket scalpers, you never know! Fans would have a strong case for contesting charges with their credit card company if they paid for something that the scalper didn’t deliver.”
And if scalpers don’t offer refunds?That could lead to multiple lawsuits, or class action litigation, according to some executives watching this unfold. “It could get tested if enough [fans] are affected,” one lawyer explained. “It’s perfect class-action litigation.”
But scalpers themselves could sue, depending on how local laws treat secondary markets.
For now, it’s unclear what the fallout will be. It’s been estimated that 2,000 of the 25,000 tickets are for a pair of upcoming Nashville dates in May. Before that, Church will be playing dozens of dates across the US and Canada, starting Thursday (February 23rd) in Indianapolis.
The Trump administration proposal to stabilize Obamacare’s health insurance markets
The proposal tightens when people can sign up for coverage, giving health insurers more flexibility.
The U.S. Department of Health and Human Services proposed new regulations [click highlighted words to see them] even as President Donald Trump seeks to repeal the law. In the meantime, the health department lead by his new secretary, Tom Price, is trying to placate health insurers that are considering dropping out of the program’s government-run markets, threatening to leave people without options in a growing number of states.
The rule would cut in half the time when people can sign up for coverage under the Affordable Care Act, to about a month and a half. It would also curtail so-called special enrollment periods that allow people to sign up for coverage outside the regular window. Insurers have said that those sort of exceptions let people game the system, and only sign up after they get sick.
“This proposal will take steps to stabilize the Marketplace, provide more flexibility to states and insurers, and give patients access to more coverage options,” said Patrick Conway, Acting Administrator of the Centers for Medicare & Medicaid Services.
Full article: https://www.bloomberg.com/news/articles/2017-02-15/trump-administration-releases-obamacare-stabilization-rules
Note: Many consumer advocates complain that health care consumers will be hurt by the change.
Bill to limit class actions introduced in Congress
The bill is HR 985, introduced by Bob Goodlatte (R-VA). The short title: ‘‘Fairness in Class Action Litigation Act of 2017.” The proposed bill is similar to HR 1927, introduced by Goodlatte in the previous Congress. The bill contains dramatic limitations of class action litigation. DCCRC has join other organizations in opposing the bill. .
HR 985 can be found here: https://judiciary.house.gov/wp-content/uploads/2017/02/PT_002_xml.pdf.
GovTrack link to HR 985: https://www.govtrack.us/congress/bills/115/hr985.
HR 1927 can be found here: https://www.govtrack.us/congress/bills/114/hr1927/text
America First Antitrust
Antitrust bar uneasy about international merger coordination as Trump declares ‘America First’
26 January 2017. By Curtis Eichelberger.
[This story was first published on MLex’s White House Watch. Click here to request a free subscription.]
Excerpt: Antitrust lawyers based in the US and abroad say they are concerned that US President Donald Trump’s “America First” philosophy could mean less US coordination with foreign antitrust regimes, leading to greater complications on big deals that require remedies across multiple jurisdictions.
Trump’s inauguration speech focused their concern because his slogan could no longer be dismissed as mere campaign rhetoric. His words are seen as an indication of his priorities in filling positions at the US Department of Justice and the US Federal Trade Commission, the nation’s two primary antitrust agencies.
“We assembled here today are issuing a new decree to be heard in every city, in every foreign capital, and in every hall of power,” Trump said in his inauguration speech in front of the US Capitol last week in Washington. “From this day forward, a new vision will govern our land. From this day forward, it’s going to be only America first, America first.”
Under the Obama administration, US antitrust enforcers coordinated so closely with their European — and even Chinese and Brazilian — counterparts that companies could design global remedies to get their deals through. If US agencies focus inward and have less concern about companies’ antitrust problems in foreign jurisdictions, deals that get quicker US antitrust approval could ultimately face greater resistance abroad.
While Trump has not made clear his plans for antitrust enforcement, US attorneys expect the DOJ and FTC to become more conservative, requiring greater economic certainty that a merger would be anticompetitive before acting to block a deal. This less aggressive approach to merger review will stand in contrast to those of many foreign regulators, including the European Commission.
Multi-jurisdictional reviews are an increasing concern for US companies (see here). Whereas two decades ago, the US and European Commission were the world’s primary antitrust regulators, today there are more than 100 regulatory regimes, many of them operating with different rules from those in the US.
Under the best of circumstances, seeking approval from multiple jurisdictions can delay deals, cost millions in regulatory and legal fees, lessen efficiencies created by the deal and introduce uncertainty that leads customers and employees to jump ship.
An “America First” approach to coordination would have its greatest impact on large international deals, attorneys say.
Full story: http://mlexmarketinsight.com/editors-picks/antitrust-bar-uneasy-international-merger-coordination-trump-declares-america-first/
From Bipartisan Policy Council Regulating the Financial System During the Trump Administration
Regulating the Financial System During the Trump Administration
ulating the Financial System During the Trump Administration
Tuesday, March 14, 2017
2:00 p.m. - 3:30 p.m. ET
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Bipartisan Policy Center
1225 Eye Street NW, Suite 1000
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Can't join us in person? The event will be webcast.
Kenneth E. Bentsen, Jr. | President and CEO, SIFMA
Michael S. Barr | Roy F. and Jean Humphrey Proffitt Professor of Law, University of Michigan Law School; Former Assistant Secretary for Financial Institutions, Treasury Department
More than six years after the passage of the Dodd-Frank Act, the future of the post-crisis financial regulatory structure may be in line for substantial changes. In February, President Trump signed a new executive order laying out seven “core principles” for regulating the financial system and directing the Treasury Department to issue a report on whether current financial regulation meets those principles.
Join us on March 14 for a discussion of such questions as: are we moving in the right direction with financial regulation? Is current policy serving the economy and consumers while ensuring financial stability? What other changes to financial regulatory policy are needed to better achieve these goals? What approach should the United States take with other countries with respect to financial regulation and global agreements?
The Limits of Divestiture as an Antitrust Remedy
Another View
By CHRIS SAGERS FEB. 14, 2017
The Federal Trade Commission’s recent study of its own merger remedies was in some ways an update of a well-regarded 1999 report on the divestitures almost always imposed when mergers are challenged.
Yet the new study claims success of a kind that its evidence could not even plausibly demonstrate. It raises the question of why preserving the antitrust remedy of divestiture is so important to regulators. And it tells a story of something wrong politically with competition as a public policy.
Divestiture is important because the antitrust agencies have no real alternative. If divestitures prove generally ineffective, and the agencies had to sue every time a deal raised antitrust concerns, their entire merger programs could be jeopardized.
Criticism of merger remedies has been partly anecdotal. In recent years, two of them failed spectacularly. In 2012, the commission conditioned a huge rental car merger on a spinoff to a company whose own chief executive said it wouldn’t work. That company filed for bankruptcy months later. The commission approved a large grocery merger in 2015 on the condition that the merged company divest itself of stores to a small Oregon chain, which increased that chain’s size by roughly 900 percent. When that chain soon filed for bankruptcy, the merged company wound up buying back more than 20 percent of the stores it divested itself of, for pennies on the dollar.
But more serious has been growing empirical evidence that horizontal mergers may cause harm at levels of concentration much lower than the agencies now take seriously, and also that mere divestitures may not work well. Most important so far is a 2015 book, “Mergers, Merger Control, and Remedies” (MIT Press), by the economist John Kwoka, which drew a public objection from Edith Ramirez, then the F.T.C. chairwoman, and the acting chairwoman, Maureen Ohlhausen, and a fairly scathing rebuke from the commission’s own economists.
It is not surprising that the new report finds the commission’s merger remedies extraordinarily successful. Federal agency reports pretty much always do that kind of thing. What is remarkable is the degree to which it reports success of a kind that its own evidence could not support.
The report says it found a previous commission remedy successful “only if it cleared a high bar — maintaining or restoring competition in the relevant market.” “Competition” in antitrust law means actual rivalry on price and quality. The only way to measure it convincingly is econometric study.
In their own harsh critique of Mr. Kwoka’s book, commission economists said econometric measurement was “essential if one is to correctly measure the competitive effect of a merger.” Ms. Ramirez herself was a champion for doing it more.
But while the F.T.C. study is remarkably evasive in describing its own methodology, it appears that the data gathered are far short of that standard. Commission staff members interviewed market participants and calculated market shares, and then reported only their own unelaborated subjective judgments whether a given remedy “succeeded” or not.
While bold claims are made in abstract terms, “success” appears to mean nothing more than that a given divestiture was actually carried out and that the divested assets stayed in the market.
How the commission would howl if defendants could prove their markets were “competitive” just because none of their competitors went bankrupt. Indeed, with that understanding of the report’s methodology, one of its most striking results is that about a sixth of the merger remedies the commission ordered from 2006 to 2012 didn’t even have any effect at all, apparently because the divested assets left the market.
Admittedly, this was the same measure of success in the 1999 study. But it was also very candid about its own limitations and explicitly acknowledged it could not measure actual “competition.” Unlike that study, which began with staff experts’ concerns about remedies under the then-new Hart-Scott-Rodino merger review regimen, this study was urged by top leadership as a reply to external criticism.
Econometric study could have been done here. Most telling is that the Federal Trade Commission itself has done a fair bit of groundbreaking econometric study of just the kind that could have measured “competition” here. But it’s done that when it suits the agency’s own purposes, as in its well-known studies of the consequences of hospital mergers, performed to vindicate its own views after it suffered a series of painful and highly visible losses in hospital merger cases in the 1990s.
Ultimately, an overstated defense of the divestiture remedy may reflect the single oldest criticism of antitrust law. Preserving a remedy that allows the agencies to show that they are doing something, without actually taking meaningfully aggressive action, maintains a political compromise both sides can live with.
Published in NYT: click here to read the article in the NYT
NYT Duhigg on prospects for Dodd-Frank repeal
Excerpt: The Dodd-Frank law can essentially be broken into two parts. There is the act’s core legislation, which placed new constraints on banks’ financial activities and required them to hold onto more money as a cushion against crisis. This core legislation also created an independent regulator, the Consumer Financial Protection Bureau, which has become a proud thorn in the side of many financial firms.
The secondary aspects of Dodd-Frank, however, have almost nothing to do with stabilizing the economy or protecting consumers. They include provisions like forcing companies to disclose their use of conflict minerals, or to report payments that oil and mining companies make to foreign governments. There’s a provision that regulates how much it costs to swipe a credit card.
Some recent Republican attempts to roll back Dodd-Frank focused largely on these secondary provisions. In January, Congress eliminated that oil and mining requirement. This week, the acting head of the Securities and Exchange Commission signaled his intent to weaken a rule forcing companies to publicly compare the salaries of chief executives and employees.
“Some of these changes are depressing, because they undermine transparency and increase corruption, but they’re not going to blow up our financial system,” said Michael Barr, a former assistant secretary of the Treasury and one of the key architects of Dodd-Frank. “They leave the core of Dodd-Frank intact.”
Full article: https://www.nytimes.com/2017/02/09/business/trump-dodd-frank-reforms.html?ref=business&_r=0
Texas court upholds DOL fiduciary rule, denies stay
By: Hazel Bradford
Published: February 8, 2017
U.S. District Judge Barbara M.G. Lynn in Dallas late Wednesday dismissed a legal challenge to the Department of Labor's fiduciary rule.
She also denied the Justice Department's motion, made Wednesday, to stay the case while the agency reviews the rule following a White House executive order.
The lawsuit filed June 1 by the U.S. Chamber of Commerce, Securities Industry and Financial Markets Association and other financial groups, challenged the DOL's authority to issue the rule on several issues. Ms. Lynn disagreed with those points, saying that “the rule does not exceed DOL's authority,” and the agency's cost-benefit analysis was reasonable, among other reasons for granting the Department of Labor's motion for summary judgment.
Federal district courts in Topeka, Kan., and Washington in 2016 upheld the rule in similar challenges, which have been appealed. A fourth case in Minneapolis has not been decided.
Original Story Link: http://www.pionline.com/article/20170208/ONLINE/170209843/texas-court-upholds-dol-fiduciary-rule-denies-stay
Note: President Trump has ordered a DOL review of the fiduciary rule, with the apparent goal of eliminating it. DR
Consumer Reports on DIY estate planning
The trouble with DIY estate planningSome people who pay professionals to fill out their tax returns, mow their lawns, or color their hair cannot bring themselves to pay a lawyer to prepare an estate plan for them. They do not want to spend thousands of dollars on something that they think they can do themselves with will-writing software that sells for less than $100. It’s possible to get a very basic estate plan for $1,200 to $2,000 if you shop around, says Deborah Jacobs, a lawyer in New York City.
An experienced attorney can use legal software more efficiently than you can. More important, he or she can offer customized solutions if your situation is complicated. Your needs are too complex for a do-it-yourself estate plan if you must provide for a disabled child, you owe estate taxes, or you own a business. Consumer Reports tested three will-writing products in 2011 with the help of a law professor specializing in estates and trusts. We concluded that all were inadequate unless a very simple plan was required, such as one that leaves everything to a spouse, with no other provisions.
Jacobs suggests a compromise. “I encourage consumers to seek the help of a lawyer and I also tell them to shop aggressively on price,” she said. “You can go out and get multiple bids, just as you would if you were getting your house painted.”
Start by getting referrals to lawyers with expertise in estate planning from your accountant or financial planner, or check the websites of the American College of Trust and Estate Counsel and the National Academy of Elder Law Attorneys for estate-planning specialists in your area.
Then call a few and ask how much they will charge, if anything, to meet with you for an hour and discuss your estate planning needs. After your consultation, some attorneys will quote a flat fee for an estate plan; others bill by the hour and will estimate how much time it will take to draft the legal documents you need. Concentrate on negotiating the lowest price you can with the lawyers you like the best.
http://www.consumerreports.org/cro/2013/11/how-to-create-a-bulletproof-estate-plan/index.htm
The dawn of the big data monopolists
By CPI on February 8, 2017
Posted by Social Science Research Network
By Akiva A. Miller (New York University)
Abstract: There is a sea change in regulators’ approach to competition and big data. In the past, competition regulators tended to dismiss Big Data as a competitive concern, generally believing Big Data uses to be irrelevant or pro-competitive in digital markets. But in recent years that attitude is changing, and regulators are becoming increasingly concerned over the possible anticompetitive conduct by internet industry leaders from their control over massive amounts of user data and are starting to take action.
Continue reading…
Stream of oral arguments 2-7-2017 before 9th Circ -- State of Washington v. Trump
https://www.nytimes.com/interactive/2017/02/07/us/ninth-circuit-oral-arguments-trump-immigration.html
Copy of the Administration brief to the 9th Circuit on the travel ban
Click here: the administration’s brief to the 9th Circuit filed late in the day 2/6/2017
Copy of two states brief to the 9th Circuit on the travel ban
Click here: The two states’ appellate brief filed early Monday morning, 2/6/2017. Additional states are now participating, along with a number of companies, and several former State Department officials
Copy of the tech industry filing against the Trump travel ban
https://www.nytimes.com/interactive/2017/02/06/business/document-Trump-Amicus-Brief.html
Text of 9th Circuit Order on USDOJ application on lower court immigration decision: "Appellants’ request for an immediate administrative stay pending full consideration of the emergency motion for a stay pending appeal is denied."
UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
STATE OF WASHINGTON; STATE OF MINNESOTA, Plaintiffs-Appellees,
v.
DONALD J. TRUMP, President of the United States; et al., Defendants-Appellants.
No. 17-35105 D.C. No. 2:17-cv-00141
Western District of Washington, Seattle
ORDER
Before: CANBY and FRIEDLAND, Circuit Judges.
The court has received appellants’ emergency motion (Docket Entry No. 14). Appellants’ request for an immediate administrative stay pending full consideration of the emergency motion for a stay pending appeal is denied. Appellees’ opposition to the emergency motion is due Sunday, February 5, 2017 at 11:59 p.m. PST. Appellants’ reply in support of the emergency motion is due Monday, February 6, 2017 at 3:00 p.m. PST.
http://cdn.ca9.uscourts.gov/datastore/general/2017/02/05/17-35105.pdf
Click here for the USDOJ brief to the 9th Circuit: USDOJ brief
The brief says: Judge Robart “improperly second-guessed the president’s national security determinations.” The brief said the president has great vast power over immigration under the Constitution and federal law.
Washington State AG doc links on successful state action against Trump immigration limitation order
AG FERGUSON OBTAINS COURT ORDER HALTING TRUMP IMMIGRATION ACTION
FOR IMMEDIATE RELEASE:
Feb 3 2017Judge grants nationwide Temporary Restraining Order against President’s Executive Order
SEATTLE -- A federal judge in Seattle today granted Attorney General Bob Ferguson’s request to immediately halt implementation of President Donald Trump’s Executive Order on immigration nationwide.
Attorney General Bob Ferguson speaks to reporters after a federal judge granted his request to immediately halt implementation of President Donald Trump’s Executive Order on immigration nationwide.The Temporary Restraining Order will remain in place until U.S. District Court Senior Judge James L. Robart considers the Attorney General’s lawsuit challenging key provisions of the President’s order as illegal and unconstitutional. If Ferguson prevails, the Executive Order would be permanently invalidated nationwide.
To obtain the Temporary Restraining Order, the state needed to prove that its underlying lawsuit was likely to succeed, that irreparable harm was likely to occur without the restraining order, and that halting the President’s order immediately is in the public interest. The state also needed to establish that the potential injury to Washington residents caused by leaving the President’s order in place outweighs any potential damage from halting it.
Judge Robart, who was nominated to the court by President George W. Bush in 2003, ruled that Ferguson had met the high standards necessary to block the Executive Order until the court reaches the merits of the lawsuit.
“The Constitution prevailed today,” Ferguson said. “No one is above the law — not even the President.”
Washington became the first state to challenge the President’s order on Monday. Ferguson argues that the Executive Order violates the U.S. Constitution’s guarantee of Equal Protection and the First Amendment’s Establishment Clause, infringes individuals’ constitutional right to Due Process and contravenes the federal Immigration and Nationality Act.
Major Washington state institutions supported the Attorney General’s lawsuit through declarations filed alongside the complaint. In their declarations, for example, Amazon and Expedia set forth the detrimental ways the Executive Order impacts their operations and their employees.
Minnesota, led by Attorney General Lori Swanson, joined Ferguson’s amended complaint filed Thursday.
In addition, since Washington brought its action, Massachusetts, New York and Virginia intervened in similar lawsuits challenging the Executive Order in their respective jurisdictions.
Solicitor General Noah Purcell, Deputy Solicitor General Anne Egeler and Solicitor General’s Office Fellow Kelly Paradis, as well as members of the Wing Luke Civil Rights Unit, including Unit Chief Colleen Melody and Assistant Attorneys General Patricio Marquez and Marsha Chien, are handling the case.
See http://www.atg.wa.gov/news/news-releases/ag-ferguson-obtains-court-order-halting-trump-immigration-action
POSTED BY DON ALLEN RESNIKOFF
NYT: Trump collaborates with financial industry leaders on rollback of Dodd-Frank regulation
In a development struggling rust-belt supporters of the new President may not have contemplated, The President is working with financial industry leaders concerning rollback of Dodd-Frank, according to this New York Times piece:
Excerpt: As he announced his goals on financial deregulation, Mr. Trump sat beside Stephen A. Schwarzman, the chief executive of the private equity giant the Blackstone Group and the chairman of his business council, who said the panel would “advise the government on the areas where we could do things a lot better in our country, for all Americans.”
The president had praise for Jamie Dimon, whose bank, JPMorgan Chase, was often a target of regulatory actions by the Obama administration.
“There’s nobody better to tell me about Dodd-Frank than Jamie, so you’re going to tell me about it,” Mr. Trump said.
The meeting underscored the degree to which the architects of Mr. Trump’s economic strategy are now some of the people he denounced in his campaign, which ended with a commercial that described “a global power structure that is responsible for the economic decisions that have robbed our working class, stripped our country of its wealth and put that money into the pockets of a handful of large corporations.”
https://www.nytimes.com/2017/02/03/business/dealbook/trump-congress-financial-regulations.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region®ion=top-news&WT.nav=top-news&_r=0
DC Bar Sections letter raises democratic governance and procedural fairness issues concerning proposal to eliminate Bar Sections
LITIGATION SECTION
INTELLECTUAL PROPERTY LAW SECTION
CORPORATION FINANCE AND SECURITIES LAW SECTION
INTERNATIONAL LAW SECTION
TAXATION SECTION
LABOR AND EMPLOYMENT LAW SECTION ENVIRONMENT
ENERGY AND NATURAL RESOURCES SECTION
ADMINISTRATIVE LAW AND AGENCY PRACTICE SECTION
REAL ESTATE, HOUSING AND LAND USE SECTION
OVERNMENT CONTRACTS AND LITIGATION SECTION
HEALTH LAW SECTION
ANTITRUST AND CONSUMER LAW SECTION
STATES, TRUSTS AND PROBATE LAW SECTION
RIMINAL LAW AND INDIVIDUAL RIGHTS SECTION
ARTS, ENTERTAINMENT, MEDIA AND SPORTS LAW SECTION
FAMILY LAW SECTION
TORT LAW SECTION
DISTRICT OF COLUMBIA AFFAIRS SECTION
COURTS, LAWYERS AND ADMINISTRATION OF JUSTICE SECTION
DISTRICT OF COLUMBIA BAR
January 27, 2017
Board of Governors District of Columbia Bar
1101 K Street NW, Suite 200
Washington DC 20005
RE: DC Bar "Communities" Proposal
Dear Members of the Board of Governors:
The undersigned sections of the District of Columbia Bar are writing to express their opposition to the captioned proposal (''the Proposal"), including its plan to terminate all existing Bar sections and committees. In view of the expedited schedule set for consideration of the Proposal, and the significant harm we believe it will likely cause to the mission of the Bar and the professional interests of its members, we request your response to the points raised below in this letter before further action is taken to move forward on the Proposal.
(1) Opportunity for Notice and Comment. The first time the Bar's section leaders were told of the existence of the Proposal -or even heard its term "communities" -was on January 18, 2017, when Bar staff sent section leaders an email asking them to listen to a linked web recording that orally described the Proposal in general terms. At the same time, section leaders were told that the Proposal will be rushed to the Board of Governors ("the BOG") for approval in just a few weeks. This rushed approach, without providing details and a meaningful opportunity for consultation on the Proposal, shows serious disrespect for the lawyers who are the Bar's members and who provide its financial and programming support. While Bar members have elected their steering committee members to three-year terms, the Proposal would disregard this electoral decision and, without consulting the electorate, prematurely terminate all elected steering committee members in June.
At the very least, (i) there should be a detailed written memorandum describing the Proposal, not simply a vague and repetitive audio recording; (ii) both the memorandum and this letter should be circulated to all Bar members for review and consideration, perhaps including publication in Washington Lawyer; (iii) comments should be available on the Bar's website for a sufficient period of time to allow review by all interested Bar members; (iv) an open forum should then be held for Bar members to learn more about the Proposal's details and to ask questions directly of the proponents of the changes; (v) an open forum should then be held for Bar members to engage directly with the BOG on the Proposal; and (vi) the Proposal should be an item for discussion with the membership at the Bar's annual meeting. And then finally, whether formally required or not, a proposal of this importance should be put before the Bar's full membership for at least an advisory vote to inform the BOG's decision. The overall process should be given sufficient time to assure full and responsible consideration by the Bar's members and the BOG. There is no reason that a decision must be hurriedly made within weeks, or even months.
(2) No Case Made for Radical Change. Bar members have suggested various ways to improve the sections' operations. This has included a July 28, 2016 letter to the BOG from the Corporation, Finance and Securities Law Section ("CFSL") making concrete proposals to improve program operations -a letter that a number of other sections supported in separate letters to the BOG, but which has to date received no substantive response. That letter essentially repeated points that elected sections leaders had been making for many years without adequate response or action by the Bar. We're all in agreement in wanting an environment that promotes improvement for the Bar, including with respect to the sections. But a desire to improve and streamline certain features of section operations doesn't justify scrapping the Bar's entire section and committee structure and replacing that structure with a new and untried construct.
Even if a radical change were warranted, which it is not, this would not be the time for such a change. There is a transition of Bar leadership underway, including the departure of the Bar's CEO and the COO. If the BOG approves the Proposal, it will likely tie the hands of new leadership for years as it is difficult in any organization to reverse course on recent major decisions. We should not tie the hands of new leadership by radical structural changes just as they are walking in the door. Instead, we should let the new leaders settle in for an appropriate period of time, let them have an opportunity to fully assess the organization and its needs and opportunities, and let them get to know and interact with section leaders and members. To the extent they may have seen the Proposal, we and they should realize that the decisions these newcomers make for the Bar today will likely not be the decisions they would make after a year in their new positions.
(3) The Section Finance Argument. The principal reason advanced so far for making the Proposal's radical change to the Bar's structure is apparently that the existing sections will supposedly soon become insolvent. This is puzzling, as the DC Bar's larger sections appear to run a surplus most years. The Proposal claims that the sections' financial needs cannot be satisfied by raising section dues above $55, where they have been needlessly frozen for several years. Yet at the same time, the Proposal inconsistently says that section members are not dues price-sensitive, and the Proposal actually plans to charge $79, an increase of $24 above the current $55 section dues, for Bar members to join the Proposal's new "communities." Additionally, the Proposal will inevitably increase costs by the expenditures needed simply to create its new "communities" structure, as well as by its plan to expand staff responsibility over the new communities' finances and management. Finally, the Proposal is unclear regarding how revenues generated by programs and publications would be handled -whether communities would continue to have their own budgets.
Instead of creating a new structure, simply increasing the dues of the Bar's existing sections from $55 to $79 would more than assure the solvency of all existing sections well into the foreseeable future, although this decision should not be made unilaterally but only after consideration through the sections. Indeed an increase in section dues to a level well short of $79 would probably be sufficient. This is particularly the case if programming operations can be streamlined, as suggested in CFSL's July 2016 letter, so that the cost of running the Sections Office can be reduced by eliminating needless staff activities that actually hinder and delay programming as discussed in that letter. If as the Proposal suggests, we want to add some free CLE as a sweetener for those who need CLE for bars other than DC, such free CLE can be added to our existing section structure, as can a dues reduction for joining a second or third section.
The case has not been made that the proposed non-democratically-elected communities would be more cost effective than the present sections.
Finally, the details of the Proposal's finance argument require considerably more scrutiny, evaluation and broad discussion among section members before we risk our Bar's future health on this argument. Thus, without meaningful and thorough analysis, the Proposal's optimistic scenarios appear to project annual losses in the early years through mid-2019, even with membership increases, and then either (i) continued losses through mid-2022, or (ii) some recovery in later years if the Bar can manage to achieve annual membership increases of 5% or more. On the other hand, the Proposal offers no analysis of the impact if the current slow decline in membership continues, or if that decline actually increases due to operational and other problems with the Proposal's new "communities" structure and its proposed 44% increase in communities dues over current sections dues. The Proposal needs to include analysis of potential results under less optimistic scenarios, as well as an explanation of the growth of Sections Office expenses, the other side of the finance equation. The Proposal offers, at most, mere speculation that it can achieve a more robust, sustainable fiscal outlook. Yet if it fails to improve the current financial trend, or makes it worse, years will be lost as its consequences play out. Recall the Dues Stabilization Fund approach adopted four years ago that froze section dues increases, and now with resulting depletion of section financial reserves, the Proposal tells us to hike dues 44% for the new communities. Before jumping to a new, and far more radical approach, we need thorough analysis accompanied by full transparency in the evaluation process to make sound judgments for our Bar's future.
(4) A High Risk Approach. Bars around the country have long had sections and committees -the ABA, the Federal Bar Association, the New York City Bar Association, and many others. Has any other bar replaced their sections with "communities"? In the bar context, we are given no examples of how this communities structure has worked, if it's been tried at all. Even if other kinds of membership organizations have done this, it does not mean it will satisfy the particular needs of lawyers in the nation's capital. The DC Bar is in competition with national bar associations, specialty bar associations, regional bars, and commercial CLE and other panel providers -- competition both for panel presenters and panel audiences. 1 If the DC Bar is to avoid decline in this competitive environment, it has to satisfy real and long-understood needs of lawyers.
Instead of a tried-and-true formula that has long worked for bar associations, the webinar emailed to section leaders on January 18, 2017 offers a complex, vague and bureaucratic vision. The Proposal leaves much to be reinvented --indeed, much of what is now managed well by our present sections and their section standing committees. To provide just one example, the Proposal does not explain how its "communities" would deal with public statements -- the only way DC Bar members can express the profession's views on topics where their voice is especially useful, such as DC and federal legislation, court rules and administrative regulations. The Bar itself is restricted in its ability to engage in any such advocacy, thus making the sections' opportunity to speak especially crucial.
Apart from the obvious point that the Proposal will likely not produce an organization that can compete for lawyer attention and dollars, there is a real question whether the Bar, despite best intentions, will even be able to execute what is so vaguely conceived. Many of the Bar's larger sections have for years unsuccessfully sought list serves to be able to communicate directly with their members on even a basic level -- and thereby to draw their section members into more active participation in section program and committee work -- but the Bar has failed to deliver even on something that is very simple from a technology standpoint. New technology will not suddenly reverse this past frustrating experience.
If DC Bar members sense disorganization at the programming level, they will stop enrolling in either sections or communities -the label won't matter. These concerns, especially the risk that the Bar is embarking on an untried course, require that the Proposal be fully aired with the members the Bar serves before it is considered for implementation.
(5) No Meaningful Transition. The Proposal terminates all DC Bar sections in June, and fires all present section and committee leaders. The Proposal then starts from scratch with an entirely new structure that lacks any leadership at all. This is like starting a whole new bar association. Such a hard-stop-and-rebuild approach frustrates any attempt at continuity of programs, leadership and relationships. And if present section and committee leaders do not reapply for the new leadership positions the Proposal contemplates -- or if they do apply, but are not recommended to the BOG by Bar staff --the DC Bar will have lost an important connection to its members, as well as much of the talent pool that currently manages to produce excellent, top quality programs for the Bar. A drop in quality programming, vital to most of our sections as their principal value-added offering, will naturally and inevitably result in declining membership and revenue that could take years to rebuild.
(6) Governance Concerns. The Bar is an organization formed by lawyers, composed of lawyers, and financially and substantively supported by lawyers. Each year, these lawyers elect the members of their respective sections' steering committees, based on the professional credentials and platforms the candidates offer, to preside over and operate their sections for the coming year. These elected steering committee members, in turn, elect their section officers and their sections' standing committee leaders for the year. These elected lawyers then run their sections by organizing professional programs, and engaging in the general administrative tasks necessary for the functioning of the sections. Elected steering committee members focused on a specific section are able to focus, coordinate and nurture the practice-specific work of their particular section, including the work of the section's standing committees (over ten in larger sections). Additionally, the present section model allows the sections, through their elected leaders, to provide focused legal policy advice, counsel and advocacy to the DC Council, Council members, agencies and others, as appropriate.
For many years this fundamentally democratic governance model --lawyers electing lawyers to govern a lawyers' organization --has worked well. The only exception has been with respect to the particular issues raised in CFSL's July 2016 letter, which outlined certain aspects where the elected lawyers in the section steering committees needed to be given more discretion and relief from certain well-intentioned but counterproductive measures taken in recent years by Bar staff. The steps outlined in CFSL's letter now need to be implemented promptly, as we section leaders have been waiting for action on CFSL's letter for over six months.
Lawyers have created and continue to provide the support to maintain this Bar, and the lawyers they elect to run their sections must retain the authority to enable them to do so. The Proposal misses this point entirely by proposing to rip governance from the hands of elected lawyers and transfer governance to unelected Bar staff, many of whom are non-lawyers and not Bar members. The Proposal takes all administrative and financial decision making away from the lawyers who have been elected to lead its sections, and turns this authority over to the unelected Bar staff. And it further eliminates the election process and instead empowers the Bar staff to identify and recommend candidates for leadership of the Proposal's new "communities," effectively the new name for the sections. Any such change in the involvement by lawyers in their legal organization should not be considered without serious and informed dialogue with and input on the Proposal from the lawyers whom the Bar serves, and who serve the Bar.
* * *
The risk of this Proposal is great, and the prospective benefits questionable. Certainly such a drastic change should not be undertaken without careful education of and consideration by the Bar's membership. Without open, democratic buy-in by Bar membership, especially those volunteers who have for years worked hard on behalf of the Bar, this Proposal will not succeed.
For the reasons above, we oppose the rush to act on the Proposal. We urge you to suspend further consideration of the Proposal until the due process steps described above can be taken to ensure informed consideration by the Bar's members. We respectfully await your response.
LITIGATION SECTIONJulia M. Jordan, Co-Chair Gordanjm@sullcrom.com)
Kevin M. Clark, Co-Chair (kevin.michael.clark@gmail.com)
INTELLECTUAL PROPERTY LAW SECTIONKenie Ho, Co-Chair (kenie.ho@finnegan.com) Benjamin Huh, Co-Chair (benhuhlaw@gmail.com)
CORPORATION, FINANCE AND SECURITIES LAW SECTIONJoan E. McKown, Co-Chair Gemckown@jonesday.com)
Stephen J. Crimmins, Co-Chair (stephen.crimmins@mmlawus.com)
INTERNATIONAL LAW SECTIONStephen Claeys, Co-Chair (claeys.stephen@gmail.com)
Mary Ann McGrail, Co-Chair (lawofficeofmamcgrail@gmail.com)
TAXATION SECTIONLayla J. Asali, Chair (lasali@milchev.com)
Michael Caballero, Vice Chair (mjcaballero@cov.com)
LABOR AND EMPLOYMENT LAW SECTIONKeith D. Greenberg, Co-Chair (kdgreenberg@laborarbitration.com) Edgar F. Ndjatou, Co-Chair (endjatou@mnlawyerspllc.com)
ENVIRONMENT, ENERGY & NATURAL RESOURCES SECTION
Linda Tsang, Co-Chair (ltsang@alum.mit.edu) Justin Smith, Co-Chair (rjustin@gmail.com)
ADMINISTRATIVE LAW AND AGENCY PRACTICE SECTION
Judith R. Starr, Co-Chair (starr.judith@pbgc.gov) Matthew R. Oakes, Co-Chair (oakes.mattl@gmail.com)
REAL ESTATE, HOUSING AND LAND USE SECTION
June L. Marshall, Co-Chair Gune.marshall@hklaw.com)
Brian W. Thompson, Co-Chair (bwthompson@jackscamp.com)
GOVERNMENT CONTRACTS AND LITIGATION SECTION
Lisa Martin, Co-Chair (lmartin@uspsoig.gov)
Joseph P. Homyak, Co-Chair Goe.homyak@hklaw.com)
HEALTH LAW SECTION
Julia Tamulis, Co-Chair Gtamulis@bassberry.com) Amy E. Nordeng, Co-Chair (amyn@astro.org)
ANTITRUST AND CONSUMER LAW SECTION
Robert E. Hauberg, Jr., Co-Chair (rhauberg@bakerdonelson.com) Daniel P. Ducore, Co-Chair (dducore@ftc.gov)
ESTATES, TRUSTS AND PROBATE LAW SECTION
Jennifer C. Concino, Co-Chair Gcconcino@tobinoconnor.com) Giannina Lynn, Co-Chair (gina@ginalynnlaw.com)
CRIMINAL LAW AND INDIVIDUAL RIGHTS SECTION
Heather N. Pinckney, Co-Chair (hardenpinckney@gmail.com) Brandi J. Harden, Co-Chair (hardenpinckney@gmail.com)
ARTS, ENTERTAINMENT, MEDIA & SPORTS LAW SECTION
Micah Ratner, Co-Chair (mratner@npr.org)
Alison B. Schary, Co-Chair (alisonchary@dwt.com)
FAMILY LAW SECTION
Stephanie Troyer, Co-Chair (stroyer@legalaiddc.org) Christopher M. Locey, Co-Chair (clocey@ksfmlaw.com)
TORT LAW SECTIONDaniel Scialpi, Chair (dscialpi@patrickmalonelaw.com)
Nicholas S. McConnell, Vice Chair (nmcconnell@jackscamp.com)
DISTRICT OF COLUMBIA AFFAIRS SECTIONJanene Jackson, Co-Chair Ganene.jackson@hklaw.com) Esther Bushman, Co-Chair (esther.bushman@dc.gov)
COURTS, LAWYERS & ADMIN. OF JUSTICE SECTIONSusan D. Bennett, Co-Chair (sbennet@wcl.american.edu) David Steib, Co-Chair (david@ayuda.c
1 In particular, the ABA and the Federal Bar Association run programs that attract DC Bar members. If DC Bar members stop seeing value in "communities" altogether, they will simply drop membership, pay the basic dues, and obtain their program needs through other sources.
POSTING OF THE SECTIONS LETTER IS BY DON ALLEN RESNIKOFF
A question for President Trump: What should trade policy be toward General Motors when it makes cars in China (or South Korea)?
From the NYT: THE new Buick Envision might seem like any other two-row crossover sport utility vehicle available in the United States, but for a crucial distinction. It is the first mainstream vehicle to come to this country from China.
Although designed and engineered in America, Envision is assembled in China. Yep, just like your iPhone. . . .
Buick is exceedingly popular in China. Elite leaders of the past, including Pu Yi, Sun Yat-sen and Zhou Enlai, were driven in American-made Buicks. That pedigree (and the shabby quality of domestic Chinese cars in the past) catapulted the mark to great success in China.
The Envision slots between the tiny Buick Encore, which is assembled in South Korea, and the large Michigan-made three-row Buick Enclave. Although a limited number of 2016-model Envisions from China were quietly introduced a few months ago, it is with the 2017 models that Buick is playing up the vehicle’s American market entry.
Buick has held focus groups in the United States and says that — unlike politicians, unions and auto journalists — buyers care little about where a vehicle is built, as long as it is welded and screwed together well. The Envision seems well constructed. The design presents itself as nondescript at first, but it grew more handsome to my eye as the week progressed. During that time, not a single squeak or rattle developed.
See:
https://www.nytimes.com/2016/11/11/automobiles/autoreviews/video-review-buick-envision-a-crossover-with-a-chinese-heritage.html?rref=collection%2Fcolumn%2Fdriven&action=click&contentCollection=autoreviews®ion=stream&module=stream_unit&version=latest&contentPlacement=3&pgtype=collection
Walmart litigation presses the public's interest in PIN security with CHIP money cards
Antitrust complaints charging anticompetitive conduct must always charge harm to competition. But Walmart's recent complaint against Walmart takes that idea to an unusual level, complaining that Visa's preclusion of PIN security damages the competitive performance of an entire industry segment. (Walmart also makes the more mundane complaint that Visa's practice forces transaction processing by Walmart and other merchants through Visa's more costly network rather than distinct and less costly PIN oriented networks.)
Complaint excerpts:
The parties' dispute exists because Walmart implemented a "chip-and-PIN" protocol for debit card transactions: when consumers presented a debit card with an embedded computer chip for payment, Walmart required consumers to insert their card into a terminal that could read the computer chip (instead of swiping the card's magnetic stripe through a terminal) and then required consumers to enter a Personal Identification Number (PIN) to verify their identities (instead of signing). This chip-and-PIN protocol accords with global best practices for fraud prevention: PIN verification is much more secure than signature verification. It also enables Walmart to route transactions across PIN debit networks rather than [Visa] signature debit networks, which saves Walmart (and its customers) money.
* * *
PIN verification is significantly more secure and less prone to fraud than signature verification. Signatures can be forged or copied, and cashiers may forget to check the signature on a receipt or POS terminal to make sure it matches the signature on the back of the card.
* * *
In November 2015, eight state Attorneys General wrote a public letter to Visa and several financial institutions, urging them to “expedite the implementation of chip and PIN technology in the United States.” The Attorneys General called signature verification a “less secure standard, since signatures can easily be forged or copied or even ignored at the point-of-sale.” By contrast, the Attorneys General wrote, “[i]f employed here in the United States, PIN-based verification is likely to reduce fraud as is [sic] it has done in other places.” The Attorneys General stated: “The chip and PIN approach is considered by many to be the gold standard currently for payment card security.”
The Complaint can be found at
https://regmedia.co.uk/2016/05/11/walmartvisacomplaint.pdf
Public relations marketing and Trump related politics at Uber and Lyfft
Uber is now the target of a consumer boycott for sending drivers to New York’s John F. Kennedy International Airport during a taxi-driver strike in protest of the Trump administration’s travel ban of nationals of seven majority-Muslim countries. The PR problem has been exacerbated by Uber CEO Travis Kalanick’s role on an economic advisory council to President Trump.
Lyft, meanwhile, pledged to donate $1 million over four years to the American Civil Liberties Union, whose lawsuit won Saturday night’s stay of Trump’s ban—earning them goodwill from consumers who saw fit to delete Uber and cancel their accounts. On Sunday, Lyft surpassed Uber in downloads for the first time ever, the Verge reports.
See http://www.slate.com/blogs/moneybox/2017/01/30/the_uber_boycott_and_lyft_s_aclu_donation_herald_a_new_era_of_corporate.html
Virginia Court restraining order on the Trump immigration order is here:
https://www.justice4all.org/wp-content/uploads/2017/01/TRO-order-signed.pdf
The ACLU Complaint on the Trump Immigration order is here:
https://www.nytimes.com/interactive/2017/01/28/us/politics/ACLU-Complaint.html?rref=collection%2Ftimestopic%2FAmerican%20Civil%20Liberties%20Union&action=click&contentCollection=timestopics®ion=stream&module=stream_unit&version=latest&contentPlacement=2&pgtype=collection
Kwak and Sarducci on simple-minded economics
James Kwak, first known to me as co-author of the book “13 Bankers,” (about the 2008 financial meltdown and aftermath) has hit on a simple but true point about economics and politics: What people think they remember from their college course in economics—or what people who never took economics think the subject teaches—is that competitive markets produce optimal outcomes. It is the idea, as expressed in a Paul Samuelson textbook, that “any interference with free competition by government was almost certain to be injurious … is all that some of our leading citizens remember, 30 years later, of their college course in economics.” That narrow perception of economics by many members of the public facilitates wrong-headed and narrow political views, including bad and narrow competition policies.
Kwak explains the political consequences of narrow economics in his article in the Chronicle Review [click to see it].
I am struck by the parallel between Kwak’s insight and the observations of Father Guido Sarducci (Don Novello) in the Sarducci piece about the Five Minute University, which you can see at https://www.youtube.com/watch?v=kO8x8eoU3L4. (To be fair, Sarducci is funnier.)
Father Guido reinforces Kwak’s point that while college educated people may tend to be more sophisticated politically, many college educated people are not, recalling little about economics other than “supply and demand,” and that any interference with free competition by government is almost certain to be injurious. Fortunately, as Father Guido and Barack Obama remind us, God loves us, and the arc of history tends to curve upward.
Posted by Don Allen Resnikoff
NYT and Gajda: Will the courts protect freedom of the press?
Excerpt: "[T]he courts cannot be relied on — at least not as they once could be — for forceful protection of press liberties. The Supreme Court has not decided a major press case in more than a decade, in part because it has declined to do so, and in part because media companies, inferring the court’s relative lack of interest, have decided not to waste their resources pressing cases. Several justices have spoken negatively of the press in opinions or speeches. Lower courts have likewise become less favorable to the press, showing more willingness than in the past to second-guess the editorial judgment of journalists."
See https://www.nytimes.com/2017/01/25/opinion/dont-expect-the-first-amendment-to-protect-the-media.html
The law review article cited by the Times says:
"Quite aside from the remedy provided by defamation law for false reporting, tort law provides remedies against even accurate reporting when it invades personal privacy. In these cases, media defendants may argue that their reporting relates to something of legitimate public concern. [cite omitted.] Accordingly, resolving tort claims brought by victims of unwanted news coverage inevitably invites judges and juries to make legal determinations of 'newsworthiness,' deciding what news is fit to print and, indeed, whether certain embarrassing or salacious disclosures really qualify as news at all."
See http://www.californialawreview.org/wp-content/uploads/2014/10/09Aug_Gajda.pdf
From Brookings:
Why Republicans can’t–and won’t–repeal Obamacare
by Henry J. Aaron
Henry Aaron predicts that GOP efforts to repeal the Affordable Care Act will fail. “When it comes to casting votes, enough Republicans will conclude that repeal is a bad idea and will join Democrats to sustain the basic structure of the health reform law,” Aaron says.
Read Aaron's opinion: Why Republicans can’t–and won’t–repeal Obamacare Henry J. Aaron
From AAI: AAI Praises District Court Opinion Enjoining Aetna-Humana Merger
Excerpt: The AAI praised Judge John D. Bates's opinion granting the U.S. Department of Justice (DOJ) an injunction to block the merger of health insurers Aetna and Humana. AAI President Diana Moss noted, "This is a victory for competition and consumers. The opinion sets forth a clear, logical, and understandable rationale for why the merger would have raised prices and reduced benefits to consumers in important health insurance markets."
In a letter to the DOJ in January 2016, the AAI laid out the case for why the government should block both the Aetna-Humana and Anthem-Cigna mergers, raising numerous issues addressed in Judge Bates's opinion. These include, among others, the finding that Medicare Advantage and Medicare are different markets. Similarly, the opinion holds that the merging parties' efficiency defense "fails," particularly in light of very high levels of market concentration and with most claimed efficiencies likely to flow to the merging parties, not to consumers.
DR Comment: Some have wondered whether the Trump administration can upset the decision, as Charles James as USDOJ antitrust chief famously did in the Microsoft case by adopting a settlement many perceived as weak. But Microsoft was a complex monopolization case, not a merger case where blocked is blocked. But anything is possible, including the Government reversing its position on an appeal.
Editor's Comment: Donald Trump's ad hoc and personal intervention in big firm mergers
In the days before his inauguration as President, Donald Trump initiated a practice of personal engagement in vetting mergers between large companies. The Monsanto/Bayer merger is one that attracted Mr. Trump’s attention. It is reported that Mr. Trump is more likely to favor large company mergers that promise job creation.
No law is broken when a President is personally engaged in vetting the terms and conditions of a merger, but it is a dramatic departure from past practice, and a worrying one.
When Republican Ronald Reagan became President in 1982 he wanted change in antitrust policy, but his approach was a sharp contrast to what so far seems to be President Trump’s. Reagan appointed a widely respected Stanford University scholar, William Baxter, to head the USDOJ’s Antitrust Division. Baxter was a “Chicago School” enforcement conservative, but his idea of change was to update the written Merger Guidelines followed by federal enforcement agencies -- hardly an ad hoc approach.
When Baxter and the Reagan administration famously withdrew the nearly completed USDOJ merger litigation against IBM, it happens that I was first assistant to the Government’s lead lawyer on the case, and the most senior USDOJ person on site in New York. While it was clear that Baxter opposed the Government prosecution of IBM (he traveled to Europe to lobby the EU authorities against pursuing a case), he diligently presided over a form of moot court for the Government staff, with staffers presenting their best evidence and arguments for pursuing the case. At the end of the review process Baxter issued a quasi-judicial written discussion explaining why he thought the case was not worth pursuing. For example, he found predatory pricing allegations to be strong, but so dated as not to be worth pursuing.
It could be argued that there is little consequential difference between the formalistic Reagan/Baxter approach to antitrust change and iconoclastic approach suggested by Donald Trump's recent personal and ad hoc engagement with executives of companies seeking mergers. I think the difference is big, and worrying. I learned in law school that the law as we know it today began with the English “law merchant,” a system where merchant disputes on issues like liability for deliveries of spoiled fruit could be addressed using regularized rules and procedures rather than ad hoc resolutions. The idea of regularized rules and procedures is a crucial part of modern law, including antitrust.
One problem among many that derives from ad hoc Presidential participation in merger policy is the appearance of crony capitalism, where merger policy appears to be what powerful business oligarchs can work out in informal conversations on particular cases with a President whose history is one of being a business oligarch. The William Baxter idea of carefully crafted and transparent Merger Guidelines and reasoned bases for Government decisions on particular cases is better, even if the Guidelines follow narrow “Chicago School” precepts, and cases are dismissed that many believe should not be.
Of course, it may be that President Trump will nominate someone to head the USDOJ Antitrust Division who will have staff follow Agency Merger Guidelines that are deferential to legal precedent, and the President will not weigh in on particular mergers. It may be that Division decisions on cases will be made on a reasoned and articulated basis that respects legal precedent. That would be better than ad hoc and personal Presidential involvement in the daily work of the Antitrust Division of the kind suggested by President Trump's recent meetings with executives.
By Don Allen Resnikof
CFPB v. Navient
From the CFPB complaint: "Navient has failed to perform its core duties in the servicing of student loans, violating Federal consumer financial laws as well as the trust that borrowers placed in the company."
The Complaint is here: http://files.consumerfinance.gov/f/documents/201701_cfpb_Navient-Pioneer-Credit-Recovery-complaint.pdf
Center for American Progress Action Fund
Live and webcast event: Undermined and Under Siege
Democracy in the Age of Cyberwar
January 25, 2017, 9:30 a.m. - 11:00 a.m. ET
RSVP
Bookmark this link to watch the live webcast
Welcome:
William Danvers, Senior Fellow, Center for American Progress Action Fund
Remarks:
Rep. Adam Schiff (D-CA), Ranking Member, House Permanent Select Committee on Intelligence
Distinguished guests:
Jeremy Bash, Founder and Managing Director, Beacon Global Strategies; former Chief of Staff to the Director of the CIA (2009–2011); former Chief of Staff to the Secretary of Defense (2011–2013)
Rand Beers, former Deputy Homeland Security Advisor to the President of the United States; former Acting Secretary of Homeland Security (2013)
Julianne Smith, Senior Fellow and Director, Strategy and Statecraft Program, Center for a New American Security
Moderator:
Vikram Singh, Vice President, National Security and International Policy, Center for American Progress Action Fund
The disturbing facts around Russia’s use of hacking and information warfare to interfere with America’s election and democratic institutions continue to emerge. With the recent release of the intelligence community's report on Russian interference in the U.S. election, please join the Center for American Progress Action Fund (CAPAF) and the National Security Leadership Alliance (NSLA) for a discussion about Russia, its role in the hacking of various U.S. entities, and the 2016 election. The event will feature remarks by Rep. Adam Schiff (D-CA), who is the ranking member of the House Permanent Select Committee on Intelligence.
January 25, 2017
9:30 a.m. - 11:00 a.m. ET
Center for American Progress Action Fund
1333 H Street NW, 10th Floor
Washington, DC 20005
Space is extremely limited. RSVP required.
Seating is on a first-come, first-served basis and not guaranteed.
RSVP to attend this event
For more information, call 202.682.1611.
* * *
Judge to Block Mega-Merger of Anthem and Cigna
New York Post - A federal judge is expected to block a proposed mega-merger between Anthem and Cigna — a $54 billion deal that would create the nation's biggest health insurer — as soon as Thursday, sources told The Post.
Read Article
Class Decertified in Mail-Order Pharmacy Antitrust Case
The Legal Intelligencer - A class of independent pharmacies that filed a price-fixing class action against large mail-order pharmacies has been decertified by a Pennsylvania federal judge.
Read Article
Wright Under Consideration as Trump's Antitrust Chief, Source Says
Bloomberg - The Trump team is considering giving a top antitrust post to a former U.S. trade commissioner whose hands-off views on competition have at times failed to withstand court scrutiny.
Read Article
ChemChina Files for U.S. Antitrust Approval on Syngenta Deal
Bloomberg - China National Chemical Corp. said it filed for U.S. antitrust approval with the Federal Trade Commission for its proposed $43 billion takeover of Swiss agrochemical company Syngenta AG.
Read Article
Comment on Trump’s CEO meetings
CPI on January 15, 2017
President-elect Donald Trump’s meetings with CEOs seeking federal approval for major mergers are raising red flags for ethics lawyers concerned about the possible erosion of a firewall between the incoming White House and regulators reviewing those billion-dollar deals.
Trump met this past week with the heads of German chemical company Bayer and seed and herbicide giant Monsanto, who made their case for their $57 billion merger. The deal would likely need to be approved by Trump’s choices to lead antitrust enforcement at the Justice Department.
On Thursday, Trump sat down to discuss jobs with the chief executive of AT&T, which is trying to acquire Time Warner.
Presidents typically keep their distance from such reviews, so as not to appear to be exerting political influence on a regulatory process intended to evaluate the impact a merger could have on competition and consumers. Trump’s private sessions suggest he may be less worried with appearing to be close to pending deals that require government approval.
“While it’s true the Department of Justice is under the executive branch, it’s not appropriate for the president to make that regulatory decision — and certainly not for political considerations,” said Bruce Green, a law school professor at Fordham University who specializes in ethics.
Full Content: Bloomberg
Trump involvement in Bayer-Monsanto deal
Bayer AG has pledged to boost its investments in the United States amid its deal to buy U.S. seeds giant Monsanto, investing $8 billion in research and development and adding American jobs, U.S. President-elect Donald Trump's spokesman said on Tuesday.
The German drugs and pesticides maker pledged to maintain its more than 9,000 U.S. jobs and add 3,000 new U.S. high-tech positions, Sean Spicer told reporters in a conference call following Trump's meeting with the chief executives of both companies last week.
See http://www.reuters.com/article/us-monsanto-m-a-bayer-trump-idUSKBN1512CT
Residents of 15 states who bought milk in the past 14 years may get redress
15 states (Arizona, California, Kansas, Massachusetts, Michigan, Missouri, Nebraska, Nevada, New Hampshire, Oregon, South Dakota, Tennessee, Vermont, West Virginia, Wisconsin, and the District of Columbia) are involved in a class action lawsuit against milk producers.
The lawsuit accused milk producers of price-fixing. Instead of taking the case to court, the producers settled the case for $52 million.
Full Content: KMov
Chris Sagers on Trump merger meetings
Excerpt: In a nearly unprecedented move, President-elect Donald Trump not once but twice this week met with executives of very large firms and their lobbyists whose pending merger deals will require approval by his own antitrust officials. The moves offered evidence that Trump’s antitrust program—and perhaps by extension all of his administration’s white-collar enforcement—may be altogether darker than what we thought even a few days ago.
Article: http://www.slate.com/articles/news_and_politics/jurisprudence/2017/01/donald_trump_s_high_profile_apparent_merger_meetings_are_a_major_cause_for.html?wpsrc=sh_all_mob_em_top
NYT: Hidden handling charges for "only on TV" products
Q. In November, I purchased one bottle of Scratch Aide, expecting to pay $10 for it, along with a modest shipping and handling fee. I ended up being charged more than $80. I got three bottles of Scratch Aide, and three bottles of wood butter, along with a large bottle of furniture polish. I had explicitly said that I wanted one bottle of Scratch Aide for $10 and nothing more.
I was charged nearly $50 for shipping and handling — for a box that could not have cost more than $12 to send.
SAS Group of Tarrytown, N.Y., which markets the product on TV, states on its invoice that I can return all of the products free of charge. But I will not get a refund for shipping and handling, which is much of what I spent.
This seems pretty outrageous to me. Can you help?
Lola Backlund
Lakewood, Ohio
A. The Haggler did a little research on SAS Group. It is owned by Scott Sobo, according to his LinkedIn page and other online sources. It currently has an F rating from the Better Business Bureau, along with 169 complaints that sound remarkably similar to Ms. Backlund’s. “I ordered $20 worth of products and was charged a total of $53.88,” one typical entry reads. “Shipping and handling were outrageously high and included items I did not order.”
If so many people have complained about the same problem with the same company, you may wonder why no one in a position of authority — the government, for instance — has tried to stop it.
Wonder no more. In 2011, SAS settled an investigation by the Pennsylvania attorney general’s office by agreeing to pay restitution to consumers who said they were overcharged for shipping and handling fees after buying as-seen-on-TV products.
“SAS charged shipping and handling for those free products that far exceeded the actual cost for shipping and handling,” said Linda Kelly, then the attorney general. As part of the deal, the company was prohibited from making false and misleading statements in the future. That included telling customers that a product was free when, in fact, shipping and handling fees were tacked on.
SAS paid a $22,000 fine and threw in $20,203 for future consumer protection efforts. [But the offending conduct apparently continues. DR]
Continue reading the story
Sally Hubbard on fake news as an antitrust issue
When viewed through an antitrust lens, news publishers are Facebook’s competitors. They compete for users’ time spent online, user data and advertising dollars. This competitive dynamic may in part explain why Will Lewis, Dow Jones CEO and WSJ publisher, has accused Facebook (and Google) of “killing news.”
Indeed, competitive biases baked into Facebook’s design deserve a healthy portion of the responsibility for the rise of fake news. By pulling technological levers that keep users on its platform, thereby lessening clicks to news publishers’ sites, Facebook has sped the decline of legitimate news and provided a breeding ground for the fake variety.”
Full Content: Forbes
Brianne Gorod: Can CFPB's Cordray be fired by President Trump?
From article at http://yalejreg.com/nc/why-the-cfpb-director-shouldnt-be-going-anywhere-by-brianne-gorod/
When Congress created the CFPB, it deliberately chose to insulate the CFPB Director from political influence, giving him a five-year term and making him removable only for “inefficiency, neglect of duty, or malfeasance in office.” Although in PHH Corp. v. CFPB, a panel of the United States Court of Appeals for the D.C. Circuit recently held, in a divided vote, that the removal provision is unconstitutional, the full D.C. Circuit is currently deciding whether to rehear the case. If it decides to do so, that decision will vacate the panel’s judgment, restoring the status quo. In other words, if the D.C. Circuit decides to rehear the case, the law creating the CFPB would continue to operate as Congress intended, and the CFPB Director would not be removable at will by the President.
Center for American Progress Action Fund Program:
Mayors on the Front Line
Protecting Progressive Policy at the Local Level
January 17, 2017, 10:30 a.m. - 11:45 a.m. ET
RSVP
Bookmark this link to watch the live webcast
Welcoming remarks:
Neera Tanden, President and CEO, Center for American Progress Action Fund
Distinguished guests:
Mayor Muriel Bowser, District of Columbia
Mayor Jim Kenney, Philadelphia, Pennsylvania
Mayor Ed Murray, Seattle, Washington
Mayor Nan Whaley, Dayton, Ohio
Moderated By:
Winnie Stachelberg, Executive Vice President, External Affairs, Center for American Progress Action Fund
With the election of Donald Trump and a Republican-controlled Congress, U.S. mayors are emerging as front-line defenders of progressive policies. Please join the Center for American Progress Action Fund for a conversation with four mayors on the role of the chief executives of our nation’s cities in this new political environment. Seattle, Washington, Mayor Ed Murray (D); District of Columbia Mayor Muriel Bowser (D); Philadelphia, Pennsylvania, Mayor Jim Kenney (D); and Dayton, Ohio, Mayor Nan Whaley (D) will discuss the potential impacts of the new administration and Congress on cities, including how mayors plan to defend against regressive rollbacks in policy areas such as immigration, health care, climate, and civil rights, among others.
January 17, 2017,
10:30 a.m. - 11:45 a.m. ET
Center for American Progress
1333 H Street NW, 10th Floor
Washington, DC 20005
Space is extremely limited. RSVP required.
Seating is on a first-come, first-served basis and not guaranteed.
RSVP to attend this event
For more information, call 202.682.1611.
From Peter Geier:
ATM anti-steering case: Judge tells counsel to streamline antitrust actions
“I love the word ‘efficiency’,” US District Judge Richard Leon told lawyers at a status hearing on 12 January, “and I am going to say something for the first time that you are not going to hear for the last time: Less is more. Less is more.” Leon sits in the District of Columbia in Washington DC.
The three class actions before him—one on behalf of independent ATM owner-operators, one by Visa and MasterCard ATM users and one by independent non-bank ATM users—challenge Visa and MasterCard’s rules preventing ATM operators from “steering” ATM users to payment options that charge ATM operators lower transaction fees. The cases were dismissed in 2013, but an appeals court vacated that ruling in October 2015, sending the cases back to the trial court—and a new judge—for litigation.
Plaintiffs allege that Visa and MasterCard’s agreement among themselves and with every card-issuing bank in their network violates the Sherman Act because it puts a horizontal restraint on the pricing of ATM access fees to customers at the point of sale. The card networksimpose horizontal restraints likewise on ATM access fee pricing by independent ATMs that compete with bank-owned and -operated ATMs, plaintiffs allege.
The rules and fee regime in effect “insulate” the payment card networks from competition, said Jonathan Rubin of Rubin PLLC which represents the non-bank ATM operators.
Leon told counsel that these cases realistically have about a 2% chance actually of going to trial. He added that the notion of “more documents, more depositions, more data and more experts might be good for billable hours, but it is not good for getting these cases resolved.”
The 12 January hearing opened on the issue the judge must decide first, which is whether to issue an injunction preventing Visa and MasterCard from charging fees to non-Visa-MasterCard ATM operators for not upgrading their systems to read the new EMV security chips. An EMV chip is a micro-processor that acts as a form of electronic data storage on credit cards. The acronym EMV derives from “Europay, MasterCard and Visa,” the companies that initiated development of the EMV specifications in 1994.
The networks say that they developed the chip to help reduce losses due to fraudulent credit card charges which historically have been absorbed by the issuers and only rarely by the merchants. MasterCard implemented its so-called “liability shift” for handling such charges in October 2015. Under this regime, liability “shifts” from the bank which issued the card to the merchant, unless the merchant has upgraded his system to read the chips. Visa’s liability shift takes effect in October 2017.
Merchants and ATM operators are assessed a “charge-back” fee in instances where there is a problem with a charge, and a “fall back” fee when a card processor’s system automatically defaults a payment to the metallic swipe which preceded the EMV technology.
Leon, after lending the lawyers a skeptical ear on the issue of the injunction, agreed to accept written briefs, and then to hear oral argument in April, and to issue an opinion in July. But he recommended that counsel in the meantime set up a plaintiffs’ and defense counsel working group, with one lawyer from each firm, to narrow down the factual and legal issues, and to settle among themselves as many issues as possible.
Leon acknowledged that he had little experience with antitrust litigation, but said that he had presided over In re Fannie Mae Securities Litigation a decade ago. He said that the case involved 30 million documents, 14 million of which were emails, of which he said a lawyer had admitted that less than 1000 were important. “Aw, come on! This is silly,” Leon said that he had replied.
Co-lead interim class counsel for the National ATM Council and independent ATM owner-operator plaintiffs are Rubin PLLC; Lukas, Nace, Gutierrez & Sachs; and the Mogin Law Firm. Co-lead interim class counsel for Visa/MasterCard-owned ATM user plaintiffs are Quinn Emanuel Urquhart & Sullivan; Hagens Berman Sobol Shapiro; and Mehri & Skalet. Non-bank-owned ATM user class plaintiffs are represented by Finkelstein Thompson and Lovell Stewart Halebian Jacobson.
Visa is represented by Arnold & Porter; MasterCard is represented by Paul, Weiss, Rifkind, Wharton & Garrison.
The cases are: The National ATM Council et al. v. Visa and MasterCard et al., no. 11cv1803; Mackmin et al. v Visa et al., no. 11cv1831; and Stoumbos v. Visa Inc. et al., no. 11cv1882, in the US District Court for the District of Columbia (Washington DC).
by Peter Geier in Washington DC
Disclosure: Don Resnikoff is Of Counsel to Rubin PLLC
CFPB acts against two law firms for misrepresenting attorney involvement to collect on debts
The Consumer Financial Protection Bureau has taken action against two medical debt collection law firms and their president for falsely representing that letters and calls were from attorneys attempting to collect on a debt when no attorney had yet reviewed the account. The law firms also did not ensure the accuracy of the consumer information they furnished to credit reporting companies and used improperly notarized affidavits in lawsuits filed against consumers. The practices affected thousands of individuals. The CFPB is ordering Works and Lentz, Inc., Works and Lentz of Tulsa, Inc., and their president, Harry A. Lentz, Jr., to provide $577,135 in relief to harmed consumers, correct their business practices, and pay a $78,800 penalty.
The CFPB's press release, with a link to the consent order, is here.
Credit: Consumer Law Policy Blog
State laws and gun violence
The Violence Prevention Center has released a new analysis (http://www.vpc.org/press/states-with-weak-gun-laws-and-higher-gun-ownership-lead-nation-in-gun-deaths-new-data-for-2015-confirms/) of just-released Centers for Disease Control and Prevention data showing, as in prior years, that states with weak gun violence prevention laws and higher rates of gun ownership have the highest overall gun death rates and that states with the lowest overall gun death rates have lower rates of gun ownership and stronger gun violence prevention laws.
China Ready to Step Up Scrutiny of U.S. Firms If Trump Starts Feud
Bloomberg - China is prepared to step up its scrutiny of U.S. companies in the event President-elect Donald Trump takes punitive measures against Chinese goods and triggers a trade war between the world's two biggest economies after he takes office. The options include subjecting well-known U.S. companies or ones that have large Chinese operations to tax or antitrust probes, the people said, asking not to be identified because the matter isn't public.
click title for link
From the Legal Services Center at Harvard Law School: Former ITT Tech students move to intervene in ITT’s bankruptcy proceedings
On January 3, 2017, a group of former ITT Tech students moved to intervene in ITT’s bankruptcy proceedings in the Southern District of Indiana. They seek to act as representatives of hundreds of thousands who have been defrauded by ITT.
Along with legal documents, the students filed over a thousand pages of first-hand accounts from students who attended ITT, affidavits from several whistleblowers, and evidence developed from state and federal law enforcement investigations. The CFPB and multiple state attorneys general are also parties in the bankruptcy proceedings.
See http://www.legalservicescenter.org/get-legal-help/predatory-lending-and-consumer-protection-unit/project-on-predatory-student-lending/itt-bankruptcy-student-intervention/
CLE and Webinar on expert witnesses in the DC Superior Court
In its ruling on Motorola Inc. v Murray in October 2016, the D.C. Court of Appeals adopted Federal Rule of Evidence 702 and the Daubert standard for determining the admissibility of expert witnesses in the D.C. Superior Court. The decision overturned decades of case law and now applies to all experts in every type of trial.
To help practitioners navigate the new rule, the D.C. Bar Continuing Legal Education Program will host “Evaluating Expert Witnesses: The New Daubert Standard in D.C. Superior Court” on Tuesday, January 10. The 3-hour program will be led by a panel of seasoned practitioners, a medical scientist, and D.C. Superior Court Judge Frederick Weisberg.
Prior to the course, moderator Patrick Malone of Patrick Malone and Associates gave the D.C. Bar a sneak peek, offering his insider tips for trial lawyers.
Ten Lessons for Trial Lawyers
Doctrine
1) “Reliability” is a malleable term.
2) Same intellectual rigor should be used both inside and outside the court.
3) There is no easy bright-line test for all experts.
Protect Your Experts
4) Articulate the methodology.
5) Do thorough literature searches.
6) Ask opposing experts: “Can reasonable persons differ?”
Probe Soft Spots
7) Watch for experts wandering from their core expertise.
8) Mind the gaps.
9) Become literate in statistics and probability, and don’t forget to examine those error rates.
Tactics to Attack/Defend
10) Know when and how to launch a Daubert attack.
Want to know more? In addition to expanding on his tips, Malone will be joined by Judge Weisberg, who played a key role in changing the law of expert admissibility; Michael Ambrosino, Special Counsel for DNA and Forensics, U.S. Attorney’s Office for the District of Columbia; Dr. Bernard Goldstein, MD, Emeritus Professor and Emeritus Dean, Graduate School of Public Health, University of Pittsburgh; and Maneka Sinha, Public Defender Service for the District of Columbia. These experts will guide attendees through this new rule on topics such as:
Register for the in-person class today! Not able to make it in? The program is also offered as a Webinar.
U.S. Loses Bid to Overturn AmEx Antitrust Decision
Reuters - A federal appeals court on Thursday rejected the U.S. government's request that it reconsider its decision allowing American Express Co. to stop merchants from encouraging customers to use rival cards that charge lower fees.
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Four Mega-Mergers Hang Over Into New Year
Bloomberg - Four long-pending mega-mergers aren't likely to emerge this year untouched by their months-long regulatory reviews. Parties to three of the four deals have already said they've received second requests for information from antitrust regulators, and the companies' lawyers are presumed to be working to negotiate settlements that mollify agency concerns.
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Trump Tells Confidant He Still Opposes AT&T-Time Warner
Bloomberg - Donald Trump remains opposed to the megamerger between AT&T Inc. and Time Warner Inc. because he believes it would concentrate too much power in the media industry, according to people close to the president-elect, who has been publicly silent about the transaction for months.
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Post-ACA Landscape Raises Stakes for Insurer Megamergers
Modern Healthcare - The possibility that the Affordable Care Act will be bulldozed and replaced by the incoming administration means the nation's largest insurers are consolidating amidst a very different landscape than the one they viewed when they first proposed some of the industry's largest tie-ups.\
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Will there be continued prosecution of horizontal agreements under a Trump antitrust regimen?
Recent historical precedent is that antitrust enforcement of straightforward anticompetitive horizontal agreements continued under Republican administrations generally unenthusiastic about antitrust. With that in mind, the recent Wolters-Kluwer review of current enforcement of price fixing and other horizontal conduct is interesting:
In 2016, the Department of Justice Antitrust Division continued filing new actions in a number of its long-running probes, such as its investigations of the auto parts industry and real estate foreclosure auctions. However, the year also saw charges in some new probes. Two particularly important price fixing investigations announced in 2016 involved packaged seafood and generic drugs.
In December, the Justice Department announced its first charge in its packaged seafood industry probe against a former Bumble Bee Foods executive. Just two weeks later, another executive was charged and agreed to plead guilty for his alleged role in the price fixing conspiracy. More charges will likely follow in 2017, including corporate plea deals.
News of the Justice Department investigation has been circulating for some time. When a proposed merger in the industry was abandoned in 2015 in light of a Justice Department challenge, government concerns about the competition in the marketplace were disclosed. In the face of a challenge in late 2015, Thai Union Group P.C.L.—the owner of Tri-Union Seafoods LLC, doing business as Chicken of the Sea International—and Lion Capital LLP mutually agreed to terminate plans to acquire Bumble Bee Foods, LLC. In response, William Baer, then assistant attorney general in charge of the Antitrust Division, stated: “Our investigation convinced us—and the parties knew or should have known from the get go—that the market is not functioning competitively today, and further consolidation would only make things worse.”
Another newly announced investigation in 2016 involved generic drug price fixing. Two former pharmaceutical industry executives were charged with participating in a conspiracy to fix prices, rig bids, and allocate customers for two forms of generic drugs. The Antitrust Division announced charges against Jeffrey Glazer, the former chief executive officer of generic pharmaceutical company Heritage Pharmaceuticals, Inc., and Jason Malek, the former president of the same company. The government alleged that the two participated in conspiracies involving an antibiotic, doxycycline hyclate, and glyburide, a medicine used to treat diabetes. The challenged conduct took place between April 2013 and December 2015. Charges in this long-running investigation have been anticipated for years. In 2014, Senator Bernie Sanders, joined by fellow lawmakers, sent a letter to Glazer, seeking information on the dramatic price increases for doxycycline hyclate. The letter represented that the average price of the drug increased by as much as 8,281 percent between October 2013 and April 2014. A number of private antitrust suits have been filed in response to the government’s investigation. Additional charges are likely in 2017.
These new investigations were announced as the Justice Department continued its long-running probes in other areas. For instance, charges continued to be filed in the global auto parts cartel investigation, in which fines now total nearly $2.9 billion. The first filings in this probe date back to 2011.
The government also continued to pursue real estate investors who engaged in anticompetitive conduct at foreclosure auctions around the country. The foreclosure case filings started in 2010. Most of the convictions result from conduct that took place in California, and some indicted individuals await trial there. There also have been a number of convictions in Alabama, Georgia, and North Carolina.
The auto parts and foreclosure auction probes could be winding down. Grand jury indictments against in Maruyasu Industries Co., Ltd. and Tokai Kogyo Co., Ltd. for their alleged participation in a conspiracy to fix the prices of automotive body sealing products and trials in the foreclosure investigation are indications that fewer plea deals with cooperating witnesses are on the horizon.
Credit: Wolters-Kluwer blog
EMV and ATM operators: what are the issues?
1. A liability shift followed by charge-backs
There are unforeseen consequences of the liability shift that create a larger business case for implementation. Industry insiders suggest that the number of charge-backs have multiplied by a factor of 10.
One reason why is that issuers charging back fallback transactions (in which a mag stripe card is used on a chip-enabled terminal) and take the word of their cardholders for granted. There is certainly fraud, and there is definitely abuse of the rules.
Some transactions are coded “chip capable” as the hardware is already in place, but issues with certification delay activation of software, which means that every EMV card transaction would be considered fallback. ATM operators are also feeling the impact since fraudulent cardholders and heavy-handed issuers don’t distinguish between POS terminals and ATMs.
2. Continuing use of signature
Continuing with signature is similar to building a huge barbwire fence around your house, then leaving the gate open for your car. Experience elsewhere has demonstrated that use of a PIN code actually shortens the transaction time — a bonus for multilane retailers for whom queuing means either less turnover or higher costs.
3. Reluctance to embrace change
Given the implementation issues, it is easy for critics to say that EMV does not work and argue that there is no business case. With this attitude, I doubt that the steam engine would have made it. The case for EMV can be qualified.
4. A rush to the courts
It is fair enough that no-one could see the Draconian impact of the liability shift, but a central EMV migration body with a proper mandate would allow for a constructive debate between the stakeholders rather than immediate escalation to the courts.
CMS Payments Intelligence, a consultancy specializing in retail payments, has published a convincing business case that the cost of counterfeiting continues to rise and is at such a level that the cost of chip cards and terminal upgrades is now lower than the cost of counterfeit fraud. Rather than “to EMV or not” the debate should center on “how can we make it work.”
From: http://www.atmmarketplace.com/articles/enough-with-the-finger-pointing-its-time-for-the-us-to-refocus-reform-and-unite-on-emv/
NY AG: "The Trump Foundation is still under investigation by this office and cannot legally dissolve until that investigation is complete”
A spokesperson for New York Attorney General Eric Schneiderman said some days ago that President-elect Donald Trump’s charitable foundation cannot cease operations until an investigation into the organization is complete.
Trump has announced that he would dissolve the Donald J. Trump Foundation amid mounting scrutiny over potential conflicts of interests with his business holdings.
The foundation has been the subject of an investigation by the New York attorney general's office following reports from The Washington Post that the charity’s funds may have been used to personally benefit Trump.
"The Trump Foundation is still under investigation by this office and cannot legally dissolve until that investigation is complete,” Amy Spitalnick, a spokeswoman for Schneiderman, said in a statement to The Hill.
Full article: http://thehill.com/blogs/blog-briefing-room/news/311773-ny-ag-trump-cannot-legally-dissolve-foundation-until
California officials are bracing for a major clash with Donald Trump and his incoming presidential administration in the battle over global warming
Trump — who has repeatedly described climate change as a hoax — could make the crusade to curtail emissions in California much more difficult. Experts said he could, among other actions, slash funding for scientific research and technology, end tax credits for electric cars and solar roofs, and mount a comprehensive legal fight against the state’s ability to regulate greenhouse gases from polluting industries.
The showdown could ripple to other states that have or plan to follow California’s policies, such as reducing vehicle emissions, forcing power utilities to increasingly use renewable sources of energy and requiring industry to pay money for the right to pollute.
Full article: http://www.sandiegouniontribune.com/news/environment/sd-me-california-climate-20161205-story.html
Modern Healthcare: Medicare Advantage 'only safe game in town' for insurers
While Medicare Advantage plans added nearly 900,000 members in 2016, enrollment is growing at a slower pace. Still, experts say the future of Medicare Advantage will be lucrative for insurers.
“It's the only safe game in town [for insurance companies], in all of health insurance,” said John Gorman, a former CMS official who is now a healthcare consultant in Washington.
Enrollment in Medicare Advantage, the private, managed care version of the federal health program for seniors, reached nearly 18.7 million as of Dec. 1, according to the latest federal data.
http://www.modernhealthcare.com/article/20161222/NEWS/161229969?utm_source=modernhealthcare&utm_medium=email&utm_content=20161222-NEWS-161229969&utm_campaign=am
From DMN: Run-DMC Sue Wal-Mart, Amazon, and Jet for $50 Million
Amazon has a pirating problem, so Run DMC is taking them to court. Wal-Mart and Jet, too, apparently.
In court documents obtained by Digital Music News, Run DMC is taking Amazon, Wal-Mart, and Jet to court. The lawsuit also names Vision World, Infinity Fashion, SW Global Corp. and twenty John Does.
The lawsuit begins with a quick history on Run DMC.
Full article here.
Committee Report of Bipartisan Congressional Drug Pricing Investigation
REPORT INCLUDES FINDINGS FROM THREE HEARINGS; REVIEW OF MORE THAN ONE MILLION PAGES OF DOCUMENTS; AND INTERVIEWS WITH SCORES OF PATIENTS, DOCTORS, HOSPITAL ADMINISTRATORS, CONSUMER ADVOCATES, HEALTH EXPERTS, AND PHARMACEUTICAL INDUSTRY EXECUTIVES
CLICK HERE to read report
Excerpt from Better Market's Dennis Kelleher's email to supporters:
A few of our most notable victories and activities include:
How did we do this? By directly taking on Wall Street's biggest banks and their lawyers and lobbyists in more than 30 rule makings at all the agencies in Washington, and battling them in court when Wall Street tried to get these common-sense rules and laws thrown out.
Are taxpayers funding immunotherapy drug research for corporate profits?
From the NY Times:
Enthusiasm for cancer immunotherapy is soaring, and so is Arie Belldegrun’s fortune.
Dr. Belldegrun, a physician, co-founded Kite Pharma, a company that could be the first to market next year with a highly anticipated new immunotherapy treatment. But even without a product, Dr. Belldegrun has struck gold.
His stock in Kite is worth about $170 million. Investors have profited along with him, as the company’s share price has soared to about $50 from an initial price of $17 in 2014.
The results reflect widespread excitement over immunotherapy, which harnesses the body’s immune system to attack cancer and has rescued some patients from near-certain death. But they also speak volumes about the value of Kite’s main scientific partner: the United States government.
Kite’s treatment, a form of immunotherapy called CAR-T, was initially developed by a team of researchers at the National Cancer Institute, led by a longtime friend and mentor of Dr. Belldegrun. Now Kite pays several million a year to the government to support continuing research dedicated to the company’s efforts.
The relationship puts American taxpayers squarely in the middle of one of the hottest new drug markets. It also raises a question: Are taxpayers getting a good deal?
Defenders say that the partnership will likely bring a lifesaving treatment to patients, something the government cannot really do by itself, and that that is what matters most.
Critics say that taxpayers will end up paying twice for the same drug — once to support its development and a second time to buy it — while the company reaps the financial benefit.
“If this was not a government-funded cancer treatment — if it was for a new solar technology, for example — it would be scandalous to think that some private investors are reaping massive profits off a taxpayer-funded invention,” said James Love, director of Knowledge Ecology International, an advocacy group concerned with access to medicines.
Continue reading the NYT story
See editor Don Resnikoff's 2001 article on the same topic at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=314859
PUBLIC NOTICE
Superior Court of the District of Columbia:
Increase in Jurisdiction Limits for Small Claims and Conciliation Cases
Effective immediately, and pursuant to the “District of Columbia Judicial Financial Transparency Act” of 2016, the Small Claims and Conciliation Branch jurisdiction limit is increased from $5,000 to $10,000.
All cases for the recovery of money for $10,000 or less, exclusive of interest, attorney fees, protest fees, and costs must be filed in the Small Claims and Conciliation Branch. The Small Claims and Conciliation Branch rules and forms apply to these actions. The fee for filing these cases is $45.
Cases filed in the Civil Actions Branch for the recovery of money for $10,000 or less will not be accepted. These cases must be filed in the Small Claims and Conciliation Branch in person. This Branch currently does not accept electronic filings. If a case is electronically filed in the Civil Actions Branch on or before Friday, December 23, 2016 by 11:59 p.m. it will be accepted for filing and certified to the Small Claims Branch. All cases filed in the Civil Actions Branch on or after Saturday, December 24, 2016 will be rejected if they do not meet the jurisdiction requirement.
For additional information, please contact the Clerk’s Office, Small Claims and Conciliation Branch on (202) 879-1120. You can also contact the Clerk’s Office using our Live Chat online at http://info.caseedge.com/e/137571/ublic-aud-civil-civilchat-jsf-/22nsd9/38019522 The Clerk’s Office is located in Court Building B, 510 4th Street, N.W., Room 120, Washington, D.C. 20001.
From DMN: President Barack Obama Signs Anti-Ticket Bot Legislation Into Law
President Barack Obama signed into law the Better Online Ticket Sales (BOTS) Act of 2016. Last week, both the Senate and the House passed the legislation. The law deems ticketing bots “an unfair and deceptive practice” in violation of the Federal Trade Commission Act. This follows a similar law passed recently in New York.
The BOTS Act of 2016 makes it illegal to use software to purchase online tickets for popular events. Engadget reports that the Act also make it illegal to use bots or software to resell tickets. The new law aims to give users a fair shot at normal ticket prices, reducing scalping.
Article continues here.
The view from Great Britain: Donald Trump lashes out over insult to his New York restaurant's chinese-style dumplings and T-bone steak
Excerpt from the Telegraph:
Donald Trump in feud with Vanity Fair over 'flaccid dumplings' restaurant review Allen, washington
15 DECEMBER 2016 • 9:51PMAmid concerns over Russian hacking of the US election Donald Trump also had another preoccupation - a scathing review of his Trump Grill restaurant by the magazine Vanity Fair.
In a withering assessment of the eaterie in the lobby of Trump Tower in New York, critic Tina Nguyen described eating a steak that "slumped to the side over the potatoes like a dead body in a T-boned minivan".
**
[T]he Vanity Fair writer described eating "flaccid, grey Szechuan dumplings with flaccid, grey innards as a campy version of Jingle Bells jackhammered in the background".
She also criticised bathrooms that "transport diners to the experience of desperately searching for toilet paper at a Venezuelan grocery store"
The reviewer conceded that the taco bowl was "perfectly adequate" but concluded: "As soon as I got home I brushed my teeth twice and curled up in bed until the nausea passed."
Mr Trump turned his fire on the magazine's editor Graydon Carter.
He wrote on Twitter: "Has anyone looked at the really poor numbers of Vanity Fair magazine? Way down, big trouble, dead! Graydon Carter, no talent, will be out!
From http://www.telegraph.co.uk/news/2016/12/15/donald-trump-feud-vanity-fair-flaccid-dumplings-restaurant-review/
Recap of Washington D.C. area (close-in Maryland) Purple Line light rail litigation developments
Earlier this year a the Federal ruling vacating the Record of Decision denied the Purple Line its anticipated $1 billion in federal funds. This ruling was recently reaffirmed by Judge Richard Leon. (Click highlighted language to see the rulings.)
The Friends of the Trail group opposes the Purple Line and seeks donations: Click: Donations Needed
NYT: Uber Defies California Regulators With Self-Driving Car Service
Uber said it had no intention of ending a new test of its self-driving vehicles in San Francisco, even though the state said it was illegal.
Click title to see article
CFPB questions college sponsored bank cards
Excerpt from CFPB report:
o Certain agreements between colleges, financial institutions, and other vendors present continued risks to students. Publicly available agreements show many students face high fees when using college-sponsored banking products. In addition, colleges may miss opportunities to monitor program execution and position themselves to understand the economic costs to students from products marketed under these agreements. These observations raise important questions about whether certain agreements promote products that may be inconsistent with the best financial interests of their students.
o General marketing agreements for college-sponsored accounts, including agreements in place at many of the nation’s largest colleges and universities, do not protect students from certain costly account fees. Under a general marketing agreement that does not restrict certain fees, a large college or university could expect its students to collectively pay hundreds of thousands of dollars per year in overdraft fees alone.
o Students’ interests may be an afterthought in many marketing agreements. General marketing agreements between banks and colleges often do not contain certain specific account terms, conditions, or features, suggesting that colleges may not be negotiating terms that maximize value for their students. The Bureau identified dozens of general marketing agreements that may feature accounts with higher fees or fewer protections than widely available alternatives that are safer or more affordable, including accounts currently in use at hundreds of other colleges. In contrast, these marketing agreements tend to specify detailed terms describing the financial arrangement between colleges and banks, such as provisions detailing revenue sharing and other payments made in exchange for exclusive marketing access to a student population.
o Many colleges fail to ensure they are in position to evaluate products offered to students and oversee the execution of their campus banking marketing agreements. For example, many colleges do not negotiate the right to receive periodic reporting detailing student product use and costs, to accept or decline account pricing changes, including fee increases, or to obtain information about the resolution of student complaints. Such missed opportunities mitigate colleges’ ability to ensure their programs are in the best financial interest of their students.
Full CFPB report: http://files.consumerfinance.gov/f/documents/201612_cfpb_StudentBankingReport2016.pdf
AG Jepsen: Conn. Joins Antitrust Lawsuit over Allegations that Drug
Company Illegally Blocked Generic Opioid Treatment from Market
35 states and D.C. file antitrust, consumer protection lawsuit over alleged Suboxone "product hopping"
12-15-2016
Connecticut, 34 other states and the District of Columbia filed a federal lawsuit yesterday afternoon against the makers of Suboxone, a prescription drug used to treat opioid addiction, alleging that the companies engaged in an illegal scheme to block generic competitors from entering the market and cause purchasers to pay artificially high prices, Attorney General George Jepsen said.
Reckitt Benckiser Pharmaceuticals, Inc. – now known as Indivior PLC – and MonoSol Rx are accused of conspiring to switch Suboxone from a tablet version to a film, which dissolves in the mouth, in order to prevent or delay generic alternatives and maintain artificially inflated profits. The states allege that the companies' behavior violates both state and federal laws.
Full press release: http://www.ct.gov/ag/cwp/view.asp?A=2341&Q=585944
Insurance merger trials consider how to define markets
By Shannon Muchmore | December 14, 2016
Excerpt:
Potential upheaval of the insurance industry remains on trial as two major merger cases that could help define national insurance markets are progressing in the same Washington, D.C., building.
Anthem is facing an uphill battle in its attempts to convince a U.S. district judge that its $54.2 billion proposal to take over Cigna meets legal scrutiny, analysts said. The government wrapped up its arguments this week in a separate challenge to the $37 billion merger bid between Aetna and Humana.
If the insurers are successful in their arguments, the “big five” insurers would be down to three companies. Attorney General Loretta Lynch has said this would “fundamentally reshape the health insurance industry” and kill competition in key markets.
The second phase of the Anthem trial began Wednesday. U.S. District Judge Amy Berman Jackson is considering the closing arguments from the first phase, which focused on the merger's impact on the national market. She could rule at any time that the government has already shown the merger to be unlawful.
The U.S. Justice Department sued to stop both mergers in July, arguing that they would reduce competition and result in higher prices, fewer choices for consumers and lower quality care.
Tim Greaney, co-director of the Center for Health Law Studies at St. Louis University, said the government has done a good job of making its core argument in the Anthem trial and has sewn doubt that the insurers' could provide better and less expensive services by working together, as both claim.
Full article: http://www.modernhealthcare.com/article/20161214/NEWS/161219969?utm_source=modernhealthcare&utm_medium=email&utm_content=20161214-NEWS-161219969&utm_campaign=am
Baker, Hostetler primer on state action doctrine after North Carolina Dental ruling
Excerpt: The Supreme Court’s North Carolina Dental Ruling In North Carolina State Board of Dental Examiners v Federal Trade Commission, the Supreme Court provided unusually detailed guidance on state action immunity questions that had vexed lower courts for years. [footnote omitted] In that case, North Carolina delegated a dentist licensing system to its Board of Dental Examiners. Its members were selected by dentists in the state, with most being dentists with active practices, including providing teeth-whitening treatments. After nondentists began offering teeth-whitening services, the Board decided that teeth whitening is the practice of dentistry and then launched an aggressive campaign to stop non-dentists from providing teeth whitening in North Carolina.
The FTC claimed the Board’s actions unreasonably restrained trade. The Board responded by arguing the state action doctrine provides state-designated entities with immunity from the FTC’s lawsuit. The Fourth Circuit concluded, with little analysis, that ‘when a state agency is operated by market participants who are elected by other market participants, it is a “private” actor’ and required to satisfy both Midcal prongs. [footnote omitted] This conclusion effectively decided the case, as the Board did not argue it could meet Midcal’s second prong.
The Supreme Court affirmed with an opinion addressing the very core of the state action doctrine. The Court explained that the doctrine is not ‘unbounded’ and its application is ‘disfavoured’. These limits on state action, the Court said, are ‘most essential’ when a state attempts to delegate its regulatory power to participants in the very market they are regulating due to the risk that those participants will pursue private interests that restrain trade. Consequently, the Court reasoned, immunity does not automatically apply to non-sovereign actors, even if they are delegated regulatory authority by a state.
In blunt terms, the Court observed that ‘active market participants cannot be allowed to regulate their own markets free from antitrust accountability’.
full article: https://www.bakerlaw.com/files/uploads/Documents/News/Articles/LITIGATION/2015/US%20Private%20Antitrust%20Litigation.pdf
Pharmaceutical Antitrust: What the Trump Administration Can Do
By Michael A. Carrier (Rutgers Law School)
Abstract excerpt: Drug prices are in the news. “Pharma Bro” Martin Shkreli increased the price of Daraprim, a treatment for fatal parasitic infections, by 5000%. Mylan found itself on the hot seat for raising the price of the anaphylaxis-treating EpiPen 15 times in 7 years, resulting in a 400% increase to more than $600. Politicians rail about the harms of high drug prices.
What can the next Administration do? A lot. This article shows how—even without directly regulating price—it can use antitrust law to reduce prices by challenging an array of anticompetitive behavior. It can target settlements by which brand drug firms pay generics to delay entering the market. It can go after “product hopping,” by which a brand firm switches from one version of a drug to another to forestall generic competition. It can target distribution restrictions that brands have instituted to block generics. And it can challenge other conduct in the industry.
In short, antitrust law has a vital role to play.
Full article: Pharmaceutical Antitrust: What the Trump Administration Can Do
California considers laws to protect immigrants
Immigrant protection bills introduced this week:
One would create a program to finance legal services for immigrants fighting deportation. Another would provide training and advice on immigration law to public defenders’ offices. Come the purge — and Mr. Trump has said he is going after two million to three million people immediately — many will need lawyers.
The third bill, potentially the most consequential, seeks to ensure that California will never be an accomplice to mass deportation. Its sponsor, Kevin de León, the California Senate president pro tempore, calls it the California Values Act, befitting a state that is nearly 40 percent Latino, and where one in four residents is foreign-born. It would bar state or local resources from being used for immigration enforcement, a strictly federal duty. No state or local law enforcement agency would be allowed to detain or transfer anyone for deportation without a judicial warrant.
Nothing in the bill would obstruct the federal government.
Full article: http://www.nytimes.com/2016/12/09/opinion/california-looks-to-lead-the-trump-resistance.html?action=click&pgtype=Homepage&clickSource=story-heading&module=opinion-c-col-left-region®ion=opinion-c-col-left-region&WT.nav=opinion-c-col-left-region
After Oakland fire, questions about vigilance of city inspectors
Questions about the competence of Oakland’s building inspection agency arose five years ago. An Alameda County Grand Jury in 2011 released a scathing report accusing the city’s building services division of mismanagement and having haphazard policies about conducting building inspections.
The grand jury found that agency was riddled with “poor management, lack of leadership, and ambiguous policies and procedures.” It added that the agency had inconsistent standards on code violations and that the violation notices sent to property owners were late and hard to understand. In addition, inspectors treated property owners in an “unprofessional, retaliatory and intimidating” manner.
[Current Mayor] Schaaf, who was a city councilwoman at the time of that report, said many of those concerns were quickly addressed, and she noted that the city also has been criticized in the past for being too aggressive with building code inspections.
The Ghost Ship warehouse was owned by Oakland resident Chor N. Ng’s trust and zoned exclusively for commercial use. It housed an artists collective and, according to former residents and those who frequented the building, had unpermitted living quarters inside and hosted concerts and other events.
The catastrophic fire appears to have triggered a wave of warehouse inspections by Oakland code enforcers.
See http://www.latimes.com/local/california/la-me-oakland-fire-inspection-questions-20161208-story.html
Am. Banker: CFPB on Collision Course with Trump's Justice Department
Posted: 08 Dec 2016 12:16 PM PST
Here. Excerpt:
* * * Title X of the Dodd-Frank Act * * * gives the agency explicit authority to pursue its own litigation up to and including the Circuit Court level. But when it comes to the Supreme Court, the law says the CFPB must first file a written request to the U.S. Attorney General within a specified timeframe and that the "Attorney General concurs with such request or fails to take action within 60 days of the request."
But Sen. Jeff Sessions, R-Ala., Trump's pick for attorney general, could conceivably withhold such concurrence. That would mean the Trump administration effectively blocks the CFPB's decision to appeal to the Supreme Court.
This leaves CFPB with relatively few scenarios to prevail in the PHH v CFPB case. The agency has requested an en banc rehearing of the matter before all sitting justices on the D.C Circuit, and if either that request for rehearing is denied or is granted and the panel upholds the earlier ruling, the Justice Department could prevent the CFPB from appealing the case further. * * *
But if the CFPB prevails en banc, * * * presumably PHH would appeal to the Supreme Court * * * if the high court did grant cert and heard the case, Ohio State University law professor Peter Shane said, the court would likely assign an amicus defendant to stand in the government's place if it decides it does not want to defend its side of the case.
The Politics of Professionalism: Reappraising Occupational Licensure and Competition Policy
Sandeep Vaheesan & Frank A. Pasquale III (Yale University)
Elite economists and lawyers have united to criticize occupational licensing. They contend that licensure rules raise consumer prices and restrict labor market entry and job mobility. The Obama Administration’s Council of Economic Advisers and Federal Trade Commission have joined libertarians and conservatives in calling for occupational regulations to be scaled back.
+ READ MORE
Protest groups want space at Trump inauguration
Excerpt from https://www.washingtonian.com/2016/11/15/inauguration-day-protest-might-face-restrictions/
On Monday, the US Court of Appeals for the DC Circuit heard arguments from the Act Now to Stop War and End Racism (ANSWER) Coalition against the National Park Service, which decides where protesters can and cannot be on Inauguration Day. This year, ANSWER wants to be on Freedom Plaza and the sidewalk in front of Trump’s DC hotel. The Park Service wants to reserve it for the inaugural committee’s “ticketed bleacher viewing stands.”
**
Since Bush’s inauguration, advocacy organizations have sued the National Park Service every four years for space to protest along the inaugural parade route. The cases have had varying verdicts: according to the Washington Post, in 2009 ANSWER protesters were allowed to use part of Freedom Plaza for President Obama’s inauguration. The coalition said it was a “unique, prime location” for their protest. In 2013, however, the inaugural committee claimed the plaza for itself. The regulations also reserve the space in front of the Trump Hotel for the inaugural committee.
In its response to ANSWER’s suit, the government claims some 84 percent of the sidewalks along the parade route will be open and available for the public, including protesters. That may prove more effective: If protesters are concentrated in one location, they would be easy for the incoming president to overlook, even if there were in front of his hotel. In 2001, Salon said there was a “steady stream of heckling” along the entire Bush inaugural route because protesters were dispersed throughout the crowd. It was easier for the police to de-escalate any problems, despite egg throwing. 16 years later, the crowd might be just as large and just as rowdy. It’s just no one knows yet exactly where they will be.
Illegal and dangerous music venues and artist residences are not only an Oakland problem
See: http://www.dallasobserver.com/music/dallas-underground-dance-parties-struggle-to-survive-city-crackdown-8000794
Excerpt:
"Dallas Fire [and] Rescue Inspectors did have to close down some New Year's Eve events due to invalid or no CO at all," he says. He would not say how many such events were shut down that night, but says none of them, to his knowledge, had proper certification. "Sometimes we have to make unpopular decisions to make sure that our goal [of public safety] is achieved," he says. "Ultimately the venue owner is responsible for helping us keep their patrons safe by following the laws, guidelines, policies and procedures of the city."
Barry Annino, the former president of both the Deep Ellum property owners group and merchants association, says the fire department is doing the right thing. "If for some reason they let it go and there's a fire and something happens, whose fault is it? The fire department's," he says.
**
Getting a CO requires navigating the city's bureaucracy. Frances Estes, assistant building official with City of Dallas Building Inspection, says that a tenant can apply for one with a one-time $280 fee for as long as the tenant occupies that space. There are limits. "We wouldn't allow commercial amusements to go into a residential zoning district," Estes adds. Even then, a building might need proper sprinkler, plumbing and electrical systems, stairway access and additional parking.
A zoning change would require a heavier lift, including a trip to the city's plan commission and possible objections from the reliably contentious City Council. There would also be significant extra costs, which Trich estimates could be as high as $2,000. Other effects of "playing by the rules" include being required to close at a certain time and likely having smaller-capacity parties to meet fire code. Compliance costs money, so going legit would mean charging more for admission. So much for the affordable, after-hours club. Obeying the letter of the law sort of kills the spirit of the party.
Excerpt from Guardian book review: Virtual Competition: The Promise and Perils of the Algorithm-Driven Economy
Enter Ariel Ezrachi and Maurice Stucke, two distinguished scholars specialising in competition law, who decided to ask if the online emperor has any clothes. Is the veneer of competitiveness provided by the vigour and diversity of our online marketplaces just an illusion? Their book – Virtual Competition: The Promise and Perils of the Algorithm-Driven Economy – provides some sobering answers.
Traditional competition law is about firms and their activities. The great insight underpinning Ezrachi’s and Stucke’s book is that, in a digital world, competition law will be mostly about algorithms and big data because these are the forces that now determine what happens in online marketplaces. The book focuses on three particular areas in which anticompetitive and manipulative behaviour is possible and, in some cases, already evident. They are: algorithmically enabled collusion (essentially computerised price fixing); behavioural discrimination (the process by which different customers get different offers depending on their data trails); and what the authors describe as “the dynamic interplay among frenemies” (ie the new ways in which firms can be both collaborators and competitors).
AdvertisementIn each of these areas, Ezrachi and Stucke dig deep into the ways in which algorithmic and big-data analytics combine to produce behaviours and outcomes that are – or could be – troubling for society. They then go on to discuss the extent to which existing competition law and legal precedents may – or may not – be able to address abuses. In the analogue world, for example, the law can deal with tacit collusion on price fixing because corporate executives are the agents who do it and it is possible often to prove intent. But Ezrachi and Stucke come up with plausible scenarios in which the pricing algorithms of rival firms may produce outcomes that are indistinguishable from tacit collusion, yet difficult to prosecute. Who do you sue when the “culprit” is a machine-learning algorithm? And how would you prove intent when an algorithm produces outcomes that its programmers could not have predicted?
Entire review: https://www.theguardian.com/commentisfree/2016/dec/04/how-do-you-throw-book-at-an-algorithm-internet-big-data?CMP=soc_3156
The Oakland warehouse fire: the need for effective local regulation
From DAR: Sadly, the son of my wife's cousin is one of those missing in the Oakland warehouse fire, so we have been following news reports closely. He was at the warehouse on a gig: his job was to present the light show to go with the rock music on the night of the ill-fated party.
The Oakland mayor and first responders who spoke at news conferences are impressive: deeply concerned about affected families, transparent in providing information, and appearing highly competent in supervising the grim chores of locating survivors and investigating what happened.
Local officials have explained that the warehouse had a government permit to operate only as a warehouse,not as a residence, not as a party or performance venue. There was no evidence of sprinklers or permits for a party at the building, Oakland officials said. An artists collective had divided the warehouse into areas, with people doing woodworking, sculpting and other art. Officials said that the crowded, cluttered "labyrinth" made it difficult for first responders to make their way through the smoldering building.
It is hard to imagine some advocate of reduced regulation arguing that the building owners should be allowed to use the warehouse any way they wished, without regulation. It seems plain that local regulation of the warehouse was needed, and if anything needed to be tougher.
The Oakland Mayor said in a news conference that the City government attempted to inspect the warehouse in November, but could not get in.
Media reports suggest that illegal use of the warehouse was open and notorious. Images posted to a website (www.ghostship.com) show a space heavily decorated with rugs, musical instruments, vintage lamps and lanterns and furniture, with individual spots carved out of the warehouse by nailed wood constructions. The warehouse, which also hosted a collective called Satya Yuga, regularly hosted EDM dance parties, according to its site. Friday's performance was scheduled for 9 PM to 4 AM Pacific time Friday-Saturday, according to the electronic musician Golden Donna's Facebook page.
See http://www.usatoday.com/story/news/2016/12/03/oaklands-ghost-ship-warehouse-had-known-safety-concerns/94906424/
From the USDOJ's 2nd Circuit brief in the American Express case
[on the lower court's belief that Plaintiff must account for effects on both sides of two-sided markets]
American Express operates a platform that facilitates transactions between merchants and cardholders. The platform’s appeal to merchants depends on attracting cardholders, and vice-versa. The panel discards bedrock antitrust principles under the mistaken belief that those principles cannot properly account for the interdependence of the platform’s two sides. Its decision conflicts with Supreme Court and Second Circuit precedent on two important questions of law:
1. The panel fails to apply the basic principle that a relevant market is “composed of products that have reasonable interchangeability for the purposes for which they are produced—price, use, and qualities considered.” United States v. E.I. du Pont de Nemours & Co., 351 U.S. 377, 404 (1956). Under this principle, distinct competitions on different sides of a platform are in “separate though interdependent markets.” Times-Picayune Publ’g Co. v. United States, 345 U.S. 594, 610 (1953). Here, services to cardholders and services to merchants are in “interrelated, but separate” markets. United States v. Visa U.S.A., Inc., 344 F.3d 229, 238-39 (2d Cir. 2003). In holding that the relevant market must include the services provided to “both merchants and cardholders,” Op. 57, the panel misapplies du Pont, ignores Times-Picayune, and erroneously distinguishes Visa.
2. The panel departs from this Court’s burden-shifting approach to the rule of reason. The plaintiff bears an initial burden of demonstrating that the challenged 2 restraint has an “adverse effect on competition as a whole in the relevant market”; if it does, the burden shifts to defendants “to offer evidence of the pro-competitive effects of their agreement”; and if they do, the burden shifts back to the plaintiff. Geneva Pharms. Tech. Corp. v. Barr Labs. Inc., 386 F.3d 485, 506-07 (2d Cir. 2004). The panel, however, erroneously requires plaintiffs not only to prove an adverse effect but also to account for any benefits in step one, proving “net harm.” Op. 57, 60. This improperly collapses the three-step approach into a single step. As a result, millions of merchants continue to pay higher credit-card fees and nearly every American continues to pay higher retail prices.
The brief is here: https://www.justice.gov/atr/case-document/file/910116/download?utm_source=CPI+Lista+Combinada&utm_campaign=38f5acb38a-&utm_medium=email&utm_term=0_ee26de8909-38f5acb38a-236764313
Judge In NFL Drug Case: Jones Can Be Deposed
From article By Daniel Kaplan,
Published November 29, 2016
A federal court judge yesterday ordered that lawyers for former players suing the NFL over alleged prescription drug abuse can depose Cowboys Owner Jerry Jones, but denied the players’ request to depose Colts Owner Jim Irsay. Judge William Alsup ordered Jones can be deposed for “seven hours on one day,” on a date within two weeks after his team’s season ends. Alsup did not give a reason for granting the Jones request in his short, one-page order. On Irsay, he wrote simply, “The record does not justify deposing Mr. Irsay.” The NFL strongly objected to both requests.
The ex-players allege they were given illegal pain medications during their playing days.
See http://www.sportsbusinessdaily.com/Daily/Morning-Buzz/2016/11/29/Jerry-Jones.aspx
NCLC is launching an emergency campaign to protect consumer rights
, and needs your help to defend the Consumer Financial Protection Bureau (CFPB) and other laws and regulations protecting consumers from abuse and promoting economic justice for all.
We're up against powerful adversaries: predatory lenders, abusive debt collectors and others who target struggling families; banks, financial services companies, their lobbyists and anti-consumer politicians in Washington, DC -- including President-elect Trump, who threatens to dismantle the law which created the Consumer Financial Protection Bureau (CFPB), the most important pro-consumer reform in the last 75 years.
NCLC is launching an emergency campaign to protect consumer rights, and we need your help to defend the Consumer Financial Protection Bureau (CFPB) and other laws and regulations protecting consumers from abuse and promoting economic justice for all.
We're up against powerful adversaries: predatory lenders, abusive debt collectors and others who target struggling families; banks, financial services companies, their lobbyists and anti-consumer politicians in Washington, DC -- including President-elect Trump, who threatens to dismantle the law which created the Consumer Financial Protection Bureau (CFPB), the most important pro-consumer reform in the last 75 years.
Click title to go to NCLC
Trump on bringing Apple manufacturing back to the US
Trump tells NYT he will reduce taxes and regulation.
NYT Trump interview excerpt:
I got a call from Tim Cook at Apple, and I said, ‘Tim, you know one of the things that will be a real achievement for me is when I get Apple to build a big plant in the United States, or many big plants in the United States, where instead of going to China, and going to Vietnam, and going to the places that you go to, you’re making your product right here.’ He said, ‘I understand that.’ I said: ‘I think we’ll create the incentives for you, and I think you’re going to do it. We’re going for a very large tax cut for corporations, which you’ll be happy about.’ But we’re going for big tax cuts, we have to get rid of regulations, regulations are making it impossible. Whether you’re liberal or conservative, I mean I could sit down and show you regulations that anybody would agree are ridiculous. It’s gotten to be a free-for-all. And companies can’t, they can’t even start up, they can’t expand, they’re choking.
I tell you, one thing I would say, so, I’m giving a big tax cut and I’m giving big regulation cuts, and I’ve seen all of the small business owners over the United States, and all of the big business owners, I’ve met so many people. They are more excited about the regulation cut than about the tax cut. And I would’ve never said that’s possible, because the tax cut’s going to be substantial. You know we have companies leaving our country because the taxes are too high. But they’re leaving also because of the regulations. And I would say, of the two, and I would not have thought this, regulation cuts, substantial regulation cuts, are more important than, and more enthusiastically supported, than even the big tax cuts.
Comment: Not all commenters agree that tax and regulation cuts will be enough to bring Apple electronics manufacturing to the U.S. Some point out that China has the manufacturing advantage of extremely low wages. DR
http://www.nytimes.com/2016/11/23/us/politics/trump-new-york-times-interview-transcript.html?_r=2
ATM Operators Need Early Injunction Against Unfair Rules
From article in Jurist by dccrc news editor Don Resnikoff (who is Of Counsel to Rubin PLLC, attorneys for the Plaintiff ATM Operators):
US Supreme Court published an order stating that it would no longer hear the appeal in two antitrust suits by ATM operators and consumers against Visa, MasterCard and several banks concerning ATM fees. The suit alleges that the defendants, credit card companies and banks have agreed to keep the ATM charges high. They have implemented rules preventing independent ATM operators from setting lower ATM fees for customers that use networks that charge the ATM operators less than Visa or MasterCard.
The lawsuit was originally dismissed by the district court. The US Court of Appeals for the District of Columbia Circuit reversed the decision and ordered the case to continue in the district court. The defendants appealed the decision to the US Supreme Court, which granted certiorari and was set to hear the case in December. However, without leave from the Court, petitioners abandoned the original argument upon which the grant of certiorari was based and advanced a different argument on the merits, so the basis for the certiorari grant was no longer present. The Supreme Court in its recent order decided that its earlier grant of certiorari was improvident, so that the appeal is dismissed and the case can go forward in the district court.
With the petition for certiorari dismissed, the plaintiff ATM operators have the opportunity to proceed to a trial on their allegations of price fixing behavior by banks that make use of the Visa and MasterCard networks and competitive networks. The ATM operators seek to end the rules that impose access fees favorable to MasterCard and Visa but harmful to the operators. These rules threaten the viability of their businesses. The fees are on top of high and increasing wholesale network fees from Visa and MasterCard, along with burdensome costs such as those caused by the compelled transition to EMV chip cards. (EMV stands for Europay, MasterCard and Visa and is a global standard for cards equipped with computer chips and the technology used to authenticate chip-card transactions).
full article at http://www.jurist.org/hotline/2016/11/Don-Resnikoff-atm-opertators.php
From DMN: Judge Allows “We Shall Overcome” Lawsuit to Move Forward
Earlier this year, We Shall Overcome Foundation filed a lawsuit against Warner/Chappell to free the song We Shall Overcome. This song is actually a 19th century spiritual, according to the foundation. Pete Seeger’s version copyrighted in 1960 and 1963 includes only minor alterations.
Now, a New York federal judge rejected a publisher’s bid to dismiss the lawsuit. The judge ruled that the plaintiffs have “plausibly alleged that lyrics in the first verse…were copied from material in the public domain.” The judge also said that the plaintiffs plausibly alleged that “there’s been a fraud on the U.S. Copyright Office. . . .“[These] allegations of fraud are sufficiently specific, and provide enough information from which to infer the requisite intent, to survive a motion to dismiss.” The opinion is here: OPINION.
From the opinion
“The copyrighted work differs from the 1948 version by only three words: (1) ‘we’ll’ for ‘I’ll’; (2) ‘shall’ for ‘will’; and (3) ‘deep’ for ‘down.’ The Plaintiffs have also plausibly alleged that the individuals listed on the 1960 copyright registration are not the authors of the changes that were made to the three words in the Song’s first verse. If they are not the authors, the Defendants cannot claim copyright protection. The Plaintiffs allege that the author of the underlying work is unknown, that it is unclear who changed ‘will’ to ‘shall,’ and that a Black tobacco worker named Lucille Simmons changed ‘I’ to ‘We.’ Simmons is not listed as an author in the application to register the copyright for the Song.”
Exxon decides to fight New York's climate change probe
Attorneys for ExxonMobil Corp. and New York Attorney General Eric Schneiderman on Monday sparred over a probe into the oil giant’s statements to investors regarding climate change's impacts on its business, with ExxonMobil lawyers accusing the AG’s office of using the climate investigation to boost an unrelated dive into the company’s accounting.
http://www.bloomberg.com/news/articles/2016-10-18/exxon-decides-to-fight-new-york-s-climate-change-probe
State Regulators Aim To Fill Trump’s Financial Regulation Vacuum
With many expecting the incoming Trump administration to dial back on his predecessor’s enforcement of financial regulations, attorneys general and financial regulators from states that did not support Trump are expected to step in where they can to police financial markets.
See Law 360 -- click title-- (paywall)
Light-in-the-box and other direct from China sellers as rivals of Walmart and Amazon
From DAR: I thought I had a great insight when I noticed that Light-in-the-Box and other Chinese companies are on the web selling Chinese made products to be shipped directly to Americans from China. The prices are often much cheaper than if you bought the same or similar products through American owned outlets. Examples include inexpensive musical instruments, such as violins or string bass bows. Some odd examples are items featured on TV infomercials, which I confess to watching, such as old-fashioned metal style razors that use double-edge blades. Looking to the future, it seems logical that Chinese exporters of Chinese made goods could replace American importers of the same goods, and that Chinese exporters could arrange US located warehouses if necessary. When I checked to see if anyone else had noticed the same phenomenon, I quickly found the following 2014 article in the Wall Street Journal. It might be little out of date, but not by a lot:
Excerpts from the article by Dennis Berman:
Wal-Mart and Amazon have become America’s main conduits for cheap, mass-produced goods from China’s factory floors. But who needs them anymore? . . . . [Products sent directly from China are] the final and direct link between China’s manufacturers and the global consumer. In the same way Chinese companies took over the production of goods, they are now increasingly capable of merchandizing those goods, using the Web and modern freight transport. Bentonville, you are being outsourced to China, too.
This is in part why China’s Alibaba has a $268 billion market capitalization. And it’s why United Parcel Service Inc. recently bought a company called i-parcel, to help U.S. suppliers penetrate the thickets of customs, fraud and language that still exist.
Today UPS estimates that e-commerce is an $850 billion global business, with cross-border representing about $70 billion of that. It expects the segment to grow at seven times the rate of global GDP. “What you see is the tip of the iceberg,” said Steve Brill, UPS’s vice president for business-to-consumer strategy. Smartphones and rising incomes mean “people have visibility of products from around the world.”
“More retailers will have to recognize that if they stay only within their country boundaries, other merchants will compete from outside their country boundaries,” Mr. Brill said.
. . . LightInTheBox [is] a Beijing company listed on the New York Stock Exchange. Run by Chinese with deep experience in America, the site can shapeshift into 27 different languages, from Arabic to Bahasa to Swedish, and ship goods piecemeal all over the world. For the 12 months ending in September, LightInTheBox sold $349 million of merchandise, a 25% increase from the year earlier. It is still far from profitable, posting significant operating and net losses. Its stock has fallen 23% this year.
LightInTheBox got its start selling wedding dresses, and it’s now selling about 800 different designs for under $200. It sells 400,000 a year. For wedding dresses, “the manufacture price in China is less than $100, but the store price in the U.S. or Europe was thousands of dollars,” company co-founder and CEO Quji “Alan” Guo said in an interview. “That was a category where there should have been better availability, but it was not there.”
The 1,800-person company has since moved from dresses to other categories, ones in which it can sell what Mr. Guo described as differentiated goods. Think Target, he said, more than Wal-Mart. That means things like my jacket, sold under the bizarre brand name Hanbeidi. It means faucets with LED lights, as well as makeup brushes, wigs, iPhone chargers and crocheted table linens. In essence, it’s the full run of China’s factory floor, some 700,000 separate items in all.
Much of this stuff is available from dozens of sites around the Web. What makes this significant is that the Chinese are selling it directly to consumers now—no Western middleman required.
* * *
The real change in world markets is how technology is connecting China directly to consumers. The company employs customer representatives in each of the 27 languages. There aren’t a lot of Danish speakers in China, of course. So instead it employs part-time workers from all over the world, training them over the Web, and then getting them to use the Web to make calls and do email.
* * *
Who knows whether LightInTheBox will be a lasting competitor. It doesn’t matter. Looking at my coat [sent from China], bedecked in Chinese labels, we do know the future of retail: It will be a global war of all against all.
Full article at http://www.wsj.com/articles/who-needs-amazon-or-wal-mart-china-cuts-out-the-middleman-1418950309
4 step "too big to fail" remedy from Neel Kashkari of the Minneapolis Fed
Substantial capital reserves are a major emphasis:
Step 1 of the Minneapolis Plan dramatically increases capital requirements for all bank holding companies larger than $250 billion to 23.5 percent of risk-weighted assets. And we count only common equity as capital. That is a key difference from current regulations, which also set 23.5 percent as the total amount of loss absorption that the largest banks must have, but current regulations include long-term debt in that amount. History has shown that long-term debt is not useful protection against losses in a crisis. That’s why we insist on common equity.
Step 2 of the Minneapolis Plan then calls on the U.S. Treasury Secretary to analyze and certify that individual large banks are no longer TBTF. If the Treasury Secretary refuses to certify a large bank as not TBTF, that bank will face dramatically increasing capital requirements, until either the Treasury Secretary certifies it as no longer TBTF or its capital reaches 38 percent. This is a critical step, because today there is no time limit for solving the TBTF problem. Today, banks can enjoy their explicit or implicit status as being TBTF potentially indefinitely. In contrast, the Minneapolis Plan puts a hard deadline on Treasury: Certify banks as no longer TBTF within five years, or else that bank will see dramatic increases in capital requirements. We believe the threat of these massive increases in capital will provide strong incentives for the largest banks to restructure themselves so that they are no longer systemically important. Any bank that remains TBTF will have so much capital that it virtually cannot fail. This is the approach regulators have taken with nuclear power plants. People understand that if a nuclear reactor melts down, it is devastating for society. Rather than ban nuclear power, regulators impose such tight restrictions on it in order to truly minimize the risk of failure. Step 2 takes the same approach with the largest banks.
Step 3 imposes a tax on debt for large shadow banks, greater than $50 billion, including hedge funds, mutual funds, and finance companies, of either 1.2 percent or 2.2 percent, depending on whether they are systemically risky. One of the concerns many experts expressed was the potential for risky activity to move from banks to shadow banks. If we increase capital requirements on banks and the risky activity just moves to large shadow banks, has safety actually improved? To protect against this scenario, our proposed tax will roughly level the playing field between banks and shadow banks by equalizing the cost of the funding so that activity doesn’t just move to a less-regulated segment of the financial system. Shadow banks that do not utilize debt funding will not pay any tax.
Finally, Step 4 rationalizes regulations on community banks, which are not systemically risky for the U.S. economy and that do have a vital role to play in American communities. Banks with less than $10 billion in assets should be subject to a much simpler and less burdensome regulatory framework that reflects their relative lack of risk to the economy.
full presentation at https://www.minneapolisfed.org/news-and-events/presidents-speeches/neel-kashkari-presents-the-minneapolis-plan-to-end-too-big-to-fail
ABA puts one law school on probation and censures another
POSTED NOV 17, 2016 01:36 PM CST
BY DEBRA CASSENS WEISS
The ABA Section of Legal Education and Admissions to the Bar announced on Tuesday that it is placing the Charlotte School of Law on probation and publicly censuring Valparaiso University School of Law.
The section said it is taking the actions because both schools were out of compliance with ABA accreditation standards.
According to Law.com, the action is part of “a recent crackdown on campuses it says are enrolling students who aren’t likely to graduate and pass the bar.” In August, the ABA legal education section directed the Ave Maria School of Law to take specific remedial actions.
The ABA legal education section is requiring the Charlotte and Valparaiso law schools to supply the section’s accreditation committee with admissions data and methodology for the fall 2017 entering class. The ABA section is also requiring both law schools to inform students about first-time bar pass rates by class quartiles for their law schools, and to inform each individual student about the quartile he or she is in.
The notice regarding Charlotte School of Law is here (PDF), and the notice regarding Valparaiso University School of Law is here (PDF).
Both law schools remain accredited and have two years to regain compliance with ABA standards, according to Law.com.
http://www.abajournal.com/news/article/aba_puts_one_law_school_on_probation_and_censures_another/?utm_source=maestro&utm_medium=email&utm_campaign=weekly_email
DraftKings and FanDuel Agree to Merge Daily Fantasy Sports Operations
http://www.nytimes.com/2016/11/19/sports/draftkings-fanduel-merger-fantasy-sports.html?ref=business
Message from National Consumer Law Center
Dear NCLC allies and supporters,
Fighting for consumer rights against powerful corporate and special interests is always an uphill battle. But the road ahead got considerably more difficult last week, with an election that increases the power of politicians who have vowed to roll back many of the pro-consumer protections that NCLC and our allies have helped win since the Great Recession.
Already, one of the very first policy positions added to President-elect Trump's new website says that "The [Trump] Financial Services Policy Implementation team will be working to dismantle the Dodd-Frank Act," which created the Consumer Financial Protection Bureau (CFPB) -- the most important pro-consumer reform in the last 75 years.
Opponents of consumer protections clearly feel emboldened to push the agenda of predatory lenders, abusive debt collectors and others who target struggling families, but they'll have a fight on their hands -- and NCLC will be at the center of it. NCLC's experts are already hard at work developing strategies for protecting the gains we've made and continuing to advance consumer protections.
I am confident that by banding together with our allies around the country, we can ensure that the voices of consumers continue to be heard by decision-makers
From Modern Healthcare: Repeal and replace Obamacare? It's not gonna be easy
President-elect Donald Trump and congressional Republican leaders are promising to make repeal and replacement of the ACA one of their highest priorities in the first 100 days after they take full control of the federal government in January. But they face a rocky road. READ MORE
NYT-Morgenson on political consequences of government failure to prosecute bankers responsible for the 2008 financial crash
Excerpt:
As millions of foreclosures and job losses followed [the 2008 financial crash], the failure to go after fraudsters confirmed the suspicion that the powerful got protection while those on Main Street were kicked to the curb. . . .
Many readers of The New York Times, particularly if you live in Manhattan, San Francisco or another affluent enclave, may not see how an accountability failure of years ago could still resonate. But the failure to prosecute even one or two high-profile bankers — or force them simply to pay fines and penalties out of their own pockets — left millions of Americans believing that our justice system was unjust.
Recall that more than 800 bankers went to jail after the savings and loan crisis of the 1980s. And that mess wreaked nowhere near the devastation that the housing debacle did on the overall United States economy.
Embarrassed, perhaps, by their passivity, Justice Department officials recently pledged to take a more aggressive approach to white-collar crime. But the memo issued last September by Sally Quillian Yates, deputy attorney general, outlining new ways the department would hold individuals to account, has not translated into results.
Full article: http://www.nytimes.com/2016/11/13/business/how-letting-bankers-off-the-hook-may-have-tipped-the-election.html?ref=business
NYT: Trump’s victory is not a clear boon for bankers and financiers in the way that past Republican wins have been
On paper, many of his campaign proposals appear to favor banks and investors, including a promise to undo Dodd-Frank, which was passed after the 2008 financial crisis.
Yet repealing the law and its many rules seems unlikely to gain much traction in Congress. And even many banks admit they have spent so much time and money complying with the law, they would rather keep it.
Several Obama administration officials said on Wednesday that they did not expect Congress to completely repeal Dodd-Frank. Instead of undertaking such a costly and controversial effort, one likely possibility is that the Trump administration and Congress would take aim at a handful of specific rules that most irritate the banks, including what is known as the Volcker Rule, a centerpiece of Dodd-Frank that prohibits banks from placing risky bets with their own money.
Otherwise, many of the expected changes would benefit small and midsize banks rather than Wall Street banks. Regulators, for example, could
raise the size at which a bank is subject to Dodd-Frank’s enhanced oversight.
Other pieces of Dodd-Frank could be picked off, like reining in the authority of the Consumer Financial Protection Bureau, a hallmark of the Obama administration.
Mr. Trump could prune other low-hanging financial regulations, including a newly enacted Department of Labor rule that holds investment advisers liable for certain advice to their clients.
He also promised on the campaign trail to close the so-called carried interest tax loophole that increases the wealth of private equity executives.
And Mr. Trump’s campaign took aim at the honey pot of global banking revenue: free trade. For decades, banks have benefited from facilitating deals and lending to companies worldwide.
“Probably more so than any president in modern history it will be difficult to predict what issues he latches onto,” said Aaron Klein, a former Treasury official in the Obama administration, who is now a fellow at the Brookings Institution.
http://www.nytimes.com/2016/11/10/business/dealbook/trump-expected-to-seek-deep-cuts-in-business-regulations.html?ref=business
EU: Google responds: “Android hasn’t hurt competition” By CPI on November 10, 2016
Google—as expected—has dismissed the European Commission’s charge that the ad giant abused Android’s dominance to block its competitors in the market.
The company is accused of using Android’s position as the dominant smartphone operating system in Europe to force manufacturers to pre-install Google services while locking out competitors.
Competition commissioner Margrethe Vestager sent a so-called Statement of Objections to Google in April.
On Thursday, the multinational corporation defended its position and spoke of the open source nature of the Android operating system. It also compared a typical Android smartphone to rivals Apple and Microsoft. According to Google, 39 out of 39 pre-installed apps are from Apple on iPhone 7, and 39 out of 47 pre-installed apps on the Microsoft Lumia 550 are from Microsoft.
In a blog post on Thursday, Google general counsel Kent Walker said: “The response we filed today shows how the Android ecosystem carefully balances the interests of users, developers, hardware makers, and mobile network operators. Android hasn’t hurt competition, it’s expanded it.”
Full Content: ARS Technica UK
Google abused its monopoly power in ways that harmed Internet users and competitors. That was the conclusion drawn by experts at a federal regulatory agency back in 2012, according to The Wall Street Journal
Google, however, avoided a massive antitrust fight because the Federal Trade Commission didn't pursue a legal fight based on those findings.
Back in 2013, the FTC wrapped up a two-year investigation into the company's online monopoly power and it looked odd when Google got away relatively unscathed.
Unlike European regulators, all five FTC commissioners decided to not sue.
But the Wall Street Journal revealed some time ago that FTC investigators did indeed conclude that Google abused its monopoly power. FTC staff found proof that Google used anticompetitive tactics that hurt competitors like Yelp and TripAdvisor, according to secret internal documents obtained by the Journal.
The FTC's decision not to sue Google contradicted those findings.
The staff did find that Google (GOOG) posed "real harm to consumers and to innovation." However, FTC Chairman Jon Leibowitz affirmed at a press conference that Google "doesn't violate the American antitrust laws."
In reality, the FTC likely didn't pursue a legal fight because it was going to be a tough case. After all, it had to be able to prove that Google was a monopoly power that was not only harming competition but also the public. Google was popular with the public, which could easily choose to use competitors that were just a click away like Yahoo (YHOO, Tech30) and Bing.
Google general counsel Kent Walker said in a statement that the FTC staff reviewed 9 million pages of documents over 19 months and found that there was no need to take action on how the site ranked and displayed search results.
"Speculation about potential consumer and competitor harm turned out to be entirely wrong," Google said.
From http://money.cnn.com/2015/03/19/technology/google-monopoly-ftc/
Is Google a monopolist? Jonathan Rubin, lawyer and economist, is skeptical
“Beyond its influence over users’ preferences, Google has no means of control over its users’ access to any website on the web. To characterize Google as a “gatekeeper” is to attribute to it power that it does not possess.” RUBIN PLLC Public Interest Blog, July 10, 2012
ProtonMail alleges: For nearly a year, Google was hiding ProtonMail from search results for queries such as ‘secure email’ and ‘encrypted email’
More from ProtonMail:
This was highly suspicious because ProtonMail has long been the world’s largest encrypted email provider.
When ProtonMail launched in Beta back in May 2014, our community rapidly grew as people from around the world came together and supported us in our mission to protect privacy in the digital age. Our record breaking crowdfunding campaign raised over half a million dollars from contributors and provided us with the resources to make ProtonMail competitive against even the biggest players in the email space.
By the summer of 2015, ProtonMail passed half a million users and was the world’s most well known secure email service. ProtonMail was also ranking well in Google search at this time, on the first or second page of most queries including “encrypted email” and “secure email”. However, by the end of October 2015, the situation had changed dramatically, and ProtonMail was mysteriously no longer showing up for searches of our two main keywords.
Between the beginning of the summer and the fall of 2015, ProtonMail did undergo a lot of changes. We released ProtonMail 2.0, we went fully open source, we launched mobile apps in beta, and we updated our website, changing our TLD from .ch to the more widely known .com. We also doubled in size, growing to nearly 1 million users by the fall. All of these changes should have helped ProtonMail’s search rankings as we became more and more relevant to more people.
In November 2015, we became aware of the problem and consulted a number of well known SEO experts. None of them could explain the issue, especially since ProtonMail has never used any blackhat SEO tactics, nor did we observe any used against us. Mysteriously, the issue was entirely limited to Google, as this anomaly was not seen on any other search engine. Below are the search rankings for ProtonMail for ‘secure email’ and ‘encrypted email’ taken at the beginning of August 2016 across all major search engines. We rank on either page 1 or 2 everywhere except Google where we are not ranked at all.
All throughout Spring 2016, we worked in earnest to get in touch with Google. We created two tickets on their web spam report form explaining the situation. We even contacted Google’s President EMEA Strategic Relationships, but received no response nor improvement. Around this time, we also heard about the anti-trust action brought forward by the European Commission against Google, accusing Google of abusing its search monopoly to lower the search rankings of Google competitors. This was worrying news, because as an email service that puts user privacy first, we are the leading alternative to Gmail for those looking for better data privacy.
See https://protonmail.com/blog/search-risk-google/
Another U.S. Copyrights Office/Google conspiracy theory? There’s more than meets the eye, says Digital Music News and the Wall Street Journal
Several weeks ago, Digital Music News published a piece about Google’s (probable) involvement in the “removal” of Maria Hassante from the Copyrights Office. An opinion piece published by the Wall Street Journal published last Wednesday echoes these concerns:
“Most Americans think of Google as a search engine doing unalloyed social good, but the company also wants to make money and wield political influence along the way. So you don’t have to be a conspiracy theorist to notice that an abrupt change of leadership at the U.S. Copyright Office is good news for Google, which aims to pay less for profiting from the property of others.”
According to the WSJ piece, Maria Pallante was “reshuffled” to a new job in an advisory post for “digital strategy,” including expanding the digital library shop. Afterwards, in less than a week, she presented her resignation to Carla Hayden, the Librarian of Congress. Hayden was sworn in weeks before. Maybe there is more than just meets the eye.
Pallante strongly believed in defending the little guy, often siding with music and content creators in the digital media realm. According to WSJ, she also favored reorganizing the copyright office as “an independent agency.” Pallante’s re-shuffling was unprecedented, with no other removals noted in agency history.
Just prior to her “removal,” Pallante worked with Congress to review copyright laws. Hayden stipulated in a memo that Pallante’s new job didn’t include “any communications” to Congress. Pallante leaked that memo to the press.
The Wall Street Journal writes that circumstantial evidence exists that Google lobbied for Pallante’s dismissal.
See http://www.digitalmusicnews.com/2016/11/07/wsj-crticizing-google-washington-copyright-coup/
By Will Dobbie, Jacob Goldin, and Crystal S. Yang*
Abstract:
Over 20 percent of prison and jail inmates in the United States are currently awaiting trial, but little is known about the impact of pretrial detention on defendants. This paper uses the detention tendencies of quasi-randomly assigned bail judges to estimate the causal effects of pretrial detention on subsequent defendant outcomes. Using data from administrative court and tax records, we find that pretrial detention significantly increases the probability of conviction, primarily through an increase in guilty pleas. Pretrial detention has no net effect on future crime, but decreases formal sector employment and the receipt of employment- and tax-related government benefits. These results are consistent with (i) pretrial detention weakening defendants’ bargaining positions during plea negotiations and (ii) a criminal conviction lowering defendants’ prospects in the formal labor market.
Full article: https://pubs.aeaweb.org/doi/pdfplus/10.1257/aer.20161503
Zion's busted Nike shoe and inequity for NCAA's unpaid stars --the Alston case
"It [Zion Williamson's on court injury caused by a defective Nike shoe] is a powerful illustration of the fundamental inequity of big-time college sports, underscoring the risks incurred by unsalaried athletes in making millionaires of their coaches and university administrators. And though it is unlikely to impact Judge Claudia Wilken’s decision in the antitrust case known as Alston vs. NCAA — closing arguments were made two months ago; a ruling is due any day — it is sure to have ripples in future litigation, public opinion and as college athletes weigh whether to compete without additional compensation." From https://www.courier-journal.com/story/sports/2019/02/21/zion-williamson-injury-underscores-inequities-ncaa-sports/2937819002/
The following is from a law student's write-up on the Alston case:
A decision in the “mother of all pay-for-play lawsuits” is pending in the Northern District of California.4 Former West Virginia University running back Shawne Alston, the plaintiff in Alston v. NCAA, argued that the NCAA and the major conferences violated federal antitrust law by conspiring to fix the costs of compensation to athletes, and sought to enjoin the NCAA’s cap on grant-in-aid.5 Put simply, Alston contends the NCAA’s rules unreasonably limit the value of his athletic services to the full cost of attendance, while his actual worth to the university may far exceed that amount.6 Alston v. NCAA was combined with numerous other cases; three classes were certified in the consolidated case In Re NCAA Athletic Grant-In-Aid Cap Antitrust Litigation (hereinafter NCAA Grant-in-Aid Cap}.7 Those three certified classes are Division I FBS football players, Division I men’s basketball players, and Division I women’s basketball players.8
To properly understand the players’ legal argument in NCAA Grant-In-Aid Cap, it is imperative to look to O’Bannon v. NCAA, which they strongly relied and expanded upon in bringing the current suit.9 In O’Bannon, current and former college football and men’s basketball players challenged the NCAA’s prohibition of athletes receiving compensation for the use of their name, image, and likeness (NIL).10 There, plaintiffs argued this was an unlawful restraint on trade and thus a violation of Section 1 of the Sherman Act, which invalidates “[e]very contract, combination…or conspiracy, in restraint of trade or commerce.”11 At the time, the scholarships available to athletes were limited to the amount of grant in aid, which was comprised of the cost of tuition, room and board, and required course books.12 Plaintiffs sought to increase the scholarship amount to the full cost of attendance at their respective universities.13 The full cost of attendance includes other miscellaneous expenses that result from attending school such as non-required books, school supplies, and transportation.14 This change in scholarship limitations would increase the amount available to each student-athlete by a few thousand dollars.15 Plaintiffs also sought to receive compensation from the schools for the use of their NILs, and proposed that schools place a portion of their licensing revenues in a trust that would become available to these student athletes upon leaving their school.
16
The NCAA contended in O’Bannon that Section 1 antitrust challenges to their amateurism rules fail as a matter of law because they are presumed valid under the Supreme Court’s decision in NCAA v. Board of Regents.17 However, on appeal, the Ninth Circuit rejected that argument and interpreted the Supreme Court’s decision to mean that the “Rule of Reason” test, as explained below, must be used to analyze the NCAA actions’ competitive effects.18 In essence, the Ninth Circuit affirmed the Northern District of California’s decision that the NCAA is subject to antitrust laws and their unique structure does not exempt them from compliance.19
Based on its interpretation of Regents, the circuit court used the three-step “Rule of Reason” framework in its analysis:“[1] The plaintiff bears the initial burden of showing that the restrain produces significant anticompetitive effects within a relevant market. [2] If the plaintiff meets this burden, the defendant must come forward with evidence of the restraint’s procompetitive effects. [3] The plaintiff must then show that any legitimate objective can be achieved in a substantially less restrictive manner.”20
The Ninth Circuit found by essentially valuing the student-athletes’ NILs at zero, the NCAA unreasonably restrained trade producing an anticompetitive effect.21 They also found the rules furthered the NCAA’s commitment to amateurism, which maintains consumer demand.22 In addition, the rules also protect the integration of athletics and academics.23 At the third step of the analysis, the Ninth Circuit considered the proposed, less-restrictive alternatives.24 The Ninth Circuit affirmed the district court’s finding that the NCAA should increase the scholarships available to student-athletes to cover the full cost of attendance rather than only the full grant-in-aid amount, as a less restrictive alternative that does not compromise the NCAA’s purpose.25
However, the circuit court also reversed the district court’s decision that schools should share the revenues obtained from using the players’ NILs in the form of a trust available to athletes upon leaving school.26 The court found that “offering student-athletes education-related compensation and offering them cash sums untethered to educational expenses is not minor; it is a quantum leap. Once that line is crossed, we see no basis for returning to a rule of amateurism.”27In reversing the district court, the Ninth Circuit relied on the Supreme Court’s statement in Regents that the NCAA must be given “ample latitude” to oversee college athletes, which includes the preservation of amateurism.28 While the NCAA has changed its bylaws since the 2015 O’Bannon decision, to allow financial aid up to the cost of attendance or potentially more if the student also receives a Pell grant, student-athletes have continued to challenge the system.29
NCAA Grant-In-Aid Cap goes one step further than O’Bannon, attacking the restriction on sharing revenue obtained from the use of players’ NILs, as well as contending that the cap on financial aid in general unlawfully restrains trade.30 In addition, plaintiffs argue NCAA rules also fix prices by regulating and prohibiting additional benefits that are related to education while allowing benefits that are incidental to athletic participation.31 For example, the NCAA limits academic tutoring and prohibits reimbursement for items such as computers and science equipment, but at the same time permits some reimbursement for players’ families to travel to games.32
In his ruling on a motion for summary judgment, Judge Wilken of the Northern District of California stated the allegations were sufficiently distinct from those raised in O’Bannon to permit litigation, as the NCAA rules had changed since that decision.33 Judge Wilken also ruled the plaintiffs had met their burden of proving anticompetitive effects in the college athletic market.34 The NCAA must again prove that their rules, which have evolved in the years since O’Bannon continue to advance the NCAA’s procompetitive purposes.35 Specifically, that they preserve consumer demand because interest in college athletics is in part due to their amateur nature and they promote integration between the academic and athletic aspects of university life.36
The student-athletes will try to argue that less restrictive alternatives exist to achieve the same goal.37 Specifically, the plaintiffs argue the individual conferences should provide the expenses that can be provided to student athletes in their own conference rather than the NCAA setting the amount for all its member schools.38 They also propose another alternative that all prohibitions on payments or benefits related to educational expenses or athletic participation should be enjoined.39
In September 2018, the NCAA Grant-In-Aid Cap bench trial was held over the course of ten days in California.40 Each side called numerous economic and industry experts to argue in their favor.41 If the NCAA prevails, little if anything will likely change in the college sports industry.42 However, if Judge Wilken finds the NCAA violated antitrust law, as she did in O’Bannon, it could mark a significant change in the NCAA’s structure.43 It may lead to “super-conferences” in which the larger schools can offer recruits significant compensation to attend their school. It could also bring about several questions regarding how such a system would work, and whether athletes would be paid on a yearly basis. Would that amount be fixed at the time of recruiting or would it change every year depending on the value the athlete brings to the university? Would other aspects of the athletic program be compromised if funds were going to the players rather than the programs as a whole—for example, less money to spend on the facilities or coaching staff? How would this impact the other sports and athletes not certified within this case? This case has the potential to alter the college athletic system as we know it, but until the district court renders its decision, we can only continue to speculate about the NCAA’s future.
Full article: http://www.fordhamiplj.org/2018/12/04/college-athletes-fight-for-compensation-continues-in-alston-v-ncaa/
NYC v. AirB&B owners, operators
An excerpt from the Complaint filed in January:
23. The City brings this action first to stop the public nuisance being maintained by all Defendants at the Subject Buildings, including: (1) the illegal rental of permanent residential dwelling units to numerous transient occupants, without having the more stringent fire and safety features required in buildings legally designed to serve transient occupants; (2) the creation of significant risks in buildings not staffed to handle the security issues associated with transient occupancy, and a degradation in the quiet enjoyment, safety, and comfort of permanent residents in the Subject Buildings and in neighboring buildings caused by noise, filth, and the excessive traffic of unknown and constantly changing individuals entering their homes; and (3) the unlawful reduction of the permanent housing stock available to the residents of New York City at a time when there is a legislatively declared housing emergency. The conditions created by Defendants’ illegal conduct in the Subject Buildings negatively affect the health, safety, security, and general welfare of the residents of the City of New York and its visitors.
24. The City also brings this action because Operator Defendants have been repeatedly committing deceptive trade practices against visitors and tourists seeking short-term accommodations in New York City, implicitly holding themselves out as engaging in a legal business, when in fact they are conducting a business which places consumers in illegal occupancies and exposes them to serious fire safety risks. These practices include advertising and promoting the booking of illegal short-term accommodations in the Subject Buildings, properties in which transient, short-term occupancies of less than 30 days are prohibited by New York State and City laws.
The Complaint is here: https://iapps.courts.state.ny.us/fbem/DocumentDisplayServlet?documentId=9oXwjxhzUZCWNhplGXSoSA==&system=prod
NYT on 5G and the continuing Huawei quandary
Huawei’s fate will hang over the wireless industry’s largest annual trade conference, MWC Barcelona, previously called Mobile World Congress, which starts on Monday. Typically a celebration of new handsets from Samsung, LG, Sony and other brands, this year’s conference in Spain is being overshadowed by less glamorous policy questions about how to safeguard the behind-the-scenes infrastructure that keeps those devices connected to the internet.
“Many operators are now delaying their 5G investments because there is so much uncertainty related to whether they can work with Huawei or not,” said Mikael Rautanen, an industry analyst with Inderes Oy, a research firm. “That affects the whole telecommunications sector.”
5G networks are considered critical to the future global economy, increasing mobile phone speeds by up to 20 times from the current 4G system, while also creating new applications in medicine, augmented reality and manufacturing. Telecom companies are starting to roll out the new systems this year, with wider adoption coming in 2020.
Huawei makes the antennas, base stations, switches and other gear that make the technology work.
The debate over Huawei is particularly intense in Europe, where network operators that have long relied on the company’s equipment are facing potential new regulations. Britain, Germany, France, Poland and the Czech Republic are among those considering new restrictions against Huawei.
British and German authorities have indicated that a complete ban is unlikely, but the United States-led campaign threatens to slow down construction of the new technology in Europe that governments and businesses believe is needed to stay competitive in a digitized economy. The head of T-Mobile in Poland warned this week that new restrictions could disrupt the introduction of 5G technology.
For a year, Trump administration officials have been working on an executive order that would effectively ban Chinese telecom companies, including Huawei, from American 5G networks. The order would block American companies from purchasing equipment from China and other “adversarial powers,” but would not stop purchases of European-made equipment.
The wireless industry’s global trade group, GSM Association, said a ban of Huawei equipment in Europe would disrupt the overall market and increase costs for consumers.
“The effects would be delay the roll out, delay the technology and very probably higher pricing,” said Boris Nemsic, chairman of Delta Partners, an advisory and investment firm focused on the telecommunications market.
Huawei has become a lightning rod in the broader trade war between the United States and China. The Trump administration argues that Huawei is beholden to the Chinese government, and that allowing its equipment into 5G networks will create a grave national security risk — a charge Huawei has vehemently denied.
The increased scrutiny of Huawei would appear to present an opportunity for rivals such as Ericsson and Nokia, but executives at the companies have said it risks creating a broader slowdown.
“All our customers are trying to work out what this means, and that is causing uncertainty,” Borje Ekholm, the chief executive of Ericsson, told The Financial Times this month.
Ericsson and Nokia, which declined to comment, have fallen behind Huawei in market share over the past decade, struggling to match its rival’s lower prices and large investments in 5G and other emerging technology. Many carriers say the Chinese company’s 5G technology is more advanced than that of its Western rivals.
Despite being blocked by the United States, Huawei is the largest seller of telecommunications equipment, accounting for about 28 percent of the global market, according to the Dell’Oro Group, a market research firm. Companies such as Cisco Systems provide equipment like routers used by carriers in other parts of their networks.
The new 5G networks represent a once-in-a-decade opportunity. In Europe, mobile carriers are expected to spend at least $340 billion by 2025 constructing the networks, according to GSMA.
Ericsson and Nokia have been careful not to appear to take advantage of Huawei’s misfortune, perhaps out of concern that China would retaliate against the European companies if new bans against Huawei were introduced.
The two companies each earn around $1.5 billion in revenue each year in China, according to an estimate by Pierre Ferragu, an analyst at New Street Research in New York. By contrast, Huawei earns $3.5 billion a year in Europe, Mr. Ferragu estimates.
Any company forced to replace Huawei equipment will have to shoulder heavy costs. “It would take time for the existing vendors to scale R&D, operations, sales, services and partner agreements to fill the void,” the Dell’Oro Group said in a recent report.
It may be for that reason wireless carriers that have long depended on Huawei are coming to its defense. Mr. Read of Vodafone urged governments to act carefully before imposing new restrictions, because much of the present debate was not “fact based.”
Source: https://www.nytimes.com/2019/02/22/technology/huawei-europe-mwc.html
From Digital Music News
The American Mechanical Licensing Collective (AMLC) Wants Competition And Isn’t Going Away — Here’s Their Full Statement to the Music Industry
Paul Resnikoff
February 21, 2019
2https://www.digitalmusicnews.com/2019/02/21/amlc-american-mechanical-licensing-collective/#comments
The American Mechanical Licensing Collective (AMLC) says they represent the interests of independent songwriters and rights owners. In fact, they feel they’re addressing a bigger group than the major publisher-backed ‘MLC’.
Back in November, we first reported on a new mechanical licensing agency: the American Mechanical Licensing Collective, or AMLC. The group tossed their hat in the ring to administer mechanical licenses for the government-created Mechanical Licensing Collective, or MLC, as outlined by the now-passed Music Modernization Act.
In response, major publishers and other industry heavyweights assembled a broad consortium of industry players to back its own mechanical licensing contender. David Israelite, head of the National Music Publishers’ Association (NMPA), argued that the role of the MLC should not be filled by a competitive process, especially since his group already enjoyed an overwhelming consensus among industry players.
In fact, the NMPA-backed group has already called themselves the ‘MLC’, while also naming themselves the ‘consensus’ mechanical licensing organization. Additionally, Israelite has argued that his group was most responsible for passing the MMA, therefore, they should be the ones implementing its core function.
The AMLC, along with a long list of independent songwriters and producers, have sharply questioned that approach. They say this shouldn’t be a no-bid contract. And more importantly, they feel that they represent the real majority of rights owners, most of whom would be marginalized by the mainline MLC group.
Here’s the AMLC’s official statement on their position.
The Mechanical Licensing Collective will be a non-profit organization charged with the payment of songwriter and music publisher “mechanical” royalties to the rightful songwriter and music publishers. In addition, it must maintain a musical works database, providing blanket licenses to U.S. digital streaming services; hold onto earned but unpaid money; resolve conflicts; and more.
The Register of Copyrights will designate the MLC from submitted applications based on an entity proving itself able to achieve the goals of the MLC, as well as meeting all the legal requirements as stipulated in the MMA.
Last week it was reported in the press that an organization planning to apply to be designated as the MLC prematurely suggested that the competition among entities to become the MLC is all but over.
This suggestion was made despite the Register of Copyright making no such statement and still awaiting receipt of complete applications, which are not due until mid-March. If the suggestion is true, the selection process would at best not have been made — and, at worst, been compromised.
It is possible that the reported public press statement indicating their application is “the only one that meets the statutory definition” is inaccurate or perhaps rests on the role the traditional industry played in the passage of the Music Modernization Act. Although we recognize the role and importance those organizations played in getting the bill drafted and passed, we agree with the Copyright Office’s statement that “[s]ervice on the Board or its committees is not a reward for past actions, but is instead a serious responsibility that must not be underestimated.”
The suggestion that only one entity gets to compete — which, by default, is not a competition — counters the MMA and the Copyright Office’s intentions and requirements.
The suggestion that only one entity gets to compete — which, by default, is not a competition — counters the MMA and the Copyright Office’s intentions and requirements. In fact, to help encourage the needed competition, the Copyright Office publicly stated that “the Office does not read this clause as prohibiting a musical work copyright owner from endorsing multiple prospective MLCs.” The intent of the law is to clearly allow copyright owners to recognize and endorse multiple groups.
As the MLC will work for independent and major music publishers as well as all global music copyright owners, this ties into the MMA provision that clearly states, and logically requires, that the MLC have “substantial support” from “musical copyright owners” who together represent “the greatest percentage of the Licensor Market for uses.”
About 90 percent of the millions of global music copyright creators own and control their own copyrights. Each month alone in the U.S. there are over 500,000 new recordings of new songs from tens of thousands of DIY, self-owning copyright owners being delivered to U.S. music services and made available to stream. In just the last year, hundreds of thousands of DIY copyright owners have created and distributed at least 6 million works. In the past 10 years, estimates place that number closer to millions of copyright owners distributing over 20 million songs to streaming services. The majority of works being written, recorded, distributed and made available to stream overwhelmingly come from this constituency.
It is this constituency of millions of hard-working individuals, with a rising market share, that represents the majority of musical works copyright owners. These global copyright owners, combined with the legacy industry, make up the entire Licensor Market eligible to be streamed in the U.S. Surely the intent of the law is not to make them irrelevant in the process of establishing the MLC, particularly when there is a further important distinction between the two market segments: some of the biggest publishers in the traditional music industry are expected to bypass and not use the MLC due to their direct licensing deals with the digital streaming services, as compared to the millions of global copyright owners whom will rely on the MLC for licensing and payments.
This point further exacerbates the yet-to-be-resolved conflict of interest; that is, board members of the MLC can recommend other copyright owners’ money be liquidated and given to themselves through market share disbursements, all without actually having to use the MLC for their own copyrights. This outcome is most certainly not the intended application of the law.
This speaks as to why competition is needed.
The AMLC (American Mechanical License Collective) is competing to become the MLC. The AMLC’s board members are independent songwriters, technologists, entrepreneurs, music publishers and administrators, legal scholars, and business people who have profound and extensive knowledge in the areas of administration, technology, and identification of royalties without the same conflict of interest as the other.
The AMLC believes it serves all copyright owners including the independent writers and publishers as well as the major music publishers. It believes the companies and individuals of the board members of the MLC should use the MLC whenever possible. In addition, the AMLC directly addresses the importance of serving both the traditional industry as well as the independent writers and publisher, as it is their songs which will generate the vast majority of licenses and royalties flowing through the MLC.
In further contrast, the experience and credentials of the AMLC in the relatively new world of digital streaming are impressive and profound. This can be seen not just by examining the creation of the technology, innovation and success of its board members but also by the fact that many of the AMLC board members were hired by the traditional industry to build the systems
they needed to fix their data, resolve conflicts, audit statements, confirm splits, locate recordings and more (the very same needs of the MLC).
The AMLC has been forthright and has highlighted that its primary goals are to get all copyright owners and songwriters paid what they earned and reducing black box money by ensuring those funds go to its rightful owners and are not liquidated without intense due diligence. Finally, the AMLC is focused on keeping any perceived or actual conflict of interest to the lowest possible minimum and avoiding any activities that might give one group of copyright owners advantages over other groups of owners.
To that end, as we further expand our board, round out our committees and put forth an efficient one of a kind cutting edge technology solution we encourage the spirit and goal of the MMA to create competition, allowing the best entity possible to emerge and serve the world’s songwriters, publishers, and copyright owners under the requirements of the law.
The AMLC
From the Complaint in
THE CITY OF PHILADELPHIA, Plaintiff,
vs.
BANK OF AMERICA CORPORATION, BANK OF AMERICA, N.A., BANC OF AMERICA SECURITIES LLC, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, BARCLAYS BANK PLC, BARCLAYS CAPITAL INC., CITIGROUP, INC., CITIBANK N.A., CITIGROUP GLOBAL MARKETS INC., CITIGROUP GLOBAL MARKETS LIMITED, THE GOLDMAN SACHS GROUP, INC., GOLDMAN SACHS & CO. LLC, JPMORGAN CHASE & CO., JPMORGAN CHASE BANK, N.A., J.P. MORGAN SECURITIES LLC, THE ROYAL BANK OF CANADA, RBC CAPITAL MARKETS LLC, WELLS FARGO & CO., WELLS FARGO BANK, N.A., WACHOVIA BANK, N.A., WELLS FARGO FUNDS MANAGEMENT, LLC, WELLS FARGO SECURITIES LLC, Defendants.
Case No.: 1:19-cv-01608, Southern District of New York
Plaintiff The City of Philadelphia, individually and on behalf of all persons and entities similarly situated, brings this class action under Section 1 of the Sherman Antitrust Act, Sections 4 and 16 of the Clayton Antitrust Act, and certain state laws, for actual damages, treble damages, punitive damages, declaratory and injunctive relief, costs of suit, pre- and post-judgment interest, and other relief, and alleges as follows:
NATURE OF THE ACTION
1. This is an antitrust class action charging the Defendant banks with conspiring to inflate the interest rates for a type of bonds often called “Variable Rate Demand Obligations” or “VRDOs.” 1 The City of Philadelphia (“Philadelphia” or “Plaintiff”) brings this action on behalf of itself and a proposed Class of VRDO issuers—mainly state and local public entities such as municipalities, agencies, public universities, and hospitals—to redress the harm inflicted by Defendants, which likely amounts to billions of dollars class-wide.
2. VRDOs are tax-exempt bonds with interest rates that are reset on a periodic basis, typically weekly. VDROs are issued by public entities to raise money to fund their operations, as well as critically important infrastructure and public services, such as neighborhood schools, water and wastewater systems, public power utilities, and transportation services. VRDOs are also issued by public entities on behalf of tax-exempt 501(c)(3) organizations—including schools, community organizations, and charities—which use the VRDOs to fund their operations and projects.
3. VRDOs allow issuers to borrow money for long periods of time while paying short-term interest rates. Investors find VRDOs attractive because the bonds include a built-in “put” feature that allows investors to redeem the bond at any periodic reset date, thus making VRDOs a low-risk and high-liquidity investment.
4. To manage the bond, VRDO issuers contract with banks—like Defendants here— to act as re-marketing agents (“RMAs”). RMAs have two primary jobs under the remarketing agreements. First, on each reset date, RMAs are required to reset the interest rate of the VRDO at the lowest possible rate that would permit the bonds to trade at par. For the vast majority of VRDOs, the reset date occurs on a weekly basis, typically every Tuesday or Wednesday. Second, when an existing investor exercises the “put” on the bonds and tenders the bond to RMAs, RMAs are required to “remarket” the VRDO to other investors at the lowest possible rate. For these ongoing services, issuers pay RMAs remarketing fees.
5. VRDO issuers are motivated to obtain the lowest interest rates for their debt. The higher the rates that VRDO issuers pay, the more costly it is for them to finance their operations and fund infrastructure projects. If an RMA cannot deliver low rates, issuers have the right to replace that RMA with another one who can. Thus, in a properly functioning market, RMAs would compete against each other for issuers’ business by actively working to set the best (i.e., the lowest) possible rate for their customers.
6. Defendants—which, collectively, served as RMAs for approximately 70% of all VRDOs in the United States from 2008 through 2016—did not work to set the lowest possible VRDO rates for Plaintiff and the Class, however.
7. Since about late 2015, various government authorities have been investigating Defendants’ practices in the market for VRDO remarketing services, based on facts that were first brought to their attention by a whistleblower. Among other things, the whistleblower alleges that RMAs (including Defendants here) were not actively and individually marketing and pricing VRDOs at the lowest possible interest rates, but instead were setting artificially high rates without regard to the individual characteristics of VRDOs, market conditions, or investor demand. The whistleblower also alleges that RMAs (including Defendants here) were improperly coordinating the rates they set for VRDOs. These allegations were based on the whistleblower’s extensive analysis of data available to the whistleblower due to that person’s role in the marketplace.
8. Starting in or about late 2015 and 2016, the whistleblower began to meet and share data and the whistleblower’s analysis of data with federal authorities, including the Antitrust Division of the U.S. Department of Justice (the “DOJ”). The DOJ subsequently opened a preliminary criminal investigation into Defendants’ remarketing practices in connection with VRDOs. That preliminary criminal investigation is ongoing.
9. Plaintiff counsel’s investigation of this matter has confirmed that there exists evidence of direct communications between competing banks concerning VRDO rate-setting. In these communications, senior personnel sitting within Defendants’ Municipal Securities Groups, which housed the Short-Term Products desks on which Defendants ran their VRDO operations, shared competitively sensitive information that was material to the setting and resetting of VRDO rates.
10. As a result of Plaintiff counsel’s investigation, Plaintiff has further learned that, as early as February 2008, Defendants were agreeing among themselves not to compete against each other in the market for remarketing services, and instead to keep VRDO rates artificially high, to the detriment of their customers, including Plaintiff here. Defendants conspired by communicating with each other in person, via telephone, and through electronic communications. In these inter-Defendant communications, they repeatedly shared highly sensitive information about the “base rates” that Defendants used to make initial determinations of the interest rates they set for VRDOs as well as the levels of VRDO inventory Defendants held on their books.
11. Defendants’ overarching objective was to ensure that the cartel members would keep VRDO rates artificially high in order to prevent investors from “putting” the bonds back to Defendants. When investors tender VRDOs back to RMAs, it triggers the RMAs’ obligation to remarket the VRDOs while also forcing the RMAs to carry the bonds in their inventory. By keeping rates high, Defendants ensured that investors would not exercise their put options on the bonds on a widespread basis. This allowed Defendants to continue to collect remarketing fees for doing, essentially, nothing.
12. Economic analysis provides strong support for the existence of this conspiracy. As detailed below, Plaintiff’s preliminary economic analysis demonstrates that VRDO interest rates were artificially inflated for several years starting as early as 2008 and continuing until late 2015 to early 2016. This economic analysis also demonstrates the existence of several historical patterns in VRDO rates that are each indicative of an agreement among Defendants not to compete in the market for VRDO remarketing services that began to break up in late 2015 to early 2016, around the same time that government authorities began investigating Defendants’ practices in the market for VRDO remarketing services.
13. Defendants’ conspiracy restrained competition in the market for VRDO remarketing services and inflicted significant financial harm on Plaintiff and the Class. Plaintiff and the Class paid billions of dollars in inflated interest rates during the Class Period due to Defendants’ conspiracy. By artificially increasing the rates paid by Plaintiff and the Class, Defendants’ conduct necessarily decreased the amount of funding available for critical public projects and services, as well as the operations of 501(c)(3) organizations. At the same time, Defendants banked hundreds of millions of dollars in the form of remarketing fees charged for services that Defendants never provided.
14. Free-market competition is, and has long been, the fundamental economic policy of the United States. As the Supreme Court has explained, this policy is enshrined in the Sherman Act,2 which makes it per se illegal for competitors (like Defendants here) to conspire and coordinate with each other to limit competition. Defendants’ conspiracy offends the very core of the antitrust laws. Defendants were supposed to be aggressively competing with each other for the business of their customers, but they secretly conspired not to compete against each other and instead to work together to keep rates high. Accordingly, Plaintiff brings this class action to hold Defendants accountable for the injuries they have caused.
Full Complaint at https://images.law.com/contrib/content/uploads/documents/402/36507/2019.02.20-Philly-VRDO-complaint.pdf
Editorial from the CPPC: State AGs Must Protect Consumers and Fill The Void to Challenge PBM Misconduct
February 21, 2019
Last fall’s meeting between the Department of Justice and several State Attorneys General reminds us that sound antitrust enforcement is not just a federal affair. While the Department of Justice called the meeting to discuss the antitrust concerns regarding the consolidation of information and data on technology platforms, the State Attorneys Generals turned the focus of the meeting to consumer protection and data privacy issues. Although they did not see eye to eye on all the issues, the states were clear that they will not stand on the sidelines. Indeed, the states appear to be taking the lead and will coordinate a multi-state antitrust and consumer protection inquiry into the practices of the tech platforms.
Many of the seminal antitrust cases including cases creating key principles of monopolization and merger law were brought by state attorneys generals. State Attorneys Generals have used the power under federal and their own state statutes to protect consumers against anticompetitive and fraudulent conduct in credit card, pharmaceutical, computer and many other markets crucial to consumers.
Much of the recent attention to escalating drug prices has focused on Pharmacy Benefit Managers (“PBMs”), the drug middlemen, who are driving up drug prices and reducing consumer choice. Appropriately the President’s May 2018 Blueprint to Reduce Drug Prices is focusing attention on how the lack of PBM competition and transparency permits PBMs to use their market power to drive up drug prices. In many cases, PBM customers such as states, health plans and employers do not receive the full benefit of these rebates because PBMs do not always classify certain fees as rebates.
Unfortunately, federal antitrust enforcement has simply dropped the ball on PBM competition. The recent approval of the CVS/Aetna deal makes that crystal clear. Over the past decade, the PBM industry has gotten stronger as it has undergone significant horizontal and vertical consolidation, leaving the market with just three large participants – Express Scripts, CVS Health, and OptumRx – that cover more than 85 percent of the PBM market. And the FTC has opposed efforts by states to adopt sensible regulations.
PBM rebate schemes also interfere in the relationship between doctors and their patients. PBMs often prevent consumers from getting the drugs they need or force consumers to switch drugs so they can secure higher rebates. Consumers lose through higher prices, less choice and threatened health care.
In short, the current system is broken, federal enforcers are passive and we need strong enforcement by state attorneys generals to protect competition and consumers.
States have significant advantages over federal enforcers. They are closer to the market and recognize the direct harm to consumers. They have the ability to secure monetary damages. States are often customers and victims of anticompetitive schemes. State enforcers can bring combined antitrust and consumer protection cases. And although each state has limited antitrust and consumer protection resources, states increasingly are using multistate task forces to investigate and prosecute unlawful conduct.
The strategic advantages of State Attorneys General are substantial. They have the authority to investigate and challenge mergers as well as the practices of PBMs under various federal and state laws including the False Claims Act (most states have enacted analogous false claims acts), state law deceptive trade practices acts, and the antitrust laws.
The states have begun to take matters into their own hands. In 2018, over 80 bills related to PBM regulation were introduced in state legislatures across the country and dozens of them were signed into law. Some of this legislation relates to requiring PBMs to have a fiduciary duty to its health plans, prohibiting gag clauses or PBM contract provisions that limit a pharmacist’s ability to inform customers about the least expensive way for customers to purchase prescription drugs; prohibiting a PBM from setting patient copays at a higher level than the health plan’s cost of the drug; requiring rebate transparency; and limiting PBM requirements on independent pharmacies.
There are clear precedents for state action. In the past decade a coalition of over 20 State Attorneys General brought a series of cases against the three major PBMs for manipulating the rebate process – switching patients to less safe, more expensive drugs in order to secure greater rebates. Thousands of consumers were prevented from using the drugs they needed and that worked. Ultimately the state cases were settled with penalties and damages of over $370 million.
The orders in these cases have expired and it seems that the PBMs have returned to their playbooks of misleading consumers and preventing them from getting the drugs they need. State AGs can obtain huge healthcare fraud settlements and judgments, which can provide an additional source of revenue for the states. As PBMs are increasingly scrutinized by the federal and state authorities, State AG investigations and complaints are likely to increase.
While historically State AGs typically coordinate with the federal government, they can certainly act alone or along with other states. Some State AGs with active enforcement agendas have sought to elevate their enforcement levels during periods when they have anticipated or perceived a reduction in federal enforcement. The DOJ and FTC have had a light hand in terms of scrutinizing PBM conduct so State AGs seem to be filling the void. Such an uptick in state level PBM enforcement is now in play and PBMs should take note of the resulting enhanced risk.
Indeed, Ohio and other states are increasing their enforcement activities due to the slow progress by the federal government. In July, then Ohio Attorney General and current Ohio Governor Mike DeWine put “PBMs on notice that their conduct is being heavily scrutinized, and any action that can be taken and proven in court will be filed to protect Ohio taxpayers and the millions of Ohioans who rely on the pharmacy benefits provided.” Ohio’s investigation began at the end of 2017.
And just this week, the new Ohio Attorney General Dave Yost announced he is seeking repayment of nearly $16 million paid to the OptumRx by the Bureau of Workers’ Compensation. A report found that the PBM overcharged the state and violated its contract by failing to adhere to agreed discounts on generic drugs. Yost will take OptumRx to nonbinding mediation, and that fails, the dispute will be taken to court. He has also promised further action against PBMs, saying “they took our money.”
In February 2018, Arkansas Attorney General Leslie Rutledge opened an investigation into CVS Caremark’s reimbursement practices after reviewing complaints of plummeting prescription medication reimbursement rates paid to local pharmacies. She is concerned that the PBM’s “reimbursements do not cover the actual cost of the medications.” If the local pharmacies’ prescription reimbursement rates are lower than their costs to purchase the drugs, they may eventually have to close their doors, which in turn, harms patients.
Fortunately, state AGs are there to protect consumers and competition and they have tremendous interest in controlling drug spending. States are clearly victims of these PBM schemes as significant drug price increases take a substantial amount out of state budgets. State AGs have the tools and need to use their enforcement powers to stop the egregious practices that are currently harming consumers. They are essential to protecting consumers and making the market work. Other State AGs should follow the examples of Arkansas and Ohio, and launch investigations and enforcement actions to stop abuses and ensure that PBMs are actually lowering drug costs.
From:https://www.thecppc.com/single-post/2019/02/21/State-AGs-Must-Protect-Consumers-and-Fill-The-Void-to-Challenge-PBM-Misconduct?utm_campaign=4f29d95c-84d4-42a2-9746-c5c44d551d91&utm_source=so
Rebecca Sandefur on access to justice. Her article: “Access to What?”https://www.mitpressjournals.org/doi/full/10.1162/daed_a_00534
Journalists tend to focus on Rebecca Sandefur’s observation that people seeking solutions to civil justice problems may do just as well on their own as with the help of a lawyer. See https://www.nytimes.com/2019/02/13/opinion/legal-issues.html
Sandefur does start her recent article with the point that “resolving justice problems lawfully does not always require lawyer assistance. . . .” But Sandefur’s main point is deeper, and thought provoking. It is that justice is about just resolutions, not necessarily about access to legal services. A broader understanding of what just resolutions entail will help lawyers to work with problem solvers who are not lawyers to craft an array of approaches to achieving just results.
Civil justice problems Sandefur has in mind for solution include a broad array: wage theft, eviction, debt collection, bankruptcy, domestic violence, foreclosure, access to medical treatment, and care and custody of children and dependent adults.
Following is an excerpt from Sandefur’s article (citations omitted):
When a system is broken, the solution is systemic reform. Consider consumer debt. Today, small-claims and lower-civil-court dockets are flooded with debt claims against consumers. These claims have usually been sold by the original debtor, such as a credit-card company, to a third-party debt buyer in a bundle of hundreds or thousands of debts. Such claims against consumers are often based on “bad paper,” insufficient documentation to sustain the debt owners’ claim to the amount demanded. Courts spend scarce time and money processing hundreds of thousands of baseless claims. This situation persists because, in most states, courts do not require creditor-plaintiffs to show that they have documentation of ownership for the debt when they file lawsuits; individual debtors must appear in court and contest the documentation for each debt. In 2014, New York State's then–Chief Judge Jonathan Lippman issued an order requiring debt-owners to produce documentation of the amount claimed at the time of filing. The number of debt lawsuits against New York consumers dropped dramatically.
These are just a few examples from growing evidence that the current course of focusing narrowly on lawyers’ services is wrong, whether the goal is understanding the access problem or taking action to fix it. Looking only at the civil justice activity processed by lawyers or the court system misses most of the action. Focusing on existing programs that deliver legal services and on court cases will never provide a picture of all of the other civil justice activity that never makes it to the justice system–and that is the majority of civil justice activity. Practically speaking, it would be impossible for the nation's existing courts, administrative agencies, and other forums that resolve disputes to process the estimated more than one hundred million justice problems that Americans experience every year. There is no reason to want them to. The rule of law means that most people can rely on most others to be basically compliant with legal norms most of the time, with a fair and accessible legal system as backup.
The access-to-justice crisis is a crisis of exclusion and inequality, for which legal services will sometimes provide a solution. At other times, lawyers’ services will be too expensive and much more than necessary. At other times still, systemic reforms will be the right solution, not providing costly and inefficient assistance to individuals. Lawyers and social scientists have a limited understanding of how to determine which justice problems of the public need lawyers’ services and which do not.
From Paul Levy:
Consumer Warning: Copyright Trolling by Higbee and Associates
Excerpt:
Over the past few years, the law firm Higbee and Associates (based in Los Angeles, although it pretentiously labels itself a "National Law Firm") has become identified with a pattern of making aggressive and, in many cases, unsupportable demands for the payment of significant sums of money by individuals and nonprofits whose web sites feature copyrighted graphics, and especially photographs, that they saw online but have never tried to license. The firm’s principal, Mathew Higbee, revels in his reputation for aggressive enforcement. (The interview linked above, for example, is featured on his own firm’s web site.)
Either in concert with a specialized search firm or using his own firm’s software, this firm patrols the Internet looking for graphics (especially photographs) that have been copied improperly from online sources. The firm then sends a demand letter bearing Higbee's signature, threatening to seek up to $150,000 in statutory damages as well as attorney fees unless the target of the letter promptly agrees to pay a specified amount. Deploying a tactic that is all too familiar from the depredations of Evan Stone and Prenda Law, the specified amount is low enough – usually in the low four figures, but I have seen high three figures as well —that it is not likely to be cost-effective for the target to hire a knowledgeable copyright lawyer to litigate an infringement lawsuit, even if the claim is bunk or, at least, if there is good reason to believe that the claim can easily be defended. The letter encloses a document identifying the allegedly infringing use as well as the online location where the work was found; another document that purports to authorize the firm to represent the copyright holder in seeking damages in connection with the work; a proposed “settlement agreement”; and a credit card payment form. If the target of the letter does not respond, or responds without agreeing to pay, then the Higbee firm increases the pressure: a non-lawyer who calls herself a “claim resolution specialist” sends an email warning that the claim is going to be “escalated to the attorneys,” at which point “[t]claim gets more stressful and expensive,” and an assurance that “my goal is to not let that happen to you.”
The documents linked above all relate to a single Higbee demand to a single target, but I have seen a number of other demand letters and ensuing emails from this firm, and spoken to several other copyright lawyers who have helped clients respond to Higbee’s blustering and threats, and it appears to me that these are pretty standard exemplars. Indeed, when I was reaching out to some other copyright lawyers to try to get their sense of some of the documents I was reviewing, a number of them guessed that it was Higbee based only on what I said I wanted to ask about, based on work they had done for their clients trying to address his threats against them. Plainly, this is a copyright troll with an outsized reputation.
The Demand to Homeless United for Friendship and Freedom (“HUFF”)
As it happens, I had heard recently from colleagues in the copyright law community about threats that Higbee was making to nonprofits when I was contacted by Thomas Leavitt, a former client in a free speech case, about a Higbee demand to Homeless United for Friendship and Freedom (“HUFF”). HUFF is a loose-knit activist group in Santa Cruz, California, that addresses issues of poverty, with specific reference to homelessness. It maintains a blog which, among other things, shows media coverage related to homelessness. On August 6, 2012, the blog reposted an article from the New York Times about a mass detention of migrants in Greece. That article featured a photograph showing an immigrant in the hands of the Greek police. The photograph could be seen in the HUFF blog post, along with the photo credit “Angelos Tzortzinis/Agence France-Presse — Getty Images.” but although the text of the Times article was placed directly on the blog, the photograph appeared only by virtue of deep-linking to the graphic as it appeared on the Times’ own web site, at this address.
More than six years later, on January 2, 2019, Mathew Higbee sent HUFF his demand letter, accompanied by the other documents described above. Several things jumped out at me. First, instead of reciting that the copyright in the photograph had been registered, and either attaching the registration or at least citing the registration number, the letter recited the photo’s “PicRights Claim Number” – a matter of utterly no consequence for the recipient of the demand. The registration number, by contrast, is far more significant in this context, because, for most copyrighted works (the exception is discussed below), a copyright holder cannot bring suit for infringement until the copyright has been registered, and regardless of the exception, a copyright holder cannot seek statutory damages or attorney fees for infringements that take place before registration, or even for infringements that continue after registration unless the copyright was registered promptly after the work was first published. Because this photograph appeared in the New York Times within a day after the photo was taken, and more than six years before the demand letter was sent, a failure to register would have meant that the letter’s warning about statutory damages and attorney fees was an empty bluff meant to intimidate.
Second, the letter was plainly a boilerplate form, containing somewhat stilted language that was poorly adapted to the specifics of HUFF’s claimed infringement. For example, the letter varies back and forth between referring to the recipient in the second and third person singular, suggests that HUFF might have its wages garnished, warns of action against “the business owner,” and refers to “the attached exhibits” even though only one exhibit was attached. Indeed, the “representation agreement” that was provided along with the demand letter, purporting to show that Agence France-Presse, PicRights and a European version of PicRights had authorized Higbee to pursue claims on its behalf about HUFF’s alleged infringement with respect to this specific photograph, did not identify the photograph but simply indicated that Higbee was handling “a copyright infringement matter.”
Third, the exhibit revealed Higbee’s recognition that the “infringing location” for the copyrighted work was not HUFF’s own web site but rather the web site of the New York Times which, presumably had licensed the photograph (I was able to confirm that assumption by contacting the Times’ legal department). And the Court of Appeals for the Ninth Circuit has decided, in Perfect 10 v. Amazon, that Google does not infringe a photographer’s copyright by including images in its search results, because American copyright law does not prevent the “framing” of deep-linked images that actually sit on the server of a party that is entitled to display the photograph and serve copies of the image to visiting viewers; it is only displaying and distributing from the defendant’s own server that violates the copyright laws (the “server test”).
Higbee Retreats Rapidly When Challenged by a Lawyer
Consequently, I wrote back to Higbee, asking directly whether the copyright in the image had been registered, and pointing out some of the legal flaws in his demand letter as well as the bullying email that had been sent as a followup by his "claims resolution specialist," Rebecca Alvarado. I told him that he needed to issue a prompt retraction of the demand, else we would be seeking a declaratory judgment of non-infringement.
For the complete article, go to https://pubcit.typepad.com/clpblog/2019/02/consumer-warning-copyright-trolling-by-higbee-and-associates.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+ConsumerLawPolicyBlog+%28Consumer+Law+%26+Policy+Blog%29
Press Release, House Committee on Financial Services:
Waters and Green request documents from Consumer Bureau on recent settlements that do not require companies that have violated the law to provide redress to consumers who have been harmed.
Washington DC, February 7, 2019
Tags: CFPBToday, Congresswoman Maxine Waters (D-CA), Chairwoman of the House Committee on Financial Services, and Congressman Al Green (D-TX), Chairman of the Subcommittee on Oversight and Investigations, wrote to Consumer Financial Protection Bureau Director Kathy Kraninger to request documents relating to recent settlements that do not require companies that have violated the law to provide redress to consumers who have been harmed.
“The Consumer Financial Protection Bureau (“Consumer Bureau”) has recently announced several settlements against entities for engaging in unlawful practices without requiring the payment of redress to consumers harmed by the illegal conduct,” the lawmakers wrote. “This stands in stark contrast to the Consumer Bureau’s practice under the leadership of former Director Cordray. During Director Cordray’s tenure, the Consumer Bureau recovered nearly $12 billion in relief for harmed consumers over its first six years.[1] American consumers deserve a Consumer Bureau that will fight to recover their hard-earned money when they are cheated.”
In the letter, the lawmakers requested documents regarding recent Consumer Bureau settlements with Sterling Jewelers Inc., Enova International, Inc, and NDG Financial Corp. et al.
See below for the full letter. [https://financialservices.house.gov/uploadedfiles/letter_to_cfpb_re_settlements_020719.pdf]
The Honorable Kathy Kraninger
Director
Consumer Financial Protection Bureau
1700 G Street, NW
Washington, D.C. 20552
Dear Director Kraninger:
The Consumer Financial Protection Bureau (“Consumer Bureau”) has recently announced several settlements against entities for engaging in unlawful practices without requiring the payment of redress to consumers harmed by the illegal conduct. This stands in stark contrast to the Consumer Bureau’s practice under the leadership of former Director Cordray. During Director Cordray’s tenure, the Consumer Bureau recovered nearly $12 billion in relief for harmed consumers over its first six years.[1] American consumers deserve a Consumer Bureau that will fight to recover their hard-earned money when they are cheated.
On January 16, 2019, the Consumer Bureau announced it had reached a settlement with Sterling Jewelers Inc. (“Sterling”) for numerous claims, including that the company engaged in unfair practices by enrolling consumers who had a Sterling credit card in payment protection insurance without their consent.[2] Under the terms of the settlement, Sterling is required to pay a penalty to the Consumer Bureau of $10 million, but does not have to refund consumers any of the money paid for payment protection insurance.[3] According to the Consumer Bureau’s complaint against Sterling, payment protection insurance generated $60 million in revenue in 2016 alone.[4] The Consumer Bureau has previously required payments to consumers in similar cases where it found that consumers were enrolled in payment protection products without their consent.[5] The Committee is deeply troubled that the Consumer Bureau would allow a company to keep the profits they made from their illegal sales practices.
On January 25, 2019, the Consumer Bureau announced a settlement with Enova International, Inc. (“Enova”), an online lender, for engaging in unfair practices by debiting consumers’ bank accounts without authorization.[6] The settlement requires Enova to pay a $3.2 million civil money penalty to the Consumer Bureau, but contains no provision for paying redress to consumers.[7] The factual findings in the administrative consent order indicates that Enova debited payments on thousands of consumers’ outstanding loans where it did not have authorization and “extracted millions of dollars in unauthorized debits from consumers’ accounts.”[8]
On February 1, 2019, the Consumer Bureau announced a settlement with NDG Financial Corporation and other Defendants (“NDG Financial”) that did not require them to pay either a penalty or restitution to consumers.[9] The Consumer Bureau initiated its action against NDG Financial when the agency was still led by former Director Cordray. In its December 2015 amended complaint, the Consumer Bureau alleged that NDG Financial engaged in unfair, deceptive, and abusive practices by collecting on payday loans that were made in violation of state law.[10]The amended complaint specifically sought “damages and other monetary relief as the Court finds necessary to redress injury to consumers resulting from [NDG Financial’s] violations of federal consumer protection laws including but not limited to restitution and the refund of monies paid.”[11] Yet, the settlement agreement seeks no such relief for the wronged consumers.
Section 1055 of the Consumer Financial Protection Act of 2010 (“CFPA”) explicitly authorizes the Consumer Bureau to obtain relief for consumers, including the refund of money, restitution, or the payment of damages or other monetary relief. 12 U.S.C. § 5565(a)(1)(2).
The Committee has serious concerns about how the Consumer Bureau is exercising its enforcement authority, especially how it is determining whether to require companies to pay redress to consumers that have been harmed. The fact that two of the three settlements involve online lending raises serious questions about the Consumer Bureau’s commitment to protecting America’s consumers from predatory online lending practices.
As part of the Committee’s oversight over the Consumer Bureau,[12] please provide the following records by no later than March 5, 2019:
- All documents and communications referring or related to the issue of restitution in the settlement in Bureau of Consumer Financial Protection and the People of the State of New York, by Letitia James, Attorney General for the State of New York, v. Sterling Jewelers Inc., Case 1:19-cv-00448, including but not limited to, all memoranda (whether draft or final), any and all drafts of the proposed consent order, and all meeting minutes.
- All communications between the Bureau and Sterling or its representatives referring or related to the issue of restitution in the settlement in Bureau of Consumer Financial Protection and the People of the State of New York, by Letitia James, Attorney General for the State of New York, v. Sterling Jewelers Inc., Case 1:19-cv-00448, including but not limited to, any and all drafts of the proposed consent order.
- All documents and communications referring or related to the issue of restitution in the settlement in In the Matter of Enova International, Inc., 2019-CFPB-0003, including but not limited to, all memoranda (whether draft or final), any and all drafts of the proposed consent order, and all meeting minutes.
- All communications between the Bureau and Enova or its representatives referring or related to the issue of restitution in the settlement in In the Matter of Enova International, Inc., 2019-CFPB-0003, including but not limited to, any and all drafts of the proposed consent order.
- All documents and communications referring or related to the issue of restitution in the settlement in Consumer Financial Protection Bureau v. NDG Financial Corp. et al., Case 1:15-cv-05211, including but not limited to, all memoranda (whether draft or final), any and all drafts of the proposed consent order, and all meeting minutes.
- All communications between the Bureau and NDG (or any of the other Defendants named in the settlement) or their representatives referring or related to the issue of restitution in the settlement in Consumer Financial Protection Bureau v. NDG Financial Corp. et al., Case 1:15-cv-05211, including but not limited to, any and all drafts of the proposed consent order.
Sincerely,
MAXINE WATERS
CHAIRWOMAN
AL GREEN
CHAIRMAN
Subcommittee on Oversight and Investigations
cc: The Honorable Patrick McHenry, Ranking Member
Why The Sprint-T-Mobile Merger Epitomizes What Has Gone Wrong With U.S. Merger Enforcement
Diana Moss, President, American Antitrust Institute
Excerpt:
As Sprint and T-Mobile continue to hawk their proposed merger to antitrust enforcers, Congress, and the public, they face a growing tsunami of opposition from consumers, workers, and smaller competitors. This week, the companies go before another congressional committee to attempt to justify a deal that would combine the third and fourth wireless largest telecommunications carriers in the U.S.
The reality of a Sprint-T-Mobile merger is the elimination of the two "disruptive" competitors that have kept the big guys, AT&T and Verizon, on their toes. Worse, it would leave U.S. consumers with a cozy trio of national wireless carriers with strong incentives to collude rather than compete. The deal would virtually guarantee higher prices, less quality, and slower innovation for wireless services for millions of U.S. consumers.
So what is the justification for a combination that would fundamentally restructure the U.S. wireless industry? The deal will purportedly enable Sprint and T-Mobile to roll out 5G networks better and faster than if they did not combine forces. The companies have continued to dangle this enticing but elusive benefit before antitrust enforcers, Congress, and the public, even though both carriers are on record as ready, able, and willing to roll out 5G before they proposed to merge in early 2018.
The Sprint-T-Mobile story boils down to a fallacy that everyone can and should understand. That is, accepting significant harms to competition, consumers, and workers on the claim that the companies can deliver a benefit that both could achieve without the merger. We should not forget that it is the very competition between the existing four wireless carriers that drove Sprint and T-Mobile to begin rolling out 5G as independent wireless rivals.
The specter of Sprint and T-Mobile succeeding in justifying their merger should make every U.S. consumer hot under the collar. It prompted the American Antitrust Institute (AAI) to issue a commentary in June 2018, "Why the Sprint-T-Mobile Merger Should be DOA at the DOJ." AAI's piece laid out the facts: mergers that leave three competitors in a market are demonstrably some of the most virulently anticompetitive and anti-consumer deals because they create incentives to collude and weaken incentives to compete.
Full statement: https://www.antitrustinstitute.org/work-product/why-the-sprint-t-mobile-merger-epitomizes-what-has-gone-wrong-with-u-s-merger-enforcement/
9th Circuit to reconsider decision on openly carrying guns in Hawaii
The 9th US Circuit Court of Appeals will re-examine a case concerning the open carrying of firearms in Hawaii. Last year, a panel of the court held that Hawaii violated a man's constitutional rights by denying him a permit to openly carry a firearm for self-defense in public.
https://www.reuters.com/article/us-usa-guns-court/us-appeals-court-to-revisit-open-carrying-of-guns-idUSKCN1PX2A9
From DMN:
Live Nation Acquires Neste, Forming a New Live Joint Venture — Neste Live!
Daniel Sanchez
February 14, 2019
Neste marks the fourth acquisition Live Nation has made so far this year.
Live Nation Entertainment has made another important acquisition.
The live entertainment giant has acquired a majority stake in Neste, a full-service event marketing agency.
Live Nation plans to combine Neste’s expertise with its own extensive resources to launch Neste Live! The live joint venture will focus on talent buying and event production for US music festivals, fairs, and corporate clients.
With Neste Live!, Live Nation will service these markets combining Neste’s artist matching process with its own talent pool. The live joint venture will also combine event production expertise from both companies.
Neste Event Marketing first launched in 1995 as a corporate sponsorship and event marketing agency. The company first serviced the music festival marketplace. Neste eventually added talent buying and event production elements to its services. The event marketing agency has spearheaded and supported over 500 events. Its corporate clientele has included Jack Links, Jockey, Kansas City Life Insurance, Advisors Excel, and the NCAA College World Series.
Speaking about the majority acquisition and the new live joint venture, Gil Cunningham, President of Neste, said,
“We are looking forward to seeing the way Neste Live! unfolds and changes the talent buying process for clients of all kinds.”
Bob Roux, President of US Concerts at Live Nation, explained the live joint venture will help both companies work with even more events and clients in the live entertainment market.
“Gil and the team at Neste are amazing at what they do and make the perfect partners for this new endeavor.”
Based out of Tennessee, the Neste Live! team will report directly to Cunningham.
Neste marks Live Nation’s fourth acquisition so far this year. Last month, the live entertainment giant acquired One Production, a promoter in Singapore. This month, the company acquired Embrace Presents, a Canadian promoter, and Latin promoter Planet Events.
Source: https://www.digitalmusicnews.com/2019/02/14/live-nation-acquisition-neste-live/
From DMN:
Sprint Is Suing AT&T Over ‘Fake’ 5G Advertising Claims
Ashley King
February 8, 2019
Sprint has filed a lawsuit against AT&T for its 5G Evolution branding.AT&T rolled out the branding on phones that still use 4G LTE Advanced technology, which is not true 5G.
Both T-Mobile and Verizon have mocked the branding through social media, but Sprint is the first to respond with litigation. In federal court filings, Sprint is seeking an injunction against AT&T to prevent them from using 5GE tags on devices or in advertising.
The claim filed by Sprint says the network performed a survey and found people believed 5G Evolution was the same thing as actual 5G.
54% of respondents believed 5GE networks were the same or better than true 5G. 43% of people said they believed that buying an AT&T phone in 2019 would be 5G capable.
Sprint argues that AT&T is damaging the reputation of true 5G, which is many times faster than 4G LTE.
AT&T says they will fight the lawsuit while continuing to deploy more 5G Evolution areas across the United States.
They see no problem with the advertising because — according to AT&T — most customers don’t see a problem with it. Sprint proved as much with their consumer survey, AT&T claims.
AT&T clapped back at the lawsuit in a statement to Engadget [ https://www.engadget.com/2019/02/08/att-5g-sprint-lawsuit/ ], mentioning the potential merger with T-Mobile and the reliance on their 5G network.
“Sprint will have to reconcile its arguments to the FCC that it cannot deploy a widespread 5G network without T-Mobile while simultaneously claiming in this suit to be launching ‘legitimate 5G technology imminently’.”
When 4G technology was the new kid on the block, both AT&T and T-Mobile were branding HSPA+ technology as 4G. It’s not surprising to see them doing the same with 5G, though it will be interesting to see how this lawsuit turns out.
See https://www.digitalmusicnews.com/2019/02/08/sprint-att-fake-5g/ where a copy of the complaint filed in court can be found
District of Columbia gun control
(By DAR) D.C.’s current gun control regulations can be found at https://mpdc.dc.gov/firearms Qualifying adults may register rifles, shotguns,revolvers, or handguns. In general, carrying a firearm in the District is prohibited.
At an earlier time the District of Columbia had a firearm regulatory scheme that more broadly prohibited the possession of firearms, including possesion of an operable handgun in a home. In 2008 in the case of District of Columbia v. Heller, 128 S.Ct. 2783 (2008), a 5 to 4 majority of the Supreme Court, in an opinion written by Justice Scalia, declared DC’s firearm regulatory scheme unconstitutional to the extent that it prohibited possession of an operable handgun in a home for self-defense purposes.
In an article criticizing the Heller decision, Anthony Picadio points out that the U.S. Supreme has been reluctant to review lower court decisions putting restrictions on gun ownership, including restrictions analogous to those now applicable in the District of Columbia. Following is an excerpt from Mr. Picadio’s article, with footnotes omitted:
Since Heller was decided, and as of October 18, 2018, there have been over 1,310
Second Amendment cases nationwide, challenging restrictive gun laws, with the
overwhelming majority (93%) upholding these restrictions.37 The Supreme Court
was petitioned to accept an appeal in 88 of those cases and in each case the Court
declined to hear the appeal.
Among the cases left standing by the Supreme Court are the following:
Peruta v. California, in which the Ninth Circuit Court of Appeals held that the
Second Amendment does not protect the right to carry concealed firearms in
public;
United States v. Mahin, in which the Fourth Circuit Court of Appeals upheld a
federal law prohibiting persons subject to domestic violence restraining order
from possessing firearms;
Kolbe v. Hogan, in which the Fourth Circuit Court of Appeals held that assault
weapons and large capacity magazines are not protected by the Second
Amendment;
Justice v. Town of Cicero, in which the Seventh Circuit Court of Appeals upheld a
local law requiring registration of all firearms.
These are only a few of the many restrictive Second Amendment decisions the
Supreme Court has left stand after the Heller decision.
The history of the Second Amendment in the courts since the Heller decision does
in fact support Justice Thomas’ lament [in a case dissent] that the courts have failed to afford the Second Amendment “the respect due an enumerated constitutional right.” Perhaps one of the reasons that the Amendment has been so disfavored by the courts is a growing recognition that it was never intended by those who drafted and adopted it to grant any rights to own or use a firearm unconnected to membership in a militia.
Mr. Picadio’s article appears in the PENNSYLVANIA BAR ASSOCIATION QUARTERLY | January 2019
A copy of the article accompanies a newspaper op-ed at https://www.post-gazette.com/opinion/brian-oneill/2019/02/10/Brian-O-Neill-Slavery-root-of-the-Second-Amendment/stories/201902100107
FROM PBS WEEKEND NEWSHOUR: the Consumer Financial Protection Bureau is proposing changes to regulations that previously protected borrowers from being trapped in long-term debt
In a major win for the payday lending industry which gives quick loans at exorbitant interest rates, the Consumer Financial Protection Bureau is proposing changes to regulations that protect borrowers from being trapped in long-term debt. Kevin Sweet, Associated Press’ business reporter, joins Hari Sreenivasan for more.
Go to https://www.pbs.org/newshour/show/consumers-may-lose-protections-in-proposed-payday-lending-changes#audio
Abusive litigator and patent troll Shipping and Transit LLC files for bankruptcy
(By DAR) A complex legal system makes it possible for some companies and lawyers to misuse the legal process to make money. In a recent case involving Shipping and Transit LLC the Judge explained that:
"Plaintiff [Shipping and Transit LLC] 's business model involves filing hundreds of patent infringement lawsuits, mostly against small companies, and leveraging the high cost of litigation to extract settlements for amounts less than $50,000. These tactics present a compelling need for deterrence and to discourage exploitative litigation by patentees who have no intention of testing the merits of their claims. Based on the totality of the circumstances, the Court finds that this [a case by a Defendant who fought back and asked for attorney's fees] is an “exceptional” case. . . . Defendant’s Motion for Attorney Fees and Costs is GRANTED. The Court rules that Defendant is the prevailing party, that Defendant is entitled to recover its costs to the extent taxable under L.R. 54-3, and that Defendant is entitled to recover its reasonable attorney fees under 35 U.S.C. § 285, including fees associated with its motion for attorney fees and costs."
The case report is at https://www.eff.org/files/2017/07/07/shipping_transit_llc_v_hall_-_fee_order.pdf
Daniel Nazer of the Electronic Frontier Foundation reports that Shipping & Transit LLC, formerly known as Arrivalstar, was one of the most prolific patent trolls ever. It filed more than 500 lawsuits alleging patent infringement. Despite having filed so many cases, it never had a court rule on the validity of its patents. In recent years, Shipping & Transit’s usual practice was to dismiss its claims as soon as a defendant spends resources to fight back. A district court in California issued an order this week [see above] ordering Shipping & Transit to pay a defendant's attorney's fees. The court found that Shipping & Transit has engaged in a pattern of “exploitative litigation.” The fee award is from a case called Shipping & Transit LLC v. Hall Enterprises, Inc. After getting sued, Hall told Shipping & Transit that it should dismiss its claims because its patents are invalid under Alice v. CLS Bank. Shipping & Transit refused. Hall then went to the expense of preparing and filing a motion for judgment on the pleadings (PDF at https://www.eff.org/files/2017/07/07/shipping_transit_v_hall_-_motion_for_judgment_on_the_pleadings.pdf) arguing that Shipping & Transit’s patents are invalid. In response, Shipping & Transit voluntarily dismissed its claims. Hall then filed its successful motion for attorney’s fees.
Subsequently Shipping and Transit filed for bankruptcy, declaring the value of its patents to be $1. See https://www.techdirt.com/blog/?company=shipping+%26+transit+llc
Warren questions Fed resolve on mergers after BB&T-SunTrust deal
ByExcerpt:
WASHINGTON — After the proposed merger of BB&T and SunTrust Banks announced this week, Sen. Elizabeth Warren, D-Mass., said she is concerned about the Federal Reserve’s scrutiny of merger and acquisition applications.
“The board's record of summarily approving mergers raises doubts about whether it will serve as a meaningful check on this consolidation that creates a new too big to fail bank and has the potential to hurt consumers,” Warren said in a letter to Fed Chair Jerome Powell on Thursday, the same day the deal was announced.
Warren’s concerns about the merger come less than a year after she questioned the Fed and the Justice Department about how they have reviewed past bank mergers and how they intend to preserve competition and financial stability. She warned in April 2018 that a regulatory relief bill, which she and many other progressive Democrats opposed and which was signed into law in May, would lead to a “wave” of bank mergers
From https://www.americanbanker.com/news/elizabeth-warren-questions-fed-resolve-on-mergers-after-bb-t-suntrust-deal
Open Markets Press Release: The Podcast Market is Working and We Must Protect It
February 7, 2019
Spotify yesterday announced plans to buy podcast producer and network Gimlet Media for $230 million as well as podcast recording startup Anchor, two of the most important platforms in the podcast industry. The Open Markets Institute calls for the Federal Trade Commission and European enforcers to block the deals. The market for podcasts is one of the few news media markets that is growing, diverse, and successful, and antitrust enforcers should head off efforts by platform monopolists to take control over the industry.
The podcast market today includes a wide range of truly independent voices able to finance their operations with advertising revenue. Listeners, meanwhile, are able to download podcasts with little interference or personalized tracking by third-party software or advertising monopolists. And this old-school, open market system works. In 2017, US podcast ad revenues was $314 million dollars, and is forecast to hit $659 million by 2020.
This early stage market is, however, highly vulnerable to enclosure. Spotify CEO Daniel Ek has said he plans to spend some $500 million total to buy podcasts and podcast platforms just this year. Such a position would enable Spotify to begin to capture a significant amount of the advertising revenue that now goes straight to podcasters.
A takeover of Anchor, in particular, could also prove to be especially harmful to the industry. Anchor has provided a platform for start-up podcasters to produce, host, and sell advertising for their podcasts. If Spotify plans to change Anchor’s model, it may stifle new players, or lock them into a Spotify controlled system.
The present diversity in the Podcast industry is directly tied to market structure. There is vertical separation between the layers of the market, with software, production, and advertising done independently of one another. There is limited or no data collection, so there is no user-centric behavioral targeting or privacy breaches. This means podcast producers can still profit in a fair market for advertising sponsorships and compete fairly for an audience.
It is vital that the Federal Trade Commission and European anti-monopoly enforcers not only move to protect the podcast market, they should also study it closely for lessons to apply to other news media markets. The podcast market is a glowing example of what an open market looks like in America and the abundance it brings to both creators and listeners, and the political and civic dialogue it enables among citizens.
For media inquiries please contact Stella Roque, Communications Director at roque@openmarketsinstitute.org.
From Bloomberg: Pilgrim’s Pride Sued Over ‘Natural’ Chicken Marketing: The litigation follows a complaint filed in December with the Federal Trade Commission about its “humane” animal treatment claims.
By Lydia Mulvany
and Deena Shanker
February 7, 2019,
American consumers willingly pay more for foods advertised as “natural,” “organic” or “humane.” Food companies took notice long ago, adding such pledges to all manner of products. But it can be challenging for shoppers to figure out whether those promises are real or empty branding.
A lawsuit against chicken giant Pilgrim’s Pride Corp., filed by advocacy groups Food & Water Watch Inc. and Organic Consumers Association, turns on this very question. And they filed it in what’s arguably one of the most consumer-friendly courts in America.
At issue is the Greeley, Colorado-based company’s marketing claims that its birds are fed “only natural ingredients,” treated humanely and produced in an environmentally responsible way, according to a complaint filed on Wednesday in the Superior Court of the District of Columbia in Washington.
The company’s practices don’t live up to those claims, the plaintiffs alleged. The birds live in crowded, unsanitary warehouses, are abused by employees and have debilitating health conditions due to their breed, which was developed to grow fast, according to court papers. They’re raised with the help of routine use of antibiotics to promote growth and fed genetically modified organisms, the advocacy groups alleged in the filing.
“Contrary to Pilgrim’s Pride’s representations, the chickens who become these products are, as a matter of standard business practices, treated in unnatural, cruel, and inhumane manners, from hatching through slaughter,” according to the complaint. The plaintiffs, represented by Richman Law Group and Animal Equality, are seeking an injunction and corrective advertising.
“We strongly disagree with these allegations and look forward to defending our approach to animal welfare and sustainability,” said Misty Barnes, a spokeswoman for Pilgrim’s Pride.
“It’s a tough position that the company finds itself in.”
Pilgrim’s Pride now faces challenges about its marketing on multiple fronts. In December the company was the subject of a complaint filed by the Humane Society of the United States with the Federal Trade Commission, which said Pilgrim’s Pride was “scalding fully conscious chickens” as a result of its methods for slaughter, yet stating on its website at the time that its birds were being produced “as humanely as possible. ”
At the time, Cameron Bruett, a spokesman for Pilgrim’s Pride, a subsidiary of Brazilian meat processing giant JBS SA, rejected the Humane Society’s allegations.
“Pilgrim’s is committed to the well-being of the poultry under our care,” Bruett wrote in an email. “We welcome the opportunity to defend our approach to animal welfare against these false allegations.”
The language cited by the Humane Society subsequently disappeared from multiple places on the company’s website. Pilgrim’s Pride said at the time that the change in language was part of a long-planned update.
“It’s a tough position that the company finds itself in,” said attorney John E. Villafranco, who practices advertising law at Kelley Drye & Warren LLP. The district where the lawsuit was filed has “maybe the most permissive consumer protection statute in the country.”
https://www.bloomberg.com/news/articles/2019-02-07/pilgrim-s-pride-sued-over-natural-chicken-labels?
From DMN: Five Artists File Two Class-Action Lawsuits Against Sony Music and UMG
Daniel Sanchez, February 6, 2019
Will Sony Music and Universal Music Group willingly return copyrights to artists?
Two major labels have now come under fire in a New York courtroom.
Five musicians have filed two separate class-action lawsuits against Sony Music Entertainment and Universal Music Group (UMG) at the US District Court in the Southern District of New York.
he New York Dolls’ David Johansen along with John Lyon and Paul Collins filed the lawsuit against Sony Music. John Waite and Joe Ely are taking UMG to court.
According to both lawsuits, Sony and UMG have violated Section 203 of the Copyright Act, better known as the ’35-Year-Law.’ The termination law states that creators who assign their copyright to a company or person have the right to reclaim their rights after 35 years.
In violation of that law, enacted in 1976, both major labels have allegedly refused to acknowledge Notices of Termination sent by the artists.
The actions, if successful, could seriously impact the catalog cash-cows enjoyed by the major recording labels.
Evan S. Cohen, an LA music attorney representing the artists, explained,
“Our copyright law provides recording artists and songwriters with a valuable, once-in-a-lifetime chance to terminate old deals and regain their creative works after 35 years. This ‘second chance’ has always been a part of our copyright law.
“Sony and UMG have refused to acknowledge the validity of any of the Notices, and have completely disregarded the artists’ ownership rights by continuing to exploit those recordings and infringing upon our clients’ copyrights.
“This behavior must stop. The legal issues in these class action suits have never been decided by a court, and are of paramount importance to the music industry.”
Cohen also represents over one hundred recording artists who have sent major labels similar Notices of Termination along with Maryann R. Marzano, the LA attorney who successfully brought class-action lawsuits against SiriusXM and Spotify. In addition, Blank Rome LLP’s Gregory M. Bordo, David C. Kistler, and David M. Perry will represent the artists against the major labels. Reportedly Delayed Until February or March
The lawsuit court filings are posted with the DMN article
https://www.digitalmusicnews.com/2019/02/06/sony-music-umg-class-action-lawsuits/
Opinion: How to Stop Facebook’s Dangerous App Integration Ploy
Its plan to combine Instagram, WhatsApp and Facebook Messenger entrenches its monopoly power, and the F.T.C. should step in.
By Sally Hubbard
Ms. Hubbard is an editor at The Capitol Forum.
Feb. 5, 2019
In response to calls that Facebook be forced to divest itself of WhatsApp and Instagram, Mark Zuckerberg has instead made a strategic power grab: He intends to put Instagram, WhatsApp and Facebook Messenger onto a unified technical infrastructure. The integrated apps are to be encrypted to protect users from hackers. But who’s going to protect users from Facebook?
Ideally, that would be the Federal Trade Commission, the agency charged with enforcing the antitrust laws and protecting consumers from unfair business practices. But the F.T.C. has looked the other way for far too long, failing to enforce its own 2011 consent decree under which Facebook was ordered to stop deceiving users about its privacy claims. The F.T.C. has also allowed Facebook to gobble up any company that could possibly compete against it, including Instagram and WhatsApp.
Not that blocking these acquisitions would have been easy for the agency under the current state of antitrust law. Courts require antitrust enforcers to prove that a merger will raise prices or reduce production of a particular product or service. But proving that prices will increase is nearly impossible in a digital world where consumers pay not with money but with their personal data and by viewing ads.
The integration Mr. Zuckerberg plans would immunize Facebook’s monopoly power from attack. It would make breaking Instagram and WhatsApp off as independent and viable competitors much harder, and thus demands speedy action by the government before it’s too late to take the pieces apart. Mr. Zuckerberg might be betting that he can integrate these three applications faster than any antitrust case could proceed — and he would be right, because antitrust cases take years.
https://www.nytimes.com/2019/02/05/opinion/facebook-integration.html?action=click&module=Opinion&pgtype=Homepage
Heavy local pushback to AMAZON hq in NYC
Company executives have bristled at the intense criticism and, last week at a City Council hearing, seemed to float the notion that Amazon could reconsider its commitment to New York.
The ability of a local legislator to block the deal to bring a major new Amazon campus to Long Island City was exactly what Mr. Cuomo and Mayor Bill de Blasio had tried to avoid when they decided to use a state development process and to bypass more onerous city rules. Opposition, while vocal, seemed futile.
But now, with the insistence of Senate Democrats on appointing Mr. Gianaris to the little-known Public Authorities Control Board, those who want to stop Amazon from coming to Queens have gotten their most tangible boost yet. The board will have to decide on the development plan for Amazon, Mr. Cuomo has said, and could veto it.
From: https://www.nytimes.com/2019/02/04/nyregion/amazon-hq2-board-veto.html?action=click&module=Well&pgtype=Homepage§ion=New%20York
Baltimore State’s Attorney Marilyn Mosby announces that her office will no longer prosecute arrests for marijuana possession
MARILYN MOSBY: As an office, I’ve instructed my attorneys that we will no longer be prosecuting the possession of marijuana, regardless of weight, and regardless of criminal history.
TAYA GRAHAM: Which is why Baltimore State’s Attorney Marilyn Mosby has decided to do something about it. This week she announced her office would no longer prosecute arrests for marijuana possession–a sweeping policy change that would apply to possession of unlimited amounts.
MARILYN MOSBY: We are going to continue to proceed upon possession with intent to distribute and distribution charges if there is an articulation of evidence which would indicate some sort of indicia of distribution.
TAYA GRAHAM: And aligns Mosby with progressive prosecutors across the country who have made similar commitments to not prosecute marijuana crimes. Mosby cited the same statistics, that marijuana arrests target people of color.
One of the reasons why we came to the conclusion that we were ultimately not going to prosecute possession of marijuana is because of the statistics and the disparate sort of enforcement of these laws on communities of color, and not the disparate use. The statistics, the data shows that the use among black and white people are the same. Yet in the city of Baltimore it has been an extreme problem, and for a very long time. In 2010 the ACLU put out a report in which, you know, nationally, if you are a black person, you were four times more likely to be arrested for mere possession of marijuana. In the city of Baltimore you were six times more likely to be arrested for possession of marijuana.
Excerpt is from therealnews.com/stories/prosecutor-refuses-to-try-pot-cases-but-police-pledge-to-continue-to-arrest See also foxbaltimore.com/news/local/mosby-to-stop-prosecuting-marijuana-possession-in-baltimore
Editor’s note: The article below tells an interesting story of the use of default judgments by RIAA lawyers against remote actors as an aspect of copyright enforcement in the music industry. It reflects the view of the Digital Music News author and others that the RIAA lawyers abuse litigation procedures when they use default judgments to enhance client rights. It may be that many lawyers would be less offended, and some might feel that securing default judgments against remote bad actors advances good public copyright policy, but the critical view of a number of music industry experts seems worth noting.
A copy of the relevant court opinion is here: https://torrentfreak.com/images/ripperdismiss.pdf
Don Allen Resnikoff, Editor
From Digital Music News: RIAA Lawyers Botched a Big One Against FLVTO.biz — So What’s Next?
by Paul Resnikoff
January 25, 2019
The RIAA received a stunning defeat at the hands of Russian stream-ripper, FLVTO.biz. The decision could have far-reaching implications for US-based music, film, TV, fashion, and other IP-focused industries.
This was sort of like the Los Angeles Rams losing 45-0 to the Arizona Cardinals. Not impossible, of course. Just very unlikely — unless the Rams showed up hungover and skipped practice all week.
Which brings us to the Recording Industry Association of America (RIAA), which represents major label goliaths Sony Music Entertainment, Warner Music Group, and Universal Music Group. In its latest battle, the well-funded RIAA squared off against a little-known site operator from Russia, and prepared for an easy victory.
The RIAA, aside from its own highly-paid executives and attorneys, contracted the pricey services of law firm Jenner & Block, a self-described ‘litigation powerhouse‘. The collective legal army went to war against tiny FLVTO.biz, as well as 2conv.com, both sites apparently owned by a guy living in Russia, Tofig Kurbanov.
Who?
At first, the RIAA and Jenner weren’t even sure that Kurbanov was a real person. Apparently that’s the name the RIAA’s lawyers found on some DNS registrations, and that seemed to be the extent of the investigation. The legal team filed against the shadowy operator — along with some mysterious ‘John Does’ — in the U.S. District Court for the Eastern District of Virginia.
The court is conveniently located a few miles away from the RIAA’s F Street offices in downtown Washington, D.C.
According to filings, it looked like the RIAA was trying to serve Mr. Kurbanov by email, instead of actually chasing him down. The whole thing seems a little half-baked, until you realize the strategy at play. Instead of hunting down Kurbanov, or whomever was actually operating these sites, the RIAA was [it seems to the author] actually hoping that nobody would respond.
Why?
Without a response, the RIAA would have scored a quick, default judgment against their overseas John Doe defendant. Decisive decision in hand, the trade group could then force site blocks from ISPs, DNS providers, and search engines, and even recruit assistance from federal agencies like the FBI and Department of Homeland Security.
The resulting decision could then be used to intimidate other YouTube stream-rippers, many of whom are also operating overseas.
This isn’t a brand-new legal tactic. Far from it. And the results are glorious — at least from the perspective of the RIAA. In effect, the plaintiff — in this case the major labels — get pretty much everything they ask for from a federal judge.
Mitch Stoltz, an attorney with the Electronic Frontier Foundation, described the strategy this way:
“These sites, run from outside the U.S., don’t bother appearing in U.S. court to defend themselves—and the labels know this. When one party doesn’t show up to court and the other wins by default, judges often grant the winning party everything they ask for. Record labels, along with luxury brands and other frequent filers of copyright and trademark suits, have been using this tactic to write sweeping orders that claim to bind every kind of Internet intermediary: hosting providers, DNS registrars and registries, CDNs, Internet service providers, and more. Some of these requested orders claim to cover payment providers, search engines, and even Web browsers. Judges often sign these orders without much scrutiny.”
But what if the ‘John Doe’ defendant actually responds?
That would never happen — or so the RIAA and Jenner attorneys [apparently] thought. After all, is a shadowy individual (or group) in Russia (or wherever) really going to fight back, much less show up in a US-based courtroom?
Of course not.
Unless, of course, they do. Which is essentially what happened with FLVTO.biz (technically, Mr. Kurbanov never appeared in person, because he doesn’t have a visa to travel to the United States).
It turns out that Tofig Kurbanov is not only a real person living in Rostov-on-Don, Russia. He was also keenly aware of the legal action against him. Despite the obvious jurisdictional issues — or maybe because of them — Kurbanov decided to respond.
And he responded in full force. Kurbanov did his research, and ultimately hired three different law firms. That included Val Gurvits of Boston Law Group, PC, who started scrappily fighting this case against the polished pros at Jenner.
Gurvitz, along with a team that included Virginia-based Sands Anderson PC and Boston-based Ciampa Fray-Witzer, LLP, immediately started going for the jugular. They argued that this case was filed in the wrong jurisdiction, given that FLVTO and 2conv are based in Russia.
Virginia’s a nice state, but it’s connection to FLVTO is tenuous, at best, according to the defense.
Gurvitz’s team quickly moved to toss the case, suggesting that perhaps California would be the better venue given its proximity to YouTube and the music industry’s nerve center. Jenner & Block fought back, arguing that somehow Virginia was an important market for Kurbanov, and beyond that, targeted by Kurbanov’s sites.
It was a stretch. And it didn’t work.
Not only was Kurbanov ‘showing up,’ he came out swinging. And the RIAA got knocked out in the first round.
Earlier this week, Eastern District Court of Virginia judge Claude M. Hilton ruled that the case simply lacked jurisdiction. But Hilton not only tossed the case from the District Court of Virginia, he also disqualified it from being refiled anywhere else in the United States — California or otherwise.
“Due to the Court’s finding that personal jurisdiction is absent… the Court need not address whether transfer to the Central District of California would be appropriate as that venue would also be without jurisdiction,” Hilton opined.
The RIAA was stunned. The group’s PR person, Jonathan Lamy, was still on vacation. Another exec, Cara Duckworth, told us that the organization hadn’t decided their next step. She was just digesting the decision herself.
Gurvitz said he expects the trade group to appeal. But instead of a slam dunk, the RIAA is now battling to protect a major litigation weapon against alleged copyright infringers. The decision not only dims the RIAA’s hopes of defeating FLVTO.biz, it also raises serious questions about whether other industries can use the same absentee tactic.
That includes the film, TV, gaming, adult, fashion, or any other IP-related industry facing copyright infringement threats from shadowy overseas operators.
“All too often, plaintiffs file actions in US courts against foreign defendants that have no connections with the US – and all too often foreign defendants are subjected to default judgments for failure to appear in a US court,” Gurvitz told us. “We are happy we were able to defend our client from having to defend this action in a US court thousands of miles away from where the relevant business activities take place.”
In the short term, Kurbanov is now free to operate FLVTO.biz and 2conv.com with impunity in the United States, and pretty much anywhere else in the world. But the RIAA’s expected appeal is now far more important than a pair of YouTube stream-rippers, thanks to an extremely inconvenient jurisdictional precedent.
Aside from the ethical qualms, the problem with the RIAA’s legal tactic is that there was a small chance that the shadowy Kurbanov would fight back.
Now, that little miscalculation could change the face of anti-copyright litigation forever.
Does Starbucks rip off coffee farmers?
Some reports suggests that the answer is yes, and has been for years. In contrast, the Starbucks website describes its policies as supportive of the economic interests of farmers. Following is an excerpt from an article at https://www.dailysabah.com/economy/2017/01/18/ethiopias-coffee-farmers-eye-more-fair-trade-amid-rising-share-in-global-market
For every kilogram of coffee beans an Ethiopian farmer sells for $3, it is estimated that people up in the supply chain make around $200.
There are an estimated 15 million farmers who produce 270,000 tons (297,600 tons) of coffee in Ethiopia, the fifth-largest producer in the world after Brazil, Vietnam, Columbia and Indonesia.
Around 95 percent of the coffee is produced by small farmers like 68-year-old Selkamo Kemissa, who work in their own farms and sell their produce to middlemen. These intermediaries are widely suspected of short changing them on the huge profit margins.
Kemissa told Anadolu Agency the Arabica coffee produced on his farm near the small town of Shebedino Woreda - located around 315 kilometers (196 miles) southeast of capital Addis Ababa - ends up in multinational chains like Starbucks, where a single cup of coffee could cost as much as what he gets for a kilogram or even more.
The FDA may be backsliding on quality control just as it’s approving more generics
The FDA approved a record 971 generic drugs in the fiscal year ending Sept. 30, according to a report from the accounting firm PricewaterhouseCoopers. That was a 94 percent increase over fiscal 2014, when 500 were approved.
Yet the number of so-called surveillance inspections done globally by the FDA—meant to ensure existing drug-making plants meet U.S. standards—dropped 11 percent, to 1,471, in fiscal 2018 from fiscal 2017. Those inspection numbers also decreased in fiscal 2017, which included Gottlieb’s first few months in office, falling 13 percent from the prior year. The figures were obtained through a public-records request.
Surveillance inspections of just U.S. drug factories declined 11 percent, to 693, from fiscal 2017 to fiscal 2018, the lowest going back for at least a decade, the data show. Such inspections have been falling since 2011, as the agency began focusing more on foreign manufacturers.
Meanwhile, from fiscal 2017 to fiscal 2018, surveillance inspections of foreign factories fell 10 percent, to 778. This was the second year-over-year decline, after surveillance inspections of foreign factories dropped 9 percent from fiscal 2016 to fiscal 2017, reversing a trend of rising inspections over most of the previous decade.
Excerpt from https://www.bloomberg.com/news/features/2019-01-29/america-s-love-affair-with-cheap-drugs-has-a-hidden-cost?cmpid=BBD020119_WKND&utm_medium=email&utm_source=newsletter&utm_term=190201&utm_campaign=weekendreading
From Brookings: UPCOMING EVENT
WEBINAR – The Flint water crisis: Lessons learned
Tuesday, Feb 05, 2019 1:00 PM-2:30 PM EST
Online only
REGISTER FOR WEBCAST here: https://attendee.gotowebinar.com/register/7825849173049604365
The Flint water crisis, involving lead contamination of the city’s drinking water and an outbreak of Legionnaires’ disease, has been on the national radar for years—but there are still unanswered questions. What happened, and how? What are the health, political, and economic implications for the city and its people? How widespread is the lead problem in America’s water supplies? How are water utilities and governments responding? What are the possible solutions to address this public health problem?
Join us on Tuesday, February 5, 1:00-2:30 pm EST for a webinar on these topics. We’ll begin with presentations by Anna Clark (Author, Poisoned City: Flint’s Water and the American Urban Tragedy) on Flint and Douglas Farquhar (Program Director, Environmental Health, National Conference of State Legislatures) on what’s happening in other communities.
The presentations will be followed by a discussion with webinar participants.
Phil the dog’s answer to Punxatawny Phil the groundhog’s spring weather forecast
Phil the dog believes in the science of global warming. He believes that shifting seasons are directly linked to warmer global temperatures. A slight change in temperature is enough to push the spring thaw earlier, and delay the first frost until later in the fall. These environmental changes will cause many trees and spring wildflowers to bloom earlier than in the past. As a result, winter will be shorter, spring earlier, summer longer, and fall arrives later.
Phil the dog relies on EPA data discussed at http://climatechange.lta.org/climate-impacts/shifting-seasons
Tim Wu disccusses his "Curse of Bigness" book on PBS NewsHour
https://www.pbs.org/newshour/show/why-tech-industry-monopolies-could-be-a-curse-for-society
Competition issues in Health Information Technology
In 2014, Katherine Jones and I wrote about competition policy issues affecting health information technology (HIT) businesses, particularly issues involving difficulties in sharing of electronic patient information among systems of competing companies. Seehttps://www.ftc.gov/system/files/documents/public_comments/2014/03/00020-88806.pdf
A business relevant to such competition issues is Epic Systems, an industry leader in health information technology. The company has been criticized for using proprietary software that puts competitors at a disadvantage because it obstructs sharing of patient data. An effect of reduced competition can be higher prices for users of HIT, such as large hospitals.
Sharing of patient data may be relatively simple among hospitals if they all use Epic proprietary software, but more difficult if one of the hospitals uses different proprietary software of a competitor.
In our earlier article we pointed out that in the past companies using proprietary technologies in other so-called “platform” markets such as computer software have achieved and maintained a dominant position in a developing market by limiting competitor access to their proprietary technology. The U.S. government’s action against Microsoft made such allegations of exclusionary conduct.
We pointed out that exclusionary conduct may be addressed through antitrust enforcement after the fact, as it was in the Microsoft case. But we suggested that a preferable approach is proactive government engagement that avoids the antitrust problem by facilitating and encouraging interoperability among products of competitors in the health information technology (HIT) markets. By “interoperability” we meant the extent to which HIT systems of different manufacturers can exchange data, and interpret that shared data.
To the extent that HIT systems are interoperable, so that HIT systems of different manufacturers can easily exchange data, there is less danger that network effects will lead to the dominance of the market by a single large firm. The consequences include lower prices for consumers of HIT, such as hospitals.
Interoperability in HIT markets has been an important component of announced federal healthcare policy. The U.S. Government has been actively involved in both promoting the use of HIT and encouraging the interoperability of HIT products. The use of HIT has been incentivized by federal legislation and reimbursement policies. A goal of the legislation has been to foster the “development of a nationwide health information technology infrastructure” to promote “a more effective marketplace, greater competition . . . [and] increased consumer choice.”
Federal legislation called on the Secretary of Health and Human Services (“HHS”) to invest in and take an active role in: “(1) Health information technology architecture that will support the nationwide electronic exchange and use of health information in a secure, private, and accurate manner. . . .” and “(5) Promotion of the interoperability of clinical data repositories or registries.”
So, what has happened since 2014?
A review of trade press suggests that the U.S. government has not taken strong steps to promote interoperability standards. The CEO of Epic Systems, Judy Faulkner, recently gave a speech in which she promoted Epic’s role in facilitating interoperability standards. She pointed out that her company’s role in promoting standards filled a gap left by lack of government action. There are no public indications of government antitrust scrutiny.
A recent trade press article by Margaret Rouse discusses the business of today’s Epic Systems in a helpful way. See https://searchhealthit.techtarget.com/definition/Epic-Systems-Corp?vgnextfmt=print
Ms. Rouse explains that Epic Systems remains one of the largest providers of health information technology, used primarily by large U.S. hospitals and health systems to access, organize, store and share electronic medical records. The company has a reputation as both a technological leader and one that comes with an expensive price -- sometimes more than $1 billion -- for its products and related installations.
Ms. Rouse says that since the federal government established electronic health record incentive programs in 2009 to promote the adoption of electronic health records through meaningful use of the technology, Epic has seen its client base grow. In 2017, the Milwaukee Journal Sentinel reported that Epic employed 9,700 people and earned revenue of $2.5 billion in 2016. Epic states that 190 million people across the world use its technology. Meanwhile, Forbes has estimated that at least 40% of the U.S. population has medical data stored on an Epic electronic health records (EHR) system, and Epic's clients include some of the biggest names in healthcare.
KLAS Research concluded in 2017 that Epic had the largest EHR market share in acute care hospitals at 25.8%. Epic's top competitor, Cerner Corp., took 24.6% of the market, showing the close tug of war between the two companies for customers. Other competitors include Allscripts (which in 2017 bought McKesson Corp.'s EHR technology), Meditech and AthenaHealth.
Ms. Rouse tells us that “Due to its influence, product costs and, in some cases, practices, the company is often criticized. One of the chief complaints, historically, has been against its EHR systems' lack of interoperability with other vendors' products. Epic seems to have recognized this problem and is taking steps to change.” Also,”The company was also not as fast as smaller EHR vendors to embrace cloud-based medical records systems.”
A recent American Hospital Association report complains about the continuing need to improve interoperability among HIT systems. See https://www.aha.org/system/files/2019-01/Report01_18_19-Sharing-Data-Saving-Lives_FINAL.pdf
The Report suggests, among other things, there needs to be improvement in “consistent use of standards, common vocabulary and 'rules of the road' to connect information-sharing networks. . . .” That improvement will also “improve the ability to distribute information within and across settings, between providers of care, with individuals and within the marketplace. . . .The end goal is complete data sharing via a non-proprietary, vendor-neutral data exchange platform, similar to how the country is served by cable technology.
According to the Report, “The current standards supporting our information sharing infrastructure are incomplete, implemented inconsistently, and may differ between systems. They may not be up to the task of seamless sharing of information. There is an urgent need to coalesce around improved standards that overcome the significant gaps making communication difficult between systems.”
So, in 2019 is there a continued need for government involvement in setting interoperability standards for HIT systems, despite some industry initiatives that have occurred? Is there a need for continuing antitrust scrutiny? Probably yes. The reasons include the goal of bringing down the costs of HIT to users, such as hospitals, and to the end users -- patients.
This posting is by Don Allen Resnikoff, who takes full responsibility for its content.
From The New York Times: Mentally Ill Prisoners Are Held Past Release Dates, Lawsuit Claims
New York keeps mentally ill people in prison after they have finished their sentences because of a lack of supportive housing for them, a lawsuit filed on their behalf argues.
https://www.nytimes.com/2019/01/23/nyregion/prisoners-mentally-ill-lawsuit.html
DC's Bread for the City Opens Its Doors to Furloughed Federal Employees and Contractors
January 10, 2019 by BFC in BFC Updates In the Community https://breadforthecity.org/blog-cat/bfc-updates
For nearly 45 years, Bread for the City has shown up for D.C., and D.C. has shown up for us. With help from our community, we assist tens of thousands of D.C. residents living with low income each and every year. As the government shutdown enters its third week, it’s time for us to show up again. We want furloughed workers to know that Bread for the City is here for you, too.
Beginning Monday, January 14, if you are a District of Columbia resident and are a furloughed federal worker or federal contractor currently out of work because of the furlough, you can visit our NW or SE Centers for a five day supply of groceries. In addition, our medical clinic, located in our NW Center is currently accepting new patients. Visit our services page for more information including hours of operation and documents we will need you to bring in.
To current clients: Bread for the City will continue to be here for you too.
But I also need to say something to our federal elected officials — and one in particular. At the heart of what we do is our sense of equity. When we have economic downturns or man-made crises such as this shutdown, people living with low incomes suffer most. One of the reasons this game of chicken is easy for the powers that be is that those in charge don’t suffer. The people who suffer most are the ones who already struggling to get by.
When our leaders make these kinds of decisions, it impacts everyday people. The ripple effect extends far beyond talking points and news cycles. This bickering over billions for a border wall is now threatening food stamps, housing subsidies and more.
But even in these stressful times, there are glimmers of hope, and our hope is always YOU.
To our donors and volunteers: When the government does not meet its obligations to the people, organizations like ours are all the more important. If this shutdown continues and more people have no choice but to seek help from organizations like Bread for the City, our existing resources — particularly the food program — may be pushed to their limit. In these trying times for so many, if you’re able to give just a little more to help your neighbors, please do. Visit https://www.breadforthecity.org/govshutdown.
And if you’re a furloughed worker looking for something positive to do in the midst of this crisis, we’re always looking for volunteers. Visit https://breadforthecity.org/volunteer/ to find out how you can help.
Rising Drug Prices Linked to Older Products, Not Just Newer, Better Medications
PITTSBURGH (Jan. 7, 2019) – It’s no secret that drug prices are increasing, but to what extent are rising costs explained by the advent of newer, better drugs? A study from the University of Pittsburgh and the UPMC Center for High-Value Health Care found that new drugs entering the market do drive up prices, but drug companies are also hiking prices on older drugs.
The paper, published in the January issue of Health Affairs, shows that for specialty and generic drugs, new product entry accounted for most of the rising costs, whereas for brand-name drugs, existing products explained most of the cost increases.
“It makes sense to pay more for new drugs because sometimes new drugs are more effective, safer or treat a new disease you didn’t have a treatment for. Sometimes new drugs do bring more value,” said lead author Inmaculada Hernandez, Ph.D., assistant professor at the Pitt School of Pharmacy. “But the high year-over-year increases in costs of existing products do not reflect improved value.”
The researchers examined the list price of tens of thousands of drug codes from a national database between 2005 and 2016 and UPMC Health Plan pharmacy claims over the same time period. Drugs were considered “new” for the first three years they were available, or in the case of generics, the first three years after patent expiration.
What they saw was that each year the price of brand-name oral medications increased by about 9 percent – nearly five times the rate of general inflation over the same time period – and the price of brand-name injectables increased by 15 percent. In both cases, soaring prices were overwhelmingly attributable to existing drugs.
For instance, the list price for Sanofi’s Lantus brand insulin increased by 49 percent in 2014. Lantus had been on the market for more than a decade.
“These types of insulin have been around for a while,” Hernandez said. “Whereas the original patent for Lantus expired in 2015, dozens of secondary patents prevent competition, and it is this lack of competition that allows manufacturers to keep increasing prices much faster than inflation.”
Excerpt from: https://www.upmchealthplan.com/pdf/ReleasePdf/2019_01_07.html
Justice Department’s Reversal on Online Gambling Tracked Memo From Adelson Lobbyists
“The legal reasoning behind the Justice Department’s unusual reversal this week of an opinion that paved the way for online gambling hewed closely to arguments made by lobbyists for casino magnate and top Republican donor Sheldon Adelson. In April 2017, one of the lobbyists sent a memo to top officials in the Justice Department, arguing that a 2011 opinion that benefited online gambling was wrong.
“Officials in the department’s Criminal Division, in turn, forwarded it to the Office of Legal Counsel, which had issued the opinion, and asked attorneys there to re-examine their stance that a law on the books for decades didn’t prohibit online gambling, according to documents and interviews with people familiar with the matter. ... The department’s new position was a victory for Mr. Adelson, who has poured millions into a multiyear lobbying campaign on the matter.”
WSJ https://www.wsj.com/articles/justice-departments-reversal-on-online-gambling-tracked-memo-from-adelson-lobbyists-11547854137?mod=hp_lead_pos4 (paywall) WSJ’S BYRON TAU in D.C. and ALEXANDRA BERZON in Los Angeles:
Anatomy of a big- payout class action:
$2.3M Fee Award in $6.9M Citigroup ERISA Class Action
January 7, 2019 | Posted in : Class Action, Expenses / Costs, Fee Award
A recent Law 360 story by Emily Brill, “Attys Get $2.3M Fee for $6.9M Citigroup ERISA Class Deal,” reports that a New York federal judge has awarded $2.3 million to the attorneys for a class of over 300,000 Citigroup Inc. 401(k) plan participants who negotiated a $6.9 million settlement in a long-running Employee Retirement Income Security Act suit in August. U.S. District Judge Sidney Stein granted final approval to the settlement and fee award closing the book on claims that a Citigroup committee stuffed the company’s 401(k) plan with Citigroup-affiliated funds even though other funds charged lower fees.
The case has been pending since 2007, and its closure came as a relief to class attorney James A. Moore of McTigue Law LLP. “The case was hard-fought for over a decade, and we think the result is an excellent one for plan participants,” Moore said. “Citigroup stopped offering through its 401(k) plan the high cost proprietary funds that were the subject of the lawsuit.” Moore added that he thinks the nearly $7 million recovery “sends a message to other employers that, under the law, they must manage retirement plans in the best interest of employees.”
The Citigroup 401(k) Plan Investment Committee and the class — a group of current and former Citigroup employees — told Judge Stein in August that they had reached a deal to end the case. Soon, Citigroup workers, former workers and retirees who invested in certain funds in the 401(k) plan between Oct. 18, 2001, and Dec. 1, 2005, will be notified of the money headed their way. Judge Stein signed off on the settlement notice.
He also signed an order awarding $2.3 million to the plaintiffs’ attorneys and $15,000 to each of the two class representatives. The order also approved devoting $374,100 of the settlement to case-related expenses, leaving roughly $4.2 million left for the class after all the deductions — attorneys’ fees, class representative fees and expenses — are made.
The settlement notice tells Citigroup workers that the class’s three attorneys and two representatives “have devoted many hours to investigating the claims, bringing this case, and pursuing it for almost 11 years” and that the attorneys “have not been paid for their time and expenses while the case has been pending.”
The class sued Citigroup and its 401(k) plan committee in October 2007, accusing them of putting the bank’s interests ahead of workers’ when stocking the employee retirement plan. The company and plan committee allegedly failed to remove or replace subpar, expensive Citigroup funds from the 401(k) plan’s lineup, allowing Citigroup to reap “substantial revenues” at plan participants’ expense while violating the Employee Retirement Income Security Act, which requires fiduciaries to make decisions in participants’ best interests, according to the complaint.
Citigroup was dropped as a defendant in 2010, leaving the 401(k) investment committee, another committee called the Benefit Plans Investment Committee of Citigroup Inc. and various individual committee members and officers to defend the suit. The class won certification in November 2017. Moore said Monday that the class has more than 300,000 members.
The case is Leber et al. v. The Citigroup 401(k) Plan Investment Committee et al., case number 1:07-cv-09329, in the U.S. District Court for the Southern District of New York.
Article source: http://www.thenalfa.org/blog/2-3m-fee-award-in-6-9m-citigroup-erisa-class-action/
Question To what extent is pharmaceutical industry marketing of opioids to physicians associated with subsequent mortality from prescription opioid overdoses?
Findings In this population-based, cross-sectional study, $39.7 million in opioid marketing was targeted to 67 507 physicians across 2208 US counties between August 1, 2013, and December 31, 2015. Increased county-level opioid marketing was associated with elevated overdose mortality 1 year later, an association mediated by opioid prescribing rates; per capita, the number of marketing interactions with physicians demonstrated a stronger association with mortality than the dollar value of marketing.
Meaning The potential role of pharmaceutical industry marketing in contributing to opioid prescribing and mortality from overdoses merits ongoing examination.
For full report: https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2720914
from Public Citizen Consumer Law & Policy Blog
CFPB and NY settle with Sterling Jewelers over enrolling customers in credit cards without the customers' consent
Posted: 17 Jan 2019 01:05 PM PST
The State of New York and the Consumer Financial Protection Bureau (which is not shut down) yesterday settled claims against Sterling Jewelers, based on findings that that the company violated the Consumer Financial Protection Act of 2010 by opening store credit-card accounts without customer consent; enrolling customers in payment-protection insurance without their consent; and misrepresenting to consumers the financing terms associated with the credit-card accounts. The CFPB also found Truth in Lending Act violations, based on Sterling signing customers up for credit-card accounts without having received an oral or written request or application from them.
Under the settlement, the company will pay a $10 million civil money penalty to the CFPB and a $1 million civil money penalty to New York. The settlement also includes injunctive relief designed to prevent the continuation of the wrongdoing.
The consent order is here. https://s3.amazonaws.com/files.consumerfinance.gov/f/documents/bcfp_sterling-jewelers_proposed-consent-order.pdf
So apparently Wells Fargo is not the only company to sign people up for accounts without consent. The scope of wrongdoing by Wells Fargo, and the penalty, were of course much larger.
Source: https://pubcit.typepad.com/clpblog/2019/01/cfpb-and-ny-settle-with-sterling-jewelers-over-enrolling-customers-in-credit-cards-without-the-custo.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+ConsumerLawPolicyBlog+%28Consumer+Law+%26+Policy+Blog%29
Attorney General nominee William Barr testifies on antitrust
Excerpt from article By TED JOHNSON
WASHINGTON — William Barr, President Donald Trump’s nominee for the next attorney general, said that it was “more important” that the Department of Justice get involved in questions of how effective antitrust enforcers have been in protecting competition amid the growth of tech giants.
“I would like to weigh in on some of these issues,” Barr said at his confirmation hearing on Tuesday, adding that privacy and data gathering were other areas of concern.
Earlier in the day, Barr said he is “sort of interested in stepping back and reassessing or learning more about how the Antitrust Division has been functioning and what their priorities are.”
“I don’t think big is necessarily bad, but I think a lot of people wonder how such huge behemoths that now exist in Silicon Valley have taken shape under the nose of antitrust enforcers.”
He added that there was a way “to win in that marketplace without violating antitrust laws, but I want to find out more about that dynamic.”
Barr expressed his concerns amid increased scrutiny in Washington over the growth of tech companies like Facebook, Google, and Amazon. The Federal Trade Commission has been examining the effectiveness of antitrust laws in a series of hearings, but it is unclear if that will ultimately lead to any changes in legislation.
Barr also said that he would “absolutely” recuse himself from the Justice Department’s antitrust lawsuit against the AT&T-Time Warner merger. A three-judge panel is considering the the DOJ’s appeal.
Sen. Amy Klobuchar (D-Minn.) asked Barr about his prior criticism of the Justice Department’s decision to try to block the transaction. When he was a board member of Time Warner, Barr wrote an affidavit in support of AT&T-Time Warner’s contention that the merger was politically motivated. He wrote in the affidavit that cited Trump’s “prior public animus toward this merger” as a reason many would view the lawsuit as political motivated.
But at the confirmation hearing, Barr toned down his criticsm. He said that his affidavit “speaks for itself,” and that he was expressing concern that the Antitrust Division “wasn’t engaging in some of our arguments…I am not sure why they acted the way they did.”
Makan Delrahim, the chief of the DOJ’s Antitrust Division, has denied that the White House influenced the decision to challenge the merger.
from https://variety.com/2019/politics/news/william-barr-antitrust-impact-tech-giants-1203108418/
The NTEU lawsuit on behalf of unpaid federal workers--cite to Complaint
Excerpt from filed Complaint:
This is a collective action lawsuit, brought by Eleazar Avalos and James Davis, on behalf of themselves and all similarly situated individuals. The complaint makes two central allegations. First, it alleges that the government’s failure to timely pay overtime wages earned on December 22, 2018, to Fair Labor Standards Act (FLSA) nonexempt employees like Mr. Avalos and Mr. Davis is illegal. Second, the complaint further alleges an FLSA violation based upon the expected government failure to pay a minimum wage and overtime wages earned for the pay period beginning December 23, 2018 and ending on January 5, 2019. They seek payment of the owed wages, an equal amount of liquidated damages, and other appropriate remedies.
The Complaint is here: https://www.nteu.org/~/media/Files/nteu/docs/public/letters/2018/nteu-shutdown-flsa-complaint.pdf?la=en
NYT opinion: Opinion
Can States Fix the Disaster of American Health Care?
The governor of California has proposed some big ideas. Who knows whether he can pull them off, but there’s reason for hope.
By Elisabeth Rosenthal
See the Op-Ed at Opinion https://www.nytimes.com/pages/opinion/index.html
From USDOJ:
Reconsidering Whether the Wire Act Applies to Non-Sports Gambling
This [USDOJ] Office concluded in 2011 that the prohibitions of the Wire Act in 18 U.S.C. § 1084(a) are limited to sports gambling. Having been asked to reconsider, we now conclude that the statutory prohibitions are not uniformly limited to gambling on sporting events or contests. Only the second prohibition of the first clause of section 1084(a), which criminalizes transmitting “information assisting in the placing of bets or wagers on any sporting event or contest,” is so limited. The other prohibitions apply to non-sportsrelated betting or wagering that satisfy the other elements of section 1084(a)
Full USDOJ Statement: https://www.justice.gov/olc/file/1121531 [the URL is there at the bottom of the page, despite the shut down warning]
THE FTC THINKS YOU PAY TOO MUCH FOR SMARTPHONES. THEY BLAME QUALCOMM
Excerpt from: https://www.wired.com/story/ftc-thinks-you-pay-too-much-smartphones-heres-why/?
Qualcomm CEO Steven Mollenkopf told a federal court Friday that the company requires buyers of its chips to also license its patents, but it argued that it does so for legitimate business reasons.
THE FEDERAL TRADE Commission thinks you're paying too much for smartphones. But it doesn’t blame handset makers like Apple and Samsung or wireless carriers. Instead, the agency blames Qualcomm, which owns key wireless technology patents and makes chips that can be found in most high-end Android phones and many iPhones.
Qualcomm charges companies like Apple a set percentage of the total price of a phone in exchange for the right to use its technology, according to the antitrust suit filed by the FTC. The percentages vary, but Qualcomm generally charges 5 percent of the value of a device, up to a maximum of about $20 per device, according to a legal brief filed by Qualcomm.
Phone makers like Apple and Huawei argue that Qualcomm demands a larger cut of each phone sale than is fair, but that they pay because Qualcomm essentially threatens to cut off their supply of important wireless chips if they don’t. The FTC describes this as a "tax" on cellular phones that drives up prices and hurts competition.
In court Friday, Apple executive Tony Blevins accused the chipmaker of strong-arm tactics. Blevins said that during negotiations in 2013, Qualcomm president Cristiano Amon told him, "I'm your only choice, and I know Apple can afford to pay it,” CNET reports.
You pay $4 for a cup of coffee, but farmers earn less than a cent a cup
* A crisis is brewing after green coffee prices slide
* Calls for more value to be added in producing countries
Excerpts from article by Aaron Maasho, Nigel Hunt
Now, a slump in global coffee prices to their lowest in nearly 13 years in September is raising questions about whether it’s worth growing beans at all in some of the traditional coffee heartlands of Central America, Colombia and Ethiopia.
The industry has seen a wave of acquisitions as companies such as Nestle, JAB Holding and Coca-Cola spend billions to boost their market share.
For struggling farmers, though, times are tough. Growers around the world have warned coffee company executives in the West of a growing “social catastrophe”, unless they can help to raise farmers’ incomes.
In a letter last year to chief executives at companies such as Starbucks, Jacobs Douwe Egberts (JDE) and Nestle, a group representing growers in more than 30 countries said there was a risk farms would be abandoned, fuelling social and political unrest as well as more illegal migration.
Some companies are responding. Starbucks, for example, has committed $20 million to help smallholders they do business with in Central America until coffee prices rise above their cost of production. “For us that is an initial step, acknowledging we need to do something helpful in the near term in the countries that need it most,” said Michelle Burns, head of coffee at Starbucks, which buys about 3 percent of the world’s coffee.
One problem for Ethiopian farmers is that most of their coffee is exported in bulk as green, unroasted beans, with most of the processes that add the greatest value taking place afterwards in the countries that consume the coffee.
“There hasn’t been a really significant change in how coffee has been transported, purchased or produced in many decades. It has always just been extracted from the country,” said Rob Terenzi, co-founder of Vega Coffee in the United States.
Fair Trade arrangements for farmers are seen by Terenzi and some other observers as insufficient.
See article at https://www.reuters.com/article/coffee-farmers/coffee-price-slump-leaves-farmers-earning-less-than-a-cent-a-cup-idUSL8N1YJ4D2?te=1&nl=dealbook&emc=edit_dk_20190115
A Pennsylvania federal judge issued a nationwide injunction last Monday blocking Trump administration carve-outs to the Affordable Care Act's birth control mandate from taking effect
From the Opinion:
Plaintiffs, the Commonwealth of Pennsylvania and the State of New Jersey (collectively “the States”), have sued the United States of America, President Donald J. Trump, the United States Secretary of Health and Human Services Alex M. Azar II, the United States Secretary of the Treasury Steven T. Mnuchin, and the United States Secretary of Labor Rene Alexander Acosta in their official capacities, as well as each of their agencies (collectively “Defendants”), seeking to enjoin enforcement of two Final Rules that grant exemptions to the Affordable Care Act’s requirement that health plans cover women’s preventive services. The Final Rules “finalize” two Interim Final Rules, which Defendants issued in October 2017 and which this Court enjoined soon thereafter, see Pennsylvania v. Trump, 281 F. Supp.3d 553, 585 (E.D. Pa. 2017). On November 15, 2018, while their appeal of that preliminary injunction was pending, Defendants promulgated the Final Rules currently before the Court. The States move to enjoin enforcement of the Final Rules arguing that, like the IFRs before them, the Final Rules violate a variety of constitutional and statutory provisions. For the reasons set forth below, Plaintiffs’ Case 2:17-cv-04540-WB Document 136 Filed 01/14/19 Page 2 of 65 3 Second Motion for a Preliminary Injunction shall be granted.
From the Order:
ORDERED that Defendants Alex M. Azar II, as Secretary of the United States Department of Health and Human Service; the United States Department of Health Case 2:17-cv-04540-WB Document 135 Filed 01/14/19 Page 1 of 2 2 and Human Services; Steven T. Mnuchin, as Secretary of the United States Department of Treasury; the United States Department of Treasury; Rene Alexander Acosta, as Secretary of the United States Department of Labor; and the United States Department of Labor;1 and their officers, agents, servants, employees, attorneys, designees, and subordinates, as well as any person acting in concert or participation with them, are hereby ENJOINED from enforcing the following Final Rules across the Nation, pending further order of this Court: 1. Religious Exemptions and Accommodations for Coverage of Certain Preventive Services Under the Affordable Care Act, 83 Fed. Reg. 57,536 (Nov. 15, 2018); and 2. Moral Exemptions and Accommodations for Coverage of Certain Preventive Services Under the Affordable Care Act, 83 Fed. Reg. 57,592 (Nov. 15, 2018).
The Order and Opinion are here:
https://www.attorneygeneral.gov/wp-content/uploads/2019/01/2019-01-14-Order.pdf
https://www.courthousenews.com/wp-content/uploads/2019/01/injunction-opinion.pdf
NYT: Gavin Newsom dives into the highly charged debate over prescription drug prices in his first week as California’s governor
His idea: Find strength in numbers. Within hours of taking office on Monday, Mr. Newsom signed an executive order proposing a plan that would allow California to directly negotiate with drug manufacturers.
The state would bring to the bargaining table not just the 13 million beneficiaries of Medi-Cal (California’s version of Medicaid), but also other state agencies that purchase drugs, including coverage for state workers and prisoners. Down the road, the plan could possibly allow private insurers and employers to join in the savings.
“We think this is a significant step forward,” Mr. Newsom said in a video address. “It’s the right thing to do, and I recognize deeply the anxiety so many of you feel around the issues related to the cost of prescription drugs, and I hope California’s efforts here can lead the way for other states to consider the same.”
https://www.nytimes.com/2019/01/11/health/drug-prices-california.html
The Supreme Court has declined to hear an appeal from ExxonMobil regarding Massachusetts Attorney General Maura Healey’s climate change investigation
The Court’s decision requiring production of documents could have implications beyond the state of Massachusetts as Exxon is forced to hand over documents detailing what it knew about climate change and when.
Healey isn't alone in investigating ExxonMobil. In October, former Democratic New York Attorney General Barbara Underwood announced a lawsuit against Exxon Mobil alleging the company misled investors regarding the risk that climate change regulations posed to its business. The probe had been initiated by her predecessor, former Democratic New York Attorney General Eric Schneiderman.
Other States are potential litigants against ExxonMobil.
To find court filings and documents related to the Mass. AGO's investigation of Exxon Mobil: https://www.mass.gov/lists/attorney-generals-office-exxon-investigation
From Elizabeth Warren's letter to Comerica on direct deposit fraud issues:
I am writing to seek information regarding security breaches in Comerica's Direct Express debit card program which led to hundreds of Americans becoming victims of fraud when their Social Security, disability, or other federal benefit payments were stolen. This program was managed by Comerica via the now discontinued Direct Express Cardless Benefit Access Service.
Complaints from my constituents, confirmed by detailed reporting in the American Banker, described your company's security vulnerabilities, your mismanaged responses to data breaches, and your misleading and cruel customer service tactics when harmed consumers sought help. I am particularly concerned about the lack of transparency about the security breaches and subsequent fraud schemes that compromised Americans' federal benefits.
The Department of Treasury partners with Comerica and other financial agents to distribute monthly federal benefit payments on behalf of the Social Security Administration, the VA, and at least five other federal agencies. 1 Comerica has administered the Direct Express program since 2008 and provides prepaid debit cards that allow recipients without bank accounts to electronically access Social Security, and other federal benefits, without relying on physical checks. But according to reports "criminals .... stole Direct Express card numbers, addresses and three-digit card identifiers, enabling them to make fraudulent online purchases. In some cases, criminals also called Direct Express to report cards as lost or stolen, or to have PIN numbers changed, and had payments routed to MoneyGram locations where they could pick up a check and cash it."
The letter is at https://www.warren.senate.gov/imo/media/doc/2018.10.16%20Letter%20to%20Comerica%20Bank%20re%20Direct%20Express.pdf
Hospice care and "Do not resuscitate" orders for people with advanced dementia?
Advances in health care can mean an increase in the number of older people suffering from dementia. It may not be obvious that advanced dementia is a terminal illness, but some medical people see it that way. The issue that follows from that point of view is whether a “do not resuscitate” policy and hospice care are appropriate for people with advanced dementia. The issue can be controversial. Some will see the withholding of medical care from a person with advanced dementia as cruel, or even immoral. Others will think that withholding of care is humans, allowing the patient to die with dignity. An NIH article at https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4396757/
helpfully reviews the issues. It discusses care options for patients with advanced dementia, including family counseling issues.
Posting by Don Allen Resnikoff
From DMN:
RCA Records Faces Heavy Pressure to Drop R. Kelly — So Far, No Response
In the wake of the #MeToo movement, pressure continues to build around R. Kelly.
In the past week, Lifetime has aired a six-part documentary featuring women describing sexual misconduct from the singer. The damning biopic, Surviving R. Kelly, chronicles numerous issues involving allegations of sexual assault involving multiple women.
After that documentary aired, the Rape, Abuse and Incest National Network’s sexual crisis hotline received 20% more calls. RAINN president Scott Berkowitz says this is common after high-profile cases.
The story continues here. https://www.digitalmusicnews.com/2019/01/09/rca-records-faces-heavy-pressure-to-drop-r-kelly-no-response-yet/
From Public Citizen
The Growing Rise of Megacompanies Hurts Consumers and Damages Our Democracy
REMINGTON A. GREGG --Consumer & Worker Safeguards--, -Antitrust & Competition Laws-
This month, Apple became the first publicly-traded American company to reach $1 trillion in market value. It is now one of the most powerful companies in the world both in revenue and in the share of the market that it holds. In 2017, Apple took home 79% of the global profit share for smartphones. What does this milestone mean for American consumers?
Megacompany monopolization is not unique to Apple, or even the tech industry. Five banks control half of all assets in the American financial system. Thirty publicly traded companies collect half of the profits produced by all publicly traded companies in the market. According to Business Insider, the difference between how much it costs American companies to make products and how much they make selling products—a mechanism that experts use to measure how much power companies have in the marketplace—is at the highest level since 1950.
When companies consolidate, it makes it harder for plucky startups to gain a foothold as a competitor. As a result, consumers have fewer options, which can drive prices up and innovation down.
Apple has spent decades fostering a consumer-invested ecosystem where users become so familiar and comfortable with its products that it’s difficult to switch another company. This ecosystem is so strong that other companies struggle to create similar systems, effectively allowing Apple to monopolize the market. However, Apple is not the only tech titan set to monopolize the market. Only about 1% of smartphone consumers use an operating system that is not made by Apple or Google.
In industries where corporate consolidation is rampant, such as the tech field, workers’ share of the overall pie is shrinking because these merged companies are focused on efficiency and need fewer workers to perform the necessary jobs, which means fewer people employed in quality, high paying jobs. This leads to an overall decline of the share of the nation’s wealth that goes to workers. In addition, while Apple’s valuation soared to new heights this week, it is aggressively outsourcing its workforce out of the country, taking advantage of poorly-paid workers in other countries and robbing Americans of good jobs.
U.S. Supreme Court Justice Louis Brandeis long ago warned against the “curse of bigness” in corporate power. During the Progressive Era of the 1910s and 1920s, American trustbusters sought to rein-in excessive corporate power by enacting bold laws such as the Clayton and Sherman Act, and the Federal Trade Commission Act, which created the Federal Trade Commission (FTC), to protect competition. However federal antitrust enforcement, the Department of Justice and the FTC, have not used their enforcement powers robustly to curb excessive concentration. Market commentators may argue that stopping companies like Apple, Google, and Amazon from driving out their competitors from the marketplace is impossible. But they are wrong. Congress can fix our antitrust laws to stop companies from growing so big that they stamp out all competition, and Public Citizen will continue to advocate for strong antitrust laws and enforcement that protects consumers against corporate monopolies.
https://citizenvox.org/2018/08/15/the-growing-rise-of-megacompanies-hurts-consumers-and-damages-our-democracy/
Ocasio-Cortez reportedly in line for banking post, and that could be bad news for Wall Street
- Freshman Rep. Alexandria Ocasio-Cortez is in line to be appointed to the House Financial Services Committee, according to a Politico report.
- The New York democratic socialist would be a thorn in the side of Wall Street, which has seen its regulatory burden lowered since Donald Trump became president.
- Ocasio-Cortez also could be an important ally for committee Chairwoman Maxine Waters.
See https://www.cnbc.com/2019/01/11/ocasio-cortez-in-line-for-banking-post-and-that-could-be-bad-news-for-wall-street.html
Big Vaping Companies v. regulators:
F.D.A. Accuses Juul and Altria of Backing Off Plan to Stop Youth Vaping
By Sheila Kaplan
Jan. 4, 2019
WASHINGTON — The Food and Drug Administration is accusing Juul and Altria of reneging on promises they made to the government to keep e-cigarettes away from minors.
Dr. Scott Gottlieb, the agency’s commissioner, is drafting letters to both companies that will criticize them for publicly pledging to remove nicotine flavor pods from store shelves, while secretly negotiating a financial partnership that seems to do the opposite. He plans to summon top executives of the companies to F.D.A. headquarters to explain how they will stick to their agreements given their new arrangement.
Dr. Gottlieb was disconcerted by the commitments the companies made in the deal announced Dec. 19, under which Altria, the nation’s largest maker of traditional cigarettes, agreed to purchase a 35 percent — $13 billion — stake in Juul, the rapidly growing e-cigarette start-up whose products have become hugely popular with teenagers. Public health officials, as well as teachers and parents, fear that e-cigarettes have created a new generation of nicotine addicts.
“Juul and Altria made very specific assertions in their letters and statements to the F.D.A. about the drivers of the youth epidemic,” Dr. Gottlieb said in an interview. “Their recent actions and statements appear to be inconsistent with those commitments.”
In October, after meeting with Dr. Gottlieb, Altria had agreed to stop selling pod-based e-cigarettes until it received F.D.A. permission or until the youth problem was otherwise addressed. In doing so, Howard A. Willard III, Altria’s chief executive, sent the F.D.A. a letter agreeing that pod-based products significantly contribute to the rise in youth vaping.
But the new deal commits the tobacco giant to dramatically expanding the reach of precisely those types of products, by giving Juul access to shelf space in 230,000 retail outlets where Marlboro cigarettes and other Altria tobacco products are sold. (Juul currently sells in 90,000 stores.)
It is a development that startled the F.D.A., which in September had threatened to pull e-cigarettes off the market if companies could not prove within 60 days that they could keep the products away from minors. Altria, Juul and three tobacco companies sent the detailed plans spelling out how they would comply with the agency’s request. Now, those plans appear in jeopardy, Dr. Gottlieb said.
“I’m reaching out to both companies to ask them to come in and explain to me why they seem to be deviating from the representation that they already made to the agency about steps they are taking to restrict their products in a way that will decrease access to kids,” Dr. Gottlieb said.
Dr. Scott Gottlieb, the F.D.A. commissioner, has accused both companies of negotiating with him in bad faith. It is possible that the F.D.A. will pressure Altria to keep Juul flavor pods off its shelf space, but the tobacco company is not likely to consent.
https://www.nytimes.com/2019/01/04/health/fda-juul-altria-youth-vaping.html
About shooting deer in Rock Creek Park
My 11 year old granddaughter was upset by a bright pink sign near the Rock Creek Park Nature Center announcing planned sharpshooting of deer. My granddaughter complained that birth control by sterilizing deer would be the more humane approach.
Several organized groups support birth control for deer as a way to control population. They have the same view as my granddaughter: they believe that sterilization is more humane than shooting deer. The groups include the Humane Society, In Defense of Animals, and the National Parks Conservation Association.
I’ve told my granddaughter that I applaud her taking a stand in opposition to shooting deer, and I encouraged her to support the Human Society, In Defense of Animals, and the National Parks Conservation Association as they encourage sterilization rather than shooting.
Pasted in below is part of an article published by people at the National Parks Conservation Association. Among other things, It discusses an unsuccessful law suit against the Park Service brought a few years ago:
The move [to shoot deer] has upset those who prefer birth control over bullets. They want deer to live out their normal lifespans in places where hunting is off limits. Sometimes they sue to prevent the cull.
This happened to Rock Creek Park when a handful of private D.C. citizens, and In Defense of Animals, a national animal-protection nonprofit, filed a lawsuit in 2012. They alleged that the Park Service is cherry-picking its science, and that the park’s plan is inhumane and unnecessary because successful reproductive control exists.
“We love both the deer and the national park, but the decision to kill the deer has affected the public’s ability to enjoy the park and has ruined the Park Service’s reputation here,” says Carol Grunewald, a plaintiff whose property is near the park. “Our scientists show that Rock Creek Park can easily support 300 deer. But regardless of the numbers, the public will no longer stand for the routine, mass extermination of animals.”
Their legal petition included a scientific analysis by Oswald Schmitz, a professor at Yale’s School of Forestry and Environmental Studies, stating that deer don’t have an adverse impact on the park’s vegetation because forests are self-thinning. That is, seedlings compete for sunlight and other resources, most die, and in the end, a thousand seedlings in an area, for example, may produce only 20 trees with or without deer present.
Their action delayed the park’s cull by a year, but ultimately a court dismissed the case on the grounds that Congress granted the Park Service the authority to act in Rock Creek Park’s interest.
Although not a plaintiff in the lawsuit, the Humane Society of the United States (HSUS) also criticized the park’s plan during the public comment period, championing the nonlethal solution of using a fertility-control vaccine on the herd as an alternative.
“We think Rock Creek’s plan is a wasteful killing program and a lost opportunity to repress the growth rate,” says Stephanie Boyles Griffin, senior director of innovative wildlife management and services at HSUS. The group offered to pay 50 percent of the cost of sterilizing the park’s deer. “We asked park officials to give fertility control a chance, to show they had explored and exhausted all methods before resorting to lethal control,” she says. “The problem wasn’t created overnight, so why does it have to be solved overnight?”
This posting is by Don Allen Resnikoff, who takes full responsibility for its content
From Public Citizen:
CFPB Complaint Database Scores Win for Times Columnist
Posted: 04 Jan 2019 12:21 PM PST
by Jeff Sovern
The CFPB's former acting director, Mick Mulvaney, compared the Bureau's public database to Yelp and threatened to take it private, though he never did so. Director Kraninger has not made public her plans for the database, to the best of my knowledge, and so public access to the complaints may still be at risk. We have reported before how the database has helped even a consumer law expert. Now Pulitzer-Prize winning NY Times columnist Michelle Goldberg reports how the database helped her secure an $11,000 refund after her own efforts to work things out with her bank had failed:
I’d been signed up for a dubious program that purported to protect users’ credit in certain emergency situations. My bank had been accused of fraudulent practices in connection with it and fined $700 million by the Consumer Financial Protection Bureau, * * * I tried, maddeningly, to seek redress from the bank — cycling through phone trees, screaming at automated operators. No one could tell me how I’d been enrolled in the program, or for how long.
Eventually, I turned to the C.F.P.B. itself, filling out a simple form on its website. A few weeks later, I was notified that the bank had been deducting money from my account for years, and I was being refunded more than $11,000.
I wonder how many consumers have a similar story to tell. House Financial Services Chair Maxine Waters has said she will focus on the Bureau. This seems like one of many topics worth congressional attention.
From the Minnesota AG press release (October 2018) on its litigation against drug companies concerning insulin pricing
Press ReleaseTuesday, October 16, 2018
Attorney General Lori Swanson Files Lawsuit Against Pharmaceutical Companies Over Deceptive Price Spikes For Insulin
Price Hikes More Than Doubled the Cost Of Diabetes Medication
Minnesota Attorney General Lori Swanson today filed a lawsuit against the nation’s three major manufacturers of insulin used to treat diabetes after prices more than doubled in recent years. The lawsuit alleges that the drug companies—Sanofi-Aventis U.S. LLC, Novo Nordisk, Inc., and Eli Lilly and Co.—deceptively raised the list prices of insulin, making it less affordable to patients in high deductible health plans, the uninsured, and senior citizens on Medicare.
“Insulin is a life-or-death drug for people with diabetes. Many people can’t afford the price hikes but can’t afford to stop taking the medication either,” said Attorney General Swanson.
The list price of some insulin products has more than doubled since 2011 and tripled since 2002. For example, the cost of Levemir increased from $120.64 for 100 units/ml vial in 2012 to $293.75 in 2018; HumaLog increased from $122.60 for 100 units/ml vial in 2011 to $274.70 in 2017; and Lantus increased from $99.35 in 2010 when it first entered the market to $269.54 in 2018.
The lawsuit alleges that the drug companies fraudulently set an artificially high “list” price for their insulin products but then negotiated a lower actual price by paying rebates to pharmacy benefit managers (PBMs). A PBM is a company retained by a health plan to negotiate prices with drug companies and develop “formularies” of approved drugs that policyholders may take. Drug companies want their drugs to be on the formulary because if a drug is not on the formulary, it is not covered by the health plan or costs more. Pharmaceutical companies obtain favorable placement of their products on PBM formularies by artificially raising their list prices and then offering rebates to the PBM in exchange for favorable formulary placements.
PBMs normally get paid in part based on the “spread” between the list price of a drug and the net price paid by the health plan after the rebates (i.e. the greater the “spread,” the higher the compensation.) Because drug companies want their drugs to be on the formulary, they raise list prices so they can offer higher “rebates” or “spreads” to PBMs than their competitors. This causes the “list price” of the drugs to spiral upward. Health insurers receive a portion of the rebates from the PBM and do not pay the list price. Patients who are in high deductible health plans, who are uninsured, or who are on Medicare, however, may end up paying the artificial list price because they do not get the rebates.
Thus, the drug companies establish two prices for their insulin products: a higher artificial list price and the much lower, secret net price that insurance companies pay, which is confidential. PBMs and manufacturers do not disclose the rebates paid for favorable formulary placement, claiming this information is a “trade secret.” In most industries, competitors normally compete with one another to offer lower prices but here, the drug companies compete with each other by raising their prices so they can give larger rebates to the PBMs who are responsible for the placement of their products.
The “spread” between the list and net prices paid by PBMs has increased dramatically in recent years. For example, Lantus’s spread increased seven-fold between 2009 and 2015; HumaLog’s spread nearly tripled between 2009 and 2015; and Levemir’s spread nearly doubled between 2011 and 2014.
The lawsuit alleges that the list prices the drug companies set are so far from their net prices that they are not an accurate approximation of the true cost of insulin and are deceptive and misleading.
Underinsured and uninsured patients who purchase insulin at a pharmacy are unaware of the product’s net price and do not benefit from the rebates or discounts negotiated by PBMs, but instead make payments based on the deceptive list price published by the manufacturers. There are currently nearly 350,000 Minnesotans without health coverage.
The products included in the lawsuit include Sanofi’s Lantus, Novo Nordisk’s NovoLog, and Eli Lilly’s HumaLog, among others.
See https://www.ag.state.mn.us/Office/PressRelease/20181016_InsulinPriceHikes.asp
WSJ: CVS, UnitedHealth, Humana and other health insurers’ bids to manage Part D prescription-drug plans for seniors have been consistently off in ways that benefit the companies at the expense of taxpayers
1
Joseph Walker and
Christopher Weaver
January 4, 2019
Excerpts from https://www.wsj.com/articles/the-9-billion-upcharge-how-insurers-kept-extra-cash-from-medicare-11546617082?mod=hp_lead_pos1 (Paywall)
Each June, health insurers send the government detailed cost forecasts for providing prescription-drug benefits to more than 40 million people on Medicare.
Year after year, most of those estimates have turned out to be wrong in the particular way that, thanks to Medicare’s arcane payment rules, results in more revenue for the health insurers, a Wall Street Journal investigation has found. As a consequence, the insurers kept $9.1 billion more in taxpayer funds than they would have had their estimates been accurate from 2006 to 2015, according to Medicare data obtained by the Journal.
Those payments have largely been hidden from view since Medicare’s prescription-drug program was launched more than a decade ago, and are an example of how the secrecy of the $3.5 trillion U.S. health-care system promotes and obscures higher spending.
Overdoing ItHealth insurers reaped $9 billion in additional revenue from 2006 to 2015 byoverestimating drug costs to Medicare and keeping a share of the extra money.Extra revenue kept by insurersSource: Centers for Medicare and Medicaid Services
.billion2006’07’08’09’10’11’12’13’14’150.00.20.40.60.81.01.21.4$1.62009x$1.08 billion
Medicare’s prescription-drug benefit, called Part D, was designed to help hold down drug costs by having insurers manage the coverage efficiently. Instead, Part D spending has accelerated faster than all other components of Medicare in recent years, rising 49% from $62.9 billion in 2010 to $93.8 billion in 2017. Medicare experts say the program’s design is contributing to that increase. Total spending for Part D from 2006-15 was about $652 billion.
The cornerstone of Part D is a system in which private insurers such as CVS Health Corp. , UnitedHealth Group Inc. and Humana Inc.submit “bids” estimating how much it will cost them to provide the benefit. The bids include their own profits and administrative costs for each plan. Then Medicare uses the estimates to make monthly payments to the plans.
After the year ends, Medicare compares the plans’ bids to the actual spending. If the insurer overestimated its costs, it pockets a chunk of the extra money it received from Medicare—sometimes all of it—and this can often translate into more profit for the insurer, in addition to the profit built into the approved bid. If the extra money is greater than 5% of the insurer’s original bid, it has to pay some of it back to Medicare.
For instance, in 2015, insurers overestimated costs by about $2.2 billion, and kept about $1.06 billion of it after paying back $1.1 billion to the government, according to the data reviewed by the Journal.
FDA on fraudulent diet medications
We checked the FDA web site for advice on fraudulent diet drugs after a reader sent us a suspicious looking ad.
The main point of the FDA video and text posting below is that many dietary supplements that promise weight loss contain hidden and dangerous ingredients. The FDA ability to regulate dietary supplements is limited.
See https://www.fda.gov/drugs/resourcesforyou/consumers/buyingusingmedicinesafely/medicationhealthfraud/ucm234592.htm
Cardless ATMs expand despite security risks
Jan. 3, 2019
Cardless ATMs are on the rise, driven partially by the perception that they are safer to use than physical debit cards for withdrawing cash, according to bankrate.com. Besides allowing for faster cash withdrawals, cardless ATMs, combined with mobile wallets, could make cash unnecessary.
Last year, Chase and Fifth Third allowed card-free ATM access, while PNC followed suit at select terminals. In addition, 3,500 credit unions allowed members to use cardless ATMs via the Co-op Financial Services network.
Cardless ATMs remove the risk of card skimming, the biggest type of fraud afflicting ATMs, but they are not immune to theft, according to the report.
Fraudsters reportedly stole more than $106,000 through a phishing scam from Fifth Third Bank customers after it began offering cardless ATM access. The fraudsters sent a text message to customers and tricked them into visiting a fake website where they provided personal information, which allowed the thieves to initiate cardless ATM transactions.
One Chase Bank customer was robbed after her password and username were stolen. Thieves added a phone number to her account and used a cardless ATM to withdraw funds which they had transferred from her savings account to her checking account.
Mike Byrnes, a product marketing manager at Entust Datacard, said the security aspect of cardless ATMs has not been fully thought through.
Credit: https://www.atmmarketplace.com/news/cardless-atms-expand-despite-security-risks/?utm_source=AMC&utm_medium=email&utm_campaign=Week+In+Review&utm_content=2019-01-04
Los Angeles Sues the Weather Channel
January 4, 2019CNS
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TLOS ANGELES (CN) — Los Angeles’ city attorney sued The Weather Channel on Thursday, claiming it fraudulently and deceptively uses its Weather Channel App “to amass its users’ private, personal geolocation data,” not, as advertised — “to provide them with ‘personalized local weather data’”— but to monetize the information by selling it to third parties.
Suing on behalf of the People of California, City Attorney Michael Feuer asked the superior court to enjoin the deceptive and unfair business practices, and fine the company $2,500 for each violation, doubled if committed against elderly or disabled people.
Defendant TWC Product and Technology LLC owns and operates The Weather Channel App, which can be downloaded on Apple and Android products. TWC is a subsidiary of IBM.
Excerpt from https://www.courthousenews.com/los-angeles-sues-the-weather-channel%EF%BB%BF/
AZ Police have responded to dozens of calls regarding people threatening and harassing self-driving Waymo vans.
- One man aimed a gun at a Waymo to scare the emergency driver
- One Jeep ran six Waymo vans off the road
The Indian government announced new regulations that appear to limit Walmart and Amazon bundling of its platform business with sales promotion
The regulation will block the companies from selling products supplied by affiliated companies, and also precludes offering their customers special discounts or exclusive products.
The steps taken by India appear to reflect suggestions of some for structural limitations or break-up of Amazon, such as Stacy Mitchel, the co-director of Institute for Local Self-Reliance. Earlier this year she wrote an article for The Nation called, “Amazon doesn’t just want to dominate the market — it wants to become the market.” In the Podcast below from public radio station WNYC, Mitchell describes the history of regulation of corporate concentration. She then explains why she thinks that the government should forcibly separate Amazon's platform business from its other businesses.
This Podcast is at https://www.wnycstudios.org/story/making-america-antitrust-again
Posting by Don Allen Resnikoff, who is responsible for its content
Revisiting two influential books on big business and agriculture: Reposting of an earlier review from 2014
The Meat Racket: The Secret Takeover of America's Food Business
By Christopher Leonard
Simon & Schuster, 2014
Foodopoly: The Battle Over the Future of Food and Farming in America
By Wenonah Hauter
The New Press, 2012
Review by Don Allen Resnikoff
The Meat Racket author Christopher Leonard and Foodopoly author Wenonah Hauter both describe a scenario of American agriculture where large wholesale and retail companies bully farmers and misuse consumers while the government stands by and does little to help. They advocate for stronger government action against big companies to help small farmers and consumers. Both authors emphasize the need for policy reform to increase the number of competitors in the business of distributing farm products. Both believe that current antitrust enforcement and relevant legislative mechanisms work poorly.
Their books are addressed to broad audiences, not expert economists or antitrust lawyers, and the reason is plain: The authors hope that informing the masses will lead to public pressure for government action, and that pressure will turn the tide against big companies and improve the future of food and farming in America.
In The Meat Racket, Leonard offers clear and forceful reform recommendations that support the interests of small farmers, although much of the book’s space is devoted to stories of the growth of Tyson Foods, Inc. and other giant wholesale agribusiness companies that act as middlemen between farmers and consumers. Often the companies started as small family businesses, developing innovative, efficient, and often cruel-to-animals factory farming techniques as they grew. As these agribusinesses expanded, their exploitation of farmers also increased.
Leonard’s bottom line on public policy reform is that the government, including antitrust enforcers, needs to better protect farmers as well as the consuming public from the clutches of huge, vertically integrated agribusiness companies. The executive branch of government should, among other things, more vigorously enforce antitrust laws, and Congress should take effective legislative action.
Leonard tells us that large wholesale-level agribusinesses use their great market power to bully farmers into contracts that allow the companies to decree the price of animals, making competitive wholesale market pricing of chicken, pork, and beef virtually irrelevant. The result is impoverished farmers. Farmers have little bargaining power, are hardly entrepreneurs, and are reduced to “a state of indebted servitude, living like modern-day sharecroppers on the ragged edge of bankruptcy.” In past years there were small wholesale meat buyers that competed on price, allowing farmers to bargain on price and make some money, but those wholesalers mainly are now gone.
While large companies like Tyson Foods benefit financially from contract farming arrangements that cause poverty to farmers, the benefits to consumers are dubious. Threshold concerns are the ethical and human health issues of factory-style farming being promoted by companies like Cargill, ConAgra Foods, JBS, Smithfield Foods, and Tyson Foods. Further, large agribusinesses can use their market power to limit supply to and raise prices on consumers without worrying about significant competitive constraints. There are some powerful buyers like McDonalds and Walmart, but Leonard sees them as incidental to the main story of the stranglehold of big agribusiness over ordinary consumers.
Since Leonard’s story is about the extraordinary market power of large agribusiness companies, a reader may wonder why antitrust remedies haven’t been effective. Leonard is judicious in addressing the failures of antitrust enforcement. He recognizes that recent antitrust enforcement is restrained and timid, and that government is unlikely to pursue strong action. Leonard wishes for a more vigorous government response, but he accepts that in the world of real politics, it is not going to happen.
Similarly, if farmers and consumers are being misused by a few big companies, and antitrust enforcement is not working to fix the problem, why hasn’t Congress stepped in yet? Again, Leonard recognizes how things work in the political world.
Leonard tells us the back stories about the political realities that explain the Obama administration’s or Congress’s action, or lack of it. He writes that the transition from the Bush presidency to the Obama presidency in 2008 promised important political change for farmers. Many politically engaged farmer advocates had hoped that an Obama administration would bring tougher antitrust enforcement and congressional action. When Barack Obama campaigned in Democratic primaries against Hillary Clinton in states like Iowa, he rallied great support among farmers who did not follow the urban-based notion that rural people don’t recognize or assert their political interests. Farmers often do. Leonard reports that farmers were impressed by Obama’s push for farm policy reform and unimpressed by Clinton’s apparent lack of interest, as well as by her political ties to Arkansas agribusiness, particularly Tyson Foods. Leonard quotes an Iowa Democratic Party operative as saying about Clinton, “I don’t know a single farmer who would vote for her!”
The Iowa caucus left Clinton in third place, and put Obama first, which some saw as a turning point in his successful quest for nomination and, ultimately, the presidency.
Initially, the new Obama presidency promised important reforms in U.S. agricultural policy. Obama appointed former Iowa governor Tom Vilsack as secretary of agriculture. As governor, Vilsack had been a leading advocate for farmers in his state, and many expected him to successfully continue that advocacy at the national level.
Obama also appointed Christine Varney as head of the Antitrust Division of the U.S. Department of Justice. She quickly became known for her strong rhetoric, promising a new day for antitrust enforcement generally, including helping farmers and food consumers. Varney complained that antitrust enforcement had been all but abandoned, and she vowed to change that under her watch. “[T]here is no adequate substitute for a competitive market, particularly during times of economic distress. . . . [V]igorous antitrust enforcement must play a significant role in the government’s response to economic crises to ensure that markets remain competitive,” Varney said in 2009.
In 2010 the Justice Department’s Antitrust Division and the U.S. Department of Agriculture joined to sponsor a series of hearings around the country on the state of competition in the agriculture sector. It is interesting to reach beyond the Leonard book and into the transcripts and summary report of the hearings, which bring us the comments of people with feet-on-the-ground knowledge of agricultural markets in the United States. The 2012 report is titled “Competition and Agriculture: Voices From the Workshops on Agriculture and Antitrust Enforcement in Our 21st Century Economy and Thoughts on the Way Forward.”
The government report presents testimony by producers of cattle, hogs, poultry, and dairy, as well as growers of fruits and vegetables, about problems of concentration in wholesale food processing and retail. Many who testified specifically raised the issue of monopsony power—market power on the buying side of a market as opposed to the selling side. For example, in Iowa one panelist expressed concern that “larger companies are able to exert more buyer power . . . over farmers.”
Some testified that existing antitrust laws are inattentive to a persistent monopsony problem. During a hearing in Washington, D.C., a farmer remarked that “it’s the monopsony power of these concentrated purchases of farm goods that are stressing the people and the natural systems that are producing food,” and that “[r]ight now antitrust jurisprudence isn’t solving the problem.” Similarly, at a hearing held in Alabama, a union member argued that “[i]n competition we all know the word monopoly. . . . But I want us to learn a new word today. It’s monopsony.”
While the hearings allowed farmers and their supporters to speak out, follow-up action by the government was weak. Promises of reform by the Obama administration faded away when they faced political opposition. The consequence is that today large agribusinesses continue to hold great power over farmers and consumers, and are largely unaffected by antitrust enforcement.
The 2012 report includes language explaining the Obama administration’s lack of action. Leonard points out that while the report enumerates problems and abuses in agricultural markets, including an unprecedented level of market concentration caused by a wave of company mergers, it also says that not much can be done about it. In its concluding analysis, the report mostly focuses on why the Justice Department can’t do much to solve the problems. The report says that antitrust laws weren’t made to solve many of the problems identified during the hearings. It also did not point to any major antitrust case filed by the Obama administration. At a public conference where Leonard’s book was being discussed, Bert Foer, president of the American Antitrust Institute, agreed that antitrust enforcement has failed to meet the challenges of agricultural markets.
While there has been some congressional legislation to improve the lot of farmers, it has been much weaker than originally offered by the Obama administration. Leonard explains that while new coalitions of interest groups have formed to press for legislation favorable to farmers, the pro-farmer interest groups have been outmatched and outmaneuvered by industry lobbyists in Washington. The White House has backed off its initially aggressive stance, and the odds of Congress passing new legislation seem increasingly remote at this point.
The stories Leonard tells in his book reflect the skills of a practiced writer who simply and directly explains agricultural markets and the market power of big companies. He takes us on a straight line, from the fascinating stories of agribusiness industry development to powerful arguments of antitrust and legislative policy.
In contrast, the organizational structure of Hauter’s book is more diffuse, partly because it is a loose cobbling together of her short writings on a number of different topics. Hauter is a political activist who supports an array of causes and groups that are linked only loosely by conventional notions of antitrust and related policy. She offers discussions of diverse topics such as the importance of small family farms, local food sourcing, the undermining of organic farming principles by Whole Foods Market, and grassroots opposition to retailer Walmart for a number of behaviors, including low worker pay. What brings these topics together is that they are all relevant to broad issues of social and political policy linked to big companies.
As mentioned earlier, Hauter’s book focuses on retailers like Walmart and Whole Foods as particular sources of harm, which makes her emphasis different than Leonard’s. Hauter sees giant retailers, particularly Walmart, as pernicious, influencing behavior throughout the supply chain and using great market power to force suppliers to compromise on quality and production standards.
Hauter’s loosely associated points fit with her views about grassroots political action against giant companies like Walmart. It is plain to see from the subtitle of her book that the battle she has in mind is political in a broad sense, and not a battle that accepts the constraints of conventional politics or policy.
Hauter’s book is optimistic in tone, upbeat about the prospect that the reforms she advocates for will be adopted. But it is difficult for a reader to conclude that the political struggle Hauter contemplates is going very well thus far. A striking aspect of both the government hearings about agriculture at the national level and the local political battles against Walmart over low wages is the extent to which Walmart, like other large companies, is able to successfully defend itself and avoid regulation or antitrust enforcement. Big company strategies include very public reasoned rebuttals against a broad array of “big is bad” arguments.
Walmart has launched a counter-campaign to the issues raised in Foodopoly: market power, promotion of highly processed junk food, Tyson Foods-style, corporate-dominated factory farms, low wages, and harm to local businesses. Foodopoly proffers a formidable indictment of Walmart, but the retailer uses skilled public relations techniques and excellent media access to convey its well-honed messages. It points out that it helps the disadvantaged by charging low prices and by providing employment. It claims that it promotes and popularizes organic food and healthy eating. Walmart presents these and other arguments to the public through mass media in a manner intended to develop broad support. Mass media, on the other hand, tends to present the views of Walmart opponents as mere counterpoints, suggesting two evenly balanced sides of an argument.
I see little indication that the government will soon adopt enforcement proposals discussed by Leonard or Hauter and those who agree with them. It seems unlikely, for example, that Tyson Foods or Walmart will soon be dismantled by government enforcers. (The Justice Department’s response to Tyson Foods’ recent plan to buy rival Hillshire Brands was to file a complaint and settle it the same day, August 27, 2014, based on Tyson’s selling its sow purchasing division to a third party.)
But that is not a reason to criticize the efforts of Leonard and Hauter to reach out to a wider audience, nor to demean Hauter’s vision of a multifaceted struggle of mobilizing people against large companies like Walmart or Tyson Foods. On the contrary, big companies may be winning now, but what antitrust and other business regulation will look like decades from now depends a great deal on what the public wants it to be. What the public wants may be influenced by messages like Hauter’s or Leonard’s. The idea of democracy includes political visionaries who reach out and successfully catch the attention of the public, and make a difference.
This positing is by Don Allen Resnikoff who takes full responsibility for its content.
California Court of Appeals' first Muslim judge
Published on Dec 30, 2018
Justice Halim Dhanidina was recently elevated to California’s Courts of Appeal, making him the state’s most senior judge of Muslim faith. The PBS NewsHour Weekend Edition offers an interesting piece with Special Correspondent David Tereshchuk talking with Dhanidina about engaging with supporters and critics alike, and setting an example for what it looks like to be a "Muslim judge" in the United States. The Judge believes in acceptance for people of all religions, and would like to educate those who imagine, without a basis, that he will apply Sharia law. (13 States have passed legislation banning Sharia law, solving what some would say is a non-problem. Other States are considering such legislation.)
The video is at: https://www.youtube.com/watch?reload=9&v=27m2iEdfYv0
Cannabis-related bank reform legislation falls short in Senate
Dec. 27, 2018
A new attempt to give cannabis firms access to legal banking services has failed in the U.S. Senate, according to a new report.https://www.fool.com/investing/2018/12/22/mitch-mcconnell-blocks-marijuana-banking-reform-am.aspx
Sen. Cory Gardner last week reintroduced the States Act, which called for an easing of laws in the cannabis business, in a bid to make sure financial institutions could offer banking services to these firms without being liable for drug trafficking. The act, which was reintroduced as an amendment to the First Step Act, a criminal justice reform bill, failed in the Senate.
If passed, the legislation would free legal cannabis states to directly address creating legal financial services for cannabis industry companies.
Big tobacco companies are reportedly interested in cannabis as a business, so banking issues are a problem for the tobacco companies.
Credit: Motley Fool
From DMN:
A Fed Up Musician Demands That YouTube Fix Its Broken Content ID System. More Than 100,000 People Have Signed His Petition.
YouTube’s Content ID has a major copyright infringement problem. Now, people have urged Google to fix it.
As part of the video platform’s large-scale protest against the EU’s Copyright Directive, YouTube has pointed to its Content ID as an existing viable solution.
According to YouTube CEO Susan Wojcicki and YouTube Music chief Lyor Cohen, Content ID already does enough to protect owners.
The story continues here. https://www.digitalmusicnews.com/2018/12/27/christian-buettner-thefatrat-youtube-content-id-petition/
Federal regs on added coloring will delay supermarket sales of "bloody" uncooked vegetarian burgers
Impossible Foods, the Silicon Valley-based maker of the eponymous burger, uses genetically modified yeast to mass produce its central ingredient, soy leghemoglobin, or “heme.” It’s heme that gives the Impossible Burger its essential meat-like flavor, the company said. The substance was ready to break out this summer after the U.S. Food and Drug Administration, following years of back-and-forth, declined to challenge findings voluntarily presented by the company that the cooked product is “Generally Recognized as Safe,” or GRAS. Such a “no questions” letter means the FDA found the information provided to be sufficient.
Heme is “responsible for the flavor of blood,” Impossible Foods CEO Patrick Brown said in an interview earlier this year. “It catalyzes reactions in your mouth that generate these very potent odor molecules that smell bloody and metallic.”
It’s how the burger looks that’s now at issue, though. An FDA spokesman said heme, which is red in hue, needs to be formally approved as a color additive before individual consumers can purchase the uncooked product.
“If the firm wishes to sell the uncooked, red-colored ground beef analogue to consumers, pre-market approval of the soy leghemoglobin as a color additive is required,” FDA spokesman Peter Cassell told Bloomberg in a Dec. 17 email. Impossible Foods filed a petition Nov. 5 seeking heme’s formal approval as a color additive, the FDA said. The agency has 90 days to respond, and the timeline can be extended.
Impossible Foods says heme isn’t a color additive as currently used in cooked Impossible Burgers sold in restaurants. However, other future uses might qualify as a color additive, company spokeswoman Rachel Konrad said in an email. The company submitted the FDA petition to retain “maximum flexibility as our products and business continue to evolve.” Konrad declined to say whether uncooked heme-containing products to be sold in supermarkets were one of those contemplated future uses.
Excerpt from: https://www.bloomberg.com/news/articles/2018-12-26/why-the-bloody-impossible-burger-faces-another-fda-hurdle?cmpid=BBD122618_BIZ&utm_medium=email&utm_source=newsletter&utm_term=181226&utm_campaign=bloombergdaily
Huawei Rivals Nokia and Ericsson Struggle to Capitalize on U.S. Scrutiny
Nokia and Ericsson have been slow to release telecom equipment as advanced as Huawei’s, major wireless providers say
By
Stu Woo
Updated Dec. 31, 2018 10:17 a.m. ET
U.S.-led scrutiny of Huawei Technologies Co. should have been good news for its two biggest competitors in the telecommunications-equipment business, Finland’s Nokia Corp. NOK -0.43% and EricssonERIC +0.79% AB of Sweden.
It isn’t turning out to be so simple.
Major European wireless providers—big customers of all three—say Nokia and Ericsson have been slow to release equipment that is as advanced as Huawei’s.
Nokia and Ericsson also face a new, deep-pocketed challenger inSamsung Electronics Co . , the South Korean smartphone giant that is aiming to quickly grow its nascent cellular-infrastructure business.
And there is another big pitfall for the two: Both Nokia and Ericsson fear that if they are seen trying to take advantage, Beijing could retaliate by cutting off access to the massive Chinese market, people familiar with the matter said.
In recent years, Huawei has surpassed the Nordic companies to become the world’s biggest maker of cellular-tower hardware, internet routers and related telecom equipment. For the first three quarters of 2018, Huawei had a 28% share of the global telecom-equipment market, Nokia had 17% and Ericsson 13.4%, according to research-firm Dell’Oro Group. That compares with market shares in 2017 of 27.1% for Huawei, 16.8% for Nokia and 13.2% for Ericsson.
Huawei has dominated the world-wide industry despite being essentially barred from the U.S. over concerns that Beijing could order Huawei to spy on or disable communications networks. Recently, the U.S. has been urging allies to enact similar bans.
Excerpt from WSJ (paywall): https://www.wsj.com/articles/huawei-rivals-nokia-and-ericsson-struggle-to-capitalize-on-u-s-scrutiny-11546252247?mod=hp_lead_pos4
NYT editorial: State AGs have gone light on big pharma and opioids
Public officials and plaintiffs’ lawyers, by failing to use lawsuits to hold the opioid industry to account, have allowed a containable crisis to mushroom into catastrophe. Repeatedly, they ended lawsuits quickly for the sake of political and financial expediency rather than digging out information that would have alerted the public to the dangers of these drugs.
Consider the case of Florida, which in 2001 became one of the first states to investigate Purdue Pharma. Its attorney general at the time, Robert Butterworth, pointing to a growing number of overdose deaths, declared that he would discover when Purdue Pharma first knew about OxyContin’s abuse.
That never happened. Instead, state investigators interviewed only a single former OxyContin sales representative, and Mr. Butterworth, who was running for a State Senate seat, ended the case soon after it was filed.
He lost his election and the case’s settlement proved empty. While Purdue Pharma agreed to pay $2 million to fund a system that would monitor how Florida doctors prescribed opioids, state legislators blocked its creation. David Aronberg, the state attorney for Palm Beach County, told me that nearly all of the $2 million was returned to the drug company and Florida went on become a major center of the opioid crisis.
The decision by Justice Department officials in 2007 to forgo felony charges against the executives of Purdue Pharma also resulted in the loss of a critical chance to slow the epidemic’s trajectory. Without a public trial, doctors remained unaware about the extent of Purdue Pharma’s deceptions and increasingly prescribe opioids. During the five years that followed the Justice Department settlement, 80,000 people died from overdoses involving pain pills, federal data shows.
Also, in striking these settlements, government officials have agreed to demands by drug companies that information gathered during legal discovery about corporate practices be sealed. Three years after Kentucky settled its lawsuit against Purdue Pharma, a media organization that covers health care, STAT, won a court order this month that will result in the release of records from that case. Those records include the pretrial testimony of Richard Sackler, the son of a founder of Purdue Pharma and the company’s president when the abuse of OxyContin was becoming rampant.
Excerpt from https://www.nytimes.com/2018/12/26/opinion/opioids-lawsuits-purdue-pharma.html?action=click&module=Opinion&pgtype=Homepage
Barry Lynn's end-of-year list of best anti-monopoly books
The early days of winter are a great time to catch up on your anti-monopoly studies. The days are cold and drear, and the nights dark and long, which make smoldering anger and fiery prose a welcome addition to the home of any true believer in liberty and democracy. A few of our favorites:
The Curse of Bigness: Antitrust in the New Gilded Age, Columbia Global Reports, Tim Wu
An elegant primer for all to understand the thinking that underlays America’s anti-monopoly traditions and the many dangers of concentrated corporate power.
The Myth of Capitalism: Monopolies and the Death of Competition, Wiley, Jonathan Tepper with Denise Hearn
Tepper and Hearn use the growing body of social science research, indicating that America’s economy is structured to favor fewer and fewer corporations, to show how monopolies and oligopolies exacerbate inequality, cut growth and wages, and hurt entrepreneurs.
Globalists: The End of Empire and the Birth of Neoliberalism, Harvard University Press, Quinn Slobodian
A strong history of neoliberalism, including a chronicle of the post-World War I origins of the Geneva School of neoliberal thought. Slobodian details how the ultimate goal of neoliberalism is not to establish market relations and market logic, but to shield markets and private property from democracy.
The Age of Surveillance Capitalism: The Fight for a Human Future at the New Frontier of Power, PublicAffairs, Shoshana Zuboff (January 15, 2019)
Zuboff coined the term "surveillance capitalism" and in this book she details how platform monopolists use their systems to control and exploit an extensive range of human behavior, information, and experience for private gain.
Winners Take All: The Elite Charade of Changing the World, Alfred A. Knopf, Anand Giridharadas
A powerful critique of elite “thought leaders” who spend their professional careers consolidating power and control in the hands of the few, then pretend to make the world a better place through extracurricular activities like philanthropy.
From: https://outlook.live.com/mail/inbox/id/AQMkADAwATM3ZmYAZS04MTcxLTJmMjgtMDACLTAwCgBGAAADRnoWw%2B1oGkecPn377%2FL9tQcA97M33DyMxEGb7MCV%2BuIrtgAAAgEMAAAA97M33DyMxEGb7MCV%2BuIrtgACGgVq4gAAAA%3D%3D
Rent-A-Center, perennial Christmas grinch
In a current California class-action lawsuit against Rent-A-Center, lawyers argue that the company’s customers, a disproportionate number of whom are people of color, are charged prices that violate the state’s rent-to-own pricing laws. The legal documents say that a Rent-A-Center in Northern California ultimately charged, after installments, $1,379.54 for an Xbox that normally retails at $299.99, and $2,834.19 for a television that sells for $717.60.
The docket and Court filings are at https://dockets.justia.com/docket/california/candce/3:2017cv02335/310704
The FTC and State AGs have been active concerning the company's pricing a credit practices. See https://www.nerdwallet.com/blog/finance/rent-a-center-complaints-lawsuits/The Complaint recently filed by DC AG Racine against Facebook is here :
http://oag.dc.gov/sites/default/files/2018-12/Facebook-Complaint.pdf
“Facebook failed to protect the privacy of its users and deceived them about who had access to their data and how it was used,” AG Racine said in a statement.
New York City council members railed against Amazon in a December 12 hearing
From article By Shirin Ghaffary Dec 12, 2018
Members of a New York City council committee denounced terms of the recent Amazon HQ2 deal in the first of three public hearings being held about the plans.
“We are not in the business of corporate welfare here at the city council,” said City Council Speaker Corey Johnson, referencing the up to $3 billion in government subsidiesthe company will receive. Johnson, one of the fiercest critics of the deal, spoke at the council’s Committee on Economic Development hearing on Wednesday at City Hall.
Amazon says the move will bring at least 25,000 jobs to the city over the next decade and $27.5 billion in state and city revenue in the next 25 years. Johnson contested these numbers at the hearing, saying they warrant an outside independent verification beyond the report the state commissioned.
Johnson and other council members were upset about being denied oversight of the plan — but that wasn’t on Amazon alone. Both New York City Mayor Bill de Blasio and New York Governor Andrew Cuomo worked together with Amazon to bypass the standard review processes that would have given the city council a chance to veto or even review the deal. The hearing was the first opportunity council members had to publicly and directly vent their frustrations to key people behind the negotiations.
While city council members have threatened to throw a wrench in the process, they’re limited in what they can do. A five-member state board is expected to vote on some aspects of the deal in the new year. Some council members are hoping they can influence new appointees to the board to vote against the plan, but it’s not clear how realistic that outcome is.
One leader from the city’s Economic Development Corporation, James Patchett, who helped work on the deal, took the brunt of the tough questions.
From https://www.recode.net/2018/12/12/18137488/new-york-amazon-hq2-deal-hearing
Is the Altria acquisition of an interest in Juul an antitrust issue?
There are press reports, particularly from Financial Times, that the recent Altria cigarette company's acquisition of some of e-gigarette company Juul's stock includes a standstill provision blocking further acquisition of Juul stock until antitrust issues are cleared with government.
Why the antitrust concern?
Perhaps because, as the FDA's head has explained (see below), five e-cigarette manufacturers represent more than 97 percent of the current market for e-cigs — JUUL, Vuse, MarkTen, Blu, and Logic. As the Huffington Post/Healthline reported last year, large cigarette companies have big interests in e-cigarettes, a rapidly growing market. E-cigarette brand VUSE is owned by R.J. Reynolds Vapor Company, a subsidiary of the tobacco giant Reynolds America. British American Tobacco (BAT), the largest tobacco company in the Europe, owns e-cigarette brand Vype. Blu e-cigarette is owned by Imperial Tobacco, and Altria (formerly Phillip Morris) already owns MarkTen.
So, the acquisition of Juul stock by Altria increases market concentration in e-cigarettes,. But it is not clear whether for antitrust enforcement purposes e-cigarettes are a relevant market and whether the increase in concentration within that market (or a broader market for all tobacco products, or even a possible future market) is significant to antitrust agencies.
But regulatory concern about the consequences of big-company influence on e-cigarette use is not limited to the intellectual silo of antitrust enforcement. Recent FDA information requests about consumer use of e-cigarettes have focused on five large manufacturers, and reflect concerns about the market influence of large companies that are familiar to antitrust enforcers. The FDA, like federal bank regulators, operate on the idea that the largest industry players deserve the closest regulatory scrutiny.
A speech by the FDA head reflects the focus on large manufacturers:
Today, we sent letters to five e-cigarette manufacturers whose products were sold to kids during the enforcement blitz and that, collectively, represent more than 97 percent of the current market for e-cigs — JUUL, Vuse, MarkTen, blu e-cigs, and Logic. These brands will be the initial focus of our attention when it comes to protecting kids. They’re now on notice by the FDA of how their products are being used by youth at disturbing rates. Given the magnitude of the problem, we’re requesting that the manufacturers of these brands and products come back to the FDA in 60 days with robust plans on how they’ll convincingly address the widespread use of their products by minors, or we’ll revisit the FDA’s exercise of enforcement discretion for products currently on the market.
See https://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm620185.htm
Posted by Don Allen Resnikoff
From the WSJ: The Food and Drug Administration is backing off a proposal that would have opened up generic companies to possible product-liability lawsuits over drug safety.The FDA had proposed a new federal rule in 2013 that would have allowed people to hold generic-drug companies legally liable for the side effects of medicines. Thursday’s action by the agency withdrew the proposed rule, and keeps generic companies largely impervious to lawsuits.
At issue in the complex matter is whether generic-drug companies are allowed, like brand-name drug companies, to change their drug labels to reflect new safety concerns. Currently, generic-drug companies must follow the labels written by the brand-name companies.
The otherwise arcane issue of drug labels became a major practical issue beginning with a 2011 Supreme Court decision that an injured person can’t bring a claim against generic makers over failure to warn about a drug’s adverse side effects. The court reasoned that generic companies—unlike brand-name companies—shouldn’t be liable because they have no authority to modify their labels.
In 2013, the FDA proposed the rule that would have allowed generic makers to change labels, a step the generic industry largely opposed. Thursday the agency dropped its plans to pursue the new rule.
FDA Commissioner Scott Gottlieb and the FDA’s drug-center director Janet Woodcock said in a statement, “We heard from manufacturers that they believed this change would have imposed on them significant new burdens and liabilities” and that the measure “might have raised the price of generic drugs to patients.”
Excerpt from https://www.wsj.com/articles/fda-withdraws-proposed-rule-that-would-have-exposed-generic-drug-makers-to-liability-11544726478 (paywall)
You think real estate dealings in the US can be rough? Here are real estate sales fraud stories from Russia, told by NYT:
In one common scheme, agents collude with property owners to sell homes and then race to petition judges that the sale should be invalidated because the seller was temporarily insane. Buyers lose their cash, sellers keep the homes and sales agents — and judges who may be in on the scheme — pocket millions of rubles. Buyers may sue to reclaim their money, but the asset that may be the most lucrative for recompense is the apartment, and that is out of reach. Laws routinely protect homeowners in these kind of disputes.
This fraud is prevalent enough that nearly all of the roughly 140,000 transactions annually in Moscow have required sellers to show certificates of sanity in recent years, real estate agents say.
Most fraud involves buildings that are still under construction, where builders offer discounts for prepurchases but often steal the money and declare bankruptcy. The Ministry of Construction reported in August that it has 34,085 open complaints from such transactions.
https://www.nytimes.com/2018/12/25/business/moscow-russia-real-estate.html
In the spirit of the holiday season in the USA, 2018:
President Trump questions the existence of Santa Claus, creating doubt about the practice of leaving out milk and cookies on Christmas eve :
https://www.cnn.com/2018/12/25/politics/trump-santa-phone-call/index.html
Some somber seasonal music from Handel's Messiah:
https://www.youtube.com/watch?v=H5-yTzY1dn4
Is the decision of the Texas judge who struck down the ACA a partisan decision?
The New York Times says yes:
https://www.nytimes.com/2018/12/15/opinion/obamacare-unconstitutional-texas-judge.html?action=click&module=Opinion&pgtype=Homepage
The Trump administration, which has long sought to repeal the ACA, applauded Friday’s ruling.
“Wow, but not surprisingly, ObamaCare was just ruled UNCONSTITUTIONAL by a highly respected judge in Texas. Great news for America!” President Trump wrote on Twitter. In a statement, the White House elaborated, saying, “Once again, the President calls on Congress to replace Obamacare and act to protect people with preexisting conditions and provide Americans with quality affordable healthcare.”
The Georgia State AG agrees with the Trump Administration opinion:
https://www.ajc.com/news/opinion/opinion-lawsuit-rule-aca-unconstitutional-will-aid-georgia/1PP6RcRlTNHRGDjDKF0S0J/
The Texas Court's opinion and Order is here:
https://www.documentcloud.org/documents/5629711-Texas-v-US-Partial-Summary-Judgment.html
Simon Johnson on the political power of U.S. banks
Simon Johnson is a leader in bringing competition issues in banking to the attention of the American people. He argues to diverse audiences that banking is controlled by a small number of banks that have outsized political influence. He would like to see big banks controlled by aggressive antitrust enforcement as well as regulatory constraints.
Johnson has an impressive resume. Currently, he is a professor at the MIT Sloan School of Management and a senior fellow at the Peterson Institute for International Economics. He is a cofounder of the BaselineScenario.com, and a member of the FDIC’s Systemic Resolution Advisory Committee. In 2012, he became a member of the private sector systemic risk council founded by Sheila Bair. In July 2014, he joined the Financial Research Advisory Committee of the US Treasury’s Office of Financial Research (OFR). Also, he served as member of the Congressional Budget Office’s Panel of Economic Advisers from April 2009-April 2015.
Johnson was active in opposing the regulatory rollback that occurred in May, 2018, when Congress rolled back some of the restraints imposed on banks after the 2007-2009 global financial crisis. The rollback included reducing federal oversight of banks with between $50 billion and $250 billion in assets.
Johnson testified in opposition to regulatory rollback legislation. He said that $50 billion, as earlier defined under the Dodd-Frank financial reform legislation, is a sensible threshold at which the Federal Reserve should pay more attention to financial institutions.
Johnson’s recent testimony is illustrative of his broader concerns about the structure of our financial system. As part of earlier testimony to Congress in 2016 [https://financialservices.house.gov/uploadedfiles/hhrg-114-ba19-wstate-sjohnson-20161207.pdf] Johnson argued that the nature and structure of our financial system led to the deep crisis of 2008 and 2009, and still poses real risks to our collective economic future. He argued for overall strengthening rather than weakening financial regulation, with a particular focus on capital requirements. He said:
We should be attempting to strengthen the safeguards in the Dodd-Frank financial reform legislation. Repealing or rolling back that legislation poses a major fiscal risk. . . . [A] financial system with dangerously low capital levels – hence prone to major collapses – creates a nontransparent contingent liability for the federal budget in the United States.
Simon Johnson is author of several influential books. An important book concerning the power of bank and bankers to coopt legislators and regulators, written with co-author Jame Kwak, is 13 Bankers – The Wall Street Takeover and the Next Financial Meltdown.
The Johnson/Kwak book offers an excellent discussion of the run-up to the 2008 financial crisis and government efforts to resolve it, emphasizing problems caused by banks that grew to be very big.
The authors invoke the spirit of U.S. antitrust enforcement of the early 1900s, and urge government regulatory policies that limit bank assets.
Johnson and Kwak argue in their book that U.S. government regulatory policy affecting financial institutions has effectively been captured and controlled by people associated with large banks. Government regulators are portrayed as enablers of the country’s 2008 financial crisis. “The U.S. financial elite . . . constituted an oligarchy – a group that gained political power because of its economic power. . . .[T]he major banks engineered a regulatory climate that allowed them to embark on an orgy of product innovation and risk-taking that would create the largest bubble in modern economic history . . . .”
Johnson and Kwak tell us in 13 Bankers that just a few very large banks dominate the U.S. financial system – hence the book title. When CEOs of the largest U.S. banks were called to Washington in March of 2009 to meet with President Obama and senior government officials to discuss the financial meltdown, there were just thirteen. We learn that at the time of the meeting Bank of America’s assets were 16.4 percent of gross domestic product; J.P. Morgan Chase had 14.7; Citigroup 12.9. As of the end of the third quarter of 2010 Johnson and Kwak believed there were six banks that together have assets in excess of 64% of U.S. GDP.
The authors complain that in the dark days of 2008 and 2009 the government chose to rescue the financial system “by extending a blank check to the largest, most powerful banks in their moment of greatest need. The government chose not to impose conditions [on bail-outs] that could reform the industry or even to replace the management of large failed banks.”
Much has happened since 2010, including passage of Dodd-Frank bank reform legislation – elements of which have been under attack in 2018. It is clear, however, that Simon Johnson continues to be concerned about the continuing great size and political power of U.S. Banks.
This posting is by Don Allen Resnikoff, who takes full responsibility for its content
Regulation shortfall for dementia care
Assisted living facilities were originally designed for people who were largely independent but required help bathing, eating or other daily tasks. Unlike nursing homes, the facilities generally do not provide skilled medical care or therapy, and stays are not paid for by Medicare or Medicaid.
Dementia care is the fastest-growing segment of assisted living. But as these residences market themselves to people with Alzheimer’s and other types of dementia, facilities across the country are straining to deliver on their promises of security and attentive care, according to a Kaiser Health News analysis of inspection records in the three most populous states.
In California, 45 percent of assisted living facilities have violated one or more state dementia regulations during the last five years. Three of the 12 most common California citations in 2017 were related to dementia care.
In Florida, one in every 11 assisted living facilities has been cited since 2013 for not meeting state rules designed to prevent residents from wandering away.
And in Texas, nearly a quarter of the facilities that accept residents with Alzheimer’s have violated one or more state rules related to dementia care, such as tailoring a plan for each resident upon admission or ensuring that staff members have completed special training, according to nearly six years of records.
“There is a belief in our office that many facilities do not staff to the level” necessary to meet the unanticipated “needs of residents, especially medical needs,” said Fred Steele, Oregon’s long-term-care ombudsman. “Many of these are for-profit entities. They are setting staffing ratios that maybe aren’t being set because of the care needs of the residents but are more about the bottom line of their profits.”
Uneven Regulation
These concerns, though particularly acute for people with dementia, apply to all assisted living residents. They are older and frailer than assisted living residents were a generation ago. Within a year, one in five has a fall, one in eight has an emergency room visit and one in 12 has an overnight hospital stay, according to the Centers for Disease Control and Prevention. Half are over 85.
“Assisted living was created to be an alternative to nursing homes, but if you walk into some of the big assisted living facilities, they sure feel like a nursing home,” said Doug Pace, director for mission partnerships with the Alzheimer’s Association.
Yet the rules for assisted living remain looser than for nursing homes. The federal government does not license or oversee assisted living facilities, and states set minimal rules.
From https://www.nytimes.com/2018/12/13/business/assisted-living-violations-dementia-alzheimers.html
Lina Khan on Radical Antitrust and the Consumer Welfare Standard
Lina Khan spoke at "Charles River Associate's Annual Brussels Conference: Economic Developments in Competition Policy, 2018" on a panel which asked "Do We Need a 'Radical Antitrust' Answer to 'Populist Antitrust?'" Khan discussed some criticisms of the consumer welfare standard, how competition policy extends beyond antitrust law, and how the legal structure of antitrust enforcement could benefit from more active competition rulemaking from the FTC.
See https://www.youtube.com/watch?v=GVw6HR5duPk&feature=youtu.be
Jack Bogle’s warning about dominant index funds
Bogle, who founded The Vanguard Group in 1974, wrote Thursday in The Wall Street Journal [https://www.wsj.com/articles/bogle-sounds-a-warning-on-index-funds-1543504551] that if current trends continue, index funds will soon own half of all U.S. stocks. He thinks that could lead to a dangerous vacuum in corporate governance – with nobody to effectively police the corporate executives who run America’s largest companies.
“Public policy cannot ignore this growing dominance, and consider its impact on the financial markets, corporate governance, and regulation,” he wrote. “These will be major issues in the coming era.”
Over the past few decades indexing’s popularity has soared. Holdings have trended steadily upwards, from 4.5% of total U.S. stock market value in 2002 to 9% by 2009. Stock index fund assets now total $4.6 trillion, and their overall percentage of total stock market value has almost doubled again in the last decade to 17%.
Index funds’ growth has had some unintended consequences. As Bogle points out, there are three index fund managers who dominate the field: Vanguard has a 51% share of the market, followed by BlackRock with 21%, and State Street Global with 9%.
There are significant obstacles to becoming a major player, however, so it’s not likely any new competitors will reduce the huge concentration enjoyed by these big powerhouses.
While most economists expect the share of corporate ownership by index funds to increase further over the next decade, index mutual funds will no doubt rise above 50% of total market value – between 2021 and 2024, according to Moody’s. [https://www.reuters.com/article/us-funds-passive/index-funds-to-surpass-active-fund-assets-in-u-s-by-2024-moodys-idUSKBN15H1PN ] That means the so-called ‘Big Three’ would own over 30% of the U.S. stock market, which Bogle says gives them effective control. “I do not believe that such concentration would serve the national interest.”
If historical patterns hold, index funds’ popularity could soon become a problem, Bogle argues. “A handful of giant institutional investors will one day hold voting control of virtually every large U.S. corporation.”
That might leave a power vacuum, leaving corporate chieftains unaccountable. CEOs who run companies supposed to answer to boards of directors, who are in turn elected by shareholders. Index funds are the biggest shareholders at most companies though. In theory, funds are supposed to vote their shares on behalf of their own investors – everyday workers who own fund shares in a 401(k) or IRA account. But there’s a wrinkle: Index funds’ investing strategy revolves around passively buying every stock in the market, while holding cost down as low as possible. The upshot is that they have little wherewithal or incentive to keep tabs on CEOs or other corporate managers.
Excerpts above are from: http://time.com/money/5468239/jack-bogle-index-funds-problem/
Thanks to Newsletter reader Gary Sunden for pointing out the WSJ article. DR
Einer Elhauge:
HOW HORIZONTAL SHAREHOLDING HARMS OUR ECONOMY—AND WHY ANTITRUST LAW CAN FIX IT
When the leading shareholders of horizontal competitors overlap, horizontal shareholding exists. In Elhauge’s earlier Harvard Law Review article on horizontal shareholding, he argued that economic theory and two industry studies indicated that high levels of horizontal shareholding in concentrated product markets can have anticompetitive effects, even when each individual horizontal shareholder has a minority stake.
Elhauge argued that those anticompetitive effects could help explain high executive compensation rewards executives despite lack of performance, and the historic increase in the gap between corporate profits and investment, and the recent rise in economic inequality.
He also argued that when horizontal shareholding has likely anticompetitive effects, it can be remedied under Clayton Act §7. He recommended that antitrust agencies should investigate any horizontal stock acquisitions that result in high product market concentration.
In a new article, Elhauge argues that new proofs and empirical evidence strongly confirm his earlier claims.
The new article can be found at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3293822
Note from Editor Don Allen Resnikoff: Following is the first of several posts reviewing books by advocates for antitrust enforcement reform who were leaders in a movement to bring the political significance of antitrust enforcement to the attention of the general public
Cornered – the New Monopoly Capitalism and the Economics of Destruction ,
Barry Lynn, John Wiley & Sons, Inc., 2010, 311 pages
Lynn’s background is as a business journalist who is comfortable speaking to a broad audience, clearly and persuasively. He studies industries with a journalist’s eye for detail, but is not bound by conventional wisdom of antitrust lawyers and economists. Currently he directs the Open Markets Institute, and is active researching and writing about big company power. Lynn’s work has gotten much public attention. His work has been profiled on CBS and in the New York Times, and his articles have appeared in publications including Harper’s, the Financial Times, Harvard Business Review, and Foreign Policy. He frequently addresses public forums.
In his 2010 Cornered book Lynn presents a theme that he has since forcefully pressed: concentrated power of big companies in the U.S. economy is causing great harm. The harm he sees ranges from the broadly political – loss of individual liberties -- to physical injury of consumers. He advocates drastic reform of antitrust enforcement, and broad political reform.
Lynn’s book includes many points of continuing relevance. Lynn addresses the entrenched consumer welfare oriented view of antitrust enforcement litigation that focuses on efficiency and prices to consumers. He argues for a return to antitrust enforcement based on social and political values.
Barry Lynn would like to see antitrust enforcement revised, but he wants more. He also would like broad reform of politics in the United States, because “our political economy is run by a compact elite that is able to fuse the power of our public government with the power of private corporate governments . . . .”
Cornered supports Franklin Roosevelt era New Deal reforms: “In instance after instance, the reforms aimed not to lower prices for consumers but to fortify systems of checks and balances, create systems of personal and local ownership, and force large governmental institutions, both public and private, to compete.” New Deal reformers worked to create “a political framework that successfully protected the individual citizen from being crushed” by concentrated industrial forces. A key is a political system organized around “open markets.”
But, Lynn explains, the New Deal reform efforts have been largely squelched. Power is “concentrated once more in the capitalist alone, who is the one actor . . . served . . . by reducing the number of workers . . . and by stripping out the various forms of wealth . . . .” Control over important property interests is “shared among an immensely powerful class [of people] that has largely communalized all its holdings . . . [T]he interest remains only to maximize capital and hence power, even if this means tossing another factory or two full of perfectly necessary machines on the scrap heap.” The author tells us that a financier class holds great power and doesn't care much about preserving domestic factory production.
Lynn worried about concentration in various industries that remain a problem today, even if some details have changed.
One problematic industry is poultry production. Lynn was concerned that in poultry farming, as in pig, dairy, and some other areas of farming, a few large companies effectively control the business of the farmers that provide the relevant product. In addition, Lynn said that the giant poultry companies respect each other’s market territories and avoid competition with each other.
Health insurance is another industry that concerned Lynn: “A 2006 study revealed that in 166 of the top 294 metropolitan areas, a single insurer controls more than half of the HMO and preferred provider business.”
Lynn also complained about mergers of large financial institutions, the “too big to fail,” banks that led to the financial crisis of 2008. Lynn complains that even following the financial “meltdown” of 2008 the U.S. government “responded to the collapse of our financial system in most instances by accelerating consolidation. . . .” Government money was used “to broker and subsidize such whopping mergers as the Wells Fargo takeover of Wachovia, the JPMorgan Chase acquisition of Washington Mutual and Bear Stearns, and Bank of America’s absorption of Countrywide Financial and Merrill Lynch . . . .”
Cornered presents some unconventional approaches to antitrust and political policy. Lynn worries that U.S. industry is not only highly monopolized, but dangerously reliant on systems involving extensive outsourcing and fragile supply chains. The Cornered book explains that fragile supply chains result in products of unpredictable availability and poor quality.
The author explains that even as much industrial production shifts away from the United States to China and other places, some American companies may control the bottleneck of supplying U.S. and other consumers. These companies may sit atop a hierarchy of power, in the manner Lynn ascribed to Wal-Mart: Wal-Mart “sits atop the entire system [of product distribution], where it determines . . . who shall make what and how much they shall earn, and who shall buy what and how much they shall pay.”
The Cornered book tells us that some other U.S. companies, including manufacturers, import products that they “snap together” or otherwise organize for resale. For example, Boeing has applied an import and assemble manufacturing philosophy in construction of passenger aircraft.
Some industry facts have changed since 2010, such as the rise of Amazon. But Lynn’s factual observations concerning outsourcing and fragile supply chains continue to challenge antitrust enforcers to take a fresh look at how modern industries work. His observations about industry systems suggest that antitrust enforcers need to examine the relationships among companies at different levels in the distribution chain. In examining the competitive impact of Wal-Mart conduct, for example, its relations with suppliers can be important.
Some antitrust analysts have discussed outsourcing and supply chain issues like those presented in Cornered. Their comments often tend to suggest that the supply chain issues Lynn identifies are not within the scope of antitrust enforcement. But Bert Foer wrote an article some years ago that takes Lynn’s supply chain points seriously. The article is called Mr. Magoo Visits Wal-Mart: Finding the Right Lens for Antitrust. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1103609
Foer’s article explains that “Wal-Mart is the leading example of a firm whose scale and strategy give it the ability to exercise extraordinary influence over its supply chain.” The article asks “to what extent are the criticized actions [of Wal-Mart] susceptible to treatment under the antitrust laws?” Referring to material in Lynn’s book End of the Line, Foer says that “The transformation of supply lines that Lynn describes can be seen as part of a movement toward tighter and relatively more closed systems which is rapidly changing the way business is done. It should lead antitrust experts to question whether the tools that were developed during a long era of more independent companies acting competitively rather than as integrated segments of large networks, are still adequate.” See also Bert Foer’s comments at URL https://www.ftc.gov/policy/public-comments/2018/08/19/comment-ftc-2018-0054-d-0007 (“The evidence and analysis of monopsony power, including but not limited to, in labor markets”)
Lynn closes his Cornered book with an upbeat if general suggestion that the American people have the ability to reverse the consolidation of power he describes, and “retake control of our political economy.” While It is not clear precisely what actions he expects his audience to take, he does invite us to look at competition issues from outside of the Chicago-Harvard consumer welfare, efficiency, price-oriented enforcement consensus. He asks us to embrace the idea that antitrust enforcement properly has social and political goals. He invites us to study closely the facts of industries, and politics, and encourages us to work to fix what he sees as broken.
In 2010 Lynn worried about a lack of public awareness of much recent industry concentration: “The making of monopoly . . . is once again the business of business in America. Increasingly, it seems, everyone knows this except the American people.” It is fair to say that since then Barry Lynn is one of the people who has done much to increase public awareness.
This posting is by Don Allen Resnikoff, who takes full responsibility for its content
Tweets about CFPB, retweeted by Jeff Sovern
Christopher Peterson, @PetersonLawProf
Today @CFPB settled a case against State Farm Bank for illegal credit report practices. Instead of holding the bank accountable, @CFPB imposed no fines or restitution at all. ZERO. The multi-billion dollar bank paid less than a parking ticket.
Ed Mierzwinski, @edmpirg
We [at USPIRG]anticipated @senatemajldr would force a vote to make the unqualified @KathyKraninger the @CFPB director so we have a new report offering ideas for states, counties and cities to fill the #ProtectConsumers gap.
Tim Wu: Antitrust’s 10 Most Wanted
Excerpts from Medium.com article (URL below)
An increasing number of industries are dominated by oligopolies and monopolies. Compiled here are firms or industries that are ripe for investigation.
1. Amazon
Amazon has taken a dominant share of online retail in part through the acquisition of competitors. Its practice of aggressively copying successful marketplace products has similarly raised questions as has its bullying of smaller brands, its efforts to control pricing on competing platforms through “most favored nation” contracts, and aggressive use of 18-month noncompete agreements.
2. AT&T/WarnerMedia
AT&T, the one-time telephone monopolist broken up in the 1980s, has moved into television. Since acquiring Time Warner and HBO for $85.4 billion this year, AT&T has begun using HBO as a club against Dish and Dish Sling.
3. Big Agriculture
Over the last five years, the agricultural seed, fertilizer, and chemical industry has consolidated into four global giants: BASF, Bayer, DowDuPont, and ChemChina. According to the U.S. Department of Agriculture, seed prices have tripled since the 1990s, and since the mergers, fertilizer prices are up as well.
4. Big Pharma
The pharmaceutical industry has a long track record of anticompetitive and extortionary practices, including the abuse of patent rights for anticompetitive purposes and various forms of price gouging.
Can something be done about pharmaceutical price gouging on drugs that are out of patent or, perhaps more broadly, the extortionate increases in the prices of prescription drugs?
5. Facebook
Should the Instagram and WhatsApp mergers be retroactively dissolved (effectively breaking up the company)? Did Facebook use its market power and control of Instagram and Instagram Stories to illegally diminish Snapchat from 2016–2018?
6. Google
On its way to becoming the search monopoly, Google acquired advertising competitors iMob and DoubleClick along with rival Waze and other potential competitors. Has Google anticompetitively excluded its rivals?
7. Ticketmaster/Live Nation
Has Live Nation used its power as a promoter to protect Ticketmaster’s monopoly on sales? Was Songkick the victim of an illegal exclusion campaign? Should the Ticketmaster/Live Nation union be dissolved?
8. T-Mobile/Sprint
In what appears to be a straightforward anticompetitive merger, the two carriers are attempting to merge to reduce the wireless market to three major firms (AT&T, Verizon, and Sprint/T-Mobile).
9. U.S. Airline Industry Over the 2010s, the agencies allowed it to consolidate to three major players (four airlines control 85% of the industry), yielding tiny seats, packed cabins, regular overbooking, higher fees, and other well-known unpleasantries?
10. U.S. HospitalsAfter years of consolidation, the number of independent hospitals in most cities and towns has decreased significantly. A series of retrospective studies have found that post-merger, prices increased while the quality of service, measured by mortality rate, decreased.
The preceding excerpts are from the article: https://medium.com/s/story/antitrusts-most-wanted-6c05388bdfb7 (paywall)
Advocate Marcia Bernbaum reports progress on implementation of DC public toilets proposal
On Tuesday, December 4 the DC City Council, as part of a Consent Agenda (packaging proposed legislation with which the attending Council members had no problems) voted 12 - 0 in favor of Bill 22 -223, Public Restroom Facilities & Installation Act of 2018 [https://pffcdc.org/wp-content/uploads/2018/12/B22-223-Public-Restroom-Facilities-Installation-Act-of-2018-Com.-on-Health..pdf]
On Tuesday, December 18 there is a second vote. Assuming that at a minimum 7 of the 13 Council Members vote in favor the Bill will be passed.
Next steps:
This Bill, and any others passed by the DC Council on Dec. 18 will next go to Congress for a 30 day period. Assuming there are no objections on the Hill the Bill goes to the Mayor to be signed.
The Executive will implement the guidelines included in the Bill, including two pilots included in the Bill:
- One or two stand-alone public restrooms open 24/7;
- A pilot of a program where businesses are provided incentives to open their restrooms to the public.
The Kojo Show on NPR recently interviewed public toilet advocates: See The plan to bring public restrooms to DC[https://thekojonnamdishow.org/shows/2018-12-03/the-plan-to-bring-public-restrooms-to-d-c] runs 28 minutes.
From DigitalMusicNews
As litigation pressure mounts, FCC chairman Ajit Pai has admitted that Russians interfered with the agency’s open commenting process related to the repeal of net neutrality.
An extremely contentious battle over net neutrality in the United States has a familiar interloper: Russia. Earlier this week, Federal Communications Commission (FCC) chairman Ajit Pai flatly admitted that Russian operatives were actively attempting to persuade the agency to repeal net neutrality, with the agency’s open commenting period gamed with thousands of fake comments from Russian accounts.
In a court filing issued this week, Pai admitted that it was a “fact” that a “half-million comments [were] submitted from Russian e-mail addresses and… nearly eight million comments [were] filed by e-mail addresses from e-mail domains associated with FakeMailGenerator.com…”
(The full statement from Pai is here).
The admission marks a strong shift for Pai, who previously denied or negated the importance of fake comments during the FCC’s open commenting period.
The filing itself is part of a broader lawsuit against the FCC by The New York Times and Buzzfeed, both of whom are seeking access to FCC documents under the Freedom of Information Act (FOIA). The FCC, led by Pai, has pushed back on those requests, arguing that the release of sensitive internal documents could open the agency to security threats.
An earlier report found that nearly 100 percent of verified comments from actual citizens were in favor of preserving net neutrality.
Separately, FCC chairwoman Jessica Rosenworcel has sharply criticized her own agency, while calling for the release of the documents in question. She also pointed to extreme spamming of the FCC’s comment system, with Russian interference a major contributing factor.
“As many as nine and a half million people had their identities stolen and used to file fake comments, which is a crime under both federal and state laws,” Rosenworcel declared. “Nearly eight million comments were filed from e-mail domains associated with FakeMailGenerator.com. On top of this, roughly half a million comments were filed from Russian e-mail addresses.
“Something here is rotten — and it’s time for the FCC to come clean.”
The open commenting period occurred in 2017, ahead of the FCC’s momentous rollback of net neutrality rules.Since that point, a number of U.S. states have fiercely fought back against the FCC’s decision, with California leading the charge. Earlier this year, California passed a strong net neutrality protection law, setting the stage for a major showdown against the FCC and the U.S. Department of Justice.
Within moments of passing its neutrality-protecting SB 822, the U.S. Department of Justice filed a lawsuit. Soon thereafter, several major ISPs filed their own lawsuits.
Just recently, California agreed to stay the implementation of its neutrality protection law, pending a ruling by the D.C. Circuit Court in early 2019. The FCC’s rollback prohibits any “state or local measures that would effectively impose rules or requirements that we have repealed,” though California legislators argue that the FCC lacks jurisdiction to enforce its provisions.
The DOJ’s lawsuit, perhaps symbolically, has been filed as United States v. State of California.
Credit: https://www.digitalmusicnews.com/2018/12/05/fcc-ajit-pai-russia-net-neutrality/
Documents released in a British parliamentary committee inquiry suggests that Facebook and CEO Mark Zuckerberg may have given select developers special access to user data and deliberated on whether to sell that data.
A WSJ video (behind a paywall) is interesting in that it shows the documents:
https://www.wsj.com/articles/u-k-releases-internal-facebook-emails-deliberating-data-access-1544022496?mod=cx_picks&cx_navSource=cx_picks&cx_tag=video&cx_artPos=1#cxrecs_s
Bloomberg: Exchange-traded funds are making stock markets dumber -- and more expensive.
That’s the finding of researchers at Stanford University, Emory University and the Interdisciplinary Center of Herzliya in Israel. They’ve uncovered evidence that higher ownership of individual stocks by ETFs widens the bid-ask spreads in those shares, making them more expensive to trade and therefore less attractive.
This phenomenon eventually turns stocks into drones that move in lockstep with their industry. It makes life harder for traders seeking informational edges by offering fewer opportunities to capitalize on insights into earnings and other signals.
The study is the latest to point out signs of diminished efficiency in markets increasingly overrun by the funds.
Excerpt from https://www.bloomberg.com/news/articles/2017-04-19/etfs-seen-creating-market-that-s-both-mindless-and-too-expensive
Gerrymandering in Wisconsin
Recent news reports discuss whether the legislature in Wisconsin remains dominated by Republicans despite a majority Democratic party vote in the state, arguably because of gerrymandering. Without expressing any opinion on that issue, here is Scotusblog's history of litigation on the gerrymandering issue in Wisconsin:
Gill v. Whitford (U.S. Supreme Court)
Docket No.Op. Below16-1161W.D. Wis. Oct 3, 2017
Tr.Aud.Jun 18, 2018- Roberts OT 2017Holding: Plaintiffs -- Wisconsin Democratic voters who rested their claim of unconstitutional partisan gerrymandering on statewide injury -- have failed to demonstrate Article III standing.
Judgment: Vacated and remanded, 9-0, in an opinion by Chief Justice Roberts on June 18, 2018. Thomas and Gorsuch joined the opinion except as to Part III. Justice Kagan filed a concurring opinion, in which Justices Ginsburg, Breyer, and Sotomayor joined. Justice Thomas filed an opinion concurring in part and concurring in the judgment, in which Justice Gorsuch joined.
Excerpt of SCOTUSblog Coverage:
Symposium: The Supremes put off deciding whether politics violates the Constitution (Hans von Spakovsky)
Symposium: The elections clause as a structural constraint on partisan gerrymandering of Congress (Richard Pildes)
Symposium: Back to the drawing board for political gerrymandering plaintiffs (John Phillippe)
Posting by Don Allen Resnikoff
A brief book review by Don Allen Resnikoff:
The Curse of Bigness: Antitrust in the New Gilded Age
by Tim Wu, Columbia Global Reports, RRP, 170 pages.
Tim Wu’s short new book argues for a return to a more aggressive style of antitrust law enforcement in the U.S.
Wu makes his argument in a way that is accessible to a broad array of people, not just antitrust litigators and scholars. His book has drawn a lot of attention in popular media.
What has gone wrong with antitrust law? Wu explains in his introductory chapter that the law is suffering from the ideas of Robert Bork and the Chicago School of thinking: “Bork contended, implausibly, that the Congress of 1890 exclusively intended the antitrust law to deal with one very narrow type of harm: higher prices to consumers. That theory, the ‘consumer welfare’ approach, has enfeebled the law.”
An example of enfeeblement is abandonment by the government of big monopolization cases like those pursued in the past. In the distant past the Teddy Roosevelt, William Howard Taft, and Woodrow Wilson Administrations pressed monopolization cases against Standard Oil, Morgan banking interests, and others. More recently, federal and state governments have pressed monopolization cases against IBM, AT&T, and Microsoft.
The IBM, AT&T, and Microsoft cases focused on exclusionary and other anti-competitive conduct, and Wu praises them as doing some good in promoting competition. The prosecution of each case was disabled to some extent by wavering support from government. The Reagan Administration dismissed the U.S. v. IBM prosecution as “without merit.” The Bush Administration agreed to a consent decree for the U.S. Microsoft case that many found to be too mild. The Microsoft decree did have some important provisions that aided competition, such as requiring Microsoft to share information that permits competitor’s products to successfully interface with Microsoft products. The AT&T decree was strong in breaking up AT&T when it was entered in 1982, but the government has since permitted mergers which have in effect largely put the AT&T Humpty-Dumpty back together again.
Despite the disabilities of the recent monopolization cases, Wu describes what followed in recent years as much worse. Some examples: The government permission for reassembly of the AT&T monopoly; merger of airlines to just a few players; consolidation of the cable and pharmaceutical industries, and an array of permitted mergers in beer, seed and pesticides (Monsanto/Bayer), and other industries.
Perhaps most concerning to Wu is the emergence of dominant tech firms like Google, Ebay, Facebook, and Amazon. These companies, once disruptive upstarts, have become defensive behemoths that discourage new disruptive upstart companies, often by simply merging with them. Government enforcers have done little to discourage the mergers.
Wu has suggestions for reform of antitrust enforcement. He would like to see more vigorous merger enforcement. He would also like to see a return to government prosecution of big monopoly cases in the style of the cases against IBM, AT&T, and Microsoft, but with strong remedies like the break-up remedy initially used for AT&T. He would like more proactive government investigations into companies that have long-lasting dominant market power.
And, Wu would like to see the jettisoning of government prosecutor’s reliance on the “consumer welfare” standard for antitrust enforcement and its preoccupation with avoiding high consumer prices. Instead, he believes prosecutors and courts should focus on finding antitrust violations based on whether the targeted conduct is that which “promotes competition or whether it is such as may suppress or even destroy competition”—the standard prescribed by Justice Brandeis in his Chicago Board of Trade opinion of 1918.
Wu explains that a Brandeisian “protection of competition” test has the advantage of being focused on conduct and a process, as opposed to an abstract value such as maximization of consumer welfare. He argues that a protection of competition test will be practical and predictable, contrary to the complaints of critics. His analysis of recent big monopolization cases supports his argument. In those cases defendants like Microsoft beat down rivals in products like the web browser by pressing coercive arrangements on the industry. Deciding that such arrangements are anti-competitive need not turn on whether the prosecutor can prove what the price of browsers would be in a but-for world where browser rivals are not forced out of business.
I admire Wu’s ability to explain his points about reforming antitrust enforcement in a way that is understandable for a non-technical audience. But I think it is fair to say that Wu oversimplifies a bit for his non-technical book audience.
Some of the complexity of discussion about antitrust enforcement standards was on display at a recent FTC panel discussion on the consumer welfare standard, in which Wu participated. The session can be seen at https://www.ftc.gov/news-events/audio-video/video/ftc-hearing-5-nov-1-alternatives-consumer-welfare-standard-consumer
Some FTC panelists argued that the consumer welfare standard can be used in a flexible way, as it was in the Microsoft litigation. There the main focus was on anti-competitive behavior by Microsoft executives, not on consumer prices in a but-for world. Part of Tim Wu’s response to the argument that the consumer welfare standard can be used flexibly is his observation that frequently courts are using the consumer welfare standard in a narrow and inflexible way. That has led to many unfortunate case decisions that permit anti-competitive outcomes.
Some panelists at the FTC discussion raised questions about the relationship between Tim Wu’s reform proposals and political activism. One panelist referred to Tim Wu’s views as “left-wing.” I don’t think that suggestion is fair, at least in relation to the Gilded Age book, for reasons Wu explained at a recent book-store talk (at the Politics & Prose shop in D.C.). He explained that his core goal is to reinvigorate antitrust enforcement and broaden the goal of prosecutions so that they encompass traditional antitrust goals of protecting competition. The book does not address broader political reform proposals.
The discussion in Tim Wu’s Gilded Age book of the political corruption caused by large companies is so compelling that the reader is left hoping that there are political reform solutions bigger and broader than fixing the standards for antitrust investigations and prosecutions. A critical comment is possible about the limited scope of Wu’s suggestions for reform of a sort that Wu refers to in another context as “external.” It is like criticizing the Star Wars movie because it fails to explain the science of intergalactic travel. Similarly, it is true that Wu’s Gilded Age book does not suggest a broad political program for curing the political corruption caused by large and powerful companies, but that is not what the book is about.
This review is by Don Allen Resnikoff, who takes full responsibility for its content
Bloomberg reports:
A federal judge in Washington warned CVS Health Corp. and Aetna Inc. not to integrate operations after learning CVS closed its acquisition of the health insurer before obtaining court approval of an antitrust settlement the companies reached with the government.
U.S. District Judge Richard Leon blasted the companies and the Justice Department at a court hearing Thursday for treating him like a “rubber stamp.” He complained he was “being kept in the dark, kind of like a mushroom.”
“You need to slow this down,” Leon told Justice Department lawyer Jay Owen. “You’re like a freight train out of control. And you’re operating as if this is just some rubber-stamp operation. It is not, and it will not be.”
(Related: CVS Health Now Owns Aetna -- https://www.thinkadvisor.com/2018/11/28/cvs-health-now-owns-aetna/?slreturn=20181101133907)
CVS closed the $68 billion Aetna acquisition on Wednesday after receiving final regulatory approvals. The combination will create a health care giant with a hand in insurance, prescription-drug benefits and drugstores across the U.S.
The Justice Department cleared the deal in October after requiring the sale of Aetna’s Medicare prescription-drug plans to WellCare Health Plans Inc. The sale is intended to address the government’s concerns that the merger would otherwise harm competition between CVS and Aetna.
DOJ Consent
CVS, based in Woonsocket, Rhode Island, said in a statement the closing of the deal was done with the “full knowledge and consent” of the Justice Department and was in compliance with the federal law governing court approvals of merger settlements, known as the Tunney Act.
Merger settlements negotiated between the Justice Department and companies require court approval. The process can take months, and it’s routine for merging companies to close their deals before a judge signs off.
Nonetheless, the move irked Leon, who has previously taken issue with companies that treat their merger as a fait accompli. He said he probably won’t consider final approval to the settlement until the summer, at which point the companies will be far along in their integration. That will make it difficult to unwind the merger if he doesn’t approve the settlement, he said.
“The risk is on the public that I can unwind it and that we can recoup whatever negative consequences there were on the public in that interim seven months, and that’s going to be a big problem for me, if it should come out that way,” he said.
It’s not the first time the Justice Department’s antitrust division has faced Leon’s wrath. Leon oversaw the division’s unsuccessful challenge to AT&T Inc.’s takeover of Time Warner. During the trial, he criticized the government’s lawyers for their handling of the case.
From: https://www.thinkadvisor.com/2018/11/30/cvs-aetna-closed-their-deal-a-judge-is-not-happy/
From DigitalMusicNews 11/20/18
Multiple AMLC Board Members Quit as a Post-MMA Turf War Breaks Out
Donald Trump signed the Music Modernization Act at on October 11th.
Last week, DMN first reported on the formation of the American Music Licensing Collective, or AMLC, which is focused on fulfilling the duties the the MMA’s Mechanical Licensing Collective (MLC).
Now, that group has quickly lost a pair of board members, for reasons that remain suspicious. Others are also rumored to be departing.
The AMLC was the first to declare its intentions of handling the responsibilities of the Mechanical Licensing Collective, or MLC, which is a collective mandated by the now-passed Music Modernization Act (MMA). Interestingly, the AMLC beat a consortium of major publishers to the punch, a group that was largely expected to assume the MLC’s responsibilities with no competition.
But at least two AMLC heavy-hitters have contracted a quick case of cold feet, according to details confirmed by Digital Music News.Among the quickly-departed are George Howard and Larry Mestel, with neither offering a reason for their exits.
Both are extremely qualified to help manage the MLC’s charter of administering digital mechanical licenses. George Howard is the cofounder of both Music Audience Exchange and TuneCore, and CIO of Riptide Publishing. Mestel is the founder of independent publishing and entertainment company Primary Wave.
But earlier this week, the profiles of both Howard and Mestel were removed from the AMLC site with no explanation. Howard didn’t respond to an email sent on Monday, and the AMLC did not offer a reason for the departures.
Other names were also floated as either exiting or opting not to sign onto the AMLC at the last minute. We’ll report more departures as we confirm them.
Separately, a source close to the AMLC claimed that the departures were directly tied to threats by major publishers, with the National Music Publishers’ Association (NMPA) and at least one highly-influential publishing executive cited.
That group may be unhappy to be battling an MLC contender, though government-created agencies and contracts typically involve bidding processes. In fact, ‘no bid contracts’ are often regarded as an unfair, and a sign of corruption.
We reached out to NMPA president David Israelite on Monday morning to discuss the allegations, but have yet to receive a response.
Separately, AMLC cofounder Jeff Price confirmed to DMN that threats had been issued, but declined to name names. Price, who cofounded TuneCore and more recently founded Audiam, remains a board member of the AMLC but noted that he has “received threats that I recuse myself from the board or suffer repercussions to my career.”
Beyond that, Price was uncertain if other board members had received similar threats, but strongly suggested the possibility. “If there is a coordinated effort, and a colluded or orchestrated effort occurring to remove people from the AMLC, the question is why?”
“Is there something with the core mission statement they want to change? Otherwise what could it possibly be?”
That ‘core mission’ is likely a contentious one to the NMPA, which has been accused — by Price and others — of creating an MLC structure that unfairly enriches major publishers at the expense of independent songwriters.
Indeed, the formation of the AMLC appears to be motivated by issues related to MLC conflicts of interest, specifically those tied to the treatment of ‘unallocated funds’.
According to the MMA’s language, mechanical licenses that remain unclaimed after just one year will be largely mopped up by major publishers according to marketshare, an arrangement that has drawn protest. The value of the initial unclaimed tranche of funds has been estimated to be as high as $1.5 billion, at least according to a report by Variety.
But at least one other AMLC member says that there haven’t been threats — and the rest are remaining with the organization.
That includes AMLC board member Benji Rogers, who says he’s received largely positive feedback. “I intend to stay and have had no pressure to leave,” Rogers emailed DMN.
“Actually the opposite. People seem to be excited about it.”
Ricardo Ordoñez, who aims to rectify longstanding problems with international mechanical licensing payment flows via the AMLC, also said he’s staying put. “I am still on the board and not planning to leave,” Ordoñez told us on Monday.
Prodigious multi-platinum songwriter Rick Carnes is also remaining on the board: “Yes I will be remaining on the AMLC board….” Carnes emailed. “It is important that ALL of the potential MLC boards have qualified and dedicated Songwriter board members. It is in that interest that I agreed to serve on the AMLC.”
Also staying put is Stewart Copeland, former drummer of The Police and the highest-profile AMLC member.
Separately, there’s been no MLC-related announcement from the NMPA or its members.
That group, which helped to mastermind the passage of the Music Modernization Act through Congress, has been rumored to have pre-selected SoundExchange to oversee MLC mechanical administration. Prominent members of that group are expected to include Sony/ATV, Warner/Chappell, and Universal Music Publishing Group (UMPG), among others.
Rapper/business mogul Jay-Z (Shawn Carter) asks NY Court to block arbitration because of lack of arbitrator panel racial diversity
Excerpts from the filed Complaint:
he AAA’s lack of African-American arbitrators came as a surprise to Petitioners,
in part because of the AAA’s advertising touting its diversity. This blatant failure of the AAA to
ensure a diverse slate of arbitrators is particularly shocking given the prevalence of mandatory
arbitration provisions in commercial contracts across nearly all industries. It would stand to
reason that prospective litigants—which undoubtedly include minority owned and operated
businesses—expect there to be the possibility that the person who stands in the shoes of both
judge and jury reflects the diverse population.
By virtue of the increasing prevalence of arbitrations in commercial contracts,
arbitrators have gained unprecedented power to oversee and make decisions regarding significant
business disputes. The AAA’s arbitration procedures, and specifically its roster of neutrals for
large and complex cases in New York, deprive Mr. Carter and his companies of the equal
protection of the laws, equal access to public accommodations, and mislead consumers into
believing that they will receive a fair and impartial adjudication.
When a contract violates New York law, New York courts do not hesitate to
invalidate that contract provision as void as against public policy, notwithstanding the fact that
the parties willingly agreed to the provision. The AAA’s failure to provide a venire of arbitrators
that includes more than a token number of African-Americans renders the arbitration provision
in the contract void as against public policy. Accordingly, Petitioners seek a preliminary
injunction staying the pending arbitration under CPLR 7503(b) for a minimum of ninety days, so
that Petitioners may work with AAA to include sufficient African-American arbitrators from
which the parties may choose.
FILED: NEW YORK COUNTY CLERK 11/28/2018 10:32 AM
INDEX NO. 655894/2018
NYSCEF DOC. NO. 1
URL: https://dlbjbjzgnk95t.cloudfront.net/1105000/1105807/655894_2018_shawn_c_carter_et_al_v_shawn_c_carter_et_al_petition_1.pdf
Part of GM's recent product announcement suggests that the electric hybrid car may be on its way out, to be replaced by the electric-only car
In GM’s recent announcement “unallocating” a number of GM car plants, this sentence appears: ” GM now intends to prioritize future vehicle investments in its next-generation battery-electric architectures.”
Industry analysts suggest that the day of the hybrid electric car is over, and the future belongs to all-electric cars. Following is an excerpt from an article in Quartz: https://qz.com/1474677/gm-kills-the-chevrolet-volt-as-plug-in-hybrids-lose-market-share/
Plug-in hybrid cars, originally designed to be the transition between conventional cars and their electric successors, are looking more like a dead-end in automotive evolution. Likely, they won’t be missed.
The latest line in their epitaph was written by General Motors today (Nov. 26) when the automaker announced it was killing off its Chevrolet Volt, which arrived in 2011, along with five other models. The company is shuttering seven factories worldwide and shedding more than 14,000 salaried staff and factory jobs by the end of 2019 as the company retools for the future. “GM now intends to prioritize future vehicle investments in its next-generation battery-electric architectures,” GM Chairman and CEO Mary Barra said in a statement. The company will still build its popular all-electric Bolt sedan.
GM’s decision marks the latest transition in automobiles from combustion engines to electric. This quarter the sales of battery electric (BEV) and plug-in hybrid vehicles, which have tracked each other closely since 2014, finally diverged. The sales of battery electric cars soared 120%, outselling plug-in hybrids 3-to-1 in the third quarter, reports (paywall) Bloomberg New Energy Finance. BEV sales hit more than 77,000, thanks to Tesla’s red-hot Model 3, compared 29,000 plug-in hybrids, a 6% decline from a year earlier.
What happened? Plug-in hybrids tried to be everything to everyone. Electric drive and gasoline range? Check. Recharge at home, work or while driving? Covered. But they were always a compromise because they’re dragging around two drivetrains, rather than optimizing for one. As a result, they tended to have slightly higher prices (the Volt is $5,000 more than the all-electric Nissan Leaf) without the full high-octane performance or cachet of their all-electric cousins. While buyers claimed they want a hybrid option, just as they might pick a car with a sunroof, it seems many would rather plug-in, or fill up, but not both.
Before car companies committed to electric vehicles, almost all were waiting until batteries had improved, and buyers demanded electric vehicles (only 1.2% of US car sales were EVs last year). Well, batteries have improved and Tesla has proved you can make one of the most popular cars on the market powered only on batteries.
Since 2014, lithium-ion battery prices have fallen more than 50% while the median EV range now exceeds 100 miles, enough to cover the vast majority of drivers’ needs. After accounting for the reduced cost in fuel and maintenance, BEVs are winning over those who might have once favored the plug-in hybrid middle-ground.
In first for the organization Housing Rights Initiative, two NYC landlord lawsuits achieve class certification
The Upper Manhattan and Bronx J-51 cases are the group's first to reach the milestone
From: https://therealdeal.com/2018/10/08/in-first-for-housing-rights-initiative-two-landlord-lawsuits-achieve-class-certification/
By Will Parker | October 08, 2018 12:31PM
It’s been a slow march in the state courts, but as of last week, two class action lawsuits generated by the Housing Rights Initiative achieved class certification — the first of the group’s cases to reach this milestone.
Over the last two years HRI has organized more than 40 lawsuits against landlords, most alleging “schemes” to up rents more than prevailing laws allow.
The first of the two landlords in the class actions, Scharfman Organization, is alleged to have defrauded tenants of 260 Convent Avenue in Hamilton Heights. In the second, Richard Albert is similarly accused by his tenants at 3045 Godwin Terrace in the Bronx.
Both lawsuits allege the landlords’ companies broke the law by accepting the J-51 property tax benefit while deregulating rent-stabilized apartments. Keeping apartments rent-stabilized is a required condition of tax program, according to state law.
Should they win their cases, the more than 100 current and former tenants of both buildings could receive rent overcharge refunds and damages.
“My constituents living at 3045 Godwin Terrace deserve better!” Bronx City Council member Andrew Cohen said in a statement. “They deserve to have their rent-stabilized leases rightfully restored to their apartments.”
Albert was not reachable by phone and Mark Scharfman declined to comment. This is the ninth complaint HRI has helped put together against Scharfman’s companies.
Apart from J-51 cases, HRI has ventured into less tested waters by filing class actions against landlords alleged to have overcharged on rent by exaggerating the cost of apartment renovations, or “Individual Apartment Improvements.” A couple of these cases were dismissed by lower courts and then refiled. One, against Harlem property owner Big City Realty, faced an appeals court panel in July. The majority of the panel decided the complaint should have survived a motion to dismiss so that discovery could first be granted to the tenant plaintiffs to help prove their claims.
What is the law on genetic modifications of babies?
None in China, where media reports a recent unprecedented use of gene modification technology on human babies.
In the US, two crucial sentences inside a federal spending bill in 2015 (https://www.congress.gov/bill/114th-congress/house-bill/2029/text), the U.S. Congress effectively banned the human testing of gene-editing techniques that could produce genetically modified babies.
The language in the bill is a clear reference to the use of techniques like CRISPR to modify the human germline (see “Engineering the Perfect Baby”). Most scientists agree that testing germline editing in humans is irresponsible at this point. But regulators have decided that the description also fits mitochondrial replacement therapy, which entails removing the nucleus from a human egg and transplanting it into one from a different person to prevent the transmission of debilitating or even deadly mitochondrial disorders to children.
See https://www.technologyreview.com/s/602219/the-unintended-consequence-of-congresss-ban-on-designer-babies/ for more detail, and for the argument that the U.S. ban is too broad.
Gas Stations Shouldn't Delay Card Swipe Fee Deal, Court Told
By Christopher Cole
Excerpt from Law360 (paywall) https://www.law360.com/articles/1104678?ta_id=758500&utm_source=targeted-alerts&utm_medium=email&utm_campaign=case-article-alert
-- A tentative deal to end a class action over credit card swipe fees shouldn’t get delayed because brand gasoline retailers are locked in disputes with the oil companies whose fuel they sell, class lawyers have told a New York federal judge.
Merchants that are suing banks and major credit card issuers including Visa and Mastercard are trying to gain court approval to seal a $900 million addition to roughly $5.3 billion already set aside to pay out claims that the retailers were overcharged fees that they pay when they run credit cards. The class action claims the card issuers set up network rules that led to higher fees than merchants would pay in a competitive market.
But so-called “branded operators” — primarily gas stations and convenience stores that sell fuel from oil companies like Shell — are objectingto the settlement (https://www.law360.com/articles/1104187) , saying they are concerned that retailers will be counted as class members in name only and get left out of any financial claims. The class attorneys said those disputes are with the oil companies and the settlement should be approved before the disputes are resolved.
The Robins, Kaplan letter defending the settlement is here: https://dlbjbjzgnk95t.cloudfront.net/1104000/1104678/https-ecf-nyed-uscourts-gov-doc1-123114910718.pdf
How to use IRS data to evaluate charities
There are many excellent tools and organizations to help you determine which organizations might be putting your money to good uses vs. spending your money on administrative overhead. One organization that can help you is CharityWatch (https://www.charitywatch.org/home) a nonprofit charity watchdog and information service. In rating charities they try and help you maximize the effectiveness of every dollar you contribute to a charity by providing donors with the information they need to make more informed giving decisions.
If you want to do some investigating on your own, most charities must file a 990 tax return with the IRS. These forms contain a wealth of information about charities, but like most tax forms, they can be difficult to digest. But you only need to focus on a few pages. The first page will give you a summary of the organization’s revenue and expenses during the most recent two years. Charities are required to make their 990 forms available through their websites or by calling.
Page 7 gives you a list of the organization’s officers, directors, key employees, highest compensated employees and independent contractors (though only those receiving more than $100,000 from the organization). Page 9 and 10 are important. Page 9 tells you the source of the organization's revenue. Page 10 breaks down the organization’s expenses, in two ways. First it lists amounts spent on different types of expenses, such as program, salaries and wages, office expenses, information technology, travel, etc. Second it divides up each of these expenses according to whether it was a program-service expense, management expense or fundraising expense.
By focusing on line 25 (Total Functional Expenses) you can figure out the percentage of its revenue that a charity spends on its services vs. its fundraising and management (overhead). You can use a simple formula to figure out overhead:
Line 25C (management) plus 25D (fundraising) divided by line 25A (total expenses).
For a more complete description of how to read a 990 see: https://www.charitychoices.com/page/how-read-charity-990-tax-form
Thanks to Betsy Carrier for this information
Comment by Don Allen Resnikoff:
Tim Wu on US v. IBM
In his short book The Curse of Bigness: Antitrust in the New Gilded Age, Columbia Global Reports, RRP, 170 pages, Tim Wu argues for a return to an earlier and more aggressive interpretation of U.S. antitrust law. Tim Wu would like antitrust enforcement to focus on reducing the economic and political power of large companies. He argues vehemently for reviving the kind of big anti-monopoly cases the USDOJ pursued in the past.
At one point in his book Tim Wu focuses on the last series of monopoly cases pursued by the federal government, including the cases against IBM, Microsoft, and AT&T.
Wu’s focus on the US v. IBM case is particularly interesting to me. He is one of relatively few commenters who describe the case as having merit, and doing some good.
I worked on the US. v. IBM case during its last few years before the Reagan administration dismissed the case in 1982. My agreement with Wu is based on that experience. I participated in the moot-court like inquiry that USDOJ antitrust chief William Baxter conducted before he decided to abandon the case. As first assistant to the US v. IBM trial chief I was the senior trial staff person on hand in New York when the phone call came in from one of Baxter’s assistants in Washington directing me to hotfoot it over to the nearby Cravath, Swaine, & Moore offices and meet with IBM’s lawyer Tom Barr. My chore was to deal with papers terminating the litigation. The papers described the case as “without merit.” I recall walking over to the Cravath offices very slowly, after talking with the staff.
Wu believes that the US v IBM case was important for holding a regulatory gun to the head of IBM for many years, even if at the end the Reagan administration dropped the case. Wu attributes the success of then upstarts Microsoft and Apple to the restraints IBM placed on itself to avoid government action. For example, IBM dropped its practice of tying (“bundling”) hardware and software, which facilitated an independent software industry, and development of personal computers. Wu promises a deeper dive into the IBM case in a forthcoming article called “Tech Dominance and the Policeman at the Elbow.”
I hope that Wu’s new article will go into more detail on the merits of the US v. IBM case. The allegations and proofs in the government’s case support Wu’s focus on the concern that companies like IBM and Microsoft may seek to squelch competitors by creating barriers to entry. The barriers can be effective and anti-competitive whether or not they are viewed that way by “Chicago school” critics.
With regard to the allegations and proofs in the US v. IBM case, a brief but fair summary can be found in a USDOJ brief filed in 1995 in connection with a tangentially related IBM court action. See https://www.justice.gov/atr/case-document/united-states-memorandum-1969-case
The 1995 USDOJ summary explains that the US v. IBM action that ended in 1982 alleged that IBM had undertaken exclusionary and predatory conduct with the aim and effect of eliminating competition so that IBM could maintain its monopoly position in general purpose digital computers. Specifically, the Government contended that IBM engaged in anticompetitive practices "for the purpose or with the effect of restraining or attempting to restrain actual or potential competitors from entering" the relevant markets.
The Government alleged that IBM's bundling of software with "related computer hardware equipment" for a single price was anti-competitive. A related allegation addressed the IBM practice of insisting on proprietary rather than industry standard interfaces between elements of the computer systems, and then arbitrarily shifting the standards in a way that created barriers for competitors.
Another allegation was that IBM predatorily priced and preannounced specialized computer systems that the Government termed "fighting machines." IBM allegedly introduced the specialized computer systems "knowing [the products] had unusually low profit expectations." Allegedly, IBM "developed and announced" the products "primarily for the purpose or with the effect of discouraging actual and potential customers from acquiring [competing products] " A goal was to discourage successful manufacturers of specialized computer systems from expanding into the general purpose systems that were IBM’s core business.
Also, in an effort to deter entry and injure competition, IBM allegedly "announced future production and marketing [of certain products] when it believed or had reason to believe that it was unlikely to be able to produce and market such products within the announced time frame . . . ."
To remedy these alleged violations, the Government sought, inter alia, divestiture.
The decision to dismiss the US v. IBM case was made in 1982 by USDOJ’s new antitrust chief, William Baxter. It is clear that the Reagan administration gave Baxter the job of antitrust chief with the expectation that he would rigorously apply Chicago School antitrust principles to USDOJ enforcement. He did that. The goal-posts set by Baxter for evaluating the US v. IBM case were narrow.
Baxter’s reasons for dismissal did include case management problems: the case went on for 13 years, and was not concisely presented. But the reasons for dismissal went far beyond that. From a narrow Chicago School point of view the allegations of IBM conduct creating barriers to competition did not pass muster. Baxter appeared to agree with Robert Bork’s often-quoted assessment that “There was no sensible explanation for IBM’s dominance . . . other than superior efficiency . . .”
But arguably IBM’s conduct would be found to be effectively anti-competitive if more assertive standards for antitrust illegality were applied. It is instructive that in August of 1984 the European Commission reached a settlement agreement with IBM that required IBM to facilitate interchangeability of complementary computer system products. For example, IBM was required to reveal hardware and software interface specifications to allow rivals to achieve compatibility. Also, IBM was required to cooperate with a European agency working to establish standardized interface standards.
The later USDOJ settlement in the US v. Microsoft case addressed similar concerns. In US v. Microsoft, for example, a focus was on computer code used to integrate the Internet Explorer with Windows. The government’s concern was about “middleware,” software that fits in the middle between applications and an operating system. The worry was that Microsoft integrated code in a way that was opaque to rivals, so that removing Microsoft middleware and substituting rival middleware would cause Windows to crash.
The US cases against IBM and Microsoft reinforce a basic point of Tim Wu’s Curse of Bigness book: A goal for the prosecutor and Court in a monopolization case is to maintain an open mind and carefully examine the facts to determine whether the main effect of product design and marketing practices of a monopolist is to block competitors and thereby deprive customers of choice.
This posting is by Don Allen Resnikoff, who is wholly responsible for the views expressed.
Sackler family members face mass litigation and criminal investigations over Purdue conduct and opioids crisis:
Suffolk county in Long Island has sued several family members, and Connecticut and New York are considering criminal fraud and racketeering charges against leading family members
Joanna Walters in New York
@Joannawalters13
Members of the multibillionaire philanthropic Sackler family that owns the maker of prescription painkiller OxyContin are facing mass litigation and likely criminal investigation over the opioids crisis still ravaging America.
Some of the Sacklers wholly own Connecticut-based Purdue Pharma, the company that created and sells the legal narcotic OxyContin, a drug at the center of the opioid epidemic that now kills almost 200 people a day across the US.
Suffolk county on Long Island, New York, recently sued several family members personally over the overdose deaths and painkiller addiction blighting local communities. Now lawyers warn that action will be a catalyst for hundreds of other US cities, counties and states to follow suit.
At the same time, prosecutors in Connecticut and New York are understood to be considering criminal fraud and racketeering charges against leading family members over the way OxyContin has allegedly been dangerouslyoverprescribed and deceptively marketed to doctors and the public over the years, legal sources told the Guardian last week.
“This is essentially a crime family … drug dealers in nice suits and dresses,” said Paul Hanly, a New York city lawyer who represents Suffolk county and is also a lead attorney in a huge civil action playing out in federal court in Cleveland, Ohio, involving opioid manufacturers and distributors.
Source: Excerpt is from https://www.theguardian.com/us-news/2018/nov/19/sackler-family-members-face-mass-litigation-criminal-investigations-over-opioids-crisis
AAI Asks First Circuit to Preserve Pharma Antitrust Class Actions Targeting Generic Exclusion (In re Asacol Antitrust Litigation)
AAI filed an amicus brief in the First Circuit Court of Appeals warning that unreasonable class action standards threaten to harm competition and consumers in the critically important pharmaceutical sector.
In In re Asacol Antitrust Litig., a class of indirect purchasers challenged an alleged "product hopping" scheme whereby brand-drug manufacturer Warner Chilcott pulled an ulcerative colitis drug from the market just as its patent was set to expire, only to substitute a replacement, patented drug and thereby stave off generic entry that would have benefitted consumers.
Read More https://www.antitrustinstitute.org/work-product/aai-asks-first-circuit-to-preserve-pharma-antitrust-class-actions-targeting-generic-exclusion-in-re-asacol-antitrust-litigation/
Facebook on Thanksgiving eve took responsibility for hiring a Washington-based lobbying company, Definers Public Affairs, that pushed negative stories about Facebook’s critics, including the philanthropist George Soros.
Facebook’s communications and policy chief, Elliot Schrage, said in a memo posted Wednesday that he was responsible for hiring the group, and had done so to help protect the company’s image and conduct research about high-profile individuals who spoke critically about the social media platform. Mr. Schrage will be leaving the company, a move planned before the memo was released.
Facebook fired Definers last week, after a New York Times investigation published on Nov. 14.
“Did we ask them to do work on George Soros?” Mr. Schrage wrote in the memo, a draft of which had circulated online earlier in the week. “Yes.”
***
The Shrage memo is here: https://newsroom.fb.com/news/2018/11/elliot-schrage-on-definers/
Source: https://www.nytimes.com/2018/11/22/business/on-thanksgiving-eve-facebook-acknowledges-details-of-times-investigation.html?action=click&module=Latest&pgtype=Homepage
The total value of the incentive package New York is using to lure Amazon could top $2.8 billion.
Amazon announced Tuesday that it would build new headquarters in New York City and Washington D.C.’s Virginia suburbs, each of which would host around 25,000 workers.
The New York City headquarters, built on the East River waterfront in Queens, would vault Amazon into the ranks of the city’s top private-sector employers while transforming a site now mostly occupied by industrial buildings and parking lots.
Snagging the online retailer, though, comes at a cost.
In addition to nearly $1.53 billion in tax credits and grants offered by the state, Amazon would also qualify for two big tax breaks from the city.
If it creates 25,000 jobs, as promised, Amazon would qualify for a city corporate income tax credit worth nearly $900 million over 12 years. On top of that, it would get a 15-year property-tax abatement worth an estimated $386 million.
Those city tax credits aren’t unique to the Amazon deal. They have long been available to other companies, too, as a way of incentivizing growth and development outside Manhattan’s crowded business districts.
Gov. Andrew Cuomo and New York City Mayor Bill de Blasio said they expect to more than recoup that amount in the form of personal income taxes paid by Amazon’s employees, sales tax and economic activity generated by the company’s presence.
Cuomo on Tuesday predicted that the project would eventually bring in $27.5 billion in new state revenue over the next 25 years, though that figure would depend on Amazon creating 40,000 new jobs in New York City — far more than the initial 25,000 it has promised. State budget director Robert Mujica said that calculation also includes an assumption that other businesses not connected to Amazon will have to hire as many as 67,000 workers to serve the needs of the company and its employees.
Some experts say that revenue projection, which includes ancillary jobs like a food vendor who sells sandwiches to Amazon workers, may overestimate the company’s impact.
“I’m not a big fan of counting the indirect jobs,” said Nicole Gelinas, a senior fellow at the Manhattan Institute. She said vendors would likely sell to someone else if Amazon weren’t there.
Source: https://www.washingtonpost.com/business/incentives-to-amazon-could-top-28-billion-in-nyc/2018/11/14/86ecfc8a-e85a-11e8-8449-1ff263609a31_story.html?utm_term=.283684e6726c
Democrats have captured state AG offices from Republicans in four states — Colorado, Michigan, Nevada and Wisconsin — while maintaining control of AG seats in New York, California, Illinois, Maryland, and eight other states, plus the District of Columbia.
Combined with the eight states where current Democratic AGs were not up for election and the two states where Democrats have been or will likely soon be appointed as AGs, those results mean that a Democrat will soon be the top prosecutor in a majority of U.S. states — including Iowa, Massachusetts and Maryland, where Republicans will control the governors’ mansions.
“Compared to the last few cycles, this was a resurgence on the Democratic attorney general side,” said Joe Jacquot, a Foley & Lardner LLPpartner and former chief deputy attorney general of Florida. “I think those AGs — not only the ones that won in significant states, like Michigan, Wisconsin and Nevada, but also as a whole — feel a new motivation, and I think you’re going to see them press that in enforcement actions.”
The increased enforcement could include banking and financial issues.
Credit: Joe Hill, Law 360 (paywall)
Posting by Don Allen Resnikoff, who is responsible for the content
A Brief Book Review, by Don Allen Resnikoff:
THE FIXER: MY ADVENTURES SAVING STARTUPS FROM DEATH BY POLITICS,
by Bradley Tusk (Portfolio/Penguin, 2018)
Bradley Tusk’s short book reads like a promotional piece for his business. He is a consultant for businesses that need to fight political battles to survive. Successful clients have included the taxi app company, Uber, a fantasy sports company, FanDuel, and on-line insurer Lemonade.
Tusk wants you to know that he is pragmatic about politics, and tough minded. He describes politicians as motivated largely by self interest and the wishes of “pay-to-play” money donors. Politicians seldom do what is right for their broader constituency simply because it is the right thing to do.
Tusk’s book is worth reading for its war stories. The stories convey insights about the realities of interactions between competition and local politics.
Tusk’s stories have a common thread. The new businesses Tusk represents are disruptive, typically depending on modern internet technology. The new businesses challenge large commercial interests that are protected by favorable regulation. The businesses challenged by Tusk’s clients are well-connected politically, because they make large money contributions to politicians. For that reason the entrenched businesses are in a good position to preserve regulations that protect them.
Tusk’s strategy for his clients is to develop a campaign that puts pressure on politicians to dismantle the regulations that favor entrenched market players. That will clear a path for his clients.
Tusk’s first big client was Uber. When Tusk represented Uber it was a disruptive upstart, not the 800 pound gorilla it has become. Uber had not yet compromised its ability to charm the public. Uber’s innovative app-based business model challenged local government regulated and protected “yellow cabs.” Local governments regulated the cabs, but not necessarily in a way that made them cheap or efficient. Local governments often limited taxi competition by limiting the number of licenses, called “medallions,” that issued.
Local yellow cab interests were politically important in holding on to protective regulation, although the cab industry story differs from the FanDuel and Lemonade stories in that many yellow cab drivers are individual or otherwise small enterprises.
Tusk’s strategies for Uber involved mobilizing Uber customers to complain to legislators, and using lobbying firms to persuade regulators. A public relations campaign was launched as well. A key to Uber’s success was that customers disliked the traditional yellow cabs, but liked Uber.
Early victories for Uber were achieved in the District of Columbia and New York City, where regulations that blocked Uber were dismantled. The New York City victory marked a turning point for Uber. Here is an excerpt from the book outlining the New York strategy:
A memo I wrote [Uber’s] Travis in mid-2011 laying out my initial thoughts on how Uber should deal with its New York City problem ended up encompassing many of the same tactics we’d use over the next five years to fight the taxi industry: In every jurisdiction, make taxi’s opposition all about their own corrupt, entrenched needs, and not about the good of drivers or riders; align Uber with any elected official who really cared about technology and innovation; draw attention to taxi’s long and ugly history of racism; posit Uber as a way to fundamentally change that; and demonstrate that Uber drivers were all individual small businesses and this was a new and different type of opportunity for them. Taxi’s strength was their political influence. We needed to make it their weakness.
For the purposes of this brief review we will not explore in detail Tusk’s additional strategies for Uber, Fanduel, and Lemonade. They are, of course, available in Tusk’s book.
Like Tusk, the FTC and USDOJ have engaged in challenges to local regulations that favor particular entrenched businesses. But that is regulatory action that is tangential to Tusk’s business activity, which involves a lot of grass-roots effort and lobbying of politicians. Tusk’s approach is mostly about political campaigns that involve customer support and action, in addition to employing lobbyists. Tusk’s activity for his clients carries the spirit of street fighting.
The Tusk stories are useful in a way that is reminiscent of the industry studies economists have traditionally done to provide insight into particular markets. The stories help us understand app based taxi service, fantasy sports, and on-line insurance, all of which rely on the internet. Knowledge about particular markets is obviously a useful predicate for considering the need for market regulation.
This posting is by Don Allen Resnikoff, who takes full responsibility for its content.
DAR Commentary: Deltrahim tells CNBC he ignores the President’s opinions on Antitrust –
From https://www.investorideas.com/news/2018/main/11133CNBC-MakanDelrahim.asp
Interview excerpt:
FABER: But when the president writes, and this is from this summer, "In my opinion, The Washington Post is nothing more than an expensive lobbyist for Amazon as it uses protection against anti-trust claims, which many feel should be brought." Again, as the man who runs enforcement for the anti-trust division, when you hear something like that from the executive, is there a response that you have?
DELRAHIM: Well, we hear that from executive and legislative. I mean, by the way, these types of concerns raised about Amazon are bipartisan. And Senators raise them, the president has raised it. It's -- again, I think it's great that we have such a debate about free markets and the anti-trust laws there to protect the free markets. As far as what we do in our enforcement, you know, we need the evidence, we need the economics, we go to court. And politics, you know, that goes on between various aspects of the government don't affect our decisions to make these cases.
Could that be true? Is it consistent with past USDOJ deference to Presidential opinion?
Teddy Roosevelt famously was an active participant in antitrust enforcement. Writers Johnson and Kwak tell us that:
In late February 1902, J.P. Morgan, the leading financier of his day, went to the White House to meet with President Theodore Roosevelt and Attorney General Philander Knox. The government had just announced an antitrust suit -- the first of its kind -- against Morgan's recently formed railroad monopoly, Northern Securities, and this was a tense moment for the stock market. Morgan argued strongly that his industrial trusts were essential to American prosperity and competitiveness.
The banker wanted a deal. "If we have done anything wrong, send your man to my man and they can fix it up," he offered. But the president was blunt: "That can't be done." And Knox succinctly summarized Roosevelt's philosophy. "We don't want to fix it up," he told Morgan, "we want to stop it."
Johnson and Kwak make it clear that, more recently, Barack Obama was much more than a passive commenter on USDOJ enforcement. When leading bankers visited the White House in 2008, at the height on the banking crisis, the President was not shy in expressing himself:
"My administration is the only thing between you and the pitchforks," he famously told the bankers.
Johnson and Kwak complain that the enforcement that followed the Obama statement was weak, but that is not because President Obama was not engaged in the process of enforcement (or lack of it).
Perhaps Delrahim’s characterization of President Trump as a political commenter on USDOJ policy without much effect is less than fully persuasive.
Posted by Don Allen Resnikoff, who takes full responsibility for the content.
Stacy Mitchell advocates break-up of Amazon
Mitchell is the co-director of Institute for Local Self-Reliance. Earlier this year she wrote an article for The Nation called, “Amazon doesn’t just want to dominate the market — it wants to become the market.” In the Podcast below from public radio station WNYC, Mitchell describes the history of regulation of corporate concentration in a manner reminiscent of Tim Wu. She then explains why she thinks that the government should forcibly separate Amazon's platform business from its other businesses.
This Podcast is at https://www.wnycstudios.org/story/making-america-antitrust-again
AAI Files Comments in FTC Competition Hearings
On November 15, the AAI submitted comments in response to the Federal Trade Commission's request for public comments for Hearing #2 On Competition and Consumer Protection in the 21st Century. The FTC sought feedback on eleven wide-ranging topics, including the propriety of the consumer welfare standard, how antitrust law should account for public policy concerns, evidence of increasing concentration and changing price-cost margins, reform priorities, international convergence, error costs, out-of-market benefits, and monopsony and buyer power.
Read More - https://www.antitrustinstitute.org/work-product/aai-files-comments-in-ftc-competition-hearings/
Tim Wu: Competition policy as politics
Tim Wu’s Op-ed in Sunday’s NY Times anticipates his forthcoming book “The Curse of Bigness: Antitrust in the New Gilded Age.” Wu presents competition policy as a political issue. The dominance of big companies leads to totalitarianism. Former FTC Commissioner Robert Pitofsky warned in 1979 that “massively concentrated economic power, or state intervention induced by that level of concentration, is incompatible with liberal, constitutional democracy.” Antitrust has more than an economic goal. It is a check against the political dangers of unaccountable private power.
Tim Wu’s book, which will be available shortly (I do not have access to a preview copy), is likely to discuss details of how government should enforce the antitrust laws. In earlier writing, Wu has argued for antitrust enforcement that reaches beyond the current “consumer welfare” standard. He argues for post-consumer welfare antitrust that will be practical and predictable. (See https://www.competitionpolicyinternational.com/wp-content/uploads/2018/04/CPI-Wu.pdf)
Wu’s new book comes at a moment when it has become plain that the political importance of antitrust is known not only to devotees of Brandeis and Pitofsky, but also to Donald Trump.
President Donald Trump recently said that his administration is looking into antitrust violations by Amazon, Facebook and Google parent Alphabet.
In a video interview with Axios' Jonathan Swan and Jim VandeHei, Trump said he's "not looking to hurt" the U.S. tech giants but is considering action.
"We are looking at [antitrust] very seriously," Trump said. "Look, that doesn't mean we're doing it, but we're certainly looking and I think most people surmise that, I would imagine."
Trump says administration is looking into antitrust violations by Amazon, other tech giants
- President Donald Trump says his administration is looking into antitrust violations by Amazon, Facebook and Google parent Alphabet.
- In an interview with Axios, Trump says he's "not looking to hurt" the U.S. tech giants but is considering action.
Berkeley Lovelace Jr. | @BerkeleyJr
Published 7:02 AM ET Mon, 5 Nov 2018 Updated 2:20 PM ET Mon, 5 Nov 2018 CNBC.com
Rex Curry | Reuters
Jeff Bezos, Chairman and CEO of Amazon, speaks at the George W. Bush Presidential Center's Forum on Leadership in Dallas, Texas, U.S., April 20, 2018.
President Donald Trump said his administration is looking into antitrust violations by Amazon, Facebook and Google parent Alphabet.
In a video interview with Axios' Jonathan Swan and Jim VandeHei that aired on Sunday, Trump said he's "not looking to hurt" the U.S. tech giants but is considering action.
"We are looking at [antitrust] very seriously," Trump said. "Look, that doesn't mean we're doing it, but we're certainly looking and I think most people surmise that, I would imagine."
Trump said others have also considered action against tech companies but a "previous administration" stopped that. "They were talking about this years ago. You know they were actually talking about this same subject — monopoly."
Shares of the three tech companies were essentially flat in premarket trading on Monday.
The president has repeatedly attacked Amazon, saying without evidence that package deliveries by the U.S. Postal Service for Amazon were costing the service money.
Trump has also been critical of Amazon CEO Jeff Bezos, who owns The Washington Post.
Mike Allen, co-founder and executive editor of Axios, told CNBC on Monday he thinks Trump was being serious about this inquiry into big tech.
"The president has been talking about this for a long time," Allen said in a "Squawk Box" interview. He also mentioned Trump's "obsession" with Amazon.
Tech companies have been under the microscope in Washington recently on efforts to prevent foreign meddling in U.S. elections.
Source: https://www.cnbc.com/2018/11/05/trump-looking-into-antitrust-violations-against-amazon-other-tech-giants.html
Watch: CNBC's Is Google a monopoly?
Is Google a monopoly? https://www.cnbc.com/video/2018/11/01/is-google-a-monopoly.html
Tim Wu's "told you so" on AT&T --Time Warner
From his NYT Op-Ed:
Last week, HBO went dark for both DISH and DISH-Sling, the main competitors to DirecTV and DirecTV Now, AT&T’s television services. This brazenly anticompetitive strategy does not portend a happy future for the viewing public, or for HBO itself.
At the risk of saying “we told you so,” it was widely predicted before the merger that AT&T would use HBO and other Time Warner media properties in just this way. When the Justice Department sued (unsuccessfully) to block the merger last year, its case was premised on the idea that AT&T would use its ownership of such properties to hurt its rivals in telecommunications. And now it is doing so.
Post-merger, AT&T has the means and the incentive to raise prices on valuable content (like HBO or the coverage of the N.C.A.A. “March Madness” basketball tournament) for cheaper, “unintegrated” telecom competitors that have been saving consumers money. If its rivals refuse to pay up, it can withhold the content entirely, diminishing them as competitors.
Full Op-ed: https://www.nytimes.com/2018/11/07/opinion/att-hbo-antitrust.html?action=click&module=Opinion&pgtype=Homepagewww.nytimes.com/2018/11/07/opinion/att-hbo-antitrust.html?action=click&module=Opinion&pgtype=Homepage
Concentration in Cardiology Markets Associated with Higher Prices and Lower Quality of Care
Study by: Thomas Koch, Brett Wendling, and Nathan E. Wilson
In recent years local markets for physician services have become increasingly concentrated. A new study uses Medicare claims and enrollment data to examine the effect of cardiology market structure on utilization and health outcomes for four patient populations—those treated for hypertension, a chronic cardiac condition, an acute cardiac condition, or an acute myocardial infarction (AMI). The study found that higher market concentration is associated with higher total expenditures and worse health outcomes. In three of the sample populations, patients residing in a zip code at the 75th percentile of cardiology market concentration were found to have a 5 to 7 percent greater chance of risk-adjusted mortality as compared with identical patients in a zip code at the 25th percentile of market concentration.
Researchers also found that there was a 7 to 11 percent increase in expenditures when moving from the 25th percentile to the 75th percentile of market concentration. The negative correlation between concentration and quality of care found in this study indicates that antitrust agencies have reason to be concerned about the effects of consolidation in physician markets on the price and quality of healthcare services.
Full study here. http://www.hsr.org/hsr/abstract.jsp?aid=53913902447
NYT: A strike by antiquarian booksellers against Amazon succeedsIt was a rare concerted uprising against any part of Amazon by any of its millions of suppliers, leading to an even rarer capitulation. Even the book dealers said they were surprised at the sudden reversal by AbeBooks, the company’s secondhand and rare bookselling network.
The uprising, which involved nearly 600 booksellers in 27 countries removing about four million books, was set off by the retailer’s decision to cut off stores in five countries: the Czech Republic, Poland, Hungary, South Korea and Russia. AbeBooks never explained its actions beyond saying it was related to payment processing.
“[Amazon sub] AbeBooks was saying entire countries were expendable to its plans,” said Scott Brown, a Eureka, Calif., bookseller who was an organizer of the strike. “Booksellers everywhere felt they might be next.”
The matter was apparently resolved when Sally Burdon, an Australian bookseller who is president of the International League of Antiquarian Booksellers, spoke with Arkady Vitrouk, chief executive of AbeBooks. In a Wednesday email to her members after their talk, Ms. Burdon said Mr. Vitrouk apologized for the platform’s behavior “a number of times” and said booksellers in the affected countries would not be dropped as scheduled on Nov. 30.
From: https://www.nytimes.com/2018/11/07/technology/amazon-bookseller-protest-strike.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=stream&module=stream_unit&version=latest&contentPlacement=9&pgtype=sectionfront
After mid-terms, MD Consumer Rights Coalition is cautiously optimistic about what the future holds in both Maryland and in Congress.
From a recent email letter to supporters:
In Congress, a number of candidates who support economic rights, affordable healthcare, and consumer protections won their elections. Deb Haaland, a Native American woman, was elected to Congress from New Mexico on a platform of economic fairness and immigration rights. Haaland and Sharice Davids (D-KS) are the first two Native American women elected to Congress. Ilhan Omar, the first Somali-American woman (and one of the first Muslim women) elected to Congress, won her race in Minnesota on a detailed economic rights platform including a federal jobs guarantee and increasing taxes on the wealthy. Alexandria Ocasio-Cortez (D-NY) became the youngest woman elected to Congress and ran a strong campaign centered on strong proposals for economic equity.
Shared themes of economic justice, Medicare for All, debt-free college,and reducing income inequality and the racial wealth gap vaulted Rashida Talib (D-MI), a Muslim woman, Ayanna Pressely (D-MA), an African-American former City Councilwoman, and Veronica Escobar (D-TX), a Latina former county judge, to Congress.
In January, there will be 223 Democrats and 197 Republicans in the House of Representatives. As Democrats ascend to leadership in House Congressional committees, several economic rights and consumer protection champions will chair committees including Maxine Waters (D-CA), who will chair the House Financial Services Committee, and Maryland’s own Elijah Cummings (D-MD), who will helm the House Oversight Committee. This means that it will be far more difficult for Members of Congress who oppose economic rights and consumer protections to attempt to overturn Obama-era regulations.
In the U.S. Senate, there will be 51 Republicans and 46 Democrats. This means that there may be strong differences between the Senate and House as they work towards passage of consumer protection legislation.
The Maryland Consumer Rights Coalition believes that consumer protection is a bipartisan issue: regulations help businesses and consumers both know the rules and operate from the same rule book in the marketplace. We look forward to working with members of Congress on both sides of the aisle to pass strong consumer protection legislation.
In Maryland, Governor Larry Hogan was re-elected, becoming only the second Republican governor to win a second term in Maryland. In the State House, Democrats held onto a super-majority in the House and Senate-meaning they can override a veto by the Governor. A number of new legislators elected to both the House and Senate ran on campaigns highlighting economic equity and inclusion issues.
Governor Hogan has already laid out his agenda highlighting tax cuts and greater accountability and oversight of schools, among other issues. What does these policies mean for public education and for low-income and working families?
What do these elections mean for us – and for the issues we care about – in Congress and in Annapolis? How can we take the energy and enthusiasm that so many individuals demonstrated in their work around the midterm elections and translate that momentum into the legislative session and federal advocacy?
Step one: join us at our Economic Summit & Consumer Celebration on November 15th when Congressman Jamie Raskin will share his thoughts on are his thoughts on how we should move forward and articulate, expand, and deepen the movement for economic rights in Maryland and Congress in this new political landscape. Congressman Raskin is one of the nation’s strongest progressive voices and strategists, and we’re delighted to present him with our Federal Champion of the Year award. You can buy tickets by clicking here.
Grass-roots campaigner Desmond Meade on the successful Florida ballot initiative on ex-felons' right to vote
For those engaged in local campaigns concerning consumer and other citizen rights, there is encouragement in the success of the grass roots campaign to restore voting rights to ex-felons in the state of Florida. At least 1.4 million people have regained the right to vote in Florida, following the passage of Amendment 4, a statewide initiative to re-enfranchise people with felony convictions who have completed their sentences, excluding people convicted of murder or sex offenses. The amendment passed with 64.5 percent of the vote. It needed 60 percent to pass.
There has been a lot of media coverage, but left-leaning Democracy Now's reporting includes a touching video interview with Desmond Meade, a convicted felon who spearheaded the fight for Amendment 4. Desmond Meade is the president of the Florida Rights Restoration Coalition. He’s also chair of Floridians for a Fair Democracy. DAR
The Democracy Now video, including the interview with Desmond Meade, is here: https://www.democracynow.org/2018/11/7/love_prevails_floridians_celebrate_massive_restoration
Posting by Don Allen Resnikoff, who is responsible for the content
Medicaid expansion scores election wins and losses across the country
By Harris Meyer | November 7, 2018
Updated at 2:40 a.m. ET
From the Rocky Mountains to the Great Plains to New England, Medicaid expansion got a big boost Tuesday from ballot initiatives that appeared headed for passage and from gubernatorial victories by Democrats in several states who made expansion a central issue.
Vvoters in Nebraska and Utah approved mandatory ballot initiatives to extend Medicaid coverage under the Affordable Care Act to adults with incomes under 138% of the federal poverty level. Republican governors and lawmakers in those states had repeatedly refused to pass it.
Democratic gubernatorial candidates who campaigned on expansion won contests in Kansas and Maine, both states where Republican governors have rejected it. Those victories made expansion much more likely.
On the other hand, a Republican who either oppose expansion or favor imposing limits on eligibility, such as work requirements, won in Florida, and a Republican may win in Georgia. Their Democratic opponents had made Medicaid expansion central to their campaigns.
In Michigan, a state that already expanded Medicaid, the Democratic gubernatorial candidate prevailed against a GOP opponent who favored work requirements. Gretchen Whitmer now will have to convince GOP lawmakers not to move forward with those eligibility limits, which likely would reduce enrollment.
But in Ohio, former U.S. Senator and current Attorney General Mike DeWine, who supported work requirements for the state's expansion program, beat the Democrat, Richard Cordray, who opposed a work mandate.
From: https://www.modernhealthcare.com/article/20181107/NEWS/181109942?utm_source=modernhealthcare&utm_campaign=am&utm_medium=email&utm_content=20181107-NEWS-181109942
DAR comment: The outcome of Tuesday's Medicaid ballot initiatives and some of the governor and Senate races underlines the obvious point that health care and other consumer advocacy points require buy-in of voters; there are many voters who would seem to be helped by expanded government support for health care and other government benefits who vote against because of other issues, such as those emphacized in the rhetoric of Donald Trump. Obviously, consumer benefit policy advocacy and political advocacy are linked.
Policy as politics: McCaskill's focus on health care and wage issues did not carry the day in Missouri
McCaskill's campaign focused primarily on pocketbook issues, like health care. She backed a ballot initiative raising Missouri's minimum wage and a union-led referendum on the Republican-backed right to work law passed by the Missouri General Assembly.
In Kansas City, voters turned out overwhelmingly for McCaskill, but it wasn't enough to carry her to victory. And while Greene County, which contains Springfield, turned out for Hawley, McCaskill fared better than Hillary Clinton did in the 2016 presidential election.
While McCaskill insisted she's a moderate, Hawley sought to tie her to national Democratic leaders, including U.S. Senate Minority Leader Chuck Schumer, D-N.Y., and House Minority Leader Nancy Pelosi, D-Calif.
During the campaign, McCaskill said she supported increased border security and she touted an endorsement by the union that represents Border Patrol agents, while Hawley accused her of supporting a "radical" immigration bill. The bill McCaskill is co-sponsoring would halt family separations at the border.
McCaskill tried to focus the race on protecting parts of former President Barack Obama's Affordable Care Act -- the same one Trump campaigned on repealing. Hawley is part of a Republican lawsuit that would undo the health care law.
Hawley, in response, said he supported a stand-alone law requiring that insurance companies provide coverage for those with pre-existing conditions. His campaign released an ad featuring his son, who he said has a rare chronic bone condition.
https://www.msn.com/en-us/news/politics/republican-hawley-beats-mccaskill-to-capture-us-senate-seat-in-missouri/ar-BBPqKtI?ocid=spartandhp
"Trump Administration Spares Corporate Wrongdoers Billions in Penalties"
The New York Times reports:
Across the corporate landscape, the Trump administration has presided over a sharp decline in financial penalties against banks and big companies accused of malfeasance, according to analyses of government data and interviews with more than 60 former and current federal officials. The approach mirrors the administration’s aggressive deregulatory agenda throughout the federal government.
The New York Times and outside experts tallied enforcement activity at the S.E.C. and the Justice Department, the two most powerful agencies policing the corporate and financial sectors. Comparing cases filed during the first 20 months of the Trump presidency with the final 20 months of the Obama administration, the review found:
• A 62 percent drop in penalties imposed and illicit profits ordered returned by the S.E.C., to $1.9 billion under the Trump administration from $5 billion under the Obama administration;
• A 72 percent decline in corporate penalties from the Justice Department’s criminal prosecutions, to $3.93 billion from $14.15 billion, and a similar percent drop in civil penalties against financial institutions, to $7.4 billion;
• A lighter touch toward the banking industry, with the S.E.C. ordering banks to pay $1.7 billion during the Obama period, nearly four times as much as in the Trump era, and Mr. Trump’s Justice Department bringing 17 such cases, compared with 71.
The full article is here. https://www.nytimes.com/2018/11/03/us/trump-sec-doj-corporate-penalties.html
AAI Asks Seventh Circuit for Better Monopolization Standards (Viamedia v. Comcast)
The American Antitrust Institute (AAI) and Public Knowledge have filed an amicus brief in the Seventh Circuit Court of Appeals(Link: https://www.antitrustinstitute.org/wp-content/uploads/2018/11/Viamedia-v.-Comcast-11.1.18.pdf) urging the court to reverse a district court's dismissal of refusal-to-deal and tying claims based on overly demanding monopolization standards.
Among other things, the brief argues that the district court improperly extended the defendant-friendly Trinko decision to mean that a refusal-to-deal claim can only be brought if a plaintiff shows that the monopolist's conduct had no potential rational purpose. And it improperly extended the defendant-friendly Masushita decision to mean that a plaintiff cannot avoid summary judgment unless it presents evidence that "tends to exclude" the possibility that the monopolist's conduct was lawful.
Read More - URL https://www.antitrustinstitute.org/work-product/aai-asks-seventh-circuit-for-better-monopolization-standards-viamedia-v-comcast/
20 minutes of John Oliver on State Attorneys General
Many State AGs are elected, and if that is true in your state then John Oliver wants you to do some research and vote. Many State AGs, Republican and Democrat are highly partisan, and spend great effort challenging the federal government, for better or worse. Oliver seems able to focus on worse.
The YouTube video URL follows. WARNING: Oliver uses profanity, and jokes.
https://www.youtube.com/watch?v=UpdMYOtAmKY
From NYT:
Letitia James and Keith H. Wofford faced off on Tuesday in their only debate for New York attorney general
Mr. Wofford, a Republican, had called for multiple debates, but Ms. James, a Democrat who is handily leading in public polls, agreed to just this debate at the Manhattan studios of Spectrum NY1 — and it nearly did not happen.
The New York attorney general’s office currently has dozens of actions against Mr. Trump and his administration, including a lawsuit against the president’s charitable foundation and another challenging efforts to ask a citizenship question on the census.
Ms. James has vowed to continue the efforts against Mr. Trump and his policies, and she continued to embrace that role on Tuesday. “Attorneys general across this country have been the firmest pillars of our democracy,” she said.
Her one question to Mr. Wofford was why he had voted for Mr. Trump for president in 2016.
From: https://www.nytimes.com/2018/10/31/nyregion/letitia-james-keith-wofford-debate.html?fallback=0&recId=1CLKskjlCJ60b6AUG479Co1il2n&locked=0&geoContinent=NA&geoRegion=DC&recAlloc=contextual-bandit-home-geo&geoCountry=US&blockId=midterm-elections&imp_id=267963940&action=click&module=Election%202018&pgtype=Homepage
Christy McDonald of Detroit Public Television shares a look at a close Attorney General race in Michigan, where Democratic candidate Dana Nessel is running against Republican candidate Tom Leonard.
The video is here: https://www.youtube.com/watch?v=uhCb11aq3RI
Pence speech suggests full bore US government conflict with China -- so resolution of trade and tariff issues affecting US consumers may be difficult
Vice President Mike Pence's speech blasting China was a "wake up call," according to CNBC's Jim Cramer.
Pence's Oct. 4 address at Washington's Hudson Institute accused China of "malign" efforts to undermine President Donald Trump and sway the November midterm elections from Republicans — a charge China has denied.
Cramer described the tone of the Pence speech as not just hawkish but a "declaration of economic war."
Cramer said: "It was a recognition that it's a communist country" and not really an ally of the U.S. because it "has none of the protections that democracies afford," he added.The U.S. and China are currently locked in a trade war that's seen each side imposing tariffs on each other's products.
However, Cramer said the divide between the world's two largest economic superpowers is bigger than trade.
Source: https://www.cnbc.com/2018/10/24/cramer-pence-speech-on-china-most-important-of-trump-administration.html
The Pence speech is here: https://www.whitehouse.gov/briefings-statements/remarks-vice-president-pence-administrations-policy-toward-china/
Excerpt from Pence speech:
But I come before you today because the American people deserve to know that, as we speak, Beijing is employing a whole-of-government approach, using political, economic, and military tools, as well as propaganda, to advance its influence and benefit its interests in the United States.
China is also applying this power in more proactive ways than ever before, to exert influence and interfere in the domestic policy and politics of this country.
Under President Trump’s leadership, the United States has taken decisive action to respond to China with American action, applying the principles and the policies long advocated in these halls.
In our National Security Strategy that the President Trump released last December, he described a new era of “great power competition.” Foreign nations have begun to, as we wrote, “reassert their influence regionally and globally,” and they are “contesting [America’s] geopolitical advantages and trying [in essence] to change the international order in their favor.”
NY Judge says fantasy sports is gambling
The opinion is here:
https://dlbjbjzgnk95t.cloudfront.net/1096000/1096870/fantasyruling-2-29.pdf
White, et al. v. Cuomo
IndexNo.: 5851-16
Excerpt:
Accordingly, it is hereby
ORDERED,ADJUDGED AND DECLARED that Plaintiff's motion for Summary Judgment is granted herein (and Defendant's cross-motion denied) as follows: that Chapter 237 of the Laws of the State of N ew York, to the extent that it authorizes and regulates IFS within the State of New York, is found null arid void as in violation of Article I, §9 of the New York State Constitution; and it is further
ORDERED, ADIDDGED and DECLARED that Defendant's cross-motion for summary judgment granting dismissal of the within action is granted herein (and plaintiffs motion denied) as follows; Chapter 237 of the Laws of the State of New York, to the extent that it excludes IFS from the scope of the New York State Penal Law definition of "gambling" at Article 225, is not in violation of Article I, §9 of the New York State Constitution,
Following is the study that is the source for many media articles:
Advertising in Young Children's Apps: A Content Analysis
Meyer, Marisa*; Adkins, Victoria, MSW†; Yuan, Nalingna, MS*; Weeks, Heidi M., PhD‡; Chang, Yung-Ju, PhD§; Radesky, Jenny, MD*
Journal of Developmental & Behavioral Pediatrics: October 26, 2018 - Volume Publish Ahead of Print - Issue - p
- Abstract -https://journals.lww.com/jrnldbp/Abstract/publishahead/Advertising_in_Young_Children_s_Apps___A_Content.99257.aspx#article-abstract-content1
Objective: Young children use mobile devices on average 1 hour/day, but no studies have examined the prevalence of advertising in children's apps. The objective of this study was to describe the advertising content of popular children's apps.
Methods: To create a coding scheme, we downloaded and played 39 apps played by children aged 12 months to 5 years in a pilot study of a mobile sensing app; 2 researchers played each app, took detailed notes on the design of advertisements, and iteratively refined the codebook (interrater reliability 0.96). Codes were then applied to the 96 most downloaded free and paid apps in the 5 And Under category on the Google Play app store.
Results: Of the 135 apps reviewed, 129 (95%) contained at least 1 type of advertising. These included use of commercial characters (42%); full-app teasers (46%); advertising videos interrupting play (e.g., pop-ups [35%] or to unlock play items [16%]); in-app purchases (30%); prompts to rate the app (28%) or share on social media (14%); distracting ads such as banners across the screen (17%) or hidden ads with misleading symbols such as “$” or camouflaged as gameplay items (7%). Advertising was significantly more prevalent in free apps (100% vs 88% of paid apps), but occurred at similar rates in apps labeled as “educational” versus other categories.
Conclusion: In this exploratory study, we found high rates of mobile advertising through manipulative and disruptive methods. These results have implications for advertising regulation, parent media choices, and apps' educational value.
NYT: Rural Hospitals are closing: State Medicaid expansion choices have an effect
In its June report to Congress, the Medicare Payment Advisory Commission found that of the 67 rural hospitals that closed since 2013, about one-third were more than 20 miles from the next closest hospital.
A study published last year in Health Affairs by researchers from the University of Minnesota found that over half of rural counties now lack obstetric services. Another study, published in Health Services Research, showed that such closures increase the distance pregnant women must travel for delivery.
And another published earlier this year in JAMA found that higher-risk, preterm births are more likely in counties without obstetric units. (Some hospitals close obstetric units without closing the entire hospital.)
Ms. Kozhimannil, a co-author of all three studies, said, “What’s left are maternity care deserts in some of the most vulnerable communities, putting pregnant women and their babies at risk.”
Many factors can underlie the financial decision to close a hospital. Rural populations are shrinking, and the trend of hospital mergers and acquisitions can contribute to closures as services are consolidated.
Another factor: Over the long term, we are using less hospital care as more services are shifted to outpatient settings and as inpatient care is performed more rapidly. In 1960, an average appendectomy required over six days in the hospital; today one to two days is the norm.
Part of the story is political: the decision by many red states not to take advantage of federal funding to expand Medicaid as part of the Affordable Care Act. Some states cited fiscal concerns for their decisions, but ideological opposition to Obamacare was another factor.
In rural areas, lower incomes and higher rates of uninsured people contribute to higher levels of uncompensated hospital care — meaning many people are unable to pay their hospital bills. Uncompensated care became less of a problem in hospitals in states that expanded Medicaid.
In a Commonwealth Fund Issue Brief, researchers from Northwestern Kellogg School of Management found that hospitals in Medicaid expansion states saved $6.2 billion in uncompensated care, with the largest reductions in states with the highest proportion of low-income and uninsured patients. Consistent with these findings, the vast majority of recent hospital closings have been in states that have not expanded Medicaid.
Richard Lindrooth, a professor at the University of Colorado School of Public Health, led a study in Health Affairs on the relationship between Medicaid expansion and hospitals’ financial health. Hospitals in nonexpansion states took a financial hit and were far more likely to close. In the continuing battle within some states about whether or not to expand Medicaid, “hospitals’ futures hang in the balance,” he said.
Excerpts are from: https://www.nytimes.com/2018/10/29/upshot/a-sense-of-alarm-as-rural-hospitals-keep-closing.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=rank&module=package&version=highlights&contentPlacement=6&pgtype=sectionfront
Objecting class members' counsel's petition to U.S. Supreme Court in opposition to "cy pres" remedies; Public Citizen response
The introduction of the Petition follows:
INTRODUCTION
Petitioners, as class members, challenge an $8.5 million class settlement negotiated between class counsel and the defendant that pays the class no money, but instead directs millions to class counsel and funnels the remainder to third parties, including class counsel's alma maters and nonprofits to which the defendant already contributes. This is a clear abuse and must be curtailed.
This Court has long recognized that Rule 23(b)(3) opt-out class actions are an "adventuresome" innova tion fraught with potential conflicts. E.g., Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 614, 625-26 (1997). Rule 23 must be "applied with the interests of absent class members in close view." Id. at 629. The Court has consistently rejected the use of proce dural tactics by plaintiffs or defendants to game class actions. E.g., China Agritech, Inc. v. Resh, 138 S. Ct. 1800 (2018); Microsoft Corp. v. Baker, 137 S. Ct. 1702 (2017); Campbell-Ewald Co. v. Gomez, 136 S. Ct. 663 (2016); Standard Fire Ins. Co. v. Knowles, 568 U.S. 588 (2013).
Because of conflicts of interest inherent in the class-action process-especially with regard to settlements-careful judicial scrutiny is necessary lest class counsel and the defendant bargain away the rights of the class members on terms that minimize payoff by the defendant, maximize benefit to class counsel, and leave injured class members out in the cold. Yet the Ninth Circuit below took the opposite approach, declaring that close scrutiny of the terms of a cy pres settlement would be "an intrusion into the private parties' negotiations" and therefore "improper and disruptive to the settlement process." Pet. App. 15.
The majority of class actions that survive motions to dismiss are resolved by settlement. As one court has noted, "Inequitable settlements are an unfortunate recurring bug in our system of class litigation." Pearson v. Target Corp., - F.3d -, 2018 WL 3117848, at *1 (7th Cir. Jun. 26, 2018) (Wood, C.J.) ("Pearson II"). In the absence oflegal rules providing proper incentives, the negotiating parties' preferences readily achieved even in the absence of explicit collusion-are to structure a settlement that maximizes the class attorneys' share of the settlement value of the case while minimizing cost to the defendant, all at the expense of absent class members. In re Dry Max Pampers Litig., 724 F.3d 713, 717-18 (6th Cir. 2013) (Kethledge, J.); see generally Howard M. Erichson, Aggregation as Disempowerment: Red Flags in Class Action Settlements, 92 Notre Dame L. Rev. 859, 874-903 (2016) ("Erichson"). Parties structure settlements to hide the economic reality, create the appearance of a larger recovery, and thus support a larger claim for attorneys' fees. This case involves one of the most notorious devices used to create the "illusion of compensation," so-called cy pres recovery. Martin H. Redish et al., Cy Pres Relief and the Pathologies of the Modern Class Action: A Normative and Empirical Analysis, 62 Fla. L. Rev. 617 (2010) ("Redish").
The Ninth Circuit treated the cy pres arrangement here as equivalent to a class settlement paying $8.5 million to class members. In fact they got zero. All the money went to class counsel and to favored non profit organizations affiliated with class counsel and the defendant. It is not fair or reasonable under Rule 23(e) for class attorneys to arrogate millions for themselves and nothing for their clients. In ratifying the district court's approval of this settlement, the Ninth Circuit adopted several holdings that create perverse incentives that encourage both gamesman ship at the expense of absent class members and meritless class actions designed to benefit only attor neys. If this Court affirms the Ninth Circuit's approach, cy pres settlements like this one, previously substantially deterred by other appellate courts' re fusal to endorse them, will become dramatically more common, even supplanting settlements that currently directly pay class members tens of millions of dollars. The Court should reverse the judgment below, thereby making clear that class counsel has a fiduciary duty to class members, and that Rule 23(e) requires courts to align the interests of class counsel with the interests of their clients.
From https://www.supremecourt.gov/DocketPDF/17/17-961/52594/20180709130345481_17-961BriefForPetitioners.pdf
Public Citizen's brief is here:
- Amicus Curiae Brief (09/05/2018) https://www.citizen.org/system/files/case_documents/frank_v_gaos_amicus_curiae.pdf
Following is a Case Description posted by Public Citizen:
The plaintiffs in this case brought a class action against Google for violating users’ privacy by disclosing their Internet search terms to third-party websites. The complaint alleged claims for violation of the Stored Communications Act and several state-law causes of action. The class includes approximately 129 million people. Following mediation, the parties entered into a settlement providing for injunctive relief, an $8.5 million settlement fund, and attorney’s fees. Because distribution to the individual class members was infeasible, the settlement provided for cy pres distribution of the fund to organizations dedicated to protecting Internet privacy. In accordance with federal Rule of Civl Procedure 23(e), the district court then evaluated the settlement to assess whether it was fair, reasonable, and adequate, and held that it was. Two objectors to the settlement appealed and, after losing the appeal, petitioned for Supreme Court review. The Court accepted the case to consider whether distributing the settlement fund as cy pres rather than directly to class members complies with Rule 23(e).
Public Citizen filed an amicus brief in support of the settling parties. The brief explained that, to allow appropriate use of cy pres settlements while preventing their misuse, the federal appellate courts have articulated a consistent set of standards to assess cy pres awards. The courts allow settlements involving cy pres payments when distributions to individual class members are impracticable or when class members to whom distributions are practicable have been fully compensated for their losses. And the courts agree that proposed cy pres awards must be carefully scrutinized to ensure that they adequately benefit class members in ways that have a sufficient relationship to the claims asserted by the class.
In this case, the courts properly applied these broadly accepted standards. The brief also explained that, contrary to the suggestion in the amicus brief of the Solicitor General, Article III neither limits the ability of parties to settle a case nor addresses the form of distribution of compensatory relief.
California Net Neutrality Law Put on Hold Until Federal Lawsuit Is ResolvedBy Ted Johnson
WASHINGTON — California’s net neutrality law, signed last month by Gov. Jerry Brown, will be put on hold until federal litigation over the FCC’s role is resolved.
The state’s attorney general, Xavier Becerra, agreed to pause the implementation of the law, which includes the strongest net neutralityprotections of any state measure that has passed recently. The same day that Brown signed the law, the Justice Department sued to stop it, arguing that only the federal government can regulate interstate commerce.
California’s passage of the law was in response to the FCC’s decision late last year to repeal many of the net neutrality rules it had in place, including ones that ban internet providers from blocking or throttling traffic, or engaging in paid privatization.
After that action, a number of public interest groups and state attorneys general sued to challenge the FCC’s action, including a provision to preempt any state-level attempts to implement their own net neutrality rules. Oral arguments in the D.C. Circuit Court of Appeals case are scheduled for Feb. 1.
FCC chairman Ajit Pai called California’s agreement to pause its law a “substantial concession” that “reflects the strength of the case made by the United States earlier this month. It also demonstrates, contrary to the claims of the law’s supporters, that there is no urgent problem that these regulations are needed to address.”
State Sen. Scott Wiener, who authored California’s law, said, “of course, I very much want to see California’s net neutrality law go into effect immediately, in order to protect access to the internet. Yet I also understand and support the Attorney General’s rationale for allowing the DC circuit appeal to be resolved before we move forward to defend our net neutrality law in court.”
California’s law was due to go into effect on Jan. 1.
From: https://variety.com/2018/politics/politics/california-net-neutrality-law-on-hold-1202999031/
NYT: Service providers drop Gab
Pittsburgh shooter Bowers’s affiliation with Gab has already cost the company dearly. On Saturday, the company’s web hosting provider, Joyent, said it would stop hosting the site, according to an email posted by Gab on Twitter. Gab’s website went offline Sunday night and was replaced with a statement saying that its service would be temporarily inaccessible while it switched to a new hosting provider.
In addition, GoDaddy, the domain name provider, told Gab it had 24 hours to move its domain name to another service, after finding content on the site that promoted violence.
The payment processing platform Stripe, which Gab has used to receive fees for its paid Gab Pro membership level, and which froze Gab’s account this month for violating its terms of service, said it was suspending transfers to the company’s bank account pending an investigation, according to another email posted to Twitter by Gab. PayPal, another payment processor, canceled Gab’s account, saying it had been closely monitoring the site even before Saturday’s massacre.
Source: https://www.nytimes.com/2018/10/28/us/gab-robert-bowers-pittsburgh-synagogue-shootings.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=rank&module=package&version=highlights&contentPlacement=2&pgtype=sectionfront
Kavanaugh, Gorsuch, and Thomas v FDR New Deal style regulation?
The early phase of the Congressional hearings for Justice Kavanaugh involved some focus on his views about the power of administrative agencies. Democratic Senators in particular worried that Kavanaugh's judicial opinions were restrictive of the power of administrative agencies that carry out various government regulatory functions. Op-ed writer Eric Posner shares that concern, worrying that a conservative U.S. Supreme Court could bring us back to the kind of judicial thinking that prevailed prior to the FDR New Deal.
We recall that antipathy to regulations intended to protect workers and consumers dates back to at least 1905. Lochner v. New York was a 1905 Supreme Court case that blocked legislation limiting working hours for bakers. The theory of the Court involved support for freedom of contract. The years 1905 to 1936 have been called the “Lochner era,” ending with a partisan battle by Democrat President Franklin Delano Roosevelt.
Roosevelt wanted to stop the U.S. Supreme Court from blocking his regulatory efforts, so he threatened to use his popularity and power with Congress to increase the number of Justices. Such “court packing” would give Roosevelt the power to appoint sympathetic judges and change case decision outcomes. Faced with that challenge, the nine sitting Justices became more inclined to see things Roosevelt’s way. Case decisions on regulatory issues began to go Roosevelt’s way, and court packing was not pursued.
But Eric Posner is worried that a new Lochner era may soon be upon us. Following is an excerpt from his Op-Ed. DAR
The conservative assault on the administrative state has four elements.
First, Justices Gorsuch and Thomas want to revive a discredited legal rule that was invoked by the Supreme Court in 1935 and then abandoned. The “nondelegation doctrine” says that Congress may not “delegate” its legislative power to administrative agencies — in other words, authorize agencies to make policy through regulation. That doctrine is at issue again in the Gundy case, where the challengers argue that Congress gave the attorney general too much discretion to set the rules for sex offenders.
Second, Justices Gorsuch, Kavanaugh and Thomas want to undermine a rule called the Chevron doctrine, after a 1984 Supreme Court case. That rule says that when an agency regulation is based on a reasonable interpretation of a statute, courts should “defer” to the agency. The Chevron rule codified existing judicial recognition of the core idea of the administrative state. Specialists — in environmental hazards, in credit markets, in workplace safety — should regulate. Generalist judges, who end up disagreeing with one another and causing administrative confusion, should keep their hands off. The Chevron doctrine is at issue in the Nielsen case, where the challengers have urged the court not to defer to the government’s interpretation of the immigration statute.
Third, the conservative justices dislike the principle of agency autonomy and have looked askance at job protections for agency officials.
Fourth, the conservative justices have endorsed a novel interpretation of the First Amendment that protects businesses from regulation — from campaign finance regulation, labor regulation and even regulations that require them to disclose information to consumers.
What is the basis for this radical change in the law? Justices Kavanaugh, Gorsuch and Thomas claim to be “originalists,” who believe that the court should strike down laws that violate the original understanding of the Constitution. But the founders did not bar Congress from creating administrative agencies or think that the First Amendment protected businesses from commercial regulation.
Many liberals think that the conservative justices are cat’s paws of business. But their claims to the contrary, businesses do not oppose regulation. Businesses constantly beseech the agencies to regulate — not themselves, but the other businesses that they compete with or depend on, and are harmed by. The new conservative jurisprudence may help some businesses in the short run but ultimately will undermine the legal structure in which they flourish.
The answer is both obvious and depressing. The modern conservative jurisprudence is an exercise in nostalgia, a yearning for pre-New Deal America when, supposedly, government was less oppressive and people were freer than they are today. You can see this nostalgia in the homilies to olden times in Justices Gorsuch’s and Kavanaugh’s lectures — and their insistence that answers to today’s challenges can be found in a theory of government invented in the 18th century by men wearing breeches and powdered wigs.
https://www.nytimes.com/2018/10/23/opinion/supreme-court-brett-kavanaugh-trump-.html?action=click&module=Opinion&pgtype=Homepage
From Public Citizen
Sant'Ambrogio: Federal government filed only eight consumer protection cases in federal court in a recent year (click title for Public Citizen website)
Posted: 27 Oct 2018 09:58 AM PDT
by Jeff Sovern
According to Private Enforcement in Administrative Courts, 72 Vanderbilt Law Review, (Forthcoming), [https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3246738] by Michael Sant'Ambrogio of Michigan State, in the year ending March 31, 2017, the government filed only eight consumer protection cases in federal court, which contrasts with the 9,706 cases filed by private plaintiffs. Sometimes we see the argument that we don't need private enforcement of consumer laws because public enforcement is sufficient. If the numbers Sant'Ambrogio reports are accurate, they make that claim harder to make; indeed, they make it ludicrous. To be sure, many government cases are resolved short of filing in federal court, some government cases are resolved in internal administrative proceedings, and state agencies--especially AG's offices--also file consumer protection cases, but those categories are unlikely to come close to solving underenforcement problems.
Opinion: Patent Thickets Blocks More Affordable Drugs: The Case of Humira
October 23, 2018
From: https://www.thecppc.com/single-post/2018/10/23/How-Patent-Thickets-Blocks-More-Affordable-Drugs-The-Case-of-Humira?utm_campaign=06332353-a8ee-4aba-b739-ad057a76f56a&utm_source=so
The drug manufacturer AbbieVie Inc. has thrown up a formidable shield of patents around its drug Humira, preventing cheaper versions of the medicine from coming to market. This patent abuse should not be allowed to stand, and Congress, the Department of Health and Human Services, and the Food and Drug Administration should stop this manipulation and enact reforms to combat further abuses.
Humira has been around for over fifteen years and is one of the world's best selling drugs, with over $18 billion in global sales. It is used to treat inflammatory diseases-everything from rheumatoid arthritis to gut disorders-and it is extremely expensive, with a list price of over $50,000 per patient. Humira is also a biologic medicine, meaning it is made from living cells in a process similar to brewing. It accounts for over 60% of AbbieVie's revenue.
The main patent for Humira (which gives the drug manufacturer a monopoly on the drug) expired in 2016, so you would think that consumers could now benefit from biosimilars (cheaper versions of this medicine analogous to generic drugs). But AbbieVie has obtained over one hundred additional patents for Humira, an incredibly number for a single drug, and these patents extend into the 2020s and 2030s. They have 22 patents for various treatments, 14 patents for the drug's formulation, 24 patents on its manufacturing practices, and 15 other patents. Moreover, the company has filed suit to block two biosimilar versions approved by the FDA.
This is a prime example of what FDA Commissioner Scott Gottlieb criticized as "patent thickets" that block biosimilars and generic drugs and thwart competition, making consumers pay much higher prices. The biosimilar versions of Humira would sell at a 10% to 25% discount, which could help a lot of people struggling to afford their medicines.
As a result, AbbieVie still has a monopoly on Humira, and its price has risen to over $60,000 annually for some patients, and that earns over $12 billion in sales in the United States. And they are not the only company doing this. The drug company Johnson & Johnson has also created a thicket of over 100 patents around the anti-inflammatory drug Remicade to block cheaper generic drugs and increase its profits. Evidence shows that patent abuse, where companies file many different patents and make small changes to drugs to extend their exclusivity, is a serious and growing problem.
In Europe, where the legal environment is more friendly to patent challenges, over 20 biosimilar drugs have been approved since 2006, with immense benefits for patients. In the United States, these "patent thickets" have choked off much of the market, and only five versions are available.
One way to reduce patent abuse would be to pass the CREATES Act, a bipartisan bill that would make it easier for medicines whose patents have expired to be sold as cheaper generic versions. It allows generic drug companies to sue patented drug companies to compel them to provide samples they need to make these cheaper versions.
Patents should be used to reward substantive research and real innovation, not to maintain a monopoly and force consumers to pay skyrocketing prices.
From The ABA
DoNotPay app aims to help users sue anyone in small claims court--without a lawyer
By Jason Tashea
A new update to an existing chatbot app promises to allow users to "sue anyone in small claims court for up to $25,000 without the help of a lawyer," though early users warn of technical bugs and legal and ethical concerns.
Launched Wednesday, new updates to DoNotPay, a company that first made a splash by automating challenges to parking tickets in court without an attorney, will allow a user to sue anyone in small claims court in any county in all 50 states—without the need for retaining a lawyer. Previously only a web tool, the new product is also available for iPhone and will also include new features allowing users to find deals on prescription and over-the-counter drugs; make an appointment at the California Department of Motor Vehicles; and see if they are eligible to opt-in to various class-action settlements. The app also aims to fight unfair bank fees; earn refunds from ride-hailing companies; fix errors in a credit report; and dispute bank transactions.
An Android version is in the works.
“I want people to be addicted to fighting for their rights,” says Josh Browder, CEO of DoNotPay, who hopes his revamped app will be a one-stop shop for consumer protection issues.
The idea for the new app was born out of a project the company released last year, which helped people sue Equifax for up to $25,000 after the credit company’s 2017 data breach affecting 143 million people.
“Although lots of lawyers said it wasn’t possible,” said Browder in a statement reported by Yahoo Finance, “I was shocked when people won $9,000, $10,000 and $11,000 judgments. Even when Equifax appealed, the average person still prevailed.”
The new small claims suit feature, which Browder demoed at the Clio Cloud Conference last week in New Orleans, asks a user for their name and address and what the claim size is to determine whether it complies with a state’s limit, among other factors. It then generates a demand letter, creates a filing, helps serve notice of the suit and provides other support to usher users through the trial process. The app even generates suggested scripts and questions pro se litigants can use when they go to court. Parties are often not represented by an attorney in a small claim proceeding because it is either not permitted by law or because the amount in controversy is too low to justify the cost of an attorney.
Browder says the new application has three goals: Getting users what’s owed, fighting corporations and fighting bureaucracy.
Not just a small claims app, DoNotPay acquired Visabot to assist in the application of green cards and other visa applications. Previously, Visabot charged for many of its services (a green card application was $150, for example). All features on DoNotPay, including immigration, are free to users.
This isn’t to say that the new app won’t make money. While the revenue model is still a work in progress, Browder sees a future where after helping someone challenge a cellphone bill, they offer deals to switch carriers and take a commission based on conversions. While the app will require extensive user data to function, Browder says the venture-backed DoNotPay will not store or sell user data.
Of course, many of these features raise the specter of the unlicensed practice of law, a criminal offense in California, where Browder is based.
For his part, Browder is “a bit worried” about potential challenges. However, he believes that he can avoid some of these issues since his product is free to users. Further, he argues that the app is a free speech issue because its underlying code is speech. Code has been found to be speech on issues as broad as publishing encryption source code to the sharing of digital blueprints of 3-D printed guns.
“If you can 3-D print a gun,” he says, “you should be able to print a few documents.”
The legal profession is only one possible group to take issue with the new tool—the other are the users themselves. While the automated process was set up with the assistance of lawyers and paralegals, there’s no lawyer oversight of the app’s final products.
Asked how users should manage their dissatisfaction towards the product, Browder says it’s easy. “They can sue us with the app.”
In the day after the app’s release, several Twitter users took issue with technical and legal aspects of the tool. Nicole Bradick, a 2012 ABA Journal Legal Rebel, noted that the tool did not work properly. Gabriel Teninbaum, director of Suffolk University Law School’s Institute on Legal Innovation & Technology in Boston, said that he was given bad, inaccurate advice on Massachusetts law. Chase Hertel, counsel and deputy director for the ABA Center for Innovation, expressed concerns that the immigration feature did not fully inform people of various ongoing and evolving issues.
For his part, Browder says DoNotPay has pushed numerous updates to handle some of the technical issues.
Regarding the immigration feature, Browder defends it as the same tool it was before acquisition, which had “extremely positive reviews.” He adds that “we not only plan to maintain it, but also expand it.”
“While I can understand the skepticism of the legal establishment, I worked with public defenders in [Massachusetts] in detail to ensure it’s accurate,” says Browder over email regarding criticisms coming from Massachusetts. “Accuracy is an objective term and not opinion. Unless they can point to a precise and specific contradiction between the demand letter [DoNotPay] provides and [Massachusetts] law, it is false and defamatory to suggest it’s inaccurate.”
Updated on Oct. 11 after the app’s launch to add details about the issues users were reporting and Browder’s response.
Source: http://www.abajournal.com/news/article/file_a_smalls_claims_suit_anywhere_in_the_country_through_an_app
Restaurants, food allergies, and the law
For some, food allergies can mean that a take-out restaurant meal is a killer. Web-MD advises that people with serious food allergies should pick large corporate restaurants that are systematic about choosing food ingredients and providing information to customers. Small mom-and-pop operations have legal responsibilities to be careful, but are less likely to be systematic about knowing their ingredients and communicating with vulnerable customers. A recent prosecution for criminal negligence in the UK illustrates the problem. Owners of a small Indian-food carry out were convicted of criminally negligent manslaughter after the tragic death of a 15 year old customer with a serious peanut allergy.
Sources:
https://www.webmd.com/allergies/features/food-allergies-tips-for-eating-out#4
https://nam02.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.itv.com%2Fnews%2F2018-10-26%2Ftakeaway-bosses-guilty-of-manslaughter-by-gross-negligence-after-nut-allergy-death-of-15-year-old-megan-lee%2F&data=02%7C01%7C%7C589861fef4f44c85de5f08d63cc610ce%7C84df9e7fe9f640afb435aaaaaaaaaaaa%7C1%7C0%7C636763218705484378&sdata=oFXNuFG8U9aqiobR8Ct7g3yBRBaUfnTu1ZJVL8n90Hk%3D&reserved=0
Posted by Don Allen Resnikoff
David Boies, attorney for Elizabeth Holmes and her company Theranos: information on aggressive lawyering that you won’t learn in a law school
In his book Bad Blood: Secrets and Lies in a Silicon Valley Startup (Knopf), Wall Street Journal reporter John Carreyrou reviews his investigative reporting about the bad behavior of Elizabeth Holmes and her company Theranos. It was Carreyrou who broke the story in the Wall Street Journal that Theranos was essentially a scam, falsely promising new technology that yielded valuable analytical results from a pin prick of blood. In fact the new technique was not reliable. Elizabeth Holmes ended up being charged by the SEC with defrauding investors.
Theranos board members included some famous people, such as Henry Kissinger and George Shultz. When Theranos needed legal counsel, Elizabeth Holmes hired the well known firm of Boies, Schiller, and Flexner, led by David Boies.
An interesting aspect of the Carreyrou book is its focus on the tactics of David Boies and his firm. Author Carreyrou, who apparently is not a lawyer himself, expresses surprise and dismay about aggressive tactics used by the Boies firm.
What Carreyrou seems to find most upsetting is the Boies firm’s aggressive behavior toward whistle-blowers who exposed Theranos, including Tyler Shultz, the grandson of George Shultz. Tyler was an important early source for Carreyrou’s investigative reporting.
In a book chapter called “The Ambush,” Carreyrou recounts how Tyler visited his grandfather to discuss the grandfather’s concern that Tyler was speaking to the press and saying unflattering things about Theranos. Tyler had specifically asked that no lawyers be present for the meeting, but grandfather George Shultz had two Boies partners waiting out of sight in an upstairs room.
After some conversation with Tyler that George Shultz found unsatisfactory, the grandfather brought the lawyers downstairs. The lawyers told Tyler that they had identified him as the person who had leaked Theranos information to the Wall Street Journal. The lawyers handed Tyler a temporary restraining order, a notice to appear in court, and a letter saying that Theranos believed Tyler had violated confidentiality obligations. The lawyers communicated that Theranos was prepared to file a law suit.
The next day Tyler met again with a Boies firm lawyer, who asked Tyler to sign an affidavit swearing he had not spoken to a reporter, and to name anyone he knew who did. Tyler did not sign. Instead he ended the meeting and consulted with a lawyer of his own.
Tyler then engaged in some days of lawyer-led negotiations. The topics were the affidavit the Boies firm asked for, and the threats of litigation. Tyler eventually agreed to sign an affidavit saying he had spoken to the press, but he refused to include any information about other press sources.
What happened next, says Carreyrou, is that Boies Schiller resorted to the “bare-knuckles tactics it had become notorious for. Brille [the Boies firm attorney] let it be known that if Tyler didn’t sign the affidavit and name the Journal’s sources, the firm would make sure to bankrupt his entire family when it took him to court. Tyler also received a tip that he was being surveilled by private investigators.”
Boies Schiller also put pressure on other sources for Carreyrou’s reporting about Theranos: “Boies Schiller’s Mike Brille sent a letter to Rochelle Gibbons threatening to sue her if she didn’t cease making what he termed ‘false and defamatory’ statements” about Theranos.
The Wall Street Journal itself was the target of legal hardball. The Journal received a formal letter from David Boies: “Citing several California statutes, the letter sternly demanded that the Journal 'destroy or return all Theranos trade secrets and confidential information in its possession.’” That was followed a few days later by a 23 page letter from Boies to the Journal threatening a lawsuit.
The day came when David Boies met with Wall Street Journal people in an effort to squelch publication of Carreyrou’s investigative article about Theranos. The Boies effort was unsuccessful. The Carreyrou article on Theranos’ bad behavior ran on October 15, 2015.
For Tyler Shultz, the price for being a whistle blower included $400,000 in legal bills, estrangement from his famous grandfather, and much personal anguish.
What lessons can be drawn from Carreyrou’s description of the Boies firm’s practices? Not that Boies or his firm’s lawyers necessarily did anything illegal or unethical. The Carreyrou book does not provide enough information to justify that conclusion. It may be, for example, that David Boies and his firm had great faith in Theranos technology.
But even in the absence of clear evidence of illegality or unethical lawyer behavior there is significance in Carreyrou’s sense of outrage. Careyrou feels that “bare-knuckles” lawyering was used on behalf of Theranos in an effort to suppress information from Tyler Shultz and Carreyrou’s other sources of information. Also, that aggressive lawyering was used in an effort to squelch publication of his reporting. A main element of the bare-knuckles lawyering described by Carreyrou is the threat of legal liability and litigation expense.
Even where it is legal and ethical, such aggressive lawyer behavior should be examined further by those interested in legal policy. The behavior suggests a problem: that the complexity of laws and legal proceedings may have the unintended side effect of facilitating bullying by parties with deep legal resources. The targets of such bullying may be individuals like Tyler Shultz, or small companies. Bullying based on unmatched deep resources can occur, for example, in the context of landlord-tenant disputes involving small commercial tenants, and franchisor-franchisee disputes where the franchisees have limited resources.
Bare-knuckles bullying by lawyers that is within the bounds of legality and permissible ethics is nevertheless concerning. Among other bad effects, bullying may result in information about wrongdoing being suppressed, inappropriate financial burdens being imposed on targets of bullying, and failure to fairly resolve disputes among parties.
This posting is by Don Allen Resnikoff, who takes full responsibility for its contents
Theodore Frank, professional class action settlement objector
On October 31, attorney Theodore Frank will argue his own case before the U.S. Supreme Court. The case concerns objection by Mr. Frank and the non-profit he heads, Center for Class Action Fairness, to a class action settlement involving Google as Defendant.
The Google class action settlement is one of many class action settlements Mr. Frank has objected to. Objecting to class action settlements is Mr. Frank’s profession.
Mr. Frank’s Google class action settlement case arises from an $8.5 million settlement between Google and class action lawyers. The class action complaint says that Google violated users’ privacy rights.
Under the settlement, the lawyers are to be paid more than $2 million, but members of the class they represented get nothing. Instead Google agreed to make contributions to institutions concerned with privacy on the internet, including centers at Harvard, Stanford and Chicago-Kent College of Law.
A divided three-judge panel of the United States Court of Appeals for the Ninth Circuit, in San Francisco, upheld the settlement. The opinion can be found at http://www.scotusblog.com/wp-content/uploads/2018/04/17-961-opinion-below.pdf In dissent, Judge J.Clifford Wallace expressed concerns about the payments.
Google’s position is that while class action settlements can be bad, the particular settlement is good. The Google brief on the Writ of Certiorari to the Supreme Court is at https://www.supremecourt.gov/DocketPDF/17/17-961/61166/20180829194522714_17-961%20bs.pdf
The story of Mr. Frank as objector to the Google settlement draws attention to the role that professional class action settlement objectors play as class action spoilers. Not surprisingly, there are those who are highly critical of the objectors’ spoiler role, and others who see at least some objectors as a force for good, limiting class actions that lack social value.
Commenters have observed that there is a cottage industry of professional objectors: attorneys who earn a livelihood by opposing settlements on behalf of unnamed class members. Professional objectors may threaten to file meritless appeals of final judgments merely to extract a payoff. Class attorneys have a strong incentive to pay objectors to withdraw their appeal to avoid the cost of delay.
Professional objectors are widely unpopular, “perhaps the least popular parties in the history of civil procedure,” according to one observer. A judge has observed that “[f]ederal courts are increasingly weary of professional objectors.”
Theodore Frank’s legal practice is unusual in that he and the non-profit he heads do not take payments from Plaintiffs’ counsel. A Bloomberg-BNA article explains that he does not accept “green mail,” a name for payments demanded by, and made to, an objector to drop an objection to a settlement.
“That’s always been the position of the Center for Class Action Fairness,” Frank said to Bloomberg-BNA about his organization. “Not only is that the position, but we’re looking for opportunities for courts to order divestments of green mail payments.”
“We lose money on every objection,” Frank told Bloomberg BNA. “If we weren’t doing it as a non-profit, we couldn’t do it. And if we didn’t have generous donors, and attorneys taking 50-, 60- and 70-percent pay cuts, we couldn’t do what we do.”
The bottom line point is that there can be great value in legitimate and well grounded objections to class action settlements made in good faith. It polices the settlement process. The policy challenge is to allow such beneficial objections while suppressing extortionate green mail objections made in bad faith.
Credits: Much of the content of this comment is drawn from The New York Times story at https://www.nytimes.com/2018/10/15/us/politics/theodore-frank-supreme-court.html Also, the article by Lopatka-Smith, which is at https://judicialstudies.duke.edu/sites/default/files/centers/judicialstudies/class-action_objectors_0.pdf Also, The Bloomberg-BNA article at https://www.bna.com/ted-frank-lightning-n57982069046/
This comment is posted by Don Allen Resnikoff, who takes full responsibility for its content
An Interview with Diana Moss (American Antitrust Institute)
by Jon Baker (American University)
Ahead of the inaugural conference on Challenges to Antitrust in a Changing Economy, at Harvard Law School on November 9th, CPI reached out to Jon Baker (Professor, American University) and Diana Moss (President, American Antitrust Institute). They will participate in “The Consumer Welfare Standard” panel, together with Rob Atkinson (President, Information Technology and Innovation Foundation), Renata Hesse (Partner, Sullivan & Cromwell), and Einer Elhauge (Professor, Harvard Law School).
In this exclusive interview, Diana Moss has responded to three questions asked by Professor Baker on the consumer welfare standard and its current application in US antitrust law.
This conference is co-organized by CPI and CCIA. To see the full program and register free, please click here.
Following is Q and A # 1. For the other 2, see
https://www.competitionpolicyinternational.com/cpi-talks-on-the-consumer-welfare-standard/?utm_source=CPI+Subscribers&utm_campaign=b47147cbd9-EMAIL_CAMPAIGN_2018_10_20_07_01&utm_medium=email&utm_term=0_0ea61134a5-b47147cbd9-236508653
Some progressives say that antitrust rules pay insufficient attention to harms to suppliers, including workers; harms along competitive dimensions other than price and output, such as quality or innovation; and the ways that the exercise of market power may undermine non-economic values, as by creating anti-democratic political pressures or limiting the opportunity of small businesses to compete. To what extent are these concerns justified?
Today’s debate over the role of antitrust has generated a lot of blue sky thinking about the state of U.S. antitrust. I think of this debate as a very different process from that of crafting constructive reform proposals. Actual reform requires knowledge of how the laws and standard have been and can be applied by enforcers and the courts. For example, we know that the consumer welfare standard can address the price and non-price dimensions (e.g., quality and innovation) of competition. The standard also reaches to the harms resulting from the exercise of market power anywhere along the supply chain (e.g., consumers and workers). The control of economic power serves to limit barriers to entry and exclusionary conduct that targets smaller innovative rivals and in stemming the growth of political power.
In sum, if enforcers and courts used the full scope of the law and standard, antitrust would today be more effective in defending and promoting our markets. The reality has been different, namely, a narrow interpretation of the consumer welfare standard under the conservative ideology has held sway for decades. In response to this, some proposals advocate for wholesale reforms that would essentially do away with any standard. This risks reforms that divert the antitrust laws to purposes for which they are not designed and could exacerbate the current state of under-enforcement.
As a progressive (as I will articulate more in my panel remarks), I think of constructive reform as including a more nuanced approach through a package of complementary proposals. These include: (1) legislative clarification of the full scope of the law and increased appropriations for the agencies for enforcement; (2) guidance from the agencies that articulates a “dynamic and symmetric” consumer welfare standard (describes in #2 below) and requirements for implementing it; and (3) efforts to strengthen or introduce presumptions of illegality in mergers and some forms of conduct.
DC public restrooms legislation proposed
Marcy Bernbaum, a retired USAID official, and a D.C. resident, has a mission of providing help to the most disadvantaged citizens. A particular campaign she has focused on is providing access to public toilets in the District of Columbia.
Her efforts, and the efforts of many others, have now resulted in a legislative proposal: D.C. Council Bill 22-0223 has the goal of installing and maintaining clean, safe, and available public restrooms. Support has come from churches, advocacy organizations, community associations and others.
Here is an excerpt from Marcy Bernbaum’s op-ed in the Washington Post. https://www.washingtonpost.com/opinions/why-does-dc-have-so-few-public-restrooms/2017/12/15/951e3fde-cfcf-11e7-9d3a-bcbe2af58c3a_story.html?utm_term=.33069c2c8867
We did an inventory of restrooms in private facilities in five D.C. neighborhoods: Gallery Place, Dupont Circle, Georgetown, the K Street corridor and Columbia Heights. And we carried out a comprehensive search to identify public restrooms open during the day as well as those open 24/7.
To our amazement, we found that there are only three public restrooms in all of the District that are open 24/7: those at Union Station, the Lincoln Memorial and the Jefferson Memorial — and there are no signs telling you how to get to them. Imagine it is late at night. You are walking down the street and urgently have to go to the bathroom. If you can't make it and experience the misfortune of having no choice but to "go" outside and are caught by a police officer, you risk receiving a fine of up to $500, up to 90 days in jail or both. During the day, off the Mall there are only six public restrooms in downtown Washington, their hours are limited, and there are no signs to tell you where they are.
The situation isn't much better when it comes to finding private facilities with restroom access. Forty-two of the 85 private facilities we visited in early 2015 permitted people who weren't patrons to use their restrooms. When we visited the same facilities in early 2016, the number had dwindled to 28. And when we returned to the same facilities in mid-2017, only 11 (or 13 percent) permitted entry to non-patrons.
In April, D.C. Council members Brianne K. Nadeau (D-Ward 1), David Grosso (I-At Large), Elissa Silverman (I-At Large) and Robert C. White Jr. (D-At Large) introduced Bill 22-0223, the Public Restroom Facilities Installation and Promotion Act of 2017.
The bill would work toward creating public restrooms and establish an incentive for private businesses to make their restrooms available to the public.
A business tax measure to fund homelessness services
is on the ballot for San Francisco voters in San Francisco County, California, on November 6, 2018.
A yes vote is a vote in favor of authorizing the city and county of San Francisco to fund housing and homelessness services by taxing certain businesses at the following rates:
- 0.175 percent to 0.69 percent on gross receipts for businesses with over $50 million in gross annual receipts, or
- 1.5 percent of payroll expenses for certain businesses with over $1 billion in gross annual receipts and administrative offices in San Francisco.
A no vote is a vote against authorizing the city and county of San Francisco to tax businesses at the above rates to fund housing and homelessness services.
Credit: balletopedia.org
Not all businesses support the San Francisco tax proposal. See https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=6&cad=rja&uact=8&ved=2ahUKEwiClq2V9pPeAhXSwFkKHfoWCqEQFjAFegQIBRAB&url=https%3A%2F%2Fwww.businessinsider.com%2Fmarc-benioff-and-jack-dorsey-clash-over-san-francisco-homeless-measure-prop-c-2018-10&usg=AOvVaw0j7wtU1oE5T-AnRBnwaD3Q
Regulators have been cracking down on abusive rent-to-own deals
offered by operators of manufactured home communities, otherwise known as trailer parks, in which people shell out thousands of dollars for run-down homes that they never actually get to buy
The New York attorney general’s office is expected to announce a settlement that could give hundreds of people who signed rent-to-own leases with a trailer park the right to tear up those deals and recoup any deposits they paid, according to two people briefed on the matter who were not authorized to speak publicly.
The settlement is with eight trailer park operators, including two publicly traded “real estate investment trusts,” that run more than 100 parks from Long Island to upstate New York. The settlement would end a yearlong investigation by the attorney general’s office, which had received dozens of complaints from renters about misleading sales pitches by park operators, the people said.
Private equity firms and large real estate investors have been looking to buy trailer parks and combine them into larger companies. They are attractive investments because prefabricated homes are relatively cheap to produce and maintain. New manufactured homes often sell for as little as $70,000.
One of the companies settling with New York is Sun Communities, which has a market value of $9 billion and whose shares have soared nearly a thousand percent in the last decade. Sun operates more than 300 parks for manufactured homes and recreational vehicles.
Sun representatives didn’t respond to a phone message seeking comment.
The contracts, which typically last seven to 10 years, sometimes referred to rent payments as “mortgage payments,” even though the tenants would take possession of the property only if they made a large payment at the end of the contract.
The state negotiated some of the settlement terms with the New York Housing Association, which represents manufactured home parks in New York. Mark Glaser, a lawyer for the association, said the group had “cooperated with the attorney general’s office and was pleased to help facilitate a resolution of the issues under review.”
The terms are similar to ones that led a number of state attorneys general, including those in Wisconsin and Pennsylvania, to sue rent-to-own housing firms. Regulators in those states have said the rent-to-own contracts were deceptive.
From https://www.nytimes.com/2018/10/18/business/trailer-park-rent-settlement.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=rank&module=package&version=highlights&contentPlacement=2&pgtype=sectionfront
The campaign for Proposition 10, a ballot initiative that would loosen California state restraints on local rent control laws.
The effort has stoked a battle that has already consumed close to $60 million in political spending, a sizable figure even in a state known for heavily funded campaigns.
Depending on which side is talking, Proposition 10 is either a much-needed tool to help cities solve a housing crisis or a radically misguided idea that will only make things worse. Specifically, it would repeal the Costa-Hawkins Rental Housing Act, which prevents cities from applying rent control laws to single-family homes and apartments built after 1995.
The initiative drive builds on the growing momentum of local efforts to expand tenant protections.
From: https://www.nytimes.com/2018/10/12/business/economy/california-rent-control-tenants.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=rank&module=package&version=highlights&contentPlacement=2&pgtype=sectionfront
Washington Post says dark money from both left and right groups participated in Kavanaugh public advocacy campaigns
From the Post article:
Judicial Crisis Network is a 501(c)(4) advocacy organization — a “dark money” group that is not required to disclose the sources of its funding, regardless of the industry groups or individual donors behind them. It poured at least $5.3 million into its pro-Kavanaugh advertising campaign, much of it targeting vulnerable Senate Democrats in red and swing states. At least $1.5 million of that was spent defending Kavanaugh after Christine Blasey Ford went public with her allegation of sexual assault against him.
A liberal group of a similar stripe, Demand Justice, spent at least $700,000 of a planned $5 million campaign trying to scuttle Kavanaugh’s nomination.
https://www.msn.com/en-us/news/politics/collins-blasted-‘dark-money’-groups-in-kavanaugh-fight-one-just-paid-to-thank-her-for-her-vote/ar-BBOkLwr?ocid=spartandhp
From DC AG Racine: OAG's "Cure the Streets" program
Earlier this summer, the District saw a tragic spike in violence where 13 people were shot in 11 separate incidents over Memorial Day weekend. In response, the Council gave OAG funds to set up a pilot program for violence interruption. In just four months, OAG has launched “Cure the Streets” in the District and it’s already showing some signs of progress.
Cure the Streets is operating in two pilot sites in Wards 5 and 8, which have some of the highest rates of gun violence in the city. This pilot program uses a proven, public-health approach to treat violence as a disease, focusing on three main actions:
Interrupt: Interrupt potentially violent conflicts by preventing retaliation and mediating simmering disputes;
- Treat: Identify and treat individuals at the highest risk for conflict by providing support services and changing behavior; and
- Change: Engage communities in changing norms around violence.
Although Cure the Streets is just getting started, it’s already making a positive difference in these communities. We must continue investing in these data-driven, proven solutions to stop violence before it happens and save lives in the District.
Karl A. Racine
Attorney General
AAI Statement: DOJ's Approval of CVS-Aetna Merger Imperils Competition and Consumers in Critical Parts of Healthcare Supply Chain
Today [10/10/2018] , the U.S. Department of Justice (DOJ) approved the vertical merger of leading retail pharmacy and pharmacy benefits manager (PBM) CVS with major health insurer Aetna. "While the DOJ obtained divestitures to address the horizontal overlap in CVS's and Aetna's Medicare Part D individual prescription drug plans, it did nothing to address the significant vertical competitive problems raised by the combination," said AAI President Diana Moss.
The approval of CVS-Aetna comes on the heels of the DOJ's recent approval of a similar vertical merger of PBM Express Scripts and heath insurer Cigna.
"Within a short period of time, antitrust enforcers have green-lighted a fundamental restructuring of important segments of the healthcare industry in the U.S.," said Moss. "Competition now depends almost entirely on having 'enough' rivalry between integrated PBM-insurers. This 'roll-the-dice' model of competition stands in stark contrast to a model of standalone PBMs competing hard to gain insurers' drug plan business and insurers aggressively seeking out competitive PBM services."
In a March 26, 2018 letter to the DOJ, AAI raised serious concerns about the competitive effects of the proposed merger. The deal creates a large, vertically integrated PBM-insurer that operates in upstream and downstream markets featuring only a few rivals. AAI also provided testimony at the California Department of Insurance hearings on the proposed merger.
"We are disappointed that the DOJ did not address a merged CVS-Aetna's enhanced incentives to use their market positions to disadvantage rival PBMs, independent pharmacies, and rival health insurers," said Moss. "Competition will undoubtedly suffer, as will consumers through higher prices, lower quality, less innovation, and less choice," Moss added, noting that any efficiencies claims would have to be monumentally large to overcome significant competitive concerns. AAI says the DOJ's decision highlights the need for new guidelines on vertical mergers.
AAI's advocacy against the CVS-Aetna merger explains that giant PBM-insurer organizations created by the recent swath of merger approvals will make it harder for companies with more innovative business models to enter markets. Because of widespread vertical integration, new entrants will be forced to enter at both the PBM and insurer levels to be viable competitors.
"If ever there were a vertical merger that should have been challenged by antitrust enforcers, this would be it," said Moss. High levels of concentration in the PBM and insurer markets, demonstrated exclusionary conduct by one of the merging parties, and past enforcement actions involving consolidation in these important markets are all powerful indicators that the deal should have been deemed illegal.
Wash Post Op-Ed on Pay to Protest
By Mara Verheyden-Hilliard and
Carl Messineo
September 11
Mara Verheyden-Hilliard is executive director of the Partnership for Civil Justice Fund. Carl Messineo is the group’s legal director.
For the first time, the U.S. government wants demonstrators to pay to use our parks, sidewalks and streets to engage in free speech in the nation’s capital. This should be called what it is: a protest tax.
This is a bold effort by the Trump administration to burden and restrict access to public spaces for First Amendment activities in Washington. If enacted, it would fundamentally alter participatory democracy in the United States.
Last month, Interior Secretary Ryan Zinke announced the administration’s radical, anti-democratic rewriting of regulations governing free speech and demonstrations on public lands under federal jurisdiction in Washington. Under the proposal, which is open to public comment, the National Park Service (NPS) would charge protesters “event management” costs. This would include the cost of barricades and fencing erected at the discretion of police, the salaries of personnel deployed to monitor the protest, trash removal and sanitation charges, permit application charges and costs assessed on “harm to turf” — the effects of engaging in free speech on grass, as if our public green spaces are for ornamental viewing.
And it goes beyond just the Mall. Want to protest in front of the Trump hotel on Pennsylvania Avenue? Under this proposal, you’ll have to take out your checkbook, because the NPS maintains control over the broad sidewalks of Pennsylvania Avenue. In addition to the upfront costs to even request a permit, you may be billed for the cost of barricades erected around the hotel — fencing you didn’t ask for but that the hotel wants.
Such a “pay to protest” plan will probably be challenged in court. The right to petition the government for a redress of grievances cannot be burdened by such charges. And discretionary fees or measures that can serve as a proxy for content-based discrimination are unconstitutional.
This is just one element of a larger initiative to close off public space to silence dissent by both financial and physical restriction. The NPS has, at the same time, quietly sneaked into its new regulatory proposal a plan to essentially close the iconic White House sidewalk to protest, leaving only five feet for a narrow pedestrian walkway.
During the Vietnam War, the Nixon White House was surrounded by buses to block protesters from approaching the sidewalk. Now, the government seeks to remove the protests by taking the public spaces out from under our feet. What’s next, closing Lafayette Square?
The NPS describes our democratic rights as too costly for our democracy. An NPS spokeswoman justified the measure as cost recovery, pointing to last year’s Women’s March as having imposed “a pretty heavy cost” on the government.
Free speech is not a cost. It is a value. It is a fundamental pillar of democracy.
For the full op-ed, see https://www.washingtonpost.com/opinions/the-trump-administration-wants-to-tax-protests-what-happened-to-free-speech/2018/09/11/70f08bfa-b5e1-11e8-b79f-f6e31e555258_story.html?noredirect=on&utm_term=.8d0af0c6ddc1
A second look at The Case Against the Supreme Court, the 2014 book by Erwin Chemerinsky
This seems like a good moment to take down from the bookshelf Erwin Chemerinsky’s 2014 book, The Case Against the Supreme Court (Viking, 386 pages).
The book argues that over time the U.S. Supreme Court’s decisions have frequently been wrong. The wrong case decisions are often a product of the ideology of the Justices who decide the cases. For Chemerinsky, ideology means the “values, views, and prejudices” of the Justices. Those values, views and prejudices are not necessarily the same as those of a particular political party, but often overlap. There have been some moments when the Court’s wrong decisions were partisan in the sense of favoring a particular political party’s agenda.
The author’s suggestions for structural reform of the Court are mild. He does not, for example, advocate doing away with the Court's power to review laws for their constitutionality. He would have Congress impose term limits, perhaps 18 years, so that the prevailing ideologies of a particular moment in history are less likely to persist for decades.
But Chemerinsky would like to see Justices appointed who share his own strongly felt ideological views, which he is not reluctant to express. He believes, for example, that the Justices should permit latitude so the government can use regulations to aid workers and consumers. He believes the Justices should allow the government to protect ethnic minorities. He opposes “originalist” approaches to construing the Constitution.
Chemerinsky is not recommending that operatives for a particular political party he favors be appointed as Justices – very few people have that point. But it seems likely that he would subscribe to the popular observation that elections matter.
Turning to some of the history recounted by the author, one point of ideology that has caused harm concerns race. The “separate but equal” doctrine justifying racial separation was the law of the land for many decades. The doctrine was abandoned by the U.S. Supreme Court only in 1954, in Brown v. Board of Education, which Chemerinsky hails as a high point of good Supreme Court decision making. But it took the Court a long time to get there -- decades. And Chemerinsky finds the Court’s follow-up on the Brown decision to be less than perfect.
And, Chemerinsky points out, the ideology of the judges deciding Brown was crucial. The deciding judges believed in racial equality and were not “originalists.” They did not limit interpretation of the Constitution to what the framers originally intended. Recall that framer Thomas Jefferson (who wrote "all men are created equal") owned slaves, and engaged in sexual predation.
Among other points of ideology that have caused harm is hostility to ethnic minorities such as the Japanese. In Korematsu v. United States, the Court, in a 6-3 decision, upheld evacuation and internment of Japanese-American citizens. Chemerinsky points out that the decision was highly offensive in its reliance on ethnicity alone to decide who is a threat to national security.
Another important point of ideology is antipathy to regulations intended to protect workers and consumers. Lochner v. New York was a 1905 Supreme Court case that blocked legislation limiting working hours for bakers. The theory of the Court involved support for freedom of contract. The years 1905 to 1936 have been called the “Lochner era,” ending with a partisan battle by Democrat President Franklin Delano Roosevelt.
Roosevelt wanted to stop the U.S. Supreme Court from blocking his regulatory efforts, so he threatened to use his popularity and power with Congress to increase the number of Justices. Such “court packing” would give Roosevelt the power to appoint sympathetic judges and change case decision outcomes. Faced with that challenge, the nine sitting Justices became more inclined to see things Roosevelt’s way. Case decisions on regulatory issues began to go Roosevelt’s way, and court packing was not pursued.
This article is posted by Don Allen Resnikoff, who takes entire responsibility for the views expressed.
- States have important role in CFPB suit against student lender Navient
The states’ lawsuits will take on increased importance if the federal consumer bureau pursues its case in a weak manner, or drops its case against Navient.
See: https://www.nytimes.com/2018/10/07/business/student-loans-navient.html
From: DMN:
Ticketmaster Is Now In the Crosshairs of the U.S. Federal Trade Commission
Weeks after an explosive undercover report revealed that Ticketmaster works closely with scalpers to sell their second-hand tickets; the FTC has announced a workshop to investigate how online ticketing is handled.
Ticketmaster parent company Live Nation witnessed its stock price drop as much as 5.5% after the report of the workshop. But a little damage control helped to recover some of those losses.
So what’s the FTC doing, exactly?
The story continues here. -- https://www.digitalmusicnews.com/2018/10/05/ticketmaster-scalper-federal-trade-commission-ftc/
Chinese ride-share company Didi is at the center of the ride-hailing web that it and its investor SoftBank have spun.
Truces and alliances between regional players may follow.
Didi has invested in Lyft, Uber through the deal they cut in August 2016, Southeast Asia’s Grab, India’s Ola, and the Middle East’s Careem. It put $100 million into and later acquired Brazil’s 99. Didi was last valued at $57 billion during its $4.6 billion financing in December 2017, and is reportedly in talks with South Korea’s Mirae Asset Financial Group to raise an additional $263 million.
SoftBank also has a stake in most of these ride-hailing companies, positioning it to broker truces and alliances between regional players, like Uber’s recent sale of its Southeast Asia operations to Grab. According to data from industry research firm PitchBook, SoftBank has invested five times in Ola, four times in Didi, four times in Grab, once in Uber, and once in 99. It’s unclear how much these investments total, but they are well into the billions. SoftBank is playing the ride-hailing version of Risk, but it also owns a piece of all the players. So long as a single company controls a country or region, so that it’s not burning money to compete, SoftBank seems likely to be happy with the outcome.
That said, insofar as SoftBank has picked a single winner, it seems like Didi. It’s notable that Didi has continued to expand globally even as Uber has now repeatedly withdrawn from key international markets, first in China, then Russia and most recently in Southeast Asia. SoftBank has also not-so-subtly hinted that it would like to see Uber retreat. Rajeev Misra, a SoftBank board director who also sits on Uber’s board, told the Financial Times in January that Uber should focus on its core markets, which he identified as the US, Europe, Latin America, and Australia. Uber CEO Dara Khosrowshahi said Uber would “invest aggressively” in the Southeast Asia business about a month before it sold to Grab.
From https://qz.com/1261177/softbanks-winner-in-ride-hailing-is-chinas-didi-chuxing-not-uber/
States Urge Justices To Flip Illinois Brick In Apple Case -- See briefs below:
Brief for states:
https://dlbjbjzgnk95t.cloudfront.net/1088000/1088314/states.pdf
Excerpt:
This case presents a rare opportunity to revisit the controversial holding in Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977). The Court can overrule its precedents based on briefing by amici, and it has done so before. The Court should do so again here.
I. Section 4 of the Clayton Act directs that “any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefor . . . and shall recover threefold the damages by him sustained.” 15 U.S.C. § 15(a). It is widely accepted that consumers can be injured when manufacturers take concerted action to fix supracompetitive prices and distributors of the overpriced products pass on some or all of the overcharges to end users.
Before 1977, when this Court decided Illinois Brick, lower courts generally allowed consumers who purchased goods made by an antitrust violator to prove that they had been harmed by overcharges passed on to them by intermediaries in the distribution chain. Illinois Brick, however, held that an “indirect purchaser” is categorically forbidden from attempting to prove damages from an antitrust violation. 431 U.S. at 726. Instead, “the overcharged direct purchaser should be deemed for purposes of section 4 to have suffered the full injury from the overcharge.” Id.
The Court admitted that this conclusive presumption “denies recovery to those indirect purchasers who may have been actually injured by antitrust violations.” Id. at 746. The Court did not identify any statutory text denying recovery to “any person who shall be injured,” 15 U.S.C. § 15(a), by an antitrust violation. Instead, the Court reasoned that “the legislative purpose” of “encouraging vigorous private enforcement of the antitrust laws” was “better served” by a ban on “attempting to apportion the overcharge among all that may have absorbed a part of it.” Ill. Brick, 431 U.S. at 745-46.
Brief for AAI:
https://dlbjbjzgnk95t.cloudfront.net/1088000/1088314/americanantitrust.pdf
Brief for Open Markets:
https://dlbjbjzgnk95t.cloudfront.net/1088000/1088314/http-www-supremecourt-gov-docketpdf-17-17-204-65344-20181001145735965_17-204-20amicus-20bom-pdfa-pdf.pdf
Could you be seated next to someone's service horse on your next Alaska Airlines flight?
Alaska Airlines News release
SEATTLE, Aug. 30, 2018 /PRNewswire/ -- Alaska Airlines is updating its support animal policy, limiting the number and type of emotional support animals and type of service animals a customer can travel with on all aircraft.
The updated policy aligns with recent airline industry changes and provides clear guidance and a consistent and safe travel experience for guests and employees. This change is being made to protect the health and safety of passengers and crew while maintaining a safe and orderly operation.
Summary of the new policy, which goes into effect for all travel occurring on or after Oct. 1, 2018, regardless of when booked:
- May bring only one emotional support animal on the flight.
- Emotional support animals will be limited to either a dog or cat. No other species of animal will be permitted.
- For the safety of other passengers, all emotional support animals must be in a carrier or leashed at all times.
- Must provide appropriate documentation and 48-hours advance notice, per our existing policy.uests traveling with an emotional support animal:
- Guests traveling with a trained service animal:
- Service animals (now includes psychiatric service animals) will be limited to either a dog, cat or miniature horse.
- Service animals must be under the control of their owner at all times.
- Alaska Airlines accepts fully trained psychiatric service animals as trained service animals—no documentation is required for service animals.
Customers traveling with one or more emotional support animals after Oct. 1 have the option to limit their travel to only one emotional support animal, to travel without their animal, or to receive a full refund if they no longer wish to travel.
Learn more about the support animal policy at alaskaair.com.
CONTACT: Media Relations, (206) 304-0008, newsroom@alaskaair.com
URL: https://newsroom.alaskaair.com/news-releases?item=123851
- From Health Affairs Blog
September 13, 2018
URL: 10.1377/hblog20180907.685440
- erpt from article:
Limited access to reliable transportation causes millions of Americans to forgo important medical care every year. Transportation barriers are most prominent among the poor, elderly, and chronically ill—populations for whom routine access to ambulatory and preventive care is most important.
Payers that focus on vulnerable populations have taken steps to address transportation barriers by providing non-emergency medical transportation (NEMT) benefits to select beneficiaries. A majority of Medicare Advantage (MA) plans and state Medicaid programs currently provide NEMT benefits.
NEMT benefits are typically administered by specialized brokers that coordinate and dispatch private cars, taxis, or specialized vehicles to bring patients to medical appointments. Multiple reports have highlighted challenges with traditional approaches to NEMT delivery, including poor customer service, inadequate responsiveness, and fraud and abuse. In the face of these challenges, payers and health care delivery organizations have been experimenting with new strategies for delivering NEMT.
An approach that has attracted considerable attention is the use of transportation network companies (TNCs)—such as Uber or Lyft—to provide NEMT services. NEMT brokers such as such as American Logistics Corporation, National MedTrans, American Medical Response, and Access2Careare all now piloting TNC-based rides. New companies, such as Circulation and RoundTrip, have emerged to help hospitals and health plans offer TNC-based rides. And both Lyft and Uber are contracting directly with health plans and delivery organizations to provide NEMT services.
Despite the proliferation of these programs, there is scant data regarding their impact. Here we report the results from a large-scale, system-wide implementation of Lyft-based NEMT services at CareMore Health.
As is typical for MA plans, CareMore contracts with brokers to administer its NEMT benefits. Historically, these NEMT brokers arranged for rides using private car services. In 2016, CareMore launched a pilot program to evaluate the impact of Lyft-based C2C rides on patient experience and costs. The pilot ran for two months at select CareMore locations in Southern California, during which a total of 479 rides were provided. Resultswere encouraging: wait times decreased by 30 percent and per-ride costs decreased by 32 percent, and satisfaction rates were 80 percent.
California just passed its net neutrality law. The DOJ is already suing
https://money.cnn.com/2018/09/30/technology/california-net-neutrality-law/index.html
by Heather Kelly @heatherkellySeptember 30, 2018: 11:58 PM ET
The Department of Justice said it is filing a lawsuit against the state of California over its new net neutrality protections, hours after Gov. Jerry Brown signed the bill into law on Sunday.The California law would be the strictest net neutrality protections in the country, and could serve as a blueprint for other states. Under the law, internet service providers will not be allowed to block or slow specific types of content or applications, or charge apps or companies fees for faster access to customers.
The Department of Justice says the California law is illegal and that the state is "attempting to subvert the Federal Government's deregulatory approach" to the internet.
"Under the Constitution, states do not regulate interstate commerce—the federal government does," Attorney General Jeff Sessions said in a statement. "Once again the California legislature has enacted an extreme and illegal state law attempting to frustrate federal policy. The Justice Department should not have to spend valuable time and resources to file this suit today, but we have a duty to defend the prerogatives of the federal government and protect our Constitutional order."
As the largest economy in the United States and the fifth largest economy in the world, California has significant influence over how other states regulate businesses and even federal laws and regulations. That power is being tested under the Trump administration, which is currently battling the state in court over multiple issues, including emissions standards, immigration laws and the sale of federal lands..
"It's critically important for states to step in," state senator Scott Wiener, who co-authored the bill, told CNNMoney. "What California does definitely impacts the national conversation. I do believe that this bill ... will move us in a positive direction nationally on net neutrality."
For that to happen, the law will likely have to survive a legal battle. In addition to the lawsuit from the Department of Justice, ISPs may sue California over the bill. Major broadband companies, including AT&T and Comcast, have lobbied heavily against the California bill. (AT&T is the parent company of CNN.) They say the new rules will result in higher prices for consumers.
Jonathan Spalter, president of USTelecom -- a trade group representing broadband providers -- said while the group supports "strong and enforceable net neutrality protections for every American," the bill was "neither the way to get there nor will it help advance the promise and potential of California's innovation DNA."
"Rather than 50 states stepping in with their own conflicting open internet solutions, we need Congress to step up with a national framework for the whole internet ecosystem and resolve this issue once and for all," Spalter said.
Broadband providers lobbied against the California law, but were also for the repeal of the most recent federal regulations.
"The broadband providers say they don't want state laws, they want federal laws," said Gigi Sohn, a fellow at the Georgetown Law Institute for Technology and a former lawyer at the FCC, in an interview. "But they were the driving force behind the federal rules being repealed ... The federal solution they want is nothing, or extremely weak."
The FCC is fighting California over a pre-exemption clause included in its 2017 order repealing net neutrality protections. The FCC holds that it can preempt state-level laws because broadband service crosses state lines. Legal experts are split over whether or not the FCC can challenge a state net neutrality law, but Wiener believes the clause is unenforceable.
"We don't think the FCC has the power to preempt state action," said Wiener. "We are prepared to defend this law. We believe that California has the power to protect the internet and to protect our residents and businesses."
Barbara van Schewick, a professor at Stanford Law School, says the California bill is on solid legal ground and that California is within its legal rights.
"An agency that has no power to regulate has no power to preempt the states, according to case law. When the FCC repealed the 2015 Open Internet Order, it said it had no power to regulate broadband internet access providers. That means the FCC cannot prevent the states from adopting net neutrality protections because the FCC's repeal order removed its authority to adopt such protections," said van Schewick.
The bill was approved by lawmakers in early September, but it had been unclear if Brown would veto or approve the comprehensive measure, even though it had broad support from state Democrats.
California is the third state to pass its own net neutrality regulations, following Washington and Oregon. However, it is the first to match the thorough level of protections that had been provided by the Obama-era federal net neutrality regulations repealed by the Federal Communications Commission in June. At least some other states are expected to model future net neutrality laws on California's.
The original FCC rules included a two page summary and more than 300 additional pages with additional protections and clarifications on how they worked. While other states mostly replicated the two-page summary, California took longer crafting its law in order to match the details in the hundreds of supporting pages, said van Schewick.
"Most people don't understand how hard it is to do a solid net neutrality law," said van Schewick. "What's so special about California is that it includes not just two pages of rules, but all of the important protections from the text of the order and as a result closes the loopholes."
Loopholes addressed in California's new law include a prohibition on "zero rating," which allows carriers to exempt content from certain companies (like their own streaming services) from counting against a customer's data usage. The prohibition would not apply if a carrier wanted to exempt an entire category of content, like all streaming services. It also bans interconnection fees, which are charges a company pays when its data enters the internet provider's network.
The FCC says those rules will hurt consumers.
"The law prohibits many free-data plans, which allow consumers to stream video, music, and the like exempt from any data limits. They have proven enormously popular in the marketplace, especially among lower-income Americans. But notwithstanding the consumer benefits, this state law bans them," said Ajit Pai, chairman of the FCC, in a statement.
The authors of the bill did have support from consumer and labor groups, grassroots activists, and small and mid-sized tech companies including Twilio, Etsy and Sonos. Larger technology companies, like Apple, Google, and Facebook, have stayed quietly on the sidelines.
Sohn and van Schewick believe states with legislatures controlled by Democrats are the ones most likely to pass strong net neutrality protections. Other states have already started working on similar bills, including New York and New Mexico.
From DMN:
California Passes Its Strict Net Neutrality Bill Into Law
— Setting the Stage for a Fight Against Trump’s FCC
California’s tough net neutrality bill is now state law, thanks to a signature from governor Jerry Brown on Sunday (September 30th).
It’s easily the toughest net neutrality measure in the nation. Now, it’s the law in the country’s most populous and economically powerful state, thanks to a signature from governor Jerry Brown.
The ratification happened late Sunday (September 30th), with Brown approving SB 822, which was simply titled ‘Communications: broadband Internet access service.’ The bill, which places strict limitations on ISPs like Verizon, AT&T, and Comcast, was led by California Senator Scott Wiener (D-San Francisco).
The story continues here: https://www.digitalmusicnews.com/2018/09/30/california-net-neutrality-law/
Nobel Prize-winning economist Joseph Stiglitz says it’s time for the US to update its antitrust laws
Nobel Prize-winning economist Joseph Stiglitz says it’s time for the US to update its antitrust laws
By Richard Feloni & Andy Kiersz
There are plenty of companies that may feel too big to you, whether it’s trillion-dollar monoliths Apple and Amazon, or even the cable company you’re forced to deal with every day.
But the question of whether they’ve got so much power that they’re harming the economy is the subject of a debate in the spotlight once again.
For Nobel Prize-winning economist Joseph Stiglitz of Columbia University, there is indeed a monopoly and monopsony problem in the United States, and it’s high time to address it with new antitrust laws.
At a recent Federal Trade Commission hearing on the subject, Stiglitz said, “The point is, if our standard competitive analysis tools don’t show that there is a problem, it suggests something may be wrong with the tools themselves.”
The bedrock of America’s antitrust law was primarily built in the late 19th and early 20th century, during the democratic and reform-minded Progressive Era that followed the Gilded Age’s reign of robber barons and progression of inequality.
Even Adam Smith, the father of capitalism himself, warned in “The Wealth of Nations” against the consolidation of market power in the hands of a few. This is represented on the selling side by monopoly and on the buying side by monopsony, a term coined in the 20th century that refers to firms using their size to push down suppliers’ prices (Walmart is arguably an example).
Years of economic research has found that when market power is highly concentrated, barriers to entry prevent new competitors from building businesses, consumers have fewer options, and employees receive lower wages. This in turn slows overall economic growth.
Even before data on market power was routinely gathered, the federal government established the definition for an illegal monopoly and an illegal merger with the Sherman Act of 1890 and the Clayton Act of 1914. It also created the FTC in 1914 to enforce these rules.
Continue reading…https://www.businessinsider.com/economist-joseph-stiglitz-us-must-update-antitrust-laws-2018-9
Website USAReally is based in Moscow and has received funding from the Federal News Agency, a Russian media conglomerate with ties to the Internet Research Agency, the “troll farm” whose employees were indicted by the special counsel, Robert S. Mueller III, for interfering in the 2016 presidential election.
Caught flat-footed by the influence campaigns of 2016, intelligence agencies and tech companies in the United States have spent months looking for hidden Russian footprints ahead of the midterm elections.
USAReally’s website, which began publishing in May, does not advertise its Russian roots. But in many ways, it is operating in plain sight.
Its founder, Alexander Malkevich, is a Russian journalist with little previous experience in American media. Its domain was registered through a Russian company, and its formation was announced in a news release on the Federal News Agency’s website. The project, originally known as “USAReally, Wake Up Americans,” was intended to promote “information and problems that are hushed up by major American publications controlled by the political elite of the United States,” according to the release.
Today, USAReally’s website depicts the United States as a democracy in decline, riddled with crime and divided by partisan rancor.
Full article: https://www.nytimes.com/2018/09/25/technology/usareally-russian-news-site-propaganda.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=rank&module=package&version=highlights&contentPlacement=2&pgtype=sectionfront
Russia-sponsored US TV
Clandestine Russian government efforts to spread disruptive information in the US have gotten great attention, but other Russian government sponsored efforts are in plain sight. One example is website USAReally, as discussed in the NY Times article above. The NY Times says that USAReally’s website depicts the United States as a democracy in decline, riddled with crime and divided by partisan rancor.
Another Russian government sponsored media outlet in plain site is RT. Wikipedia says that RT is a Russian international television network funded by the Russian government. It operates cable and satellite television channels directed to audiences outside of Russia, as well as providing Internet content in English, Spanish, French, German, Arabic and Russian.
Here is an interesting example of RT content, a segment explaining how US voting machines can be hacked. See https://www.youtube.com/watch?v=fmM2xkeyPI0
In some ways the RT segment resembles the NY Times discussion of vulnerable US voting machines that appears below, but the RT piece is different. It is more alarmist in tone, and arguably exaggerates the likelihood of people physically engaging with voting machines to insert compromising devices.
The RT voting machine story reflects a propaganda strategy of some interest and complexity. The story suggests that the US government is fumbling in its efforts to protect voting rights, which has the ring of a Russian propaganda point. But the story is not stupid, working from concerns that have a basis in a reality of voting machine problems, as discussed by the New York Times article that follows.
Posting by Don Allen Resnikoff, who is entirely responsible for the content
NYT: Vulnerable US voting machines
There are roughly 350,000 voting machines in use in the country today, all of which fall into one of two categories: optical-scan machines or direct-recording electronic machines. Each of them suffers from significant security problems.
With optical-scan machines, voters fill out paper ballots and feed them into a scanner, which stores a digital image of the ballot and records the votes on a removable memory card. The paper ballot, in theory, provides an audit trail that can be used to verify digital tallies. But not all states perform audits, and many that do simply run the paper ballots through a scanner a second time. Fewer than half the states do manual audits, and they typically examine ballots from randomly chosen precincts in a county, instead of a percentage of ballots from all precincts. If the randomly chosen precincts aren’t ones where hacking occurred or where machines failed to accurately record votes, an audit won’t reveal anything — nor will it always catch problems with early-voting, overseas or absentee ballots, all of which are often scanned in county election offices, not in precincts.
Direct-recording electronic machines, or D.R.E.s, present even more auditing problems. Voters use touch screens or other input devices to make selections on digital-only ballots, and votes are stored electronically. Many D.R.E.s have printers that produce what’s known as a voter-verifiable paper audit trail — a scroll of paper, behind a window, that voters can review before casting their ballots. But the paper trail doesn’t provide the same integrity as full-size ballots and optical-scan machines, because a hacker could conceivably rig the machine to print a voter’s selections correctly on the paper while recording something else on the memory card. About 80 percent of voters today cast ballots either on D.R.E.s that produce a paper trail or on scanned paper ballots. But five states still use paperless D.R.E.s exclusively, and an additional 10 states use paperless D.R.E.s in some jurisdictions.
The voting-machine industry — an estimated $300-million-a-year business — has long been as troubling as the machines it makes, known for its secrecy, close political ties (overwhelmingly to the Republican Party) and a revolving door between vendors and election offices. More than a dozen companies currently sell voting equipment, but a majority of machines used today come from just four — Diebold Election Systems, Election Systems & Software (ES&S), Hart InterCivic and Sequoia Voting Systems. Diebold (later renamed Premier) and Sequoia are now out of business. Diebold’s machines and customer contracts were sold to ES&S and a Canadian company called Dominion, and Dominion also acquired Sequoia. This means that more than 80 percent of the machines in use today are under the purview of three companies — Dominion, ES&S and Hart InterCivic.
Many of the products they make have documented vulnerabilities and can be subverted in multiple ways. Hackers can access voting machines via the cellular modems used to transmit unofficial results at the end of an election, or subvert back-end election-management systems — used to program the voting machines and tally votes — and spread malicious code to voting machines through them. Attackers could design their code to bypass pre-election testing and kick in only at the end of an election or under specific conditions — say, when a certain candidate appears to be losing — and erase itself afterward to avoid detection. And they could make it produce election results with wide margins to avoid triggering automatic manual recounts in states that require them when results are close.
From: https://www.nytimes.com/2018/09/26/magazine/election-security-crisis-midterms.html?action=click&module=Top%20Stories&pgtype=Homepage
Low price association health plans spark tussle between state regulators, business groups
By Harris Meyer | September 27, 2018
Some business associations and insurers are plunging ahead in launching a cheaper type of health plan newly permitted by the Trump administration, while others are holding back due to big regulatory and legal uncertainties about the future of these products.
Since the U.S. Department of Labor issued a final rule in June allowing small employers and self-employers to band together across state lines and form to association health plans (AHPs), there have been intensive discussions between business groups, state insurance commissioners and Labor Department officials about how states can regulate these plans.
Pennsylvania Insurance Commissioner Jessica Altman has taken the position that AHPs must comply with state laws and Affordable Care Act provisions governing individual and small group plans. The Labor Department wrote to Altman last month to say the rule "does not modify the states' existing authority to regulate AHPs under state insurance laws."
She and other state insurance regulators fret that the growth of AHPs will destabilize their ACA-regulated individual and small-group markets, leave consumers uncovered for healthcare services they need and lead to a spike in insurance fraud and insolvencies associated with lightly regulated AHPs in the past.
But a coalition of 10 business associations, including the National Federation of Independent Business, argue that federal law does not allow states to bar groups of employers from forming association health plans together.
Association plans are deemed large-group plans exempt from state regulation under the federal Employee Retirement Income Security Act.
Earlier this month, the Nebraska Farm Bureau and Medica announced they were teaming up to offer a menu of association health plans in 2019 for individual farmers, ranchers and small agriculture-related businesses. The plans will have essentially the same benefits as ACA market plans with premium savings of up to 25%, they say. Rates will vary based on age, geographic location, and type of business.
"We hear stories every day about how farmers and ranchers are struggling to provide affordable coverage for their families," said Steve Nelson, president of the Nebraska Farm Bureau. "That's what drove us to put this together."
The Nebraska Department of Insurance said other business groups also have applied to start AHPs.
In August, three chambers of commerce in Nevada announced they would offer an association health plan through UnitedHealth Group that will aggregate small firms into one large-group plan, though they initially aren't making it available to sole proprietor businesses.
But other associations say they're taking a wait-and-see stance, citing resistance to the AHP rule from many state insurance commissioners, combined with a federal lawsuit filed in July by 12 Democratic attorneys general to block the rule.
"We wanted to jump on it fast, and then the states sued," said Chris Paulitz, senior vice president of membership and marketing for the Financial Services Institute, an association representing nearly 30,000 self-employed individual financial advisers. "There's too much up in the air from a legal standpoint."
Since the rule was issued, a number of state insurance departments have issued emergency rules and bulletins limiting AHPs or highlighting existing state laws that prohibit key features of plans allowed under the new federal rule.
Several states, including Connecticut, Massachusetts, New York, Oregon and Pennsylvania, have said they will look at the small employers and individuals signing up for AHPs and apply state and ACA rules for small-group and individual coverage to them, essentially nullifying the AHP structure.
In a Sept. 10 bulletin, the Oregon Division of Financial Regulation said it would follow more demanding federal guidelines issued in 2011 for determining bona fide association plans that qualify for an ERISA exemption from state insurance requirements.
Regulators in Connecticut, Maryland, Massachusetts and New York are taking an even harder line. They say their state laws permit no exception for bona fide association plans, meaning that none qualify for an ERISA exemption.
In contrast, the Nebraska Department of Insurance fully recognizes the Trump administration's new AHP rule, including allowing sole proprietors to join association plans. Its officials say they aren't worried about AHPs drawing younger and healthier people out of the Affordable Care Act market and driving up premiums because the new plans likely will attract mostly consumers who already have dropped out of the ACA market due to high premiums.
Laura Arp, the department's life and health administrator, noted that consumer protection provisions in the Affordable Care Act and state law still apply to AHPs, including rules prohibiting annual and lifetime benefit caps and discrimination against people with pre-existing medical conditions.
From: http://www.modernhealthcare.com/article/20180927/NEWS/180929912?utm_source=modernhealthcare&utm_medium=email&utm_content=20180927-NEWS-180929912&utm_campaign=am
From: Department of Justice
U.S. Attorney’s Office
Eastern District of New York
FOR IMMEDIATE RELEASE
Tuesday, September 25, 2018
Queens Attorney and Second Individual Indicted For Scheme to Bribe a Witness in Double Homicide Trial on Long Island
A superseding indictment was unsealed today in federal court in Brooklyn charging Queens-based criminal defense attorney John Scarpa, Jr., and Charles Gallman, also known as “T.A.,” with violating the Travel Act by bribing a witness who testified in a double-homicide trial in Suffolk County Supreme Court. Scarpa was arrested earlier today and will be arraigned this afternoon in federal court in Brooklyn before United States Magistrate Judge Steven L. Tiscione. Gallman will be arraigned at a later date.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Richard A. Brown, District Attorney of Queens County, announced the charges.
“As alleged, the defendants bribed a witness to commit perjury in an effort to help Scarpa’s client, who had committed two execution-style murders, escape justice,” stated United States Attorney Donoghue. “This Office and our law enforcement partners will never tolerate the rigging of a trial and will vigorously prosecute attorneys or anyone else who seeks to undermine the integrity of the judicial process by witness tampering.” Mr. Donoghue also expressed his grateful appreciation to the Office of the Suffolk County District Attorney for its assistance during the investigation.
“Defense attorneys do all they can to help their clients fight criminal charges, which is everyone’s right by law,” stated FBI Assistant Director-in-Charge Sweeney. “However, Mr. Scarpa allegedly broke the law trying to get his client off the hook for murder charges by bribing a witness. Everyone accused deserves the best defense, but attorneys cannot use illegal methods to win in court.”
“We will continue to work with our federal partners to root out corruption in the criminal justice system wherever it is found,” stated Queens District Attorney Brown. “I will say again that integrity is the foundation of our criminal justice system. These allegations go to the core of that foundation and are prejudicial to the administration of justice. The charges today send a strong message to those who would undermine that integrity that they will be held accountable. I commend the United States Attorney’s Office for the Eastern District and the Federal Bureau of Investigation, the Suffolk County District Attorney’s Office and my Rackets, Special Victims and District Attorney’s Detective Bureaus for their vigorous pursuit of justice in this matter.”
As alleged in the indictment and detailed in court filings, the charges stem from an investigation conducted by the Queens County District Attorney’s Office. Court-authorized intercepted communication between Scarpa and Gallman showed how the two men plotted to bribe a witness, Luis Cherry, in a Suffolk County criminal trial against Reginald Ross. Scarpa represented Ross, who was ultimately convicted of the unrelated murders of two men: Raymond Hirt, a road crew flagman killed at his jobsite in May 2010 because Ross was upset about traffic, and John Williams, whom he shot to death in October 2010 as Williams was going to work, mistaking Williams for his brother. Cherry participated in the Williams murder, and had pleaded guilty to that murder as well as another.
On January 13, 2015, Gallman visited Cherry at Downstate Correctional Facility and spoke to him about testifying at Ross’s trial. Thereafter, Gallman reported to Scarpa: “Anything we need, he’s willing. Whichever way you wanna play it, he’s willing.” Later in the conversation Scarpa asked, “So this guy is willing to do whatever?” And Gallman confirmed, “Whatever you need, John. Whatever you need.” Gallman added that there was a “bunch of stuff I wrote down that [Cherry] wants.”
Scarpa called Cherry as a defense witness at trial and led Cherry through perjurious testimony relevant to the Williams murder. For example, Cherry claimed that he had committed the murder alone after he crawled from the driver’s seat and exited through the passenger side of his vehicle with firearms in both hands despite physical evidence that clearly indicated two gunmen were involved. When asked on cross-examination about meeting Gallman, Cherry falsely denied that they had talked about the murder case.
The charges in the superseding indictment are allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted, Scarpa and Gallman face up to five years’ imprisonment on each count.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Lindsay K. Gerdes and Andrey Spektor are in charge of the prosecution.
from https://www.justice.gov/usao-edny/pr/queens-attorney-and-second-individual-indicted-scheme-bribe-witness-double-homicide
Proposal to Limit the Anti-Competitive Power of Institutional Investors
Last revised: 1 Nov 2017
Eric A. Posner University of Chicago - Law School
Fiona M. Scott Morton Yale School of Management; National Bureau of Economic Research (NBER)
E. Glen Weyl Microsoft Research New York City; Princeton University - Julis Rabinowitz Center for Public Policy and Finance
Abstract
Recent scholarship has shown that institutional investors may cause softer competition among product market rivals because of their significant ownership stakes in competing firms in concentrated industries. However, while calls for litigation against them under Section 7 of the Clayton Act are understandable, private or indiscriminate government litigation could also cause significant disruption to equity markets because of its inherent unpredictability and would fail to eliminate most of the harms from common ownership.
To minimize this disruption while achieving competitive conditions in oligopolistic markets, the Department of Justice and the Federal Trade Commission should take the lead by adopting a public enforcement policy of the Clayton Act against institutional investors. Investors in firms in well-defined oligopolistic industries would benefit from a safe harbor from government enforcement of the Clayton Act if they either limit their holdings of an industry to a small stake (no more than 1% of the total size of the industry) or hold the shares of only a single “effective firm” per industry. Free-standing index funds that commit to pure passivity would not be limited in size.
Using simulations based on empirical evidence, we show that under broad assumptions this policy would generate many times larger competitive gains than harms to diversification and other values. The policy would also improve corporate governance by institutional investors.
Citation:
Posner, Eric A. and Scott Morton, Fiona M. and Weyl, E. Glen, A Proposal to Limit the Anti-Competitive Power of Institutional Investors (March 22, 2017). Antitrust Law Journal, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2872754 or http://dx.doi.org/10.2139/ssrn.2872754
Do Institutional Investors Suppress Competition?
By Vito J. Racanelli
Can institutional investing have anticompetitive effects? I’m still not convinced.
The idea, known as the common-ownership theory, received another airing at a panel debate at the Harvard Club Monday. As Barron’s recently wrote, the model is based on studies of airlines and banks that suggest when groups of big investors such as index or mutual funds hold material equity stakes in several companies in the same industry, they can foster behavior such as consumer price increases that improves the profits of the companies they own.
Panelist Douglas H. Ginsburg, a judge on the District of Columbia US Court of Appeals and a well-known critic of the theory, said that those who argue common ownership runs afoul of antitrust regulation are “opportunistically naïve” to believe laws such as the Sherman Ant-Trust Act and the Clayton Act are aimed at ownership by large asset managers. Those who argue the contrary, he said, aren’t interpreting the law consistently with what it intends.
Continue reading…https://www.barrons.com/articles/do-big-investors-push-the-antitrust-envelope-1537220418
From NYT and ProPublica:
Sloan Kettering’s Cozy Deal With Start-Up
At Memorial Sloan Kettering Cancer Center in Manhattan, doctors and staff objected to a for-profit venture that could be lucrative for a few leading researchers and board members
- An artificial intelligence start-up founded by three insiders at Memorial Sloan Kettering Cancer Center debuted with great fanfare in February, with $25 million in venture capital and the promise that it might one day transform how cancer is diagnosed.
The company, Paige.AI, is one in a burgeoning field of start-ups that are applying artificial intelligence to health care, yet it has an advantage over many competitors: The company has an exclusive deal to use the cancer center’s vast archive of 25 million patient tissue slides, along with decades of work by its world-renowned pathologists.
Memorial Sloan Kettering holds an equity stake in Paige.AI, as does a member of the cancer center’s executive board, the chairman of its pathology department and the head of one of its research laboratories. Three other board members are investors.
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The arrangement has sparked considerable turmoil among doctors and scientists at Memorial Sloan Kettering, which has intensified in the wake of an investigation by ProPublica and The New York Times into the failures of its chief medical officer, Dr. José Baselga, to disclose some of his financial ties to the health and drug industries in dozens of research articles. He resigned last week, and Memorial Sloan Kettering’s chief executive, Dr. Craig B. Thompson, announced a new task force on Monday to review the center’s conflict-of-interest policies.
Article at https://www.nytimes.com/2018/09/20/health/memorial-sloan-kettering-cancer-paige-ai.html?action=click&module=Top%20Stories&pgtype=Homepage
The EU is checking how Amazon gathers information on sales made by competitors on Amazon Marketplace
The concern is that the information gives Amazon an edge when it sells to customers, EU Competition Commissioner Margrethe Vestager told reporters at a press conference in Brussels.
While she stressed that the EU investigation of Amazon is at a very early stage, she said her team is “trying to understand this issue in full."
“The question here is about the data” Amazon collects from smaller merchants on its site, Vestager said. “Do you then also use this data to do your own calculations, as to what is the new big thing, what is it that people want, what kind of offers do they like to receive, what makes them buy things? That has made us start a preliminary” investigation, she said.
From https://www.bloomberg.com/news/articles/2018-09-19/amazon-probed-by-eu-on-data-collection-from-rival-retailers
From DMN:
Ticketmaster Is Working Hand-In-Hand With Scalpers, Undercover Investigation Reveals
A new undercover investigation from CBC News and the Toronto Star has revealed what customers have long-suspected: Ticketmaster is working hand-in-hand with scalpers.
Back in July, the CBC sent reporters undercover to Ticket Summit 2018 in Las Vegas, which is a convention designed for live entertainment industry executives. The reporters posed as scalpers with hidden cameras attached to their bodies while recording themselves being pitched on Ticketmaster’s professional reseller program.
That members-only program is called TradeDesk, billed as ‘The Most Power Ticket Sales Tool. Ever.”
The story continues here: .https://www.digitalmusicnews.com/2018/09/19/ticketmaster-supports-scalpers/
Statement of the Department of Justice Antitrust Division on the Closing of Its Investigation of the Cigna–Express Scripts Merger
September 17, 2018
Assistant Attorney General Makan Delrahim of the Antitrust Division of the U.S. Department of Justice issued the following statement today in connection with the closing of the Division’s investigation into Cigna Corporation’s $67 billion proposed acquisition of Express Scripts Holding Co. (“ESI”):
“Quality healthcare and competitive pricing for healthcare services and pharmaceutical drugs is critical to U.S. consumers. After a thorough review of the proposed transaction, the Antitrust Division has determined that the combination of Cigna, a health insurance company, and ESI, a pharmacy benefit management (“PBM”) company, is unlikely to result in harm to competition or consumers.”
During the Antitrust Division’s comprehensive, six-month investigation, it received over two million documents, analyzed transactional data from the merging companies and other industry firms, and interviewed over 100 knowledgeable industry participants.
In particular, the Division analyzed whether the merger would: (1) substantially lessen competition in the sale of PBM services or (2) raise the cost of PBM services to Cigna’s health insurance rivals. PBM services are sold to employers and health insurance companies to manage their pharmacy benefits, which can include designing formularies, processing prescription claims, and providing access to pharmacy networks and pharmaceutical rebates.
The merger is unlikely to lessen competition substantially in the sale of PBM services because Cigna’s PBM business nationwide is small. The Division also determined that the proposed transaction is unlikely to lessen competition substantially in markets for customers because at least two other large PBM companies and several smaller PBM companies will remain in the market post-merger.
In evaluating whether the merger may harm competition for the sale of PBM services, the Division understands that Cigna intends to use ESI for PBM services and that Cigna’s current PBM services provider, UnitedHealthcare’s subsidiary Optum, will be free to compete for PBM customers that purchase medical insurance from Cigna upon closing of the transaction.
The Division also considered how the merger would affect ESI’s incentives to provide competitive PBM services to Cigna’s health insurance rivals. ESI currently sells PBM services to some of Cigna’s rivals. The merger is unlikely to enable Cigna to increase costs to Cigna’s health insurance rivals due to competition from vertically-integrated and other PBMs. The merger is unlikely to lead ESI to raise PBM prices to Cigna’s rivals because that likely would result in the merged company losing PBM customers and not result in Cigna’s gaining a sufficient volume of additional health insurance business to offset the loss of PBM customers.
Updated September 17, 2018
https://www.justice.gov/atr/closing-statement
What makes a monopoly in the age of Amazon?
By Lydia DePillis
It’s not often that a government agency decides to do a wholesale rethink of how to do its job. But that’s what’s happening at the Federal Trade Commission.
On Thursday, the federal watchdog tasked with protecting consumers from fraud and anti-competitive behavior kicked off a months-long series of hearings. The goal: Figuring out whether regulators need to be tougher on companies that have staked out ever-larger chunks of the markets they serve.
+ READ MORE at https://nam03.safelinks.protection.outlook.com/?url=https%3A%2F%2Fcompetitionpolicyinternational.us2.list-manage.com%2Ftrack%2Fclick%3Fu%3D66710f1b2f6afb55512135556%26id%3D620bb40a4f%26e%3Dc9725fdc15&data=02%7C01%7C%7C00eb2b99a2af4b41a8ca08d61c8f0e41%7C84df9e7fe9f640afb435aaaaaaaaaaaa%7C1%7C0%7C636727798071942816&sdata=3Oz8xE%2B0X8d1FIb2IbSWJrlHgWu1SS8xjsbaCN9r2lE%3D&reserved=0
Investor expert Ray Dalio traces connection between government policies to fix the 2008 financial crash and resulting wealth disparities and political unrest that will complicate government strategies for future debt crises
In an interesting interview for Bloomberg TV, Dalio explains that recovery from the 2008 crisis involved such government policies as low interest rates and "quantitative easing," asset buying, that increase wealth disparities between rich and poor, and create political discord. That discord may interfere with government efforts to deal with a future economic crisis. Needless to say, not all experts agree with Dalio's analysis, but it is thought provoking. The URL for the interview follows.
Posted by Don Allen Resnikoff
https://www.bloomberg.com/view/articles/2018-09-12/ray-dalio-spells-out-america-s-worst-nightmare
The FTC is holding hearings of great interest to antitrust and consumer advocates. Here is what the FTC says it is interested in:
The Commission is especially interested in new empirical research that indicates (or contraindicates) a causal relationship with respect to any of the topics identified for comment. Upon review and consideration of a public comment highlighting such research, the Commission may request the voluntary sharing of the data and models underlying the comment, in accordance with general principles of peer review of social scientific inquiry, and consistent with confidentiality or other limitations on the sharing of such data.
Commenters are invited to address one or more of the following topics generally, or with respect to a specific industry, such as the health care,5 high-tech6, or energy7 industries.
1) The state of antitrust and consumer protection law and enforcement, and their development, since the Pitofsky hearings. Of particular interest to the Commission: (a) the continued viability of the consumer welfare standard for antitrust law enforcement and policy; (b) economic analysis and evidence on market competitiveness, enforcement policy, and the effects of past FTC enforcement decisions; (c) the identification of new developments in markets and in business-to-business or business-to-consumer relationships; (d) the benefits and costs associated with the growth of international competition and consumer protection enforcement regimes; and (e) the advisory and advocacy role of the FTC regarding enforcement efforts by competition and consumer protection
agencies outside the United States, when such efforts have a direct effect on important U.S. interests. Comments filed in electronic form should be submitted using this link.
2) Competition and consumer protection issues in communication, information, and media technology networks. FTC staff’s 1996 Competition Policy in the New High-Tech Global Marketplace report8 discussed the competitive analysis of both unilateral and joint conduct in industries subject to network effects; and FTC staff’s 2007 Broadband Connectivity and Competition Policy report9 addressed similar issues in the broadband internet access service market. Of particular interest to the Commission: (a) whether contemporary industry practices in networked industries continue to present competition and consumer protection concerns like those discussed in the prior reports; (b) the welfare effects of regulatory intervention to promote standardization and interoperability; (c) the application of the FTC’s Section 5 authority to the broadband internet access service business; and (d) unique competition and consumer protection issues associated with internet and online commerce. Comments filed in electronic form should be submitted using this link.
3) The identification and measurement of market power and entry barriers, and the evaluation of collusive, exclusionary, or predatory conduct or conduct that violates the consumer protection statutes enforced by the FTC, in markets featuring “platform” businesses.10 Of particular interest to the Commission: (a) whether the platform business model has unique implications for antitrust and consumer protection law enforcement and policy; and (b) whether and how the presence of “network effects” should affect the Commission’s analysis of competition and consumer protection issues in these markets. Comments filed in electronic form should be submitted using this link.
4) The intersection between privacy, big data, and competition.11 Of particular interest to the Commission: (a) data as a dimension of competition, and/or as an impediment to entry into or expansion within a relevant market; (b) competition on privacy and data security attributes (between, for example, social media companies or app developers), and the importance of this competition to consumers and users; (c) whether consumers prefer free/ad-supported products to products offering similar services or capabilities but that are neither free nor adsupported; (d) the benefits and costs of privacy laws and regulations, including the effect of such regulations on innovation, product offerings, and other dimensions of competition and consumer protection; (e) the benefits and costs of varying state, federal and international privacy laws and regulations, including the conflicts associated with those standards; and (f) competition and consumer protection implications of use and location tracking mechanisms. Comments filed in electronic form should be submitted using this link.
5) The Commission’s remedial authority to deter unfair and deceptive conduct in privacy and data security matters. Of particular interest to the Commission: (a) the efficacy of the Commission’s use of its current remedial authority; and (b) the identification of any additional tools or authorities the Commission may need to adequately deter unfair and deceptive conduct related to privacy and data security. Comments filed in electronic form should be submitted using this link.
6) Evaluating the competitive effects of corporate acquisitions and mergers. Of particular interest to the Commission: (a) the economic and legal analysis of vertical and conglomerate mergers; (b) whether the doctrine of potential competition is sufficient to identify and analyze the competitive effects (if any) associated with the acquisition of a firm that may be a nascent competitive threat; (c) the analysis of acquisitions and holding of a non-controlling ownership interest in competing companies; (d) the identification and evaluation of the exercise of monopsony power and buyer-power as arising from consolidation; (e) the identification and evaluation of differentiated but potentially competing technologies, and of disruptive or generational changes in technology, and how such technologies affect competitive effects analysis; and (f) empirical validation of the analytical tools used to evaluate acquisitions and mergers (e.g., models of upward pricing pressure, gross upward pricing pressure, net innovation pressure, critical loss analysis, compensating marginal cost reduction, merger simulation, natural experiments, and empirical estimation of demand systems). Comments filed in electronic form should be submitted using this link.
7) The evidence and analysis of monopsony power, including but not limited to, in labor markets. Of particular interest to the Commission: (a) the analytic framework applied to conduct and transactions that negatively or positively affect competition between employers as buyers in labor markets; (b) evidence regarding the existence and exercise of buyer monopsony or market power in properly defined markets, including by employers in labor markets; (c) the exercise of monopsony power through collusion, including in labor markets through employer collusion; and (d) the use of non-competition agreements and the conditions under which their use may be inconsistent with the antitrust laws. Comments filed in electronic form should be submitted using this link.
8) The role of intellectual property and competition policy in promoting innovation. The Commission has taken a dual-pronged approach to issues arising at the intersection of intellectual property and antitrust law: (1) antitrust enforcement against harmful business conduct involving intellectual property; and (2) competition advocacy regarding the development of intellectual property law. The Commission has articulated its enforcement positions in a number of public documents, including the joint Commission and Department of Justice 2017 Antitrust Guidelines for the Licensing of Intellectual Property12 and 2007 Antitrust Enforcement and Intellectual Property Rights report.13 The Commission has engaged in substantial competition advocacy with respect to the legal and policy regime related to intellectual property rights, including its three “IP” reports: the 2003 To Promote Innovation14 report, the 2011 Evolving IP Marketplace15 report, and the 2016 Patent Assertion Entity Activity16 report. Of particular interest to the Commission: (a) the adoption and utilization of novel business practices (beyond those addressed in the Commission’s prior guidance and actions)17 with respect to obtaining or enforcing intellectual property rights, where such practices may be inconsistent with the antitrust laws; (b) identification of contemporary patent doctrine that substantially affects innovation and raises the greatest challenges for competition policy; (c) evaluation of intellectual property litigation in competitive effects analysis; and (d) evaluation of efficiencies and entry considerations in technology markets in merger analysis. Comments filed in electronic form should be submitted using this link.
9) The consumer welfare implications associated with the use of algorithmic decision tools, artificial intelligence, and predictive analytics. Of particular interest to the Commission: (a) the welfare effects and privacy implications associated with the application of these technologies to consumer advertising and marketing campaigns; (b) the welfare implications associated with use of these technologies in the determination of a firm’s pricing and output decisions; and (c) whether restrictions on the use of computer and machine learning and data analytics affect innovation or consumer rights and opportunities in existing or future markets, or in the development of new business models. Comments filed in electronic form should be submitted using this link.
10) The interpretation and harmonization of state and federal statutes and regulations that prohibit unfair and deceptive acts and practices. Of particular interest to the Commission: (a) whether and to what extent other enforcement entities authorized to prosecute unfair or deceptive acts and practices apply FTC precedent in their enforcement efforts; and (b) whether the Commission can, and to what extent it should, take steps to promote harmonization between the FTC Act and similar statutes. Comments filed in electronic form should be submitted using this link.
11) The agency’s investigation, enforcement and remedial processes. Of particular interest to the Commission: (a) whether the agency’s investigative process can be improved without diminishing the ability of the Commission to identify and prosecute prohibited conduct; (b) the extent to which the Commission’s Part 3 process facilitates timely and efficient administrative litigation; (c) the efficacy of the Commission’s current use of its remedial authority; and (d) willingness of affected parties to cooperate with the Commission in conducting postinvestigation and enforcement retrospectives. Comments filed in electronic form should be submitted using this link.
From:https://www.ftc.gov/system/files/attachments/hearings-competition-consumer-protection-21st-century/hearings-announcement_0.pdf
Broadcast email from DC AG Racine: student loan litigation
Last year, I sued the U.S. Department of Education for delaying a rule that would make it easier for students to get their loans forgiven when their school is proven to have defrauded students. This week, a federal judge ruled that the Trump administration’s move to delay this student protection was illegal.
This ruling is a victory for student borrowers, especially here in the District which has the highest student debts in the nation. On average, District borrowers owe more than $46,000 in federal student loans and more than 1-in-4 student borrowers owe over $80,000. With soaring debt here and across the nation, our struggling borrowers need robust protections against predatory schools that try to cheat them.
To preserve another critical student borrower protection, I’m also suing the Department of Education for delaying the Gainful Employment Rule. This rule would require for-profit schools to disclose to students the costs, average debt load, and job prospects of their programs. Enacting this rule is important because predatory schools commonly exaggerate job placement rates to prospective students.
When the federal government fails to do its job, I believe we have a responsibility to step up to protect our residents. I won’t stand idly by while the Trump Administration slashes student borrower protections.
Karl A. Racine
Attorney General
Prosecutors from the US Department of Justice (DOJ) have asked a California judge to delay a grocery wholesaler's lawsuit against former Bumble Bee Foods CEO Chris Lischewski over concerns that it could complicate the criminal case against him.
Lischewski, who was indicted on criminal price-fixing charges in May 2018 and subsequently stepped down to focus on his defense, is also the defendant in a civil lawsuit from Associated Wholesale Grocers (AWG) that claims the company was harmed by the tuna canner's price-fixing.
Prosecutor Leslie Wulff wrote in a filing that allowing the AWG lawsuit to proceed, which could involve depositions of witnesses including Lischewski, could potentially interfere with the prosecution and run the risk of violating the former CEO's fifth amendment right prohibiting self-incrimination.
From the filing:
"The government’s proposed stay balances the government’s interest in protecting the integrity of the criminal proceedings, Mr. Lischewski’s fifth amendment rights, and the victims’ interest in conducting discovery and seeking restitution for the price-fixing scheme."
From: https://www.undercurrentnews.com/2018/09/10/prosecutors-want-suit-against-lischewski-stalled-due-to-criminal-case/
A bill, introduced by Rep. Darrell Issa, proposes dividing the Ninth Circuit into three regionally based divisions
—The text of the bill is at https://judiciary.house.gov/wp-content/uploads/2018/09/HR-6730.pdf
The three divisions would be a Northern Division composed of the district courts in Alaska, Idaho, Montana, Oregon and Washington’s Eastern and Western districts of Washington; a Middle Division made up of the courts in Guam, Hawaii, Nevada and the Northern Mariana Islands, as well as California’s Eastern and Northern districts; and a Southern Division including Arizona and the Southern and Central districts of California.
Ross Todd of Law.com's Recorder periodical reports that Brian Fitzpatrick of Vanderbilt University Law School, who advocated splitting the Ninth Circuit at a subcommittee hearing chaired by Issa last year [see https://www.law.com/therecorder/almID/1202781463210/house-panel-restarts-debate-on-splitting-ninth-circuit/], said that he wasn’t sure that the representative’s proposal would address his central concern—that the size of the circuit leads to three-judge panels that are more likely to be made up of ideological outliers: “I think we would expect fewer outliers within each of the three regional divisions relative to the makeup of the divisions because each division will have only 11 judges,” he said. “I am not sure if that conclusion carries over to the ‘circuit’ division, however,” said Fitzpatrick, noting that the ratio of judges on the circuit division compared to the court’s total—13 of 24—closely mirrors the makeup of current Ninth Circuit en banc panels—11 of the court’s 29 current active judges.
Todd's full article is at https://www.law.com/therecorder/2018/09/12/house-committee-to-take-up-measure-to-reconfigure-the-ninth-circuit/?kw=House%20Committee%20to%20Take%20Up%20Measure%20to%20Reconfigure%20the%20Ninth%20Circuit&et=editorial&bu=TheRecorder&cn=20180912&src=EMC-Email&pt=AfternoonUpdate
The DCist: These Are Some Of The Areas Most Susceptible To Flooding In D.C.
While it may be that the worst effects of Hurricane Florence will have stayed south of D.C., the storm provided an occasion for reporter by Natalie Delgadillo to review areas in DC most susceptible to flooding. Here are some excerpts from her suggestions:
The National Mall
Areas around the National Mall are some of the lowest points in the city. Flooding from the Potomac River in 1936 and 1942 overwhelmed the National Mall, stranding the Jefferson Memorial like an island. In 2006, persistent rain flooded the National Archives building, the Internal Revenue Service, the Commerce Department, the Justice Department, and several museums on the mall.
That's why the Army Corp of Engineers installed a levee across 17th Street in 2014. It's meant to keep all of downtown D.C. safe from flooding off the Potomac—though it wouldn't be much help if, as in the 2006 storm, the rainwater just became too much for the city's storm drains to bear.
The Wharf
The new businesses on the Wharf have been there open for less than a year, and already they're facing the test of floods. Back in 2003, when rains from Hurricane Isabel hit the District, the Southwest waterfront was inundated.
The Capitol Riverfront/Yards Park
Hurricane Isabel also caused major tidal flooding in Navy Yard in 2003, and too much water this weekend could cause flooding again.
Georgetown Harbour
In 2011, Georgetown Harbour officials failed to deploy a levee to protect the area from flooding, and the boardwalk area was inundated. Restaurants and businesses had to be evacuated, the gas and water turned off.
Rock Creek Park
Here's one everybody knows: Rock Creek Park is always flooding. The trails running along the creek often become unusable for bikers during heavy or persistent rains.
Alexandria
Alexandria has already been dealing with a lot of flooding this week from high tide conditions and lots of rain.
The city has been giving out sand bags since Monday.
DAR comment: It seems an obvious question whether global warming and rising sea levels are relevant to hurricane Florence and the flooding travails of DC, as is also true in Miami and other near sea level cities, although that isn't discussed in the DCist story.
Expert Marshall Shepherd recently addressed that point in an article that appears in The Verge:
We do have higher sea level because of climate change. So whenever we have these types of storms, you’re probably dealing with a more significant storm surge because of that than you would perhaps 100 years ago. The literature certainly suggests that on a global, average sense, we would start to see more intense storms because of the warming oceans perhaps, and changing upper level wind patterns. The jury is still out on whether you’re going to see more or less of them.
In fact, most of the literature I have seen has suggested that you might not see them as frequently — but when you do they’ll be stronger. Yes there’s likely some connection between climate change and hurricanes, but I think it’s irresponsible to conclusively start linking individual storms to climate change, particularly as the storm is unfolding. I’m more concerned about the immediate impacts of the hazard.
See https://www.theverge.com/2018/9/10/17844258/hurricane-florence-atlantic-storm-category-four-intensity-unusual
Posting by Don Allen Resnikoff
Four national healthcare organizations sue HHS over delay of its final rule on price ceilings in the 340B drug discount program.
The 340B program is intended to help hospitals to provide pharmaceuticals to needy patients. The expected rule would set price ceilings and impose civil penalties on pharmaceutical companies that knowingly overcharge hospitals in the program. The Department of Health and Human Services delayed the rule for a fifth time in June, [see https://www.fiercehealthcare.com/payer/for-fifth-time-hhs-delays-340b-drug-ceiling-prices-and-penalitiesafter it was initially issued in January 2017.]
The American Hospital Association, America’s Essential Hospitals, 340B Health and the Association of American Medical Colleges are signed on to the lawsuit (PDF). The lawsuit Complaint can be viewed at https://www.aha.org/system/files/2018-09/180911-340b-delay-suit-complaint.pdf In it, they argue that the nearly two-year delay is unlawful under the Administration Procedure Act.
The Economics Of Amateurism: Breaking Down The Latest Lawsuit Against The NCAA
By Thomas Baker In what could prove to be a battle of economic experts, the NCAA is back in court and must once again defend its amateurism regulations from its own student-athletes. The current case is In Re: Grant-in-Aid Cap Antitrust Litigation and was initiated in the United States District Court for the Northern District of California by former NCAA student-athletes Shawne Alston and Justine Hartman.
Read the article at
https://competitionpolicyinternational.us2.list-manage.com/track/click?u=66710f1b2f6afb55512135556&id=0a7c194709&e=b23ef9e519
FTC Commissioner proposes FTC rule making as supplement to antitrust litigation
From: https://www.ftc.gov/system/files/documents/public_statements/1408196/chopra_-_comment_to_hearing_1_9-6-18.pdf
Excerpt of statement by FTC Commissioner Chopra, who credits Lina Kahn for her help
I see three major benefits to the FTC engaging in rulemaking under “unfair methods of competition,” even if the conduct could be condemned under predecessor antitrust laws. As I describe above, the current approach generates ambiguity, is unduly burdensome, and suffers from a democratic participation deficit. Rulemaking can create value for the marketplace and benefit the public on all of these fronts.
First, rulemaking would enable the Commission to issue clear rules to give market participants sufficient notice about what the law is and is not, helping ensure that enforcement is predictable.30 The APA requires agencies engaging in rulemaking to provide the public with adequate notice of a proposed rule. The notice must include the substance of the rule, the legal authority under which the agency has proposed the rule, and the date the rule will come into effect.31 An agency must publish the final rule in the Federal Register, at least 30 days before the rule becomes effective.
These procedural requirements promote clear rules and clear notice. As the Supreme Court has stated, a “fundamental principle” in our legal system is that “laws which regulate persons or entities must give fair notice of conduct that is forbidden or required.”32 Clear rules also help deliver consistent enforcement and predictable results. Reducing ambiguity about what the law is will enable market participants to channel their resources and behavior more productively, and will allow market entrants and entrepreneurs to compete on more of a level playing field. Second, establishing rules could help relieve antitrust enforcement of steep costs and prolonged trials. Establishing through rulemaking that certain conduct constitutes an “unfair method of competition” would obviate the need to establish the same through adjudication. Targeting conduct through rulemaking, rather than adjudication, might lessen the burden of expert fees or protracted litigation, potentially saving significant resources on a present-value basis.33 Moreover, establishing a rule through APA rulemaking can be faster than litigating multiple cases on a similar subject matter. For taxpayers and market participants, the present value of net benefits through the promulgation of a clear rule that reduces the need for litigation is higher than pursuing multiple, protracted matters through litigation.
At the same time, rulemaking is not
so fast that it surprises market participants. Establishing a rule through participatory rulemaking can often be far more efficient. This is particularly important in the context of declining government enforcement relative to economic activity, as documented by the American Bar Association.34
And third, rulemaking would enable the Commission to establish rules through a transparent and participatory process, ensuring that everyone who may be affected by a new rule has the opportunity to weigh in on it. APA procedures require that an agency provide the public with meaningful opportunity to comment on the rule’s content through the submission of written “data, views, or arguments.”35 The agency must then consider and address all submitted comments before issuing the final rule. If an agency adopts a rule without observing these procedures, a court may strike down the rule.36
This process is far more participatory than adjudication. Unlike judges, who are confined to the trial record when developing precedent-setting rules and standards, the Commission can put forth rules after considering a comprehensive set of information and analysis.37 Notably, this would also allow the FTC to draw on its own informational advantage – namely, its ability to collect and aggregate information and to study market trends and industry practices over the long term and outside the context of litigation.38 Drawing on this expertise to develop standards will help antitrust enforcement and policymaking better reflect empirical realities and better keep pace with evolving business practices.
The New York Times:
Amazon’s Antitrust Antagonist Has a Breakthrough Idea
By David Streitfeld
The dead books are on the top floor of Southern Methodist University’s law library.
“Antitrust Dilemma.” “The Antitrust Impulse.” “Antitrust in an Expanding Economy.” Shelf after shelf of volumes ignored for decades. There are a dozen fat tomes with transcripts of the congressional hearings on monopoly power in 1949, when the world was in ruins and the Soviets on the march. Lawmakers believed economic concentration would make America more vulnerable.
At the end of the antitrust stacks is a table near the window. “This is my command post,” said Lina Khan.
It’s nothing, really. A few books are piled up haphazardly next to a bottle with water and another with tea. Ms. Khan was in Dallas quite a bit over the last year, refining an argument about monopoly power that takes aim at one of the most admired, secretive and feared companies of our era: Amazon.
The retailer overwhelmingly dominates online commerce, employs more than half a million people and powers much of the internet itself through its cloud computing division. On Tuesday, it briefly became the second company to be worth a trillion dollars.
If competitors tremble at Amazon’s ambitions, consumers are mostly delighted by its speedy delivery and low prices. They stream its Oscar-winning movies and clamor for the company to build a second headquarters in their hometowns. Few of Amazon’s customers, it is safe to say, spend much time thinking they need to be protected from it.
But then, until recently, no one worried about Facebook, Google or Twitter either. Now politicians, the media, academics and regulators are kicking around ideas that would, metaphorically or literally, cut them down to size. Members of Congress grilled social media executives on Wednesday in yet another round of hearings on Capitol Hill. Not since the Department of Justice took on Microsoft in the mid-1990s has Big Tech been scrutinized like this.
Amazon has more revenue than Facebook, Google and Twitter put together, but it has largely escaped sustained examination. That is beginning to change, and one significant reason is Ms. Khan.
In early 2017, when she was an unknown law student, Ms. Khan published “Amazon’s Antitrust Paradox” in the Yale Law Journal. Her argument went against a consensus in antitrust circles that dates back to the 1970s — the moment when regulation was redefined to focus on consumer welfare, which is to say price. Since Amazon is renowned for its cut-rate deals, it would seem safe from federal intervention.
Continue reading…https://www.nytimes.com/2018/09/07/technology/monopoly-antitrust-lina-khan-amazon.html
Klobuchar questions Kavanaugh on antitrust
By CPI on September 6, 2018No Comment
Senator Amy Klobuchar (D – MN) joined fellow Democrats Wednesday in grilling Supreme Court nominee Brett Kavanaugh over his views on antitrust issues.
Klobuchar, ranking member on the Senate Judiciary Antitrust Subcommittee, said that Supreme Court decisions on antitrust issues in recent years, including the decisions in Ohio v. American Express, Leegin Creative Leather Products v. PSKS and Bell Atlantic v. Twombly, have made it harder to enforce our antitrust laws.
Klobuchar: “Senator Lee and I run the Antitrust Subcommittee…and in recent years…the Supreme Court has made it harder to enforce our antitrust laws in cases like Trinco, Twombly, Leegin, and most recently Ohio v. American Express. This could not be happening at a more troubling time. We’re experiencing a wave of industry consolidation. Annual merger filings increased by more than 50% between 2010 and 2016. I’m concerned that the Court, the Roberts Court, is going down the wrong path and your major antitrust opinions would have rejected challenges to mergers that majorities found to be anticompetitive. I’m afraid you’re going to move it even further down the path. Starting with 2008, in the Whole Foods case, where Whole Foods attempted to buy Wild Oats Market. Very complicated. I’m going to go to the guts of it from my opinion. The majority of courts and…what happened is the Republican majority FTC challenges a deal, and you dissent and you apply your own pricing test to the merger. My simple question is: where did you get this pricing test?”
Kavanaugh: “I would have affirmed the decision by the district judge in that case which allowed the merger and the district judge is Judge Friedman, an appointee of President Clinton’s to the district court. I was following his analysis of the merger. The case is very fact specific…it really turns on whether the larger supermarket sells organic food or not.”
Klobuchar: “Where did you get the pricing test…? You used different tests. I’m trying to figure that out. What legal authority actually requires a government to satisfy your standard to block a merger? …I remember in our discussion you cited these non-binding horizontal merger guidelines that you used to come up with this test.”
Kavanaugh: “You’re looking at the effect on competition and what the Supreme Court has told us, at least from the late 1970s, is to look at the effect on consumers and what’s the effect on the prices for consumers and the theory of the district court and Judge Friedman in this case was that the merger would not cause an increase in prices because they were competing in a broader market that included larger supermarkets that also sold organic food. The question is whether there an organic food market solely or a broader supermarket market.”
Klobuchar also asked Kavanaugh questions about net neutrality, consumer regulation and other issues. She suggested that the public may be focused more on economic issues than the Supreme Court, but “it’s our case to make that it does matter.”
Klobuchar: “Or in another case you wrote a dissent against the rules [that] protect net neutrality, rules that help all citizens, and small businesses have an even playing field when it comes to accessing the Internet. Another example that seems mired in legalese, but is critical for Americans, antitrust law. In recent years the conservative majority on the Supreme Court has made it harder and harder to enforce the nation’s antitrust laws, ruling in favor of consolidation and market dominance. Yet two of Judge Kavanaugh’s major antitrust opinions suggest that he would push the court even further down this pro-merger path. We should have more competition and not less.”
From: https://www.competitionpolicyinternational.com/us-sen-klobuchar-questions-kavanaugh-on-antitrust/?utm_source=CPI+Subscribers&utm_campaign=ac38616102-EMAIL_CAMPAIGN_2018_09_07_06_39&utm_medium=email&utm_term=0_0ea61134a5-ac38616102-236474137
U.S. is expected to let lapse $600 million in funding to combat global disease outbreaks
From: http://centerforpolicyimpact.org/2018/02/09/penny-wise-pandemic-foolish/
The money was appropriated in 2014 at the height of a catastrophic Ebola outbreak in West Africa. Yet there is considerable evidence that this emergency funding worked. In West Africa and other parts of the world, the CDC has trained disease detectives to diagnose, prevent and contain outbreaks.
When Ebola again began to spread in the Democratic Republic of the Congo last year, health officials, including those trained and supported by the CDC, were able to act swiftly to contain the virus, saving lives and preventing what could have been a massive disaster.
To end this funding now would be like a homeowner, having just been spared from a fire by a smoke alarm, deciding to disconnect the alarm.
We’ve made this mistake before. It’s relatively easy to garner support to fight infectious diseases when they are rampant and capturing our attention, but too often the motivation to sustain funding wanes when the infection appears to be under control. Peter Sands, executive director of The Global Fund, argues that our approach to fighting infections is characterized by “cycles of panic followed by neglect.”
Global health history is full of such examples. In a study that I co-authored, we found 75 episodes of malaria resurgence, where in most cases countries had successfully controlled malaria, only to have it come roaring back once they cut their malaria programs.
This is why the findings by Summers and colleagues are so urgent. When economic losses from a pandemic are expected to exceed $500 billon per year, penny-pinching on our funding to prevent outbreaks is glaringly short-sighted.
Perhaps most curious is the CDC’s reported plan to deal with dwindling resources by downscaling efforts in 39 of the 49 countries where this funding is currently deployed. Most pandemics begin with a spark — a pathogen jumps from domesticated or wild animals to humans. And yet the CDC plans to lessen its vigilance in some of the most likely places in the world for that spark to occur, countries such as China, Pakistan, Haiti, Rwanda and the Congo.
Pandemics know no boundaries. That is especially true now, when factors such as international travel, climate change, deforestation and human-animal interactions are accelerating the spread of infectious diseases. In our modern age, when an outbreak in a far-off land can quickly reach our backyard, there is no room for territorial thinking. Like ships on an ocean, we rise and fall together.
We cannot make the world safe from pandemic diseases by looking away after an emergency fades, nor by hoping that infectious diseases stay within the borders of far-away nations. It is time for us to end the cycles of panic and neglect and invest reasonably and rationally in outbreak preparedness every day and everywhere. The human and economic costs of inaction are intolerable.
Creating Effective Health Care Markets
September 7, 2018
by David Blumenthal, M.D.
Toplines:
The conditions underlying the effective functioning of market economies do not currently exist in health care
Supporters of market-based approaches to health care should seek to promote competition and develop better information on provider prices and quality
Article intro:
Disagreement about the role of markets lies at the root of many of our fiercest health care controversies. One side believes that unleashing market forces will rescue our health care system. From this viewpoint, government involvement is inherently destructive, except in rare circumstances. Many opponents of the Affordable Care Act share this opinion.
The other side believes that health care markets are deeply flawed and that government must play a major role in achieving a higher-performing health system. These people point out that markets make no claim to ensuring equity in the use of health care resources, only improved efficiency. Supporters of the ACA tend to hold this view.
Given this fundamental divide, it’s worth considering the conditions underlying the effective functioning of market economies, whether those conditions currently prevail in health care and, if not, what changes would be required to establish them.
www.commonwealthfund.org/blog/2018/creating-effective-health-care-markets?omnicid
What can the Trump Administration do to rein in Google, Twitter, and Facebook?
Wired has some ideas. It asked some antitrust experts for their thoughts. A main theme is that the government's options are limited, but antitrust enforcers could do more to stop mergers with anti-competitive potential. DR
https://www.wired.com/story/how-to-curb-silicon-valley-power-even-with-weak-antitrust-laws/
Is Apple-Shazam an example of a tech merger that should be blocked? Did the EU get it wrong?Or are the findings of no likely harm to competition well founded?
European Commission - Press release
http://europa.eu/rapid/press-release_IP-18-5662_en.htm
Mergers: Commission clears Apple's acquisition of ShazamBrussels, 6 September 2018
The European Commission has approved under the EU Merger Regulation the proposed acquisition of Shazam by Apple. The Commission concluded that the merger would not adversely affect competition in the European Economic Area or any substantial part of it.
Commissioner Margrethe Vestager, in charge of competition policy, said: "Data is key in the digital economy. We must therefore carefully review transactions which lead to the acquisition of important sets of data, including potentially commercially sensitive ones, to ensure they do not restrict competition. After thoroughly analysing Shazam's user and music data, we found that their acquisition by Apple would not reduce competition in the digital music streaming market."
Today's decision follows an in-depth [http://europa.eu/rapid/press-release_IP-18-3505_en.htm] investigation of Apple's proposed acquisition of Shazam. Apple operates "Apple Music", which is the second largest music streaming service in Europe, after Spotify. Shazam offers a leading music recognition application ("app") in the European Economic Area (EEA) and worldwide.
The Commission's investigation
Apple and Shazam mainly offer complementary services and do not compete with each other. The Commission opened an in-depth investigation to assess:
- whether Apple would obtain access to commercially sensitive data about customers of its competitors for the provision of music streaming services in the EEA, and whether such data could allow Apple to directly target its competitors' customers and encourage them to switch to Apple Music. As a result, competing music streaming services could have been put at a competitive disadvantage.
- considering Shazam's strong position in the market for music recognition apps, whether Apple Music's competitors would be harmed if Apple, after the transaction, were to discontinue referrals from the Shazam app to them.
The Commission found that:
- the merged entity would not be able to shut out competing providers of digital music streaming services by accessing commercially sensitive information about their customers. In particular, access to Shazam's data would not materially increase Apple's ability to target music enthusiasts and any conduct aimed at making customers switch would only have a negligible impact. As a result, competing providers of digital music streaming services would not be shut out of the market;
- the merged entity would not be able to shut out competing providers of digital music streaming services by restricting access to the Shazam app. This reflects the fact the app has a limited importance as an entry point to the music streaming services of Apple Music's competitors; and
- the integration of Shazam's and Apple's datasets on user data would not confer a unique advantage to the merged entity in the markets on which it operates. Any concerns in that respect were dismissed because Shazam's data is not unique and Apple's competitors would still have the opportunity to access and use similar databases.
Companies and products
Apple is a US based global technology company which designs, manufactures and sells mobile communication, media devices, portable digital music players and personal computers. It also sells and delivers digital content online and offers the music and video streaming service ''Apple Music''.
Shazam is a UK based developer and distributor of music recognition applications for smartphones, tablets and PCs. It mainly generates revenues from online advertising, and commissions earned on referrals of users to digital music streaming and download services, such as Apple Music, Spotify and Deezer.
__._,_.___
9th Circuit: "We consider whether the Eighth Amendment’s prohibition on cruel and unusual punishment bars a city from prosecuting people criminally for sleeping outside on public property when those people have no home or other shelter to go to. We conclude that it does."
http://cdn.ca9.uscourts.gov/datastore/opinions/2018/09/04/15-35845.pdf
NYT: The Government’s New Strategy to Crack Down on ‘Stock Trader Spoofing’
The Justice Department charged two former Deutsche Bank traders late last month with wire fraud for placing and quickly canceling orders to move markets.
By Peter J. Henning
The Justice Department has tried to crack down on traders who try to move markets by entering and quickly canceling orders, conduct that goes by the catchy moniker “spoofing.”
But the government’s early prosecution of the crime has faced a big setback. In just the second trial for spoofing, which the Dodd-Frank Act outlawed, a Connecticut jury acquitted a former trader at UBS of spoofing this spring. That raised questions about whether prosecutors can pursue these cases.
Late July the Justice Department took a new tack. Rather than use the spoofing law, prosecutors charged two former Deutsche Bank traders, James Vorley and Cedric Chanu, with wire fraud. The government claims the pair placed and quickly canceled orders for precious metals futures contracts to create the impression that there was greater supply or demand.
https://www.nytimes.com/2018/09/04/business/dealbook/government-strategy-crack-down-on-spoofing.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=stream&module=stream_unit&version=latest&contentPlacement=4&pgtype=sectionfront
President Trump says tech firms may be in a “very antitrust situation”
Referring to Google, Amazon, and Facebook, he repeatedly said he can’t comment publicly on whether they should be broken up.
“I won’t comment on the breaking up, of whether it’s that or Amazon or Facebook,” Trump said in an Oval Office interview Thursday with Bloomberg News. “As you know, many people think it is a very antitrust situation, the three of them [including Google]. But I just, I won’t comment on that.”
Note: Our angry comment translator is unavailable to explain Trump's antitrust thinking. DR
https://www.bloomberg.com/news/articles/2018-08-30/google-under-fire-again-on-search-as-hatch-calls-for-ftc-probe
California abolishes cash bail, aiming to treat rich and poor defendants equally
SMARTINEZ, Calif. —California has abolished bail as a condition of pretrial release, a controversial move to address inequities in the justice system that have often allowed those with personal wealth to walk free while poor defendants, unable to pay, have been incarcerated.
The measure, signed into law by Gov. Jerry Brown (D) on Tuesday, puts California at the head of a small group of states that have made bail reform a priority amid rising incarceration rates and increasing concerns about the justice system’s economic and racial biases.
From https://www.msn.com/en-us/news/crime/california-abolishes-cash-bail-aiming-to-treat-rich-and-poor-defendants-equally/ar-BBMDdn3?ocid=spartandhp
DMN: California’s ‘Gold Standard’ Net Neutrality Bill Moves Towards a Final Vote
California’s stringent net neutrality bill, SB 822, has been overwhelmingly approved by the State Assembly.
The California State Assembly has overwhelmingly passed net neutrality bill SB 822, 58-17. The lopsided decision, issued Thursday (August 30th), will send the tough provision to the California Senate before it hits the desk of state governor Jerry Brown.
Both are widely expected to pass the measure.
The story continues here. https://www.digitalmusicnews.com/2018/08/30/california-net-neutrality-final-vote/
Copy of Statement of Arbitrator -- Kaepernick:
The Justice Department's filed "statement of interest" that sides with a group of students rejected for admission by Harvard University who allege the school discriminates against Asian-American applicants.
The URL for the filing appears below. In the "statement of interest" the Justice Department says that Harvard can't show it is following legal restrictions established to limit how race is used as a factor in admissions, essentially agreeing with the plaintiffs in the case, Students for Fair Admissions.
https://www.justice.gov/opa/press-release/file/1090856/download?utm_medium=email&utm_source=govdelivery
The University responded Thursday.
"We are deeply disappointed that the Department of Justice has taken the side of Edward Blum and Students for Fair Admissions, recycling the same misleading and hollow arguments that prove nothing more than the emptiness of the case against Harvard. This decision is not surprising given the highly irregular investigation the DOJ has engaged in thus far, and its recent action to repeal Obama-era guidelines on the consideration of race in admission," the Harvard statement said.
"Harvard does not discriminate against applicants from any group, and will continue to vigorously defend the legal right of every college and university to consider race as one factor among many in college admissions, which the Supreme Court has consistently upheld for more than 40 years. Colleges and universities must have the freedom and flexibility to create the diverse communities that are vital to the learning experience of every student, and Harvard is proud to stand with the many organizations and individuals who are filing briefs in support of this position today," the statement continued.
The URL for Harvard's 8/27/2018 filed Reply is here: https://admissionscase.harvard.edu/files/adm-case/files/harvards_reply_brief_iso_summary_judgment.pdf
A number of amicus briefs have been filed in support of Harvard. URLs can be found at https://admissionscase.harvard.edu/supporting-documents
The initial Kaepernick grievance filing by the Geragos firm is here: http://a.espncdn.com/pdf/2017/1015/KaepernickGrievance_r.pdf
From DC AG Racine's recent newsletter-- short term residential rentals (like Air BnB):
Last week, I demanded landlords at 33 apartment buildings detail how their commercial short-term rentals work. This action was in response to residents who claim they were not informed about hotel-like businesses operating in their apartment buildings and worry that the rowdy guests pose safety concerns. Under the law, landlords must disclose their operation of these hotel-like units to their residents. These requests for information will help us determine if the landlords misled their long-standing residents about the short-term rentals and if they violated District consumer protection or rent control laws.
I will continue to use all the tools at my disposal to ensure that commercialized short-term apartment rentals do not endanger District residents or our supply of affordable housing.
In July The New York City Council voted in favor of a new law requiring Airbnb and similar home-share companies to share data on their users with NYC government
The law was characterized by the council as one that would “provide the City with an additional tool to enforce the laws against illegal short term rentals.” “This bill is about transparency and bringing accountability to billion-dollar companies who are not being good neighbors,” explained NYC Councilwoman Carlina Rivera.
You can read the text here --legistar.council.nyc.gov/ViewReport.ashx?M=R&N=Text&GID=61&ID=3143400&GUID=AB36F650-AAE2-444B-A300-8CF56C056E99&Title=Legislation+Text
Three editorials (pointed out by Consumer Law and Policy Blog)
The Washington Post, addressing the current work of the CFPB and the Department of Education, had editorials yesterday and today pertinent to student loans and higher education: Read "The Trump administration’s scandalous handling of student loans," here. Read "How Betsy DeVos could trigger another financial meltdown," here.
The New York Times, addressing proposed changes by the Office of the Comptroller of the Currency to the rules for banks compliance with the Community Reinvestment Act, writes "A Green Light for Banks to Start ‘Redlining’ Again," here.
Email from Solar United Neighbors (excerpt): As part of a settlement agreement with Solar United Neighbors, the DC government, Pepco, and other stakeholders, last week the DC Public Service Commission (PSC) rejected Pepco’s proposal to increase residential demand charges in our electric bills.
Residential demand charges are a particularly unfair, confusing, and unpredictable rate increase because of how they are calculated and how they can impact your bill for the rest of the year. Typically, demand charges have been applied to large commercial operations, where the impact of the energy use—say to run a factory full of equipment—would materially impact the amount of energy the grid needed to supply. Residential demand charges, on the other hand, make no sense and are punitive to those who try to lower their bills by using less energy and installing solar panels on their roofs.One of the important factors in the settlement was the strong public outcry against the rate increase.
A U.S. federal judge authorizes the seizure of Citgo Petroleum Corp. to satisfy a Venezuelan government debt
The ruling that could set off a scramble among Venezuela’s many unpaid creditors to wrest control of its only obviously seizable U.S. asset.
Judge Leonard P. Stark of the U.S. District Court in Wilmington, Del., issued the ruling.
The court order raises the likelihood that Venezuela’s state oil company, Petróleos de Venezuela SA, will lose control of a valuable external asset amid the country’s deepening economic and political crisis. The decision could still be appealed to a higher, federal court.
Excerpts from https://www.wsj.com/articles/u-s-judge-authorizes-seizure-of-venezuelas-citgo-1533853734 (paywall)
What is the effect on US automobile consumers of the Trump Administration's new trade deal with Mexico? Not much, according to Bloomberg -- Washington selling tweaks to existing treaties as historic victories
By
David Fickling
and
Anjani Trivedi
August 28, 2018, 3:20 AM
A car can look like a fantastic bargain on the lot, only to reveal itself as a lemon when you drive it away. It’s not so different with trade agreements.
Take the deal hammered out Monday between the U.S. and Mexico on automotive imports, which the two countries hope to extend to Canada, the third member of the North American Free Trade Agreement.
The key elements certainly look dramatic: lifting rules-of-origin requirements to 75 percent to avoid import tariffs, and a separate rule that 40 percent to 45 percent of content come from factories paying more than $16 an hour. The wage rule in particular is about twice what Mexican assembly-line workers make, and four times the average at parts companies there.
When you take a look under the hood, though, there’s a lot less than meets the eye.
Take those rules-of-origin requirments. These specify the share of a car’s content that must be made within Nafta, and have been at 62.5 percent for 16 years. Usefully, the National Highway Traffic Safety Administration already produces data on rules of origin so that U.S. consumers can buy local, and these show which cars would be affected by the change.
Big Deal
Just three Mexican-made cars that don't currently attract Nafta tariffs will do so under the revised agreement, according to NHTSA data
Based on the NHTSA’s data, there are just three models made in Mexico that are currently exempt but would attract tariffs under the new regime: Nissan Motor Co.’s Versa Sedan, Audi AG’s SQ5, and Fiat Chrysler Automobiles NV’s Fiat 500. Of these, only the Versa sells more than a handful of models in the U.S., with 106,772 vehicles shipped in 2017.
The wage rules are likely to be tougher, though even there the devil is in the detail. Almost all non-Nafta content in Mexican-made cars sold in the U.S. comes from Germany, Japan or South Korea, where total compensation typically takes pay well above $16 an hour. So unless the requirement relates solely to Nafta workers earning at least $16 per hour (full details haven’t been released yet), the rules will only really affect vehicles that are at least 55 percent made in Mexico.
That’s a similarly small group. Excluding Ford Motor Co.’s Fusion and Fiesta, General Motors Co.’s Chevrolet City Express, and Mazda Motor Corp.’s Mazda2 — which are already off the U.S. market or heading that way — they sold a collective 658,640 units in 2017, according to our calculations. That compares with total imports from Mexico of about 2.44 million cars.
There’s still likely to be some pain at the margins. The impact of the rules on parts supply chains could reduce earnings at Mazda and Nissan by 5 billion yen ($45 million) and 15 billion yen, respectively, or 4 percent and 2 percent of operating profits, according to Nomura Holdings Inc.’s estimates. With automakers continuing to battle rising costs from President Donald Trump’s other tariffs, any additional pressure won’t help.
Still, the small list of affected vehicles chimes with the equanimity with which the agreement is being greeted in Mexico.
About 70 percent of the country’s light-vehicle exports to the U.S. would be compliant under the new rules, with the remaining 30 percent getting a five-year phase-in period running through 2024, Economy Minister Ildefonso Guajardo told a press conference Monday. Even those that fall short would only receive the usual tariff of 2.5 percent for cars and 25 percent for trucks — levels that Volkswagen AG, Hyundai Motor Co., Kia Motors Corp. and others consider worth paying on swathes of models in return for Mexico’s drastically cheaper labor costs.
It’s likely to be a similar story with Canada, which shouldn’t be affected at all by the wage rules. “Canada should find it relatively simple to join the U.S.-Mexico consensus” and the agreement is a “fundamentally positive development” that should reduce perceptions of risks around Nafta, Brett House, deputy chief economist at Bank of Nova Scotia, wrote in a note after the announcement.
The Honda CR-V and two-door Civic, the Ford Flex, and three Lincoln and Cadillac models are the only Canada-produced cars that would be swept up in an extended version of the U.S-Mexico deal
It shouldn’t be all that surprising that this deal is more limited than it first appears. Mexico is scarcely going to agree to devastate its domestic industry to please President Trump.
Indeed, its modest nature should be considered a virtue, and global equity markets are quite right to be rallying in relief that this element of uncertainty has been lifted.
If Washington can sell tweaks to existing treaties as historic victories that merit a ratcheting-down of global tensions, that’s good news for the other seemingly intractable trade disputes rumbling around the world.
https://www.bloomberg.com/view/articles/2018-08-28/trump-s-mexico-trade-deal-looks-like-a-lemon?cmpid=BBD082818_BIZ&utm_medium=email&utm_source=newsletter&utm_term=180828&utm_campaign=bloombergdaily
A slightly different take on trade deal and auto prices from CBS News:
Maybe higher wage requirements and higher local content requirements (aluminum and steel) will cause auto prices to rise
https://www.msn.com/en-us/money/markets/if-trump-slaps-auto-tariffs-on-canada-heres-what-itll-cost-the-us/ar-BBMDZO3?ocid=spartandhp
WSJ Editors worry that "Half-Nafta" means higher auto prices
Excerpt:
The deal also imposes new red tape and costs on the auto industry to punish
imports. The deal says that to get tariff-free treatment cars sold in North
America must have 75% of their content made here, up from 62.5%, and at
least 40% of the content must be made with workers who earn $16 an hour.
This is politically managed trade, and its economic logic is the opposite of Mr.
Trump’s domestic deregulation agenda. Ford and GM seem to have made
their peace with this intrusion into their management, but car makers with
assembly plants in Tennessee, Alabama and other GOP-leaning U.S. states
could suffer if they import more than 25% of their parts.
This auto gambit is part of the Trump-Lighthizer strategy to blow up global
supply chains, and it is a political strategy to get a revised deal through
Congress. That also explains the deal’s new labor provisions that go far to
imposing U.S.-style labor laws on Mexico. The details still aren’t clear, but Mr.
Lighthizer said Monday those rules will be “enforceable” on Mexico as part of
the new deal.
https://www.wsj.com/articles/half-a-nafta-1535413208?mod=searchresults&page=1&pos=9 (pay wall)
Is Judge Kavanaugh a Fan of Antitrust Laws?
By CPI on August 27, 2018
Posted by The Legal Intelligencer
By Carl W. Hittinger and Tyson Y. Herrold
We know Judge Brett Kavanaugh is a fan of the Washington Nationals. But is he also a fan of the antitrust laws? On July 9, 2018, President Donald Trump nominated Kavanaugh, who currently sits on the U.S. Court of Appeals for the District of Columbia Circuit, to replace retiring justice and long-time swing voter Anthony Kennedy. Judge Kavanaugh is sure to be the subject of exacting congressional scrutiny on any number of topics. But the Senate Judiciary Committee should not overlook Kavanuagh’s antitrust jurisprudence. As of this writing, Kavanaugh’s Senate Judiciary Committee hearing is scheduled to begin on Sept. 4.
Unlike Justice Neil Gorsuch, who practiced antitrust law in the private sector and authored three unanimous antitrust opinions while on the U.S. Court of Appeals for the Tenth Circuit, Judge Kavanaugh has no private antitrust experience. Kavanaugh has authored two antitrust dissents while on the D.C. Circuit, both of which drew sharp criticism from fellow judicial panel members. Despite his limited antitrust experience, these dissents shed some light on Kavanaugh’s antitrust and economic persuasion and provide fertile ground for congressional examination.
‘FTC v. Whole Foods Market’
In the 2008 case of FTC v. Whole Foods, the FTC filed a motion for preliminary injunction challenging Whole Foods’ merger with Wild Oats, which the district court denied. The ensuing appeal to the D.C. Circuit turned on the appropriate definition of the relevant product market. The FTC defined the market as “premium, natural, and organic supermarkets,” called “PNOS” for short. According to the FTC, these stores “focus on high-quality perishables,” “generally have high levels of customer services,” “target affluent and well educated customers,” and “emphasi[ze] … social and environmental responsibility.”
D.C. Circuit Judge Janice Brown, with Judge David Tatel concurring in the judgement, agreed with the FTC’s narrow PNOS market definition and rejected Whole Foods’ proposed alternative market, which included so-called “conventional” supermarkets. In support, Judge Brown pointed to evidence of lower profits on “high-quality perishables” where Whole Foods and Wild Oats competed, compared to where they did not. Further economic data from the FTC showed that, although PNOSs competed with conventional supermarkets for “dry grocery” goods, conventional supermarkets had little to no effect on margins for the “high-quality perishables” sold by PNOSs. Judge Brown also relied on Whole Foods’ proprietary “internal projections” that a majority of Wild Oats’ consumers would switch to Whole Foods if the former chain closed, as well as “pseudonymous blog postings” by Whole Foods’ CEO that conventional supermarkets were “unable to compete” with PNOSs.
Dissenting, Kavanaugh branded the FTC’s case “weak” and, by extension, the court’s decision to preliminarily enjoin the merger (according to him), “a relic of a bygone era when antitrust law was divorced from basic economic principles.”
First, Kavanaugh criticized the court for “diluting the standard for preliminary injunction relief.” He argued that its purportedly lenient application of that standard allowed the “FTC to just snap its fingers and temporarily block a merger.” Citing Robert Bork’s famous (or infamous) book “The Antitrust Paradox,” Kavanaugh explained, “the FTC’s position … calls to mind the bad old days when mergers were viewed with suspicion regardless of their economic benefits.”
In turn, in his concurrence, Judge Tatel called Kavanaugh’s criticism “baffling” and noted that the court “scrupulously followed … the likelihood of success standard.” He rebuked Kavanaugh for his “zeal to reach the merits and preempt the FTC” and reminded him that the preliminary injunction standard was designed by Congress to maintain the status quo pending the FTC’s administrative review of mergers within its jurisdiction.
Second, throwing binding case authority to the winds (not to mention stare decisis), Kavanaugh criticized the court for relying too heavily on the Supreme Court’s Brown Shoe v. United States decision, which framed “practical indicia,” or factors, used to identify discrete product submarkets in merger cases. He called that binding decision “free-wheeling,” and commented that it “has not stood the test of time.” Kavanaugh again approvingly quoted a passage from Bork’s “Antitrust Paradox,” contending that, while it would be “overhasty to say that the Brown Shoe opinion is the worst antitrust essay ever written, … [it] has considerable claim to the title.”
Third, Kavanaugh rejected the court’s PNOS product market, citing Whole Foods’ economic expert. Kavanaugh applauded that expert for relying on “all-but-dispositive price evidence” that prices were uniform across Whole Foods’ stores, regardless of whether there was a competing PNOS like Wild Oats in the area. This observation drew further sharp criticism from Judge Tatel who, calling Kavanaugh’s “all-but-dispositive” price evidence “all-but-meaningless,” pointed out that Whole Foods’ expert testimony only showed pricing on a single day and only after “Whole Foods announced its intent to acquire Wild Oats.” This made the data susceptible, according to Judge Tatel, to “manipulation” and “gave Whole Foods every incentive to eliminate any price differences that may have previously existed between its stores … not only to avoid antitrust liability, but also because the company was no longer competing with Wild Oats.”
Continue reading…https://www.law.com/thelegalintelligencer/2018/08/24/is-judge-kavanaugh-a-fan-of-antitrust-laws-lets-take-a-look/
NYT: Central bankers are wrestling with the idea that how companies compete and exert power affects the overall well-being of the economy.
From the NYT: While these topics more commonly show up in debates around antitrust policy or how the labor market is regulated, it may have implications for the work of central banks as well. For example, if concentrated corporate power is depressing wage growth, the Fed may be able to keep interest rates lower for longer without inflation breaking out. If online retail makes prices jump around more than they once did, policymakers should be more reluctant to make abrupt policy changes based on short-term swings in consumer prices.
Alan Krueger, a Princeton economist, argues that monopsony power is most likely part of the apparent puzzle of why wage growth is low. By his estimates, wages should be rising 1 to 1.5 percentage points faster than they are, given recent inflation levels and the unemployment rate. His paper is at https://www.kansascityfed.org/~/media/files/publicat/sympos/2018/papersandhandouts/824180824kruegerremarks.pdf?la=en
Nicolas Crouzet and Janice Eberly of Northwestern University presented a paper pointing out that more of the investment of modern corporations takes the form of intangible capital, like software and patents, rather than machines and other physical goods. That may be a reason low interest rate policies by central banks over the past decade didn’t prompt more capital spending. Banks are generally disinclined to treat intellectual property or other intangible items as collateral against loans, which could mean interest rate cuts by a central bank have less power to generate increased investment spending. The Crouzet-Eberly paper is at https://www.kansascityfed.org/~/media/files/publicat/sympos/2018/papersandhandouts/824180810eberlycrouzetpaper.pdf?la=enwww.kansascityfed.org/~/media/files/publicat/sympos/2018/papersandhandouts/824180810eberlycrouzetpaper.pdf?la=en
The NYT article is at https://www.nytimes.com/2018/08/25/upshot/big-corporations-influence-economy-central-bank.html?action=click&module=Well&pgtype=Homepage§ion=The%20Upshot
Companies and advocacy groups file amicus brief asking appeals court to review the FCC decision to end net neutrality rules.
Software developer Mozilla Corp., video-sharing service Vimeo LLC, and e-commerce site Etsy Inc., and other technology advocacy groups and media companies filed the brief Monday in the U.S. Court of Appeals for the District of Columbia Circuit [#18-1051], joining a petition by attorneys general of 22 states and D.C. against the FCC order ending net neutrality.
The brief is at https://blog.mozilla.org/wp-content/uploads/2018/08/As-filed-Initial-NG-Petitioners-Brief-Mozilla-v-FCC-20Aug2018-1.pdf
PBS Newshour segment suggests that stock buybacks artificially limit supply and raise price of stocks
www.pbs.org/newshour/show/why-recent-stock-market-gains-might-not-benefit-the-economy
Excerpt:
Irene Tung:
By buying back a company’s stock, the company is removing from the open market a number of shares, creating an artificial scarcity of shares, which then temporarily drives up the price.
From NYT: Opinion about negative effects of stock buybacks
By William Lazonick and Ken Jacobson
Excerpt:
In 2003, the S.E.C. revealed that it was aware of the use of buybacks to manipulate the stock market. The agency acknowledged, in amending Rule 10b-18 to include block trades, that “during the late 1990s, it was reported that many companies were spending more than half their net income on massive buyback programs that were intended to boost share prices — often supporting their share price at levels far above where they would otherwise trade.” But its 2003 amendment was hardly a solution.
From 2003 to 2007, the value of buybacks by companies in the S.&P. 500 Index quadrupled, reaching almost $600 billion in 2007. With their cash reserves depleted by this orgy of buyback activity, these companies were more vulnerable when the downturn came. Having wasted billions on buybacks, many of them incurred huge losses and required mass layoffs to avoid bankruptcy.
After plummeting in 2008 and 2009, buybacks have again soared: A record $800 billion in buybacks by S.&P. 500 companies is predicted for this year.
Democrats have argued that the Republican tax cuts have funded increased buybacks. While this is true, the damage done by corporate stock buybacks over the past decades has been systemic.
Short of a Congressional ban on buybacks, as Ms. Baldwin proposes, the S.E.C. should immediately rescind Rule 10b-18, and confront the reality of stock market manipulation that open market repurchases entail. If Congress and regulators do not take action to rein in buybacks, the rampant economic inequality that already afflicts the United States will only get worse.
www.nytimes.com/2018/08/23/opinion/ban-stock-buybacks.html?action=click&module=Opinion&pgtype=Homepage
Nearly a decade after the crisis, the country's biggest banks are starting to raise their Washington profile.
from Bloomberg News article:
A prime example: the push for the Federal Reserve to reconsider its capital surcharge for global systemically important banks, an additional capital requirement for the country’s eight largest banks.
While Fed officials have not indicated that they have any immediate plans to recalibrate the surcharge, the fight is one that solely affects the industry’s largest institutions — a constituency that has garnered little traction in policymaking circles in recent years.
It’s a sign, observers say, that the biggest banks are starting to reassert themselves, after absorbing much of the blame for the financial crisis a decade ago. While moving legislation through Congress is likely to remain an uphill battle given ongoing suspicion of Wall Street on both sides of the aisle, the banks are now raising the profile of key issues they would like President Trump’s regulators to tackle at the banking agencies.
“They’ve come out of the shadows,” said Camden Fine, president and chief executive of Calvert Advisors and the former head of the Independent Community Bankers of America. “They’re becoming more vocal, more aggressive, more strident about the issues that are top priorities to them.”
Legislation to benefit the biggest banks would likely still prove difficult. But in some notable cases even lawmakers are starting to feel more comfortable supporting initiatives to help Wall Street institutions — especially now that regulatory relief for smaller institutions has passed Congress. Republican lawmakers in the House and Senate have both recently sent letters to the Fed asking it to reconsider the capital surcharge, a move backed by the industry. And just last week, seven Republican senators asked the Fed to consider further tailoring prudential standards for those above the $250 billion asset threshold as well as for those with assets between $100 billion and $250 billion.
The shift can also be seen in the fight over the Volcker Rule, a ban on proprietary trading that mostly affects the biggest institutions. As reported by The Wall Street Journal, representatives from more than half a dozen of the biggest banks have raised alarms about the Fed’s proposed revision to the rule, which they argue could make compliance even harder. The biggest banks have largely opposed the Volcker Rule since its creation under the Dodd-Frank Act.
As larger banks seek to re-enter the public debate, they’re bolstered by the support of two industry groups that have recently been revamped: The Financial Services Forum, which now represents eight major banks, is under new leadership, and the Bank Policy Institute, which speaks for large and regional institutions, is the byproduct of a merger between The Clearing House Association and the Financial Services Roundtable. The two groups recently collaborated on a joint blog post about the capital surcharge.
“There is a desire to have more of a voice in the conversation,” said Barbara Hagenbaugh, executive vice president and head of communications for the Financial Services Forum. “We think it is important and appropriate to address the issues of unique importance to our members and to convey the vital role they play in the economy.”
Opinion from DMN:
You Can’t ‘Remaster’ a Brand-New Copyright, U.S. Court of Appeals Rules
August 21, 2018
Remastered oldies sound better. But they’re ultimately technical improvements that don’t constitute a brand-new copyright, the 9th Circuit Court of Appeals just ruled.The complexity of U.S. Copyright Law is now becoming outright absurd, especially as it relates to ‘pre-1972’ oldies recordings. For those just tuning in, federal copyright law in the United States only covers recorded works released after February 15th, 1972, with earlier works defaulting to a patchwork of state laws.
That, of course, has created a giant gray area for rights owners, as well as licensees. Unfortunately, those gray areas have translated into years of expensive litigation and confusion. And, some frankly absurd results.
A reversal of an earlier absurdity just happened in Pasadena, California, where the 9th Circuit Court of Appeals ruled that a remastered song doesn’t create a new copyright.
Why would a remastering create a brand-new copyright, you ask? Well, back in 2016, a lower court ruled that a remastering introduces substantially new elements into the recording, making it a brand-new work. That argument was cleverly posited by CBS Radio, which is fending off a lawsuit alleging that it should pay royalties for pre-1972 recordings.
The lawsuit was lodged by ABS Entertainment, which owns the recording copyrights of Al Green and other ‘oldies’ performers.
In a nutshell, CBS argued that it technically was never playing the old vinyl LPs of pre-1972 tracks. Instead, the station played digitally remastered CDs and digital files, which were released after 1972. Therefore, they should only be liable for post-1972 statutory rates under federal law, which are much lower.
The lower District Court agreed, opening up a number of strange possibilities. Read literally, the ruling meant that any recording copyright could theoretically be extended forever, as long as it was remixed before its expiration date. Other theoretical possibilities were equally hair-raising, though the 9th Circuit ruling has now slammed the door on a myriad of remastering loopholes.
Instead, the 9th Circuit has rejected the idea that a remaster is a substantially unique work deserving for new protections.“It should be evident that a remastered sound recording is not eligible for independent copyright protection as a derivative work unless its essential character and identity reflect a level of independent sound recording authorship that makes it a variation distinguishable from the underlying work,” 9th Circuit Court judge Richard Linn opined.
“That is so even if the digital version would be perceived by a listener to be a brighter or cleaner rendition.”
Accordingly, this case is now headed back to the lower District Court for reconsideration — and perhaps a more sane ruling.
The strange ruling is rooted in arcane U.S. Copyright Law, and this particular wrinkle isn’t quite getting fixed by the Music Modernization Act.Sadly, the Music Modernization Act (MMA) is threatening to further complicate oldies copyrights, in different ways. Under the CLASSICS sub-bill, pre-1972 oldies recordings would enjoy longer copyright terms and broader protections, but also be subject to a patchwork of state laws. That would give copyright owners the greatest level of protection and royalties, simply because states often carry stronger laws and payment requirements for pre-1972 works.
Perhaps predictably, CLASSICS has drawn a counter-proposal in the form of a competing bill. The ACCESS to Recordings Act, introduced by Oregon Democratic Senator Ron Wyden, would place pre-1972 recordings on the same copyright footing as every other recording, pre- or post-1972, a structure that would vastly simplify recording copyright in the US.
At this stage, it’s unclear if ACCESS will hamper the MMA’s chances of passage in the Senate (and ultimately into law).
Here’s the 9th Circuit Court Appeals ruling in ABS Entertainment Inc. v. CBS Corp. et al. [https://www.digitalmusicnews.com/wp-content/uploads/2011/07/9th_circuit_pre_1972_remaster.pdf]
See https://www.digitalmusicnews.com/2018/08/21/remaster-copyright-district-court-appeals/
Court decides: Constitution does not require State to require access to minimum level of education by which the child can attain literacy
The decision is here:http://mediad.publicbroadcasting.net/p/michigan/files/opinion_-_gary_b_vs_richard_snyder__16-13292.pdf [UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION ]
Language from the opinion:
The conditions and outcomes of Plaintiffs' schools, as alleged, are nothing short of devastating. When a child who could be taught to read goes untaught, the child suffers a lasting injury—and so does society. But the Court is faced with a discrete question: does the Due Process Clause demand that a State affirmatively provide each child with a minimum level of education by which the child can attain literacy? Based on the foregoing analysis, the answer to the question is no.
The Trump Administration's National Park Service proposes fees for free speech demonstrations on federal land
A DCist article explains that NPS released a list of 14 proposed rule changes to the permitting process. One of the new rules under consideration is a requirement for permit applicants to pay fees for free speech demonstrations, to help NPS recover some of the costs of managing the events and providing security. NPS already requires people to pay for special event permits.
“The federal government and taxpayers shouldn’t be required to underwrite the cost of somebody’s special event, whether it’s a concert, wedding, or gathering of some sort,” said NPS spokesman Mike Litterst. “We’re just asking the question,” he said of the proposal to apply the same reasoning to demonstrations. He said there has been no discussion yet of what the fees would be.
The Park Service said the “volume and complexity” of permit requests for the National Mall and White House have increased over the years. NPS issues around 750 permits for First Amendment demonstrations and an additional 1,500 permits for special events in and around D.C. each year.
The NPS proposal URL is https://www.nps.gov/nama/learn/news/upload/TPM-Proposed-Rule-Regs-Draft-08-06-18.pdf
One proposal is: "Consider requiring permit applicants to pay fees to allow the NPS to recover some of the costs of administering permitted activities that contain protected speech."
Ninth Circuit Says Remastered Songs Not Original in Win for Pre-1972 Artists
Even if engineers make the sound brighter or cleaner, they do not alter the expressive character and identity of the original recording. The decision wipes away a creative defense mounted by broadcasting companies.
https://www.law.com/therecorder/2018/08/20/ninth-circuit-says-remastered-songs-not-original-in-win-for-pre-1972-artists/?kw=Ninth%20Circuit%20Says%20Remastered%20Songs%20Not%20Original%20in%20Win%20for%20Pre-1972%20Artists
Who knew? There is a theme song for those who don't like competition: The Too Much Competition Blues
https://www.youtube.com/watch?v=VR717pSC5Kc
Grunes and Stucke on terminating ASCAP and BMI decrees
In their article at https://www.competitionpolicyinternational.com/potential-legal-issues-in-terminating-the-ascap-and-bmi-decrees/?utm_source=CPI+Subscribers&utm_campaign=afe405147d-EMAIL_CAMPAIGN_2018_08_17_03_46&utm_medium=email&utm_term=0_0ea61134a5-afe405147d-236508653
Grunes and Stucke point out, among other things, that the decrees have played an important role in mitigating the antitrust risks from ASCAP and BMI while promoting the efficiencies from collective licensing; and that it is a problem that if the ASCAP and BMI consent decrees were terminated, the duopoly would remain, and licensees and consumers would bear the risk of unduly restrictive anticompetitive practices.
A related problem pointed out by the authors is the difficulty the DOJ would likely face in convincing the court that terminating the decrees would benefit the public, given that it reached the opposite conclusion a couple of years ago. Moreover, the concerns the DOJ heard during its review process from licensees, such as Netflix, Pandora, and religious broadcasters, would undercut the argument that the public would somehow benefit from the decrees’ termination.
NYT: NY State's ethical horrors
A NYT editorial on an AG candidate mentions in passing that "Albany has long been a chamber of ethical horrors." It then provides the following litany:
n March, Gov. Andrew Cuomo’s former senior aide Joseph Percoco was convicted on corruption charges.
In May, former Assembly Speaker Sheldon Silver, a Democrat, was also convicted of corruption.
In July, the former Republican Senate majority leader, Dean Skelos, was convicted of bribery, extortion and conspiracy. Prosecutors said he used his office to pressure businesses to pay his son $300,000 for no-show jobs.
The same month, Alain Kaloyeros, a key figure behind Mr. Cuomo’s “Buffalo Billion” economic initiative, was convicted in a bid-rigging scheme.
And: Not to be forgotten are the allegations against former Attorney General Eric Schneiderman, who resigned in disgrace earlier this year after women who dated him accused him of choking them and beating them up.
See https://www.nytimes.com/2018/08/19/opinion/zephyr-teachout-new-york-attorney-general.html?action=click&pgtype=Homepage&clickSource=story-heading&module=opinion-c-col-left-region®ion=opinion-c-col-left-region&WT.nav=opinion-c-col-left-region
NYT: To fight shoplifting, some big retail companies are employing aggressive legal tactics — sometimes against people who didn’t do anything wrong.
But those strategies disproportionately harm low-income shoppers, who say they’re unmatched in the legal fight against the world’s largest retailers.
See NYT at https:// www.nytimes.com/2018/08/17/business/falsely-accused-of-shoplifting-but-retailers-demand-they-pay.html?WT.nav=top-news&action=click&=&=&=&=&=&=&clickSource=story-heading&emc=edit_ne_20180817&hp=&module=second-column-region&nl=evening-briefing&nlid=67075843ng-briefing&pgtype=Homepage®ion=top-news&te=1
Does Airbnb suppress some bad reviews by renters? Some customers complain that their negative reviews are suppressed and never appear publicly.
An acquaintance says she recently complained to Airbnb about a rental that was misdescribed as to condition, size, and convenience. She received a partial refund, but her critical review was never published. The property listing shows only the positive reviews my acquaintance relied on when booking.
The Airbnb website says “To promote trust and transparency in our community, we won't delete reviews unless they violate our content policy.”
That may be true, but some on-line bloggers have a different impression.
One wrote:
“I recently concluded my second stay in two months, and for the second time, my review has not appeared on my host's page, nor have I received any feedback.”
Another wrote:
“Same thing here. Only can see my review in My reviews column but it is not publish on the host page and can't even contact the Airbnb helpline or their email.”
Yet another:
“I have the same problem and cant contact Airbnb! One of my reviews for a host does not appear on their page ( it was there for only 2 days) it was not a bad review at all, quite the contrery. However, i did deduct stars due to bad communication on the day of check in and problems accessing their property (Our host did not communicate with us and did not reply to our message the day before or on the day of check in and we couldn't get into her house. even so, I did not make this public but only told her in the private feedback) . I have noticed that this host has full stars and my review is now not on her page, which makes me feel that hosts can manipulate their ratings. Im trying to get answers to this as it makes me very weary to trust airbnb reviews in the future.”
Yet another:
“I am wondering the same thing. Are negative reviews not published? I didn't post any feelings in my review, only facts. Therefore I believe it's important for others to know how terrible this host was. Despite me calling AirBandB for help with the matter, nothing was resolved. And now, the only recourse I have is to review the place and it won't publish.”
DAR comment: I can’t vouch for any of these complaints, except for the first cited above. What is your experience? It does seem that it is misleading if a property has negative reviews that are not disclosed to prospective renters.
Posted by Don Allen Resnikoff
A lesson to politicians everywhere: Italy’s governing right wing party wrote off safety fears about the motorway bridge that collapsed in Genoa as a children’s “fairy story”
The "fairy tale" jibe at the regional president and other officials was on the party’s website, but is now deleted
The Five Star Movement (M5S), which has been leading the country’s government since earlier this year, has made political capital out of opposing major construction and infrastructure projects, which often draw opposition in Italy because they can be disruptive to local residents.
In 2013 a statement on the party’s website described warnings of “the imminent collapse of the Morandi Bridge” as a “favoletta”, an Italian word meaning a children’s fantasy tale or fairy story. The bridge collapsed on Tuesday killing at least 39 people and severing the country’s A10 motorway.
The statement has since been deleted from the party’s website, but a cached version is still visible online. It was drawn up in opposition to the “Gronda di Genova”, a major infrastructure project to improve the motorways in the city region that included work on the now collapsed bridge.
Some architects and engineers had warned that the bridge, built by Italian civil engineer Riccardo Morandi in the 1960s, suffered from fatal design flaws; reinforcement work was carried out on it in 2016 in an attempt to shore it up. A complete rebuild was not carried out to avoid disruption, however.
The statement on the M5S website accuses the regional president who backed the reinforcement work of not having read a public inquiry report into the state of the bridge, and says the party “asks ourselves what credibility those who support the great works can still have”.
Other infrastructure projects opposed by the M5S include a new high-speed rail line from Turin to the south France, which was also the subject of protests and which has been put under review by the incoming transport ministry and similarly described as a waste of money.
Improvements to the bridge were also included by the M5S on a list of infrastructure projects which could be scrapped subject to a review of the costs and benefits.
Bridges designed by the late civil engineer Mr Morandi tend to be unusual because the planner used reinforced concrete instead of steel cables for the stays of the bridge, and used relatively few cables compared to most other designs.
The story is from https://www.independent.co.uk/news/world/europe/genoa-bridge-collapse-safety-issues-italy-government-five-star-movement-league-populists-a8492201.html
Twitter CEO Jack Dorsey interviewed about Alex Jones "time out" decision
Dors
D Dorsey addresses the company’s decision to give Alex Jones, the controversial conspiracy theorist and radio host, a “timeout,” removing his ability to tweet for seven days. conspiracy theorist and radio host, a “timeout,” removing his ability to tweet for seven days. to tweet for seven days.
https://www.nbcnews.com/nightly-news/video/exclusive-twitter-ceo-jack-dorsey-addresses-alex-jones-timeout-decision-1299834435689
ConAgra seeks US Supreme Court cert of lead-paint judgment it says is "retroactively imposing massive liability based on a defendant’s nearly century-old promotion of its then-lawful products without requiring proof of reliance thereon or injury therefrom. . . ."
The cert petition is here: http://www.leadlawsuits.com/wp-content/uploads/2018/07/ConAgra-cert-petition.pdf
The cert petition statement of questions presented:
Petitioners (or their predecessors) are two of the dozens of companies that promoted lead pigments for use in house paints from the late-nineteenth to midtwentieth centuries, when interior residential use of lead paint was both lawful and widespread. Now, decades later, the decision below has deemed those lawful activities a “public nuisance,” and has ordered petitioners to pay hundreds of millions of dollars to remedy the continued existence of lead paint inside residences constructed before 1951 in ten of the most populous counties in California.
This massive judgment was not imposed because petitioners’ paint was traced to any such residence. Instead, the linchpin for imposing this massive liability was petitioners’ speech, not their paint. Yet plaintiffs were expressly relieved of any need to demonstrate that anyone relied on the speech for which petitioners were held liable. In fact, plaintiffs stipulated that they had no proof of reliance, and the trial court expressly held that no such proof was required. Instead, under the legal ruling below, it was enough that petitioners (or their predecessors) promoted lead paint for interior residential use during the first half of the twentieth century. In short, petitioners were ordered to pay hundreds of millions of dollars to remediate a decades-old problem that plaintiffs were not required to trace to either petitioners’ paint or their speech.
The questions presented are:
1. Whether imposing massive and retroactive “public nuisance” liability without requiring proof that the defendant’s nearly century-old conduct caused any ii individual plaintiff any injury violates the Due Process Clause.
2. Whether retroactively imposing massive liability based on a defendant’s nearly century-old promotion of its then-lawful products without requiring proof of reliance thereon or injury therefrom violates the First Amendment.
Santa Clara county provides its summary of the case history in April, at https://www.sccgov.org/sites/cco/leadpaint/Documents/Fact%20Sheet%20Re%20Lawsuit.pdf
The Santa Clara summary follows:
In 2000, the County of Santa Clara filed this landmark case to hold former lead paint manufacturers responsible for promoting lead paint for use in homes despite their knowledge that the product was highly toxic. Young children are especially vulnerable to lead poisoning, and lead paint is the predominance source of lead poisoning. There is no known level of exposure to lead that is considered safe, and the effects of lead poisoning are irreversible. Lower level exposure can result in reduced IQ and attention, and high level exposure can result in coma, convulsions and death.
Nine other California cities and counties joined the lawsuit, with the County of Santa Clara taking the lead role in prosecuting the case on behalf of the People of the State of California. The other cities and counties involved are the City and County of San Francisco, the Cities of Oakland and San Diego, and the Counties of Alameda, Los Angeles, Monterey, San Mateo, Solano, and Ventura.
In 2014, the Santa Clara County Superior Court issued a lengthy decision holding The SherwinWilliams Company, ConAgra Grocery Products Company, and NL Industries, Inc. (collectively, “Manufacturers”) accountable for creating a public nuisance in the ten cities and counties involved in the lawsuit. The public nuisance created by these Manufacturers consists of the collective presence of lead paint in the interiors of homes in the ten cities and counties.1 The 1 Notably, the court did not find that lead paint on any individual property is a public nuisance.
Manufacturers were ordered to pay $1.15 billion to fund (1) inspection for, and abatement of, lead paint and lead-contaminated dust from the interiors of homes and lead-contaminated soil around homes built in 1980 or earlier in the ten cities and counties, (2) remediation of any structural deficiencies in the homes that would cause the lead control measures to fail, and (3) public education and outreach necessary for the program. The ten cities and counties were designated to oversee the lead inspection and abatement program in their respective jurisdictions. Property owners’ participation would be entirely voluntary, and any unspent funds after four years would revert back to the Manufacturers.
In 2017, the Court of Appeal upheld the Superior Court’s determination that the Manufacturers were liable for creating a public nuisance in the ten cities and counties. (People v. ConAgra Grocery Products Co. (2017) 17 Cal.App.5th 51.) However, the Court of Appeal limited their responsibility to homes built before 1951 in the ten jurisdictions. In February 2018, the California Superior Court announced that it would not review the Court of Appeal’s decision. The Manufacturers plan to further appeal the decision to the U.S. Supreme Court. In the meantime, however, the case is returning to the Superior Court to (1) calculate the amount that the Manufacturers must pay for pre-1951 homes only and (2) decide on a receiver to administer the fund and distribute.
Opinion from Sanchez of DMN:
If Sony’s acquisition for EMI Music Publishing goes through, will it really harm the music market?
The Independent Music Companies Association (IMPALA) has filed two complaints with the European Commission. The organization, which represents the indie music community in Europe, fears Sony will eclipse the competition in the European digital music space.
IMPALA’s complaints come as Sony has prepared the process for lawmakers to approve its acquisition bid of EMI Music Publishing.
Sony, which already held a 30% EMI stake, completed its ownership across two transactions. First, it agreed to purchase 60% of EMI from a consortium led primarily by Mubadala for $2.3 billion earlier this year. Then, it acquired the remaining 10% stake from the Michael Jackson Estate for $287.5 million.
According to IMPALA, the number of songs the company controls would double from 2.16 million to 4.21 million. This would make Sony “the biggest and most formidable music company in the world.”
In addition, the independent organization argues that the Commission had previously approved Sony’s initial stake in EMI, but on a partial basis. The European Commission ruled the company couldn’t combine EMI with its own current publishing and recording operations.
IMPALA explains,
“When Sony became a shareholder in the consortium structure which acquired EMI Music Publishing in 2012, the European Commission said Sony would control too much music and insisted on divestments. It only approved the transaction on the basis that EMI would be run separately and would not be combined with Sony’s own publishing or recording operations. This was reconfirmed in 2016, when the Commission allowed [the company] to buy out the proportion of Sony/ATV that it did not already own.”
Railing against the potential acquisition, Helen Smith, Executive Chair of IMPALA, argues,
“It cannot be overemphasized that this is completely different to an ordinary change from joint to sole control. It’s like seeking to merge two majors. That would never be allowed and neither should this. Sony’s latest financial results confirm that ‘EMI will become a wholly-owned subsidiary…’”
But has IMPALA simply exaggerated Sony’s potential market reach with EMI?
For starters, Sony’s acquisition of EMI Music Publishing wouldn’t create the largest music company in the world. That would still be Universal Music Group. Though strictly on a publishing basis, Smith is correct: Sony+EMI would become the largest music publisher in the world.
Sony already negotiates on behalf of EMI Music Publishing as its administrator. In fact, some of EMI’s staff already serve at Sony/ATV.
Billboard notes the music company currently uses “the combined clout to strike deals with digital services.” Sony/ATV staff also “run the two catalogs as one portfolio.” That structure may contradict Smith’s worst-case scenario.
Yet, she continues on.
“If permitted, this transaction would also harm collecting societies, songwriters and composers, and consumers who would face higher charges for music services.”
But, has it really?
Smith adds,
“Our view is that the transaction has to be blocked. EMI would have a better future as a stand-alone operation or combined with another smaller music company to make a more effective competitor to the majors.”
So, what’s next?
First, Sony has to file the necessary paperwork for approval. The European Commission will then review the transaction. The independent organization writes the company’s competitors and other market participants will receive questionnaires to answer.
The European Commission will finally assess the transaction and decide whether it would lead to a ‘significant impediment.’
If so, it would decide whether to block the transaction or stipulate certain acquisition conditions.
Source: https://www.digitalmusicnews.com/2018/08/14/sony-emi-music-publishing-acquisition-impala/
Harvard study on water pollution across the US -- PFAs
A two year old but still relevant study of levels of a widely used class of industrial chemicals linked with cancer and other health problems—polyfluoroalkyl and perfluoroalkyl substances (PFASs)—shows federally recommended safety levels exceeded in public drinking water supplies for six million people in the U.S. The study was led by researchers from Harvard T.H. Chan School of Public Health and the Harvard John A. Paulson School of Engineering and Applied Sciences (SEAS).
The study is published in Environmental Science & Technology Letters. http://pubs.acs.org/doi/pdf/10.1021/acs.estlett.6b00260
“For many years, chemicals with unknown toxicities, such as PFASs, were allowed to be used and released to the environment, and we now have to face the severe consequences,” said lead author Xindi Hu, a doctoral student in the Department of Environmental Health at Harvard Chan School and Environmental Science and Engineering at SEAS. “In addition, the actual number of people exposed may be even higher than our study found, because government data for levels of these compounds in drinking water is lacking for almost a third of the U.S. population—about 100 million people.”
PFASs have been used over the past 60 years in industrial and commercial products ranging from food wrappers to clothing to pots and pans. They have been linked with cancer, hormone disruption, high cholesterol, and obesity. Although several major manufacturers have discontinued the use of some PFASs, the chemicals continue to persist in people and wildlife. Drinking water is one of the main routes through which people can be exposed.
The researchers looked at concentrations of six types of PFASs in drinking water supplies, using data from more than 36,000 water samples collected nationwide by the U.S. Environmental Protection Agency (EPA) from 2013–2015. They also looked at industrial sites that manufacture or use PFASs; at military fire training sites and civilian airports where fire-fighting foam containing PFASs is used; and at wastewater treatment plants. Discharges from these plants—which are unable to remove PFASs from wastewater by standard treatment methods—could contaminate groundwater. So could the sludge that the plants generate and which is frequently used as fertilizer.
Source: https://www.hsph.harvard.edu/news/press-releases/toxic-chemicals-drinking-water/
California jury awards $289 million to man who claimed Monsanto's Roundup pesticide caused cancer
www.latimes.com/business/la-fi-roundup-verdict-20180810-story.html
A civil jury in San Francisco granted a $289 judgment to a groundskeeper who said his lymphoma resulted from years of applying Monsanto's
Roundup pesticide. From the LA Times article:
Scott Partridge, Monsanto’s vice president of global strategy: “Today’s decision does not change the fact that more than 800 scientific studies and reviews — and conclusions by the U.S. Environmental Protection Agency, the U.S. National Institutes of Health and regulatory authorities around the world — support the fact that glyphosate does not cause cancer, and did not cause Mr. Johnson’s cancer.”
****
Having inherited a company long vilified by environmental activists as “Monsatan,” Bayer faces high potential liabilities from hundreds of similar lawsuits, along with a battle over adding a cancer warning label on products sold in California.
A U.S. District Court judge earlier this year temporarily halted moves by California to require a cancer warning label under Proposition 65, the Safe Drinking Water and Toxic Enforcement Act, passed by voters in 1986.
California’s decision to include [Rounndup ingredient] glyphosate on its list of chemicals linked to cancer followed a 2015 ruling by the Europe-based International Agency for Research on Cancer that the chemical is a “probable” carcinogen.
The U.S. EPA as well as its counterpart agencies in the European Union have disagreed with the conclusion reached by that panel, which is part of the World Health Organization. Last December, the U.S. EPA ruled that glyphosate was “not likely” to cause cancer.
DAR comment: It is striking that the jury declined to follow the views of federal government agencies, the EPA and NIH
"District Dig" blog reports on allegations that lobbyists were influential in DCRA’s sign regulation enforcement effort against the Digi company
www.districtdig.com/2018/08/07/inside-game/
The publiication reports AG Racines's response, which includes the following: “I hold our attorneys at the Office of the Attorney General to very high professional standards. While the actions of the DCRA lawyer fell short of professional obligations, no one alleged—nor did the Court find—that any attorney employed by OAG acted improperly."
Posting by Don Allen Resnikoff
From David Balto: PBM 101
My testimony makes the following points:
PBMs are one of the least regulated sectors of the health care system. There is no federal regulation and only a modest level of state regulation.
The PBM market lacks the essential elements for a competitive market: (1) transparency, (2) choice and (3) a lack of conflicts of interest.
The lack of enforcement, regulation, and competition has created a witches brew in which PBMs reign free to engage in anticompetitive, deceptive and fraudulent conduct that harms consumers, employers and unions, and pharmacists. The profits of the major PBMs are increasing at a rapid pace, exceeding $6 billion annually. As drug prices increase rapidly, PBMs are not adequately fulfilling their function in controlling costs
– indeed PBM profits are increasing at the same time drug costs increase because they secure higher rebates from these cost increases. Plan sponsors (employers and unions) cannot attack this problem because PBMs fail to provide adequate transparency.
See http://www.dcantitrustlaw.com/assets/content/documents/testimony/PBM%20Testimony.Balto.pdf
New NewsHour video: Michael Carrier explains PBM pricing -- video
https://www.youtube.com/watch?v=_4_WNFPnmO8
Source documents on NYC crackdown on Uber
The legislative package: One will stop the TLC from issuing new licenses for FHVs for one year, with the exception of wheelchair-accessible vehicles, while the city studies how the services impact traffic. http://legistar.council.nyc.gov/LegislationDetail.aspx?ID=3331789&GUID=6647E630-2992-461F-B3E3-F5103DED0653&Options=ID%7cText%7c&Search=144
Another will enact new regulations on high-volume FHV services like Uber and Lyft, requiring them to provide data on usage and charges, as well as impose a fine of $10,000 for those who do not comply.http://legistar.council.nyc.gov/LegislationDetail.aspx?ID=3479666&GUID=01C67FF7-C56D-474A-BA53-E83A23173FA7&Options=ID%7cText%7c&Search=838
Geographic restrictions, as well as a minimum wage for FHV drivers, will also be implemented through other measures. http://legistar.council.nyc.gov/LegislationDetail.aspx?ID=3487613&GUID=E47BF280-2CAC-45AE-800F-ED5BE846EFF4&Options=&Search=
Members of the City Council also support “driver assistance centers” that would help struggling cab drivers. http://www.nydailynews.com/news/politics/ny-pol-taxi-bills-20180806-story.html
Graying of U.S.-- Bankruptcy: Fallout from Life in a Risk Society
Deborah ThorneUniversity of Idaho
Pamela FooheyIndiana University Maurer School of Law
Robert M. LawlessUniversity of Illinois College of Law
Katherine M. PorterUniversity of California - Irvine School of Law
Date Written: August 5, 2018
Abstract:
The social safety net for older Americans has been shrinking for the past couple decades. The risks associated with aging, reduced income, and increased healthcare costs, have been off-loaded onto older individuals. At the same time, older Americans are increasingly likely to file consumer bankruptcy, and their representation among those in bankruptcy has never been higher. Using data from the Consumer Bankruptcy Project, we find more than a two-fold increase in the rate at which older Americans (age 65 and over) file for bankruptcy and an almost five-fold increase in the percentage of older persons in the U.S. bankruptcy system. The magnitude of growth in older Americans in bankruptcy is so large that the broader trend of an aging U.S. population can explain only a small portion of the effect. In our data, older Americans report they are struggling with increased financial risks, namely inadequate income and unmanageable costs of healthcare, as they try to deal with reductions to their social safety net. As a result of these increased financial burdens, the median senior bankruptcy filer enters bankruptcy with negative wealth of $17,390 as compared to more than $250,000 for their non-bankrupt peers. For an increasing number of older Americans, their golden years are fraught with economic risks, the result of which is often bankruptcy.
Citation:
Thorne, Deborah and Foohey, Pamela and Lawless, Robert M. and Porter, Katherine M., Graying of U.S. Bankruptcy: Fallout from Life in a Risk Society (August 5, 2018). Available at SSRN: https://ssrn.com/abstract=3226574
From Public Citizen Consumer Blog
Will the OCC Try to Preempt State Consumer Protection Rules in FinTech, as It Once Did for Predatory Lending?
by Jeff Sovern
That's the question David Dayen raises in an important essay in InTheseTimes, Trump Appointees Are Pushing a Deregulation Plan That Could Dramatically Erode Consumer Protections. As Dayen points out, in the run-up to the Great Recession, the OCC proclaimed that state anti-predatory lending laws were preempted as to national banks. We know how that ended. Now the OCC has announced that it will accept national bank charters from FinTech companies. When states try to regulate FinTech, will the OCC attempt to preempt their efforts too? For example, will the OCC enable nationally-chartered FinTech companies to skirt state limits on payday lending? That would be an ironic twist from lawmakers usually quick to claim the mantle of states' rights, and any such effort is likely to be subject to court challenges, but we could be headed there. Under the Dodd-Frank Act, section 1044, it is probably going to depend on whether the state "law prevents or significantly interferes with the exercise by the national bank of its powers." I haven't looked into that issue enough to know whether this would qualify. But if, as seems likely for the next five or so years, we can't count on the CFPB to protect consumers, and state efforts to protect them can be preempted, consumers could be in trouble when it comes to predatory lending.
Posted by Jeff Sovern on Saturday, August 04, 2018 at 04:33 PM in Predatory Lending | Permalink
NYT:Steel Giants With Ties to Trump Officials Block Tariff Relief for Hundreds of Firms
Nucor and United States Steel have exercised veto power, so far without fail, over other companies, forcing them to buy their products instead of steel from abroad.
https://www.nytimes.com/2018/08/05/us/politics/nucor-us-steel-tariff-exemptions.html?rref=collection%2Fsectioncollection%2Fbusiness
From the International Steel Institute's litigation challenging the Constitutionality of the President's imposition of tariffs
MEMORANDUM IN SUPPORT OF PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT: INTRODUCTION AND SUMMARY OF ARGUMENT
This is an action seeking a declaratory judgment and an injunction against the enforcement of section 232 of the Trade Expansion Act of 1962, as amended, 19 U.S.C. § 1862 (“section 232”), on the ground that it constitutes an improper delegation of legislative authority to the President, in violation of Article I, section 1 of the Constitution and the doctrine of separation of powers and the system of checks and balances that the Constitution protects. The specific claim before this Court arises from the actions of the President, through proclamations issued under section 232, in which he imposed a 25% ad valorem tariff on steel products imported into the United States from most, but not all, countries (“the 25% tariff”).
As a facial challenge to section 232, this case should be decided on cross-motions for summary judgment. To demonstrate the injuries caused them by section 232 and the 25% tariff, Plaintiffs have submitted the declarations of Richard Chriss, President of Plaintiff American Institute for International Steel, Inc. (“AIIS”); John Foster, President of Plaintiff Kurt Orban Case 1:18-cv-00152-N/A Document 20 Filed 07/19/18 Page 10 of 54 2 Partners, LLC (“Orban”); and Charles Scianna, President of Plaintiff Sim-Tex, LP (“Sim-Tex”).
In further support of their motion, Plaintiffs cite to the four proclamations of the President that imposed the 25% tariff and then modified the countries whose steel products are subject to it, as well as to the procedures that the Secretary of Commerce (the “Secretary”) issued to respond to individual requests by U.S. companies for product-specific exclusions from the 25% tariff.
Finally, this memorandum includes citations to the Steel Report prepared by the Secretary in support of his finding for the President that steel imports may threaten to impair the national security, as that term is broadly defined in section 232. Included as an appendix to the Steel Report are the written statements submitted by 37 witnesses who testified before the Department of Commerce (“Commerce”) on May 24, 2017. The Steel Report also contains a link to the written statements submitted by more than 200 other interested persons to the Secretary for his consideration, some of which will also be cited herein. The citations to these statements are not to establish the truth of what they assert, but to establish the many ways that those who rely on imported steel in their businesses informed Commerce that the tariffs would affect them. Those statements are significant because they are the kind of effects that a 25% steel tariff would be expected to produce, and yet, most pertinent to this challenge, section 232 does not (a) require the President to take them into account in selecting the means to respond to the perceived threat that imported steel products may impair the national security, (b) forbid him from taking them into account, (c) forbid him to take some into account, but not others; or most importantly (d) provide him with any guidance on whether and how to take these factors into account. Case 1:18-cv-00152-N/A Document 20 Filed 07/19/18 Page 11 of 54 3
This case challenges the constitutionality of section 232 because Congress has essentially turned over to the President the constitutional authority “[t]o lay and collect [t]axes, [d]uties, [i]mposts and [e]xcises,” expressly given in Article I, section 8 of the Constitution to Congress. U.S. CONST., art. 1, § 8, cl. 1. Section 232 does that without providing the kind of “intelligible principle” required by the Supreme Court in J.W. Hampton, Jr., & Co. v. United States, 276 U.S. 394, 409 (1928), to satisfy the nondelegation doctrine and the mandate of Article I that the legislature, not the President, make the laws.
Section 232, like most statutes challenged on nondelegation grounds, has two components, each of which must contain an intelligible principle to guide its application. First, there is a trigger, which is the finding needed to make the statute operative, in this case a conclusion that imports may “threaten to impair the national security.” 19 U.S.C. § 1862(b)(3)(A). Second, once the trigger has been found, the statute gives the designated official the authority to select the remedies (or means of implementation).
Specifically, section 232 allows the President, in his unbridled discretion, to “determine the nature and duration of the action that, in the judgment of the President, must be taken to adjust the imports of the [imported] article and its derivatives so that such imports will not threaten to impair the national security.” 19 U.S.C. § 1862(c)(1)(A)(ii). As we describe below, section 232 provides no restraints that limit the President’s invoking the trigger or in his choice of remedies—tariffs, quotas, or something else—in what amounts, as applied to which products, and to which countries.
In essence, in section 232 Congress has transferred to the President the ability to make the essential policy choices that the Constitution assigns to Congress and Congress is required to retain under our Constitution and the principles of separation of powers that animate it. For that Case 1:18-cv-00152-N/A Document 20 Filed 07/19/18 Page 12 of 54 4 reason, section 232 is like the Line Item Veto Act, which was condemned by the Supreme Court in Clinton v. City of New York, 524 U.S. 417 (1998), because that Act purported to permit the President to use the “cancellation” process in that Act to reject the policy choices made by Congress in the parts of a law that he “canceled.”
To be sure, the Court in Clinton did not rely on the nondelegation doctrine on which Plaintiffs rely here, but the structural flaw of presidential versus congressional lawmaking is present in both. There is another aspect of section 232 that reinforces the conclusion that it is unconstitutional. When today so much of the power to implement the laws has been assigned to the President or administrative agencies, Congress has provided important checks on their use of those powers to assure that the laws are carried out as Congress provided. But section 232 contains none of the procedural safeguards found in rulemakings governed by the Administrative Procedure Act.
Moreover, section 232 has no provision for judicial review, and because discretionary decisions like that imposing the 25% tariff here are made by the President, they are not subject to judicial review under the Administrative Procedure Act. The result is that Congress created an unconstitutional regime in section 232, in which there are essentially no limits or guidelines on the trigger or the remedies available to the President, and no alternative protections to assure that the President stays within the law, instead of making the law himself.
The motion papers are at http://www.aiis.org/wp-content/uploads/2018/07/2018.07.19-Plaintiffs-Motion-Proposed-Order-Memo-for-Summary-Judgment-MMM-from-docket.pdf
The WSJ's Greg Ip explains Donald Trump's policy of picking industry winners and losers
Greg Ip says that President Donald Trump is steering U.S. economic policy in a radically new direction. From trying to revive steelmakers with tariffs to vetoing Chinese technology investments, he is using the federal government to direct which industries prosper and which don’t.
Ip explains that many countries have long tilted the playing field toward favored companies and industries, a practice economists call industrial policy. American presidents have traditionally resisted this as “picking winners.”
The president has broken with that tradition, unveiling a series of actions on trade, foreign investment and energy he hopes will revive favored industries and beat back the competitive challenge of other countries—but which risk creating domestic losers.
Ip's point is that whether it is imposing tariffs to protect the steel industry at the expense of industries that use steel, propping up the dying coal industry or seeking to raise postal rates on Amazon, Trump has become a practitioner of industrial policy of the type conservatives traditionally have shunned. DAR
Drawn from https://www.wsj.com/articles/trumps-emerging-economic-policy-picking-winners-and-losers-1532100935# (paywall)
From Open Markets Institute:
As Independent Grocery Stores Wane and Amazon Looms, Wholesale Middlemen Merge
DAR comment: This article focuses on the supply chain issues relevant to independent groceries. Supply seems crucial to survival of independent groceries, whether their goal is healthy food or providing alternatives in poor neighborhood food deserts.
Last week, organic and natural foods distributor, United Natural Foods Inc. (UNFI) announced plans to buy the largest publicly traded grocery wholesaler, Supervalu, for just under $3 billion. The deal is largely a defensive move by UNFI after Amazon bought their largest customer, Whole Foods.
The takeover is the latest step in a larger trend of grocery consolidation that has greatly reduced the ranks of independent regional groceries and the wholesalers that supply them. As supermarkets and wholesalers try to “get big or get out,” producers at the end of the supply chain feel the squeeze from fewer and bigger buyers.
Between 1992 and 2013, the market share of America’s top twenty grocery stores increased from 39 percent to 64 percent, while the share of just the top four chains more than doubled, from 17 percent to 36 percent. This shifted the majority of the grocery business from smaller regional chains to increasingly large national brands. Today, independent grocers represent only 25 percent of all grocery sales.
The larger a grocer becomes, the more likely they are to cut out the middleman. “Once you get to a certain level it’s easier to have your own warehouses and be self-supplied,” explains grocery analyst David Livingston of DJL Research. WalMart, Kroger, Costco, and Publix are among the chains that increasingly rely on in-house distribution networks.
“There are fewer big wholesalers left today,” says Neil Stern, Senior Partner for retail analysts, McMillan Doolittle. Indeed, between 1997 and 2000 alone, there were 105 grocery wholesaler mergers and acquisitions. In ten years, the market share of the four largest independent grocery wholesalers went from 52 percent in 1997 to 87 percent in 2007. This consolidation has continued. In just the past two years, Supervalu acquired regional wholesalers Central Grocers, Associated Grocers of Florida, and Unified Grocers.
Even though Supervalu bought many of its rivals, the wholesaler’s customer base continued to shrink. “Supervalu’s customers include small- to mid-sized supermarket chains,” Stern says. These are precisely the grocers that have lost the most market share over the past three decades.
To compensate, Supervalu began to vertically integrate into retail in the 1970s, through the buying of regional grocery chains. In 2006, Supervalu briefly became the third largest grocery retailer in the US, when it bought national grocery leader, Albertson’s, taking in their network of 2,150 stores.
But this takeover strategy left Supervalu heavily burdened by debt, and after just seven years the wholesaler sold Albertson’s and started divesting the rest of its retail business. The company ended up with over $1.5 billion in debt and lost 90 percent of its stock value in the process.
UNFI, meanwhile, since 2000 has acquired 19 distributors, manufacturers, and private label suppliers, and their sales have grown at a compounded rate of 12.9 percent each year. They primarily supply organic and natural foods to conventional supermarkets and independent natural chains. But, like Supervalu, in recent years UNFI has come under more pressure as their customer base has consolidated.
In the case of UNFI’s largest customer, Whole Foods, the corporation started to consolidate the organic grocery market in 1988, acquiring thirteen natural grocery chains in 20 years. Today, Whole Foods has 487 locations and accounts for a third of UNFI’s revenue. UNFI’s reliance on Whole Foods was not a major liability until the e-commerce goliath, Amazon, absorbed the chain. Some analysts believe Amazon may soon move to cut UNFI out of the business, much the way other major grocery chains have done.
“They’ve gotten a huge threat from Amazon,” explains Livingston. “They’re probably going to develop their own ways of distribution and kick UNFI to the curb.”
As UNFI and Supervalu combine their supply chains some suppliers, from packaged food companies to produce aggregators, stand to lose. “There might be some overlap in suppliers,” Stern explains, and redundant suppliers could lose contracts. But because UNFI and Supervalu generally fill different niches, Stern argues that many suppliers may benefit from access to new markets. “More scale and size…, could allow suppliers to expand their business,” Stern says.
In general, studies show that as the number of food buyers shrinks, suppliers face greater price pressure. As early as 2000, agricultural economists at UC Davis reported that growing concentration in grocery retail and wholesale created “fewer but larger buyers” for produce growers and shippers, and argued that such big “buyers may enjoy an unfair advantage in bargaining with suppliers.”
If UNFI’s big bet fails, the playing field could shrink further still. “What they’re taking on is risky,” says Livingston, “it’s not a simple acquisition.”
Can voter gerrymandering be fixed by ballot initiative and State constitutional amendment?
The Michigan Voters Not Politicians group thinks so. Here is material from their website: https://www.votersnotpoliticians.com/thesolution:
Let's end Gerrymandering in Michigan
Michigan voters can end gerrymandering in Michigan before 2021 when the next election maps are redrawn.
Voters Not Politicians’ mission is to end gerrymandering by 2018 through a citizen led ballot initiative. We have collected the required 315,654 valid signatures in 180 days, that will secure a spot in the November 6, 2018 election as a ballot measure. With a simple majority vote from the voters of Michigan, we will amend Michigan’s constitution to place an Independent Citizens Redistricting Commissionin charge of redistricting, ensuring that voters will choose their politicians, not the other way around.
The proposal to end gerrymandering in Michigan
Instead of giving politicians the power to draw our voting districts - who ultimately stand to benefit from their decisions - we propose an Independent Citizens Redistricting Commission of registered Michigan voters to draw voting districts using guidelines that ensure fairness to all. We believe that the voters of Michigan - not politicians - should be entrusted with this important and monumental task.
Our proposal will eliminate political influence and bias in the redistricting process through a fair, transparent, and nonpartisan solution. Here’s how:
- Voters, Not Politicians: An Independent Citizens Redistricting Commission (ICRC) will be in charge of the redistricting process. The Commission will be made up of 4 Democrats, 4 Republicans, and 5 voters who affiliate with neither party with representation from across the state. Political insiders (politicians, consultants, lobbyists) will be banned from serving on the Commission. Read more about how the Commissioners are selected here.
- Transparency: Instead of secret closed door meetings, the ICRC is required to conduct its business in public hearings that are open to input from across the state. All proposed maps and the methodology/data to create them must be submitted as public reports. Everything down to the variables used by the computers to draw the maps will be available to the public. Read more about how the proposal maximizes transparency, promotes meaningful public participation, and ensures independent decision-making here.
- Fairness: The fairness of any idea to reform partisan voting maps comes down to how the maps themselves end up being drawn. The ICRC is required to follow a prioritized set of criteria and standards when drawing the maps. A minimum of 2 Democrats, 2 Republicans, and 2 voters who affiliate with neither party on the Commission must approve the final maps. This prevents one political party from controlling the process. Read more about how maps are drawn here.
The proposal takes redistricting out of the backroom and ends the conflict of interest that festers when politicians have the power to choose their voters. The Independent Citizens Redistricting Commission will ensure voters choose their politicians, instead of the other way around, so that Michigan votes count and Michiganders’ voices are heard.
Amending Michigan’s constitution
In order to adopt the Independent Citizens Redistricting Commission, we must pass a constitutional amendment through a ballot initiative. Here’s how we do it:
- Create and submit a proposal to amend Michigan’s constitution.
- Collect 315,654 valid signatures on paper petitions in 180 consecutive days.
- Obtain a simple majority "yes" vote in the November 2018 general election.
Take Action
People across Michigan who value their votes are taking action to reform redistricting rules. If you're ready, find out how you can get involved.
The D.C. Palisades Citizens Association on Airplane Noise Updates
Updated April 10, 2018
Editorial note by DAR: When citizens have a complaint about private or government action, they may first try complaining, and if that fails they may turn to litigation. The available litigation procedures should be transparent, fair, and expedient. It is plain from the following report that the writers find the litigation procedures to be none of those things. DR
To file a noise complaint, click here.
Click here to see Pierre Oury's slides from his recent presentation at the library, A Pilot's Perspective
DC Fair Skies - AIRCRAFT NOISE LEGAL FIGHT UPDATE:
Unfortunately, the Court did not reach the merits of the case and dismissed the Petition for Review as untimely. Despite the lack of notice to any elected DC Government Official and the efforts by the FAA to ensure no one in DC was aware of the plan to make the LAZIR route the flight path for all northbound departures, the Court found that two small adds in the Washington Post of the intent to do an EA [Environmental Assessment] of the entire DC Metroplex and the fact that one had been completed were adequate notice. The only support for that decision is an old Supreme Court Clean Water case which sanctioned publication as a means of providing notice but did not state that it was sufficient to satisfy NEPA’s [National Environmental Policy Act] requirements that agencies make “diligent efforts to involve the public”. In this case the FAA made diligent efforts to ensure no one in DC was aware of the new flight path we challenged until it was an accomplished fact. We need to consider what if any steps we need to consider taking at this point, but pursuing our Administrative Petition with the FAA is one possible alternative to further litigation. The Opinion is found here.
Click here for the latest summary on our involvement in the Fair Skies Coalition.
Click here to listen to the Oral Argument in DC Fair Skies vs FAA that look place in the Federal Court of Appeals on January 11, 2018.
Neighborhood associations file reply brief. The Reply Brief lambasts the FAA over increased aircraft noise created by the new northern departure flight path.Click here to read it.
New report says noise complaints are up at National, Dulles airports. Click here to read the recent The Washington Post article.
Click here to read about the brief filed to challenge disruptive new aircraft noise created by the FAA’s new northern departure flight path. The brief filed represents many weeks of working through the record to find the holes in the FAA’s argument. Fair Skies then had to prepare motions to expand the record to include materials it wanted included, create statutory addendums to the brief required by the Court, and provide case and record citations for its arguments-all of which took many hours of his time.
Check out this story on jet noise that aired on WAMU in October 2016.
From: http://www.palisadesdc.org/
Steve Calkins on: How Might A Justice Kavanaugh Impact Antitrust Jurisprudence?
Posted on July 20, 2018 by Stephen Calkins on pro-arket.org
Throughout his judicial career, the US president’s latest nominee to the Supreme Court, Brett Kavanaugh, has written three antitrust opinions. Here, Stephen Calkins of Wayne State University Law School reviews the trends that emerge from those opinions.
'A Justice Kavanaugh—this comment simply assumes that he will be confirmed—would become the second Trump-appointed aggressively conservative, pro-business justice. Nominated at age 53, he could be expected to serve for decades.
This commentary reviews Judge Kavanaugh’s antitrust opinions.1) He has dissented from two D.C. Circuit decisions that acceded to government requests to block mergers: United States v. Anthem, Inc.;2) and FTC v. Whole Foods Market, Inc.3)The first, preventing a 4-3 merger of health insurance carriers, turned largely on arguable efficiencies. The second, objecting to the merger of the two largest “premium, natural, and organic supermarkets,” turned principally on market definition. Judge Kavanaugh also addressed antitrust in his concurring opinion in Comcast Cable Communications, LLC v. FCC,4) in which the Court rebuffed the FCC’s order requiring Comcast to carry the Tennis Channel on equal terms with comparable Comcast-owned offerings. The Court reached this result on narrow grounds. Judge Kavanaugh separately wrote a sweeping opinion disagreeing with the FCC and saying that statutory language authorizing regulations to prevent conduct that “unreasonably restrain[s]” a rival from “compet[ing] fairly by discriminating . . . on the basis of affiliation or nonaffiliation” (a) must have meant (no citation of Chevron) to allow only duplication of antitrust law, and (b) must have meant that all vertical restraints are per se protected at least absent proof of market power – which he concluded that Comcast did not have — and (c) that’s a good thing, because the First Amendment protects Comcast’s “editorial discretion” about whether to carry the Tennis Chanel.
Several themes emerge from the three opinions:
- Judge Kavanaugh is smart, energetic, and well-informed;
- He shows considerable respect for the views of defense expert witnesses;
- He is a firm believer in what he repeatedly calls “modern” antitrust law;
- Judges in the majority suggest (with some justification) that he treats the law as he wishes it were, rather than as it is; and
- He sometimes takes a concept and pushes it further than it deserves.
To see the continuation of the Calkins analysis, go to: https://promarket.org/might-justice-kavanaugh-impact-antitrust-jurisprudence/
Bid rigging at public foreclosure auctions: A Too Familiar DOJ Press Release with a Sad Detail
By Robert E. Connolly
The DOJ issued a standard press release yesterday announcing yet another individual guilty plea in its long running real estate foreclosure auction collusion investigation: Seventh Mississippi Real Estate Investor Pleads Guilty to Conspiring to Rig Bids at Public Foreclosure Auctions. According to the press release to date there have been “convictions of well over 100 other individuals who rigged foreclosure auctions all across the country.” Many of those convicted have been sentenced to prison.
What jumped out at me about the press release was that the individual is pleading guilty to rigging auctions “from at least as early as August 20, 2009 through at least as late as December 14, 2016.” In other words, while the DOJ investigation, prosecution and sentencing of others to prison, this defendant continued to collude at auctions. And you can’t collude by yourself, so others were still joining in. I suppose it is more sad than surprising. [People still rob banks.] The temptation for a quick (and illegal) buck by colluding at auctions is too great for some to pass up. After all, this the real estate foreclosure auction investigation is by no means the first widespread auction collusion investigation the Antitrust Division has had with large numbers of criminal prosecutions. When I was the Chief of the Philadelphia office we prosecuted auction “rings” in antiques, jewelry, various types of commercial equipment and Department of Defense surplus auctions. In every investigation we learned was that collusion at auctions was a “way of life” in that business. The individuals prosecuted had excuses for their behavior: “it’s the only way to make money” “there were still other bidders we had to compete against” “the auctioneers pulled phantom bids” “it was a cloudy day” “it was a sunny day” and on and on. But, each person I dealt with understood that what they were doing was a fraud. One guy even remarked in answer to a question about the collusion: “You mean the combination?” I remember that many years later because I had never heard the Sherman Act term “combination” actually used by someone who was in one. [Auction conspirators frequently use the term “the ring.”]
Like many white-collar criminals, auction collusion defendants have not had previous encounters with the law. The entire lengthy process of the investigation, prosecution, and jail sentence if there is one, is usually an absolutely devastating experience to the individuals’ business, family life and self. It can be tempting get involved in an auction ring if you compete against the same individuals/businesses time after time. But, in my experience, auctions rings were by far the easiest bid rigging crime to prosecute. The payoffs to the ring members leave a detailed road map of who was involved and what the scam was.
I don’t know who reads Cartel Capers. Probably not many in the auction business. But, if you are and you are invited into an auction ring, RUN. Be conspicuous that you are not part of the group. If you are in an auction ring, GET OUT. You may want to speak with an attorney and consider the Antitrust Division’s Leniency Program. If it’s the only way to make money, find another line of work. (But don’t rob banks.)
Thanks for reading. Bob Connolly
This post originally appeared on the Cartel Capers blog. https://wklawbusiness.us6.list-manage.com/track/click?u=752026a04d2007135a2ab4662&id=88fe73100b&e=84837a780d
AG Racine on Enhancing Safety through Justice Reformfrom Karl Racine:
Across the country, reform-minded prosecutors are simultaneously making our communities safer and rehabilitating young offenders through evidence-based, age-sensitive solutions. In a recent article in USA Today, I highlight how prosecutors are implementing reforms tailored to juveniles, such as developing youth-centered facilities that keep young people out of jail and raising the age at which someone can be tried as an adult. These reforms have succeeded in increasing public safety, keeping youth out of the justice system, and saving taxpayers money.
Recently, in partnership with Fair and Just Prosecution and Georgetown University’s Center for Juvenile Justice Reform, I convened prosecutors from across the country to share ideas that can help reform the juvenile justice system. I highlighted two OAG programs that have shown early success in the District: (1) the Alternatives to Court Experience (ACE) Diversion program which provides support services for offenders as an alternative to incarceration and (2) a first-in-the-nation Restorative Justice program which uses mediated conferences between victims and offenders to repair the victim’s harm instead of traditional prosecution. Both programs have shown similar success with approximately 80 percent of participants not being re-arrested after completing either program.
Prosecutors are gatekeepers to the justice system and I strongly believe we can use our positions to change practices and advocate for evidence-based juvenile justice reforms. At OAG, I will continue to implement and advocate for strategies that keep our communities safe, make financial sense, and give young people a shot at a brighter future.
Sincerely,
Karl A. Racine
Attorney General
Lina Khan, a critic of Amazon on antitrust grounds, joins the FTC
One of Amazon's most prominent critics on antitrust grounds, Lina Khan, has been hired at the Federal Trade Commission. The FTC will hold hearings on competition and consumer protection this fall. "Ms. Khan is one of the leading proponents of the idea that conventional antitrust enforcement needs to be rethought in the era of giant tech platforms like Amazon," reports Priya Anand of The Information.
From Open Markets Institute: Colluding Pork Packers Accused of Pigging Out On Fixed Prices
Since roughly 2009, Americans may have been paying too much for their pork chops, barbeque, hams, and trotters.
That’s the claim of two law firms that filed separate class action suits on behalf of consumers and food distributors charging eight major pork packers and an industry data sharing service, Agri Stats, with colluding to manipulate prices.
The case comes more than a year after dominant chicken packers were charged with an identical crime. In both cases, the suits argue that Agri Stats’ detailed, company-specific, and forward-looking data made it possible for pork processing companies to coordinate the supply of pork, and critically, monitor one another’s behavior to ensure no one in the cartel deviated from their conspiracy.
Hormel and Smithfield have denied the price-fixing allegations. A representative from Tyson, also a defendant in the poultry case, said in an email, “We intend to vigorously defend against the allegations in court.” Other defendants have not commented.
The suits allege that collusion began around 2008 when Agri Stats started to market pork “benchmarking” reports, which compare data from pork meat packers on everything from total profits and hogs slaughtered, to farm-level data about feed ratios, mortality rates, piglet weaning costs, and so on. By 2016, Agri Stats benchmarking reports collected and internally audited information from over 90 percent of the pork industry.
“Once Agri Stats got everyone in the pork industry to put their card on the table, there was no competition,” said Steve Berman, managing partner at Hagens Berman, one of the firms suing pork producers, in a public statement.
Pork production stagnated and prices increased almost immediately after pork corporations began using Agri Stats benchmarking data. Between 1998 and 2009 the year average price per hundredweight of pork was never more than $50. But from 2009 to 2014, prices rose over 50 percent to $76.30. This was true even though the price of other agricultural commodities started to fall around 2012 and 2013. Annual pork production fell in 2009, 2010, and again in 2013 (with another dip in 2014 due to disease).
The plaintiffs argue that pork corporations coordinated changes in production with the help of Agri Stats. However, this claim raises the question, what makes Agri Stats different from other industry data service companies or market information provided by the USDA?
Darren Tristano, the CEO of a foodservice and hospitality data research service, CHD Expert, says market reports with un-aggregated, company-level information are “very rare.” Indeed, the pork suit claims that “Agri Stats’ reports are unlike those of other lawful industry reports,” in that they provide “current and forward-looking sensitive information” broken down by company and even farm. All of this data is anonymous, but the suit contends that Agri Stats reports contain “the keys to deciphering which data belongs to which producers.”
This key difference, in turn, could allow conspirators to tie specific data back to individual companies and identify any one who tried to cheat the others by not adhering to their price-fixing plan. Without frequent, audited, and disaggregated data from Agri Stats, the suits argue, large pork companies could not be sure that all conspirators were cooperating.
Furthermore, in a decentralized market of many independent pork producers, collusion on the scale in question would be almost impossible to coordinate, even with the help of an especially detailed data service. Yet today, four companies sell just under 70 percent of all pork, making collusion comparatively easy.
Pork packers also have unprecedented ownership over all steps in the supply chain, from breeding to feed production and slaughter, while individual farmers take on the risk of raising hogs on contract for large corporations.
While the new suits focus on the impact of the conspiracy on pork buyers, Agri Stats data-sharing also raises questions about potential harms to hog growers. A 2017 lawsuit filed on behalf of poultry growers claims that poultry processors used Agri Stats to share data on farmer compensation. The suit argues that poultry processors worked together to “[depress] Grower compensation below competitive levels.”
Such a suit has not been filed on behalf of hog farmers, and neither of the current pork price-fixing suits makes mention of Agri Stats providing data on hog grower compensation.
The pork suits do argue that hog farmers bore the brunt of price variations over the course of the alleged conspiracy. Hog farmer earnings plummeted in 2014, and have since failed to bounce back to 2010-2013 levels. Meanwhile, pork packer earnings grew precipitously from 2012 onward, with only a slight dip this past year.
Intentional wage suppression or not, these cases highlight the immense power that a handful of vertically integrated meat companies have to force farmers to assume all the risk, to increase prices for consumers, and to hog the benefits for themselves.
Transcript: Dan Coats warns the lights are 'blinking red' on Russian cyberattacks - including attacks on infrastructure crucial to consumers
NPR July 19, 2018 5:57 a.m.
Director of National Intelligence Dan Coats warned a think tank last week that cyberattacks from Russia and others are ongoing: "The warning lights are blinking red again."
The director of National Intelligence spoke before the Hudson Institute, a D.C.-based conservative think tank, on July 13. Transcript provided by the Hudson Institute.
Excerpts:
Every day, foreign actors — the worst offenders being Russia, China, Iran and North Korea — are penetrating our digital infrastructure and conducting a range of cyber intrusions and attacks against targets in the United States. The targets range from U.S. businesses to the federal government (including our military), to state and local governments, to academic and financial institutions and elements of our critical infrastructure — just to name a few. The attacks come in different forms. Some are tailored to achieve very tactical goals while others are implemented for strategic purpose, including the possibility of a crippling cyberattack against our critical infrastructure.
All of these disparate efforts share a common purpose: to exploit America’s openness in order to undermine our long-term competitive advantage.
* * *
But focusing on the potential impact of these actions on our midterm elections misses the more important point: these actions are persistent, they are pervasive, and they are meant to undermine America’s democracy on a daily basis, regardless of whether it is election time or not. Russian actors and others are exploring vulnerabilities in our critical infrastructure as well. The DHS and FBI — in coordination with international partners — have detected Russian government actors targeting government and businesses in the energy, nuclear, water, aviation and critical manufacturing sectors.
The warning signs are there, the system is blinking, and that is why I believe we are at a critical point. Today, unlike the status of our intelligence community in 2001, we’re much more integrated and much better at sharing information between agencies. But the evolving cyber threat is illuminating new daily challenges in how we treat information. We are dealing with information silos of a different kind, including between the public and private sector.
* * *
In many ways, the nature of the cyber threat requires that we — the national security community — treat the private sector and American people as intelligence customers. And that is why you will see us talking about this threat more vocally, and why you will continue to see us publish unclassified assessments and statements to inform the American people.
Full transcript: https://www.opb.org/news/article/npr-transcript-dan-coats-warning-on-continuing-russian-cyberattacks/
WSJ: Counterfeit products of Amazon
Excerpts:
Amazon.com Inc. AMZN -1.16% has made it easy for small brands to sell their products to large numbers of customers, but that has also enabled some counterfeiters to cut into their business.
Counterfeiters, though, have been able to exploit Amazon’s drive to increase the site’s selection and offer lower prices. The company has made the process to list products on its website simple—sellers can register with little more than a business name, email and address, phone number, credit card, ID and bank account—but that also has allowed impostors to create ersatz versions of hot-selling items, according to small brands and seller consultants.
WSJ article at https://www.wsj.com/articles/on-amazon-fake-products-plague-smaller-brands-1532001601?mod=hp_lead_pos4 (pay wall)
The Center For Automotive Research says US car and car parts manufacturers will not benefit from tariffs
Produced By: Industry, Labor, & Economics Group
Categories: Economic Contribution Analysis, Employment, Forecasts, Trade
Download Now
Full Description:
The U.S. Department of Commerce is currently investigating whether U.S. automobiles and automotive parts constitute a national security threat under Section 232 of the Trade Expansion Act of 1962, as amended. The Center for Automotive Research (CAR) estimates that consumers will see the price of all new vehicles rise by $455 to $6,875 depending on the level of tariff or quota, where the vehicle was assembled, and whether the policy provides exemptions for automotive trade with Canada and Mexico. Used vehicle prices will also rise due to heightened demand and constricted supply, and higher automotive parts prices will drive up the price of vehicle maintenance and repair, so even holding on to an existing vehicle will become more expensive.
U.S. automotive and automotive parts manufacturers would not benefit from tariff or quota protection since all vehicles produced in the United States rely on imported content and a substantial share of U.S.-produced automotive parts and components are exported for assembly in vehicles built in other countries. CAR estimates that automotive demand will fall by between 493,600 to 2 million vehicles as a result of the implementation of tariffs or quotas. Declining demand is associated with employment losses ranging from over 82,000 to nearly 715,000 jobs and a $6.4 billion to $62.2 billion hit to U.S. Gross Domestic Product (GDP).
This briefing covers the economic, trade, employment, output, and price impacts of the potential Section 232 tariffs or quotas at a range of levels and levied against all trading partners or all non-NAFTA trading parnters.
Download at https://www.cargroup.org/wp-content/uploads/2018/07/NADA-Consumer-Impact-of-Auto-and-Parts-Tariffs-and-Quotas_July-2018.pdf
The EU press release on the Google fine:
http://europa.eu/rapid/press-release_IP-18-4581_en.htm
Excerpt:
Brussels, 18 July 2018
The European Commission has fined Google €4.34 billion for breaching EU antitrust rules. Since 2011, Google has imposed illegal restrictions on Android device manufacturers and mobile network operators to cement its dominant position in general internet search.
Google must now bring the conduct effectively to an end within 90 days or face penalty payments of up to 5% of the average daily worldwide turnover of Alphabet, Google's parent company.
Commissioner Margrethe Vestager, in charge of competition policy, said: "Today, mobile internet makes up more than half of global internet traffic. It has changed the lives of millions of Europeans. Our case is about three types of restrictions that Google has imposed on Android device manufacturers and network operators to ensure that traffic on Android devices goes to the Google search engine. In this way, Google has used Android as a vehicle to cement the dominance of its search engine. These practices have denied rivals the chance to innovate and compete on the merits. They have denied European consumers the benefits of effective competition in the important mobile sphere. This is illegal under EU antitrust rules."
In particular, Google:
- has required manufacturers to pre-install the Google Search app and browser app (Chrome), as a condition for licensing Google's app store (the Play Store);
- made payments to certain large manufacturers and mobile network operators on condition that they exclusively pre-installed the Google Search app on their devices; and
- has prevented manufacturers wishing to pre-install Google apps from selling even a single smart mobile device running on alternative versions of Android that were not approved by Google (so-called "Android forks").
Google obtains the vast majority of its revenues via its flagship product, the Google search engine. The company understood early on that the shift from desktop PCs to mobile internet, which started in the mid-2000s, would be a fundamental change for Google Search. So, Google developed a strategy to anticipate the effects of this shift, and to make sure that users would continue to use Google Search also on their mobile devices.
In 2005, Google bought the original developer of the Android mobile operating system and has continued to develop Android ever since. Today, about 80% of smart mobile devices in Europe, and worldwide, run on Android.
When Google develops a new version of Android it publishes the source code online. This in principle allows third parties to download and modify this code to create Android forks. The openly accessible Android source code covers basic features of a smart mobile operating system but not Google's proprietary Android apps and services. Device manufacturers who wish to obtain Google's proprietary Android apps and services need to enter into contracts with Google, as part of which Google imposes a number of restrictions. Google also entered into contracts and applied some of these restrictions to certain large mobile network operators, who can also determine which apps and services are installed on devices sold to end users.
The Commission decision concerns three specific types of contractual restrictions that Google has imposed on device manufacturers and mobile network operators. These have enabled Google to use Android as a vehicle to cement the dominance of its search engine. In other words, the Commission decision does not question the open source model or the Android operating system as such.
Insight into government subsidies to farmers: peanuts and peanut butter
Peanut growers where first financially helped by the government with the 1933 Agricultural Adjustment Act. Through federal policies, it increased overall income for peanut growers. However, consumers felt the hit as they were paying more for their everyday bag of peanuts. The Act later went through a bunch of changes; modifications were made in years 1937, 1941, 1948, and 1949 to justify poverty alleviation incentives.
In 2002, a quota system was introduced into the mix. This allowed peanut growers to obtain funds from US taxpayers versus from consumers. This also meant an increase in the price of consumer-oriented products, such as peanut butter. Around this time, lobbyists justified keeping the subsidies flowing based on the fact that the government had been providing them for so long, it would be unfair to suddenly take them away.
A couple of years later, peanuts were threatened to be kicked off of the 2014 Farm Bill. But, lobbyists fought back for favorable treatment made in a new Price Loss Coverage Program (PLC), which allows them protection from adverse market changes.
With these subsidies in place and the government having a strong control on market price with quotas, the unlikely consequence is huge stockpiles. This year, it is projected that American farmers will harvest 6.1 billion pounds of peanuts with 2.9 billion pounds in leftover. While stockpiles last, consumers will find themselves paying a bit less for their favorite peanut butter brands. However, taxpayers are expected to cover the $2 billion in subsidy payments by the government to farmers.
As mentioned, peanuts are now a lower price based on the stockpiles and the government's quotas for harvest. However, consumers pay for these "lowered prices" through taxes.
When peanut butter is made and marketed, it's sold at a lower price versus other nut spreads. The ingredients of a conventional jar of peanut butter do contain peanuts, but they may also contain other subsidized ingredients such as corn, soy, or sugar (this also ties into the reason of why a fast food salad is going to be more expensive than a cheeseburger). The more subsidized ingredients a product contains, the less it's going to cost. This is also why all-natural peanut butter will be more expensive than one with added sugars and preservatives.
Recently, there has been a big push to reduce the number of subsidies given to farmers. The current presidential administration has even proposed a $4.8 billion annual cut to the $23 billion currently given to farmers in hopes of fixing the issue. What will the future look like for the prices of peanut butter? It will certainly be one to keep an eye out for in the news- and the grocery shelves.
Excerpt from: https://www.msn.com/en-us/foodanddrink/foodnews/peanut-butter-is-subsidized-by-the-government-and-heres-what-that-means-for-you/ar-AAAhBOD?ocid=spartandhp
Montenegro as a tourist destination
Montenegro has recently been in the news only as a place with an easily pushed aside prime minister, unimportant to the US Administration's NATO defense strategy. But it is an actual, not imaginary place. You might want to visit there as a tourist, while you still can. So, for perspective, here is what the country's tourist agency has to say:
The sea, the lakes, the canyons or the mountains enable everyone to decide on the best way to enjoy a quality vacation. In one day, the curious traveler can have a coffee on one of the numerous beaches of the Budva Riviera, eat lunch with the song of the birds on Skardar Lake and dine next to a fireplace on the slopes of the Durmitor Mountain. These are all characteristics of Montenegro as a tourist destination that has a lot to offer.
The turbulent history of this small country has left behind an invaluable treasure in numerous historic monuments throughout this proud country. The blue sea with endless beaches, restless waters of the clear rivers and beautiful mountain massifs, mixed with the spirit of the old times, have given Montenegro everything one needs for an unforgettable vacation.
Montenegro is an ecological state. This fact grants it one of the primary posts on the tourist maps. A large number of sunny days in summer and a large quantity of snow in winter determine the two most developed forms of tourism in Montenegro: the coastal one- in summer and the ski recreational one – in winter.
Montenegrin towns are rich in architecture, from various periods that take the breath away and bring one back to the time when the structures were created. Through the numerous event and festivals, the tourist gets the opportunity to learn more about the traditions and customs of this country.
In recent times, following the global trends, Montenegro is developing extreme sports that the tourists can enjoy, as well.
From: https://www.visit-montenegro.com/tourism/tourism-in-montenegro/
Shades of Barry Lynn: The Trump trade wars will be affected by need for rare metals supplied almost solely by China
From NYT: And in one of its more strategic weapons, Beijing could use its dominance [in rare metals] to cut off key parts of the global supply chain. China is the major supplier of a number of mundane but crucial materials and components needed to keep the world’s factories humming. They include obscure materials like arsenic metals, used to make semiconductors; cadmium, found in rechargeable batteries; and tungsten, found in light bulbs and heating elements.
See https://www.nytimes.com/2018/07/11/business/china-trade-war-rare-earths-lynas.html?
Barry Lynn argued in 2016 that the US leaves itself vulnerable when China is a sole source of supply, althouth the material he used to illustrate the point was ascorbic acid, not rare metals:
But to understand the full extent of the danger posed by the radical shift in trade policy in the mid 1990s we must also look at the structure of supply chains. We should study what exactly is made in China, and how much of any vital good comes from China. Looking at supply chains is what allows us to see the full extent of our vulnerabilities in a time of conflict, and a way to judge whether the Pivot to Asia was well designed. Twenty years ago the United States depended on China for nothing that we needed day to day. But the radical changes in U.S. trade policy in the 1990s freed China – often in alliance with large U.S. corporations – to use trade power to consolidate control over many assembly activities and industrial components. This includes the basic ingredients for some of the nation’s most important drugs, including antibiotics, and some of the most vital inputs in our industrial food system, such as ascorbic acid.
See https://docs.house.gov/meetings/FA/FA05/20161206/105445/HHRG-114-FA05-Wstate-LynnB-20161206.pdf
Posting by Don Allen Resnikoff
Just what did Judge Kavanaugh opine about the CFPB?
That the CFPB single director structure is unconstitutional, but the remedy is simply to delete the "for cause" limitation on removable, so the President can remove the director at will. An exceprt from the Kavanaugh opinion follows: DR
The CFPB’s concentration of enormous executive power in a single, unaccountable, unchecked Director not only departs from settled historical practice, but also poses a far greater risk of arbitrary decisionmaking and abuse of power, and a far greater threat to individual liberty, than does a multi-member independent agency. The overarching constitutional concern with independent agencies is that the agencies are unchecked by the President, the official who is accountable to the people and who is responsible under Article II for the exercise of executive power. Recognizing the broad and unaccountable power wielded by independent agencies, Congresses and Presidents of both political parties have therefore long endeavored to keep independent agencies in check through other statutory means. In particular, to check independent agencies, Congress has traditionally required multi-member bodies at the helm of every independent agency. In lieu of Presidential control, the multi-member structure of independent agencies acts as a critical substitute check on the excesses of any individual independent agency head – a check that helps to prevent arbitrary decisionmaking and thereby to protect individual liberty.
This new agency, the CFPB, lacks that critical check and structural constitutional protection, yet wields vast power over the U.S. economy. So “this wolf comes as a wolf.” Morrison v. Olson, 487 U.S. at 699 (Scalia, J., dissenting).
In light of the consistent historical practice under which independent agencies have been headed by multiple commissioners or board members, and in light of the threat to individual liberty posed by a single-Director independent agency, we conclude that Humphrey’s Executor cannot be
stretched to cover this novel agency structure. We therefore hold that the CFPB is unconstitutionally structured. [emphasis added by DR]
What is the remedy for that constitutional flaw? PHH contends that the constitutional flaw means that we must shut down the entire CFPB (if not invalidate the entire Dodd-Frank Act) until Congress, if it chooses, passes new legislation fixing the constitutional flaw. But Supreme Court precedent dictates a narrower remedy. To remedy the constitutional flaw, we follow the Supreme Court’s precedents, including Free Enterprise Fund, and simply sever the statute’s unconstitutional for-cause provision from the remainder of the statute. Here, that targeted remedy will not affect the ongoing operations of the CFPB. With the for-cause provision severed, the President now will have the power to remove the Director at will, and to supervise and direct the Director. The CFPB therefore will continue to operate and to perform its many duties, but will do so as an executive agency akin to other executive agencies headed by a single person, such as the Department of Justice and the Department of the Treasury. [emphasis added by DR]
Those executive agencies have traditionally been headed by a single person precisely because the agency head operates within the Executive Branch chain of command under the supervision and direction of the President. The President is a check on and accountable for the actions of those executive agencies, and the President now will be a check on and accountable for the actions of the CFPB as well.
Because the CFPB as remedied will continue operating, we must also address the statutory issues raised by PHH in its challenge to the $109 million order against it.
* * *
With apologies for the length of this opinion, we now turn to our detailed explanation and analysis of these important issues.
See the opinion at https://www.cadc.uscourts.gov/internet/opinions.nsf/AAC6BFFC4C42614C852580490053C38B/$file/15-1177-1640101.pdf
DC Council majority backs repeal of ballot measure approved by voters -- initiative 77 -- forcing a higher minimum wage for hourly workers who rely on tips
A majority of the D.C. Council on Tuesday backed repeal of a ballot measure approved by voters last month that would force businesses to pay more to servers, bartenders, bellhops and other hourly workers who depend on tips.
Seven of the council’s 13 members co-introduced a bill that would overturn Initiative 77, which was passed by 56 percent of District voters in June’s primary election.
The initiative would stop businesses from counting the tips received by employees toward the minimum wage they must earn under law. The District’s minimum hourly wage is now $13.25 and is on track to reach $15 by 2020. Currently, employers are allowed to pay tipped workers just $3.89 per hour if tips make up the difference.
Initiative 77 was backed by liberal activists and some workers who argued that some workers did not receive enough in tips to earn the minimum wage and that their employers failed to fill the gap.
See: https://www.washingtonpost.com/local/dc-politics/majority-of-dc-council-moves-to-overturn-tipped-wage-ballot-measure/2018/07/10/5320f156-8458-11e8-9e80-403a221946a7_story.html?utm_term=.fa36efadc101
Question for readers: Should the Council follow the wishes of the voters? Is it OK for the Council to force a contrary approach?
The EU v. Google
For those who feel that US competition policy enforcement is too narrow and too meek in addressing use of economic power by big companies, the EU "abuse of dominant position" approach suggests an alternative. Currently (July, 2018) the media reports action by the EU against Google. Following is an earlier statement directly from the EU that explains some of the EU's analysis:
From: http://europa.eu/rapid/press-release_IP-16-1492_en.htm
Antitrust: Commission sends Statement of Objections to Google on Android operating system and applications Brussels, 20 April 2016
The European Commission has informed Google of its preliminary view that the company has, in breach of EU antitrust rules, abused its dominant position by imposing restrictions on Android device manufacturers and mobile network operators. The Commission's preliminary view is that Google has implemented a strategy on mobile devices to preserve and strengthen its dominance in general internet search.
First, the practices mean that Google Search is pre-installed and set as the default, or exclusive, search service on most Android devices sold in Europe.
Second, the practices appear to close off ways for rival search engines to access the market, via competing mobile browsers and operating systems.
In addition, they also seem to harm consumers by stifling competition and restricting innovation in the wider mobile space. The Commission's concerns are outlined in a Statement of Objections addressed to Google and its parent company, Alphabet. Sending a Statement of Objections does not prejudge the outcome of the investigation.
Commissioner Margrethe Vestager, in charge of competition policy, said: "A competitive mobile internet sector is increasingly important for consumers and businesses in Europe. Based on our investigation thus far, we believe that Google's behaviour denies consumers a wider choice of mobile apps and services and stands in the way of innovation by other players, in breach of EU antitrust rules. These rules apply to all companies active in Europe. Google now has the opportunity to reply to the Commission's concerns."
Smartphones and tablets account for more than half of global internet traffic, and are expected to account for even more in the future. About 80% of smart mobile devices in Europe and in the world run on Android, the mobile operating system developed by Google. Google licenses its Android mobile operating system to third party manufacturers of mobile devices.
The Commission opened proceedings in April 2015 concerning Google's conduct as regards the Android operating system and applications. At this stage, the Commission considers that Google is dominant in the markets for general internet search services, licensable smart mobile operating systems and app stores for the Android mobile operating system. Google generally holds market shares of more than 90% in each of these markets in the European Economic Area (EEA).
In today's Statement of Objections, the Commission alleges that Google has breached EU antitrust rules by: requiring manufacturers to pre-install Google Search and Google's Chrome browser and requiring them to set Google Search as default search service on their devices, as a condition to license certain Google proprietary apps; preventing manufacturers from selling smart mobile devices running on competing operating systems based on the Android open source code; giving financial incentives to manufacturers and mobile network operators on condition that they exclusively pre-install Google Search on their devices.
The Commission believes that these business practices may lead to a further consolidation of the dominant position of Google Search in general internet search services. It is also concerned that these practices affect the ability of competing mobile browsers to compete with Google Chrome, and that they hinder the development of operating systems based on the Android open source code and the opportunities they would offer for the development of new apps and services. In the Commission's preliminary view, this conduct ultimately harms consumers because they are not given as wide a choice as possible and because it stifles innovation.
State inquiry letter on employee "no-poach" by fast food chains; targets promptly settle
from https://ag.ny.gov/sites/default/files/npnh_letter_redacted.pdf
Re: Request for Information Regarding Franchise Agreements
Dear ,
Our Offices have learned that certain franchise agreements used in our States and the District of Columbia (hereinafter collectively referred to as “States”) may contain provisions that impact some employees’ ability to obtain higher paying or more attractive positions with a different franchisee. These provisions are known by many terms, including “employee non-competition,” “no solicitation,” “no poach,” “no hire,” or “no switching” agreements (hereinafter referred to collectively as “No Poach Agreements”). As their names suggest, these agreements restrict a franchisee’s ability to recruit or hire employees of and other franchisees of . We have reason to believe that may be including such provisions in its franchise agreements.
As State Attorneys General, we have a common interest in the economic health of our residents and the communities in which they live. Many of us enforce laws that ensure basic worker protections, such as minimum wage, overtime, and anti-discrimination laws, in addition to consumer protection and antitrust laws. Given these roles, we are concerned about the use of No Poach Agreements among franchisees and the harmful impact that such agreements may have on employees in our States and our state economies generally.1 By limiting potential job opportunities, these agreements may restrict employees’ ability to improve their earning potential and the economic security of their families. These provisions also deprive other franchisees of the opportunity to benefit from the skills of workers covered by a No Poach Agreement whom
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1 “Non-compete Contracts: Economic Effects and Policy Implications,” report issued by the Office of Economic Policy, U.S. Department of the Treasury, March 2016. Available at: https://www.treasury.gov/resource-center/economic-policy/Documents/UST%20Noncompetes%20Report.pdf; and Alan B. Krueger and Orley Ashenfelter, Theory and Evidence on Employer Collusion in the Franchise Sector, (July 18, 2017) found that 80 percent of quick service restaurant franchise contracts (i.e., 32 out of 40) contained no poach provisions.
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they would otherwise wish to hire. When taken in the aggregate and replicated across our States, the economic consequences of these restrictions may be significant.
Given these potentially harmful impacts, we would like to gather information relating to the purpose and effects of No Poach Agreements. To that end, we request that you provide the following information and documents:
For the purposes of the below Request for Information and Request for Documents, the term “No Poach Agreement” refers to any and all language contained within franchise agreements or any other document which restricts or prevents franchisees from hiring or soliciting employees of and/or other franchisees for employment. Such language includes, but is not limited to, any “employee non-competition,” “no solicitation,” and/or “no hire” provisions. In addition, all requests for information and documents shall encompass the time period from January 1, 2015 to the present (“Relevant Period”).
Requests for Information
1. At any point during the Relevant Period, have franchise agreements included any language restricting employee hiring between franchise locations? If yes, when did first start including such language in its franchise agreements? Does this practice continue to the present? If this practice does not continue, when did stop the practice and why was it stopped?
2. What categories of employees have been subject to No Poach Agreements? Please provide in your response information about the types of positions (including job titles), whether full-time or part-time employees, as well as the hourly wage and salary ranges for such workers.
3. Have employees who are subject to No Poach Agreements been informed of this restriction on their mobility? If yes, when and how have they been informed?
4. What is the temporal scope of No Poach Agreements? What is the geographic scope?
5. Please identify the franchise locations currently subject to No Poach Agreements, the number and percentage of your franchises to which No Poach Agreements apply, and an estimate of the number of workers currently subject to such agreements in each of the following States: California, Illinois, Massachusetts, Maryland, Minnesota, New Jersey, New York, Oregon, Pennsylvania, Rhode Island and the District of Columbia.
6. Has or any of its franchisees been a party to litigation or binding arbitration involving No Poach Agreements? If yes, please provide the case name, case number, and a summary of the case status as well as resolution (if applicable).
Requests for Documents
1. A copy of any and all franchise or other agreements used by that include No Poach Agreements. Please provide sample franchise agreements or other documents containing the No Poach Agreements that have been used during the Relevant Period. If the terms or language of the No Poach Agreements have changed over the course of the Relevant Period, provide a copy of each version of the No Poach Agreements that have been used.
2. Any and all communications, including emails, correspondence and text messages, with franchisees, separate and apart from the franchise agreement, regarding No Poach Agreements, including any practices, rules, requirements, or contract provisions used within the past three years. This request includes, but is not limited to any and all documents related to training provided to franchisees or store management regarding No Poach Agreements.
3. Any and all documents demonstrating the business rationale and operational need for the No Poach Agreements.
4. Any and all communications, including emails, correspondence and text messages, by and between , employees, and/or franchisees relating to enforcement of the No Poach Agreements, such as for any employee subject to No Poach Agreements who requested a transfer from one franchisee to another, or a new job with a franchisee while employed at another franchisee, whether that request was granted or denied, and the reasoning for such a decision.
5. Any and all communications, including emails, correspondence and text messages, with other franchisors concerning No Poach Agreements, or related practices, policies, rules, requirements or provisions.
We request that you provide your responses on or before August 6, 2018. Please send all written communications via email to Cynthia.Mark@state.ma.us and provide all responsive documents in an electronic format according to the delivery standards separately attached to this communication to Cynthia Mark at the address listed below.
Let us know if you have any questions, and thank you in advance for your prompt attention.
Sincerely,
Cynthia Mark, Chief, Fair Labor Division Massachusetts Office of the Attorney General One Ashburton Place Boston, MA 02108 (617) 963-2626 Cynthia.Mark@state.ma.us
Satoshi Yanai Supervising Deputy Attorney General Underground Economy Unit California Department of Justice Office of the Attorney General 300 S. Spring Street, Suite 1702 Los Angeles, CA 90013 (213) 269-6400
Jane H. Lewis Section Chief, Office of Housing and Community Justice Office of the Attorney General for the District of Columbia 441 4th Street, Suite 630S Washington, DC 20001 Phone: (202) 727-1038 Jane.Lewis@dc.gov
Jane R. Flanagan Chief, Workplace Rights Bureau Office of the Illinois Attorney General 100 W. Randolph Street, 11th Floor Chicago, IL 60601 (312) 814-4720
Leah J. Tulin Special Assistant to the Attorney General Office of the Attorney General State of Maryland 200 Saint Paul Place Baltimore, Maryland 21202 410-576-6962
Jacob Campion Assistant Attorney General Solicitor General’s Division Minnesota Attorney General’s Office 445 Minnesota Street, Suite 1100 St. Paul, Minnesota 55101-2128 (651) 757-1459
Jeremy M. Feigenbaum, Assistant Attorney General Counsel to the Attorney General Office of the New Jersey Attorney General Richard J. Hughes Justice Complex 25 Market Street, 8th Floor, West Wing Trenton, New Jersey 08625-0080 Desk: (609) 376-2690 | Cell: (609) 414-0197 Jeremy.Feigenbaum@njoag.gov
ReNika Moore Labor Bureau Chief New York State Office of the Attorney General 28 Liberty Street New York, NY 10005 (212) 416-6280
Tim Nord, Special Counsel Oregon Department of Justice 1162 Court Street NE Salem, OR 97301 Tel: (503) 934-4400 Fax: (503) 373-7067 Tim.D.Nord@doj.state.or.us
Nancy A. Walker, Chief Deputy Attorney General Fair Labor Section Pennsylvania Office of the Attorney General Strawberry Square Harrisburg, PA17120
Adam D. Roach Special Assistant Attorney General Rhode Island Attorney General’s Office 150 South Main Street Providence, RI 02903 (401) 274-4409, ext. 2490
Follow-up: Under agreements with Washington State announced on Thursday, the companies pledged to remove so-called no-poach clauses from their contracts with franchisees. Auntie Anne’s, Buffalo Wild Wings and Cinnabon also agreed to drop the clauses.
The provisions prohibit workers at, for example, one Carl’s Jr. franchise from going to another Carl’s Jr. They do not stop those workers from taking jobs at restaurants run by a different chain.
In addition to stripping the clauses from existing franchise contracts in Washington, the seven chains have also vowed not to enforce them nationwide. The clauses cannot be included in new and renewed contracts either.
Update from: https://www.nytimes.com/2018/07/12/business/fast-food-wages-no-poach-deal.html?
Are the poorest US citizens deprived of human rights? The UN says yes; the US government says no
More than three million Americans live in “extreme poverty,” according to a report from the United Nations, which ranked poverty in the U.S. alongside some of the poorest areas in the world, and argued the human rights are at stake. The US government vehemently disagrees.
The UN Special Rapporteur for Extreme Poverty paid a visit to the U.S. last year, drawing worldwide attention to his findings.
NewsHour Weekend Special Correspondent Simon Ostrovsky followed in his footsteps to report from Lowndes County, Alabama.
The PBS report is at https://www.pbs.org/newshour/show/the-story-of-american-poverty-as-told-by-one-alabama-county
The vehement US response is reported at https://www.theguardian.com/world/2018/jun/21/nikki-haley-un-poverty-report-misleading-politically-motivated
From WaPo: CFPB drops "kickback" action against Zillow
By Ken Harney July 3
Excerpts from Washington Post article:
Zillow said in a statement that “we are pleased the [Consumer Financial Protection Bureau] has concluded their inquiry into our co-marketing program.”
Early last year, Zillow was informed by the CFPB that the bureau was considering legal action because of possible violations of the Real Estate Settlement Procedures Act (RESPA) and federal rules on unfair and deceptive practices. (Scott Eells/BLOOMBERG)
In a move with potentially significant implications for consumers, realty agents and lenders, the Trump administration has decided not to take legal action against online realty giant Zillow under federal anti-kickback and deceptive-practices rules.
The decision represents a departure from the direction the Consumer Financial Protection Bureau appeared to be headed under its previous director, Richard Cordray, an Obama appointee who resigned last November to run for governor of Ohio.
***
The focus of the bureau’s concerns was Zillow’s “co-marketing” plan, under which “premium” realty agents have portions of their advertising bills on Zillow sites paid for by mortgage lenders. (Some quick background here: When buyers visit Zillow’s website, which includes millions of home listings, they frequently see “premium” agents featured prominently, along with a photo and contact information.)
“Premium” agents often are not the listing agent for the property, nor are they necessarily among the most active or successful in the neighborhood. Instead, they are advertisers, paying Zillow hundreds, sometimes thousands of dollars per month for the placement, hoping that shoppers will contact them. Given these high costs for leads, Zillow instituted a “co-marketing” plan that allows mortgage lenders to be featured on the same page as the agent, along with contact information. In exchange for the placement, lenders pay as much as half of the realty agent’s Zillow bill. As with premium agents, “premium” lenders do not necessarily offer the best financial deal or the lowest interest rates to the shopper; they pay money to reduce the realty agent’s monthly expenses and market their own mortgages.
Among the key issues in the CFPB’s investigation, according to legal experts familiar with the case, was whether the Zillow plan violates federal prohibitions against paying compensation for referrals of business — kickbacks. RESPA bans “giving or receiving” anything of value in exchange for referrals of business related to real estate settlements. The rationale is that referral payments are anti-consumer: They add to overall costs, they frequently are unknown to the consumer, and they discourage shopping for the best available services or prices. Zillow insists its co-marketing plan does not entail referrals or endorsements, but on its website in an area designated for realty agents it touts the program as a way to “promote your favorite lenders to customers on Zillow.”
The full Washington Post article is at https://www.washingtonpost.com/realestate/consumer-agency-will-not-take-action-against-zillow/2018/07/02/d3eedaa8-7e15-11e8-b660-4d0f9f0351f1_story.html?noredirect=on&utm_term=.e16c29e973a9
Perspectives on Poverty Law from the Bench: DC Superior Court
From Washington Council of Lawyers:
Trial-court judges with busy dockets must treat each litigant fairly, give each person a chance to be heard, and still keep cases moving apace. Doing all three things is challenging, especially given how many cases most judges have and the number of parties who don't have lawyers.
It's a lot to juggle, and we'll find out how judges do it—and still try to deliver justice—at Perspectives on Poverty Law from the Bench: DC Superior Court. This brown-bag lunch and panel takes place on Tuesday, July 10, from noon to 1:30 at DLA Piper (500 8th Street NW).
The event is free, but space is limited. Register here. [ https://wclawyers.wildapricot.org/EmailTracker/LinkTracker.ashx?linkAndRecipientCode=UF9WJHIWLqH3bsV4TH0gAlMt3qmHEr3cID7O%2bBfBrUYtV5rm%2beGX%2bDyCvM8XEs6srLme594vR56IDDKxpwGk4TYdt2g1NvPxQygf%2fSWvdB0%3d]
Our panel includes D.C. Superior Court Associate Judges Robert Okun and Anita Josey-Herring and Magistrate Judge Noel Johnson. Associate Judge Julie Becker will moderate.
Bring your lunch and feel free to bring a friend; we'll supply drinks, desserts, and a lively, candid discussion.
Nancy Lopez (@NancyLopezWCL)
Executive Director, Washington Council of Lawyers
The role of the States in monopolization cases
Some years ago I wrote about the role of the States in monopolization cases. My main point was that the States had played a role of significance to businesses and consumers. That demonstrated that States could do it again. Review of past and more recent State enforcement efforts provides a useful reminder of what the States can do in the future.
State Enforcement Activities Against Microsoft
The active role of States in the litigation against Microsoft is well known. It has now become an old story, but a useful reminder of the potential of the States. Briefly, in 1998 a group of States joined with the DOJ in filing a complaint against Microsoft alleging monopolization, and two years later Microsoft was found liable for maintaining an illegal monopoly in personal computer operating systems.
Following an appeal and several additional court hearings, the U.S. District Court for the District of Columbia issued judgments in 2002 prohibiting Microsoft from continuing certain unlawful conduct. In testimony before the Antitrust Modernization Commission, Steve Houck and Kevin O’Connor, the attorneys who represented plaintiff States at the Microsoft liability trial, emphasized the independent and aggressive role taken by States. They said that the States had decided to file a complaint against Microsoft before the DOJ did and were prepared to proceed without the DOJ. They said that after consolidation of the State and federal actions against Microsoft, the States made important contributions to the trial, and acted independently and assertively in pursuing settlement negotiations.
Some of the States that participated in the liability trial against Microsoft agreed to settlement in 2001, but not all. Non-settling States filed in court for additional relief. The results of their efforts were meager, as the litigated decree added little to the consent decree. Both the consent and litigated decrees provided for termination five years after entry, subject to the court later ordering an extension.
In October 2007, some States filed motions to extend the termination dates of the Final Judgments. Despite opposition by the DOJ, Judge Kollar-Kotelly partially granted the motions. The DOJ argued in part that “the California Movants do not provide any evidence that the goals of the expiring provisions of the Final Judgments have not been achieved.” Judge Kollar-Kotelly reached a different conclusion: Based upon the extreme and unforeseen delay in the availability of complete, accurate, and useable technical documentation, the Court required Microsoft to make such information available to licensees under the Final Judgments.
As a consequence of the court’s granting the States’ motion, significant portions of the Final Judgment were enforced by the States alone.
Recent State Enforcement
States have continued to be aggressive in initiating monopolization challenges in other industries, such as pharmaceuticals.
For example, in 2017 the states of Alaska, Maryland, New York, Texas and Washington joined in the FTC’s complaint and a $100 million settlement with Mallinckrodt ARD Inc.
The Complaint alleged that Mallinckrodt ARD Inc., formerly known as Questcor, violated the antitrust laws when Questcor acquired the rights to a drug that threatened its monopoly in the U.S. market for adrenocorticotropic hormone (ACTH) drugs. Acthar is a specialty drug used as a treatment for infantile spasms, a rare seizure disorder afflicting infants, as well a drug of last resort used to treat other serious medical conditions.
The Complaint alleges that, while benefitting from an existing monopoly over the only U.S. ACTH drug, Acthar, Questcor illegally acquired the U.S. rights to develop a competing drug, Synacthen Depot. The acquisition stifled competition by preventing any other company from using the Synacthen assets to develop a synthetic ACTH drug, preserving Questcor’s monopoly and allowing it to maintain extremely high prices for Acthar.
These stories suggest continuing reasons to believe that vigorous State prosecutors will in the future pursue monopolization cases based on a pragmatic and sometimes aggressive view of specific facts, and be independent about it if necessary. They can do it.
By Don Allen Resnikoff
When Scott Pruitt was Oklahoma’s Attorney General
Scott Pruitt has famously failed to survive ethical scrutiny as a big fish in national waters. But what was he like when he was Attorney General in the more local waters of Oklahoma? That is of interest to those of us interested in local law enforcement. Several publications, including the New York Times, have offered articles suggesting that his behavior then was similar. Here is an excerpt from an article in Mother Jones:
As attorney general of Oklahoma from 2011 to 2017, Pruitt fostered close ties with industry interests, including Koch-funded groups, oil and gas, and agriculture. He used his position as attorney general to advance these interests, copying their language to use against Barack Obama’s EPA, while he benefited from their political support and campaign donations. He targeted the Humane Society’s nonprofit tax status, which the group’s President Wayne Pascell said was motivated by its feud with the Oklahoma Farm Bureau, a Pruitt ally. The AG’s office was slow to release emails that detailed the full extent of Pruitt’s close ties with industry, only making some emails public after a court order that was issued the same day he was confirmed by the US Senate for the EPA.
* * *
At his Senate confirmation hearing last year, Sen. Cory Booker (D-N.J.) asked Pruitt if he used a private email as attorney general. Pruitt answered he did not. Shortly after, Oklahoma reporter Phil Cross found that Pruitt had used a non-government email address in publicly released records. On top of the private email, groups such as the Oklahoma chapter of the American Civil Liberties Union are still fighting for the remainder of Pruitt’s emails with industry groups like Devon Energy. An earlier batch of emails revealed that Pruitt’s Oklahoma office thanked a Devon staffer with messages like, “You are so amazingly helpful!!!” while adopting much of Devon’s language as its own for a letter opposing Obama’s attempt to rein in methane leaks from drilling operations.
Full article: https://www.motherjones.com/environment/2018/04/scott-pruitt-was-always-an-ethical-nightmare/
Here is an excerpt from an article in the New York Times:
During his six years as attorney general, Mr. Pruitt blazed a path of spending that holds new meaning now that his E.P.A. expenditures are the subject of investigations and growing political outrage.
[Photo caption] Early into Mr. Pruitt’s term as state attorney general, he and his wife paid $1.18 million for a 5,518-square-foot home in Tulsa.
Mr. Pruitt moved the attorney general’s outpost in Tulsa to a prime suite in the Bank of America tower, an almost $12,000-a-month space that quadrupled the annual rent. He required his staff to regularly drive him between Tulsa and Oklahoma City, according to several people familiar with his time as attorney general.
And he channeled state contracts to Mr. Wagner’s law firm, which was already doing business with the state.
From 2011 to 2017, state records show, the attorney general’s office awarded more than $600,000 in contracts to Mr. Wagner’s Tulsa-based law firm, Latham, Wagner Steele & Lehman — greatly increasing work with the firm, which had gotten a total of about $100,000 over the four years before that. These contracts are not competitively bid. The additional expenditures reflected an approach, contentious even among some fellow Republicans, to hire private lawyers for state business, often for cases challenging federal regulations.
“He said that these people had special expertise that his agency didn’t have,” said Paul Wesselhoft, a Republican former state representative. “He has an army of lawyers with expertise. He didn’t have to spend that extra tax money to hire another law firm. It didn’t seem frugal.”
Mr. Pruitt used the Bank of America building as a base for his growing political ambitions. Oklahoma Strong Leadership, a political action committee he formed in 2015 to help finance fellow Republicans’ campaigns, operated out of the building. The group shared a suite with another PAC tied to Mr. Pruitt, Liberty 2.0, as well as his campaign office.
Oklahoma Strong Leadership, funded by private donors and corporations, also appeared to support lavish travel and entertainment.
An analysis of expenditure disclosures by the Campaign Legal Center, a nonprofit that pushes for stricter rules governing money in politics, shows that just 9 percent of the PAC’s spending was devoted to other candidates. The group found that the PAC had disbursed more than $7,000 for trips to Hawaii in summer 2015 and 2016, $2,180 of which was spent at a Ritz-Carlton. The PAC also put $4,000 toward dining, including a $661 meal at the Cafe Pacific, a high-end seafood restaurant in Dallas.
The NYT article: https://www.nytimes.com/2018/04/21/us/politics/scott-pruitt-oklahoma-epa.html
Posting by Don Resnikoff
Declaration filings from 18 state AG lawsuit challenging Trump administration immigrant family separation policies
From Washington State AG press release:
AG FERGUSON ASKS COURT TO ACCELERATE FAMILY SEPARATION CASE
Jul 2 2018AG’s motion includes declarations from families affected by separation policy
SEATTLE -- Attorney General Bob Ferguson today asked a federal judge to order the federal government to provide details about and access to victims of the Trump Administration’s family separation policy on an expedited schedule. Last week, Attorney General Ferguson led a coalition of 18 attorneys general in filing a lawsuit in Seattle seeking to end the family separation policy permanently.
The motion for expedited discovery is necessary because hundreds of separated parents are in federal custody and the Administration can move them to other facilities at any time without notice. The motion asks the court to order the federal government to cooperate in facilitating access to detained parents and to report to the court on the progress of such efforts.
In support of the motion, the states included declarations from parents and interviews with children [ https://agportal-s3bucket.s3.amazonaws.com/uploadedfiles/Another/News/Press_Releases/motion%20declarations%201-33.pdf ] separated by immigration officials as a result of the policy. The states also filed other declarations from immigration rights workers, elected officials and medical experts. The motion includes 99 declarations in all, and they can be found here [ https://agportal-s3bucket.s3.amazonaws.com/uploadedfiles/Another/News/Press_Releases/motion%20declarations%201-33.pdf ], here [ https://agportal-s3bucket.s3.amazonaws.com/uploadedfiles/Another/News/Press_Releases/motion%20declarations%2034-66.pdf ] and here [ https://agportal-s3bucket.s3.amazonaws.com/uploadedfiles/Another/News/Press_Releases/motion%20declarations%2067-99.pdf ].
One migrant mother said her 14-month-old son was "full of dirt and lice" after being separated from his family for months by the Trump administration.
Another mother who fled Honduras after receiving death threats, currently held in Washington, described the experience of being separated from her 6-year-old son shortly after crossing the border: “From there, my son Jelsin and I were separated. I was not told where he was being taken. They only told me he would be a ward of the state. To calm my son down, I told him it would only be for three days, although I really did not know. We had never been apart.”
She was not able to speak to her son for almost a month. When she did contact him, she said, “He was only able to say a few words. He was just crying. … I cannot express the pain I have felt being apart from him.”
“The Trump Administration’s family separation policy is not over – it continues to harm thousands of parents and children,” said Ferguson. “The gut-wrenching stories we have heard from families demonstrate just how much it violates basic decency and fundamental American values. The policy also violates the Constitution, and I will continue to fight to put an end to it.”
"The federal government has an obligation to reunite children with their parents immediately, and an obligation to cease any and all policies that ignore the due process rights of families seeking asylum or refuge at any of our borders," Governor Jay Inslee said. "Washington will not cease nor desist until justice and fairness for every impacted child and parent in Washington state is restored."
The motion for expedited discovery [https://agportal-s3bucket.s3.amazonaws.com/uploadedfiles/Another/News/Press_Releases/motion%207-2-18.pdf ], filed in the U.S. District Court for the Western District of Washington, requests that Judge Marsha Pechman order several actions to ensure that the Attorney General’s Office can collect information in a timely fashion.
If the judge grants the motion, it will require the federal government to respond to the states’ requests for information on an accelerated timeline and to cooperate with state requests to interview parents in federal detention. Some states have faced procedural difficulties or been denied access to federal detention centers and other federal locations that house affected immigrants.
Ferguson also requests weekly status conferences with the court during the period of expedited discovery.
Victims’ stories from Washington
In addition to the filing, the attorneys general included 99 declarations. Some declarations, given by experts in developmental psychology and public health, discuss the dangers of separating families and housing immigrant families together in barracks housing. Other declarations include those given directly by parents separated from their children and interviews with separated children.
Interviews and testimonies by parents and children voiced the sadness, distress and frustration the family separation policy has caused.
A 13-year-old girl was not able to say goodbye to her father when immigration officials separated them. The investigator wrote that the girl “reported that the guards threatened the people that they detained with separating them and sending them back home, she overheard them telling others they would be jailed for about 10 or 15 years, which scared her. The younger children were crying.”
In attempting to recount her experiences, the girl “had a hard time talking during most of the interview, was visibly upset and broke down in tears frequently.”
A 15-year-old girl identified as G and fleeing threats from a member of a criminal association in her home country, told the investigator “[Immigration officials] told her mother that G would be taken to another place where she would be able to visit her. G and her mother said goodbye to each other while crying, but G’s mother comforted her, saying she was going to visit her wherever she was going. Only later did G realize this was not true. As she recounted this moment, G was sobbing and visibly distraught.”
G also described seeing a 4-year-old girl crying inconsolably, and watching as an immigration official reprimanded the girl and turned her away.
Another girl in Washington is working with a therapist because she has nightmares. Immigration officials also separated her from her father shortly after she arrived in the United States.
Immigration officials took one mother’s children as she was in court. Upon returning and realizing this, she said, “I became physically unwell when I found out that my little boys had been taken away.”
Most parents related the difficulty they had had in contacting their children, and not receiving information on how to find their children from immigration officials. More than one parent relayed that after asking for weeks, their home country’s embassy was able to provide them with the location of their children.
A mother, fleeing death threats to her and her family, described the relief she had at finally contacting her daughter, but her daughter was unable to speak “because of how strongly she was sobbing.”
Though many families were seeking asylum, a number reported that immigration officials had never asked them why they sought refuge in the United States.
The motion includes costs the policy has imposed on states involved in the lawsuit, as well.
Ferguson and the states request that Judge Pechman consider their motion by July 13.
Ferguson leads a coalition of 17 states in the lawsuit: Massachusetts, California, Delaware, Iowa, Illinois, Maryland, Minnesota, New Jersey, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, and the District of Columbia.
The Office of the Attorney General is the chief legal office for the state of Washington with attorneys and staff in 27 divisions across the state providing legal services to roughly 200 state agencies, boards and commissions. Visit www.atg.wa.gov to learn more.
Contacts:
Brionna Aho, Communications Director, (360) 753-2727; brionna.aho@atg.wa.gov
The California Supreme Court rules that Yelp did not need to remove negative comments posted by a user
In a 4-to-3 opinion, the court said that federal law protected internet companies from liability for statements written by others. The decision to remove posts is at the company’s discretion, the court said.
The Court's opinion is here: http://www.courts.ca.gov/opinions/documents/S235968.PDF
Excerpt from opinion:
In this case, we consider the validity of a court order, entered upon a default judgment in a defamation case, insofar as it directs appellant Yelp Inc. (Yelp) to remove certain consumer reviews posted on its website. Yelp was not named as a defendant in the underlying lawsuit, brought by plaintiffs Dawn Hassell and the Hassell Law Group, and did not participate in the judicial proceedings that led to the default judgment. Instead, Yelp became involved in this litigation only after being served with a copy of the aforementioned judgment and order. Yelp argues that, to the extent the removal order would impose upon it a duty to remove these reviews, the directive violates its right to due process under the federal and state Constitutions because it was issued without proper notice and an opportunity to be heard. Yelp also asserts that this aspect of the order is invalid under the Communications Decency Act of 1996, relevant provisions of which (found at 47 U.S.C. § 230, hereinafter referred to as section 230) relate, “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider” (§ 230(c)(1)), and “No cause of action may be brought and no liability may be imposed under any State or local law that is inconsistent with this section” (§ 230(e)(3)). The Court of Appeal rejected Yelp’s arguments. We reverse. The Court of Appeal erred in regarding the order to Yelp as beyond the scope of section 230. That court reasoned that the judicial command to purge the challenged reviews does not impose liability on Yelp. But as explained below, the Court of Appeal adopted too narrow a construction of section 230.
In directing Yelp to remove the challenged reviews from its website, the removal order improperly treats Yelp as “the publisher or speaker of . . . information provided by another information content provider.” (§ 230(c)(1).) The order therefore must be revised to comply with section 230. I
GM's comments to the Commerce Department on the adverse effect of tariffs are here:
https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rJBrNbApznVU/v0
Excerpt:
Overly Broad and Steep Import Tariffs Undermine Our Ability to Compete
If import tariffs on automobiles are not tailored to specifically advance the objectives of the economic and national security goals of the United States, increased import tariffs could lead to a smaller GM, a reduced presence at home and abroad for this iconic American company, and risk less—not more—U.S. jobs. The threat of steep tariffs on vehicle and auto component imports risks undermining GM’s competitiveness against foreign auto producers by erecting broad brush trade barriers that increase our global costs, remove a key means of competing with manufacturers in lower-wage countries, and promote a trade environment in which we could be retaliated against in other markets. The penalties we could incur from tariffs and increased costs will be detrimental to the future industrial strength and readiness of manufacturing operations in the United States, and could lead to negative consequences for our company and U.S. economic security.
Combined with the other trade actions currently being pursued by the U.S. Government—namely the 232 Steel and Aluminum tariffs and the Section 301 tariffs against Chinese imports—the threat of additional tariffs on automobile imports could be detrimental to our company. At some point, this tariff impact will be felt by customers. Based on historical experience, if cost is passed on to the consumer via higher vehicle prices, demand for new vehicles could be impacted. Moreover, it is likely that some of the vehicles that will be hardest hit by tariff-driven price increases—in the thousands of dollars—are often purchased by customers who can least afford to absorb a higher vehicle price point. The correlation between a decline in vehicle sales in the United States and the negative impact on our workforce here, which, in turn threatens jobs in the supply base and surrounding communities, cannot be ignored. Alternatively, if prices are not increased and we opt to bear the burden of tariffs or plant moves, this could still lead to less investment, fewer jobs, and lower wages for our employees. The carry-on effect of less investment and a smaller workforce could delay breakthrough technologies and threaten U.S. leadership in the next generation of automotive technology.
DC AG Racine's aggressive action against house-flippers that do shoddy renovations and rip off buyers.
From the report House flip couple to pay $1.6 Million in restitution - https://www.wusa9.com/article/news/local/house-flip-couple-to-pay-16-million-in-restitution/65-237254061
Virginia couple agrees to settle lawsuit filed by DC's Office of Attorney General
The AG's actions occurred some months ago, but reflect ongoing consumer protection issues. It seems that consumers often go into house purchases without realizing or dealing with risks from shoddy renovations. One ongoing consumer protection issue is education. Home buyers are not necessarily real estate experts, and may not know questions to ask and documents to demand.
Another ongoing issue is whether there should be a legal requirement that sellers provide disclosures to buyers when there has been recent renovation. Required disclosures might include whether the renovations were inspected by the City as being up to Code, and whether the work was done by properly licensed people.
Posted by Don Resnikoff
NYT editorial says USDOJ approval of Fox-Disney deal looks political
Excerpts:
[I]t was stunning when the department announced on Wednesday — just six months after the deal was announced — that it had approved Disney’s $71 billion purchase of the entertainment assets of 21st Century Fox, one of Disney’s top rivals.
***
Mr. Trump and his aides have publicly criticized the AT&T-Time Warner deal — the president said last November that it’s “not good for the country.” And he regularly lambastes CNN, the news network owned by Time Warner.
But he’s all praise when it comes to 21st Century Fox and its executive chairman, Rupert Murdoch. In December, the White House press secretary, Sarah Huckabee Sanders, told reporters that the president congratulated Mr. Murdoch on the impending Disney deal. In addition, Mr. Trump praises Fox News and its hosts every chance he gets — and they regularly return the favor. While Disney will not acquire Fox News or the Fox network and stations as part of this deal, the acquisition will make the Murdoch family the largest individual shareholders in Disney, increasing their wealth by billions of dollars.
The Justice Department’s antitrust chief, Makan Delrahim, will surely argue that the president’s feelings about CNN and Fox News have no bearing on his decisions. But it is mystifying why Mr. Delrahim took such a hard line against AT&T-Time Warner, which legal experts argued would be a difficult case to bring because of the nature of the merger, while going so easy on Disney-Fox.
Full editorial: https://www.nytimes.com/2018/07/01/opinion/disney-fox-deal.html?action=click&pgtype=Homepage&clickSource=story-heading&module=region®ion=region&WT.nav=region
DC Mayor Bowser on the DC Violence Interrupter program
We know that policing alone will not end violence in our communities,” said Mayor Bowser. “The organizations we selected have already done so much to strengthen our community, and these partnerships will serve as critical tools for engaging residents, preventing senseless violence, providing the supports and resources our most vulnerable neighbors need to succeed, and building a safer, stronger DC.
”The violence interruption program will cover all eight wards, with Training Grounds providing interruption services in Wards 6 and 7 and the Far Southeast Family Strengthening Collaborative providing services in Ward 8. Training Grounds is a District-based non-profit organization founded in 2005 with a mission to assist youth and adults with personal, career, and leadership development through neighborhood-based services. The Far Southeast Family Strengthening Collaborative, also District-based, is guided by its mission to act as a catalyst to develop, nurture, and sustain partnerships of residents, agencies, and institutions in the Southeast community and to create a healthy socioeconomic environment. The community partner serving Wards 1-5 will be announced tomorrow.
When choosing the providers, the Safer Stronger DC Office of Neighborhood Safety and Engagement sought providers that would be able to:
- establish a strong presence in communities that have experienced high levels of violence;
- build partnerships with community members, local agencies, community-based organizations, and businesses to prevent violence and increase community efficacy;
- cultivate relationships with individuals and families most at-risk of participating or being victims of violence;
- connect high-risk individuals and families to resources needed to meet personal goals and objectives; and
- prevent retaliatory violence.
See also https://www.nbcwashington.com/news/local/DC-Using-Violence-Interrupters-to-Stop-Crime_Washington-DC-486501761.html
From PBS: Stockton's young mayor giving city’s youth more opportunities
Jun 30, 2018 4:54 PM EDT
By --Ivette Feliciano Ivette Feliciano --Zachary Green Zachary Green
Stockton, California has come a long way since 2012, when it became the largest U.S. city to declare bankruptcy. Now that it’s solvent, Mayor Michael Tubbs, who was sworn in as the youngest and first-ever black mayor last year, says that using philanthropy and other resources to fight inequality could help secure the city’s financial status.
Excerpt from video:
- IVETTE FELICIANO:
Mayor Tubbs is spearheading a raft of programs addressing violence and inequality in Stockton. Each initiative receives philanthropic funding and is administered independently. One program launching next year is an eighteen-month experiment called the Stockton Economic Empowerment Demonstration–or “SEED”. One hundred recipients will receive five hundred dollars a month on top of what they earn through work. - MAYOR MICHAEL TUBBS:
When one in two Californians can’t afford one $500 emergency, I think that that tells us that, yes, $500 a month matters. - OUTREACH WORKER:
We connect and we talk to people. - IVETTE FELICIANO:
Another program in the works is called Advance Peace, which got its start in 2007 in the nearby city of Richmond. Homicides there have since fallen by more than half. Outreach workers make contact with young men who have had run-ins with law enforcement and then work with them on reforming criminal behavior. Participants may even earn cash stipends for meeting certain benchmarks–like holding down a job or going through drug rehabilitation. - MAYOR MICHAEL TUBBS:
The idea is to target and identify the guys who are currently driving our violent crime rate, which is less than 1% of the population. And to flood them with as much attention as the police used to give them.
URL: https://www.pbs.org/newshour/show/stocktons-young-mayor-giving-citys-youth-more-opportunities
WSJ on the connection between US sanctions on Iran and local gasoline prices
Oil’s recent rally has been undeterred by the prospect of higher production. Prices have gained 11% since OPEC gathered Friday and agreed to raise output. On Wednesday, U.S. oil futures rose to their highest level since November 2014, settling at $72.76 a barrel.
The shift in sentiment stems from a drop-off in Venezuelan production and concerns that harsher-than-anticipated U.S. sanctions on Iran could curb the country’s oil exports and exacerbate supply disruptions.
“If the administration is going to take as hard a line on Iranian exports as their statements would suggest, consumers are going to pay higher prices at the pump, even if OPEC and other countries produce as much as they can," said Jason Bordoff, director of Columbia University's Center on Global Energy Policy.
OPEC has faced pressure to increase supply as oil prices have soared, but analysts say major producers like Saudi Arabia and Russia may not be able to fill the gap left by other exporters.
"Saudi Arabia can't save you from an oil price spike if you sanction Iran,” said Bob McNally, president of Rapidan Energy Group, a consulting firm. “That’s what the market is telling you.”
Excerpt from WSJ article by Stephanie Yang. (paywall)
Quotation of the day: Judge Richard Posner on a politicized judiciary:
“We have a very crappy judicial system. That’s the long and short of it. And that contaminates much of government,” said Posner. “In England, judges up to the level of the Supreme Court are appointed by commissions which are composed of judges and professors, not politicians or Parliament. Our federal courts are instead appointed by politicians and the president, and confirmed by the Senate. Those politicians do not care about quality, beyond a very low minimum. They care about other things: tokens, political and religious leanings. So you end up with mediocre courts that are highly politicized."
URL: https://promarket.org/richard-posner-real-corruption-ownership-congress-rich/
Editorial comment: We take no position on Posner's observations, but offer them to provoke discussion. DAR
From SCOTUS BLOG: Beth Farmer, a very able reporter, summarizes the recent US Supreme Court decision in the Amex case:
Opinion analysis:
Divided court defines credit-card networks as single two-sided market, rejecting antitrust challenge to anti-steering provision
Posted Mon, June 25th, 2018 6:12 pm by Beth Farmer http://www.scotusblog.com/2018/06/opinion-analysis-divided-court-defines-credit-card-networks-as-single-two-sided-market-rejecting-antitrust-challenge-to-anti-steering-provision/
Today, the Supreme Court ruled that American Express’ anti-steering provisions do not violate the federal antitrust laws. In a 5-4 decision, Justice Clarence Thomas wrote that credit networks such as Amex provide services to cardholders and merchants in a “special type of two-sided platform known as a ‘transaction platform,’” and that this platform is a relevant market for the purposes of antitrust analysis in this vertical-restraints case.
According to the majority, the district court did not define the relevant market properly and the plaintiffs below, Ohio and 10 other states, failed to meet their burden of proving that the challenged anti-steering provision caused competitive harm in a properly defined market. Thomas was joined by Chief Justice John Roberts and Justices Anthony Kennedy, Samuel Alito and Neil Gorsuch. Justice Stephen Breyer, joined by Justices Ruth Bader Ginsburg, Sonia Sotomayor and Elena Kagan, dissented.
The case arose from a Sherman Act Section 1 complaint filed by the U.S. Department of Justice and 17 states that challenged provisions in contracts between American Express and merchants that accept Amex credit cards.
In credit-card transactions, a platform such as the one operated by Amex effectively connects cardholder buyers and merchant sellers, allowing the buyers to obtain the product or service immediately and pay later, and the merchant to receive prompt, guaranteed payment. Amex charges a fee to merchants for each transaction with an Amex card. Merchant fees can vary and the district court found in this case that the Amex merchant fees were historically higher than the fees of other networks. Because the price a buyer pays for the item does not change depending on the particular credit card used, merchants prefer to accept credit cards with lower merchant fees. The Amex anti-steering contract provision prohibited merchants from steering customers to use another credit card or means of payment at the moment of the purchase.
The issue in the case was whether Amex’s anti-steering contract provision was an unreasonable restraint of trade prohibited by the Sherman Act. As I explained in my preview, vertical price and non-price agreements are judged under the rule of reason, which provides that business practices only violate the antitrust law when their effect is to restrain trade unreasonably. Traditionally, plaintiffs have the burden of identifying and describing the challenged conduct and showing that it causes harm to competition. If they meet that burden, the burden shifts to the defendants to establish procompetitive benefits from the conduct. The district court found that the plaintiffs had met their burden, establishing a prima facie case by showing that there was an actual harm to competition in the market for cardholder services for merchants. The 2nd Circuit reversed, holding that the relevant market was the entire two-sided market, consisting of both merchants and cardholders, and that the plaintiffs had failed to show actual or predicted harm in that market. Today, the Supreme Court accepted the 2nd Circuit’s market definition for this particular type of market, and held that the plaintiffs had not proved that the anti-steering provision adversely affected competition.
The majority and dissent agreed on the burden-shifting structure of an antitrust rule of reason case, but little else. Citing a number of scholarly articles, Thomas described modern credit-card transactions as part of a “special type” of two-sided platform called “transaction” platforms. Two-sided markets in general involve sales of products or services to two different sets of buyers. For the majority, a transaction platform requires a simultaneous sale to both sides of the market — that is, the consumer cardholder and the merchant — facilitated by the credit-card platform. These two-sided platforms involve “indirect network effects” because the value of each side of the platform depends on the other side of the platform – the more consumers that use Amex cards, the more merchants are likely to accept Amex cards for payment. In a footnote, Thomas stated that, in competitive markets, these indirect network effects “encourage” firms to increase prices and profits on one side of the platform and divert them to the other side to increase the number of participants on that side of the market.
With that as background, the majority sketched out areas of agreement between the parties: The challenged anti-steering provisions are vertical agreements, the proper antitrust analysis involves a three-step burden-shifting rule of reason, and the plaintiff must prove a substantial anticompetitive effect to shift the burden of going forward with the evidence to the defendant. There was also agreement that the anticompetitive effects can be shown directly by actual harm to competition or by proof of market power and “some evidence” of harm. At this stage, the government is relying on direct evidence of competitive harm. However, the majority stated that market definition is required, even when plaintiffs assert direct evidence of actual anticompetitive effects. Distinguishing Federal Trade Commission v. Indiana Federation of Dentists because it involved horizontal agreements, the court stated that “vertical restraints are different” because there is usually no risk to competition absent market power, so the market and the defendant’s market shares must be identified.
Markets are usually defined by starting with the product at issue and then identifying reasonable substitutes from the buyers’ point of view. However, the majority stated, “commercial realities” may require inclusion of different products or services in a single market, citing United States v. Grinnell Corp. (1966) and Brown Shoe Company Inc. v. United States (1962). Accordingly, the majority wrote that price increases on the merchant side of the two-sided credit card platforms may not reflect either market power or competitive harm. Therefore, both sides of the platform must be included in credit-card markets. The majority took care to limit this rule, noting that “two-sided transaction platforms, like the credit-card market, are different,” so not every two-sided market constitutes a relevant market for antitrust purposes. The key distinction is that a credit-card platform is a transaction platform that facilitates a single, simultaneous transaction.
Having defined the relevant market, the majority stated that the competitive effects must include both the merchant side and the consumer/buyer side of the credit-card transaction. Credit card firms sell transactions, the majority stressed, so plaintiffs must prove that the anti-steering provision increased the cost of transactions or reduced the number of transactions as compared to competitive markets. In this case, they failed to do so. Higher merchant fees were not sufficient proof and, in any case, might indicate a competitive market in which the consumer side of the market was receiving benefits, such as rebates or airline miles. Finally, the majority observed that the credit-card market has expanded, offering a larger variety of cards to diverse consumers and more credit cards overall.
In dissent, Breyer began with a short history of the antitrust rule of reason. He noted that everyone agrees that step one of the analysis requires plaintiffs to show the fact or likelihood of anticompetitive effects and that the issue in this case is how to apply step one. Then the dissent diverged from the majority almost completely. Relying on Indiana Federation of Dentists, Breyer emphasized that market definition is not always required because it is merely a surrogate for actual competitive effects.
The dissent went on to fault the majority’s market definition for incorrectly conflating complementary products rather than using substitutes to define a relevant product market. Complementary products, Breyer argued, are those that function in tandem so that output likely increases together — for example, gasoline and car tires, tennis balls and tennis rackets, and so forth. Breyer found no support in antitrust law for treating customer- or buyer-related services and merchant-related services as a single market. Accordingly, using consumer substitution or, as in Grinnell, producer substitution, as the test, he argued that the market is merchant-related credit-card services, at least as part of step one of the rule of reason.
Breyer found no support in case law or economic literature for the majority’s definition of a market for “two-sided transaction platforms” that include four elements: different products or services, different groups of customers, connection by the platform and simultaneous transactions. Characterizing the definition as “novel,” the dissent failed to find adequate justification for a special rule of market definition, and concluded that traditional principles of market definition should apply to this industry.
Pointing to footnote 7 in the majority opinion, Breyer also noted that the majority “seems categorically to exempt vertical restraints from the ordinary ‘rule of reason’ analysis that has applied to them since the Sherman Act’s enactment in 1890.” He asserted that this would be a new development, because, although the majority cites Leegin Creative Leather Products Inc. v. PSKS Inc. in support, that case did not create such a “novel exemption.”
Finally, Breyer maintained that the government had proved its prima facie case even under the market definition employed by the 2nd Circuit and the majority. He concluded that the “majority’s decision in this case is contrary to basic principles of antitrust law, and it ignores and contradicts the District Court’s detailed factual findings, which were based on an extensive trial record.”
The case is important for the announcement of a new requirement of proof of market definition and market power at step one of the rule of reason in vertical-restraints cases, even when plaintiffs seek to prove competitive harm by direct evidence. It also appears to announce a new relevant market for transaction platforms, which may be distinguishable from other two-sided markets. From now on, plaintiffs may be required to prove total competitive harm summing both sides of the market at step one of a rule of reason case.
[Disclosure: Goldstein & Russell, P.C., whose attorneys contribute to this blog in various capacities, is among the counsel on an amicus brief in support of the petitioners in this case. The author of this post is not affiliated with the firm.]
Appellate Court vacates "fiduciary rule."
The opinion is here: https://www.ca5.uscourts.gov/opinions/pub/17/17-10238-CV0.pdf
Excerpt from opinion:
Three business groups filed suits challenging the “Fiduciary Rule” promulgated by the Department of Labor (DOL) in April 2016. The Fiduciary Rule is a package of seven different rules that broadly reinterpret the term “investment advice fiduciary” and redefine exemptions to provisions concerning fiduciaries that appear in the Employee Retirement Income Security Act of 1974, Pub. L. No. 93-406, 88 Stat. 829 (ERISA), codified as amended at 29 U.S.C. § 1001 et seq, and the Internal Revenue Code, 26 U.S.C. § 4975. The stated purpose of the new rules is to regulate in an entirely new way hundreds of thousands of financial service providers and insurance companies in the trillion dollar markets for ERISA plans and individual retirement accounts (IRAs). The business groups’ challenge proceeds on multiple grounds, including (a) the Rule’s inconsistency with the governing statutes, (b) DOL’s overreaching to regulate services and providers beyond its authority, (c) DOL’s imposition of legally unauthorized contract terms to enforce the new regulations, (d) First Amendment violations, and (e) the Rule’s arbitrary and capricious treatment of variable and fixed indexed annuities. The district court rejected all of these challenges. Finding merit in several of these objections, we VACATE the Rule.
What happened with the US trade war with Chinese phone company ZTE?
Excerpt from Jeff Spross article in THE WEEK -- URL http://theweek.com/articles/779687/trump-senates-cold-war-over-zte-about-turn-hot
Earlier this month, Commerce Secretary Wilbur Ross said an agreement had been reached with ZTE: In exchange for allowing the company to trade with America again, ZTE would pay a $1 billion fine, replace its management, and allow U.S. officials to conduct oversight of its operations.
This is where things get interesting.
Reaction to the deal from politicians on both sides of the aisle was angry and immediate. And it was the Senate, normally a staid and sober institution, that reacted the most forcefully: Sens. Chris Van Hollen (D-Md.) and Tom Cotton (R-Ark.), along with Senate Minority Leader Chuck Schumer (D-N.Y.), got an amendment added to the National Defense Authorization Act (NDAA) that would scuttle Commerce's deal and resurrect the ban on doing business with ZTE. It would require Trump to certify that ZTE is in compliance for a full year before lifting the bans. Cotton's involvement is especially noteworthy since he's been a long-time Trump ally. The senators also have support from other conservative stalwarts, like Sen. Marco Rubio (R-Fla.) and Sen. John Cornyn (R-Texas), the Republicans' second-in-command in the chamber.
In fact, they went further. The amendment not only went after ZTE, it also banned the U.S. government from doing any business with or giving loans to an even bigger Chinese telecommunications firm called Huawei. The latter is the world's third-largest supplier of smartphones, it brought in over $90 billion in 2017, and it employs 180,000 people. For years, suspicions have swirled that heavy American reliance on Huawei's products could allow the Chinese to spy on U.S. communications. The government hasn't nailed down evidence of misbehavior by the company the same way it has with ZTE, but previous reports at least raised concerns from industry experts and former Huawei employees that it's falling afoul of various U.S. laws.
The Senate passed the NDAA with the amendment Monday night.
Of course, support for the amendment is not universal in the Senate or the House, so it's conceivable the language could get watered down or eliminated in conference before it reaches Trump's desk. But the NDAA bill is considered must-pass legislation, which shows how serious the senators are about cracking down on both ZTE and Huawei: Should the amendment turn into a sticking point, or if the White House threatens to veto the NDAA over the amendment, the controversy would force a massive funding bill for U.S. defense back to the drawing board. "I talked to my colleagues on the Intelligence Committee and they are pretty dug in on this," said Sen. Bob Corker (R-Tenn.).
Ross went to Congress to lobby against the amendment. But it's unclear if the White House would actually go to the mat and threaten a veto over it. "I don't think the president cares about ZTE. Someone told me that he gave them a wink and a nod and told them he didn't care," Corker added. "I think [Trump] did what he did for the Chinese leader but doesn't really care what Congress does."
Nationalism has always played a big role in Republican politics. But cutting taxes and regulations for corporations is equally, if not more, important. The GOP has generally shied away from expressing nationalism through aggressive U.S. trade policies, and has instead focused on national security issues. That's certainly where the Republican senators amassed against ZTE and Huawei are coming from.
Trump, on the other hand, has been happy to deploy economic policy in defense of nationalism as well. Indeed, to the extent he's used laws meant for national security to slap tariffs on China and other countries, it's been a rather obvious pretext for starting trade fights in the name of jobs. But he also wants to be seen as America's dealmaker-in-chief, so if he ultimately forces other countries to the bargaining table — as seemed to happen with China on ZTE, initially — he's fine with that too.
All of which is how we've arrived at the odd impasse of the normally laissez-faire Senate trying to pick a trade fight with China, while the Trump administration pushes for comity and the cessation of hostilities.
AAI Issues Part II in New White Paper Series on Competition in the Delivery and Payment of Healthcare Services — Experts Tim Greaney And Barak Richman Discuss Promoting Competition in Healthcare Enforcement And Policy: Framing an Active Competition Agenda
Jun 18 2018
Health and Pharma
Today, the AAI released the second part of its new White Paper series on Competition in the Delivery and Payment of Healthcare Services. Part II of this important and comprehensive analysis addresses “Promoting Competition in Healthcare Enforcement and Policy: Framing an Active Competition Agenda. The White Papers are co-authored by two of AAI's Advisory Board competition experts: Thomas Greaney, Visiting Professor at the University of California Hastings College of Law and Chester A. Myers Professor Emeritus at Saint Louis University School of Law; and Barak Richman, the Edgar P. & Elizabeth C. Bartlett Professor of Law and Business Administration at Duke University.
The policy community, albeit belatedly, now fully recognizes the economic dangers of highly concentrated healthcare markets. The Federal Trade Commission (FTC) and states continue to closely scrutinize hospital mergers. Recent successes by the U.S. Department of Justice (DOJ) in challenging mergers of health insurers are additional indications of invigorated enforcement in the healthcare payment sector. In addition, the FTC, DOJ, and State Attorneys General (AGs) have appropriately dedicated substantial resources to healthcare antitrust enforcement and have achieved significant victories in litigation.
Traditional merger review, however, will be inadequate to compensate for the policy failures of the past. In large part because failed antitrust interventions, overwhelmed enforcers, or mistaken beliefs that market dynamics or negotiated settlements will preserve market competition, both provider and insurer markets across the country are highly concentrated, and dominant providers currently enjoy enormous pricing power. To create the market dynamics that consumers desire, policymakers will need to pursue proactive approaches in healthcare markets that confront extant market power and aim to limit its damage. It will also require exploring innovative paths to stimulate lost or impeded competition. Over the past several years, the FTC has enhanced its advisory and advocacy efforts on healthcare competition issues in numerous forums, and its leadership will need to continue exploring its influence outside its traditional purview.
Antitrust policy, like many other policy areas, will have to be farsighted and proactive to maintain and enhance sorely needed competition in healthcare markets. While traditional antitrust measures can prevent the agglomeration of additional harmful market power, less traditional and more creative policies are necessary to police the harmful market power many healthcare entities have already amassed. Federal and state entities should therefore pursue an active competition agenda by deploying sufficient resources to both prevent the consummation of additional anticompetitive consolidation that enhances or entrenches monopoly power and to pursue multipronged policies to facilitate efficient, competitive markets in healthcare markets. These issues are complicated by the healthcare sector’s long history of state and federal regulatory interventions that impede rivalry, discourage entry and innovation, and advance professional and corporate interests over those of consumers, but they also present multiple opportunities to correct problematic policies and inject competition into previously insulated markets.
In addition, responsibilities and opportunities to promote pro-competition policies must stretch beyond traditional antitrust enforcers, as regulators across government have the capacity to promote competition in healthcare markets. Close attention to regulatory interventions is also important because the distinction between public and private healthcare is vanishing. Government-financed health services, including Medicare and Medicaid, are increasingly relying on privately managed care to provide services. Without robustly competitive markets, these changes will not achieve the goals of controlling costs and improving quality. Likewise, proposals to replace Medicare’s guaranteed benefits with premium support payments, block grant Medicaid, or force downward budgetary pressures on national healthcare spending are also highly dependent on competition between providers and between insurers.
Part I of the AAI White Paper series Competition in the Delivery and Payment of Healthcare Services provided an in-depth examination of the competition concerns and priorities in provider and insurer consolidation—both horizontal and vertical--that is sweeping the industry. Part II of the AAI White Paper Series advances the discussion to identify and define the policy responses needed to address extant market power and prospective issues raised by consolidated markets. These issues include employing antitrust and other measures to stem monopolistic provider practices, encouraging federal agencies to advocate in correcting anticompetitive state policies, and seeking alternative strategies to promote competition in healthcare provider and payer markets. We emphasize a growing need for advocacy in state policymaking, payment reform, and transparency, including issues such as scrutiny of state medical boards, state efforts to improve price and quality transparency, and encouraging precompetitive policies at the Center for Medicare & Medicaid Services (CMS). The final section concludes with policy recommendations.
America has chosen, wisely we think, to rely on competition to spur innovation, assure quality of care, and control costs in the healthcare sector. Where markets have been allowed to function under competitive conditions—free of anticompetitive regulations, cartels, and monopolies—competition has done its job. Much of the revolutionary change occurring today is designed to improve the function of healthcare markets and deal with problems of market failure and excessive regulation. In many areas however, problems persist. Many markets remain controlled by monopolies, constrained by outdated regulation, and foreclosed to new entrants and ideas from anticompetitive strategies from incumbents. We therefore believe the role of the federal antitrust agencies in making healthcare policy is a vital one, and they should be given the fullest support by Congress, the Executive branch and the States. In light of these observations, we offer a number of takeaways from the analysis that would help frame an active competition policy agenda that complements vigorous antitrust enforcement in healthcare. These include:
- Traditional antitrust measures can prevent the agglomeration of additional harmful market power. However, less traditional and more creative, farsighted, and proactive policies are necessary to police the harmful market power many healthcare entities have already amassed.
- COPA proceedings are unlikely to ascertain when consolidations will generate benefits that outweigh costs to competition. Given the weighty evidence that provider consolidations impose significant economic harm, COPA’s frequently amount to evasions of needed FTC scrutiny.
- To mitigate the anticompetitive consequences of bundling monopolized and unmonopolized hospital services, antitrust enforcers ought to require hospitals and other provider entities to unbundle, at a purchaser’s request, certain services so that the purchaser can negotiate prices. This offers a promising, proactive remedial approach to hospital mergers and would restore some lost competition from excessive consolidation.
- Contractual terms between providers and insurers such as MFNs and anti-steering provisions entrenches dominant providers and insurers, limiting competition and benefits to consumers. Antitrust rules can prohibit the use of such anticompetitive contractual terms and insurance regulators can bar such provisions wherever they threaten to preclude effective price competition.
- States should examine reducing barriers that prevent entry by upstart providers, from overly restrictive rules regarding facility licensure and CON. New outpatient surgery centers, retail clinics and urgent care facilities, and physicians are well positioned to offer alternatives to the traditional inpatient acute care facility.
- Insurance exchanges set up under the ACA offer a platform for effective price and quality comparisons across insurance products and are an important tool for combatting concentration in health insurance markets. While regulatory supervision is necessary in the health insurance markets, excessive regulation could undermine the viability of state insurance markets. The FTC and DOJ should monitor the development of these exchanges, help the states fine tune regulation, and encourage the promotion of pro-competitive regulatory strategies.
- The FTC and DOJ should invest in monitoring and advising state regulators regarding potential harms to competition arising from state regulations and policies. This includes advocating for liberalizing state licensure and scope-of-practice limitations. Where repeal is not feasible, states should consider clarifying standards for, and explicitly require consideration of the competitive impact of, CON determinations.
- State licensing boards dominated by market participants are prone to produce anticompetitive regulations. The FTC should take a proactive role in helping states craft regimes in which medical boards do not have inappropriate leeway without active state supervision. And because many states and Congress are considering how best to revise existing regulatory regimes, the FTC should monitor and guide how policymakers implement mechanisms to actively supervise their professional boards.
- The FTC and DOJ should monitor and support public and private initiatives to establish APCDs and similar databases that compile and disseminate healthcare quality and price data. Greater transparency in healthcare markets can enhance competition and expand informed consumer choice.
- Federal healthcare program regulation has a profound impact on competition. As such, we suggest that the Administration inaugurate an interagency health competition task force to advise CMS on policies that affect the competitiveness of provider and payer markets. The FTC and DOJ should use this task force and other opportunities to advocate and support policies affecting payment, conditions of participation, and quality measures for providers that promote entry and cost-effective delivery of care.
From The Nation: "The AT&T-Time Warner Merger Ruling Is Bad for the Country"
An excerpt from the Nation article by David Dayen follows the editorial comment.
Editorial comment (DAR): Dayen is an advocate of what is sometimes called "big is bad" antitrust. He complains that the Justice Department needed to make its case in the AT&T-Time Warner litigation while bound in the "straitjacket" of the traditional "consumer welfare" litigation standard: "Derived during the Reagan administration and now infecting virtually the entire judiciary, the consumer welfare standard puts antitrust law in the province of economists and models and dueling sets of numbers, when common sense clearly demonstrates the dangers of concentration." Dayen holds the consumer welfare litigation approach to blame for the government's reliance on economic witness Carl Shapiro's economic model unpersuasively showing consumer harm from the AT&T-Time Warner merger of less than a dollar a month for the average customer.
I personally have no problem with advocates like David Dayen who argue that "big is bad." On the contrary, I applaud advocates who reach out to the broad public to point out the economic and political problems caused by particular large companies. I would like advocates of "big is bad" thinking to get along well with courtroom advocates like the Justice Department Antitrust Division lawyers, who should be applauded for taking the AT&T-Time Warner merger to court. The DOJ lawyers certainly knew that they were fighting an uphill battle, and that it would be difficult to present facts that would persuade Judge Leon to depart from a judicial tradition of skepticism toward vertical merger challenges. USDOJ leaders showed great determination is pressing forward with a difficult but important case.
Is there a way to bridge the gap between David Dayen's advocacy of "common sense" and the antitrust law's current reliance on the consumer welfare standard in litigation? That gap could be narrowed somewhat by expanding the consumer welfare standard, or perhaps by using different litigation standards. But in American jurisprudence the tradition is that the standards for antitrust prosecution, somewhat like standards in ordinary criminal prosecutions, need to be reasonably precise and understandable to the potential targets of the prosecution. The requirements for litigation standards that will work well in the courtroom can be rigorous, but we can hope for constructive dialog between "big is bad" advocates and courtroom litigators on how standards for antitrust prosecutions can evolve.
Don Allen Resnikoff
- The Dayen article excerpt:
It’s hard to over-emphasize the impact of this ruling. First, the deal itself brings together one of America’s largest telecom and cable companies with a suite of valuable programming to distribute on those networks. HBO, TNT, CNN, Cartoon Network, Warner Brothers Studios, a stake in Hulu and much more will now be held by the owners of DirecTV, U-verse, AT&T mobile and broadband, Cricket wireless, and more. AT&T has already started bundling HBO for free for wireless users; the entire idea is to leverage things people want to watch by forcing them to watch it on AT&T services.
The Justice Department argued this would allow AT&T to raise the cost of Time Warner programming, whether for rival cable companies, online pay-TV services, or consumers. The trial mostly didn’t address other concerns, like narrowing the channels for artists to get their work out, concentrating the power to distribute news and information in too few self-interested hands, or stunting innovation by creating a barrier to competition. That’s because modern antitrust jurisprudence operates under the consumer welfare standard, a constrained method that only looks at costs to consumers to determine whether a merger should be granted.
In other words, the Justice Department needed to make its case while bound in a straitjacket. Derived during the Reagan administration and now infecting virtually the entire judiciary, the consumer welfare standard puts antitrust law in the province of economists and models and dueling sets of numbers, when common sense clearly demonstrates the dangers of concentration. UC Berkeley economics professor and Obama administration veteran Carl Shapiro put together a model for the government to prove consumer harm; it ended up showing less than a dollar a month for the average customer, and AT&T’s attorneys poked numerous holes in it (predictably so, as it was an inherently complex rendering of an uncertain future).
But we know that monopoly is the entire point of this merger. During the trial, the Justice Department revealed an internal document where an executive from Turner Broadcasting, now part of AT&T, stated outright that “Time Warner would be a weapon for AT&T because AT&T’s competitors need Time Warner programming.” But instead of recognizing that this desire to screw rivals obviously may “substantially lessen competition,” as the antitrust statute states, judges require economists to act as wizards and predict precise percentages of the market and markups in price.
So the courts can overlook very clear statements from executives running these companies that they need this merger to secure market power. The desire to monopolize is crystal clear, but as long as you can spin a theoretical model showing a pretense of consumer benefits, then market power is no hurdle.
***
Comcast will announce a bidding war for coveted Fox TV and movie assets, already pledged to Disney, as early as Wednesday. That’s just the first domino in a likely rush to close deals. Amazon could buy a movie studio like Lion’s Gate. Apple, Facebook and Google are dipping into producing video and can acquire more assets for that endeavor. Sprint has already announced a deal with T-Mobile, which has a partnership with Netflix. Sinclair Broadcasting, with an assist from the FCC, is morphing into an indomitable giant at the local news level. Verizon, the other big distribution network, waits in the wings. The media business is already deeply consolidated, and this merger will ramp that up.
The entire point of these mergers—indeed, a stated goal of AT&T’s deal—is to compete with the tech platforms in a war for your attention, enabling the sale of targeted ads using your personal data. Time Warner wants more of your information so they can keep your eyeballs glued to your screen as they serve up more ads. This is nothing less than a surveillance tax on every man, woman, and child: an endless sea of using your every waking thought to bombard you with corporate pitches. Targeted advertising serves no useful purpose, facilitates monopoly and magnifies the potential for abuse of consumers and our democracy. It ought to be banned; instead it will further entrench itself.
The ruling will also give a green light for more vertical deals—those between companies that don’t technically compete with one another. That was never actually true in this case; HBO had a distribution network for its programming that will now almost certainly be folded into AT&T’s offerings. But modern antitrust law has taken a hands-off approach to vertical mergers, despite the ability to use leverage in one market to stifle competition further down the supply chain (like using Time Warner content as a weapon against AT&T’s rival distributors, you know, like Time Warner executives said explicitly that AT&T would do). Judge Leon so thoroughly smacked down the government in this case, that vertical deals will likely be too hot to handle for a few years.
The full article is at https://www.thenation.com/article/att-time-warner-merger-ruling-bad-country/
AT&T, Time Warner, and the Future of Health Care
June 21, 2018
David Blumenthal, M.D.
The recent federal district court ruling allowing the merger of AT&T and Time Warner — a case of so-called vertical integration — will likely encourage similar unions throughout the U.S. economy, including in health care. Nevertheless, a close look at the court’s decision, and at the wide variety of vertical health care mergers under way, suggests that policymakers and private actors should not interpret the court’s ruling as an unconditional green light for vertical integration in health care, or any other sector.
***
Some antitrust experts question whether the analogy between manufactured products and health care delivery is accurate. Independent physicians, for example, often work within hospitals and help to produce their “products.” Nevertheless, there are clear differences between mergers across the same types of health care organizations, like hospitals, and those between different types of providers, like physicians and hospitals.
***
Evidence on the effects of horizontal health care mergers has grown considerably in recent years, and generally shows that they increase prices. But studies of vertical health care mergers are much less common. Perhaps the most relevant experience concerns long-standing integrated health systems, such as Kaiser Permanente, Intermountain, Geisinger, and a handful of similar organizations.
Full article: https://www.commonwealthfund.org/blog/2018/att-time-warner-and-future-health-care?omnicid=EALERT%25%25jobid%25%25&mid=%25%25emailaddr%25%25
FTC Announces Hearings On Competition and Consumer Protection in the 21st Century
- For Release June 20, 2018
The Federal Trade Commission announced that the agency will hold a series of public hearings on whether broad-based changes in the economy, evolving business practices, new technologies, or international developments might require adjustments to competition and consumer protection enforcement law, enforcement priorities, and policy. The multi-day, multi-part hearings, which will take place this fall and winter, will be similar in form and structure to the FTC’s 1995 “Global Competition and Innovation Hearings” under the leadership of then-Chairman Robert Pitofsky.
“The FTC has always been committed to self-examination and critical thinking, to ensure that our enforcement and policy efforts keep pace with changes in the economy,” FTC Chairman Joe Simons commented today. “When the FTC periodically engages in serious reflection and evaluation, we are better able to promote competition and innovation, protect consumers, and shape the law, so that free markets continue to thrive.”
The hearings and public comment process will provide opportunities for FTC staff and leadership to listen to interested persons and outside experts representing a broad and diverse range of viewpoints. Additionally, the hearings will stimulate thoughtful internal and external evaluation of the FTC’s near- and long-term law enforcement and policy agenda. The hearings may identify areas for enforcement and policy guidance, including improvements to the agency’s investigation and law enforcement processes, as well as areas that warrant additional study.
In advance of these hearings, public comments on any of the following topics may be submitted to the FTC:
- The state of antitrust and consumer protection law and enforcement, and their development, since the Pitofsky hearings;
- Competition and consumer protection issues in communication, information, and media technology networks;
- The identification and measurement of market power and entry barriers, and the evaluation of collusive, exclusionary, or predatory conduct or conduct that violates the consumer protection statutes enforced by the FTC, in markets featuring “platform” businesses;
- The intersection between privacy, big data, and competition;
- The Commission’s remedial authority to deter unfair and deceptive conduct in privacy and data security matters;
- Evaluating the competitive effects of corporate acquisitions and mergers;
- Evidence and analysis of monopsony power, including but not limited to, in labor markets;
- The role of intellectual property and competition policy in promoting innovation;
- The consumer welfare implications associated with the use of algorithmic decision tools, artificial intelligence, and predictive analytics;
- The interpretation and harmonization of state and federal statutes and regulations that prohibit unfair and deceptive acts and practices; and
- The agency’s investigation, enforcement, and remedial processes.
The Commission will invite public comment in stages throughout the term of the hearings.
- Through August 20, 2018, the Commission will accept public comment on the topics identified in the announcement. Each topic description includes issues of particular interest to the Commission, but comments need not be restricted to these subjects.
- Additionally, the Commission will invite comments on the topic of each hearing session. The FTC will issue a news release before each session to inform the public of the agenda, the date and location, and instructions on submitting comment.
- The Commission will also invite public comment upon completion of the entire series of hearings.
Public comments may address one or more of the above topics generally, or may address them with respect to a specific industry, such as the health care, high-tech, or energy industries. Any additional topics for comment will be identified in later notices.
The hearings will begin in September 2018 and are expected to continue through January 2019, and will consist of 15 to 20 public sessions. All hearings will be webcast, transcribed, and placed on the public record. A dedicated website for information about the hearings including the schedule as it evolves can be found at www.ftc.gov/ftc-hearings.
Public Comments: Interested parties are invited to submit written comments on the topics listed above to the FTC, either electronically at www.ftc.gov/ftc-hearings or in paper form. FTC staff may use these comments in any subsequent reports or policy papers. Comments should refer to “Competition and Consumer Protection in the 21st Century Hearings, Project Number P181201.” If an interested party wishes to comment on multiple topics, we encourage filing a separate comment for each topic. If an interested party wishes to make general comments about the hearings, we encourage filing a comment in response to Topic 1. For this stage of the public comment process, comments will be accepted until August 20, 2018.
If you prefer to file a comment in hard copy, write ‘‘Competition and Consumer Protection in the 21st Century Hearing, Project Number P181201,” on your comment and on the envelope and mail your comment to the following address: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW., Suite CC–5610 (Annex C), Washington, DC 20580, or deliver your comment to the following address: Federal Trade Commission, Office of the Secretary, Constitution Center, 400 7th Street SW., 5th Floor, Suite 5610 (Annex C), Washington, DC 20024.
The FTC Act and other laws that the Commission administers permit the collection of public comments. More information, including routine uses permitted by the Privacy Act, may be found in the FTC’s privacy policy, available at ftc.gov/site-information/privacy-policy.
For Further Information Contact: Derek Moore, Office of Policy Planning, 202-326-3367, John Dubiansky, Office of Policy Planning, 202-326-2182 or email us at CCPhearings@ftc.gov (link sends e-mail).
The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topicsand file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357). Like the FTC on Facebook (link is external), follow us on Twitter(link is external), read our blogs and subscribe to press releases for the latest FTC news and resources.
Contact InformationFTC Media Contact
Peter Kaplan (link sends e-mail)
Office of Public Affairs
202-326-2334
From NYT: Koch brothers affiliated group, Americans for Prosperity, focuses on local issues, opposes mass transit
Excerpt:
Last year Americans for Prosperity spent $711,000 on lobbying for various issues, a near 1,000-fold increase since 2011, when it spent $856. Overall, the group has spent almost $4 million on state-level lobbying the past seven years, according to disclosures compiled by the National Institute on Money in State Politics, a nonpartisan nonprofit that tracks political spending.
Broadly speaking, Americans for Prosperity campaigns against big government, but many of its initiatives target public transit. In Indiana, it marshaled opposition to a 2017 Republican gas-tax plan meant to raise roughly a billion dollars to invest in local buses and other projects. In New Jersey, the group ran an ad against a proposed gas-tax increase in 2016 that showed a father giving away his baby’s milk bottle, and also Sparky the family dog, to pay for transit improvements among other things. “Save Sparky,” the ad implores.
In Nashville, Americans for Prosperity played a major role: organizing door-to-door canvassing teams using iPads running the i360 software. Those in-kind contributions can be difficult to measure. According to A.F.P.’s campaign finance disclosure, the group made only one contribution, of $4,744, to the campaign for “canvassing expenses.”
Instead, a local group, NoTax4Tracks, led the Nashville fund-raising. Nearly three-quarters of the $1.1 million it raised came from a single nonprofit, Nashville Smart Inc., which is not required to disclose donors. The rest of the contributions to NoTax4Tracks came from wealthy local donors, including a local auto dealer.
Both NoTax4Tracks and Nashville Smart declined to fully disclose their funding.
Note: In Nashville, the anti-transit campaign succeeded -- voters failed to approve the City's mass transit plan
https://www.nytimes.com/2018/06/19/climate/koch-brothers-public-transit.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region®ion=top-news&WT.nav=top-news
Here is a blog post from a Koch bothers ally attacking the concept of mass transit for most urban areas:
https://www.cato.org/blog/nine-reasons-few-americans-use-transit
Local DC area mass transit advocacy group launches Purple Line Newsletter
The Koch brothers may be supporting local advocacy against mass transit, but in the DC area there is an advocacy group that supports mass transit, particularly the new Purple line. The Purple Line NOW group has launched a newsletter. Their announcement follows. DAR
Welcome to the Debut of the Purple Line NOW Bi-weekly Newsletter!
We’re fast approaching the 1-year anniversary of the groundbreaking of the Purple Line and you may have noticed that construction activity is beginning to pick up across the corridor. The first year of construction has largely consisted of preparatory work such as tree clearing, utility relocation, staging areas, and demolition, but you’ll begin to see more visible signs of progress and changes to the built environment starting this month.
For that reason, we’ve decided to launch a new bi-weekly newsletter to keep the community up-to-date on the latest construction news and how it will impact getting around town, as well as important events, and general Purple Line information. Going forward, you can expect a new edition of this newsletter in your inbox every other Wednesday, provided, of course, that there is news to report.
See the full announcement at http://www.purplelinenow.com/
Here is language from the site's "Who we are" section:
Who We ArePurple Line NOW! is a coalition of business, labor, environment, neighborhood, and civic organizations that works with local, state, and federal government officials in pursuit of our mission to build the Purple Line.
"Our mission is ensure the completion of the light rail purple line from Bethesda to New Carrollton, integrated with a hiker/biker trail between Bethesda & Silver Spring."
Our Vision: The Purple Line will energize Maryland suburbs of the national capital region by integrating transportation systems including existing Metro and MARC lines and improved bycycle and pedestrian connections.
Our Board: PLN is governed by a Board of Directors with balanced representation from the environmental, civic, business and labor support for the Purple Line. The strength of our organization is in its diversity and we continue to work to expand our base of support. PLN Executive Director Christine Scott works at the direction of the Board to assist in coordinating the PLN advocacy efforts. Ms. Scott can be contacted at cscott@purplelinenow.com.
From CBS News: Lobbyists pay for access to state attorneys general at fancy resorts
A CBS video reports that State attorneys general, are playing an increasingly bigger role – and lobbyists are noticing. CBS News got an inside look at one lavish retreat at Kiawah Island, South Carolina, where businesses and trade groups paid for access. Some of the companies are under investigation by state attorneys general, but still give large donations so they can get one-on-one access to AGs to state their case.
The video is here:
https://www.msn.com/en-us/video/n/inside-a-lavish-retreat-where-lobbyists-pay-for-access-to-state-attorneys-general/vp-AAyQKhA
DC proposition 77 and the tipped minimum wage issue
My wife and I recently joined friends at an upscale DC restaurant with lots of style, high prices, and weak fast-food quality menu offerings, where we chatted with the waitress about proposition 77. That is the proposal on the DC ballot that would change the current system where tips go to the wait staff, and the minimum wage for tipped wait staff is lower than for non-tipped workers. The waitress feels strongly about preserving the current tipping arrangement, and recommended that we consult Washington City Paper to learn more. DAR
Here is an excerpt from Washingtion City Paper:
On June 19, D.C. voters will decide whether the city should eliminate its two-tiered wage system. Tipped employees currently earn $3.33 an hour compared to the standard minimum wage of $12.50. All but seven states in the U.S. have this so-called “tip credit” that restaurateurs rely on to staff a robust team of employees and tame prices for customers.
Even with this tip credit, all workers in D.C. are entitled to the standard minimum wage. If a worker fails to reach $12.50 per hour with their base wage plus tips, the employer is required to make up the difference.
If 77 passes, the tipped minimum wage will go up eight increments until it equals the standard minimum wage in 2026. The standard minimum wage will reach $15 in 2020. Increases after that would be tied to inflation. If 77 doesn’t pass, the tipped minimum wage will still increase to $3.89 in July, $4.45 in 2019, and $5 in 2020.
Diners may have noticed servers and bartenders sporting “Save Our Tips” buttons that ask D.C. residents to vote no on 77. The initiative committee by the same name is one of several being bankrolled by industry leaders, operators, employees, and trade associations. National groups like Restaurant Workers of America (RWA) have also joined the local fight against 77.
Restaurant Opportunities Center United (ROC) is the national nonprofit that’s bringing 77 to the table. They advocate for workers rights and the elimination of the tip credit in favor of “One Fair Wage.” ROC tried and failed to do away with the tip credit when the D.C. Council approved increasing the standard minimum wage to $15 in June 2016, but after jumping a few more hurdles, including gathering enough signatures from voters, ROC succeeded in getting 77 on the ballot two years later. Now this monumental decision is in the hands of the voters, and early local and national polling suggests D.C. residents will vote yes on 77.
Full article at https://www.washingtoncitypaper.com/food/young-hungry/article/21004275/fear-mounts-in-restaurant-industry-as-dc-prepares-to-vote-on-the-tipped-minimum-wage
Court filing from lawsuit charging Harvard with systematically discriminating against Asian-Americans
See https://int.nyt.com/data/documenthelper/43-sffa-memo-for-summary-judgement/1a7a4880cb6a662b3b51/optimized/full.pdf#page=1
The suit says that Harvard imposes what is in effect a soft quota of “racial balancing.” This keeps the numbers of Asian-Americans artificially low, while advancing less qualified white, black and Hispanic applicants, the plaintiffs contend.
Tim Wu's Brandeisian "big is bad" antitrust v. "Chicago School" limited antitrust
Responding to Judge Lean's decision in the AT&T/Time Warner merger matter, Tim Wu writes:
Judge Leon’s decision shows just how far the law has wandered from congressional intent. The law has become a license for near-uncontrolled consolidation and concentration in almost every sector of economy. Whether involving airlines, hospitals, the pharmaceutical industry, cable television or the major tech platforms, mergers leading to oligopolies or monopolies have become commonplace.
Reading Judge Leon’s opinion makes it clear how this has happened. The decision barely touches on Congress’s concerns about excessive concentration of economic power or other guiding principles or values. Instead, the opinion is mostly a tedious dissection of whether customers might end up paying an extra 45 cents per month for pay-TV service.
***
The public cares about the aggregation of wealth in the top echelons, the suppression of wages and the shrinking of the middle class, all of which are linked to industry concentration. That’s why Congress, in the wake of repeated affirmations that the anti-merger laws no longer work, needs to act. It should reassert that Congress in 1950 really did intend to preserve a competitive economy — one that is free, if possible, from what the Supreme Court Justice Louis Brandeis once called the “curse of bigness.”
[NYT URL: https://www.nytimes.com/2018/06/14/opinion/time-warner-att-merger.html?action=click&pgtype=Homepage&clickSource=story-heading&module=region®ion=region&WT.nav=region]
Judge Leon's opinion has been widely criticized (another accessible critique is at https://www.washingtonpost.com/amphtml/news/wonk/wp/2018/06/15/how-judge-leon-blew-it-with-u-s-v-att/), but it seems fair to say that Judge Leon's opinion reflects a decades old judicial tradition that treats "vertical" mergers -- joining companies at different levels of distribution -- as unlikely to be an antitrust problem.
There is obviously a clash between the judicial tradition that is permissive to vertical mergers and the Brandeisian view urged by Tim Wu. Because of that clash, Tim Wu suggests that reconciliation requires Congressional action.
But it seems unlikely that a Congress that doesn't do much will take up Tim Wu's action proposal any time soon.
In the meanwhile, there are issues to wrestle with for lawyers and economists who earn their living as courtroom antitrust advocates. First, should courtroom advocates join Tim Wu in in supporting broad legal restraints against "aggregation of wealth in the top echelons." Many do not. To the extent that courtroom advocates agree with Tim Wu, they would need to deal with his observation that the courts generally get vertical cases wrong. To Tim Wu, getting it wrong may mean rejecting broad legal restraints against corporate behemoths. Court precedent broadly approving vertical mergers reduces the leeway for advocates successfully arguing against vertical mergers in court.
Can Tim Wu's "big is bad" thinking ever be reconciled with courtroom legal precedent in vertical cases, without recourse to Congress? Maybe yes, to some extent, if antitrust advocates can argue within the leeway allowed by legal precedent for judicially manageable legal standards that are less permissive toward vertical mergers.
--Don Allen Resnikoff
The text of the NY AG lawsuit against the Trump Foundation is here:
https://int.nyt.com/data/documenthelper/38-lawsuit-against-the-trump-foundation/5e54a6bfd23e7b94fbad/optimized/full.pdf#page=1
The AG's concern about the Foundation and its Board includes extensive
political activity, repeated and willful self-dealing transactions, and failure to follow basic
fiduciary obligations or to implement even elementary corporate formalities required by law.
DAR
Excerpt from the Complaint:
PRELIMINARY STATEMENT
1. For more than a decade, the Donald J. Trump Foundation has operated in
persistent violation of state and federal law governing New York State charities. This pattern of
illegal conduct by the Foundation and its board members includes improper and extensive
political activity, repeated and willful self-dealing transactions, and failure to follow basic
fiduciary obligations or to implement even elementary corporate formalities required by law.
The Attorney General therefore brings this special proceeding to dissolve the Foundation for its
persistently illegal conduct, enjoin its board members from future service as a director of any
not-for-profit authorized by New York law, to obtain restitution and penalties, and to direct the
Foundation to cooperate with the Attorney General in the lawful distribution of its remaining
assets to qualified charitable entities.
2. In June 2016, the Attorney General began an investigation (the "Investigation") of
the Donald J. Trump Foundation (the "Foundation") "Foundation"
pursuant to the New York Not-for Profit Corporation Law ("N-PCL"), the New York Estates, Powers and Trusts Law ("EPTL"), the New
York Executive Law, and other applicable law governing New York State charities. The
Investigation found that the Foundation operated without any oversight by a functioning board of
directors. Decisions concerning the administration of the charitable assets entrusted to the care
of the Foundation were made without adequate consideration or oversight, and resulted in the
misuse of charitable assets for the benefit of Donald J. Trump ("Mr. Trump"
and his personal, political and/or business interests. In sum, the Investigation revealed that the Foundation was
little more than a checkbook for payments to not-for-profits from Mr. Trump or the Trump
Organization. This resulted in multiple violations of state and federal law because payments
were made using Foundation money regardless of the purpose of the payment. Mr. Trump used
charitable assets to pay off the legal obligations of entities he controlled, to promote Trump
hotels, to purchase personal items, and to support his presidential election campaign.
3. As set forth below, the Foundation and its directors and officers violated multiple
sections of the N-PCL, the EPTL, and the Executive Law, including provisions that prohibit
foundations from making false statements in filings with the Attorney General, engaging in self
dealing, wasting charitable assets, or violating the Internal Revenue Code by, among other
things, making expenditures to influence the outcome of an election. The Foundation's directors
failed to meet basic fiduciary duties and abdicated all responsibility for ensuring that the
Foundation's assets were used in compliance with the law. The violations that resulted were
significant and not only ran afoul of the applicable provisions of the N-PCL, the EPTL, and the
Executive Law, but also resulted in the Foundation failing to comply with the terms of its own
certificate of incorporation.
4. As a result of these persistent violations of law by the Respondents, the Attomey
General brings this special proceeding to dissolve the Foundation pursuant to Article 11 of the
N-PCL and New York Civil Practice Law and Rules ("CPLR") Article 4. In addition, pursuant
to the N-PCL, EPTL, Executive Law and CPLR Article 4, the Attorney General seeks an order
(i) directing Mr. Trump, Donald J. Trump, Jr., Ivanka Trump, and Eric Trump (together, the
"Individual Respondents") to make restitution and pay all penalties resulting from the breach of
fiduciary duties and their misuse of charitable assets for the benefit of Mr. Trump and his
interests; (ii) enjoining Mr. Trump from future service as an officer, director or trustee, or in any
other capacity as a fiduciary of any not-for-profit or charitable organization incorporated or
authorized to conduct business in the State of New York, or which solicits charitable donations
in the State of New York for a period of ten years, and enjoining the remaining Individual
Respondents from future service as an officer, director or trustee, or in any other capacity as a
fiduciary of any not-for-profit or charitable organization incorporated or authorized to conduct
business in the State of New York, or which solicits charitable donations in the State of New
York for a period of one year, subject to suspension in the event the remaining Individual
Respondents undergo adequate training on the fiduciary duties of directors of not-for-profit
corporations; (iii) directing Mr. Trump to pay an amount up to double the amount of benefits
improperly obtained through related party transactions entered into after July 1, 2014; (iv)
declaring that the Foundation has conducted its business in a persistently illegal manner and has
abused its powers contrary to the public policy of this state; (v) directing the Foundation to
cooperate with the Attorney General in the distribution of remaining assets to qualified charities;
(vi) restraining the Foundation, except by permission of the court, from exercising any corporate
powers; (vii) dissolving the Foundation; and (viii) granting such other and further relief as the
Court may deem just and proper.
FILED: NEW YORK COUNTY CLERK 06/14/2018 09:58 AM INDEX NO. 451130/2018 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 06/14/2018
3 of 41
From the NYT: Have patients been misled about the dangers of LASIK surgery?
Nearly half of all people who had healthy eyes before Lasik developed visual aberrations for the first time after the procedure, a recent FDA trial found. Nearly one-third developed dry eyes, a complication that can cause serious discomfort, for the first time.
The authors wrote that “patients undergoing Lasik surgery should be adequately counseled about the possibility of developing new visual symptoms after surgery before undergoing this elective procedure.”
Lack of precise information about complications is a problem that plagues many medical devices, which are tested by manufacturers and often gain F.D.A. approval before long-term outcomes are known, said Diana Zuckerman, president of the nonprofit National Center for Health Research in Washington.
Patients’ vision may regress after surgery, and they may need to use eyeglasses at times, some concede. But most Lasik surgeons maintain that soreness, dry eyes, double vision and other visual aberrations like those suffered by Mr. Ramirez subside within months for most patients.
Surgeons frequently point to the procedure’s popularity as evidence of its success: Lasik was performed on some 700,000 eyes last year, up from 628,724 in 2016, according to Market Scope, a market research company that focuses on the ophthalmic industry.
Dr. Donnenfeld wrote a frequently cited 2016 review paper that reported the vast majority of Lasik patients were satisfied. He counsels patients that symptoms like halos and excessive glare may get worse in the short term but improve over time, except in the “rare patient.”
Yet few studies have followed patients for more than a few months or a year, and many are authored by surgeons with financial ties to manufacturers that make the lasers.
One such study, written by the global medical director for a large laser eye-surgery provider, reported high satisfaction rates among patients five years after Lasik.
But the study also found that even after all those years, nearly half had dry eyes at least some of the time. Twenty percent had painful or sore eyes, 40 percent were sensitive to light, and one-third had difficulty driving at night or doing work that required seeing well up close.
A similar percentage experienced “severe or worse” glare, halos and problems driving at night.
Lasik surgeons say the procedure has improved over time, and one surgeon’s 2017 analysis of more recent data submitted to the F.D.A. by manufacturers concluded that for many patients, visual problems eventually resolved.
Still, a year after surgery, the percentage of the roughly 350 patients who had mild difficulties driving at night had increased slightly to 20 percent, while the percentage with mild glare and halos had more than doubled to about 20 percent in each category. The percentage with mild dryness more than doubled to 40 percent.
Now a vocal cadre of patient advocates is demanding the agency issue strong public warnings about Lasik.
The group is led by Morris Waxler, a retired senior F.D.A. official who regrets the role he played in Lasik’s approval over 20 years ago, and Paula Cofer, a patient-turned-advocate who says Lasik destroyed her eyesight and left her with chronic pain.
Ms. Cofer now runs a website, lasikcomplications.com, that features blog posts like “Top 10 Reasons Not to Have Lasik Surgery” and is dedicated to two men who committed suicide after suffering Lasik complications, including Max Burleson Cronin, a 27-year-old veteran.
The preceding is a series of excerpts from the full article, which is at https://www.nytimes.com/2018/06/11/well/lasik-complications-vision.html
The SEC's fraud complaint against Theranos principals is here:
https://www.sec.gov/litigation/complaints/2018/comp-pr2018-41-theranos-holmes.pdf
Excerpt:
Plaintiff Securities and Exchange Commission (the “Commission”) alleges:
SUMMARY OF THE ACTION
1. This case involves the fraudulent offer and sale of securities by Theranos, Inc. (“Theranos”), a California company that aimed to revolutionize the diagnostics industry, its Chairman and Chief Executive Officer Elizabeth Holmes, and its former President and Chief Operating Officer, Ramesh “Sunny” Balwani. The Commission has filed a separate action against Balwani.
2. Holmes, Balwani, and Theranos raised more than $700 million from late 2013 to 2015 while deceiving investors by making it appear as if Theranos had successfully developed a commercially-ready portable blood analyzer that could perform a full range of laboratory tests from a small sample of blood. They deceived investors by, among other things, making false and misleading statements to the media, hosting misleading technology demonstrations, and overstating the extent of Theranos’ relationships with commercial partners and government entities, to whom they had also made misrepresentations.
3. Holmes, Balwani, and Theranos also made false or misleading statements to investors about many aspects of Theranos’ business, including the capabilities of its proprietary analyzers, its commercial relationships, its relationship with the Department of Defense (“DOD”), its regulatory status with the U.S. Food and Drug Administration (“FDA”), and its financial condition. These statements were made with the intent to deceive or with reckless disregard for the truth.
4. Investors believed, based on these representations, that Theranos had successfully developed a proprietary analyzer that was capable of conducting a comprehensive set of blood tests from a few drops of blood from a finger. From Holmes’ and Balwani’s representations, investors understood Theranos offered a suite of technologies to (1) collect and transport a fingerstick sample of blood, (2) place the sample on a special cartridge which could be inserted into (3) Theranos’ proprietary analyzer, which would generate the results that Theranos could transmit to the patient or care provider. According to Holmes and Balwani, Theranos’ technology could provide blood testing that was faster, cheaper, and more accurate than existing blood testing laboratories, all in one analyzer that could be used outside traditional laboratory settings.
5. At all times, however, Holmes, Balwani, and Theranos were aware that, in its clinical laboratory, Theranos’ proprietary analyzer performed only approximately 12 tests of the over 200 tests on Theranos’ published patient testing menu, and Theranos used third-party
commercially available analyzers, some of which Theranos had modified to analyze fingerstick samples, to process the remainder of its patient tests.
6. In this action, the Commission seeks an order enjoining Holmes and Theranos from future violations of the securities laws, requiring Holmes to pay a civil monetary penalty, prohibiting Holmes from acting as an officer or director of any publicly-listed company, requiring Holmes to return all of the shares she obtained during this period, requiring Holmes to relinquish super-majority voting shares she obtained during this period, and providing other appropriate relief.
Karl A. Racine's May 12, 2017 Washington Post writing on violence in DC
Karl A. Racine is the D.C. attorney general.
With the District’s coffers brimming with excess revenue, our officials and community leaders must devise, fund and competently implement a comprehensive strategy to treat the trauma that hurts our city’s most vulnerable young residents and breeds the violence that affects us all — violence described in the April 23 front-page article “‘Did your father die?.’ ” That article depicted the experiences of 8-year-old Tyshaun McPhatter and heartbreakingly described parts of the nation’s capital as places where children live in fear.
At the Office of the Attorney General, we come into contact with kids such as Tyshaun every day. Based on that experience, there are three steps we can take quickly.
First, we must invest in proven, data-based methods to interrupt violence and address it as a public-health crisis. Shootings and other violence cause long-term damage to whole communities, hampering prospects of economic development, traumatizing children and trapping families inside their homes out of fear. While heightened law enforcement is necessary, it is not sufficient to turn around high-crime communities.
Models such as Cure Violence are proven. This model has three main components.
● Detect and interrupt potentially violent conflicts by preventing retaliation and mediating simmering disputes.
● Identify and treat individuals at the highest risk for conflict by providing services and changing behavior.
● Engage communities in changing norms around violence (for instance, organize community responses to every shooting to counter normalization).
Multiple studies have shown that, where implemented, Cure Violence results in reductions in shootings and violent confrontations. New Orleans went 200 days without a murder in its Cure Violence sites; Philadelphia saw significant reductions in shootings in Cure Violence areas compared with similar districts; and Baltimore’s Cure Violence sites saw fewer homicides. We must fund a Cure Violence-based program in the District.
Second, the District must invest in strategies to reduce and prevent childhood trauma at home. Ongoing trauma puts a child’s brain in a constant fight-or-flight state, making it hard for other parts of the brain to develop properly. Children experience difficulty paying attention. Untreated trauma can lead to school failure, higher dropout rates, and aggression and other risky behavior. According to the National Kids Count Data Center, for children in the District, rates of abuse and neglect — major contributors to childhood trauma — are higher than the national average. In neighborhoods such as Tyshaun’s, they are dramatically higher.
The District should invest in evidence-based parenting programs that have been proved to reduce rates of child abuse and neglect, such as Triple P (for “Positive Parenting Program”). Triple P draws on extensive social science research to help parents and has the strongest evidence base of any such program in the country. For instance, a Centers for Disease Control and Prevention-funded randomized study showed a reduction in child-abuse and foster-care rates in counties using Triple P compared with control locations. This is the kind of support that should be available to every District family that needs it.
Third, the District must invest more resources in programs and services that treat the effects of trauma before children make contact with the court system. Therapeutic early interventions, when instituted in a comprehensive manner, have improved public safety. For instance, since I took office, we have increased the rate at which we divert low-level juvenile offenders into the D.C. Department of Human Services’ Alternatives to the Court Experience (ACE) program. This program offers intensive services for six months, tailored to an individual child’s needs. Of the approximately 1,000 kids who have completed the ACE program, more than 80 percent have not been rearrested. That’s an extraordinary success rate in juvenile justice.
The same approach should be used to provide quality psychiatric services for children, increase trauma-informed practices for schools and provide other supports to children before they find themselves in trouble.
My colleagues and I do not pretend to have all the answers. But we owe it to our young people to give them what they need to become resilient, thriving, contributing members of our community. We must focus our resources to meet the crisis facing our children. No child in this city should have to face the fear that young Tyshaun and his peers face every day.
***
Editor's comment: AG Racine's comment reflects the view that violence is much more than a police problem -- an array of social interventions is required. DAR
Massachusetts joins ranks of states guaranteeing counsel in fees/fines cases
Massachusetts now provides a right to counsel in fees and fines cases thanks to SB 2371, which was signed by the Governor in April. This provision added ALM GL ch. 127, § 145(b), which specifies that “A court shall not commit a person to a correctional facility for non-payment of money owed if such a person is not represented by counsel for the commitment proceeding, unless such person has waived counsel. A person deemed indigent for the purpose of being offered counsel and who is assigned counsel for the commitment portion of a proceeding solely for the nonpayment of money owed shall not be assessed a fee for such counsel.” This is a big win on the fees/fines front, and we expect to see other similar bills in the coming years.
Credit: The National Coalition for a Civil Right to Counsel. The Coalition " is an association of individuals and organizations committed to ensuring meaningful access to the courts for all. Our mission is to encourage, support and coordinate advocacy to expand recognition and implementation of a right to counsel in civil cases."
--From AAI:
AAI SAYS THE PROPOSED SPRINT-T-MOBILE MERGER SHOULD BE "DOA AT THE DOJ"
JUNE 05 2018
DIANA MOSS
WHITE PAPERS
DOJ, IP AND INNOVATION, TECHNOLOGY AND COMMUNICATIONSNew analysis from the American Antitrust Institute (AAI) concludes that the proposed merger of U.S. wireless carriers Sprint and T-Mobile should not survive a first look by the U.S. Department of Justice (DOJ). AAI says the government should move to block the deal to protect competition and consumers.
In less than a decade, consolidation has restructured the national U.S. wireless market. In 2002, the market featured seven major wireless carriers. By 2009, the number of significant national rivals fell to four. A Sprint-T-Mobile deal would further reduce the number of rivals from four to three, stoking even higher concentration in the national U.S. wireless market and contributing to growing concerns over a broader systemic decline in competition, market entry, and equality in the U.S. economy.
If approved, the Sprint-T-Mobile merger deal would complete the roll-up of the national U.S. wireless market. The 4-3 merger would create an oligopoly that would promote the market “stabilization” that is coveted by large players that grow tired of the rough and tumble of competition and the disruptive rivals that pressure them to compete. At the same time, the deal would eliminate important head-to-head competition between Sprint and T-Mobile, the two disruptive wireless carriers in the U.S. Either way, the competition eliminated by the merger would likely result in higher prices, less choice, lower quality, and slower innovation—to the detriment of U.S. wireless subscribers.
AAI’s analysis explains that a government complaint seeking to enjoin the merger should be based on five straightforward arguments:
- Sprint-T-Mobile is a highly concentrative merger that is presumed to be illegal under longstanding U.S. merger law. If allowed, it would virtually guarantee harm to competition and consumers through higher retail and wholesale prices, lower quality and variety, less choice, and slower innovation.
- By reducing the field of rivals from four to three, the deal is a textbook set-up for anticompetitive coordination between the remaining Big 3 carriers: Verizon, AT&T, and Sprint-T-Mobile. The merged firm would undoubtedly find that maintaining a competitive “peace” with its rivals would be more profitable than trying to gain market share by competing aggressively on price, quality, and innovation.
- Compelling economic evidence from consummated mergers and enforcement in the U.S., together with experience in wireless sectors in other countries, strongly supports concerns over the anticompetitive and anti-consumer effects of highly concentrative 4-3 mergers.
- The merger eliminates head-to-head competition between the two disruptive rivals in the national U.S. wireless market. The proposed AT&T-T-Mobile merger failed in large part because it eliminated T-Mobile as a disruptive competitor, or a “maverick.” Sprint also competes hard on price to woo consumers away from rival carriers. Such competition, and the benefits it delivers to consumers, would be lost by the merger.
- No claimed cost savings or consumer benefits from the merger outweigh the merger’s likely harmful effects. The major “efficiency” claimed by Sprint and T-Mobile—that they need the merger to roll out 5G network technology—is meritless. Indeed, the potential difficulties of integrating the different Sprint and T-Mobile networks could actually increase costs and create inefficiencies for consumers.
Download AAI Spring-T-Mobile Analysis -- http://www.antitrustinstitute.org/sites/default/files/AAI_Sprint-T-Mobile.pdf
The NYC "Right to Counsel" Bill for Landlord-Tenant Court
The New York Times recently ran a series focusing on lack of access to justice in NYC courts dealing with landlord-tenant issues: The Eviction Machine Churning Through New York City-- https://www.nytimes.com/interactive/2018/05/20/nyregion/nyc-affordable-housing.html
In a letter to the NYT editor, a writer said:
While the article mentions the right to counsel, it misses the strength and potential of this law that the tenant movement won. It is so much more than funding for free attorneys; the law emboldens tenants to organize and fight for their rights as the threat of eviction becomes less powerful. The knowledge that tenants have a right to an attorney will be a deterrent to landlords who would otherwise harass tenants, deny services and repairs or charge illegal rents.
What is the law the letter writer refers to? Here's language from an article that explains it:
The "Right to Counsel" bill, passed by the City Council in July [2017, signed into law in August], funds housing court lawyers for New Yorkers facing eviction or foreclosure who earn up to double the federal poverty line — $49,200 annually for a family of four.
Higher-income people will also get legal consultation, but will not be represented in court.
In 2015, almost 22,000 New Yorkers were evicted, according to City Councilman Mark Levine's office. Only about 20 percent of people facing eviction are represented by an attorney. The law aims to level the playing field in housing courts, which have long been criticized for exacerbating inequities between landlords and tenants.
"For too long unscrupulous landlords have used housing court as a weapon to push out tenants by hauling them into court, often on the flimsiest of eviction grounds, knowing that the other side would not have an attorney," said Levine, who co-sponsored the bill.
"The era of any New Yorker losing their home because they simply didn't have an attorney ends today, for tenants in private housing and tenants in public housing as well."
Prior to the passing of the law, [Mayor] de Blasio said, low-income tenants facing of evictions were defenseless and would end up in shelters costing the city money.
"For a long time when that eviction notice came it felt like the ballgame was over," de Blasio said, adding that people felt "powerless." That, he said, was about to change.
"God forbid anyone gets that notice. The next thing they're gonna do is they're gonna reach for their phone and they're gonna call 3-1-1 and they're gonna get a lawyer to defend them. It's gonna be as simple as that," de Blasio said.
Levine said New York leading is the way for similar legislation in other cities, including Washington, D.C., Chicago and Philadelphia. De Blasio said the bill will impact hundreds of thousands of people.
Article cite: https://www.dnainfo.com/new-york/20170811/concourse/right-to-counsel-bill-law/
Good News for Consumers: Free Credit Freezes - Consumer Reports
see https://www.consumerreports.org/credit-protection.../credit-freezes-are-now-free/
Article excerpts:
Credit reporting companies such as Equifax, Experian, and TransUnion will soon be required to let consumers freeze and unfreeze their credit files free of charge.
The provision is part of a bipartisan bill signed Thursday by President Donald Trump that rolls back certain Dodd-Frank financial rules that Congress approved after the 2008 financial crisis.
Currently, consumers could pay up to $10 to freeze their credit reports, depending on where they live. The new rules take effect in 120 days.
Along with the free credit freezes are some other benefits. Consumers now have the right to place a fraud alert on their credit file at no cost for one year—up from 90 days currently.
If you do that, businesses will be required to take steps to verify your identity before extending new credit, providing you with extra protection but possibly delaying the amount of time it takes for you to get a new credit card, say, or be approved for a mortgage. In addition, victims of identity theft are entitled to an extended fraud alert lasting seven years.
Each credit reporting agency will also be required to create a web page that allows consumers to request security freezes and fraud alerts, and opt out of the use of their information by companies marketing credit or insurance products.
“The new law has strengths and weaknesses regarding credit freezes,” says Anna Laitin, director of financial policy at Consumers Union, the advocacy division of Consumer Reports. “It would enable individuals across the country to freeze and unfreeze their credit at no cost, a right that consumers in only a few states now have. However, it also preempts the ability of states to provide greater protections to consumers. States have been the innovators on credit freezes, and this legislation would stop that innovation in its tracks.”
Laitin points to recent legislation in California that would make it so that if a consumer freezes his or her credit report at one of the main credit reporting agencies, it would be frozen at the others as well, creating a one-stop shop for consumers seeking to implement a credit freeze.
The DC judiciary on access to justice for all
The District of Columbia is fortunate that the DC Bar and DC’s judiciary are dedicated to the goal of access to justice for all. That includes the poor. But there will always be challenges to achieving that goal. The DC Court’s website says:
The Courts have a responsibility to eliminate barriers to meaningful participation in the judicial process and to accessing court services. Such barriers may include a lack of legal representation, limited literacy or limited English language skills, limited financial resources, and physical or mental disability. In collaboration with justice and community partners, the Courts will work to ensure full access to the justice system and court services.
With regard to legal assistance, the Court’s site says:
The Courts provide legal representation for eligible indigent defendants in criminal cases at the trial and appellate levels and to parents in child abuse and neglect matters. There is an urgent need for legal assistance for parties in our Courts who cannot afford legal representation for many types of civil disputes or appeals. In 2017, the Courts sought and received legislative authority to raise the monetary limit for matters that can be brought to small claims court, from $5,000 to $10,000, which will bring some needed relief to these residents. In addition, the Courts will continue to partner with the DC Bar, law firms and other local organizations to identify unmet needs for legal assistance and to expand the availability of free, pro bono or low-cost civil legal assistance in the District.
With regard to unrepresented litigants, the Court’s site says:
Many of the District’s residents who cannot afford an attorney must represent themselves in court, often against an opposing party with legal representation. Additionally, an increasing number of individuals who may be able to afford counsel are choosing to represent themselves. In partnership with the DC Bar, legal services providers and organizations, the Courts have created self-help centers where such litigants can obtain information and assistance in representing themselves. The Courts will continue to expand the availability of assistance and information at the self-help centers and resource centers. The Courts will expand the electronic filing program to enable self-represented litigants to file cases and documents online, saving time and costs incurred to visit the courthouse. The Courts will also develop informational videos and self-guided materials on key court processes and post them on the Courts’ website and electronic monitors in court buildings. Continuing efforts will be made to ensure that all court forms and documents are in plain language.
The Court recognizes the challenges of bringing justice to people of limited means. These challenges affect many lawyers, not just those who provide legal services to the poor. For example, attorneys in litigation where the opposing party is unrepresented may be challenged by an adversary who is ill-prepared for litigation but very angry. Of course, the unpresented litigant can be a challenge to the presiding judge.
The relevant DC Court website URL is https://www.dccourts.gov/about/organizational-performance/goal1
Posting by Don Allen Resnikoff
Oncotype DX, a genetic test first marketed in 2004, will now be used to spare "intermediate risk" breast cancer patients from chemotherapy
Oncotype DX [URL http://www.oncotypeiq.com/en-US] first hit the market in 2004. The genomic test measures the expression of 21 genes in tumor tissue removed at the time of surgery and predicts risk of recurrence on a scale of 0 to 100.
Earlier research [URL https://www.nejm.org/doi/full/10.1056/NEJMoa1510764?query=recirc_curatedRelated_article] found that a patient with a high-risk case, or score of 26-100, would benefit from chemotherapy, while a patient at the lower end with a score of 10 and under would not. This left a lot of women, an estimated 65,000 in the U.S. each year, in a gray zone, unsure if they would benefit from chemo.
A new study, published Sunday in the New England Journal of Medicine,[URL http://dx.doi.org/10.1056/NEJMoa1804710] finds that patients who fall in the intermediate risk zone do as well with hormone therapy alone as with chemo plus hormone therapy after surgery. "[The findings] are both important and significant, and also practice-changing," says, Dr. José Baselga, a medical oncologist and physician in chief at Memorial Sloan Kettering Cancer Center in New York, who was not involved with this research. "Basically, it's going to spare a lot of unnecessary chemotherapy in patients with breast cancer."
Source: https://www.npr.org/sections/health-shots/2018/06/03/616298863/for-some-breast-cancer-patients-the-chemo-decision-just-got-easier
The Trump Administration's leaked memo preserving unprofitable coal and nuclear power plants-- see it here: https://www.documentcloud.org/documents/4491203-Grid-Memo.html
The rationale is that coal and nuclear power plants are more stable than natural gas plants, because the fuel source is on site. That aids national security.
Pending and recent federal and state government investigations and actions regarding for-profit colleges
Compiled by David Halperin, Attorney, Washington DC
UPDATED 05-23-18
This is a list of pending and recent significant federal and state civil and criminal law enforcement investigations of, and actions against, for-profit colleges. It also includes some major investigations and disciplinary actions by the U.S. Department of Education and Department of Defense. It does not include investigations or disciplinary actions by state education oversight boards. It also does not include (except for False Claims Act cases that resulted in payments to the United States) lawsuits prosecuted only by private parties — students, staff, etc.
To date, 37 state attorneys general [link: http://migration.kentucky.gov/newsroom/ag/conwaydurbin.htm ] are participating in a joint working group examining for-profit colleges. Many of those are actively investigating specific for-profit colleges in their states.
Some of the most-investigated for-profit colleges have now converted to non-profit status or are in the process of doing so, often through troubling transactions and arrangements. Schools will remain on this list, for-profit or not, if they have engaged in troubling behavior.
Please send corrections, additions, updates, and comments to tips@RepublicReport.org
Mr. Halperin's list is here: https://www.republicreport.org/2014/law-enforcement-for-profit-colleges/
Trump orders facilitating firing of federal employess are a threat to democracy, union says.
White House directives aim to strip federal workers of right to representation
NEWS PROVIDED BY
American Federation of Government Employees May 25, 2018, 16:49 ET
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"This is more than union busting – it's democracy busting," AFGE National President J. David Cox Sr.said. "These executive orders are a direct assault on the legal rights and protections that Congress has specifically guaranteed to the 2 million public-sector employees across the country who work for the federal government."
"Our government is built on a system of checks and balances to prevent any one person from having too much influence. President Trump's executive orders will undo all of that. This administration seems hellbent on replacing a civil service that works for all taxpayers with a political service that serves at its whim."
"Federal employees swear an oath to serve this country. The American people rightly expect that federal employees go to work every day and do the jobs they were hired to do – whether it's ensuring our food is safe to eat, caring for veterans who were injured while serving their country, preventing illegal weapons and drugs from crossing our borders, or helping communities recover from hurricanes and other disasters."
"President Trump's executive orders do nothing to help federal workers do their jobs better. In fact, they do the opposite by depriving workers of their rights to address and resolve workplace issues such as sexual harassment, racial discrimination, retaliation against whistleblowers, improving workplace health and safety, enforcing reasonable accommodations for workers with disabilities, and so much more."
"These executive orders strip agencies of their right to bargain terms and conditions of employment and replace it with a politically charged scheme to fire employees without due process," Cox said.
AFGE representatives have used official time in myriad ways that benefit taxpayers, including to:
- Blow the whistle on management's attempt to cover up an outbreak of Legionnaires disease that killed and sickened veterans in Pittsburgh;
- Address an incident in which a noose was placed on the chair of an African-American worker at the U.S. Mint in Philadelphia;
- Mitigate the impact of Army downsizing on employees and their families;
- Expedite the processing of benefits to veterans and their survivors; and
- Successfully negotiate equipping federal correctional officers with pepper spray to keep them safe on the job.
"It's a policy that has saved taxpayers in the long run because it helps resolve isolated conflicts that arise in the workplace before they become costly, agency-wide problems. And contrary to some reports, official time is never used to conduct union-specific business, solicit members, hold internal union meetings, elect union officers, or engage in partisan political activities."
"By preventing problem solving, these executive orders will create inefficiencies and hinder the ability of dedicated federal employees to effectively deliver services to the American public."
The American Federation of Government Employees (AFGE) is the largest federal employee union, representing 700,000 workers in the federal government and the government of the District of Columbia.
For the latest AFGE news and information, visit the AFGE Media Center. Follow us on Facebook, Twitter, and YouTube.
SOURCE American Federation of Government Employees
Related Linkshttp://www.afge.org
From the federal indictment concerning bribes and fraud in distribution of opioid Fentanyl:
"Beginning in or about May 2012 and continuing until in or about December 2015, the Company, KAPOOR, BABICH, BURLAKOFF, GURRY, SIMON, LEE, and ROWAN, the co-conspirator practitioners, . . .the co-conspirator pharmacies, and other persons and entities known and unknown to the Grand Jury, conspired with one another to profit from the illicit distribution of the Fentanyl Spray, by using bribes and fraud."
A copy of the unsealed federal indictment is here: https://www.scribd.com/document/362727686/Unsealed-Indictment-vs-Insys-Founder-John-Kapoor-others
The current NYT magazine article on the story is here: https://www.nytimes.com/interactive/2018/05/02/magazine/money-issue-insys-opioids-kickbacks.html
NYT explains zoning practices in lava land
“Many people are willing to risk living next to a volcano because the living is cheap.”
When developers were carving up Puna back in the 1960s and 70s, many investors on the mainland bought lots in the lava lands sight unseen.
In some cases, public officials leveraged their power into cobbling together real estate deals on the Big Island from which they could benefit.
At the time, basic infrastructure — things like paved roads, sewage systems, running water and electricity — was lacking. Subdivisions such as Leilani now have some of those services, but many residents still rely on rain catchment tanks for water. Just a few miles away, many homeowners live entirely off the grid, on even cheaper land parcels.
In some parts of Puna, newcomers are building nearly directly on fields of hardened lava from eruptions that destroyed other communities. For instance, an eruption of Kilauea in 1990 destroyed about 100 homes in the community of Kalapana. Less than 30 years later, dozens of homes now stand atop the flow field that swallowed Kalapana. The homes, some built without heed to code, lack ties to the electricity grid and sewage systems. Residents collect water in catchment tanks.
Often, banks won’t issue a traditional mortgage on such properties, but those determined to come here have found other ways to finance their ventures.
DAR comment: Go figure.
From https://www.nytimes.com/2018/05/25/us/hawaii-volcano-housing.html?emc=edit_ne_20180525&nl=evening-briefing&nlid=6707584320180525&te=1
From DMN:
The newly launched YouTube Music's ’s payouts to artists are a tiny fraction of what Spotify delivers, thanks to clever loopholes in existing copyright law.
Just recently, Elon Musk blasted streaming music platforms for delivering ‘crazy low payouts,’ while presenting a depressing breakdown from Statista of what those payouts are. But on the ‘crazy low’ spectrum, perhaps YouTube would qualify as ‘psychotically bottom-scraping’.
The story continues here. [ https://www.digitalmusicnews.com/2018/05/23/youtube-music-threat-artist-livelihood/ ]
Comment of the DCConsumerRightsCoalition.org filed with the CFPB regarding limiting or reducing the CFPB's public consumer complaint database:
The mission of the Consumer Financial Protection Bureau (CFPB) is to identify dangerous and unfair financial practices, educate consumers about these practices, and regulate the financial institutions that perpetuate them.
To accomplish these goals, the CFPB created the public Consumer Complaint Database. The database tracks complaints made by consumers to the CFPB and how they are resolved. As USPIRG and others have pointed out, the database enables the CFPB to identify financial practices that threaten to harm consumers and enables the public to evaluate both the performance of the financial industry and of the CFPB. More importantly, a database which is also publicly available, also assist consumers in making choices. By reviewing complaints, and the responses, consumers can vet potential businesses and choose companies based on real track records rather than puffery and advertising.
If CFPB were to limit or reduce the public Consumer Complaint Database, that would impede the public's ability to evaluate the performance of financial industry participants and of the CFPB. For that reason we believe the public Consumer Database should be maintained in essentially the same manner as in the recent past.
The recent US Supreme Court decision in Murphy v. NCAA opens the door to State policies permitting gambling. There are many questions that follow about the evolution of gambling as a business in the future. Which companies will play an important role? Will it be fantasy sports companies like Fanduel and DraftKings? Casino companies? What will be the reaction of the National Collegiate Athletic Association and others responsible for events and athletes likely to be the targets for gambling? How will issues of legality and ethics be dealt with? The statement recently issued by four State gambling regulators briefly suggests that State regulators can handle it. --DAR
FOUR STATE GAMBLING REGULATORS ISSUE STATEMENT IN DEFENSE OF STATE REGULATION
- Published on May 23, 2018
André Wilsenach Executive Director, International Center for Gaming Regulation, UNLV1MAY 22, 2018
This statement is issued by gaming regulatory leaders from four state gambling jurisdictions in response to the recent U.S. Supreme Court ruling to confirm and assert that states and tribal gaming regulatory agencies have the capacity, resources, and ability to oversee the regulation of legalized sports betting.
Sports betting in Nevada has already been regulated with integrity and success, and gaming jurisdictions across the United States, including tribal jurisdictions, have demonstrated their ability to oversee gaming of all sorts while adhering to the highest standards.
Since the opinion in Murphy v. National Collegiate Athletic Association was released last week, there has been an overwhelming response by the various interested parties, including states, leagues, federal congressional representatives, responsible gambling organizations, sports betting consumers, and gambling industry operators and affiliates. As we expect the dialogue to continue with substantial actions to be undertaken rapidly, it is important to assert and confirm our support for a rational, state-based and tribal government approach to an expansion of legal, regulated sports wagering in the United States.
For nearly two years, leading regulators from key state commercial gambling jurisdictions have been meeting under the auspices of the University of Nevada, Las Vegas’s International Center for Gaming Regulation (ICGR), to dialogue about current issues affecting the gambling industry and to further best regulatory practices.
As experienced gaming regulators who are part of the U.S. State Gaming Regulators Forum, we would encourage jurisdictions to establish and implement regulatory models that are not only adaptive and successful, but that remain flexible enough to be sturdy, yet encourage innovation.
This group looks forward to continuing to collaborate together while serving as a resource as the various states and tribal governments begin implementing sports betting in their jurisdictions. Nevada, having both the depth and experience with legalized, regulated sports wagering, serves as a leader to help guide us and other jurisdictions through this historical time.
As the regulators in different gambling jurisdictions, we have jointly concluded that the following simple guidelines will help with an initial approach to sports betting regulation. While we cannot personally commit our respective jurisdictions to any specific position or practice, we support all of these positions individually, will support them throughout our regulatory agencies, and will help provide guidance to other jurisdictions as to how these guidelines can be implemented.
1. Coordinated action among jurisdictions offering sports betting against illegal bookmaking, illegal gambling activities, and any unsuitable and unlawful associations, along with strong support from federal-level enforcement agencies, is the best way to eradicate illegal activities.
2. Another critical element of legalized sports betting is the establishment of structures and processes that will ensure a high level of integrity in all sports. Therefore, all of our jurisdictions and others that legalize and regulate sports wagering should aim to share real-time betting information, in an effort to detect, prevent, and eliminate match fixing.
3. Measures for responsible gambling in sports betting are important to help protect and maintain the credibility of the activity.
4. The history of legalized sports betting in both Nevada and the United Kingdom indicates that it is a very low-margin business compared to other forms of gambling. Reasonable tax rates and fees are essential for legal sports betting to be competitive until illegal providers can be eradicated.
5. Additional fees, including the so-called “integrity fee,” increase the costs of legal sports betting, siphon much needed tax revenues away from state coffers, and increase state regulatory burdens.
We encourage state legislatures that elect to legalize sports betting to consider these guidelines in order to promote a coherent regulatory environment.
We, as members of the U.S. State Gaming Regulators Forum, will look to immediately develop a Memorandum of Understanding between our jurisdictions to acknowledge support for implementation of these principles. We welcome other jurisdictions’ regulatory bodies sharing these values to join with us.
Becky Harris, Chairwoman, Nevada Gaming Control Board
Stephen P. Crosby, Chairman, Massachusetts Gaming Commission
Ronnie Jones, Chairman, Louisiana Gaming Control Board
Rick Kalm, Executive Director, Michigan Gaming Control Board
For further media inquiries, contact Jennifer Roberts, Associate Director of UNLV International Center for Gaming Regulation, at jennifer.roberts@unlv.edu or 702-895-2653.
Law.com provides copy of Complaint by Sandy Hook victims against conspiracy theorist Alex Jones
Law.com reports that trial lawyers from Bridgeport, Connecticut-based Koskoff Koskoff & Bieder filed suit Wednesday against media personality Alex Jones on behalf of an FBI agent and the families of six victims of the deadly Sandy Hook Elementary School shooting. The Complaint cites a campaign of inflammatory statements by Jones. Jones claims that the shooting was a fake. The Complaint says that:
“Time and again, Jones has accused Sandy Hook families, who are readily identifiable, of faking their loved ones’ deaths, and insisted that the children killed that day are actually alive.” The premise of the litigation is that the First Amendment does not protect such lies.
The Law.com article provides a copy of the Complaint
The Law.com article is at https://www.law.com/ctlawtribune/2018/05/23/connecticut-lawyers-sue-conspiracy-theorist-alex-jones-for-sandy-hook-families-fbi-agent/
Court decision refusing to dismiss the NY AG's suit charged internet service provider Spectrum-TWC with false advertising of internet speeds
The decision is here: https://iapps.courts.state.ny.us/nyscef/ViewDocument?docIndex=dJY_PLUS_yretXYSY8msX1l3vXQ=='
A brief excerpt follows:
According to the complaint, Spectrum-TWC did not deliver the promised level of service (id., ¶¶ 75-76, 80-83, 178-241). For many customers, the promised Internet speeds were impossible to attain because of technological bottlenecks for which Spectrum-TWC was responsible.
First, in early 2013, defendants determined (as a result of Internet speed tests conducted by the FCC) that the older generation modems they leased to many of their subscribers were incapable of reliably achieving Internet speeds of even 20 Mbps per second (id., ¶¶ 9, 76, 101-177) (the Modem Failures). These failures date back to early in the Covered Period, and intensified when Spectrum-TWC began to promise New York City subscribers faster speeds in connection with its MAXX upgrade, which was launched in 2014 (id., 5 78). These failures were not resolved by the company's modem "replacement" program, which was designed to result in many subscribers continuing to pay for promised speeds beyond the technical capabilities of their Spectrum-TWC-provided modems (id., ¶¶ 121, 146, 151, 159).
Plaintiff alleges that, in fact, Spectrum-TWC knew that the modems it leased to many subscribers were "non-compliant," or incapable of delivering the speeds promised (id., ¶¶ 76, 110-113, 169). Plaintiff alleges this failure affected 900,000 subscribers (id., ¶ 102).
Second, Spectrum-TWC also failed to maintain its network as necessary to deliver the promised speeds (id., 55 178-200) (the Network Failures).
Plaintiff alleges that, although Spectrum-TWC knew the precise levels of network congestion at which customers would be prevented from achieving the promised speeds, it deliberately hid and exceeded those congestion levels to save itself money (id., ¶¶ 184-193).
Third, plaintiff alleges that, due to older or slower wireless routers it provided, and other technological limitations, Spectrum-TWC knew that its subscribers could not achieve the same speeds wirelessly as through a wired connection (id., ¶¶ 221-241) (the Wireless Failures). Plaintiff asserts that Spectrum-TWC's failure to deliver its promised Internet speeds is confirmed by the results of at least three independent tests of Internet speed: (1) a test used by the FCC to generate its annual "Measuring Broadband America" report; (2) a test used by Spectrum-TWC to monitor speeds on its last miles of service; and (3) a test recommended by Spectrum-TWC to its subscribers for testing Internet speeds (Complaint, ¶¶ 196-213).
National Women’s Law Center announcement: launch of the TIME’S UP Legal Defense Fund.
From https://nwlc.org/times-up-legal-defense-fund/
The sexual harassment that has been reported in the last few months has been both horrific and illuminating. We stand with the brave individuals who have come forward, at great risk to themselves, to protect others from similar behavior.
The National Women’s Law Center is excited to announce the launch of the TIME’S UP Legal Defense Fund. The TIME’S UP Legal Defense Fund, which is housed at and administered by the National Women’s Law Center, connects those who experience sexual misconduct including assault, harassment, abuse and related retaliation in the workplace or in trying to advance their careers with legal and public relations assistance. The Fund will help defray legal and public relations costs in select cases based on criteria and availability of funds. Donations to the TIME’S UP Legal Defense Fund are tax deductible through the Direct Impact Fund, a 501(c)(3) nonprofit organization or through the National Women’s Law Center, a 501(c)(3) nonprofit organization. The initiative was spearheaded by actors and others in the entertainment industry, attorneys Tina Tchen and Roberta Kaplan, and top public relations professionals. Women in Hollywood came together around their own experience of harassment and assault, and were moved by the outpouring of support and solidarity against sexual harassment from women across sectors. This inspired them to help create a Fund to help survivors of sexual harassment and retaliation in all industries—especially low-income women and people of color. They worked together in an historic first to design a structure that would be both inclusive and effective. The Fund will be housed and administered by the National Women’s Law Center and the participating attorneys will be working with the Center’s Legal Network for Gender Equity. Access to prompt and comprehensive legal and communications help will empower individuals and help fuel long-term systemic change.
This Fund will enable more individuals to come forward and be connected with lawyers — regardless of industry, rank or role. Countless activists, celebrities, and other donors want to see an end to a culture that allows sexual harassment and retaliation of those who courageously step forward to go unpunished. This effort is not just to support women in Hollywood, but others in need – the factory worker, the waitress, the teacher, the office worker, and others subjected to this unacceptable behavior. Now is the time to finally stop the sexual harassment and retaliation that has often gone unchecked.
The text of the US Supreme Court decision permitting workplace arbitration clauses precluding class actions:
https://www.supremecourt.gov/opinions/17pdf/16-285_q8l1.pdf
Federal student loans to be made more expensive by Congress
Federal student loan rates are a few percent higher than benchmark rates like the interest rate on 10 year federal bonds. As those bond rates move up closer to 3%, student loan rates will go up in tandem. In addition, new "PROSPER" legislation in planned that -- surprise-- make student loans more expensive and students less prosperous. The legislation would eliminate variations among student loans and eliminate federal subsidies. The Forbes article, an excerpt of which appears below, provides more detail. -- DAR
From https://www.forbes.com/sites/andrewjosuweit/2018/01/17/student-loan-changes-you-need-to-know-for-2018-and-beyond/#11d9ebe6ba51 :
As we head into 2018, changes could be coming to student loans that could impact your borrowing beyond the coming year. Here’s what to watch out for:
Student Loan Rates Could Rise Again
In December, the Federal Reserve raised its Funds rate, and three rate hikes are expected in 2018. On top of that, the London Interbank Offered Rate (LIBOR), on which most private student loan interest rates are based, continues its rise. The LIBOR ended 2016 just under 1.00%, and as of December 15, 2017, the rate was at 1.61%.
Private student loans follow what’s happening with the Federal Reserve’s benchmark rate and LIBOR. On top of that, when setting federal student loan rates, members of Congress rely, in part, on what’s happening in the market and with 10-year Treasuries, which are also adding upward pressure on interest rates.
Even though they just raised rates for the 2017-18 academic year, there’s a possibility that our representatives will give them a bit of a further boost for 2018-2019. And, of course, continued increases in market rates means heftier interest rates on private student loans.
The Prosper Act Could Impact Student Loans In 2019 And Beyond
What you really have to watch for, though, is the passage of the Promoting Real Opportunity, Success and Prosperity through Education Reform (PROSPER) Act.
Unlike many of the pieces of student loan legislation that often languish and die in committee, the PROSPER Act has a chance of being passed, thanks to the fact the bill also includes long-awaited reform of the Higher Education Act (HEA) of 1965, which hasn’t been reauthorized since 2008.
If not reauthorized, the HEA is automatically extended for a year. Work has been done on the issue, but nothing has managed to pass both the House of Representatives and the Senate in a decade. If the PROSPER Act does clear Congress in 2018 (as currently written), here are some of the changes you can expect to see, starting in 2019:
Taking The “Subsidized” Out Of Subsidized Federal Loans
Right now, the government pays the interest on some federal loans while borrowers are in school, during the grace period (usually the first six months after graduation), or during certain deferments. This program is based on need. However, if the PROSPER Act passes, no federal loans — no matter the need of the student — will be subsidized.
A Catholic Church report discusses Credit Default Swaps -- as in "The Big Short"
The recent report from the Catholic Church is consistent with recent comments from the Pope: Banking is not necessarily immoral, but ethical standards are relevant. Government engagement is required to avoid ethical abuses. The Catholic Church report does not mention Barry Lynn, Tim Wu, or Simon Johnson by name, or explicitly refer to the book "The Big Short." But there is some similarity among them in opposing unregulated greed by financial industry people as a source of economic and social harm. DAR
Excerpt from “‘Oeconomicae et pecuniariae quaestiones’. Considerations for an ethical discernment regarding some aspects of the present economic-financial system” of the Congregation for the Doctrine of the Faith and the Dicastery for Promoting Integral Human Development, 17.05.2018,
found at http://press.vatican.va/content/salastampa/en/bollettino/pubblico/2018/05/17/180517a.html
26. Some financial products, among which the so called “derivatives”, are created for the purpose of guaranteeing an insurance on the inherent risks of certain operations often containing a gamble made on the basis of the presumed value attributed to those risks. At the foundation of such financial instruments lay contracts in which the parties are still able to reasonably evaluate the fundamental risk on which they want to insure.
However, in some types of derivatives (in the particular the so-called securitizations) it is noted that, starting with the original structures, and linked to identifiable financial investments, more and more complex structures were built (securitizations of securitizations) in which it is increasingly difficult, and after many of these transactions almost impossible, to stabilize in a reasonable and fair manner their fundamental value. This means that every passage in the trade of these shares, beyond the will of the parties, effects in fact a distortion of the actual value of the risk from that which the instrument must defend. All these have encouraged the rising of speculative bubbles, which have been the important contributive cause of the recent financial crisis.
It is obvious that the uncertainty surrounding these products, such as the steady decline of the transparency of that which is assured, still not appearing in the original operation, makes them continuously less acceptable from the perspective of ethics respectful of the truth and the common good, because it transforms them into a ticking time bomb ready sooner or later to explode, poisoning the health of the markets. It is noted that there is an ethical void which becomes more serious as these products are negotiated on the so-called markets with less regulation (over the counter) and are exposed more to the markets regulated by chance, if not by fraud, and thus take away vital life-lines and investments to the real economy.
A similar ethical assessment can be also applied for those uses of credit default swap (CDS: they are particular insurance contracts for the risk of bankruptcy) that permit gambling at the risk of the bankruptcy of a third party, even to those who haven’t taken any such risk of credit earlier, and really to repeat such operations on the same event, which is absolutely not consented to by the normal pact or insurance.
The market of CDS, in the wake of the economic crisis of 2007, was imposing enough to represent almost the equivalent of the GDP of the entire world. The spread of such a kind of contract without proper limits has encouraged the growth of a finance of chance, and of gambling on the failure of others, which is unacceptable from the ethical point of view.
In fact, the process of acquiring these instruments, by those who do not have any risk of credit already in existence, creates a unique case in which persons start to nurture interests for the ruin of other economic entities, and can even resolve themselves to do so.
It is evident that such a possibility, if, on the one hand, shapes an event particularly deplorable from the moral perspective, because the one who acts does so in view of a kind of economic cannibalism, and, on the other hand, ends up undermining that necessary basic trust without which the economic system would end up blocking itself. In this case, also, we can notice how a negative event, from the ethical point of view, also harms the healthy functioning of the economic system.
Therefore, it must be noted, that when from such gambling can derive enormous damage for entire nations and millions of families, we are faced with extremely immoral actions, it seems necessary to extend deterrents, already present in some nations, for such types of operations, sanctioning the infractions with maximum severity.
Uber press release: No more forced arbitration in sexual misconduct cases
Perhaps the most offensive use of forced arbitration and confidentiality requirements involves sexual misconduct actions. Uber has responded to public campaigns on these topics by changing its announced policies. DAR
Excerpt:
First, we will no longer require mandatory arbitration for individual claims of sexual assault or sexual harassment by Uber riders, drivers or employees.
Arbitration has an important role in the American justice system and includes many benefits for individuals and companies alike. Arbitration is not a settlement (cases are decided on their merits), and, unless the parties agree to keep the process confidential, it does not prevent survivors from speaking out about their experience.
But we have learned it’s important to give sexual assault and harassment survivors control of how they pursue their claims. So moving forward, survivors will be free to choose to resolve their individual claims in the venue they prefer: in a mediation where they can choose confidentiality; in arbitration, where they can choose to maintain their privacy while pursuing their case; or in open court. Whatever they decide, they will be free to tell their story wherever and however they see fit.
Second, survivors will now have the option to settle their claims with Uber without a confidentiality provision that prevents them from speaking about the facts of the sexual assault or sexual harassment they suffered.
Confidentiality provisions in settlement agreements also have an appropriate role in resolving legal disputes. Often they help expedite resolution because they give both sides comfort that certain information (such as the settlement amount) will remain confidential. And frequently, survivors insist on broad confidentiality in order to preserve their privacy.
But divulging the details of what happened in a sexual assault or harassment should be up to the survivor, not us. So we’re making it clear that Uber will not require confidentiality provisions or non-disclosure agreements to prevent survivors from talking about the facts of what happened to them. Whether to find closure, seek treatment, or become advocates for change themselves, survivors will be in control of whether to share their stories. Enabling survivors to make this choice will help to end the culture of silence that surrounds sexual violence.
Third, we commit to publishing a safety transparency report that will include data on sexual assaults and other incidents that occur on the Uber platform.
We believe transparency fosters accountability. But truthfully, this was a decision we struggled to make, in part because data on safety and sexual assaults is sparse and inconsistent. In fact, there is no data to reliably or accurately compare reports against Uber drivers versus taxi drivers or limo drivers, or Uber versus buses, subways, airplanes or trains. And when it comes to categorizing this data for public release, no uniform industry standard for reporting exists today.
Making things even more complicated, sexual assault is a vastly underreported crime, with two out of three assaults going unreported to police.
But we decided we can’t let all of that hold us back. That’s why we’ve met more than 80 women’s groups and recruited advisors like Ebony Tucker of the National Alliance to End Sexual Violence, Cindy Southworth of the National Network to End Domestic Violence and Tina Tchen, one of the founders of the Time’s Up Legal Defense Fund and partner at Buckley Sandler LLP to advise us on these issues.
We’re working with experts in the field to develop a taxonomy to categorize the incidents that are reported to us. We hope to open-source this methodology so we can encourage others in the ridesharing, transportation and travel industries, both private and public, to join us in taking this step. We know that a project of this magnitude will take some time, but we pledge to keep you updated along the way.
Dara recently said that sexual predators often look for a dark corner. Our message to the world is that we need to turn the lights on. It starts with improving our product and policies, but it requires so much more, and we’re in it for the long haul. Together, we can make meaningful progress towards ending sexual violence. Our commitment to you is that when we say we stand for safety, we mean it.
Press release at https://www.uber.com/newsroom/turning-the-lights-on/
There there are just two relevant smartphone platforms left .
Devices running Android (85.9%) and iOS (14%) accounted for 99.9% of global smartphone sales to end users in 2017, according to market research firm Gartner. All other platforms, including former market leaders BlackBerry and Microsoft’s Windows Phone have been rendered completely irrelevant.See https://www.gartner.com/newsroom/id/3859963 (table 3)
Does that lack of competition raise competition/antitrust concerns? Of course. -- DAR
Internet connect speeds much slower than your carrier promised? Maybe your State AG can help: NY AG v. Charter Communications
NY's State AG sued carrier Charter Communications for failing to deliver promised internet communication speeds. In a recent slip opinion the Court allowed the suit to go forward. Here is an excerpt from the opinion:
Spectrum-TWC advertised specific Internet speeds, available in tiers ranging from 20 to 300 megabits per second (Mbps), and promised its subscribers that it would deliver such speeds in exchange for a fee, with higher fees for faster-speed tiers (id., ~~ 79-84). Spectrum-TWC assured subscribers not only that they could achieve the advertised speeds, but that subscribers were guaranteed "reliable Internet speeds," delivered "consistently," "without slowdowns," and otherwise without interruption (id., ~ ~ 83, 85-86). Spectrum-TWC assured subscribers that the promised speeds would be delivered anywhere in their homes, at any time, and on any number of devices, regardless of whether the subscriber connected by wire or wirelessly (see id.,~~ 74, 83, 89, 94-95)
According to the complaint, Spectrurn-TWC did not deliver the promised level of service (id., ,.rn 75-76, 80-83, 178-241 ). For many customers, the promised Internet speeds were impossible to attain because of technological bottlenecks for which Spectrurn-TWC was responsible. First, in early 2013, defendants determined (as a result of Internet speed tests conducted by the FCC) that the older generation moderns they leased to many of their subscribers were incapable of reliably achieving Internet speeds of even 20 Mbps per second (id., ,-r ,-r 9, 76, 101-177) (the Modern Failures). These failures date back to early in the Covered Period, and intensified when Spectrurn-TWC began to promise New York City subscribers faster speeds in connection with its MAXX upgrade, which was launched in 2014 (id., ,-r 78). These failures were not resolved by the company's modern "replacement" program, which was designed to result in many subscribers continuing to pay for promised speeds beyond the technical capabilities of their Spectrurn-TWC-provided moderns (id., ,-r ,-r 121, 146, 151, 159). Plaintiff alleges that, in fact, Spectrurn-TWC knew that the moderns it leased to many subscribers were "non-compliant," or incapable of delivering the speeds promised (id., ,-r,-r 76, 110-113, 169). Plaintiff alleges this failure affected 900,000 subscribers (id., ,-r 102).
Second, Spectrurn-TWC also failed to maintain its network as necessary to deliver the promised speeds (id., ,-r,-r 178-200) (the Network Failures). Plaintiff alleges that, although Spectrurn-TWC knew the precise levels of network congestion at which customers would be prevented from achieving the promised speeds, it deliberately hid and exceeded those congestion levels to save itself money (id., ,-r,-r 184-193).
Third, plaintiff alleges that, due to older or slower wireless routers it provided, and other technological limitations, Spectrurn-TWC knew that its subscribers could not achieve the same speeds wirelessly as through a wired connection (id., ,-r,-r 221-241) (the Wireless Failures).
Plaintiff asserts that Spectrurn-TWC's failure to deliver its promised Internet speeds is confirmed by the results of at least three independent tests of Internet speed: (1) a test used by the FCC to generate its annual "Measuring Broadband America" report; (2) a test used by Spectrurn-TWC to monitor speeds on its last miles of service; and (3) a test recommended by Spectrurn-TWC to its subscribers for testing Internet speeds (Complaint, ,-r,-r 196-213).
The slip opinion is here: https://cases.justia.com/new-york/other-courts/2018-2018-ny-slip-op-30253-u.pdf?ts=1519251428
The NY AG initial pleading is here: https://ag.ny.gov/sites/default/files/summons_and_complaint.pdf
Washington, DC has one of the highest per capita 911 calls for Emergency Medical Services (EMS) in the country, but a new program hopes to change that.
On April 19th, Washington, DC's EMS Department rolled out a new pilot program for handling non-emergency 911 calls. The goal of this program is to alleviate emergency room crowding and improve patient care. The “Right Care, Right Now” program will filter out non-emergency calls by redirecting them to a nurse triage line to assess the caller's symptoms. The hope is that the program will decrease the burden on the Emergency Medical system and reduce some of the overcrowding in local emergency rooms. This approach was adopted from some other jurisdictions' attempts to deal with the problem of how to handle non-emergency calls.
The medical director for Washington, DC EMS' system, Dr. Holman, explained, “About 25-percent of callers turn out to have lower acuity calls which could be better handled in an outpatient setting rather than an emergency department.” The nurse triage line will be tested for six months and is expected to route to a nurse 64 out of an estimated 500 emergency calls received daily.
DC Fire & EMS Chief Gregory Dean said that some non-emergency Medicaid callers will have appointments made for them at a clinic for treatment and would also be eligible for round-trip Lyft transportation in non-life-threatening situations.
The District has high hopes that the pilot program will work to improve care across the board, though some are skeptical of this new process as it is sometimes difficult to detect an emergency situation over the phone.
See https://www.washingtonpost.com/local/public-safety/nurses-will-be-in-dcs-911-center-in-latest-attempt-to-cut-emergency-call-volume/2018/04/18/6b40764c-4288-11e8-8569-26fda6b404c7_story.html?noredirect=on
NY Times pickup of lack of zoning restrictions in Hawaii lava flow risk areas: There have been three lava flows in the Leilani Estates area since 1790.
From the NYT article:
The most recent eruption near the Leilani Estates area was in 1955, before subdivisions were built in the area. The volcano had long been dormant, until its eruption forced villagers in the area to flee.
Lava flow after1790 eruption: [graphic showing lava flows in Leilani Estates area omitted]: 1840, 1955, 2018
Source: Historic lava flows from the United States Geological Survey | Note: Lava areas for 2018 are through May 10
The construction of Leilani Estates was approved in 1960, according to Daryn Arai, deputy planning director at the Hawaii County Planning Department, and about 1,600 people live in the neighborhood today. It’s a rural neighborhood that has offered relatively affordable homes, in contrast with Hawaii’s more expensive real estate on Oahu and Maui.
Despite the neighborhood’s position in an area where lava flows are most likely to occur on the island, there are no building restrictions, Mr. Arai said.
https://www.nytimes.com/interactive/2018/05/12/us/kilauea-volcano-lava-leilani-estates-hawaii.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=photo-spot-region®ion=top-news&WT.nav=top-news
Does Microsoft resist product repairs in order to promote product replacements that boost its sales?
Microsoft faces questions about how it handled the case of Eric Lundgren, facing 15 months in prison for duplicating freely available MS Windows restore software.
U.S. PIRG and iFixit noted the tough environment for repair and Microsoft’s role in other repair disputes, and called for Microsoft to come to the table to move repair forward.
Los Angeles – Microsoft is facing widespread criticism for the way it handled a dispute with recycling entrepreneur Eric Lundgren. Among the criticisms are that the company presented misleading testimony about the function of the software in question to increase the penalties—which is provided for free and can only be used to repair a computer with a valid Windows license. Microsoft’s testimony was the basis for the sentence.
The U.S. Public Interest Research Group (U.S. PIRG), a national advocacy organization which works to cut waste and advocate for repair, and iFixit, the world’s leading online repair manual, spoke out, noting other issues around with repair with Microsoft and other large tech companies, and calling for Microsoft to meet with advocates and discuss how repair can continue to move forward.
“Electronic waste is a rapidly growing problem and by far the best solution we have is repair and reuse,” said Nathan Proctor, Director of U.S. PIRG’s Right to Repair campaign. “Repair saves people money, extends the life of electronics and keep things off the scrap heap. Some 70 percent of the toxic waste produced now is electronic waste. But we face significant barriers to repair from a wide-range of large manufacturing companies, and that adds to how much waste we produce. Microsoft has a role to play in coming up with solutions, as one of the leading tech companies in the world.”
“I have a lot of friends at Microsoft, and know many people who have put in significant effort regarding their environmental record, but this was a setback,” said Kyle Wiens, CEO of iFixit.com. “We tried to broker a peace before this got out of hand. I like Microsoft and have a lot of respect for Satya Nadella, but their actions in this case were very discouraging. Across the board, recyclers are innovative and resourceful people who find that they can make more money repurposing hardware than shredding it. But they frequently run headlong into copyright issues. I’ve never seen tactics like those used by Microsoft in this case.”
The case against Mr. Lundgren is not the only example of Microsoft resisting repair. Microsoft lobbies against “Right to Repair” reforms which would give consumers and independent businesses access to tools, parts, manuals and diagnostics needed for repair.
Through the Entertainment Software Association, Microsoft and other gaming companies argue against changes to federal Copyright law to protect repair and address barriers to repair. And while some of their products are designed for serviceability, their Surface line is notorious for being almost impossible to repair.
The Surface’s glued-in battery design is so egregious that consumer protection legislators in Microsoft’s home state of Washington have discussed banning the practice altogether. iFixit recently awarded the Surface Laptop their lowest serviceability score ever, a 0 out of 10, for its completely unrepairable (and likely unrecyclable) design that both glues and welds the battery into the frame.
Furthermore, Microsoft has been one of the biggest offenders using illegal void if removed warranty stickers to prevent consumer repair. They were one of six companies that received letters from the FTC last month warning them to change the language in their warranties. Failure to comply could win them charges for “unfair or deceptive acts”.
“Companies have gotten too aggressive at pushing us to throw things away and buy new things. What we should be doing instead is reusing more, repairing more, and recycling the rest — ideas that Eric Lundgren has been pioneering,” added Proctor. “Microsoft has a chance to show they can be part of the solution, but they need to step up.”
“We welcome the chance to meet with Microsoft,” added Wiens.
U.S. PIRG has launched a petition calling for Microsoft to apologize and pledge to work with repair advocates moving forward.
From: https://ifixit.org/blog/10010/microsoft-eric-lundgren/
The District of Columbia prevailed before the DC Court of Appeals in its case against ExxonMobil, Capitol Petroleum Group, et al.; In February, 2018 the Court docket shows "Filed Stipulation To Dismiss Appeal and withdrawal of petition for rehearing en banc (Appellee Exxonmobil Oil Corporation)"
Excerpts from the Court's docket:
11/09/2016 Filed Argued before Associate Judge Thompson, Associate Judge Easterly, and Senior Judge Reid. (Catherine A. Jackson, Esq. for appellant District of Columbia) (Alphonse M. Alfano, Esq. for appellee Capitol Petroleum Group LLC, Anacostia Reality LLC, Springfield Petroleum Realty LLC) (Robert M. Loeb, Esq. for appellee Exxonmobil Oil Corporation, et al)
11/02/2017 Filed Reversed And Remanded by OPINION
11/13/2017 Filed Motion For Extension Of Time to File petition for rehearing en banc. (Appellee Exxonmobil Oil Corporation)
.
11/15/2017 Filed Motion For Extension Of Time to File petition for rehearing en banc (Appellee Anacostia Reality LLC, Appellee Capitol Petroleum Group LLC, Appellee Springfield Petroleum Realty LLC)Granted
11/21/2017 Filed Order Granting Appellees's Motion For Extension Of Time to File petition for rehearing en banc to November 30, 2017. (Appellee Anacostia Reality LLC, Appellee Capitol Petroleum Group LLC, Appellee Springfield Petroleum Realty LLC)
11/30/2017 Filed Petition For Rehearing En Banc (Appellee Exxonmobil Oil Corporation)
12/21/2017 Filed ORDERED that appellant, within 14 days from the date of this order, shall file a response thereto.
01/04/2018 Filed Motion For Extension Of Time to File response to the petition for rehearing en banc (Appellant)Granted
01/18/2018 Filed Motion For Extension Of Time to File Response to petition for rehearing en banc. (Appellant)Granted
01/26/2018 Filed Order Granting Appellant's Motions For Extensions Of Time to File a Response to appellees' petition for rehearing en banc to February 20, 2018.
02/14/2018 Filed Stipulation To Dismiss Appeal and withdrawal of petition for rehearing en banc (Appellee Exxonmobil Oil Corporation)
* * * *
Following is some explanatory language from the Appellate Court's opinion:
According to the District — and this is the gravamen of its complaint — “[t]he dealer franchise agreements, and later versions of these agreements” unlawfully “compel the independent retail dealers operating these stations to buy their Exxon-branded gasoline exclusively from – and at prices set by” Anacostia or Springfield or CPG. The complaint further alleges that Exxon continues to enforce the unlawful exclusive-supply requirement through its distribution agreements with Anacostia and Springfield, which “allow only one supplier to supply [Exxon-branded] gasoline to each Exxon-branded gasoline station in D.C.” As a result of the dealer-franchise and distribution agreements, the complaint alleges, the defendants/appellees “set the wholesale price[ ] paid for Exxon-branded gasoline in D.C.,” depriving retail dealers who sell Exxon-branded gasoline and “many thousands of consumers in D.C.” who purchase Exxon-branded gasoline in D.C. of “the benefits of competition in the wholesale supply of Exxon-branded gasoline.” The complaint asserts that independent retail Exxon stations cannot “purchase Exxon-branded gasoline at prices below the prices charged by” the Distributors. The complaint further asserts that of the thirty-one Exxon-branded gasoline stations in the District, all of which are owned by Anacostia or Springfield, twenty-seven are operated by independent retail dealer franchisees, all of which are subject to and restricted by the allegedly unlawful dealer-franchise and distribution agreements. According to the complaint, these independent franchisee-operated retail stations comprise about 25% of the gasoline stations in the District.
The complaint charges that the dealer-franchise agreements between the Distributors and independent retail service stations and the distribution agreements between Exxon and the Distributors (all of which the District asserts constitute “marketing agreements” as that term is defined in the RSSA) violate two provisions of Subchapter III of the RSSA: D.C. Code § 36-303.01 (a)(6) and (11). D.C. Code § 36-303.01 (a)(6) states that:
[No marketing agreement shall ․] [p]rohibit a retail dealer from purchasing or accepting delivery of, on consignment or otherwise, any motor fuels, petroleum products, automotive products, or other products from any person who is not a party to the marketing agreement or prohibit a retail dealer from selling such motor fuels or products, provided that if the marketing agreement permits the retail dealer to use the distributor's trademark, the marketing agreement may require such motor fuels, petroleum products, and automotive products to be of a reasonably similar quality to those of the distributor, and provided further that the retail dealer shall neither represent such motor fuels or products as having been procured from the distributor nor sell such motor fuels or products under the distributor's trademark[.]
D.C. Code § 36-303.01 (a)(11) states that “no marketing agreement shall” “[c]ontain any term or condition which, directly or indirectly, violates this subchapter.” The complaint asks for a declaration that defendants'/appellees' marketing agreements violate these provisions of District of Columbia law and for an injunction prohibiting enforcement of the agreements.
Is it wise to buy a Hawaiian house in Zone 1 for volcano risk?
It hasn't worked out well for some who live in Leilani Estates, one of the areas evacuated recently because of volcanic eruption. That includes a man interviewed on TV who said he moved to Hawaii from California to avoid fires.
It turns out that the US Geological Survey categorizes areas by volcano lava riskiness. Apparently government regulations permit people to buy into high risk areas, and people are attracted to buy because home prices are lower where risk is higher. On the other hand, its harder to get insurance or financing in high risk areas. Luckily for people who need financing to buy a high risk home, the Federal government apparently does offer a lending program through Rural Housing development. A local real estate broker posting explains it [see: http://www.koarealty.com/buying-property/lava-zones/ ] -- DAR
Lava hazard zones:
Here on the island of Hawaii Lava hazards are a real part of the journey. Hawaii island is comprised of active volcanoes and as that is a real fact there are important issues to consider when looking at purchasing real estate in areas that are at higher risk of the flow of lava. The United States Geological Survey has broken up the island in 9 zones commonly known as lava hazard zones, and labeled them 1-9. Zone 1 is considered the highest risk zone based upon and according to the degree of the risk of hazard, historical flows, and the geographical lay of the land. Zone 2 is also a high-risk zone based upon the same criteria. As the hazard zone number increases in number the degree of risk decreases. In such lava zone 9 is considered a zone of least risk.
When it comes to purchasing real estate in these high risk areas one needs to be aware of the risks that come with owning in these areas as well as the costs associated on a level related to lending and insurance, as well as to the actual physical risk factor associated.
When choosing to purchase real estate here on the island, many buyer’s are attracted to lava zones 1 and 2. This is in part due to the weather and scenic beauty but along with this we cannot deny the affordable prices. It is true, land located in the lava hazard zones 1 & 2 is typically less expensive than any other areas on Hawaii island. In fact, the district of Puna and the district of Kau; both areas designated with lava hazard zones 1 & 2; offer some of the most affordable land in ALL of the island chain. When making a decision to purchase in these areas one must be aware and consider these variables:
1. Limited insurers for homeowners insurance and hazard insurance.
Currently there is the Hawaii Property insurance Association that offers insurance on homes up to a value of $350,000.00. Any replacement value amount above and beyond $350,000.00 would be provided by Lloyds of London. Typically insurance premiums are higher than what one would see on a property outside of these high-risk zones.
2. Limited financing for residential purchases or construction loans.
In recent times many lending institutions have completely eliminated programs that they once had for financing in these risk zones. At current, the Federal government does offer a program through Rural Housing development.
As for conventional financing, most institutions are requiring a minimum of 20% down in order to lend on a property in either of these two high-risk zones.
Which subdivisions are in each lava hazard zone?East side, covering Hilo to the district of Puna the following are
District of PUNA:
Lava Zone 1
- Leilani Estates
- Kapoho (parts of it, not all — call for details)
- Kalapana Vacation Lots
- Royal Gardens
Where can YOU get more information?
Go to the experts by following this site.
http://hvo.wr.usgs.gov/hazards/lavazones/main.html
CRISPR gene-editing technology IP battles
CRISPR is a recent break-through technology that allows genes to be edited is a way that may potentially cure many illnesses with a genetic component. For example, blindness caused by retinitis pigmentosa might be curable by using CRISPR technology to fix the relevant genetic defect. It seems unfortunate that patent battles have developed which could cause scientists to compete in a commercial sense rather than coordinating research to accelerate scientific progress. The patent battles are going on now, but the article I've picked for your attention is an older one that provides a useful overview. What you see below is a brief excerpt, with a link to the original article. DAR
The battle to own the CRISPR–Cas9 gene-editing toolApril 2017
By Catherine Jewell, Communications Division, WIPO, and Vijay Shankar Balakrishnan, Science and Health Journalist
Millions suffer from devastating genetic disorders like cancer, muscular dystrophy, cystic fibrosis, sickle cell anaemia, Huntington’s disease and many others. Imagine the pain and suffering that could be avoided (not to mention the healthcare costs) if we could cure these diseases simply by rewriting the genetic code of patients. This is the promise of the CRISPR-Cas9 gene-editing technology.
Billed as the most exciting breakthrough in biomedical research since the dawn of genetic engineering in the 1970s, the CRISPR-Cas9 gene editing tool has huge scope to improve understanding of human and animal disease and its treatment (photo: iStock.com/cosmin4000).Billed as the most exciting breakthrough in biomedical research since the dawn of genetic engineering in the 1970s, the CRISPR-Cas9 gene-editing tool has huge scope to improve understanding of human and animal disease and its treatment. It has the potential to revolutionize medicine and agricultural research. The race to develop commercial applications of CRISPR-Cas9 in healthcare, agriculture and industry, however, has thrust the technology, its pioneers, the institutions they work for and a clutch of startups in which they are involved into a high-stakes legal battle over who actually invented it and when. The outcome will determine who controls the technology and where the highly lucrative economic benefits it promises to generate will flow.
The technology and how it came about:
Ever since Watson and Crick identified the DNA double helix, scientists have been searching for ways to better understand the role that DNA plays in the genetic make-up of living organisms. The CRISPR tool is a huge step forward. Compared to existing research tools, it offers a relatively quick, easy, reliable and cheap way to target and edit specific genetic sequences.
CRISPR stands for Clustered Regularly Interspaced Short Palindromic Repeats. It is a natural defence mechanism that allows bacterial cells to detect and destroy the viruses that attack them.
The CRISPR mechanism was first identified as a “general purpose gene-editing tool” in a scientific paper published by scientists Erik Sontheimer and Luciano Marrafinni from Northwestern University, Evanston, Illinois, USA in 2008. The scientists filed for a patent but their application was rejected because they were unable to reduce it to any practical application, Science’s Jon Cohen writes.
But CRISPR really began to create a buzz, with the publication in June 2012, of a scientific paper by Emmanuelle Charpentier, a French microbiologist then working at the University of Vienna and now at the Max Planck Institute for Infection Biology, Germany and Umeå University, Sweden, and Jennifer Doudna at the University of California, Berkeley, USA. Their paper outlined how CRISPR, with the help of an enzyme called Cas9, can be transformed into a tool to edit genes. Specifically, how CRISPR-Cas9 can be used to cut DNA in a test tube. They filed their first CRISPR-related patent application in May 2012. It is still under review.
Six months later, in January 2013, scientists at the Broad Institute of the Massachusetts Institute of Technology (MIT) and Harvard University, led by Feng Zhang, reported that they had found a way to use CRISPR-Cas9 to edit the cells of mammals, further fuelling interest in its potential to generate new and more effective medical treatments. The Broad researchers filed their first CRISPR-related patent application in December 2012 and paid for a fast-track review process. Eleven additional patent applications were filed to bolster the claim that they were the first to invent a CRISPR system to edit mammalian cells, Jon Cohen notes. In April 2014, the United States Patent and Trademark Office (USPTO) granted the Broad team a patent on their CRISPR technology.
Jennifer Doudna (top left) at the University of California, Berkeley, USA, and Feng Zhang (top right) at the Broad Institute of the Massachusetts Institute of Technology (MIT) and Harvard University, have each undertaken pioneering work in relation to CRISPR-Cas9. They and others are currently embroiled in a legal firestorm over who owns commercial or IP rights in the technology. (Photos: Keegan Houser/UC Berkeley and Justin Knight Photography).The battle for ownershipThe grant of the patent to the Broad team triggered a legal firestorm. Professor Jake Sherkow of the New York Law School characterizes it as “an absolutely humungous biotech patent dispute”.
The stakes are clearly very high. Whoever owns the commercial or IP rights to CRISPR-Cas9 has the potential to generate huge financial returns and to decide who gets to use it.
Each of the pioneering researchers and their respective institutions has a stake in a handful of start-ups which have attracted millions of investment dollars to translate CRISPR-Cas9 systems into new treatments for a broad range of genetic diseases. They include Intellia Therapeutics (UC Berkeley), Caribou Sciences (J. Doudna), CRISPR Therapeutics and ERS Genomics (E. Charpentier) and Editas Medicine (Broad Institute).
An analysis of the CRISPR-Cas9 commercial landscape by Science’s Jon Cohen reveals that a web of often overlapping licenses have already been granted by CRISPR startups for many applications in medicine, agriculture and industry.
Full article:http://www.wipo.int/wipo_magazine/en/2017/02/article_0005.html
AAI 19th Annual Conference "Antitrust at a Crossroads - Plotting the Course for the Next Decade"
DATE: JUNE 21, 2018
LOCATION: NATIONAL PRESS CLUB, WASHINGTON DCOn Thursday June 21, 2018, the American Antitrust Institute will host its 19th Annual Conference “Antitrust at a Crossroads: Plotting the Policy Course for the Next Decade.” Experts from law, economics, and policy will offer insight via four panels:
- Antitrust and Workers -- Agreements, Mergers, and Monopsony
As American workers struggle to navigate an economy characterized by increasing corporate concentration, experts have begun to focus greater attention on anticompetitive conduct in labor markets. This panel will explore applications of the antitrust laws to prohibit the exercise of buyer power that harms competition and suppresses wages and salaries. Among other things, panelists will discuss landmark civil cases challenging employer no-poaching and no-hiring agreements, the Department of Justice’s movement toward prosecuting naked wage-fixing and no-poaching agreements criminally, and recent scholarship addressing the role of merger enforcement in preserving buy-side competition. - Innovation and Antitrust — Sword or Shield?
Promoting innovation is widely recognized to be a critical, if not the most important, goal of antitrust law. In practice, however, harm to innovation is just as often used as a defense to antitrust claims, particularly where intellectual property rights are involved. This panel of experts will address several hot topics at the edge of this divide, including: antitrust claims involving product redesign and product hopping, developments in the Noerr-Pennington doctrine and sham litigation, the antitrust treatment of FRAND breaches and SSO rules, and the use of the potential competition doctrine as a means to protect nascent competition and promote innovation. - Vertical Merger Enforcement — Competitive Effects, Remedies, and Guidelines
Vertical merger proposals in key sectors such as telecommunications, media, agricultural biotechnology, and healthcare continue to pile up. Once a lower-profile area of enforcement, vertical mergers are now a hot topic that have generated debate over competitive effects and past remedies. This panel will take up three important, interrelated topics in vertical merger enforcement. Panelists will first discuss recent developments in framing theories of harm around bargaining leverage and exclusionary effects and anticompetitive coordination. In light of controversy in past vertical merger cases, panelists will then turn to how enforcement should address the question of effectiveness of conduct remedies. Finally, the panel will take up the question of whether more guidance on how the antitrust agencies will evaluate vertical mergers is warranted, through an update and/or formalization of the 1984 vertical merger guidelines. - Oyez! Antitrust and the Supreme Court
This term at the Supreme Court has been a busy one for antitrust cases and could be quite significant. The leading case, Ohio v. Amex, may have wide ramifications beyond its practical implications for credit-card merchant fees and two-sided markets. Fundamental antitrust issues of market definition and the operation of the rule of reason are at stake. Animal Science v. Hebei raises important questions involving international comity and export cartels. And Salt River v. Tesla indicates that the Court is poised to resolve a split in the circuits over the state-action doctrine. Our panel of leading Supreme Court advocates will address these cases and other antitrust developments at the Court, including potentially momentous cert petitions.
Registration Fees:
Early Bird (until May 18): $450
Government and Academic Rate: $15
AAI letter opposing "Smarter" Act modifying agency jurisdiction
AAI issued a letter opposing the SMARTER Act to the Ranking Member of the House Judiciary Committee, Jerry Nadler, and Ranking Member of the House Subcommittee on Regulatory Reform, Commercial and Antitrust Law, David Cicilline. The SMARTER Act proposes “[t]o amend the Clayton Act and the Federal Trade Commission Act to provide that the Federal Trade Commission shall exercise authority with respect to mergers only under the Clayton Act and only in the same procedural manner as the Attorney General exercises such authority.” AAI reviewed workload statistics compiled by the U.S. Department of Justice and Federal Trade Commission to examine whether the premise of the SMARTER Act is sound. The review indicates that the concerns of the bill’s sponsors are without foundation and that the SMARTER Act would not serve the interests of competition or consumers. The letter summarizes AAI’s analysis and findings.
Download AAI Letter Opposing SMARTER Act [ http://www.antitrustinstitute.org/sites/default/files/AAI%20Letter%20for%20Record_H.R.%205645_5.2.18.pdf ]
Bloomberg on exploitation of the elderly
Excerpt:
The total number of victims is increasing as baby boomers retire and their ability to manage trillions of dollars in personal assets diminishes. One financial services firm estimates seniors lose as much as $36.5 billion a year. But assessments like that are “grossly underestimated,” according to a 2016 study by New York State’s Office of Children and Family Services. For every case reported to authorities, as many as 44 are not. The study found losses in New York alone could be as high as $1.5 billion.
The U.S. Centers for Disease Control and Prevention drew attention to elder exploitation as a public health problem in a 2016 report, citing groundbreaking research two decades earlier by Mark Lachs. Now co-chief of the Division of Geriatrics and Palliative Medicine at Weill Cornell Medicine and New York-Presbyterian Hospital, Lachs says elder abuse victims—including those who suffer financial exploitation--die at a rate three times faster than those who haven’t been abused. It’s a “public health crisis,” he warns.
“I knew these crimes were killing people,” says Elizabeth Loewy, who directed the elder abuse unit at the Manhattan District Attorney’s Office. As her exploitation cases steadily rose to hundreds per year, she says, “so many family members told me, ‘I can’t prove it, but this killed him.’”
Full article: https://www.bloomberg.com/news/features/2018-05-03/america-s-elderly-are-losing-37-billion-a-year-to-fraud
California's press release: California and States Representing Over 40 Percent of U.S. Car Market Sue to Defend National Clean Car Rules
May 1, 2018
See https://oag.ca.gov/news/press-releases/california-and-states-representing-over-40-percent-us-car-market-sue-defend
Excerpt:
SACRAMENTO – Moving to curb toxic air pollution and improve car gas mileage, California Attorney General Xavier Becerra, California Governor Edmund G. Brown Jr. and the California Air Resources Board today announced that they are leading a coalition of 17 states and the District of Columbia in suing the U.S. Environmental Protection Agency to preserve the nation’s single vehicle emission standard.
“The evidence is irrefutable: today’s clean car standards are achievable, science-based and a boon for hardworking American families. But the EPA and Administrator Scott Pruitt refuse to do their job and enforce these standards,” said Attorney General Becerra. “Enough is enough. We’re not looking to pick a fight with the Trump Administration, but when the stakes are this high for our families’ health and our economic prosperity, we have a responsibility to do what is necessary to defend them.”
“The states joining today’s lawsuit represent 140 million people who simply want cleaner and more efficient cars,” said Governor Brown. “This phalanx of states will defend the nation’s clean car standards to boost gas mileage and curb toxic air pollution.”
Financial problems of new technology proton radiation medical treatment systems suggest that the market doesn't always correctly allocate resources
For years, health systems rushed enthusiastically into expensive medical technologies such as proton beam centers, robotic surgery devices and laser scalpels — potential cash cows in the one economic sector that was reliably growing. Developers got easy financing to purchase the latest multimillion-dollar machine, confident of generous reimbursement.
There are now 27 proton beam units in the U.S., up from about half a dozen a decade ago. More than 20 more are either under construction or in development.
But now that employers, insurers and government seem determined to curb growth in health care spending and to combat overcharges and wasteful procedures, such bets are less of a sure thing.
The problem is that the rollicking business of new medical machines often ignored or outpaced the science: Little research has shown that proton beam therapy reduces side effects or improves survival for common cancers compared with much cheaper, traditional treatment.
If the dot-com bubble and the housing bubble marked previous decades, something of a medical-equipment bubble may be showing itself now. And proton beam machines could become the first casualty.
“The biggest problem these guys have is extra capacity. They don’t have enough patients to fill the rooms” at many proton centers, said Dr. Peter Johnstone, who was CEO of a proton facility at Indiana University before it closed in 2014 and has published research on the industry. At that operation, he said, “we began to see that simply having a proton center didn’t mean people would come.”
Sometimes occupying as much space as a Walmart store and costing enough money to build a dozen elementary schools, the facilities zap cancer with beams of subatomic proton particles instead of conventional radiation. The treatment, which can cost $48,000 or more, affects surrounding tissue less than traditional radiation does because its beams stop at a tumor rather than passing through. But evidence is sparse that this matters.
And so, except in cases of childhood cancer or tumors near sensitive organs such as eyes, commercial insurers have largely balked at paying for proton therapy.
“Something that gets you the same clinical outcomes at a higher price is called inefficient,” said Dr. Ezekiel Emanuel, a health policy professor at the University of Pennsylvania and a longtime critic of the proton-center boom. “If investors have tried to make money off the inefficiency, I don’t think we should be upset that they’re losing money on it.”
Investors backing a surge of new facilities starting in 2009 counted on insurers approving proton therapy not just for children, but also for common adult tumors, especially prostate cancer. In many cases, nonprofit health systems such as Maryland’s partnered with for-profit investors seeking high returns.
Companies marketed proton machines under the assumption that advertising, doctors and insurers would ensure steady business involving patients with a wide variety of cancers. But the dollars haven’t flowed in as expected.
Indiana University’s center became the first proton-therapy facility to close following the investment boom, in 2014. An abandoned proton project in Dallas is in bankruptcy court.
California Protons, formerly associated with Scripps Health in San Diego, landed in bankruptcy last year.
A number of others, including Maryland’s, have missed financial targets or are hemorrhaging money, according to industry analysts, financial documents and interviews with executives.
From https://khn.org/news/as-proton-centers-struggle-a-sign-of-a-health-care-bubble/?utm_campaign=KHN%3A%20First%20Edition&utm_source=hs_email&utm_medium=email&utm_content=62610060&_hsenc=p2ANqtz-__oPaRRQbRgimaO9tY0aAr0CXq4FUiDbftmnl6HOdmdxv43-WsRmzkvSPvfIzsJktuXQIabIKJqEYahL5t1zNyp5-euQ&_hsmi=62610060
DCCRC Joins 132 Groups Urging SEC Not to Facilitate Forced Arbitration
133 organizations including DCCRC, sent a letter [ https://secureoursavings.com/wp-content/uploads/2018/04/SEC-Sign-on-Letter-Forced-Arbitration.pdf] urging the U.S. Securities and Exchange Commission (SEC) to stand by its mission and longstanding policy of empowering and protecting American investors, including retired servicemembers, first responders, and teachers, by safeguarding their right to join together to hold law-breaking corporations publicly accountable in a court of law.
In recent months, Chairman Clayton has fueled speculation about a dramatic policy shift at the SEC that would threaten the security of hardworking Americans’ retirement savings and gut their legal rights by allowing publicly traded corporations to use forced arbitration clauses against their investors. These “rip-off clauses” would force investors to give up their most effective tool to fight back against securities fraud that could decimate their savings – class action lawsuits.
The letter reads in part:
“Investors rely on the SEC to promote market integrity and deter and detect fraud. But the SEC cannot fulfill this role on its own. Private shareholder lawsuits serve as an essential supplement to Commission action…Recent high-profile examples of securities fraud illustrate the devastating effect this would have. In enforcement actions against Enron, WorldCom, Tyco, Bank of America and Global Crossing, for example, the SEC recovered penalties and fees totaling $1.8 billion, while private securities class actions were able to recover $19.4 billion for defrauded shareholders – more than ten times as much.”
In addition to the letter, more than 40 national and state-based organizations, led by the Consumer Federation of America, Public Justice, and the American Association for Justice, have joined together to form the Secure Our Savings (SOS) Coalition to keep up pressure on SEC leadership.
Susan Crawford on the problems of a T-Mobile/Sprint merger
Excerpt from article in Wired:
The problem is not just that we’d have three instead of four wireless giants in the US, though that’s certainly a major issue. An even bigger threat to the consumer is what would happen next. As I see it, a Sprint/T-Mobile combination would inevitably end up being a wholesale partner for our giant cable companies (Comcast and Spectrum). The resulting business deals would allow those behemoths to neatly control many segments—wired, wireless, prepaid, post-paid—of the stagnant and expensive connectivity marketplace in America. That isn’t a future we should want.
Full article: https://www.wired.com/story/the-case-against-the-t-mobile-sprint-merger/
Philip Marsden on "Hipster" antitrust -- a European perspective
Marsden is Professor of Competition Law and Economics at the College of Europe, Bruges and Senior Director for Case Decision Groups at the Competition & Markets Authority, London.
Here is an excerpt from the concluding part of Marsden's article:
In many fast-moving and high tech markets, consumer engagement and data are key. It thus makes sense to divert loud but vague populist calls for action into joined-up assessments of how these markets work. Consumer law plays a crucial role here. So often we see consumer enforcement complementing competition enforcement, and vice versa. The complement is natural, since in both we are making sure that consumers can trust markets and helping them know that what they’re seeing is what they’re getting.
Online reviews, for example, bolster competition as people can make more informed choices, but this only works if reviews are trustworthy. Making sure that businesses abide by consumer protection law, that they treat their customers fairly, and in ways that engender trust, helps to create a more competitive marketplace. Firms have to work harder to offer better products, across all the competitive variables.
A CALL FOR EVIDENCE: Competition authorities can adapt further too. Competition laws are designed to adapt – but this doesn’t necessarily mean entirely new rules are required. The evolutionary process starts with deepening our understanding of how markets work. Can authorities stimulate this understanding, rather than always being on the back foot, or being presumed to be defending our corner from hipster and political intrusion?
As evidence-based authorities, is there not something blindingly obvious we could contribute to the calls for us to do more? Two things come to mind: a call for evidence, and at the same time, an enhancement of the tools we have to analyze evidence. This year, at the CMA, we are encouraging more fundamental research into trust in markets. This would likely be highly interdisciplinary in nature and would seek to identify which market practices are most likely to be considered unfair and to undermine trust in markets. We could, for example, test perceptions of the fairness of a range of practices, including those that are not transparent or where the consumer does not feel in control; practices that require undue effort or transactions costs to secure a good deal or practices that involve extreme forms of price discrimination. We want to understand the drivers of trust and mistrust in markets and improve our understanding of the challenges facing vulnerable groups of customers who are at high risk of experiencing poor outcomes in markets.
This could all be with a view to informing case selection, diagnosis of problems and the development of remedies. At the same time, we need to improve our ability to assess the evidence we will receive. All competition authorities need highly skilled economics and remedies teams to understand and examine markets and business models. To address the knowledge gaps regarding the use of data, though the CMA is creating a Data and Digital Insights team to help us understand better how online markets work, the importance of data in these markets, what are the barriers to entry, what drives consumer behavior, and when the transparent nature of the Internet might increase the scope for dominance to become entrenched.
This should enhance our understanding of the digital economy and make sure our interventions and capabilities keep pace with the evolution of business models and practices. This welcoming of new evidence and the ability to assess it will of course influence a range of thinking within authorities, on markets, consumer work, mergers or even antitrust. Until then though, I will close with some arguments about why I feel it is incredibly important to hold the line and not let wooly, non-evidence based, populist influences affect antitrust law enforcement itself.
The full article is at https://www.competitionpolicyinternational.com/wp-content/uploads/2018/04/CPI-Marsden.pdf
This Start-Up Says It Wants to Fight Poverty. A Food Stamp Giant Is Blocking It
April 23, 2018. From https://www.nytimes.com/2018/04/23/technology/start-up-fight-poverty-food-stamp-giant-blocking-it.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=stream&module=stream_unit&version=latest&contentPlacement=8&pgtype=sectionfront Author Steve Lohr
Four years ago, Jimmy Chen left a lucrative perch as a product manager at Facebook to found Propel, what he calls an “anti-poverty software company.”
In 2016, the Brooklyn start-up released a smartphone app that lets food stamp recipients easily look up how much money was left in their accounts, rather than call an 800 number or keep paper receipts. Today, one million food stamp participants use Propel’s app, and the start-up has added features like links to food coupons, healthy recipes, budgeting tools and job opportunities.
But in the last few months, the Propel app has been hobbled or become unavailable in many states, sometimes for weeks. Behind the slowdown is a big government contractor, Conduent, which runs the food stamp networks in 25 states, including New York, California and Pennsylvania. In those states, where 60 percent of Propel’s users live, Conduent maintains the database that Propel’s app uses to let people check their accounts.
The Propel-Conduent conflict offers a textbook case of a digital newcomer running into resistance from the old order.
Ford to cede sedan market to foreign imports
Protectionist efforts by the US government appear not to have saved Ford's sedan automobile business. Industry rumors suggest that Chevrolet will also abandon sedans.
Ford's recent financial report is at https://media.ford.com/content/dam/fordmedia/North%20America/US/2018/04/25/1q18-financials.pdf
The report includes the following language describing its strategy:
• Building a winning portfolio and focusing on products and markets where Ford can win. For example, by 2020, almost 90 percent of the Ford portfolio in North America will be trucks, utilities and commercial vehicles. Given declining consumer demand and product profitability, the company will not invest in next generations of traditional Ford sedans for North America. Over the next few years, the Ford car portfolio in North America will transition to two vehicles – the best-selling Mustang and the all-new Focus Active crossover coming out next year. The company is also exploring new “white space” vehicle silhouettes that combine the best attributes of cars and utilities, such as higher ride height, space and versatility.
In Walmart’s home town
By Don Allen Resnikoff
Recently I visited Walmart’s home town, Bentonville, Arkamsas. It is where Sam Walton operated a small five and dime store that was the forerunner of his enormous Walmart retail chain.
The Walton legacy in Bentonville is a strong one, and there are many who will admiringly tell you the story of Sam Walton as a humble and innovative entrepreneur who succeeded because of ingenuity, hard work, and good ability to work with people.
Sam’s autobiography was on the bookshelf of the Bentonville bed and breakfast where my wife and I stayed. It reinforces the very American story of Sam Walton’s success achieved from humble beginnings.
The autobiography, written with a professional co-author shortly before Sam Walton’s death (Sam Walton:Made in America:My Story, 1992, Doubleday), includes some rebuttal of complaints about Walmart as a bad corporate citizen. Part of the defense is that Walmart disrupted the retail business in the same positive way that A&P once disupted the grocery business: It brought large scale efficiencies to a business that had been small scale and inefficient. The result benefited consumers.
The autobiography argues that Walmart did not have the advantage of artificial barriers to competition, so competitors have been free to challenge Walmart. Kmart, Sears, and others have been serious competitors, but fell by the wayside because of self-inflicted management problems.
The autobiography is written in a popular style and addressed to a largely admiring audience, so the rebuttal of complaints about Walmart is limited. Of course it does not address more recent complaints of critics like Barry Lynn, who point to the low wages paid by Walmart to employees, as well as low wages paid to employees by Walmart suppliers. Barry Lynn argues that Walmart causes an array of problems, including use of market power to degrade the quality of products provided by Walmart suppliers.
Whatever the complaints made about Walmart, the Sam Walton legacy includes transforming Bentonville from a rural backwater to a model of small town living. Many middle class people live in the Bentonville area, some of whom are either Walmart employees or employees of suppliers that work with Walmart and do business in Bentonville. In 1950 Bentonville was a shabby small town, but now its small town square is almost Disneyland perfect, surrounded by prosperous businesses and attractive residences, many in spruced-up vintage buildings. We had dinner at a restaurant on the square that offered an interesting menu at prices just a bit lower than similar upscale Washington, D.C. restaurants.
The town adjoins the Crystal Bridges development, an extensive park-like area of great beauty that contains the Crystal Bridges Art Museum. Walton largesse allows the museum admission to be free. Exhibits are beautifully curated in a manner reminiscent of the National Galleries in Washington DC, and tend to be grouped by socially relevant themes. For example, an exhibit shown in cooperation with the Tate Museum focuses on art by black artists relevant to black political issues.
The elegance of the architecture of the Bentonville town-park-museum complex sponsored by the Walton family stands out in comparison with nearby areas like Springdale, where Tyson operates its chicken plants. Springdale is close to areas of great natural beauty, but the Bentonville level of integration of town and open space and attractive visiting spots is lacking. Interestingly, because of Tyson there are substantial areas in Springdale where nearly all residents are Spanish speaking and primarily of Mexican descent. Points of interest in Springdale include the Tyson’s company store, and some great small Mexican food stands and restaurants.
Further reading: A 201l article about Crystal Bridges Museum and the Walton heir who is the museum’s moving force: https://www.newyorker.com/magazine/2011/06/27/alices-wonderland
PS: By way of full disclosure, I made several purchases at the Walmart Neighborhood Store on the main square in Bentonville. Purchases included a bottle of wine, a roasted half chicken for a picnic, and a few other items. I paid by credit card. On the last stay of my stay in Bentonville I received an email from Walmart inviting me to be an occasional paid secret shopper for the company and provide reports about store conditions. I have not accepted.
Posted by Don Allen Resnikoff
Southwest Airlines sought more time last year to inspect jet-engine fan blades like the one that snapped off during one of its flights Tuesday in an accident that left a passenger dead.
The airline opposed a recommendation by the engine manufacturer to require ultrasonic inspections of certain fan blades within 12 months. Southwest said it needed more time, and it raised concern over the number of engines it would need to inspect. Other airlines also voiced objections.
It wasn't until after Tuesday's accident that the Federal Aviation Administration announced that it will soon make the inspections mandatory. It is unclear how many planes will be affected by the FAA order. Airlines including Southwest say they have begun inspections anyway.
From http://www.omaha.com/news/nation/southwest-airlines-sought-more-time-for-engine-inspections/article_383c4093-b2c7-5b1d-ba1a-be5e90442e36.html
FCC opens process to step up offensive on Chinese companies Huawei, ZTE
18 APR 2018
The Federal Communications Commission (FCC) launched a consultation process on a proposal to block smaller operators from using government funds to purchase equipment and services from vendors deemed a national security risk.
The move, announced in a statement, comes after FCC chairman Ajit Pai confirmed in a briefing last month [ https://www.mobileworldlive.com/featured-content/home-banner/fcc-moves-to-ban-vendors-deemed-security-threats/ ] that the regulator had prepared a draft document outlining laws to restrict operators from using money in the FCC’s $8 billion Universal Service Fund (USF) to purchase equipment from vendors on a ban list.
Such a move forms part of a wider offensive instigated by the US government, stepping up regulations against Chinese vendors Huawei and ZTE. This week, the US Department of Commerce banned US companies from selling components to ZTE [ https://www.mobileworldlive.com/featured-content/top-three/us-clamps-down-on-zte/ ], while Huawei’s efforts to establish a foothold in the US have also been thwarted.
Operators accessing the USF tend to be the country’s tier two and three operators, which target rural parts of the US. The country’s big four operators (AT&T, Verizon, Sprint and T-Mobile US) are already barred from using ZTE and Huawei equipment.
Feedback
The FCC said it is now seeking comment on the proposal to prohibit the use of government funds, stating it “alone cannot safeguard our networks from these threats”.
Comments are being sought on “a number of issues”, including: how best to implement the proposal going forward; what types of equipment and services should be covered by the rule; how the FCC can identify, and USF recipients learn, which suppliers are covered by the proposed rule; and the cost and benefits of the move.
FCC commissioner Jessica Rosenworcel said in a statement that she would vote to approve the proposal as it supports Congress’ concerns “about the potential for supply chain vulnerability to undermine national security”.
She added communications networks also face “other security threats that we cannot continue to ignore”.
Credit:https://www.mobileworldlive.com/featured-content/home-banner/fcc-opens-process-to-step-up-offensive-on-huawei-zte/
A looming trade war between the United States and China has put Qualcomm, one of America’s largest technology companies, squarely in the middle of the battlefield.
A major supplier in both China and the United States, the San Diego-based chip maker has long managed to play the trading relationship between the world’s two largest economies to its advantage. But an escalating trade battle over which country will dominate the technologies of the future is now threatening Qualcomm’s business and its growth.
On Monday, Qualcomm lost the ability to export semiconductors [ https://www.nytimes.com/2018/04/16/technology/chinese-tech-company-blocked-from-buying-american-components.html ] to one of its biggest customers after the United States banned Chinese telecom equipment maker ZTE Corporation from purchasing American technology for seven years.
In China, Qualcomm’s plan to acquire NXP Semiconductors, a critical part of its growth strategy, has been stalled by a prolonged antitrust review, a move critics see as Chinese retaliation for President Trump’s aggressive trade moves.
The White House, which has already threatened tariffs on more than $150 billion in Chinese goods, is preparing new restrictions on Chinese investments in the United States and could limit American partnerships with Chinese firms abroad. Such a move could place further restraints on American companies with advanced technology, like Qualcomm, General Electric and Boeing, as they seek to form overseas partnerships. It would also likely incite more retaliation from the Chinese.
On Tuesday, the administration advanced a new rule
[ https://www.nytimes.com/2018/04/17/technology/china-huawei-washington.html ] that would limit the ability of Chinese telecommunications companies, including Huawei, one of Qualcomm’s competitors and a customer, to sell their products in America.
Credit: https://www.nytimes.com/2018/04/18/us/politics/qualcomm-us-china-trade-war.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=rank&module=package&version=highlights&contentPlacement=1&pgtype=sectionfront
Short-term dockless rental bikes may be a public nuisance, and they may also be unprofitable
See http://www.sandiegouniontribune.com/business/energy-green/sd-fi-dockless-profitable-20180415-story.html#nws=true
The San Diego Journal article shows a a picture that may be worth a thousand words. It shows a big pile of dockless bikes on a street in Beijng China, where dockless bikes have been around for a while. DR
Mirosoft forces obsolescence of Office 2007
Microsoft may not be dominant in many things as it was 20 years ago, but it is still a major force in word processing and related MS Office Suite products, and some others. That is simply because the applications are in common use. Other cheaper software offerings offer similar capabilities, like Apache Open Office, which is free. But Open Office word processing is not so convenient when colleagues are using Word.
As I recently discovered when trying to make an old laptop useful, in late 2017 Microsoft used its market position to make Office 2007 applications obsolete, or at least much less useful. No matter that Word 2007 and other applications work quite well, and that people around the world use them. Microsoft wishes you to switch to newer alternatives, which are not cheap. Following is a media piece from October 2017 describing the MS policy. DR
* * *
Microsoft is urging customers still on Outlook 2007 and Office 2007 to upgrade as each of the products ran out of extended support on Tuesday.
That means no more security updates, feature updates, support or technical notes for the products, which Microsoft has supported for the past decade.
Microsoft wants customers on Office 2007 to plan to migrate to Office 365 in the cloud or to upgrade to Office 2016.
Office 2007 introduced Microsoft's "ribbon" interface that brought a series of tabbed toolbars with each ribbon containing related buttons.
For customers that have already use Office 365 that still use Outlook 2007, it will be important to upgrade by the end of October [2017], after which the product won't allow users to access Exchange Online mailboxes though the Office 365 portal.
"Customers who use Office 365 will have noted that there is a change to the supported client connectivity methods. Outlook Anywhere is being replaced with MAPI/HTTP. Outlook 2007 does not support MAPI/HTTP, and as such will be unable to connect," Microsoft highlights in a send-off note for the email client.
Come October 31, Microsoft will drop support for the RPC over HTTP protocol, also known as Outlook Anywhere, for accessing mail data from Exchange Online. The new protocol, MAPI over HTTP, is sturdier and supports multi-factor authentication for Office 365, according to Microsoft.
Microsoft didn't backport the protocol to Outlook 2007 as it would be past its extended support date by the time it cut off Outlook Anywhere.
Microsoft has a full list of Office 2007 products and their exact cut off dates here and Outlook 2007 here.
Unlike previous years Microsoft is not offering enterprise customers extended support for Office 2007 through its custom support contracts. The same goes for its other Office products, including Exchange Server; Office Suites; SharePoint Server; Office Communications Server; Lync Server; Skype for Business Server; Project Server and Visio.
Microsoft said demand for custom support has declined with greater adoption of Office 365.
See https://www.zdnet.com/article/microsoft-just-ended-support-for-office-2007-and-outlook-2007/
FDA's Gottlieb warns drug companies: don't game the generics system
From the speech at https://www.fda.gov/NewsEvents/Speeches/ucm584195.htm:
One of the practices that concerns me the most is when branded firms “game” the system: taking advantage of certain rules, or exploiting loopholes in our system, to delay generic approval – and thereby extend a drug’s monopoly beyond what Congress intended.
I see this clearly, for example, in steps branded companies sometimes take to make it hard, or altogether impossible, for generic firms to get access to the doses of the branded drug needed in order to complete bioequivalence studies that FDA requires for a generic approval.
Consider this: FDA requires generic firms to complete certain bioequivalence and bioavailability studies as a condition of the approval of a generic drug. To do these studies, they need to purchase doses of the branded drug that they seek to copy, to prove that the generic copy performs the same way original medicine.
The generic companies are willing to go into the market and buy these branded doses at full market price. They’re not asking for a discount.
They’re just asking for the right to be able to buy the drug at its retail price, just like a pharmacy or a hospital can make these legal purchases.
But we know that branded companies sometimes adopt tactics to make it nearly impossible for the generic firms to accumulate the doses they need to run their studies. That’s a real concern of mine.
We have a system that relies on, and requires, the ability of generic firms to conduct certain studies for approval.
When drug manufacturers game the system in ways such as this, they upend the generic drug framework created by Hatch Waxman.
The effects of this gaming do not end within FDA or drug manufacturers. Medicare relies on this process working to help make sure its beneficiaries can get access to the benefits of low cost generics.
Patients depend on this system. So does innovation. I’ll say this plainly:
Our economic model, which rewards highly innovative drugs with the opportunity to hold monopolies for a limited period of time through patents and exclusivities, and to freely price their products to a measure of the value that a transformative drug offers, also depends on the generic approval process working as intended.
It depends on the ability to have vigorous competition once those patents and exclusivities have lapsed.
Our system would not have functioned so well for so long without this carefully crafted balance between access and innovation.
If innovators want the current structure to continue to work, but they actively prevent certain parts of the system from functioning as Congress intended, then at some point, they’ll find more advocacy for moving away from this incentive based model.
When the NHTSA tracked user compliance with auto safety recalls through Vehicle Identification Numbers (VIN), they found that just 61 percent of recalled vehicles get repaired.
Recall notices are typically sent out multiple times for a single recall over the course of 18 months.
“The results suggest a discrepancy between the good intentions of automobile owners and what they actually do when they receive a recall notice,” said Wayne Mitchell, Stericycle's Director of Automotive Solutions.
Traditional outreach methods may be failing when it comes to recalls. Only 46 percent of respondents stated they'd gotten between one and four auto recall notices, while 37 percent claim to have never received any.
“This is another example where communication techniques come into play,” said one commenterl. “A multichannel approach – including emails, text messages, and outbound calls – has been proven to raise repair rates, and it may be even more beneficial among millennials.”
From https://www.autocreditexpress.com/blog/new-survey-suggests-car-owners-don-t-act-on-recall-notices/
Editor's note: GM recently pointed out that State inspection systems could require inspections on cars subject to safety recalls, but that most States don't do it.
From foodtruckoperators.com: DC food truck owners object to new system for assigning prime city locations
April 13, 2018
The D.C., Maryland and Virginia Food Truck Association has sent a letter to the Department of Consumer and Regulatory Affairs in Washington, D.C., stating its opposition to a change in the way the department decides which trucks get the best spots in the city.
The new policy limits every food truck business — no matter how many trucks it operates — to one lottery entry to win the prime locations.
When some of those businesses called DCRA to find out why policy change was made, they were informed that the regulations were changed this month to prevent multitruck businesses from entering more than one truck in the lottery, according to the letter.
The association claims the policy discourages growth in the food truck segment. It also claims that the policy discriminates against one group of small businesses in favor of another group; that there are better ways for the department to address the problems it has identified; and that the manner in which the policy was implemented violates the Administrative Procedure Act.
From American Antitrust Institute
Class Action Issues Update April 2018
The American Antitrust Institute seeks to preserve the effectiveness of antitrust class actions as a central component of ensuring the vitality of private antitrust enforcement. As part of its efforts, AAI issues periodic updates on developments in the courts and elsewhere that may affect this important device for protecting competition and consumers. This update covers developments since our Fall 2017 update.
Read More [http://r20.rs6.net/tn.jsp?f=001SBHRRBBZpuze4VAFXhDTWGToZVNxfRtPrB4pRm0s0Medt3gF_B2_RPZ65esmwohl5lsWX1y4C3sH8um18xz8XlQDZU3t6SYyKlsRa8uQER1EJh-igsLO9mdUBf_4MqVtQV18uHch_UU4nN5mBqmzBsxXcqGBnRPNMmIMoPcJu4XsEuxyvI3uqOYXddIzP9Ay104ZoYkbP6vngKOeo_aGmMA4Pdem9wCU_QKuIumWEQ6ieIZ-zCtT3Q==&c=icU7QXSchHojBit5pWmgYayxIngHWmvvmeDqB_CNfDtaBAglFjPzZw==&ch=ueZhcgcTX3ii2Ygr7EPlkjzNrMCxSGCCq0r8VyrEq5aHBltJtwnjDw== ]
AAI Highlights Need to Realign Merger Remedies With the Goals of Antitrust
In a white paper released today "Realigning Merger Remedies with the Goals of Antitrust," [ http://r20.rs6.net/tn.jsp?f=001SBHRRBBZpuze4VAFXhDTWGToZVNxfRtPrB4pRm0s0Medt3gF_B2_RPZ65esmwohlSTZdBtBcPItEGaYw3O-ViC6Swe0Rp8BJd3tmBMIXc1Cb5-f58ZoCafawGvVv8QLANi4Sjrr7YIien3vw9I2a4OnpDLRvDRtyBu1oKaPlku2GXL5tuD-VI9cIEQte9DyuY0LXtxVduiD93NiBS3TmCZ6IIxJQP6xaEQkimrLx7_lTVtzbCbz5NiEbcWxzaYFWDjroRjR-_ZlKmdixqc0VQA==&c=icU7QXSchHojBit5pWmgYayxIngHWmvvmeDqB_CNfDtaBAglFjPzZw==&ch=ueZhcgcTX3ii2Ygr7EPlkjzNrMCxSGCCq0r8VyrEq5aHBltJtwnjDw== ] the American Antitrust Institute makes the case for why remedies policy may be at an important inflection point. The paper notes that we do not yet know the full extent to which rising concentration, slowing rates of startups, and widening inequality gaps are the product of the lax antitrust enforcement that has prevailed in U.S. for three decades. But as the story continues to unfold, it remains clear that merger enforcement should be high on the antitrust agenda.
Read More [ http://r20.rs6.net/tn.jsp?f=001SBHRRBBZpuze4VAFXhDTWGToZVNxfRtPrB4pRm0s0Medt3gF_B2_RPZ65esmwohlSTZdBtBcPItEGaYw3O-ViC6Swe0Rp8BJd3tmBMIXc1Cb5-f58ZoCafawGvVv8QLANi4Sjrr7YIien3vw9I2a4OnpDLRvDRtyBu1oKaPlku2GXL5tuD-VI9cIEQte9DyuY0LXtxVduiD93NiBS3TmCZ6IIxJQP6xaEQkimrLx7_lTVtzbCbz5NiEbcWxzaYFWDjroRjR-_ZlKmdixqc0VQA==&c=icU7QXSchHojBit5pWmgYayxIngHWmvvmeDqB_CNfDtaBAglFjPzZw==&ch=ueZhcgcTX3ii2Ygr7EPlkjzNrMCxSGCCq0r8VyrEq5aHBltJtwnjDw== ]
The text of Zuckerberg's Facebook mea culpa testimony to Congress is here:
https://www.politico.com/story/2018/04/09/transcript-mark-zuckerberg-testimony-to-congress-on-cambridge-analytica-509978
Towns cracking down on GPS app shortcuts; do apps risk legal liability when shortcuts cause harm?
- UPI.comhttps://www.upi.com/Towns-cracking-down-on-GPS-app.../4341517446997/
From the article:
When larger thoroughfares clog with heavy traffic, GPS apps like Waze, Google Maps and Apple Maps often will reroute drivers.
In the town of Leonia, N.J., a town with a population of just under 10,000 about a quarter-mile from the George Washington Bridge, a new ordinance went into effect there in January leveling a $200 fine against non-resident drivers who use the town as a shortcut.
"They should stay on the highway," resident Carlos Gomez told WCBS-TV in New York. "Why bother us?" Leonia Mayor Judah Zeigler said he hopes the legislation will inspire the app makers to remove the city's side streets from their rerouting algorithms.
"They will do that once this legislation takes effect," he said.
But with Google Maps, at least, those roads won't be removed from the apps so much as restrictions will be factored in.
"Municipalities and agencies responsible for managing roads and reducing traffic are free to take measures according to their individual needs (e.g. speed humps, changing speed limits, adding traffic lights)," a Google representative told UPI. "Google Maps will then strive to reflect that reality completely and accurately in our map model. And our automated routing optimization algorithm will inherently take those parameters into account in every route created in Google Maps."
Editor note: Does Google Maps and Wayz (now owned by Google) risk legal liability when the suggested shortcuts are dangerous and cause damage? See the report at https://www.cbsnews.com/news/los-angeles-baxter-street-accidents-waze-traffic/ showing accidents and damage caused by GPS induced shortcuts
From Open Markets Institute: Amazon poses many grave threats to the wellbeing of the American people
Editor's note: In the discussion and reading list that follows, OMI presents arguments that Amazon is a monopolist. The OMI discussion and many of the items on the reading list are controversial for some experienced antitrust enforcers. Some experienced antitrust enforcers feel it is painting with too broad a brush to say that the solution to Google, Facebook, and Amazon market power is a return to the politically popular antitrust enforcement spirit of an earlier day. Some enforcers take exception to antitrust approaches they see as more political than practical. They see politically oriented antitrust as ignoring antitrust enforcement principles that have won important cases in the Courts. For example, much recent antitrust enforcement has focused on concepts of "consumer welfare," with good results. My own opinion (for which I take full responsibility) is that there is room for OMI style politically oriented or popular antitrust to coexist with the more traditional sort of analysis that the USDOJ or private enforcers must use when they take cases to court. I see OMI as a force for good in the spirit of Barry Lynn, educating the public to the problems often caused by too-big companies. DR
The corporation was built to monopolize multiple markets vital to the functioning of our society and democracy. It uses its power in ways that harm the interests of workers, entrepreneurs, authors, musicians, and innovators, as well the public at large and communities from coast to coast. At Open Markets we began to shine a light on Amazon’s power a decade ago. As the following list of articles by our team and close allies details, over those years we helped Americans better understand the structure of Amazon and the nature of its power.
A steadily growing list of political leaders is speaking out against Amazon and its monopolies. This includes senators Elizabeth Warren (D-MA), Marco Rubio (S-FL), Bernie Sanders (D-VT), Cory Booker (D-NJ), and Orrin Hatch (R-UT). It also includes Representatives Keith Ellison (D-MN), Ro Khanna (D-CA) and many other members of Congress. Unfortunately, in recent years, antitrust law enforcers in the Department of Justice and the Federal Trade Commission not only ignored the pressing need to act, they sometimes used their power in ways that actually made Amazon more powerful.
During the last presidential campaign, then-candidate Donald Trump also began to target Amazon’s monopoly. He usually did so while also targeting the Washington Post, which has provided vitally important oversight of his candidacy and Administration, and which is personally owned by Amazon CEO Jeff Bezos. Until last week, the President’s comments had little practical effect. But when he began to threaten to use his power to raise the postal rates Amazon pays to deliver its packages, the corporation’s stock price fell suddenly and sharply.
At OMI we condemn the President’s targeting of specific newspapers and corporations in the strongest terms. Such comments are a threat to the rule of law. They are a threat to the freedom of the press. They have no place in the United States.
By the same reasoning, it is also vital that law enforcers and policymakers across America – at both the Federal and state levels – continue to move swiftly to address the clear and present threats posed by Amazon. To choose to ignore Amazon’s great and fast-growing threat to the American economy and the wellbeing of the American people – because Donald Trump verbally overstepped his constitutional bounds – obviously also amounts to a threat to the rule of law.
At OMI, we believe it is time for leaders in Congress to step up and fulfill their constitutional duty to provide a clear check on this Administration and thereby protect the integrity of America’s antimonopoly law enforcement regimes.
Recommended Articles for Understanding Amazon
- Lina Khan, Amazon is a 21st-century railroad: Anti-trust expert, CNBC (2018)
- Stacy Mitchell, Amazon Doesn’t Just Want to Dominate the Market—It Wants to Become the Market, The Nation (2018)
- Matt Stoller, The Return of Monopoly, The New Republic (2017)
- Lina Khan, Amazon Bites Off Even More Monopoly Power, The New York Times (2017)
- David Dayen, The 238 Attempted Bribes of Amazon Should Be Illegal, The New Republic (2017)
- Lina Khan, Amazon's Antitrust Paradox, Yale Law Journal (2017)
- Stacy Mitchell and Olivia Lavecchia, How Amazon’s Tightening Grip on the Economy Is Stifling Competition, Eroding Jobs, and Threatening Communities, Institute for Local Self-Reliance (2016)
- Daniel Kolitz, Is Amazon Evil and Am I Evil for Using It?, Gizmodo(2016)
- David Streitfeld, Accusing Amazon of Antitrust Violations, Authors and Booksellers Demand Inquiry, The New York Times (2015)
- Lina Khan, What everyone’s getting wrong about Amazon, Quartz(2014)
- Frank Foer, Amazon Must Be Stopped, The New Republic (2014)
- Barry C. Lynn, The Real Bad Guy in the E-Book Price Fixing Case, Slate(2012)
- Barry C. Lynn, Killing the Competition, Harpers (2012)
California lawsuit says Toyota Prius cars have defects in the intelligent power modules (IPMs)
By David A. Wood
, CarComplaints.com February 5, 2018 — A Toyota Prius intelligent power module (IPM) recall and warranty extension weren't good enough for a California driver who filed a lawsuit against the automaker.
According to the lawsuit, 2010-2016 Toyota Prius cars have defects in the hybrid systems that cause the cars to stall, including while traveling at highway speeds.
The lawsuit references a 2014 Toyota warranty extension (ZE3) for about 711,000 model year 2010-2014 Prius cars nationwide. The extension involves the intelligent power module (IPM) located inside the inverter assembly and covers failure of the IPM and other internal inverter components potentially damaged by IPM failure.
This condition is indicated by diagnostic trouble codes P0A94, P324E, P3004 or P0A1A.
If any of those codes exist, Toyota says various warning lights will illuminate and the car will enter fail-safe mode, also called limp-home mode.
To qualify for the warranty extension, Prius owners must have had repairs made under a 2014 IPM recall.
Toyota recalled nearly 700,000 model year 2010-2014 Prius cars in 2014 because of the intelligent power modules (IPMs) with sensors that can become damaged by high temperatures.
As mentioned in the warranty extension, the recall described warning lights activating and the Prius going into limp-home mode. Toyota also said the hybrid system could completely shut down and cause the Prius to stall.
The recall, which began in March 2014, saw Toyota dealers update software for the motor/generator control and hybrid electronic control units. For a vehicle that had already experienced a failure of the inverter before the software update, the dealer replaced the inverter assembly.
The plaintiff says Toyota's previous actions didn't solve the IPM problems because the automaker wanted to save money on parts, and the software Toyota used allegedly did nothing but cause more problems.
According to the plaintiff, the software update affected the ability of the cars to accelerate properly. Calling the Toyota Prius recall a "sham," the plaintiff says drivers, occupants and others on the roads are at risk because the automaker took the cheap way out.
The California lawsuit also alleges replacing the IPM can cost thousands of dollars and replacing one bad module with another faulty IPM does nothing to help the car.
Included in the proposed class-action are current and former California owners and lessees of 2010-2016 Prius cars who paid their own money related to the intelligent power modules.
The Toyota Prius IPM lawsuit was filed in the Los Angeles County Superior Court of California - Jevdet Rexhepi, et al., v. Toyota Motor Sales USA Inc.
The plaintiff is represented by Beasley, Allen, Crow, Methvin, Portis, & Miles PC, Cuneo Gilbert & LaDuca LLP, DiCello Levitt & Casey, and Fazio Micheletti LLP.
CarComplaints.com has complaints submitted by owners of the Toyota Prius cars named in the IPM lawsuit.
Analysts criticize Apple Pay nag, call it ‘antitrust behavior’
Excerpt from CPI on April 3, 2018, from WSJ article [https://www.competitionpolicyinternational.com/author/nancy-2/ ]
Apple is prompting users of its iPhone to enroll in Apple Pay. Critics said the strategy may give rivals some opportunity against the tech giant. Analysts and user-interface experts are criticizing this describing it as as “antitrust behavior.”
The prompts to enroll in Apple Pay are tied to the iPhone’s most recent operating system update. Users who do not enter their credit card information for Apple Pay upon setting up their phones will see a red circle that denotes incomplete setup. Some users also get notifications that stop only after entering the data.
Roger Kay, an analyst with Endpoint Technologies Associates, compared Apple Pay setup badges and notifications to Microsoft, bundling its Internet Explorer browser with Windows in the 1990s—a strategy the Justice Department successfully sued to stop on antitrust grounds saying it hurt rivals. “They used to have actual behavioral remedies and say you can’t do this,” Mr. Kay said.
The WSJ said only 34% of iPhone users link their cards to Apple Pay upon setup, with 18% having used the function in the past 90 days.
[DAR comment: the analogy to MS bundling is interesting, but arguably a stretch.]
Walmart's press release on new MoneyGram wire transfer service
Walmart Changes the Game Again with New Global Wire ServiceWalmart2World Offers Low Flat Fees to Send Money Anywhere in the World – Fast
BENTONVILLE, Ark. – WEBWIRE – Tuesday, April 3, 2018
Four years ago, Walmart changed the money transfer game with the introduction of Walmart2Walmart – a domestic money transfer service that offered dramatically lower costs that has since saved customers nearly $700 million in fees. Now, with MoneyGram International, Walmart is bringing its game-changing model to the global wire service market, with the launch of Walmart2World.
“We think sending money should cost the same regardless of where you send it; that’s why we’ve designed a brand new global wire service to send money to 200 countries with a consistently low fee,” said Kirsty Ward, vice president, Walmart Services. “There are millions of people sending money around the world to help loved ones with everyday needs or in times of emergency. Walmart2World, Powered by Moneygram helps customers get money to family and friends across the world in minutes, and the new low fees mean more of their hard-earned cash goes where it’s needed most.”
Scheduled to launch in all of Walmart’s 4,700 U.S. stores this month, three key features differentiate Walmart2World from other global wire service offerings:
- Unique Pricing Structure: Wherever you are in the United States, and to wherever you are sending money, the new, low fees for Walmart2World are the same – $4 to send up to $50, $8 to send $51 to $1,000, and $16 to send $1,001 to $2,500. This is unlike other international transfer services that change the fee to transfer money based on where sender and/or receiver are located.
- Highly Competitive Exchange Rates: Walmart is committed to ensuring customers receive a more competitive foreign exchange rate when transferring money using Walmart2World. The new Walmart2World low fees, combined with these great exchange rates deliver incredible value for international sends.
- Delivery Within Minutes to Worldwide Network: Compared to other international wire services that can take up to three days, Walmart2World will deliver funds in 10 minutes or less, whether the receiver opts to pick up the money at any one of MoneyGram’s agent locations in 200 countries, or an international bank or mobile wallet account.
In addition to saving money, customers using Walmart2World can also save time by using Mobile Express Money Services in the Walmart App. After a quick, one-time set-up, customers initiate their transfer from the Walmart App, and once at the store, fast-track through the Mobile Express Lane to quickly complete their transaction. Receipts and transaction details are saved electronically, helping to make future transactions even faster and easier.
Trump tweet seen as boost for Sinclair deal
By MARGARET HARDING MCGILL and JOHN HENDEL | 04/02/2018 05:47 PM EDT 4/5/2018
From - POLITICO https://www.politico.com/story/2018/04/02/trump-sinclair-merger-tweet-453014 3/7
President Donald Trump's tweet in support of Sinclair Broadcast Group leaves little question his administration will approve the conservative TV empire's bid for Tribune Media, according to the company's critics. Trump came to the broadcaster's defense after a viral video showing dozens of TV anchors at Sinclair-owned stations reciting the same Trump-like script bashing the media for spreading "fake news."
While the president didn't mention Sinclair's pending $3.9 billion acquisition of Tribune, opponents of the deal say Trump's comments send a message to regulators now reviewing the transaction. “If anybody didn’t understand that the green light was on for the Sinclair deal, I think it’s crystal clear now,” said Michael Copps, a former Democratic FCC commissioner who now serves as an adviser to public interest group Common Cause.
The Justice Department and the Federal Communications Commission are reviewing Sinclair’s bid to buy Tribune's stations, which would allow the company, known for injecting must-run conservative segments into local stations' programming, to reach nearly three out of every four households in the U.S.
US Chamber of Commerce criticizes White House attack on Amazon
By CPI on April 4, 2018 -- Full Content: PYMNTS [ https://www.pymnts.com/amazon/2018/chamber-of-commerce-criticizes-u-s-government-attack-amazon-trump-tweets/ ]
After President Donald Trump’s recent Twitter rants against eCommerce giant Amazon, the US Chamber of Commerce has criticized government officials for their attacks against American companies.
“It’s inappropriate for government officials to use their position to attack an American company,” said Neil Bradley, executive vice president and chief policy officer for the Chamber of Commerce, according to Reuters. “The U.S. economy is the world’s most powerful because it embraces the free enterprise system and the rule of law, whereby policy matters are handled through recognized policymaking processes. The record is clear: Deviating from those processes undermines economic growth and job creation.”
Trump criticized Amazon via Twitter on March 29, writing, “I have stated my concerns with Amazon long before the Election. Unlike others, they pay little or no taxes to state & local governments, use our Postal System as their Delivery Boy (causing tremendous loss to the U.S.), and are putting many thousands of retailers out of business!”
He followed up those comments a few days later, tweeting, “While we are on the subject, it is reported that the U.S. Post Office will lose $1.50 on average for each package it delivers for Amazon. That amounts to Billions of Dollars.”
Trump’s comments come after an Axios report revealed that the president is apparently “obsessed” with Amazon and has wondered out loud if the government could go after the company from an antitrust or competition standpoint.
NYT: Trump's public demeaning undermines US companies
Excerpt from https://www.nytimes.com/2018/04/03/us/politics/trump-amazon.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region®ion=top-news&WT.nav=top-news
President Trump once accused Verizon of making “a STUPID deal” for AOL. He ridiculed Coca-Cola as “garbage” — but said he would keep drinking it. He called both H&R Block and Nordstrom “terrible.” He said Sony had “really stupid leadership” and described executives at S&P Global, a financial firm, as “losers.”
Before and after he became president, Mr. Trump attacked tech firms, military contractors, carmakers, cellphone companies, financial firms, drug companies, air-conditioner makers, sports leagues, Wall Street giants — and many, many media companies, which he has labeled “shameful,” “dishonest,” “true garbage,” “really dumb,” “phony,” “failing” and, broadly, “the enemy of the American people.”
Lately, Mr. Trump’s antibusiness rants have become particularly menacing and caused the stocks of some companies to plunge. His Twitter posts have carried with them the threat, sometimes explicit, that he is prepared to use the power of the presidency to undermine the companies that anger him.
The U.S. Chamber of Commerce, long a booster of Republican presidents, is not happy. “It’s inappropriate for government officials to use their position to attack an American company,” said Neil Bradley, the executive vice president and chief policy officer of the chamber. Mr. Bradley, who did not specifically name Mr. Trump, added that criticism of companies from politicians “undermines economic growth and job creation.”
Protect Democracy files amicus brief on political interference in law enforcement https://protectdemocracy.org/update/amicus-political-interference-law-enforcement/
From the Protect Democract statement:
Protect Democracy filed an amicus brief [https://www.scribd.com/document/373358295/US-vs-AT-T-BRIEF-OF-FORMER-DEPARTMENT-OF-JUSTICE-OFFICIALS-AS-AMICI-CURIAE-IN-SUPPORT-OF-NEITHER-PARTY ] in the USDOJ antitrust suit to block the AT&T/Time Warner merger. The brief was filed on behalf of a bipartisan group of former high-ranking DOJ officials, including former Nixon White House Counsel John Dean, former U.S. Attorneys Preet Bharara, Joyce Vance, and John McKay, and other former DOJ officials. Heidi Przybyla and Pete Williams at NBC reported on the brief late last night here [ https://www.nbcnews.com/politics/justice-department/top-attorneys-try-help-t-challenge-potential-trump-interference-n855036 ].
The brief is filed on behalf of neither party and takes no position on the underlying merits of the antitrust case. Rather, it explains that White House interference in law enforcement is likely unconstitutional in most circumstances. This principle applies generally, “President Trump’s claim to be able to direct federal law enforcement against specific parties is inconsistent with the Constitution.”
In the specific case of the AT&T/Time Warner merger, President Trump’s repeated attacks on CNN for perceived unfavorable coverage and his pledge, made when he was a candidate for president, to block the merger has created a perception—at least by some—that DOJ brought this case at the behest of President Trump in order to punish CNN. If so, that would amount to a constitutional violation of the highest order. The amicus brief asks the Court to allow further inquiry into the issue and, if it turns out that the president did intervene in the matter, to remedy the resulting constitutional violation.
We are also releasing a White Paper (along with an executive summary) [ https://protectdemocracy.org/independent-law-enforcement/grounded-in-the-constitution/ ]that describes the constitutional principles that prohibit political interference in law enforcement. As detailed in the white paper — and a related post on Lawfare — with the exception of certain narrow types of circumstances, it will likely conflict with the Constitution for the White House to intervene in the Justice Department’s handling of an enforcement matter involving specific parties. And if the White House intervention is based on personal or corrupted interests, such interventions will always be unconstitutional. So for example, it would be unconstitutional for the President or the White House to interfere with the Mueller investigation or to pressure the Justice Department to prosecute a political opponent.
Protect Democracy is also releasing a list of examples of White House political interference in law enforcement here.
This is part of Protect Democracy’s project to Protect Independent Law Enforcement.
President Harry Truman and limits on Presidential power to control the behavior of businesses
As people over the age of 85 may clearly recall, President Harry S Truman ordered the Secretary of Commerce on April 8, 1952, to seize and operate most of the country’s steel mills for the ostensible purpose of maintaining production of critical munitions. The Korean War required it, in the President's view.
Owners of the seized properties obtained a court injunction against the seizure, and an appeal of that injunction to the U.S. Supreme Court gave rise to one of the “great cases” in constitutional law, Youngstown Sheet & Tube Co. et al. v. Sawyer. (language drawn from Robert Higgs at http://www.independent.org/publications/article.asp?id=1394) The U.S. Supreme Court opinion is on line at https://supreme.justia.com/cases/federal/us/343/579/case.html#587
From the Youngstown opinion:
Nor can the seizure order be sustained because of the several constitutional provisions that grant executive power to the President. In the framework of our Constitution, the President's power to see that the laws are faithfully executed refutes the idea that he is to be a lawmaker. The Constitution limits his functions in the lawmaking process to the recommending of laws he thinks wise and the vetoing of laws he thinks bad. And the Constitution is neither silent nor equivocal about who shall make laws which the President is to execute. The first section of the first article says that "All legislative Powers herein granted shall be vested in a Congress of the United States. . . ." After granting many powers to the Congress, Article I goes on to provide that Congress may "make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof."
The President's order does not direct that a congressional policy be executed in a manner prescribed by Congress -- it directs that a presidential policy be executed in a manner prescribed by the President. The preamble of the order itself, like that of many statutes, sets out reasons why the President believes certain policies should be adopted, proclaims these policies as rules of conduct to be followed, and again, like a statute, authorizes a government official to promulgate additional rules and regulations consistent with the policy proclaimed and needed to carry that policy into execution. The power of Congress to adopt such public policies as those proclaimed by the order is beyond question. It can authorize the taking of private property for public use. It can make laws regulating the relationships between employers and employees, prescribing rules designed to settle labor disputes, and fixing wages and working conditions in certain fields of our economy. The Constitution does not subject this lawmaking power of Congress to presidential or military supervision or control.
It is said that other Presidents, without congressional authority, have taken possession of private business enterprises in order to settle labor disputes. But even if this be true, Congress has not thereby lost its exclusive constitutional authority to make laws necessary and proper to carry out the powers vested by the Constitution "in the Government of the United States, or any Department or Officer thereof."
The Founders of this Nation entrusted the lawmaking power to the Congress alone in both good and bad times. It would do no good to recall the historical events, the fears of power, and the hopes for freedom that lay behind their choice. Such a review would but confirm our holding that this seizure order cannot stand.
Here is part of what the Protect Democracy amicus brief in the AT&T/Times-Warner antitrust case [see prior posting] says about the Youngstowncase:
The Take Care Clause [of the Constitution] subjects the president to the rule of law. See Youngstown Sheet &Tube Co. v. Sawyer, 343 U.S. 579 (1952). In Youngstown, the Supreme Court held that the president lacked the power to effectively enact his own laws by taking over the nation’s steelmills during the Korean War. Justice Black began with the premise that “[t]he president’s power . . . must stem either from an act of Congress or from the Constitution itself.” 343 U.S. at585. Rather than taking care that the laws be faithfully executed, the president had become a law unto himself—and, as Justice Black explained, that conduct summoned up all “the fears of power and the hopes for freedom that lay behind” the decision to “entrust the law making power to theCongress alone in both good and bad times.” Id. at 589.
Justice Jackson’s famous Youngstown concurrence further bolsters the view that the Take Care Clause imposes constraints on presidential power. Justice Jackson rejected the argument that Article II’s Vesting Clause constitutes “a grant of all the executive powers of which the Government is capable.’” 343 U.S. at 640 (Jackson, J., concurring). . . . Justice Jackson further explained that any authority conferred by the Take Care Clause“ must be matched against words of the Fifth Amendment that ‘No person shall be . . . deprived of life, liberty, or property, without due process of law . . . .’ One gives a governmental authority that reaches so far as there is law, the other gives a private right that authority shall go no farther.” Id . at 646 (alterations in original). This approach envisions a president constrained by law and doubly checked by the right of private citizens to enforce the requirements of due process. These two provisions, Justice Jackson added, “signify . . . that ours is a government of laws, not of men,” and that “we submit ourselves to rulers only if under rules.” Id.
This posting is by Don Allen Resnikoff, who takes full responsibility for its content.
Hospitals fear that the potential merger between Walmart and Humana could significantly hurt their bottom lines.
Sources told The Wall Street Journal last week that Walmart, the nation's largest employer and retail giant, was in talks to purchase Humana. Walmart has dipped its toes into healthcare in the past, opening a series of primary care clinics in its stores.
A merger with Humana would accelerate the corporation's entry into the healthcare space, a prospect that's worrying to providers, according to an article from the WSJ. [ https://www.wsj.com/articles/hospitals-fear-competitive-threat-from-potential-walmart-humana-deal-1522587600 ] The deal "should be a concern to everybody in healthcare," Randy Oostra, CEO of Ohio-based health system ProMedica, told the publication.
Oostra said Walmart would likely join the retail healthcare options that are pulling patients away from outpatient care provided by traditional hospitals—which often helps cover the cost of more expensive inpatient services.
"What worries us is death by a thousand cuts," Oostra said. "Another deal and another deal."
The mega-merger between CVS and Aetna rang similar alarm bells for providers. If the deal goes through, CVS intends to expand its MinuteClinics to become a one-stop shop for patient needs including primary care, pharmacy services and vision care.
Hospitals haven't lowered costs enough to meet the prices offered by these retail clinics, which can make them a less attractive option for patients.
Retail healthcare is also a major threat to primary care providers, leading some PCPs to open their own walk-in clinics to stay competitive.
Another wrinkle in the potential Walmart-Humana deal that could worry providers is how Walmart currently operates its employee benefits, according to the WSJ. It has increasingly formed direct contacts with specific hospitals.
This practice, combined with Humana's infrastructure, could lead the combined entity to build employer health plans with narrow networks that leave many hospitals out in the cold. Geisinger Health System, for example, currently contracts with Walmart and is paid notably lower rates—but it attracts potential patients it might not otherwise, according to the article.
The CVS-Aetna merger and a similar deal planned between Cigna and Express Scripts have faced criticism
that they would be anticompetitive, and both are under scrutiny from lawmakers and the Department of Justice.
From: https://www.fiercehealthcare.com/hospitals-health-systems/walmart-humana-merger-hospital-finances-retail-healthcare-outpatient-care?mkt_tok=eyJpIjoiWkdVd1pHUmtZamd3WXpRMyIsInQiOiIxS2ZqSFNjXC9TNUlSRDc2Y01KZlRtTllmaTRPbGtjeFZ5Q1oyakNlRXRWMjYzVE1GcFdRS0tGYWxyMmdRSUVneE80Z1BuMVQ3b3I0d1RYVjlcL3RVK0d5cWd0TXJaeFVUMlwvTGNXUk9cL2lNUG9PNG9qM0Ywc3V4UHhIT0tGMVR5MDUifQ%3D%3D&mrkid=730008
Reporting from the NYT on the aftermath of the 2010 merger of Live Nation-Ticketmaster merger
The report highlights the limitations of behavioral remedies in vertical mergers.
https://www.nytimes.com/2018/04/01/arts/music/live-nation-ticketmaster.html
The Royal Opera House Gets Sued By Its Own Viola Player — for Hearing Damage
No, this isn’t an early April joke, but the editorial comment that the case is frivolous is owned by DMN, the source of the article. We don't offer an editorial comment, although your editor plays in amateur orchestras and has used ear stopples, particularly when sitting just behind the French horns. DR
Viola player Chris Goldscheider has successfully sued the Royal Opera House (ROH) in a case that takes frivolity to new heights. Goldscheider accused the venue of being liable for the hearing damage he sustained during a rehearsal six years ago.
Goldscheider cited the responsibility of ROH under UK Noise Regulations. He claimed to have suffered from “acoustic shock” while rehearsing Wagner’s ‘Die Walkure’ in 2012. This after sound levels of the performance reached 130 decibels.
Read the rest here.
When is regulation appropriate? Deaths linked to a common paint stripper chemical go back decades ...https://www.ecowatch.com/methylene-chloride-epa-health-risks-2553228197.html
Excerpt:
By Jamie Smith Hopkins
It might be surprising to learn that simply removing paint could be fatal, but the key ingredient in many paint-stripping products has felled dozens of people engaged in this run-of-the-mill task. In the waning days of the Obama administration, the U.S. Environmental Protection Agency (EPA) proposed to largely ban paint strippers containing the chemical methylene chloride so they would no longer sit on store shelves, widely available for anyone to buy.
What's happened since should be no shock to close observers of the Trump administration's pattern of regulatory rollbacks. The EPA, after hearing from both Americans in support of a ban and companies opposed to it, pushed back its timeline for finishing the rule to an unspecified date, saying it needed more time to weigh the issue.
Federal Judge pressures local Orange County CA officials to provide for homeless people
An agreement brokered by a federal judge to provide motel rooms to the 400 homeless people estimated to still be living next to the Santa Ana River received its final approval with unanimous votes from the county Board of Supervisors to ratify and implement the agreement. [The Court filing is at http://bit.ly/2EGLZDV ]
The agreement was the result of two straight days of morning-to-night pressure from U.S. District Judge David O. Carter for the county and attorneys for homeless people to quickly find a solution, after years of slow action in dealing with the growing number of homeless living along the riverbed.
Carter acted in response to a lawsuit challenging the county’s evictions of homeless people from the riverbed. He temporarily halted the evictions, and told the county he would allow them to clear the riverbed starting Tuesday morning – but only if they worked with the homeless people’s attorneys to find shelter for the people living there.
Under the agreement, the county will provide motel rooms for at least 30 days to those now living along the riverbed. People at the riverbed will have a choice of moving to a motel, leaving the riverbed, or facing arrest if they stay after the 9 a.m. Tuesday deadline.
Additionally, as part of the court-brokered deal, the county is working to add separate shelter for 300 to 400 people by erecting tents or other structures on county land and adding beds at existing shelters. The new space potentially could house people after their 30 days in motels
See https://voiceofoc.org/2018/02/plan-to-move-riverbed-homeless-to-motels-approved-by-oc-supervisors/
* * *
Subsequent articles note strong opposition to resettlement of the Orange County homeless people from local residents
See: https://www.wsj.com/articles/orange-county-was-set-to-house-the-homeless-and-there-was-a-popular-revolt-1522324800
How not to do antitrust policy:
Amazon shares fall after report Trump wants to curb its power
According to Reuters, Amazon.com Inc (AMZN.O) shares fell almost 5 percent on Wednesday, wiping more than $30 billion off its market value, after news website Axios reported that U.S. President Donald Trump is obsessed with the world’s largest online retailer and wants to rein in its growing power.
On Easter Sunday Trump tweeted hostile views about Jeff Bezos and Amazon.
The issue of Trump's personal intervention on antitrust or regulatory issues came up recently concerning AT&T/Time Warner:
As NBC News reported [ see https://www.nbcnews.com/politics/justice-department/top-attorneys-try-help-t-challenge-potential-trump-interference-n855036], Trump’s outspoken criticism of CNN and its coverage of his campaign and White House sparked concerns about potential White House influence on the AT&T/Time Warner deal. During a 2016 campaign rally, Trump said any AT&T-Time Warner deal is “a deal we will not approve in my administration.”
The DOJ says it brought the case through its antitrust division because it believes the deal will harm consumers and that it has nothing to do with the president’s personal griping about CNN.
A group of former USDOJ officials recently wrote that “President Trump’s claim to be able to direct federal law enforcement against specific parties is inconsistent with the Constitution.”
Late last month, a federal judge denied AT&T’s request for communications between the White House and the DOJ to determine if there was any inappropriate influence. The the former USDOJ attorneys quoted above insist the judge got it wrong, and have submitted a brief they hope will inform the AT&T/Time Warner trial.
This posting is by Don Allen Resnikoff, who takes full responsibility for its content.
Maurice Stucke says a few big tech companies holding our data is bad, and antitrust enforcement is the remedy:
Here Are All the Reasons It’s a Bad Idea to Let a Few Tech Companies Monopolize Our Data
MARCH 27, 2018
- Excerpt:
“It’s no good fighting an election campaign on the facts,” Cambridge Analytica’s managing director told an undercover reporter, “because actually it’s all about emotion.” To target U.S. voters and appeal to their hopes, neuroses, and fears, the political consulting firm needed to train its algorithm to predict and map personality traits. That required lots of personal data. So, to build these psychographic profiles, Cambridge Analytica enlisted a Cambridge University professor, whose app collected data on about 50 million Facebook users and their friends. Facebook, at that time, allowed app developers to collect this personal data. Facebook argued that Cambridge Analytica and the professor violated its data polices. But this was not the first time its policies were violated. Nor is it likely to be the last.
This scandal came on the heels of Russia’s using Facebook, Google, and Twitter “to sow discord in the U.S. political system, including the 2016 U.S. presidential election.” It heightened concerns over today’s tech giants and the influence they have.
That influence comes in part from data. Facebook, Google, Amazon, and similar companies are “data-opolies.” By that I mean companies that control a key platform which, like a coral reef, attracts to its ecosystem users, sellers, advertisers, software developers, apps, and accessory makers. Apple and Google, for example, each control a popular mobile phone operating system platform (and key apps on that platform), Amazon controls the largest online merchant platform, and Facebook controls the largest social network platform. Through their leading platforms, a significant volume and variety of personal data flows. The velocity in acquiring and exploiting this personal data can help these companies obtain significant market power.
Is it OK for a few firms to possess so much data and thereby wield so much power? In the U.S., at least, antitrust officials so far seem ambivalent about these data-opolies. They’re free, the thinking goes, so what’s the harm? But that reasoning is misguided. Data-opolies pose tremendous risks, for consumers, workers, competition, and the overall health of our democracy. Here’s why.
Why U.S. Antitrust Isn’t Worried About Data-opoliesThe European competition authorities have recently brought actions against four data-opolies: Google, Apple, Facebook, and Amazon (or GAFA for short). The European Commission, for example, fined Google a record €2.42 billion for leveraging its monopoly in search to advance its comparative shopping service. The Commission also preliminarily found Google to have abused its dominant position with both its Android mobile operating system and with AdSense. Facebook, Germany’s competition agency preliminarily found, abused its dominant position “by making the use of its social network conditional on its being allowed to limitlessly amass every kind of data generated by using third-party websites and merge it with the user’s Facebook account.”
We will likely see more fines and other remedies in the next few years from the Europeans. But in the U.S., the data-opolies have largely escaped antitrust scrutiny, under both the Obama and Bush administrations. Notably, while the European Commission found Google’s search bias to be anticompetitive, the U.S. Federal Trade Commission did not. From 2000 onward, the Department of Justice brought only one monopolization case in total, against anyone. (In contrast, the DOJ, between 1970 and 1972, brought 39 civil and 3 criminal cases against monopolies and oligopolies.)
The current head of the DOJ’s Antitrust Division recognized the enforcement gap between the U.S. and Europe. He noted his agency’s “particular concerns in digital markets.” But absent “demonstrable harm to competition and consumers,” the DOJ is “reluctant to impose special duties on digital platforms, out of [its] concern that special duties might stifle the very innovation that has created dynamic competition for the benefit of consumers.”
So, the divergence in antitrust enforcement may reflect differences over these data-opolies’ perceived harms.
Full article: https://hbr.org/2018/03/here-are-all-the-reasons-its-a-bad-idea-to-let-a-few-tech-companies-monopolize-our-data
States face challenge in curbing premiums after stabilization package fails
By Susannah Luthi | March 23, 2018
This week, Congress left states holding the baton in a lonely sprint to curb 2019 Obamacare premiums, with just a couple of months to get creative with legislation, waiver requests, and regulations before insurers file their rate requests.
After opposing Republican efforts to expand federal abortion funding prohibitions to Affordable Care Act cost-sharing reduction payments and other measures, Senate Democrats opposed the GOP-led stabilization package with its funding for CSRs and a $30 billion reinsurance pool. Without Democratic support, the measure was dropped this week from the $1.3 trillion omnibus spending bill, the last must-pass legislation of the year. To insurers' dismay, it isn't likely to come back.
Although their time and options are limited, state officials and policy analysts agree the best immediate opportunity to stem 2019 rate hikes lies in states seeking ACA Section 1332 waivers to set up reinsurance funds. Otherwise, premiums for ACA-compliant individual-market plans are expected to rise by about 30%.
But for the states, the challenge lies in the details as they race against the calendar. Carriers will begin filing their proposed rates as soon as May, and most state legislatures that remain in session have to wrap up their legislative business in April. The 1332 waiver required for a reinsurance fund must be approved by state legislatures.
Excerpt from http://www.modernhealthcare.com/article/20180323/NEWS/180329946?utm_source=modernhealthcare&utm_medium=email&utm_content=20180323-NEWS-180329946&utm_campaign=am
Tim Wu discusses Facebook as a regulatory recidivist
VC Roger McNamee says:
"Google, Facebook, Amazon are increasingly just super-monopolies, especially Google and Facebook. The share of the markets they operate in is literally on the same scale that Standard Oil had ... more than 100 years ago — with the big differences that their reach is now global, not just within a single country," he said on "Squawk Alley." https://www.cnbc.com/squawk-alley/
The New York Times editorial writers say:
"We must demand that legislators and regulators get tougher. They should go after Facebook on antitrust grounds. Facebook is by far the dominant social platform in the United States, with 68 percent of American adults using it, according to the Pew Research Center. That means Facebook can gobble up potential competitors, as it already has with Instagram, and crowd out upstarts in fields such as artificial intelligence and virtual reality. The Department of Justice should consider severing WhatsApp, Instagram and Messenger from Facebook, much as it broke up AT&T in 1982. That breakup unleashed creativity, improved phone service and lowered prices. It also limited the political power of AT&T." https://www.nytimes.com/2018/03/24/opinion/sunday/delete-facebook-does-not-fix-problem.html?action=click
Comments like these upset some experienced antitrust enforcers. The upset is caused by broad-brush suggestions that the solution to the size and behavior of Google, Facebook, and Amazon is a return to the antitrust enforcement spirit of the Teddy Roosevelt era. To some enforcers such broad-brush comments look more poliical than practical. The commenters ignore antitrust enforcement principles that have won important cases in the Courts. For example, much recent antitrust enforcement has focused on concepts of "consumer welfare," with good results.
It may be that there is no one-size-fits-all solution to problems that may be caused by the Google, Facebook, and Amazon giants. It may be that what is needed from law enforcers is the approach of a scientist studying the characteristics of a previously unknown creature. As a 20th century poet once pointed out, the right way to start a study of the biology of a previously unknown species of animal is to carefully study a specimen of the animal. The wrong way is to believe, like the medieval scholar Pliny, that general principles of animalism will lead to useful conclusions. (Pliny reasoned that since there were animals in Africa with two horns, and others with none, therefore there must also be one-horned Unicorns.)
Tim Wu seems to be in the school of studying particular industry specimens before suggesting regulatory solutions, if some of his comments about Facebook are an indicator.
Here is what he wrote about Facebook in 2015 in the New Yorker ( https://www.newyorker.com/business/currency/facebook-should-pay-all-of-us ):
Businesses we are paying with attention or data are conflicted. We are their customers, but we are also their products, ultimately resold to others. We are unlikely to stop loving free stuff. But we always pay in the end—and it is worth asking how.
When Tim Wu appeared on the PBS News Hour a few days ago, he said that the FTC has imposed a tailored regulatory solution on Facebook addressing privacy issues some years ago, and that the problem was in lack of Facebook compliance. He suggested that the relevance of Facebook's great size and scope of operations is simply that lack of compliance -- recidivism --- carries a high cost for the public.
See more of Wu's comments at https://www.pbs.org/.../mark-zuckerberg-promises-change-but-facebook-has- failed-to-follow-through-in-the-past
With regard to Tim Wu's point that Facebook is a recidivist in failing to comply with the 2011 FTC order, the following article provides a number of source documents concerning the FTC order:
https://epic.org/privacy/ftc/facebook/
This posting is by Don Allen Resnikoff, who takes full responsibility for its content
Increased privacy requirements looming for Facebook?
In interviews, Mr. Zuckerberg and Sheryl Sandberg, Facebook’s chief operating officer, seemed to accept the possibility of increased privacy regulation. See video at https://www.cnn.com/videos/cnnmoney/2018/03/22/zuckerberg-facebook-data-regulation-ac-sot.cnn
Zuckerberg: " I'm not sure we shouldn't be regulated . . . . The question is, what is the right regulation?"
It is not clear that Zuckerberg or Sandberg will like the regulation to come in the EU.In May, the European Union is instituting a comprehensive new privacy law, called the General Data Protection Regulation. The new rules treat personal data as proprietary, owned by an individual, and any use of that data must be accompanied by permission — opting in rather than opting out — after receiving a request written in clear language, not legalese. See https://www.eugdpr.org/key-changes.html A brief excerpt follows:
The aim of the GDPR is to protect all EU citizens from privacy and data breaches in an increasingly data-driven world that is vastly different from the time in which the 1995 directive was established. Although the key principles of data privacy still hold true to the previous directive, many changes have been proposed to the regulatory policies; the key points of the GDPR as well as information on the impacts it will have on business can be found below.
***
Consent
The conditions for consent have been strengthened, and companies will no longer be able to use long illegible terms and conditions full of legalese, as the request for consent must be given in an intelligible and easily accessible form, with the purpose for data processing attached to that consent. Consent must be clear and distinguishable from other matters and provided in an intelligible and easily accessible form, using clear and plain language. It must be as easy to withdraw consent as it is to give it.
Does the internet fringe teach some people that Jews control the weather?
A few days ago the Washington Post reported on a A D.C. lawmaker who responded to a brief snowfall by publishing a video in which he espoused a conspiracy theory that Jewish financiers control the climate. See https://www.washingtonpost.com/local/dc-politics/dc-lawmaker-says-recent-snowfall-caused-byrothschilds-controlling-the-climate/2018/03/18/daeb0eae-2ae0-11e8-911f-ca7f68bff0fc_story.html
The Post article on this bizarre incident (most politicians would be more politic) points out that the internet can infect people's thinking with weird conspiracy theories.
An article in the Examiner put it this way:
It is unclear what White, currently the youngest representative on the 13-member D.C. Council, meant by "climate control," or where he picked up this narrative. But as the Washington Post, which was the first to report the video, points out, fringe Internet users have falsely linked the Rothschilds to weather changes.
Established by another dynastic family, the Rockefeller Foundation runs an initiative called 100 Resilient Cities to help cities adapt to major challenges. Conspiracies have also centered around the Rockefellers.
White has reportedly mused aloud about supposed connections between the Rothschilds and climate change before. At a February working breakfast between the D.C. Council and Mayor Muriel Bowser, he asked the Bowser administration about links between the Rothschilds, the Rockefellers, the World Bank, and D.C.'s recently created Office of Resilience, according to a District official who was present.
Weird and offensive conspiracy theories preceded the internet, but it seems that fringe internet users help spread them around.
This posting is by Don Allen Resnikoff, who takes full responsibility for its content
Regulatory controversy over what makes a chicken egg organic
The U.S. Department of Agriculture finalized a plan under the Obama administration that required chickens laying organic eggs to have access to soil, not just porch enclosures attached to hen houses. But before the rule could be implemented under the Trump administration it was reversed, raising regulatory controversy, and litigation, over the legal meaning of "organic."
https://www.pbs.org/newshour/show/what-makes-eggs-organic-it-depends-on-who-you-ask
Mass. AG Healey announces investigation into Cambridge Analytica, the data
firm used by Trump campaign
- From The Boston Globe
https://www.bostonglobe.com/metro/2018/03/17/maura-healey-announces-investigation-into-data-firm-used-trump-campaign/Njq4PGzF1IQC3ahtVCW… 1/2
By Eric Moskowitz
Responding to reports that a data firm employed by the Trump presidential campaign improperly harvested information on 50 million Facebook users, Massachusetts Attorney General Maura Healey on Saturday launched a state investigation into the matter.
Citing a New York Times investigation into Cambridge Analytica — a British data-analysis outfit funded by New York billionaire Robert Mercer, a major underwriter of right-wing candidates and campaigns — Healey retweeted the story and announced the investigation Saturday afternoon.
“Massachusetts residents deserve answers immediately from Facebook and Cambridge Analytica,” Healey wrote on Twitter, leading it with the “#BREAKING” hashtag. “We are launching an investigation.”
The attorney general’s office confirmed by e-mail Saturday evening that they were opening acivil investigation and had been in touch with Facebook already to inform the social-media giant.
State investigators intend to learn more about what happened, when it happened, and whether Massachusetts residents were affected, Healey spokeswoman Emily Snyder said in the e-mail. The attorney general’s office will examine whether the reported breach violated Facebook policies while evaluating possible legal implications as well, she said.
Should CFIUS (Committee on Foreign Investment in the United States) be reformed?
The U.S. Government's Committee on Foreign Investment in the United State (CFIUS) reviews acquisitions, mergers and other foreign investments in the United States for national security risks. It recently and famously squelched the idea of a Qualcomm/Broadcom merger. It has taken similarly aggressive actions in the past. Reasons include protecting American technology companies like Qualcomm from aggressive competition from Chinese companies like Huawei.
There is a reason for CFIUS. Press reports indicate that the Chinese government keeps a tight reign on its companies. In February, the Chinese government seized Anbang Insurance, the owner of New York's Waldorf Astoria and other properties around the world. Chinese oil company CEFC is reportedly being constrained by the Chinese government because of its borrowing for foreign investments. The reasons for Chinese government constraints are not the point. The point is that Chinese companies appear to be subject to tight control by the Chinese Government.
CFIUS proceedings tend to be quick and lacking in transparency. The CFIUS process does not involve court review.
CFIUS market analysis can be superficial, as suggested by a recent Treasury letter to Qualcomm. The letter focuses on Qualcomm's role as a national champion and resource for the U.S. Government. The letter explains that “Qualcomm is a global leader in the development and commercialization of foundational technologies and products used in mobile devices and other wireless products. . . .” Further, that experience has “positioned Qualcomm as the current leading company in 5G technology development and standard setting.” The letter says that any diminishing of that role is a potential opening for China and, specifically, Huawei Technologies Co., a Chinese telecommunications-equipment maker that is also a big force in 5G. (The Wall Street Journal points out that Chinese companies, including Huawei, have increased their engagement in 5G standardization working groups as part of their efforts to build out a 5G technology, and that Huawei and Samsung are the main companies with 5G cell phone offerings.)
One reform suggested by Bert Foer in a paper he will present to a Waseda University conference in Japan is that CFIUS should allow USDOJ to complete its antitrust review before stepping in to consider national security issues. If, for example, USDOJ had been allowed to complete its review and blocked the merger of Qualcomm and Broadcom -- which seems quite possible--then CFIUS would need to take no further action. If USDOJ approved a merger, CFIUS could step in and have the benefit of a thorough antitrust oriented investigation and a factual record that could be relatively transparent. In Bert Foer's words:
Other countries have their own methods for bringing national security concerns into what would otherwise be antitrust investigations, assuring that, for better or worse, more than traditional microeconomic effects will be taken into account. The lack of transparency in these national security contexts can open the door for unfortunate decisions. One might suggest that it would be better policy to have the antitrust authority carry out a normal investigation and only utilize CFIUS if the authority has concluded there is no antitrust reason to stop it.
There is an underlying question about the relationship between CFIUS protectionist policies said to advance national security interests and usual considerations of competition policy, including antitrust. One view is that policies of national security and encouragement of domestic industry are very different from and entirely trump and preclude usual competition and antitrust policy concerns. A reason for that view is that competition policy may prefer international competition when national security concerns suggest protecting U.S. companies.
I prefer the view that competition policy is a relevant and useful complement to national security policy, and that antitrust expertise could be usefully brought to bear, as Bert Foer suggests, by having the USDOJ carry out the usual antitrust review before CFIUS steps in.
This posting is by Don Allen Resnikoff, who takes full responsibility for its content.
Competition policy concerns and the US move to a protectionist industrial policy for American tech companies like Qualcomm
Currently developing U.S. government policy linked to national security seeks to protect established American technology companies like Qualcomm from aggressive competition from Chinese companies like Huawei. For example, U.S. officials reportedly pressed AT&T not to distribute Huawei 5G cell phones, and AT&T complied. Huawei and and Samsung are identified by the Wall Street Journal as the principal
companies developing 5G technology for cell phones.
The Committee on Foreign Investment in the United State (CFIUS) reviews acquisitions, mergers and other foreign investments in the United States for national security risks. It recently and famously squelched the idea of a Qualcomm/Broadcom merger, and has taken similarly aggressive actions in the past. Reasons include protecting American technology companies like Qualcomm from aggressive competition from Chinese companies like Huawei.
Proposed legislation with bi-partisan support proposes expanding the jurisdiction of CFIUS. The legislation would give CFIUS jurisdiction over non-passive, minority position investments by a foreign person; also over joint ventures involving technology transfers in a foreign entity.
The CFIUS process does not involve court review. It does involve evaluation of competition in markets, as addressed in a recent Treasury letter to Qualcomm. As pointed out in a Wall Street Journal article, the letter says that “Qualcomm is a global leader in the development and commercialization of foundational technologies and products used in mobile devices and other wireless products, including network equipment, broadband gateway equipment, and consumer electronic devices.” Also, that experience has “positioned Qualcomm as the current leading company in 5G technology development and standard setting.” The letter says further that iQualcomm’s leadership role in the development of leading edge 5G technology is good for national security: “Qualcomm has become well-known to, and trusted by, the U.S. government. Having a well-known and trusted company hold the dominant role that Qualcomm does in the U.S. telecommunications infrastructure provides significant confidence in the integrity of such infrastructure as it relates to national security.” The letter says that any diminishing of that role is a potential opening for China and, specifically, Huawei Technologies Co., a Chinese telecommunications-equipment maker that is also a big force in 5G. The Wall Street Journal points out that Chinese companies, including Huawei, have increased their engagement in 5G standardization working groups as part of their efforts to build out a 5G technology.
A point that has gotten little public comment is the relationship between protectionist policies said to advance national security interests and usual considerations of competition policy, including antitrust. National security and encouragement of domestic industry may be seen as trumping competition and antitrust policy interests, but it does not follow that competition policy is irrelevant or that application of antitrust expertise would not be useful.
There is some analogy to U.S government policy toward banks following the 2008 financial markets. Banks were pressured by the government to merge, and thereafter were regulated with scant attention to competition policy or antitrust expertise. It may be reasonably argued that even in a financial crisis competition policy considerations and antitrust expertise should have been brought to bear. Similarly, today's strong concerns about national security and protection of domestic industry should not foreclose consideration of competition policy considerations and antitrust expertise.
Generally, competition policy concerns will push for encouraging healthy international competition, and encouraging domestic industry through R & D and other support, rather than attempting to discourage rivals.
****
Following is a Treasury letter that presaged the U.S. Government decision to block the Qualcomm/Broadcom merger, and describes the relevant competition between U.S. and Chinese companies:
https://www.qcomvalue.com/wp-content/uploads/2018/03/Letter-from-Treasury-Department-to-Broadcom-and-Qualcomm-regarding-CFIUS.pdf
Following is part of a discussion from the Reed-Smith law form web site of proposed legislation to expand U.S. government review of foreign financial invests in the interests of national security:
Proposed Legislation Would Expand CFIUS Jurisdiction Over Foreign Investment
Authors: Michael J. Lowell Jill Ottenberg Paula A. Salamoun
On November 8, 2017, a bipartisan bill was proposed in the Senate to “modernize and strengthen the process by which the Committee on Foreign Investment in the United State (CFIUS) reviews acquisitions, mergers and other foreign investments in the United States for national security risks.”1 Co-sponsored by Senators John Cornyn (R-TX), Dianne Feinstein (D-CA) and Richard Burr (R-NC), the Foreign Investment Risk Review Modernization Act (FIRRMA) is intended to “provide CFIUS with updated tools to address present and future security needs . . . [and] strengthen CFIUS by expanding its jurisdiction and moderniz[ing] its processes.” The legislative proposal follows a Senate hearing held in September before the Banking, Housing and Urban Affairs Committee, which sought to examine the CFIUS process and scope.
FIRRMA has been proposed as a means to address the “gaps in the current process [that] have allowed foreign adversaries to weaponize their investment in U.S. companies and transfer sensitive dual-use U.S. technologies, many of which have potential military applications.” FIRRMA comes at a time when there has been growing concern amongst Congress, the intelligence community, as well as the Trump administration, that the CFIUS process is outdated and in need of reform. Similar to Senator Cornyn’s concern, Secretary of Defense Jim Mattis has called the CFIUS process “outdated and overburdened”. The reform proposed by FIRRMA would serve to significantly alter the CFIUS process in a number of meaningful ways.
Background
CFIUS is an interagency organization that reviews inbound foreign investments for national security concerns, and advises the President on appropriate actions that may be necessary to suspend or prohibit foreign acquisitions, mergers, or takeovers which threaten to impair the national security of the United States. CFIUS has the authority to review all “covered transactions” for potential national security concerns. “Covered transaction” is a term of art defined by statute, and applies to any transaction that will result in “foreign control” of a U.S. business. A transaction will be found to result in foreign control of a U.S. business if the transaction will result in a foreign person or business having “power, direct or indirect, through the ownership of a majority or a dominant minority of the total outstanding voting interest in an entity, board representation, proxy voting, a special share, contractual arrangements, formal or informal arrangements to act in concert, or other means, to determine, direct, or decide important matters affecting an entity . . .” Under the current statutory construction governing CFIUS, a foreign person does not control an entity if it holds 10% or less of the voting interest in the entity and it holds that interest solely for the purpose of a passive investment.6 While the statute covering CFIUS does not define what constitutes a “national security concern,” it does include a list of factors that would contribute to a finding that a covered transaction has national security implications. These factors include, but are not limited to, whether the transaction will affect: national defense requirements; U.S. technological leadership in areas affecting national security; or U.S. critical technologies and infrastructure.
Under the current CFIUS process, parties to a covered transaction make a voluntary filing to begin CFIUS review of the transaction. CFIUS may also compel filings if it is determined that the transaction may pose a risk to national security. Following the filing of the initial notice, CFIUS will conduct an initial 30-day review, followed by an additional 45-day investigation period if it is determined that such an investigation is warranted. After the 45-day investigation, CFIUS may refer the transaction for a 15-day presidential review. The President makes the ultimate determination of whether to suspend or prohibit the transaction from proceeding. Even if CFIUS does not refer the transaction for presidential review, if it is determined that the transaction presents national security risks, CFIUS may impose mitigation measures as a condition of clearance.
FIRRMA Modifications to the CFIUS Process
If passed, FIRRMA will expand the scope of transactions that CFIUS has the authority to review, as well as alter the nature of the review process itself.
Expanding CFIUS’s Jurisdiction
FIRRMA would expand the definition of “covered transactions” to include a broader range of transactions that would be subject to CFIUS jurisdiction. Under FIRRMA, “covered transactions” would include:
- Non-passive, minority-position investments by a foreign person in a critical technology or infrastructure company. Even if such an investment does not result in foreign control of the U.S. business, under FIRRMA, it will still be considered a covered transaction and subject to CFIUS review.
- Joint ventures involving technology transfers to a foreign entity. Under FIRRMA, an IP licensing arrangement that includes “associated support” (e.g. technical cooperation or training) will be a covered transaction, even if it does not result in foreign control of a U.S. business. This jurisdiction would seemingly create a parallel requirement for U.S. government approval when the IP involved is subject to export control requirements, which already require prior U.S. government approval in many cases.
- Real estate investments near military or other national security facilities. Covered transactions under FIRRMA would include foreign investments in real estate even if it does not host an existing U.S. business.
FIRRMA would also expand the definition of “critical technology” to include “[o]ther emerging technologies that could be essential for maintaining or increasing the technological advantage of the United States over countries of special concern with respect to national defense, intelligence, or other areas of national security, or gaining such an advantage over such countries in areas where such an advantage may not currently exist.”
This posting is by Don Allen Resnikoff, who takes full responsibility for its content
J
Six top US intelligence chiefs caution against buying Huawei and other Chinese phones
- The directors of the CIA, FBI, NSA and several other intelligence agencies express their distrust of Apple-rival Huawei and fellow Chinese telecom company ZTE.
- During a hearing, the intelligence chiefs commended American telecom companies for their measured resistance to the Chinese companies.
- Huawei has been trying to enter the U.S. market, first through a partnership with AT&T that was ultimately called off.
Sara Salinas | @saracsalinas
Published 12:22 PM ET Tue, 13 Feb 2018 Updated 11:03 AM ET Thu, 15 Feb 2018CNBC.com
Six top U.S. intelligence chiefs told the Senate Intelligence Committee in February that they would not advise Americans to use products or services from Chinese smartphone maker Huawei.
The six — including the heads of the CIA, FBI, NSA and the director of national intelligence — first expressed their distrust of Apple-rival Huawei and fellow Chinese telecom company ZTE in reference to public servants and state agencies.
When prompted during the hearing, all six indicated they would not recommend private citizens use products from the Chinese companies.
"We're deeply concerned about the risks of allowing any company or entity that is beholden to foreign governments that don't share our values to gain positions of power inside our telecommunications networks," FBI Director Chris Wray testified.
"That provides the capacity to exert pressure or control over our telecommunications infrastructure," Wray said. "It provides the capacity to maliciously modify or steal information. And it provides the capacity to conduct undetected espionage."
In a response, Huawei said that it "poses no greater cybersecurity risk than any ICT vendor."
A spokesman said in a statement: "Huawei is aware of a range of U.S. government activities seemingly aimed at inhibiting Huawei's business in the U.S. market. Huawei is trusted by governments and customers in 170 countries worldwide and poses no greater cybersecurity risk than any ICT vendor, sharing as we do common global supply chains and production capabilities."
Huawei has been trying to enter the U.S. market, first through a partnership with AT&T that was ultimately called off. At the time, Huawei said its products would still launch on American markets.
Last month, Huawei CEO Richard Yu raged against American carriers, accusing them of depriving customers of choice. Reports said U.S. lawmakers urged AT&T to pull out of the deal.
ZTE said in a statement it "takes cybersecurity and privacy seriously" and that it remains a "trusted partner" to US suppliers and customers.
"As a publicly traded company, we are committed to adhering to all applicable laws and regulations of the United States, work with carriers to pass strict testing protocols, and adhere to the highest business standards," a ZTE spokesperson said.
At the hearing, the intelligence chiefs commended American telecom companies for their measured resistance to the Chinese companies.
"This is a challenge I think that is only going to increase, not lessen over time for us," said Adm. Michael Rogers, the NSA's director. "You need to look long and hard at companies like this."
https://www.cnbc.com/2018/02/13/chinas-hauwei-top-us-intelligence-chiefs-caution-americans-away.html
Another view: The WSJ editorializes, suggesting that the real reason for US government opposition to Huwei's 5G technology is fear that Huwei's technology advances will swamp less innovative US companies
3/9/2018 Why Washington Is So Obsessed With China’s Huawei - WSJ
Excerpts from WSJ article:
The world’s top cellular-equipment maker and a leading smartphone brand, Huawei in the past
three months has been the subject of a series of interventions, or attempted interventions, by
the Trump administration and Congress across the telecommunications industry.
***
5G is the next-generation mobile-network technology that the industry is preparing to roll out
around the world. American officials and some Western telecom companies worry that if China
gains widespread 5G before the U.S. does, it could have a head start in technologies that the new
networks’ speed and capacity are expected to kick-start, like self-driving cars.
Some Washington policy makers and industry executives have suggested a deeper worry that,
with Huawei’s help, China could displace Silicon Valley as the world’s innovation center and
lure top engineers there. Another concern: If Huawei extends its lead in the telecom-equipment
industry, these officials believe, American wireless carriers might have no choice but to use
Huawei gear in the future.
***
The extent to which the U.S. government shares that fear was laid bare in unusual clarity in the
CFIUS letter. The committee said it would probe whether a Broadcom-Qualcomm tie-up would
“leave an opening for China to expand its influence on the 5G standard setting process.” It cited
specifically Huawei’s 5G “engagement.”
***
Concern over Huawei isn’t new. Congress effectively barred major carriers from using the
company, after a 2012 report concluded Beijing could force Huawei to use knowledge of how its
own equipment is designed to spy or disable telecom networks.
***
Late last year, congressional pressure mounted on AT&T to drop plans to sell Huawei
smartphones in the U.S. In a surprise reversal, the company did just that in January; it declined
to cite a reason.
***
in December, President Donald Trump signed a defense-spending bill that will ban
equipment from Huawei and China’s ZTE Corp. from the Defense Department’s nuclear-weapon
infrastructure. Lawmakers in the House and Senate have also introduced separate bills to bar
the U.S. government and its contractors from using Huawei and ZTE equipment.
https://www.wsj.com/articles/why-washington-is-so-obsessed-with-chinas-huawei-1520373341
NYT explains CFIUS and its ability to quash mergers on national security grounds
Qualcomm, one of the world’s largest chip makers, has spent the last four months fending off a hostile takeover from Broadcom, a Singaporean rival. The fate of the proposed takeover may now be in jeopardy because of a little-known committee of top administration officials who meet in secret, wielding power to kill the biggest multibillion-dollar global deals.
The Committee on Foreign Investment in the United States, or Cfius (pronounced Sif-e-us), investigates mergers that could result in control of an American business by a foreign individual or company, judging whether deals could threaten national interests. In a letter on Monday, the committee said that a deal for Qualcomm, whose semiconductors will be used in the next generation of ultrafast wireless networks known as 5G, could pose a risk to national security.
It appears to be the first time the committee has intervened on a deal before it has been finalized, a signal that Cfius may play a more prominent role in the Trump administration’s America First policymaking.
Cfius is the ‘ultimate regulatory bazooka’
The committee is made up of members of the State, Defense, Justice, Commerce, Energy and Homeland Security departments, and is led by the treasury secretary. These days, that means Steven Mnuchin.
When Cfius reviews a possible deal, the committee does not publicly disclose any information provided to it — nor does it even acknowledge that a party to a merger has submitted a deal to review. It also has the authority to intervene and review pending or completed transactions, without being asked by any of the companies involved, if members of the committee think a deal that could raise national security concerns.
The committee’s findings, which are not publicly announced, are sent to the president, who may suspend or prohibit the deal.
But cases do not often get that far: The rejection of a deal by the committee is usually enough to kill it.
Cfius “is the No. 1 weapon in the Trump administration’s protectionist arsenal, the ultimate regulatory bazooka,” said Hernan Cristerna, co-head of global mergers and acquisitions at JPMorgan Chase.
* * *
Cfius was empowered with reviewing mergers for potential threats.
China is a frequent element in the deals Cfius reviewsCfius reviews deals across a variety of industries and companies from dozens of different countries. It has often set its sites on deals involving Chinese companies, as the country’s economic might has grown in recent years. From 2013 to 2015, the latest years for which the committee has made data public, about 20 percent of the deals that Cfius reviewed involved investors from China.
Among the notable recent reviews were:
MONEYGRAM — ANT FINANCIAL Ant Financial, a Chinese electronic payments company, wanted to purchase MoneyGram, a money transfer company based in Dallas, for $1.2 billion. But the deal collapsed in January after both sides said Cfius refused to approve it. The collapse came despite a charm offensive by Jack Ma, the Chinese tycoon who controls Ant Financial, who had visited President-elect Donald Trump at Trump Tower and pledged to create one million American jobs. But he could not overcome the Trump administration’s concerns about Chinese acquisition of American know-how.
CANYON BRIDGE CAPITAL — LATTICE Canyon Bridge Capital, a private equity firm, wanted to acquire Lattice, a chip maker based in Portland, Ore. Canyon Bridge received investment from a group that included China Venture Capital Fund Corporation, which is owned by Chinese government-backed organizations. Lattice said Cfius objected to the deal, and the company tried to appeal to the president, offering to resolve national security concerns. But Mr. Trump formally blocked the deal in September 2017, prompting China’s commerce ministry to issue a statement saying countries should not push protectionism through security reviews.
GO SCALE — PHILIPS In 2015, the Dutch electronics giant Philips had an agreement to sell a controlling stake in its automotive and LED business for as much as $2.9 billion to GO Scale, an investment fund sponsored by GSR Ventures of China and Oak Investment Partners. Philips canceled the deal after it could not resolve Cfius’s concerns, and in December 2016 announced it would sell the unit to Apollo Global Management for $1.5 billion, almost half the amount of the earlier deal.
The Broadcom-Qualcomm deal does not involve China-based companies. But there has been concern that the acquisition could undermine the ability of the United States to compete with China in the race for telecommunications supremacy. Members of Cfius pointed to Broadcom’s statements that it would take a “‘private equity’-style” approach if it acquired Qualcomm, suggesting to the committee that Broadcom could reduce long-term investment on research and development in favor of focusing on short-term profits.
While the United States has remained a standard-bearer in mobile technology, the committee noted, “China would likely compete robustly to fill any void left by Qualcomm as a result of this hostile takeover.”
Lawmakers want to expand Cfius’s jurisdiction
A bipartisan group in Congress has proposed legislation that would greatly expand the number of deals reviewed by Cfius. In November, Senator John Cornyn, Republican of Texas, and Senator Dianne Feinstein, Democrat of California, introduced a bill that could add thousands of companies with foreign ties to the list of those reviewed each year by Cfius and provide more funding to deal with that increase. A similar House bill was also introduced by Representative Robert Pittenger, Republican of North Carolina. The measure would expand Cfius’s jurisdiction to include joint ventures, sales of minority stakes and real estate deals for property near military bases and other sensitive facilities.
“By exploiting gaps in the existing Cfius review process,” said Mr. Cornyn, “potential adversaries, such as China, have been effectively degrading our country’s military technological edge by acquiring, and otherwise investing in U.S. companies.”
The proposal has drawn objections from some businesses. IBM said the changes would limit “the ability of American firms to do business abroad while empowering foreign competitors to capture global markets.”
https://www.nytimes.com/2018/03/05/business/what-is-cfius.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=rank&module=package&version=highlights&contentPlacement=1&pgtype=sectionfront
From Better Markets:Protecting Investors From Rip-Offs Must Be Priority for SECMarch 16, 2018
FOR IMMEDIATE RELEASE
Friday, March 16, 2018
Contact: Nick Jacobs, 202-618-6430 or njacobs@bettermarkets.com
Washington, D.C. – The executive directors of Public Citizen and Better Markets, two of the nation’s leading organizations protecting investors, called on U.S. Securities and Exchange Commission (SEC) Chair Jay Clayton to reject any proposals that would allow publicly traded companies to force their investors into mandatory arbitration, through obscure clauses in initial public offering (IPO) documents or otherwise. Such action would deprive investors of their right to access the justice system if they are scammed or cheated and would allow companies to pocket their ill-gotten gains, sometimes amounting to hundreds of millions of dollars.
“Corporations have invested a decade in a campaign to convince the SEC to permit them to slip forced arbitration clauses into IPOs, precisely because they know that only a tiny few will pursue cases on their own, before arbiters,” said Robert Weissman, president of Public Citizen.
Forced arbitration clauses, which use fine-print “take-it-or-leave it” agreements to rig the system, have become ubiquitous in modern society. These clauses deprive people of their day in court when they are harmed by violations of the law. Instead, people are forced into industry-biased, secretive arbitration proceedings with little right to appeal if arbitrators ignore the law or facts.
“Arbitration proceedings are like kangaroo courts where everything is stacked against the investor and the industry almost always wins. That’s why the industry has to force it on investors, who will be doubly victimized. First, when they are ripped off and, second, when they can’t get a fair hearing to recover their losses. Adding insult to injury, the company that rips them off will get to pocket a windfall of ill-gotten gains, often tens of millions of dollars. The SEC must not allow this,” stated Dennis M. Kelleher, president and CEO of Better Markets.
Industry and its allies, including at the regulatory agencies that are supposed to protect investors first and foremost, increasingly are pushing for this dramatic policy change.
Advocates for investors are resisting these attempts. Last month, U.S. Sen. Elizabeth Warren (D-Mass.) questioned Chairman Clayton on whether the SEC was prepared to allow companies to insert forced arbitration clauses into IPO documents. Also last month, SEC Commissioner Robert J. Jackson, Jr., and SEC Investor Advocate Rick Fleming both strongly and publicly cautioned the SEC against taking actions that would allow companies to force investors into arbitration.
The full letter to Clayton can be read here and here.
A California district attorney’s hiring of outside law firms on a contingency basis did not violate a defendant’s rights to due process, according to the first federal circuit court to address the issue.
In an opinion on Thursday, the U.S. Court of Appeals for the Ninth Circuit upheld the dismissal of a case that American Bankers Management Co. Inc. brought against the district attorney of Trinity County. The district attorney hired three law firms on contingency to pursue injunctive relief and civil penalties against the company under California consumer protection laws. The panel disagreed with American Bankers’ contention that the hiring of the law firms violated its due process rights under the Fourteenth Amendment.
The opinion is here:
https://images.law.com/contrib/content/uploads/documents/403/12061/Contingency-Ruling-3-16.pdf
Excerpt from The Recorder, Law.com
From DMN: Mayors from 12 U.S. Cities Will Refuse Business from Any Company Opposed to Net Neutrality
“We will not do business with any vendor that does not honor net neutrality.”
— Bill de Blasio, mayor of New York City.
Now, there’s another front in the net neutrality rebellion: mayors from major U.S. cities. Already, twelve different mayors from some of the largest U.S. cities in America have vowed to sever business ties with any company that refuses to honor net neutrality provisions.
The just-formed Mayors for Net Neutrality Coalition already includes New York City mayor Bill de Blasio, San Francisco mayor Mark Farrell, Portland mayor Ted Wheeler, and San Jose mayor Sam Liccardo. The group just announced their existence at SXSW Interactive in Austin, drawing another layer of resistance for embattled Trump FCC chairman Ajit Pai.
The group is even talking about building certified ‘Net Neutrality Cities,’ and encouraging other mayors to sign their Cities Open Internet Pledge. That Pledge requires anyone doing business within the respective city to adhere to net neutrality principles — or take their business elsewhere. The end result is a net neutrality safe zone.
Read the rest here.
A brief primer on bitcoin, blockchain, and banks
by Aziz Bin Zainuddin, founder and chief crypto officer, Master The Crypto
Some have dismissed blockchain and cryptocurrency as a fad that spells too much trouble for governments to become a mainstay in our everyday lives. Others believe it presents too many advantages for businesses and consumers for it to disappear.
Either way, the technology is too revolutionary for banks to ignore.
Here is a roundup of how blockchain works and how banks might utilize it in the future.
A brief history
Bitcoin is a borderless decentralized digital currency that was invented in 2008. Its founder, known only by the pseudonym Satoshi Nakamoto, cultivated it partly in response to the global financial crisis that unfolded in the same year.
One of Nakamoto's primary goals was to create a currency with a value that couldn't be affected by quantitative easing. To this end, he created an automated mining system that ensures there will only ever be 21 million bitcoins in existence. This means that the value of bitcoin will always be based on supply and demand.
Bitcoin transactions are stored in an immutable decentralized ledger called the blockchain. Instead of existing on a single server, it exists on every computer that can connect to the internet.
The decentralized nature of blockchain makes it more secure and reliable than traditional banking databases, as there is no single database that could to be compromised by hackers or suffer from system failure.
Blockchain transactions are pseudonymous and there is no central authority that can ban anyone from making bitcoin transactions.
The advantages of bitcoin over fiat currency have driven its remarkable growth in value since its creation.
The beauty of blockchain
Blockchain technology was invented simply as a ledger for bitcoin transactions. Eventually, though, it became clear that its decentralized, immutable, pseudonymous nature could be put to use in innumerable other industries.
The invention of Ethereum in 2015 was a historic moment for blockchain technology. This open-source platform allows developers to create any type of software on blockchain without limits.
Revolutionary blockchain technologies such as smart contracts and decentralized autonomous organizations seem to be poised to disrupt the banking industry in a major way.
How banks benefit
It is likely to be difficult for retail banks to ignore technology that is undeniably more secure and reliable than their current databases.
Firstly, its pseudonymous nature could help end identity fraud. Secondly, the decentralized nature of blockchain could help introduce faster payments than two centralized systems could ever manage.
While some blockchains (most notably bitcoin's) are notoriously slow, others that are lightning fast. Ripple, the second most-valuable cryptocurrency by market capitalization, can handle 1,500 transactions per second.
The use of smart contracts could improve the efficiency of banking transactions further still. Banks rely on contracts for all of their products, from credit cards to mortgages to checking and savings accounts.
Smart contracts can be applied to all of the processes detailed in these documents and, it is believed, massively reduce processing costs for banks. Indeed, smart contracts are expected to replace to replace the clunky and inefficient Know Your Customer identity management process soon rather than later.
Wasting no time
Several start-ups have received venture capital to develop the projects discussed above, but the majority of them are still just ideas at this stage.
However, several major banks have already moved to invest in and develop blockchain technology. A group of financial institutions led by Swiss bank UBS has agreed to use Ethereum to improve the quality of their reference data. Instead of entrusting it to a third party to review, they are happy to rely solely on blockchain.
Meanwhile, Santander will use Ripple to power its new mobile app and it has been widely predicted that central banks will hold bitcoin and Ether cryptocurrencies in their reserves for the first time this year.
The long view
Perhaps unsurprisingly, many central governments are doing their best to limit the growth of cryptocurrency on their shores.
This might be enough to halt the growth of bitcoin as the world's first truly global currency. It must overcome other hurdles as well, not least slow transaction times and wild fluctuations in value.
Whatever happens with bitcoin, though, it's difficult to dispute the advantages that blockchain is likely to bring to retail banking.
Aziz Bin Zainuddin is a blockchain expert and the founder and chief crypto officer of Master The Crypto (MasterTheCrypto.com), a knowledge hub and resource center for cryptocurrency investing and all things blockchain. In addition, Aziz runs C.M. Fund, a Singapore-based crypto hedge fund based that invests in cryptos with solid fundamentals and game-changing technology.
Credit: https://www.atmmarketplace.com/articles/could-bitcoin-and-blockchain-blow-up-banking-as-we-know-it/?utm_source=AMC&utm_medium=email&utm_campaign=EMNA&utm_content=2018-03-08%3Fstyle%3Dprint
An elaborate system involving non-disclosure agreements has developed to silence women who level accusations against powerful men. One of those women is Stephanie Clifford, a pornographic actress who claims to have had an affair with Donald J. Trump.
On the NYT podcast (see URL below)
• Jim Rutenberg, The New York Times’s media columnist.
Background reading:
• President Trump’s lawyer secretly obtained a temporary restraining order to prevent a pornographic film actress from speaking out about her alleged affair with Mr. Trump.
• Beyond facilitating a $130,000 payment intended to silence Ms. Clifford, the lawyer, Michael D. Cohen, spent years making aggressive behind-the-scenes efforts to protect Mr. Trump.
Find the podcast here:
www.nytimes.com/2018/03/09/podcasts/the-daily/stormy-daniels-trump.html?rref=collection%2Fbyline%2Fjim-rutenberg&action=click&contentCollection=undefined®ion=stream&module=stream_unit&version=latest&contentPlacement=1&pgtype=collection
From Public Citizen:
The problem of judges substituting their own opinions for facts
by Stephen Gardner
On February 27, the Northern District of California issued an opinion on a motion to dismiss in Becerra v. The Coca-Cola Company. The court got the law right, but then ruled based on incorrect conclusions on disputed facts.
There are two parts to the opinion. First, the court analyzed Coke’s various attempts to avoid liability under state law, based on preemption and safe harbor, and rejected each attempt. So far, so good.
But then the court turned to Rule 9(b). Here, too, the court was generally correct on the law, but ruled based on its own beliefs of what a reasonable consumer would think.
For example, the court said that “a reasonable consumer would simply not look at the brand name Diet Coke and assume that consuming it, absent any lifestyle change, would lead to weight loss.”
The court is wrong. Diet Coke’s name itself indeed suggests (really, outright says) that it’s part of a diet, and many consumers do not know that reduced calories alone will not likely lead to weight loss. Consumers are not nutrition scientists, and often turn (wrongly, but encouraged by companies like Coke) to quick fixes. The FTC’s many weight loss cases are evidence of this.
The court is expert on law, but not on consumer behavior, and it erred in substituting its opinion of the facts—at the motion to dismiss stage—for a disputed merits question.
The court compounded its error with the unsupported statement that “Reasonable consumers would understand that Diet Coke merely deletes the calories usually present in regular Coke, and that the caloric reduction will lead to weight loss only as part of an overall sensible diet and exercise regimen dependent on individual metabolism.”
Again, the court wrongfully draws its own conclusions as to how consumers reasonably behave. The court is also wrong on the facts—Diet Coke did not “merely delete[] the calories usually present in regular Coke.” It also added aspartame, which is an artificial non-nutritive sweetener.
Consumers are chary of artificial sweeteners, with good reason. The Center for Science in the Public Interest says, “Three key studies funded by an independent lab (rather than by a maker of aspartame) found that the sweetener caused lymphomas, leukemias, kidney, and other cancers in rats and mice. That should be reason enough for the Food and Drug Administration to ban aspartame from the food supply, says CSPI. In addition, aspartame might cause headaches or other neurological symptoms in a small number of people.” (For a longer discussion of risks, see this article from CSPI's excellent magazine Nutrition Action Healthletter.)
The court concluded, “In order to overcome the otherwise sensible view of reasonable consumers that Diet Coke consumption alone will not lead to weight loss, the complaint would need to cite far more powerful evidence than is now provided to make a claim of fraud plausible.”
The court gave plaintiff the chance to file an amended complaint, saying that “Plaintiff must plead her best case.”
Let’s hope she does.
Posted by Steve Gardner on Monday, March 05, 2018 at 04:45 PM Illustration of the problem of judges substituting their own opinions of factsby Stephen Gardner
http://pubcit.typepad.com/clpblog/2018/03/illustration-of-the-problem-of-judges-substituting-their-own-opinions-of-facts.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+ConsumerLawPolicyBlog+%28Consumer+Law+%26+Policy+Blog%29
From DMN: Washington has now become the first state in the nation to pass a law protecting net neutrality. Other states, including California and Oregon, are expected to follow suit.
In a bold statement against the Trump-led FCC, the State of Washington has officially passed a law protecting net neutrality. The bill, HB2282, received a lopsided 95-3 vote in the House earlier this month. Late today (Tuesday, Feb. 27th), the bill received a 35-14 vote in the state’s Senate.
Rep. Drew Hanson (D-Bainbridge Island), the bill’s prime sponsor, shared the development. “Today’s vote guarantees the net neutrality rules
that have protected a free and open internet will continue to remain in place in Washington state,” Hanson emailed. “Net neutrality is important to everyone – our constituents, small business owners, teachers, entrepreneurs, everyone. This is a cause with overwhelming bipartisan support; it’s always nice to see something where Democrats and Republicans can work together to maintain common-sense consumer protections.”
Hanson stressed that the bill was a bipartisan effort. Indeed, Republican Rep. Norma Smith (R-Clinton) was the bill’s co-sponsor.
Specifically, the bill makes it illegal for any ISP to:
- Block customers’ access to lawful content
- ‘Throttle’ or slowing down lawful content
- Favor certain content over others due to ‘paid prioritization’
Any ISP found violating any of those core tenets will face serious fines and penalties. Continued violations may result in a revocation of an ISP’s license to conduct business in the state.
Of course, those three tenets are expressly permitted by the FCC’s recent repeal of net neutrality. All of which sets the stage for a serious battle between Washington State and the FCC. In its rollback, the FCC attempted to make state laws protecting net neutrality null and void, though any ISP testing that power is likely to lose its business in Washington.
(Here’s the FCC’s Official 284-Page Order Repealing Net Neutrality — It’s Titled ‘Restoring Internet Freedom’)
Importantly, the Washington State law closely follows the FCC’s official submission of its net neutrality repeal into the Federal Register. That triggers a 60-day approval window before the rollback becomes federal law.
Meanwhile, Washington’s strong statement is likely to be followed by other powerful U.S. states. That includes California, whose House has already passed a net neutrality bill with passage likely from the Senate. In Oregon, a similar bill has also passed the lower House. Elsewhere, Nebraska recently introduced a bill, potentially making it the first red state to push back.
The developments in Washington are being cheered by the state’s considerable tech industry. “Today, Washington took a stand for internet freedoms and preserving an equal playing field for consumers and entrepreneurs,” remarked Sarah Bird, CEO of Seattle-based search engine optimization company MOZ. “Our internet economy is the envy of the world; Washington lawmakers are helping make sure that remains true.”
Governor Jay Inslee is expected to officially sign HB2282 this week.
A copy of the bill can be found here.
The DMN article is here: https://www.digitalmusicnews.com/2018/02/27/washington-state-law-net-neutrality/
5G Cell Service Is Coming. Who Decides Where It Goes?
There is a heated fight about when, where and how the next generation of cell service gets delivered. ... The prospect of their installation has many communities and their officials, from Woodbury, N.Y., to Olympia, Wash., insisting that local governments control the placement and look of the new equipment, not the federal government.
https://www.nytimes.com/2018/03/02/technology/5g-cellular-service.html (click title for link)
D.C. Administration seeks to limit litigation opposing real estate development
From the Washington Post:
Activists seeking to thwart the breakneck speed of development across the District have turned with greater frequency to the city’s highest court, filing legal challenges that have delayed more than two dozen projects in the past two years and driven up their costs.
Now the Bowser administration wants to curtail those challenges, proposing to amend District policies in ways to reduce those avenues for protest.
District officials say that the changes would end nuisance legal challenges, reduce the cost of doing business in Washington, and expedite the construction of housing units that the city needs.
“We have thousands of new homes that are hung up in court, including hundreds of affordable homes,” said Cheryl Cort, policy director for the Coalition For Smarter Growth. “The courts seem much more willing to second-guess the process, and it has thrown everything into uncertainty.”
But activists counter that the city is making it more difficult to stave off gentrification. They say their ability to turn to the D.C. Court of Appeals is necessary to prevent District officials from violating their own policies to accommodate luxury projects that drive up housing prices in exchange for minimal benefits for neighborhoods.
“It’s the most basic part of our checks and review,” said Kirby Vining, an activist who successfully appealed the city’s approval of a project in his neighborhood. “Without it, we would have been stuck.” He called the administration’s proposals a “Christmas present for developers.”
The full article:
https://www.washingtonpost.com/local/dc-politics/dc-mayor-seeking-to-stop-costly-legal-delays-to-development-projects/2018/02/28/29855a06-1b14-11e8-b2d9-08e748f892c0_story.html?utm_term=.31ced0d73465
Can CVS-Aetna merger squeeze hospitals by forcing customers to accept cheaper non-hospital care alternatives?
That is the premise of a Moody's study reported in a Modern Healthcare article titled: Hospitals pressured as insurers pursue more vertical integration
An article excerpt follows:
The artBy Alex Kacik | February 24, 2018
Hospitals that don't adapt could get squeezed out of the care continuum as insurers grow and direct more care to lower-cost settings, according to an analysis from Moody's Investors Service.
Both not-for-profit and for-profit hospitals are feeling the pressure of falling inpatient volumes and reimbursement levels from government payers along with rising drug costs and labor expenses, as well as regulatory changes to policies like the 340B drug discount program.
Those downward pressures on margins will continue if insurers' plans to vertically integrate with providers come to fruition, the ratings agency said. The Medicare Payment Advisory Commission estimated that hospital margins could sink to negative 10% in 2017, a drop from negative 7.1% in 2015.
Insurers have had to get creative since regulators blocked recent attempts to grow horizontally, including the thwarted mergers between Aetna and Humana, and Anthem and Cigna Corp. They now look to align with providers through proposed combinations between CVS Health and Aetna, UnitedHealth Group's Optum and DaVita Medical Group, and Humana and Kindred Healthcare—partnerships designed to prevent hospital visits through regular primary-care checkups and home healthcare.
Since they don't have to carry the hefty overhead of full-service hospitals, insurers that combine with physician groups and non-acute-care service providers can offer similar preventive, outpatient and post-acute care to their members at lower costs. Scale will also give them an upper hand in rate negotiations, denting providers' bottom lines.
The proposed deals could give insurers the power to direct care rather than doctors, said Juan Morado Jr., of counsel at law firm Benesch. But limiting patient choice is a risky proposition, he added.
As insurers grow their physician networks, they will be better able to carve out "high-cost" hospitals or certain services from contracts, which will mean lower volume and revenue for hospitals, Moody's said. Optum, which has been on a physician-acquisition binge, could funnel more care to cheaper, risk-bearing hospitals. Also, Anthem's policy to limit coverage of emergency visits in certain states will mean fewer patient visits, lower revenue and higher bad-debt rates for hospitals, the report said.
Full article: http://www.modernhealthcare.com/article/20180224/NEWS/180229944?utm_source=modernhealthcare&utm_medium=email&utm_content=20180224-NEWS-180229944&utm_campaign=am
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A related topic:
As Surgery Centers Boom, Patients Are Paying With Their LivesSIMPLE SURGERIES. TRAGIC RESULTSBy Christina Jewett, Kaiser Health News and Mark Alesia, USA TODAY Network
MARCH 2, 2018
This story also ran on USA Today. This story is at https://khn.org/news/medicare-certified-surgery-centers-are-expanding-but-deaths-question-safety/view/republish/
Excerpt:
The surgery went fine. Her doctors left for the day. Four hours later, Paulina Tam started gasping for air.
Internal bleeding was cutting off her windpipe, a well-known complication of the spine surgery she had undergone.
But a Medicare inspection report describing the event says that nobody who remained on duty that evening at the Northern California surgery center knew what to do.
How a push to cut costs and boost profits at surgery centers led to a trail of death.
A team of journalists based in California, Indiana, New Jersey, Florida, Washington, D.C., and Virginia worked to tell this story in a partnership between Kaiser Health News and USA TODAY Network.
Christina Jewett is a senior correspondent for Kaiser Health News. Mark Alesia is an investigative reporter for the Indianapolis Star.
Reporters pored through thousands of pages of court records and crisscrossed the U.S. to talk to injured patients or families of the deceased.
For more than a year, using federal and state open-records laws, reporters gathered more than 12,000 inspection records and 1,500 complaint reports, as well as autopsies and EMS documents and medical records, together forming the foundation for this report.
In desperation, a nurse did something that would not happen in a hospital.
She dialed 911.
By the time an ambulance delivered Tam to the emergency room, the 58-year-old mother of three was lifeless, according to the report.
If Tam had been operated on at a hospital, a few simple steps could have saved her life.
But like hundreds of thousands of other patients each year, Tam went to one of the nation’s 5,600-plus surgery centers.
Such centers started nearly 50 years ago as low-cost alternatives for minor surgeries. They now outnumber hospitals as federal regulators have signed off on an ever-widening array of outpatient procedures in an effort to cut federal health care costs.
Thousands of times each year, these centers call 911 as patients experience complications ranging from minor to fatal. Yet no one knows how many people die as a result, because no national authority tracks the tragic outcomes. An investigation by Kaiser Health News and the USA TODAY Network has discovered that more than 260 patients have died since 2013 after in-and-out procedures at surgery centers across the country. Dozens — some as young as 2 — have perished after routine operations, such as colonoscopies and tonsillectomies.
Reporters examined autopsy records, legal filings and more than 12,000 state and Medicare inspection records, and interviewed dozens of doctors, health policy experts and patients throughout the industry, in the most extensive examination of these records to date.
The investigation revealed:
- Surgery centers have steadily expanded their business by taking on increasingly risky surgeries. At least 14 patients have died after complex spinal surgeries like those that federal regulators at Medicare recently approved for surgery centers. Even as the risks of doing such surgeries off a hospital campus can be great, so is the reward. Doctors who own a share of the center can earn their own fee and a cut of the facility’s fee, a meaningful sum for operations that can cost $100,000 or more.
- To protect patients, Medicare requires surgery centers to line up a local hospital to take their patients when emergencies arise. In rural areas, centers can be 15 or more miles away. Even when the hospital is close, 20 to 30 minutes can pass between a 911 call and arrival at an ER.
- Some surgery centers are accused of overlooking high-risk health problems and treat patients who experts say should be operated on only in hospitals, if at all. At least 25 people with underlying medical conditions have left surgery centers and died within minutes or days. They include an Ohio woman with out-of-control blood pressure, a 49-year-old West Virginia man awaiting a heart transplant and several children with sleep apnea.
- Some surgery centers risk patient lives by skimping on training or lifesaving equipment. Others have sent patients home before they were fully recovered. On their drives home, shocked family members in Arkansas, Oklahoma and Georgia discovered their loved ones were not asleep but on the verge of death. Surgery centers have been criticized in cases where staff didn’t have the tools to open a difficult airway or skills to save a patient from bleeding to death.
Most operations done in surgery centers go off without a hitch. And surgery carries risk, no matter where it’s done. Some centers have state-of-the-art equipment and highly trained staff that are better prepared to handle emergencies.
But Kaiser Health News and the USA TODAY Network found more than a dozen cases where the absence of trained staff or emergency equipment appears to have put patients in peril.
Data breach class action with small individual recoveries, many attorneys, and big fees = irritated judge
By Daniel R. Stoller - Bloomberg Law
February 6, 2018
• Federal judge orders more oversight of $37.95 million attorneys’ fees request
• Case grew out of 2015 Anthem breach that exposed 78.8 million consumers’ data
Anthem Inc. can’t dispose of consumer class claims stemming from a 2015 data breach for now, after a federal judge raised concerns about nearly $38 million in proposed attorneys’ fees.
A class counsel request for $37.95 million in attorneys’ fees, out of a $115 million settlement, is getting an extra layer of oversight, Judge Lucy Koh of the U.S. District Court for the Northern District of California wrote in a Feb. 2 order.
The court is concerned with the attorneys’ fee request because the class counsel assigned tasks “across 53 law firms and 331 billers,” wrote Koh, who granted a motion to appoint a special master to oversee the attorneys’ fees award.
Such billing could be “duplicative or inefficient,” Koh wrote. James Kleinberg, a retired California state judge, will likely be named special master to review the fee request because the parties didn’t object to his possible appointment, Koh said in her order. Although the settlement is beneficial to the class, Koh refused to give final approval before the special master’s decision on attorneys’ fees.
The case stems from a hacking attack in 2015 where cybercriminals were able to obtain data on 78.8 million Anthem customers, including Social Security numbers, birth dates, and health-care data. Anthem settled with consumers June 23 but didn’t acknowledge any wrongdoing.
After the settlement, plaintiffs filed a motion for the attorneys’ fees. But Jan. 4, class member objector Adam Shulman filed a motion to appoint a special master to oversee the fees award.
The special master will review “the extensive billing in the case” because the current attorneys’ fees and expenses request would account for 45 percent of the settlement class—higher than the 33 percent generally awarded, Koh wrote.
Hogan Lovells represents Anthem. Altshuler Berzon LLP and Cohen Milstein Sellers & Told Pllc are class counsel.
The case is In Re Anthem, Inc. Data Breach Litig., N.D. Cal., No. 15-md-02617, motion granted 2/2/18, link address http://www.bloomberglaw.com/public/document/In_re_Anthem_Inc_Data_Breach_Litigation_Docket_No_515md02617_ND_C/3?doc_id=X1Q6NUUSFT82
To contact the reporter on
Private Equity Meets Antitrust….Complications Ensue
By CPI on February 27, 2018
Posted by Social Science Research Network
Private Equity Meets Antitrust….Complications Ensue
By Kent Bernard
Private Equity is simply a way in which an investment company is structured. What the term usually means, however, is an entity that seeks to make an investment, quickly make changes in the company, and then sell out. Antitrust gets involved to determine whether the acquisition of stock or assets leads to a lessening of competition in any market. As part of that process, potential acquirers must give notice to the antitrust agencies and observe a waiting period. The private equity business model seeks to minimize, or avoid, such waiting. The approaches taken by private equity investors, and the agencies’ responses, have created an interesting legal landscape.
Continue Reading…https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3123183
From the U.S. Office of Government Ethics: A Refresher on the Impartiality Rule
January 25, 2017
On January 1, 2017, new government ethics training regulations went into effect. These regulations now require agencies to train more employees than in the past. They also place a new emphasis on four core topics: conflicts of interest, impartiality, misuse of position, and gifts. Earlier “Director’s Notes” have discussed conflicts of interest, misuse of position, and gifts. To round out the set, this Director’s note focuses on the impartiality rule.
As explained in my most recent note, executive branch employees are subject to an important set of ethics rules contained in the Standards of Ethical Conduct for Employees of the Executive Branch. Underlying these rules is a principle that employees must avoid even the appearance of impropriety. The impartiality rule breathes life into this principle.
Under the primary conflict of interest law, an employee must not participate in any particular matter affecting the employee’s financial interests, and the impartiality rule goes even further by focusing on appearance issues. This rule applies even when the employee is free of financial conflicts of interest.
Briefly stated, the impartiality rule requires an employee to consider appearance concerns before participating in a particular matter if someone close to the employee is involved as a party to that matter. This requirement to refrain from participating (or “recuse”) is designed to avoid the appearance of favoritism in government decision-making.
The rule is not implicated by everyone the employee knows, for example, mere friends and neighbors. Instead, the rule focuses on professional and family relationships. Among others, the rule arises based on the employee’s relationship with any member of the employee’s household, an outside employer, a spouse’s employer, any relative with whom the employee has a close personal relationship, or an outside organization in which the employee is an “active” member. The rule is also triggered by the employee’s relationship with individuals, clients, and organizations the employee has served professionally as an employee, attorney, contractor, etc., in the past year.
The duty to recuse comes up if one of these individuals and organizations is involved and if a reasonable person with knowledge of the relevant facts would be concerned about the employee’s impartiality. Because the rule is somewhat technical, employees should attend required ethics training to ensure that they understand how to make impartial decisions when performing their government jobs. Employees should also contact their agency ethics officials for assistance in applying the rule in specific cases.
See https://www.oge.gov/web/oge.nsf/Resources/A+Refresher+on+the+Impartiality+Rule
Editor's note: For a long-time federal employee, there is some poignancy in this reminder. A line attorney with a federal agency would risk serious jeopardy by participating in review of a bank merger involving a bank with which the employee had significant business dealings. For a long-time federal employee, it seems obvious that at least the same standard should apply to high level federal executives. Perhaps that will happen. DR
Takata airbags settlement: After the array of legal proceedings and prodigious enforcement efforts that followed the bad behavior of auto makers and Takata: criminal proceedings, National Highway Traffic Safety Administration agreement, "darn good" class action settlements, and the State AG actions, were consumers well served?
Press reports, including one in the New York Times, indicate that State AGs that sued Takata over auto airbag defects have reached a settlement involved $650 million dollars and behavioral restraints.
Takata, which became the auto airbag supplier of choice for many car makers, has been the topic of a number of legal proceedings.
As part of a criminal plea agreement with the U.S. Justice Department, Takata agreed to pay $125 million to victims and $850 million in restitution to automakers who bought its inflaters and were stuck with recall and litigation costs.
Conduct restraints were included in an agreement by Takata with the National Highway Traffic Safety Administration.
In 2017 Japanese automaker Honda agreed to a $605 million class-action settlement covering economic losses suffered by the U.S. owners of vehicles fitted with Takata air bags. Particular Honda owners reportedly received a promise to be paid $500 each. The deal was similar to agreements between Takata air bag vehicle owners and Nissan, Toyota, BMW, Mazda and Subaru.
“It's a darn good settlement,” lead class counsel Peter Prieto of Podhurst Orseck PA said at the time about the class action deals reached with Toyota Motor Corp., BMW of North America LLC, Subaru of America Inc. and Mazda North American Operations, during the final fairness hearing in Miami. $166 million was to be reserved to pay the class attorneys, 22 percent of the total value.
Takata has been through a bankruptcy proceeding. Under a restructuring plan, Takata will sell most of its assets unrelated to airbags to a Chinese-owned rival for $1.6 billion.
The recent press release issued by the lead state AG, Alan Wilson of South Carolina, says, in part:
TK Holdings, Inc. has also agreed to reimburse the multistate for its investigative costs, and for the entry of stipulated civil penalty in the amount of 650 million dollars. Since the company has filed for bankruptcy protection and cannot pay its debts, the multistate agreed not to collect this civil penalty in order to maximize the recovery available to consumers who were the victims of this airbag defect.
http://www.scag.gov/archives/34760
At the end of this story is a question: After the array of legal proceedings and prodigious enforcement efforts that followed the bad behavior of auto makers and Takata: criminal proceedings, National Highway Traffic Safety Administration agreement, "darn good" class action settlements, and the State AG actions, were consumers well served?
Posted by Don Allen Resnikoff, who takes responsibility for the content.
See Judge Leon's opinion blocking AT&T's assertion of selective merger enforcement
From the opinion:
Defendants have fallen far short of establishing that this enforcement action was selective, that is, that there exist persons similarly situated who have not been prosecuted. . . . It is . . . difficult to even conceptualize how a selective enforcement claim applies in the antitrust context, where each merger must be functionally viewed in the context of its particular industry and in light of a variety of factors including the transaction's size, structure, and potential to generate efficiencies or enable evasion of rate regulation, are relevant in determining whether a transaction is likely to lessen competition.
See the full opinion here: https://www.nytimes.com/interactive/2018/02/20/technology/document-Court-Order-Re-TWX-T-Motion-Re-Political.html
Make rock music great again? Changing music tastes appear to be driving iconic Gibson Guitar toward bankruptcy
Only a few years ago Gibson and Fender were dominant as guitar manufacturers, and the FTC was concerned about price fixing in the musical instrument market place.
In 2010 Gibson was listed in 30 lawsuits and had been the subject of a Federal Trade Commission investigation involving Fender Musical Instruments Corp., the Guitar Center and the International Music Products Association, known as NAMM.
The FTC investigation spun off of a previous probe of NAMM, which the FTC accused of organizing meetings where various retailers worked out pricing strategies.
That investigation ended with NAMM admitting no wrongdoing, but being prohibited from working with retailers in any anti-competitive fashion.
At that time Gibson stated: "The allegation that Gibson participated in any scheme to artificially inflate or fix prices is wholly without merit."
But now Gibson may be going the way of the leather sole Hanover Shoe, and becoming obsolete as musical tastes turn away from guitar based music, and guitar sales decline.
For more details on the declining fortunes of Gibson, see
https://www.digitalmusicnews.com/2018/02/16/gibson-guitar-bankruptcy/
From Maryland Consumer Rights Coalition: de facto debtor prisons
Media contact: Marceline White, 410-624-8980
Maryland has created a system of de facto debtors prisons. Maryland's Constitution says that "no person shall be imprisoned for debt," but each month, the Maryland District Court issues about 130 arrest warrants for consumers who are being sued for debt.
The arrest warrant, or body attachment, is an order for law enforcement to arrest the person in question and bring him or her in front of a court or commissioner in order to address the debt for which they are being sued.
The average underlying debt in these cases is less than $4,400. However, the addition of attorneys’ fees (78% of the time), interest (56% of the time) and court costs add, on average one-fifth to the amount of the original debt. When arrested, defendants may be required to pay bail or a bond which ranges from $200 to $3,000. In one case, bail was set at $5,000 for a $2,800 debt. In another case, bail was set at $10,000. If a defendant cannot pay this bail, he or she can end up languishing in prison for days or weeks until she or he can arrange to pay the bail bond set in the case.
Today [2-21-2018], the House Judiciary and Senate Judicial Proceedings committees will hear HB 1081 and SB 1050, bills that would ensure low-income Marylanders are treated with respect and fairness within the debt collection process, while still allowing creditors to obtain the information they need to collect the debt.
Under this proposal, when Marylanders are picked up, they complete the required forms and are released. No one is jailed for debt. This reduces the burden on the sheriffs’ departments, jails, taxpayers, and judges and creates a more fundamentally fair process for indigent consumers.
Because many of the Marylanders who are being sued for debt never received court summons, which is a causal factor in body attachments, we are recommending amending HB 1081/ SB 1050 to strengthen the service requirements.
We need you to tell your Delegates and Senators: No Prison for Poverty. Click here, to check if your elected officials serve on the Judiciary or Judicial Proceedings committees, and shoot them a note telling them to support the bill and the amendment.
These de facto debtors prisons criminalize poverty and create a two-tiered system of justice: those who can afford to pay do not go to jail, while those who can’t afford to pay remain in jail. Jailing someone for an underlying debt serves no constructive purpose: the individual is not violent nor a danger to the community, will be harmed-possibly losing their job if they are incarcerated, thereby making it more difficult to repay a debt, has no need for rehabilitation nor for punishment.
Take three minutes today to make sure your representatives know you oppose debtor’s prisons, and support HB 1081 and SB 1050 with our amendments!
Best,
Marceline
PBS News hour on modern real estate loan redlining in Philadelphia and elsewhere
From PBS: Ten years since the economic recession, lending has returned for many Americans. Yet the gap between white and black homeownership is wider now than it was in 1960, with signs of modern-day redlining showing up across the country. Special correspondent Aaron Glantz reports as part of a year-long investigation by Reveal from The Center for Investigative Reporting.
Excerpt from the News hour report:
- Emmanuel Martinez:
We looked at nearly 31 million mortgage records, nearly every loan application filed with the government in 2015 and 2016. In 61 metros across the country, applicants of color are more likely to be denied a conventional mortgage. - Aaron Glantz:
Banks don’t share credit scores. They say that is proprietary. But by using other information the government requires be disclosed, Reveal found statistically significant differences by race. - Emmanuel Martinez:
My analysis includes nine different factors. Among them are the applicant’s income, the size of the loan, and specific information about the neighborhood that they are looking to buy in.
Here, we have the likelihood of denial. So, black applicants in Philadelphia are almost three times as likely to be denied a conventional mortgage. - Aaron Glantz:
Reveal found this pattern in dozens of cities. Philadelphia was one of the largest. That means that a black applicant and a white one with similar financial profiles will likely have very different outcomes.
This wasn’t true for just for one bank, but for the lending industry as a whole. The Mortgage Bankers Association wouldn’t go on camera for this story, but in a statement, it said that the data available under the Home Mortgage Disclosure Act is not sufficient to make a determination regarding fair lending.
And the American Bankers Association said that without access to borrowers’ credit history, the data cannot paint a complete picture. - Emmanuel Martinez:
Unfortunately, credit score and an applicant’s total debt-to-income ratio aren’t part of this publicly available data set, but it’s those same financial institutions that have lobbied from keeping it away from researchers, from academics, from journalists like me, who want to study those disparities.
Go to: https://www.pbs.org/newshour/show/struggle-for-black-and-latino-mortgage-applicants-suggests-modern-day-redlining
Warren Buffett's real investment strategy: own companies with great power to charge high prices
From article in the Nation:
“The single most important decision in evaluating a business is pricing power,” Buffett said. “If you’ve got the power to raise prices without losing business to a competitor, you’ve got a very good business.” The “big three” rating agencies—Moody’s, Standard & Poor’s, and Fitch--controlled 95 percent of the rating-agency market, an insurmountable advantage over would-be competitors. “If you’ve got a good enough business, if you have a monopoly newspaper or if you have a network television station,” Buffett concluded, “your idiot nephew could run it.”
For the article, and a podcast by the author: https://www.thenation.com/article/special-investigation-the-dirty-secret-behind-warren-buffetts-billions/
Student Outcry on Guns; the Emma Gonzalez video
Students used Twitter, the news media and a courthouse rally to pressure lawmakers for gun control after a deadly shooting at a Florida high school.
Feb. 18, 2018FORT LAUDERDALE, Fla. — They shouted into a microphone until their voices became hoarse. They waved handmade signs. They chanted.
At the federal courthouse here on Saturday, students — including many of the very people who had to endure the trauma of a shooting on campus — continued to speak out about guns. Since Wednesday, when a gunman killed 14 students and three staff members at Marjory Stoneman Douglas High School in Parkland, Fla., their youthful voices have resonated where those of longtime politicians have largely fallen flat.
And on Saturday, another young woman’s words captivated the nation.
Speaking publicly at the rally, Emma González, a senior, pledged that her school would be the site of the nation’s last mass shooting. How could she know? Because, she said, she and her peers would take it upon themselves to “change the law.”
“The people in the government who are voted into power are lying to us,” she said. “And us kids seem to be the only ones who notice and are prepared to call B.S.”
“They say that tougher gun laws do not decrease gun violence — we call B.S.!” she continued as a chorus of supporters echoed her. “They say a good guy with a gun stops a bad guy with a gun — we call B.S.! They say guns are just tools like knives and are as dangerous as cars — we call B.S.! They say that no laws could have been able to prevent the hundreds of senseless tragedies that have occurred — we call B.S.! That us kids don’t know what we’re talking about, that we’re too young to understand how the government works — we call B.S.!”
She wiped her eyes aggressively. Then, she urged the people in the crowd to register to vote — and to give their elected officials “a piece of your mind.”
Just hours later, one video of the speech had been viewed more than 100,000 times.
The video is here: youtu.be/ZxD3o-9H1lY
NYT article: https://www.nytimes.com/2018/02/18/us/emma-gonzalez-florida-shooting.html?action=click&module=RelatedCoverage&pgtype=Article®ion=Footer&contentCollection=Related
New York’s top regulator is planning to investigate insurance companies after a bombshell report showed that gay men were being denied life insurance coverage because they were taking HIV prevention medications
Dr. Philip J. Cheng, a Harvard-educated urologist, said he was denied a life insurance policy and was offered a five-year policy instead after telling his insurer that he used Truvada, a drug that prevents the transmission of HIV, according to the New York Times. [https://www.nytimes.com/2018/02/12/health/truvada-hiv-insurance.html]
The treatments, referred to as PrEP (short for pre-exposure prophylaxis), are nearly 100 percent effective, studies have shown — but that wasn’t good enough for some insurers.
Maria T. Vullo, superintendent of the state’s Department of Financial Services, said that the practice amounts to discrimination.
“Insurers cannot choose to deny life and disability insurance coverage based on discriminatory reasons,” she said.
“This is tantamount to penalizing applicants based on sexual orientation. DFS will not tolerate discriminatory treatment in the approval or denial of life, long-term care and disability insurance policies and will hold companies that discriminate accountable,” she added
FTC press release:
FTC Sues Dental Products Distributors for Alleged Conspiracy Not to Provide Discounts to a Customer Segment
Complaint names nation’s three largest dental suppliers: Benco Dental Supply Company, Henry Schein, Inc. and Patterson Companies, Inc.
The Federal Trade Commission filed a complaint against the nation’s three largest dental supply companies, a public version of which will be linked to this news release shortly, alleging that they violated U.S. antitrust laws by conspiring to refuse to provide discounts to or otherwise serve buying groups representing dental practitioners. These buying groups sought lower prices for dental supplies and equipment on behalf of solo and small-group dental practices seeking to gain discounts by aggregating and leveraging the collective purchasing power and bargaining skills of the individual practices. The complaint also alleges an FTC Act Section 5 violation against Benco for inviting a fourth competing distributor to join the conspiracy.
The alleged agreement among Benco, Henry Schein and Patterson deprived independent dentists of the benefits of participating in buying groups that purchase dental supplies from national, full-service distributors. As full-service dental distributors, Benco, Henry Schein and Patterson offer gloves, cements, sterilization products and a range of other consumable supplies, as well as equipment, such as dental chairs and lights. Collectively, the big three control more than 85 percent of all distributor sales of dental products and services nationwide. The U.S. market for dental products is valued at approximately $10 billion. The dental practices that would have benefited from the discounts achieved by these buying groups were small businesses comprised of solo or small groups of dentists.
Benco and Henry Schein allegedly entered into an agreement refusing to provide discounts to or compete for the business of buying groups. The complaint details communications between executives of the two companies evidencing the agreement, as well as attempts to monitor and ensure compliance with the agreement. The complaint also asserts that Patterson joined the agreement. The complaint charges Benco, Henry Schein and Patterson of conspiring in violation of Section 5 of the FTC Act.
The complaint also alleges that on multiple occasions, Benco invited Burkhart Dental Supply – a regional distributor and the fourth largest full-service distributor in the United States – to refuse to provide discounts to buying groups. As a result of this conduct, the complaint separately charges Benco with a Section 5 invitation to collude count.
Based on the agreement among the distributors, the complaint contends that Benco, Henry Schein and Patterson unreasonably restrained price competition for dental products in the United States; distorted prices and undermined the ability of independent dentists to obtain lower prices and discounts for dental products; deprived independent dentists of the benefits of vigorous price and service competition among full-service, national dental distributors; unreasonably reduced output of dental products to dental buying groups; and eliminated or reduced the competitive bidding process for sales to these buying groups. This case reflects the Commission’s ongoing efforts to ensure competition in the healthcare industry.
The Commission vote to issue the administrative complaint was 2-0. The administrative trial is scheduled to begin on Oct. 16, 2018.
https://www.ftc.gov/news-events/press-releases/2018/02/ftc-sues-dental-products-distributors-alleged-conspiracy-not
Two states are scrutinizing Aetna's processes for approving or denying payment for medical care
The scrutiny cpmes after a former Aetna medical director admitted he never reviewed patient medical records when deciding whether to authorize treatment.
The states' inquiries and the medical director's admission, which drew scorn from the medical community, are a public relations nightmare for Hartford, Conn.-based Aetna, and puts a microscope on the insurance industry's pre-authorization and appeals processes. It could also hamper the national insurer's ability to merge with pharmacy giant CVS Health.
California Insurance Commissioner Dave Jones on Monday confirmed he is launching an investigation into Aetna's processes in denying claims and requests for prior authorization for care, as well as its utilization review process. Later that day, Colorado's insurance department said it would be asking questions about Aetna's compliance with state law regarding consumers' rights to appeal a coverage decision.
The two insurance departments were reacting to an October 2016 deposition of Dr. Jay Iinuma, who worked as Aetna's medical director for Southern California from 2012 to 2015, in a lawsuit concerning Aetna's denial of coverage for treatment of a patient's autoimmune disease in 2014.
In the deposition, Iinuma said that although he was responsible for overseeing the preauthorization of care, he never looked at patients' medical records during his tenure. Instead, he relied on nurses employed by Aetna to review the medical records and feed him pertinent information, such as lab values.
The deposition was first reported by Kaiser Health News in June 2017, but spurred an investigation after CNN showed the deposition to Jones.
"I wouldn't look at the medical records. I'd look at what the nurse provided, the information that the nurse provided," Iinuma said in his deposition. He also said Aetna trained him to make pre-authorization decisions this way.
In a statement, Aetna said its medical directors "review all necessary available medical information for cases that they are asked to evaluate. That is how they are trained, as physicians and as Aetna employees. In fact, adherence to those guidelines, which are based on health outcomes and not financial considerations, is an integral part of their yearly review process."
But state insurance departments worry that Aetna's pre-authorization and appeals processes could harm patients.
"If a health insurer is making decisions to deny coverage without a physician ever reviewing medical records that is a significant concern and could be a violation of the law," Jones said in a statement.
Iinuma's deposition drew scorn from the medical community, and the states' investigations into Aetna's internal processes are bad optics for a company hoping to merge with CVS Health. The U.S. Justice Department is now reviewing the proposed $69 billion merger.
http://www.modernhealthcare.com/article/20180213/NEWS/180219975?utm_source=modernhealthcare&utm_medium=email&utm_content=20180213-NEWS-180219975&utm_campaign=am
http://www.modernhealthcare.com/article/20180213/NEWS/180219975?utm_source=modernhealthcare&utm_medium=email&utm_content=20180213-NEWS-180219975&utm_campaign=am
NYT on the decline of EPA enforcement under Trump
Excerpt:
The data from the E.P.A. represented activity during the government’s 2017 fiscal year, which ended on Sept. 30, meaning the totals included the final three and half months of the Obama administration, when some of the E.P.A.’s biggest cases were settled. The data also reflected cases that were resolved during the Trump administration but had been initiated and largely handled under President Obama.
The New York Times in December did its own analysis of the E.P.A.’s civil enforcement action initiated in the first nine months under Scott Pruitt, the administrator appointed by President Trump. During that time frame, the agency sought civil penalties of about $50.4 million from polluters, which, adjusted for inflation, was about 39 percent of what the Obama administration sought in the same time period under its first E.P.A. director and about 70 percent of what the Bush administration sought in the same period.
The tally released Thursday showed a total of $1.6 billion in civil judicial and administrative penalties — money paid to punish polluters — the second largest amount in the last decade, with the single biggest amount of that coming from Volkswagen, which agreed to pay a $1.45 billion penalty at the end of the Obama administration. The prior peak was in fiscal year 2016, when BP agreed to pay $5.7 billion in penalties for the 2010 Deepwater Horizon disaster in the Gulf of Mexico.
In her statement, Ms. Bodine, who became enforcement director in December, said that the agency had focused its enforcement efforts during fiscal 2017 on speeding up the cleanup of contaminated sites, “deterring noncompliance” as well as a philosophy of “cooperative federalism,” which has meant turning over enforcement responsibilities to states.
The $20 billion in commitments by polluters to correct problems was up from $14 billion in 2016, the E.P.A. said.
But the analysis by The Times showed that during the first nine months of Mr. Pruitt’s tenure, demands for such fixes dropped sharply. The agency sought about $1.2 billion worth of fixes, known as injunctive relief, in civil cases initiated during that period. Adjusted for inflation, that was about 12 percent of what was sought under Mr. Obama and 48 percent under Mr. Bush. Overall, The Times’s analysis said, cases started under Mr. Pruitt’s leadership dropped significantly from both of the previous administrations.
Cynthia Giles, who was the assistant administrator for the E.P.A.’s enforcement office during the Obama administration, said the data released Thursday should not be interpreted as the Trump administration being tough on polluters.
“Nearly all of the large cases included in E.P.A.’s annual enforcement report were essentially over before the new administration arrived at E.P.A.,” said Ms. Giles, who had reviewed The Times’s analysis. “Without an unprecedented disavowal of an already negotiated and public agreement, there is nothing Administrator Pruitt’s team could have done to change the outcome. In no sense do these cases reflect the intentions or actions of the new administration.”
https://www.nytimes.com/2018/02/08/business/epa-penalties-polluters.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=stream&module=stream_unit&version=latest&contentPlacement=16&pgtype=sectionfront
Trump Council of Economic Advisors on lowering pharma prices
oThe Report is here: https://www.whitehouse.gov/wp-content/uploads/2017/11/CEA-Rx-White-Paper-Final2.pdf
The following excerpt discusses Medicaid and Medicare Policy:
To promote patient welfare, government policy should induce price competition. In the two primary U.S. insurance programs, Medicaid and Medicare, current policies dampen price competition, thereby artificially raising prices.
Medicaid Manufacturers that choose to enter the Medicaid Drug Rebate Program are required to offer state Medicaid programs their prescription medications at a price that either includes a minimum rebate of 23.1 percent of the average manufacturer price (AMP – the average price paid to manufacturers by wholesalers and retail pharmacies that buy direct net of prompt pay discounts) for brand drugs or, if lower, the “best price” the manufacturers offer to any other purchaser (“Medicaid Drug Rebate Program”). In exchange for these discounted rates, states are then required to cover the manufacturer's drugs in their Medicaid programs.
In fiscal year 2014, Medicaid programs spent $42 billion on prescription drugs and collected about $20 billion back in rebates so that net expenditures equaled about $22 billion (Baghdadi et al. 2017). The practice of mimicking public relative prices to private relative prices is partly beneficial because it allows the private market rather than bureaucrats to determine relative prices based on patient value.
While this basic approach of using market prices is sound, as currently implemented, the Medicaid Best Price program can create artificially high prices in the private sector under certain conditions. If a large share of a given drug’s market is enrolled in Medicaid (e.g., for HIV or mental health drugs), a pharmaceutical firm has an incentive to inflate prices in the private sector so that it can collect higher post-rebate prices from its large Medicaid customer base. Similarly, the mandated price discrimination implicit in this program prevents price discounts to lower-income patients in the private sector. Lower-income, private patient populations cannot be charged low prices as that jeopardizes the Medicaid price.
Reforms could help prevent the inflated private sector prices the program induces while at the same time allowing the government to use pricing information from the private sector to determine value. While CMS rules require that best prices be determined on a unit basis, Medicaid statutes do not (42 C.F.R. 477.506(e)(2)) (Sachs et al. 2017). CMS could revise rules to specify how manufacturers calculate best prices determined after the sale and the patient’s recovery. This may encourage competition and lower prices. It would also incentivize better adherence regimens and lower the risk to the government that it pays money for something that turns out to be less effective than expected. CMS could also provide more guidance on how value-based contracts and price reporting would affect other price regulations. This would encourage drug purchasers to negotiate, thus increasing competition and lowering prices.
Medicare Medicare Part B Physician Administered Drugs Medicare Part B drugs are those administered by physicians in their outpatient clinics to Medicare recipients. From 2006 through 2013, twenty-eight percent of this spending was for newly approved drugs that were concentrated among a small number of conditions, such as cancer, blood diseases, and ophthalmology (GAO 2015). According to the GAO, over time, expensive specialty drugs and biologics approved through expedited pathways have come to represent a higher proportion of newly approved drugs that are administered by physicians.
In the Medicare Part B program, through which many specialty drugs are reimbursed, drugs administered in physicians’ offices and hospital outpatient departments are reimbursed based on a 6 percent markup (now 4.3 percent due to the sequester) above the Average Sales Price (ASP), that manufacturers receive net of any price discounts. For example, with a 6 percent markup above ASP the doctor receives $600 for administering a $10,000 drug and $60 for a $1,000 drug. As is true in any cost-plus reimbursement environment, this leads to a lack of incentive to control costs and instead an incentive to raise costs. The current policy mutes the incentives for doctors to prescribe cheaper drugs and therefore for manufacturers to engage in price competition.
While there may be larger costs to providers for prescribing more expensive drugs, such as storing expensive drugs and the lower probability of collecting reimbursement or copays, these costs are routinely handled in other healthcare markets without resorting to distorted cost-plus reimbursements. While some private payers have responded to this type of perverse incentive problem through alternative reimbursement procedures for drugs delivered in clinics, similar reforms have not been made for the Medicare Part B program. The Medicare Payment Advisory Commission (MedPAC), the Government Accountability Office (GAO), the Department of Health and Human Services (HHS) Office of the Inspector General (OIG), and others have all proposed solutions for how Medicare could remove perverse incentives for prescribing higher-priced drugs and instead provide an incentive for doctors to prescribe cheaper drugs, putting competitive pressure on manufacturers to reduce their prices.
Options for reform include: i. Introducing physician reimbursement that is not tied to drug prices, ii. Moving Medicare Part B drug coverage into Medicare Part D, where price-competition over drug prices is better structured, and iii. Changing how pricing data is reported to increase transparency. By moving Part B coverage into Part D, the 71 percent of Medicare beneficiaries who participate in Part D would receive prescriptions that they would fill and their physicians would administer, thereby removing any economic incentive from prescribing decisions.
There are additional reforms to consider that increase price transparency and reduce incentives for more spending.
First, require better and more accurate sales data from drugs that are older than six months since launch. This is important because drug makers have an incentive to exclude discount prices from the sales price they report, since the higher the average sales price, the more they are paid.
Second, for new drugs that do not have much sales data, cut the doctor’s payment. This removes the incentive of prescribing a high-priced drug when physicians write prescriptions, and elevates clinical competition as a decision-making factor.
Medicare Part D Outpatient Drugs Medicare Part D reimburses outpatient drugs, and the program has several provisions that artificially raise costs for patients. The Social Security Act requires Medicare Part D plan formularies to include drugs within each category and class of covered drugs. CMS has previously interpreted the Social Security Act’s requirement to include drugs within each therapeutic category and class to mean the inclusion of at least two non-therapeutically equivalent drugs. This requirement eliminates the ability of Part D sponsors to negotiate for lower prices when there are only two drugs on the market since drug manufacturers know that CMS must cover both. The two-drug requirement leads to more spending.
Another problem resulting from Medicare Part D is the overpricing of low value drugs. The Social Security Act §1860D-14A stipulates cost-sharing amounts for low-income subsidy enrollees that vary by income and are adjusted by projected program cost growth. The use of formulary tier-based cost-sharing is prohibited, which eliminates the ability of sponsor plans to price and discount drugs according to value for patients. Low-income subsidy enrollees and sponsor plans should have incentives to use high value drugs. The Medicare Payment Advisory Commission (MedPAC 2016) has highlighted this problem by reporting that 17.3 percent of lowincome subsidy enrollees are high-cost compared to just 2.8 percent of other enrollees. The Medicare Part D Coverage Gap Discount Program requires drug manufacturers to provide a 50 percent discount to enrollees while in the coverage gap. The 50 percent discount is then counted toward the calculation of an enrollee’s true out-of-pocket cost, accelerating them through the coverage gap into the catastrophic phase of benefit where Medicare pays 80 percent of all drug costs and the sponsor and enrollee are responsible for the remaining 15 and 5 percent, respectively. With such discounts, enrollees may have an incentive to use brand drugs and reference biologics when less expensive generics and biosimilars are available, since the large discounted payment counts toward the true out-of-pocket cost. The overall Part D benefit structure creates perverse incentives for plan sponsors and pharmacy benefit managers (PBMs) to generate formularies that favor high-price, high-rebate drugs that speeds patients through the early phases of the benefit structure where plans are most liable for costs.
The Medicare Part D program has unintended consequences that have resulted in higher drug prices for consumers. MedPAC and OIG, among others, have each produced various policy CEA • Reforming Biopharmaceutical Pricing at Home and Abroad 9 options to address these misaligned incentives within the program. Solutions to overcome these problems could include:
i. Requiring plans to share drug manufacturer discounts with patients.;
ii. Allowing plans to manage formularies to negotiate better prices for patients;
iii. Lowering co-pays for generic drugs for patients; and
iv. Discouraging plan formulary design that speeds patients to the catastrophic coverage phase of benefit and increases overall spending.
From Publtic Citizen: Jeff Sovern on the new CFPB and payday lending
How Mulvaney Can Sabotage the CFPB's Payday Lending Ruleby Jeff Sovern
Last month, Interim Director Mulvaney announced that the Bureau may reconsider the Bureau's payday lending rule. But he can't just rescind it. That would require a full notice-and-comment rulemaking, and that would take longer than Mulvaney will be at the CFPB (under the Vacancies Act, he is limited to 210 days). True, Mulvaney could start that process and a successor could finish it. But even then, the Bureau would have to to meet the requirements of the APA and not appear to be acting arbitrarily and capriciously, which would be hard to do after it already promulgated a rule on the subject.
But according to a Kate Berry article in the American Banker, Mulvaney can’t just kill CFPB payday rule, but here’s what he can do, Mulvaney could delay implementation of the existing rule and then a successor could amend the rule to make it less protective of consumers. One scenario would shift the rule from prohibiting a payday lender from making certain loans unless the lender verified that the consumer could repay the loan to a rule that obliged lenders to provide disclosures.
The problem with that approach is that consumers all too often ignore disclosures, as Omri Ben-Shahar and Carl E. Schneider demonstrated in their book, More Than You Wanted to Know: The Failure of Mandated Disclosure. For example, a study by Marianne Bertrand and Adair Morse, both of Chicago's Booth School of Business, Information Disclosure, Cognitive Biases and Payday Borrowing and Payday Borrowing, that displayed the image below to payday borrowers, found that it reduced payday borrowing by 11% in later pay cycles and the amount borrowed by 23%. That doesn't seem like much when you look at some of the comparisons below, such as that a three-month credit card loan would cost $15, versus $270 for a payday loan. So the difference between regulation and disclosure for some--perhaps many--consumers is the difference between being caught in a debt trap, or not.
[see original for graphic]
Posted by Jeff Sovern on Saturday, February 10, 2018 at 04:45 PM in Consumer Financial Protection Bureau, Predatory Lending |Permalink
The LA Times on what the Mick Mulvaney CFPB will do, and not do
Excerpt:
Between the bevy of recent moves by the bureau and the launch of a wide-ranging review of its practices ordered by Mulvaney, a picture is emerging of what a Trump-era CFPB will look like — and it appears it will not the resemble the agency that developed a pugnacious reputation over the last six years.
Mulvaney outlined his view in a memo [http://www.documentcloud.org/documents/4357880-Mulvaney-Memo.html], obtained by news site ProPublica, criticizing the bureau for being overly aggressive under Cordray and saying it would now serve not only consumers but the financial-services companies it was created to regulate.
"We don't just work for the government, we work for the people. And that means everyone: those who use credit cards and those who provide those cards; those who take loans and those who make them; those who buy cards and whose who sell them," wrote Mulvaney, a free-market advocate who once called the CFPB a "sad, sick joke."
For Lauren Saunders, associate director of the National Consumer Law Center, such a mission statement simply means unwinding consumer protections.
"I think we'll see a lot of rollbacks," she said.
For now, the practical implications of the pullback appear to be limited to the agency's more aggressive interpretations of consumer-protection law.
The lawsuit against Golden Valley Lending and other firms owned by the Habematolel Pomo of Upper Lake tribe is an example.
In that case and others, the agency relied on what industry attorneys have described as a novel argument: that lenders broke federal consumer protection laws that forbid unfair, deceptive or abusive practices by collecting on loans that carried interest rates higher than state laws allow, in some cases as high as 950%. In other words, the argument goes, the bureau piggybacked on state laws to allege a violation of federal laws.
Saunders said dropping the case looks to her like a clear sign that Mulvaney, who accepted contributions from high-interest lenders while serving in the House of Representatives, plans to go easy on players in that industry. Mulvaney in 2016 was one of a group of House members who argued in a 2016 letter to Cordray that federal regulation of the payday loan industry ignored states' rights and would cut off access to credit for many Americans.
http://www.latimes.com/business/la-fi-cfpb-overhaul-20180205-story.html
The federal government lacks even basic information about the quality of assisted living services provided to low-income people on Medicaid, according to the Government Accountability Office
From the NYT:
.
Billions of dollars in government spending is flowing to the industry even as it operates under a patchwork of vague standards and limited supervision by federal and state authorities. States reported spending more than $10 billion a year in federal and state funds for assisted living services for more than 330,000 Medicaid beneficiaries, an average of more than $30,000 a person, the Government Accountability Office found in a survey of states.
States are supposed to keep track of cases involving the abuse, neglect, exploitation or unexplained death of Medicaid beneficiaries in assisted living facilities. But, the report said, more than half of the states were unable to provide information on the number or nature of such cases.
Just 22 states were able to provide data on “critical incidents — cases of potential or actual harm.” In one year, those states reported a total of more than 22,900 incidents, including the physical, emotional or sexual abuse of residents.
Many of those people are “particularly vulnerable,” the report said, like older adults and people with physical or intellectual disabilities. More than a third of residents are believed to have Alzheimer’s or other forms of dementia.
The report provides the most detailed look to date at the role of assisted living in Medicaid, one of the nation’s largest health care programs. Titled “Improved Federal Oversight of Beneficiary Health and Welfare Is Needed,” it grew out of a two-year study requested by a bipartisan group of four senators.
Assisted living communities are intended to be a bridge between living at home and living in a nursing home. Residents can live in apartments or houses, with a high degree of independence, but can still receive help managing their medications and performing daily activities like bathing, dressing and eating.
Nothing in the report disputes the fact that some assisted living facilities provide high-quality, compassionate care.
The National Center for Assisted Living, a trade group for providers, said states already had “a robust oversight system” to ensure proper care for residents. In the last two years, it said, several states, including California, Oregon, Rhode Island and Virginia, have adopted laws to enhance licensing requirements and penalties for poor performance.
Continue reading the NYT story at https://www.nytimes.com/2018/02/03/us/politics/assisted-living-gaps.html#story-continues-3
Federal Reserve documents on Wells Fargo
Press Release February 02, 2018
Responding to recent and widespread consumer abuses and other compliance breakdowns by Wells Fargo, the Federal Reserve Board on Friday announced that it would restrict the growth of the firm until it sufficiently improves its governance and controls. Concurrently with the Board's action, Wells Fargo will replace three current board members by April and a fourth board member by the end of the year.
In addition to the growth restriction, the Board's consent cease and desist order with Wells Fargo requires the firm to improve its governance and risk management processes, including strengthening the effectiveness of oversight by its board of directors. Until the firm makes sufficient improvements, it will be restricted from growing any larger than its total asset size as of the end of 2017. The Board required each current director to sign the cease and desist order.
"We cannot tolerate pervasive and persistent misconduct at any bank and the consumers harmed by Wells Fargo expect that robust and comprehensive reforms will be put in place to make certain that the abuses do not occur again," Chair Janet L. Yellen said. "The enforcement action we are taking today will ensure that Wells Fargo will not expand until it is able to do so safely and with the protections needed to manage all of its risks and protect its customers."
In recent years, Wells Fargo pursued a business strategy that prioritized its overall growth without ensuring appropriate management of all key risks. The firm did not have an effective firm-wide risk management framework in place that covered all key risks. This prevented the proper escalation of serious compliance breakdowns to the board of directors.
The Board's action will restrict Wells Fargo's growth until its governance and risk management sufficiently improves but will not require the firm to cease current activities, including accepting customer deposits or making consumer loans.
Emphasizing the need for improved director oversight of the firm, the Board has sent letters to each current Wells Fargo board member confirming that the firm's board of directors, during the period of compliance breakdowns, did not meet supervisory expectations. Letters were also sent to former Chairman and Chief Executive Officer John Stumpf and past lead independent director Stephen Sanger stating that their performance in those roles, in particular, did not meet the Federal Reserve's expectations.
See https://www.federalreserve.gov/newsevents/pressreleases/enforcement20180202a.htm
The consent cease and desist order and Fed letters are available at the same URL WTF Independent repair geek rants on the planned obsolescence of Apple products
Louis Rossmann is an independent service technician in New York City who has repaired Apple products for years.
In this video, Rossman uses passionate and remarkably profane language to argue that Apple withholds crucial repair information from independent repair technicians, and refuses to do repairs itself, thereby forcing product replacement rather than repair. He points out that auto manufacturers face government regulations that discourage withholding of repair information. He then goes on to explain in great detail (maybe a lot more than you want) how he is able to effect particular repairs that Apple refuses to do -- notably, he can fix a common faulty sensor problem with $2 worth of parts, a repair that Apple charges $750 for (Rossman charges less than half of that, and in cheaper markets, you can get it done for as little as $75).
Rossman has testified to lawmakers in support of "right to repair" legislation. See https://repair.org/legislation/ for a description of the legislative proposals.
The video is at https://boingboing.net/2017/04/17/right-to-repair.html
This posting is by Don Allen Resnikoff, who takes responsibility for the content.
A Geek guide to the technology and economics supporting disinformation on the internet:
#DigitalDeceit: The Technologies Behind Precision Propaganda on the Internet
By Dipayan Ghosh, Shorenstein Fellow, and Ben Scott, Senior Advisor to the Open Technology Institute at New America. Co-published by the New America Foundation and the Shorenstein Center.
See https://shorensteincenter.org/digital-deceit-precision-propaganda/
The introduction to the piece:
Over the past year, there has been rising pressure on Facebook, Google and Twitter to account for how bad actors are exploiting their platforms. The catalyst of this so-called “tech-lash” was the revelation in summer 2017 that agents of the Russian government engaged in disinformation operations using these services to influence the 2016 presidential campaigns.
The investigation into the Russian operation pulled back the curtain on a modern Internet marketplace that enables widespread disinformation over online channels. Questionable digital advertisements, social media bots, and viral internet memes carrying toxic messages have featured heavily in the news. But we have only begun to scratch the surface of a much larger ecosystem of digital advertising and marketing technologies. To truly address the specter of future nefarious interventions in the American political process, we need to broaden the lens and assess all of the tools available to online commercial advertisers. Disinformation operators in the future will replicate all of these techniques, using the full suite of platforms and technologies. These tools grow more powerful all the time as new advances in algorithmic technologies and artificial intelligence are integrated into the marketplace for digital marketing and advertising.
The central problem of disinformation corrupting American political culture is not Russian spies or a particular social media platform. The central problem is that the entire industry is built to leverage sophisticated technology to aggregate user attention and sell advertising. There is an alignment of interests between advertisers and the platforms. And disinformation operators are typically indistinguishable from any other advertiser. Any viable policy solutions must start here.
To inform and support this important public debate, this paper analyzes the technologies of digital advertising and marketing in order to deepen our understanding of precision propaganda.
From Public Citizen Consumer Law & Policy Blog
CFPB Has No Update on Enforcement Freeze After Not Announcing Enforcement Action in More Than 2 MonthsPosted: 24 Jan 2018 11:45 AM PST
by Jeff Sovern
In response to my inquiry, a CFPB representative, Brenda Muniz, informed me today that "There are no updates with respect to the freeze on enforcement actions or the issuance of CIDs," and that the CFPB has not announced an enforcement action since its November 21 announcement about Citibank. Though the Bureau's press releases say that it is “consistently enforcing federal consumer financial law," and Mr. Mulvaney released a statement yesterday, which Allison linked to, in which he said the Bureau would enforce consumer laws on his watch, it's hard to find evidence of it, unless he means that the Bureau will continue to litigate cases Mulvaney's predecessor commenced, though even that is not always happening. Meanwhile, today the Bureau issued the promised Request for Information Regarding Bureau Civil Investigative Demands and Associated Processes.
The Post's View
Opinion
A D.C. statute bars redeveloping land with a gas station on it. That’s absurd.
By Editorial Board January 21
SELF-GOVERNMENT, alas, does not guarantee sensible government. Exhibit A: the District’s strange statute that effectively prohibits the redevelopment of any land containing a full-service gas station. If you own the ground under one of the city’s roughly four dozen such establishments, you’re stuck: You can’t tear the garage down and put up condos; you really can’t even reduce it to a leaner “gas-and-go” operation. Ostensibly intended to protect an urban amenity for car owners, the ban can be waived, case by case, by the mayor — but only with the prior approval of the Gas Station Advisory Board. Alas, this august body has no members. In fact, a succession of mayors has declined to appoint any for the past 11 years.
John C. Formant is tired of this Catch-22. He owns the site of a full-service Shell station at a major intersection in booming Petworth. He would like to sell the land for construction of a residential-commercial building, including 57 condos, and even has permission from a different part of the District bureaucracy for the plan. Unless and until he can get out from under the gas-station conversion ban, however, his plans are not worth the paper they’re printed on — and his land’s market value may be suffering, too. On Jan. 2, Mr. Formant filed a lawsuit asking the U.S. District Court for the District of Columbia to declare D.C.’s law unconstitutional, as an uncompensated “taking” of his property and a form of involuntary servitude, to boot.
Those are sweeping claims, regarding which we would not hazard a legal analysis. On the essential absurdity of the District’s law, however, Mr. Formant appears to have an open-and-shut case. There’s a long history to the D.C. Council’s micromanagement of the city’s gas stations, some of it reflecting council members’ well-intentioned but exaggerated concerns about preserving a balanced commercial landscape — and a lot of it involving petty political rivalries and rent-seeking business interests too arcane to enumerate.
Complete editorial: https://www.washingtonpost.com/opinions/a-dc-statute-bars-redeveloping-land-with-a-gas-station-on-it-thats-insensible/2018/01/21/ac496ef2-fc7c-11e7-a46b-a3614530bd87_story.html?utm_term=.dbec22d78342
A copy of the lawsuit Complaint is here: https://www.scribd.com/document/368429732/Gas-Station-Lawsuit
The Supreme Court rules that D.C. police officers acted reasonably in arresting 21 people at a late-night house party a decade ago in a case that featured women in garter belts stuffed with cash and a mystery hostess named “Peaches.”
The court ruled unanimously that the officers could not be held liable for making the arrests after they came upon a scene of “utter Bacchanalia,” as Justice Clarence Thomas described it in announcing the decision, at a house party where the homeowner was not present and it was unclear whether the guests had been invited.
“Based on the vagueness and implausibility of the partygoers’ stories, the officers could have reasonably inferred that they were lying and that their lies suggested a guilty mind,” Thomas wrote in his decision for the court. At any rate, the officers had qualified immunity for their actions, the court said.
From U.S. Supreme Court opinion syllabus:
District of Columbia police officers responded to a complaint about loud music and illegal activities in a vacant house. Inside, they found the house nearly barren and in disarray. The officers smelled marijuana and observed beer bottles and cups of liquor on the floor, which was dirty. They found a make-shift strip club in the living room, and a naked woman and several men in an upstairs bedroom. Many partygoers scattered when they saw the uniformed officers, and some hid. The officers questioned everyone and got inconsistent stories. Two women identified “Peaches” as the house’s tenant and said that she had given the partygoers permission to have the party. But Peaches was not there. When the officers spoke by phone to Peaches, she was nervous, agitated, and evasive. At first, she claimed that she was renting the house and had given the partygoers permission to have the party, but she eventually admitted that she did not have permission to use the house. The owner confirmed that he had not given anyone permission to be there. The officers then arrested the partygoers for unlawful entry. Several partygoers sued for false arrest under the Fourth Amendment and District law. The District Court concluded that the officers lacked probable cause to arrest the partygoers for unlawful entry and that two of the officers, petitioners here, were not entitled to qualified immunity. A divided panel of the D. C. Circuit affirmed.
Held: 1. The officers had probable cause to arrest the partygoers.
The U.S. Supreme Court decision is here: https://www.supremecourt.gov/opinions/17pdf/15-1485_1qm2.pdf
The Washington Post story is here: https://www.washingtonpost.com/local/public-safety/supreme-court-rules-for-police-officers-in-dc-house-party-case-that-involved-mystery-hostess-called-peaches/2018/01/22/87e5eb4a-fed3-11e7-bb03-722769454f82_story.html?hpid=hp_local-news_court-1050a%3Ahomepage%2Fstory&utm_term=.a30451c8eedb
WSJ's Greg Ip on the future prospects of antitrust enforcement against Google and other similar companies
Greg Ip's front page Wall Street Journal article is remarkable for several reasons. One is that it is good journalism: The introductory paragraphs offer some of the flavor of the piece:
Standard Oil and Co. and American Telephone and Telegraph Co. were the technological titans of their day, commanding more than 80% of their markets.
Today's tech giants are just as dominant: In the U.S., Alphabet Inc.'s Google drives 89% of internet search; 95% of young adults on the internet use a Facebook Inc. product; and Amazon.com Inc. now accounts for 75% of electronic book sales. Those firms that aren't monopolists are duopolists: Google and Facebook absorbed 63% of online ad spending last year; Google and Apple Inc. provide 99% of mobile phone operating systems; while Apple and Microsoft Corp. supply 95% of desktop operating systems.
A growing number of critics think these tech giants need to be broken up or regulated as Standard Oil and AT&T once were. Their alleged sins run the gamut from disseminating fake news and fostering addiction to laying waste to small towns' shopping districts. But antitrust regulators have a narrow test: Does their size leave consumers worse off?
That may not be true in the future: if market dominance means fewer competitors and less innovation, consumers will be worse off than if those companies had been restrained. "The impact on innovation can be the most important competitive effect" in an antitrust case, says Fiona Scott Morton, a Yale University economist who served in the Justice Department's antitrust division under Barack Obama.
The Ip article can be found behind a paywall at https://www.wsj.com/articles/the-antitrust-case-against-facebook-google-amazon-and-apple-1516121561
The article is available without a subscription at http://www.foxbusiness.com/features/2018/01/16/antitrust-case-against-facebook-google-2.html
Greg Ip has made several TV appearances to discuss his article. A video of his appearance on Fox News is here:
https://eblnews.com/video/antitrust-action-looms-over-techs-biggest-names-307425
The Greg Ip article is remarkable for another reason. It demonstrates that competition policy arguments raising concerns about Google and similar companies are no longer evangelical exhortations of a few. The idea that Google and Facebook can be harmful in a manner analogous to Standard Oil and AT&T in the past and be targets for future regulation has become mainstream, at least for those who would read the Wall Street Journal or watch Fox Business News.
The mainstream attention to market power issues concerning tech companies with product prices of zero is a reminder to antitrust insiders that antitrust law is not just something chiseled in stone in Chicago some time ago, or just the ideas that practicing lawyers can take to court today. Market power issues are public policy, and have a political dimension. What the public thinks about competition policy issues will influence future government action.
Some may think that discussions that touch on aspects of competition policy and antitrust with political overtones are "claptrap," either because they prefer that antitrust be static rather than dynamic, or they believe that antitrust and competition policy should exist in separate worlds. The Greg Ip article suggests that such retrograde views will not stop the progress of public debate of competition policy issues.
Posted by Don Allen Resnikoff, who takes personal responsibility for the content.
AAI Digital Platforms Roundtable
DATE: MARCH 22, 2018
LOCATION: NATIONAL PRESS CLUB, WASHINGTON DC
Questions about the efficacy of the antitrust laws in overseeing large technology platforms are a prominent theme in public policy discourse. Many advocates contend that the antitrust laws are fully able to handle anticompetitive conduct or mergers that may arise in digital markets. Others question whether the existing laws and the prevailing consumer welfare standard are up to this important task.
AAI’s Digital Platforms Roundtable will address the growth of digital platforms and advance the state of thinking about competition in this important domain. The Roundtable will explore the central question: What does an analysis of digital platforms under the antitrust laws look like?
The Roundtable will bring together experts in competition law from government, industry, academia, and the public interest community. They will participate in discussions about the elements of antitrust approaches to mergers and strategic competitive conduct and advance the debate on the applicability of the antitrust laws to digital platforms. The half-day program will include opening remarks, two panels, and a roundtable discussion.
More information: http://www.antitrustinstitute.org/events/aai-digital-platforms-roundtable
From DMN: 117 Colorado Cities & Counties Have Voted In Favor of Locally-Owned ISPs
Paul Resnikoff
January 17, 2018
Tech giants, Democrats in Congress, and more than 22 states are fighting the FCC to protect net neutrality. But the most powerful weapon could be municipal governments themselves. The FCC has been criticized for gutting net neutrality despite overwhelming demand to protect it. Even worse, FCC commissioner Ajit Pai has been assailed by accusations of cronyism and corruption, especially given his strong ties to mega-ISP Verizon.
But what if ISPs weren’t so easily controlled by the FCC?
Enter the State of Colorado, which could become ground zero for the net neutrality resistance. Earlier this month, the municipality of Fort Collins, CO approved a $150 million budget to initiate a homegrown, locally-controlled ISP network. That homegrown ISP, in turn, would determine rules like net neutrality, not to mention fees charged to its citizens.
But that looks like the tip of the iceberg.
Fort Collins is just one of dozens of municipalities in Colorado that voted to protect their ability to create a local ISP.
Amazingly, municipal internet networks are illegal in Colorado. Back in 2005, Senate Bill 152 was passed. It made it illegal to use taxpayer dollars to construct a local broadband network. Of course, that bill was largely created by the lobbying efforts of major ISPs like Comcast and CenturyLink, both entrenched Colorado broadband providers.
Now, a total of 117 communities within Colorado have successfully voted against Senate Bill 152. As a result, they have protected their ability to develop their own broadband networks.
Last November, as the FCC prepared to gut net neutrality, another 19 joined the group. Fort Collins is simply one of the first communities to seriously act on that right.
According to the Institute for Local Self-Reliance, the latest batch of votes were a landslide. More than 83 percent of voters wanted out of Senate Bill 152 in the November round. “These cities and counties recognize that they cannot count on Comcast and CenturyLink alone to meet local needs, which is why you see overwhelming support even in an off-year election,” said Christopher Mitchell, director of the Community Broadband Networks initiative at the Institute for Local Self-Reliance.
All of which spells a major problem for entrenched ISPs — in Colorado and beyond. Instead of enjoying outright monopolies and elevated rates, the presence of a local ‘utility ISP’ spells serious competition.
The biggest reason is that a municipally-created ISP is designed to meet the needs of its citizens, both in terms of service and price. That means that if a local community wants net neutrality and affordable speeds, then the locally-created network will strive to deliver just that.
It also means that citizens less capable of paying for internet access have a greater chance of receiving it.
Actually, there’s another Colorado municipality that offers its own broadband. Back in 2011, the town of Longmont started offering a high-speed, 1 gigabyte/second service for $49.95. That crushed the next competitor, which offers a 20Mbps connection.
As of last summer, the Longmont service had 90,000 takers. That’s more than half of all residents, according to the city.
So who’s next?
Importantly, voting against Senate Bill 152 merely gives cities and counties the right to build their own networks. But given enough outcry over issues like net neutrality, bad service, and high prices, it’s likely a few other homegrown ISPs will appear in the coming months and years.
Source: https://www.digitalmusicnews.com/2018/01/17/colorado-municipalities-net-neutrality/
New York and Connecticut sue EPA in New York federal court for failing to meet a Clean Air Act deadline for curbing smog pollution from other states
States Complaint: https://www.law360.com/articles/1002928/attachments/0
Law 360 article (paywall): https://www.law360.com/energy/articles/1002928/ny-conn-sue-epa-over-lax-upwind-smog-enforcement?nl_pk=9fa8806b-1d9f-4443-911f-ca2a2f4a32a7&utm_source=newsletter&utm_medium=email&utm_campaign=energy
States, environmental groups asked the D.C. Circuit to restart litigation over Government Clean Power Plan
EPA asks to hold case in suspense.
States brief:
https://www.law360.com/articles/1002846/attachments/0
Environmental organizations brief:
https://www.law360.com/articles/1002846/attachments/1
Law 360 article (paywall) at https://www.law360.com/energy/articles/1002846/states-oppose-epa-bid-for-time-in-clean-power-plan-row?nl_pk=9fa8806b-1d9f-4443-911f-ca2a2f4a32a7&utm_source=newsletter&utm_medium=email&utm_campaign=energy
The legal fight against the Federal Communications Commission’s recent repeal of so-called net neutrality regulations began on Tuesday [1/16], with a flurry of lawsuits filed to block the agency’s action
One suit, filed by 21 state attorneys general, said the agency’s actions broke federal law. The commission’s rollback of net neutrality rules were “arbitrary and capricious,” the attorneys general said, and a reversal of the agency’s longstanding policy to prevent internet service providers from blocking or charging websites for faster delivery of content to consumers.
Mozilla, the nonprofit organization behind the Firefox web browser, said the new F.C.C. rules would harm internet entrepreneurs who could be forced to pay fees for faster delivery of their content and services to consumers. A similar argument was made by another group that filed a suit, the Open Technology Institute, a part of a liberal think tank, the New America Foundation.
Suits were also filed on Tuesday by Free Press and Public Knowledge, two public interest groups. Four of the suits were filed in the United States Court of Appeals for the District of Columbia Circuit. The Free Press suit was filed in the United States Court of Appeals for the First Circuit.
From https://www.nytimes.com/2018/01/16/technology/net-neutrality-lawsuit-attorneys-general.html?dlbk=&emc=edit_dk_20180117&nl=dealbook&nlid=67075843&te=1&_r=0
From Wolters-Kluwer AntitrustConnect Blog:
Three Antitrust Cases To Be Heard by High Court
(CLICK TITLE FOR LINK)
JEFFREY MAY
January 15, 2018
It’s shaping up to be a busy term for antitrust issues at the U.S. Supreme Court. The Court on January 12 decided to review a third antitrust case.
In the context of a price fixing action against foreign vitamin C manufacturers, the Court will consider “whether a court may exercise independent review of an appearing foreign sovereign’s interpretation of its domestic law” or must defer to the foreign government’s legal statement. Earlier this term, the justices agreed to weigh in on the appealability of a denial of state action immunity, and consider a joint state effort to challenge so-called “anti-steering” rules that prohibited merchants who accepted American Express cards from directing customers to alternative credit card brands.
Foreign compulsion, comity. The most recent issue to be taken up by the Court involves a Second Circuit decision that vacated a district court judgment against Chinese vitamin C manufacturers for fixing prices. Animal Science Products and other U.S. purchasers of vitamin C alleged that Hebei Welcome Pharmaceutical and other Chinese manufacturers and exporters of vitamin C conspired to fix the price and supply of vitamin C sold to U.S. companies on the international market in violation of the Sherman Act. The federal district court in New York City rejected the defendants’ motion for judgment as a matter of law, ruling that that the doctrines of act of state and international comity did not bar plaintiffs’ suit. After a jury trial, the court entered judgment, awarding the plaintiffs approximately $147 million in damages and enjoining the defendants from engaging in future anticompetitive behavior.
In September 2016, the U.S. Court of Appeals in New York City vacated the judgment and reversed the order denying the manufacturers’ motion to dismiss. It said that the case presented the question of what laws and standards control when U.S. antitrust laws are violated by foreign companies that claim to be acting at the express direction or mandate of a foreign government. The appellate court addressed how a federal court should respond when a foreign government, through its official agencies, appears before that court and represents that it has compelled an action that resulted in the violation of U.S. antitrust laws.
The Second Circuit concluded, that because the Chinese government had filed a formal statement in the district court asserting that Chinese law required the defendants to set prices and reduce quantities of vitamin C sold abroad and because the manufacturers could not simultaneously comply with Chinese law and U.S. antitrust laws, the principles of international comity required the district court to abstain from exercising jurisdiction in this case.
Animal Science petitioned the Supreme Court for review, arguing that the Chinese government had mischaracterized its own law in asserting that the Chinese companies’ anti-competitive behavior was required by Chinese law. The petitioners pointed to statements that the manufacturers’ anti-competitive agreement was self-regulated and voluntarily adopted without government intervention.
The petition presented three questions for the Supreme Court: (1) whether the Second Circuit, in conflict with decisions of three courts of appeals, erred in exercising jurisdiction under 28 U.S.C. §1291 over a pre-trial order denying a motion to dismiss following a full trial on the merits; (2) whether a court may exercise independent review of an appearing foreign sovereign’s interpretation of its domestic law (as held by the Fifth, Sixth, Seventh, Eleventh, and D.C. Circuits), or whether a court is “bound to defer” to a foreign government’s legal statement, as a matter of international comity, whenever the foreign government appears before the court (as held by the opinion below in accord with the Ninth Circuit); and (3) whether a court may abstain from exercising jurisdiction on a case-by-case basis, as a matter of discretionary international comity, over an otherwise valid Sherman Antitrust Act claim involving purely domestic injury.
The Court said that it would consider the second question presented. The U.S. Solicitor General filed an amicus brief in November 2017, arguing that the Court should grant the petition solely on the question of whether a federal court determining foreign law under Fed. R. Civ. P. 44.1 is required to treat as conclusive a submission from the foreign government characterizing its own law. The Solicitor General argued that a foreign government’s characterization of its own law is entitled to substantial weight, but was not conclusive. The government said that the case raised an important and recurring issue (Animal Science Products, Inc. v. Hebei Welcome Pharmaceutical Co. Ltd., Dkt. 16-1220).
State action immunity. The Supreme Court also agreed to review of a decision of the U.S. Court of Appeals in San Francisco rejecting an interlocutory appeal of a federal district court order denying a motion to dismiss monopolization charges on state action immunity grounds
because the collateral order doctrine did not allow immediate appeal of such an order as it was not considered a final decision.
The petition for certiorari asks whether orders denying state action immunity to public entities are immediately appealable under the collateral-order doctrine and highlights a split among the circuits on this issue. The Fifth and Eleventh Circuits have held that state action immunity is an immunity against suit rather than a mere defense against liability, and concluded that if a denial of state action immunity cannot be appealed immediately, then in effect it cannot be appealed at all. The Fourth and Sixth Circuits, and the Ninth Circuit in this case, have held that the interlocutory denial of state action immunity to a public entity is not immediately appealable (SolarCity Corp. v. Salt River Project Agricultural Improvement and Power District, Dkt. 17-368).
Anti-steering rules. In October 2017, the Court granted a petition brought by 11 states seeking a review of a Second Circuit ruling that the Department of Justice and the states failed to prove that “anti-steering” rules that prohibited merchants who accepted American Express cards from directing customers to alternative credit card brands violated Section 1 of the Sherman Act.
In 2010, the Justice Department and 17 states filed suit against the country’s three largest credit and charge card transaction networks. A February 2015 decision of the federal district court in Brooklyn, New York, in favor of the Justice Department and the states, and an order prohibiting American Express (AmEx) from enforcing these nondiscriminatory provisions (NDPs) in contracts with merchants, were reversed and remanded by the Second Circuit in September 2016, with instructions to enter judgment in favor of AmEx.
The petition asked: “Under the ‘rule of reason,’ did the government’s showing that AmEx’s anti-steering provisions stifled price competition on the merchant side of the credit-card platform suffice to prove anticompetitive effects and thereby shift the burden of establishing any procompetitive benefits from the provisions?”
The Justice Department declined to participate in the appeal and initially asked the Supreme Court to reject the states’ petition, arguing that the case does not satisfy the Court’s traditional certiorari standards. While the Justice Department agreed with the states that the district court’s findings established a prima facie case that the anti-steering rules unreasonably restrain trade, and that the Second Circuit had erred in holding otherwise, it nevertheless argued against the Supreme Court taking the cases. Specifically, the Justice Department argued that the decision was based almost entirely on the “two-sided” nature of the credit-card industry, and neither the Supreme Court nor any other circuit had squarely considered the application of the antitrust laws to two-sided platforms, as such.
After the Court agreed to hear the case, the Justice Department filed a brief, contending that the Court should vacate the judgment holding that the government failed to establish a prima facie case. On remand, the appellate court could consider any challenges that Amex properly preserved to the district court’s holding that Amex failed to establish
sufficient procompetitive justifications for the anti-steering rules, according to the Justice Department.
The case is set for argument on February 26, 2018 (State of Ohio v. American ExpressCompany, Dkt. 16-1454).
French prosecutor launches probe into Apple planned obsolescence: judicial source
Reuters Staff
PARIS (Reuters) - A French prosecutor has launched a preliminary investigation of U.S. tech giant Apple (AAPL.O) over alleged deception and planned obsolescence of its products following a complaint by a consumer organization, a judicial source said on Monday.
The investigation, opened on Friday, will be led by French consumer fraud watchdog DGCCRF, part of the Economy Ministry, the source said.
Apple acknowledged last month that it takes some measures to reduce power demands - which can have the effect of slowing the processor - in some older iPhone models when a phone’s battery is having trouble supplying the peak current that the processor demands.
The French watchdog’s preliminary investigation could take months, and depending on its findings, the case could be dropped or handed to a judge for an in-depth investigation.
Under French law, companies risk fines of up to 5 percent of their annual sales for deliberately shortening the life of their products to spur demand to replace them.
An Apple spokeswoman in the United States declined to comment on the French investigation, pointing to a Dec. 28 statement in which the company apologized over its handling of the battery issue and said it would never do anything to intentionally shorten the life of any Apple product.
An Apple spokesman in France could not immediately be reached for comment.
* * * *
A French consumer association called “HOP” -- standing for “Stop Planned Obsolescence” -- filed a legal complaint against Apple.
Apple already faces lawsuits in the United States over accusations of defrauding iPhone users by slowing down devices without warning to compensate for poor battery performance.
Apple also said on Dec. 28 it was slashing prices for battery replacements and would change its software to show users whether their phone battery was good.
Reporting by Yann Le Guernigou; Additional reporting by Stephen Nellis in San Francisco; Writing by Bate Felix; Editing by Adrian Croft
From: https://www.reuters.com/article/us-apple-france-investigation/french-prosecutor-launches-probe-into-apple-planned-obsolescence-judicial-source-idUSKBN1EX27V
Sally Hubbard on the connection between market power issues and fake news problems
Excerpt:
I. INTRODUCTION
The public and political outcry over fake news — and what to do about it — has generated abundant commentary. Yet few commentators have focused on how concentrated market power in online platforms contributes to the crisis. This essay expands on my view, originally set forth in Washington Bytes in January, that fake news is, in part, an antitrust problem.2
Fake news can be challenging to define. In this essay, fake news means stories that are simply made up for profit or propaganda without using trained journalists, conducting research or expending resources. Articles written according to journalistic practices from a particular political perspective or containing factual errors do not meet the definition of fake news used here.
This essay will explore two primary reasons why fake news is an antitrust problem.
First, Facebook and Google compete against legitimate news publishers for user attention, data and advertising dollars. The tech platforms’ business incentives run counter to the interests of legitimate news publishers, and the platforms pull technological levers that harm publishers’ business models and advantage their own. Such levers keep users within Facebook’s and Google’s digital walls and reduce traffic to news publishers’ properties, depriving publishers of the revenue essential to fund legitimate journalism and to counter fake news.
Second, Facebook and Google lack meaningful competition in their primary spheres of social media and online search, respectively. As a result, their algorithms have an outsized impact on the flow of information, and fake news purveyors can deceive hundreds of millions of users simply by gaming a single algorithm. Weak competition in social media platforms means Facebook can tailor its news feed to serve its financial interests, prioritizing engagement on the platform over veracity. Lack of competition in online search means Google does not face competitive pressure to drastically change its algorithm to stem the spread of fake news. Consumers and advertisers unhappy about the spread of fake news on Facebook and Google, or publishers dissatisfied with the two platforms’ terms of dealing, have limited options for taking their business elsewhere. If eliminating fake news were necessary to keep users, advertisers and content creators from defecting to competitive platforms – if profits were at stake – Facebook and Google would find a way to truly fix the problem.3
Facebook and Google, like all corporations, have fiduciary duties to maximize profits for their shareholders. Distinguishing content based on quality or veracity runs counter to the platforms’ profit motives because any content they cannot advertise around is a lost revenue opportunity. And because fake news is more likely to gain attention and foster engagement, it better serves both platforms’ advertising-based business models. The problem is not that Facebook and Google are bad corporations, as corporations are designed to place profits over socio-political concerns, even democracy. The problem rather is that the normal checks and balances of a free, competitive market do not constrain Facebook and Google from pursuing profits.
The full article is at https://www.competitionpolicyinternational.com/wp-content/uploads/2017/12/CPI-Hubbard.pdf
Industry complaints about Intel chips followed by class action filings
Meltdown and Spectre exploit an architectural flaw with the way processors handle speculative execution, a technique that most modern CPUs use to increase speed. Both classes of vulnerability could expose protected kernel memory, potentially allowing hackers to gain access to the inner workings of any unpatched system or penetrate security measures. The flaw can’t be fixed with a microcode update, meaning that developers for major OSes and platforms have had to devise workarounds that could seriously hurt performance.
In an email to a Linux list this week, Torvalds questioned the competence of Intel engineers and suggested that they were knowingly selling flawed products to the public. He also seemed particularly irritated that users could expect a five to 30 percent projected performance hit from the fixes.
“I think somebody inside of Intel needs to really take a long hard look at their CPU’s, and actually admit that they have issues instead of writing PR blurbs that say that everything works as designed,” Torvalds wrote. “.. and that really means that all these mitigation patches should be written with ‘not all CPU’s are crap’ in mind.”
“Or is Intel basically saying ‘we are committed to selling you shit forever and ever, and never fixing anything’?” he added. “Because if that’s the case, maybe we should start looking towards the ARM64 people more.”
“Please talk to management,” Torvalds concluded. “Because I really see exactly two possibibilities:—Intel never intends to fix anything OR—these workarounds should have a way to disable them. Which of the two is it?”
As Business Insider noted, as the person in charge of the open-source Linux kernel, Torvalds may be freer to share his opinion on Intel’s explanation for the issue than engineers working for the company’s business partners. Intel is currently being hit by a series of class action lawsuits citing the flaws and its handling of the security disclosure.
From: https://gizmodo.com/linus-torvalds-is-not-happy-about-intels-meltdown-and-s-1821845198
A copy of a California class action filing complaining about recent Intel CPU chip defects is here: https://images.law.com/contrib/content/uploads/documents/403/8058/GarciavIntel.pdf
- Internet Association: Statement Announcing Intention To Intervene In Judicial Action To Preserve Net Neutrality Protections
Washington, DC -- Internet Association President & CEO Michael Beckerman issued the following statement on the publication of the “Restoring Internet Freedom Order” that will gut net neutrality protections for consumers, startups, and other stakeholders:
“The final version of Chairman Pai’s rule, as expected, dismantles popular net neutrality protections for consumers. This rule defies the will of a bipartisan majority of Americans and fails to preserve a free and open internet. IA intends to act as an intervenor in judicial action against this order and, along with our member companies, will continue our push to restore strong, enforceable net neutrality protections through a legislative solution.”
A longer statement of the Internet Association position is here:
https://internetassociation.org/reports/an-empirical-investigation-of-the-impacts-of-net-neutrality/
A judge has given preliminary approval of a class-action settlement with Southwest Airlines for $15 million and “significant cooperation” in proving a cartel case against co-defendants American, Delta and United airlines
The Court order is here, through ABA Journal: www.abajournal.com/images/main_images/Preliminary_Settlement.pdf
The lawsuit alleges that the nation’s top four carriers “participated in an unlawful conspiracy” to artificially hold down passenger capacity to increase fare prices.
Southwest was the first defendant to settle in this case, which was consolidated from 103 actions from around the country, according to a court order from December 2015, and is being heard in the U.S. District Court for the District of Columbia.
From Public Citizen Consumer Law & Policy Blog:
Bank Trade Group Fears Industry Will Capture CFPB
Posted: 05 Jan 2018 11:22 AM PST
by Jeff Sovern
Camden R. Fine is the president and CEO of the Independent Community Bankers of America, a trade group for community bankers. The American Banker recently published his op-ed, Don’t let a credit union regulator run the CFPB, opposing the candidacy of National Credit Union Administration Chairman J. Mark McWatters to head the CFPB. Here's an excerpt:
[A]mid concerns that the CFPB lacks sufficient checks on its regulatory authority, the NCUA’s willingness to flout Congress in its rulemakings makes its chairman suspect for leading the bureau. McWatters and others at the NCUA have been strident advocates for expanding the credit union charter far beyond what Congress intended when it established the industry in the 1930s.
* * *
The CFPB should not be led by the head of an agency that has acted as a cheerleader for the industry under its oversight.
* * *
if Washington is willing to settle for single-director governance at the CFPB, then let’s advance a director with meaningful experience in the full range of regulations for which the CFPB is responsible. And let’s choose a leader not with a track record of cheerleading for the industry he is charged with overseeing and regulating, but rather a commitment to the laws by which our agencies are established by Congress.
Mr. Fine should be commended for pointing out that regulatory capture is a problem, especially when it comes to the CFPB (Mr. Fine's position appears to be rooted in the fact that credit unions compete with community banks). Regulatory capture has been endemic among banking regulators, most notably at the OCC. Indeed, it was the fear of regulatory capture that prompted Congress to structure the CFPB the way it did. It would be great if the next CFPB director, whomever that person may be, avoids regulatory capture, not only by credit unions, but also by banks and other financial institutions. One place the president could look for a director who would be unlikely to be captured by the industry, of course, would be among consumer advocates. Yes, I know, but a person's reach should exceed his grasp, or what's a heaven for?
The American Law Institute is engaged in a project to draft a Restatement of Consumer Contracts that takes arguably limited views related to unconscionability
From an advocacy letter to the ALI signed by a number of consumer groups, including DCCRC:
We are writing to express our deep concerns regarding the current Council Draft of this proposed Restatement. If followed by courts, it would tilt the marketplace dramatically toward businesses at the expense of consumers. Instead of respecting precedent, it undermines the well-accepted factors that courts and legislatures have developed to determine whether contract terms are procedurally unconscionable, and replaces them with a theory spun out in a law review article that cites not a single judicial decision in its support.
We write as organizations that work to protect consumers from unfairness in the marketplace every day. We have a keen on-the-ground feel for how some businesses treat consumers fairly and reasonably and how other businesses do not. We are also painfully aware of the dearth of legal resources available to consumers to defend themselves from mistreatment by businesses. The combined legal resources available to assist consumers are very limited and are able to help very few people.
We have a number of concerns about the assent, addition of new terms, and modification of terms provisions (Sections 2-4). These sections take an extremely loose view of the terms to which the consumer has agreed. Moreover, the Draft would allow a business to insert new terms after the fact as long as the consumer was told beforehand that it might do so, and the consumer has an opportunity to review the new terms and either continue under the existing terms or terminate the contract. Notably, the consumer is not given the same right to impose new terms upon the business.
The Draft justifies these lenient standards for courts to construct consumer assent on the ground that the doctrines of unconscionability and deception will act as a counterbalance to predatory terms, abuse, and overreaching by businesses. The entire premise of this proposed Restatement is that the unconscionability and deception doctrines are essential to “police” the market in light of the permissive assent rules found throughout. However, Sections 5 and 6 of the Draft undermine rather than strengthen these doctrines.
There are four primary problems with the Draft’s approach: (1) the definitions of procedural and substantive unconscionability are too restrictive; (2) the Draft fails to state that unconscionability and deception can be raised affirmatively to challenge the specific terms or the contract as a whole; (3) the Draft severely limits the remedies available once a court finds a term or contract to be unconscionable or that the business engaged in deception; and 4) the Draft places the burden of proof on consumers even though only businesses have access to most of that proof. In sum, the proposed Restatement embodies an expressly preferential treatment of businesses over consumers.
I. The Draft Undermines the Critically Important Doctrine of Unconscionability
Restatements consist of three parts: the “black letter,” which is intended to be the essential law on the subject; the Comments, which are regarded as an integral part of the section to which they belong and are consulted in order to understand the background and rationale of the black letter and the details of its application; and the Reporters’ Notes, which are regarded as the product of the Reporters (not the Institute) and discuss the legal and other sources they relied upon in formulating the black letter and the comments.
The black letter of the current Draft states that a term is procedurally unconscionable—i.e. that consumer’s agreement to the term was obtained in an unconscionable way—when it causes unfair surprise or results from the lack of meaningful choice of the part of the consumer.
Section 5(b)(2).
We do not object to this general statement. However, the Restatement also proposes to abandon—or drastically recast—the well-accepted set of factors that courts use to determine procedural unconscionability: (1) the consumer’s lack of financial sophistication (including cognitive biases); (2) the business’s exploitation of consumer disadvantages; (3) unequal bargaining power; (4) the use of incomprehensible language; (5) high pressure tactics and misrepresentations; and (5) whether economic, social, or practical duress compelled a party to execute the contract.
Comment 6 and the Reporters’ Notes seek to replace this set of factors with a new concept, “salience.”
The Reporters’ Notes define a contract term as salient “if it can affect the contracting decisions of a substantial number of consumers,” and then take the remarkable position that, if a term can affect the contracting decisions of a substantial number of consumers, then the market will police the term and the courts need not evaluate whether it was imposed on the consumer in an unconscionable way. The Reporters, however, do not cite any judicial decisions that define or apply the concept of “salience” in the unconscionability context, and there is not one reported or unreported decision on Westlaw that takes this approach. Instead, the Reporters’ Comments appear to rely entirely on a law review article that spins out this theory, again without citing any judicial decisions that support it.
This attempt to inject an entirely new approach contravenes the methodology that ALI claims to follow of ascertaining the majority and minority rules, determining which rule is the better one, and providing the rationale for choosing it. But of greater concern is its unfounded reliance on the marketplace to prevent overreaching and unfairness toward consumers. Recent history, including the vast wave of irresponsible lending that caused the mortgage meltdown ten years ago, demonstrates that overreaching and unfairness flourish in the marketplace.
The Draft also expresses an overly restrictive standard for whether a contract term is substantively unconscionable. While Section 5(b)(1) states that a term is substantively unconscionable if it is “fundamentally unfair” or “unreasonably one-sided,” the Comments state that: “the doctrine is to be used only when the one-sidedness of a term in the contract is extreme.” This test sets an overly high standard. Many fine print terms in consumer contracts today are unreasonable and unfair, but might not be viewed as “unconscionable” under this definition. For example, a fine print $35 charge might not seem “fundamentally” unfair in isolation. But when a $35 charge is repeatedly imposed, is high when compared to the cost of the contract, exceeds the cost to the business that the charge is intended to offset, or is imposed repeatedly, the fee should be declared unreasonable and unfair even though a court might not find it “extreme.”
Moreover, non-mutual enforcement clauses—clauses that deny the consumer the right to a remedy that the business is allowed to invoke—were not added to the list of contract terms that are prima facie unconscionable in the text of Section 5. It is common for businesses to place non-mutual clauses in consumer contracts that allow the business to sue the consumer in court, but relegate the consumer to mandatory binding arbitration. Although court decisions are split on whether “one-sided” or “non-mutual” enforcement clauses are unconscionable in the arbitration context, the better rule is that they are prima facie substantively unconscionable. The role of a Restatement is to “propose the better rule and provide the rationale for choosing it.” The Draft’s failure to apply the presumption of substantive unconscionability to such clauses, whether or not they involve mandatory arbitration, also undermines the critical role that the unconscionability doctrine is supposed to contribute to the success of the Restatement’s approach.
II. The Draft Cripples the Enforcement of Unconscionability and Deception
Our second concern about the Draft’s approach to the unconscionability doctrine is the failure to provide for robust consumer enforcement. The unconscionability doctrine will provide little or no counterweight to the permissive assent rules if consumers can raise it only as defense to a lawsuit to enforce the contract. Traditionally, common law unconscionability could be raised only as a defense to an action brought against a consumer. A court could permit a suit seeking a declaration that a term or the contract is unconscionable if the suit does not seek damages or other affirmative relief. The black letter of this Draft does not address the limited enforcement options available to consumers. Neither the Comments nor Reporters’ Notes discuss any judicial rulings on this point. Enforcement of the doctrine of deception suffers the same fate.
In the context of state and federal statutory protections, optimal policing of marketplace behavior occurs when state, federal, and private attorneys are acting as cops on the beat. In the context of the common law, however, there is little or no governmental enforcement, leaving consumers and their attorneys to bear this burden. Consumers should not be put in the position of having to default on the contract and subject themselves to negative credit reporting in order to raise unconscionability or deception. Moreover, the threat of enforcement is insignificant and will not significantly affect market behavior if only a small percentage of consumers (those who default and are sued) can raise the issue. Businesses will be well aware that they have little to fear from consumers.
In light of these practical and legal restrictions to private enforcement found in this Draft, the pivotal roles that unconscionability and deception are called upon to play in policing the marketplace are severely undermined. To remedy this, the black letter of Sections 5 and 6 must include a provision stating that a consumer can raise unconscionability affirmatively and defensively by seeking a declaration that the contract is void in part or in its entirety, providing for restitution for the costs incurred by virtue of the void provisions, and allowing class action relief.
The current Draft addresses this critical question just in Comment 12 to Section 5 and Comment 7 to Section 6, not in the black letter. And the two Comments are entirely inadequate. They reject the use of these doctrines affirmatively except in the limited circumstance where the consumer paid an unconscionable fee and seeks to recover it.
III. The Draft Severely Limits Remedies Related to Unconscionability and Deception
The only remedies available in this Draft in the event of a finding of unconscionability or deception are found in Section 9. This Section instructs the courts to refuse to enforce the offending term or the contract or replace the offending provisions with other terms. These provisions, without more, do not realistically deter business overreaching at contract inception or police the marketplace after the fact. These remedies are especially feeble when considered in conjunction with the lack of affirmative enforcement, the burdens of proof imposed on consumers, and silence regarding standards of proof.
IV. The Drafts Fails to Address Burdens of Proof and Standards of Proof
The allocation of burdens of proof and the level of evidence the consumer must present to prove unconscionability and deception also reduce the effectiveness of the roles that these doctrines are supposed to play. According to the Draft, the consumer bears the initial burden of proving the elements of unconscionability. Businesses, however, have access to nearly all of the relevant evidence. For example, only businesses are “recording this call to for quality assurance,” and therefore control the recordings which would show that telemarketers pressure and deceive consumers into agreeing to bad deals. Only businesses draft the contracts and only they know “the commercial setting, purpose, and effect” of the terms they impose on consumers.
Regarding procedural unconscionability related to a contract term, the Draft takes the position that a consumer must show that the term did not affect the contracting decisions of a substantial group of consumers, i.e., the term is not salient. To meet this burden a consumer would have to commission a study of consumers—an unrealistic task for a consumer to perform given the cost involved. Such a study lacks validity in any event because, if conducted by consumers once unconscionability has become an issue, the study would take place well after consummation of the contract, rather than at the time of contracting. A prior draft added a Comment to Section 5 that placed the burden on the business to prove that the standard contract terms were presented in a way that affected consumers’ contracting decisions to rebut a finding of procedural unconscionability. It also addressed burdens related to substantive unconscionability. Council Draft No. 4 removed that Comment, taking a big step backwards.
Neither Section 5 nor Section 6 address the standard of proof a court should apply in cases raising these claims. In both contexts, the black letter should state that the standard of proof is preponderance of the evidence. The application of a stricter standard reduces the deterrence and policing role of these doctrines. This is especially so where the remedy is limited to unenforceability and replacement with a substitute term and deterrence damages are not available for business deception, as would be the case with common law fraud.
IV. Conclusion
Unfortunately, this Draft unnecessarily restricts the scope of procedural and substantive unconscionability, fails to provide that unconscionability and deception can be raised affirmatively, circumscribes the remedies available for violations of these doctrines well beyond what the general common law otherwise provides, and fails to address burdens and standards of proof. As a result, the Restatement collapses under the weight of “freedom to contract” due to the lack of any meaningful consumer protections.
For these reasons, we urge the Council to not approve this Draft. Thank you for your consideration.
Editor's note: The ALI proposal, if followed by the courts, would undermine protections of local law, including the law of the District of Columbia. We will explore articulating that concern in greater detail. DR
The Geek explanation of design flaw (what the British media calls a "cockup") in Intel chips
From: https://www.theregister.co.uk/2018/01/02/intel_cpu_design_flaw/
DAR summary: Intel CPU chips have a serious design flaw not shared by rival AMD. Intel CPUs speculatively execute code potentially without performing security checks. AMD CPUs do not --they do not have the Intel design flaw.
The bug is present in modern Intel processors produced in the past decade. It allows normal user programs – from database applications to JavaScript in web browsers – to discern to some extent the layout or contents of protected kernel memory areas.
The fix is to separate the kernel's memory completely from user processes using what's called Kernel Page Table Isolation, or KPTI. At one point, Forcefully Unmap Complete Kernel With Interrupt Trampolines, aka FUCKWIT, was mulled by the Linux kernel team, giving you an idea of how annoying this has been for the developers.
Whenever a running program needs to do anything useful – such as write to a file or open a network connection – it has to temporarily hand control of the processor to the kernel to carry out the job. To make the transition from user mode to kernel mode and back to user mode as fast and efficient as possible, the kernel is present in all processes' virtual memory address spaces, although it is invisible to these programs. When the kernel is needed, the program makes a system call, the processor switches to kernel mode and enters the kernel. When it is done, the CPU is told to switch back to user mode, and reenter the process. While in user mode, the kernel's code and data remains out of sight but present in the process's page tables.
Think of the kernel as God sitting on a cloud, looking down on Earth. It's there, and no normal being can see it, yet they can pray to it.
* * *
In an email to the Linux kernel mailing list over Christmas, AMD said it is not affected. The wording of that message, though, rather gives the game away as to what the underlying cockup is:
AMD processors are not subject to the types of attacks that the kernel page table isolation feature protects against. The AMD microarchitecture does not allow memory references, including speculative references, that access higher privileged data when running in a lesser privileged mode when that access would result in a page fault.
A key word here is "speculative." Modern processors, like Intel's, perform speculative execution. In order to keep their internal pipelines primed with instructions to obey, the CPU cores try their best to guess what code is going to be run next, fetch it, and execute it.
It appears, from what AMD software engineer Tom Lendacky was suggesting above, that Intel's CPUs speculatively execute code potentially without performing security checks.
* * *
Here is the email from AMD:
FromTom Lendacky <>
Subject[PATCH] x86/cpu, x86/pti: Do not enable PTI on AMD processors
DateTue, 26 Dec 2017 23:43:54 -0600· share 0
· share 2k
AMD processors are not subject to the types of attacks that the kernel
page table isolation feature protects against. The AMD microarchitecture
does not allow memory references, including speculative references, that
access higher privileged data when running in a lesser privileged mode
when that access would result in a page fault.
Disable page table isolation by default on AMD processors by not setting
the X86_BUG_CPU_INSECURE feature, which controls whether X86_FEATURE_PTI
is set.
Signed-off-by: Tom Lendacky <thomas.lendacky@amd.com>
---
arch/x86/kernel/cpu/common.c | 4 ++--
1 file changed, 2 insertions(+), 2 deletions(-)
diff --git a/arch/x86/kernel/cpu/common.c b/arch/x86/kernel/cpu/common.c
index c47de4e..7d9e3b0 100644
--- a/arch/x86/kernel/cpu/common.c
+++ b/arch/x86/kernel/cpu/common.c
@@ -923,8 +923,8 @@ static void __init early_identify_cpu(struct cpuinfo_x86 *c)
setup_force_cpu_cap(X86_FEATURE_ALWAYS);
- /* Assume for now that ALL x86 CPUs are insecure */
- setup_force_cpu_bug(X86_BUG_CPU_INSECURE);
+ if (c->x86_vendor != X86_VENDOR_AMD)
+ setup_force_cpu_bug(X86_BUG_CPU_INSECURE);
fpu__init_system(c);
A Message from People for Fairness Coalition, sponsor of a campaign supporting public restrooms in DC:
Support Bill 22-0223 Public Restroom Facilities Installation & Promotion Act of 2017
Let members of the DC City Council know that you are in favor of:
CLEAN, SAFE, AVAILABLE PUBLIC RESTROOMS FOR EVERYONE in needed areas of DC
A DC Council hearing on Bill 22-0223 is scheduled for January 10 2018
Bill 22-0223 was introduced April of this year by Council Members Nadeau, Grosso, Silverman, and R White. It is inspired by lessons learned and best practices from cities in the US and elsewhere that have successfully installed clean, safe, available public restrooms for everyone.
The Bill:
Proposes the establishment of a working group consisting of DC Water, DDOT, DGS, DHS, DPR, and DPW. They will be responsible for:
- Identifying -- in close consultation with ANCs, BIDs, and community associations -- at least 10 sites in areas of the District with limited access to public restroom facilities where stand alone public restrooms available 24/7 can be installed;
- Authorizing the creation of a subsidy program for private entities to open their restrooms to the public
It is very hard, when you have to go, to find a clean, safe restrooms in Washington DC:
- Only 3 public restrooms open 24/7 and no signs
- Off the Mall, only 5 public restrooms open during the day for limited hours, and there are no signs
- Private facilities are increasingly closing their restrooms to the public.
See https://actionnetwork.org/letters/support-bill-22-0223-public-restroom-facilities-installation-promotion-act-of-2017?source=direct_link
FTC "has gone dark" on fighting hidden resort fees, D.C. attorney general says
An attempted crackdown on hidden hotel charges now faces a potential roadblock in Washington, as a growing number of travelers complain that resort, urban or facility fees can add up to $50 to your bill. Even lower-priced hotels are adding the fees to room charges. One watchdog says the number of hotels charging extra fees has grown 26 percent year-over-year. The size of the fees has risen 12 percent.
District of Columbia Attorney General Karl Racine is helping lead an investigation, along with the attorneys general in 47 states, into a dozen major hotel chains.
"What these lodging companies do is they hook the would-be buyer with a lower rate … then spring the additional charge on them," Racine said.
We found one Las Vegas hotel charging a room rate of $26 with a "resort fee" of $34. One San Francisco hotel adds a $20 "urban facility fee" and another hotel in Arizona listed its resort fee of $50 underneath taxes.
"What's illegal about it is that it misleads consumers as to what the actual price of a hotel room is," Racine said.
Even properties with a certain famous name make money off resort fees. We found three Trump hotels in Florida and Las Vegas charge resort fees of $35, $20 and $24 for a potential $66,000 in charges per day.
The American Hotel and Lodging Association told CBS News, "The hotel industry provides guests full disclosure for mandatory resort fees charged up front" and said the hotels wanted to "provide consumers with the best value by grouping amenity fees into one cost" following the FTC's guidance.
But in January this year, the FTC found charging resort fees separately without first disclosing the total hotel price likely harms consumers. Racine said the FTC was working with the states on their investigation – at least, he said, until the Trump administration came in.
"The FTC in a way has gone dark and I think that to be honest, that has given some confidence to the hospitality industry perhaps they're going to be able to wait out or otherwise evade the efforts of the 47 states because the FTC is no longer our partner," Racine said.
"You're saying the FTC backed off?" Werner asked.
"That is the case," Racine said.
Backed off, he claimed, during a crucial time in negotiations with the hotel chains.
"We were headed towards what I thought would be a pretty fair settlement... The election hit and then all of a sudden, the hospitality industry sort of dug in against our position," Racine said.
We asked the FTC about Racine's allegations. Officials responded with a statement saying the agency was "never a co-plaintiff" with the attorneys general but "has worked with the industry and state AGs to try improve disclosures about resort fees." We asked the Trump Organization and the White House if they had any comments but did not receive any response.
Excerpts are from https://www.cbsnews.com/news/resort-fee-investigation-ftc-allegedly-backing-off-trump-administration/
A federal judge on Friday allowed the CMS to move forward with its planned $1.6 billion cut to a federal drug discount program.
U.S. District Judge Rudolph Contreras ruled that the American Hospital Association, Association of American Medical Colleges, America's Essential Hospitals and three hospitals prematurely sued the CMS, since the proposed 340B program cuts have not gone into effect yet.
Starting Jan. 1, providers participating in 340B are scheduled to begin receiving smaller reimbursements for purchased drugs. Under the old calculation, providers received 6% on top of the average sales price of the drug. Starting next week, the CMS will pay approximately $65,000 for a drug that costs $84,000.
The hospital associations sued the HHS in November, shortly after the CMS issued its final rule changing the 340B payment calculations.
The groups said Friday that they will continue to pursue their lawsuit, noting that Contreras did not rule on the merits of the case. They will have the opportunity to refile their complaint after the reimbursement cuts go into effect.
"Making cuts to the program, like those CMS has put forward, will dramatically threaten access to healthcare for many communities with vulnerable patients," AHA president and CEO Rick Pollack said in a statement. "We are disappointed in this decision from the court and will continue our efforts in the courts and the Congress to reverse these significant cuts to the 340B program."
HHS has said it is well within its authority to make the 340B changes, calling the final rule a redistribution of funds to all hospitals that received reimbursement under Medicare's outpatient fee schedule rather than a cut to 340B.
Although Judge Contreras said last week during a hearing that it would be difficult to "unscramble eggs" after the cuts go into effect, he determined that the associations' and hospitals' comments on the proposed rule weren't enough to give them standing to sue. They will have to have to cite specific reimbursement claims in order for a renewed suit to move forward.
"Plaintiffs' failure to present any concrete claim for reimbursement to the (HHS) secretary for a final decision is a fundamental jurisdictional impediment to judicial review," the judge wrote.
From http://www.modernhealthcare.com/article/20171229/NEWS/171229919?utm_source=modernhealthcare&utm_medium=email&utm_content=20171229-NEWS-171229919&utm_campaign=mh-alert
From the Office of the Inspector General: The Food and Drug Administration's Food-Recall Process Did Not Always Ensure the Safety of the Nation's Food Supply
Prior Office of Inspector General (OIG) reviews focused on U.S. Food and Drug Administration (FDA) oversight of food recalls. Food recalls are the most effective means of protecting public health when a widely consumed food product is either defective or potentially harmful. At the time of those OIG reviews, FDA did not have statutory authority to require food manufacturers to initiate recalls of most foods.
After those reviews, enactment of the FDA Food Safety Modernization Act gave FDA new authority to order a mandatory recall and require firms to recall certain harmful foods. We conducted this review to determine whether FDA is fulfilling its responsibility in safeguarding the Nation's food supply now that it has mandatory recall authority.
Our objective was to determine whether FDA had an efficient and effective food-recall process that ensured the safety of the Nation's food supply. Specifically, we focused on FDA's (1) oversight of firms' initiation of food recalls, (2) monitoring of firm-initiated recalls, and (3) maintenance of food-recall data in the electronic recall data system.
We reviewed documentation for 30 voluntary food recalls judgmentally selected from the 1,557 food recalls reported to FDA between October 1, 2012, and May 4, 2015.
FDA did not always have an efficient and effective food-recall process that ensured the safety of the Nation's food supply. We identified deficiencies in FDA's oversight of recall initiation, monitoring of recalls, and the recall information captured and maintained in FDA's electronic recall data system, the Recall Enterprise System (RES). Specifically, we found that FDA could not always ensure that firms initiated recalls promptly and that FDA did not always (1) evaluate health hazards in a timely manner, (2) issue audit check assignments at the appropriate level, (3) complete audit checks in accordance with its procedures, (4) collect timely and complete status reports from firms that have issued recalls, (5) track key recall data in the RES, and (6) maintain accurate recall data in the RES.
Recalls were not always initiated promptly because FDA does not have adequate procedures to ensure that firms take prompt and effective action in initiating voluntary food recalls. FDA's monitoring of recalls was not always adequate because FDA staff had insufficient oversight to ensure that the assignment was at the appropriate level, and FDA obtained incomplete or inaccurate consignee information from firms initiating recalls. Additionally, FDA lacked adequate procedures to collect timely and complete status reports from these firms because the procedures did not require staff to request status reports at the time the recall was initiated. Lastly, the RES contained deficient recall information because it did not track all information necessary for FDA to effectively monitor recall activities and assess the timeliness of recalls; the RES also contained inaccurate data.
We recommended that FDA use its Strategic Coordinated Oversight of Recall Execution (SCORE) initiative to establish set timeframes, expedite decision-making and move recall cases forward, and improve electronic recall data. We also made other procedural recommendations, which are listed in the report.
FDA agreed with our conclusion that it needs to help ensure that recalls are initiated promptly in all circumstances and said that it will consider the results of our review as it "continues to operate the SCORE team." FDA also described other actions it has taken in response to our early alert, issued June 8, 2016, and draft report including initiating a new quality system audit process and a plan to provide early notice to the public and more guidance to staff.
Copies can also be obtained by contacting the Office of Public Affairs at Public.Affairs@oig.hhs.gov.
Download the complete report or the Report in Brief.
USDOJ retracts guidance letter limiting imprisonment for failure to pay fines
The withdrawn guidance letter was issued in March 2016. It was addressed to chief judges and court administrators in states, and urged them to abandon policies that could trap poor people in cycles of fines, debt and prison.
Suggesting that such policies were unconstitutional and illegal, it said arrest warrants should not be used as a way to collect fees, that courts were obligated to consider whether defendants were able to pay their fines and that judges should not use driver’s license suspensions as a punishment for missed payments.
The letter echoed the conclusions of the department’s investigation into the police and courts in Ferguson, Mo., which portrayed the legal system there as a moneymaking venture preying on poor and minority residents.
Vanita Gupta, the president of the Leadership Conference on Civil and Human Rights, who served as the head of the Justice Department’s Civil Rights Division in the Obama administration and issued the fines and fees letter, said it came about because states and cities around the country wanted guidance after the department’s Ferguson report about what federal civil rights and constitutional law required.
She maintained it did not articulate any new principles, but simply explained and clarified existing law, citing a landmark 1983 Supreme Court ruling that held that local governments cannot imprison people for failing to pay fines they could not afford.
“The retraction of this guidance doesn’t change the existing legal framework,” Ms. Gupta said. “He can retract the guidance, but he can’t change what the law says.”
From NYT article at https://www.nytimes.com/2017/12/21/us/politics/justice-dept-guidance-documents.html
A federal appeals court is ordering the Environmental Protection Agency (EPA) to take action within 90 days to revise standards meant to protect children from lead-based paint.
The San Francisco-based Court of Appeals for the 9th Circuit ruledWednesday that the EPA has taken too long to act on a 2009 petition from health and environmental groups who want the agency to further restrict lead paint limitations.
The judges issued a “writ of mandamus,” a rare edict from a federal court that requires a litigant to take action.
The EPA told the court that it would take another six years to develop a lead paint rule, which the judges did not accept.
“EPA fails to identify a single case where a court has upheld an eight year delay as reasonable, let alone a fourteen year delay, if we take into account the six more years EPA asserts it needs to take action,” Judge Mary Schroeder, nominated by former President Carter, wrote on behalf of herself and Judge Randy Smith, a George W. Bush nominee.
The judges said the EPA also has an unambiguous duty to act. Scientific studies point toward a higher danger to children from lead paint than when Congress developed standards in the 1990s, studies that the EPA did not dispute.
“Under the [Toxic Substances Control Act] and the Paint Hazard Act, Congress set EPA a task, authorized EPA to engage in rulemaking to accomplish that task, and set up a framework for EPA to amend initial rules and standards in light of new information,” the judges said.
“The new information is clear in this record: the current standards for dust-lead hazard and lead-based paint hazard are insufficient to accomplish Congress’s goal.”
from http://thehill.com/policy/energy-environment/366598-court-orders-epa-to-take-quick-action-on-lead-paint
Case to watch in 2018: FTC v D-Link
From The Recorder:
Earlier this year, the Federal Trade Commission brought a potentially groundbreaking case alleging that selling connected devices like routers and video cameras with known security weaknesses was an unfair and deceptive business practice.
In filing the suit against Taiwanese device manufacturer D-Link Systems Inc., the regulator was grabbing hold of an emerging theory in litigation that makes tech companies tremble: that manufacturers can be held liable if their products don’t provide a minimum level of security.
That theory took a bit of a beating in Court.
In an order this past year partially granting D-Link’s motion to dismiss, U.S. District Judge James Donato of the Northern District of California wrote that the mere existence of a known security flaw is not enough to prove injury under the Federal Trade Commission Act:
The FTC does not identify a single incident where a consumer’s financial, medical or other sensitive personal information has been accessed, exposed or misused in any way [...] The absence of any concrete facts makes it just as possible that DLS’s devices are not likely to substantially harm consumers, and the FTC cannot rely on wholly conclusory allegations about potential injury to tilt the balance in its favor.
That part of Donato’s ruling wiped out the agency’s unfair practices claim—although he allowed the FTC to amend its complaint. At the same time, he allowed claims to move forward alleging that D-Link deceived consumers by marketing its devices as having “the latest wireless security features to help prevent unauthorized access,” among other safeguards.
See https://www.law.com/therecorder/sites/therecorder/2017/09/22/d-link-ruling-may-help-device-makers-but-isnt-a-total-win/?back=law
A message from Diana Moss of AAI
I have been asked how growing concerns about the health of competition in the U.S. economy and the fading fortunes of the consumer and worker affect AAI's research, education, and advocacy mission. My response is that recent developments reaffirm the importance of AAI's work and provide an opportunity for AAI to have an even greater impact than it has over the last 20 years.
The importance of antitrust is now at the center of a vibrant debate. The policy spectrum has recently expanded to include additional perspectives. As our work reveals, AAI promotes the fundamental durability of the antitrust laws and their relevance to both traditional and modern markets. AAI also believes the consumer welfare standard to be capable of addressing the price and non-price dimensions of competition such as choice, quality, and innovation. The existing framework can effectively protect all markets, consumers, and workers.
In contrast to conservatives that promote lax enforcement and populists that seek to use the laws for purposes for which they were not designed, AAI will continue to push for more vigorous enforcement under current standards. As we have testified in Congress, the necessary tools are in the antitrust toolkit, but we need enforcers, courts, and legislators that promote a more aggressive approach. This applies to not only specific issues and cases, but also to judicial appointments, legislation, and complementary sector regulation.
Guided by the priorities outlined in our National Competition Policy statement, and through our amicus briefs, white papers, letters, filings, and other research, education, and advocacy, AAI will point the way toward effective and coherent competition enforcement and policy.
Our mission is more important than ever. Please help us continue to promote competition that protects consumers, businesses, and society. We cannot do this without your support.
Sincerely,
Diana Moss
President
The American Antitrust Institute is a 501(c)(3) not-for-profit organization.
Tax ID #52-2093834
Source: AAI
Three major cities have filed a lawsuit against the Defense Department for its failure to report many criminal convictions in the military justice system to the Federal Bureau of Investigation and its national gun background-check database
The Pentagon has for years run afoul of federal laws intended to keep guns out of the hands of felons and domestic abusers by not transmitting to the F.B.I. the names of service members convicted of crimes that disqualify gun ownership.
This is what allowed Devin P. Kelley, who was convicted of domestic assault in the Air Force, to buy at a store the rifle he used to kill 25 people, including a pregnant woman whose fetus also died, at a Texas church in November.
Now, after two decades of serious lapses — and one of the worst mass shootings in American history — officials from New York, Philadelphia and San Francisco are trying to force a change. Their suit would require the Pentagon to submit to federal court monitoring of its compliance with the reporting laws it has broken time and again.
“This failure on behalf of the Department of Defense has led to the loss of innocent lives by putting guns in the hands of criminals and those who wish to cause immeasurable harm,” Mayor Bill de Blasio of New York said.
The cities say they are suing because their police departments regularly access the federal background-check database and rely on it to provide accurate information about who should be prevented from buying guns.
The Pentagon has repeatedly been chided since the 1990s by its own inspector general for woefully failing to comply with the law. In a 2015 report — and another one issued just a few weeks ago — investigators said that nearly one in three court-martial convictions that should have barred defendants from gun purchases had gone unreported by the military.
Having a federal court oversee compliance, the cities in the lawsuit say, would reduce the chance that a tragedy like the massacre in Sutherland Springs, Tex., happens again.
If the lawsuit is successful and the military fails to adhere to a court order to demonstrate compliance with the law, a federal judge could hold the defendants in contempt, lawyers for the plaintiffs say. The lawsuit names as defendants the Defense Department and its secretary, James N. Mattis; the Departments of the Air Force, Army and Navy and their respective secretaries; the directors of the military’s criminal investigative organizations; and the commander of the Navy’s personnel command.
From: https://www.nytimes.com/2017/12/26/us/gun-background-checks-military.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region®ion=top-news&WT.nav=top-news&_r=0
Florida Attorney General Pam Bondi News Release:
Court Orders Tobacco Company to Honor Florida’s Historic Tobacco Settlement
TALLAHASSEE, Fla.—Attorney General Pam Bondi today announced a major ruling in a case involving Florida’s historic tobacco settlement agreement. The litigation centers around R.J. Reynolds Tobacco Company’s sale of three iconic cigarette brands, Winston, Kool and Salem, along with a legacy Lorillard Tobacco Company brand, Maverick, to Imperial Tobacco Group in June 2015 for $7 billion.
From the time of the tobacco settlement in 1997 through 2015, RJR paid the state tens of millions of dollars annually for these cigarette brands in compliance with the historic settlement. After the June 2015 sale, RJR stopped making payments on these brands, costing the state an estimated $30 million a year in perpetuity.
“Today’s ruling will ensure Florida’s landmark tobacco settlement is honored and our state receives the money it is owed,” said Attorney General Bondi. “My office is committed to pursuing all appropriate remedies when companies try to evade their monetary obligations to the State of Florida.”
RJR’s refusal to pay the agreed to settlement money led to Attorney General Bondi filing an enforcement motion on Jan. 18, 2017. The enforcement motion was the subject of a three-day bench trial before the Honorable Jeffrey Dana Gillen on Dec. 18-20. Judge Gillen today ruled that “Reynolds is still obligated to make the payments pursuant to the Florida Agreement.”
After the entry of the order requiring RJR to make all of the payments to Florida for the past and future sales of these cigarettes, the next step in the lawsuit will involve RJR and ITG providing the necessary information to accurately calculate the amounts owed pursuant to reporting requirements under the settlement agreement.
To view a copy of the trial court’s order granting the enforcement motion, click here.
The historic 1997 settlement resolved Florida’s landmark 1995 lawsuit against RJR and the other major tobacco companies seeking relief from decades of past unlawful actions relating to the marketing and sale of cigarettes. The annual, perpetual payments compensate Florida for the past and future public health care expenses from its citizens’ consumption of the settling defendants’ cigarettes.
Happy New Year and no net neutrality for Comcast and Cox and other ISPs: At least three major ISPs have already announced significant price hikes for 2018. News of the increases comes just days after the FCC voted to roll back net neutrality protections.
From: https://www.digitalmusicnews.com/2017/12/19/comcast-cox-frontier-net-neutrality/ Additional credit: Karl Bode of DSLReports
The timing of this couldn’t be worse. But maybe that’s not a concern for major ISPs. Accordingly, at least three major ISPs have now announced rate hikes for 2018.
That is, January, 2018. So customers have very little time to react, modify their plans, or even cancel their accounts.
Recently, Karl Bode of DSLReports caught wind of numerous increases at mega-ISP Comcast. But that is simply the latest in a string of planned increases by the likes of Cox, Frontier, and even DirecTV and Dish Network.
In all cases, these are increases for essentially the same services, with Bode noting that American will be stuck paying ‘significantly more money for the same service in the new year’. In many cases, the changes are padded into existing bills, with most consumers failing to see the changes.
In the case of Comcast, increases are happening across the board.
That includes rates for conventional cable TV, but also a range of internet and internet-based services. “Even Comcast’s streaming TV service Instant TV, barely a year old, is seeing price hikes,” Bode noted.
“Users that subscribe to this service can expect to pay $3 to $3.50 more per month in the new year.”
Additionally, Comcast is jacking up its modem rental fees by 10%. “Modem rental fees will be bumped $1 to $11 per month, while missed payment fees are also being increased fifty cents to $10,” the report continues.
That’s likely the beginning of far broader increases.
Another major ISP, Cox, is increasing the rates for all of its internet service packages.Here’s a quick rundown of those increases, based on a notice sent to Cox subscribers.
Starter will change from $34.99 to $36.99.
Essential will change from $52.99 to $55.99.
Preferred will change from $67.99 to $71.99.
Preferred 100 will change from $72.99 to $76.99.
Premier will change from $79.99 to $82.99.
That’s on top of a range of other increases affecting Cox’s cable TV packages, and are effective as of January, 2018. The rates were officially announced on December 9th, just days before net neutrality provisions were officially scrapped.
Similarly, Frontier Communications is tacking on a sneaky surcharge for internet customers.
Specifically, Frontier is wedging a $2 ‘Internet Infrastructure Surcharge’ onto most accounts. That includes promotional deals, which are advertised as being cheaper, but leave out a lot of hidden fees. “Beginning with this bill, customers not on an Internet Service term agreement, price protection plan or subject to other exclusions will be assessed a $1.99 per month Internet Infrastructure surcharge,” a Frontier notice states.
Other shoes dropping soon.
Both DirecTV and Dish are enacting heavy increases for most packages in 2018. At this stage, we’re not sure if packaged internet deals are getting affected (at least for 2018). Eventually, we’re betting they will.
We haven’t seen any (recent) changes from Charter, Verizon, and AT&T’s U-verse. But maybe they’re waiting until after Christmas.
Author credit: Paul Resnikoff
SEAFOOD IMPORT bEZOS wALTON
See Court opinion: La. Not Bound By Flonase Antitrust Settlement: 3rd Circ.
The Third Circuit finds that a class action antitrust settlement GlaxoSmithKline involving efforts to stymie generic competition for Flonase nasal spray did not bar the state of Louisiana from pursuing its own claims over the drug.
While GSK argued that the federal courts had authority to require Louisiana’s attorney general to abide by the $150 million settlement, which included a release of future claims over its activity, a three-judge panel found that such a holding would violate the state’s sovereign immunity under the 11th Amendment.
“In approving the settlement agreement, the district court lacked jurisdiction over the state because the Eleventh Amendment applies to the primary case and because Louisiana did not waive its sovereign immunity in that case,” the opinion said.
Credit: Law360
The opinion is here:
http://www2.ca3.uscourts.gov/opinarch/161124p.pdf
From the Watertown newspaper in upstate New York: Locals seek to save failing local mall with local retail businesses and local crafts
The North Country Showcase Inc., store has opened at the Massena mall.
The store is the first attempt by local investors pooling money to create an entity to help sell the products of vendors throughout the north country region.
Karen M. St. Hilaire, president of the venture, said the long-term goal is to enhance and create other small business opportunities using the same model of community ownership, in an effort to build a stronger and more diversified economy.
“I have to say it is incredible to me how we have been able to put together this business that has products from 32 vendors from across a huge geographic region, and we have been able to do it in one year and on less than $10,000,” Ms. St. Hilaire said.
Opening a brick-and-mortar store is just the first step in expanding the effort across the north country, according to Ms. St. Hilaire. She said Northern New York has always been rich in human and natural resources, and that organizing a way to showcase what the region has to offer has always been needed.
“This business, the one we are opening today, we see it as a vehicle to help other small businesses, and in particular to help those people who produce things here in a seven county region of New York state,” Ms. St. Hilaire said. “So our goal is to help be the marketer, if you will, of 32-plus businesses and to help them to sell their products, to produce more sales and hopefully spur new businesses to join in.”
Ms. St. Hilaire said she and others are now working to create a well-structured online presence to push sales outside the region.
“Within six months we hope to have a very robust e-commerce branch, aimed at doing whatever it is we can do to push sales,” she said. “And quite frankly, I think it is going to be much bigger than sales we will have here in the bricks and mortar storefront. But we need both.”
In addition to promoting entrepreneurship, the efforts of the RIOT group in creating North Country Showcase Inc. have sparked fresh hope for a revitalized St. Lawrence Centre mall. The struggling retail facility, built in 1990, was recently purchased by the Shapiro Group of Montreal and is being operated by its subsidiary, St. Lawrence Centre Group.
Erika A. Leonard, manager of the mall, said the new owners are making plans to turn the mall’s hockey arena into a year-round indoor turf field and athletic facility, and are working to find new anchor stores and other retailers.
She said the North Country Showcase store’s opening represents the fresh start the new mall owners envision.
“It’s very exciting because this is the first store that we’ve had a grand opening for, so this is going to show the community that we’re here, we’re open for business and we are working on getting the retailers in here as well as the entertainment to get more traffic through the mall,” Ms. Leonard said.
Ms. Leonard said other plans call for opening a 12-theater cinema complex at the mall.
“Like most mall restructurings nowadays, the vision is to make this an entertainment-slash-retail mall,” she said.
Massena Town Supervisor Joseph D. Gray and Village Mayor Timothy Currier both said that the opening of the North Country Showcase store is more proof that the community continues to reinvent itself and remains a vibrant and resilient part of the region.
“This is another good sign we have been seeing,” Mr. Currier said. “We are seeing monthly increases in traffic at the [Canadian] border crossing, the housing market has improved, and we are seeing some new businesses in the community.”
Mr. Gray agreed, pointing out that in his opinion, improvements at the mall and the early success of those involved in the North Country Showcase project, stand in sharp contrast to those naysayers in the region who talk of Massena’s decline.
“We can’t rely on the big three any more, because they ain’t here,” Mr. Gray said in reference to the community’s mostly shuttered industries. “We need to figure out what we are going to do and this is a good step in the direction we need. We need to determine our own best interests, rather than relying on someone from the outside to come in and save us, we need to save ourselves and we’re doing that.”
Credit: http://www.watertowndailytimes.com/news05/north-country-showcase-prompts-talk-of-regions-resurgence-20170709
Editor's note: Merry Christmas, and a Happy New Year to the residents of New York's north country, and my their business ventures prosper. A.G. Schneiderman: I Will Sue To Stop Illegal Rollback Of Net Neutrality
A.G. Schneiderman Will Lead Multistate Lawsuit:
AG’s Investigation into 2 Million Comments that Stole Real Americans’ Identities Also Continues
Click Here for Video of AG Schneiderman Discussing the Vote and His Intent to Sue
Today, New York Attorney General Eric T. Schneiderman released the following statement upon the Federal Communications Commission’s vote, announcing that he will lead a multistate lawsuit to stop the rollback of net neutrality:
“The FCC’s vote to rip apart net neutrality is a blow to New York consumers, and to everyone who cares about a free and open internet. The FCC just gave Big Telecom an early Christmas present, by giving internet service providers yet another way to put corporate profits over consumers. Today’s rollback will give ISPs new ways to control what we see, what we do, and what we say online. That’s a threat to the free exchange of ideas that’s made the Internet a valuable asset in our democratic process.
Today’s new rule would enable ISPs to charge consumers more to access sites like Facebook and Twitter and give them the leverage to degrade high quality of video streaming until and unless somebody pays them more money. Even worse, today’s vote would enable ISPs to favor certain viewpoints over others.
New Yorkers deserve the right to a free and open Internet. That’s why we will sue to stop the FCC’s illegal rollback of net neutrality.
Today’s vote also follows a public comment process that was deeply corrupted, including two million comments that stole the identities of real people. This is a crime under New York law – and the FCC’s decision to go ahead with the vote makes a mockery of government integrity and rewards the very perpetrators who scammed the system to advance their own agenda.
This is not just an attack on the future of our internet. It’s an attack on all New Yorkers, and on the integrity of every American's voice in government – and we will fight back.”
For seven months, Attorney General Schneiderman has been investigating the flood of fake comments submitted during the net neutrality comment process. The Attorney General’s latest analysis shows that two million comments stole the identities of real Americans – including over 100,000 comments per state from New York, Florida, Texas, and California. Yet the FCC has repeatedly refused to cooperate with the Attorney General’s investigation, despite widespread evidence that the public comment process was corrupted.
SEE ag.ny.gov/press-release/ag-schneiderman-i-will-sue-stop-illegal-rollback-net-neutrality
Bloomberg's quick take on net neutrality debate:
from https://www.bloomberg.com/quicktake/net-neutrality
By Gerry Smith
Updated on December 14, 2017, 7:24 AM EST
The internet is a set of pipes. It’s also a set of values. Whose? The people who consider it a great social equalizer, a playing field that has to be level? Or the ones who own the network and consider themselves best qualified to manage it? It’s a philosophical contest fought under the banner of “net neutrality,” a slogan that inspires rhetorical devotion but eludes precise definition. Broadly, it means everything on the internet should be equally accessible — that the internet should be a place where great ideas compete on equal terms with big money. Even in the contentious arena of net neutrality, that’s a principle everybody claims to honor. But the U.S. is preparing to do a big U-turn on how to interpret it.
The Situation
At the start of his presidency, Donald Trump picked Ajit Pai, a Republican member of the U.S. Federal Communications Commission and longtime foe of net neutrality regulation, to head the agency. In November, Pai proposed to vacate net neutrality rules that had been enacted under Democratic President Barack Obama. The FCC is voting on the change Dec. 14. The 2015 rules had imposed increased government oversight of broadband traffic. Internet service providers became treated as public utilities and were forbidden from blocking or slowing rivals’ content. The rules also applied open-internet protections to wireless services for tablets and smartphones. After Pai first proposed the idea of gutting net neutrality rules back in May, websites and internet organizations promoted a “day of action” to save net neutrality. Reddit, the social news and discussion site, made its point with a pop-up message that slowly typed out letter by letter: “The internet’s less fun when your favorite sites load slowly, isn’t it?” Both the Obama administration and internet service providers, which had fought the rules, said they wanted an open internet and “net neutrality,” an idea also embraced by other countries with widely varying definitions of the principle.
The Background
The term “network neutrality” was coined in 2002 by Tim Wu, a law professor and author. He argued that no authority should be able to decide what kind of information was and wasn’t allowed on the internet. But Wu also recognized the expense of maintaining network hardware, so he proposed that providers should be allowed to charge based on usage. People would pay for more bandwidth, not for access to certain sites. In 2005, the FCC released a statement turning Wu’s principles into policies. When Comcast interfered with access to web networks that used a lot of bandwidth and enabled trading of pirated content, the FCC balked in 2008. Comcast sued, and won. The FCC set new rules and Verizon then challenged them, winning in a U.S. court in early 2014. This started the process for what became the 2015 rules.
The Argument
Supporters say that with internet use and related costs rising fast, the FCC needed net neutrality power to force a shrinking handful of powerful internet service providers to treat all web traffic equally. Small startup companies argue that without strong net neutrality rules, internet providers could slow their content or charge them for unimpeded access to their audience. Supporters also note that the regulation survived a federal appeals court challenge from broadband providers in 2016. Many Republicans have sided with internet providers who said that more regulation deters investment in a better internet. In announcing the proposed rules change in November, FCC Chairman Pai said he was looking forward to returning to a “light-touch, market-based framework.” Opponents of the rules had also challenged the FCC’s legal right to upend the old regulatory framework that was in place as companies spent billions of dollars to build high-speed internet networks. Beneath the legal and policy questions lies a philosophical one: Who owns the internet? Providers who pay to maintain it? Consumers who pay to connect to it? Content companies whose services depend on it? Who balances their competing interests?
The Reference Shelf
- Professor Tim Wu coined the phrase “network neutrality” in a 2002 paper.
- A Wired magazine article untangles some confusion over “fast lanes.”
- Title II of the Communications Act of 1934 sets forth regulations “common carriers” must follow “in the public interest,” and the 2015 open internet order.
- The comedian John Oliver had strong feelings about net neutrality (boring and “hugely important”) in 2014 and in May called for people to contact the FCC about the issue.
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From PBS news hour: EPA v States on drinking water pollutants
See:
https://www.pbs.org/newshour/show/long-island-residents-worry-their-tap-water-is-unsafe
Local consumer advocates worry that the EPA is too slow to provide protection against newly identified pollutants. In the absence of EPA action it falls to local authorities to consider possible precautions. The precautions can be expensive, and are controversial.
Cape Fear Public Utility Authority (“CFPUA”), sues Chemours and DuPont for chemical dumping affecting water supplies.
The Complaint alleges that for over three decades DuPont and later Chemours have been manufacturing and/or using perfluoroalkyl and polyfluoroalkyl substances (“PFASs”), and quietly releasing or discharging PFASs and associated wastes contaminated by those chemicals (collectively “Fluoropollutants”) at their Fayetteville Works Facility. During that time, Defendants withheld from state regulators and the public information regarding both the identity of the Fluoropollutants being discharged and information related to the safety of those Fluoropollutants. . Moreover, Defendants have deliberately evaded accountability for, and scrutiny of, their releases of toxic Fluoropollutants.
Facing multiple lawsuits and EPA pressure over its use and releases of one PFAS, perfluorooctanoic acid (“PFOA”), DuPont publicly discontinued its manufacture and use of that PFAS, but privately replaced it with “GenX”—a set of 2 structurally and functionally similar PFASs, with similar harmful effects—that Defendants could then release into the environment without public notice. Defendants’ strategy amounts to a toxic chemical shell game, played at the expense of the lower Cape Fear River and those who use it for potable water.
The Complaint is here: http:/wwwcache.wral.com/asset/news/state/2017/10/17/17022284/CFPUA_v._Chemours__DuPont-DMID1-5cgv0c9v6.pdf
The Consumer Reports article on the CVS-Aetna proposed merger
The article says this:
[S]ome consumer advocates and antitrust experts are skeptical that consumers will reap any cost savings from this merger and say that continued consolidation in the healthcare marketplace only hurts consumers.
“The health insurance and retail pharmacy markets are already highly concentrated, with just a few big insurers and pharmacies dominating,” says George Slover, senior policy counsel for Consumers Union, the policy and mobilization division of Consumer Reports. He says the combination could lead to fewer choices for consumers. . . .
Big mergers have a poor track record of delivering lower prices to customers, says Diana Moss, president of the American Antitrust Institute, a nonprofit that does research and advocacy on antitrust issues. “There are no guarantees that any cost savings realized will be passed onto consumers.”
The comments from George Slover and Diana Moss suggest where to look for consumer harm from a merger. (Of course, the discussion can be complex, and any suggestions incorrectly drawn from their comments is this writer's responsibility, not theirs.) An Aetna customer for self-administered prescription medicines, for example, may lose choices of which pharmacies to use, and be pushed to use CVS retail pharmacy services. That will enhance CVS's already strong position in retail sales of self-administered prescription medicines. The customer may be faced with higher prices because of that enhanced position of CVS as a retailer, and her loss of the ability to select a rival pharmacy. Also, CVS, which is one of a few very powerful players in the market for pharmacy benefit manager (PBM) services, with many insurance company customers, may use merger-enhanced power to favor Aetna with regard to PBM services in negotiating lower prices from manufacturers for prescription drugs, thereby raising costs for Aetna's rivals in the relevant health insurance markets.
To the extent CVS can use its PBM services to obtain lower manufacturer prices for prescription drugs, there is little reason to think savings will be passed on to consumers. PBMs already have a history of complaints that savings the obtain are not passed on. As Diana Moss says, big mergers have a poor record of delivering lower prices to consumers.
The Consumer Reports article is here: https://www.consumerreports.org/health-insurance/how-big-healthcare-mergers-like-cvs-and-aetna-could-affect-you/
From AAI:
Diana Moss to Testify on Antitrust and the Consumer Welfare Standard
AAI President Diana Moss will testify before the U.S. Senate Committee on the Judiciary, Subcommittee on Antitrust, Competition and Consumer Rights on December 13, 2017. The subject of the hearing is "Consumer Welfare Standard in Antitrust: Outdated or a Harbor In a Sea of Doubt?" The hearing can be streamed live.
Moss's testimony, available here, addresses three major issues: One is "climate change" around antitrust and important context for the debate over competition enforcement. A second is the adequacy of the existing approach to antitrust enforcement, the consumer welfare standard, and the vital importance of vigorous enforcement. Moss concludes by identifying priorities for addressing the challenges facing antitrust enforcement and competition policy moving forward.
AAI Applauds Move to Block AT&T-Time Warner Merger, Sets Record Straight on Vertical Merger Enforcement
AAI issued a commentary on the U.S. Department of Justice's (DOJ's) recent move to block the proposed merger of AT&T and Time Warner. AAI applauds the government's decision. It reflects sound enforcement of Section 7 of the Clayton Act in an area of merger control that has been of concern to many policymakers for years. The government has laid out a strong case for how the merger could potentially harm the competitive process and consumers. And contrary to some claims, the DOJ's move to block the merger is supported by a long-standing record of enforcement on vertical mergers.
Read More
AAI Warns USTR Against Import Restrictions on Washing Machines That Would Stand Competition Policy on Its Head
AAI has filed has filed comments with the Office of the U.S. Trade Representative opposing the imposition of "safeguard restrictions" on the import of Large Residential Washers (LRWs) under Section 201 of the Trade Act.
Read More
AAI's Bert Foer's words of wisdom on antitrust advocacy, from a 2015 article:
As the attacks by big businesses and their advocates mount against class actions and as the courts clamp down on antitrust processes in favor of defendants, it becomes increasingly difficult for victims of anticompetitive conduct to gain fair compensation. This undermines the deterrent force of the antitrust laws, as well as the potential for broad civil society support of the antitrust enterprise. For example, recent judicial decisions have forced plaintiffs to defend their economic case much earlier in the process, often before substantial discovery, which raises the risks and costs of bringing a case. In a field that depends on contingent fee funding, as the costs go up and other trends contribute to a reduced likelihood of success,47 the result appears to be that many valid claims for recovery will necessarily go unrepresented. Thus, protection of the antitrust class action, even while supporting legitimate efforts to make it work more efficiently, will be critical to AAI’s mission.
The largest risk going forward is political. Unless legislators see more value in antitrust, erosion of private remedies will continue, and public enforcement will suffer from inadequate funding as well as the narrowing rulings of courts that generally do not like antitrust or simply do not like to handle complex antitrust cases. The education of judges and legislators is therefore going to be more important and probably more difficult than ever.
The primary gatekeepers to the public and, therefore, to the politicians are the media. Reporters must present antitrust developments clearly and in a way that highlights their importance, if the citizenry is to support antitrust in a political process where large contributors, bearing the benefits of corporate personhood under prevailing interpretations of the First Amendment, will have the advantage.48 Meanwhile, antitrust-knowledgeable journalists are disappearing behind electronic paywalls, such that only those willing to pay large subscription fees (i.e., investors, arbitrageurs, and law firms and their clients with much at stake, as compared to average citizens) will know what is going on with sufficient detail and precision to effectively influence the outcome. The enforcement agencies and the AAI need to work more creatively to help public-facing journalists understand and communicate the antitrust story.
Antitrust is faced with a particular political challenge because it represents a middle ground between heavy state intervention and laissez faire. Will the libertarian ideologies that disdain government prevail? Will the politics of economically unsophisticated populism prevail? Or can the antitrust intermediary continue to serve, while moving up or down the playing field between the forty yard lines, as a balancing and integrative force? Whether the center can hold goes beyond antitrust, but is crucial to antitrust’s future.
Antitrust must be viewed as part of a political system. It rests on the conception not only that competition is usually a good thing, but that change (we like to call it progress) is a good thing. It is fundamental to recognize that as better mousetraps are invented, there will be winners and losers. The prospect of becoming a loser—which must be faced even by the most successful businesses and their top management—creates deep social anxiety. Here is the paradox of modern capitalism: unless the political system can deal with that anxiety, the fear of losing out in a competitive regime, it is hard to believe that either a competition-based economy or its necessary control element, antitrust, will long survive.
The middle way demands a social welfare net that is widely perceived to be working, requiring liberals and conservatives to compromise in creative reforms that the current political standoff may not be able to produce. A tragedy of our times has been that the country has turned against government at the same time it has turned toward ever-freer markets—the libertarian equation. Markets are not a natural phenomenon, however. Their creation, maintenance, and efflorescence depend on government in numerous ways.49 Yes, government can act in anticompetitive ways, and this reality must always be a high concern for antitrust. In addition to direct regulation that unduly hampers market activity, there are many other ways in which government can be unnecessarily interventionist, ranging from tax policy to trade, intellectual property rights, and consumer protection. Getting the balance right is crucial. It is a task of politics in a democracy. At the center of this task is the role of antitrust.
The full article is at http://journals.sagepub.com/stoken/rbtfl/Kkz6kqJrOWK0c/full
The grass-roots campaign for public restroom facilities in DC
From a Washington Post article by Marcia Bernbaum:
Nearly three years ago, the People for Fairness Coalition launched the Downtown DC Public Restroom Initiative. We carried out a feasibility study to identify lessons learned and best practices from U.S. cities that in recent years have been successful in installing clean, safe, available public restrooms. We did an inventory of restrooms in private facilities in five D.C. neighborhoods: Gallery Place, Dupont Circle, Georgetown, the K Street corridor and Columbia Heights. And we carried out a comprehensive search to identify public restrooms open during the day as well as those open 24/7.
To our amazement, we found that there are only three public restrooms in all of the District that are open 24/7: those at Union Station, the Lincoln Memorial and the Jefferson Memorial — and there are no signs telling you how to get to them. Imagine it is late at night. You are walking down the street and urgently have to go to the bathroom. If you can’t make it and experience the misfortune of having no choice but to “go” outside and are caught by a police officer, you risk receiving a fine of up to $500, up to 90 days in jail or both. During the day, off the Mall there are only six public restrooms in downtown Washington, their hours are limited, and there are no signs to tell you where they are.
The situation isn’t much better when it comes to finding private facilities with restroom access. Forty-two of the 85 private facilities we visited in early 2015 permitted people who weren’t patrons to use their restrooms. When we visited the same facilities in early 2016, the number had dwindled to 28. And when we returned to the same facilities in mid-2017, only 11 (or 13 percent) permitted entry to non-patrons.
In April, D.C. Council members Brianne K. Nadeau (D-Ward 1), David Grosso (I-At Large), Elissa Silverman (I-At Large) and Robert C. White Jr. (D-At Large) introduced Bill 22-0223, the Public Restroom Facilities Installation and Promotion Act of 2017.
The bill would work toward creating public restrooms and establish an incentive for private businesses to make their restrooms available to the public. A public hearing on the bill is scheduled for Jan. 10.
The article is at https://www.washingtonpost.com/opinions/why-does-dc-have-so-few-public-restrooms/2017/12/15/951e3fde-cfcf-11e7-9d3a-bcbe2af58c3a_story.html?utm_term=.0c4ee853f14e
Kojo NNambi explores the new push for more clean and safe public restroom accommodations for all on his radio show. Listen at https://thekojonnamdishow.org/shows/2017-03-16/the-push-for-public-restrooms-in-d-c.
Guests
- Sheila White Member, People For Fairness Coalition
- Marcia Bernbaum Member, People For Fairness Coalition
- Brianne Nadeau Member, D.C. Council (D-Ward 1); @BrianneKNadeau
17 AGs To President Trump: Mulvaney's Attacks On CFPB Should Disqualify Him From Leading Agency
Coalition of 17 AGs Make Clear They’ll Redouble Efforts to Enforce Consumer Protection Laws, Even if CFPB Leadership Won’t
A coalition of 17 state Attorneys General have written President Trump to express unwavering support for the mission of the Consumer Financial Protection Bureau (CFPB), and made clear that state Attorneys General would continue to vigorously enforce consumer protection laws regardless of changes to the Bureau’s leadership or agenda.
“The CFPB has been a critical partner in protecting American consumers and holding fraudsters accountable. It deserves a leader who actually believes in its mission,” the letter said. “However, Attorneys General won’t hesitate to protect those we serve – with or without a partner in Washington.”
Joining New York Attorney General Schneiderman on the letter are the Attorney Generals of California, Connecticut, District of Columbia, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Minnesota, New Mexico, North Carolina, Oregon, Vermont, Virginia, and Washington State.
Click here to read the full letter.
US: FCC and FTC agree to collaborate on monitoring Open Internet
The Federal Communications Commission (FCC) and Federal Trade Commission (FTC) have drafted a memorandum of understanding (MOU) on how they will divvy up enforcement of internet service providers’ (ISPs) promises and disclosures about their business practices and network management practices after the FCC eliminates most network neutrality rules.
After the rule rollback becomes official—it is scheduled to be voted on–and FCC Chairman Ajit Pai has said will be approved—December 14, the FCC will investigate and take actions against any violations of the order’s transparency requirements, under which ISPs have to disclose any blocking, throttling, paid prioritization or congestion management. That means if they don’t disclose what they are doing, the FCC’s Enforcement Bureau will handle it.
Under the agreement, the FTC will investigate ISPs for any divergence from what they say they are, or are not, doing, as well as any other practices the FTC deems unfair or deceptive. That unfairness could include anticompetitive blocking or throttling or paid prioritization.
“The Memorandum of Understanding will be a critical benefit for online consumers because it outlines the robust process by which the FCC and FTC will safeguard the public interest,” said FCC Chairman Ajit Pai in a statement. “Instead of saddling the Internet with heavy-handed regulations, we will work together to take targeted action against bad actors. This approach protected a free and open Internet for many years prior to the FCC’s 2015 Title II Order and it will once again following the adoption of the Restoring Internet Freedom Order.”
Rollback of the Net Neutrality rules is a controversial topic that is opposed by advocacy groups and Silicon Valley incumbent firms.
Full Content: Federal Trade Commission & Public Knowledge
From Public Citizen Consumer Law & Policy Blog:
Ninth Circuit rejects First Amendment petition clause challenge to arbitration agreement, saying that private party's conduct is not attributable to the state (for purposes of the "state action" doctrine)
Posted: 11 Dec 2017 07:30 PM PST
Take a look at the Ninth Circuit's decision in Roberts v. AT&T Mobility. Here's the court's description of the dispute:
Plaintiffs—AT&T customers and putative class representatives—contracted with AT&T for wireless data service plans. Their contracts included arbitration agreements. Plaintiffs allege AT&T falsely advertised that its mobile service customers could use “unlimited data,” but actually “throttled”—intentionally slowed down—customers’ data speeds once reaching “secret data usage caps” between two and five gigabytes. Plaintiffs claim a phone’s key functions, such as streaming video or browsing webpages, are useless at “throttled” speeds.
Plaintiffs filed a putative class action, alleging statutory and common law consumer protection and false advertising claims under California and Alabama law. AT&T moved to compel arbitration in light of the Supreme Court’s ruling in AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011),“that the FAA preempts state law deeming AT&T’s arbitration provision to be unconscionable.” Plaintiffs opposed the motion on First Amendment grounds. They argued that an order forcing arbitration would violate the Petition Clause, as they “did not knowingly and voluntarily give up their right to have a court adjudicate their claims... .”
The Ninth Circuit nixed the argument without getting to the merits, holding that
There is no state action here. First, AT&T’s conduct must be fairly attributable to the state, and Denver Area [Educational Telecommunications Consortium, Inc. v. FCC, 518 U.S. 727 (1996)] did not hold otherwise. Second, AT&T is not a state actor under the “encouragement” test. The FAA merely gives AT&T the private choice to arbitrate, and does not “encourage” arbitration such that AT&T’s conduct is attributable to the state.
(Click title for link to Public Citizen)
A holiday season plug for the DC Bar's advice and referral clinic
The D.C. Bar web site explains:
The Bar's Pro Bono Center Advice & Referral Clinic offers pro se individuals the opportunity to discuss with volunteer attorneys certain kinds of matters governed by D.C. or federal law, including bankruptcy/debt collection, consumer law, employment law, family law, health law, housing law, personal injury, probate, public benefits, and tax law. All services are provided free of charge.
The clinic is limited to providing general information, advice, and brief services, and does not provide representation.
Providing "brief services" may not always be achievable by the end of the clinic session. For example, calling a third party or government agency to ascertain information about a client's matter, writing a demand letter to a landlord or a judgment–proof letter to a creditor, or reviewing a contract or settlement agreement may require some of the volunteer attorney’s time after the clinic. However, clinic volunteers do not appear in court or otherwise establish an extended attorney–client relationship unless they wish to do so.
If brief service is not enough to resolve the problem or if a different type of service is required, clinic volunteers attempt to refer individuals to, or provide information about, a legal or social service provider appropriately suited to handle the case.
Local legal service providers also benefit from the Advice & Referral Clinic, since it lessens the number of individuals walking into their organizations, allowing those practitioners to spend more of their resources representing clients instead of providing general information, advice, and brief services.
For more information, please contact Managing Attorney Nakia Matthews at NMatthews@dcbar.org.
Volunteering
Advice & Referral Clinic volunteers must be associated with a participating organization. Please refer to the list of clinic participants. If you are associated with a clinic participant, please contact that organization’s pro bono or volunteer coordinator to arrange to volunteer for the clinic. If you are not an employee or member of a participating organization, ask your employer, Bar section, voluntary bar association, or other organization to become a clinic participant.
What Volunteers Need to Know
On the second Saturday of every month from 10 a.m. until 12 p.m., the Advice & Referral Clinic operates out of two locations: Bread for the City’s Northwest Center at 1525 7th Street NW, and Bread for the City’s Southeast Center at 1640 Good Hope Road, SE. Parking is available at both locations.
Volunteers should arrive at the clinic by 9:30 a.m. for a brief orientation of clinic operations. Bagels and juice will be served. Dress is casual. Volunteers should be prepared to stay until the last client is served (usually around 1:00 p.m.).
Although it is impossible to predict, most individuals have basic questions. Volunteers are not expected to be familiar with every area of the law. Mentors are available onsite and reference materials are provided.
News reports suggest that an aspect of the CVS/Aetna proposed merger that can raise antitrust questions concerns horizontal overlap involving Medicare Part D
The WSJ explains:
One area where CVS and Aetna do compete directly is in Medicare drug plans. CVS is the biggest provider of these so-called Part D plans, with about 5.5 million members, according to figures compiled by analysts at Wells Fargo. Aetna ranks fifth, with around 2.1 million enrollees. Antitrust enforcers “will look at anything and everything where there’s overlap,” said Martin Gaynor, a professor at Carnegie Mellon University.
But analysts said that even if the Justice Department requires divestitures related to the Part D business, that isn’t likely to be a major impediment to the deal, since stand-alone Medicare drug plans aren’t generally a major source of profits.
See (paywall) https://www.wsj.com/articles/will-cvs-health-deal-to-buy-aetna-hold-up-to-antitrust-scrutiny-1512343663#
So, what is Medicare part D? Here is an answer from Medicare.gov:
Medicare offers prescription drug coverage to everyone with Medicare. . . . To get Medicare drug coverage, you must join a plan run by an insurance company or other private company approved by Medicare. Each plan can vary in cost and drugs covered.
2 ways to get drug coverage:
- Medicare Prescription Drug Plan (Part D). These plans (sometimes called "PDPs") add drug coverage to Original Medicare, some Medicare Cost Plans, some Medicare Private Fee-for-Service (PFFS) Plans, and Medicare Medical Savings Account (MSA) Plans.
- Medicare Advantage Plan (Part C) (like an HMO or PPO) or other Medicare health plan that offers Medicare prescription drug coverage. You get all of your Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance) coverage, and prescription drug coverage (Part D), through these plans. Medicare Advantage Plans with prescription drug coverage are sometimes called “MA-PDs.” You must have Part A and Part B to join a Medicare Advantage Plan.
Here is further insight from the Galen Institute concerning aspects of part D competition:
Many MA plans also cover prescription drugs as part of the benefit, while other seniors opt for free-standing Medicare Part D prescription drug plans. Either way, private plans negotiate fiercely to get the best prices from physicians, hospitals, and drug companies
so they can offer the lowest prices on plans and attract the greatest number of members. This model has been highly successful, saving both seniors and taxpayers money. The Part D program has been particularly successful.
See the article by Grace-Marie Turner at http://galen.org/2016/competition-in-medicare-advantage-part-d-and-extra-help-working-together-for-seniors-and-taxpayers/
Comment: WORLD WITHOUT MIND, The Existential Threat of Big Tech, By Franklin Foer, Penguin Press. 257 pp. $27
The headline for Jon Gertner's Washington Post book review is "Are tech giants robbing us of our decision-making and our individuality?" Based on my reading of the Foer book I think that is a fair headline.
Gertner explains that Foer’s book aims to expose the dangers that four technology giants — Google, Apple, Facebook and Amazon, and companies like them — pose to our culture and careers. In their methods of consumer observation and data gathering, and in their intention to replace human decision-making with merciless algorithms, these companies, Foer says, “are shredding the principles that protect individuality.”
Gertner agrees with Foer that the four corporations have lulled us into a sense of dependency as they influence our thinking and activities. Gertner summarizes: Far more powerful than the elite “gatekeeping” institutions of the past — the major television networks, for example, or the leading newspapers — this fearsome four, as Foer characterizes them, are the new arbiters of media, economy, politics and the arts. By making their services cheap and indispensable, and by tailoring their complex algorithms to our data profiles, they can gently push us toward products they want us to buy or, say, YouTube videos they want us to watch. Yet the methods by which we get such recommendations — for news, consumer goods, movies, music, friends and the like — remain opaque. Facebook’s acceptance of thousands of Russian ads during the recent election may be a case in point. As Foer reminds us, through an algorithmic dispersal of misinformation, the social-media giant possibly helped elect to the presidency of the United States a frequently bankrupt real estate developer without any political experience whatsoever.
Gertner focuses on Foer's point that the companies that dominate the world’s technology ecosystem have assumed the roles of monopolists.
Gertner is accurate, in my opinion, in seeing Foer as focused on the broad political challenges posed by the new powerful companies, invoking broad antitrust and political thinking of people like Justice Brandeis. Foer is not focused so much on particular immediate technical antitrust reforms. Foer wishes government to face the new realities of monopoly behavior by the likes of Google, Apple, Facebook, and Amazon in the spirit of argumentation and experimentation that carried Brandeis and later Thurman Arnold during the Roosevelt New Deal period.
Foer does not suggest a series of fixes to current antitrust enforcement, but others do.
For example, Lina Khan, writing in the Yale Law Jounal, suggests replacing the consumer welfare framework of current antitrust enforcement with an approach oriented around preserving a competitive process and market structure: "Applying this idea involves, for example, assessing whether a company’s structure creates anticompetitive conflicts of interest; whether it can cross-leverage market advantages across distinct lines of business; and whether the economics of online platform markets incentivizes predatory conduct and capital markets permit it. More specifically, restoring traditional antitrust principles to create a presumption of predation and to ban vertical integration by dominant platforms could help maintain competition in these markets. If, instead, we accept dominant online platforms as natural monopolies or oligopolies, then applying elements of a public utility regime or essential facilities obligations would maintain the benefits of scale while limiting the ability of dominant platforms to abuse the power that comes with it. See Ms. Khan's article at https://www.yalelawjournal.org/note/amazons-antitrust-paradox Ms. Khan can be seen in an Open Markets program speaking on related points at http://openmarketsinstitute.org/events/are-tech-giants-too-big-for-democracy-with-senator-al-franken/ at approximately hour 2:05.
Commenters Ezrachi and Stucke advise that "Ultimately, the super-platforms–in harming both the content providers upstream and consumers downstream–can undermine our economic well-being and democracy. Competition law has at its origins the protection of society from the misuse of economic and political power. Thus, our competition authorities must step up. Failing to challenge the super-platforms’ anticompetitive practices will only embolden these (and aspiring) gatekeepers. When the enforcer only looks down, upstream competition, innovation, and the livelihood of many market participants, who deserve a competitive marketplace, will be hindered. See their writing https://www.authorsguild.org/industry-advocacy/law-profs-antitrust-enforcers-rein-super-platforms-look-upstream/
Posted by Don Allen Resnikoff, who is responsible for the content
Opinion from The Hill: A lawsuit in San Juan by the Aurelius hedge fund has the potential to be one of the most significant in sovereign debt history. This lawsuit could not only derail Puerto Rico’s current debt restructuring attempts, but it could also call into question the constitutionality of its status as an “unincorporated” U.S. territory.
Editor note: As Puerto Rican citizens struggle to recover from devastating storm damage, an important legal challenge to the legal and financial stability of Puerto Rico looms in the background. The following article from The Hill tells the story. DR
Rarely does a case that is nominally about debt so squarely involve the question of what it means to be sovereign.
In 2016, Congress passed the Puerto Rico Oversight, Management and Economic Stability Act, or Promesa, which among other things established a control board with broad powers to run Puerto Rico’s finances until it can be returned to fiscal stability. To quote the title of one of the academic articles that inspired the control board idea, it is a “dictatorship for democracy” in the form of a temporary, undemocratic institution designed to restore order.
Unsurprisingly, the board has faced strong opposition. Critics allege that it fails to address the island’s underlying economic problems, and also that it fails even the most basic tests of democratic accountability. Some union leaders, environmental groups, and left-wing political parties see the board as a tool of vulture capitalists working in cahoots with the federal government to reimpose colonial rule.
This makes it all the more striking that their most powerful ally against the board might well be an infamous New York hedge fund, whose lawsuit could bring the control board crashing down, and perhaps even alter Puerto Rico’s territorial status. The hedge fund, Aurelius, has a straightforward claim: The members of the Promesa board were unconstitutionally appointed, and therefore the steps toward a debt restructuring that the control board has taken and plans to take (which would likely force Aurelius to take a haircut on the nearly half a billion dollars of Puerto Rican debt it holds) are invalid.
The basis for this claim lies in the appointments clause of the Constitution, which specifies that principal federal officers must be appointed by the president, with the advice and consent of the Senate. Although the case law is not crystal clear, principal federal officers tend to be those who exercise significant authority pursuant to federal law and who have the president as their only boss. If the appointment of a seven-member control board with carte blanche to run the finances of the country’s biggest territory is not the appointment of primary federal officers, what is?
But the board members have an answer. Puerto Rico is, according to century-old Supreme Court precedents, an “unincorporated territory.” That means that the board members are territorial officers under the territorial clause of the Constitution, not federal officers subject to the appointments clause. The former clause gives Congress the power to “make all needful rules and regulations respecting the territory or other property belonging to the United States.” A plenary authority is not subject to the usual constraints of the separation of powers.
That those Supreme Court precedents, the much-reviled Insular Cases, are still part of American law is an embarrassment. They were written by the same basic lineup of justices who penned Plessy v. Ferguson, and are tainted by a stunningly racist and colonial mindset. Plessy v. Ferguson is the infamous case that held that “separate but equal” was constitutional, and it was explicitly overturned by Brown v. Board of Education. The Insular Cases, by contrast, remain good law and are still the basis of Puerto Rico’s form of sovereign limbo.
The federal district court in San Juan is therefore presented not simply with an aggrieved creditor, but with a claim that goes right to the heart of Puerto Rico’s legal status. The core question, in a way, is whether Puerto Rico, more than a century after it was acquired through conquest, remains still a distant colony, as the Insular Cases held, or has truly become part of the United States. For the millions of American citizens in Puerto Rico, the island’s legal status has been of paramount importance long before the debt crisis or the impact of Hurricane Maria.
For decades now, Puerto Ricans have debated whether and how to become the 51st state, become an independent nation, or remain a territory with no voting representation in Congress. Many have concluded that their preferences will be ignored on the mainland, which might help explain why only a quarter of eligible voters showed up for a June referendum on the island’s status. In the words of one U.S. congressman of Puerto Rican descent, “Congress won’t do anything.” Maybe. But Aurelius is not going away, and it has a war chest, a brilliant legal team, and a tenacity that will force the federal government to take note.
This is, after all, one of the same hedge funds that, in the infamous “pari passu” litigation, brought the Argentine government to its knees just a few years ago. The Aurelius managers did not set out to lead a constitutional crusade from their Fifth Avenue penthouses. They simply want to avoid having to take pennies on the dollar for their bonds (which is what the board will probably do in order to get Puerto Rico back to sustainability). But in fighting against the board, Aurelius has already proven willing to smash away at the foundations of Puerto Rico’s legal status.
A century ago, economic disputes over things like sugar tariffs led to the Insular Cases, which established Puerto Rico’s status as an “unincorporated territory.” The financial dispute currently playing out in that quiet federal district court in San Juan might just unwind it.
http://thehill.com/opinion/finance/361775-puerto-ricos-colonial-status-hinges-on-a-new-york-hedge-funds-greed#bottom-story-socials
Rat Control in the District of Columbia
Are there any government programs that libertarian conservatives and liberal progressives can agree are useful, and should be supported by tax revenues? The answer is probably yes, and rat control in public areas may be an example. DC Government has tried many approaches, including exhortations to citizens to dispose of garbage in a rodent-resistant way, and organizing stray cats to chase rats (really). Here is an earlier description of the DC government's efforts:
https://www.nbcwashington.com/news/local/Rats-DC-Announces-Steps-to-Control-Rat-Problem-as-Resident-Complaints-Rise-430231833.html
Posted by Don Resnikoff
Mulvaney curtails CFPB collection of consumer data
The Wall Street Journal (paywall) reports that Mick Mulvaney has exercised his authority at the CFPB to freeze collection of consumer data from credit cards and mortgages. The WSJ explains:
Critics of the CFPB have long complained about the bureau’s efforts to collect consumer data on credit cards and mortgages through its disclosure rules, consumer complaint database and enforcement actions. They say such actions threaten privacy and information security. CFPB officials have in the past said such data help the agency identify discrimination and other industry misconduct, and can serve as a basis for writing rules.
https://www.wsj.com/articles/new-cfpb-chief-curbs-data-collection-citing-cybersecurity-worries-1512429736?te=1&nl=dealbook&emc=edit_dk_20171205&mg=prod/accounts-wsj#
Editorial comment: consumer law advocacy in the time of tax law changes in aid of large corporations
We do consumer law and policy here. But as a blogger on Public Citizen's consumer law and policy blog suggested recently, that doesn't mean we should be oblivious to larger political issues. That includes the ways in which the new federal tax law recently passed by the Senate and sent to Congressional conference may affect the ordinary citizens we seek to protect as consumers, and the character of the political forces that caused the law to pass.
It may be that the benefits promised to ordinary citizens by supporters of the tax bill may materialize. Or, as I think is more likely, the New York Times editorial board has it right when it suggests that "the Senate passed a tax bill confirming that the Republican leaders’ primary goal is to enrich the country’s elite at the expense of everybody else, including future generations who will end up bearing the cost. . . . The bill is expected to add more than $1.4 trillion to the federal deficit over the next decade [the CBO analysis is at https://www.cbo.gov/system/files/115th-congress-2017-2018/costestimate/53362-summarysenatereconciliation.pdf], a debt that will be paid by the poor and middle class in future tax increases and spending cuts to Medicare, Social Security and other government programs. Its modest tax cuts for the middle class disappear after eight years. And up to 13 million people stand to lose their health insurance because the bill makes a big change to the Affordable Care Act. Yet Republicans somehow found a way to give a giant and permanent tax cut to corporations like Apple, General Electric and Goldman Sachs, saving those businesses tens of billions of dollars."
The New York Times editorial board view on the tax bill winners and losers and the role of big business political donors as supporters of the tax bill suggests a need for political engagement by citizens of a broad sort, but it does not at all suggest that our focusing on consumer law and policy issues is unimportant.
The contrary is the case. Consumer advocates do something important when we fight for institutional fairness and access to the courts, as by fighting against compelled arbitration that deprives consumers of fair court access for their grievances. Consumer advocates work in other important ways to provide procedural and substantive fairness for consumers. Supporting the currently challenged work of the CFPB is just one example.
Particular consumer-oriented campaigns for procedural and substantive fairness are of a piece with broader political campaigns, such as the broader campaign to reduce the role of big business political donations on electoral politics and democracy in the United States. We should not be discouraged in our pursuit of consumer law initiatives.
Posting by Don Allen Resnikoff, who is responsible for the views expressed
Will antitrust agencies block CVS from buying Aetna?
Commenters generally agree that the agencies are faced with the same sort of questions raised by the ATT/Times-Warner merger: Can a powerful vertically integrated market player effectively limit market access for an input provider? In the case of ATT/Times Warner the concern is about restricted opportunities for program providers.
In the Economist article excerpted below, the author discusses the vertical foreclosure concern in the context of the CVS/Aetna deal in simple terms, and suggests that the extent of vertical foreclosure will be mild. Other commenters can be expected to see a more complex market power story and suggest greater negative consequences:
Excerpts from Economist article:
The CVS-Aetna deal is an example of “vertical integration”, in which separate bits of a supply chain are brought together under one roof. This tie-up would reach across three distinct layers of the health-care industry: the retail pharmacies for which CVS is famous; the pharmacy-benefit managers (PBM), intermediaries which negotiate drug prices on behalf of medical plans and whose number again includes CVS; and the insurers, like Aetna.
Supporters of the deal argue that aligning the interests of insurers and pharmacies would reduce costs and improve life for consumers. An insurer that could send patients to walk-in clinics of the sort CVS owns would be better placed to monitor and improve results.
In the case of CVS-Aetna, the incentive for the pharmacy-benefit manager to fatten its profits would disappear. The question then is would that benefit accrue to the consumer? That depends on whether firms are dominant in their respective markets. The benefits to consumers of a vertical merger disappear if one of the parties has a monopoly. The proposed deal between AT&T and Time Warner, for instance, fails this test. The monopoly that AT&T wields as a broadband provider in many parts of America means that rivals to Time Warner have no simple options for getting their content distributed there. Uncontested markets would have a similar impact on the CVS-Aetna deal: a combined entity would be free to restrict insured customers to CVS medications and clinics, for example, if it had no rivals to fear.
That seems unlikely. CVS has about 23% of the pharmacy market, and 24% of the PBM market; Aetna has about 6% of the insurance market. And more competition may be on the way in the pharmacy business: the prospective entry of Amazon lies behind CVS’s hunt for Aetna. But the deal would require close scrutiny and may need conditions attached. A proposed agreement with Anthem, another insurer, which would give CVS an even bigger slice of the PBM pie would need to be ditched. And the local picture matters. In the median American state, for example, the two largest health insurers have 66% of the market. Trustbusters might need to insist on the sale of some local assets to smaller rivals before approving a tie-up.
The Economist article is at https://www.economist.com/news/leaders/21730882-proposed-health-care-merger-raises-difficult-antitrust-questions-should-regulators-block-cvs
From Public Citizen Blog: Professor Chris Peterson's study on why the republican version of the CFPB -- contained in the Financial Choice Act of 2017 -- would be bad for consumers
If you want to learn what the CFPB would look like if republican plans to defang it were enacted, law prof Chris Peterson has done a study for you: Choosing Corporations Over Consumers: The Financial Choice Act of 2017 and the CFPB. Here is the abstract:
The Consumer Financial Protection Bureau (CFPB) is the U.S. Government’s primary regulator and civil law enforcement agency governing consumer lending, payment systems, debt collection, and other consumer financial services. Created in the wake of the financial crisis, Congress tasked the agency with stopping deceptive, unfair, and abusive consumer finance. However, Congress is currently considering legislation which would significantly change the CFPB’s law enforcement authorities. This Article analyzes the proposed Financial Choice Act of 2017 which would rename the CFPB, and eliminate many of the CFPB’s law enforcement powers. If the Financial Choice Act were the law of the United States from 2012 to 2016, how would the CFPB’s enforcement track record have changed? Drawing upon pleadings, consent orders, settlement agreements, press releases, and other public documents, this Article presents an empirical study of every publicly announced CFPB enforcement case to determine what law enforcement cases and awards would have been eliminated had the bill been law. Among the study’s findings, had the Financial Choice Act had been adopted in 2012 it would have eliminated:
• Over 91 percent of consumer restitution for illegal home mortgage lending practices, amounting to $2.7 billion dollars;
• Over 94 percent of consumer restitution for illegal credit card practices amounting to $6.8 billion dollars; and
• Every single case addressing illegal practices in the “payday” and car title lending industry.
The study concludes that the Financial Choice Act of 2017 will, if enacted, seriously weaken the CFPB’s law enforcement program.
On Thursday, November 30, a High Court judge in London handed a win to Visa, ruling in a long-running case brought by Sainsbury’s Supermarkets Ltd. that the credit card company did not set its interchange fees at an unlawful level that restricted competition
In 2013 a group of high street retailers launched legal proceedings in the UK, claiming that Visa’s UK and cross-border European interchange fees were contrary to competition law.
The card giant is now claiming victory after a high court ruling that its UK fees are lawful and is looking to put the matter to bed, urging merchants to work with it to “create the future of digital commerce.”
In an open letter, Visa said, “We hope the Court’s decision will accelerate the collaboration between retailers and Visa and will allow us to address the greatest disruption – and potentially the greatest opportunity – facing the merchant community in Europe today: the digitisation of commerce.”
A Sainsbury’s spokeswoman said, “This claim concerned the damage Sainsbury’s maintains was caused by Visa’s breach of UK and EU competition laws in its setting of interchange fees.
“Sainsbury’s is disappointed by the decision of the High Court in finding that Visa had not infringed competition law.
“Sainsbury’s is now considering its position.” It is expected to launch an appeal.
Sainsbury’s won a separate court case last summer, with a £68 million (US$91.9 million) award from Mastercard.
Full Content: AOL & Law 360
The ACLU brief in US v Carpenter, the recently argued US Supreme Court case on warrantless use of cellphone location data
From the brief:
Simply by using cell phones, the government maintains, the populace gives law enforcement constitutionally unchecked authority to collect a detailed record of every person’s historical whereabouts — without probable cause, a warrant, or any Fourth Amendment protection whatsoever.
This cannot be right.
The brief is at https://www.aclu.org/legal-document/united-states-v-carpenter-reply-brief-petitioner
The Supreme Court seemed ready at oral argument to interpret a federal law protecting whistle-blowers narrowly, barring many retaliation suits from people who say they were fired for reporting wrongdoing.
The plain words of the law, part of the Dodd-Frank Act, required that conclusion, justices across the ideological spectrum said.
“How much clearer could Congress have been?” Justice Neil M. Gorsuch asked.
The question for the justices was who qualified as a whistle-blower entitled to protection from retaliation. Most of the justices seemed ready to rely on the definition in the law itself, which defines “whistle-blower” to mean “an individual who provides information relating to a violation of the securities laws” to the Securities and Exchange Commission.
The definition seemed to exclude people who merely reported wrongdoing to their employers, and some justices said that could have been a drafting oversight.
The transcript of the oral argument before the US Supreme Court is here: https://www.supremecourt.gov/oral_arguments/argument_transcripts/2017/16-1276_i426.pdf
See NYT article: https://www.nytimes.com/2017/11/28/business/29dc-bizcourt.html
CVS Health could announce an acquisition of insurer Aetna for more than US$66 billion as early as Monday, December 4
The talks are advanced and would likely see Aetna valued at between US$200 and US$205 a share offered mainly in cash.
Aetna shares rose about 1% on the news. CVS shares rose more than 2% on the report.
Full Content: Wall Street Journal
Leandra English's lawsuit defending her right to head the CFPB is here:
https://assets.documentcloud.org/documents/4310647/English-Complaint-CFPB.pdf …
From the Complaint:
Effective at midnight on November 24, 2017, the Bureau’s first Director, Richard Cordray, resigned his post. At that point, plaintiff Leandra English, the Bureau’s Deputy Director, became the agency’s Acting Director by operation of law. The Dodd-Frank Act is clear on this point: It mandates that the Deputy Director “shall . . . serve as the acting Director in the absence or unavailability of the Director.” 12 U.S.C. § 5491(b)(5)(B). By statute, she serves in that capacity until such time as the President appoints and the Senate confirms a new Director. See 12 U.S.C. § 5491(b)(2). Case 1:17-cv-02534 Document 1 Filed 11/26/17 Page 1 of 9 2
Disregarding this statutory language, President Trump issued a press release on the evening of November 24 indicating his desire to install defendant Mulvaney, the Director of the White House Office of Management and Budget, as the Bureau’s Acting Director. Under this scenario, Mr. Mulvaney would seek to serve indefinitely as the interim head of a statutorily “independent” agency while simultaneously occupying his current White House post.
The President apparently believes that he has authority to appoint Mr. Mulvaney under the Federal Vacancies Reform Act of 1988, 5 U.S.C. § 3345(a)(2). But the Vacancies Act, by its own terms, does not apply where another statute “expressly . . . designates an officer or employee to perform the functions and duties of a specified office temporarily in an acting capacity,” 5 U.S.C. § 3347(a)(1)(B)—which is exactly what the Dodd-Frank Act does.
The Trump administration late Friday set up a clash over the leadership of the Consumer Financial Protection Bureau, installing an acting director hours after Richard Cordray told the agency his chief of staff would assume the role at the moment of his departure
Cordray named Leandra English as deputy director, setting her up to become acting director after Cordray’s departure. Cordray sent out his resignation letter to staff on Friday, moving up his planned departure a week. His resignation is effective midnight on Friday.
Cordray said in a separate letter to the CFPB on Friday: “In considering how to ensure an orderly succession for this independent agency, I determined that it would be best to avoid leaving this key position filled only in an acting capacity. In consultation over the past few days, I have also come to recognize that appointing the current chief of staff to the deputy director position would minimize operational disruption and provide for a smooth transition given her operational expertise.”
Hours after Cordray’s announcement, President Donald Trump said Mick Mulvaney, director of the Office of Management and Budget, would
serve as acting director of the CFPB.
The White House said in a statement: “The president looks forward to seeing Director Mulvaney take a common sense approach to leading the CFPB’s dedicated staff, an approach that will empower consumers to make their own financial decisions and facilitate investment in our communities. Director Mulvaney will serve as Acting Director until a permanent director is nominated and confirmed.”
The move set up a clash over the leadership of the agency.
Sen. Elizabeth Warren, D-Massachusetts, an architect of the CFPB, tweeted on Friday:
View image on Twitter
Elizabeth Warren
✔@SenWarren
The Dodd-Frank Act is clear: if there is a @CFPB Director vacancy, the Deputy Director becomes Acting Director. @realDonaldTrump can’t override that.
“If there ends up being a dispute about who’s the rightful head of the CFPB, the final say will rest with the courts. And if the courts follow the text, structure, and history of Dodd-Frank, it’s clear what they should say: Leandra English is currently the acting Director of the CFPB,” Brianne Gorod, chief counsel to the Constitutional Accountability Center, wrote late Friday at the blog Take Care.
Full article at https://www.law.com/nationallawjournal/sites/nationallawjournal/2017/11/24/read-consumer-bureau-director-richard-cordrays-resignation-letter/?slreturn=20171025081145
Cerner deal as another sign Amazon has big plans for healthcare
by Mark Brohan | Nov 24, 2017 (click title for link to full article)
Reportedly, the two companies will announce a business development and technology integration deal whereby Amazon Web Services would provide cloud computing services for HealtheIntent, Cerner’s population health management product series.New reports have Amazon.com Inc. via its Amazon Web Services unit, moving further into digital healthcare with a new partnership with electronic health records vendor Cerner Corp.
If that is indeed the case the move makes lots of sense and opens new potential for both companies, says R.W. Baird senior research analyst Matthew Gilmore who follows healthcare stocks.
CNBC has reported that next week Amazon Web Services, the online retailer’s cloud computing arm, will announce a major new alliance with Cerner at its annual user group meeting. Reportedly, the two companies will announce a business development and technology integration deal whereby Amazon Web Services would provide cloud computing services for HealtheIntent, Cerner’s population health management product series. Amazon and Cerner have yet to talk publicly about the proposed deal.
The expanded relationship will also leverage AWS's analytics capabilities and global data.
Population Health Management is the aggregation of patient data from many sources into a single electronic patient record. HealtheIntent is a cloud-based, population health management system that Cerner says can receive data from any electronic health record, existing healthcare information technology system and other data sources, such as pharmacy benefits managers or insurance claims.
Big health systems such as Carolinas HealthCare in Charlotte, NC, are using HealtheIntent to better manage more than 12 million patient records says.
Cerner already utilizes Amazon Web Services for storage services, but it is reportedly set to use AWS for a broader range of cloud computing services to support HealtheIntent. If that is case, Cerner be able to offer better cloud computing services to major hospital clients at time when many are looking to replace outdated legacy systems with cloud-based software.
In return Amazon, via Amazon Web Services, gets broader access to the mainstream health systems and hospital information technology market, says Gilmore. “We believe Cerner’s population health platform, HealtheIntent, already uses Amazon AWS for storage and other services, but the expanded relationship will also leverage AWS’s analytics capabilities and global data,” Gilmore writes in a new research note.
With Amazon reportedly weighing a broader move into healthcare, the deal with Cerner gives the e-commerce giant new ways to sell to hospitals, Gilmore says.
* * * *
Editor's note: A writing by Don Resnikoff and Katherine Jones described the dominance of Epic, the leading company in the health care records space. The Amazon/Cerner alliance is potentially a threat to Epic's dominance. See http://www.scribd.com/doc/211776613/DC-ConsumerRightsCoalition-Comments-for-FTC-Public-Workshop-3-10-14 Following is an excerpt from the Resnikoff-Jones writing describing the Health Information Technology (HIT) industry:
Avoiding another “Microsoft” Situation
Experienced antitrust observers have counseled about the danger that HIT companies may follow
in the footsteps of other technology companies, such as Microsoft, that attracted antitrust law
enforcement. Microsoft’s behavior raised competitive concerns when the company achieved a
strong market presence early in the development of particular software markets, and then sought
to protect its dominant position in those markets by withholding access to its proprietary
technologies from competitors and potential competitors.7 Microsoft achieved its dominant
position in the marketplace in large part by offering a product that consumers valued. But its
behavior raised competition concerns when it began to appear to make strategic decisions with
an eye towards thwarting competition, instead of competing by simply continuing to improve its
technology in ways that would benefit consumers.
HIT has network characteristics that could all too easily tip markets toward settling on the use of
one particular proprietary technology and abandoning other technologies. In the absence of
interoperability, such a development might have the effect of foreclosing competitors to a
dominant firm from being able to enter a market and offer competition. It might also create
difficulties for health care providers in seeking access to information needed to effectively offer
their services to consumers. And finally, it might open the door to strategic use of proprietary
technology in ways that cause competitive harm. Such use of proprietary technology can be
especially anticompetitive when the cost of switching to another software vender is high. In the
case of Microsoft, the problematic strategic behavior was Microsoft’s effort to hold on to market
ascendency by protecting its proprietary platform technology in a manner perceived by
government enforcers as improperly foreclosing competition. Blocking competition in HIT
markets through strategic use of proprietary standards is, of course, the opposite of facilitating
interoperability.
The State of Current HIT Markets
Currently, companies providing HIT products already exist that have a strong market position
that may have resulted, at least in part, through reliance on proprietary standards and network
effects. One company that has drawn attention because of its strong market position is Epic
Systems. Some have suggested that about 40% of the U.S. population has its medical
information stored in an Epic EHR system. Other data suggests that Epic market shares in
various segments of the EHR market vary from about 15% to 30%, substantially less than the
market shares of Microsoft when it aroused strong government antitrust concerns. Some federal
data suggests that Epic has the most customers receiving federal electronic health record system
incentive payments in a key category, complete EHRs. Of 2,950 hospitals receiving federal
payments for using complete EHRs in the inpatient environment, Epic has 578, a 19.6% market
share, in this segment. It appears that for large physician practices and hospitals, Epic is
currently the company with the greatest market presence. Evidence of this presence can be
found in, among other sources, the result of annual year-end rankings published by the research
firm KLAS. Epic has long been a very large player in EHR for “jumbo” group practices. One
industry expert suggests that Epic dominates inpatient EHR among large hospitals and health
systems, and increasingly, physician practices: "Even if physicians prefer another vendor, they're
forced to go on the hospital's system."
Epic Systems is not without competitors in various segments of the EHR market. They include
Meditech, Computer Programs and Systems, Cerner, HCA Information & Technology Services,
and Athenahealth. Some competitors arguably have superior technology which could increase
their market position in the future.
Is your new electric bicycle subject to regulation as a motorcycle? The National Council of State Legislators explains
State legislatures have begun to grapple with how to differentiate and define e-bikes and regulate their operation and equipment standards on roadways and trails in their respective states. One challenge is the distinction between other motorized vehicles such as scooters and mopeds, and the burgeoning market and interest in e-bikes as a cost-effective and environmentally friendly transportation option.
Electronic Bicycle: An e-bike that meets the federal definition of an electric bicycle and is subject to product safety standards for bicycles.
See http://www.ncsl.org/research/transportation/state-electric-bicycle-laws-a-legislative-primer.aspx
The text of the recent FCC statement moving away from net neutrality:
http://transition.fcc.gov/Daily_Releases/Daily_Business/2017/db1121/DOC-347868A1.pdf
Paul Alan Levy on "bogus" Homeland Security summons seeking to identify the owners of a Twitter account hostile to the government agency
Posted: 21 Nov 2017
By Paul Alan Levy
Last spring, Twitter received a fair amount of attention for fighting a patently bogus attempt by the Department of Homeland Security to abuse its statutory authority to investigate the importation of goods as the basis for to issuing an administrative summons seeking to identify the owners of a Twitter account hostile to the new leadership of the U.S. Citizenship and Immigration Service. Twitter sued to block the summons, and the government withdrew it, mooting the litigation.
In response to a senatorial inquiry, the responsible agency (Customs and Border Protection) apparently tried to hide behind the DHS Inspector General, implying that the summons related to an OIG investigation of whether CPB staff were undermining their new president. The DHS Inspector General publicly repudiated that move, noting archly that OIG carefully considers First Amendment ramifications ("we strive . . . to ensure that our work does not have a chilling effect on individuals’ free speech rights"), but saying that the office was reviewing the question whether CBP had misbehaved in issuing the summons.
Late last week, the DHS OIG released a report condemning the summons as being impermissible under the statute. The report indicates that, in retrospect, Customs and Border Protection admitted that its staff have been taking an overbroad view of how they can use the summons procedure, and agreed to issue a new manual, to institute a new review process, and to provide training to ensure that such abuses are not repeated.
From: http://pubcit.typepad.com/clpblog/2017/11/homeland-security-inspector-general-pegs-back-misuse-of-importation-summons-authority.html?
Walmart pulls back on aggressive online pricing, reducing competitive pressure on Amazon
Press reports suggest that Walmart has retreated from aggressive online pricing against major rival Amazon.
Walmart has worked hard to gain a position in on-line sales that rivals Amazon. In October, industry observer Nat Levy wrote that "Walmart has dropped some serious cash on deals to help grow the company’s online presence. It started with Jet.com, which Walmart bought for $3.3 billion. . . .Walmart has invested heavily in logistics and delivery as one of the primary fronts in its battle against Amazon. At the end of January, Walmart introduced free two-day shipping on millions of items for orders over $35." https://www.geekwire.com/2017/walmart-acquires-new-york-based-parcel-take-amazon-rapid-package-delivery/
2016 online sales were was reportedly strong for Walmart. "In its fourth quarter and year-end earnings report, Walmart said online sales increased 29 percent in the U.S. and 15.5 percent globally. Walmart does not release dollar figures for e-commerce sales." https://www.geekwire.com/2017/look-out-amazon-walmarts-3-3b-jet-com-deal-starts-to-pay-off-with-big-growth-in-online-sales/
According to the Geekwire article, Jet.com’s Founder and CEO Marc Lore, who is leading Walmart’s U.S. e-commerce effort, commented earlier this year that “We’re moving with speed to become more of a digital enterprise and better serve customers.”
Doug McMillon, president and CEO of Walmart, said in an earlier statement that Walmart has become the second largest online retailer by revenue and among the top three by traffic.
But recently the Wall Street Journal reported that Walmart is experimenting with a new system, which has at times resulted in higher web prices for goods that would otherwise be unprofitable to ship.
In some cases, product listings on walmart.com show an “online” and “in the store” price. Often the online price is now higher than the in store price and matches Amazon. Formerly, online and in store prices were generally the same.
“We always work to offer the best price online relative to other sites,” a Wal-Mart spokeswoman said to the Wall Street Journal. https://www.wsj.com/articles/now-featured-on-wal-marts-website-higher-prices-1510517219
Different comparison shoppers may disagree on whether Walmart was previously competing aggressively with Amazon on online prices, but some commenters found aggressive competition: "In this price comparison, Walmart.com offered the lowest price eight times, and Amazon was the best bargain in two cases. The retailers surprisingly had the same price on one-third of the products I compared. When I added up the total for all 15 items in my shopping cart, Walmart was the big winner: 17% cheaper than Amazon!" http://clark.com/shopping-retail/amazon-walmart-price-compare/
So what explains the Walmart decision to raise prices and be a less aggressive competitor to Amazon in the realm of on-line pricing? The frequently stated Walmart explanation is that it wants to drive customers to its brick and mortar stores.
Another idea may be suggested by Tim Wu's brief New Yorker article published a few years ago, which talks about the need for renewed antitrust attention for industries with a relatively few large players that coordinate in ways that have anticompetitive effects, but escape usual enforcement approaches.
Tim Wu authored a companion scholarly article written with Scott Hemphill. The New Yorker article is at http://www.newyorker.com/online/blogs/elements/2013/04/tmobile-verizon-monopoly-oligopoly-business-practices.html The scholarly paper, called “Parallel Exclusion,” can be found at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1986407 It discusses in greater detail some cases where a few large companies act in ways that are cooperative and anticompetitive, but without the explicit contractual offer and acceptance to pursue a conspiracy that facilitates a court finding of antitrust wrongdoing.
Of course, the Walmart/Amazon story can be looked at as simply about price. We might ask whether we are seeing tacit collusion on price, and whether, as Tim Wu and others have suggested, an antitrust problem should be found despite lack of explicit contractual offer and acceptance to pursue a conspiracy that facilitates a court finding of antitrust wrongdoing. Judge Posner threw cold water on litigation raising antitrust concerns about tacit collusion on price when he wrote in a 2015 opinion that "We can . . . expect competing firms to keep close track of each other’s pricing and other market behavior and often to find it in their self-interest to imitate that behavior rather than try to undermine it—the latter being a risky strategy, prone to invite retaliation. [That behavior is] consistent with independent parallel behavior. . . . [and] does not violate section 1 of the Sherman Act. Collusion is illegal only when based on agreement." IN RE: TEXT MESSAGING ANTITRUST LITIGATION. Aircraft Check Services Co., et al., individually and on behalf of all others similarly situated, Plaintiffs–Appellants, v. Verizon Wireless, et al., Defendants–Appellees. 782 F.3d 867 (7 Cir, 2015) Find on-line at https://h2o.law.harvard.edu/cases/5429
This comment is posted by Don Allen Resnikoff, who is solely responsible for its content
FROM COVINGTON & BURLING LLP
FTC Seeks Comment on Petition to Modify 2009 Sears Order Concerning Online Browsing Tracking
By Calvin Cohen on November 14, 2017
The Federal Trade Commission (“FTC”) is soliciting public comments on a petition filed by Sears Holdings Management (“Sears”) to reopen and modify a 2009 FTC order regarding the tracking of personal information on their software apps. The petition is notable for a number of reasons. First, the Sears consent order was a seminal order in the development of the FTC’s privacy jurisdiction, standing for the proposition that a company cannot “bury” disclosures that consumers would not expect in long privacy notices. Second, the concept of modifying 20-year consent orders is an important one in light of changes over time. Third, the petition seeks to correct the unintended consequences that a consent order can have on future technologies when such an order regulates present ones.
In the 2009 FTC order, Sears settled charges that it failed to disclose adequately the scope of consumers’ personal information it collected via a downloadable software app. As part of that 20-year consent order, Sears agreed to make certain disclosures and obtain consent in connection with its downloadable software app and future ones that “monitor, record, or transmit information.” The petition argues that the 2009 FTC order should be modified to update its existing definition of “tracking application,” presently defined as:
any software program or application . . . that is capable of being installed on consumers’ computers and used . . . to monitor, record, or transmit information about activities occurring on computers on which it is installed, or about data that is stored on, created on, transmitted from or transmitted to the computers on which it is installed.
The petition seeks to modify this definition to exempt information about “(a) the configuration of the software program or application itself; (b) information regarding whether the program or application is functioning as represented; or (c) information regarding consumers’ use of the program or application itself.”
The petition argues that this modification is necessary for three reasons. First, changed circumstances in the mobile app arena have rendered the 2009 FTC order’s broad definition of “tracking application” impracticable. The FTC’s original administrative complaint targeted Sears’ desktop software application, which could track users’ activities outside of its boundaries. Since then, software distribution has overwhelmingly shifted from desktop to mobile apps, which are distributed through two main online marketplaces (Apple’s App Store and Google Play). These marketplaces control “the manner and form” of disclosures to consumers relating to apps and impose restrictions on the collection of information from consumers, in concert with the FTC’s goals. According to Sears, the desktop software that led to the 2009 FTC order “would be impermissible under the rules of the two dominant mobile app stores,” but the additional disclosure requirements imposed on Sears by the order are onerous given that the app stores have a “standardized workflow” to allow consumers to review the app provider’s data collection, use, and sharing policies before downloading the apps.
Second, Sears argues that modifying the 2009 FTC order is in the public interest. Sears argues that while the order was “intended to protect consumers from undisclosed and invasive tracking of consumers outside of” its software, the obligations it imposes upon Sears “are poorly adapted to today’s mobile app ecosystem.” Under the 2009 FTC order, a user of multiple Sears apps must read and consent to nearly identical disclosures in each of those apps, and “no other competitor uses a similarly disruptive approach to mobile app disclosures.” Similarly, modification of the order’s definition would reflect the commonplace practices of data collection and intra-app activity sharing in today’s marketplace. Sears’ mobile apps share data with remote servers to fulfill consumer requests and collect data to support app security. Such practices, the petition asserts, are consistent with the FTC’s 2012 privacy report.
Third, the petition argues that the requested modification is consistent with more recent FTC precedent and priorities. The petition cites two FTC orders from 2012 and 2013 that exempted the specific types of information collection enumerated above. Modifying the 2009 FTC order to exempt tracking that is “necessary for the basic operation of mobile apps” would be consistent with consumer expectations and recent FTC guidance and regulations. Indeed, the petition claims that modifying the definition of “tracking application” would leave intact the order’s “core continuing mandate—to provide notice to consumers when software applications engage in potentially invasive tracking.”
The petition will be subject to public comment through December 8, 2017. After that time, the Commission will decide whether to approve Sears’ petition to modify the definition of “tracking application” in the 2009 FTC order.
See https://www.ftc.gov/news-events/press-releases/2017/11/ftc-seeks-public-comment-sears-holdings-management-corporation?utm_source=govdelivery
C&B notes at https://www.insideprivacy.com/united-states/federal-trade-commission/ftc-seeks-comment-on-petition-to-modify-2009-sears-order-concerning-online-browsing-tracking/
CBS News reports that Ford is now offering free repairs to deal with reports of carbon monoxide seeping into Ford Explorers
Excerpts from CBS news:
Affecting models from 2011 to 2017, 1.3 million owners of the popular SUV will begin receiving notices beginning November 23, 2017.
But the automaker is stopping short of recalling the Explorer. The watchdog group, Center for Auto Safety, says anything short of a recall is not enough.
- The repairs include reprogramming the air conditioner, replacing drain valves and checking the seals around the back of the vehicle.
Nearly 1,300 people have filed complaints with the regulator. Ford acknowledged getting more than 2,000 reports as of August last year. In the letter to customers, Ford insists Explorers "are safe" and its "investigation has not found carbon monoxide levels that exceed what people are exposed to every day."
NTHSA said it's found no actual evidence of carbon monoxide poisoning. That's despite documented cases.
NHTSA isn't commenting on the timeline for its investigation, but said it is very concerned about this potential safety problem, adding, "this action by Ford does not bring closure to the issue." The agency recommends call your dealer if you get the letter.
See https://www.cbsnews.com/news/ford-explorer-carbon-monoxide-free-repairs/
From the Center for Auto Safety: "The Center for Auto Safety, the nation’s leading independent non-profit organization providing consumers a voice for auto safety, quality, and fuel economy, today [October 13] called on Ford and NHTSA to recall all Ford Explorers from 2011-2017 because of a risk of Carbon Monoxide poisoning to the drivers and occupants of more than 1.3 million vehicles.
https://www.autosafety.org/center-auto-safety-calls-ford-recall-explorers-carbon-monoxide-exposure-inside-1-3-million-vehicles/
We have not yet found the text of the Ford letter. DR
The Missouri AG goes where the USDOJ and FTC have not: The Missouri AG has subpoenaed Google.
The AG's press release explains the focus: "Google’s collection, use, and disclosure of information about Google users . . . misappropriation of online content from the websites of its competitors; and Google’s alleged manipulation of search results. . .
See https://www.ago.mo.gov/home/breaking-news/ag-hawley-issues-investigative-demands-to-google-inc-www.ago.mo.gov/home/breaking-news/ag-hawley-issues-investigative-demands-to-google-inc-
Public Citizen's Paul Alan Levy: DC Superior Court Ruling on the Facebook Search Warrant: The Good, the Bad, and the Ugly
Excerpt from Levy posting:
D.C. Superior Court Chief Judge Robert Morin has issued his ruling on the pending objections to search warrants served on Facebook by Federal prosecutors seeking the entire contents of the Facebook accounts for the DisruptJ20 Facebook page as well as the personal accounts of two individuals, Lacey MacAuley and Legba Carrefour, who served as press contacts for the DisruptJ20 organizing effort. His decision represents something of a mixture of good and bad. The judge insisted on strong protections are provided for the identities of the anonymous third-parties who communicated with the page and the accounts, the client group whom I have been representing as a Public Citizen litigator, and good protections for the owner of the DisruptJ20 page. But he accorded fewer protections to the individual account holders – ironically, the very people who are likely to be the most in need of privacy protections. And the judge closes with an odd ruling on intervention.
The full Levy posting is at http://pubcit.typepad.com/clpblog/2017/11/dc-superior-court-ruling-on-the-facebook-search-warrant-the-good-the-bad-and-the-ugly.html?pubcit.typepad.com/clpblog/2017/11/dc-superior-court-ruling-on-the-facebook-search-warrant-the-good-the-bad-and-the-ugly.html?
Watch the video of the recent Open Markets Institute program featuring Senator Al Franken: Are tech giants too big for American Democracy?
The video is at http://openmarketsinstitute.org/
Wired reviews Franken speech to Open Markets Institute on dangers of big tech - - Google, Facebook, Amazon, etc.
SENATOR AL FRANKEN (D-Minnesota) delivered some of the sharpest criticism yet about the dangers of tech giants like Facebook, Google, and Amazon during a speech on Wednesday, encouraging regulators, as well as lawmakers in both parties, to better police the market power of dominant online platforms.
“Everyone is rightfully focused on Russian manipulation of social media, but as lawmakers it is incumbent on us to ask the broader questions: How did big tech come to control so many aspects of our lives?” Franken asked in a speech to a Washington think tank. A handful of companies decide what Americans “see, read, and buy,” dominating access to information and facilitating the spread of disinformation, he added.
“Last week’s hearings demonstrate that these companies might not be up to the challenge they created for themselves,” Franken said.
* * *
Franken has not shied away from voicing concerns about tech’s encroachments on privacy and competition in the past, but Wednesday’s criticism was unusually sweeping, tying together a revised narrative about Silicon Valley that only emerged in glimpses during the Russia hearings. Franken argued that the same control over consumers that facilitated the spread of Russian propaganda on social media also helps Facebook and Google siphon advertising revenue from other publishers and helps Amazon dictate terms to content creators and smaller sellers. Tech giants are incentivized to disregard consumer privacy, Franken noted. “Accumulating massive troves of information isn’t just a side project for them. It’s their whole business model,” he said. “We are not their customers, we are their product.”
Franken’s speech kicked off an event hosted by Open Markets Institute, a think tank devoted to fighting monopoly power. The group is led by former journalist Barry Lynn, who gained fame when his group was asked to leave New America, a left-leaning think tank that counts Google among its financial backers, after Lynn praised a harsh European antitrust ruling against Google. Senator Elizabeth Warren (D-Massachusetts) offered a similar critique of tech at an Open Markets conference last year.
See https://www.wired.com/story/al-franken-just-gave-the-speech-big-tech-has-been-dreading/
About the Democratic "Better Deal"
The brief four page document brief outlining a Democratic view of competition policy is at https://www.democraticleader.gov/wp-content/uploads/2017/07/A-Better-Deal-on-Competition-and-Costs.pdf
The Democratic statement has been criticized as too aggressive in recommending a "big-is-bad" approach to competition policy. It may also be criticized as too brief and general to provide useful guidance on remedies to competition issues. Be that as it may, an interesting aspect of the Democratic statement is its brief recital of current industry-specific problem areas: An excerpt follows:
Airlines:
Despite a rapid decline in the cost of fuel, ticket prices continue to rise while the quality of service declines. This is the result of a lack of competition in air travel; over the last two decades, regulators allowed mergers that reduced ten major U.S. airlines to four megacarriers.
Currently, those four carriers serve 80 percent of the market. As a result, consolidated airlines have mirrored each other in their attempts to reduce benefits and services, imposing egregious traveling fees, eliminating certain service lines, and downgrading amenities and consumer choice. Recently, we have seen those effects firsthand, with a United Airlines overbooking policy that led to the brutal assault of an airline passenger, shrinking airline seats, fees for using the overhead bin, and other similar policy changes that have hurt consumers.
Cable/Telecom:
Access to cable and internet services are critical for American consumers, workers, and small businesses to communicate and compete in today’s economy. Yet today, the market for those services is so concentrated that consumers rarely have any meaningful choice of provider, and prices are high enough to be prohibitive for many. In over 50 million households, Americans have no choice at all for internet provider; they are forced to pay the exorbitant price their single carrier requires, if they get service at all. In fact, some reports have determined that Americans pay far more for high-speed internet access, cable television, and home phone lines than people in many other advanced countries – even though the services they receive are not any better. And the largest companies rank the lowest on customer satisfaction rankings – they don’t need to improve their service because there is no competition. Consolidation in the telecommunications is not just between cable or phone providers;
increasingly, large firms are trying to buy up content providers. Currently, AT&T is trying to buy Time Warner. If AT&T succeeds in this deal, it will have more power to restrict the content access of its 135 million wireless and 25.5 million pay-TV subscribers. This will only enable the resulting behemoths to promote their own programming, unfairly discriminate against other 4 distributers and their ability to offer highly desired content, and further restrict small businesses from successfully competing in the market.
Beer Industry:
As of 2016, five breweries controlled over 50 percent of global beer production compared to ten companies in 2004. Although there is a burgeoning craft brewery industry, these small businesses are under threat from large legacy brewers that are acquiring their craft competitors or trying to block craft brewers’ access to the marketplace.
In the last year, InBev which owns Anheuser-Busch and is the world’s largest beer company, struck a deal to purchase SABMiller, the second largest. The companies have already announced that jobs will be cut as a result of the merger, and the resulting conglomerate will make it even harder for small, local breweries to compete.
Food Prices:
The consolidation of six agricultural giants is set to threaten the safety of food and agriculture in America. The merger of Dow with DuPont, Monsanto with Bayer AG, and Syngenta with ChemChina, will result in the control of more than 61 percent of commercial seed sales and 80 percent of the U.S. corn seed market. These mergers take place as countless farmers in rural America struggle to adapt to a declining farm economy. This corporate takeover of the farm industry will not only hurt small-town, family operated farms, who will have to pay more for seeds, but it will also raise food prices – vastly limiting consumer choice.
Eyeglasses:
With more than 200 million Americans affected by vision loss, eyeglass affordability has become a critical consumer issue that affects the entire nation [CDC]. Eyeglasses are a necessity for many Americans, but due to consolidation and concentration in the supply chain, they are increasingly difficult to afford. In fact, the current average price of eyeglasses is now at $400, a cost in line with an iPad, and is steadily rising [Consumer Reports]. The current eyeglass industry, both in the U.S. and abroad, is largely dominated by one company – Luxottica – which owns and manufactures most of the top eyewear and sunglass brands, such as Oakley, Ray-Ban, and Persol, in addition to luxury designer brands. It also owns most of major distribution chains like LensCrafters, Pearle Vision, Sears and Target Optical, and vision insurance company EyeMed Vision Care. If Essilor, which controls 45 percent of the global market share for lenses, successfully acquires Luxottica, the nearly $50 billion merger is set to control the entire supply chain of eyeglasses [Financial Times]. I
Posting by Don Allen Resnikoff, whi is responsible for its content
Comment: Does the law, and the legal process, conspire to facilitate sexual harassment in the corporate workplace?
Here are a few reasons why the answer might be yes, the law and legal process can conspire to facilitate or even encourage sexual harassment in the corporate workplace.
-- employment contracts may contain arbitration provisions. Arbitration proceedings can move the dispute about whether sexual harassment occurred out of a public courtroom and into a non-judicial and possibly secret proceeding. The courts, and the Congress, have tended to supportive of arbitration as an alternative to courtroom litigation. (Of course, potential plaintiffs should determine whether in a particular situation there are ways to avoid arbitration.)
-- Out of court settlements of sexual harassment claims are commonplace, and facilitate keeping secret the occurrence of sexual harassment. Settlement agreements may resolve sexual harassment claims in return for substantial amounts of money. But the agreements are often secret and contain provisions that would impose a severe money penalty on complainants who break secrecy and speak publicly about the sexual harassment.
-- The confidentiality provisions of sexual harassment out of court settlements deserve special mention. It does not appear that sexual harassment settlements with confidentiality provisions are currently considered to be against public policy, or unethical for lawyers to facilitate. But perhaps that permissiveness is wrong, since current news about Harvey Weinstein and others suggest that secret settlements facilitate continuation of offensive behavior without punishment.
Comment posted by Don Allen Resnikoff, who is individually responsible for its content.
NYT: Local governments lobby legislators on plastic for water infrastructure
The American Chemistry Council, a deep-pocketed trade association that lobbies for the plastics industry, has backed bills in at least five states — Michigan, Ohio, South Carolina, Indiana and Arkansas — that would require local governments to open up bids for municipal water projects to all suitable materials, including plastic. A council spokesman, Scott Openshaw, criticized the current bidding process in many localities as “virtual monopolies which waste taxpayer money, drive up costs and ultimately make it harder for states and municipalities to complete critical water infrastructure upgrades.”
Opponents of the industry-backed bills, including many municipal engineers, say they are a thinly veiled effort by the plastics industry to muscle aside traditional pipe suppliers.
“It’s simply catering to an industry that is trying to use legislation to gain market share,” Stephen Pangori of the American Council of Engineering Companies testified this year before a Michigan Senate committee.
To more directly reach towns and counties across the country, the plastics industry is also leaning on the American City County Exchange, a new group that gives corporations extraordinary capacity to influence public policy at the city and county levels. The group operates under the auspices of the American Legislative Exchange Council, a wider effort funded by the petrochemicals billionaires Charles G. and David H. Koch that has drawn scrutiny for helping corporations and local politicians write legislation behind closed doors.
Full article: https://www.nytimes.com/2017/11/10/climate/water-pipes-plastic-lead.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=stream&module=stream_unit&version=latest&contentPlacement=17&pgtype=sectionfront&_r=0
The Century Foundation analyzes government data on loan fraud by colleges
- Out of the total of 98,868 complaints reviewed by TCF, for-profit colleges generated more than 98.6 percent of them (97,506 complaints). Of these complaints nonprofit colleges generated 0.79 percent (789 complaints) and public colleges generated 0.57 percent (559 complaints).
- Approximately three-fourths of all claims (76.2 percent) were against schools owned by one for-profit entity, the now-closed Corinthian Colleges (75,343 claims). Removing Corinthian from the analysis, the vast majority of claims, over 94 percent, were still against for-profit colleges (22,160 of the 23,525 non-Corinthian claims).
- Claims are concentrated around fifty-two entities—forty-seven for-profit companies and five nonprofit institutions—that have each generated twenty or more borrower defense claims. Of these five nonprofits, three converted from for-profit ownership.
- The backlog of fraud complaints—currently numbering 87,000 not yet reviewed—is increasing, with the number of new claims submitted per month averaging approximately 8,000 since mid-August.
From PCJF: It has been established that the GSA project manager communicated with the Trump Organization in discussions over the Trump Hotel development, using a private non-governmental email account to maintain those government records.
While the manager also possessed a GSA account, substantial communication, including directly with the Trump Organization, appears to have taken place solely using the private email and without cc’ing to the GSA email network.
“Transparency, and the law, demand the release of these records to the public,” stated Mara Verheyden-Hilliard, Executive Director of the PCJF.
Details of the PCJF litigation, other details, and a request for financial backing, are at http://www.justiceonline.org/news
About being a lawyer, from the New Yorker: The contract between a private security firm and one of Harvey Weinstein’s lawyers, David Boies
On July 11, 2017, Harvey Weinstein’s attorney David Boies, of the law firm Boies Schiller Flexner, LLP, signed a contract with Black Cube, an Israeli private-intelligence agency operated by former members of Israel’s Mossad intelligence service. The contract describes Black Cube’s tactics and goals in its work for the client, identified in other documents as Weinstein. The firm’s first objective, as stated in the contract, was to uncover information that would help stop the publication of a new, negative newspaper story, which sources said was a New York Times story focussed on sexual-misconduct allegations against Weinstein. Its second objective was to obtain a manuscript of a book that sources identified as the memoir of the actress Rose McGowan, who had accused Weinstein of rape.
The contract with Black Cube is here: https://www.newyorker.com/sections/news/read-the-contract-between-a-private-security-firm-and-one-of-harvey-weinsteins-lawyers
AAI Weighs In On State Occupational Licensing Reform Debate
The American Antitrust Institute (AAI) has issued a new white paper discussing the role of federal antitrust law in an ongoing reform movement aimed at reducing burdens created by state occupational licensing laws. The white paper is titled State Occupational Licensing Reform and the Federal Antitrust Laws: Making Sense of the Post-Dental Examiners Landscape. [ http://www.antitrustinstitute.org/sites/default/files/Occupational%20Licensing%20White%20Paper.11.6.17.pdf ]
Appellate Court upholds standing of DC AG to sue ExxonMobil for violating statute prohibiting exclusive dealing that facilitates ExxonMobil price control
Opinion at: https://www.scribd.com/document/363361380/DC-AG-ExxonMobil-Appellate-Decision-14-CV-633-1
DAR comment:
The Washington Post reported some time ago that in 2013, then District Attorney General Irvin B. Nathan sued ExxonMobil, Capitol Petroleum and others for allegedly manipulating prices at the pumps in the District. Exxon’s oil-refining subsidiaries had struck exclusive supply deals with about 60 percent of the city’s gas stations, including almost all of the Exxon, Shell and Valero stations, effectively shutting out competition and allowing them to set retail prices as high as they’d like, the suit argued. The D.C. Superior Court granted ExxonMobil’s motion to dismiss the case in 2014. (That is the dismissal that the recent Court of Appeals decision reverses.) ExxonMobil argued that under the District’s Retail Service Station Act, the attorney general had “neither expressed nor implied statutory authority” to investigate gas prices.
The Washington Post reporting oversimplified the litigation story to some extent, but catches an important point about the litigation: the DC AG's Complaint alleges that ExxonMobil conduct causes serious harm to DC consumers.
As Tracy Rezvani and I wrote in an earlier article, The D.C. Attorney General alleged that high local D.C. gasoline prices are caused by anticompetitive exclusive dealing restrictions imposed on retailers by dominant distributors. In recent years, the District of Columbia has had a reputation for high retail gasoline prices. Experts like John Townsend of the AAA and antitrust expert David Balto have publicly pointed out that a duopoly of local gasoline distributors has used exclusive dealing contracts with gasoline retailers that keep prices artificially high. Townsend has said of the larger distributor in the duopoly, Eyob Mamo, that “He is overcharging gas station owners.”
The reason that dominant distributors can successfully use exclusive dealing requirements to keep prices high is that the exclusivity requirement locks in the retailer and prevents the retailer from shopping for a lower wholesale price. Retailers forced to pay high wholesale prices have little choice but to pass on the high price to consumers. If consumers in particular neighborhoods have limited ability to avoid the locked-in retailers, then those consumers are likely to share the experience of high prices being passed on to them.
The legal complaint filed by the District of Columbia’s Attorney General Irving Nathan in the DC Superior Court against ExxonMobil and local gasoline distributors (often called “jobbers”) is intended to blocked the anticompetitive exclusive dealing contracts by distributors, and to reduce gasoline prices in the District of Columbia.
The Attorney General’s Complaint charges violation of a local statute with limited proof requirements, the Retail Service Station Act, D.C. Code §§ 36-301.01 et seq. (the “RSSA”), which prohibits distributors from enforcing exclusive dealing contracts with gasoline retailers. The action was dismissed by Superior Court Judge Craig Iscoe on May 6, 2014. You can see the opinion at http://www.scribd.com/doc/222728637./DC-Exxon-5-6-2014-Order-Granting-MTDs-1. Judge Iscoe did not dismiss the AG's action on the merits. Instead, Judge Iscoe ruled that the Attorney General lacked standing under the relevant Subchapter of the RSSA. Judge Iscoe wrote: “Until such time as the [DC] Council changes its position, the Court finds that the Attorney General has no standing to bring actions under that Subchapter of III of the RSSA, more specifically, D.C. Code § 36-303.01(a)(6) and (a)(11)." The judge concluded that the RSSA statute permits only actions by particular affected dealers.
Judge Iscoe’s opinion includes a footnote telling ExxonMobil that it could indeed be held liable under the RSSA for the alleged conduct, but for the standing issue. Consequently, there is good reason to believe that if Judge Iscoe had reached the antitrust merits, the District would have prevailed, and a trial on the merits would have been allowed.
The appellate court has now overruled Judge Iscoe and decided that the District may go forward and litigate its Complaint. We believe that trial on the merits will serve the interests of the consuming public as well as gasoline retailers. Various publicly available court filings and other documents report in some detail the facts that support an enforcement action. Former D.C. Attorney General Irv Nathan explained the local gasoline market’s dysfunction in a letter published by the Washington Post on September 6, 2013. His letter (which is available at http://www.washingtonpost.com/opinions/exclusive-supply-agreements-for-fuel-drive-prices-in-the-district/2013/09/06/7f164ce2-1591-11e3-961c-f22d3aaf19ab_story.html) rebutted a Washington Post editorial criticizing the Attorney General's suit against ExxonMobil and local distributors. (The Post reiterated its criticism at http://www.washingtonpost.com/opinions/the-districts-crusade-against-gas-station-magnate-joe-mamo-is-running-on-fumes/2014/05/23/962f6b6a-e297-11e3-810f-764fe508b82d_story.html.)
The facts outlined in the the Nathan letter are straightforward. Vertical exclusive dealing restraints against gasoline retailers are imposed by dominant wholesalers in the District of Columbia and are harmful because they raise wholesale and retail gasoline prices: "Vertically imposed supply restrictions, while perhaps 'benign' in a truly competitive market, have great potential to harm competition and raise consumer prices in one dominated by a single large supplier. The unusually high prices at many D.C. pumps should surprise no one. The District’s lawsuit challenging exclusive supply agreements is brought against a single, large gasoline wholesaler that supplies about 60 percent of the city’s stations, including almost all of the Exxon, Shell and Valero brand stations."
Mr. Nathan’s points sound in traditional antitrust: exclusive dealing conduct by dominant distributors, supported by major oil companies, raises prices to station owners and consumers.
The recent Court of Appeals decision allowing the District's case to go forward does not rely on factual allegations of harm to DC citizens in the AG's Complaint. The appellate decision explains:
"The District‘s complaint alleges on its face that appellees have in place marketing agreements that violate District of Columbia law, specifically, prohibitions set out in the RSSA. Those allegations by the District were sufficient to satisfy the injury-in-fact element of Article III-type standing on the District."
The Court of Appeals found it unnecessary to reach factual issues of harm associated with the District's "quasi-sovereign-interest" theory of standing -- the idea that standing turns on harm to DC citizens. However, as the Court of Appeals pointed out in a footnote, "Whether appellees‘ marketing agreements actually cause the type of concrete injury the trial court believed must be alleged to establish standing will be
a relevant consideration if the District succeeds on its claim that the agreements violate § 36-303.01 (a) [of the RSSA statute] and the court goes on to consider whether to issue a permanent injunction enjoining implementation of the offending terms of the agreements."
I congratulate the DC AG's office on winning the ability to go forward with litigation of its Complaint.
Note: The opinions expressed are the personal responsibility of Don Allen Resnikoff
Illinois AG press release:
ATTORNEY GENERAL MADIGAN OPPOSES TRIBUNE-SINCLAIR MEDIA MERGER
Madigan Leads Attorneys General in Urging FCC to Reject Massive Merger that Will Decrease Consumer Choices and Diverse Media Voices
Chicago — Attorney General Lisa Madigan today led a multistate group of attorneys general in filing comments with the Federal Communications Commission (FCC) opposing the proposed merger between the Tribune Media Company (Tribune) and Sinclair Broadcast Group Inc. (Sinclair). Madigan and the other attorneys general argue the potential merger fails to further the public interest by allowing for increased consolidation that will decrease consumer choices and a diversity of voices in the media marketplace.
The Tribune/Sinclair merger would create the largest television broadcast company in the country. The merged company would own or operate over 200 stations nationwide with the ability to reach 72 percent of U.S. television households, far above the statutory 39 percent limit.
"To ensure people have access to a diverse landscape of perspectives, services and stations, the FCC should reject the proposed Tribune-Sinclair media merger," Madigan said. "People throughout Illinois depend on their local broadcast stations for diverse viewpoints and this merger threatens that long-held practice."
In addition, Madigan and the other attorneys general point out that the proposed merger inappropriately relies on an outdated method known as the UHF Discount Rule for calculating national audience reach that does not reflect the reality of today's technology, understating the audience reach of a UHF station by 50 percent.
The attorneys general argue that, at a minimum, the FCC should delay consideration of the merger until the D.C. Circuit Court completes its rule of the UHF Discount, which is underway.
Joining Madigan in filing today's comments are the attorneys general of Maryland, Massachusetts and Rhode Island.
A copy of the comments can be found here. http://www.illinoisattorneygeneral.gov/pressroom/2017_11/FCC_MB_DocketNo17-179CommentofStateAttorneysGeneral.pdf
State AGs multistate settlement of the LIBOR investigation of Deutschebank
The California AG's press release is at https://oag.ca.gov/news/press-releases/attorney-general-becerra-announces-220-million-multistate-settlement-deutsche
From the press release:
California Attorney General Xavier Becerra today announced a $220 million multistate settlement with Deutsche Bank for fraudulent conduct involving the manipulation of the London Interbank Offered Rate (LIBOR). LIBOR is the rate at which banks lend money to one another. It is a key financial tool that determines interest rates for many financing mechanisms, including government and corporate bonds. Deutsche Bank colluded with other banks to skew borrowing rates in its favor, illegally profiting on contracts with municipalities linked to LIBOR. This unlawful strategy resulted in a sharp increase in profits for Deutsche Bank at the expense of government entities and non-profit organizations in California and throughout the country. Through the settlement announced today, California governmental and non-profit entities that invested with Deutsche Bank will receive approximately $29 million.
“During the financial crisis, Deutsche Bank was consumed with increasing its profits at the expense of Californians,” said Attorney General Becerra. “They manipulated interest rates hoping to turn a quick profit. In the process, they left government entities and non-profits in California hanging out to dry. This conduct is unacceptable and it is illegal. Banks and financial institutions do not get to play fast and loose with the law.”
The investigation was led by the attorneys general of California and New York and conducted by a working group of 43 other attorneys general: Alabama, Alaska, Arizona, Arkansas, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, Virginia, Washington, West Virginia, Wisconsin, and Wyoming.
The settlement agreement is at https://oag.ca.gov/system/files/attachments/press_releases/Settlement.pdf The key factual allegations of the plaintiff states are at are at paragraphs 14 to 69.
The FEMA statement on the no-bid Whitefish contract for Puerto Rico
Facing withering criticism from members of Congress and the Federal Emergency Management Agency, the governor of Puerto Rico moved on Sunday to cancel a $300 million contract awarded to a small Montana company to rebuild part of the island’s battered power grid.
The 10-27 FEMA statement on the contract is here: https://www.fema.gov/news-release/2017/10/27/updated-fema-statement-puerto-rico-electric-power-authoritys-contract
Here is an excerpt from the FEMA statement:
FEMA has not provided any reimbursement to Puerto Rico to date for the PREPA contract with Whitefish Energy. Regardless, FEMA will verify that the applicant (in this case PREPA) has, in fact, followed applicable regulations to ensure that federal money is properly spent.
Based on initial review and information from PREPA, FEMA has significant concerns with how PREPA procured this contract and has not confirmed whether the contract prices are reasonable. FEMA is presently engaged with PREPA and its legal counsel to obtain information about the contract and contracting process, including how the contract was procured and how PREPA determined the contract prices were reasonable.
See also https://www.nytimes.com/2017/10/29/us/whitefish-cancel-puerto-rico.html?_r=0
The NYT reports the Senate shoe dropping on the CFPB
Senate Republicans voted on Tuesday to strike down a sweeping new rule that would have allowed millions of Americans to band together in class-action lawsuits against financial institutions.
The overturning of the rule, with Vice President Mike Pence breaking a 50-to-50 tie, will further loosen regulation of Wall Street as the Trump administration and Republicans move to roll back Obama-era policies enacted in the wake of the 2008 economic crisis. By defeating the rule, Republicans are dismantling a major effort of the Consumer Financial Protection Bureau, the watchdog created by Congress in the aftermath of the mortgage mess.
The rule, five years in the making, would have dealt a serious blow to financial firms, potentially exposing them to a flood of costly lawsuits over questionable business practices.
For decades, credit card companies and banks have inserted arbitration clauses into the fine print of financial contracts to circumvent the courts and bar people from pooling their resources in class-action lawsuits. By forcing people into private arbitration, the clauses effectively take away one of the few tools that individuals have to fight predatory and deceptive business practices. Arbitration clauses have derailed claims of financial gouging, discrimination in car sales and unfair fees.
The new rule written by the consumer bureau, which was set to take effect in 2019, would have restored the right of individuals to sue in court. It was part of a spate of actions by the bureau, which has cracked down on debt collectors, the student loan industry and payday lenders.
The arbitration rule has sparked a political battle that has taken on broader significance in the new administration. Republicans latched on to the rule as a way to cast the agency as a player in the regulatory regime that was impeding business and the economy. Shortly after the rule was adopted in July, the U.S. Chamber of Commerce pointed to it as a “prime example of an agency gone rogue.”
In recent months, financial firms and their Republican allies in Congress mobilized to defeat the rule. Some credit unions and community banks also weighed in, lodging calls to lawmakers in their home states.
Under the Congressional Review Act, Republicans had roughly 60 legislative days to overturn the rule. The House passed its own resolution in July.
Wrangling the votes in the Senate was trickier. In the weeks leading up to the vote, Senator Lindsey Graham, Republican of South Carolina, who sponsored legislation to protect military members from being forced into arbitration, said he would not support a repeal of the rule.
Looking to head off a repeal, Democrats and consumer advocates branded the effort as a gift to financial institutions like Wells Fargo and Equifax. Both companies, in the face of corporate scandals, used arbitration clauses to try to quash legal challenges from customers.
The rule, Democrats argued, was precisely what was needed to protect the rights of vulnerable borrowers. Regulators and judges, including some appointed by Republican presidents, have also backed the position.
Class actions, they argue, are not just about the size of the payouts, which are typically spread out among a large group of people. They are also about pushing companies to change their practices. Large banks, for example, had to pay more than $1 billion to settle class actions beginning in 2009 that accused them of tweaking checking account policies to increase the amount of overdraft fees that they could charge customers.
“Tonight’s vote is a giant setback for every consumer in this country,” Richard Cordray, the director of the consumer bureau, said in a statement. “As a result, companies like Wells Fargo and Equifax remain free to break the law without fear of legal blowback from their customers.”
https://www.nytimes.com/2017/10/24/business/senate-vote-wall-street-regulation.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=rank&module=package&version=highlights&contentPlacement=7&pgtype=sectionfront#story-continues-2
The Consumerist on House anti-CFPB vote:
House Votes To Strip Bank & Credit Card Customers Of Constitutional Right To A Day In CourtIMAGE COURTESY OF (J.G. PARK)7.25.175:09 PM EDTBy Chris Morran@themorrancave
GET OUT OF JAIL FREE FORCED ARBITRATION CFPB MANDATORY BINDING ARBITRATIONLAWSUITS CONSUMER FINANCIAL PRODUCTION BUREAUCONGRESSIONAL REVIEW ACT
Because the Sixth and Seventh Amendments of the U.S. Constitution are apparently less important than making sure that banks, credit card companies, student loan companies, and other financial services be allowed to behave badly with impunity, the House of Representatives has voted to overturn a new federal regulation that would have helped American consumers hold these companies accountable through the legal system.
In a largely party-line 231-190 vote this afternoon, the House passed a Congressional Review Act resolution that, if also adopted by the Senate and signed by the President, would overturn recently finalized rules from the Consumer Financial Protection Bureau.
Those rules seek to curb the use of “forced arbitration” in many consumers’ financial contracts. These arbitration clauses dictate that any legal dispute between the customer and the bank must be resolved outside of the legal system. Instead, these matters — no matter the scope of the allegation — must go through a closed-door arbitration process, where the results are often confidential, so there is no public record of the alleged wrongdoing.
Additionally, most arbitration clauses include a ban on class actions — even through arbitration. So a bank could, for example, open millions of fake, unauthorized accounts in customers’ names, but then try to block all of those customers from moving forward as a plaintiff class. Rather, each of the millions of wronged customers is required to go through arbitration on their own. As a result, very, very few people ever enter into the arbitration process.
READ MORE: CFPB’s Finalized Arbitration Rule Takes Away Banks’ ‘Get Out Of Jail Free Card’
The Consumer Financial Protection Bureau’s new rule doesn’t bar affected companies from using arbitration clauses, but it severely limits their ability to use class action bans.
Last week, a group of heavily bank-backed lawmakers in both the House and Senate introduced Review Act resolutions to roll back the rule.
READ MORE: Lawmakers Who Want To Hand ‘Get Out Of Jail Free’ Card To Banks Made Millions From Financial Sector Last Year
During debate in advance of today’s vote, GOP representatives repeatedly attempted to claim that arbitration is superior to class actions because the typical payout of an arbitration dispute is significantly higher (around $5,000) than in a class action (around $32).
Rep. Dave Trott of Michigan belittled class actions, pointing to a $3.99 settlement he recently received. What the congressman didn’t mention is that he was likely one of thousands — potentially millions — of people who received that $3.99 settlement. To him, it was the price of a latte, but to the company that had to pay that settlement, it was a large financial spanking.
Democratic representatives responded to this repeated criticism by noting that arbitration cases tend to involve small numbers of customers with high-dollar disputes, whereas class actions often involve large numbers of wronged customers with small-dollar issues.
Rep. David Cicilline of Rhode Island mocked the GOP contention that forced arbitration is pro-consumer.
“If these provisions were so beneficial, why do you have to sneak them into the contracts?,” asked Cicilline.
Maryland Rep. John Sarbanes questioned the GOP’s reason for trying to undo these protections.
“Who back home is asking for this?” asked Sarbanes. “Who is coming to the town hall and asking for you to repeal this?”
In the end, only one Republican — Walter Jones of North Carolina — voted against repealing the CFPB rule. No Democrats strayed across the aisle to vote in favor of repeal.
What Choice?
In his closing remarks before the vote, Rep. Jeb Hensarling (TX) — whose campaign received nearly $2 million from financial services companies last year — made the dubious claim that arbitration clauses provide consumers with a “choice” between arbitration and the court system.
The problem is, that this is not at all true in practice. Arbitration clauses generally say that either party in the contract can elect to enter into arbitration, and that the other party must abide by that decision. So yes, if a customer chooses arbitration, they get arbitration, but if a company wants arbitration, the customer has no “choice” to speak of. While this might seem harsh, the Supreme Court has repeatedly upheld that aspect of arbitration clauses.
What Now?
Even though these resolutions to overturn the CFPB rules face huge opposition from consumer advocates, there was little hope that the Republican-dominated House would vote against passing the bill. The Senate resolution may face a tougher fight, as the GOP can only afford to lose two votes to the opposition.
“House Republicans have turned their backs on their constituents for Wall Street’s benefit,” said Christine Hines, legislative director at the National Association of Consumer Advocates. “Instead of supporting a reasonable rule that helps consumers get back their day in court, the U.S. House sided with big banks, which for too long have used their fine-print contracts to take Americans’ rights away.”
“By voting to overturn the CFPB’s arbitration rule, Republicans in Congress are siding with predatory banks, payday lenders, credit card companies and the financial industry against Main Street Americans, and are choosing to be on the wrong side of history,” adds Lisa Gilbert, Vice President of Legislative Affairs, Public Citizen. “Big banks, the financial industry and their allies in Congress are trying to overturn the CFPB’s rule because it will deprive them of a means to rip off consumers.”
“Consumers shouldn’t be forced to give up their legal rights when they sign up for a loan or open a bank account,” says our colleague George Slover, senior policy counsel for Consumers Union. “The CFPB’s rule ensures they can join with others and have their day in court if they’ve been harmed by their bank or credit card company. Repealing the forced arbitration rule will make it harder for consumers to hold financial firms accountable for breaking the law or treating their customers unfairly.”
Article is at https://consumerist.com/2017/07/25/house-votes-to-strip-bank-credit-card-customers-of-constitutional-right-to-a-day-in-court/
Courts have been allowing States to provide special support to nuclear power suppliers like Exelon
Several months ago a federal judge ruled that New York's plan to subsidize nuclear power plants “is constitutional” and “of legitimate state concern.”
The decision helped nuclear power provider Exelon, which has been struggling financially. Nuclear plants are notoriously expensive to run.
The ruling was one of several federal court rulings supporting States’ authority to favor muclear power providers.
Plaintiffs in New York were energy supply competitors who argued that subsidies for the state’s nuclear power plants violate federal market rules and put out-of-state generators at a disadvantage.
District Judge Valerie Caproni e ruled that New York’s zero-emissions credit (ZEC) program which aided nuclear providers does not intrude on the Federal Energy Regulatory Commission's jurisdiction over wholesale electricity markets.
“The ZEC program is plainly related to a matter of legitimate state concern: the production of clean energy and the reduction of carbon emissions from the production of other energy,” Caproni wrote in her decision.
Caproni’s ruling came shortly after a federal judge in Illinois threw out a nearly identical challenge to the State’s ZEC program. A couple of weeks prior, the Second Circuit Court of Appeals upheld a Connecticut district court decision to dismiss arguments against the state’s renewable energy procurement program.
Credit: https://www.greentechmedia.com/articles/read/nuclear-subsidies-court-new-york-illinois-renewable-energy -- which takes the view that victories today for Exelon and provision of nuclear energy will benefit other renewable suppliers in the future. Other commenters argue that state support for nuclear should be withheld in favor of immediate support for other and greener renewables.
Ralph Nader on Trump's anti-consumer agenda
As a candidate, Donald Trump promised regular people, “I will be your voice,” and attacked the drug industry for “getting away with murder” in setting high prices for lifesaving medications. But as president, he has declared war on regulatory programs protecting the health, safety and economic rights of consumers. He has done so in disregard of evidence that such protections help the economy and financial well-being of the working-class voters he claims to champion.
Already his aggressive actions exceed those of the Reagan administration in returning the country to the “Let the buyer beware” days of the 1950s.
Though Mr. Trump is brazen in his opposition to consumer protections, many of his most damaging attacks are occurring in corners of the bureaucracy that receive minimal news coverage. His administration, for instance, wants to strip the elderly of their right to challenge nursing home abuses in court by allowing arbitration clauses in nursing home contracts. The Federal Motor Carrier Safety Administration has announced that it is canceling a proposed rule intended to reduce the risk of sleep apnea-related accidents among truck drivers and railway workers.
And the Environmental Protection Agency is busy weakening, repealing and under-enforcing protections, including for children, from toxic exposure. Scott Pruitt, the director, went against his agency’s scientists to jettison an imminent ban on the use of chlorpyrifos, an insecticide widely used on vegetables and fruits. Long-accumulated evidence shows that the chemical is poisoning the drinking water of farm workers and their families.
This assault began with Mr. Trump choosing agency chiefs who are tested corporate loyalists driven to undermine the lifesaving, income-protecting institutions whose laws they have sworn to uphold.
At the Food and Drug Administration, Mr. Trump has installed Dr. Scott Gottlieb, a former pharmaceutical industry consultant, who supports weakening drug and medical device safety standards and has shown no real commitment to reducing sky-high drug prices. At the Department of Education, Betsy DeVos, a billionaire investor in for-profit colleges, has weakened enforcement policy on that predatory industry, hiring industry insiders and abandoning protections for students and taxpayers.
Mr. Pruitt, as the attorney general of Oklahoma, filed suits against the E.P.A. He has hired former lobbyists for the fossil fuel and chemical industries. Mr. Trump’s aides and Republicans in Congress are pushing to restrict access to state courts by plaintiffs who seek to hold polluters accountable.
The administration is even threatening to dismantle the Consumer Financial Protection Bureau and fire its director, Richard Cordray, who was installed after Wall Street’s 2008 crash. Their sins: They returned over $12 billion to defrauded consumers and plan to issue regulations dealing with payday debt traps and compulsory arbitration clauses that deny aggrieved consumers their day in court. (The Senate is now considering legislation to gut the arbitration rule.)
Draconian budget cuts, new restrictions on health insurance, diminished privacy protections and denying climate change while putting off fuel-efficiency deadlines and auto safety standards will hurt all Americans, including Mr. Trump’s most die-hard supporters.
Mr. Trump’s deregulation crowd argues that they are freeing markets to grow. But preventing casualties and protecting consumers are, in fact, good for the economy. Nicholas Ashford, a professor of technology at M.I.T., has shown how safety regulation has fostered innovation. Markets grow in humane and efficient ways when workers make airbags, products to detect contaminants in food and water, and recycling equipment. Fraud prosecutions leave consumers with more money, generating sales, jobs and a higher standard of living.
When courts grant compensation for wrongful injuries, they not only help victims pay their bills but also lessen the burden on public insurance programs like Medicare. Fuel-efficiency standards save consumers money, improve air quality and reduce dependence on foreign oil. The Department of Energy itself says that over five years, a 30-m.p.g. vehicle will save $3,125 if driven 15,000 miles annually.
Mr. Trump’s regulatory abolitionists should know they will face litigation. In the 1980s, the Reagan administration’s repeal of the rule requiring airbags in cars was challenged by the insurance industry and consumer groups. The Supreme Court unanimously required the rule to be reinstated. Labor, consumer and environmental groups are mobilizing to fight efforts to sap health and safety protections. Citizens are rediscovering the benefits of focusing on members of Congress at town halls and other gatherings.
Smashing safety and consumer safeguards will lead to deaths, injuries and diseases that provoke intense news coverage. Demands to hold the profit-obsessed Trump team accountable for conflicts of interest will intensify. And civil servants, blocked from enforcing laws, will respect established procedures or become whistle-blowers, with legal protections.
The administration’s corrosive polices should be a clarion call to Democrats not to mimic Republicans in pursuing special interest campaign dollars and instead devise a powerful consumer protection message for voters left, right and center — voters who can be injured or defrauded regardless of their political views.
Championing a consumer agenda should be a good way to win elections.
Article from NYT: https://www.nytimes.com/2017/10/23/opinion/ralph-nader-trump-consumers.html?action=click&pgtype=Homepage&clickSource=story-heading&module=opinion-c-col-left-region®ion=opinion-c-col-left-region&WT.nav=opinion-c-col-left-region&_r=0
Trump Treasury Department report attacks CFPB s arbitration rule
From the report:
“An agency implementing such a drastic shift in policy should typically subject its rulemaking to the rigors of cost-benefit analysis and require incremental efficiency justification for more stringent regulations. The bureau’s analysis fell short of these standards for agency rulemaking, as well as its own statutory command to determine that the rule serves the public and consumer interests.”
The Treasury Department report is here: https://www.treasury.gov/press-center/press-releases/Documents/10-23-17%20Analysis%20of%20CFPB%20arbitration%20rule.pdf
Editor's note: We support the CFPB rule as protecting consumer's litigation rights.
A Congressional vote to repeal of the CFPB arbitration rule is reported to be imminent as of October 24
We join others is opposing S.J. Res. 47. We believe that the CFPB rule provides important protections to consumers who wish to assert State and Federal rights in court. Here is a video featuring "Mr. Monopoly:"
video ( https://www.facebook.com/indivisibleguide/videos/331938930603316/ )
U.S. Supreme Court has accepted cert in the Amex antitrust case in which the lower court requires assessment of two-sided market elements. From SCOTUSblog, here are some amicus briefs:
.
Jul 06 2017Brief amici curiae of Former Federal Antitrust Officials filed.
Jul 06 2017Brief amicus curiae of United States Public Interest Research Group Education Fund, Inc. filed.
Jul 06 2017Brief amici curiae of 25 Professors of Antitrust law filed.
Aug 07 2017Brief of respondent United States in opposition filed.
Aug 21 2017Brief of respondent American Express Company in opposition filed.
Sep 05 2017Reply of petitioner Ohio, et al. filed. (Distributed)
From the Former Federal Officials brief:
INTRODUCTION AND
SUMMARY OF ARGUMENT
This petition involves an antitrust issue of exceptional importance to the modern economy: the application of
the rule of reason to industries that function as two-sided platforms. “In a two-sided platform,” a firm “sells different
products or services to two separate yet interrelated groups of customers”—like merchants and consumers in
the credit-card industry. Pet. App. 77a.
The district court and court of appeals disagreed on what burden of proof antitrust plaintiffs must bear in such circumstances.
Clarity about this key element of the antitrust enforcement regime is necessary for the law to “evolve to
meet the dynamics of present economic conditions.” Leegin Creative Leather Prods., Inc. v. PSKS, Inc., 551
U.S. 877, 899 (2007).
And this Court’s central role in shaping the common law of antitrust makes its review of this discrete legal issue both timely and appropriate in this case, especially because this Court has had few opportunities to weigh in on cases brought by government antitrust authorities over the last forty years.
The Acting Solicitor General’s failure to join this petition—at a time when both the Antitrust Division and the Solicitor General’s office lack Senate-confirmed leadership—does not diminish the importance of clarifying the proper burden of proof in two-sided platform antitrust cases. The government plaintiffs are ably represented by eleven sovereign states. And, of course, the federal government’s voice need not go unheard. The Court may call for the views of the Solicitor General, both as to this petition and on the merits.
Here is a website that helps students avoid scam schools and scam student loans:
https://www.knowb4youenroll.com/
From the website:
Predatory for-profit schools make it their business to trick students into attending high-cost programs that don't lead to well-paying jobs. That's why we've created tip sheets to help you detect if a school you're considering is not working in your best interest.
The Sierra Club has sued the US EPA
The suit alleges that the EPA failed to update Congress on the environmental impacts of the Renewable Fuel Standard program, and failed to study whether increased ethanol use has adversely impacted air quality.
The Complaint is here: https://dlbjbjzgnk95t.cloudfront.net/0976000/976399/https-ecf-dcd-uscourts-gov-doc1-04516269427.pdf
Morgenstern of NYT reports: Freddie Mac has decided to allow Equifax to ban dozens of rival credit-reporting companies from one part of its automated system.
From the NYT article:
Here’s the background. Both Freddie Mac and the other government-sponsored mortgage finance company, Fannie Mae, have automated underwriting systems that are meant to make their loan guarantee or purchasing processes work smoothly and quickly. Mortgage lenders rely on them heavily.
A borrower’s credit standing is a crucial piece of the information that flows into these systems. While Equifax and the other big credit-reporting agencies dominate, a group of about 40 other firms also provide lenders with credit information. In addition to supplying merged credit reports as Equifax does, these firms often provide more detailed information, including verification of a borrower’s employment, and past payments to utilities, phone companies and landlords.
That these independent companies can still operate in a world that Equifax dominates may be an indication that they provide superior customer service such as quickly correcting errors or outdated information in a report. Equifax can supply the same information, but its customer service is not so stellar. The internet abounds with consumer complaints about the company, and since the data breach, many consumers have said they have been unable to reach the company.
That is what comes of having little or no competition. Which is why it is troubling that Freddie Mac has decided to allow Equifax to ban dozens of rival credit-reporting companies from one part of its automated system.
Freddie Mac recently developed Loan Quality Advisor, a new part of that system. It was, according to the company’s website, a “risk and eligibility assessment tool that evaluates loan data to help lenders determine if a loan is eligible for sale to Freddie Mac.”
Naturally, a borrower’s credit history goes into this system. But Freddie Mac assigned gatekeeper status to Equifax, essentially allowing it to bar an array of competing firms from providing credit information during the process.
This change hurts competitors by ensuring that what could be their business goes to Equifax instead. But it may also harm certain borrowers. Because of the more efficient services the other firms often provide, preventing them from participating could make it more difficult for borrowers with errors on their credit histories to correct them in time to secure a mortgage.
(Fannie Mae has taken a different approach with its automated loan-underwriting system. Its structure is more open, allowing independent credit-information providers to participate at multiple levels)
Interestingly, an internal Freddie Mac email indicates that Equifax drove the decision to keep independent companies, known as technical affiliates, out of the system.
Article: https://www.nytimes.com/2017/10/13/business/equifax-freddie-mac.html?_r=0
California, New York and 16 other states on Friday 10/13 sued the Trump administration to force federal regulators to continue paying billions of dollars in cost-sharing insurance subsidies under the Affordable Care Act.
President Donald Trump announced Thursday he would end federal payments that help qualifying residents purchase insurance plans. More than one million Californians buy coverage through the Affordable Care Act's health care exchanges.
The U.S. Department of Justice on Friday told the U.S. Court of Appeals for the D.C. Circuit, where the health care law's cost-sharing subsidies are being challenged, that the federal government does not intend to make the next scheduled payment on Oct. 18.
California Attorney General Xavier Becerra on Friday called the president’s decision “sabotage, plain and simple.” A coalition of attorneys general—18 states and the District of Columbia--filed the suit- see it at https://assets.documentcloud.org/documents/4108324/California-v-Trump-20171013.pdf ] --Friday in the U.S. District Court for the Northern District of California.
Becerra was joined on a media call by Massachusetts Attorney General Maura Healey, Connecticut Attorney General George Jepsen and Kentucky Attorney General Andy Beshear. New York Attorney General Eric Schneiderman joined the lawsuit filed in California.
Credit: http://www.therecorder.com/id=1202800402342/Calling-Trumps-Health-Care-Move-Sabotage-Becerra-Teams-Up-for-New-Suit?kw=Calling%20Trump%27s%20Health%20Care%20Move%20%27Sabotage%2C%27%20Becerra%20Teams%20Up%20for%20New%20Suit&et=editorial&bu=The%20Recorder&cn=20171013&src=EMC-Email&pt=Afternoon%20Update#!
CBS and WashPost report that Drug Enforcement Agency's efforts to crack down on the opioid epidemic were derailed by lobbying efforts of pharma distributors like McKesson and Cardinal, and Congress
Illegal diversion of prescription opiods was not properly prosecuted by DEA, according to the reports. Pharma distributors and Congress are blamed for holding back DEA efforts.
Washington Post's investigative reporters Scott Higham and Lenny Bernstein will appear Sunday, Oct. 15 in The Washington Post and on 60 Minutes at 7:30 p.m. ET and 7 p.m. PT. The 60 Minutes segment includes an interview with the highest-ranking DEA agent ever to turn whistleblower, former Deputy Assistant Administrator Joe Rannazzisi.
See: https://www.cbsnews.com/news/how-the-dea-efforts-to-crack-down-on-the-opioid-epidemic-were-derailed/
P.S. This is a problem that a group of State AGs are investigating. See http://www.cnn.com/2017/09/19/health/state-ag-investigation-opioids-subpoenas/index.html
The next big thing in cashless payments, possibly with no Visa or MasterCard or other credit card required -- the QR code on your cellphone
Excerpts condensed from Bloomberg article:
Around the developing world, QR codes are beating out Apple Pay and other brand-name payment services for consumers and businesses keen to go cashless. China offers a useful model for that transformation -- and a standard that others may soon be emulating.
The QR code may seem like an unlikely candidate to foster a financial revolution. It was developed in the 1990s by Japan's Denso Corp.
By the time Tencent Holdings Ltd. released the social media app WeChat, in 2011, it was clear that QR codes had a lot more potential. WeChat offered users personalized codes that could be used to exchange contact information. When combined with the app's built-in wallet, they could also be used for payments. Sending money through the app has since become a way of life: During this year's Chinese New Year holiday, WeChat users sent 46 billion cash gifts via virtual "red envelopes."
That success shows why QR code payments are likely to take off in emerging markets. For one thing, they don't require credit cards [emphasis added], which few people in poorer countries have. Apple Pay and other such services, which use Near Field Communication technology, are uneconomical for many of these consumers. (Apple Pay's market share in China is in the single digits, despite a recent marketing push.) And the small-scale merchants that predominate in the developing world -- restaurants, corner markets, buskers -- have little reason to invest in expensive payment terminals for the equivalent of $0.50 transactions.
WeChat Pay, by contrast, allows just about anyone with a bank account and a smartphone to make electronic payments. All a Shanghai noodle shop or a Shenzhen busker needs to accept payments is a free WeChat account and a printout of a QR code. Much of China has become a QR first economy, where codes are now found next to nearly every cash register. WeChat's share of China's mobile payments market has grown from 3.3 percent in 2013 to 40 percent today.
Other developing countries are starting to see the potential. Last year, MasterCard Inc. rolled out a QR code system in Africa that has already attracted 100,000 Nigerian traders. In February, the Indian government launched IndiaQR, its latest effort to spur a cashless society. Thailand is similarly enthusiastic.
But perhaps the most ambitious step is a new industry standard published last week by EMVCo, a global payments consortium that includes MasterCard, Visa Inc. and the state-backed China UnionPay Co. The effort, spearheaded by UnionPay, would effectively extend China's payment standard globally, helping to ensure that QR-mediated transactions can flow seamlessly between banks and card companies, while also making them more secure.
That should make the technology more attractive to consumers, merchants and governments around the world. It could help fill the digital tip jars of subway buskers from Shenzhen to Lagos. And it just might make the cashless society a reality far sooner than anyone had predicted.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
The author of this story:
Adam Minter at aminter@bloomberg.net
The article is at:
https://www.bloomberg.com/view/articles/2017-07-19/china-s-cashless-revolution
Will Visa and MasterCard manage globalization of the new QR cashless mobile phone app? From
South China Morning Post:
QR code takes a baby step in world conquest as group adopts global cashless payment format
PUBLISHED : Sunday, 16 July, 2017,
Daniel Ren in Shanghai
A version of the QR code, the ubiquitous data-storage format that dominates daily life in the internet age in mainland China, is taking a significant step abroad, after a global organisation that supports unified payment systems adopted and published the specifications for transactions using the code.
EMVCo, a consortium for smart payments that’s collectively owned by American Express, Visa, Mastercard and UnionPay, on Saturday published the first version of QR code specifications, or the industry standard for the payment format, a year after UnionPay proposed a safe and open global system.
“UnionPay played an active and leading role in the preparations for the issuance of the standard,” said Zhou Jinjia, a UnionPay executive in charge of the QR code promotion. “It was UnionPay, the leader in the EMVCo working group, that helped provide the final technical solution.”
The move is a giant leap in the evolution of the black and white squiggles first created in 1994 by Denso for the Japanese automotive industry. Known as the Quick Response codes, the format comprised random patterns of black squares on white background, capable of holding 300 times more data than traditional bar codes.
Embraced in China, nine of 10 of the world’s QR code users are in the country, according to an estimate by the People’s Daily newspaper. QR codes are now an integral part of the social media-enabled, mobile internet age by more than 700 million smartphone owners, where the data is used in everything from identification to cashless payments to online shopping. Even roadside peddlers and beggars have been seen providing their QR codes to accept cashless payments.
China’s consumers made 38 trillion yuan (US$5.6 trillion) of payments through mobile devices in 2016, more than half of the country’s total economic output, according to iResearch.
“Given the fast growth of the country’s internet-related businesses, it’s safe to say that some of the new technological applications in China have the potential to become world leaders,” said Zhang Ming, a managing director with Flag Leader information, which focuses on online-to-offline businesses. “But China has yet to be a true locomotive in driving global innovations, since the technology was developed and widely used here, but not invented” in China, he said.
Tencent Holdings and Alibaba Group Holdings have been the biggest drivers of the QR code, where their Wechat Pay and Alipay cashless payment platforms use the data format for storing and deciphering data. Alibaba owns the South China Morning Post.
Last year, the Payment & Clearing Association of China, an industry consortium overseen by the central bank, drew up rules governing QR code payment, marking a milestone in China’s drive to promote the new payment method at home and abroad.
UnionPay International, a subsidiary of UnionPay that handles the group’s businesses outside the mainland, has been actively expanding QR code services abroad, launching the services in Hong Kong and Singapore recently.
Analysts expected the rising penetration of QR code to eventually lure more new players including the big-name foreign payment service providers into the market.
Article at http://www.scmp.com/print/business/banking-finance/article/2102855/qr-code-takes-baby-step-world-conquest-group-adopts-global
Don't bother to call George Forman and InventHelp to say that you've invented an ATM machine that uses QR codes to access bank accounts and bypasses Visa and MasterCard and their expensive fees. You are years too late:
SMART ATM USES QR CODES INSTEAD OF CARDS TO DISPENSE CASH By Mike Flacy -- Posted on June 16, 2012 11:40 am
Developed by the NCR Corporation, the payments group within the company has created a way to withdraw cash from an ATM without having to pull an ATM card out of a purse or wallet. Assuming that a bank customer has an Android or iOS smartphone with a built-in camera, the customer approaches an ATM and launches the NCR application. After the app loads, the customer enters the four digit PIN number tied to their bank account on the smartphone touchscreen. When the pin is accepted, the app brings up all bank accounts related to the customer’s account.
At this point, the customer can choose if they want to withdraw money from their checking or savings account. After picking an account, the customer chooses a dollar figure on the smartphone touchscreen. In the NCR example, there are preset dollar figures in addition to a custom option to withdraw a specific amount of cash.
Once the dollar figure is picked, the customer taps the scan button to launch the camera on the smartphone. The customer simply scans the QR code on the ATM screen with the camera application. At this point, the transaction is confirmed and cash is dispensed. The customer gets an electronic receipt on the smartphone screen as well.
According NCR management, the entire process takes about ten seconds to complete. In addition, someone waiting in line at an ATM could hypothetically run through all the first steps on the smartphone and would be ready to scan the QR code immediately when they reached the front of the line. From the bank’s perspective, there’s no new hardware to purchase since the ATM software would only have to display the QR code on the ATM screen. The company argues that this technology also improves safety as thieves can’t utilize ATM skimming devices to collect debit card numbers since the customer has no need for an ATM card anymore.
Article: https://www.digitaltrends.com/cool-tech/smart-atm-uses-qr-codes-instead-of-cards-to-dispense-cash/
Here are the EMVCo specifications for the QR codes
EMVCo QR Code Specification for Payment Systems: Merchant-Presented Mode
https://www.emvco.com/wp-content/plugins/pmpro-customizations/oy-getfile.php?u=/wp-content/uploads/documents/EMVCo-Merchant-Presented-QR-Specification-v1_0.pdf
EMVCo QR Code Specification for Payment Systems: Consumer Presented Mode
https://www.emvco.com/wp-content/plugins/pmpro-customizations/oy-getfile.php?u=/wp-content/uploads/documents/EMVCo-Consumer-Presented-QR-Specification-v1.pdf
Following is the "Overview" from the "Merchant-Presented Mode"
Overview to EMV® QR Code Payment
An EMV Merchant-Presented QR Code payment transaction enables consumers to make purchases using a merchant generated and displayed QR Code based on the merchant’s details. For example, it can be used for a transfer of funds to a Merchant account designated by the Merchant Account Information over a payment network in exchange for goods and services provided by the Merchant.
Consumers are issued a mobile application that has the capability to scan an EMV Merchant-Presented QR Code and initiate a payment transaction. This mobile application may be an existing mobile banking app offered by the Issuer or a third party. In both cases, the request to process the payment transaction is ultimately directed to the Issuer managing the account from which the funds will be withdrawn.
The Issuer receives the initial payment transaction, and secures or withdraws the transaction amount from the consumer's account.
Upon receiving the payment transaction, the Acquirer checks the validity of the Merchant Account Information and other merchant credentials and, when valid, credits the payment transaction amount to the account associated with the Merchant Account Information.
The Merchant awaits notification of a successful transaction response before delivering the goods and services to the Consumer.
The Issuer also provides a notification to the Consumer (typically to their mobile application).
Figure 2.1 illustrates the EMV Merchant-Presented QR Code transaction flow. Different message flows are possible between the entities involved, depending on type of wallet (Issuer wallet or third-party wallet) and the infrastructure supported by the payment network. In Figure 2.1, the combination of entities involved and the various message flows is jointly referred to as the 'Network'. Note that the specifics of this message flow from the mobile to the Network is out of EMVCo's scope.
Figure 2.1: Merchant-Presented Mode Transaction Flow [schematic omitted here]
[1] Merchant generates and displays QR Code based on merchant details.
[2] Consumer scans QR Code using a mobile application to initiate the transaction, with CDCVM if required.
[3] Mobile application sends the transaction initiation request to the Network.
[4] The Network processes the transaction and informs the Merchant and the Consumer of the transaction outcome.
DAR Comment: My impression (subject to correction) is that the "Network" referred to in steps [3] and [4] need not be the networks of Visa, MasterCard, or other credit card network participants in EMVCo, the proponent of the specification for the industry. It could, perhaps, be a Google network, for example, although Visa, MasterCard, or other credit card network participants in EMVCo may be the ones most ready with networks when QR technology is introduced in countries like the USA.
The US Treasury Report that advocates undermining Dodd-Frank regulation of banking:
US Treasury Second Report On The Administration’s Core Principles Of Financial Regulation
The 10/6/2017 press release:
WASHINGTON – Today the U.S. Department of the Treasury released a report detailing how to streamline and reform the U.S. regulatory system for the capital markets. Treasury’s evaluation of current capital market regulations found that there are significant reforms that can be undertaken to promote growth and vibrant financial markets while maintaining strong investor protections. The report issued today was in response to Executive Order 13772 issued by President Trump on February 3rd, which calls on Treasury to identify laws and regulations that are inconsistent with a set of Core Principles of financial regulation.
“The U.S. has experienced slow economic growth for far too long. In this report, we examined the capital markets system to identify regulations that are standing in the way of economic growth and capital formation,” said Treasury Secretary Steven T. Mnuchin. “By streamlining the regulatory system, we can make the U.S. capital markets a true source of economic growth which will harness American ingenuity and allow small businesses to grow.”
Over the last 20 years, the United States has seen a nearly 50 percent decline in the number of publicly traded companies. The capital markets are a source of liquidity for small businesses as they grow, invest, and hire. In the report, Treasury identifies numerous ways to reduce the burden on companies that are looking to go public or stay public, while maintaining strong investor protections, including:
- Streamlining disclosure requirements to reduce costs for companies while providing investors the information they need to make investment decisions;
- Tailoring the disclosure and other requirements for companies going public based on their size; and
- Re-examining the JOBS Act to identify how its tools can be improved.
- Evaluating the regulatory overlaps and opportunities for harmonization of SEC and CFTC regulation;
- Incorporating more robust economic analysis and public input into the rulemaking process in order to make the rulemaking process more transparent; and
- Opening up private markets to more investors through proposals to facilitate pooled investments in private or less liquid offerings, and revisit the “accredited investor” definition;
- Limiting imposing new regulations through informal guidance, no-action letters or interpretation, instead of through notice and comment rulemaking; and
- Reviewing the roles, responsibilities and capabilities of self-regulatory organizations (SROs) and making recommendations for improvements.
Additional recommendations in the report include:
- Improving the oversight of financial market utilities (FMUs), such as by FSOC continuing to study the role FMUs play in the financial system, and regulators considering appropriate risk management for FMUs in order to avoid taxpayer-funded bailouts;
- Repealing Section 1502, 1503, 1504 and 953(b) of the Dodd-Frank Act;
- Investigating how to reduce costs of securities litigation for issuers with the goal of protecting all investors’ rights and interests;
- Increasing the amount that can be raised in a crowdfunding offering from $1 million to $5 million;
- Examining the impact of Basel III capital standards on secondary market activity in securitized products; and
- Advancing U.S. interests and promoting a level playing field in the international financial regulatory structure.
To view the fact sheet click here
Chatting corporate greed with Mr. Monopoly, hero of the Equifax Senate hearing ...
Click title for link: https://techcrunch.com/.../the-monopoly-man-interview-equifax-forced-arbitration/
From the article:
TechCrunch spoke to the mysterious Monopoly man, now identified as Amanda Werner of advocacy group Public Citizen, about the cause behind the Senate appearance. (As the author I must disclose that Werner is in fact a friend and honestly this is the best thing I’ve ever seen.)
The argument that regulation won't fix credit reporting agencies, but antitrust enforcement will
Sep. 18, 2017 6:26 PM ET
By Karen Webster
Author's Summary
We don't need more regulation.
What we need is competition.
We have the pieces and players in place to create a competitive playing field, we just need policymakers to let them play.
Excerpts:
Nowhere is outrage more deafening than the halls of Congress, where member after member now demands that executive heads at Equifax be placed on chopping blocks and massive regulatory changes across the credit reporting industry be made. Senator Elizabeth Warren (D - Mass.) has strongly hinted that the agency she birthed in 2008 and opened for business in 2011 - the Consumer Financial Protection Bureau (CFPB) - should be given the authority to do even more. The credit bureaus were included in the CFPB's scope of oversight in 2012, and she's asked the agency to let her know what additional power it might need to better regulate the credit reporting agenciesgoing forward.
But why now, just this week, is everyone so outraged and so willing to talk tough about the credit reporting agencies in the name of consumer harm?
Here's a theory.
Consumers have been complaining bitterly about credit reporting agency practices for decades. More recently, their complaints have been made more transparent, thanks to the CFPB's consumer complaint database. But as consumer complaints about those agencies have escalated over the years, policymakers have seemed happy to let the Big Three run fast and loose. Government agencies, like the FHA, Fannie Mae and Freddie Mac require a minimum FICO score to qualify for a loan, and 90 percent of mortgage lendersuse FICO scores to do the same. FICO scores are based on a credit scoring model using data from one of The Big Three agencies - Equifax, TransUnionand Experian.
As a consequence, we have three credit reporting agencies operating today which are largely free to do whatever they want with the data they have - consumer complaint database be damned.
The Big Three sell that data to anyone who'll pay for it, adding to their multibillion-dollar annual revenue streams.
They keep how they collect all the data they have on consumers a secret, locked inside an opaque black box that consumers have to pay to open if they want to see inside more than once a year.
And, in the case of Equifax, they make that consumer data vulnerable to compromise - an egregious lapse in security for a company that is, above all, an information and data repository.
All of this happened because the Big Three operate in an environment with political barriers to entry so steep - given the many agency requirements to use a FICO score and how reliant most lenders are on using it - that it's largely impossible for viable competition to emerge, challenge them and get scale.
There aren't many markets where consumers actually have little to no other choice, but this is one of them.
***
[A]mendments to the FCRA gave consumers the right to get their credit report for free once a year, to remove inaccurate and certain derogatory information and to limit who can access their data.
The credit score itself, the FICO score, was an innovation brought to market in 1989 by the Fair Isaac Corporation. Their software models created each score based on the data that the credit reporting agencies reported to them. Credit reporting agencies got their data from lenders. FICO's innovation was to use software and algorithms to create a standard and consistently calculated measure of creditworthiness so that lenders could more reliably make decisions about the creditworthiness of each potential borrower.
So, What's the Problem?
Given the changes in regulatory oversight, in theory, one might think that consumers should all be living happily ever after today.
They are not.
Since 2012, the CFPB's consumer complaint database has collected 1.1 million complaints across a wide variety of financial services issues. Its February 2017 report, posted on its website, highlighted credit reporting complaints.
That report noted that of the 1.1 million complaints it's received, 185,717 of them were about credit reporting agency practices - about 18 percent of all consumer complaints. Another 12 percent of complaints had to do with debt collection agency practices.
Maybe you think that doesn't sound so bad. Not even 20 percent of consumers have a beef with the Big Three. Peeling back that onion tells a different story, however.
The CFPB reported that the average number of monthly complaints received about credit reporting issues was 3,523. In February 2017, that number was up 24 percent to 4,620. Only complaints about mortgages (4,193) and debt collectors (6,904) topped it that month. They also reported that complaints about credit reporting agencies and debt collectors were consistently ranked in the top three, month after month.
The CFPB's complaint database also tracked the companies with the highest number of complaints. The February report showed Wells Fargo (NYSE:WFC) in the lead, followed by Equifax, TransUnion and Experian in that order. Equifax and the other credit reporting agencies were consistently among the top five.
Roughly 143,000 of the consumer complaints about the credit reporting agencies - or 77 percent - were about inaccurate data showing up on their credit reports. That inaccurate data ran the gamut from data that was wrong, wasn't expunged, corrected or updated as requested, data about other consumers that wasn't supposed to be on their reports and requests to access their credit reports from companies they didn't recognize.
The rest of the complaints were related to customer service issues, including excessive wait times to speak with a customer service representative, not having updated information corrected in a timely fashion and difficulty understanding what was needed to correct an error on their report that the agencies had made.
Listening with Only Half an Ear
In January of 2017, the CFPB fined TransUnion and Equifax $23 million over marketing schemes that lured consumers into paying monthly subscription fees for access to their credit reports. In Equifax's case, that included giving consumers "free" access to their data only after they watched an ad (for which Equifax was being paid money by an advertiser). The fine was mostly consumer restitution, with a small piece paid in penalties to the CFPB.
In March of 2013, Experian was fined $3 million for a variation on that same theme.
All fines levied and all of the complaints logged were over practices that the FCRA prohibited The Big Three from doing: making it hard for consumers to access their credit reports and making it difficult for consumers to correct information that the credit reporting agencies had wrong.
Not getting that information right has consequences that are far greater to consumers than the fines the credit reporting agencies have to pay. Bad data can make getting credit impossible or extremely costly for consumers. An FTC study reports that one in five consumers has an error on a report, and those errors will cost one in 20 of those consumers in the form of higher interest and carrying costs on their loans.
Meanwhile, the Big Three credit reporting agencies have little incentive to care.
Why should they work hard to satisfy the consumer when they have a virtual lock on the data that stands between a consumer and her loan, as long as a FICO score is required to get it? Why make their process transparent to consumers or bust a gut to get things corrected when there's no competitor operating at or near scale nipping at their heels to force them to step up their game?
And, it's a drop in the bucket for these multibillion-dollar monopolists to get a superficial slap on the wrist and microscopic fines when there's no existential reason for them to change their business practices.
The great irony here is that consumers have been complaining about credit reporting agencies for decades.
It was their complaints 50-plus years ago that led to the creation of the FCRA in 1970 - after 10 years of consumer advocates raising alarm bells.
And it's been transparent to policymakers since 2012, when there became a source of truth called the CFPB consumer complaint database, that credit reporting agencies are one of the top three places that consumers say they consistently feel the most pain.
Instead, policymakers have doubled down on advocating wholesale changes in how prepaid cards, payday lending and arbitration rules work today - topics that are consistently lower on the list of consumer pain points.
***
But here we are - the most horrific breach of highly sensitive consumer data ever recorded in the U.S., the OPM hack notwithstanding - with policymakers focused on how to regulate these three monopolists within an inch of their lives instead of focusing on the much bigger problem.
We don't need more regulation. After all, the Big Three were regulated by the CFPB and the FTC, and look where that got us.
What we need is competition.
Figuring out how to make credit reporting competitive - where consumers actually have a voice to discipline credit reporting agencies that provide bad service, no innovation and risky behavior - and giving lenders options that would foster a more dynamic marketplace won't be easy, but that's what policymakers, and others, should be working to solve.
We have the pieces and players in place to create a competitive playing field, we just need policymakers to let them play.
The full article is at https://seekingalpha.com/article/4107777-regulation-fix-credit-reporting-agencies?page=2 (free registration required)
Don Allen Resnikoff Editor's comment: In a reseller's suit against Equifax alleging overcharging, an appellate court pointed out that federal regulation can provide a defense:
[T]o the extent that CBC alleges an impact on the Mortgage Lender Market, the federal regulations are the more likely basis for any putative injury, and not any specifically anticompetitive conduct on the part of Equifax. No cognizable antitrust injury exists where the alleged injury is a “byproduct of the regulatory scheme” or federal law rather than of the defendant's business practices. RSA Media, Inc. v. AK Media Group, Inc., 260 F.3d 10, 13, 15 (1st Cir.2001); see Standfacts Credit Servs. v. Experian Info. Solutions, Inc., 294 Fed.Appx. 271, 272 (9th Cir.2008) (holding that even where the NCRA defendants held “monopoly power in the wholesale market,” plaintiff resellers could not succeed on their antitrust claims where the monopoly power derived from federal requirements and not anticompetitive conduct).
United States Court of Appeals,Sixth Circuit. CBC COMPANIES, INC.; CBC Innovis, Inc., Plaintiffs-Appellants, v. EQUIFAX, INC.; Equifax Information Services LLC, Defendants-Appellees. No. 08-3261. Decided: April 02, 2009. Available on line at http://caselaw.findlaw.com/us-6th-circuit/1073757.html
As of October 4, what is the lead story on the website of NRA-ILA (National Rifle Association Institute for Legislative Action)? This is it, a screed for knocking out Maryland's law banning detachable magazine fed semi-automatic rifles, and large capacity magazines -- you know, the kind used on October 1 in Las Vegas:
NRA, Others Urge Supreme Court to Review “Assault Weapon,” Magazine Ban - FRIDAY, SEPTEMBER 29, 2017
This month, the United States Supreme Court commenced its October sitting. Among the cases that the Court may decide to review is Kolbe v. Hogan, No. 17-127. The case arises out of a challenge to Maryland’s Firearm Safety Act of 2013, a law banning so-called “assault weapons” like AR-15s and other detachable magazine-fed semi-automatic rifles, and the sale and transfer of magazines capable of holding more than ten rounds.
A three-judge panel of the U.S. Court of Appeals for the Fourth Circuit had initially struck down the law, finding it was “beyond dispute” that the banned firearms and magazines were commonly owned and in common use by law-abiding citizens and thus, based on District of Columbia v. Heller, clearly within the scope of Second Amendment protection. The case was subsequently reargued before a larger panel (an “en banc” appeal).
In a ruling early this year, that panel reversed and upheld Maryland’s law, using an “out-of-context parsing of the Supreme Court’s statement in Heller” that had been rejected as inappropriate by the earlier decision. Citing language in Heller on “dangerous and unusual weapons” (“weapons that are most useful in military service—M-16 rifles and the like”), the en banc court crafted a new constitutional test that is unsupported both legally and factually: that the banned semi-automatic rifles and large-capacity magazines are “like” M-16 rifles and other military weapons, and as such, are not constitutionally protected at all.
Maryland Attorney General Brian E. Frosh, who wrote and ensured the passage of the challenged law as part of his continuing campaign for ever more stringent gun control in the state, applauded this new ruling, commenting that it “is unthinkable that these weapons of war …would be protected by the 2nd Amendment.”
The NRA has filed an amicus brief in support of the plaintiffs’ petition seeking the Supreme Court’s review of the case. The brief contends that the decision not only contradicts Heller – that arms in common use for lawful purposes are protected by the Second Amendment and cannot be subject to an outright ban – but that the factual underpinnings of the ruling are fundamentally incorrect.
Heller’s standard for identifying the “arms” protected by the Second Amendment excludes those “not typically possessed by law-abiding citizens for lawful purposes” and “highly unusual in society at large.” In this analysis, it is the choices of citizens that are determinative, and not those of legislatures or government officials. “Millions of Americans own millions of” these banned firearms and magazines.
A standard manufacturer-supplied magazine generally holds more than ten rounds, and Americans own approximately 75 million “large capacity” magazines, representing about half of all magazines owned in the United States.
The AR-15 banned under the law is the “most popular centerfire semiautomatic rifle in the United States.” Under Heller, that is all that is needed for citizens to keep such firearms under the Second Amendment.
Further, equating these typical arms to military weapons, those “that are unquestionably most useful in military service,” is demonstrably wrong. Earlier Supreme Court precedent recognized the AR-15 rifle, “the paradigmatic type of firearm that Maryland seeks to ban,” is a “civilian” rifle distinct from an M-16. More generally, as another brief notes, the “semiautomatic rifles banned by Maryland are not the main military rifle of any country on earth.” Such guns are neither functionally equivalent to M-16s, nor more lethal or dangerous.
The inherent folly of the Fourth Circuit’s decision is that it not only subverts the Second Amendment, the test it imposes (“like” M-16s or “useful in military service”) is staggeringly overbroad: any firearm that fires a projectile from a barrel by the action of an explosive stands to be banned because it is “like” a military rifle or “useful” in warfare.
The brief mentions a greater concern, the urgent need to address the cumulative effect of decisions like this one. In the almost ten years since Heller was decided, lower courts continue to distort or disregard Supreme Court precedents on the Second Amendment to the detriment of law-abiding gun owners. “The result is a steady erosion of the fundamental right to keep and bear arms. … In no other context would such a widespread, overt, and severe entrenchment upon constitutional rights be tolerated.”
Besides the NRA, a diverse range of other interested parties have filed briefs asking the Court to take up this appeal and invalidate the Maryland decision, among them 21 state Attorneys General, over 30 national and international law enforcement groups and local firearm rights groups, and many others.
In order for the U.S. Supreme Court to hear a case, four out of nine justices must agree that the case merits an appeal. The Court has not yet decided on whether to hear the appeal in this important case, but your NRA-ILA will post updates on this case as they occur.
Posted by Don Allen Resnikoff with this editorial comment: The NRA-ILA should be ashamed, but they are not. The 21 State AGs that filed on the side of the NRA include Nevada. Maybe they should reconsider.
From "Rules at Risk" --
Forced Arbitration Is a ‘Get-Out-of-Jail-Free’ Card for Banks That Cheat Customers
Public Citizen, Americans for Financial Reform and Allies Deliver Monopoly-Inspired ‘Community Cheat’ Card to All 100 Senate Offices -- Oct. 3, 2017
Public Citizen, Americans for Financial Reform and their allies are defending limits on forced arbitration from congressional attack with a special delivery to all 100 U.S. Senate offices: a mock “Get-Out-of-Jail-Free” card for the banks inspired by the board game Monopoly. An activist dressed as the billionaire Monopoly Man led the delivery.
The Senate leadership is pushing to roll back the U.S. Consumer Financial Protection Bureau’s arbitration rule using the Congressional Review Act’s (CRA) expedited process and has until early November to act. The rule allows consumers to join together in class actions to challenge wrongdoing in court. Widespread wrongdoing and negligence at Wells Fargo and Equifax and their attempts to evade legal accountability using forced arbitration “rip-off” clauses have transformed the issue from an obscure regulatory debate into a leading national story.
Forced arbitration clauses buried in the fine print of take-it-or-leave-it contracts may be the single most important tool that predatory banks, payday lenders, credit card companies and other financial institutions have used to escape accountability for cheating and defrauding consumers. These clauses push disputes into secretive arbitration proceedings rigged to favor financial companies and conceal wrongdoing from regulatory authorities. The average consumer forced into arbitration ends up paying more than $7,700 to the bank or lender, according to the Economic Policy Institute.
“Forced arbitration gives companies like Wells Fargo and Equifax a monopoly over our system of justice by blocking consumers’ access to the courts,” said Robert Weissman, president of Public Citizen. “The CRA resolution striking down the arbitration rule is a virtual get-out-of-jail-free card for companies engaged in financial scams. It should not pass go.”
“The CFPB has restored people’s right to take Wall Street banks, payday lenders and other bad financial actors to court if they rip people off and break the law,” said Lisa Donner, executive director of Americans for Financial Reform. “Overturning it would be handing companies like Wells Fargo and Equifax a tall stack of get-out-of-jail-free cards – for use whenever they want.”
“Make no mistake: Arbitration is a rigged game, one that the bank nearly always wins,” said Amanda Werner, arbitration campaign manager for Public Citizen and Americans for Financial Reform. “Shockingly, the average consumer forced to arbitrate with Wells Fargo was ordered to pay the bank nearly $11,000. Bank lobbyists and their allies in Congress are trying to overturn the CFPB’s rule so they can continue to rip off consumers with impunity.”
AAI, FWW, and NFU Say Monsanto-Bayer Merger Raises Competitive Concerns Over Traits-Seeds-Chemicals Platforms, Digital Farming, and Strategic Competitive Use of Farm Data
AAI, FWW, and NFU sent a joint letter to the U.S. Department of Justice regarding the proposed merger of Monsanto and Bayer. The joint letter is an addendum to a letter submitted by the three organizations on July 26th. It discusses the merger's potential to enhance the ability and incentive for Monsanto and Bayer to integrate traits, seeds, and chemicals into proprietary systems or platforms that are closed to competition. The companies' combined digital farming capabilities will likely facilitate such integration. Together with strengthened incentives for the appropriation and strategic competitive use of vast stores of farm data, these merger- related concerns have potentially adverse implications for competition, farmers, and consumers.
Media Contact:
Diana L. Moss
President, American Antitrust Institute
dmoss@antitrustinstitute.org
The California debate about Bar exam pass/fail standards: who is in charge?
Actually, the California Supreme Court has made it clear that it is in charge, and that the State Bar's role is advisory.
The ABA Journal reports that traditionally, the cut score on the Bar's admission exam is set by the state’s bar exam committee, but in July the California Supreme Court amended the rule, asserting its own authority to determine the score, and directed the state bar, which is the administrative arm of the court, to study the issue. Rather than take a position on the issue, the bar’s board of trustees on Sept. 6 voted 6-5 to send the court three options—keep the score at 1440, where it’s been since 1986, lower the score to 1414 or lower it to 1390.The California Supreme Court's decision on pass/fail Bar exam standards is thought to be imminent.
The California Supreme Court's assertion of its authority over Bar exam test scores sets a precedent for its taking authority over other issues where the State Bar is perceived as pursuing goals that do not serve the general public's interests.
Posting by Don Allen Resnikoff
Text of financial industry lawsuit Complaint in Texas federal court challenging the Consumer Financial Protection Bureau’s final arbitration rule
The U.S. Chamber of Commerce, American Bankers Association, the Consumer Bankers Association, Financial Services Roundtable, American Financial Services Association, Texas Association of Business, Texas Bankers Association, and nine chambers of commerce located throughout Texas today filed a lawsuit in Texas federal court challenging the Consumer Financial Protection Bureau’s final arbitration rule.
The lawsuit seeks to stay implementation of the arbitration rule, a declaration that it is unlawful and other relief. The case has been assigned to Judge Sidney A. Fitzwater, U.S. District Court for the Northern District of Texas (Dallas).
The Complaint can be seen at https://www.consumerfinancemonitor.com/wp-content/uploads/sites/14/2017/09/Complaint-for-Declaratory-and-Injunctive-Relief-Chamber-of-Commerce-v-CF....pdf
Credit: Ballard Spahr news
Klobuchar Legislation to Modernize Antitrust Enforcement
On September 14, Ranking Member of the Senate Judiciary Antitrust Subcommittee, Klobuchar introduced the Merger Enforcement Improvement Act to update and strengthen important merger enforcement tools
From the press release: Antitrust enforcement agencies need adequate tools and resources to address the threat of economic concentration, promote competition, and protect consumers. The Merger Enforcement Improvement Act would update those existing laws to reflect the current economy and provide agencies with better information post-merger to ensure that merger enforcement is meeting its goals.
To see the press release click the title or go to: https://www.klobuchar.senate.gov/public/index.cfm/news-releases?ID=7F1EC9A3-5D28-4757-9F60-8CEAD9111971
Death by Stun Gun: A Reuters series finds a high number of deaths are caused by police use of supposedly non-lethal Tazer stun guns
In the most detailed study ever of fatalities and litigation involving police use of stun guns, Reuters finds more than 150 autopsy reports citing Tasers as a cause or contributor to deaths across America. Behind the fatalities is a sobering reality: Many who die are among society’s vulnerable – unarmed, in psychological distress and seeking help.
See https://www.reuters.com/investigates/special-report/usa-taser-911/
A PBS Weekend Newshour interview of an author of the Reuters series is here: http://www.pbs.org/newshour/bb/police-killed-1000-people-tasers-since-2000/
More from Public Citizen's Paul Alan Levy on litigation over the search warrant to DreamHost concerning anonymous internet protesters:
Response to Trump Prosecutors’ Effort to Attack Peaceful Protests
Posted: 22 Sep 2017 04:26 PM PDT
by Paul Alan Levy
In my blog post yesterday about developments in the litigation over the search warrant to DreamHost, I recounted the encouraging signs from DC Superior Court Chief Judge Morin’s written order and colloquys with counsel during oral argument at a hearing this week about his determination to protect the privacy rights of anonymous Internet users who communicated with the Trump inauguration protest web site, or who provided their names to activists so that they could receive updates from that web site. At the hearing, as readers can see from the hearing transcript that I linked from the blog post, the lawyer who appeared for the Government at that hearing assured the judge that he understood what the judge was demanding and that the Government would comply with the judge’s conditions in a new proposed order.
Just as I was ready to press “publish” on that blog post, the Government submitted its promised proposed order enforcing the warrant. I confess that I was horrified: that proposal was so far from what Judge Morin said he wanted, and so far from what Government counsel said he would deliver, that I was left wondering whether the problem is that the Trump Administration is represented in this case by a disingenuous lawyer, or whether the problem is that the new proposed order was prepared by other lawyers who were not at the hearing and also did not review the transcript of the hearing (which was not ready until very late yesterday afternoon). The proposed order is unsigned.
Today, meeting the judge's timetable that responses be filed within twenty-four hours, we submitted our response on behalf of the intervenors, including both a brief explaining what parts of the government’s proposal we dispute, and how we would revise that proposal, as well as a markup of the proposed order that attempts to be true to Judge Morin’s rulings, even ones with which we disagreed (although at the same time we ask the judge to revisit one very significant issue). DreamHost has also filed a response to the Government’s proposal.
Given the lateness of the hour, I leave it to readers to review the papers submitted by both sides and see whether they share our concern at the continued efforts of the Trump Administration to invade the political discussions of the vast majority of Trump opponents whose response to his election remained entirely peaceful, basically taking advantage of the foolishness of a small number of individuals who carried out a riot during the inauguration and, according to an undercover police officer, deliberately planned to riot.
This is a president who has no tolerance for dissent, and we shall all have to be on our guard against the misuse of the judicial process to oppress his opponents. We must hope that Judge Morin will persist in holding the prosecutors to the First Amendment protections that he has enunciated to date.
The Globe and Mail Reviews Franklin Foer's book "World Without Mind"
Excerpt: [Foer] makes the trenchant point that, while our antitrust laws are thought of as saving the public from monopolies that would worsen the consumer experience, "some of the biggest corporations in America now give their products away for free … " and so we begin to think that monopolies don't need to be broken apart any more. (Foer points out that the Obama administration brought forward only two cases against existing monopolies.) We need a new approach to antitrust law, one with a different end in mind: a mission of preserving a competitive thought economy where new ideas, strategies and approaches are allowed to have their day. The alternative, argues Foer, is an Orwellian morass controlled by a handful of thought authorities.
See: https://beta.theglobeandmail.com/arts/books-and-media/book-reviews/review-franklin-foers-world-without-mind-explores-the-dangers-of-tech-monopolies/article36363670/?ref=http://www.theglobeandmail.com&
Don Allen Resnikoff comment: Foer is the latest in a series of authors who reach out to a broad popular audience with an appeal for antitrust reform. Earlier champions include, for example, Johnson and Kwak "13 Bankers," Wenonahi Hauter "Foodopoly," Barry Lynn "Cornered," among others. These authors deserve credit for keeping alive a public debate of antitrust issues. But heavy lifting remains to accomplish antitrust reform, hopefully including participation from people with antitrust enforcement experience and expertise. DAR
Gab sues Google for antitrust violations
Gab, has filed a lawsuit in a federal court accusing Google of abusing its power after the search giant removed the upstart from its app store.
See http://competitionpolicyinternational.us2.list-manage.com/track/click?u=66710f1b2f6afb55512135556&id=d25d98efc2&e=c9725fdc15
From Maryland Consumer Rights Coalition: The result of using non-driving related factors to price auto insurance? Economic discrimination.
MCRC’s research, as well as that of national partners including the Consumer Federation of America and Consumer Reports, has found that the use of non-driving related factors results in perverse outcomes including:
- Maryland insurance companies that use sex as a factor charge women between $450-$500 more simply for being a woman;
- Single women pay 24% more for car insurance because they are single women; single men often get a discount and thus pay an average of 0.8% more for being single.
- A driver living in Roland Park with two at-fault accidents would pay $215 less than a driver with a perfect record living in Park Heights.
- A driver with a high school degree would pay $300 more than the same driver with a college degree
- 2017 statistical analysis has found the more African-Americans that live in a zip code, the higher the cost of insurance (at a statistically significant level). The analysis also found that the the wealthier the neighborhood, the less the residents of the neighborhood would pay in insurance (also statistically significant).
CFPB can pursue Maryland lawsuit over sale of settlement payments - ruling
by Dena Aubin
The Consumer Financial Protection Bureau can proceed with a lawsuit against Access Funding, a Maryland company accused of misleading consumers into signing away legal settlement payments in exchange for marked-down lump sums, a federal judge ruled.
In a decision on Wednesday, U.S. District Judge Frederick Motz rejected a motion to dismiss claims that Access Funding violated the Consumer Financial Protection Act (CFPA), saying the CFPB adequately alleged that the company engaged in abusive practices to cash in on consumers’ income streams.
To read the full story on Westlaw Practitioner Insights, click here: bit.ly/2juTPX
On big oil refiner control of retail prices
A case decided by the United States District Court for the District of New Jersey in 2016 refused dismissal of a dealer action against ExxonMobil based on alleged ExxonMobil control over retail pricing. Relevant law includes the the New Jersey Franchise Practices Act and the federal Robinson-Patman Act. South Gas, Inc. v. Exxonmobil Oil Corp., 2016 WL 816748 (D.N.J. February 29, 2016). The case decision can be found online at http://cases.justia.com/federal/district-courts/new-jersey/njdce/2:2009cv06236/235720/134/0.pdf?ts=1456860389
An article by New Jersey attorney Jeffrey Goldstone explains that the plaintiff franchisees’ claims in the case focused primarily on Exxon’s pricing practices. The pricing pivoted off of a discriminatory pricing program known as zone pricing. Exxon’s zone pricing scheme divided New Jersey into approximately 100 zones and charged franchisee's retail gas stations different wholesale prices for gas depending on the station’s zone placement. Because Exxon’s zone pricing scheme favored certain stations and disfavored other stations, including the plaintiffs, the franchisees claimed they were forced to charge higher retail prices to cover their operating expenses.
The New Jersey Court's opinion reviews the contracts between ExxonMobil and its franchisees, and catalogues some of the additional ways plaintiffs allege that Exxon exercised price control: "For one, Exxon manipulated delivery load times to benefit from price fluctuations. . . .Prior to drops in price Exxon delivered gas to franchisees, increasing their inventory whether they needed it or not. . . .The complaint also alleges that Exxon exerted control by requiring plaintiffs to purchase and sell volumes of gas that were above the historical averages of gas sold at those stations. . . .The complaint points to a number of provisions of the Agreements that demonstrate Exxon’s control over their businesses. . . ."
The New Jersey decision against ExxonMobil varies from the usual legal analysis which tends to afford any individual company like ExxonMobil great leeway in practices affecting dealers that may affect retail prices. That is true even though it is well understood that zone pricing indicates an ability by the refiner to set higher wholesale prices in some geographic zones even though costs to ExxonMobil or other large refiners are the same as in a lower priced contiguous zone. The FTC explained the point in 1999 while analyzing the then proposed Exxon-Mobil merger:
Exxon, Mobil and their principal competitors (Motiva, BP Amoco, and Sunoco) use delivered pricing and price zones to set DTW prices based on the level of competition in the immediately surrounding area. These DTW prices generally are unrelated to the cost of hauling fuel from the terminal to the retail store. . . . [B]randed companies can and do adjust their DTW prices in order to take advantage of higher prices in some neighborhoods, without having to raise prices throughout a metropolitan area as a whole.
The use of price zones in the manner described above indicates that these competitors set their prices on the basis of their competitors' prices, rather than on the basis of their own costs. This is an earmark of oligopolistic market behavior. . . . The effects of oligopolistic market structures (where firms base their pricing decisions on their rivals' prices, and recognize that their prices affect their sales volume) have been recognized in this industry. . . .We recognize that such interdependent pricing may often produce economic consequences that are comparable to those of classic cartels.
See https://www.federalregister.gov/documents/2000/01/18/00-570/exxon-corp-et-al-analysis-to-aid-public-comment-and-commissioner-statements
Critics of standard antitrust enforcement like Tim Wu think it is high time that oligopoly pricing behavior be prosecuted. Tim Wu has written that it is important to reëxamine how antitrust enforcers and regulators think about concentrated industries. Tim Wu's proposal: "when members of a concentrated industry act in parallel, their conduct should be treated like that of a hypothetical monopoly. . . . [A]busive or anticompetitive conduct shouldn’t get a free pass just because there are three companies involved instead of one." See https://www.newyorker.com/tech/elements/the-oligopoly-problem; also https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1986407
But antitrust prosecution of oil refiner pricing practices like zone pricing is mainly absent, based on the conventional wisdom that in the absence of multi-company collusion it is difficult to challenge as anti-competitive the pricing practices of any particular company.
California has an interesting history of multiple government antitrust investigations of large oil refiners, prompted in part by the fact that unique state-imposed fuel requirements make the California gasoline market one that is in many ways distinct. But frequent California state investigations have never led to a prosecution based on refiner zone-pricing or other similar pricing practices that arguably constrain franchisees from charging low prices. Consumer Watchdog and other consumer groups have complained a lot about the lack of prosecution, but to no avail, as discussed in the article at http://www.sandiegouniontribune.com/business/sdut-california-investigates-oil-industry-price-fixing-2016jul06-story.html
Posting by Don Allen Resnikoff, who takes full responsibility for any expressed opinions
Were you affected by the Equifax data breach? One click could cost you your rights in court
- The credit reporting firm said Thursday it detected a data breach in July that affects 143 million consumers.
- On Friday, Equifax added an opt-out clause to its terms of use, but it still requires arbitration instead of litigation to settle disputes for those who do not opt out.
- Consumer advocates are lashing out at Equifax for requiring arbitration.
NYT editorial on Treasury efforts to gut bank regulation
Excerpt:
The Treasury Department is about to release the second in a series of reports on Dodd-Frank. The first one called for weakening constraints on banks, including loosening restrictions on their traders and backing off how much loss-absorbing capital banks are required to hold.
The next report is expected to propose lighter regulation for financial firms other than banks, by restricting the government’s ability to designate insurance companies, corporate lending subsidiaries and other firms as too big to fail, a label that subjects a company to additional rules and higher capital requirements.
The rollback would be blind to history. Non-banks proved as unstable as banks in the crisis.
To read the editorial in full: https://www.nytimes.com/2017/09/08/opinion/why-the-return-of-bigger-banks-means-bigger-risks-for-everyone-else.html?action=click&pgtype=Homepage&clickSource=story-heading&module=opinion-c-col-left-region®ion=opinion-c-col-left-region&WT.nav=opinion-c-col-left-region&_r=0#story-continues-2
In surprise twist, CFPB arbitration rule racks up allies from the right
By Lorraine Woellert
A group of conservatives is breaking ranks with right-leaning groups to endorse a CFPB rule that prohibits financial companies from forcing customers into arbitration to settle disputes.
The rally from the right could be enough to tip the scales in the Senate, which is weighing S.J. Res. 47 (115) to overturn the bureau rule using the Congressional Review Act. While the House acted swiftly to nullify the CFPB rule, a Senate vote remains too close to call.
A poll released today by the American Future Fund, a super PAC established to support Mitt Romney's bid for president, shows broad support for the arbitration ban in states where moderate Republicans could decide the future of the rule.
In Ohio and Alaska, more than two-thirds of people polled supported the bureau's rule, including a majority of Republicans and people who described themselves as "very conservative," the survey found.
In Louisiana, support for the rule neared 70 percent. In Maine, where Republican Susan Collins boasts strong favorability from liberals and moderates, 65 percent of those polled backed the arbitration rule.
Collins, along with Republicans Lisa Murkowski of Alaska, John Kennedy of Louisiana and Rob Portman of Ohio, hasn't staked out a position on the resolution to overturn the rule.
"The message for Republican senators is be very careful," said Nick Ryan, founder of American Future Fund. "The people are against what the Republican majority did in the House, and they're against it by pretty clear majorities."
The poll was conducted in mid-August by American Viewpoint.
The U.S. Chamber of Commerce is leading a campaign to overturn the rule, which businesses say would line the pockets of trial lawyers while doing little to help consumers. The Chamber's allies include a coalition of small-government conservatives such as Americans for Tax Reform and Heritage Action.
With the poll, American Future Fund joins a number of conservative voices speaking out against the Chamber, including Tea Party Nation founder Judd Phillips; Dean Clancy, former vice president for public policy at FreedomWorks; Colin Hanna of Let Freedom Ring USA; and the American Legion.
In editorials and statements, they've singled out big business as a threat to liberty and the Constitution's Seventh Amendment, which guarantees the right to a jury trial.
"This issue is one that tilts the scales in favor of big banks. It has a big-business-versus-the-common-man feel to it," Ryan said. "It's really a populist issue for us. We shouldn't be doing the bidding of big banks."
To view online:
https://www.politicopro.com/financial-services/story/2017/09/in-surprise-twist-cfpb-arbitration-rule-racks-up-allies-from-the-right-161564
Trump FTC pick Delrahim promises to avoid political interference from Trump administration
Senator Elizabeth Warren, a Democrat from Massachusetts, met on Wednesday with President Donald Trump's pick to run the Justice Department's Antitrust Division, where she pressed him on political interference in antitrust and lobbying, according to a source familiar with the discussions.
The source did not say if the meeting was sufficient to convince Warren to support Makan Delrahim. She has reportedly put a "hold" on his confirmation to be assistant attorney general.
Delrahim declined comment on the discussions.
At the meeting, Warren pressed Delrahim on how he would respond to any effort by the White House to influence an antitrust decision. As a candidate, Trump said he would oppose AT&T's proposed $85 billion acquisition of Time Warner, owner of CNN and one of the country's largest film and television companies.
Delrahim said in his confirmation hearing in May that on his watch the division's reviews would be free from any political influence
Credit: http://fortune.com/2017/09/06/elizabeth-warren-trump-antitrust-pick/
Blue States Begin Suing Trump Administration Over Repeal of DACA
POSTED 7:25 AM, SEPTEMBER 6, 2017, BY CNN WIRE
Conservative states may have boxed President Donald Trump into announcing an end for the Deferred Action for Childhood Arrivals program — but Democratic state attorneys general are already fighting back.
New York Attorney General Eric Schneiderman and Washington state Attorney General Bob Ferguson will announce multi-state legal action on Wednesday, according to separate releases from their offices. On Tuesday, California Attorney General Xavier Becerra also announced he was prepared to sue the Trump administration over DACA.
The backlash was expected. In July, all three officials were part of a 20-state coalition of Democratic or non-affiliated attorneys general that wrote to Trump urging him to preserve DACA, outlining why they believed the program was constitutional and saying they stood ready to defend the program.
The states were responding to an opposite letter from 10 states led by Texas Attorney General Ken Paxton sent in late June, threatening Trump that they’d sue in an unfriendly court if the President didn’t sunset the program by September 5. Tennessee announced last week that it would no longer pursue the lawsuit, but the other nine states remained committed.
Do mandatory arbitration clauses lower the price of consumer financial services and products?
From an article at http://harvardlpr.com/wp-content/uploads/2015/07/9.2_2_Barnes.pdf:
Encouraging the CFPB to study whether mandatory arbitration clauses lower the price of consumer financial services and products, the U.S. Chamber of Commerce wrote “businesses can avoid the higher litigation costs associated with defending claims in court. That enables them to eliminate costs that otherwise would inflate the prices of their products or services” and argued that companies with these clauses “produce savings that they may pass on to consumers through lower prices.” . . . Class action settlements [in 2015] over consumer credit cards provided a unique case study for the agency to look at precisely this issue. In Ross v. Bank of America, consumers sued multiple credit card companies alleging the issuers colluded to include mandatory arbitration clauses and class action bans in their contracts. Four defendants agreed to stop using the arbitration clauses for at least three-and-a-half years as part of a settlement of the case while three non-settling defendants continued using the clauses. The CFPB found no statistically significant evidence that the consumer credit card services prices increased after the Ross settlers jettisoned the arbitration clauses or that companies pass to consumers any supposed savings from the use of mandatory arbitration clauses.
Bank of America has not been using mandatory arbitration clauses (i'm not sure whether that is a direct effect of the Ross case), and has been defendant in a number of class actions. One is the subject of an article by Paul Bland at: http://bit.ly/2wBlw42 Paul Bland reports that there has just been a large settlement against Bank of America which cheated members of the armed forces, in violation of the Serviceman’s Civil Relief Act. The settlement gets direct payments (checks mailed out, no claims process) of about $30 million (AFTER all fees and expenses) to over 100,000 members of the armed services.
The case supports arguments that it is better for cheated members of the military to have been permitted to enforce their rights through class actions, rather than being deprived of those rights.
Posted by Don Allen Resnikoff
Advocacy from DC Sun: TELL THE PSC TO MOVE FORWARD ON IMPROVING OUR ELECTRIC SYSTEM
The D.C. Public Service Commission is engaged in a process, known as MEDSIS, to develop rules to improve electric service in the District. If done correctly, this will create a lower cost, reliable, and renewable electric grid for all District residents. Unfortunately, the Public Service Commission is dragging its feet. We need to show them the public is watching.
The PSC has failed to make any meaningful progress. The commission has not developed clear objectives, work groups, and or plans to move the proceeding forward. The Commission has done nothing to create meaningful community or ratepayer engagement about an issue that impacts everyone in D.C.
Also, the Commission is sitting on $32 million dollars it obtained as part of the wrongly approved Exelon takeover of Pepco. This money was meant to support Commission-approved pilot projects that would improve electricity service in the District and support energy efficiency and energy conservation initiatives that would primarily benefit low-income residential ratepayers.
Tell the PSC to move this proceeding forward and allow D.C. ratepayers to benefit from a low-cost, reliable, and renewable energy system
For more: See http://www.dcsun.org/tell-the-psc-to-move-forward-on-improving-our-electric-system/
Washington State AGFerguson sues CHI Franciscan over price-fixing and anticompetitive Kitsap deals
OLYMPIA — Attorney General Bob Ferguson filed a federal lawsuit today against CHI Franciscan, The Doctors Clinic and WestSound Orthopaedics seeking to undo two unlawful agreements that have raised prices and decreased competition for healthcare on the Kitsap Peninsula.
Read more...
States Take On Battle Over Regulating the Gig Economy
Credit: Erin Mulvaney, The National Law Journal. Full article at http://www.nationallawjournal.com/id=1202784752208/States-Take-On-Battle-Over-Regulating-the-Gig-EconomyApril 27, 2017
Florida lawmakers will likely pass a measure that classifies drivers for companies such as Uber and Lyft as independent contractors rather than employees, marking the latest state to attempt to regulate the rapidly growing and litigious ride-hailing workforce.
The bill, now on the governor’s desk after the Legislature passed it this month, has the potential to limit the number of lawsuits against companies in which the drivers sue over workers' compensation insurance and unemployment benefits, as employees have more rights in wage-and-hour disputes. It also creates statewide protections for both the drivers and consumers.
While it’s unclear how much teeth the Florida law would have in the courts, this is the latest example of a state responding to pressure from lawsuits, the companies’ lobbying efforts and the consequences of the growing gig economy. Critics fear any carve-outs for companies will limit the ability of drivers to sue for their rights and supporters say a framework is needed to create uniform regulations to help boost the new businesses.
“The patchwork of regulations—city by city, state by state, even judge by judge—is difficult,” said Richard Meneghello of Fisher Phillips, a Portland-based attorney who helps lead the firm’s new gig economy practice. “The courts are having a hard time because we are trying to address a 21st century problem with 20th century laws.”
In response to prolific court battles, states in recent years have passed measures that regulate ride-hailing companies that include a framework for insurance requirements, recordkeeping, inspections and background checks, among other standards.
Florida would be one of the first states to delve into the distinction between contractor and employee. Several other states have made the distinction, including Arkansas, West Virginia and Colorado, said Doug Shinkle, transportation program director at the National Conference of State Legislatures.
“In general, states have steered clear of getting into that,” Shinkle said. “Going forward that is likely to change, as there continues to be pressure and awareness about further strains on the social safety net and how these cases play out in the courts.”
[Shannon_Liss-Riordan-Vert-201704271732.jpg]
Yet, this is not necessarily a new battle. Companies that hire workers such as cleaners, truckers and call center employees have fought for decades over contractor versus employee status, said Shannon Liss-Riordan, who has represented employees in several high-profile cases against Uber. The so-called sharing economy is just the latest iteration.
“By classifying drivers as contractors, the companies avoid all the responsibility of being an employer and shift the cost of doing business in hopes of avoiding liability for unemployment or workers’ compensation,” she said.
Such laws could have broader implication for the emerging sharing economy and create a larger precedent for other companies. At least 45 states, including California, Georgia and Texas, as well as D.C., have established some sort of regulatory framework for such companies, according to the National Conference of State Legislatures.
State legislatures are increasingly tackling these issues to either refine existing laws or create new ones. A California bill introduced last year would have enabled contractors to collectively organize and bargain. Illinois is debating a bill that would give these drivers a tax credit to purchase or repair their vehicle.
Spirit and Frontier moderate airline ticket costs
Excerpted from NYT:
Even as a wave of mergers has cut the number of major carriers to four and significantly reduced competition, lower-cost airlines continue to play a role in moderating ticket costs.
The low-cost carriers such as Spirit and Frontier force the big airlines to figure out a way to draw the most price-sensitive fliers in any given market — those who scour the internet for the cheapest tickets possible. Those customers make up a significant portion of travelers, meaning the major carrier cannot just ignore them.
“Those passengers certainly are important,” said David Weingart, an economist at the aviation consultant GRA. “The larger airlines have proven that in how they’ve reacted, in how they’ve tried to capture or recapture those passengers.”
Delta, American and United Airlines have all rolled out “basic economy” fares. Such tickets are priced competitively against Spirit and Frontier, but do not offer the amenities that most consumers have come to expect on a flight, like receiving a seat assignment ahead of a flight or obtaining a refund for a ticket.
Full article: https://www.nytimes.com/2017/09/01/business/budget-airlines-ticket-prices.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=rank&module=package&version=highlights&contentPlacement=1&pgtype=sectionfront&_r=0
The now famous New America think-tank statement supporting EU fines for Google
This is the statement that Barry Lynn reports is the reason he was fired.
See it here: https://www.newamerica.org/open-markets/press-releases/open-markets-applauds-european-commissions-finding-against-google-abuse-dominance/
The Maker of the Infamous $400 Juicer Is Shutting Down
Credit: Fortune, Beth Kowitt
Sep 01, 2017
Juicero has run out of juice.The San Francisco-based maker of counter-top cold-press juicers said today that it is shutting down operations and suspending the sale of its presses and produce packs immediately.
The announcement on the company’s website comes after the startup said in July that it was undergoing a “strategic shift” to more quickly lower the cost of its $399 juicers and $5-7 juice packs filled with raw fruits and vegetables. As part of the shift, the company said then that it would lay off about a quarter of its staff.
At the time, Juicero CEO Jeff Dunn wrote in a letter to employees obtained by Fortune that the current prices were “not a realistic way for us to fulfill our mission at the scale to which we aspire.”
But Juicero realized it couldn't bring down the cost of its products as a standalone company. It was too small to achieve the required economies of scale on its own. The company will now focus on finding a buyer, it wrote in Friday's blog post.
A source familiar with the situation said employees are being given 60 days notice and that the company is notifying all customers via email that they can request a refund for the machine for up 90 days.
Before today’s news, Juicero had said it would focus on building a second generation machine that would cost in the $200 range—versus its initial launch price 16 months ago of $699.
Juicero fell under heightened scrutiny after a Bloomberg article in April reported on how consumers could use their hands to squeeze the juice packs without the aid of the Juicero machine.
As Fortune reported earlier this month, Dunn addressed the Bloomberg hand-squeezing issue in a Medium post and again in the letter to employees obtained by Fortune, in which he wrote that “it was frustrating to read that something we always knew about, and that our customers simply aren’t interested in doing, was somehow new and relevant.”
The hand-squeezing dustup inflamed some of the criticism Juicero has gotten since bringing its juicer to market. "Some held up the countertop appliance as a symbol of all that was wrong with Silicon Valley: a $699 connected device that solved a problem most people didn’t even have the luxury of affording—how to get fresh juice on demand at home," Fortune wrote in January.
The Bloomberg article described Juicero as "one of the most lavishly funded gadget startups in Silicon Valley" and founder Doug Evans once said he planned to do for juicing what Steve Jobs did for computers.
It's not easy to run a hospital-Anthem says it will no longer pay for MRIs and CT scans delivered on an outpatient basis at hospitals
MRI and CT scans can often cost several times more than the same services at a freestanding imaging center.MRIs and CT scans can vary from $350 to $2,000, depending on the region and type of facility, Anthem said.
In a note to health providers, Anthem said it will require hospitals to submit precertification requests for MRIs and CT scans for patients.
“If it is NOT medically necessary for the member to receive the service in a hospital setting, the request for authorization will be denied as not medically necessary for that site of care,” according to a Q&A on Anthem’s website.
Anthem is the largest health insurer in Indiana, and its policy is sure to take a hit on hospitals' bottom line. The new policy went into effect July 1 in Indiana, Kentucky, Missouri and Wisconsin. It will go into effect Sept. 1 in Ohio.
The policy does not apply to members enrolled in Medicare Advantage, BlueCard, Medicaid or Medicare Supplement.
The Indiana Hospital Association said requiring busy physicians to get a precertification approval while trying to diagnose a patient creates an unfair burden.
Excerpt from https://www.ibj.com/blogs/17-the-dose/post/65184-anthem-to-hospitals-no-more-mris-ct-scans-for-outpatients-without-preapproval
Court Grants Motion to Compel DreamHost to Obey Warrant, but Restricts Search Process and Use of Data
by Paul Alan Levy
In a decision issued late Thursday morning, DC Superior Court Chief Judge Robert Morin said that he was ready to order DreamHost to comply with the federal prosecutors’ scaled-down search warrant, but enunciated strict procedural restrictions that he said were intended to reflect a balance between allowing the Government to pursue a facially legitimate criminal investigation and protecting the free speech rights of innocent users of the web site who were engaged in protected political speech. It appears that the precise terms of the order are still under discussion. Still, I have grave qualms about the precedent for searching anti-Trump web sites set here at the outset of the Trump Administration.
Full article:http://pubcit.typepad.com/clpblog/2017/08/court-grants-motion-to-compel-dreamhost-to-obey-warrant-but-restricts-search-process-and-use-of-data.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+ConsumerLawPolicyBlog+%28Consumer+Law+%26+Policy+Blog%29
UPCOMING NACA PROGRAM:Debt Collection Issues and other updates from the FTC
September 19, 2017 2:00 p.m. ET–3:00 p.m. ET
Registration Information
Members: $0
Nonmembers: $0 (If you have not already been vetted to attend webinars, please email Rebecca at rebecca@consumeradvocates.org (link sends e-mail)to register.)
Join us to hear about some of the recent issues the Federal Trade Commission has been seeing in debt collection matters. These issues include phantom debt, unlawful third-party communications, collectors not disclosing their identity, and other misrepresentations regarding the nature of the debt.
Staff from the FTC will talk about recent cases involving violations of the FTC Act and the Fair Debt Collection Practices Act (FDCPA). Staff will also discuss how to spot violations of the FDCPA, and what consumers can do to protect themselves from debt collection scams. The webinar will also cover the Credit Practices Rule and provide other updates of initiatives coming out of the Federal Trade Commission.
This session will be a great introduction for those new to these issues and are looking to get a good update and for those who may be more knowledgeable, but interested in the Federal Trade Commission’s work.
What You Will Learn
• Current problematic practices seen by the FTC
• The Credit Practices Rule
• Other updates from the FTC
Speakers
Rebecca Unruh, Attorney, Division of Financial Practices, Bureau of Consumer Protection, Federal Trade Commission
Quinn Martin, Attorney, Division of Financial Practices, Bureau of Consumer Protection, Federal Trade Commission
Patti Poss, Attorney, Division of Marketing Practices, Bureau of Consumer Protection, Federal Trade Commission
CLE Credit Interested in receiving CLE credit for this webinar? NACA webinars have been CLE approved in a number of states. While NACA does not seek CLE approval for each webinar in each individual state, individual attorneys can generally apply for and receive CLE credit in their own respective states. For more information and a comprehensive guide to the process of applying for CLE approval as an individual attorney, email Rebecca Smolar at rebecca@consumeradvocates.org(link sends e-mail).
Why You Should Register Even If You Can’t Attend the Live Webinar: For each webinar you register for, regardless of whether you attend live, you will automatically receive an email inviting you to view a recording of the webinar and also containing attachments of the Power Point presentation and any other supplemental materials within two business days of the live webinar. This way, if you have a time conflict, you will be able to listen to the webinar and study the course materials at your convenience. If you have any questions, please contact Rebecca Smolar, Manager of Education, at rebecca@consumeradvocates.org(link sends e-mail).
Seventh Circuit holds that unaccepted pre-litigation offer does not deprive plaintiff of standing in later-filed suit
From Public Citizen, Posted: 22 Aug 2017 12:03 PM PDT
The unanimous decision, by Chief Judge Wood, is Laurens v. Volvo Cars of N. America. Here's the beginning of the opinion, which sums things up quite nicely:
The idea of a theme and variations is a common one in music. It should be in law, too. Here we return to the familiar theme of a defense effort to pretermit a proposed class action by picking off the named plaintiff’s claim. Several variations on that theme have been tried and have failed. See Campbell‐Ewald Co. v. Gomez, 136 S. Ct. 663 (2016). (Rule 68 offers of judgment); Fulton Dental, LLC v. Bisco, Inc.,860 F.3d 541 (7th Cir. 2017) (Rule 67 payments to court registry). Undeterred, the defendant in the case now before us asserts that an unaccepted offer of relief before a putative plaintiff files a lawsuit deprives that plaintiff of standing. We see no reason why the timing of the offer has such a powerful effect. Black‐letter contract law states that offers do not bind recipients until they are accepted. See, e.g., ALI Restatement (Second) of Contracts § 17 (1981). Hence while the legal effect of every variation on the strategic‐mooting theme has not yet been explored, we are satisfied that an unaccepted pre‐litigation offer does not deprive a plaintiff of her day in court.
It's worth reading the whole thing.
"Under Trump Rule, Nursing Home Residents May Not Be Able To Sue After Abuse"
From Public Citizen, Posted: 22 Aug 2017 05:54 AM PDT
NPR reports on the Trump Administration proposed rule to allow nursing homes to require new residents to agree to arbitration as a condition of admission.
A rule issue under the Obama Administration barred nursing homes forced arbitration agreements for nursing homes, leaving it to the two sides to decide whether they preferred court or arbitration after a dispute arose. The Trump administration rule, NPR reports, "could make it almost impossible for nursing home residents to get their day in court."
The NPR story is here. The proposed regulation is here.
CFPB director Cordray's op-ed in the NY Times
From Public Citizen, Posted: 22 Aug 2017 05:42 AM PDT
Consumer Financial Protection Bureau Director Richard Cordray has an op-ed in the New York Times, explaining the importance of the CFPB rule barring class-action bans in forced arbitration provisions.His conclusion: "A cherished tenet of our justice system is that nobody should escape accountability for breaking the law. Our rule restores consumers’ legal right to stand up for themselves and have their day in court without having to wait on the government to act."
The piece is here.
Maryland’s Purple Line will receive a $900 million federal full funding agreement from the Trump administration
This is a critical step forward for the oft-delayed project.
The breakthrough came after “very productive, high-level conversations” on Friday and Monday between Gov. Larry Hogan (R) and Transportation Secretary Elaine Chao, Hogan spokesman Doug Mayer said.
A Department of Transportation spokesman confirmed the deal, and said it is expected to be signed next week.
Construction of the 16-mile light-rail line linking Montgomery and Prince George’s counties will begin within weeks after the deal is formalized.
From: https://www.washingtonpost.com/local/trafficandcommuting/maryland-to-get-full-federal-funding-agreement-for-purple-line/2017/08/21/dc7f7dda-86b8-11e7-a50f-e0d4e6ec070a_story.html?utm_campaign=08-22-17%20Email&utm_medium=email&utm_source=August%2022%20Update&utm_term=.653658ebf773
The "Save the Trail" group responded with a promise to pursue its litigation, described at http://savethetrail.org/wp-content/uploads/2015/03/Fact-sheet-about-citizen-lawsuit-Nov-2015.pdf
The ACLU litigated to protect "Unite the Right" protest in Charlottesville; but after the protest ACLU says it will no longer litigate for protesters who carry firearms
Virginia Gov. Terry McAuliffe who told NPR that Charlottesville officials “asked for [the rally] to be moved out of downtown Charlottesville to a park about a mile and a half away — a lot of open fields. That was the place that it should’ve been. We were, unfortunately, sued by the ACLU. And the judge ruled against us. The McAuliffe NPR interview is at http://www.npr.org/2017/08/14/543358169/incident-in-charlottesville-will-make-us-stronger-gov-mcauliffe-says
Charlottesville officials originally denied organizer Jason Kessler a permit for a march protesting the removal of a Robert E. Lee Confederate statue from a local park. In response, the ACLU filed a lawsuit against the city, citing the national organization’s long-held belief to uphold the rights of free speech for all. The lawsuit complaint can be found at https://acluva.org/wp-content/uploads/2017/08/KesslerComplaint20170810.pdf
But after the “Unite the Right” rally in Charlottesville, Virginia, ACLU executive director Anthony Romero told The Wall Street Journal that the group will review legal requests from white supremacist groups on a case-by-case basis, assessing more closely whether their protests would have the potential to be violent.
“The events of Charlottesville require any judge, any police chief and any legal group to look at the facts of any white-supremacy protests with a much finer comb,” Romero told the Journal. “If a protest group insists, ‘No, we want to be able to carry loaded firearms,’ well, we don’t have to represent them. They can find someone else,” he added.
ACLU’s Virginia branch previously responded to the criticism over its decision, saying in a statement: “… Let’s be clear: our lawsuit challenging the city to act constitutionally did not cause violence nor did it in any way address the question whether demonstrators could carry sticks or other weapons at the events.” The Virginia branch ACLU statement is here: https://acluva.org/20108/aclu-of-virginia-response-to-governors-allegations-that-aclu-is-responsible-for-violence-in-charlottesville/
Posting by Don Allen Resnikoff
Treasury Secretary Steven Mnuchin released a defense of President Trump on Saturday; will continue his focus on the Trump Administration's financial agenda
In a written statement, Mnuchin responded to a letter co-signed by nearly 300 of his former Yale classmates calling on him to leave the administration. For the Yale letter: http://lettertostevemnuchin.com/
The letter from his Yale classmates was posted to the site Lettertostevemnuchin.com, and said Mnuchin has a "moral obligation" to resign in protest over Trump's widely criticized response to a white supremacist and neo-Nazi rally in Virginia last weekend.
"We call upon you, as our friend, our classmate, and as a fellow American, to resign in protest of President Trump's support of Nazism and white supremacy. We know you are better than this, and we are counting on you to do the right thing," the letter reads.
"I believe that your letter and these comments raise several important issues and misconceptions that I am prepared to address," Mnuchin wrote on Saturday.
Mnuchin's full statement is here:
2nd Circuit reverses District Court decision that Uber could not force a customer to arbitrate price-fixing accusations -- says rider Spencer Meyer was given adequate notice
Read decision here: dlbjbjzgnk95t.cloudfront.net/0955000/955188/16-2752_documents.pdf
Public Citizen letter says the SEC should ban mandatory arbitration clauses that companies want to put in their covenants with shareholders as a way to limit lawsuits
The letter is here: letter http://go.politicoemail.com/?qs=4c8b0277b42fe76f915fff3f3ddd75096c0ef08206e7a5c70b14cbd86ea1058eb9b60b33d895b0f661e166873e6f5b9d668045aef7e5cc0b
Excerpt from the letter:
On behalf of Public Citizen, a non-profit membership organization with more than 400,000 members and supporters nationwide, we are greatly distressed by recent comments of Commissioner Michael Piwowar, in which he offered his support for including forced arbitration clauses in initial public offering (IPO) documents. 1 We strongly urge that you immediately begin the process of prohibiting forced arbitration clauses by entities governed by the SEC. The SEC should protect investors by banning forced arbitration clauses and bans on class actions (“forced arbitration clauses”) because it is difficult for investors to vindicate their rights under federal securities law absent the ability to bring a class action. The SEC’s powers to enforce prohibitions on manipulative practices and to enforce the anti-waiver provisions in federal securities law confer ample authority on the SEC to ban these insidious provisions.
Three pension plans sue Goldman Sachs and five other investment banks for conspiring to control the more than $1 trillion market for lending stocks
The complaint claims the banks are blocking a shift to all-electronic system for matching lenders and borrowers of shares, so they can continue to profit from each transaction. In a short sale, traders sell borrowed stock, anticipating the price will drop so they can profit by buying back the shares at a lower price.
“Major investment banks are conspiring to preserve their profits at the expense of everyday investors,” plaintiffs’ attorney Michael Eisenkraft of Washington-based Cohen Milstein Sellers & Toll said in a statement Thursday. The investors are seeking unspecified damages in the class-action antitrust case, which could be tripled under federal law.
The URL for the Complaint is here:
www.almcms.com/contrib/content/uploads/sites/292/2017/08/Complaint.pdf
Can the U.S. Government Seize an Anti-Trump Website's Visitor Logs?
The Department of Justice is seeking the 1.3 million IP addresses that accessed a website advertising Inauguration Day protests.fighters arrive as police stand guard in front of a limousine which was set ablaze during a protest against President Donald Trump on January 20, 2017, in Washington, D.C
- by ROBINSON MEYER
It will take you to the website of Disrupt J20, which organized some of the “direct action” protests on the day of President Donald Trump’s
inauguration in Washington, D.C. The site contains general information about civil disobedience and political protests, and it advertises several Washington-specific events.
Some of the protests on Inauguration Day turned violent, and the U.S. government has since charged more than 200 people with felony rioting r destruction of property in connection to events on January 20. It alleges that some of the suspects were connected to the Disrupt J20 effort.
Yet if you clicked that link above—even if you were nowhere near Washington on Inauguration Day—the government is now allegedly interested
in you.
The U.S. Department of Justice is attempting to seize the visitor logs and IP addresses of anyone who has visited DisruptJ20.org, as well as any email addresses, user logs, and photos collected by the website, according to DreamHost, a Los Angeles–based web host and domain-name registrar.
This data encompasses more than 1.3 million IP addresses, as well as the email addresses and photos of thousands of people, the company said. DreamHost is not politically connected to DisruptJ20, but it provided paid web-hosting services for the group.
DreamHost has so far refused to comply with the government’s search warrant, arguing that it constitutes “investigatory overreach and a clear abuse of government authority.”
“That information could be used to identify any individuals who used this site to exercise and express political speech protected under the Constitution’s First Amendment. That should be enough to set alarm bells off in anyone’s mind,” said a blog post published to the company’s website on Monday.
* * *
“No plausible explanation exists for a search warrant of this breadth, other than to cast a digital dragnet as broadly as possible,” said Mark Rumold, a senior staff attorney at the Electronic Frontier Foundation, in a blog post. The EFF is assisting DreamHost in its opposition to the warrant.
Excerpts from https://www.theatlantic.com/technology/archive/2017/08/department-of-justice-dreamhost-trump-visitor-logs-million-ip/536886/
See the USDOJ search warrant to DreamHost here: https://www.dreamhost.com/blog/wp-content/uploads/2017/08/DH-Search-Warrant.pdf
D.C. regulators recently ordered United Medical Center, the only full-service hospital in Southeast Washington to stop delivering babies
[Read the regulator's letter obtained by The Washington Post here]
Statement from United Medical Center Regarding Department of Health Notice of Restricted License:
On August 7, 2017 the District of Columbia Department of Health (DOH) issued a notice to United Medical Center (UMC) restricting the hospital’s license for obstetric and related newborn services.
The restricted license, which applies only to obstetrical patients and their newborns, will be in place for a period of 90 days, during which UMC will be able to address the cited deficiencies. These include three separate cases involving deficiencies in screening, clinical assessment and delivery protocols. HIPAA regulations preclude sharing specific details of these cases, however, UMC is taking immediate action to address these deficiencies.
UMC had already initiated the process of transitioning from a Level III neonatal intensive care center and we will be working to ensure that all physicians and nursing staff have appropriate training in policy and procedures. Until that process is complete, UMC will coordinate alternative services through Emergency Medical Services (EMS) and local hospital partners to care for our current obstetric patients.
Members of the public requiring emergency obstetric treatment are urged to use other D.C. facilities, with Providence Hospital recommended as the most accessible for Ward 7 and Ward 8 patients. Additional regional facilities with obstetrical capabilities include: MedStar Washington Hospital Center, George Washington University Hospital, MedStar Georgetown University Hospital, Howard University Hospital, Sibley Memorial Hospital, Prince Georges Hospital Center, and Southern Maryland Hospital. Based on DOH’s Health Systems Plan, the District currently is well below capacity with regard to hospital beds and should be more than capable of accommodating UMC patients in the interim at these other facilities.
As a long-standing and integral part of the community, United Medical Center looks forward to continuing to provide vital healthcare services to residents of Wards 7 and 8 as well as surrounding Prince George’s County, Maryland.
For further information, contact:
Jennifer Devlin
703-876-1714
From CA AG suit against Pruitt/EPA for withholding documents
Plaintiff [California] sent a written request to EPA on April 7, 2017, seeking, pursuant to FOIA, specified records concerning (a) the process EPA has undertaken to ensure that Administrator E. Scott Pruitt is in compliance with federal ethics regulations and obligations; and (b) EPA’s policies and procedures for determining who (if anyone) can assume the powers of the Administrator if he is recused or disqualified from participating in a matter.
EPA has failed to comply with FOIA. EPA did not provide Plaintiff with a determination on the scope of the documents it would produce and the exemptions it would claim within 20 working days of receiving the request. 5 U.S.C. § 552(a)(6)(A)(i).
URL for the Complaint: https://dlbjbjzgnk95t.cloudfront.net/0953000/953666/california%20v%20epa%20filed%20foia%20complaint%2017-1626.pdf
The ACLU sues the Metro system in Washington, D.C. for rejection of public service advertisements
The ACLU claims violation of the First Amendment.
The ads rejected by the Washington Metropolitan Area Transit Authority, which runs mass transit services in and around the nation’s capital, included one for an abortion pill, another promoting a new book by the right-wing provocateur Milo Yiannopoulos, and yet another urging consumers to reject animal cruelty. A fourth, submitted by the A.C.L.U. itself, consisted of little more than transcripts of the First Amendment of the United States Constitution in English, Spanish and Arabic.
Since 2015, the Metro agency has prohibited advertisements that aim to “influence public policy,” or to “influence members of the public regarding an issue on which there are varying opinions,” according to its guidelines.
The lawsuit, [URL https://www.aclu.org/legal-document/aclu-v-wmata-complaint, click United States District Court for the District of Columbia] -, seeks to to overturn the Metro agency’s policy. Ms. Rowland said it became clear how subjective that policy was when Mr. Yiannopoulos’s ads, which were accepted by the Metro earlier this year, were taken down after about 10 days, following commuter complaints. The A.C.L.U. also filed a motion for preliminary injunction, URL https://www.aclu.org/legal-document/aclu-v-wmata-motion-preliminary-injunction [click highlighted words] calling for those ads to be reinstated.
Excerpts are from NYT
NYT EDITORIAL
Closing the Courthouse Doors By THE EDITORIAL BOARD
AUGUST 10, 2017
The Trump administration is moving to deny Americans their day in court when they have been wronged.
The Centers for Medicare and Medicaid Services want to reverse an Obama-era regulation that bars most nursing homes from forcing residents to agree to resolve disputes in private arbitration, instead of in court. The Department of Education recently announced that it was working to reverse an Obama-era rule that prevents most for-profit colleges and other schools from enforcing arbitration agreements when resolving loan disputes by students.
Now, congressional Republicans are getting into the act by attacking a new rule, issued by the Consumer Financial Protection Bureau, that will let Americans bring class-action lawsuits against banks instead of being forced into arbitration. Without the rule, which is scheduled to apply to transactions next year, banks could continue to profit from abusive products and practices without ever facing a court challenge, and aggrieved customers would continue to be shunted into arbitration. Class-action lawsuits are often the only way to hold corporations to account for wrongdoing in which thousands or millions of customers lose amounts that may be meaningful for each customer, though not enough to warrant an individual fighting a corporation. Arbitration, in contrast, is so clearly stacked against customers that most people don’t even bother. And yet, arbitration has been the only recourse even in cases where customers were defrauded, like those caught up in the still-unfolding scandals at Wells Fargo who could not sue because of the bank’s mandatory arbitration requirement.
The first attempt to derail the rule failedrecently, but it underscored the administration’s support for industry arguments. Keith Noreika, a bank lawyer appointed by President Trump to oversee national banks until a Senate-confirmed regulator is in place, asked the financial protection bureau to delay the rule on the ground that more time was needed to determine if it would destabilize the banking system. The bureau refused, for good reason. The rule — which will cost banks about $1 billion a year out of more than $171 billion in profits, according to analysis by the bureau — does not threaten the banks’ survival; it only threatens their impunity. Moreover, neither the agency that Mr. Noreika temporarily heads, the Office of the Comptroller of the Currency, nor other financial regulators raised safety-and-soundness concerns during the long rule-making process.
Congressional Republicans continue to threaten the rule. Before their summer break began, House Republicans passed legislation to scrap it, using the fast-track procedures of the Congressional Review Act. Companion legislation has been introduced in the Senate. Before this year, the review act’s procedures had been used only once, by the Republican-controlled Congress of 2001, to invalidate a workplace safety rule from the Clinton administration. This year, Republicans have used it to roll back 14 rules finalized near the end of the Obama years, including labor and environmental protections. The difference this time is that they want to repeal a rule from Mr. Trump’s watch, albeit by an Obama-appointed regulator of the financial protection bureau, an agency Republicans love to loathe.
If Senate Republicans, once again blinded by their antipathy to President Barack Obama, vote to repeal this rule, they will join their House colleagues and the Trump administration in closing the courthouse door to vulnerable, victimized and defrauded Americans.
http://nyti.ms/2us4RlH
Last month, the federal government signaled its intention to roll back protections critical to the health, safety and welfare of vulnerable nursing home residents. The rule they want to eliminate bans the use of pre-dispute arbitration agreements.
These agreements require older adults, people with disabilities and their families to waive their rights to the judicial system before a dispute even arises. Then, any dispute, even abuse or neglect, and regardless of how egregiously they’ve been harmed, is forced into secretive arbitration proceedings.
Typical nursing home claims involve injuries such as pressure sores that lead to infection; amputated limbs; suffocation on bedrails and other restraints; choking;; sexual assault; renal failure and other conditions caused by dehydration; malnutrition; severe burns; gangrene; and painful, immobilizing muscle and joint problems resulting from long-term inactivity. All of these are avoidable conditions that are the result of negligence or even willful misconduct by long-term care facilities.
These forced arbitration agreements are presented to prospective residents and their families during the admission process, an extremely difficult and stressful time. Individuals typically feel compelled to sign because they are under extreme pressure to be admitted and the implied message is they must agree or be refused care. To make matters worse, under the recent government proposal, this message would no longer be implied. Nursing homes could refuse admission to a resident whose family, acting on their behalf, is unwilling to sign away their rights. This holds residents hostage – they must agree to give up their rights in order to have essential care and a place to live.
Author Robyn Grant is Director of Public Policy and Advocacy at The National Consumer Voice for Quality Long-Term Care and author Remington A. Gregg is Counsel for Civil Justice and Consumer Rights at Public Citizen.
Excerpt if from http://www.huffingtonpost.com/entry/protecting-our-vulnerable-from-abuse-and-neglect-the_us_5980c269e4b0d187a59690a0?section=us_contributor
DCCRC supports Public Citizen's recent week of action against the effort to jeopardize the health and safety of those living in assisted living and nursing homes by requiring pre-admission waivers of litigation rights
The waivers make it harder for seniors to expose neglect and abuse by nursing homes.
Almost a year ago, the Centers for Medicare and Medicaid Services (CMS) forced nursing homes to stop requiring residents to sign admission’s contracts that waived their legal right to go to court if harmed. This was an important step forward in the fight against forced arbitration as it gave power back to the residents if they were mistreated or harassed in their nursing home.
The Trump administration is trying to strip this common-sense reform. The administration approach would subject residents to forced arbitration clauses, an unfair and secretive process which can be used by nursing homes to cover up abuse.
The right to litigate and not be subject to forced pre-dispute arbitration is important to protect our seniors from being taken advantage of by the abuse and mistreatment by long-term care facilities.
Drafting credit: Peter Sheriff
Anthem restrictions on coverage for emergency room visits
Providers worry that the policy could cause patients with potentially life-threatening conditions to avoid care—and that the hard-line approach could violate federal law.
Anthem has deployed a reduced ER coverage policy in several of its state subsidiaries in regions that include Indiana and Missouri. The insurer said it will deny claims for minor injuries or conditions, like cuts and bruises, swimmer’s ear or athlete’s foot, that bring people to the emergency department, reports the Indianapolis Business Journal.
But physicians in those states worry that patients with potential dangerous symptoms, such as chest pain, may avoid care because they fear higher bills. Missouri provider groups, including the Missouri Hospital Association, the Missouri College of Emergency Physicians and the Missouri State Medical Association filed a letter (PDF) urging the state’s insurance commissioner to take a look at the policy.
“We see the Anthem policy as a cost-shifting tactic that will have a dangerous chilling effect on patients,” they wrote. “When policyholders learn that they might be held financially responsible for emergency department care, we worry some will delay or altogether forgo seeking vitally important and life-saving care at a time when they are most critically ill and vulnerable.”
http://www.fiercehealthcare.com/healthcare/providers-warn-anthem-s-new-er-policy-may-violate-federal-law
The Center for Food Safety and other groups ongoing suit against the F.D.A. over a self-affirmation process for food ingredients
“The exemption [from FDA ingredient approval] was meant to cover ingredients that had long been used in the food supply, so that companies didn’t have to come in every time they made a new product,” said Tom Neltner, chemicals policy director at the Environmental Defense Fund, an advocacy group that is one of the plaintiffs in the lawsuit. “It wasn’t meant to allow companies to simply bypass the F.D.A."
A study by the Pew Charitable Trusts found in 2013 that the F.D.A. was unaware of roughly 1,000 of some 10,000 ingredients used in food because companies had used the self-affirmation process.
Credit: NYT For the CFS litigation details see: http://www.centerforfoodsafety.org/press-releases/4956/groups-sue-fda-to-protect-food-safety
NYT: When big pharma does drug trials not for scientific discovery, but to validate proprietary copy-cat drugs
And these drugs often are not so different from one another.
Immunotherapy drugs that attack a protein known as PD-1 are approved for treatment of lung cancer, renal cell cancer, bladder cancer and Hodgkin’s disease, noted Dr. Richard Pazdur, director of the F.D.A.’s Oncology Center of Excellence.
Yet many pharmaceutical companies want their own anti-PD-1. Companies are hoping to combine immunotherapy drugs with other cancer drugs for added effect, and many do not want to have to rely on a competitor’s anti-PD-1 drug along with their own secondary drugs.
So in new trials, additional anti-PD-1 drugs are being tested all over again against the same cancers — a me-too business strategy taken to multibillion-dollar extremes.
“How many PD-1 antibodies does Planet Earth need?” wondered Dr. Roy Baynes, a senior vice president at Merck, which received approval for its first such drug in 2014.
Immunotherapy trials have proliferated so quickly that major medical centers are declining to furnish patients to them. The Yale Cancer Center participates in fewer than 10 percent of the immunotherapy trials it is asked to join.
The problem is that many of the trials are uninteresting from a scientific view, said Dr. Roy Herbst, the center’s chief of medical oncology. The companies sponsoring these trials are not addressing new research questions, he said; they are trying to get proprietary drugs approved.
https://www.nytimes.com/2017/08/12/health/cancer-drug-trials-encounter-a-problem-too-few-patients.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=second-column-region®ion=top-news&WT.nav=top-news&_r=0www.nytimes.com/2017/08/12/health/cancer-drug-trials-encounter-a-problem-too-few-patients.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=second-column-region®ion=top-news&WT.nav=top-news&_r=0
AARP Foundation-backs age discrimination in employment litigation:DONETTA RAYMOND, et al., Plaintiffs, v. SPIRIT AEROSYSTEMS HOLDINGS, INC., and SPIRIT AEROSYSTEMS, INC., Defendants.
United States District Court, D. Kansas.
Applicable Law: 28 U.S.C. § 451
Cause: 28 U.S.C. § 451 Employment Discrimination
Nature of Suit: 442 Civil Rights: Jobs
From June, 2017 court opinion:
Plaintiffs filed this collective action in July 2016, claiming Defendants wrongfully terminated their employment and/or later failed to consider them for new job openings because of their age and, in some cases, the older employees' (or family members') medical conditions and related medical expenses. In addition to the collective action claims under the Age Discrimination in Employment Act4 ("ADEA"), some Plaintiffs also assert individual ADEA claims, while other Plaintiffs claim their termination violated the Americans with Disabilities Act5 ("ADA") and/or the Family and Medical Leave Act6 ("FMLA").
http://www.leagle.com/decision/InFDCO20170703A86/Raymond%20v.%20Spirit%20AeroSystems%20Holdings,%20Inc.
Investment expert Jeremy Grantham says current great corporate power makes corporation profits high and stable
Excerpt from article at URL https://www.gmo.com/docs/default-source/public-commentary/gmo-quarterly-letter.pdf:
Corporate profitability is the key difference in higher pricing [of corporate stock] . . . . With higher margins, of course the market is going to sell at higher prices. So how permanent are these higher margins? . . . Here are some of the influences on margins (in thinking about them, consider not only the possibilities for change back to the old conditions, but also the likely speed of such change):
■ Increased globalization has no doubt increased the value of brands, and the US has much more than its fair share of both the old established brands of the Coca-Cola and J&J variety and the new ones like Apple, Amazon, and Facebook. Even much more modest domestic brands – wakeboard distributors would be a suitable example – have allowed for returns on required capital to handsomely improve by moving the capital intensive production to China and retaining only the brand management in the US. Impeding global trade today would decrease the advantages that have accrued to US corporations, but we can readily agree that any setback would be slow and reluctant, capitalism being what it is, compared to the steady gains of the last 20 years (particularly noticeable after China joined the WTO).
■ Steadily increasing corporate power over the last 40 years has been, I think it’s fair to say, the defining feature of the US government and politics in general. This has probably been a slight but growing negative for GDP growth and job creation, but has been good for corporate profit margins. And not evenly so, but skewed toward the larger and more politically savvy corporations. So that as new regulations proliferated, they tended to protect the large, established companies and hinder new entrants.
The durability of corporate power and resulting profitability is a good thing for investors over the next period of years, according to Grantham, but it is bad for productivity, bad for workers, and in the long run bad for the US economy. Charlie Rose recently quizzed Grantham on these points in an interview that can be found here:
https://charlierose.com/videos/30816
Posted by Don Allen Resnikoff
States Can Join ACA Subsidies Case: DC Circ.
The D.C. Circuit ruled late Tuesday that 17 states and the District of Columbia to join litigation over Affordable Care Act subsidies. The litigation goal is to derail efforts by the Trump administration to halt the payments and weaken regional insurance markets.
Excerpts from the States' Motion:
In this litigation, the House of Representatives attacks a critical feature of the Patient Protection and Affordable Care Act—landmark federal legislation that has made affordable health insurance coverage available to nearly 20 million Americans, many for the first time. If successful, the suit could—to use the President’s expression—“explode” the entire Act.
Until recently, States and their residents could rely on the Executive Branch to respond to this attack. Now, events and statements, including from the President himself, have made clear that any such reliance is misplaced. The States of California, New York, Connecticut, Delaware, Hawaii, Illinois, Iowa, Kentucky, Maryland, Massachusetts, Minnesota, New Mexico, Pennsylvania, Vermont, and Washington, and the District of Columbia move to intervene to ensure an effective defense against the claims made in this case and to protect the interests of millions of state residents affected by this appeal.
* * *
The district court’s ruling would destroy this design by eliminating the permanent appropriation Congress intended for cost-sharing reduction payments. Payments would cease immediately in the absence of a specific appropriation; and any future payments would be subject to the unpredictability of the appropriations process. That would directly subvert the ACA, injuring States, consumers, and the entire healthcare system. The States thus have a vital interest in seeking reversal or vacatur of the district court’s decision.
See the Court's Order: https://dlbjbjzgnk95t.cloudfront.net/0897000/897941/document.pdf
See the States' Motion: https://dlbjbjzgnk95t.cloudfront.net/0897000/897941/document%20(1).pdf
NYT: How Trump can undermine ACA
What Trump can do:
o Weaken enforcement of the individual mandate.
o Impose work requirements for Medicaid recipients.
o Fail to do advertising or outreach.
o Make tax credits for premiums less generous.
o Defund subsidies that help people pay out-of-pocket costs.
o Redefine essential health benefits.
See https://www.nytimes.com/interactive/2017/07/19/us/what-trump-can-do-to-let-obamacare-fail.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region®ion=top-news&WT.nav=top-news&_r=0NOT IN PROGRES
Public Citizen Group Letter in Opposition to Proposed Revisions to CMS Arbitration Rule
August 7, 2017
Honorable Seema Verma
U.S. Centers for Medicare & Medicaid Services
Administrator
7500 Security Boulevard
Baltimore, MD 21244
Re: CMS—3342-P, Comments Opposing Changes to Strip Legal Rights from Vulnerable Residents in Long-Term Care Facilities
The undersigned organizations dedicated to protecting the health, safety, and welfare of individuals, including seniors, condemn in the strongest possible terms proposed changes to strip legal rights from vulnerable residents in long-term care (LTC) facilities. This cruel proposed rule would repeal current Centers for Medicare & Medicaid Services (CMS) regulations, finalized less than a year ago, prohibiting nursing homes and other LTC facilities from forcing patients into signing pre-dispute arbitration clauses. Moreover, the new proposal would allow these facilities to require a signed forced arbitration agreement as a condition of residing there, which is expressly prohibited by the current rule. Placing a parent or loved one in a nursing home is already one of the most difficult things anyone will ever have to do in life. But forcing the patient or family member to then sign something that violates the resident’s legal rights should they suffer future abuse or serious neglect is a horrific thing to do to families. This proposed rule is a disturbing new direction for CMS, which should be protecting patients, not making it easier for facilities to harm them and cover it up.
In October 2016, CMS finalized a rule banning forced arbitration agreements in nursing home and long-term care contracts, ensuring residents who were harmed would have access to the courts, and that facilities would be properly held accountable for abuse, serious neglect, sexual assault, or other harms. When CMS wisely finalized its 2016 rule, it did so after examining years of evidence and studies showing increasing abuse and neglect at nursing homes and the need for more accountability. During the comment period for the 2016 rule, CMS said that forced arbitration was supported by industry alone, and that “members of the public, advocates, and members of the legal community, predominantly wanted a prohibition on ‘pre-dispute’ arbitration agreements.” In addition, 34 senators and 16 state attorneys general urged CMS to prohibit forced arbitration agreements because of the coercive nature of the process during admissions, the lack of a neutral arbitrator, and the secretive nature of the proceedings.
Indeed, no amount of “transparency” can make these contracts fair or voluntary. Forced arbitration is a private, secretive rigged system controlled by the at-fault facility. Residents have limited access to important documents that may help their claim. Nursing home arbitration companies have a financial incentive to side with repeat players who generate most of the cases they handle. There is no public record to inform industry practice or to notify the public or regulators. If cases are heard in arbitration, dangerous facilities can prolong misconduct and suppress information about harmful conditions and practices for years.
Forced arbitration agreements are never “voluntary” for the resident. Families cannot refuse what a nursing home is presenting to them, no matter how “visible” or understandable the provision is. During any admission process, families are experiencing enormous stress and pressure to get their loved one into a LTC. Indeed, even the court that granted last year’s injunction against the 2016 rule conceded that “the practice of executing arbitration contracts during the nursing home admissions process raises valid concerns, on a public policy level, since many residents and their relatives are ‘at wit’s end’ and prepared to sign anything to gain admission.” This coercion would be made even worse under the new proposed rule, which appallingly would allow nursing homes to make signing such a form a condition of admission. Providing a senior or other LTC resident with a “plainly written” document means little when one is coerced into signing it or be denied admission or kicked out of their nursing home.
In 2016, CMS finalized a sensible and fully-supported rule banning forced arbitration clauses in LTC contracts. There is absolutely no reason to undo the agency’s careful work to develop this final rule. We urge you to protect the health and safety of seniors, other LTC residents, and the public, reverse your decision to eliminate these important protections, and reject this extraordinarily-misguided new proposed rule.
Sincerely,
Public Citizen
Letter from Consumers Union On CFPB Rule Concerning Forced Arbitration
July 21, 2017
Dear Representative:
Consumers Union, the policy and mobilization arm of Consumer Reports, urges you to support the new Consumer Financial Protection Bureau’s rule to restore the rights of consumers to hold payday lenders, credit card companies, and other financial companies accountable under the law when they commit widespread wrongdoing, such as the fraud perpetrated by Wells Fargo on millions of its unsuspecting customers. This important, long-awaited rule stops lenders from forcing consumers to take their claims individually to private arbitration when they would prefer to join together in a class action in court under established legal procedures.
Contrary to what many opponents of this rule are claiming, this rule is a measured and thoroughly considered response to the growing problem of forced arbitration, in which consumers sign away their legal rights just by signing up for a loan or financial service – often unknowingly agreeing to a paragraph hidden in the fine print, and always without having any choice in the matter.
The CFPB’s rule targets one particularly harmful aspect of forced arbitration, when it shields financial companies from accountability for widespread wrongdoing. This is an area where the CFPB found the evidence most clear and compelling.
As is explained in the CFPB’s description and analysis accompanying the rule, the cumulative harm from widespread fraud or other unlawful misconduct – and the unjust enrichment to the wrongdoer – can be enormous, but the amount of money at stake for an individual victim is quite often too small to pay for the cost of arbitration. The only practical way for consumers to hold a lender accountable under the law is by joining together in a class action. In fact, that is one of the key purposes for which the class action procedure was created in our legal system.
Another reason the class action procedure was created is to help companies facing legal action by numerous consumers for the same alleged wrongful conduct. Dealing with those claims all at once is far more efficient, and less costly to the company, than dealing with them individually. Unless, that is, the claims cannot be economically pursued individually. In that case, blocking the class action amounts to shielding the company from legal accountability. That is unfortunately what has resulted from the use of forced arbitration.
In issuing this rule, the CFPB is acting at the express statutory direction of Congress in the Dodd-Frank Act, the law creating the CFPB. The rule is based on a thorough three-year examination of the use of forced arbitration agreements in consumer financial services, in which the CFPB asked for and considered input from the full range of stakeholders who could potentially be affected. Based on that examination, the CFPB issued an extensive report, then asked for further input from all concerned. The proposed rule was published more than a year ago, after which there was yet another extended opportunity to give input.
Importantly, and also contrary to what many opponents of the rule are claiming, the rule in no way restricts the freedom of a lender and a consumer to agree to use arbitration as an alternative means for resolving a dispute – as long as they make that agreement after the dispute arises, when the consumer knows what is at stake and can decide whether the alternative being offered is fair and workable. Giving the consumer a genuine choice also means the lender has the incentive to make sure the alternative is fair and workable, so informed consumers will have a reason to choose it.
In contrast, allowing lenders to unilaterally impose arbitration on all consumers, at the time they sign up for the loan or credit card or other service, in the fine print of the paperwork or electronic terms of service, is no choice. Forced arbitration means that the lender and its lawyers are free to construct an arbitration process that is unfairly slanted in favor of the lender. The consumer is utterly at the mercy of the lender.
Arbitration proceedings and their outcomes are generally required to be kept secret. Whoever designs the process also dictates what the rules are. Established law can be disregarded entirely. There is no right of appeal. It’s one thing if the two sides both agree on using arbitration, after taking a close look and satisfying themselves that the process they are agreeing to is fair and workable. It’s another thing entirely if the side with all the power forces it on the other side.
The 2015 CFPB report sets forth the basis for this rulemaking clearly and compellingly. And the description and analysis accompanying the final rule explain in great detail the CFPB’s careful assessment of the input and concerns and alternatives presented during the multi-year rulemaking process, and how and why the CFPB arrived at the final rule.
We urge you to support this important rule, and to allow it to take effect so that consumers have the right and ability to protect themselves and hold lenders accountable for widespread unlawful conduct.
Respectfully,
/s/
George P. Slover
Senior Policy Counsel
Consumers Union
Democrats open debate: Cracking Down on Corporate Monopolies and the Abuse of Economic and Political Power
Excerpt:
Over the past thirty years, growing corporate influence and consolidation has led to reductions in competition, choice for consumers, and bargaining power for workers. The extensive concentration of power in the hands of a few corporations hurts wages, undermines job growth, and threatens to squeeze out small businesses, suppliers, and new, innovative competitors. It means higher prices and less choice for the things the American people buy every day.
Vigorous, free, and fair competition is a pro-business, pro-consumer, pro-worker approach. The American people deserve a Better Deal that lowers the costs of everyday expenses, putting economic and political power back in their hands and giving them more choices. Over the last thirty years, courts and permissive regulators have allowed large companies to get larger, resulting in higher prices and limited consumer choice in daily expenses such as travel, cable, and food and beverages. And because concentrated market power leads to concentrated political power, these companies deploy armies of lobbyists to increase their stranglehold on Washington.
A Better Deal on competition means that we will revisit our antitrust laws to ensure that the economic freedom of all Americans—consumers, workers, and small businesses—come before big corporations that are getting even bigger. Specifically, the Better Deal plan will:
Prevent big mergers that would harm consumers, workers, and competition.
Require regulators to review mergers after completion to ensure they continue to promote competition.
Create a 21st century ‘Trust Buster’ to stop abusive corporate conduct and the exploitation of market power where it already exists.
Full Democratic statement: http://www.democraticleader.gov/wp-content/uploads/2017/07/A-Better-Deal-on-Competition-and-Costs.pdf
The Trump Treasury Report and "too big" banks
In its recent 149-page report on regulation of financial institutions the Trump Treasury mainly recommends reducing oversight of large financial institutions, providing an array of measures offering regulatory relief. The key Trump Treasury Report thought on the problem of “too big” banks seems to be this:
Excessive regulation imposes costs on institutions that can create incentives for institutions to grow larger than conditions would otherwise require. To the extent regulatory costs can be spread over a large number of customers, regulation can create a barrier to entry for smaller firms and confer competitive advantages on the largest institutions. Tailoring regulation therefore is essential to ensure that regulation does not play a role in fostering too-big-to-fail institutions.
Nellie Liang of Brookings is sympathetic to proposals that reduce regulation of small banks, but worries about Report “proposals that would effectively relax capital requirements for the largest, most complex financial institutions [that] would make the system more prone to another financial crisis with significant risks to the economy.” See https://www.brookings.edu/blog/up-front/2017/06/13/what-treasurys-financial-regulation-report-gets-right-and-where-it-goes-too-far/
The Treasury Report seems consistent with Treasury chief Steven Mnuchin’s testimony to Congress in May, when he distanced the Trump Administration from a populist push to break up the nation's biggest banks. During a Senate hearing where Sen. Elizabeth Warren (D-Mass.) pressed Mnuchin on Administration policy, Mnuchin said splitting up the banks "would be a huge mistake."
Posted by Don Allen Resnikoff
Missing paperwork could wipe out billions in private student loan debt
POSTED JUL 18, 2017 09:58 AM CDT
BY DEBRA CASSENS WEISS
One of the largest owners of private student loans is struggling to show it has the necessary paperwork to prove ownership of loans that have gone into collection.
Tens of thousands of people whose loans are held by National Collegiate Student Loan Trusts could have their debts wiped out because of the missing paperwork, the New York Times DealBook blog reports.
The troubled loans that have gone into default total at least $5 billion. Most borrowers who are sued either default or reach settlements. But some cases that are being fought by lawyers have revealed the problems.
Judges throughout the country have already tossed dozens of collection lawsuits filed against borrowers because of missing documents. According to DealBook’s review of court records, “many other collection cases are deeply flawed, with incomplete ownership records and mass-produced documentation.”
The paperwork documenting the chain of loan ownership disappeared as the bank loans were bundled together and sold to investors through the securitization process. The debt collector who typically sues, Transworld Systems, usually swears to the accuracy of loan records in its court papers.
Credit: http://www.abajournal.com/news/article/missing_paperwork_could_wipe_out_private_student_loan_debt_for_tens_of_thou/?utm_source=maestro&utm_medium=email&utm_campaign=weekly_email
2nd Circuit explanation of why it voided LIBOR convictions
In the United States Court of Appeals for the Second Circuit DECIDED: JULY 19, 2017
This case—the first criminal appeal related to the London Interbank Offered Rate (“LIBOR”) to reach this (or an:y) Court of Appeals—presents the question, among others, whether testimony given by an individual involuntarily under the legal compulsion of a foreign power may be used against that individual in a criminal case in an American court. As employees in the London office of Coöperatieve Centrale Raiffeisen‐Boerenleenbank B.A. in the 2000s, defendants‐appellants Anthony Allen and Anthony Conti (“Defendants”) played roles in that bank’s LIBOR submission process during the now‐well‐documented heyday of the rate’s manipulation.
Defendants, each a resident and citizen of the United Kingdom, and both of whom had earlier given compelled testimony in that country, were tried and convicted in the United States before the United States District Court for the Southern District of New York (Jed S. Rakoff, Judge) for wire fraud and conspiracy to commit wire fraud and bank fraud. While this appeal raises a number of substantial issues, we address only the Fifth Amendment issue, and conclude as follows.
First, the Fifth Amendment’s prohibition on the use of compelled testimony in American criminal proceedings applies even when a foreign sovereign has compelled the testimony.
Second, when the government makes use of a witness who had substantial exposure to a defendant’s compelled testimony, it is required under Kastigar v. United States, 406 U.S. 441 (1972), to prove, 3 at a minimum, that the witness’s review of the compelled testimony did not shape, alter, or affect the evidence used by the government.
Third, a bare, generalized denial of taint from a witness who has materially altered his or her testimony after being substantially exposed to a defendant’s compelled testimony is insufficient as a matter of law to sustain the prosecution’s burden of proof.
Fourth, in this prosecution, Defendants’ compelled testimony was “used” against them, and this impermissible use before the petit and grand juries was not harmless beyond a reasonable doubt. Accordingly, we REVERSE the judgments of conviction and hereby DISMISS the indictment.
Full opinion: http://www.ca2.uscourts.gov/decisions/isysquery/14823406-b96d-48c1-97dc-f19ed4cd84a0/1/doc/16-898_opn.pdf#xml=http://www.ca2.uscourts.gov/decisions/isysquery/14823406-b96d-48c1-97dc-f19ed4cd84a0/1/hilite/
Newspapers to bid for antitrust exemption to tackle Google and Facebook
From CPI
The news industry is banding together to seek a limited antitrust exemption from Congress in an effort to fend off growing competition from Facebook and Google.
Traditional competitors including The Washington Post, The Wall Street Journal and The New York Times, as well as a host of smaller print and online publications, will temporarily set aside their differences this week and appeal to federal lawmakers to let them negotiate collectively with the technology giants to safeguard the industry.
Antitrust laws traditionally prevent companies from forming such an alliance which could see them becoming over-dominant in a particular sector. However, the media companies are hoping that Congress will look favorably on a temporary exemption, particularly given the recent clampdown on the technology industry which saw Google slapped with a US$2.7 billion antitrust fine.
The campaign is led by newspaper industry trade group News Media Alliance and it is intended to help the industry collaborate in order to regain market share from Facebook and Google, which have been swooping in on newspapers’ distribution and advertising revenues.
The two companies currently command 70% of the US$73 billion digital advertising industry in the US, according to new research from the Pew Research Centre. Meanwhile, US newspaper ad revenue in 2016 was US$18 billion from US$50 billion a decade ago.
The News Media Alliance argue that, despite their growing dominance in news distribution, Facebook and Google lack the resources and ability to guarantee the accuracy of reporting upheld by reputable news associations. Facebook in particular came under fire during the 2016 US presidential election when it failed to suitably monitor the news content on its platform and was seen to host unverified articles.
“(Facebook and Google) don’t employ reporters: They don’t dig through public records to uncover corruption, send correspondents into war zones, or attend last night’s game to get the highlights. They expect an economically squeezed news industry to do that costly work for them,” David Chavern, president and chief executive of the News Media Alliance, wrote in an opinion piece published Sunday in the Wall Street Journal.
Full Content: Wall Street Journal (pay wall)
From Friends of the Capital Crescent Trail (and not friends of a Purple MTA line)
Excerpt of email:
On June 26, Judge Leon denied MTA's request to move forward with construction of the Purple Line even though MTA has not undertaken the required Supplemental Environmental Impact Statement (SEIS).
Our [Friends] filing, amply supported with detailed expert declarations, demonstrated to the Court why moving ahead with Purple Line construction would not be in the public interest and is not supported by the law.
We have also filed a 59e motion asking Federal Judge Leon for clarification or reconsideration on two very important issues he did not address in detail- air and noise pollution and their effects on pedestrians, cyclists, schools, residents, and parks and historic sites, which are especially protected by Federal Transportation law.
Meanwhile, MTA continues to seek to litigate its way out of its obligations and to move the case to the US Court of Appeals!
In our vigorous response filing with the US Court of Appeals, on July 3, 2017, we opposed Maryland's motion to "stay", or reverse the District Court's suspension of the Purple Line. We demonstrated that such a request has no merit, would not be in the public interest, and should be denied.
The battle of the motions and briefs continues as Maryland's expensive law firm Perkins Coie and its attorneys send barrage after barrage of motions into both courts. But in this fight for fiscal accountability, common sense solutions, green space, and the rule of law, we are the ones who stand on strong ground.
Customers of Jessica Alba’s Honest Co. alleging it falsely marketed its products as “all natural” asked a New York federal judge on Friday for preliminary approval of a $7.35 million settlement that would end four proposed class actions.
The application to the Court for settlement approval is here:
https://dlbjbjzgnk95t.cloudfront.net/0940000/940560/https-ecf-nysd-uscourts-gov-doc1-127120560288.pdf
From: Consumer Law & Policy Blog
Fortune Commentary on the CFPB's Arbitration Rule: How This New Rule Prevents Your Bank From Ripping You Off
Posted: 13 Jul 2017 01:14 PM PDT
by Jeff Sovern
My [Jeff's] latest, here. Excerpt:
The Wells Fargo case shows the difference between arbitration and class actions: the difference between getting nothing and getting something. * * *
Critics of the rule claim that class actions are just giveaways to lawyers. It’s true that not all class actions work as well as the Wells Fargo one, but the remedy for bad class actions is no more to eliminate them than the remedy for bank misconduct is to eliminate banks. Rather, the remedy is to make sure courts live up to their obligation to approve class action settlements only if they are “fair, reasonable, and adequate.”
When is an old judge too old, and forced to retire?
Richard Posner: I believe there should be mandatory retirement for all judges at a fixed age, probably 80.
Jed Rakoff: Life tenure is what guarantees federal judges their independence, enabling them to speak their minds freely, administer justice without fear or favor, and provide necessary checks on the other branches of government. Any tampering with this is likely to devolve into politics, with whichever party is in power trying to reduce the retirement age ever lower, so as to replace judges appointed by the now out-of-power party with those of the now in-power party. The recent defeat of the New York referendum that Joel references above is a good example: Even though there was widespread “good government” support for increasing the retirement age to 80, the referendum was successfully opposed by Gov. Andrew Cuomo, who wanted to replace Republican-appointed judges with judges he could personally select (as he subsequently did). The result was that several of the most experienced, most knowledgeable, and most respected judges on the highest New York court—such as Robert S. Smith, a Republican appointee who commanded bipartisan respect for his brilliance and fairness—were forced to retire at the height of their powers.
The list of federal judges who have served with great distinction into their 80s includes, among many others, some of the greatest Supreme Court justices ever, such as Louis Brandeis (82), William J. Brennan Jr. (84), Hugo Black (85), and Oliver Wendell Holmes Jr. (90). The greatest Supreme Court justice of all, John Marshall, who single-handedly provided the foundation for most of the basic principles that still govern the relationship between the federal judiciary and the other branches of government, served until he was 79, which, by modern standards, would be the equivalent of something like 95 or more. And, contrary to Joel’s hypothesis that elderly judges “become too dug in to their beliefs,” the number of Supreme Court justices (as well as lower court federal judges) whose views have evolved as they got older and served longer is very large and includes, just in the past few decades, such influential justices as Harry Blackmun, John Paul Stevens, and David Souter.
As for those (relatively few) federal judges who develop significant mental infirmities with increasing age, they typically receive a visit from the chief judges of their courts, who politely suggest that they retire—which they almost always do.
Entire dialogue: http://www.slate.com/articles/news_and_politics/jurisprudence/2017/07/should_there_be_age_limits_for_federal_judges.html
Microsoft proposes a $10 billion program to bring broadband internet to the rural U.S.
The plan, which calls for corporate and government cash, relies on nascent television “white-space” technology, which sends internet data over unused broadcast frequencies set aside for television channels.
This is technology the company helped develop as a cornerstone of an effort to connect the 23.4 million Americans in rural areas who lack high-speed internet access.
“One thing we’ve concluded is just how important broadband is for all kinds of things,” Microsoft President Brad Smith said in an interview.
Article: http://www.seattletimes.com/business/microsoft/microsoft-proposing-10b-program-to-bring-broadband-internet-to-rural-america/
President Trump has named regulation skeptic Randal K. Quarles to serve as the Federal Reserve’s top watchdog overseeing Wall Street
He is an opponent of bank regulation, and expected to play a leading role in the administration’s plans to reduce financial regulation.
Article: https://www.nytimes.com/2017/07/10/us/politics/trump-nominates-randal-quarles-to-oversee-wall-street-banks.html?rref=collection%2Ftimestopic%2FFinancial%20Legal%2FRegulatory&action=click&contentCollection=timestopics®ion=stream&module=stream_unit&version=latest&contentPlacement=1&pgtype=collection
FROM THE CFPB:
CFPB Issues Rule to Ban Companies From Using Arbitration Clauses to Deny Groups of People Their Day in CourtFinancial Companies Can No Longer Block Consumers From Joining Together to Sue Over Wrongdoing
JUL 10, 2017
WASHINGTON, D.C. — The Consumer Financial Protection Bureau (CFPB) today announced a new rule to ban companies from using mandatory arbitration clauses to deny groups of people their day in court. Many consumer financial products like credit cards and bank accounts have arbitration clauses in their contracts that prevent consumers from joining together to sue their bank or financial company for wrongdoing. By forcing consumers to give up or go it alone – usually over small amounts – companies can sidestep the court system, avoid big refunds, and continue harmful practices. The CFPB’s new rule will deter wrongdoing by restoring consumers’ right to join together to pursue justice and relief through group lawsuits.
"Arbitration clauses in contracts for products like bank accounts and credit cards make it nearly impossible for people to take companies to court when things go wrong," said CFPB Director Richard Cordray. "These clauses allow companies to avoid accountability by blocking group lawsuits and forcing people to go it alone or give up. Our new rule will stop companies from sidestepping the courts and ensure that people who are harmed together can take action together."
Hundreds of millions of contracts for consumer financial products and services have included mandatory arbitration clauses. These clauses typically state that either the company or the consumer can require that disputes between them be resolved by privately appointed individuals (arbitrators) except for individual cases brought in small claims court. While these clauses can block any lawsuit, companies almost exclusively use them to block group lawsuits, which are also known as “class action” lawsuits. With group lawsuits, a few consumers can pursue relief on behalf of everyone who has been harmed by a company’s practices. Almost all mandatory arbitration clauses force each harmed consumer to pursue individual claims against the company, no matter how many consumers are injured by the same conduct. However, consumers almost never spend the time or money to pursue formal claims when the amounts at stake are small.
The Dodd-Frank Wall Street Reform and Consumer Protection Act required the CFPB to study the use of mandatory arbitration clauses in consumer financial markets. Congress also authorized the Bureau to issue regulations that are in the public interest, that are for the protection of consumers, and which are based on findings that are consistent with the Bureau’s study of arbitration. Released in March 2015, the study showed that credit card issuers representing more than half of all credit card debt and banks representing 44 percent of insured deposits used mandatory arbitration clauses. Yet three out of four consumers the Bureau surveyed did not know whether their credit card agreement had an arbitration clause. These clauses are not only common and unknown; they are also bad for consumers. By blocking group lawsuits, companies are able to:
- Deny consumers their day in court: The study showed that few consumers ever bring – or consider bringing – individual actions against their financial service providers either in court or in arbitration. Only about 2 percent of consumers with credit cards surveyed said they would consult an attorney or consider formal legal action to resolve a small-dollar dispute. As a result, the real effect of mandatory arbitration clauses is to insulate companies from most legal proceedings altogether.
- Avoid paying out big refunds: Individual actions get less overall relief for consumers than group lawsuits because companies do not have to provide relief to everyone harmed. According to the study, group lawsuits succeed in bringing hundreds of millions of dollars in relief to millions of consumers each year. The study showed that over 34 million consumers received payments, and that $1 billion was paid out to harmed consumers over the five-year period studied. Conversely, in the roughly one thousand cases in the two years that were studied, arbitrators awarded a combined total of about $360,000 in relief to 78 consumers.
- Continue harmful practices: Individual actions might recoup previous individual losses, but they do nothing to stop the harm from happening again or to others. Resolving group lawsuits often requires companies to not only pay everyone back, but also change their conduct moving forward. This saves countless consumers the pain and expense of experiencing the same harm. The Bureau’s study found that in 53 group settlements covering over 106 million consumers, companies agreed to change their business practices or implement new compliance programs. Without group lawsuits, private citizens have almost no way, on their own, to stop companies from pursuing profitable practices that may violate the law.
CFPB Arbitration RuleThe CFPB rule restores consumers’ right to file or join group lawsuits. By so doing, the rule also deters companies from violating the law. When companies know they are more likely to be held accountable by consumers for any misconduct, they are less likely to engage in unlawful practices that can cause harm. Further, public attention on the practices of one company can more broadly influence their business practices and those of other companies. Under the rule, companies can still include arbitration clauses in their contracts. But companies subject to the rule may not use arbitration clauses to stop consumers from being part of a group action. The rule includes specific language that companies will need to use if they include an arbitration clause in a new contract.
The rule also makes the individual arbitration process more transparent by requiring companies to submit to the CFPB certain records, including initial claims and counterclaims, answers to these claims and counterclaims, and awards issued in arbitration. The Bureau will collect correspondence companies receive from arbitration administrators regarding a company’s non-payment of arbitration fees and its failure to follow the arbitrator’s fairness standards. Gathering these materials will enable the CFPB to better understand and monitor arbitration, including whether the process itself is fair. The materials must be submitted with appropriate redactions of personal information. The Bureau intends to publish these redacted materials on its website beginning in July 2019.
The new CFPB rule applies to the major markets for consumer financial products and services overseen by the Bureau, including those that lend money, store money, and move or exchange money. Congress already prohibits arbitration agreements in the largest market that the Bureau oversees – the residential mortgage market. In the Military Lending Act, Congress also has prohibited such agreements in many forms of credit extended to servicemembers and their families. The rule’s exemptions include employers when offering consumer financial products or services for employees as an employee benefit; entities regulated by the Securities and Exchange Commission or the Commodity Futures Trading Commission, which have their own arbitration rules; broker dealers and investment advisers overseen by state regulators; and state and tribal governments that have sovereign immunity from private lawsuits.
In October 2015, the Bureau published an outline of the proposals under consideration and convened a Small Business Review Panel to gather feedback from small companies. Besides consulting with small business representatives, the Bureau sought comments from the public, consumer groups, industry, and other interested parties before continuing with the rulemaking. In May 2016, the Bureau issued a proposed rule that included a request for public comment. The Bureau received more than 110,000 comments.
The rule’s effective date is 60 days following publication in the Federal Register and applies to contracts entered into more than 180 days after that.
More information about the CFPB’s arbitration rule is available at: https://www.consumerfinance.gov/arbitration-rule/
The text of the arbitration rule is available at: http://files.consumerfinance.gov/f/documents/201707_cfpb_Arbitration-Agreements-Rule.pdf
A CFPB video explaining the arbitration rule is available at: https://youtu.be/boQ2tRW_AwE
NYT: Utilities lobby against rooftop solar
Utilities argue that rules allowing private solar customers to sell excess power back to the grid at the retail price — a practice known as net metering — can be unfair to homeowners who do not want or cannot afford their own solar installations.
Their effort has met with considerable success, dimming the prospects for renewable energy across the United States.
Click here for full article: Continue reading the story
More about Google and the EU: New regulatory thinking needed
Antitrust, the underpinnings of which are based on industrial-age economic theories, needs new thinking in the digital age to ensure that antitrust policies continue to remain effective guardians of consumer welfare without inadvertently impeding economic progress.
But as important as today’s antitrust questions are, regulators shouldn’t lose sight of the bigger picture. The coming battle in antitrust will not be about controlling markets in the traditional sense. It will be about the battle for control over consumers’ information. The tech titans are currently in a race to see which of them can build a better digital replica of their consumers, which means finding a way to not just collect user data but also make it harder for competitors to do so. Tomorrow’s monopolies won’t be able to be measured just by how much they sell us. They’ll be based on how much they know about us and how much better they can predict our behavior than competitors.
From: https://hbr.org/2017/07/the-next-battle-in-antitrust-will-be-about-whether-one-company-knows-everything-about-you
The States' petition asking the U.S. Supreme Court to review the Second Circuit's decision for American Express Co. in an antitrust suit over the company’s merchant rules
The U.S. Department of Justice declined to join the States.
In their petition the 11 state petitioners s contend that the Second Circuit’s ruling that the district court neglected to account for how the rules affected the entirety of the two-sided credit card market conflicts with Supreme Court precedent. The credit card industry’s services to merchants and cardholders are not interchangeable and therefore should not be collapsed into a single market, the states said. "Simply because the same company, by virtue of its business model, provides different services to different customers does not mean that those services are somehow in the same relevant market.”
From the States' petition:
QUESTION PRESENTED
This case asks how Section 1 of the Sherman Act, which bans unreasonable restraints of trade, applies to “two-sided” platforms that unite distinct customer groups. Such platforms are ubiquitous, ranging from eBay (serving buyers and sellers), to newspapers (serving readers and advertisers). Here, credit-card networks bring cardholder customers together with merchant customers for ordinary transactions. When doing so, Respondents American Express Company and American Express Travel Related Services Company (“Amex”) contractually bar merchant customers from steering cardholder customers to credit cards that charge merchants lower prices.
Applying the “rule of reason,” the district court held that: (1) the Government proved that Amex’s anti-steering provisions were anticompetitive because they stifled competition among credit-card companies for the prices charged to merchants, and (2) Amex failed to establish any procompetitive benefits.
The Second Circuit reversed. It held that, to prove that the anti-steering provisions were anticompetitive (and so to transfer the burden of establishing procompetitive benefits to Amex), the Government bore the burden to show not just that the provisions had anticompetitive pricing effects on the merchant side, but also that those anticompetitive effects outweighed any benefits on the cardholder side.
The question presented is: Under the “rule of reason,” did the Government’s showing that Amex’s anti-steering provisions stifled price competition on the merchant side of the creditcard platform suffice to prove anticompetitive effects and thereby shift to Amex the burden of establishing any procompetitive benefits from the provisions?
The States' Petition to US Supreme Court can be found at https://dlbjbjzgnk95t.cloudfront.net/0909000/909780/amex%20cert%20petition.pdf
Over-the-Counter Hearing Aid Act of 2017, would deregulate an industry that currently restricts hearing aid sales to audiology practices
Instead, hearing aids could be sold over the counter, and audiologist services obtained separately. (Audiologists test for characteristics of hearing loss, and are skilled at adjusting hearing aids to work well with variations in hearing loss.)
Text of bill, sponsored by Elizabeth Warren:
https://www.congress.gov/bill/115th-congress/senate-bill/670/text?q=%7B%22search%22%3A%5B%22Over+the+Counter+Hearing+Aid+Act+of+2017%22%5D%7D&r=2
From the NYT: The Medicaid that our representatives in Washington are aiming to cut right now ought to matter plenty to everyone who hopes to grow old and is not certain that their savings could last for decades.
While many people don’t realize it until well into old age, it is Medicaid, not Medicare, that pays for most nursing home and community or home-based care for older adults who run out of money.
A dozen or so years into retirement, Rita Sherman had plenty going for her financially.
Recently widowed, she had a net worth of roughly $600,000 as of 1998. Her health was excellent, and she dutifully purchased a long-term care insurance policy that would cover three years of nursing home costs should she ever need help. Watching over it all was her daughter, a medical social worker, and her son-in-law, a financial planner.
By the time she died at the age of 94 last year, however, all of the money was gone after a diagnosis of dementia and five and a half years in a nursing home [probably at more than $500 a day.] Like so many people who never see it coming, she’d gone from being financially comfortable to qualifying for Medicaid.
NYT article is at https://www.nytimes.com/2017/07/07/your-money/one-womans-slide-from-the-upper-middle-class-to-medicaid.html?ribbon-ad-idx=3&src=trending&module=Ribbon&version=context®ion=Header&action=click&contentCollection=Trending&pgtype=article
S.C. hospital to pay $1.3 million for not properly treating emergency psych patients
By Harris Meyer | July 5, 2017
AnMed Health in South Carolina has agreed to pay the largest-ever settlement in a case brought under the federal law requiring hospitals to stabilize and treat patients in emergency situations.
The not-for-profit, three-hospital AnMed system will pay nearly $1.3 million to settle federal allegations that in 2012 and 2013 it held patients with unstable psychiatric conditions in its emergency department without providing appropriate psychiatric treatment in 36 incidents. AnMed, based in Anderson, S.C., serves upstate South Carolina and northeast Georgia.
"Instead of being examined and treated by on-call psychiatrists, patients were involuntarily committed, treated by ED physicians and kept in AnMed's ED for days or weeks instead of being admitted to AnMed's psychiatric unit for stabilizing treatment," according to the settlement finalized on June 2 with the HHS Office of Inspector General.
The patients — most of whom were suicidal and/or homicidal and suffered from serious mental illness — were held in the ED from six to 38 days. In each of these incidents, AnMed had on-call psychiatrists and beds available in its psychiatric unit to evaluate and stabilize the patients. But it but did not provide examination or treatment by a psychiatrist, according to the settlement agreement.
The HHS OIG's office said that violated the section of the Emergency Medical Treatment and Labor Act requiring Medicare-participating hospitals with an ED to provide appropriate medical screening and treatment to stabilize the patient's condition.
Full article: http://www.modernhealthcare.com/article/20170705/NEWS/170709977?utm_source=modernhealthcare&utm_medium=email&utm_content=20170705-NEWS-170709977&utm_campaign=am
How Uber’s Tax Calculation May Have Cost Drivers Hundreds of Millions
By NOAM SCHEIBER (NYTimes)
Drivers’ trip receipts contain signs that the ride-hailing service deducted hundreds of millions of dollars from drivers’ earnings in New York to pay state taxes
Click title for article
Brookings Program: Manufacturing under the Trump administrationThursday, July 13, 2017, 9:00 a.m. to 12:00 p.m. EDT
n the wake of the 2016 presidential election, much attention has been paid to the fate of America’s once-prosperous manufacturing communities, where residents are now facing the effects of rapidly evolving technology, increased automation, and a growing Chinese manufacturing sector.
On July 13, Brookings will host a half-day conference to discuss the future of manufacturing policy under the Trump administration, whether the president's campaign promises can be fulfilled, the effect of changes in international markets, and what it all means for American workers and the economy.
Register to attend | Register to watch the live webcast
Worldpay Group, a British payments processing company, has received preliminary takeover approaches from Vantiv, an American rival, and JPMorgan Chase.
Worldpay accounts for about 42 percent of all transactions in Britain and provides processing services in 146 countries. But it faces growing competition from services like PayPal, Square and Stripe.
Payments currently run through links between banks, card networks and payments acquirers like Worldpay. But new payments services will be able to bypass this network and to charge less for each transaction.
JPMorgan has been trying to build its payments infrastructure so that it can be involved from start to finish, fighting over smartphone payments and online purchases with peer-to-peer services like PayPal’s Venmo. Buying Worldpay would help its defenses as the payments field becomes more competitive.
http://www.nytimes.com/newsletters/2017/07/05/dealbook?nlid=67075843
Novel forms of corporate control can raise novel antitrust issues
Here are three relevant articles, from CPI [click titles to access]
Active and Passive Institutional Investors and New Antitrust Challenges: Is EU Competition Law Ready?
By Marco Claudio Corradi & Anna Tzanaki
This essay aims to disentangle the complex issues surrounding common ownership by institutional investors, and suggest a holistic approach that brings together the corporate with the competition law aspects of the problem.
The New Mandate Owners: Passive Asset Managers and The Decoupling of Corporate Ownership
By Carmel Shenkar, Eelke M. Heemskerk & Jan Fichtner
A major shift toward passively managed index funds in recent years has led to the re-concentration of corporate ownership in the hands of just three large asset management firms, the Big Three: BlackRock, Vanguard and State Street.
Why Common Ownership Causes Antitrust Risks
By José Azar, Martin Schmalz & Isabel Tecu
This article illustrates the extent of present-day common ownership and discusses the economic logic of why common ownership leads to reduced incentives to compete and may cause anticompetitive outcomes.
Social media companies operating in Germany face big fines if they do not delete illegal, racist or slanderous comments and posts within 24 hours under a new law
The law reinforces Germany’s position as one of the most aggressive countries in the Western world at forcing companies like Facebook, Google and Twitter to crack down on hate speech and other extremist messaging on their digital platforms.
But the new rules have also raised questions about freedom of expression. Digital and human rights groups, as well as the companies themselves, opposed the law on the grounds that it placed limits on individuals’ right to free expression. Critics also said the legislation shifted the burden of responsibility to the providers from the courts, leading to last-minute changes in its wording.
See: https://www.nytimes.com/2017/06/30/business/germany-facebook-google-twitter.html?ref=business
Uber Technologies Inc. used software to evade hostile law enforcement and public officials
he practice was used in cities where the company faced opposition from regulators, The New York Times reported. Legal ethics professionals raised concerns.
While the program may not be illegal, ethics professionals said, it does appear to skirt ethical standards. And if in-house counsel approved the program knowing that Uber would use it to break the law, then disbarment could be in store for the lawyers who signed off on it, they said. The New York Times report said Uber’s legal department, led by general counsel Salle Yoo, approved use of the program.
Manhattan District Attorney Cyrus R. Vance, Jr., announces new justice reform initiatives that will end the criminal prosecution of approximately 20,000 low-level offenses annually
Beginning in September 2017, the Manhattan District Attorney’s Office will no longer prosecute the overwhelming majority of individuals charged with Theft of Services for subway-related offenses, unless there is a demonstrated public safety reason to do so.
Building on the success of the Manhattan Summons Initiative launched by District Attorney Vance and the NYPD in March 2016 – which was subsequently replicated citywide – the policies being announced today will:
- Prevent New Yorkers accused of committing these offenses from accumulating a criminal record or ever setting foot in a courtroom
- Reduce the immigration, housing, employment and other collateral consequences associated with criminal prosecution
- Enable the Manhattan District Attorney’s Office to focus its resources on investigating more serious crimes, such as domestic violence, drunk driving, stalking, and assault cases
- Reduce the backlog of cases in Manhattan Criminal Court
- Strengthen bonds between law enforcement and the community members we serve, and
- Reduce the jail population of Rikers Island, in order to achieve the goal of its ultimate closure.
“Since 2010, my Office has worked with the NYPD and the Mayor’s Office of Criminal Justice to end the criminal prosecution of tens of thousands of low-level cases that needlessly bog down our Criminal Court and swell our City’s jail population. In Manhattan, we are embracing the role that District Attorneys must play to achieve the closure of Rikers Island, and proving that New York can safely reduce crime and incarceration at the same time.”
See http://manhattanda.org/press-release/district-attorney-vance-end-criminal-prosecution-approximately-20000-low-level-non-vio
From USDOJ: FOR IMMEDIATE RELEASE
Wednesday, June 28, 2017
Former Packaged Seafood Executive Pleads Guilty to Price Fixing
A former senior vice president of sales for a packaged seafood company pleaded guilty for his role in a conspiracy to fix the price of packaged seafood, such as canned tuna, sold in the United States, the Department of Justice announced today.
According to documents filed in this case, Stephen Hodge and his co-conspirators agreed to fix the prices of packaged seafood from as early as 2011 through 2013. He pleaded guilty to a one-count criminal information filed on May 30, 2017, in U.S. District Court for the Northern District of California in San Francisco. Hodge has agreed to pay a criminal fine and cooperate with the Antitrust Division’s ongoing investigation. He will be sentenced by the court at a later date.
Excerpt from https://www.justice.gov/opa/pr/former-packaged-seafood-executive-pleads-guilty-price-fixing
From Friends of the Capital Crescent Trail:
On Thursday Judge Richard Leon heard oral arguments on the State's motion requesting that he "stay" (suspend) his ruling so that MTA could move forward with the project as they appealed his ruling to the Circuit Court.
A stay would have allowed them to clear cut the Trail before they appealed to the Circuit Court for approval of the federal funding. But the Judge wasn't having any of it.
His reaction was that of a parent scolding an obstinate teenager - in this case, scolding the Maryland government for its appalling mismanagement of public funds in signing an irresponsible Purple Line P3 contract.
The headlines in the Washington Post and Bethesda Magazine understate the Judge's tongue lashing he gave Maryland's hired gun from the law firm Perkins Coie.
The criteria are very high for a stay.
In response to State's claim of being financially harmed, the Judge commented:
"So why should the Court in this situation here bail you out of the gamble that you took?...No one forced the State of Maryland to enter into the [P3 Purple Line] contract..."
Our attorney, Eric Glitzenstein, reinforced the ridiculousness of their financial harm claim: "Even after...the August 2016 ruling, the [Secretary of Transportation] Rahn declaration says, point blank, we continue to spend state money on this project with the expectation and assumption that we would get reimbursed by the federal government. That is self-inflicted injury..."
At the end of the hearing the Judge summed it up: "It is pretty obvious...what they're doing, they want a ruling out of this Court as fast as possible so they can get the Court of Appeals to grant the stay. That's what is going on here."
Whole Foods v. Wall Street: an interesting article provides background on the Amazon acquisition of Whole Foods
Excerpt:
Mackey [the Whole Foods founder], to a large degree, is a victim of his own success. He has, from the beginning, been willing to compromise his ideals to grow his company, but he has his limits. And now they’re being tested. Turning Whole Foods into more of a mainstream grocer would be a form of defeat in his eyes, and that’s what he sees as the outcome if the company were to be sold. But paradoxically, staying independent and not growing the company aggressively enough could lead to his ouster—another form of defeat. His options are narrow and not obvious.
Full article: http://features.texasmonthly.com/editorial/shelf-life-john-mackey/
Excerpt from Recorder article:
Glassdoor Inc., the operator of the anonymous online job review site, has asked the U.S. Court of Appeals for the Ninth Circuit to block an attempt by federal prosecutors to unmask reviewers as part of a grand jury investigation.
In a case unsealed on Tuesday, Glassdoor was ordered by U.S. District Judge Diane Humetewa for the District of Arizona to divulge the identities of eight people who posted anonymous reviewers about a federal contractor under investigation for fraud.
Glassdoor has refused to comply with the order, arguing on the reviewers' behalf that they have a First Amendment right to speak anonymously and to associate freely on the online platform. The company filed its sealed notice of appeal from a contempt order on June 7.
In a blog post on Friday, Glassdoor general counsel Brad Serwin wrote the district court "applied the wrong standard in placing the interests of government ahead of Americans' protected free speech rights under the First Amendment." He added: "We hope to persuade the U.S. Ninth Circuit Court of Appeals to require a higher standard for these requests."
Glassdoor is being represented in the litigation by Todd Hinnen, a Perkins Coie litigator in Seattle who previously served as acting assistant attorney general for national security at the U.S. Department of Justice. Hinnen has also represented companies such as Google Inc. in fighting warrants for user data in areas where the law is murky.
Full article: http://www.therecorder.com/id=1202790288127/Glassdoor-Resists-Feds-Bid-to-Unmask-Reviewers?kw=Glassdoor%20Resists%20Feds%27%20Bid%20to%20Unmask%20Reviewers&et=editorial&bu=The%20Recorder&cn=20170616&src=EMC-Email&pt=Afternoon%20Update
Solar panel provider Solar City's challenge to utility rate setting stays alive, despite state-action defense
From the 9th Circuit opinion:
FRIEDLAND, Circuit Judge: Solar-panel supplier SolarCity Corporation filed a federal antitrust lawsuit against the Salt River Project Agricultural Improvement and Power District (the Power District), alleging that the Power District had attempted to entrench its monopoly by setting prices that disfavored solarpower providers. The Power District moved to dismiss the complaint based on the state-action immunity doctrine. That doctrine insulates states, and in some instances their subdivisions, from federal antitrust liability when they regulate prices in a local industry or otherwise limit competition, as long as they are acting as states in doing so. See, e.g., N.C. State Bd. of Dental Exam’rs v. FTC, 135 S. Ct. 1101, 1109 (2015); FTC v. Phoebe Putney Health Sys., Inc., 133 S. Ct. 1003, 1007 (2013); Parker v. Brown, 317 U.S. 341, 352 (1943). 4 SOLARCITY V. SALT RIVER PROJECT The district court denied the motion, and the Power District appealed. We must decide whether we can consider the appeal immediately under the collateral-order doctrine, or whether any appeal based on state-action immunity must await final judgment.1 We join the Fourth and Sixth Circuits in holding that the collateral-order doctrine does not allow an immediate appeal of an order denying a dismissal motion based on state-action immunity.
See opinion: http://cdn.ca9.uscourts.gov/datastore/opinions/2017/06/12/15-17302.pdf
Can a class action be certified without an allegation that all class members have been injured?
By Danyll Foix
Excerpt:
Ten years into litigation, a hospital has moved to decertify a class of plaintiffs who claim the hospital’s merger caused them to overpay for medical services. Arguing there is insufficient proof that class members were harmed, the hospital’s motion invites the court to jump into the fray about whether classes may be certified when they include members who were not actually injured.
Defendant NorthShore University HealthSystem and Highland Park Hospital, both located near Chicago, merged in 2000. After the Federal Trade Commission pursued a post-merger challenge in 2004 for alleged violations of Section 7 of the Clayton Act, a putative class of hospital patients filed suit in 2008 claiming the merger caused them to pay inflated prices for inpatient and outpatient hospital services. The District Court initially denied a motion to certify a class of patients who had paid for NorthShore’s services, but the Seventh Circuit vacated that denial in 2012 – see Messner v. NorthShore Univ. HealthSystem, 669 F.3d 802 (7th Cir. 2012) – and on remand the District Court then certified the class in 2013.
In its current challenge to certification, NorthShore primarily argues that the class should be decertified because the plaintiffs’ expert analysis relies on average prices and they cannot show that Rule 23’s “predominance” factor is satisfied. Like most class actions, this case was brought pursuant to Rule 23(b)(3), which requires that courts find “questions of law or fact common to class members predominate over any questions affecting only individual members.” This predominance inquiry is designed to ensure that class members’ claims are sufficiently similar in order to justify class treatment. When a proposed class includes persons who have not been injured by the challenged conduct, as NorthShore argues here, individual issues may preclude establishing that common issues predominate as required by Rule 23(b)(3).
In arguing there is insufficient proof that all class members were harmed, NorthShore invites the District Court to weigh in on a developing rift over whether classes may be certified when they include members who have not been injured. Some circuit courts have explained that classes cannot be certified when they include uninjured members. See, e.g., In re Rail Freight Fuel Surcharge Antitrust Litig., 725 F.3d 244, 252 (D.C. Cir. 2013) (“plaintiffs must also show that they can prove, through common evidence, that all class members were in fact injured by the alleged conspiracy”); Denney v. Deutsche Bank AG, 443 F.3d 253, 263-64 (2d Cir. 2006) (“no class may be certified that contains members lacking Article III standing”); and New Motor Vehicles Canadian Export Litig., 522 F.3d 6, 28 (1st Cir. 2008) (holding certification required proof that “each member of the class was in fact injured”).
In contrast, other circuit courts have held that a class may be certified even though some members are not injured. See, e.g., Torres v. Mercer Canyons Inc., 835 F. 3d 1125, 1136 (9th Cir. 2016) (“a well-defined class may inevitably contain some individuals who have suffered no harm as a result of a defendant’s unlawful conduct”); In re Nexium Antitrust Litig., 777 F.3d 9, 14 (1st Cir. 2015) (“We conclude that class certification is permissible even if the class includes a de minimis number of uninjured parties”); and Suchanek v. Sturm Foods, Inc., 764 F.3d 750, 757 (7th Cir. 2014) (“If the court thought that no class can be certified until proof exists that every member has been harmed, it was wrong”).
Full article: https://www.antitrustadvocate.com/2017/06/13/hospital-seeks-second-opinion-on-certifying-class-with-uninjured-members/?utm_source=BakerHostetler+-+Antitrust+Advocate&utm_campaign=6420db9d35-RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_a95f379648-6420db9d35-70980973
Maryland and DC AGs to put imprimatur on non-government Constitutional emoluments clause litigation against Trump
The Maryland and DC AGs have filed litigation against Donald Trump based on the Constitution's emoluments clause. A copy of the complaint is here:
https://www.nytimes.com/interactive/2017/06/12/us/politics/document-dc-maryland-trump-complaint.html
The litigation follows in the footsteps of non-government emoluments clause litigation. A copy of the earlier Complaint filed by the Citizens for Responsibility and Ethics in Government group and others is here: https://s3.amazonaws.com/storage.citizensforethics.org/wp-content/uploads/2017/04/18115942/File-Stamped-First-Amended-Complaint.pdf
The Amended Citizens Complaint says as part of its opening segment that:
Defendant has committed and will commit violations of both the Foreign Emoluments Clause and the Domestic Emoluments Clause, involving at least:
(a) leases held by foreign-governmentowned entities in New York’s Trump Tower;
(b) room reservations, restaurant purchases, the use of facilities, and the purchase of other services and goods by foreign governments and diplomats, state governments, and federal agencies, at Defendant’s Washington, D.C. hotel and restaurant;
(c) hotel stays, property leases, restaurant purchases, and other business transactions tied to foreign governments, state governments, and federal agencies at other domestic and international establishments owned, operated, or licensed by Defendant;
(d) property interests or other business dealings tied to foreign governments in numerous other countries;
(e) payments from foreign-government-owned broadcasters related to rebroadcasts and foreign versions of the television program “The Apprentice” and its spinoffs; and
(f) continuation of the General Services Administration lease for Defendant’s Washington, D.C. hotel despite Defendant’s breach, and potential provision of federal tax credits in connection with the same property.
The litigations offer interesting examplea of litigation strategies available to government and non-government organizations.
Similar litigation by Democratic federal legislators has been announced.
An issue that has been raised about all of the Emolument Clause litigations concerns standing to sue. Commenters suggest that the Maryland and DC AGs are in a relatively better position on standing issues as co-equal sovereigns.
A relevant article on the broader issue of standing to sue on public policy issues discusses standing to sue on environmental issues. See https://www.americanbar.org/content/dam/aba/images/public_education/06_apr08_standingsueenvironment_martin.pdf
Posted by Don Allen Resnikoff
Without DOJ Backing, States Pursue AmEx Antitrust Appeal
Article excerpts:
Eleven states are doing what the Justice Department declined to do — asking the U.S. Supreme Court to review an appeals court win for American Express Co. that allows it to continue telling merchants not to steer customers to cheaper credit cards.
But the DOJ’s decision not to appeal its antitrust loss, its first in more than a decade, could narrow the chances of the high court taking up the case because the federal government is no longer involved, antitrust practitioners told Bloomberg BNA.
* * *
On June 2, the DOJ declined to ask the Supreme Court to review its suit challenging AmEx’s rules preventing merchants from asking customers to use lower priced credit cards. But 11 states that initially joined the DOJ’s suit pressed on and filed their own petition for a writ of certiorari.
* * *
The case was brought in 2010 by antitrust officials in the Obama administration, and it involves legal questions that haven’t been widely explored by the courts. Siding with the government, a district court in 2015 found that American Express’s rules constituted an unreasonable restraint on trade and resulted in higher prices for consumers.
But in September, the Second Circuit said the district court got it wrong by only considering the interests of merchants, which are just one side of a two-sided market that also includes card holders. The DOJ had argued that it was sufficient to examine the market generally. The lower court judge in the case, Nicholas Garaufis, has had only 11.1 percent of his decisions reversed, according to a Bloomberg Law’s Litigation Analytics.
* * *
“My hat is off to the states for carrying on even after the DOJ walked away,” [Professor Stephen] Calkins said. “It will be fascinating to see whether the court invites the views of the [Justice Department’s] solicitor general, and, if so, how the solicitor general will phrase opposition to certiorari. But it seems very unlikely that certiorari will be granted.”
The states’ decision to pursue the case is reminiscent of a divergence of antitrust thought in the Reagan era, when states had to take the lead in antitrust enforcement because of “the weakness of federal enforcement,” Peter Carstensen, a professor at University of Wisconsin Law School, told Bloomberg BNA.
“Getting the court to take a case is always a challenge,” Carstensen said. “Without the U.S. as a party, this will increase the difficulty of getting the court to review the decision.”
Some of the nation’s largest merchants, such as United Airlines Inc., Marriott International Inc., and Target Corp, supported the government’s case. They said in court filings that AmEx’s rules prevent price competition for credit card network services.
“We are delighted that the states appealed and will wholeheartedly support them in this undertaking,” Retail Litigation Center President Deborah White said in a statement provided to Bloomberg BNA. The legal advocacy group for the retail industry filed a brief with the Second Circuit in support of the DOJ’s case.
States’ Arguments
The states argued in their appeal that the Supreme Court should review the AmEx case because of an increasing need for guidance on the “rule of reason” antitrust legal standard and because the Second Circuit’s decision conflicts with past cases.
The Second Circuit panel analyzed the case under the “rule of reason” doctrine, which often requires extensive analysis of a certain conduct’s impacts on a relevant market, as opposed to the “quick look” or “per se” theory of liability to anticompetitive conduct.
None of the Supreme Court’s recent cases explain how the rule of reason should operate in practice once it is determined the case isn’t a “per se” violation. The court has “offered only generalities,” the brief said.
Before the AmEx decision, the Second Circuit had ruled that the credit card industry contains more than one market for antitrust purposes, the states said. That view guided a discovery period that lasted several years and a lengthy trial.
“Only after this costly litigation did the government learn from the Second Circuit that it had allegedly focused on the wrong market,” the appeal says. “Years of litigation that were financed through taxpayer dollars were wasted by the rule of reason’s uncertainties.”
The Second Circuit’s insistence that enforcers must view each side of a two-sided market separately is a departure from the test the appeals court has “long used” to identify antitrust markets, the states said.
“Rather than apply the established market-definition test, the Second Circuit adopted a new one,” the appeal stated.
https://bol.bna.com/without-doj-backing-states-pursue-amex-antitrust-appeal/
Antitrust Watchdogs Eye Big Tech's Monopoly On Your Data
Article excerpt:
“When more and more services are ‘free,’ you can see how that really renders antitrust feeble,” says Khan. After the rapid expansion in social networking and online search, it’s clear that financial power lies in data, not just price. “The Europeans hit on this,” says [Maurice] Stucke. “Data is the new lingua franca. That is the currency, and [tech platforms] can translate that data into dollars.”
This is evident in the European Union's intensified scrutiny of how Silicon Valley tech platforms operate. Germany’s antitrust agency is investigating Facebook. The EU conducted an antitrust probe into Amazon’s e-books business deals (the company agreed to change its contract with publishers in May). Days before the Oxford conference, the EU fined Facebook $122 million for making misleading privacy statements to the EU when it acquired WhatsApp for $19 billion in 2014 about the ability to match Facebook and WhatsApp accounts. (The merger of the popular texting apps raised concerns that Facebook’s online advertising business could gain an unfair advantage.) Days before that, watchdogs in the Netherlands and France slapped Facebook on the wrist for privacy violations.
- https://www.wired.com/2017/06/ntitrust-watchdogs-eye-big-techs-monopoly-data/?mbid=synd_digg" via Digg
Dueling filings in NY State AG battle with EXXON over climate change accounting
ExxonMobil defended itself in court documents Friday following claims by New York Attorney General Eric Schneiderman that the company used two sets of books in evaluating climate risk, one set of numbers for describing the risks to investors and the other for business decisions. Schneiderman had described the practice as a "sham" perpetrated by the oil giant while Rex Tillerson was its chief executive.
Exxon's lawyers wrote that the company had "truthfully and consistently" told the public that it "addresses potential impacts of future climate-related policies." They also accused Schneiderman of playing to the media and of disclosing confidential and proprietary records that were attached as exhibits to his brief filed last week in New York Supreme Court.
See https://www.documentcloud.org/documents/3861753-Exxon-Responds-to-Double-Numbers-6-9-17.html
The AG's filing is here: https://www.documentcloud.org/documents/3860667-Document-168-NYAG-Opposition-to-Exxon-Motion-to.html
Credit: InsideClimateNews. See https://insideclimatenews.org/news/09062017/exxon-climate-accounting-court-document
Is California's Bar pass score too high?
In February the deans of 20 California law schools sent a letter to the state Supreme Court asking study of whether the bar exam’s minimum passing score is unjustifiably high. See Dean's letter on Bar pass rate.
Discussion of the request continues.
The Deans' request came after the pass rate for the summer 2016 test plummeted to 43 percent, the lowest figure for a July sitting in 32 years. First-time test-takers among American Bar Association-accredited schools in California did better—62 percent passed—but still lagged significantly behind their counterparts in other states, including New York, Texas and Ohio.
The deans blame California’s “atypically high” passing score, or cut score, of 144 for the multistate bar exam portion of the test. Only Delaware requires a higher score on its exam. And yet those who took the California exam scored almost three points higher on the multistate bar exam than the national average.
“California graduates of ABA-accredited schools are performing better than average, and yet many of them—graduates of our law schools who would have passed the bar with similar performance in virtually any other state—are failing it in our great state, simply because of where California has decided to draw the line between passing and failing,” the deans wrote in their letter.
David Samson sentenced to just one year home confinement after his plea to bribery charges for shaking down United Airlines to get a more direct flight out of N.J. to his vacation home in South Carolina.
BY TED SHERMAN
tsherman@njadvancemedia.com,
NJ Advance Media for NJ.com
NEWARK -- Facing two years in prison for the shakedown of United Airlines in a bizarre scheme to get a more convenient direct flight to his South Carolina getaway home, former Port Authority chairman David Samson found a soft landing when he was sentenced a few months ago.
U.S. District Judge Jose Linares stunned federal prosecutors by sentencing Samson to a year of home confinement, four years of probation and 3,600 hours of community service in his admitted strong-arming of the airline.
The 77-year-old former New Jersey attorney general will also be required to pay a $100,000 fine and wear a location-monitoring device.
"I did something wrong. I violated the law. I deeply regret it. I am trying to live my life to the highest moral standards," Samson said in court, apologizing to his family his friends and the public. "I violated the law. I deeply regret it."
Full article: http://www.nj.com/news/index.ssf/2017/03/david_samson_sentenced_to_probation_in_united_airl.html
Report from abetterbalance.org: “Pointing Out: How Walmart Unlawfully Punishes Workers for Medical Absences”
- June 1, 2017
- Absence control, Featured, State Laws
Executive Summary:
Walmart is proud of its heritage as a family-founded company. Ironically, while the Walton family touts its family values, Walmart’s absence control program punishes workers who need to be there for their own families. Walmart disciplines workers for occasional absences due to caring for sick or disabled family members and for needing to take time off for their own illnesses or disabilities. Although this system is supposed to be “neutral,” and punish all absences equally, along the lines of a “three strikes and you’re out” policy, in reality such a system is brutally unfair. It punishes workers for things they cannot control and disproportionately harms the most vulnerable workers.
Punishing workers for absences related to illness or disability is not only unfair, it’s often against the law. Based on our conversations with Walmart employees as well as survey results of over 1,000 current and former Walmart workers who have struggled due to Walmart’s absence control program, Walmart may regularly be violating the federal Family and Medical Leave Act (FMLA) by failing to give adequate notice to its employees about when absences might be protected by the FMLA and by giving its employees disciplinary points for taking time to care for themselves, their children, their spouses or their parents even though that time is covered by the FMLA.
Similarly, we allege that Walmart’s policies and practices of refusing to consider doctors’ notes and giving disciplinary points for disability-related absences is a violation of the Americans with Disabilities Act (ADA). The ADA protects workers with disabilities from being disciplined or fired because of their disabilities. It also requires employers to engage in a good faith interactive process to determine an appropriate accommodation for workers with disabilities. Unfortunately, as detailed in this report, this is too often not Walmart’s practice. Other federal, state and local laws such as pregnancy accommodation protections, and sick time laws, could also be at play. Walmart’s policies and practices are not in compliance with many of these laws.
Simply put: Giving a worker a disciplinary “point” for being absent due to a disability or for taking care of themselves or a loved one with a serious medical condition is not only unfair, in many instances, it runs afoul of federal, state and local law.
We call on Walmart not only to follow the law, but to work with its employees who have occasional absences related to health and disability. Walmart can do better, and Walmart must do better. Workers and the advocates standing with them will not stop pushing until Walmart treats its workers fairly.
Read our press release here.
Trump wants to partner with States on infrastructure financing; will open infrastructure initiative with air traffic control plans
Donald Trump next week will send Congress a proposal to hand over control of the U.S. air-traffic control system to a non-profit corporation, part of a week-long push for his infrastructure plan, said Gary Cohn, the president’s chief economic adviser.
The proposal, which Trump will release on Monday in an Oval Office ceremony and Rose Garden event, will kick off what Cohn, director of the National Economic Council, called the formal launch of the president’s infrastructure initiative. Later in the week, Trump plans to travel to Ohio to garner support for his plan -- a key campaign promise -- to channel $1 trillion into the nation’s roads, bridges, inland waterways and other public facilities.
“We know that in many of these areas we’re falling behind, and the falling behind is affecting economic growth in the United States,’’ Cohn said on a call with reporters. “The president wants to fix the problems, and he doesn’t want to push these liabilities into the future.’’
ump’s actions come after an initial outline of his infrastructure plan and his proposed budget sparked criticism from state and city leaders of both parties, who said they’d be left with too much of the financial burden.
For the $1 trillion plan, Trump has proposed $200 billion in federal spending on “targeted federal investments’’ in rural areas and for projects with regional or national priority, as well as for “self-help” incentives to spur states, localities and private entities to generate more of their own revenues for projects.
Congressional Democrats, who Trump is counting on to help get his plan through Congress, have also blasted the plan – as well as proposed 2018 budget cuts to transportation programs – and have said that significantly more direct federal funding is needed.
https://www.bloomberg.com/politics/articles/2017-06-03/trump-to-kick-off-infrastructure-drive-with-air-traffic-proposal
Hersh Shefrin on financial instability and China
The late economist Hyman Minsky laid out the general warning signs in a framework he called the financial instability hypothesis (FIH). However, most ignored Minsky’s messages until it was too late. It was only after the global financial crisis erupted that the phrase “Minsky moment” became fashionable.
Coverage of Moody’s downgrade by The Wall Street Journal and The New York Times has nicely conveyed the key facts of what led Moody’s to downgrade China’s debt. But the coverage could do more by linking those facts to the FIH, in order to help readers connect the dots of how the worrisome pieces of the China puzzle fit together.
The key features of the FIH can be boiled down to six types of crisis warning signs, two signs that a crisis is erupting, and four types of policies for mitigating the magnitude of a crisis. The specific warning signs are not arbitrary, but instead characterize the evolution of systemic risk as the financial system moves towards the red zone during the latter phase of an economic expansion. In this regard, China's economy expanded at an official rate of 10.6 percent in 2010, but its more recent growth rate has been lower, 6.7 percent in 2016. Moody’s forecasts that over the next five years, the rate will continue to decline, falling to 5 percent.
What follows is a short FIH-based rundown on China, organized around the six warning signs. This rundown takes the key points in the media coverage of Moody’s China downgrade, and matches these points to Minsky’s perspective. In making the match, I hope to encourage journalists to organize their ideas so as to present the discussion in the context of the bigger picture, and thereby present their readers with a coherent view of what the facts mean for overall financial stability.
- Excessive leverage: As a percentage of GDP, China’s debt at 164 percent is high for a developing country. In the first half of the century, before the financial crisis struck in 2008, China’s debt was stable. Since then, it has grown by 15 percent of GDP, per year. The lion’s share of that debt relates to businesses, and to a lesser extent local governments, rather than to households and the central government.
- Surge in shadow banking: In the past, four large state-controlled banks dominated China’s banking sector. However, in recent years a shadow banking system has evolved, involving local and provincial banks that today account for roughly half of the assets in the country’s banking sector. While the state is the lender of last resort for the four large banks, the latter serve as the lender of last resort to the shadow banks. Therefore, imprudent risk taking by shadow banks holds the potential to shock China’s entire financial system.
- Increased speculative and Ponzi finance: According to the FIH, a major source of financial instability is when borrowers count on price appreciation, in addition to cash flows, to make principal and interest payments. This feature is compounded by mismatching the maturities of assets (long-term) and liabilities (short-term), with borrowers needing to continue borrowing short term in order to avoid defaulting on their obligations. In recent years, banks in China have continued to make loans to state-owned firms that are experiencing financial distress, in order that these firms do not default. Minsky warned that such practices render the country’s financial system to become increasingly fragile.
- Emergence of asset pricing bubbles: Although pricing bubbles were not highlighted in the media coverage of Moody's downgrade, in recent years China has experienced both a stock market bubble and a real estate bubbles. What does get highlighted is the use of financial innovation. In particular, shadow banks are partly funded by state-owned banks, and partly funded by selling wealth management products to customers. These products are often non-transparent in terms of risk, and indeed are used to finance highly speculative construction projects.
- New era thinking: China’s reaction to the Moody’s downgrade has been to suggest that Moody's does not fully understand China’s system, which is different from corresponding systems in the West. To be sure, there are differences. Chinese central government debt is relatively low, as is residential mortgage debt. Chinese borrowing from the rest of the world is also low. On the surface, China scores favorably on three of the four FIH crisis mitigating factors: a large public sector able to increase spending to offset declines in aggregate demand, the power to create jobs when the labor market weakens, and the ability to rescue enterprises that are too big to fail. Notably, The Wall Street Journal reports that China has recently initiated efforts to reduce risky investment and financing practices by raising key short-term interest rates.
- Regulatory failure: China scores less well on the FIH’s fourth crisis mitigating factor. Over time, its regulatory system has deteriorated significantly, especially as regards the country’s shadow banks, where the increase in speculative and Ponzi finance have been concentrated. Perhaps there is hope, as The Wall Street Journal reports that regulators have increased their oversight of investment products that feature highly leveraged bets in financial markets.
From: https://www.forbes.com/sites/hershshefrin/2017/05/28/the-lesson-from-moodys-overdue-downgrade-of-chinas-debt/#3febbcba65ef
Pricing algorithms and antitrust
Excerpt from article by Sophie Lawrance (Bristows LLP) in Kluwer Competition Law Blog.
However, to the extent that actions by companies using pricing algorithms fall outside the current competition law framework (i.e. if a company implementing discriminatory pricing isn’t dominant, or companies using pricing algorithms have not entered into any agreements or concerted practices to do so), arguably the competition authorities should not try and stretch the existing law to cover these kinds of situations.
Instead, this could be more of a challenge for legislatures. It’s a question of policy: does the competition law framework need re-working to cover these sorts of issues?
To some extent this is already happening. Germany has already introduced significant changes to its antitrust laws to make it easier for the Bundeskartellamt to define markets and assess market power in the digital sector (see here and here), particularly where services are offered for ‘free’ and where multi-sided markets are involved. Commissioner Vestager has recently proposed a new directive designed to make national competition authorities more effective enforcers, ensuring for example that all national competition authorities have the power to search mobile phones, laptops, and tablets for evidence.
Differential (if not personal) pricing is also under the spotlight in relation to geo-blocking – where companies and online retailers apply barriers or impose restrictions on consumers on the basis of their nationality or place of residence. At present, such conduct can be examined under the competition rules only if it results from an agreement between separate undertakings or if the company holds a dominant position. The Commission has proposed a regulation designed end the enforcement gap in this area.
However, there is little concrete evidence of any action against the main issue identified in this article – namely, the potential anti-competitive effects arising from the independent use of pricing algorithms. Any change to the competition law framework designed to cover this would involve a significant (quite possibly unpalatable to many) change to the way competition law currently works around the world.
Perhaps competition law isn’t, or shouldn’t be, the solution. In their book Virtual Competition, Professors Ezrachi and Stucke offer some other suggestions. For example, the government could promote market entry by companies with different economic incentives, for example consumer-owned co-operatives that redistribute profits via rebates. It could provide subsidies to companies using algorithms that actually promote customers’ interests, or sponsor ‘maverick’ firms that offer disruptive technologies or that are more likely to take the lead in cutting prices.
Perhaps no changes will be needed at all. As Professor Salil Mehra points out (here, p.52-53) the effective use of algorithms and big data have the potential to make businesses vastly more efficient and reduce their costs. This could ultimately result in lower prices for consumers, even if tacit collusion is occurring.
Either way, the pace of technological development is always likely to outstrip the pace of legislative change. It will be very interesting to see how these issues play out in the future.
This post originally appeared in the Kluwer Competition Law Blog.
Maryland Screwed Its Craft Brewing Industry in Favor of Guinness
By Jim Vorel | April 14, 2017
Excerpt:
It’s only natural that the state’s legislators would probably want to cater to the likes of Diageo, makers of Guinness Stout, as a potential new employer and tourist attraction.
The only problem? In order to do so, they just decided to unilaterally hamstring every small production brewery trying to get its doors open in Maryland. In the blind pursuit of corporate business, Maryland is screwing its local beer industry, forcing new breweries to live by an entirely different set of laws than established ones. It’s a shockingly, patently unfair new hurdle for small businesses to clear, and one that came about by rather dubious means when it was railroaded through the Maryland legislature last week [first week of April].
Although the amount of beer a production brewery can sell from its taproom was increased to 2,000 barrels per year, if they want to sell any more, they’ll have to buy that beer back from their own distributor first. That means those kegs or bottles will physically have to leave the brewery, travel to the distributorship, “come to rest” and then be brought back and sold to the brewery that made it. Is it stupid? Of course it is.
Then there’s the matter of hours of operation. Under the amended bill, existing breweries will be grandfathered in and given the same rights as the planned Guinness brewery, with hours determined by their local licensing districts. Some of those are as late as midnight, and others can legally remain open as late as 2 a.m. New breweries in Maryland, on the other hand, will be required to close their taprooms as early as 9 p.m., Sunday through Thursday and 10 p.m. at latest, Friday and Saturdays. In effect, it strips the taprooms of all future production breweries from being able to operate as all-night hangouts for their customers, encouraging people to take their business elsewhere. It creates an unequal playing field, and the injustice should be obvious to anyone watching.
Matt Humbard is one of those brewery owners who stands to be directly affected by the new legislation. The owner of Handsome Beer Co. in the Washington DC metro area, Humbard’s beer is contract brewed off-site and served in his taproom. Following his dream to open up a brewery of his own, he had been planning a physical brewing operation to be based in Maryland. But after the passage of House Bill 1283, even after the amendments, he’s no longer sure this idea makes any sense.
Humbard’s company, Handsome Beer Co.
“Maryland is just completely on the wrong side of this,” says Humbard. “It’s counter to the culture of the whole craft beer industry, which is very collaborative in nature, to allow this kind of grandfathering to happen. Although I’m sure specific companies are happy they get to keep their hours, it’s completely unfair that new breweries will be on a different playing field than existing ones. How can you justify limiting one business differently than another business?”
What Maryland has done is a classic example of putting interest in big business over the very homegrown companies that the state legislators are supposed to be representing. Surely, the likes of AB InBev and MillerCoors are watching this situation and looking into ways they can take advantage of similar scenarios.
Full article: https://www.pastemagazine.com/articles/2017/04/maryland-just-screwed-its-craft-brewing-industry-i.html
Warren Grimes: Why Small Firms Thrive in the Beer & Wine Industries
and how government enforcers can help them
A relatively open distribution system can be critical for new entry and entrepreneurial choice. The beer and wine industries provide a compelling example. Both of these industries involve a creative component (and winemakers, like farmers, are often growers). Small craft brewers and winemakers have enjoyed a strong resurgence. Antitrust enforcement, however, may have had little to do with protecting the opportunities of new entrants in these industries. The 21st amendment to the Constitution repealed prohibition and gave each state control over the production and sale of alcoholic beverages. At that time, many states adopted a mandatory three tier system, prohibiting vertical integration of producers, distributors, and retailers. Maintaining independently owned distributors makes it more difficult for powerful producers to lock up distribution.
There may be other advantages to localized wine or beer production that explain the growth and survival of small producers, but the open availability of distribution channels is an important part of this story. While distribution was not open in all states, the three tier system was sufficiently rooted to enable the craft beer resurgence over the past two decades. Oligopolistic firms dominate beer production in the United States. . . . .Despite this concentration, the last few decades have seen a healthy resurgence in small and regional breweries (microbreweries),which now have roughly 14% of the U.S. market by volume.
Unlike farmers or ranchers, microbrewers typically do not grow or raise their own ingredients, but exercise their craft as processors. To have a chance to distribute efficiently, such brewers require access to an effective distribution mechanism, particularly when a brewer hopes to reach a market beyond its home state. Even in states in which dominant brewers cannot own distributors, a dominant brewer may pressure independent distributors to exclude or disfavor smaller rival brewers. In permitting Anheuser Busch InBev’s acquisition of Miller Brewing, the Antitrust Division imposed a divestiture remedy to address horizontal concentration and a conduct remedy designed to protect microbrewers’ access to independent beer distributors. The decree prohibits InBev from engaging in certain loyalty or discount programs that discourage independent beer distributors from doing business with other brewers and requires InBev not to acquire other brewers or distributors without allowing for advance review by the Antitrust Division. The sensitivity the Division showed to distribution issues affecting microbrewers was constructive but insufficient. Whether the conduct remedy will be effective in preventing the large firm’s future exclusionary treatment toward smaller rivals is an open question.
he real lesson from the InBev/Miller acquisition may be a failure in past merger enforcement. Consider an industry in which, instead of a 70% dominance by two firms, there are eight firms that share roughly 80% of the U.S. market. In such an industry, issues of vertical integration are far less troublesome. If one or more of these eight firms decided to acquire its own distributors, there is much less risk that the firm would use its control of a distributor strategically to injure a micro brewer. To the contrary, with a share of 20% or less of the market, the firm is more likely to reach out to other brewers to offer them distribution, in this manner profiting from a greater share in the distribution market. Under these more competitive conditions, the market is more likely to self-regulate, and do so in a more effective manner than through merger conditions imposed on a powerful oligopolist.
The wine industry in the United States also benefits from the independent distribution system that grew out of the 21st Amendment. The largest three wine firms control roughly 46% of the US market, but the industry is relatively unconcentrated, with at least one winery in each of the fifty states and a steady growth in the number of firms (an average increase of 7% per year in the ten years ending in 2012). While large firms dominate the low price market, small and boutique firms have a large presence in the mid and high priced categories. . . . .
Given the problems in maintaining open distribution, the Department would have been justified in prohibiting any further acquisition of a craft brewer for a substantial period of years. Kwoka found conduct remedies were largely ineffective in preventing price increases by the merged firm. While some smaller wine makers sell their wine directly to retailers or end consumers, 90 percent of all wine flows through distributors. The largest 20 distributors have 75% of the market, with several hundred smaller distributors sharing the remainder. Although price competition seems to discipline the low-end market, for mid and high price segments, conditions of monopolistic competition prevail: each distinctive brand enjoys substantial pricing freedom. These conditions complement the availability of independent distributors and make it possible for new entrants to succeed and consumers to choose among an increasing number of local brands. These benefits will continue as long as merger policy (and antitrust enforcement more generally) preserves the availability of independent distribution for small wineries.
The beer and wine industries are examples of creative mid-level processing that can be efficiently performed by individual entrepreneurs or small firms. What is needed is lower thresholds for horizontal concentration among processors. To the extent that these thresholds have already been exceeded, strict rules on vertical integration are required to maintain open entry for small processors.
Full article: http://competitionpolicyinternational.us2.list-manage1.com/track/click?u=66710f1b2f6afb55512135556&id=df80077e3b&e=b23ef9e519
ALGORITHMS, ARTIFICIAL INTELLIGENCE, JOINT CONDUCT, AND PRICE STABILITY
The ability of algorithms and artificial intelligence to monitor and set prices is increasing in sophistication, effectiveness and independence from human involvement at an exponential rate. The growth in this area, which is seen simultaneously across a range of AI applications, is such that no one — even its creators — is likely to fully appreciate AI’s capabilities until sometime after they have been realized.
ricing “bots” are already capable of engaging in behavior that we would not hesitate to call “parallel conduct” if it were performed by humans, and they will only get better at it. Indeed, the day may not be so far off when the pricing bot of one firm is fully capable of colluding — in every meaningful sense — with the pricing bot of a competing firm. At that point, we may have “conspiracy” cases under Section 1 of the Sherman Act that look very much like the cases we have today, except that the parts now played by humans are played by robots.
The few existing antitrust cases involving pricing algorithms have not crossed this Rubicon, or really even approached it. They do not involve joint conduct by bots, in any sense. Instead, these cases involve human beings reaching familiar price-fixing agreements and then implementing them algorithmically. While these cases may create special problems of detection and proof, at least for the moment they do not seem to require any shift in the conceptual apparatus we use to solve antitrust problems. There is reason to think such a shift may be coming, however.
Joint conduct by robots is likely to be different — harder to detect, more effective, more stable and persistent — than traditional joint conduct by humans. For example, one of the basic precepts of the Sherman Act is that “unilateral” conduct by firms in the same market is not unlawful under Section 1, even if the conduct is closely interdependent and predictably yields supracompetitive prices that would be per se unlawful if achieved by agreement. An unspoken premise of this time-honored rule is that such interdependent conduct is likely to be relatively unstable in the absence of an agreement, and therefore, with any luck, the supracompetitive effects generally will be shorter lived and less pernicious than if they were achieved through true joint conduct.
But this premise may have less force in a world of bots, who can interpret and respond to the actions of their competitors with far more precision, agility and consistency than their human counterparts. By simply allowing these bots to go to work, it is easy to imagine an effectively permanent pricing stasis settling over many markets, and not always with procompetitive effects. How will enforcers approach such conduct, much less disrupt or prevent it? What duties should we impose on human beings to ensure their bots behave, and what culpability should they have when their bots go astray? The next ten years will begin to provide the answers, but the technology is already well ahead of the law, and the growing pains are likely to be immense.
Full article: https://www.competitionpolicyinternational.com/wp-content/uploads/2017/05/CPI-Ballard-Naik.pdf
Bloomberg lists 10 best paid executives. NY Times says such executives often meet with President Trump and typically press issues like rollback of financial regulation
Here are the top 3:
1
Marc Lore CEO, U.S. e-commerce, Wal-Mart Stores Inc.
$236,896,191
2
Tim Cook CEO Apple Inc.
$150,036,907
3
John S. Weinberg Executive Chairman, Evercore Partners Inc.
$123,991,055
For the rest of the 10 see https://www.bloomberg.com/graphics/2017-highest-paid-ceos/
The New York Times points out that President Trump has made a
pageantry of meetings with C.E.O.s at the White House or at his Mar-a-Lago resort in Florida, which he has dubbed the southern White House, a priority during his first few months in office. The visits have become an opportunity for the president to trumpet the progress he says his administration is making in creating jobs and reducing regulations.
But Mr. Trump may be getting a one-sided perspective on policy recommendations by spending so much time with a large swath of highly paid executives — at least 307 since Inauguration Day — whose views on taxes and economic inequality tend to differ from those of average Americans.
“If you hang around with executives, you adopt a certain view of the world, and it’s a view of the world that seems to be informing his policies,” said Lawrence Mishel, president of the Economic Policy Institute, a liberal-leaning advocacy group in Washington. “It takes a lot to think cutting corporate taxes is central to tax policy when corporate profits are near historic highs.”
The Times article points out that reducing financial industry regulations are often the subject of conversations between wealthy executives and the President
Full Times article at https://www.nytimes.com/2017/05/26/business/ceo-compensation-pay-president-donald-trump.html?src=me
NYT: Schools generally agree not to sweeten financial incentives to student who have committed to other schools -- although that may be an antitrust law violation
This year, however, scores of teenagers had something unexpected happen: During the first week in May, they received text messages or emails from schools that had accepted them but had not heard back. The messages all hinted at a particular question: Might a larger discount prompt you to come here after all?
Hampshire College, Elizabethtown College, Washington & Jefferson College and Ursinus College, all private liberal arts schools, did this sort of outreach in recent weeks, as did Lawrence University, and perhaps others. For some students, such notes can be a dream come true if they make their first-choice college more affordable.
These invitations raise ethical questions in higher education: Schools are not supposed to dangle discounts in front of people who have committed to other institutions. Liberal arts colleges with flexible discounting policies may be tempted to skirt that line, given that families might worry about the value of their programs in the workplace. But late communications to applicants about financial aid, even without mentioning dollar amounts, can seem like flat-out poaching to the schools that have already admitted those students.
DAR comment: Many antitrust scholars suggest that colleges' agreement not to compete on pricing to students is an antitrust law violation.
Continue reading the Times story
tps://www.nytimes.com/2017/05/24/your-money/when-colleges-dangle-money-to-lure-students-who-ignored-them.html?ref=todayspaper&_r=0
Illinois home sellers sue Zillow for allegedly too-low home value "Zestimates"
The NY Times reports: Barbara Andersen bought a home in Glenview, Ill., in 2009 with a view of a golf course, paying about $630,000. She wants to sell the home for about that amount, but the Zestimate on it is now about $536,000, which she believes is too low and has deterred buyers.
Ms. Andersen, a real estate lawyer, filed a lawsuit [click to see it] against Zillow this year, accusing the company of conducting stealth home appraisals without a state license. In recent days, she has represented several plaintiffs in a similar lawsuit [click to see it] filed in Cook County Circuit Court. (Full article at https://www.nytimes.com/2017/05/24/upshot/angry-over-zillows-home-prices-a-prize-is-offered-for-improving-them.html?ref=business)
Language from the lawsuit: "Upon information and belief, Zillow is not a licensed Illinois appraiser. Further, upon information and belief, Zillow had never appraised Andersen's home. Moreover, Andersen has never requested or authorized Zillow to conduct an appraisal of Andersen's home. . . . Illinois law prohibits the preparation of appraisals without a license: . . ."
“If it’s not reliable, you shouldn’t put it out there,” she said in a phone interview, referring to Zestimates.
From the April Newsletter of SaveMiWater, a local Michigan advocacy group
For a cost of $200 a year Nestle was asking for 210 million gallons of public water, at the same time as Detroit and Flint residents were being shut off for minor bills or charged high rates for poisoned water.
* * *
Since October 31 we have been mounting the campaign to deny this latest permit request. The request was to go from 150 gallons per minute to 400 at one well. In other words, we were right back where we started in the year 2000 when Nestle was drawing down a stream and several lakes in Mecosta County.
We have spent the winter examining the permit and finding its flaws, documenting the damage already done to two cold-water trout streams and the Muskegon River, meeting with residents and the press, and generating a large number of comments. We are also building alliances with other organizations concerned about the privatization of water and the lack of public input in the permitting process.
MCWC has been providing the grassroots, on the ground leadership in this campaign to stop the taking of any more water for private profit and stop the damage to the ecosystem involved.
The legal precedent established during the original battle with Nestle still stands. A withdrawal of 400 gallons per minute is damaging to the ecosystem and cannot be sustained. Nestle may have gone 20 miles down the road from Mecosta to increase their production, but the same rules apply, and the same strong grassroots group is opposing them once more.
None of this resistance would be possible without the active support of our members. Your letters, membership renewals, on the ground presence, donations, have made the work of the organization possible. We have been able to launch the new and up to date website (saveMIwater.org), develop a Rapid Response email list, put out brochures and informational displays, increase our speaking opportunities, engage legal support, fund the work of our committees, hold public events, contribute our share to coalition efforts, and extend our work to save water far beyond the Nestle battle.
http://www.savemiwater.org/wp-content/uploads/2017/04/NewsletterApril-Final-for-web.pdf
The federal government has filed a lawsuit against Fiat Chrysler Automobiles accusing it of using illegal engine-control software to enable its diesel-powered vehicles to pass emissions tests.
The filing occurred days after Fiat Chrysler proposed a modification to the software to ensure correct test results in hopes of resolving the issue.
In a statement, the automaker said it was disappointed by the action and would defend itself against any claims that its software represents a “deliberate scheme to install defeat devices to cheat U.S. emissions tests.”
The Environmental Protection Agency accused Fiat Chrysler in January of installing the software on about 104,000 Ram pickup trucks and Jeep Grand Cherokee sport utility vehicles sold from 2014 through 2016.
https://www.nytimes.com/2017/05/23/business/fiat-chrysler-diesel-emissions-lawsuit.html
DAR comment: can consumer class actions be far behind, similar to class actions against VW?
Is Dodd-Frank’s failure resolution regime failing?
Program scheduled for Tuesday, Jun 06, 2017 9:30 AM-11:00 AM EDT
Brookings Institution
Falk Auditorium
1775 Massachusetts Avenue N.W.
Washington, DC
20036
REGISTER TO ATTEND REGISTER FOR WEBCAST
The recent financial crisis exposed a major gap in the regulatory system: the inability for the government to safely wind down a failing financial firm that was not a commercial bank, such as Lehman Brothers or AIG. The Dodd-Frank law attempted to fix this by empowering regulators with new tools including a new Orderly Liquidation Authority (OLA) under which the Federal Deposit Insurance Corp would liquidate and wind-up a failing institution. Although never used, OLA is controversial. Some Congressional Republicans would do away with it, and the Trump Administration has undertaken its review.
On June 6, Brookings’s Center on Regulation and Markets and Hutchins Center on Fiscal and Monetary Policy will bring together four experts—including former Federal Reserve Chairman Ben Bernanke—with differing views on preserving or modifying OLA.
After the session, panelists will take audience questions.
Join the conversation on Twitter using #DoddFrankOLA
AGENDA
Introduction
Aaron Klein
Fellow - Economic Studies,Center on Regulation and Markets
Policy Director, Center on Regulation and Markets
AaronDKlein
Panel Discussion
MODERATOR
David Wessel
Director - The Hutchins Center on Fiscal and Monetary Policy
Senior Fellow - Economic Studies
davidmwessel
Ben S. Bernanke
Distinguished Fellow in Residence - Economic Studies
BenBernanke
David Skeel
S. Samuel Arsht Professor Corporate Law - University of Pennsylvania Law School
Hester Peirce
Director, Financial Markets Working Group and Senior Research Fellow - Mercatus Center at George Mason University
H. Rodgin Cohen
Senior Chairman - Sullivan & Cromwell LLP
States seek to advocate for low-cost insurance in lawsuit
New York and California attorneys general are leading a 16-state charge to intervene in a lawsuit that would threaten compensation to insurers who provide for poorer people.
New York Attorney General Eric Schneiderman and California Attorney General Xavier Becerra Thursday moved to intervene in the appeal of a lawsuit that challenges cost-sharing reduction payments allowed under the Affordable Care Act.
The payments are made to insurers to offset costs of lower price insurance plans. House Republicans sued the Obama administration in 2014 arguing the payments are illegal because they’re not authorized by Congress. The Obama administration appealed, but the Trump administration has threatened to drop the appeal.
The motion to intervene argues that the states have a concrete interest in continuing the payments to protect low-income residents.
From article at http://www.dailynews.com/health/20170519/states-seek-to-advocate-for-low-cost-insurance-in-lawsuit
24 hour electricity from rooftop solar panels? New batteries may permit it
Mercedes-Benz is taking a direct shot at Tesla's solar push and battery business.
The luxury carmaker announced on Thursday it would partner with Vivint Solar to sell a smart solar ecosystem to California residents, aiming to challenge Tesla's new solar-roof rollout on its turf.
As part of the partnership, Mercedes will introduce its at-home battery to the US market for the first time, while Vivint will provide solar-panel installation.
From article at http://www.businessinsider.com/mercedes-vivint-partner-on-solar-storage-solution-to-take-on-tesla-2017-5
Business gentrification: Upscaling Bethesda downtown loses funky or simply traditional old businesses
As Bethesda evolved into a high-end district of condos, restaurants and boutiques, cherished neighborhood places were swept away — by development, changing tastes or owners deciding it was time.
The 1980s saw the demise of the Psyche Delly, the sandwich-shop-turned-progressive-rock-club, and its countercultural soul mate, WHFS-FM. The Hot Shoppes, home of the double-decked Mighty Mo burger and the Orange Freeze milkshake, and Lowen’s, the toy emporium, closed in the 1990s. The Bethesda location for O’Donnells Seafood Restaurant made it to 2001.
Harry Eaton, who's been coming to the market since the 1950s, shows a picture of himself and his mother at her stand inside of Bethesda Farm Women's Market. (Jason Andrew/For The Washington Post)Now the clock may be running out on three other local institutions: the Tastee Diner, the Bethesda Farm Women’s Marketand Barnes & Noble on Bethesda Row. The issues facing each business are different. One is a landlord-tenant relationship gone sour. The others involve aging owners and the skyrocketing value of their land.
From article: https://www.washingtonpost.com/local/md-politics/the-future-ghosts-of-downtown-bethesda/2017/05/13/aa73db5e-310b-11e7-9dec-764dc781686f_story.html?utm_term=.1567fa5eefc7
MORGAN LEWIS WEBINAR ON AUTOMOTIVE CYBERSECURITY
The multitude of devices and systems in cars creates an array of ever-evolving privacy and cybersecurity issues. Our panel discussion will provide an overview of recent developments and evolving questions pertaining to “connected” and, in some cases, autonomous vehicles.
TOPICS WILL INCLUDE:
Privacy disclosures provided to car owners
and drivers
The current reasonable expectation of privacy
(or lack thereof)
What the various US government bodies’
expectations are regarding access to information stored on a vehicle
What measures the US government and state governments expect companies to take regarding automotive cybersecurity and protection from hacking
WHEN
Tuesday, May 23, 2017
11:00 am–12:00 pm PT
2:00–3:00 pm ET
PRESENTERS
Ronald Del Sesto, Partner
Mark Krotoski, Partner
Daniel Savrin, Partner
Robert Brundage, Of Counsel
Register at https://morganlewis.webex.com/mw3100/mywebex/default.do?nomenu=true&siteurl=morganlewis&service=6&rnd=0.6766680149048838&main_url=https%3A%2F%2Fmorganlewis.webex.com%2Fec3100%2Feventcenter%2Fevent%2FeventAction.do%3FtheAction%3Ddetail%26%26%26EMK%3D4832534b0000000473136c1462e882655caf280646ed9e36d41ee174515852cecd20d0fc3e12a40e%26siteurl%3Dmorganlewis%26confViewID%3D1759874369%26encryptTicket%3DSDJTSwAAAASnozNuAAYpZFP6OnN4cpHdsMVAogj5YUGlD0u2girP-g2%26
EU: Spotify, others complain about data “gatekeepers”
In a letter sent to the European Union’s antitrust body, the chief executives of Spotify, streaming music firm Deezer, startup investor Rocket Internet and other Europe-based companies claim dominant internet platforms” can and do abuse their privileged position,” reports the Financial Times.
The European companies complain some mobile operating systems, app stores and search engines abuse their commanding marketshare to act as “gatekeepers” to consumer choice, thus impeding segment rivals attempting to market products that compete with first-party services, the letter says.
While not named in the letter, Apple and Google are clearly targets of the complaint. Together, Apple’s iOS and Google’s Android control more than 90 percent of the mobile operating system market and maintain a set of terms and conditions that third-party apps must follow in order to market their wares on the respective app stores.
In particular, internet companies argue they are not able to access analytics data when customers sign up for service through app store portals. Further, app store owners allegedly promote their own products ahead of third-party offerings. For example, Apple often publishes App Store banners advertising Apple Music, a competitor to Spotify and Deezer.
Full Content: Apple Insider
From Congressman Cummings letter to Vision on "rent to own" financing practices
Dear Mr. Szkaradek:
I write today to seek details about the properties offered through rent-to-own and other seller-financed transactions by Vision Property Management and its subsidiaries.
According to Vision's website, your company targets "individualsand families that may not currently qualify for conventional property purchases due to various employment, health, divorce or other financial reasons" for "Lease-to-Own prope11y opp011unities." 1
Recent media reports have detailed financial and physical harms that your business model - which reportedly is structured to churn unsuspecting tenants through ever-deepening money pits- has inflicted on families with limited means.
According to a New York Times article, Vision' s rent-to-own contracts place substantial risks on tenants that traditional property rental or sales contracts do not. Vision offers each home on an "as is" basis. Under these contracts, Vision may not disclose the extensive repairs a prope11yneeds but will " require a tenant to pay for any repairs, no matter how big." If tenants fail to make the required repairs within a few months, they may be evicted-forfeiting all expenditures they have already made on the home.
https://democrats-oversight.house.gov/sites/democrats.oversight.house.gov/files/documents/2017-01-18.EEC%20to%20Vision%20Property%20Management.pdf
"Money in Politics: Prospects for Reform in the District of Columbia"
presented by The Ward 3 Democratic Committee
& UDC David A. Clarke School of Law
A panel discussion on current campaign reform efforts before the DC Council featuring
D.C. Attorney General Karl Racine
At-Large Councilmember Elissa Silverman
Darrin Sobin, Director, Board of Ethics & Government Accountability (BEGA)
Thursday, May 18 at 7pm
UDC David A. Clarke School of Law Moot Courtroom
4340 Connecticut Ave NW (5th Floor)
Free & open to the public. Registration requested HERE
You know about Trump and Comey, but do you know about the 2009 case of Lau v. U.S. Postal Service?
From a posting by the law firm of Eric L. Pines, LLC, whose practice specializes in defending against pretextual firings of federal employees:
In Lau v. U.S. Postal Service, two disabled Flat Sorter Machine Clerks had their hours reduced from eight hours a week to six, but their non-disabled coworkers did not. The Postal Service claimed their hours were reduced because of low mail volume.
Here’s how they succeeded in showing the Postal Service’s explanation was just a pretext and won their case:
First, the employees were not given the “low mail volume” reason for their reduced work hours until five months after their hours were reduced. Even worse, the agency only gave the low mail volume explanation in the context of a formal mediation, showing a lack of credibility. Waiting five months to give an explanation is suspicious, and waiting until the employees are far enough into the complaint process that they and the agency are in a formal mediation is even more suspicious.
See http://www.pinesfederal.com/blog/2017/february/pretext-part-2-shifting-explanations-and-unbelie/
Posted by Don Allen Resnikoff
Digital Music News on the effects of music industry deregulation:
Under Trump, the chances of a deregulation of decades-old publishing rules and consent decrees has never had a better chance of happening.
Which also means that every publisher, big and small, is going to start behaving like major (and indie) labels once all the regulations are lifted. Suddenly, the publishers will have to ability to withhold their IP (songs and lyrics) and effectively shut down platforms like Spotify until they get their outrageous (and unrealistic) terms.
But even if they don’t pull massive amounts of catalog, they will effectively impose unworkable licensing costs on services like Spotify. And that means that Spotify will have an even harder time convincing Wall Street and investors that these businesses can scale.
And that goes for Pandora and SoundCloud as well, both extremely over-leveraged long-terms plays that rely on licensing (and investors to cover the losses). Because right now, these companies can’t properly scale, thanks to variable and extremely high recording licensing demands. Layer in variable and extremely high publishing demands, and the goose is cooked.
Sure, it’s not fair to publishers. History screwed you guys, sorry. The labels always had the free market on their side. The music industry doesn’t need an expensive, complicated Washington babysitter anymore.
But doing what’s right means destroying the music industry’s ‘comeback’ of the past few years. And destroying a pie that’s just starting to grow again.
http://www.digitalmusicnews.com/2017/05/09/deregulation-destroy-spotify-music-industry/
Customer dissatisfaction with Spirit Air scheduling problems leads to airport terminal riots
Article and Video: http://www.cbsnews.com/news/passengers-rowdy-florida-airport-9-spirit-airlines-flights-canceled/
Washington Post: Sinclair Broadcast Group, the family-controlled TV station company headquartered outside Baltimore, wants to go from big to gigantic. The DC experience shows what that can mean
With its $3.9 billion bid for Tribune Media on Monday, Sinclair aims to add dozens of big-city stations — in Chicago, Los Angeles and Dallas, among other cities — to an already bulging portfolio that includes 173 mostly small-city stations.
What to expect when, or if, Sinclair finally swallows Tribune?
Sinclair showed what might happen the last time it took over a station in a large metropolitan area — WJLA, the ABC affiliate in Washington. In 2014, Sinclair completed its $985 million purchase of eight stations owned by Allbritton Communications, including WJLA-TV, which is now the largest Sinclair owns.
Sinclair has effectively remade WJLA in its own image, which is to say it continues to cover local and national news but with a distinctively conservative flavor.
Sinclair has been criticized for using its many stations to push Republican presidential candidates since at least 2004 when it announced it would air a documentary critical of Democratic candidate John F. Kerry but backed down amid pressure. It drew criticism from Democrats on the eve of the 2012 election when its stations in several battleground states aired a half-hour news “special” that faulted President Obama for his handling of the economy, his signature health-care law and the terrorist attack on a U.S. installation in Benghazi, Libya.
www.washingtonpost.com/lifestyle/style/heres-what-happened-the-last-time-sinclair-bought-a-big-city-station/2017/05/08/92433126-33f7-11e7-b4ee-434b6d506b37_story.html?utm_term=.2db864624325
The International Refugee Assistance Project (IRAP)
IRAP advertises that it "organizes law students and lawyers to develop and enforce a set of legal and human rights for refugees and displaced persons. Mobilizing direct legal aid and systemic policy advocacy, IRAP serves the world’s most persecuted individuals and empowers the next generation of human rights leaders.The International Refugee Assistance Project (IRAP) organizes law students and lawyers to develop and enforce a set of legal and human rights for refugees and displaced persons. Mobilizing direct legal aid and systemic policy advocacy, IRAP serves the world’s most persecuted individuals and empowers the next generation of human rights leaders."
A profile of the group and its leader is at https://www.nytimes.com/2017/05/07/us/travel-ban-lawyer.html?ref=business
The Campbell v Chadbourne law firm gender discrimination case
The complaint alleges, in part:
Plaintiff Kerrie Campbell, by her attorneys Sanford Heisler, LLP, brings this action in her individual capacity and on behalf of a class of current and former female Partners (“the Class”) of Chadbourne & Parke LLP (“Chadbourne,” “the Firm” or “Defendant”) to redress the Firm’s systematic gender discrimination.
The case is the subject of continuing media attention. The Complaint is here: http hr.cch.com/ELD/CampbellComplaint.pdf
Fate of Purple Line light rail in Maryland suburbs of DC remains iffy
Construction has been delayed on the light rail since August when U.S. District Judge Richard Leon ruled in favor of Purple Line opponents and ordered the project be put on hold so the state could recalculate ridership projections in light of Metro's falling numbers. In December, the Federal Transit Administration told Leon the line would have sufficient ridership despite Metro's woes, which Maryland officials argued should be enough for him to allow the project to proceed. The federal budget deal reached this week included the necessary $125M annual Purple Line payment, contingent on the full $900M funding agreement being signed by September, which would need Leon's go-ahead to occur.
Maryland Attorney General Brian Frosh had asked Leon to rule by April 28, saying the delay was costing taxpayers money, but Leon has yet to make a ruling. Montgomery County Executive Ike Leggett and Prince George's County Executive Rushern Baker held a rally Tuesday calling on Leon to issue a ruling. The rail had been expected to open in 2022, but as of now its fate remains uncertain
Read more at: https://www.bisnow.com/washington-dc/news/neighborhood/carr-jbg-developments-at-future-bethesda-purple-line-terminus-moving-forward-despite-rail-delay-74116?rt=41064?utm_source=CopyShare&utm_medium=Browser
Direct-from-China retail purchases and the threat to Walmart and other US retailers
https://www.nytimes.com/2017/05/03/magazine/the-online-marketplace-thats-a-portal-to-the-future-of-capitalism.html?ref=business
Brookings podcast on the House passage of the AHCA and the future of health care:
https://www.brookings.edu/podcast-episode/on-the-ahca-vote-and-the-future-of-american-health-care/?utm_campaign=Brookings%20Brief&utm_source=hs_email&utm_medium=email&utm_content=51558722
NACA on legislation affected the CFPB:
The Financial CHOICE Act-aims to undermine CFPB's authority in significant ways, including by eliminating the bureau's ability to stop forced arbitration.
NACA wrote a letter in strong opposition to this bill: www.consumeradvocates.org/resources/legislative-issue/...
An advocacy piece in opposition is at www.consumeradvocates.org/advocacy/take-action/...
A shorter write-up featuring 11 issues with the bill is at medium.com/@NACAdvocate/...
The Economist on algorithmic tacit collusion
Free exchange Price-bots can collude against consumers:
Trustbusters might have to fight algorithms with algorithms
MARTHA’S VINEYARD, an island off the coast of Massachusetts, is a favourite summer retreat for well-to-do Americans. A few years ago, visitors noticed that petrol prices were considerably higher than in nearby Cape Cod. Even those with deep pockets hate to be ripped off. A price-fixing suit was brought against four of the island’s petrol stations. The judges found no evidence of a conspiracy to raise prices, but they did note that the market was conducive to “tacit collusion” between retailers. In such circumstances, rival firms tend to come to an implicit understanding that boosts profits at the expense of consumers.
No one went to jail. Whereas explicit collusion over prices is illegal, tacit collusion is not—though trustbusters attempt to forestall it by, for instance, blocking mergers that leave markets at the mercy of a handful of suppliers. But what if the conditions that foster such tacit collusion were to become widespread? A recent book* by Ariel Ezrachi and Maurice Stucke, two experts on competition policy, argues this is all too likely. As more and more purchases are made online, sellers rely increasingly on sophisticated algorithms to set prices. And algorithmic pricing, they argue, is a recipe for tacit collusion of the kind found on Martha’s Vineyard.
Consider the conditions that allow for tacit collusion. First, the market is concentrated and hard for others to enter. The petrol stations on the Vineyard were cut off from the mainland. Second, prices are transparent in a way that renders any attempt to steal business by lowering prices self-defeating. A price cut posted outside one petrol station will soon be matched by the others. And if one station raises prices, it can always cut them again if the others do not follow. Third, the product is a small-ticket and frequent purchase, such as petrol. Markets for such items are especially prone to tacit collusion, because the potential profits from “cheating” on an unspoken deal, before others can respond, are small.
Now imagine what happens when prices are set by computer software. In principle, the launch of, say, a smartphone app that compares prices at petrol stations ought to be a boon to consumers. It saves them the bother of driving around for the best price. But such an app also makes it easy for retailers to monitor and match each others’ prices. Any one retailer would have little incentive to cut prices, since robo-sellers would respond at once to ensure that any advantage is fleeting. The rapid reaction afforded by algorithmic pricing means sellers can co-ordinate price rises more quickly. Price-bots can test the market, going over many rounds of price changes, without any one supplier being at risk of losing customers. Companies might need only seconds, and not days, to settle on a higher price, note Messrs Ezrachi and Stucke.
Their concerns have empirical backing. In a new paper**, the authors outline three case studies where well-intentioned efforts to help consumers compare prices backfired. In one such instance, the profit margins of petrol stations in Chile rose by 10% following the introduction of a regulation that required pump prices to be displayed promptly on a government website. This case underlines how mindful trustbusters must be about unintended consequences. The legal headache for them in such cases is establishing sinister intent. An algorithm set up to mimic the prices of rival price-bots is carrying out a strategy that any firm might reasonably follow if it wants to survive in a fast-moving market. Online sellers’ growing use of self-teaching algorithms powered by artificial intelligence makes it even harder for trustbusters to point the finger. A cabal of AI-enhanced price-bots might plausibly hatch a method of colluding that even their handlers could not understand, let alone be held fully responsible for.
Since legal challenges are tricky, argue Messrs Ezrachi and Stucke, it might be better to direct efforts at finding ways to subvert collusion. Trustbusters could start by testing price-bots in a “collusion incubator” to see how market conditions might be tweaked to make a price-fixing deal less likely or less stable. A “maverick” firm, with different incentives to the incumbents, might have a lasting impact; an algorithm programmed to build market share, for instance, might help break an informal cartel.
Regulators might also explore whether bots that are forced to deal directly with consumers—say, through an app that sends an automatic request to retailers when a petrol tank needs filling—could be enticed to undercut rivals. Or they might test to see if imposing speed limits on responses to changes in rivals’ prices hampers collusion. It may be that batching purchases into bulky orders might thwart a collusive pay-off by making it more profitable for robo-sellers to undercut rivals.
Never knowingly undersold
The way online markets work calls for new tools and unfamiliar tactics. But remedies have to be carefully tested and calibrated—a fix for one blem might give rise to new ones. For instance, the more consumers are pushed to deal directly with price-bots (to thwart the transparency that allows rival sellers to collude), the more the algorithms will learn about the characteristics of individual customers. That opens the door to prices tailored to each customer’s willingness to pay, a profitable strategy for sellers.
Still, there is one old-school policy to lean on: merger control. There is growing evidence in old-economy America that trustbusters have been lax in blocking tie-ups between firms. A market with many and diverse competitors, human or algorithmic, is less likely to reach an effortless, cosy consensus about what is the “right” price for sellers, and the wrong price for consumers.
* “Virtual Competition: the Promise and Perils of the Algorithm-driven Economy”, Harvard University Press (2016)
** “Two Artificial Neural Networks Meet in an Online Hub and Change the Future (of Competition, Market Dynamics and Society)” (April 2017)
This article appeared in the Finance and economics section of the print edition under the headline "Algorithms and antitrust" — http://www.economist.com/news/finance-and-economics/21721648-trustbusters-might-have-fight-algorithms-algorithms-price-bots-can-collude
Top 10 highlights in new AHCA bill
By Modern Healthcare
May 4, 2017
The bill eliminates provisions of the Affordable Care Act. The nonpartisan Congressional Budget Office estimates that the legislation will result in 24 million people losing their health insurance by 2026.
Here are key elements of the bill:
- Ends the tax penalty against people without coverage.
- Ends the Medicaid expansion funding.
- Changes Medicaid from an open-ended program to one that gives states fixed amounts of money per person.
- Replaces the ACA's cost sharing subsidies based mostly on consumers' incomes and premium costs with tax credits that grow with age.
- Repeals taxes on the wealthy, insurers, drug and medical device makers.
- Consumers who let their coverage lapse for more than 63 days in a year would be charged 30% surcharges to regain insurance. This would include people with pre-existing medical conditions.
- State waivers would allow insurers to charge older customers higher premiums by as much as they'd like.
- States get $8 billion over five years to finance high-risk pools that cover those with pre-existing conditions.
- States get $130 billion over a decade to help people afford coverage.
- Keeps ACA provision that children can remain on their parents' insurance plans until age 26.
http://www.modernhealthcare.com/article/20170504/NEWS/170509949?utm_source=modernhealthcare&utm_medium=email&utm_content=20170504-NEWS-170509949&utm_campaign=am
FROM PUBLIC CITIZEN: Should the Financial Choice Act (Concerning the CFPB) be Called the Accountability to Lobbyists Act?
by Jeff Sovern
During hearings on the CFPB and the Choice Act, I kept hearing critics of the CFPB saying they want to increase its accountability (I haven't started listening to the markups yet, but it's probably a recurring theme there too).
In fact, the CFPB is accountable. But assume it isn't for the moment. CFPB critics argue that one way it should be made more accountable is by subjecting it to the congressional appropriations process. While that sounds good in theory, the problem is that the voices of lobbyists are much louder at appropriations committee proceedings than the voices of consumers. Corporate lobbyists have the resources to pay attention to the inside baseball of appropriations while ordinary consumers busy making a living and providing for their families don't.
The result of such "accountability" in the past has been that lobbyists urge members of Congress to starve regulators of funds if the regulators don't play ball with the lobbyists--and that in turn leads to regulatory capture. That is exactly what happened with Fannie and Freddie's former regulator, which was a disaster. Critics of the Choice Act have been calling it the Wrong Choice Act, but they could also call it the Accountability to Lobbyists Act, because that's what it would create.
Posted by Jeff Sovern on Wednesday, May 03, 2017 at 02:07 PM in Consumer Financial Protection Bureau, Consumer Legislative Policy
EXPLOITATION AND ABUSE AT AN OHIO CHICKEN PLANT--Case Farms built its business by recruiting immigrant workers from Guatemala, who endure conditions few Americans would put up with.
By Michael Grabell (New Yorker Magazine)
Excerpt:
Case Farms plants are among the most dangerous workplaces in America. In 2015 alone, federal workplace-safety inspectors fined the company nearly two million dollars, and in the past seven years it has been cited for two hundred and forty violations. That’s more than any other company in the poultry industry except Tyson Foods, which has more than thirty times as many employees. David Michaels, the former head of the Occupational Safety and Health Administration (osha), called Case Farms “an outrageously dangerous place to work.” Four years before Osiel lost his leg, Michaels’s inspectors had seen Case Farms employees standing on top of machines to sanitize them and warned the company that someone would get hurt. Just a week before Osiel’s accident, an inspector noted in a report that Case Farms had repeatedly taken advantage of loopholes in the law and given the agency false information. “The company has a twenty-five-year track record of failing to comply with federal workplace-safety standards,” Michaels said.
Case Farms has built its business by recruiting some of the world’s most vulnerable immigrants, who endure harsh and at times illegal conditions that few Americans would put up with. When these workers have fought for higher pay and better conditions, the company has used their immigration status to get rid of vocal workers, avoid paying for injuries, and quash dissent. Thirty years ago, Congress passed an immigration law mandating fines and even jail time for employers who hire unauthorized workers, but trivial penalties and weak enforcement have allowed employers to evade responsibility. Under President Obama, Immigration and Customs Enforcement agreed not to investigate workers during labor disputes. Advocates worry that President Trump, whose Administration has targeted unauthorized immigrants, will scrap those agreements, emboldening employers to simply call ice anytime workers complain.
full article: www.newyorker.com/magazine/2017/05/08/exploitation-and-abuse-at-the-chicken-plant?mbid=nl_TNY%20Template%20-%20With%20Photo%20(164)&CNDID=41308812&spMailingID=10944405&spUserID=MTMzMTg0ODkyNDczS0&spJobID=1160270606&spReportId=MTE2MDI3MDYwNgS2
The United States Department of Justice announces major settlements in two lawsuits with healthcare systems
In one case, Partners Healthcare and Brigham and Women’s Hospital (BWH) will pay $10 million to resolve a suit that involves allegedly fraudulent grant funding. The other case involves an $18 million civil settlement by Indiana University Health Inc. and HealthNet Inc. to resolve alleged violations of the False Claims Act. [Click highlighted words for USDOJ material.]
The BWH case involved a stem cell research lab run by Piero Anversa, M.D., that allegedly obtained grants from the National Institutes of Health via the submission of falsified data. “Individuals and institutions that receive research funding from NIH have an obligation to conduct their research honestly and not to alter results to conform with unproven hypotheses,” said Acting U.S. Attorney William D. Weinreb in the announcement. He commended BWH for self-reporting the fraud, which he termed a waste of scarce government resources.
A BWH spokesperson told the Boston Business Journal the institution “has made significant enhancements to research integrity compliance protocols as a result of this event.” The settlement announcement came out on the same day BWH released news of buyout packages offered to
1,600 employees.
In the Indiana University case, a whistleblower filed a federal lawsuit claiming IU Health and HealthNet had violated federal anti-kickback laws by fraudulently billing Medicaid for services they said were provided by doctors when those services were allegedly provided by nurse midwives instead. Neither HealthNet nor IU Health admitted wrongdoing in the settlement, according to an article in the Indianapolis Business Journal.
Both HealthNet and IU Health claimed they agreed to the settlement in order to avoid protracted litigation. “There is no merit in [the] allegations of inappropriate patient care, referrals or billing practices,” added IU Health in a statement.
Both organizations will pay approximately $5.1 million to the United States and $3.9 million to the State of Indiana, according to the Department of Justice.
From: http://www.fiercehealthcare.com/healthcare/department-justice-announces-settlements-two-major-healthcare-suits?utm_medium=nl&utm_source=internal&mrkid=730008&mkt_tok=eyJpIjoiT0RjelkySTJNR0ZpTldZMiIsInQiOiJwY1VoSXZINlRrb0JCdUJ5ZmxKWGxlbEpGV1U4ZXdGc1NsV1hpWHRuQVJET1YxNVd1MEgrZGRQYWtxejJlM05tZ3M4SGlORk5Bekx1YXpxK2FYeVdBMmFQdzYyOXQ5UHBCWDJ5V3Urc1NlV1NCUkJhTU1HOUxVdm1xV0RQV3NYWCJ9
From Bloomberg: Mylan Tried to ‘Squelch’ EpiPen Rival, Sanofi Says in Lawsuit
-- Sanofi accuses Mylan of seeking to protect EpiPen monopoly
Mylan NV engaged in a campaign to squash a rival to its EpiPen allergy treatment and artificially inflate the price of the drug to maintain a market monopoly, French drugmaker Sanofi said in a lawsuit filed Monday.
Mylan, which once controlled more than 90 percent of the market for epinephrine allergy injectors, is already under scrutiny over the skyrocketing prices of its EpiPen product. The company is facing a U.S. antitrust probe of whether it improperly thwarted competition to the blockbuster product. Sanofi claims in its lawsuit that Mylan’s conduct is harming consumers.
“To preserve the monopoly position of their $1 billion crown jewel branded drug product, Mylan engaged in illegal conduct to squelch this nascent competition, harming both Sanofi and U.S. consumers,” Sanofi’s lawyers said in the complaint filed in federal court in New Jersey.
Mylan executives offered ‘unprecedented’ price rebates to persuade government officials, insurance companies and pharmaceutical benefit managers not to reimburse patients for Sanofi’s competing Auvi-Q allergy treatment. Mylan also allegedly ran misleading ads to convince doctors to avoid prescribing Auvi-Q and required schools to certify they would use EpiPen exclusively in order to access discounts, Sanofi said.
Full article: https://www.bloomberg.com/news/articles/2017-04-24/mylan-tried-to-squelch-epipen-rival-sanofi-says-in-lawsuit
From the DC Circuit decision upholding district court’s decision and order permanently enjoining the merger of Anthem and Cigna:
"Anthem and Cigna (hereinafter, Anthem) challenge the district court’s decision and order permanently enjoining the merger on the principal ground that the court improperly declined to consider the claimed billions of dollars in medical savings. See Appellant Br. 10. Specifically, Anthem maintains 1 the district court improperly rejected a consumer welfare standard — what it calls “the benchmark of modern antitrust law,” id. — and generally abdicated its responsibility to balance likely benefits against any potential harm. According to Anthem, the merger’s efficiencies would benefit customers directly by reducing the costs of customer medical claims through lower provider rates, without harm to the providers.
* * *
Anthem’s appeal focuses principally on factual disputes concerning the claimed medical cost savings, which the government maintains were not verified, not specific to the merger, and not even real efficiencies. For the following reasons, we hold that the district court did not abuse its discretion in enjoining the merger based on Anthem’s failure to show the kind of extraordinary efficiencies necessary to offset the conceded anticompetitive effect of the merger in the fourteen Anthem states: the loss of Cigna, an innovative competitor in a highly concentrated market.
Additionally, we hold that the district court did not abuse its discretion in enjoining the merger based on its separate and independent determination that the merger would have a substantial anticompetitive effect in the Richmond, Virginia large group employer market. Accordingly, we affirm the issuance of the permanent injunction on alternative and independent grounds. [footnotes omitted]
The full opinion is here: https://dlbjbjzgnk95t.cloudfront.net/0909000/909103/document%20(47).pdf
Note The AAI, by David Balto, and others submitted amicus briefs that appear to have been influential.
Elizabeth Rosenthal's new book on the health care industry, An American Sickness
Health care is a trillion-dollar industry in America, but are we getting what we pay for? Dr. Elisabeth Rosenthal, a medical journalist who formerly worked as a medical doctor, warns that the existing system too often focuses on financial incentives over health or science.
"We've trusted a lot of our health care to for-profit businesses and it's their job, frankly, to make profit," Rosenthal says. "You can't expect them to act like Mother Teresas."
Rosenthal's new book, An American Sickness, examines the deeply rooted problems of the existing health-care system and also offers suggestions for a way forward. She notes that under the current system, it's far more lucrative to provide a lifetime of treatments than a cure.
"One expert in the book joked to me ... that if we relied on the current medical market to deal with polio, we would never have a polio vaccine," Rosenthal says. "Instead we would have iron lungs in seven colors with iPhone apps."
For Elisabeth Rosenthal's interview with Terry Gross on NPR: www.npr.org/programs/fresh-air/2017/04/10/523279708/fresh-air-for-april-10-2017
NYT editorial: F.C.C. Invokes Internet Freedom While Trying to Kill It
Excerpt:
Here we go again. The Federal Communications Commission, now led by an anti-regulation ideologue appointed by President Trump, wants to gut the net neutrality rules that keep powerful broadband companies from calling the shots on the internet, at the expense of consumers.
Under the cynical guise of “restoring internet freedom,” the new F.C.C. chairman, Ajit Pai, wants to give big telecom companies carte blanche to treat the content of their subsidiaries and partners more favorably than information from other companies — a practice that AT&T, Comcast and Verizon are already starting to employ. They would also be able to demand fees from companies like Netflix and YouTube to deliver videos and other content to customers.
If the commission, which has a 2-to-1 Republican majority, approves Mr. Pai’s proposal, there will be little stopping the broadband industry from squelching competition, limiting consumer choice and raising prices.
Click here to read the entire editorial
What Jonathan Rubin said in 2015 about net neutrality and the logic of classifying internet providers as Title II common carriers
Blog excerpt: The Vail Compromise, reached in 1910 and named after long-time AT&T President Theodore Vail, allowed the Bell System to retain the many independent telephone companies it had aggressively acquired in exchange for federal price regulation. Then, in a 1912 version of net neutrality known as the Kingsbury Commitment, an AT&T Vice President wrote a letter settling a Department of Justice antitrust case against AT&T. Kingsbury committed the network to connecting all incoming calls, even those initiated by independent telephone companies.
Now, a century later, the medium is broadband and the same kind of compromise is taking shape. Title II regulation of broadband is only one side of a grand bargain, whereby a new, near-national broadband network created by the merger of Comcast and Time Warner Cable is allowed to emerge in exchange for a federal regulatory regime legally authorized to impose common carrier principles of access and fairness.
This basic arrangement has served the nation well in telephony and other monopolistic, regulated industries. There is no reason why it should not work just as well for broadband services.
See: https://rubinpllc.wordpress.com/2015/01/31/net-neutrality-old-wine-in-new-bottles/
Wired magazine explains FCC net neutrality developments:
THE GOP-LED FEDERAL Communications Commission this week released the first details of its long-anticipated plan to roll-back Obama-era net neutrality protections. . . . At issue is the Open Internet Order, a sweeping set of policies passed back in 2015 aimed at ensuring net neutrality, the idea that internet service providers should treat all traffic equally. The rules ban your home broadband provider from degrading your Netflix streams to encourage you to buy cable television instead, and prohibit your mobile carrier fromblocking Skype. It also reclassified internet providers as “Title II” common carriers, much like telephone companies, a designation that gave the FCC legal authority over their business practices.
Full article: https://www.wired.com/2017/04/heres-comes-next-fight-save-net-neutrality/
FCC Chair Pai on reviving "light touch" internet regulation:
Earlier today, I shared with my fellow Commissioners a proposal to reverse the mistake of Title II and return to the light-touch regulatory framework that served our nation so well during the Clinton Administration, the Bush Administration, and the first six years of the Obama Administration.
The document that we will be voting on at the Commission’s May meeting is called a Notice of Proposed Rulemaking. If it is adopted, the FCC will seek public input on this proposal. In other words, this will be the beginning of the discussion, not the end.
Now, some have called on the FCC to reverse Title II immediately, through what is known as a Declaratory Ruling. But I don’t believe that is the right path forward. This decision should be made through an open and transparent process in which every American can share his or her views.
So what are the basic elements of this Notice of Proposed Rulemaking?
First, we are proposing to return the classification of broadband service from a Title II telecommunications service to a Title I information service—that is, light-touch regulation drawn from the Clinton Administration. As I mentioned earlier, this Title I classification was expressly upheld by the Supreme Court in 2005, and it’s more consistent with the facts and the law.
Second, we are proposing to eliminate the so-called Internet conduct standard. This 2015 rule gives the FCC a roving mandate to micromanage the Internet. Immediately following the FCC’s vote adopting the Title II Order, my predecessor was asked what the Internet conduct standard meant. His answer was that “we don’t really know” what it means and that “we don’t know where things go next.” I’ve never heard a better definition of regulatory uncertainty.
Later, of course, we saw where things were headed, and it wasn’t good for consumers. The FCC used the Internet conduct standard to launch a wide-ranging investigation of free-data programs. Under these programs, wireless companies offer their customers the ability to stream music, video, and the like free from any data limits. They are very popular among consumers, particularly lower-income Americans. But no—the prior FCC had met the enemy, and it was consumers getting something for free from their wireless providers. Following the presidential election, we terminated this investigation before the FCC was able to take any formal action. But we shouldn’t leave the Internet conduct standard on the books for a future Commission to make mischief.
And third, we are seeking comment on how we should approach the so-called bright-line rules adopted in 2015.
Excerpt from talk at https://www.fcc.gov/document/chairman-pai-speech-future-internet-regulation
Regulating the Financial System During the Trump Administration
Upcoming event from Bipartisan Policy Center: Regulating the Financial System During the Trump Administration
Thursday, May 25, 2017
10:00 a.m. - 11:30 a.m. ET
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Bipartisan Policy Center
1225 Eye Street NW, Suite 1000
Washington, D.C. 20005
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Can't join us in person? The event will be webcast.
Kenneth E. Bentsen, Jr. | President and CEO, SIFMA
Michael S. Barr | Roy F. and Jean Humphrey Proffitt Professor of Law, University of Michigan Law School; former Assistant Secretary for Financial Institutions, Treasury Department
*Rescheduled due to the March 14 snow storm
More than six years after the passage of the Dodd-Frank Act, the future of the post-crisis financial regulatory structure may be in line for substantial changes. In February, President Trump signed a new executive order laying out seven “core principles” for regulating the financial system and directing the Treasury Department to issue a report on whether current financial regulation meets those principles.
Join us on May 25 for a discussion of such questions as: are we moving in the right direction with financial regulation? Is current policy serving the economy and consumers while ensuring financial stability? What other changes to financial regulatory policy are needed to better achieve these goals? What approach should the United States take with other countries with respect to financial regulation and global agreements?
Jonathan Taplin's Op-Ed: Is It Time to Break Up Google?
In his April 22, 2017 New York Times Op-Ed titled “Is It Time to Break Up Google?” Jonathan Taplin complains that the American economy is dominated by giant corporations. He writes:
In just 10 years, the world’s five largest companies by market capitalization have all changed, save for one: Microsoft. Exxon Mobil, General Electric, Citigroup and Shell Oil are out and Apple, Alphabet (the parent company of Google), Amazon and Facebook have taken their place.
They’re all tech companies, and each dominates its corner of the industry: Google has an 88 percent market share in search advertising, Facebook (and its subsidiaries Instagram, WhatsApp and Messenger) owns 77 percent of mobile social traffic and Amazon has a 74 percent share in the e-book market. In classic economic terms, all three are monopolies.
We have been transported back to the early 20th century, when arguments about “the curse of bigness” were advanced by President Woodrow Wilson’s counselor, Louis Brandeis, before Wilson appointed him to the Supreme Court. Brandeis wanted to eliminate monopolies, because (in the words of his biographer Melvin Urofsky) “in a democratic society the existence of large centers of private power is dangerous to the continuing vitality of a free people.” We need look no further than the conduct of the largest banks in the 2008 financial crisis or the role that Facebook and Google play in the “fake news” business to know that Brandeis was right.
See https://www.nytimes.com/2017/04/22/opinion/sunday/is-it-time-to-break-up-google.html?ref=opinion
An obvious question is how government might address the problem Taplin describes. The answer is: not easily within existing legal frameworks. The most conventional remedy Taplin suggests is merger enforcement. He says:
There are a few obvious regulations to start with. Monopoly is made by acquisition — Google buying AdMob and DoubleClick, Facebook buying Instagram and WhatsApp, Amazon buying, to name just a few, Audible, Twitch, Zappos and Alexa. At a minimum, these companies should not be allowed to acquire other major firms, like Spotify or Snapchat.
The other remedies Taplin mentions are less conventional:
The second alternative is to regulate a company like Google as a public utility, requiring it to license out patents, for a nominal fee, for its search algorithms, advertising exchanges and other key innovations.
The third alternative is to remove the “safe harbor” clause in the 1998 Digital Millennium Copyright Act, which allows companies like Facebook and Google’s YouTube to free ride on the content produced by others.
An alternative Taplin does not mention is regulatory action by the Federal Trade Commission using Section 5 of the FTC Act. Possible limitations of FTC action were discussed by authors Rubin and Lande in a 2012 article called “How the FTC Could Beat Google,” available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2163053 In their opening paragraph Rubin and Lande explain:
The U.S. Federal Trade Commission (“FTC”) is rumored to be deciding whether to bring a “pure Section 5” case against Google as a result of complaints that the company unfairly favors its own offerings over those of its rivals in its search results. If successful, the case could do more than improve competition in the crucial multi-billion dollar online marketplace. It also could revitalize Section 5 of the FTC Act and solidify the agency’s authority to prevent the “unfair methods of competition” or “unfair or deceptive acts or practices” that do not violate the other Antitrust or Consumer Protection statutes. But the case will fail miserably at the hands of a reviewing court and the agency will be confined to relatively non-controversial enforcement violations if the FTC fails to impose upon itself a tightly bounded and constrained legal framework that contains clear limiting principles.
There is a difference between Taplin’s op-ed approach and Lande and Rubin’s scholarly approach that is not trivial. Lande and Rubin focus in an expert manner on how courts are likely to respond to a broad assertion of regulatory authority over Google and, by extension, other large and powerful companies. Taplin does discuss regulatory alternatives in a lawyer-like way, but his comments are tailored for a broad audience of newspaper readers, and he suggests a political action context similar to the one that faced Teddy Roosevelt in the early days of “trust-busting.”
Taplin is an advocate for reform and improvement of competition and trade regulation law, coming at a time when competition and trade regulation enforcement in the United States faces existential threats.
Posted by Don Resnikoff
Video of Jonathan Taplin speaking on April 20 on Have Internet Giants Taken Over Creative Culture?
The New America Foundation web-site introduction explains:
The beginning of the 21st century brought with it the emergence of three fledgling businesses that would soon redefine America’s notion of a decentralized internet. Over the last fifteen years, Facebook, Google, and Amazon have created powerful monopolies that now control the economic success of the journalism, music, video, and book industries. These monopolies have allowed Facebook, Google, and Amazon to experience an unprecedented amount of revenue growth, while their content creators have seen an equally dramatic decrease in earnings. In Move Fast and Break Things: How Facebook, Google, and Amazon Cornered Culture and Undermined Democracy, Jonathan Taplin uses his own extensive experience as a music and film producer to explore the real consequences average consumers stand to face if this monopolistic activity goes unchecked and to recommend potential solutions.
Jonathan Taplin is Director Emeritus of the Annenberg Innovation Lab at the University of Southern California. He began his entertainment career in 1969 as Tour Manager for Bob Dylan and The Band. In 1973 he produced Martin Scorsese’s first feature film, Mean Streets, which was selected for the Cannes Film Festival. An expert in digital media entertainment, Taplin is a member of the Academy Of Motion Picture Arts and Sciences and sits on the California Broadband Task Force and Los Angeles Mayor Eric Garcetti’s Council on Technology and Innovation.
*****
The video is available on YouTube -- click the title above -- or
https://www.newamerica.org/open-markets/events/who-controls-creative-culture/
Note: because of a technological glitch the talk does not begin until about minute 14 of the video.
Editorial Comment: Competition policy in the age of Trump
We have previously commented on the tendency of the Trump administration to ad hoc participation in competition policy.
We expressed concern when in January the potential merger partners Werner Baumann, Bayer CEO, and Hugh Grant, Monsanto CEO, had what Monsanto said was “a productive meeting with President-Elect Trump and his team to share their views on the future of the agriculture industry and its need for innovation."
Later, after Mr. Trump became President, we expressed concern about New York Times reports of meetings with the White House economics team by Sprint’s parent company Softbank. The meetings coincided with Sprint and Softbank consideration of a “mega-merger,” possibly with T-Mobile, Comcast, or others. The New York Times reported that Tokyo-based SoftBank met with members of the White House economics team, talking up the need for consolidation. The Times, citing sources briefed on the matter, reported that the presentations claimed that a lack of advanced digital investments has put the US economy at risk. The companies argued that risk could be mitigated if telecommunications and wireless companies merged.
Recent comment by Adam Gopnik in the New Yorker Magazine discusses the bigger political concerns raised by the prospect of continued ad hoc policy making. He wrote:
A healthy polity lifts public life into a world of reasonable administration and procedural reliability . . . . In the April 1st issue of The Economist . . . one finds [that], “In 2016, Mr. Trump said Mr. Bezos was using the Post to attack him because Amazon has a ‘huge antitrust problem.’ If Mr. Trump believes that—or even if he doesn’t—his administration might favour action.” Stop and think about those sentences for a moment . . .: there is a presumption that it is perfectly possible that Donald Trump will act against a private company in order to take revenge against it for opposing him in print. . . . It is the kind of thing that is perfectly normal in an autocratic state, as in Russia, where one cannot mock the boss without fear of the police. Suddenly, that abuse is taken for granted here.
No law is broken when a President or close advisors are personally engaged in vetting the terms and conditions of a merger or other competition policy issue, but it is a dramatic departure from past practice, and a worrying one.
When Republican Ronald Reagan became President in 1982 he wanted change in a conservative direction for competition policy, but his cautious approach was a sharp contrast to what may be a more ad hoc approach of the Trump Administration. Reagan appointed a widely respected Stanford University scholar, William Baxter, to head the USDOJ’s Antitrust Division. Baxter was a “Chicago School” enforcement conservative, but his idea of change was reflected in his efforts to update the written Merger Guidelines followed by federal enforcement agencies -- hardly an ad hoc approach.
When Baxter and the Reagan administration famously withdrew the nearly completed USDOJ monopolization litigation against IBM, it had been clear for some time that Baxter opposed the Government prosecution of IBM (he traveled to Europe to lobby the EU authorities against pursuing a case), but he diligently presided over a form of moot court for the U.S. Department of Justice trial staff, with staffers presenting their best evidence and arguments for pursuing the case. At the end of the review process Baxter issued a quasi-judicial written opinion explaining why he thought the case was not worth pursuing. For example, he found predatory pricing allegations to be strong, but so dated as not to be worth pursuing.
It could be argued that there is little consequential difference between the formalistic respect for precedent and institutional procedures of the Reagan/Baxter approach to competition policy change and the Trump administrations' recent tendencies toward a more personal and ad hoc approach. I think the difference is big, and worrying.
Law as we know it today in the United States began with the idea of regularized and predictable rules and procedures. That was the idea of the English “law merchant,” a system where merchant disputes on issues like liability for deliveries of spoiled fruit could be addressed using regularized rules and procedures rather than ad hoc resolutions. The idea of regularized rules and procedures is a crucial part of modern U.S. law, including competition policy.
One problem among many that derives from ad hoc Presidential participation in competition policy is crony capitalism, where competition policy appears to be what powerful business oligarchs can work out in informal conversations on particular cases with political leaders whose interests are aligned with business oligarchs. The William Baxter idea of carefully crafted and transparent Merger Guidelines and reasoned bases for Government decisions on particular cases is a better approach, even if the Guidelines follow narrow “Chicago School” precepts, and cases are dismissed that many pro-plaintiff advocates believe should not be.
Of course, we can hope that President Trump will encourage the USDOJ Antitrust Division and the FTC to staff follow Agency Merger Guidelines and otherwise respect controlling legal precedent, and that the President and close advisors will not weigh in on particular mergers or other competition issues on an ad hoc basis. It is also reasonable to hope that that Antitrust Division and FTC decisions on cases will be made on a reasoned and articulated basis that respects legal precedent. That would be far better than ad hoc and personal Presidential involvement in the daily work of the agencies of the kind suggested by meetings by President Trump and advisors with executives with competition policy axes to grind.
By Don Allen Resnikoff
New Mexico Becomes 48th State with Data Breach Notification Law; Tennessee Restores Exemption for Encrypted Data
By Caleb Skeath on April 14, 2017 POSTED IN DATA BREACHES
Last week, New Mexico and Tennessee both passed legislation updating each state’s requirements for notifying residents following a data breach. New Mexico’s new law, H.B. 15, makes it the 48th U.S. state to enact a state data breach notification law, leaving Alabama and South Dakota as the only states that have not enacted similar laws. Tennessee’s bill, S.B. 547, amended its Identity Theft Deterrence Act of 1999 to exempt certain encrypted data from triggering notification requirements.
New Mexico’s breach notification law is similar to that of other states, with a few notable differences.
Entire article: https://www.insideprivacy.com/data-security/data-breaches/new-mexico-becomes-48th-state-with-data-breach-notification-law-tennessee-restores-exemption-for-encrypted-data/
Anals of local bid-rigging: Well-known Oakland CA contractors conspired to cheat government
By MALAIKA FRALEY | mfraley@bayareanewsgroup.com |
PUBLISHED: April 7, 2017 at 3:13 pm | UPDATED: April 10, 2017 at 5:44 amSAN FRANCISCO — The founders of a well-known Oakland construction company, the son of an Oakland councilman, a former state Veterans Affairs official and other Bay Area contractors have been indicted by the federal government in construction bid-rigging schemes.
Federal prosecutors said Friday that two founders of Turner Group Construction — CFO Len Turner and COO Lance Turner — and Oakland City Councilman Larry Reid’s son Taj Reid conspired to defraud the Department of Energy on a Lawrence Berkeley Lab renovation project in 2013. The Turner Group has worked on a number of high-profile construction projects in Oakland, including restoration of the historic Fox Theater, the Alameda County Family Justice Center, and a number of public school and BART projects.
Lance Turner, 57, of Oakland, and Len Turner, 56, of San Leandro, and Reid, 46, of Oakland, did not return calls for comment on Friday.
Prosecutors said the indictments arose out of the 2012-2014 public corruption investigation of then-state Sen. Leland Yee, San Francisco political consultant Keith Jackson, and San Francisco mob boss Raymond “Shrimp Boy” Chow, and involved the same “FBI source” who went undercover as a developer to obtain the most recent indictments. Jackson introduced the “developer” to three of the men indicted Thursday, according to prosecutors.
The U.S. attorney’s office also obtained an indictment against Pleasant Hill resident Eric Worthen, a former official with the California Department of Veterans Affairs, who is accused of working with Reid to take $12,000 worth of bribes from the undercover “developer.” It’s unclear if Reid was working under anyone’s employ during the alleged schemes.
Prosecutors say Worthen, 45, was working for the CalVet homes for the veterans division when he and Reid offered the undercover FBI employee the “inside advantage” on the construction of two CalVet projects, a veterans’ home in Ventura and a home remodel in West Los Angeles, by circumventing the normal bidding process.
“For both construction projects, the ‘developer’ to whom Worthen and Reid were providing an inside track on the CalVet contracts was, in actuality, a source working for the FBI. The source was posing as a developer willing to pay bribes in order to obtain contracts with public agencies,” the U.S. attorney’s office said in a news release.
Reid and the Turners are accused of offering to submit a high bid to a Lawrence Berkeley Lab modernization project in 2013 so that the “developer” could win the project.
Reid is charged with two counts of bribery and two counts of conspiracy; Worthen is charged with three bribery counts; and the Turners are each charged with one conspiracy count.
The Turner Group has longtime political ties in Oakland. Council members Desley Brooks and Larry Reid were accused by the city auditor in 2013 of illegally directing city staffers to award a $2 million demolition project at the Oakland Army Base to the company. Another developer won the project after the city administrator ordered a competitive bidding process.
Also indicted on Thursday were four other Bay Area contractors accused of conspiring to rig the bidding process for the Lawrence Berkeley Lab renovation in 2013. Derf Butler, 53, of Vallejo, president of Butler Enterprise Group, LLC in San Francisco, is charged with conspiracy and making a false statement. Anton Kalafati, 33, of San Francisco, president of San Francisco-based B Side, Inc., is charged with conspiracy and two counts of making false statements. Clifton Burch, 49, of San Lorenzo, president of Empire Engineering and Construction Inc, in Oakland and San Francisco, and Peter McKean, 48, of San Mateo, vice president of Townsend Management Inc. in San Francisco, are each charged with one conspiracy count.
All of the men are scheduled to be arraigned in federal court on April 17 and are not in custody. A conviction for conspiracy to defraud the federal government is punishable by up to five years in prison and a $250,000 fine. Receiving a bribe by an agent of an organization receiving federal funds is punishable by up to 10 years in prison and a $250,000 fine.
Staff writer David DeBolt contributed to this report.
http://www.eastbaytimes.com/2017/04/07/feds-bay-area-developers-including-well-known-oakland-contractors-conspired-to-cheat-government/
- Tags:
- Courts
Thirty-three states, the District of Columbia and Puerto Rico addressed financial exploitation of the elderly and vulnerable adults in their 2016 legislative session.
Alabama enacted the Protection of Vulnerable Adults from Financial Exploitation Act, requiring qualified individuals who reasonably believe that financial exploitation of a vulnerable adult may have occurred, been attempted, or is being attempted, to notify promptly the Department of Human Resources and the Alabama Securities Commission. Arizona now provides an exception to the confidentiality of the mediation process when disclosure is made by a court-appointed mediator who reasonably believes that a minor or vulnerable adult is or has been a victim of abuse, child abuse, neglect, exploitation, physical injury or a reportable offense. California enacted legislation requiring the state Department of Justice to develop and distribute an informational notice that warns the public about elder and dependent adult fraud, provides information regarding how and where to file complaints and requires the notice to be made available on the website of the attorney general. Connecticut broadens the circumstances when the Department of Social Services commissioner must disclose the results of an investigation into suspected elderly abuse, neglect, exploitation, or abandonment, but limits the type of information that may be disclosed.
Delaware adopted a reolution recognizing June 15, 2016, as Delaware Elder Abuse Awareness Day, encouraging all of Delaware’s citizens to learn about how to protect and nurture elderly citizens. Idaho amended existing law to revise the definition of neglect to include exploitation. Illinois enacted legislation providing that a prosecution for financial exploitation of an elderly person or a person with a disability may be commenced within seven years of the last act committed in furtherance of the crime.
New Hampshire changed the term "incapacitated" adult to "vulnerable" adult in the laws governing protective services to such adults. New Jersey established the New Jersey Task Force on Abuse of Persons who are Elderly or Disabled. Tennessee adopted a resolution directing the Tennessee Commission on Aging and Disability to conduct a study on the financial exploitation of vulnerable adults. Vermont enacted legislation directing financial institutions in Vermont to make a vulnerable adult’s financial information available to an adult protective services investigator upon receipt of a court order or the investigator’s written request.
The NCSL website allows you to conduct a full text search or use the dropdown menu option to select a state and search relevant laws: http://www.ncsl.org/research/financial-services-and-commerce/financial-crimes-against-the-elderly-2016-legislation.aspx
Neel Kashkari responds to Jamie Dimon on "too big to fail"
4/6/17 at 7:07 pm
quote:
On April 4, JPMorgan Chase Chairman and CEO Jamie Dimon published his annual shareholder letter, much of which focused on public policy and financial regulation. At 46 pages, Mr. Dimon’s letter includes a lot of interesting commentary. In this essay, I am going to respond to two of his main points because I strongly disagree with them. First, Mr. Dimon asserts that “essentially, Too Big to Fail has been solved?—?taxpayers will not pay if a bank fails.” Second, Mr. Dimon asserts that “it is clear that the banks have too much capital.” Both of these assertions are demonstrably false.
To see the entire essay, go to http://www.tigerdroppings.com/rant/money/neel-kashkari-responds-to-jamie-dimons-shareholder-letter/69533054/
Trump support for separating banks' consumer-lending businesses from their investment banks?
In a private meeting with lawmakers, White House economic adviser Gary Cohn said he supports a policy that could radically reshape Wall Street’s biggest firms by separating their consumer-lending businesses from their investment banks, said people with direct knowledge of the matter.
Cohn, the ex-Goldman Sachs Group Inc. executive who is now advising President Donald Trump, said he generally favors banking going back to how it was when firms like Goldman focused on trading and underwriting securities, and companies such as Citigroup Inc. primarily issued loans, according to the people, who heard his comments.
The remarks surprised some senators and congressional aides who attended the Wednesday meeting, as they didn’t expect a former top Wall Street executive to speak favorably of proposals that would force banks to dramatically rethink how they do business.
Yet Cohn’s comments echo what Trump and Republican lawmakers have previously said about wanting to bring back some version of the Glass-Steagall Act, the Depression-era law that kept bricks-and-mortar lending separate from investment banking for more than six decades.
https://www.bloomberg.com/news/articles/2017-04-06/cohn-said-to-back-wall-street-split-of-lending-investment-banks
Many brokers exit HealthCare.gov as high-end plan commissions go unpaid
More insurance companies around the country are refusing to pay brokers commissions on higher-tier exchange plans or special enrollment sales as the companies face financial losses on the federal marketplace, according to Ronnell Nolan, CEO of Health Agents for America, which represents independent insurance brokers.
“It's the Wild West out here, and companies are doing what they can to survive,” Nolan said. “They're not paying commissions on platinum plans, and they are not paying them for special enrollment plans which cover some of the sickest patients.”
That policy has led to an exodus of brokers from the federal marketplace, which could undermine enrollment efforts since brokers historically sign up at least 50% of exchange enrollees, according to Kevin Counihan, the former CEO of HealthCare.gov under President Barack Obama.
Brokers help consumers navigate coverage options.
http://www.modernhealthcare.com/article/20170405/NEWS/170409972?utm_source=modernhealthcare&utm_medium=email&utm_content=20170405-NEWS-170409972&utm_campaign=am
Suppliers raise market abuse complaints with the European Commission over bundling of Defender security software with Windows
Security technology suppliers have complained to European Union officials over Microsoft’s alleged abuse of its dominant market position in Europe, according to official EU sources.
A high-level EU official from the European Commission competition directorate said at least three security software companies had “met several times” with the EC to raise alleged market abuses by Microsoft.
The complaints centre on Microsoft’s free security software add-on, Defender, included by default in the Windows 10 operating system. Security companies claim the tactic is shrinking the market for competing security software.
Full Content: EU Observer
New days for the EPA: Pruitt supports use of pesticide chlorpyrifos despite advice from agency experts
Advocacy organizations seeking to ban a pesticide linked to developmental disorders in children asked the courts Wednesday to intervene and order the Environmental Protection Agency to ban the pesticide from food within 30 days and from all uses within 60 days if it cannot prove it is safe.
The head of the E.P.A., Scott Pruitt, last week denied the petition to outlaw chlorpyrifos, a pesticide often used on apples, oranges and other crops, even though the agency’s own safety experts concluded that the chemical should be outlawed. Mr. Pruitt did not present any new evidence that it is safe, and said the agency could not be forced to complete a review of chlorpyrifos until 2022, when there is a deadline for re-evaluating it.
The E.P.A. had been under a court order to respond by the end of March to a 10-year-old petition to ban the chemical, originally filed in 2007 by the Natural Resources Defense Council and Pesticide Action Network.
From: https://www.nytimes.com/2017/04/05/well/advocacy-groups-ask-for-ban-on-common-pesticide.html?ref=business&_r=0
Bloomberg: Here’s How They Play Monopoly in America, and Who Wins
Market concentration in the U.S. has reached a three-decade high,
while the government has opened fewer antitrust cases. Competition in the marketplace is a good thing. Lower prices. More innovation. Better goods and services.
Now we may have too little of that good thing, as big corporations gobble up the economic pie. Market concentration has reached a three-decade high and, since the late 1990s, has increased in more than 75 percent of U.S. industries, according to a working paper given last week at the University of Chicago's Booth School of Business. Market concentration is how much of a market, such as the wireless or automobile market, the leaders in that industry control, by revenue.
At the same time, the federal government has brought significantly fewer antitrust cases, according to the paper, titled “Is There a Concentration Problem in America?” In 2014, the Department of Justice didn't open any cases against monopolies at all, and opened just three in 2015. That compares to 22 cases in 1994.
Gustavo Grullon, a finance professor at Rice University's business school and one of the paper's three authors, acknowledged they can’t infer a causal relationship between the increased market concentration and the decline in the number of antitrust cases, but said he thinks the correlation is strong enough to require “serious attention from regulators.” The other two authors are also business school professors, from Cornell University, and York University, in Canada. Their research was cited by a recent Wall Street Journal investing column.
In the most recent draft of the working paper, the researchers, who had already found increasing market concentration, set out to determine what's driving the trend. The data they discovered led them to reject several of their hypotheses, including that the uptick was a result of consolidation of companies in unprofitable or distressed industries, such as publishing and textiles. The data did suggest, aside from antitrust enforcement, that patents are serving as “technological barriers to entry,” keeping out potential competitors.
“It is an important aspect of the economy, and it’s the responsibility of agencies to figure out if this is an issue or not,” Grullon said.
Full article: https://www.bloomberg.com/news/articles/2017-04-05/here-s-how-they-play-monopoly-in-america-and-who-wins
Is the liquidation of insurer Penn Treaty the result of a failure of regulation?
The NY Times reports that a large long term care insurer, Penn Treaty of Allentown, Pa., has been ordered to liquidate and wind down its affairs. Its long-term-care insurance was purchased by families to avoid crushing nursing home costs.
“Liquidation is rare, but it does happen in bunches sometimes,” said Robert Hunter, director of insurance for the Consumer Federation of America. The organization has been warning about problems with long-term-care insurance since the early 1990s. See the NY Times story here: read the Times story
In 2012 the judge handling the case declined to allow liquidation, complaining that the Pennsyvania insurance commissioner caused the problem by denying a justifiable rate increase. The judge wrote, in part, that:
The Insurance Commissioner, wearing his hat as a regulator of the Pennsylvania insurance industry, refused to approve the Companies' actuarially justified rate increase filings in the amount requested, both before and after rehabilitation. The Commissioner has even discouraged other state regulators from approving rate increases. Now the Commissioner seeks to liquidate the Companies because their premium rates are inadequate.
The full 164 page 2012 page opinion is at http://www.penntreatyamerican.com/downloads/20120503-ruling.pdf the entire record in the case can be found at http://www.penntreatyamerican.com/investornews.asp
US Supreme Court: Does a retailer have a Free Speech right to separately post a credit card surcharge?
The US Supreme Court has decided a case, Expressions Hair Design v. Schneiderman, that relates to the long-running dispute between Visa and MasterCard and merchants who want to avoid fees charged by credit card companies by stating surcharge fees separately and thereby steering customers toward cash. That undermines the credit card companies desire to make the fees invisible to consumers.
The decision was a victory for plaintiff businesses that wish to tell their customers that they impose a surcharge for using credit cards. But the Supreme Court decided only that the law regulated their speech rather than conduct, and it left it to an appeals court to determine whether the law violated the First Amendment.
See EXPRESSIONS HAIR DESIGN v. SCHNEIDERMAN Opinion of the Court at https://www.supremecourt.gov/opinions/16pdf/15-1391_g31i.pdf
From the opinion: "Section 518 is different. The law tells merchants nothing about the amount they are allowed to collect from a cash or credit card payer. Sellers are free to charge $10 for cash and $9.70, $10, $10.30, or any other amount for credit. What the law does regulate is how sellers may communicate their prices. A merchant who wants to charge $10 for cash and $10.30 for credit may not convey that price any way he pleases. He is not free to say “$10, with a 3% credit card surcharge” or “$10, plus $0.30 for credit” because both of those displays identify a single sticker price—$10—that is less than the amount credit card users will be charged. Instead, if the merchant wishes to post a single sticker price, he must display $10.30 as his sticker price. Accordingly, while we agree with the Court of Appeals that §518 regulates a relationship between a sticker price and the price charged to credit card users, we cannot accept its conclusion that §518 is nothing more than a mine-run price regulation. In regulating the communication of prices rather than prices themselves, §518 regulates speech."
The majority opinion is unusual in its focus on Free Speech. However, it relates to a broader policy issue of whether and to what extent suppliers should be allowed to dictate pricing policies of retailers concerning the suppliers' products.
From Public Citizen:
The Hill Reports Bill to Weaken CFPB Could be Marked Up in April While Politico Makes it Seem As it Might Not Move
Here is The Hill's Report. Excerpt:
Republicans on the House Financial Services Committee are eyeing April markups for Dodd-Frank legislation, meaning Democrats have just about a month to settle on a strategy to defend the CFPB.
Some Democrats think working with Republicans on some changes to the CFPB could be sound policy.
Several House Financial Services Committee Democrats say backing a coalition, for example, could protect the agency from withering under a Trump appointee.
“I’ve been warning my party for a long time that at some point you’re going to have a Republican president,” said Rep. Brad Sherman (D-Calif.). “I prefer a bipartisan commission.”
And here is Politico's:
What did the health care meltdown mean for Republicans’ hopes of dismantling President Barack Obama’s other legislative legacy, Dodd-Frank?
It certainly didn't help. While tax reform appears to be moving to the frontburner, sources on the Hill and downtown saw no similar opening for “doing a big number” on Democrats’ landmark Wall Street legislation, as President Donald Trump once promised.
If anything, sources said Friday's episode underscored the risk that Republicans haven’t fully identified their internal political fault lines, including when it comes to undoing Dodd-Frank, and that Democrats will be emboldened to fight back.
So don't expect House Financial Services Chairman Jeb Hensarling's Dodd-Frank alternative, known as the Financial CHOICE Act, to hit the House floor in the near future, unless Trump or his team — which includes a small army of Goldman Sachs alums — take a strong interest.
Treasury Secretary Steven Mnuchin is conducting a wide-ranging review of financial regulations for a report that’s not due until June.
“If Dodd-Frank reform is a big priority for the White House and Steven Mnuchin, you could see it potentially move up the sequence of events. But, short of that, I don’t really know if it changes that much,” an aide to a senior House Republican said. “We’d have to get a lot of people up to speed [on the Financial CHOICE Act] who aren't really up to speed on it.”
Congress completes its overturning of the nation’s strongest internet privacy protections for individuals
The action is a victory for telecommunications companies, which can track and sell a customer’s online information with greater ease.
In a 215-to-205 vote largely along party lines, House Republicans moved to dismantle rules created by the Federal Communications Commission in October. Those rules, which had been slated to go into effect later this year, had required broadband providers to receive permission before collecting data on a user’s online activities.
The action, which follows a similar vote in the Senate last week, will next be brought to President Trump, who is expected to sign the bill into law. A swift repeal may be a prelude to further deregulation of the telecommunications industry.
See https://www.nytimes.com/2017/03/28/technology/congress-votes-to-overturn-obama-era-online-privacy-rules.html?ref=business
From Public Citizen: Legal clash with FTC on marketing of used cars
Posted: 27 Mar 2017 06:10 AM PDT
FairWarning reports:
Can a used car be marketed as “safe” or “certified” even if it has defective air bags, a faulty ignition switch or other potentially lethal problems?
Yes, so long as the used car dealer discloses that the vehicle may be subject to a pending safety recall.
That stance, taken by the Federal Trade Commission, is at the heart of a recent legal settlement with General Motors and two used car dealers over deceptive advertising practices. But it is now being put to the test in a federal court in Washington, DC, by auto safety activists.
The safety groups contended in legal papers filed Friday that the settlement places unaware car buyers, their passengers and others at “the risk of injury or death caused by the defective vehicles.” In essence, the concern is that buyers will have a false sense of security if a car is described as safe and won’t take care of the defect that prompted the recall.
The full article is here.
One year after the Panama Papers: Progress on anonymous corporate ownership?
March 30, 2017, 2:00 — 4:00 p.m. EST
The Brookings Institution, Falk Auditorium, 1775 Massachusetts Avenue, N.W
Washington, DC 20036
One year after the Panama Papers exposed the offshore banking activities of the clients of the Panamanian firm Mossack Fonseca, it is still legal and permissible for corporations in America to be anonymously owned. This practice continues to draw criticism in the face of mounting requirements for financial institutions to ‘know their customers,’ and among foreign policy experts who fear a growing kleptocracy. What is the proper policy response to an area where financial regulation, national security, foreign policy, and global business converge?
On March 30, the Center on Regulation and Markets at Brookings will host Senator Sheldon Whitehouse (D-R.I.) as a sponsor of recently introduced legislation aimed at ending the use of anonymously owned corporations. A panel of experts and regulators will follow his keynote remarks. Participants will take questions from the audience.
This event will be webcast live. Join the conversation on Twitter at #PostPanama.
Opening remarks
Aaron Klein, Fellow and Policy Director, Center on Regulation and Markets, The Brookings Institution
Panel
Moderator: Kevin Hall, Chief Economics Correspondent and Senior Investigator, McClatchy Newspapers
Charles Davidson, Executive Director, Kleptocracy Initiative, The Hudson Institute
Norm Eisen, Fellow, Governance Studies, The Brookings Institution
Matthew L. Ekberg, Senior Policy Advisor, Institute of International Finance
Brian P. O'Shea, Senior Director, Center for Capital Markets Competitiveness
Keynote
The Hon. Sheldon Whitehouse (D-R.I.), Ranking Member, Judiciary Subcommittee on Crime and Terrorism and EPW Subcommittee on Oversight, U.S. Senate
Click here to Register to attend this event » Click here to Register for the live webcast »
From Joe Libertelli at UDC
Join 158 US law deans to urge the protection of Legal Services!
The deans' LETTER was signed by our alums, the Hon. Penny Willrich, ‘82, dean of Arizona Summit Law School, UDC-DCSL Dean Shelley Broderick, MAT '82 and Andrea Lyons, ’76, dean of Valparaiso University School of Law, and 155 other US law school deans. The letter is addressed to two US House Committee Chairs and two US Senate Committee Chairs. It urges continued bi-partisan support of the Legal Services Corporation, which funds local, vitally important, legal services offices nationwide.
The UDC School of Law urges all friends, alumni and others who understand the importance of continued access to justice for low-income people to take action by contacting their own members of Congress!
Write a short letter: take Action HERE
Thank you!!
Breaking news:
EU Antitrust Regulators Clear $130 Billion Dow, DuPont Merger
By REUTERS MARCH 27, 2017, 6:48 A.M. E.D.T.
Chemical and DuPont gained conditional EU antitrust approval on Monday, March 27, 2017, for their $130 billion (103.24 billion pounds) merger by agreeing to significant asset sales, one of a trio of mega mergers that will redraw the agrochemicals industry.
The European Commission had been concerned that the merger of two of the biggest and oldest U.S. chemical producers would have few incentives to produce new herbicides and pesticides in the future.
See https://www.nytimes.com/reuters/2017/03/27/business/27reuters-du-pont-m-a-dow-eu.html?src=busln
LIVE STREAMED CONFERENCE: IS THERE A CONCENTRATION PROBLEM IN AMERICA?
MARCH 27-29, 2017
About the Conference:
The Stigler Center will host a three-day conference in Chicago in March 2017, bringing together academics, regulators, and public intellectuals to discuss one of the most interesting questions of our time: is there a concentration problem in the United States? The conference will cast a wide net, in an attempt to provide multidisciplinary perspective on the issues. It will particularly emphasize the following seven themes:
- What do the data tell us? Trends in concentration and competition.
- What does history tell us? The development of antitrust in America.
- Consolidation in the financial industry and its influence on antitrust.
- Winner-take-all digital platforms and big data.
- Information in the age of concentration.
- Concentration, market power, and inequality.
- Is there a role for political antitrust?
Watch Live: The conference will be live-streamed. For details see https://research.chicagobooth.edu/stigler/events/single-events/march-27-2017
House overwhelmingly passes repeal of the McCarran-Ferguson antitrust exemption for insurance companies: Competitive Health Insurance Reform Act
By Jennifer Garvin (for the American Dental Association)
Washington — The House of Representatives on March 22 voted 416-7 in favor of repealing the McCarran-Ferguson antitrust exemption for health insurance companies by passing H.R. 372, the Competitive Health Insurance Reform Act of 2017.
The ADA has advocated for repeal of the 1945 McCarran-Ferguson Act antitrust exemption for the insurance industry for more than 20 years. The Association strongly supported H.R. 372, which was introduced Jan. 10 by Rep. Paul Gosar, R-Ariz., and would authorize the Federal Trade Commission and the Justice Department to "enforce the federal antitrust laws against health insurance companies engaged in anticompetitive conduct."
"Today, a bipartisan majority in the House joined me in taking a historic step to begin rebuilding America's health care market," said Rep. Gosar, a dentist and ADA member. "As a dentist for over 25 years, I know first-hand that restoring the application of federal antitrust laws to the business of health insurance is the key to unlocking greater competition in the marketplace. Making health insurance companies compete in a free-market will result in huge benefits for hospitals, doctors and most importantly, patients."
"Free market competition leads to lower costs, greater innovation and variety in the insurance marketplace," said Dr. Gary Roberts, ADA president. "I have long appreciated Paul Gosar for his steadfast commitment to patient advocacy, and I thank him for his work on reforming the McCarran-Ferguson Act. Further, I want to thank every one of the 416 members of Congress who voted for H.R. 372 today."
This victory in the House caps a flurry of advocacy efforts by the ADA in 2017. On Feb. 16, the Association submitted written testimony to a House subcommittee hearing on Regulatory Reform, Commercial and Antitrust Law, asking for support of the bill. That was followed by the Organized Dentistry Coalition's Feb. 27 letter to the House Judiciary Committee, which unanimously voted in favor of H.R. 372.
"History has always shown us that when we put the patient first and demand that health insurance companies compete for their business, premiums go down while quality improves," Rep. Gosar said. "I'm proud to have led this effort in the House and call on Senate leaders to take up this bipartisan legislation in a timely matter."
To keep track on all the Association's insurance reform activities, visit ADA.org/McF.
Big Bank Defendants Avoid Currency Buyers' Forex-Rigging Suit
Foreign currency buyers alleging they were charged falsely inflated prices as a result of a massive, ongoing price-fixing conspiracy by the world’s largest banks saw their latest complaint tossed out Friday by a New York federal judge, who said they failed to show how they suffered any antitrust injury.
From opinion at https://dlbjbjzgnk95t.cloudfront.net/0906000/906115/https-ecf-nysd-uscourts-gov-doc1-127119961339.pdf:
"Plaintiffs allege that they paid inflated foreign currency exchange rates caused by Defendants’ alleged conspiracy to fix prices in the foreign exchange (“FX”) or foreign currency market. Defendants move to dismiss the Second Amended Complaint (the “Complaint”) pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). For the reasons stated below, Defendants’ motion to dismiss is granted. "
Google and the EU: Vestager warns against using algorithms for price collusion
By CPI
Europe’s antitrust chief warned companies against using algorithms to block rivals or form cartels, saying she may slap heftier fines on them if they use such software to commit wrongdoing.
European Competition Commissioner Margrethe Vestager, who is poised to fine US technology giant Google in the coming months for using its algorithm to unfairly demote rival shopping services in internet search results, said she was vigilant to such illegal practices.
“I don’t think competition enforcers need to be suspicious of everyone who uses an automated system for pricing. But we do need to be alert,” Vestager said at a conference organised by the German cartel office Bundeskartellamt.
She pointed to the challenge of tackling sophisticated cartels which use software to fix prices and allocate markets among themselves to the detriment of customers and the economy, saying sanctions should reflect and deter this new tool used by companies.
Full Content: Wall Street Journal
Maryland legislator proposes law to regulate "rent to own" homesellers; Congress investigates
In Maryland, a state legislator introduced a measure to better regulate rent-to-own landlords to make sure they are renting habitable homes and not trying to pass off major repairs onto their tenants. The measure did not get out of the committee but Delegate Samuel Rosenberg said he intends to re-introduce it in the next session. Mr. Rosenberg said he drafted the proposal after reading an article in The New York Times about problems with rent-to-own landlords, including a nationwide firm that owns homes in Baltimore. What follows is a copy of his proposed legislation and some letters in support, including one from the office of Maryland's attorney general.
The proposal is here: https://www.nytimes.com/interactive/2017/03/13/business/dealbook/document-Rent-to-Own-Bill.html
A investigative letter from Congress to a rent-to-own company is here:
https://democrats-oversight.house.gov/sites/democrats.oversight.house.gov/files/documents/2017-01-18.EEC%20to%20Vision%20Property%20Management.pdf
Can Companies Behind Health Savings Accounts Bank On Big Profits Under GOP Plan?
http://khn.org/news/companies-behind-health-savings-accounts-could-bank-on-big-profits-under-gop-plan/?utm_campaign=KHN%3A%20Daily%20Health%20Policy%20Report&utm_source=hs_email&utm_medium=email&utm_content=45223467&_hsenc=p2ANqtz-_suW9EYanORyKPQzToQRh-zGPDwOsfaJ8t-mIQO_wADugkmzyEeoKe_Njfr0SETQBpWN46LwMYtMT8QMUvoh934izaxQ&_hsmi=45223467
Many states withdraw financial support for electric cars
From NYT article:
Today, the economic incentives that have helped electric vehicles gain a toehold in America are under attack, state by state. In some states, there is a move to repeal tax credits for battery-powered vehicles or to let them expire. And in at least nine states, including liberal-leaning ones like Illinois and conservative-leaning ones like Indiana, lawmakers have introduced bills that would levy new fees on those who own electric cars.
The state actions could put the business of electric vehicles, already rocky, on even more precarious footing. That is particularly true as gas prices stay low, and as the Trump administration appears set to give the nascent market much less of a hand.
Full article: https://www.nytimes.com/2017/03/11/business/energy-environment/electric-cars-hybrid-tax-credits.html?ref=business
On March 7, the State of Hawaii moved for leave to file an Amended Complaint that details their allegations against the new Executive Order on Immigration
Here, courtesy of the Hogan Lovells law firm, is the motion and proposed complaint. The latter document details the Plaintiffs’ grievances with respect to President Trump’s 3/6/17 Travel Ban.
In yet another apparent departure from traditional antitrust review protocols, Sprint is reportedly talking directly to the White House about a possible merger
In recent weeks, President Trump has repeatedly mentioned promised investments and jobs from Sprint and its parent company Softbank. Now the wireless provider is reportedly hoping to eventually turn that goodwill — and the Trump administration’s light-touch approach to regulation — into a mega merger, possibly with T-Mobile, Comcast, or others.
New wireless industry mergers are currently on hold until the government-sponsored wireless spectrum auction ends later this spring, but the New York Times reports that Tokyo-based SoftBank has met with members of the White House economics team, talking up the need for consolidation.
SoftBank executives and members of President Trump’s economic team recently addressed the future of mergers broadly. The Times, citing sources briefed on the matter, reports that the presentations claimed that a lack of advanced digital investments has put the US economy at risk. This risk could be mitigated if telecommunications and wireless companies merged.
Credit: CPI Full Content: New York Times
The new executive order on immigration of President Trump is here:
https://www.whitehouse.gov/the-press-office/2017/03/06/executive-order-protecting-nation-foreign-terrorist-entry-united-states
An interesting and well-informed video debate on the new order is here, beginning at minute 12:09:
http://www.pbs.org/newshour/episode/pbs-newshour-full-episode-march-6-2017/
Disturbing New Facts About American Capitalism from the Wall Street Journal
When winners are taking all, it's often time to buy the winners
By
Jason Zweig
“Let your winners run” is one of the oldest adages in investing. One of the newest ideas is that the winners may be running away with everything.
Modern capitalism is built on the idea that as companies get big, they become fat and happy, opening themselves up to lean and hungry competitors who can underprice and overtake them. That cycle of creative destruction may be changing in ways that help explain the seemingly unstoppable rise of the stock market.
New research by economists Gustavo Grullon of Rice University, Yelena Larkin of York University and Roni Michaely of Cornell University argues that U.S. companies are moving toward a winner-take-all system in which giants get stronger, not weaker, as they grow.
That’s the latest among several recent studies by economists working independently, all arriving at similar findings: A few “superstar firms” have grown to dominate their industries, crowding out competitors and controlling markets to a degree not seen in many decades.
Let’s look beyond such obvious winner-take-all examples as Apple or Alphabet, the parent of Google.
Consider real-estate services. In 1997, according to Profs. Grullon, Larkin and Michaely, that sector had 42 publicly traded companies; the four largest generated 49% of the group’s total revenues. By 2014, only 20 public firms were left, and the top four — CBRE Group, Jones Lang LaSalle, Realogy Holdings and Wyndham Worldwide — commanded 78% of the group’s combined revenues.
Or look at supermarkets. In 1997, there were 36 publicly traded companies in that industry, with the top four accounting for more than half of their total sales. By 2014, only 11 were left. The top four — Kroger, Supervalu, Whole Foods Market and Roundy’s (since acquired by Kroger) — held 89% of the pie.
The U.S. had more than 7,000 public companies 20 years ago, the professors say; nowadays, fewer than 4,000.
The winners are also grabbing most of the profits, according to the Leuthold Group, an investment-research and asset-management firm in Minneapolis.
At the end of 1996, the 25 companies in the S&P 500 with the highest net profit margins — income as a percentage of revenues — earned a median of just under 21 cents on every dollar of sales. Last year, the top 25 such companies earned a median of 39 cents on the dollar.
Two decades ago, the median net margin among all S&P 500 members was 6.7%. By the end of 2016, that had increased to 9.7%.
So while companies as a whole grew more profitable over the past 20 years, the winners become vastly more profitable — nearly doubling the gains they got on each dollar of sales.
Among the 25 companies with the highest margins last year were eBay, Altria Group, Baxter International, Gilead Sciences, Corning, Visa, Mastercard, Facebook, Amgen and Biogen.
“I’m disappointed in capitalism,” jokes Doug Ramsey, Leuthold’s chief investment officer. “It seems that the big ones are just slowly pulling away.”
Why might it be easier now for winners to take all? Prof. Michaely suggests two theories. Declining enforcement of antitrust rules has led to bigger mergers, less competition and higher profits. The other is technology. “If you want to compete with Google or Amazon,” he says, “you’ll have to invest not just billions, but tens of billions of dollars.”
He and his colleagues have found that if you had invested in industries where the top companies were growing more dominant, while betting against sectors whose top firms were becoming weaker, you would have outperformed the overall stock market by an average of roughly nine percentage points annually between 2001 and 2014.
To do that, you would count the public companies in a given industry each year and use the sales figures from their annual reports to calculate what’s known as a Herfindahl-Hirschman Index.
If the number of companies is trending down, and the HHI is going up, then the winners are taking all — and you should buy.
Maybe that’s what many stock investors have been doing lately, even if they’re going on their gut rather than statistical evidence. And with the winners having driven weaker companies out of business, too much money is chasing too few stocks.
Still, history offers a warning. Many times in the past, winners have taken all — but seldom for long.
Perhaps the laws of creative destruction finally have been repealed once and for all. But sooner or later, capitalism has always been able to turn yesterday’s unstoppable winners into the also-rans of today and tomorrow.
You could look it up — preferably on a BlackBerry, if you can find someone who still uses one.
Write to Jason Zweig at intelligentinvestor@wsj.com, and follow him on Twitter at @jasonzweigwsj.
Another view of Gorsuch on antitrust:
The Antitrust Jurisprudence of Neil Gorsuch, by John M. Newman, University of Memphis - Cecil C. Humphreys School of Law
March 6, 2017
From the Abstract: In January 2017, President Donald Trump nominated Judge Neil M. Gorsuch to serve on the U.S. Supreme Court. Like Justice Stevens before him, Gorsuch’s primary area of expertise is antitrust law. Like Stevens, Gorsuch both practiced and taught in the area before joining the bench. As a Tenth Circuit judge, Gorsuch penned multiple substantive antitrust opinions.
In light of Gorsuch’s unique antitrust expertise, examination of those opinions can shed unique light on his judicial proclivities. This essay provides the first in-depth prescriptive and descriptive analysis of Gorsuch’s antitrust jurisprudence. While it reveals (perhaps unsurprisingly) a great deal of sophistication vis-à-vis antitrust doctrine, it also identifies several areas for improvement.
This essay explains that as a Tenth Circuit judge, Gorsuch effectively expanded upon—even rewrote—existing precedent, including Justice Scalia’s memorable opinion for the majority in Trinko. For normative force, Gorsuch’s antitrust jurisprudence at times rests upon logical fallacies and an unduly one-sided error-cost framework. This essay critiques that reasoning.
See https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2928414
Two views of Gorsuch on antitrust issues
Law professor Zephyr Teachout’s recent op-ed in the Washington Post accused Supreme Court nomineee Gorsuch of a “preference for concentrated wealth and power” and consistent friendliness toward “big business and monopolies at the expense of competition and open markets,”
See https://www.washingtonpost.com/posteverything/wp/2017/02/21/neil-gorsuch-always-sides-with-big-business-big-donors-and-big-bosses/?utm_term=.1d31d4cf8e9f
Antitrust experts Rubin and Mogin suggest that critique is overblown, based on their reading of Gorsuch cases. See
http://www.nationalreview.com/bench-memos/445475/neil-gorsuch-antitrust-law-zephyr-teachout-washington-post-opinion-wrong
Republican legislators in at least 16 states have filed bills intended to make protests more orderly or to toughen penalties against ones that go awry
. Republicans in two other states, Massachusetts and North Carolina, have said they will file protest-related bills.
Those numbers include only bills whose sponsors have specifically linked them to protests, said Jonathan Griffin, a policy analyst who tracks the measures at the National Conference of State Legislatures. How many will be enacted is unclear; a few already have been pronounced dead in committee.
Some sociologists and legal experts say the bills are in line with a general trend toward tougher treatment of protesters in the wake of especially disruptive demonstrations like the Occupy Wall Street movement in Manhattan and the 2014 violence in Ferguson, Mo.
But interviews and news reports suggest that some of the measures are either backed by supporters of President Trump or are responses to demonstrations against him and his policies. After a Nashville motorist struck safety workers who were escorting anti-Trump protesters at a crosswalk, a Tennessee state representative introduced legislation that would relieve motorists of any liability should they accidentally hit someone deliberately blocking a street.
Continue reading the full NYT story
Uber targeted by 14 more Boston cab companies
By CPI on March 1, 2017
Uber faces new foes, this time in Boston. Fourteen Boston area cab companies have filed a complaint against the ride share platform.
The complains allege that Uber violates state laws and city ordinances. It also claims that it deceives costumers about the safety of its vehicles and drives.
“Uber’s business plan and activity illegally undermine critical safety provisions of the municipal Taxi Rules,” the complaint states. “Uber’s UberX transportation system preys parasitically on established taxi services without paying for them and without obeying the laws designed to protect taxi passengers.”
The taxi drivers claim that Uber now controls a monopoly with 80% of the low-cost, on-demand ride-shares on the area.
This is the lates complaint of six in civil cases filed against the company in federal court in the month of February alone.
Full Content: The Register
Larry Summers defends Dodd-Frank and other financial and consumer protection regulation
The talk was part of a Charlie Rose show interview. See the URL below. The Dodd-Frank and regulation discussion begins at about minute 7:40.
https://charlierose.com/episodes/30031?autoplay=true
Health insurers optimistic about post-ACA world after meeting with Trump
By Shelby Livingston | February 27, 2017
After meeting with President Donald Trump at the White House early Monday, the CEOs of several large health insurers were optimistic about the future of the health insurance industry if the Affordable Care Act is repealed and replaced. The executives discussed plans to stabilize the individual insurance market.
CEOs of Aetna, Anthem, Cigna Corp., Humana, UnitedHealth, Kaiser Permanente and several Blue Cross Blue Shield companies attended the meeting. Industry lobbying group America's Health Insurance Plans, was also in attendance.
Full article: http://www.modernhealthcare.com/article/20170227/NEWS/170229927?utm_source=modernhealthcare&utm_medium=email&utm_content=20170227-NEWS-170229927&utm_campaign=am
Former U.S. antitrust chief joins Sullivan & Cromwell, "strengthening our world-class antitrust practice"
Renata B. Hesse, who was head of the Antitrust Division at the Justice Department, is joining Sullivan & Cromwell as a partner in its Washington office, the law firm announced on Monday.
The hiring of Ms. Hesse, 52, is unusual because premier firms like Sullivan & Cromwell rarely hire partners from outside. Typically, they engage newly graduated lawyers who are trained and promoted inside the firm rather than outside its confines.
The hiring comes as many major firms gear up for an increase in complex, cross-border mergers, which are a specialty of Sullivan & Cromwell. Such firms are seeking to become “one-stop shops” for every aspect of mergers in a wide range of industries, including health care, technology, energy, and banking and financial services.
“Renata brings to S.&C. deep and highly relevant government experience, further strengthening our world-class antitrust practice,” said Joseph C. Shenker, chairman of the firm, which has 875 lawyers in New York and elsewhere around the globe. Among its clients are Bayer of Germany in its planned $66 billion acquisition of the American agriculture behemoth Monsanto.
Ms. Hesse, considered a pre-eminent high-technology antitrust attorney, was acting assistant attorney general in charge of the Justice Department’s Antitrust Division until January. She served twice in that position, and she also was deputy assistant attorney general of that division for four years. She was involved in the proposed Comcast and Time Warner Cable merger as well as the merger of US Airways and American Airlines. She also had oversight of the Antitrust Division’s criminal program.
Full Content: Wall Street Journal (paywall)
Copy of class action complaint against Takata (auto airbags) and auto makers
A copy is at: https://www.nytimes.com/interactive/2017/02/27/business/document-Plaintiffs-Court-Filing-in-Takata-Case.html
MD Consumer Rights Coalition on affordable auto insurance
This week, the [Maryland] Senate Finance and House Economic Matters committees heard two critical bills that will make auto insurance more fundamentally fair and more affordable. SB 533/HB 1295 and SB 534/HB 916 were sponsored by Senator Joanne Benson in the Senate, and Delegates Ben Brooks and Charles Sydnor in the House. Both bills provide critical pathways towards more fair and affordable insurance.
Act now and tell your state Senator and Delegates to pass these bills to create a more fair and affordable auto insurance system in Maryland. The Issue:
Affordability. Maryland law requires that all drivers carry at least limited liability car insurance. Auto insurance in Maryland is extremely expensive, which means the cost of purchasing and maintaining costly premiums is a financial strain on low-and-moderate income families.
Maryland’s average insurance premiums of $1,103 a year are the ninth highest in the nation.
The high cost of auto insurance is one important reason why 15% of drivers in Maryland remain uninsured.
Fundamental Fairness. In addition, current law allows insurance companies to use a number of non-driving related factors to price each premium. Some of these factors include credit score, zip code, occupation, education, sex, and marital status. The use of these non-driving related factors drive up the cost of insurance and discriminate against women and low-income drivers in struggling communities and communities of color.
Why is Car Insurance So Costly?
- In 2010, the General Assembly raised the minimum liability required for auto insurance from $20,000/$40,000 to $30,000/$60,000. Only four states have higher minimum liabilities. Maryland rightfully requires drivers to be insured, but we also need to make sure that they can afford the insurance that they are required to have.
Why Should I Care?
Affordability. The high costs of basic coverage means that many workforce development and low-income workers pay 12-17% of their disposable income on car insurance (read more HERE). The Federal Insurance Office’s study on auto insurance affordability assessed the cost of auto insurance in underserved communities throughout the nation. FIO found that over 330,000 people live in zip codes in Maryland where auto insurance is currently unaffordable.
Fundamental Fairness. MCRC’s 2017 study found that women are charged as much as 39% more than men for a basic car insurance policy, and that women who are single are penalized with a24% increase in cost based on their marital status, while men who are single frequently receive a discount (read our new report).
MCRC’s 2017 statistical analysis has found the more African-Americans that live in a zip code, the higher the cost of insurance (at a statistically significant level). The analysis also found that the wealthier the neighborhood, the less the residents of the neighborhood would pay in insurance (statistically significant).
US Supreme Court Finds for Whistle Blowers Against Wells-Fargo
The Supreme Court essentially confirmed that some courts have been using too narrow a legal standard when weighing whistle-blower suits under the False Claims Act, which is meant to punish those who defraud the government.
By highlighting a more expansive standard for what constitutes a false claim under the act, the court’s ruling is likely to open the door to more whistle-blower cases, according to lawyers who represent plaintiffs in these matters.
See https://www.nytimes.com/2017/02/24/business/score-one-for-the-bank-whistle-blowers.html
Copy of the Court's Summary Disposition Order:
(ORDER LIST: 580 U.S.)
TUESDAY, FEBRUARY 21, 2017
CERTIORARI -- SUMMARY DISPOSITION 16-578
BISHOP, PAUL, ET AL. V. WELLS FARGO & CO., ET AL. The petition for a writ of certiorari is granted. The judgment is vacated, and the case is remanded to the United States Court of Appeals for the Second Circuit for further consideration in light of Universal Health Services, Inc. v. United States ex rel. Escobar, 579 U. S. ___ (2016).
Copy of Waymo’s Complaint as filed Against Uber
The self-driving car company spun out from Google accused the ride-hailing service of advancing its own autonomous vehicle push by using intellectual property stolen by one of Google’s former project leaders.
The complaint is at:
https://www.nytimes.com/interactive/2017/02/23/technology/document-waymo-uber-complaint.html
Jeff Sovern on the CFPB
CFPB Critics Make Unpersuasive Arguments that Business as Usual at the CFPB Is Not Good for Consumers (click for link)
Posted: 23 Feb 2017 11:44 AM PST
by Jeff Sovern
At Real Clear Politics, by George Masonites Hester Pierce and Vera Soliman. The arguments (with my editorializing on some points) are that the Bureau's payday lending rule would put some such lenders out of business (would those be the lenders that ensnare consumers in a never-ending debt trap?), that the Bureau collects too much information about consumers (would that be the information that the companies that deal with consumers have?), that the Bureau is trying to stop lenders who finance car loans from buying car loans (would those be discriminatory loans?), that the Bureau is exceeding its powers by trying to collect information about for-profit colleges engaging in unlawful acts, that the Bureau violated due process by retroactively changing its interpretation of the law and applying its view to PHH's conduct, that the Bureau politicized consumer protection, that the Bureau was too slow to stop Wells Fargo (perhaps the Bureau should have acted faster but if it had, and if it had made a mistake, wouldn't we now be hearing about that mistake?). I look forward to hearing Bureau critics saying whether the millions of consumers who have been paid billions of dollars in redress because of the Bureau should give that money back and what will happen to such consumers in the future if the Bureau is abolished or neutered. Not to mention the other consumers who won't need redress because financial institutions behave better because of the Bureau's past interventions.
What is Department of Homeland Security Doing? See the Trump Administration's explanation at the DHS website: https://www.dhs.gov/executive-orders-protecting-homeland
Executive Orders
- January 27, 2017: Executive Order: Protecting the Nation from Foreign Terrorist Entry Into the United States | WhiteHouse.gov
- January 25, 2017: Executive Order: Enhancing Public Safety in the Interior of the United States | WhiteHouse.gov
- January 25, 2017: Executive Order: Border Security and Immigration Enforcement Improvements | WhiteHouse.gov
Implementation Memos
- February 20, 2017: Implementing the President's Border Security and Immigration Enforcement Improvement Policies
- February 20, 2017: Enforcement of the Immigration Laws to Serve the National Interest
Fact Sheets
- February 21, 2017: Fact Sheet: Executive Order: Border Security and Immigration Enforcement Improvements
- February 21, 2017: Fact Sheet: Enhancing Public Safety in the Interior of the United States
- February 21, 2017: Q&A: DHS Implementation of the Executive Order on Border Security and Immigration Enforcement
- February 21, 2017: Q&A: DHS Implementation of the Executive Order on Enhancing Public Safety in the Interior Of the United States
- Press Releases
- February 21, 2017: Secretary Kelly Issues Implementation Memoranda on Border Security and Interior Enforcement Executive Orders
- February 13, 2017: Statement From Secretary Kelly On Recent ICE Enforcement Actions
- February 7, 2017: Written testimony of DHS Secretary John F. Kelly for a House Committee on Homeland Security hearing titled "Ending the Crisis: America’s Borders and the Path to Security"
- February 4, 2017: DHS Statement on Compliance with Recent Court Order
- February 3, 2017: Statement on Countries Currently Suspended from Travel to the United States
- Posted by Don Resnikoff
Pop performer attempts DIY attack on ticket scalpers: legal confusion follows
From DMN http://www.digitalmusicnews.com/2017/02/22/eric-church-lawsuit-scalper/
Eric Church’s war on scalpers could have serious legal consequences, including from fans themselves.
Eric Church is declaring war on scalpers. And this was his offensive. Just yesterday, the singer took an extreme step by invalidating 25,000 tickets purchased by scalpers. Or, more likely, purchased by auto-buying ‘bots’ controlled by scalpers.
Church has long complained that scalpers use bots to remove tickets from the market, usually seconds after they go on sale. That auto-buying frenzy forces tickets into the ‘secondary market,’ which includes places like StubHub. There, scalpers can negotiate with buyers directly, and drive prices sky-high.
“It drives me ****ing crazy,” Eric Church told Rolling Stone back in 2014. “The problem I have is that scalpers have a bazillion people working for them. And they have those bots that scan. So it’s not fair.”
Not fair. But, is it illegal to forcibly invalidate a purchase, just because it doesn’t seem ‘fair’?And, how can Church be sure that all of those 25,000 tickets were purchased by price-gouging scalpers?
Those questions could be critical in the coming weeks. Church’s management says that a proprietary program was used to identify which tickets were scalped. But here’s one major problem with that: some of those tickets may have already been re-sold, leaving Church fans with voided tickets.
Even worse, some of those fans may end up going to the venue, only to realize the tickets are duds. Even worse, Eric Church forcibly refunded the scalpers, but not the secondary buyers.
All of which means buyers on Stubhub have (a) a cancelled ticket and (b) no way to get their money back.“Ticket scalpers got their money back, and we would expect that scalpers would in turn refund their customers,” Eric Church told CMT. “But with ticket scalpers, you never know! Fans would have a strong case for contesting charges with their credit card company if they paid for something that the scalper didn’t deliver.”
And if scalpers don’t offer refunds?That could lead to multiple lawsuits, or class action litigation, according to some executives watching this unfold. “It could get tested if enough [fans] are affected,” one lawyer explained. “It’s perfect class-action litigation.”
But scalpers themselves could sue, depending on how local laws treat secondary markets.
For now, it’s unclear what the fallout will be. It’s been estimated that 2,000 of the 25,000 tickets are for a pair of upcoming Nashville dates in May. Before that, Church will be playing dozens of dates across the US and Canada, starting Thursday (February 23rd) in Indianapolis.
The Trump administration proposal to stabilize Obamacare’s health insurance markets
The proposal tightens when people can sign up for coverage, giving health insurers more flexibility.
The U.S. Department of Health and Human Services proposed new regulations [click highlighted words to see them] even as President Donald Trump seeks to repeal the law. In the meantime, the health department lead by his new secretary, Tom Price, is trying to placate health insurers that are considering dropping out of the program’s government-run markets, threatening to leave people without options in a growing number of states.
The rule would cut in half the time when people can sign up for coverage under the Affordable Care Act, to about a month and a half. It would also curtail so-called special enrollment periods that allow people to sign up for coverage outside the regular window. Insurers have said that those sort of exceptions let people game the system, and only sign up after they get sick.
“This proposal will take steps to stabilize the Marketplace, provide more flexibility to states and insurers, and give patients access to more coverage options,” said Patrick Conway, Acting Administrator of the Centers for Medicare & Medicaid Services.
Full article: https://www.bloomberg.com/news/articles/2017-02-15/trump-administration-releases-obamacare-stabilization-rules
Note: Many consumer advocates complain that health care consumers will be hurt by the change.
Bill to limit class actions introduced in Congress
The bill is HR 985, introduced by Bob Goodlatte (R-VA). The short title: ‘‘Fairness in Class Action Litigation Act of 2017.” The proposed bill is similar to HR 1927, introduced by Goodlatte in the previous Congress. The bill contains dramatic limitations of class action litigation. DCCRC has join other organizations in opposing the bill. .
HR 985 can be found here: https://judiciary.house.gov/wp-content/uploads/2017/02/PT_002_xml.pdf.
GovTrack link to HR 985: https://www.govtrack.us/congress/bills/115/hr985.
HR 1927 can be found here: https://www.govtrack.us/congress/bills/114/hr1927/text
America First Antitrust
Antitrust bar uneasy about international merger coordination as Trump declares ‘America First’
26 January 2017. By Curtis Eichelberger.
[This story was first published on MLex’s White House Watch. Click here to request a free subscription.]
Excerpt: Antitrust lawyers based in the US and abroad say they are concerned that US President Donald Trump’s “America First” philosophy could mean less US coordination with foreign antitrust regimes, leading to greater complications on big deals that require remedies across multiple jurisdictions.
Trump’s inauguration speech focused their concern because his slogan could no longer be dismissed as mere campaign rhetoric. His words are seen as an indication of his priorities in filling positions at the US Department of Justice and the US Federal Trade Commission, the nation’s two primary antitrust agencies.
“We assembled here today are issuing a new decree to be heard in every city, in every foreign capital, and in every hall of power,” Trump said in his inauguration speech in front of the US Capitol last week in Washington. “From this day forward, a new vision will govern our land. From this day forward, it’s going to be only America first, America first.”
Under the Obama administration, US antitrust enforcers coordinated so closely with their European — and even Chinese and Brazilian — counterparts that companies could design global remedies to get their deals through. If US agencies focus inward and have less concern about companies’ antitrust problems in foreign jurisdictions, deals that get quicker US antitrust approval could ultimately face greater resistance abroad.
While Trump has not made clear his plans for antitrust enforcement, US attorneys expect the DOJ and FTC to become more conservative, requiring greater economic certainty that a merger would be anticompetitive before acting to block a deal. This less aggressive approach to merger review will stand in contrast to those of many foreign regulators, including the European Commission.
Multi-jurisdictional reviews are an increasing concern for US companies (see here). Whereas two decades ago, the US and European Commission were the world’s primary antitrust regulators, today there are more than 100 regulatory regimes, many of them operating with different rules from those in the US.
Under the best of circumstances, seeking approval from multiple jurisdictions can delay deals, cost millions in regulatory and legal fees, lessen efficiencies created by the deal and introduce uncertainty that leads customers and employees to jump ship.
An “America First” approach to coordination would have its greatest impact on large international deals, attorneys say.
Full story: http://mlexmarketinsight.com/editors-picks/antitrust-bar-uneasy-international-merger-coordination-trump-declares-america-first/
From Bipartisan Policy Council Regulating the Financial System During the Trump Administration
Regulating the Financial System During the Trump Administration
ulating the Financial System During the Trump Administration
Tuesday, March 14, 2017
2:00 p.m. - 3:30 p.m. ET
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Bipartisan Policy Center
1225 Eye Street NW, Suite 1000
Washington, D.C. 20005
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Can't join us in person? The event will be webcast.
Kenneth E. Bentsen, Jr. | President and CEO, SIFMA
Michael S. Barr | Roy F. and Jean Humphrey Proffitt Professor of Law, University of Michigan Law School; Former Assistant Secretary for Financial Institutions, Treasury Department
More than six years after the passage of the Dodd-Frank Act, the future of the post-crisis financial regulatory structure may be in line for substantial changes. In February, President Trump signed a new executive order laying out seven “core principles” for regulating the financial system and directing the Treasury Department to issue a report on whether current financial regulation meets those principles.
Join us on March 14 for a discussion of such questions as: are we moving in the right direction with financial regulation? Is current policy serving the economy and consumers while ensuring financial stability? What other changes to financial regulatory policy are needed to better achieve these goals? What approach should the United States take with other countries with respect to financial regulation and global agreements?
The Limits of Divestiture as an Antitrust Remedy
Another View
By CHRIS SAGERS FEB. 14, 2017
The Federal Trade Commission’s recent study of its own merger remedies was in some ways an update of a well-regarded 1999 report on the divestitures almost always imposed when mergers are challenged.
Yet the new study claims success of a kind that its evidence could not even plausibly demonstrate. It raises the question of why preserving the antitrust remedy of divestiture is so important to regulators. And it tells a story of something wrong politically with competition as a public policy.
Divestiture is important because the antitrust agencies have no real alternative. If divestitures prove generally ineffective, and the agencies had to sue every time a deal raised antitrust concerns, their entire merger programs could be jeopardized.
Criticism of merger remedies has been partly anecdotal. In recent years, two of them failed spectacularly. In 2012, the commission conditioned a huge rental car merger on a spinoff to a company whose own chief executive said it wouldn’t work. That company filed for bankruptcy months later. The commission approved a large grocery merger in 2015 on the condition that the merged company divest itself of stores to a small Oregon chain, which increased that chain’s size by roughly 900 percent. When that chain soon filed for bankruptcy, the merged company wound up buying back more than 20 percent of the stores it divested itself of, for pennies on the dollar.
But more serious has been growing empirical evidence that horizontal mergers may cause harm at levels of concentration much lower than the agencies now take seriously, and also that mere divestitures may not work well. Most important so far is a 2015 book, “Mergers, Merger Control, and Remedies” (MIT Press), by the economist John Kwoka, which drew a public objection from Edith Ramirez, then the F.T.C. chairwoman, and the acting chairwoman, Maureen Ohlhausen, and a fairly scathing rebuke from the commission’s own economists.
It is not surprising that the new report finds the commission’s merger remedies extraordinarily successful. Federal agency reports pretty much always do that kind of thing. What is remarkable is the degree to which it reports success of a kind that its own evidence could not support.
The report says it found a previous commission remedy successful “only if it cleared a high bar — maintaining or restoring competition in the relevant market.” “Competition” in antitrust law means actual rivalry on price and quality. The only way to measure it convincingly is econometric study.
In their own harsh critique of Mr. Kwoka’s book, commission economists said econometric measurement was “essential if one is to correctly measure the competitive effect of a merger.” Ms. Ramirez herself was a champion for doing it more.
But while the F.T.C. study is remarkably evasive in describing its own methodology, it appears that the data gathered are far short of that standard. Commission staff members interviewed market participants and calculated market shares, and then reported only their own unelaborated subjective judgments whether a given remedy “succeeded” or not.
While bold claims are made in abstract terms, “success” appears to mean nothing more than that a given divestiture was actually carried out and that the divested assets stayed in the market.
How the commission would howl if defendants could prove their markets were “competitive” just because none of their competitors went bankrupt. Indeed, with that understanding of the report’s methodology, one of its most striking results is that about a sixth of the merger remedies the commission ordered from 2006 to 2012 didn’t even have any effect at all, apparently because the divested assets left the market.
Admittedly, this was the same measure of success in the 1999 study. But it was also very candid about its own limitations and explicitly acknowledged it could not measure actual “competition.” Unlike that study, which began with staff experts’ concerns about remedies under the then-new Hart-Scott-Rodino merger review regimen, this study was urged by top leadership as a reply to external criticism.
Econometric study could have been done here. Most telling is that the Federal Trade Commission itself has done a fair bit of groundbreaking econometric study of just the kind that could have measured “competition” here. But it’s done that when it suits the agency’s own purposes, as in its well-known studies of the consequences of hospital mergers, performed to vindicate its own views after it suffered a series of painful and highly visible losses in hospital merger cases in the 1990s.
Ultimately, an overstated defense of the divestiture remedy may reflect the single oldest criticism of antitrust law. Preserving a remedy that allows the agencies to show that they are doing something, without actually taking meaningfully aggressive action, maintains a political compromise both sides can live with.
Published in NYT: click here to read the article in the NYT
NYT Duhigg on prospects for Dodd-Frank repeal
Excerpt: The Dodd-Frank law can essentially be broken into two parts. There is the act’s core legislation, which placed new constraints on banks’ financial activities and required them to hold onto more money as a cushion against crisis. This core legislation also created an independent regulator, the Consumer Financial Protection Bureau, which has become a proud thorn in the side of many financial firms.
The secondary aspects of Dodd-Frank, however, have almost nothing to do with stabilizing the economy or protecting consumers. They include provisions like forcing companies to disclose their use of conflict minerals, or to report payments that oil and mining companies make to foreign governments. There’s a provision that regulates how much it costs to swipe a credit card.
Some recent Republican attempts to roll back Dodd-Frank focused largely on these secondary provisions. In January, Congress eliminated that oil and mining requirement. This week, the acting head of the Securities and Exchange Commission signaled his intent to weaken a rule forcing companies to publicly compare the salaries of chief executives and employees.
“Some of these changes are depressing, because they undermine transparency and increase corruption, but they’re not going to blow up our financial system,” said Michael Barr, a former assistant secretary of the Treasury and one of the key architects of Dodd-Frank. “They leave the core of Dodd-Frank intact.”
Full article: https://www.nytimes.com/2017/02/09/business/trump-dodd-frank-reforms.html?ref=business&_r=0
Texas court upholds DOL fiduciary rule, denies stay
By: Hazel Bradford
Published: February 8, 2017
U.S. District Judge Barbara M.G. Lynn in Dallas late Wednesday dismissed a legal challenge to the Department of Labor's fiduciary rule.
She also denied the Justice Department's motion, made Wednesday, to stay the case while the agency reviews the rule following a White House executive order.
The lawsuit filed June 1 by the U.S. Chamber of Commerce, Securities Industry and Financial Markets Association and other financial groups, challenged the DOL's authority to issue the rule on several issues. Ms. Lynn disagreed with those points, saying that “the rule does not exceed DOL's authority,” and the agency's cost-benefit analysis was reasonable, among other reasons for granting the Department of Labor's motion for summary judgment.
Federal district courts in Topeka, Kan., and Washington in 2016 upheld the rule in similar challenges, which have been appealed. A fourth case in Minneapolis has not been decided.
Original Story Link: http://www.pionline.com/article/20170208/ONLINE/170209843/texas-court-upholds-dol-fiduciary-rule-denies-stay
Note: President Trump has ordered a DOL review of the fiduciary rule, with the apparent goal of eliminating it. DR
Consumer Reports on DIY estate planning
The trouble with DIY estate planningSome people who pay professionals to fill out their tax returns, mow their lawns, or color their hair cannot bring themselves to pay a lawyer to prepare an estate plan for them. They do not want to spend thousands of dollars on something that they think they can do themselves with will-writing software that sells for less than $100. It’s possible to get a very basic estate plan for $1,200 to $2,000 if you shop around, says Deborah Jacobs, a lawyer in New York City.
An experienced attorney can use legal software more efficiently than you can. More important, he or she can offer customized solutions if your situation is complicated. Your needs are too complex for a do-it-yourself estate plan if you must provide for a disabled child, you owe estate taxes, or you own a business. Consumer Reports tested three will-writing products in 2011 with the help of a law professor specializing in estates and trusts. We concluded that all were inadequate unless a very simple plan was required, such as one that leaves everything to a spouse, with no other provisions.
Jacobs suggests a compromise. “I encourage consumers to seek the help of a lawyer and I also tell them to shop aggressively on price,” she said. “You can go out and get multiple bids, just as you would if you were getting your house painted.”
Start by getting referrals to lawyers with expertise in estate planning from your accountant or financial planner, or check the websites of the American College of Trust and Estate Counsel and the National Academy of Elder Law Attorneys for estate-planning specialists in your area.
Then call a few and ask how much they will charge, if anything, to meet with you for an hour and discuss your estate planning needs. After your consultation, some attorneys will quote a flat fee for an estate plan; others bill by the hour and will estimate how much time it will take to draft the legal documents you need. Concentrate on negotiating the lowest price you can with the lawyers you like the best.
http://www.consumerreports.org/cro/2013/11/how-to-create-a-bulletproof-estate-plan/index.htm
The dawn of the big data monopolists
By CPI on February 8, 2017
Posted by Social Science Research Network
By Akiva A. Miller (New York University)
Abstract: There is a sea change in regulators’ approach to competition and big data. In the past, competition regulators tended to dismiss Big Data as a competitive concern, generally believing Big Data uses to be irrelevant or pro-competitive in digital markets. But in recent years that attitude is changing, and regulators are becoming increasingly concerned over the possible anticompetitive conduct by internet industry leaders from their control over massive amounts of user data and are starting to take action.
Continue reading…
Stream of oral arguments 2-7-2017 before 9th Circ -- State of Washington v. Trump
https://www.nytimes.com/interactive/2017/02/07/us/ninth-circuit-oral-arguments-trump-immigration.html
Copy of the Administration brief to the 9th Circuit on the travel ban
Click here: the administration’s brief to the 9th Circuit filed late in the day 2/6/2017
Copy of two states brief to the 9th Circuit on the travel ban
Click here: The two states’ appellate brief filed early Monday morning, 2/6/2017. Additional states are now participating, along with a number of companies, and several former State Department officials
Copy of the tech industry filing against the Trump travel ban
https://www.nytimes.com/interactive/2017/02/06/business/document-Trump-Amicus-Brief.html
Text of 9th Circuit Order on USDOJ application on lower court immigration decision: "Appellants’ request for an immediate administrative stay pending full consideration of the emergency motion for a stay pending appeal is denied."
UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
STATE OF WASHINGTON; STATE OF MINNESOTA, Plaintiffs-Appellees,
v.
DONALD J. TRUMP, President of the United States; et al., Defendants-Appellants.
No. 17-35105 D.C. No. 2:17-cv-00141
Western District of Washington, Seattle
ORDER
Before: CANBY and FRIEDLAND, Circuit Judges.
The court has received appellants’ emergency motion (Docket Entry No. 14). Appellants’ request for an immediate administrative stay pending full consideration of the emergency motion for a stay pending appeal is denied. Appellees’ opposition to the emergency motion is due Sunday, February 5, 2017 at 11:59 p.m. PST. Appellants’ reply in support of the emergency motion is due Monday, February 6, 2017 at 3:00 p.m. PST.
http://cdn.ca9.uscourts.gov/datastore/general/2017/02/05/17-35105.pdf
Click here for the USDOJ brief to the 9th Circuit: USDOJ brief
The brief says: Judge Robart “improperly second-guessed the president’s national security determinations.” The brief said the president has great vast power over immigration under the Constitution and federal law.
Washington State AG doc links on successful state action against Trump immigration limitation order
AG FERGUSON OBTAINS COURT ORDER HALTING TRUMP IMMIGRATION ACTION
FOR IMMEDIATE RELEASE:
Feb 3 2017Judge grants nationwide Temporary Restraining Order against President’s Executive Order
SEATTLE -- A federal judge in Seattle today granted Attorney General Bob Ferguson’s request to immediately halt implementation of President Donald Trump’s Executive Order on immigration nationwide.
Attorney General Bob Ferguson speaks to reporters after a federal judge granted his request to immediately halt implementation of President Donald Trump’s Executive Order on immigration nationwide.The Temporary Restraining Order will remain in place until U.S. District Court Senior Judge James L. Robart considers the Attorney General’s lawsuit challenging key provisions of the President’s order as illegal and unconstitutional. If Ferguson prevails, the Executive Order would be permanently invalidated nationwide.
To obtain the Temporary Restraining Order, the state needed to prove that its underlying lawsuit was likely to succeed, that irreparable harm was likely to occur without the restraining order, and that halting the President’s order immediately is in the public interest. The state also needed to establish that the potential injury to Washington residents caused by leaving the President’s order in place outweighs any potential damage from halting it.
Judge Robart, who was nominated to the court by President George W. Bush in 2003, ruled that Ferguson had met the high standards necessary to block the Executive Order until the court reaches the merits of the lawsuit.
“The Constitution prevailed today,” Ferguson said. “No one is above the law — not even the President.”
Washington became the first state to challenge the President’s order on Monday. Ferguson argues that the Executive Order violates the U.S. Constitution’s guarantee of Equal Protection and the First Amendment’s Establishment Clause, infringes individuals’ constitutional right to Due Process and contravenes the federal Immigration and Nationality Act.
Major Washington state institutions supported the Attorney General’s lawsuit through declarations filed alongside the complaint. In their declarations, for example, Amazon and Expedia set forth the detrimental ways the Executive Order impacts their operations and their employees.
Minnesota, led by Attorney General Lori Swanson, joined Ferguson’s amended complaint filed Thursday.
In addition, since Washington brought its action, Massachusetts, New York and Virginia intervened in similar lawsuits challenging the Executive Order in their respective jurisdictions.
Solicitor General Noah Purcell, Deputy Solicitor General Anne Egeler and Solicitor General’s Office Fellow Kelly Paradis, as well as members of the Wing Luke Civil Rights Unit, including Unit Chief Colleen Melody and Assistant Attorneys General Patricio Marquez and Marsha Chien, are handling the case.
See http://www.atg.wa.gov/news/news-releases/ag-ferguson-obtains-court-order-halting-trump-immigration-action
POSTED BY DON ALLEN RESNIKOFF
NYT: Trump collaborates with financial industry leaders on rollback of Dodd-Frank regulation
In a development struggling rust-belt supporters of the new President may not have contemplated, The President is working with financial industry leaders concerning rollback of Dodd-Frank, according to this New York Times piece:
Excerpt: As he announced his goals on financial deregulation, Mr. Trump sat beside Stephen A. Schwarzman, the chief executive of the private equity giant the Blackstone Group and the chairman of his business council, who said the panel would “advise the government on the areas where we could do things a lot better in our country, for all Americans.”
The president had praise for Jamie Dimon, whose bank, JPMorgan Chase, was often a target of regulatory actions by the Obama administration.
“There’s nobody better to tell me about Dodd-Frank than Jamie, so you’re going to tell me about it,” Mr. Trump said.
The meeting underscored the degree to which the architects of Mr. Trump’s economic strategy are now some of the people he denounced in his campaign, which ended with a commercial that described “a global power structure that is responsible for the economic decisions that have robbed our working class, stripped our country of its wealth and put that money into the pockets of a handful of large corporations.”
https://www.nytimes.com/2017/02/03/business/dealbook/trump-congress-financial-regulations.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region®ion=top-news&WT.nav=top-news&_r=0
DC Bar Sections letter raises democratic governance and procedural fairness issues concerning proposal to eliminate Bar Sections
LITIGATION SECTION
INTELLECTUAL PROPERTY LAW SECTION
CORPORATION FINANCE AND SECURITIES LAW SECTION
INTERNATIONAL LAW SECTION
TAXATION SECTION
LABOR AND EMPLOYMENT LAW SECTION ENVIRONMENT
ENERGY AND NATURAL RESOURCES SECTION
ADMINISTRATIVE LAW AND AGENCY PRACTICE SECTION
REAL ESTATE, HOUSING AND LAND USE SECTION
OVERNMENT CONTRACTS AND LITIGATION SECTION
HEALTH LAW SECTION
ANTITRUST AND CONSUMER LAW SECTION
STATES, TRUSTS AND PROBATE LAW SECTION
RIMINAL LAW AND INDIVIDUAL RIGHTS SECTION
ARTS, ENTERTAINMENT, MEDIA AND SPORTS LAW SECTION
FAMILY LAW SECTION
TORT LAW SECTION
DISTRICT OF COLUMBIA AFFAIRS SECTION
COURTS, LAWYERS AND ADMINISTRATION OF JUSTICE SECTION
DISTRICT OF COLUMBIA BAR
January 27, 2017
Board of Governors District of Columbia Bar
1101 K Street NW, Suite 200
Washington DC 20005
RE: DC Bar "Communities" Proposal
Dear Members of the Board of Governors:
The undersigned sections of the District of Columbia Bar are writing to express their opposition to the captioned proposal (''the Proposal"), including its plan to terminate all existing Bar sections and committees. In view of the expedited schedule set for consideration of the Proposal, and the significant harm we believe it will likely cause to the mission of the Bar and the professional interests of its members, we request your response to the points raised below in this letter before further action is taken to move forward on the Proposal.
(1) Opportunity for Notice and Comment. The first time the Bar's section leaders were told of the existence of the Proposal -or even heard its term "communities" -was on January 18, 2017, when Bar staff sent section leaders an email asking them to listen to a linked web recording that orally described the Proposal in general terms. At the same time, section leaders were told that the Proposal will be rushed to the Board of Governors ("the BOG") for approval in just a few weeks. This rushed approach, without providing details and a meaningful opportunity for consultation on the Proposal, shows serious disrespect for the lawyers who are the Bar's members and who provide its financial and programming support. While Bar members have elected their steering committee members to three-year terms, the Proposal would disregard this electoral decision and, without consulting the electorate, prematurely terminate all elected steering committee members in June.
At the very least, (i) there should be a detailed written memorandum describing the Proposal, not simply a vague and repetitive audio recording; (ii) both the memorandum and this letter should be circulated to all Bar members for review and consideration, perhaps including publication in Washington Lawyer; (iii) comments should be available on the Bar's website for a sufficient period of time to allow review by all interested Bar members; (iv) an open forum should then be held for Bar members to learn more about the Proposal's details and to ask questions directly of the proponents of the changes; (v) an open forum should then be held for Bar members to engage directly with the BOG on the Proposal; and (vi) the Proposal should be an item for discussion with the membership at the Bar's annual meeting. And then finally, whether formally required or not, a proposal of this importance should be put before the Bar's full membership for at least an advisory vote to inform the BOG's decision. The overall process should be given sufficient time to assure full and responsible consideration by the Bar's members and the BOG. There is no reason that a decision must be hurriedly made within weeks, or even months.
(2) No Case Made for Radical Change. Bar members have suggested various ways to improve the sections' operations. This has included a July 28, 2016 letter to the BOG from the Corporation, Finance and Securities Law Section ("CFSL") making concrete proposals to improve program operations -a letter that a number of other sections supported in separate letters to the BOG, but which has to date received no substantive response. That letter essentially repeated points that elected sections leaders had been making for many years without adequate response or action by the Bar. We're all in agreement in wanting an environment that promotes improvement for the Bar, including with respect to the sections. But a desire to improve and streamline certain features of section operations doesn't justify scrapping the Bar's entire section and committee structure and replacing that structure with a new and untried construct.
Even if a radical change were warranted, which it is not, this would not be the time for such a change. There is a transition of Bar leadership underway, including the departure of the Bar's CEO and the COO. If the BOG approves the Proposal, it will likely tie the hands of new leadership for years as it is difficult in any organization to reverse course on recent major decisions. We should not tie the hands of new leadership by radical structural changes just as they are walking in the door. Instead, we should let the new leaders settle in for an appropriate period of time, let them have an opportunity to fully assess the organization and its needs and opportunities, and let them get to know and interact with section leaders and members. To the extent they may have seen the Proposal, we and they should realize that the decisions these newcomers make for the Bar today will likely not be the decisions they would make after a year in their new positions.
(3) The Section Finance Argument. The principal reason advanced so far for making the Proposal's radical change to the Bar's structure is apparently that the existing sections will supposedly soon become insolvent. This is puzzling, as the DC Bar's larger sections appear to run a surplus most years. The Proposal claims that the sections' financial needs cannot be satisfied by raising section dues above $55, where they have been needlessly frozen for several years. Yet at the same time, the Proposal inconsistently says that section members are not dues price-sensitive, and the Proposal actually plans to charge $79, an increase of $24 above the current $55 section dues, for Bar members to join the Proposal's new "communities." Additionally, the Proposal will inevitably increase costs by the expenditures needed simply to create its new "communities" structure, as well as by its plan to expand staff responsibility over the new communities' finances and management. Finally, the Proposal is unclear regarding how revenues generated by programs and publications would be handled -whether communities would continue to have their own budgets.
Instead of creating a new structure, simply increasing the dues of the Bar's existing sections from $55 to $79 would more than assure the solvency of all existing sections well into the foreseeable future, although this decision should not be made unilaterally but only after consideration through the sections. Indeed an increase in section dues to a level well short of $79 would probably be sufficient. This is particularly the case if programming operations can be streamlined, as suggested in CFSL's July 2016 letter, so that the cost of running the Sections Office can be reduced by eliminating needless staff activities that actually hinder and delay programming as discussed in that letter. If as the Proposal suggests, we want to add some free CLE as a sweetener for those who need CLE for bars other than DC, such free CLE can be added to our existing section structure, as can a dues reduction for joining a second or third section.
The case has not been made that the proposed non-democratically-elected communities would be more cost effective than the present sections.
Finally, the details of the Proposal's finance argument require considerably more scrutiny, evaluation and broad discussion among section members before we risk our Bar's future health on this argument. Thus, without meaningful and thorough analysis, the Proposal's optimistic scenarios appear to project annual losses in the early years through mid-2019, even with membership increases, and then either (i) continued losses through mid-2022, or (ii) some recovery in later years if the Bar can manage to achieve annual membership increases of 5% or more. On the other hand, the Proposal offers no analysis of the impact if the current slow decline in membership continues, or if that decline actually increases due to operational and other problems with the Proposal's new "communities" structure and its proposed 44% increase in communities dues over current sections dues. The Proposal needs to include analysis of potential results under less optimistic scenarios, as well as an explanation of the growth of Sections Office expenses, the other side of the finance equation. The Proposal offers, at most, mere speculation that it can achieve a more robust, sustainable fiscal outlook. Yet if it fails to improve the current financial trend, or makes it worse, years will be lost as its consequences play out. Recall the Dues Stabilization Fund approach adopted four years ago that froze section dues increases, and now with resulting depletion of section financial reserves, the Proposal tells us to hike dues 44% for the new communities. Before jumping to a new, and far more radical approach, we need thorough analysis accompanied by full transparency in the evaluation process to make sound judgments for our Bar's future.
(4) A High Risk Approach. Bars around the country have long had sections and committees -the ABA, the Federal Bar Association, the New York City Bar Association, and many others. Has any other bar replaced their sections with "communities"? In the bar context, we are given no examples of how this communities structure has worked, if it's been tried at all. Even if other kinds of membership organizations have done this, it does not mean it will satisfy the particular needs of lawyers in the nation's capital. The DC Bar is in competition with national bar associations, specialty bar associations, regional bars, and commercial CLE and other panel providers -- competition both for panel presenters and panel audiences. 1 If the DC Bar is to avoid decline in this competitive environment, it has to satisfy real and long-understood needs of lawyers.
Instead of a tried-and-true formula that has long worked for bar associations, the webinar emailed to section leaders on January 18, 2017 offers a complex, vague and bureaucratic vision. The Proposal leaves much to be reinvented --indeed, much of what is now managed well by our present sections and their section standing committees. To provide just one example, the Proposal does not explain how its "communities" would deal with public statements -- the only way DC Bar members can express the profession's views on topics where their voice is especially useful, such as DC and federal legislation, court rules and administrative regulations. The Bar itself is restricted in its ability to engage in any such advocacy, thus making the sections' opportunity to speak especially crucial.
Apart from the obvious point that the Proposal will likely not produce an organization that can compete for lawyer attention and dollars, there is a real question whether the Bar, despite best intentions, will even be able to execute what is so vaguely conceived. Many of the Bar's larger sections have for years unsuccessfully sought list serves to be able to communicate directly with their members on even a basic level -- and thereby to draw their section members into more active participation in section program and committee work -- but the Bar has failed to deliver even on something that is very simple from a technology standpoint. New technology will not suddenly reverse this past frustrating experience.
If DC Bar members sense disorganization at the programming level, they will stop enrolling in either sections or communities -the label won't matter. These concerns, especially the risk that the Bar is embarking on an untried course, require that the Proposal be fully aired with the members the Bar serves before it is considered for implementation.
(5) No Meaningful Transition. The Proposal terminates all DC Bar sections in June, and fires all present section and committee leaders. The Proposal then starts from scratch with an entirely new structure that lacks any leadership at all. This is like starting a whole new bar association. Such a hard-stop-and-rebuild approach frustrates any attempt at continuity of programs, leadership and relationships. And if present section and committee leaders do not reapply for the new leadership positions the Proposal contemplates -- or if they do apply, but are not recommended to the BOG by Bar staff --the DC Bar will have lost an important connection to its members, as well as much of the talent pool that currently manages to produce excellent, top quality programs for the Bar. A drop in quality programming, vital to most of our sections as their principal value-added offering, will naturally and inevitably result in declining membership and revenue that could take years to rebuild.
(6) Governance Concerns. The Bar is an organization formed by lawyers, composed of lawyers, and financially and substantively supported by lawyers. Each year, these lawyers elect the members of their respective sections' steering committees, based on the professional credentials and platforms the candidates offer, to preside over and operate their sections for the coming year. These elected steering committee members, in turn, elect their section officers and their sections' standing committee leaders for the year. These elected lawyers then run their sections by organizing professional programs, and engaging in the general administrative tasks necessary for the functioning of the sections. Elected steering committee members focused on a specific section are able to focus, coordinate and nurture the practice-specific work of their particular section, including the work of the section's standing committees (over ten in larger sections). Additionally, the present section model allows the sections, through their elected leaders, to provide focused legal policy advice, counsel and advocacy to the DC Council, Council members, agencies and others, as appropriate.
For many years this fundamentally democratic governance model --lawyers electing lawyers to govern a lawyers' organization --has worked well. The only exception has been with respect to the particular issues raised in CFSL's July 2016 letter, which outlined certain aspects where the elected lawyers in the section steering committees needed to be given more discretion and relief from certain well-intentioned but counterproductive measures taken in recent years by Bar staff. The steps outlined in CFSL's letter now need to be implemented promptly, as we section leaders have been waiting for action on CFSL's letter for over six months.
Lawyers have created and continue to provide the support to maintain this Bar, and the lawyers they elect to run their sections must retain the authority to enable them to do so. The Proposal misses this point entirely by proposing to rip governance from the hands of elected lawyers and transfer governance to unelected Bar staff, many of whom are non-lawyers and not Bar members. The Proposal takes all administrative and financial decision making away from the lawyers who have been elected to lead its sections, and turns this authority over to the unelected Bar staff. And it further eliminates the election process and instead empowers the Bar staff to identify and recommend candidates for leadership of the Proposal's new "communities," effectively the new name for the sections. Any such change in the involvement by lawyers in their legal organization should not be considered without serious and informed dialogue with and input on the Proposal from the lawyers whom the Bar serves, and who serve the Bar.
* * *
The risk of this Proposal is great, and the prospective benefits questionable. Certainly such a drastic change should not be undertaken without careful education of and consideration by the Bar's membership. Without open, democratic buy-in by Bar membership, especially those volunteers who have for years worked hard on behalf of the Bar, this Proposal will not succeed.
For the reasons above, we oppose the rush to act on the Proposal. We urge you to suspend further consideration of the Proposal until the due process steps described above can be taken to ensure informed consideration by the Bar's members. We respectfully await your response.
LITIGATION SECTIONJulia M. Jordan, Co-Chair Gordanjm@sullcrom.com)
Kevin M. Clark, Co-Chair (kevin.michael.clark@gmail.com)
INTELLECTUAL PROPERTY LAW SECTIONKenie Ho, Co-Chair (kenie.ho@finnegan.com) Benjamin Huh, Co-Chair (benhuhlaw@gmail.com)
CORPORATION, FINANCE AND SECURITIES LAW SECTIONJoan E. McKown, Co-Chair Gemckown@jonesday.com)
Stephen J. Crimmins, Co-Chair (stephen.crimmins@mmlawus.com)
INTERNATIONAL LAW SECTIONStephen Claeys, Co-Chair (claeys.stephen@gmail.com)
Mary Ann McGrail, Co-Chair (lawofficeofmamcgrail@gmail.com)
TAXATION SECTIONLayla J. Asali, Chair (lasali@milchev.com)
Michael Caballero, Vice Chair (mjcaballero@cov.com)
LABOR AND EMPLOYMENT LAW SECTIONKeith D. Greenberg, Co-Chair (kdgreenberg@laborarbitration.com) Edgar F. Ndjatou, Co-Chair (endjatou@mnlawyerspllc.com)
ENVIRONMENT, ENERGY & NATURAL RESOURCES SECTION
Linda Tsang, Co-Chair (ltsang@alum.mit.edu) Justin Smith, Co-Chair (rjustin@gmail.com)
ADMINISTRATIVE LAW AND AGENCY PRACTICE SECTION
Judith R. Starr, Co-Chair (starr.judith@pbgc.gov) Matthew R. Oakes, Co-Chair (oakes.mattl@gmail.com)
REAL ESTATE, HOUSING AND LAND USE SECTION
June L. Marshall, Co-Chair Gune.marshall@hklaw.com)
Brian W. Thompson, Co-Chair (bwthompson@jackscamp.com)
GOVERNMENT CONTRACTS AND LITIGATION SECTION
Lisa Martin, Co-Chair (lmartin@uspsoig.gov)
Joseph P. Homyak, Co-Chair Goe.homyak@hklaw.com)
HEALTH LAW SECTION
Julia Tamulis, Co-Chair Gtamulis@bassberry.com) Amy E. Nordeng, Co-Chair (amyn@astro.org)
ANTITRUST AND CONSUMER LAW SECTION
Robert E. Hauberg, Jr., Co-Chair (rhauberg@bakerdonelson.com) Daniel P. Ducore, Co-Chair (dducore@ftc.gov)
ESTATES, TRUSTS AND PROBATE LAW SECTION
Jennifer C. Concino, Co-Chair Gcconcino@tobinoconnor.com) Giannina Lynn, Co-Chair (gina@ginalynnlaw.com)
CRIMINAL LAW AND INDIVIDUAL RIGHTS SECTION
Heather N. Pinckney, Co-Chair (hardenpinckney@gmail.com) Brandi J. Harden, Co-Chair (hardenpinckney@gmail.com)
ARTS, ENTERTAINMENT, MEDIA & SPORTS LAW SECTION
Micah Ratner, Co-Chair (mratner@npr.org)
Alison B. Schary, Co-Chair (alisonchary@dwt.com)
FAMILY LAW SECTION
Stephanie Troyer, Co-Chair (stroyer@legalaiddc.org) Christopher M. Locey, Co-Chair (clocey@ksfmlaw.com)
TORT LAW SECTIONDaniel Scialpi, Chair (dscialpi@patrickmalonelaw.com)
Nicholas S. McConnell, Vice Chair (nmcconnell@jackscamp.com)
DISTRICT OF COLUMBIA AFFAIRS SECTIONJanene Jackson, Co-Chair Ganene.jackson@hklaw.com) Esther Bushman, Co-Chair (esther.bushman@dc.gov)
COURTS, LAWYERS & ADMIN. OF JUSTICE SECTIONSusan D. Bennett, Co-Chair (sbennet@wcl.american.edu) David Steib, Co-Chair (david@ayuda.c
1 In particular, the ABA and the Federal Bar Association run programs that attract DC Bar members. If DC Bar members stop seeing value in "communities" altogether, they will simply drop membership, pay the basic dues, and obtain their program needs through other sources.
POSTING OF THE SECTIONS LETTER IS BY DON ALLEN RESNIKOFF
A question for President Trump: What should trade policy be toward General Motors when it makes cars in China (or South Korea)?
From the NYT: THE new Buick Envision might seem like any other two-row crossover sport utility vehicle available in the United States, but for a crucial distinction. It is the first mainstream vehicle to come to this country from China.
Although designed and engineered in America, Envision is assembled in China. Yep, just like your iPhone. . . .
Buick is exceedingly popular in China. Elite leaders of the past, including Pu Yi, Sun Yat-sen and Zhou Enlai, were driven in American-made Buicks. That pedigree (and the shabby quality of domestic Chinese cars in the past) catapulted the mark to great success in China.
The Envision slots between the tiny Buick Encore, which is assembled in South Korea, and the large Michigan-made three-row Buick Enclave. Although a limited number of 2016-model Envisions from China were quietly introduced a few months ago, it is with the 2017 models that Buick is playing up the vehicle’s American market entry.
Buick has held focus groups in the United States and says that — unlike politicians, unions and auto journalists — buyers care little about where a vehicle is built, as long as it is welded and screwed together well. The Envision seems well constructed. The design presents itself as nondescript at first, but it grew more handsome to my eye as the week progressed. During that time, not a single squeak or rattle developed.
See:
https://www.nytimes.com/2016/11/11/automobiles/autoreviews/video-review-buick-envision-a-crossover-with-a-chinese-heritage.html?rref=collection%2Fcolumn%2Fdriven&action=click&contentCollection=autoreviews®ion=stream&module=stream_unit&version=latest&contentPlacement=3&pgtype=collection
Walmart litigation presses the public's interest in PIN security with CHIP money cards
Antitrust complaints charging anticompetitive conduct must always charge harm to competition. But Walmart's recent complaint against Walmart takes that idea to an unusual level, complaining that Visa's preclusion of PIN security damages the competitive performance of an entire industry segment. (Walmart also makes the more mundane complaint that Visa's practice forces transaction processing by Walmart and other merchants through Visa's more costly network rather than distinct and less costly PIN oriented networks.)
Complaint excerpts:
The parties' dispute exists because Walmart implemented a "chip-and-PIN" protocol for debit card transactions: when consumers presented a debit card with an embedded computer chip for payment, Walmart required consumers to insert their card into a terminal that could read the computer chip (instead of swiping the card's magnetic stripe through a terminal) and then required consumers to enter a Personal Identification Number (PIN) to verify their identities (instead of signing). This chip-and-PIN protocol accords with global best practices for fraud prevention: PIN verification is much more secure than signature verification. It also enables Walmart to route transactions across PIN debit networks rather than [Visa] signature debit networks, which saves Walmart (and its customers) money.
* * *
PIN verification is significantly more secure and less prone to fraud than signature verification. Signatures can be forged or copied, and cashiers may forget to check the signature on a receipt or POS terminal to make sure it matches the signature on the back of the card.
* * *
In November 2015, eight state Attorneys General wrote a public letter to Visa and several financial institutions, urging them to “expedite the implementation of chip and PIN technology in the United States.” The Attorneys General called signature verification a “less secure standard, since signatures can easily be forged or copied or even ignored at the point-of-sale.” By contrast, the Attorneys General wrote, “[i]f employed here in the United States, PIN-based verification is likely to reduce fraud as is [sic] it has done in other places.” The Attorneys General stated: “The chip and PIN approach is considered by many to be the gold standard currently for payment card security.”
The Complaint can be found at
https://regmedia.co.uk/2016/05/11/walmartvisacomplaint.pdf
Public relations marketing and Trump related politics at Uber and Lyfft
Uber is now the target of a consumer boycott for sending drivers to New York’s John F. Kennedy International Airport during a taxi-driver strike in protest of the Trump administration’s travel ban of nationals of seven majority-Muslim countries. The PR problem has been exacerbated by Uber CEO Travis Kalanick’s role on an economic advisory council to President Trump.
Lyft, meanwhile, pledged to donate $1 million over four years to the American Civil Liberties Union, whose lawsuit won Saturday night’s stay of Trump’s ban—earning them goodwill from consumers who saw fit to delete Uber and cancel their accounts. On Sunday, Lyft surpassed Uber in downloads for the first time ever, the Verge reports.
See http://www.slate.com/blogs/moneybox/2017/01/30/the_uber_boycott_and_lyft_s_aclu_donation_herald_a_new_era_of_corporate.html
Virginia Court restraining order on the Trump immigration order is here:
https://www.justice4all.org/wp-content/uploads/2017/01/TRO-order-signed.pdf
The ACLU Complaint on the Trump Immigration order is here:
https://www.nytimes.com/interactive/2017/01/28/us/politics/ACLU-Complaint.html?rref=collection%2Ftimestopic%2FAmerican%20Civil%20Liberties%20Union&action=click&contentCollection=timestopics®ion=stream&module=stream_unit&version=latest&contentPlacement=2&pgtype=collection
Kwak and Sarducci on simple-minded economics
James Kwak, first known to me as co-author of the book “13 Bankers,” (about the 2008 financial meltdown and aftermath) has hit on a simple but true point about economics and politics: What people think they remember from their college course in economics—or what people who never took economics think the subject teaches—is that competitive markets produce optimal outcomes. It is the idea, as expressed in a Paul Samuelson textbook, that “any interference with free competition by government was almost certain to be injurious … is all that some of our leading citizens remember, 30 years later, of their college course in economics.” That narrow perception of economics by many members of the public facilitates wrong-headed and narrow political views, including bad and narrow competition policies.
Kwak explains the political consequences of narrow economics in his article in the Chronicle Review [click to see it].
I am struck by the parallel between Kwak’s insight and the observations of Father Guido Sarducci (Don Novello) in the Sarducci piece about the Five Minute University, which you can see at https://www.youtube.com/watch?v=kO8x8eoU3L4. (To be fair, Sarducci is funnier.)
Father Guido reinforces Kwak’s point that while college educated people may tend to be more sophisticated politically, many college educated people are not, recalling little about economics other than “supply and demand,” and that any interference with free competition by government is almost certain to be injurious. Fortunately, as Father Guido and Barack Obama remind us, God loves us, and the arc of history tends to curve upward.
Posted by Don Allen Resnikoff
NYT and Gajda: Will the courts protect freedom of the press?
Excerpt: "[T]he courts cannot be relied on — at least not as they once could be — for forceful protection of press liberties. The Supreme Court has not decided a major press case in more than a decade, in part because it has declined to do so, and in part because media companies, inferring the court’s relative lack of interest, have decided not to waste their resources pressing cases. Several justices have spoken negatively of the press in opinions or speeches. Lower courts have likewise become less favorable to the press, showing more willingness than in the past to second-guess the editorial judgment of journalists."
See https://www.nytimes.com/2017/01/25/opinion/dont-expect-the-first-amendment-to-protect-the-media.html
The law review article cited by the Times says:
"Quite aside from the remedy provided by defamation law for false reporting, tort law provides remedies against even accurate reporting when it invades personal privacy. In these cases, media defendants may argue that their reporting relates to something of legitimate public concern. [cite omitted.] Accordingly, resolving tort claims brought by victims of unwanted news coverage inevitably invites judges and juries to make legal determinations of 'newsworthiness,' deciding what news is fit to print and, indeed, whether certain embarrassing or salacious disclosures really qualify as news at all."
See http://www.californialawreview.org/wp-content/uploads/2014/10/09Aug_Gajda.pdf
From Brookings:
Why Republicans can’t–and won’t–repeal Obamacare
by Henry J. Aaron
Henry Aaron predicts that GOP efforts to repeal the Affordable Care Act will fail. “When it comes to casting votes, enough Republicans will conclude that repeal is a bad idea and will join Democrats to sustain the basic structure of the health reform law,” Aaron says.
Read Aaron's opinion: Why Republicans can’t–and won’t–repeal Obamacare Henry J. Aaron
From AAI: AAI Praises District Court Opinion Enjoining Aetna-Humana Merger
Excerpt: The AAI praised Judge John D. Bates's opinion granting the U.S. Department of Justice (DOJ) an injunction to block the merger of health insurers Aetna and Humana. AAI President Diana Moss noted, "This is a victory for competition and consumers. The opinion sets forth a clear, logical, and understandable rationale for why the merger would have raised prices and reduced benefits to consumers in important health insurance markets."
In a letter to the DOJ in January 2016, the AAI laid out the case for why the government should block both the Aetna-Humana and Anthem-Cigna mergers, raising numerous issues addressed in Judge Bates's opinion. These include, among others, the finding that Medicare Advantage and Medicare are different markets. Similarly, the opinion holds that the merging parties' efficiency defense "fails," particularly in light of very high levels of market concentration and with most claimed efficiencies likely to flow to the merging parties, not to consumers.
DR Comment: Some have wondered whether the Trump administration can upset the decision, as Charles James as USDOJ antitrust chief famously did in the Microsoft case by adopting a settlement many perceived as weak. But Microsoft was a complex monopolization case, not a merger case where blocked is blocked. But anything is possible, including the Government reversing its position on an appeal.
Editor's Comment: Donald Trump's ad hoc and personal intervention in big firm mergers
In the days before his inauguration as President, Donald Trump initiated a practice of personal engagement in vetting mergers between large companies. The Monsanto/Bayer merger is one that attracted Mr. Trump’s attention. It is reported that Mr. Trump is more likely to favor large company mergers that promise job creation.
No law is broken when a President is personally engaged in vetting the terms and conditions of a merger, but it is a dramatic departure from past practice, and a worrying one.
When Republican Ronald Reagan became President in 1982 he wanted change in antitrust policy, but his approach was a sharp contrast to what so far seems to be President Trump’s. Reagan appointed a widely respected Stanford University scholar, William Baxter, to head the USDOJ’s Antitrust Division. Baxter was a “Chicago School” enforcement conservative, but his idea of change was to update the written Merger Guidelines followed by federal enforcement agencies -- hardly an ad hoc approach.
When Baxter and the Reagan administration famously withdrew the nearly completed USDOJ merger litigation against IBM, it happens that I was first assistant to the Government’s lead lawyer on the case, and the most senior USDOJ person on site in New York. While it was clear that Baxter opposed the Government prosecution of IBM (he traveled to Europe to lobby the EU authorities against pursuing a case), he diligently presided over a form of moot court for the Government staff, with staffers presenting their best evidence and arguments for pursuing the case. At the end of the review process Baxter issued a quasi-judicial written discussion explaining why he thought the case was not worth pursuing. For example, he found predatory pricing allegations to be strong, but so dated as not to be worth pursuing.
It could be argued that there is little consequential difference between the formalistic Reagan/Baxter approach to antitrust change and iconoclastic approach suggested by Donald Trump's recent personal and ad hoc engagement with executives of companies seeking mergers. I think the difference is big, and worrying. I learned in law school that the law as we know it today began with the English “law merchant,” a system where merchant disputes on issues like liability for deliveries of spoiled fruit could be addressed using regularized rules and procedures rather than ad hoc resolutions. The idea of regularized rules and procedures is a crucial part of modern law, including antitrust.
One problem among many that derives from ad hoc Presidential participation in merger policy is the appearance of crony capitalism, where merger policy appears to be what powerful business oligarchs can work out in informal conversations on particular cases with a President whose history is one of being a business oligarch. The William Baxter idea of carefully crafted and transparent Merger Guidelines and reasoned bases for Government decisions on particular cases is better, even if the Guidelines follow narrow “Chicago School” precepts, and cases are dismissed that many believe should not be.
Of course, it may be that President Trump will nominate someone to head the USDOJ Antitrust Division who will have staff follow Agency Merger Guidelines that are deferential to legal precedent, and the President will not weigh in on particular mergers. It may be that Division decisions on cases will be made on a reasoned and articulated basis that respects legal precedent. That would be better than ad hoc and personal Presidential involvement in the daily work of the Antitrust Division of the kind suggested by President Trump's recent meetings with executives.
By Don Allen Resnikof
CFPB v. Navient
From the CFPB complaint: "Navient has failed to perform its core duties in the servicing of student loans, violating Federal consumer financial laws as well as the trust that borrowers placed in the company."
The Complaint is here: http://files.consumerfinance.gov/f/documents/201701_cfpb_Navient-Pioneer-Credit-Recovery-complaint.pdf
Center for American Progress Action Fund
Live and webcast event: Undermined and Under Siege
Democracy in the Age of Cyberwar
January 25, 2017, 9:30 a.m. - 11:00 a.m. ET
RSVP
Bookmark this link to watch the live webcast
Welcome:
William Danvers, Senior Fellow, Center for American Progress Action Fund
Remarks:
Rep. Adam Schiff (D-CA), Ranking Member, House Permanent Select Committee on Intelligence
Distinguished guests:
Jeremy Bash, Founder and Managing Director, Beacon Global Strategies; former Chief of Staff to the Director of the CIA (2009–2011); former Chief of Staff to the Secretary of Defense (2011–2013)
Rand Beers, former Deputy Homeland Security Advisor to the President of the United States; former Acting Secretary of Homeland Security (2013)
Julianne Smith, Senior Fellow and Director, Strategy and Statecraft Program, Center for a New American Security
Moderator:
Vikram Singh, Vice President, National Security and International Policy, Center for American Progress Action Fund
The disturbing facts around Russia’s use of hacking and information warfare to interfere with America’s election and democratic institutions continue to emerge. With the recent release of the intelligence community's report on Russian interference in the U.S. election, please join the Center for American Progress Action Fund (CAPAF) and the National Security Leadership Alliance (NSLA) for a discussion about Russia, its role in the hacking of various U.S. entities, and the 2016 election. The event will feature remarks by Rep. Adam Schiff (D-CA), who is the ranking member of the House Permanent Select Committee on Intelligence.
January 25, 2017
9:30 a.m. - 11:00 a.m. ET
Center for American Progress Action Fund
1333 H Street NW, 10th Floor
Washington, DC 20005
Space is extremely limited. RSVP required.
Seating is on a first-come, first-served basis and not guaranteed.
RSVP to attend this event
For more information, call 202.682.1611.
* * *
Judge to Block Mega-Merger of Anthem and Cigna
New York Post - A federal judge is expected to block a proposed mega-merger between Anthem and Cigna — a $54 billion deal that would create the nation's biggest health insurer — as soon as Thursday, sources told The Post.
Read Article
Class Decertified in Mail-Order Pharmacy Antitrust Case
The Legal Intelligencer - A class of independent pharmacies that filed a price-fixing class action against large mail-order pharmacies has been decertified by a Pennsylvania federal judge.
Read Article
Wright Under Consideration as Trump's Antitrust Chief, Source Says
Bloomberg - The Trump team is considering giving a top antitrust post to a former U.S. trade commissioner whose hands-off views on competition have at times failed to withstand court scrutiny.
Read Article
ChemChina Files for U.S. Antitrust Approval on Syngenta Deal
Bloomberg - China National Chemical Corp. said it filed for U.S. antitrust approval with the Federal Trade Commission for its proposed $43 billion takeover of Swiss agrochemical company Syngenta AG.
Read Article
Comment on Trump’s CEO meetings
CPI on January 15, 2017
President-elect Donald Trump’s meetings with CEOs seeking federal approval for major mergers are raising red flags for ethics lawyers concerned about the possible erosion of a firewall between the incoming White House and regulators reviewing those billion-dollar deals.
Trump met this past week with the heads of German chemical company Bayer and seed and herbicide giant Monsanto, who made their case for their $57 billion merger. The deal would likely need to be approved by Trump’s choices to lead antitrust enforcement at the Justice Department.
On Thursday, Trump sat down to discuss jobs with the chief executive of AT&T, which is trying to acquire Time Warner.
Presidents typically keep their distance from such reviews, so as not to appear to be exerting political influence on a regulatory process intended to evaluate the impact a merger could have on competition and consumers. Trump’s private sessions suggest he may be less worried with appearing to be close to pending deals that require government approval.
“While it’s true the Department of Justice is under the executive branch, it’s not appropriate for the president to make that regulatory decision — and certainly not for political considerations,” said Bruce Green, a law school professor at Fordham University who specializes in ethics.
Full Content: Bloomberg
Trump involvement in Bayer-Monsanto deal
Bayer AG has pledged to boost its investments in the United States amid its deal to buy U.S. seeds giant Monsanto, investing $8 billion in research and development and adding American jobs, U.S. President-elect Donald Trump's spokesman said on Tuesday.
The German drugs and pesticides maker pledged to maintain its more than 9,000 U.S. jobs and add 3,000 new U.S. high-tech positions, Sean Spicer told reporters in a conference call following Trump's meeting with the chief executives of both companies last week.
See http://www.reuters.com/article/us-monsanto-m-a-bayer-trump-idUSKBN1512CT
Residents of 15 states who bought milk in the past 14 years may get redress
15 states (Arizona, California, Kansas, Massachusetts, Michigan, Missouri, Nebraska, Nevada, New Hampshire, Oregon, South Dakota, Tennessee, Vermont, West Virginia, Wisconsin, and the District of Columbia) are involved in a class action lawsuit against milk producers.
The lawsuit accused milk producers of price-fixing. Instead of taking the case to court, the producers settled the case for $52 million.
Full Content: KMov
Chris Sagers on Trump merger meetings
Excerpt: In a nearly unprecedented move, President-elect Donald Trump not once but twice this week met with executives of very large firms and their lobbyists whose pending merger deals will require approval by his own antitrust officials. The moves offered evidence that Trump’s antitrust program—and perhaps by extension all of his administration’s white-collar enforcement—may be altogether darker than what we thought even a few days ago.
Article: http://www.slate.com/articles/news_and_politics/jurisprudence/2017/01/donald_trump_s_high_profile_apparent_merger_meetings_are_a_major_cause_for.html?wpsrc=sh_all_mob_em_top
NYT: Hidden handling charges for "only on TV" products
Q. In November, I purchased one bottle of Scratch Aide, expecting to pay $10 for it, along with a modest shipping and handling fee. I ended up being charged more than $80. I got three bottles of Scratch Aide, and three bottles of wood butter, along with a large bottle of furniture polish. I had explicitly said that I wanted one bottle of Scratch Aide for $10 and nothing more.
I was charged nearly $50 for shipping and handling — for a box that could not have cost more than $12 to send.
SAS Group of Tarrytown, N.Y., which markets the product on TV, states on its invoice that I can return all of the products free of charge. But I will not get a refund for shipping and handling, which is much of what I spent.
This seems pretty outrageous to me. Can you help?
Lola Backlund
Lakewood, Ohio
A. The Haggler did a little research on SAS Group. It is owned by Scott Sobo, according to his LinkedIn page and other online sources. It currently has an F rating from the Better Business Bureau, along with 169 complaints that sound remarkably similar to Ms. Backlund’s. “I ordered $20 worth of products and was charged a total of $53.88,” one typical entry reads. “Shipping and handling were outrageously high and included items I did not order.”
If so many people have complained about the same problem with the same company, you may wonder why no one in a position of authority — the government, for instance — has tried to stop it.
Wonder no more. In 2011, SAS settled an investigation by the Pennsylvania attorney general’s office by agreeing to pay restitution to consumers who said they were overcharged for shipping and handling fees after buying as-seen-on-TV products.
“SAS charged shipping and handling for those free products that far exceeded the actual cost for shipping and handling,” said Linda Kelly, then the attorney general. As part of the deal, the company was prohibited from making false and misleading statements in the future. That included telling customers that a product was free when, in fact, shipping and handling fees were tacked on.
SAS paid a $22,000 fine and threw in $20,203 for future consumer protection efforts. [But the offending conduct apparently continues. DR]
Continue reading the story
Sally Hubbard on fake news as an antitrust issue
When viewed through an antitrust lens, news publishers are Facebook’s competitors. They compete for users’ time spent online, user data and advertising dollars. This competitive dynamic may in part explain why Will Lewis, Dow Jones CEO and WSJ publisher, has accused Facebook (and Google) of “killing news.”
Indeed, competitive biases baked into Facebook’s design deserve a healthy portion of the responsibility for the rise of fake news. By pulling technological levers that keep users on its platform, thereby lessening clicks to news publishers’ sites, Facebook has sped the decline of legitimate news and provided a breeding ground for the fake variety.”
Full Content: Forbes
Brianne Gorod: Can CFPB's Cordray be fired by President Trump?
From article at http://yalejreg.com/nc/why-the-cfpb-director-shouldnt-be-going-anywhere-by-brianne-gorod/
When Congress created the CFPB, it deliberately chose to insulate the CFPB Director from political influence, giving him a five-year term and making him removable only for “inefficiency, neglect of duty, or malfeasance in office.” Although in PHH Corp. v. CFPB, a panel of the United States Court of Appeals for the D.C. Circuit recently held, in a divided vote, that the removal provision is unconstitutional, the full D.C. Circuit is currently deciding whether to rehear the case. If it decides to do so, that decision will vacate the panel’s judgment, restoring the status quo. In other words, if the D.C. Circuit decides to rehear the case, the law creating the CFPB would continue to operate as Congress intended, and the CFPB Director would not be removable at will by the President.
Center for American Progress Action Fund Program:
Mayors on the Front Line
Protecting Progressive Policy at the Local Level
January 17, 2017, 10:30 a.m. - 11:45 a.m. ET
RSVP
Bookmark this link to watch the live webcast
Welcoming remarks:
Neera Tanden, President and CEO, Center for American Progress Action Fund
Distinguished guests:
Mayor Muriel Bowser, District of Columbia
Mayor Jim Kenney, Philadelphia, Pennsylvania
Mayor Ed Murray, Seattle, Washington
Mayor Nan Whaley, Dayton, Ohio
Moderated By:
Winnie Stachelberg, Executive Vice President, External Affairs, Center for American Progress Action Fund
With the election of Donald Trump and a Republican-controlled Congress, U.S. mayors are emerging as front-line defenders of progressive policies. Please join the Center for American Progress Action Fund for a conversation with four mayors on the role of the chief executives of our nation’s cities in this new political environment. Seattle, Washington, Mayor Ed Murray (D); District of Columbia Mayor Muriel Bowser (D); Philadelphia, Pennsylvania, Mayor Jim Kenney (D); and Dayton, Ohio, Mayor Nan Whaley (D) will discuss the potential impacts of the new administration and Congress on cities, including how mayors plan to defend against regressive rollbacks in policy areas such as immigration, health care, climate, and civil rights, among others.
January 17, 2017,
10:30 a.m. - 11:45 a.m. ET
Center for American Progress
1333 H Street NW, 10th Floor
Washington, DC 20005
Space is extremely limited. RSVP required.
Seating is on a first-come, first-served basis and not guaranteed.
RSVP to attend this event
For more information, call 202.682.1611.
From Peter Geier:
ATM anti-steering case: Judge tells counsel to streamline antitrust actions
- Judge seeks case resolution, not ‘a high-priced gaggle’ of quarreling lawyers
- Plaintiffs claim Visa and MasterCard’s rules banning ‘steering’ block competition
- Independent ATM operators want court to ban fees over EMV security chips
“I love the word ‘efficiency’,” US District Judge Richard Leon told lawyers at a status hearing on 12 January, “and I am going to say something for the first time that you are not going to hear for the last time: Less is more. Less is more.” Leon sits in the District of Columbia in Washington DC.
The three class actions before him—one on behalf of independent ATM owner-operators, one by Visa and MasterCard ATM users and one by independent non-bank ATM users—challenge Visa and MasterCard’s rules preventing ATM operators from “steering” ATM users to payment options that charge ATM operators lower transaction fees. The cases were dismissed in 2013, but an appeals court vacated that ruling in October 2015, sending the cases back to the trial court—and a new judge—for litigation.
Plaintiffs allege that Visa and MasterCard’s agreement among themselves and with every card-issuing bank in their network violates the Sherman Act because it puts a horizontal restraint on the pricing of ATM access fees to customers at the point of sale. The card networksimpose horizontal restraints likewise on ATM access fee pricing by independent ATMs that compete with bank-owned and -operated ATMs, plaintiffs allege.
The rules and fee regime in effect “insulate” the payment card networks from competition, said Jonathan Rubin of Rubin PLLC which represents the non-bank ATM operators.
Leon told counsel that these cases realistically have about a 2% chance actually of going to trial. He added that the notion of “more documents, more depositions, more data and more experts might be good for billable hours, but it is not good for getting these cases resolved.”
The 12 January hearing opened on the issue the judge must decide first, which is whether to issue an injunction preventing Visa and MasterCard from charging fees to non-Visa-MasterCard ATM operators for not upgrading their systems to read the new EMV security chips. An EMV chip is a micro-processor that acts as a form of electronic data storage on credit cards. The acronym EMV derives from “Europay, MasterCard and Visa,” the companies that initiated development of the EMV specifications in 1994.
The networks say that they developed the chip to help reduce losses due to fraudulent credit card charges which historically have been absorbed by the issuers and only rarely by the merchants. MasterCard implemented its so-called “liability shift” for handling such charges in October 2015. Under this regime, liability “shifts” from the bank which issued the card to the merchant, unless the merchant has upgraded his system to read the chips. Visa’s liability shift takes effect in October 2017.
Merchants and ATM operators are assessed a “charge-back” fee in instances where there is a problem with a charge, and a “fall back” fee when a card processor’s system automatically defaults a payment to the metallic swipe which preceded the EMV technology.
Leon, after lending the lawyers a skeptical ear on the issue of the injunction, agreed to accept written briefs, and then to hear oral argument in April, and to issue an opinion in July. But he recommended that counsel in the meantime set up a plaintiffs’ and defense counsel working group, with one lawyer from each firm, to narrow down the factual and legal issues, and to settle among themselves as many issues as possible.
Leon acknowledged that he had little experience with antitrust litigation, but said that he had presided over In re Fannie Mae Securities Litigation a decade ago. He said that the case involved 30 million documents, 14 million of which were emails, of which he said a lawyer had admitted that less than 1000 were important. “Aw, come on! This is silly,” Leon said that he had replied.
Co-lead interim class counsel for the National ATM Council and independent ATM owner-operator plaintiffs are Rubin PLLC; Lukas, Nace, Gutierrez & Sachs; and the Mogin Law Firm. Co-lead interim class counsel for Visa/MasterCard-owned ATM user plaintiffs are Quinn Emanuel Urquhart & Sullivan; Hagens Berman Sobol Shapiro; and Mehri & Skalet. Non-bank-owned ATM user class plaintiffs are represented by Finkelstein Thompson and Lovell Stewart Halebian Jacobson.
Visa is represented by Arnold & Porter; MasterCard is represented by Paul, Weiss, Rifkind, Wharton & Garrison.
The cases are: The National ATM Council et al. v. Visa and MasterCard et al., no. 11cv1803; Mackmin et al. v Visa et al., no. 11cv1831; and Stoumbos v. Visa Inc. et al., no. 11cv1882, in the US District Court for the District of Columbia (Washington DC).
by Peter Geier in Washington DC
Disclosure: Don Resnikoff is Of Counsel to Rubin PLLC
CFPB acts against two law firms for misrepresenting attorney involvement to collect on debts
The Consumer Financial Protection Bureau has taken action against two medical debt collection law firms and their president for falsely representing that letters and calls were from attorneys attempting to collect on a debt when no attorney had yet reviewed the account. The law firms also did not ensure the accuracy of the consumer information they furnished to credit reporting companies and used improperly notarized affidavits in lawsuits filed against consumers. The practices affected thousands of individuals. The CFPB is ordering Works and Lentz, Inc., Works and Lentz of Tulsa, Inc., and their president, Harry A. Lentz, Jr., to provide $577,135 in relief to harmed consumers, correct their business practices, and pay a $78,800 penalty.
The CFPB's press release, with a link to the consent order, is here.
Credit: Consumer Law Policy Blog
State laws and gun violence
The Violence Prevention Center has released a new analysis (http://www.vpc.org/press/states-with-weak-gun-laws-and-higher-gun-ownership-lead-nation-in-gun-deaths-new-data-for-2015-confirms/) of just-released Centers for Disease Control and Prevention data showing, as in prior years, that states with weak gun violence prevention laws and higher rates of gun ownership have the highest overall gun death rates and that states with the lowest overall gun death rates have lower rates of gun ownership and stronger gun violence prevention laws.
China Ready to Step Up Scrutiny of U.S. Firms If Trump Starts Feud
Bloomberg - China is prepared to step up its scrutiny of U.S. companies in the event President-elect Donald Trump takes punitive measures against Chinese goods and triggers a trade war between the world's two biggest economies after he takes office. The options include subjecting well-known U.S. companies or ones that have large Chinese operations to tax or antitrust probes, the people said, asking not to be identified because the matter isn't public.
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From the Legal Services Center at Harvard Law School: Former ITT Tech students move to intervene in ITT’s bankruptcy proceedings
On January 3, 2017, a group of former ITT Tech students moved to intervene in ITT’s bankruptcy proceedings in the Southern District of Indiana. They seek to act as representatives of hundreds of thousands who have been defrauded by ITT.
Along with legal documents, the students filed over a thousand pages of first-hand accounts from students who attended ITT, affidavits from several whistleblowers, and evidence developed from state and federal law enforcement investigations. The CFPB and multiple state attorneys general are also parties in the bankruptcy proceedings.
See http://www.legalservicescenter.org/get-legal-help/predatory-lending-and-consumer-protection-unit/project-on-predatory-student-lending/itt-bankruptcy-student-intervention/
CLE and Webinar on expert witnesses in the DC Superior Court
In its ruling on Motorola Inc. v Murray in October 2016, the D.C. Court of Appeals adopted Federal Rule of Evidence 702 and the Daubert standard for determining the admissibility of expert witnesses in the D.C. Superior Court. The decision overturned decades of case law and now applies to all experts in every type of trial.
To help practitioners navigate the new rule, the D.C. Bar Continuing Legal Education Program will host “Evaluating Expert Witnesses: The New Daubert Standard in D.C. Superior Court” on Tuesday, January 10. The 3-hour program will be led by a panel of seasoned practitioners, a medical scientist, and D.C. Superior Court Judge Frederick Weisberg.
Prior to the course, moderator Patrick Malone of Patrick Malone and Associates gave the D.C. Bar a sneak peek, offering his insider tips for trial lawyers.
Ten Lessons for Trial Lawyers
Doctrine
1) “Reliability” is a malleable term.
2) Same intellectual rigor should be used both inside and outside the court.
3) There is no easy bright-line test for all experts.
Protect Your Experts
4) Articulate the methodology.
5) Do thorough literature searches.
6) Ask opposing experts: “Can reasonable persons differ?”
Probe Soft Spots
7) Watch for experts wandering from their core expertise.
8) Mind the gaps.
9) Become literate in statistics and probability, and don’t forget to examine those error rates.
Tactics to Attack/Defend
10) Know when and how to launch a Daubert attack.
Want to know more? In addition to expanding on his tips, Malone will be joined by Judge Weisberg, who played a key role in changing the law of expert admissibility; Michael Ambrosino, Special Counsel for DNA and Forensics, U.S. Attorney’s Office for the District of Columbia; Dr. Bernard Goldstein, MD, Emeritus Professor and Emeritus Dean, Graduate School of Public Health, University of Pittsburgh; and Maneka Sinha, Public Defender Service for the District of Columbia. These experts will guide attendees through this new rule on topics such as:
- How and when to challenge an opposing expert for not meeting the requirements of Rule 702.
- How to protect your expert from a legal challenge.
- How the law moved from the old Frye/Dyas test to the more demanding Rule 702 requirements.
- Special issues for forensic experts in criminal trials.
- What science-based experts must do to show they have applied reliable methods to the facts of the case.
Register for the in-person class today! Not able to make it in? The program is also offered as a Webinar.
U.S. Loses Bid to Overturn AmEx Antitrust Decision
Reuters - A federal appeals court on Thursday rejected the U.S. government's request that it reconsider its decision allowing American Express Co. to stop merchants from encouraging customers to use rival cards that charge lower fees.
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Four Mega-Mergers Hang Over Into New Year
Bloomberg - Four long-pending mega-mergers aren't likely to emerge this year untouched by their months-long regulatory reviews. Parties to three of the four deals have already said they've received second requests for information from antitrust regulators, and the companies' lawyers are presumed to be working to negotiate settlements that mollify agency concerns.
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Trump Tells Confidant He Still Opposes AT&T-Time Warner
Bloomberg - Donald Trump remains opposed to the megamerger between AT&T Inc. and Time Warner Inc. because he believes it would concentrate too much power in the media industry, according to people close to the president-elect, who has been publicly silent about the transaction for months.
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Post-ACA Landscape Raises Stakes for Insurer Megamergers
Modern Healthcare - The possibility that the Affordable Care Act will be bulldozed and replaced by the incoming administration means the nation's largest insurers are consolidating amidst a very different landscape than the one they viewed when they first proposed some of the industry's largest tie-ups.\
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Will there be continued prosecution of horizontal agreements under a Trump antitrust regimen?
Recent historical precedent is that antitrust enforcement of straightforward anticompetitive horizontal agreements continued under Republican administrations generally unenthusiastic about antitrust. With that in mind, the recent Wolters-Kluwer review of current enforcement of price fixing and other horizontal conduct is interesting:
In 2016, the Department of Justice Antitrust Division continued filing new actions in a number of its long-running probes, such as its investigations of the auto parts industry and real estate foreclosure auctions. However, the year also saw charges in some new probes. Two particularly important price fixing investigations announced in 2016 involved packaged seafood and generic drugs.
In December, the Justice Department announced its first charge in its packaged seafood industry probe against a former Bumble Bee Foods executive. Just two weeks later, another executive was charged and agreed to plead guilty for his alleged role in the price fixing conspiracy. More charges will likely follow in 2017, including corporate plea deals.
News of the Justice Department investigation has been circulating for some time. When a proposed merger in the industry was abandoned in 2015 in light of a Justice Department challenge, government concerns about the competition in the marketplace were disclosed. In the face of a challenge in late 2015, Thai Union Group P.C.L.—the owner of Tri-Union Seafoods LLC, doing business as Chicken of the Sea International—and Lion Capital LLP mutually agreed to terminate plans to acquire Bumble Bee Foods, LLC. In response, William Baer, then assistant attorney general in charge of the Antitrust Division, stated: “Our investigation convinced us—and the parties knew or should have known from the get go—that the market is not functioning competitively today, and further consolidation would only make things worse.”
Another newly announced investigation in 2016 involved generic drug price fixing. Two former pharmaceutical industry executives were charged with participating in a conspiracy to fix prices, rig bids, and allocate customers for two forms of generic drugs. The Antitrust Division announced charges against Jeffrey Glazer, the former chief executive officer of generic pharmaceutical company Heritage Pharmaceuticals, Inc., and Jason Malek, the former president of the same company. The government alleged that the two participated in conspiracies involving an antibiotic, doxycycline hyclate, and glyburide, a medicine used to treat diabetes. The challenged conduct took place between April 2013 and December 2015. Charges in this long-running investigation have been anticipated for years. In 2014, Senator Bernie Sanders, joined by fellow lawmakers, sent a letter to Glazer, seeking information on the dramatic price increases for doxycycline hyclate. The letter represented that the average price of the drug increased by as much as 8,281 percent between October 2013 and April 2014. A number of private antitrust suits have been filed in response to the government’s investigation. Additional charges are likely in 2017.
These new investigations were announced as the Justice Department continued its long-running probes in other areas. For instance, charges continued to be filed in the global auto parts cartel investigation, in which fines now total nearly $2.9 billion. The first filings in this probe date back to 2011.
The government also continued to pursue real estate investors who engaged in anticompetitive conduct at foreclosure auctions around the country. The foreclosure case filings started in 2010. Most of the convictions result from conduct that took place in California, and some indicted individuals await trial there. There also have been a number of convictions in Alabama, Georgia, and North Carolina.
The auto parts and foreclosure auction probes could be winding down. Grand jury indictments against in Maruyasu Industries Co., Ltd. and Tokai Kogyo Co., Ltd. for their alleged participation in a conspiracy to fix the prices of automotive body sealing products and trials in the foreclosure investigation are indications that fewer plea deals with cooperating witnesses are on the horizon.
Credit: Wolters-Kluwer blog
EMV and ATM operators: what are the issues?
1. A liability shift followed by charge-backs
There are unforeseen consequences of the liability shift that create a larger business case for implementation. Industry insiders suggest that the number of charge-backs have multiplied by a factor of 10.
One reason why is that issuers charging back fallback transactions (in which a mag stripe card is used on a chip-enabled terminal) and take the word of their cardholders for granted. There is certainly fraud, and there is definitely abuse of the rules.
Some transactions are coded “chip capable” as the hardware is already in place, but issues with certification delay activation of software, which means that every EMV card transaction would be considered fallback. ATM operators are also feeling the impact since fraudulent cardholders and heavy-handed issuers don’t distinguish between POS terminals and ATMs.
2. Continuing use of signature
Continuing with signature is similar to building a huge barbwire fence around your house, then leaving the gate open for your car. Experience elsewhere has demonstrated that use of a PIN code actually shortens the transaction time — a bonus for multilane retailers for whom queuing means either less turnover or higher costs.
3. Reluctance to embrace change
Given the implementation issues, it is easy for critics to say that EMV does not work and argue that there is no business case. With this attitude, I doubt that the steam engine would have made it. The case for EMV can be qualified.
4. A rush to the courts
It is fair enough that no-one could see the Draconian impact of the liability shift, but a central EMV migration body with a proper mandate would allow for a constructive debate between the stakeholders rather than immediate escalation to the courts.
CMS Payments Intelligence, a consultancy specializing in retail payments, has published a convincing business case that the cost of counterfeiting continues to rise and is at such a level that the cost of chip cards and terminal upgrades is now lower than the cost of counterfeit fraud. Rather than “to EMV or not” the debate should center on “how can we make it work.”
From: http://www.atmmarketplace.com/articles/enough-with-the-finger-pointing-its-time-for-the-us-to-refocus-reform-and-unite-on-emv/
NY AG: "The Trump Foundation is still under investigation by this office and cannot legally dissolve until that investigation is complete”
A spokesperson for New York Attorney General Eric Schneiderman said some days ago that President-elect Donald Trump’s charitable foundation cannot cease operations until an investigation into the organization is complete.
Trump has announced that he would dissolve the Donald J. Trump Foundation amid mounting scrutiny over potential conflicts of interests with his business holdings.
The foundation has been the subject of an investigation by the New York attorney general's office following reports from The Washington Post that the charity’s funds may have been used to personally benefit Trump.
"The Trump Foundation is still under investigation by this office and cannot legally dissolve until that investigation is complete,” Amy Spitalnick, a spokeswoman for Schneiderman, said in a statement to The Hill.
Full article: http://thehill.com/blogs/blog-briefing-room/news/311773-ny-ag-trump-cannot-legally-dissolve-foundation-until
California officials are bracing for a major clash with Donald Trump and his incoming presidential administration in the battle over global warming
Trump — who has repeatedly described climate change as a hoax — could make the crusade to curtail emissions in California much more difficult. Experts said he could, among other actions, slash funding for scientific research and technology, end tax credits for electric cars and solar roofs, and mount a comprehensive legal fight against the state’s ability to regulate greenhouse gases from polluting industries.
The showdown could ripple to other states that have or plan to follow California’s policies, such as reducing vehicle emissions, forcing power utilities to increasingly use renewable sources of energy and requiring industry to pay money for the right to pollute.
Full article: http://www.sandiegouniontribune.com/news/environment/sd-me-california-climate-20161205-story.html
Modern Healthcare: Medicare Advantage 'only safe game in town' for insurers
While Medicare Advantage plans added nearly 900,000 members in 2016, enrollment is growing at a slower pace. Still, experts say the future of Medicare Advantage will be lucrative for insurers.
“It's the only safe game in town [for insurance companies], in all of health insurance,” said John Gorman, a former CMS official who is now a healthcare consultant in Washington.
Enrollment in Medicare Advantage, the private, managed care version of the federal health program for seniors, reached nearly 18.7 million as of Dec. 1, according to the latest federal data.
http://www.modernhealthcare.com/article/20161222/NEWS/161229969?utm_source=modernhealthcare&utm_medium=email&utm_content=20161222-NEWS-161229969&utm_campaign=am
From DMN: Run-DMC Sue Wal-Mart, Amazon, and Jet for $50 Million
Amazon has a pirating problem, so Run DMC is taking them to court. Wal-Mart and Jet, too, apparently.
In court documents obtained by Digital Music News, Run DMC is taking Amazon, Wal-Mart, and Jet to court. The lawsuit also names Vision World, Infinity Fashion, SW Global Corp. and twenty John Does.
The lawsuit begins with a quick history on Run DMC.
Full article here.
Committee Report of Bipartisan Congressional Drug Pricing Investigation
REPORT INCLUDES FINDINGS FROM THREE HEARINGS; REVIEW OF MORE THAN ONE MILLION PAGES OF DOCUMENTS; AND INTERVIEWS WITH SCORES OF PATIENTS, DOCTORS, HOSPITAL ADMINISTRATORS, CONSUMER ADVOCATES, HEALTH EXPERTS, AND PHARMACEUTICAL INDUSTRY EXECUTIVES
CLICK HERE to read report
Excerpt from Better Market's Dennis Kelleher's email to supporters:
A few of our most notable victories and activities include:
- Stopping financial advisers from putting their economic interests above yours and requiring them to put your best interests first when you get retirement investment advice. (This is the "fiduciary duty" rule finalized by the Department of Labor (DOL).)
- Fighting to make sure that Wall Street's too-big-to-fail banks have more capital, liquidity and effective "living wills" to make them stronger and the slogan "no more taxpayers bailouts" a reality.
- Limiting sky-high, incentive-based compensation schemes and clawing back pay when companies violate the law.
- Arguing for prosecuting and punishing lawbreaking executives and for there to be as much accountability on Wall Street as there is on Main Street.
- Advocating for investor protections to prevent financial predators from ripping you off, including fighting predatory high-frequency computer trading (HFT).
- Convincing the SEC to approve a private sector solution to a market breakdown: the Investors' Exchange's (IEX) application levels the playing field by blocking insiders from profiting at the expense of everyone else, putting investors' best interests first.
- Litigating in the courts to protect critically important rules to prevent another financial crash, to defend the DOL best interest rule, to ensure the Financial Stability Oversight Council's ("FSOC") ability to prevent nonbank systemic risk, and to require transparency in court proceedings so the biggest financial firms in the country can't keep the American people in the dark about their high risk actions that threaten financial stability.
How did we do this? By directly taking on Wall Street's biggest banks and their lawyers and lobbyists in more than 30 rule makings at all the agencies in Washington, and battling them in court when Wall Street tried to get these common-sense rules and laws thrown out.
Are taxpayers funding immunotherapy drug research for corporate profits?
From the NY Times:
Enthusiasm for cancer immunotherapy is soaring, and so is Arie Belldegrun’s fortune.
Dr. Belldegrun, a physician, co-founded Kite Pharma, a company that could be the first to market next year with a highly anticipated new immunotherapy treatment. But even without a product, Dr. Belldegrun has struck gold.
His stock in Kite is worth about $170 million. Investors have profited along with him, as the company’s share price has soared to about $50 from an initial price of $17 in 2014.
The results reflect widespread excitement over immunotherapy, which harnesses the body’s immune system to attack cancer and has rescued some patients from near-certain death. But they also speak volumes about the value of Kite’s main scientific partner: the United States government.
Kite’s treatment, a form of immunotherapy called CAR-T, was initially developed by a team of researchers at the National Cancer Institute, led by a longtime friend and mentor of Dr. Belldegrun. Now Kite pays several million a year to the government to support continuing research dedicated to the company’s efforts.
The relationship puts American taxpayers squarely in the middle of one of the hottest new drug markets. It also raises a question: Are taxpayers getting a good deal?
Defenders say that the partnership will likely bring a lifesaving treatment to patients, something the government cannot really do by itself, and that that is what matters most.
Critics say that taxpayers will end up paying twice for the same drug — once to support its development and a second time to buy it — while the company reaps the financial benefit.
“If this was not a government-funded cancer treatment — if it was for a new solar technology, for example — it would be scandalous to think that some private investors are reaping massive profits off a taxpayer-funded invention,” said James Love, director of Knowledge Ecology International, an advocacy group concerned with access to medicines.
Continue reading the NYT story
See editor Don Resnikoff's 2001 article on the same topic at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=314859
PUBLIC NOTICE
Superior Court of the District of Columbia:
Increase in Jurisdiction Limits for Small Claims and Conciliation Cases
Effective immediately, and pursuant to the “District of Columbia Judicial Financial Transparency Act” of 2016, the Small Claims and Conciliation Branch jurisdiction limit is increased from $5,000 to $10,000.
All cases for the recovery of money for $10,000 or less, exclusive of interest, attorney fees, protest fees, and costs must be filed in the Small Claims and Conciliation Branch. The Small Claims and Conciliation Branch rules and forms apply to these actions. The fee for filing these cases is $45.
Cases filed in the Civil Actions Branch for the recovery of money for $10,000 or less will not be accepted. These cases must be filed in the Small Claims and Conciliation Branch in person. This Branch currently does not accept electronic filings. If a case is electronically filed in the Civil Actions Branch on or before Friday, December 23, 2016 by 11:59 p.m. it will be accepted for filing and certified to the Small Claims Branch. All cases filed in the Civil Actions Branch on or after Saturday, December 24, 2016 will be rejected if they do not meet the jurisdiction requirement.
For additional information, please contact the Clerk’s Office, Small Claims and Conciliation Branch on (202) 879-1120. You can also contact the Clerk’s Office using our Live Chat online at http://info.caseedge.com/e/137571/ublic-aud-civil-civilchat-jsf-/22nsd9/38019522 The Clerk’s Office is located in Court Building B, 510 4th Street, N.W., Room 120, Washington, D.C. 20001.
From DMN: President Barack Obama Signs Anti-Ticket Bot Legislation Into Law
President Barack Obama signed into law the Better Online Ticket Sales (BOTS) Act of 2016. Last week, both the Senate and the House passed the legislation. The law deems ticketing bots “an unfair and deceptive practice” in violation of the Federal Trade Commission Act. This follows a similar law passed recently in New York.
The BOTS Act of 2016 makes it illegal to use software to purchase online tickets for popular events. Engadget reports that the Act also make it illegal to use bots or software to resell tickets. The new law aims to give users a fair shot at normal ticket prices, reducing scalping.
Article continues here.
The view from Great Britain: Donald Trump lashes out over insult to his New York restaurant's chinese-style dumplings and T-bone steak
Excerpt from the Telegraph:
Donald Trump in feud with Vanity Fair over 'flaccid dumplings' restaurant review Allen, washington
15 DECEMBER 2016 • 9:51PMAmid concerns over Russian hacking of the US election Donald Trump also had another preoccupation - a scathing review of his Trump Grill restaurant by the magazine Vanity Fair.
In a withering assessment of the eaterie in the lobby of Trump Tower in New York, critic Tina Nguyen described eating a steak that "slumped to the side over the potatoes like a dead body in a T-boned minivan".
**
[T]he Vanity Fair writer described eating "flaccid, grey Szechuan dumplings with flaccid, grey innards as a campy version of Jingle Bells jackhammered in the background".
She also criticised bathrooms that "transport diners to the experience of desperately searching for toilet paper at a Venezuelan grocery store"
The reviewer conceded that the taco bowl was "perfectly adequate" but concluded: "As soon as I got home I brushed my teeth twice and curled up in bed until the nausea passed."
Mr Trump turned his fire on the magazine's editor Graydon Carter.
He wrote on Twitter: "Has anyone looked at the really poor numbers of Vanity Fair magazine? Way down, big trouble, dead! Graydon Carter, no talent, will be out!
From http://www.telegraph.co.uk/news/2016/12/15/donald-trump-feud-vanity-fair-flaccid-dumplings-restaurant-review/
Recap of Washington D.C. area (close-in Maryland) Purple Line light rail litigation developments
Earlier this year a the Federal ruling vacating the Record of Decision denied the Purple Line its anticipated $1 billion in federal funds. This ruling was recently reaffirmed by Judge Richard Leon. (Click highlighted language to see the rulings.)
The Friends of the Trail group opposes the Purple Line and seeks donations: Click: Donations Needed
NYT: Uber Defies California Regulators With Self-Driving Car Service
Uber said it had no intention of ending a new test of its self-driving vehicles in San Francisco, even though the state said it was illegal.
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CFPB questions college sponsored bank cards
Excerpt from CFPB report:
o Certain agreements between colleges, financial institutions, and other vendors present continued risks to students. Publicly available agreements show many students face high fees when using college-sponsored banking products. In addition, colleges may miss opportunities to monitor program execution and position themselves to understand the economic costs to students from products marketed under these agreements. These observations raise important questions about whether certain agreements promote products that may be inconsistent with the best financial interests of their students.
o General marketing agreements for college-sponsored accounts, including agreements in place at many of the nation’s largest colleges and universities, do not protect students from certain costly account fees. Under a general marketing agreement that does not restrict certain fees, a large college or university could expect its students to collectively pay hundreds of thousands of dollars per year in overdraft fees alone.
o Students’ interests may be an afterthought in many marketing agreements. General marketing agreements between banks and colleges often do not contain certain specific account terms, conditions, or features, suggesting that colleges may not be negotiating terms that maximize value for their students. The Bureau identified dozens of general marketing agreements that may feature accounts with higher fees or fewer protections than widely available alternatives that are safer or more affordable, including accounts currently in use at hundreds of other colleges. In contrast, these marketing agreements tend to specify detailed terms describing the financial arrangement between colleges and banks, such as provisions detailing revenue sharing and other payments made in exchange for exclusive marketing access to a student population.
o Many colleges fail to ensure they are in position to evaluate products offered to students and oversee the execution of their campus banking marketing agreements. For example, many colleges do not negotiate the right to receive periodic reporting detailing student product use and costs, to accept or decline account pricing changes, including fee increases, or to obtain information about the resolution of student complaints. Such missed opportunities mitigate colleges’ ability to ensure their programs are in the best financial interest of their students.
Full CFPB report: http://files.consumerfinance.gov/f/documents/201612_cfpb_StudentBankingReport2016.pdf
AG Jepsen: Conn. Joins Antitrust Lawsuit over Allegations that Drug
Company Illegally Blocked Generic Opioid Treatment from Market
35 states and D.C. file antitrust, consumer protection lawsuit over alleged Suboxone "product hopping"
12-15-2016
Connecticut, 34 other states and the District of Columbia filed a federal lawsuit yesterday afternoon against the makers of Suboxone, a prescription drug used to treat opioid addiction, alleging that the companies engaged in an illegal scheme to block generic competitors from entering the market and cause purchasers to pay artificially high prices, Attorney General George Jepsen said.
Reckitt Benckiser Pharmaceuticals, Inc. – now known as Indivior PLC – and MonoSol Rx are accused of conspiring to switch Suboxone from a tablet version to a film, which dissolves in the mouth, in order to prevent or delay generic alternatives and maintain artificially inflated profits. The states allege that the companies' behavior violates both state and federal laws.
Full press release: http://www.ct.gov/ag/cwp/view.asp?A=2341&Q=585944
Insurance merger trials consider how to define markets
By Shannon Muchmore | December 14, 2016
Excerpt:
Potential upheaval of the insurance industry remains on trial as two major merger cases that could help define national insurance markets are progressing in the same Washington, D.C., building.
Anthem is facing an uphill battle in its attempts to convince a U.S. district judge that its $54.2 billion proposal to take over Cigna meets legal scrutiny, analysts said. The government wrapped up its arguments this week in a separate challenge to the $37 billion merger bid between Aetna and Humana.
If the insurers are successful in their arguments, the “big five” insurers would be down to three companies. Attorney General Loretta Lynch has said this would “fundamentally reshape the health insurance industry” and kill competition in key markets.
The second phase of the Anthem trial began Wednesday. U.S. District Judge Amy Berman Jackson is considering the closing arguments from the first phase, which focused on the merger's impact on the national market. She could rule at any time that the government has already shown the merger to be unlawful.
The U.S. Justice Department sued to stop both mergers in July, arguing that they would reduce competition and result in higher prices, fewer choices for consumers and lower quality care.
Tim Greaney, co-director of the Center for Health Law Studies at St. Louis University, said the government has done a good job of making its core argument in the Anthem trial and has sewn doubt that the insurers' could provide better and less expensive services by working together, as both claim.
Full article: http://www.modernhealthcare.com/article/20161214/NEWS/161219969?utm_source=modernhealthcare&utm_medium=email&utm_content=20161214-NEWS-161219969&utm_campaign=am
Baker, Hostetler primer on state action doctrine after North Carolina Dental ruling
Excerpt: The Supreme Court’s North Carolina Dental Ruling In North Carolina State Board of Dental Examiners v Federal Trade Commission, the Supreme Court provided unusually detailed guidance on state action immunity questions that had vexed lower courts for years. [footnote omitted] In that case, North Carolina delegated a dentist licensing system to its Board of Dental Examiners. Its members were selected by dentists in the state, with most being dentists with active practices, including providing teeth-whitening treatments. After nondentists began offering teeth-whitening services, the Board decided that teeth whitening is the practice of dentistry and then launched an aggressive campaign to stop non-dentists from providing teeth whitening in North Carolina.
The FTC claimed the Board’s actions unreasonably restrained trade. The Board responded by arguing the state action doctrine provides state-designated entities with immunity from the FTC’s lawsuit. The Fourth Circuit concluded, with little analysis, that ‘when a state agency is operated by market participants who are elected by other market participants, it is a “private” actor’ and required to satisfy both Midcal prongs. [footnote omitted] This conclusion effectively decided the case, as the Board did not argue it could meet Midcal’s second prong.
The Supreme Court affirmed with an opinion addressing the very core of the state action doctrine. The Court explained that the doctrine is not ‘unbounded’ and its application is ‘disfavoured’. These limits on state action, the Court said, are ‘most essential’ when a state attempts to delegate its regulatory power to participants in the very market they are regulating due to the risk that those participants will pursue private interests that restrain trade. Consequently, the Court reasoned, immunity does not automatically apply to non-sovereign actors, even if they are delegated regulatory authority by a state.
In blunt terms, the Court observed that ‘active market participants cannot be allowed to regulate their own markets free from antitrust accountability’.
full article: https://www.bakerlaw.com/files/uploads/Documents/News/Articles/LITIGATION/2015/US%20Private%20Antitrust%20Litigation.pdf
Pharmaceutical Antitrust: What the Trump Administration Can Do
By Michael A. Carrier (Rutgers Law School)
Abstract excerpt: Drug prices are in the news. “Pharma Bro” Martin Shkreli increased the price of Daraprim, a treatment for fatal parasitic infections, by 5000%. Mylan found itself on the hot seat for raising the price of the anaphylaxis-treating EpiPen 15 times in 7 years, resulting in a 400% increase to more than $600. Politicians rail about the harms of high drug prices.
What can the next Administration do? A lot. This article shows how—even without directly regulating price—it can use antitrust law to reduce prices by challenging an array of anticompetitive behavior. It can target settlements by which brand drug firms pay generics to delay entering the market. It can go after “product hopping,” by which a brand firm switches from one version of a drug to another to forestall generic competition. It can target distribution restrictions that brands have instituted to block generics. And it can challenge other conduct in the industry.
In short, antitrust law has a vital role to play.
Full article: Pharmaceutical Antitrust: What the Trump Administration Can Do
California considers laws to protect immigrants
Immigrant protection bills introduced this week:
One would create a program to finance legal services for immigrants fighting deportation. Another would provide training and advice on immigration law to public defenders’ offices. Come the purge — and Mr. Trump has said he is going after two million to three million people immediately — many will need lawyers.
The third bill, potentially the most consequential, seeks to ensure that California will never be an accomplice to mass deportation. Its sponsor, Kevin de León, the California Senate president pro tempore, calls it the California Values Act, befitting a state that is nearly 40 percent Latino, and where one in four residents is foreign-born. It would bar state or local resources from being used for immigration enforcement, a strictly federal duty. No state or local law enforcement agency would be allowed to detain or transfer anyone for deportation without a judicial warrant.
Nothing in the bill would obstruct the federal government.
Full article: http://www.nytimes.com/2016/12/09/opinion/california-looks-to-lead-the-trump-resistance.html?action=click&pgtype=Homepage&clickSource=story-heading&module=opinion-c-col-left-region®ion=opinion-c-col-left-region&WT.nav=opinion-c-col-left-region
After Oakland fire, questions about vigilance of city inspectors
Questions about the competence of Oakland’s building inspection agency arose five years ago. An Alameda County Grand Jury in 2011 released a scathing report accusing the city’s building services division of mismanagement and having haphazard policies about conducting building inspections.
The grand jury found that agency was riddled with “poor management, lack of leadership, and ambiguous policies and procedures.” It added that the agency had inconsistent standards on code violations and that the violation notices sent to property owners were late and hard to understand. In addition, inspectors treated property owners in an “unprofessional, retaliatory and intimidating” manner.
[Current Mayor] Schaaf, who was a city councilwoman at the time of that report, said many of those concerns were quickly addressed, and she noted that the city also has been criticized in the past for being too aggressive with building code inspections.
The Ghost Ship warehouse was owned by Oakland resident Chor N. Ng’s trust and zoned exclusively for commercial use. It housed an artists collective and, according to former residents and those who frequented the building, had unpermitted living quarters inside and hosted concerts and other events.
The catastrophic fire appears to have triggered a wave of warehouse inspections by Oakland code enforcers.
See http://www.latimes.com/local/california/la-me-oakland-fire-inspection-questions-20161208-story.html
Am. Banker: CFPB on Collision Course with Trump's Justice Department
Posted: 08 Dec 2016 12:16 PM PST
Here. Excerpt:
* * * Title X of the Dodd-Frank Act * * * gives the agency explicit authority to pursue its own litigation up to and including the Circuit Court level. But when it comes to the Supreme Court, the law says the CFPB must first file a written request to the U.S. Attorney General within a specified timeframe and that the "Attorney General concurs with such request or fails to take action within 60 days of the request."
But Sen. Jeff Sessions, R-Ala., Trump's pick for attorney general, could conceivably withhold such concurrence. That would mean the Trump administration effectively blocks the CFPB's decision to appeal to the Supreme Court.
This leaves CFPB with relatively few scenarios to prevail in the PHH v CFPB case. The agency has requested an en banc rehearing of the matter before all sitting justices on the D.C Circuit, and if either that request for rehearing is denied or is granted and the panel upholds the earlier ruling, the Justice Department could prevent the CFPB from appealing the case further. * * *
But if the CFPB prevails en banc, * * * presumably PHH would appeal to the Supreme Court * * * if the high court did grant cert and heard the case, Ohio State University law professor Peter Shane said, the court would likely assign an amicus defendant to stand in the government's place if it decides it does not want to defend its side of the case.
The Politics of Professionalism: Reappraising Occupational Licensure and Competition Policy
Sandeep Vaheesan & Frank A. Pasquale III (Yale University)
Elite economists and lawyers have united to criticize occupational licensing. They contend that licensure rules raise consumer prices and restrict labor market entry and job mobility. The Obama Administration’s Council of Economic Advisers and Federal Trade Commission have joined libertarians and conservatives in calling for occupational regulations to be scaled back.
+ READ MORE
Protest groups want space at Trump inauguration
Excerpt from https://www.washingtonian.com/2016/11/15/inauguration-day-protest-might-face-restrictions/
On Monday, the US Court of Appeals for the DC Circuit heard arguments from the Act Now to Stop War and End Racism (ANSWER) Coalition against the National Park Service, which decides where protesters can and cannot be on Inauguration Day. This year, ANSWER wants to be on Freedom Plaza and the sidewalk in front of Trump’s DC hotel. The Park Service wants to reserve it for the inaugural committee’s “ticketed bleacher viewing stands.”
**
Since Bush’s inauguration, advocacy organizations have sued the National Park Service every four years for space to protest along the inaugural parade route. The cases have had varying verdicts: according to the Washington Post, in 2009 ANSWER protesters were allowed to use part of Freedom Plaza for President Obama’s inauguration. The coalition said it was a “unique, prime location” for their protest. In 2013, however, the inaugural committee claimed the plaza for itself. The regulations also reserve the space in front of the Trump Hotel for the inaugural committee.
In its response to ANSWER’s suit, the government claims some 84 percent of the sidewalks along the parade route will be open and available for the public, including protesters. That may prove more effective: If protesters are concentrated in one location, they would be easy for the incoming president to overlook, even if there were in front of his hotel. In 2001, Salon said there was a “steady stream of heckling” along the entire Bush inaugural route because protesters were dispersed throughout the crowd. It was easier for the police to de-escalate any problems, despite egg throwing. 16 years later, the crowd might be just as large and just as rowdy. It’s just no one knows yet exactly where they will be.
Illegal and dangerous music venues and artist residences are not only an Oakland problem
See: http://www.dallasobserver.com/music/dallas-underground-dance-parties-struggle-to-survive-city-crackdown-8000794
Excerpt:
"Dallas Fire [and] Rescue Inspectors did have to close down some New Year's Eve events due to invalid or no CO at all," he says. He would not say how many such events were shut down that night, but says none of them, to his knowledge, had proper certification. "Sometimes we have to make unpopular decisions to make sure that our goal [of public safety] is achieved," he says. "Ultimately the venue owner is responsible for helping us keep their patrons safe by following the laws, guidelines, policies and procedures of the city."
Barry Annino, the former president of both the Deep Ellum property owners group and merchants association, says the fire department is doing the right thing. "If for some reason they let it go and there's a fire and something happens, whose fault is it? The fire department's," he says.
**
Getting a CO requires navigating the city's bureaucracy. Frances Estes, assistant building official with City of Dallas Building Inspection, says that a tenant can apply for one with a one-time $280 fee for as long as the tenant occupies that space. There are limits. "We wouldn't allow commercial amusements to go into a residential zoning district," Estes adds. Even then, a building might need proper sprinkler, plumbing and electrical systems, stairway access and additional parking.
A zoning change would require a heavier lift, including a trip to the city's plan commission and possible objections from the reliably contentious City Council. There would also be significant extra costs, which Trich estimates could be as high as $2,000. Other effects of "playing by the rules" include being required to close at a certain time and likely having smaller-capacity parties to meet fire code. Compliance costs money, so going legit would mean charging more for admission. So much for the affordable, after-hours club. Obeying the letter of the law sort of kills the spirit of the party.
Excerpt from Guardian book review: Virtual Competition: The Promise and Perils of the Algorithm-Driven Economy
Enter Ariel Ezrachi and Maurice Stucke, two distinguished scholars specialising in competition law, who decided to ask if the online emperor has any clothes. Is the veneer of competitiveness provided by the vigour and diversity of our online marketplaces just an illusion? Their book – Virtual Competition: The Promise and Perils of the Algorithm-Driven Economy – provides some sobering answers.
Traditional competition law is about firms and their activities. The great insight underpinning Ezrachi’s and Stucke’s book is that, in a digital world, competition law will be mostly about algorithms and big data because these are the forces that now determine what happens in online marketplaces. The book focuses on three particular areas in which anticompetitive and manipulative behaviour is possible and, in some cases, already evident. They are: algorithmically enabled collusion (essentially computerised price fixing); behavioural discrimination (the process by which different customers get different offers depending on their data trails); and what the authors describe as “the dynamic interplay among frenemies” (ie the new ways in which firms can be both collaborators and competitors).
AdvertisementIn each of these areas, Ezrachi and Stucke dig deep into the ways in which algorithmic and big-data analytics combine to produce behaviours and outcomes that are – or could be – troubling for society. They then go on to discuss the extent to which existing competition law and legal precedents may – or may not – be able to address abuses. In the analogue world, for example, the law can deal with tacit collusion on price fixing because corporate executives are the agents who do it and it is possible often to prove intent. But Ezrachi and Stucke come up with plausible scenarios in which the pricing algorithms of rival firms may produce outcomes that are indistinguishable from tacit collusion, yet difficult to prosecute. Who do you sue when the “culprit” is a machine-learning algorithm? And how would you prove intent when an algorithm produces outcomes that its programmers could not have predicted?
Entire review: https://www.theguardian.com/commentisfree/2016/dec/04/how-do-you-throw-book-at-an-algorithm-internet-big-data?CMP=soc_3156
The Oakland warehouse fire: the need for effective local regulation
From DAR: Sadly, the son of my wife's cousin is one of those missing in the Oakland warehouse fire, so we have been following news reports closely. He was at the warehouse on a gig: his job was to present the light show to go with the rock music on the night of the ill-fated party.
The Oakland mayor and first responders who spoke at news conferences are impressive: deeply concerned about affected families, transparent in providing information, and appearing highly competent in supervising the grim chores of locating survivors and investigating what happened.
Local officials have explained that the warehouse had a government permit to operate only as a warehouse,not as a residence, not as a party or performance venue. There was no evidence of sprinklers or permits for a party at the building, Oakland officials said. An artists collective had divided the warehouse into areas, with people doing woodworking, sculpting and other art. Officials said that the crowded, cluttered "labyrinth" made it difficult for first responders to make their way through the smoldering building.
It is hard to imagine some advocate of reduced regulation arguing that the building owners should be allowed to use the warehouse any way they wished, without regulation. It seems plain that local regulation of the warehouse was needed, and if anything needed to be tougher.
The Oakland Mayor said in a news conference that the City government attempted to inspect the warehouse in November, but could not get in.
Media reports suggest that illegal use of the warehouse was open and notorious. Images posted to a website (www.ghostship.com) show a space heavily decorated with rugs, musical instruments, vintage lamps and lanterns and furniture, with individual spots carved out of the warehouse by nailed wood constructions. The warehouse, which also hosted a collective called Satya Yuga, regularly hosted EDM dance parties, according to its site. Friday's performance was scheduled for 9 PM to 4 AM Pacific time Friday-Saturday, according to the electronic musician Golden Donna's Facebook page.
See http://www.usatoday.com/story/news/2016/12/03/oaklands-ghost-ship-warehouse-had-known-safety-concerns/94906424/
From the USDOJ's 2nd Circuit brief in the American Express case
[on the lower court's belief that Plaintiff must account for effects on both sides of two-sided markets]
American Express operates a platform that facilitates transactions between merchants and cardholders. The platform’s appeal to merchants depends on attracting cardholders, and vice-versa. The panel discards bedrock antitrust principles under the mistaken belief that those principles cannot properly account for the interdependence of the platform’s two sides. Its decision conflicts with Supreme Court and Second Circuit precedent on two important questions of law:
1. The panel fails to apply the basic principle that a relevant market is “composed of products that have reasonable interchangeability for the purposes for which they are produced—price, use, and qualities considered.” United States v. E.I. du Pont de Nemours & Co., 351 U.S. 377, 404 (1956). Under this principle, distinct competitions on different sides of a platform are in “separate though interdependent markets.” Times-Picayune Publ’g Co. v. United States, 345 U.S. 594, 610 (1953). Here, services to cardholders and services to merchants are in “interrelated, but separate” markets. United States v. Visa U.S.A., Inc., 344 F.3d 229, 238-39 (2d Cir. 2003). In holding that the relevant market must include the services provided to “both merchants and cardholders,” Op. 57, the panel misapplies du Pont, ignores Times-Picayune, and erroneously distinguishes Visa.
2. The panel departs from this Court’s burden-shifting approach to the rule of reason. The plaintiff bears an initial burden of demonstrating that the challenged 2 restraint has an “adverse effect on competition as a whole in the relevant market”; if it does, the burden shifts to defendants “to offer evidence of the pro-competitive effects of their agreement”; and if they do, the burden shifts back to the plaintiff. Geneva Pharms. Tech. Corp. v. Barr Labs. Inc., 386 F.3d 485, 506-07 (2d Cir. 2004). The panel, however, erroneously requires plaintiffs not only to prove an adverse effect but also to account for any benefits in step one, proving “net harm.” Op. 57, 60. This improperly collapses the three-step approach into a single step. As a result, millions of merchants continue to pay higher credit-card fees and nearly every American continues to pay higher retail prices.
The brief is here: https://www.justice.gov/atr/case-document/file/910116/download?utm_source=CPI+Lista+Combinada&utm_campaign=38f5acb38a-&utm_medium=email&utm_term=0_ee26de8909-38f5acb38a-236764313
Judge In NFL Drug Case: Jones Can Be Deposed
From article By Daniel Kaplan,
Published November 29, 2016
A federal court judge yesterday ordered that lawyers for former players suing the NFL over alleged prescription drug abuse can depose Cowboys Owner Jerry Jones, but denied the players’ request to depose Colts Owner Jim Irsay. Judge William Alsup ordered Jones can be deposed for “seven hours on one day,” on a date within two weeks after his team’s season ends. Alsup did not give a reason for granting the Jones request in his short, one-page order. On Irsay, he wrote simply, “The record does not justify deposing Mr. Irsay.” The NFL strongly objected to both requests.
The ex-players allege they were given illegal pain medications during their playing days.
See http://www.sportsbusinessdaily.com/Daily/Morning-Buzz/2016/11/29/Jerry-Jones.aspx
NCLC is launching an emergency campaign to protect consumer rights
, and needs your help to defend the Consumer Financial Protection Bureau (CFPB) and other laws and regulations protecting consumers from abuse and promoting economic justice for all.
We're up against powerful adversaries: predatory lenders, abusive debt collectors and others who target struggling families; banks, financial services companies, their lobbyists and anti-consumer politicians in Washington, DC -- including President-elect Trump, who threatens to dismantle the law which created the Consumer Financial Protection Bureau (CFPB), the most important pro-consumer reform in the last 75 years.
NCLC is launching an emergency campaign to protect consumer rights, and we need your help to defend the Consumer Financial Protection Bureau (CFPB) and other laws and regulations protecting consumers from abuse and promoting economic justice for all.
We're up against powerful adversaries: predatory lenders, abusive debt collectors and others who target struggling families; banks, financial services companies, their lobbyists and anti-consumer politicians in Washington, DC -- including President-elect Trump, who threatens to dismantle the law which created the Consumer Financial Protection Bureau (CFPB), the most important pro-consumer reform in the last 75 years.
Click title to go to NCLC
Trump on bringing Apple manufacturing back to the US
Trump tells NYT he will reduce taxes and regulation.
NYT Trump interview excerpt:
I got a call from Tim Cook at Apple, and I said, ‘Tim, you know one of the things that will be a real achievement for me is when I get Apple to build a big plant in the United States, or many big plants in the United States, where instead of going to China, and going to Vietnam, and going to the places that you go to, you’re making your product right here.’ He said, ‘I understand that.’ I said: ‘I think we’ll create the incentives for you, and I think you’re going to do it. We’re going for a very large tax cut for corporations, which you’ll be happy about.’ But we’re going for big tax cuts, we have to get rid of regulations, regulations are making it impossible. Whether you’re liberal or conservative, I mean I could sit down and show you regulations that anybody would agree are ridiculous. It’s gotten to be a free-for-all. And companies can’t, they can’t even start up, they can’t expand, they’re choking.
I tell you, one thing I would say, so, I’m giving a big tax cut and I’m giving big regulation cuts, and I’ve seen all of the small business owners over the United States, and all of the big business owners, I’ve met so many people. They are more excited about the regulation cut than about the tax cut. And I would’ve never said that’s possible, because the tax cut’s going to be substantial. You know we have companies leaving our country because the taxes are too high. But they’re leaving also because of the regulations. And I would say, of the two, and I would not have thought this, regulation cuts, substantial regulation cuts, are more important than, and more enthusiastically supported, than even the big tax cuts.
Comment: Not all commenters agree that tax and regulation cuts will be enough to bring Apple electronics manufacturing to the U.S. Some point out that China has the manufacturing advantage of extremely low wages. DR
http://www.nytimes.com/2016/11/23/us/politics/trump-new-york-times-interview-transcript.html?_r=2
ATM Operators Need Early Injunction Against Unfair Rules
From article in Jurist by dccrc news editor Don Resnikoff (who is Of Counsel to Rubin PLLC, attorneys for the Plaintiff ATM Operators):
US Supreme Court published an order stating that it would no longer hear the appeal in two antitrust suits by ATM operators and consumers against Visa, MasterCard and several banks concerning ATM fees. The suit alleges that the defendants, credit card companies and banks have agreed to keep the ATM charges high. They have implemented rules preventing independent ATM operators from setting lower ATM fees for customers that use networks that charge the ATM operators less than Visa or MasterCard.
The lawsuit was originally dismissed by the district court. The US Court of Appeals for the District of Columbia Circuit reversed the decision and ordered the case to continue in the district court. The defendants appealed the decision to the US Supreme Court, which granted certiorari and was set to hear the case in December. However, without leave from the Court, petitioners abandoned the original argument upon which the grant of certiorari was based and advanced a different argument on the merits, so the basis for the certiorari grant was no longer present. The Supreme Court in its recent order decided that its earlier grant of certiorari was improvident, so that the appeal is dismissed and the case can go forward in the district court.
With the petition for certiorari dismissed, the plaintiff ATM operators have the opportunity to proceed to a trial on their allegations of price fixing behavior by banks that make use of the Visa and MasterCard networks and competitive networks. The ATM operators seek to end the rules that impose access fees favorable to MasterCard and Visa but harmful to the operators. These rules threaten the viability of their businesses. The fees are on top of high and increasing wholesale network fees from Visa and MasterCard, along with burdensome costs such as those caused by the compelled transition to EMV chip cards. (EMV stands for Europay, MasterCard and Visa and is a global standard for cards equipped with computer chips and the technology used to authenticate chip-card transactions).
full article at http://www.jurist.org/hotline/2016/11/Don-Resnikoff-atm-opertators.php
From DMN: Judge Allows “We Shall Overcome” Lawsuit to Move Forward
Earlier this year, We Shall Overcome Foundation filed a lawsuit against Warner/Chappell to free the song We Shall Overcome. This song is actually a 19th century spiritual, according to the foundation. Pete Seeger’s version copyrighted in 1960 and 1963 includes only minor alterations.
Now, a New York federal judge rejected a publisher’s bid to dismiss the lawsuit. The judge ruled that the plaintiffs have “plausibly alleged that lyrics in the first verse…were copied from material in the public domain.” The judge also said that the plaintiffs plausibly alleged that “there’s been a fraud on the U.S. Copyright Office. . . .“[These] allegations of fraud are sufficiently specific, and provide enough information from which to infer the requisite intent, to survive a motion to dismiss.” The opinion is here: OPINION.
From the opinion
“The copyrighted work differs from the 1948 version by only three words: (1) ‘we’ll’ for ‘I’ll’; (2) ‘shall’ for ‘will’; and (3) ‘deep’ for ‘down.’ The Plaintiffs have also plausibly alleged that the individuals listed on the 1960 copyright registration are not the authors of the changes that were made to the three words in the Song’s first verse. If they are not the authors, the Defendants cannot claim copyright protection. The Plaintiffs allege that the author of the underlying work is unknown, that it is unclear who changed ‘will’ to ‘shall,’ and that a Black tobacco worker named Lucille Simmons changed ‘I’ to ‘We.’ Simmons is not listed as an author in the application to register the copyright for the Song.”
Exxon decides to fight New York's climate change probe
Attorneys for ExxonMobil Corp. and New York Attorney General Eric Schneiderman on Monday sparred over a probe into the oil giant’s statements to investors regarding climate change's impacts on its business, with ExxonMobil lawyers accusing the AG’s office of using the climate investigation to boost an unrelated dive into the company’s accounting.
http://www.bloomberg.com/news/articles/2016-10-18/exxon-decides-to-fight-new-york-s-climate-change-probe
State Regulators Aim To Fill Trump’s Financial Regulation Vacuum
With many expecting the incoming Trump administration to dial back on his predecessor’s enforcement of financial regulations, attorneys general and financial regulators from states that did not support Trump are expected to step in where they can to police financial markets.
See Law 360 -- click title-- (paywall)
Light-in-the-box and other direct from China sellers as rivals of Walmart and Amazon
From DAR: I thought I had a great insight when I noticed that Light-in-the-Box and other Chinese companies are on the web selling Chinese made products to be shipped directly to Americans from China. The prices are often much cheaper than if you bought the same or similar products through American owned outlets. Examples include inexpensive musical instruments, such as violins or string bass bows. Some odd examples are items featured on TV infomercials, which I confess to watching, such as old-fashioned metal style razors that use double-edge blades. Looking to the future, it seems logical that Chinese exporters of Chinese made goods could replace American importers of the same goods, and that Chinese exporters could arrange US located warehouses if necessary. When I checked to see if anyone else had noticed the same phenomenon, I quickly found the following 2014 article in the Wall Street Journal. It might be little out of date, but not by a lot:
Excerpts from the article by Dennis Berman:
Wal-Mart and Amazon have become America’s main conduits for cheap, mass-produced goods from China’s factory floors. But who needs them anymore? . . . . [Products sent directly from China are] the final and direct link between China’s manufacturers and the global consumer. In the same way Chinese companies took over the production of goods, they are now increasingly capable of merchandizing those goods, using the Web and modern freight transport. Bentonville, you are being outsourced to China, too.
This is in part why China’s Alibaba has a $268 billion market capitalization. And it’s why United Parcel Service Inc. recently bought a company called i-parcel, to help U.S. suppliers penetrate the thickets of customs, fraud and language that still exist.
Today UPS estimates that e-commerce is an $850 billion global business, with cross-border representing about $70 billion of that. It expects the segment to grow at seven times the rate of global GDP. “What you see is the tip of the iceberg,” said Steve Brill, UPS’s vice president for business-to-consumer strategy. Smartphones and rising incomes mean “people have visibility of products from around the world.”
“More retailers will have to recognize that if they stay only within their country boundaries, other merchants will compete from outside their country boundaries,” Mr. Brill said.
. . . LightInTheBox [is] a Beijing company listed on the New York Stock Exchange. Run by Chinese with deep experience in America, the site can shapeshift into 27 different languages, from Arabic to Bahasa to Swedish, and ship goods piecemeal all over the world. For the 12 months ending in September, LightInTheBox sold $349 million of merchandise, a 25% increase from the year earlier. It is still far from profitable, posting significant operating and net losses. Its stock has fallen 23% this year.
LightInTheBox got its start selling wedding dresses, and it’s now selling about 800 different designs for under $200. It sells 400,000 a year. For wedding dresses, “the manufacture price in China is less than $100, but the store price in the U.S. or Europe was thousands of dollars,” company co-founder and CEO Quji “Alan” Guo said in an interview. “That was a category where there should have been better availability, but it was not there.”
The 1,800-person company has since moved from dresses to other categories, ones in which it can sell what Mr. Guo described as differentiated goods. Think Target, he said, more than Wal-Mart. That means things like my jacket, sold under the bizarre brand name Hanbeidi. It means faucets with LED lights, as well as makeup brushes, wigs, iPhone chargers and crocheted table linens. In essence, it’s the full run of China’s factory floor, some 700,000 separate items in all.
Much of this stuff is available from dozens of sites around the Web. What makes this significant is that the Chinese are selling it directly to consumers now—no Western middleman required.
* * *
The real change in world markets is how technology is connecting China directly to consumers. The company employs customer representatives in each of the 27 languages. There aren’t a lot of Danish speakers in China, of course. So instead it employs part-time workers from all over the world, training them over the Web, and then getting them to use the Web to make calls and do email.
* * *
Who knows whether LightInTheBox will be a lasting competitor. It doesn’t matter. Looking at my coat [sent from China], bedecked in Chinese labels, we do know the future of retail: It will be a global war of all against all.
Full article at http://www.wsj.com/articles/who-needs-amazon-or-wal-mart-china-cuts-out-the-middleman-1418950309
4 step "too big to fail" remedy from Neel Kashkari of the Minneapolis Fed
Substantial capital reserves are a major emphasis:
Step 1 of the Minneapolis Plan dramatically increases capital requirements for all bank holding companies larger than $250 billion to 23.5 percent of risk-weighted assets. And we count only common equity as capital. That is a key difference from current regulations, which also set 23.5 percent as the total amount of loss absorption that the largest banks must have, but current regulations include long-term debt in that amount. History has shown that long-term debt is not useful protection against losses in a crisis. That’s why we insist on common equity.
Step 2 of the Minneapolis Plan then calls on the U.S. Treasury Secretary to analyze and certify that individual large banks are no longer TBTF. If the Treasury Secretary refuses to certify a large bank as not TBTF, that bank will face dramatically increasing capital requirements, until either the Treasury Secretary certifies it as no longer TBTF or its capital reaches 38 percent. This is a critical step, because today there is no time limit for solving the TBTF problem. Today, banks can enjoy their explicit or implicit status as being TBTF potentially indefinitely. In contrast, the Minneapolis Plan puts a hard deadline on Treasury: Certify banks as no longer TBTF within five years, or else that bank will see dramatic increases in capital requirements. We believe the threat of these massive increases in capital will provide strong incentives for the largest banks to restructure themselves so that they are no longer systemically important. Any bank that remains TBTF will have so much capital that it virtually cannot fail. This is the approach regulators have taken with nuclear power plants. People understand that if a nuclear reactor melts down, it is devastating for society. Rather than ban nuclear power, regulators impose such tight restrictions on it in order to truly minimize the risk of failure. Step 2 takes the same approach with the largest banks.
Step 3 imposes a tax on debt for large shadow banks, greater than $50 billion, including hedge funds, mutual funds, and finance companies, of either 1.2 percent or 2.2 percent, depending on whether they are systemically risky. One of the concerns many experts expressed was the potential for risky activity to move from banks to shadow banks. If we increase capital requirements on banks and the risky activity just moves to large shadow banks, has safety actually improved? To protect against this scenario, our proposed tax will roughly level the playing field between banks and shadow banks by equalizing the cost of the funding so that activity doesn’t just move to a less-regulated segment of the financial system. Shadow banks that do not utilize debt funding will not pay any tax.
Finally, Step 4 rationalizes regulations on community banks, which are not systemically risky for the U.S. economy and that do have a vital role to play in American communities. Banks with less than $10 billion in assets should be subject to a much simpler and less burdensome regulatory framework that reflects their relative lack of risk to the economy.
full presentation at https://www.minneapolisfed.org/news-and-events/presidents-speeches/neel-kashkari-presents-the-minneapolis-plan-to-end-too-big-to-fail
ABA puts one law school on probation and censures another
POSTED NOV 17, 2016 01:36 PM CST
BY DEBRA CASSENS WEISS
The ABA Section of Legal Education and Admissions to the Bar announced on Tuesday that it is placing the Charlotte School of Law on probation and publicly censuring Valparaiso University School of Law.
The section said it is taking the actions because both schools were out of compliance with ABA accreditation standards.
According to Law.com, the action is part of “a recent crackdown on campuses it says are enrolling students who aren’t likely to graduate and pass the bar.” In August, the ABA legal education section directed the Ave Maria School of Law to take specific remedial actions.
The ABA legal education section is requiring the Charlotte and Valparaiso law schools to supply the section’s accreditation committee with admissions data and methodology for the fall 2017 entering class. The ABA section is also requiring both law schools to inform students about first-time bar pass rates by class quartiles for their law schools, and to inform each individual student about the quartile he or she is in.
The notice regarding Charlotte School of Law is here (PDF), and the notice regarding Valparaiso University School of Law is here (PDF).
Both law schools remain accredited and have two years to regain compliance with ABA standards, according to Law.com.
http://www.abajournal.com/news/article/aba_puts_one_law_school_on_probation_and_censures_another/?utm_source=maestro&utm_medium=email&utm_campaign=weekly_email
DraftKings and FanDuel Agree to Merge Daily Fantasy Sports Operations
http://www.nytimes.com/2016/11/19/sports/draftkings-fanduel-merger-fantasy-sports.html?ref=business
Message from National Consumer Law Center
Dear NCLC allies and supporters,
Fighting for consumer rights against powerful corporate and special interests is always an uphill battle. But the road ahead got considerably more difficult last week, with an election that increases the power of politicians who have vowed to roll back many of the pro-consumer protections that NCLC and our allies have helped win since the Great Recession.
Already, one of the very first policy positions added to President-elect Trump's new website says that "The [Trump] Financial Services Policy Implementation team will be working to dismantle the Dodd-Frank Act," which created the Consumer Financial Protection Bureau (CFPB) -- the most important pro-consumer reform in the last 75 years.
Opponents of consumer protections clearly feel emboldened to push the agenda of predatory lenders, abusive debt collectors and others who target struggling families, but they'll have a fight on their hands -- and NCLC will be at the center of it. NCLC's experts are already hard at work developing strategies for protecting the gains we've made and continuing to advance consumer protections.
I am confident that by banding together with our allies around the country, we can ensure that the voices of consumers continue to be heard by decision-makers
From Modern Healthcare: Repeal and replace Obamacare? It's not gonna be easy
President-elect Donald Trump and congressional Republican leaders are promising to make repeal and replacement of the ACA one of their highest priorities in the first 100 days after they take full control of the federal government in January. But they face a rocky road. READ MORE
NYT-Morgenson on political consequences of government failure to prosecute bankers responsible for the 2008 financial crash
Excerpt:
As millions of foreclosures and job losses followed [the 2008 financial crash], the failure to go after fraudsters confirmed the suspicion that the powerful got protection while those on Main Street were kicked to the curb. . . .
Many readers of The New York Times, particularly if you live in Manhattan, San Francisco or another affluent enclave, may not see how an accountability failure of years ago could still resonate. But the failure to prosecute even one or two high-profile bankers — or force them simply to pay fines and penalties out of their own pockets — left millions of Americans believing that our justice system was unjust.
Recall that more than 800 bankers went to jail after the savings and loan crisis of the 1980s. And that mess wreaked nowhere near the devastation that the housing debacle did on the overall United States economy.
Embarrassed, perhaps, by their passivity, Justice Department officials recently pledged to take a more aggressive approach to white-collar crime. But the memo issued last September by Sally Quillian Yates, deputy attorney general, outlining new ways the department would hold individuals to account, has not translated into results.
Full article: http://www.nytimes.com/2016/11/13/business/how-letting-bankers-off-the-hook-may-have-tipped-the-election.html?ref=business
NYT: Trump’s victory is not a clear boon for bankers and financiers in the way that past Republican wins have been
On paper, many of his campaign proposals appear to favor banks and investors, including a promise to undo Dodd-Frank, which was passed after the 2008 financial crisis.
Yet repealing the law and its many rules seems unlikely to gain much traction in Congress. And even many banks admit they have spent so much time and money complying with the law, they would rather keep it.
Several Obama administration officials said on Wednesday that they did not expect Congress to completely repeal Dodd-Frank. Instead of undertaking such a costly and controversial effort, one likely possibility is that the Trump administration and Congress would take aim at a handful of specific rules that most irritate the banks, including what is known as the Volcker Rule, a centerpiece of Dodd-Frank that prohibits banks from placing risky bets with their own money.
Otherwise, many of the expected changes would benefit small and midsize banks rather than Wall Street banks. Regulators, for example, could
raise the size at which a bank is subject to Dodd-Frank’s enhanced oversight.
Other pieces of Dodd-Frank could be picked off, like reining in the authority of the Consumer Financial Protection Bureau, a hallmark of the Obama administration.
Mr. Trump could prune other low-hanging financial regulations, including a newly enacted Department of Labor rule that holds investment advisers liable for certain advice to their clients.
He also promised on the campaign trail to close the so-called carried interest tax loophole that increases the wealth of private equity executives.
And Mr. Trump’s campaign took aim at the honey pot of global banking revenue: free trade. For decades, banks have benefited from facilitating deals and lending to companies worldwide.
“Probably more so than any president in modern history it will be difficult to predict what issues he latches onto,” said Aaron Klein, a former Treasury official in the Obama administration, who is now a fellow at the Brookings Institution.
http://www.nytimes.com/2016/11/10/business/dealbook/trump-expected-to-seek-deep-cuts-in-business-regulations.html?ref=business
EU: Google responds: “Android hasn’t hurt competition” By CPI on November 10, 2016
Google—as expected—has dismissed the European Commission’s charge that the ad giant abused Android’s dominance to block its competitors in the market.
The company is accused of using Android’s position as the dominant smartphone operating system in Europe to force manufacturers to pre-install Google services while locking out competitors.
Competition commissioner Margrethe Vestager sent a so-called Statement of Objections to Google in April.
On Thursday, the multinational corporation defended its position and spoke of the open source nature of the Android operating system. It also compared a typical Android smartphone to rivals Apple and Microsoft. According to Google, 39 out of 39 pre-installed apps are from Apple on iPhone 7, and 39 out of 47 pre-installed apps on the Microsoft Lumia 550 are from Microsoft.
In a blog post on Thursday, Google general counsel Kent Walker said: “The response we filed today shows how the Android ecosystem carefully balances the interests of users, developers, hardware makers, and mobile network operators. Android hasn’t hurt competition, it’s expanded it.”
Full Content: ARS Technica UK
Google abused its monopoly power in ways that harmed Internet users and competitors. That was the conclusion drawn by experts at a federal regulatory agency back in 2012, according to The Wall Street Journal
Google, however, avoided a massive antitrust fight because the Federal Trade Commission didn't pursue a legal fight based on those findings.
Back in 2013, the FTC wrapped up a two-year investigation into the company's online monopoly power and it looked odd when Google got away relatively unscathed.
Unlike European regulators, all five FTC commissioners decided to not sue.
But the Wall Street Journal revealed some time ago that FTC investigators did indeed conclude that Google abused its monopoly power. FTC staff found proof that Google used anticompetitive tactics that hurt competitors like Yelp and TripAdvisor, according to secret internal documents obtained by the Journal.
The FTC's decision not to sue Google contradicted those findings.
The staff did find that Google (GOOG) posed "real harm to consumers and to innovation." However, FTC Chairman Jon Leibowitz affirmed at a press conference that Google "doesn't violate the American antitrust laws."
In reality, the FTC likely didn't pursue a legal fight because it was going to be a tough case. After all, it had to be able to prove that Google was a monopoly power that was not only harming competition but also the public. Google was popular with the public, which could easily choose to use competitors that were just a click away like Yahoo (YHOO, Tech30) and Bing.
Google general counsel Kent Walker said in a statement that the FTC staff reviewed 9 million pages of documents over 19 months and found that there was no need to take action on how the site ranked and displayed search results.
"Speculation about potential consumer and competitor harm turned out to be entirely wrong," Google said.
From http://money.cnn.com/2015/03/19/technology/google-monopoly-ftc/
Is Google a monopolist? Jonathan Rubin, lawyer and economist, is skeptical
“Beyond its influence over users’ preferences, Google has no means of control over its users’ access to any website on the web. To characterize Google as a “gatekeeper” is to attribute to it power that it does not possess.” RUBIN PLLC Public Interest Blog, July 10, 2012
ProtonMail alleges: For nearly a year, Google was hiding ProtonMail from search results for queries such as ‘secure email’ and ‘encrypted email’
More from ProtonMail:
This was highly suspicious because ProtonMail has long been the world’s largest encrypted email provider.
When ProtonMail launched in Beta back in May 2014, our community rapidly grew as people from around the world came together and supported us in our mission to protect privacy in the digital age. Our record breaking crowdfunding campaign raised over half a million dollars from contributors and provided us with the resources to make ProtonMail competitive against even the biggest players in the email space.
By the summer of 2015, ProtonMail passed half a million users and was the world’s most well known secure email service. ProtonMail was also ranking well in Google search at this time, on the first or second page of most queries including “encrypted email” and “secure email”. However, by the end of October 2015, the situation had changed dramatically, and ProtonMail was mysteriously no longer showing up for searches of our two main keywords.
Between the beginning of the summer and the fall of 2015, ProtonMail did undergo a lot of changes. We released ProtonMail 2.0, we went fully open source, we launched mobile apps in beta, and we updated our website, changing our TLD from .ch to the more widely known .com. We also doubled in size, growing to nearly 1 million users by the fall. All of these changes should have helped ProtonMail’s search rankings as we became more and more relevant to more people.
In November 2015, we became aware of the problem and consulted a number of well known SEO experts. None of them could explain the issue, especially since ProtonMail has never used any blackhat SEO tactics, nor did we observe any used against us. Mysteriously, the issue was entirely limited to Google, as this anomaly was not seen on any other search engine. Below are the search rankings for ProtonMail for ‘secure email’ and ‘encrypted email’ taken at the beginning of August 2016 across all major search engines. We rank on either page 1 or 2 everywhere except Google where we are not ranked at all.
All throughout Spring 2016, we worked in earnest to get in touch with Google. We created two tickets on their web spam report form explaining the situation. We even contacted Google’s President EMEA Strategic Relationships, but received no response nor improvement. Around this time, we also heard about the anti-trust action brought forward by the European Commission against Google, accusing Google of abusing its search monopoly to lower the search rankings of Google competitors. This was worrying news, because as an email service that puts user privacy first, we are the leading alternative to Gmail for those looking for better data privacy.
See https://protonmail.com/blog/search-risk-google/
Another U.S. Copyrights Office/Google conspiracy theory? There’s more than meets the eye, says Digital Music News and the Wall Street Journal
Several weeks ago, Digital Music News published a piece about Google’s (probable) involvement in the “removal” of Maria Hassante from the Copyrights Office. An opinion piece published by the Wall Street Journal published last Wednesday echoes these concerns:
“Most Americans think of Google as a search engine doing unalloyed social good, but the company also wants to make money and wield political influence along the way. So you don’t have to be a conspiracy theorist to notice that an abrupt change of leadership at the U.S. Copyright Office is good news for Google, which aims to pay less for profiting from the property of others.”
According to the WSJ piece, Maria Pallante was “reshuffled” to a new job in an advisory post for “digital strategy,” including expanding the digital library shop. Afterwards, in less than a week, she presented her resignation to Carla Hayden, the Librarian of Congress. Hayden was sworn in weeks before. Maybe there is more than just meets the eye.
Pallante strongly believed in defending the little guy, often siding with music and content creators in the digital media realm. According to WSJ, she also favored reorganizing the copyright office as “an independent agency.” Pallante’s re-shuffling was unprecedented, with no other removals noted in agency history.
Just prior to her “removal,” Pallante worked with Congress to review copyright laws. Hayden stipulated in a memo that Pallante’s new job didn’t include “any communications” to Congress. Pallante leaked that memo to the press.
The Wall Street Journal writes that circumstantial evidence exists that Google lobbied for Pallante’s dismissal.
See http://www.digitalmusicnews.com/2016/11/07/wsj-crticizing-google-washington-copyright-coup/
ProtonMail alleges: For nearly a year, Google was hiding ProtonMail from search results for queries such as ‘secure email’ and ‘encrypted email’
More from ProtonMail:
This was highly suspicious because ProtonMail has long been the world’s largest encrypted email provider.
When ProtonMail launched in Beta back in May 2014, our community rapidly grew as people from around the world came together and supported us in our mission to protect privacy in the digital age. Our record breaking crowdfunding campaign raised over half a million dollars from contributors and provided us with the resources to make ProtonMail competitive against even the biggest players in the email space.
By the summer of 2015, ProtonMail passed half a million users and was the world’s most well known secure email service. ProtonMail was also ranking well in Google search at this time, on the first or second page of most queries including “encrypted email” and “secure email”. However, by the end of October 2015, the situation had changed dramatically, and ProtonMail was mysteriously no longer showing up for searches of our two main keywords.
Between the beginning of the summer and the fall of 2015, ProtonMail did undergo a lot of changes. We released ProtonMail 2.0, we went fully open source, we launched mobile apps in beta, and we updated our website, changing our TLD from .ch to the more widely known .com. We also doubled in size, growing to nearly 1 million users by the fall. All of these changes should have helped ProtonMail’s search rankings as we became more and more relevant to more people.
In November 2015, we became aware of the problem and consulted a number of well known SEO experts. None of them could explain the issue, especially since ProtonMail has never used any blackhat SEO tactics, nor did we observe any used against us. Mysteriously, the issue was entirely limited to Google, as this anomaly was not seen on any other search engine. Below are the search rankings for ProtonMail for ‘secure email’ and ‘encrypted email’ taken at the beginning of August 2016 across all major search engines. We rank on either page 1 or 2 everywhere except Google where we are not ranked at all.
All throughout Spring 2016, we worked in earnest to get in touch with Google. We created two tickets on their web spam report form explaining the situation. We even contacted Google’s President EMEA Strategic Relationships, but received no response nor improvement. Around this time, we also heard about the anti-trust action brought forward by the European Commission against Google, accusing Google of abusing its search monopoly to lower the search rankings of Google competitors. This was worrying news, because as an email service that puts user privacy first, we are the leading alternative to Gmail for those looking for better data privacy.
See https://protonmail.com/blog/search-risk-google/
More from ProtonMail:
This was highly suspicious because ProtonMail has long been the world’s largest encrypted email provider.
When ProtonMail launched in Beta back in May 2014, our community rapidly grew as people from around the world came together and supported us in our mission to protect privacy in the digital age. Our record breaking crowdfunding campaign raised over half a million dollars from contributors and provided us with the resources to make ProtonMail competitive against even the biggest players in the email space.
By the summer of 2015, ProtonMail passed half a million users and was the world’s most well known secure email service. ProtonMail was also ranking well in Google search at this time, on the first or second page of most queries including “encrypted email” and “secure email”. However, by the end of October 2015, the situation had changed dramatically, and ProtonMail was mysteriously no longer showing up for searches of our two main keywords.
Between the beginning of the summer and the fall of 2015, ProtonMail did undergo a lot of changes. We released ProtonMail 2.0, we went fully open source, we launched mobile apps in beta, and we updated our website, changing our TLD from .ch to the more widely known .com. We also doubled in size, growing to nearly 1 million users by the fall. All of these changes should have helped ProtonMail’s search rankings as we became more and more relevant to more people.
In November 2015, we became aware of the problem and consulted a number of well known SEO experts. None of them could explain the issue, especially since ProtonMail has never used any blackhat SEO tactics, nor did we observe any used against us. Mysteriously, the issue was entirely limited to Google, as this anomaly was not seen on any other search engine. Below are the search rankings for ProtonMail for ‘secure email’ and ‘encrypted email’ taken at the beginning of August 2016 across all major search engines. We rank on either page 1 or 2 everywhere except Google where we are not ranked at all.
All throughout Spring 2016, we worked in earnest to get in touch with Google. We created two tickets on their web spam report form explaining the situation. We even contacted Google’s President EMEA Strategic Relationships, but received no response nor improvement. Around this time, we also heard about the anti-trust action brought forward by the European Commission against Google, accusing Google of abusing its search monopoly to lower the search rankings of Google competitors. This was worrying news, because as an email service that puts user privacy first, we are the leading alternative to Gmail for those looking for better data privacy.
See https://protonmail.com/blog/search-risk-google/
Another U.S. Copyrights Office/Google conspiracy theory? There’s more than meets the eye, says Digital Music News and the Wall Street Journal
Several weeks ago, Digital Music News published a piece about Google’s (probable) involvement in the “removal” of Maria Hassante from the Copyrights Office. An opinion piece published by the Wall Street Journal published last Wednesday echoes these concerns:
“Most Americans think of Google as a search engine doing unalloyed social good, but the company also wants to make money and wield political influence along the way. So you don’t have to be a conspiracy theorist to notice that an abrupt change of leadership at the U.S. Copyright Office is good news for Google, which aims to pay less for profiting from the property of others.”
According to the WSJ piece, Maria Pallante was “reshuffled” to a new job in an advisory post for “digital strategy,” including expanding the digital library shop. Afterwards, in less than a week, she presented her resignation to Carla Hayden, the Librarian of Congress. Hayden was sworn in weeks before. Maybe there is more than just meets the eye.
Pallante strongly believed in defending the little guy, often siding with music and content creators in the digital media realm. According to WSJ, she also favored reorganizing the copyright office as “an independent agency.” Pallante’s re-shuffling was unprecedented, with no other removals noted in agency history.
Just prior to her “removal,” Pallante worked with Congress to review copyright laws. Hayden stipulated in a memo that Pallante’s new job didn’t include “any communications” to Congress. Pallante leaked that memo to the press.
The Wall Street Journal writes that circumstantial evidence exists that Google lobbied for Pallante’s dismissal.
See http://www.digitalmusicnews.com/2016/11/07/wsj-crticizing-google-washington-copyright-coup/
Several weeks ago, Digital Music News published a piece about Google’s (probable) involvement in the “removal” of Maria Hassante from the Copyrights Office. An opinion piece published by the Wall Street Journal published last Wednesday echoes these concerns:
“Most Americans think of Google as a search engine doing unalloyed social good, but the company also wants to make money and wield political influence along the way. So you don’t have to be a conspiracy theorist to notice that an abrupt change of leadership at the U.S. Copyright Office is good news for Google, which aims to pay less for profiting from the property of others.”
According to the WSJ piece, Maria Pallante was “reshuffled” to a new job in an advisory post for “digital strategy,” including expanding the digital library shop. Afterwards, in less than a week, she presented her resignation to Carla Hayden, the Librarian of Congress. Hayden was sworn in weeks before. Maybe there is more than just meets the eye.
Pallante strongly believed in defending the little guy, often siding with music and content creators in the digital media realm. According to WSJ, she also favored reorganizing the copyright office as “an independent agency.” Pallante’s re-shuffling was unprecedented, with no other removals noted in agency history.
Just prior to her “removal,” Pallante worked with Congress to review copyright laws. Hayden stipulated in a memo that Pallante’s new job didn’t include “any communications” to Congress. Pallante leaked that memo to the press.
The Wall Street Journal writes that circumstantial evidence exists that Google lobbied for Pallante’s dismissal.
See http://www.digitalmusicnews.com/2016/11/07/wsj-crticizing-google-washington-copyright-coup/
ZIKA FUNDING AND PARTISAN POLITICS
Janet L. Dolgin, Esq.
Excerpt:
"Without federal funding, the challenge of responding to Zika cannot adequately be met. In early August 2016, HHS Secretary Burwell announced that work on a promising Zika vaccine will be halted if funding is not soon made available.207 As important, Congress’s responses suggest a deeply troubling precedent of permitting sectarian politics to preclude action necessary to protect the nation’s health and welfare. Zika will not be the last novel and serious health threat to face the nation. The capacity of the government to respond quickly and competently to such threats is essential to population health."
http://www.americanbar.org/content/dam/aba/administrative/healthlaw/the_health_lawyer_vol_29_no%201_october_2016.authcheckdam.pdf
U.S. prosecutors investigating price collusion by generic pharmaceutical companies
The antitrust investigation by the Justice Department, begun about two years ago, now spans more than a dozen companies and about two dozen drugs, according to people familiar with the matter. The grand jury probe is examining whether some executives agreed with one another to raise prices, and the first charges could emerge by the end of the year, they said.
Though individual companies have made various disclosures about the inquiry, they have identified only a handful of drugs under scrutiny, including a heart treatment and an antibiotic. Among the drugmakers to have received subpoenas are industry giants Mylan NV and Teva Pharmaceutical Industries Ltd. Other companies include Actavis, which Teva bought from Allergan Plc in August, Lannett Co., Impax Laboratories Inc., Covis Pharma Holdings Sarl, Sun Pharmaceutical Industries Ltd., Mayne Pharma Group Ltd., Endo International Plc’s subsidiary Par Pharmaceutical Holdings and Taro Pharmaceutical Industries Ltd.
All of the companies have said they are cooperating except Covis, which said last year it was unable to assess the outcome of the investigation.
“Teva is not aware of any facts that would give rise to an exposure to the company with respect to these subpoenas,” Teva spokeswoman Denise Bradley said in an e-mail. “To date, we know of no evidence that Mylan participated in price fixing,” Mylan spokeswoman Nina Devlin said in an e-mail. Mayne continues to cooperate with the Justice Department and believes the investigations will not have a material impact on its future earnings, the company said in a statement on Thursday.
Allergan, Impax and Sun declined to comment beyond their filings. Representatives of Endo, Covis, Taro and Lannett didn’t respond to requests for comment. A Justice Department spokesman declined to comment.
full article: http://www.bloomberg.com/news/articles/2016-11-03/u-s-charges-in-generic-drug-probe-said-to-be-filed-by-year-end
Sen. Bernie Sanders calls for investigation of Eli Lilly, Novo Nordisk and Sanofi for colluding on insulin price increases
Earlier this week, Sanders took to Twitter to raise questions about insulin pricing over the years. Then on Thursday, he and Rep. Elijah Cummings, his frequent partner in attacks on drugmakers, sent a letter to the regulators. They pointed out that prices have escalated significantly over the years, but more importantly, they charged that the price increases have often happened at the same times.
“Not only have these pharmaceutical companies raised insulin prices significantly--sometimes by double digits overnight--in many instances the prices have apparently increased in tandem,” the letter reads.
Citing SSR Health research info, they charged that the prices of Sanofi’s ($SNY) Lantus and Novo’s ($NOVO) Levemir, leaders in the long-acting insulin market, have gone up at essentially the same time 13 times since 2009.
Lilly ($LLY) said in an email said that the complex reimbursement methods put an unfair burden on people with diabetes but was adamant in denying any price fixing.
“We strongly disagree with the accusations in the letter. The insulin market in the U.S. is highly competitive. As several news outlets have reported, our average net realized price for Humalog has not increased since 2009,” Lilly said. It went on to say that it adheres to the highest ethical standards and looks “forward to setting the record straight on how the insulin market works in the U.S.”
In an emailed response, the Danish drugmaker said, “Novo Nordisk is committed to developing innovative medicines for patients with diabetes. We set price for these life-saving medicines independently and then negotiate with payers and PBMs to ensure patients have access to them. We stand by our business practices and our efforts to improve the lives of patients with diabetes.”
And Sanofi said that it "understands that the price and affordability of our products is important for patients." It said it had not increased the list price of Lantus since November 2014.
Full article: http://www.fiercepharma.com/pharma/lawmakers-suggest-lilly-novo-sanofi-colluded-insulin-prices-call-for-probe?utm_medium=nl&utm_source=internal&mrkid=730008&mkt_tok=eyJpIjoiT0RBM09USXpNR1JsTTJKayIsInQiOiJsY0ZiZ0xDdVVucjhpNm5oWE01MDdHTmpRbHhxUk5OQmFtUHlWamwyQ1hZOXJMNkdMMnNVV0NtUTJBNzBtR2NLOENHcmdcLzFtbURISW1sbzBrREJobXRqcG1SVldJNzFrR3o2YndsN2xLOTA9In0%3D
Earlier this week, Sanders took to Twitter to raise questions about insulin pricing over the years. Then on Thursday, he and Rep. Elijah Cummings, his frequent partner in attacks on drugmakers, sent a letter to the regulators. They pointed out that prices have escalated significantly over the years, but more importantly, they charged that the price increases have often happened at the same times.
“Not only have these pharmaceutical companies raised insulin prices significantly--sometimes by double digits overnight--in many instances the prices have apparently increased in tandem,” the letter reads.
Citing SSR Health research info, they charged that the prices of Sanofi’s ($SNY) Lantus and Novo’s ($NOVO) Levemir, leaders in the long-acting insulin market, have gone up at essentially the same time 13 times since 2009.
Lilly ($LLY) said in an email said that the complex reimbursement methods put an unfair burden on people with diabetes but was adamant in denying any price fixing.
“We strongly disagree with the accusations in the letter. The insulin market in the U.S. is highly competitive. As several news outlets have reported, our average net realized price for Humalog has not increased since 2009,” Lilly said. It went on to say that it adheres to the highest ethical standards and looks “forward to setting the record straight on how the insulin market works in the U.S.”
In an emailed response, the Danish drugmaker said, “Novo Nordisk is committed to developing innovative medicines for patients with diabetes. We set price for these life-saving medicines independently and then negotiate with payers and PBMs to ensure patients have access to them. We stand by our business practices and our efforts to improve the lives of patients with diabetes.”
And Sanofi said that it "understands that the price and affordability of our products is important for patients." It said it had not increased the list price of Lantus since November 2014.
Full article: http://www.fiercepharma.com/pharma/lawmakers-suggest-lilly-novo-sanofi-colluded-insulin-prices-call-for-probe?utm_medium=nl&utm_source=internal&mrkid=730008&mkt_tok=eyJpIjoiT0RBM09USXpNR1JsTTJKayIsInQiOiJsY0ZiZ0xDdVVucjhpNm5oWE01MDdHTmpRbHhxUk5OQmFtUHlWamwyQ1hZOXJMNkdMMnNVV0NtUTJBNzBtR2NLOENHcmdcLzFtbURISW1sbzBrREJobXRqcG1SVldJNzFrR3o2YndsN2xLOTA9In0%3D
The often-mentioned but seldom read 2012 USDOJ memo on election season prosecutions is here:
https://www.justice.gov/sites/default/files/oip/legacy/2014/07/23/ag-memo-election-year-sensitivities.pdf
https://www.justice.gov/sites/default/files/oip/legacy/2014/07/23/ag-memo-election-year-sensitivities.pdf
Freelance Isn't Free and the future of freelancing: NYC passes freelancer protection law
By Sara HorowitzOct 28, 2016
October 27th, 2016 signifies a landmark victory for the nation’s 55 million freelance workers: The New York City Council passed The Freelance Isn’t Free Act, which extends unprecedented protections against nonpayment for millions of New York City’s freelance workers. It’s first-of-it’s-kind legislation that could have national implications by serving as a model for other cities to follow.
The bill, led by NYC Council Member Brad Lander, is a milestone moment in freelancers’ rights – and it couldn’t have happened without the collective efforts of the freelancers of New York City and the support of freelancers nationwide.
7 out of 10 freelance workers face nonpayment and freelancers are stiffed an average of $6000 annually. Under this legislation, clients will be compelled to use a contract and could face penalties for nonpayment, including double damages, attorney’s fees, and civil fees. Just as full-time employees are protected against wage theft, the Freelance Isn’t Free Act would offer protections for freelance workers.
Click title for link
By Sara HorowitzOct 28, 2016
October 27th, 2016 signifies a landmark victory for the nation’s 55 million freelance workers: The New York City Council passed The Freelance Isn’t Free Act, which extends unprecedented protections against nonpayment for millions of New York City’s freelance workers. It’s first-of-it’s-kind legislation that could have national implications by serving as a model for other cities to follow.
The bill, led by NYC Council Member Brad Lander, is a milestone moment in freelancers’ rights – and it couldn’t have happened without the collective efforts of the freelancers of New York City and the support of freelancers nationwide.
7 out of 10 freelance workers face nonpayment and freelancers are stiffed an average of $6000 annually. Under this legislation, clients will be compelled to use a contract and could face penalties for nonpayment, including double damages, attorney’s fees, and civil fees. Just as full-time employees are protected against wage theft, the Freelance Isn’t Free Act would offer protections for freelance workers.
Click title for link
Judge Posner criticizes the US Supreme Court
Judge Richard Posner said “probably only a couple of the justices,” namely Ruth Bader Ginsburg and Stephen G. Breyer, “are qualified. They’re OK, they’re not great.” Those justices’ opinions, he said, are “readable, and sometimes quite eloquent. The others, I wouldn’t waste my time reading their opinions.”
C-SPAN video of Posner’s remarks -- Supreme Court criticisms.
Judge Richard Posner said “probably only a couple of the justices,” namely Ruth Bader Ginsburg and Stephen G. Breyer, “are qualified. They’re OK, they’re not great.” Those justices’ opinions, he said, are “readable, and sometimes quite eloquent. The others, I wouldn’t waste my time reading their opinions.”
C-SPAN video of Posner’s remarks -- Supreme Court criticisms.
The EpiPen is about to get some more competition
The makers of the Auvi-Q, an EpiPen alternative taken off the market last year, announced on Wednesday that they would bring it back in 2017. The move is certain to be welcomed by many patients and lawmakers, who have denounced the rising price of EpiPens and the lack of strong competition.
But whether the Auvi-Q’s return will do much to lower prices is far from clear, especially since it cost more than the EpiPen when it was on the market. And a generic version of the EpiPen, recently announced by the EpiPen’s manufacturer, Mylan, is expected to be available before the end of the year, which may further lower the price of similar products.
http://www.nytimes.com/2016/10/27/business/an-epipen-rival-is-about-to-return-to-the-shelves.html
The makers of the Auvi-Q, an EpiPen alternative taken off the market last year, announced on Wednesday that they would bring it back in 2017. The move is certain to be welcomed by many patients and lawmakers, who have denounced the rising price of EpiPens and the lack of strong competition.
But whether the Auvi-Q’s return will do much to lower prices is far from clear, especially since it cost more than the EpiPen when it was on the market. And a generic version of the EpiPen, recently announced by the EpiPen’s manufacturer, Mylan, is expected to be available before the end of the year, which may further lower the price of similar products.
http://www.nytimes.com/2016/10/27/business/an-epipen-rival-is-about-to-return-to-the-shelves.html
Senator Warren joins criticism of USDOJ/Mylan deal
For the third time this month, a US senator is harshly criticizing a deal that Mylan Pharmaceuticals reached with the US Department of Justice for shortchanging Medicaid over rebates for its EpiPen device, which sparked national outrage after a series of price hikes.
In an Oct. 21 letter, Elizabeth Warren (D-Mass.) complained to US Attorney General Loretta Lynch that the $465 million settlement “fails to hold Mylan accountable” and is “shockingly soft on this corporate wrongdoer,” because Mylan did not admit any wrongdoing, none of its executives were penalized, and the company can deduct the payment from its corporate taxes.
She also described the settlement as “shamefully weak” and argued the feds are sending the wrong message because the deal lacks “deterrent value.”
From: http://www.nytimes.com/pages/business/index.html?module=SectionsNav&action=click&version=BrowseTree®ion=TopBar&contentCollection=Business&pgtype=article
For the third time this month, a US senator is harshly criticizing a deal that Mylan Pharmaceuticals reached with the US Department of Justice for shortchanging Medicaid over rebates for its EpiPen device, which sparked national outrage after a series of price hikes.
In an Oct. 21 letter, Elizabeth Warren (D-Mass.) complained to US Attorney General Loretta Lynch that the $465 million settlement “fails to hold Mylan accountable” and is “shockingly soft on this corporate wrongdoer,” because Mylan did not admit any wrongdoing, none of its executives were penalized, and the company can deduct the payment from its corporate taxes.
She also described the settlement as “shamefully weak” and argued the feds are sending the wrong message because the deal lacks “deterrent value.”
From: http://www.nytimes.com/pages/business/index.html?module=SectionsNav&action=click&version=BrowseTree®ion=TopBar&contentCollection=Business&pgtype=article
The daily fantasy sports companies DraftKings and FanDuel are reported to be nearing a settlement agreement with New York’s attorney general over claims that they engaged in false advertising
--They spent nearly a half-billion dollars blitzing the national airwaves with controversial commercials last year.
From: http://www.nytimes.com/2016/10/24/sports/draftkings-fanduel-daily-fantasy-near-settlement-with-new-york-state.html?ref=business
The agreement with the attorney general, Eric T. Schneiderman, was expected to cost the companies a total of $8 million to $12 million, according to the two people. It would also require the companies to acknowledge the findings of Mr. Schneiderman’s investigation into fraudulent practices and perhaps require them to institute even stronger consumer protections than those adopted in August when Gov. Andrew M. Cuomo made the games legal in New York.
Justine Sacco, a spokeswoman for FanDuel, said, “While we cannot comment on the details, we can confirm that we have been in ongoing settlement negotiations with the New York attorney general’s office. They have been tough but fair, and we hope to reach an acceptable resolution.”
A spokesman for DraftKings did not respond to a request for comment on Sunday.
--They spent nearly a half-billion dollars blitzing the national airwaves with controversial commercials last year.
From: http://www.nytimes.com/2016/10/24/sports/draftkings-fanduel-daily-fantasy-near-settlement-with-new-york-state.html?ref=business
The agreement with the attorney general, Eric T. Schneiderman, was expected to cost the companies a total of $8 million to $12 million, according to the two people. It would also require the companies to acknowledge the findings of Mr. Schneiderman’s investigation into fraudulent practices and perhaps require them to institute even stronger consumer protections than those adopted in August when Gov. Andrew M. Cuomo made the games legal in New York.
Justine Sacco, a spokeswoman for FanDuel, said, “While we cannot comment on the details, we can confirm that we have been in ongoing settlement negotiations with the New York attorney general’s office. They have been tough but fair, and we hope to reach an acceptable resolution.”
A spokesman for DraftKings did not respond to a request for comment on Sunday.
Is hacking of voting machines a concern?
Not many people are persuaded by the ideas that local election officials are corrupt, or that there there is rampant voter fraud, or that there is a political conspiracy to rig election results. But a few years ago there were election reliability concerns of a quite different sort: that the software of the few big voting machine companies is easily hacked. Following is an old New York Times article that discusses the problem. Politico has a more recent article that suggests that the problem has not been solved. Excerpts from the Politico article follow the NYT excerpt. Don Resnikoff
Excerpt from http://www.nytimes.com/2003/12/03/us/ohio-study-finds-flaws-in-electronic-voting.html:
Electronic voting machines from the four biggest companies in the field have serious security flaws, but they can -- and must -- be fixed, a new report for the State of Ohio says.
''I think there are no perfect systems out there, but there are perfectible systems,'' said Ohio's secretary of state, J. Kenneth Blackwell, who commissioned the report. In all, 57 security problems were identified.
Although technology from one of the companies, Diebold Election Systems, has undergone extensive review, the report is the first public discussion of the systems used by the four most prominent companies. The researchers ''identified several significant security issues,'' which left as is would give an attacker the opportunity to disrupt the election process or throw the election results into question, the report said.
For example, the cards used by supervisors to take charge of Diebold machines all had the simple PIN code, ''1111,'' which could leave the machines open to tampering. The tally program for Election Systems and Software could be tricked to gather information from one machine many times, overcounting votes. Machines from Hart InterCivic Inc. and Sequoia Voting Systems could allow unauthorized people to gain supervisory control, closing polls early.
''These four vendors can confidently say that their systems have gone through the most robust and publicly disclosed security evaluation in the history of voting machines,'' Mr. Blackwell said.
But Aviel D. Rubin, a computer security researcher who has studied Diebold software, said the report was ''superficial'' and ignored flaws that could leave machines open to hacking and fraud. Mr. Rubin is technical director of the Information Security Institute at Johns Hopkins University.
Excerpt from Politico:
Electronic voting machines—particularly a design called Direct Recording Electronic, or DRE’s—took off in 2002, in the wake of Bush v. Gore. For the ensuing 15 years, Appel and his colleagues have deployed every manner of stunt to convince the public that the system is pervasively unsecure and vulnerable.
Read more: http://www.politico.com/magazine/story/2016/08/2016-elections-russia-hack-how-to-hack-an-election-in-seven-minutes-214144#ixzz4NqZ3IvPb
Not many people are persuaded by the ideas that local election officials are corrupt, or that there there is rampant voter fraud, or that there is a political conspiracy to rig election results. But a few years ago there were election reliability concerns of a quite different sort: that the software of the few big voting machine companies is easily hacked. Following is an old New York Times article that discusses the problem. Politico has a more recent article that suggests that the problem has not been solved. Excerpts from the Politico article follow the NYT excerpt. Don Resnikoff
Excerpt from http://www.nytimes.com/2003/12/03/us/ohio-study-finds-flaws-in-electronic-voting.html:
Electronic voting machines from the four biggest companies in the field have serious security flaws, but they can -- and must -- be fixed, a new report for the State of Ohio says.
''I think there are no perfect systems out there, but there are perfectible systems,'' said Ohio's secretary of state, J. Kenneth Blackwell, who commissioned the report. In all, 57 security problems were identified.
Although technology from one of the companies, Diebold Election Systems, has undergone extensive review, the report is the first public discussion of the systems used by the four most prominent companies. The researchers ''identified several significant security issues,'' which left as is would give an attacker the opportunity to disrupt the election process or throw the election results into question, the report said.
For example, the cards used by supervisors to take charge of Diebold machines all had the simple PIN code, ''1111,'' which could leave the machines open to tampering. The tally program for Election Systems and Software could be tricked to gather information from one machine many times, overcounting votes. Machines from Hart InterCivic Inc. and Sequoia Voting Systems could allow unauthorized people to gain supervisory control, closing polls early.
''These four vendors can confidently say that their systems have gone through the most robust and publicly disclosed security evaluation in the history of voting machines,'' Mr. Blackwell said.
But Aviel D. Rubin, a computer security researcher who has studied Diebold software, said the report was ''superficial'' and ignored flaws that could leave machines open to hacking and fraud. Mr. Rubin is technical director of the Information Security Institute at Johns Hopkins University.
Excerpt from Politico:
Electronic voting machines—particularly a design called Direct Recording Electronic, or DRE’s—took off in 2002, in the wake of Bush v. Gore. For the ensuing 15 years, Appel and his colleagues have deployed every manner of stunt to convince the public that the system is pervasively unsecure and vulnerable.
Read more: http://www.politico.com/magazine/story/2016/08/2016-elections-russia-hack-how-to-hack-an-election-in-seven-minutes-214144#ixzz4NqZ3IvPb
Senator blasts DOJ's 'unacceptable' deal with Mylan, urges AG to dig deeper
Facing fire from all angles over EpiPen pricing, Mylan ($MYL) worked quickly earlier this month to settle federal allegations that it overcharged Medicaid for its big-selling epinephrine injector. Now, one senator says that $465 million deal wasn’t enough.
In an Oct. 14 letter, Sen. Richard Blumenthal urged U.S. Attorney General to reject the settlement, calling the agreement “a shadow of what it should be." Investors seemed to agree with Blumenthal’s sentiment at the time of the announcement, sending Mylan’s stock upward 10% in relief that the deal hadn't cost more.
Blumenthal's letter came one week after Mylan announced the DOJ deal, which followed two weeks of scrutiny on Mylan’s rebates to Medicaid. The Center for Medicare and Medicaid Services said the company had misclassified its blockbuster EpiPen as a generic, costing Medicaid hundreds of millions in rebates. Mylan admitted no wrongdoing in the settlement.
Blumenthal isn’t content with that arrangement. He said the deal lacks “real accountability for Mylan’s apparent lawbreaking.”
Full article: http://www.fiercepharma.com/pharma/senator-blasts-doj-s-unacceptable-settlement-mylan-asks-for-its-rejection?utm_medium=nl&utm_source=internal&mrkid=730008&mkt_tok=eyJpIjoiWmpsbU1qWm1PRGxsTldFMyIsInQiOiJSenZ0Mno3ZVprNzBUTDlQVHFPV3JFcGs4WVlMWXp1cCtWNno4OUFWNnZUc25cL1A4M1lHNmhYVUt0Z2N1MU9HMTh3aUJCdEJWRDR4OWc4K0VxTzhHREtzczRHVHRwOUdSQ0JSRGxSUVM1Y289In0%3D
Facing fire from all angles over EpiPen pricing, Mylan ($MYL) worked quickly earlier this month to settle federal allegations that it overcharged Medicaid for its big-selling epinephrine injector. Now, one senator says that $465 million deal wasn’t enough.
In an Oct. 14 letter, Sen. Richard Blumenthal urged U.S. Attorney General to reject the settlement, calling the agreement “a shadow of what it should be." Investors seemed to agree with Blumenthal’s sentiment at the time of the announcement, sending Mylan’s stock upward 10% in relief that the deal hadn't cost more.
Blumenthal's letter came one week after Mylan announced the DOJ deal, which followed two weeks of scrutiny on Mylan’s rebates to Medicaid. The Center for Medicare and Medicaid Services said the company had misclassified its blockbuster EpiPen as a generic, costing Medicaid hundreds of millions in rebates. Mylan admitted no wrongdoing in the settlement.
Blumenthal isn’t content with that arrangement. He said the deal lacks “real accountability for Mylan’s apparent lawbreaking.”
Full article: http://www.fiercepharma.com/pharma/senator-blasts-doj-s-unacceptable-settlement-mylan-asks-for-its-rejection?utm_medium=nl&utm_source=internal&mrkid=730008&mkt_tok=eyJpIjoiWmpsbU1qWm1PRGxsTldFMyIsInQiOiJSenZ0Mno3ZVprNzBUTDlQVHFPV3JFcGs4WVlMWXp1cCtWNno4OUFWNnZUc25cL1A4M1lHNmhYVUt0Z2N1MU9HMTh3aUJCdEJWRDR4OWc4K0VxTzhHREtzczRHVHRwOUdSQ0JSRGxSUVM1Y289In0%3D
Airbnb will crack down on individuals in New York City who rent out multiple homes
- bows to pressure from politicians and tenants’ rights groups who say the company has worsened affordable housing issues in the city.
The company also said, in a proposal to city officials, that it was willing to create a registry of hosts to make it easier for the state to enforce housing rules and that it would create a hotline for neighbors’ complaints. It would bar hosts who violated local regulations three times, and it said it had already taken 3,000 commercial operators off its service.
http://www.nytimes.com/2016/10/20/technology/airbnb-proposes-cracking-down-on-new-york-city-hosts.html
Calif. AG Launches Criminal Probe Into Wells Fargo Accounts
California’s attorney general is investigating whether Wells Fargo & Co. committed felony identity theft when it opened thousands of unauthorized accounts, according to a search warrant issued about a month after the bank was hit with a $185 million penalty over the accounts.
From Law360 (paywall)
Mass. Bars Wells Fargo As Bond Underwriter For 1 Year
Massachusetts has become the latest state to ban Wells Fargo from underwriting its bonds, a spokeswoman for the state treasurer confirmed Wednesday, saying that the bank won’t do business with the treasury for at least a year and leaving open the possibility of further adverse action.
From Law360 (paywall)
California’s attorney general is investigating whether Wells Fargo & Co. committed felony identity theft when it opened thousands of unauthorized accounts, according to a search warrant issued about a month after the bank was hit with a $185 million penalty over the accounts.
From Law360 (paywall)
Mass. Bars Wells Fargo As Bond Underwriter For 1 Year
Massachusetts has become the latest state to ban Wells Fargo from underwriting its bonds, a spokeswoman for the state treasurer confirmed Wednesday, saying that the bank won’t do business with the treasury for at least a year and leaving open the possibility of further adverse action.
From Law360 (paywall)
Analysis of state action exemption from antitrust enforcement:
Excerpt from article at https://www.bakerlaw.com/files/uploads/Documents/News/Articles/LITIGATION/2015/US%20Private%20Antitrust%20Litigation.pdf:
"Out of the many immunities and exemptions precluding or limiting the application of antitrust laws in the United States, state action may be the most widely relied upon immunity. It offers numerous state and local government entities immunity from federal antitrust law challenges. In a rare and much-anticipated decision, the Supreme Court recently explained and limited the application of this immunity where private parties purport to act pursuant to government authority. This ruling invigorated and encouraged other lawsuits, and will likely inspire litigants to continue to bring claims against government entities into the immediate future. These emerging cases, however, also offer valuable guidance to government entities on how to avoid antitrust problems."
Excerpt from article at https://www.bakerlaw.com/files/uploads/Documents/News/Articles/LITIGATION/2015/US%20Private%20Antitrust%20Litigation.pdf:
"Out of the many immunities and exemptions precluding or limiting the application of antitrust laws in the United States, state action may be the most widely relied upon immunity. It offers numerous state and local government entities immunity from federal antitrust law challenges. In a rare and much-anticipated decision, the Supreme Court recently explained and limited the application of this immunity where private parties purport to act pursuant to government authority. This ruling invigorated and encouraged other lawsuits, and will likely inspire litigants to continue to bring claims against government entities into the immediate future. These emerging cases, however, also offer valuable guidance to government entities on how to avoid antitrust problems."
Exxon Wants To Add NY AG To Climate Subpoena Suit
Exxon Mobil Corp. on Monday urged a Texas federal judge to add New York Attorney General Eric Schneiderman to its lawsuit challenging Massachusetts Attorney General Maura Healey's climate change investigation, claiming the two have conspired with like-minded state attorneys general to unconstitutionally silence the energy giant's political speech.
Law360 (paywall)
Exxon Mobil Corp. on Monday urged a Texas federal judge to add New York Attorney General Eric Schneiderman to its lawsuit challenging Massachusetts Attorney General Maura Healey's climate change investigation, claiming the two have conspired with like-minded state attorneys general to unconstitutionally silence the energy giant's political speech.
Law360 (paywall)
Google has been given about three more weeks to counter EU antitrust charges that it unfairly demotes rival shopping services in Internet search
This is a six-year-old case.
The U.S. technology giant has until Nov. 7, a European Commission spokesman said.
Google GOOG 0.04% has an Oct. 26 deadline to reply to another charge of blocking competitors in online search advertising and Oct. 31 to a third charge that it uses its dominant Android operating system for smartphones to squeeze out rivals.
The EU antitrust enforcer may impose deterrent fines in the Android and shopping cases, according to charge sheets seen by Reuters.
Google faces fines up to $7.4 billion, or 10% of its global turnover, for each case if found guilty of breaching EU rules.
From: http://fortune.com/2016/10/13/google-eu-antitrust-3/
Editor's comment: While EU law is quite different from US law, Google needs to be concerned about possible US litigation derived from EU investigations. DR
This is a six-year-old case.
The U.S. technology giant has until Nov. 7, a European Commission spokesman said.
Google GOOG 0.04% has an Oct. 26 deadline to reply to another charge of blocking competitors in online search advertising and Oct. 31 to a third charge that it uses its dominant Android operating system for smartphones to squeeze out rivals.
The EU antitrust enforcer may impose deterrent fines in the Android and shopping cases, according to charge sheets seen by Reuters.
Google faces fines up to $7.4 billion, or 10% of its global turnover, for each case if found guilty of breaching EU rules.
From: http://fortune.com/2016/10/13/google-eu-antitrust-3/
Editor's comment: While EU law is quite different from US law, Google needs to be concerned about possible US litigation derived from EU investigations. DR
What next for Mylan? A class action securities lawsuit
Bernstein Liebhard announced a class action suit claiming securities violations at Mylan caused investors to suffer when they came to light, pointing to several drops in share prices following reports that the company overcharged Medicaid for its epinephrine injector. All the while, the company made “materially false and misleading” statements about EpiPen’s Medicaid classification, the suit says.
Bernstein Liebhard announced a class action suit claiming securities violations at Mylan caused investors to suffer when they came to light, pointing to several drops in share prices following reports that the company overcharged Medicaid for its epinephrine injector. All the while, the company made “materially false and misleading” statements about EpiPen’s Medicaid classification, the suit says.
Dozens of suspicious court cases, with missing defendants, aim at getting web pages taken down or deindexed
BY PAUL ALAN LEVY AND EUGENE VOLOKH
There are about 25 court cases throughout the country that have a suspicious profile:
The answer is that Google and various other Internet platforms have a policy: They won’t take down material (or, in Google’s case, remove it from Google indexes) just because someone says it’s defamatory. Understandable — why would these companies want to adjudicate such factual disputes? But if they see a court order that declares that some material is defamatory, they tend to take down or deindex the material, relying on the court’s decision.
Yet the trouble is that these Internet platforms can’t really know if the injunction was issued against the actual author of the supposed defamation.
Full article: http://pubcit.typepad.com/clpblog/2016/10/dozens-of-suspicious-court-cases-with-missing-defendants-aim-at-getting-web-pages-taken-down-or-dein.html
BY PAUL ALAN LEVY AND EUGENE VOLOKH
There are about 25 court cases throughout the country that have a suspicious profile:
- All involve allegedly self-represented plaintiffs, yet they have similar snippets of legalese that suggest a common organization behind them. (A few others, having a slightly different profile, involve actual lawyers.)
- All the ostensible defendants ostensibly agreed to injunctions being issued against them, which often leads to a very quick court order (in some cases, less than a week).
- Of these 25-odd cases, 15 give the addresses of the defendants — but a private investigator hired by Professor Volokh (Giles Miller of Lynx Insights & Investigations) couldn’t find a single one of the ostensible defendants at the ostensible address.
The answer is that Google and various other Internet platforms have a policy: They won’t take down material (or, in Google’s case, remove it from Google indexes) just because someone says it’s defamatory. Understandable — why would these companies want to adjudicate such factual disputes? But if they see a court order that declares that some material is defamatory, they tend to take down or deindex the material, relying on the court’s decision.
Yet the trouble is that these Internet platforms can’t really know if the injunction was issued against the actual author of the supposed defamation.
Full article: http://pubcit.typepad.com/clpblog/2016/10/dozens-of-suspicious-court-cases-with-missing-defendants-aim-at-getting-web-pages-taken-down-or-dein.html
D.C. Circuit Court Opinion: PHH v. CFPB
United States Court of Appeals for the District of Columbia
“This new agency, the CFPB, lacks that critical check and structural constitutional protection, yet wields vast power over the U.S. economy.”
Read the decision
A.G. Schneiderman Leads Coalition Of Attorneys General To Urge The CFPB To Adopt Strong Consumer Protections For High Cost Lending
AGs Highlight Success Of Tough State Usury Laws That Have Effectively Outlawed Payday Lending In NY, Other States
NEW YORK – Attorney General Eric T. Schneiderman recently announced that New York and a coalition of seven other states submitted a letter in response to the Consumer Financial Protection Bureau’s (the “Bureau”) proposed rules for Payday, Vehicle Title, and Certain High Cost Installment Loans (“Proposed Rules”).
In an effort led by Attorney General Schneiderman, the attorneys general sent commentscommending the Bureau for exercising its rulemaking authority in an area that has a widespread impact on the lives of millions of financially vulnerable consumers across the nation.
“For too long, financially fragile consumers in New York and other states have been harmed by payday lenders who charge illegal and unconscionable interest rates,” said Attorney General Schneiderman. “It is critical that we have strong rules to protect consumers. The Bureau’s Proposed Rules will continue to allow states with strong usury caps like New York to keep illegal payday lenders from doing business their states.”
New York State has passed some of the toughest lending laws in the country, which essentially make payday lending illegal in the state. New York’s civil usury law prohibits most non-bank lenders that are not licensed by New York State from charging more than 16% interest on small unsecured loans. Lenders that are licensed by New York State cannot charge more than 25% under New York’s criminal usury laws. Lenders that set up their operations out-of-state, overseas, or on tribal lands in an attempt to evade state regulation are still subject to New York laws when lending to New York consumers.
The Bureau’s Proposed Rules require lenders to evaluate consumers’ ability to repay the loan in some, but not all circumstances. While the rule is significant in states without existing consumer protections, the Attorneys General urged the Bureau to make clear that, if enacted, the Proposed Rules should not be used to undermine more stringent state protections and enforcement efforts that have proven so effective in combatting predatory lending. In fact, usury caps are the most effective means of ending the harms of payday and other high interest consumer lending.
The harm to consumers resulting from payday lending is astounding:
Attorney General Schneiderman’s letter is joined by seven other states that have strong usury caps effectively banning payday lending: Connecticut, Maryland, Massachusetts, New Hampshire, Pennsylvania, Vermont and the District of Columbia.
United States Court of Appeals for the District of Columbia
“This new agency, the CFPB, lacks that critical check and structural constitutional protection, yet wields vast power over the U.S. economy.”
Read the decision
A.G. Schneiderman Leads Coalition Of Attorneys General To Urge The CFPB To Adopt Strong Consumer Protections For High Cost Lending
AGs Highlight Success Of Tough State Usury Laws That Have Effectively Outlawed Payday Lending In NY, Other States
NEW YORK – Attorney General Eric T. Schneiderman recently announced that New York and a coalition of seven other states submitted a letter in response to the Consumer Financial Protection Bureau’s (the “Bureau”) proposed rules for Payday, Vehicle Title, and Certain High Cost Installment Loans (“Proposed Rules”).
In an effort led by Attorney General Schneiderman, the attorneys general sent commentscommending the Bureau for exercising its rulemaking authority in an area that has a widespread impact on the lives of millions of financially vulnerable consumers across the nation.
“For too long, financially fragile consumers in New York and other states have been harmed by payday lenders who charge illegal and unconscionable interest rates,” said Attorney General Schneiderman. “It is critical that we have strong rules to protect consumers. The Bureau’s Proposed Rules will continue to allow states with strong usury caps like New York to keep illegal payday lenders from doing business their states.”
New York State has passed some of the toughest lending laws in the country, which essentially make payday lending illegal in the state. New York’s civil usury law prohibits most non-bank lenders that are not licensed by New York State from charging more than 16% interest on small unsecured loans. Lenders that are licensed by New York State cannot charge more than 25% under New York’s criminal usury laws. Lenders that set up their operations out-of-state, overseas, or on tribal lands in an attempt to evade state regulation are still subject to New York laws when lending to New York consumers.
The Bureau’s Proposed Rules require lenders to evaluate consumers’ ability to repay the loan in some, but not all circumstances. While the rule is significant in states without existing consumer protections, the Attorneys General urged the Bureau to make clear that, if enacted, the Proposed Rules should not be used to undermine more stringent state protections and enforcement efforts that have proven so effective in combatting predatory lending. In fact, usury caps are the most effective means of ending the harms of payday and other high interest consumer lending.
The harm to consumers resulting from payday lending is astounding:
- Payday lending had a negative impact of $774 million in 2011, resulting in the estimated loss of more than 14,000 jobs. In addition, U.S. households lost an additional $169 million as a result of an increase in Chapter 13 bankruptcies linked to payday lending usage.
- Approximately one-third of borrowers default within six months of their first payday loan and almost half of borrowers default within two years of their first payday loan.
- Consumers who take out payday loans often suffer the additional effects of difficulty paying bills, delayed medical spending, involuntary bank account closure, increased likelihood of filing for bankruptcy, and decreased job performance.
- According to the Center for Responsible Lending, states without payday and car title lending save an estimated $5 billion annually in fees. New York has saved an estimated $790 million annually.
Attorney General Schneiderman’s letter is joined by seven other states that have strong usury caps effectively banning payday lending: Connecticut, Maryland, Massachusetts, New Hampshire, Pennsylvania, Vermont and the District of Columbia.
Tools that allow police to conduct real-time social media surveillance during protests are drawing criticism from civil liberties advocates
Advocates oppose the way some departments have quietly unrolled the technology without community input and little public explanation.Police say services such as Geofeedia, which map, collect and store information from social media posts, are a powerful way to help find crime witnesses, spot brewing problems during large gatherings and gauge community sentiment.
Groups like the American Civil Liberties Union say the software can be easily used to collect information on peaceful protesters or target certain groups. The programs let police gather and record all online posts within specific geographic boundaries, and some allow users to do keyword searches for certain words or hashtags.
Law enforcement agencies have used the services to mine posts on Facebook, Twitter, Instagram, YouTube and other sites during parades, protests and other large events.
One company marketing the technology, Media Sonar, suggested police track hashtags such as #BlackLivesMatter and #imunarmed, and Geofeedia offered webinars on the ways Baltimore police used its software during protests over the death of Freddie Gray, a response to an ACLU records request showed.
The ACLU's Colorado chapter requested more information Thursday on how Denver police uses the Geofeedia program, saying the department could be gathering intelligence on law-abiding demonstrators.
excerpt from http://www.toptechnews.com/article/index.php?story_id=022000OS16L6
Advocates oppose the way some departments have quietly unrolled the technology without community input and little public explanation.Police say services such as Geofeedia, which map, collect and store information from social media posts, are a powerful way to help find crime witnesses, spot brewing problems during large gatherings and gauge community sentiment.
Groups like the American Civil Liberties Union say the software can be easily used to collect information on peaceful protesters or target certain groups. The programs let police gather and record all online posts within specific geographic boundaries, and some allow users to do keyword searches for certain words or hashtags.
Law enforcement agencies have used the services to mine posts on Facebook, Twitter, Instagram, YouTube and other sites during parades, protests and other large events.
One company marketing the technology, Media Sonar, suggested police track hashtags such as #BlackLivesMatter and #imunarmed, and Geofeedia offered webinars on the ways Baltimore police used its software during protests over the death of Freddie Gray, a response to an ACLU records request showed.
The ACLU's Colorado chapter requested more information Thursday on how Denver police uses the Geofeedia program, saying the department could be gathering intelligence on law-abiding demonstrators.
excerpt from http://www.toptechnews.com/article/index.php?story_id=022000OS16L6
A judge is allowing small businesses to sue the major credit card companies for forcing them to adopt chip readers at the checkout counter
— a case that could become a multi-billion-dollar class action.
The lawsuit takes aim at the nationwide upgrade to chip-based credit cards, an awkward rollout that’s been annoying for stores and shoppers.
Customers have found the system confusing. And it’s much slower to process transactions than the old magnetic stripe cards.
To business owners, it’s a raw deal. They were forced to upgrade to expensive machines that reduce fraud but don’t eliminate it. If they don’t upgrade, they’re penalized by the credit card companies. Stores that don’t install chip readers are on the hook whenever a shopper swipes a stolen credit card — a burden previously shouldered by banks.
“It’s remarkable … you don’t get many antitrust cases where the CEO admitted they were ‘in a room.”
These stark terms were designed by credit card companies, banks and major retailers.
The lawsuit, brought by four grocery stores in California, Florida and New York, calls it an industry conspiracy that violates fair trade practices. They sued American Express, Discover, MasterCard and Visa in California federal court in March.
The grocery store owners have yet to be granted class action status. If they are, the case could include 8 million small businesses across the United States, according to lawyers involved in the case.
They’re seeking to recoup the costs of upgrading to the chip system, an estimated $6 billion, according to the lawsuit.
The grocery store owners point to something Visa CEO Charlie Scharf told analysts in 2014: that Visa met “in a room” with fellow credit card companies, trade groups, banks and select retailers to come up with a plan.
That astounded U.S. District Judge William Alsup, a former antitrust prosecutor, at a court hearing in September.
“It’s remarkable … you don’t get many antitrust cases where the CEO admitted they were ‘in a room,'” he said, according to a court transcript. “I did antitrust cases as a lawyer. I never saw anything this good.”
The judge has issued an order allowing the case to move forward. He said the case “raises a plausible and reasonable suggestion of collusion” by the credit card industry, which operated “in lockstep.”
According to the grocery store owners, the industry eliminated free market competition by banding together to impose uniform penalties. If they hadn’t, any single credit card company could have offered better terms.
See http://www.eastidahonews.com/2016/10/small-businesses-allowed-sue-credit-card-giants-chip-readers/
— a case that could become a multi-billion-dollar class action.
The lawsuit takes aim at the nationwide upgrade to chip-based credit cards, an awkward rollout that’s been annoying for stores and shoppers.
Customers have found the system confusing. And it’s much slower to process transactions than the old magnetic stripe cards.
To business owners, it’s a raw deal. They were forced to upgrade to expensive machines that reduce fraud but don’t eliminate it. If they don’t upgrade, they’re penalized by the credit card companies. Stores that don’t install chip readers are on the hook whenever a shopper swipes a stolen credit card — a burden previously shouldered by banks.
“It’s remarkable … you don’t get many antitrust cases where the CEO admitted they were ‘in a room.”
These stark terms were designed by credit card companies, banks and major retailers.
The lawsuit, brought by four grocery stores in California, Florida and New York, calls it an industry conspiracy that violates fair trade practices. They sued American Express, Discover, MasterCard and Visa in California federal court in March.
The grocery store owners have yet to be granted class action status. If they are, the case could include 8 million small businesses across the United States, according to lawyers involved in the case.
They’re seeking to recoup the costs of upgrading to the chip system, an estimated $6 billion, according to the lawsuit.
The grocery store owners point to something Visa CEO Charlie Scharf told analysts in 2014: that Visa met “in a room” with fellow credit card companies, trade groups, banks and select retailers to come up with a plan.
That astounded U.S. District Judge William Alsup, a former antitrust prosecutor, at a court hearing in September.
“It’s remarkable … you don’t get many antitrust cases where the CEO admitted they were ‘in a room,'” he said, according to a court transcript. “I did antitrust cases as a lawyer. I never saw anything this good.”
The judge has issued an order allowing the case to move forward. He said the case “raises a plausible and reasonable suggestion of collusion” by the credit card industry, which operated “in lockstep.”
According to the grocery store owners, the industry eliminated free market competition by banding together to impose uniform penalties. If they hadn’t, any single credit card company could have offered better terms.
See http://www.eastidahonews.com/2016/10/small-businesses-allowed-sue-credit-card-giants-chip-readers/
State pension funds that do consumer-based policing of Wells Fargo and other bad actors
Under siege for setting up thousands of phony customer accounts to generate fees, Wells Fargo has taken a beating in Congress and the court of public opinion. Several states have piled on, announcing that they are temporarily cutting their business ties with the bank.
Using the power of the purse to hold a wayward behemoth to account is a good thing. But if state officials want to teach financial firms a lesson in honesty, why stop at Wells Fargo?
Many other big players in finance need this kind of instruction, too. For example, securities regulators have accused some of the nation’s top private equity firms of putting their interests ahead of their clients’. Why don’t state pension officials refuse to do business with them?
Gretchen Morgenson: http://www.nytimes.com/2016/10/09/business/wells-fargo-isnt-the-only-firm-that-needs-a-lesson.html?ref=business
Under siege for setting up thousands of phony customer accounts to generate fees, Wells Fargo has taken a beating in Congress and the court of public opinion. Several states have piled on, announcing that they are temporarily cutting their business ties with the bank.
Using the power of the purse to hold a wayward behemoth to account is a good thing. But if state officials want to teach financial firms a lesson in honesty, why stop at Wells Fargo?
Many other big players in finance need this kind of instruction, too. For example, securities regulators have accused some of the nation’s top private equity firms of putting their interests ahead of their clients’. Why don’t state pension officials refuse to do business with them?
Gretchen Morgenson: http://www.nytimes.com/2016/10/09/business/wells-fargo-isnt-the-only-firm-that-needs-a-lesson.html?ref=business
Domestic workers rights and state laws
Under the Illinois Domestic Workers Bill of Rights, more than 35,000 housecleaners, nannies and home care workers in Illinois are fully covered by labor and human rights laws for the first time in the state’s history. Whether you’re paid in cash, or are undocumented, as a domestic worker you are now guaranteed a state minimum wage, protection from discrimination and sexual harassment, a meal break in every shift and a day of rest each week.
Illinois became the seventh state to adopt a law to protect our rights, joining Massachusetts, California, New York, Oregon, Hawaii and Connecticut.
See http://www.nytimes.com/2016/10/08/opinion/a-bill-of-rights-for-housecleaners.html?action=click&pgtype=Homepage&clickSource=story-heading&module=opinion-c-col-right-region®ion=opinion-c-col-right-region&WT.nav=opinion-c-col-right-region&_r=0
Under the Illinois Domestic Workers Bill of Rights, more than 35,000 housecleaners, nannies and home care workers in Illinois are fully covered by labor and human rights laws for the first time in the state’s history. Whether you’re paid in cash, or are undocumented, as a domestic worker you are now guaranteed a state minimum wage, protection from discrimination and sexual harassment, a meal break in every shift and a day of rest each week.
Illinois became the seventh state to adopt a law to protect our rights, joining Massachusetts, California, New York, Oregon, Hawaii and Connecticut.
See http://www.nytimes.com/2016/10/08/opinion/a-bill-of-rights-for-housecleaners.html?action=click&pgtype=Homepage&clickSource=story-heading&module=opinion-c-col-right-region®ion=opinion-c-col-right-region&WT.nav=opinion-c-col-right-region&_r=0
For ripping off Medicaid, EpiPen maker Mylan pays Feds $465 million
The government said Mylan had wrongly claimed EpiPen as a generic, leading Medicare and Medicaid to overpay for it. In settlement, Myland doesn’t admit guilt for misclassifying the life-saving device.
http://arstechnica.com/science/2016/10/for-ripping-off-medicaid-epipen-maker-mylan-pays-feds-465-million/
The government said Mylan had wrongly claimed EpiPen as a generic, leading Medicare and Medicaid to overpay for it. In settlement, Myland doesn’t admit guilt for misclassifying the life-saving device.
http://arstechnica.com/science/2016/10/for-ripping-off-medicaid-epipen-maker-mylan-pays-feds-465-million/
From Consumer Law and Policy Blog:
Media Reports on How Wells Fargo's Arbitration Clauses Might Block Consumers from Obtaining Compensation
Posted: 30 Sep 2016 07:28 AM PDT
Here is the Consumer Reports story. Excerpt:
If a bank employee opens fake accounts and credit cards in your name, as recently happened at Wells Fargo, you may be charged fees for those fake accounts, which you didn't pay because you didn't know the accounts existed. And since you didn't pay those fees, your credit report and your credit score could be hurt.
And there may not be a whole lot you can do about it.
That's the problem now facing many Wells Fargo customers. Over the course of five years, Wells Fargo employees opened as many as 2 million fake accounts in the names of Wells Fargo customers and made millions in profits for the company by charging customers overdraft fees, monthly service fees, annual fees, finance charges, interest charges, and late fees on those phony accounts.
But customers lose their right to a trial in court over the creation of those phony accounts and the damage done to their credit if a pre-dispute mandatory arbitration clause was included in their customer agreement.
Wells may end up being the poster child for the CFPB's arbitration rule. WaPo weighs in with an article headlined Why Wells Fargo customers won’t be able to sue the bank over fake accounts. An excerpt:
One major group directly affected by the Wells Fargo scandal — the customers who had fraudulent accounts opened in their names — may have their hands tied.
As lawmakers pointed out at congressional hearings Thursday and last week, many Wells Fargo customers are blocked from suing the company because of arbitration clauses, little-known contracts that often ban customers from taking part in class action lawsuits. They are regularly included in the fine print for checking accounts, credit cards and other consumer products.
In the case of Wells Fargo, the arbitration clauses that customers agreed to when they opened their real accounts are being used to keep them from suing about the fake accounts opened in their names.
In a terse exchange during Thursday’s hearing, Rep. Brad Sherman (D.-Calif.) pushed John Stumpf, the chief executive, on whether the bank would waive the clause for affected customers.
Stumpf defended the arbitration process, calling it “fair” and saying that consumers would be directed to mediators.
But Sherman asked the executive to be more direct about whether customers have the ability to challenge the company in court.
“If they want to go to court are you going to let them go to court? Yes or no?” Sherman asked.
“No, but …” Stumpf responded before being interrupted by Sherman, who said he understood that the answer was no.
Media Reports on How Wells Fargo's Arbitration Clauses Might Block Consumers from Obtaining Compensation
Posted: 30 Sep 2016 07:28 AM PDT
Here is the Consumer Reports story. Excerpt:
If a bank employee opens fake accounts and credit cards in your name, as recently happened at Wells Fargo, you may be charged fees for those fake accounts, which you didn't pay because you didn't know the accounts existed. And since you didn't pay those fees, your credit report and your credit score could be hurt.
And there may not be a whole lot you can do about it.
That's the problem now facing many Wells Fargo customers. Over the course of five years, Wells Fargo employees opened as many as 2 million fake accounts in the names of Wells Fargo customers and made millions in profits for the company by charging customers overdraft fees, monthly service fees, annual fees, finance charges, interest charges, and late fees on those phony accounts.
But customers lose their right to a trial in court over the creation of those phony accounts and the damage done to their credit if a pre-dispute mandatory arbitration clause was included in their customer agreement.
Wells may end up being the poster child for the CFPB's arbitration rule. WaPo weighs in with an article headlined Why Wells Fargo customers won’t be able to sue the bank over fake accounts. An excerpt:
One major group directly affected by the Wells Fargo scandal — the customers who had fraudulent accounts opened in their names — may have their hands tied.
As lawmakers pointed out at congressional hearings Thursday and last week, many Wells Fargo customers are blocked from suing the company because of arbitration clauses, little-known contracts that often ban customers from taking part in class action lawsuits. They are regularly included in the fine print for checking accounts, credit cards and other consumer products.
In the case of Wells Fargo, the arbitration clauses that customers agreed to when they opened their real accounts are being used to keep them from suing about the fake accounts opened in their names.
In a terse exchange during Thursday’s hearing, Rep. Brad Sherman (D.-Calif.) pushed John Stumpf, the chief executive, on whether the bank would waive the clause for affected customers.
Stumpf defended the arbitration process, calling it “fair” and saying that consumers would be directed to mediators.
But Sherman asked the executive to be more direct about whether customers have the ability to challenge the company in court.
“If they want to go to court are you going to let them go to court? Yes or no?” Sherman asked.
“No, but …” Stumpf responded before being interrupted by Sherman, who said he understood that the answer was no.
The U.S. Supreme Court will hear an appeal from New York businesses that claim a state prohibition against their tacking surcharges onto credit-card purchases violates the First Amendment
The Second Circuit had ruled against the five New York businesses, including Expressions Hair Design and The Brooklyn Farmacy & Soda Fountain Inc., stating that the law regulated conduct, not speech, and thus did not violate the First Amendment. That ruling overturned U.S. District Judge Jed S. Rakoff's decision to invalidate the state statute.
The Second Circuit in January had refused to rehear the case en banc, which the parties had requested citing a split with the Eleventh Circuit.
Excerpted from Law 360 (paywall)
The Second Circuit had ruled against the five New York businesses, including Expressions Hair Design and The Brooklyn Farmacy & Soda Fountain Inc., stating that the law regulated conduct, not speech, and thus did not violate the First Amendment. That ruling overturned U.S. District Judge Jed S. Rakoff's decision to invalidate the state statute.
The Second Circuit in January had refused to rehear the case en banc, which the parties had requested citing a split with the Eleventh Circuit.
Excerpted from Law 360 (paywall)
AAI Proposes a National Competition Policy, Identifies Priorities Moving Forward
The American Antitrust Institute (AAI) has issued "A National Competition Policy: Unpacking the Problem of Declining Competition and Setting Priorities Moving Forward." AAI President Diana Moss said, "The AAI is resetting the debate over the importance of antitrust enforcement and competition policy. The statement makes the case for why we need a National Competition Policy."
The National Competition Policy statement unpacks the increasingly high-profile problems that are symptomatic of declining competition, including rising concentration, declining rates of market entry, and growing inequality. It then suggests three core principles for a National Competition Policy, and sets out seven priorities that should guide the new approach.
President Obama's April 2016 Executive Order highlighting concerns over declining competition was a "call to arms" and a reminder that competition is a political issue that the next administration must address. But little public commentary has effectively leveraged the apparent consciousness-raising intent of the Executive Order.
"The AAI is taking the next steps," said Moss. "The value of a National Competition Policy is to chart a course forward by setting the major enforcement priorities for addressing declining competition. Probably the biggest priority - which is written into the subtext of the Executive Order - is simply to acknowledge that we need a National Competition Policy."
AAI's principles and priorities for a National Competition Policy come from the organization's nearly two decades of research, education, and advocacy in competition enforcement and policy. Suggested priorities range from facilitating more aggressive and consistent enforcement to revitalizing the tools available to antitrust enforcers. The AAI also notes the importance of preserving the vital role of private antitrust enforcement, recognizing new sources and abuses of market power, and ramping up antitrust penalties and remedies.
The full National Competition Policy statement and appendix can be downloaded here. The AAI's 2016 Presidential Transition Report on Competition Policy, which contains more detailed recommendations for specific areas of competition enforcement, can be found here.
Contact:
Diana Moss, President, American Antitrust Institute
(202) 536-3408
dmoss@antitrustinstitute.org
The American Antitrust Institute (AAI) has issued "A National Competition Policy: Unpacking the Problem of Declining Competition and Setting Priorities Moving Forward." AAI President Diana Moss said, "The AAI is resetting the debate over the importance of antitrust enforcement and competition policy. The statement makes the case for why we need a National Competition Policy."
The National Competition Policy statement unpacks the increasingly high-profile problems that are symptomatic of declining competition, including rising concentration, declining rates of market entry, and growing inequality. It then suggests three core principles for a National Competition Policy, and sets out seven priorities that should guide the new approach.
President Obama's April 2016 Executive Order highlighting concerns over declining competition was a "call to arms" and a reminder that competition is a political issue that the next administration must address. But little public commentary has effectively leveraged the apparent consciousness-raising intent of the Executive Order.
"The AAI is taking the next steps," said Moss. "The value of a National Competition Policy is to chart a course forward by setting the major enforcement priorities for addressing declining competition. Probably the biggest priority - which is written into the subtext of the Executive Order - is simply to acknowledge that we need a National Competition Policy."
AAI's principles and priorities for a National Competition Policy come from the organization's nearly two decades of research, education, and advocacy in competition enforcement and policy. Suggested priorities range from facilitating more aggressive and consistent enforcement to revitalizing the tools available to antitrust enforcers. The AAI also notes the importance of preserving the vital role of private antitrust enforcement, recognizing new sources and abuses of market power, and ramping up antitrust penalties and remedies.
The full National Competition Policy statement and appendix can be downloaded here. The AAI's 2016 Presidential Transition Report on Competition Policy, which contains more detailed recommendations for specific areas of competition enforcement, can be found here.
Contact:
Diana Moss, President, American Antitrust Institute
(202) 536-3408
dmoss@antitrustinstitute.org
2nd Circuit antitrust decision for Amex and against the U.S. and 18 States
The decision can be seen here:
https://consumermediallc.files.wordpress.com/2016/09/amexsecondcircuit.pdf
The Court's introductory language:
Appeal from a decision of the United States District Court for the Eastern District of New York (Garaufis, J.) dated February 19, 2015, finding that American Express (“Amex”) unreasonably restrained trade by entering into agreements containing nondiscriminatory provisions (“NDPs”) barring merchants from (1) offering cardholders any discounts or nonmonetary incentives to use cards that are less costly for merchants to accept, (2) expressing preferences for any card, or (3) disclosing information about the costs to merchants of different cards. The District Court held Amex liable for violating § 1 of the Sherman Act, 15 U.S.C. § 1, and enjoined Amex from enforcing its NDPs. We find that without evidence of the NDPs’ net effect on both merchants and cardholders, the District Court could not have properly concluded that the NDPs unreasonably restrain trade in violation of § 1. We therefore REVERSE.
Editor's note: A controversial element of the decision is the Court's reliance on two-sided market analysis -- the idea that that the Amex network has to please both merchant customers and cardholder customers, so the Court should take both customer groups into consideration. The Court felt that forcing Amex to allow merchant steering of customers to other cheaper alternatives might lower merchants costs for Amex, but at the same time would impinge on Amex ability to provide attractive pricing to cardholders. Not all antitrust analysts support the 2nd Circuit's reliance on two sided market thinking, that is, the focus on the "net effect on both merchants and cardholders." DR
The decision can be seen here:
https://consumermediallc.files.wordpress.com/2016/09/amexsecondcircuit.pdf
The Court's introductory language:
Appeal from a decision of the United States District Court for the Eastern District of New York (Garaufis, J.) dated February 19, 2015, finding that American Express (“Amex”) unreasonably restrained trade by entering into agreements containing nondiscriminatory provisions (“NDPs”) barring merchants from (1) offering cardholders any discounts or nonmonetary incentives to use cards that are less costly for merchants to accept, (2) expressing preferences for any card, or (3) disclosing information about the costs to merchants of different cards. The District Court held Amex liable for violating § 1 of the Sherman Act, 15 U.S.C. § 1, and enjoined Amex from enforcing its NDPs. We find that without evidence of the NDPs’ net effect on both merchants and cardholders, the District Court could not have properly concluded that the NDPs unreasonably restrain trade in violation of § 1. We therefore REVERSE.
Editor's note: A controversial element of the decision is the Court's reliance on two-sided market analysis -- the idea that that the Amex network has to please both merchant customers and cardholder customers, so the Court should take both customer groups into consideration. The Court felt that forcing Amex to allow merchant steering of customers to other cheaper alternatives might lower merchants costs for Amex, but at the same time would impinge on Amex ability to provide attractive pricing to cardholders. Not all antitrust analysts support the 2nd Circuit's reliance on two sided market thinking, that is, the focus on the "net effect on both merchants and cardholders." DR
State AGs pursue antitrust investigations against Mylan concerning Epipen
New York Attorney General Eric Schneiderman in early September launched an investigation into the pharma giant’s contracts with local school systems in New York over potentially anticompetitive language in the arrangements. Mylan’s autoinjector device, which delivers a jolt of epinephrine to counteract deadly allergies, has enjoyed a near-monopoly in the market and is the go-to option for most of the 1 in 13 American children with food allergies.
There have been allegations that schools which used Mylan’s EpiPen4Schools program, which gives many schools the devices for free, were contractually barred from buying products from Mylan competitors for a year. Senators Richard Blumenthal and Amy Klobuchar asked the Federal Trade Commission on Tuesday to investigate the claims.
See article at http://fortune.com/2016/09/06/mylan-antitrust-probe-epipen-new-york-ag/
On September 20, 2016,West Virginia Attorney General Patrick Morrisey announced that he has has petitioned the court to enforce a subpoena
against Mylan as part of an investigation into the skyrocketing price of its EpiPen.
The petition, filed in Kanawha Circuit Court, outlines the increasing price against a backdrop of failed attempts to introduce an EpiPen competitor, litigation over intellectual property and dominance Mylan has over the epinephrine auto injector market.
The Attorney General believes the publicly known facts about Mylan establish probable cause for an investigative subpoena, which his office issued Aug. 26. Mylan initially agreed to cooperate, but has since failed to respond to the majority of the subpoena.
“I have a statutory responsibility to investigate any potential antitrust violation,” Attorney General Morrisey said. “Consumers lose when competition doesn’t flourish. My office owes it to consumers to be their watchdog and turn over every rock to ensure fair play.”
The Attorney General’s subpoena also inquires about rebates Mylan paid to participate in the state’s Medicaid program. Specifically, it cites public reports suggesting Mylan paid rebate amounts typically associated with “non-innovator” drugs, even though brand-name drugs like the EpiPen generally pay higher, “innovator” drug rebates.
The petition suggests such conduct, if proven, could subject Mylan to a potential Medicaid fraud action under state law.
** VIDEO: Dropbox http://bit.ly/2ck2V0F, Sharefile http://bit.ly/2cAB3GJ **
Read a copy of the petition at http://bit.ly/2cG68hg.
Editor's Comment: The West Virginia AG's video comments and the AG's information requests to Mylan suggest that, along with Medicaid Fraud, the AG is focused on monopolization concerns pursuant to Sherman Act, Section 2. The analogy is to earlier USDOJ cases against IBM and Microsoft. The NY AG appears to be more narrowly focused on exclusive dealing issues involving schools, which also may implicate Sherman Act Section 1 concerns where harm is caused by foreclosure of sales by competitors. DR
New York Attorney General Eric Schneiderman in early September launched an investigation into the pharma giant’s contracts with local school systems in New York over potentially anticompetitive language in the arrangements. Mylan’s autoinjector device, which delivers a jolt of epinephrine to counteract deadly allergies, has enjoyed a near-monopoly in the market and is the go-to option for most of the 1 in 13 American children with food allergies.
There have been allegations that schools which used Mylan’s EpiPen4Schools program, which gives many schools the devices for free, were contractually barred from buying products from Mylan competitors for a year. Senators Richard Blumenthal and Amy Klobuchar asked the Federal Trade Commission on Tuesday to investigate the claims.
See article at http://fortune.com/2016/09/06/mylan-antitrust-probe-epipen-new-york-ag/
On September 20, 2016,West Virginia Attorney General Patrick Morrisey announced that he has has petitioned the court to enforce a subpoena
against Mylan as part of an investigation into the skyrocketing price of its EpiPen.
The petition, filed in Kanawha Circuit Court, outlines the increasing price against a backdrop of failed attempts to introduce an EpiPen competitor, litigation over intellectual property and dominance Mylan has over the epinephrine auto injector market.
The Attorney General believes the publicly known facts about Mylan establish probable cause for an investigative subpoena, which his office issued Aug. 26. Mylan initially agreed to cooperate, but has since failed to respond to the majority of the subpoena.
“I have a statutory responsibility to investigate any potential antitrust violation,” Attorney General Morrisey said. “Consumers lose when competition doesn’t flourish. My office owes it to consumers to be their watchdog and turn over every rock to ensure fair play.”
The Attorney General’s subpoena also inquires about rebates Mylan paid to participate in the state’s Medicaid program. Specifically, it cites public reports suggesting Mylan paid rebate amounts typically associated with “non-innovator” drugs, even though brand-name drugs like the EpiPen generally pay higher, “innovator” drug rebates.
The petition suggests such conduct, if proven, could subject Mylan to a potential Medicaid fraud action under state law.
** VIDEO: Dropbox http://bit.ly/2ck2V0F, Sharefile http://bit.ly/2cAB3GJ **
Read a copy of the petition at http://bit.ly/2cG68hg.
Editor's Comment: The West Virginia AG's video comments and the AG's information requests to Mylan suggest that, along with Medicaid Fraud, the AG is focused on monopolization concerns pursuant to Sherman Act, Section 2. The analogy is to earlier USDOJ cases against IBM and Microsoft. The NY AG appears to be more narrowly focused on exclusive dealing issues involving schools, which also may implicate Sherman Act Section 1 concerns where harm is caused by foreclosure of sales by competitors. DR
Mylan may have violated antitrust law in its EpiPen sales to schools, legal experts say
By IKE SWETLITZ @ikeswetlitz and ED SILVERMAN @Pharmalot
Excerpts:
Schools across the country keep EpiPens in their nurses’ offices in case a student has a severe allergic reaction. For years, Mylan Pharmaceuticals has been selling the devices to schools at a discounted price, giving them a break from rising costs. But the program also prohibited schools from buying competitors’ devices — a provision that experts say may have violated antitrust law.
Mylan’s “EpiPen4Schools” program, begun in August 2012, offers free or discounted EpiPens to schools. Over 65,000 schools receive free EpiPens through the program; an unknown number of schools buy the epinephrine auto-injectors at a discount. Laws in at least 11 states require schools to stock epinephrine, and keeping a stockpile is incentivized by federal law across the country.
As of last year, the EpiPen4Schools discounted price was $112.10, according to company documents. That is about a quarter of the cost charged to pharmacies at the time, according to data from Elsevier’s Gold Standard Drug Database.
However, in order to qualify for that price, schools had to agree they would “not in the next twelve (12) months purchase any products that are competitive to EpiPen(R) Auto-Injectors,” the agreement stipulates. (In the course of STAT’s reporting, this agreement was removed from the EpiPen4Schools website.)
A Mylan spokesperson said this requirement is no longer part of its program, and did not say when the requirement was dropped. STAT found such language on EpiPen4Schools order forms dated August 2014 and June 2015, and on one order form signed by a school district official in North Carolina dated April 28, 2016.
The Mylan spokesperson added that there have never been purchase requirements to receive the free EpiPen auto-injectors.
In a statement, Mylan said “the program continues to adhere to all applicable laws and regulations.”
“It is illegal to issue a discount on the condition the customer not acquire a competitor’s goods — if the effect may be to substantially lessen competition,” said Herbert Hovenkamp, a University of Iowa law professor and antitrust expert.
At issue is the notion of an exclusionary contract, which requires a customer to promise not to deal with a competitor. Exclusionary contracts are a common tactic for keeping a lock on a market, Hovenkamp said.
But using such a contract while also having a dominant market share may hinder competition, which he explained can be an antitrust violation. Last year, EpiPen made up 89 percent of the epinephrine auto-injector market, according to IMS Health, a market research firm.
Schools might have to buy more auto-injectors in that 12-month window for a variety of reasons: they might use the auto-injectors and need to replace them, or the devices might reach their expiration date.
* * *
The fact that Mylan used to have such a stipulation may still be problematic, said Harry First, a professor at the New York University School of Law, who specializes in antitrust matters.
“It’s like the bank robber saying ‘Don’t worry, we don’t rob banks anymore,’” First said. “But if you make such a change, it casts doubt on why you needed to have such a requirement in the first place.”
The inflation-adjusted list price of EpiPens has increased by about 450 percent since 2004, according to Elsevier data.
Full article: https://www.statnews.com/2016/08/25/mylan-antitrust-epipen-schools/
By IKE SWETLITZ @ikeswetlitz and ED SILVERMAN @Pharmalot
Excerpts:
Schools across the country keep EpiPens in their nurses’ offices in case a student has a severe allergic reaction. For years, Mylan Pharmaceuticals has been selling the devices to schools at a discounted price, giving them a break from rising costs. But the program also prohibited schools from buying competitors’ devices — a provision that experts say may have violated antitrust law.
Mylan’s “EpiPen4Schools” program, begun in August 2012, offers free or discounted EpiPens to schools. Over 65,000 schools receive free EpiPens through the program; an unknown number of schools buy the epinephrine auto-injectors at a discount. Laws in at least 11 states require schools to stock epinephrine, and keeping a stockpile is incentivized by federal law across the country.
As of last year, the EpiPen4Schools discounted price was $112.10, according to company documents. That is about a quarter of the cost charged to pharmacies at the time, according to data from Elsevier’s Gold Standard Drug Database.
However, in order to qualify for that price, schools had to agree they would “not in the next twelve (12) months purchase any products that are competitive to EpiPen(R) Auto-Injectors,” the agreement stipulates. (In the course of STAT’s reporting, this agreement was removed from the EpiPen4Schools website.)
A Mylan spokesperson said this requirement is no longer part of its program, and did not say when the requirement was dropped. STAT found such language on EpiPen4Schools order forms dated August 2014 and June 2015, and on one order form signed by a school district official in North Carolina dated April 28, 2016.
The Mylan spokesperson added that there have never been purchase requirements to receive the free EpiPen auto-injectors.
In a statement, Mylan said “the program continues to adhere to all applicable laws and regulations.”
“It is illegal to issue a discount on the condition the customer not acquire a competitor’s goods — if the effect may be to substantially lessen competition,” said Herbert Hovenkamp, a University of Iowa law professor and antitrust expert.
At issue is the notion of an exclusionary contract, which requires a customer to promise not to deal with a competitor. Exclusionary contracts are a common tactic for keeping a lock on a market, Hovenkamp said.
But using such a contract while also having a dominant market share may hinder competition, which he explained can be an antitrust violation. Last year, EpiPen made up 89 percent of the epinephrine auto-injector market, according to IMS Health, a market research firm.
Schools might have to buy more auto-injectors in that 12-month window for a variety of reasons: they might use the auto-injectors and need to replace them, or the devices might reach their expiration date.
* * *
The fact that Mylan used to have such a stipulation may still be problematic, said Harry First, a professor at the New York University School of Law, who specializes in antitrust matters.
“It’s like the bank robber saying ‘Don’t worry, we don’t rob banks anymore,’” First said. “But if you make such a change, it casts doubt on why you needed to have such a requirement in the first place.”
The inflation-adjusted list price of EpiPens has increased by about 450 percent since 2004, according to Elsevier data.
Full article: https://www.statnews.com/2016/08/25/mylan-antitrust-epipen-schools/
Are American markets now more concentrated and less competitive than at any time since the Gilded Age?
This article in The Atlantic, written for a general audience, suggests yes:
http://www.theatlantic.com/magazine/archive/2016/10/americas-monopoly-problem/497549/
This article in The Atlantic, written for a general audience, suggests yes:
http://www.theatlantic.com/magazine/archive/2016/10/americas-monopoly-problem/497549/
Judge Rejects Justice Department Ruling on Music Licensing
By BEN SISARIO (NYT) SEPT. 16, 2016
A federal judge on Friday rejected a recent Justice Department ruling on music licensing, in a move that was immediately hailed by the music industry as a major victory.
In his decision, Judge Louis L. Stanton of the United States District Court in Manhattan said the Justice Department erred last month when it issued a detailed interpretation of a regulatory document known as a consent decree. The document has long governed Broadcast Music, Inc. (BMI), a licensing agency that collects money whenever songs are publicly performed, including on the radio, on streaming services and in public places like restaurants and retail stores.
After a two-year investigation, the antitrust division of the Justice Department decided that BMI and its rival performing-rights society, the American Society of Composers, Authors and Publishers (Ascap), were required to issue so-called 100-percent licenses for the millions of songs in their catalogs. That means that even if BMI or Ascap represented only one of multiple writers of a song, the organization must be able to offer performance licenses for the whole song.
The case concerns the side of the music business that deals with songwriters and publishers — not record companies and performers, whose work is covered by separate copyright laws.
The Justice Department’s decision was seen as a victory for broadcasters and for digital music providers like Google and Pandora. But music industry groups argued that it would result in tumult throughout the business. BMI challenged the interpretation, and this week a group of songwriters filed aseparate suit over the issue.
In his ruling, Judge Stanton — who monitors BMI and its compliance with its consent decree, which dates to 1941 — was unequivocal that the interpretation of the Justice Department’s antitrust division was incorrect.
“Nothing in the consent decree gives support to the division’s views,” Judge Stanton wrote.
Continue reading the main story http://www.nytimes.com/2016/09/17/business/media/judge-rejects-justice-department-ruling-on-music-licensing.html#story-continues-1
By BEN SISARIO (NYT) SEPT. 16, 2016
A federal judge on Friday rejected a recent Justice Department ruling on music licensing, in a move that was immediately hailed by the music industry as a major victory.
In his decision, Judge Louis L. Stanton of the United States District Court in Manhattan said the Justice Department erred last month when it issued a detailed interpretation of a regulatory document known as a consent decree. The document has long governed Broadcast Music, Inc. (BMI), a licensing agency that collects money whenever songs are publicly performed, including on the radio, on streaming services and in public places like restaurants and retail stores.
After a two-year investigation, the antitrust division of the Justice Department decided that BMI and its rival performing-rights society, the American Society of Composers, Authors and Publishers (Ascap), were required to issue so-called 100-percent licenses for the millions of songs in their catalogs. That means that even if BMI or Ascap represented only one of multiple writers of a song, the organization must be able to offer performance licenses for the whole song.
The case concerns the side of the music business that deals with songwriters and publishers — not record companies and performers, whose work is covered by separate copyright laws.
The Justice Department’s decision was seen as a victory for broadcasters and for digital music providers like Google and Pandora. But music industry groups argued that it would result in tumult throughout the business. BMI challenged the interpretation, and this week a group of songwriters filed aseparate suit over the issue.
In his ruling, Judge Stanton — who monitors BMI and its compliance with its consent decree, which dates to 1941 — was unequivocal that the interpretation of the Justice Department’s antitrust division was incorrect.
“Nothing in the consent decree gives support to the division’s views,” Judge Stanton wrote.
Continue reading the main story http://www.nytimes.com/2016/09/17/business/media/judge-rejects-justice-department-ruling-on-music-licensing.html#story-continues-1
Investor harm when municipal bond ratings inaccurately take into account the strength (or weakness) of government pension plans
Where pension plan liabilities are hidden through misleading accounting, then investors can be misled in buying municipal bonds where the value turns in part on pension liabilities. The SEC in the past has brought enforcement actions based on that problem.
See https://www.sec.gov/litigation/admin/2014/33-9629.pdf
A recent New York Times article explains that the problem of misleading accounting for municipal pension obligations continues. See http://www.nytimes.com/2016/09/18/business/dealbook/a-sour-surprise-for-public-pensions-two-sets-of-books.html?ribbon-ad-idx=3&rref=business/dealbook&module=Ribbon&version=context®ion=Header&action=click&contentCollection=DealBook&pgtype=article
Times author Andrew Sorkin explains that there are " serious concerns that governments nationwide do not know the true condition of the pension funds they are responsible for. That exposes millions of people, including retired public workers, local taxpayers and municipal bond buyers — who are often retirees themselves — to risks they have no way of knowing about."
“One of the first things I think you should do is publish that number for every city,” said William F. Sharpe, professor emeritus of finance at Stanford University’s Graduate School of Business who won the Nobel in economic science in 1990 for his work on how the markets price financial instruments. The article suggests that is something that could be done, if there were a will to do it.
Where pension plan liabilities are hidden through misleading accounting, then investors can be misled in buying municipal bonds where the value turns in part on pension liabilities. The SEC in the past has brought enforcement actions based on that problem.
See https://www.sec.gov/litigation/admin/2014/33-9629.pdf
A recent New York Times article explains that the problem of misleading accounting for municipal pension obligations continues. See http://www.nytimes.com/2016/09/18/business/dealbook/a-sour-surprise-for-public-pensions-two-sets-of-books.html?ribbon-ad-idx=3&rref=business/dealbook&module=Ribbon&version=context®ion=Header&action=click&contentCollection=DealBook&pgtype=article
Times author Andrew Sorkin explains that there are " serious concerns that governments nationwide do not know the true condition of the pension funds they are responsible for. That exposes millions of people, including retired public workers, local taxpayers and municipal bond buyers — who are often retirees themselves — to risks they have no way of knowing about."
“One of the first things I think you should do is publish that number for every city,” said William F. Sharpe, professor emeritus of finance at Stanford University’s Graduate School of Business who won the Nobel in economic science in 1990 for his work on how the markets price financial instruments. The article suggests that is something that could be done, if there were a will to do it.
How AT&T helps (or declines to help) when your cellphone is hacked, and the hacker orders a $700 phone to be delivered to a specified address and apartment number that is not yours
AT&T's idea: You were hacked, not them, so the follow up with "law enforcement authorities" is your problem to handle on your own, not theirs. If law enforcement asks for information from AT&T, AT&T will consider the law enforcement request through "proper" channels.
Following is a copy of correspondence from AT&T, with the customer name deleted in the interests of privacy:
=
AT&T Tele:866.562.6060
Office of the President Fax: 214.761.4600
September 14, 2016
Office of Consumer Protection 100 Maryland Avenue, Ste. 330
Rockville, MD 20850
Complainant's Name: [deleted]
Agency File Number: 16-0C-047387
Company File Number: CM20160908_1 l 7894450
AT&T is in receipt of the above-referenced complaint and appreciates the opportunity to respond. [Name deleted] states an unauthorized party ordered a device on her AT&T account which was subsequently cancelled. [Name deleted] requests AT&T' s assistance to pursue this matter with law enforcement.
An AT&T Office of the President Specialist spoke with [name deleted] on September 14, 2016. The specialist apologized for any inconvenience this matter may have caused. The specialist explained AT&T would not be able to investigate the matter with law enforcement. The specialist advised [name deleted] she would need to contact the authorities at which point if they need additional information from AT&T they would need to request the information through proper channels. [Name deleted] indicated she understood, but remains unsatisfied.
AT&T regrets any inconvenience caused by this matter. We trust this letter addresses your concerns regarding this complaint. If you have any questions regarding this case, please contact Don Artega at 806-758-6580. For all other matters, please use your normal channel.
Sincerely, Sherri Baker
AT&T Office of the President
Editorial comment: I don't think the question here is whether AT&T's position is legally correct. AT&T 's lawyers have certainly thought that through. The issue is one of customer service in a world where customers have some cell phone alternatives. Customers may be understandably be reluctant to go it alone in challenging hackers who may be dangerous adversaries, and appreciate upfront support from their cell phone provider. DR
Posted by Don Resnikoff
AT&T's idea: You were hacked, not them, so the follow up with "law enforcement authorities" is your problem to handle on your own, not theirs. If law enforcement asks for information from AT&T, AT&T will consider the law enforcement request through "proper" channels.
Following is a copy of correspondence from AT&T, with the customer name deleted in the interests of privacy:
=
AT&T Tele:866.562.6060
Office of the President Fax: 214.761.4600
September 14, 2016
Office of Consumer Protection 100 Maryland Avenue, Ste. 330
Rockville, MD 20850
Complainant's Name: [deleted]
Agency File Number: 16-0C-047387
Company File Number: CM20160908_1 l 7894450
AT&T is in receipt of the above-referenced complaint and appreciates the opportunity to respond. [Name deleted] states an unauthorized party ordered a device on her AT&T account which was subsequently cancelled. [Name deleted] requests AT&T' s assistance to pursue this matter with law enforcement.
An AT&T Office of the President Specialist spoke with [name deleted] on September 14, 2016. The specialist apologized for any inconvenience this matter may have caused. The specialist explained AT&T would not be able to investigate the matter with law enforcement. The specialist advised [name deleted] she would need to contact the authorities at which point if they need additional information from AT&T they would need to request the information through proper channels. [Name deleted] indicated she understood, but remains unsatisfied.
AT&T regrets any inconvenience caused by this matter. We trust this letter addresses your concerns regarding this complaint. If you have any questions regarding this case, please contact Don Artega at 806-758-6580. For all other matters, please use your normal channel.
Sincerely, Sherri Baker
AT&T Office of the President
Editorial comment: I don't think the question here is whether AT&T's position is legally correct. AT&T 's lawyers have certainly thought that through. The issue is one of customer service in a world where customers have some cell phone alternatives. Customers may be understandably be reluctant to go it alone in challenging hackers who may be dangerous adversaries, and appreciate upfront support from their cell phone provider. DR
Posted by Don Resnikoff
DC Court of Appeals has appeal of Exelon Pepco Merger
Petioners are Sandra Mattavous Frye for the DC Peoples' Counse, The District of Columbia by its Attorney General, and DC Solar United Neighborhoods (DC Sun), and Public Citizen. The petition of DC Sun and Public Citizen is at http://www.citizen.org/documents/Petition-Filing-8-16-16.pdf
Recently the Court of Appeals entered an order consolidating petitions challenging the merger into one proceeding, expediting hearing of the appeals, and directing that "Sandra Mattavous-Frye shall within 15 days from the date of this order clarify if she is seeking review on behalf of Office of People'sCoursel, and if so shall file an amended petition for review."
See http://edocket.dcpsc.org/edocket/docketsheets_pdf_FS.asp?caseno=FC1119&docketno=1710&flag=D&show_result=Y
Petioners are Sandra Mattavous Frye for the DC Peoples' Counse, The District of Columbia by its Attorney General, and DC Solar United Neighborhoods (DC Sun), and Public Citizen. The petition of DC Sun and Public Citizen is at http://www.citizen.org/documents/Petition-Filing-8-16-16.pdf
Recently the Court of Appeals entered an order consolidating petitions challenging the merger into one proceeding, expediting hearing of the appeals, and directing that "Sandra Mattavous-Frye shall within 15 days from the date of this order clarify if she is seeking review on behalf of Office of People'sCoursel, and if so shall file an amended petition for review."
See http://edocket.dcpsc.org/edocket/docketsheets_pdf_FS.asp?caseno=FC1119&docketno=1710&flag=D&show_result=Y
From Friends of the Capital Crescent Trail
Adapted from Friends Mailing:
On August 3, the Federal Court suspended the controversial Purple Line pending a Supplemental Environmental Impact Statement.
The Maryland Transit Administration (MTA) has filed a motion requesting the judge to reconsider his decision. Friends filed an Opposition Memorandum explaining why their motion should be denied, and supporting the arguments on which the Judge Richard Leon made his decision. Economic and transportation experts have written formal declarations in support.
MTA applied this week for the key Army Corps of Engineers permit in order to dredge and fill US waterways for the Purple Line. Such a permit is required because the Purple Line would have significant impact on waters, streams, and wetlands. See the Corps of Engineers Public Notice.
According to the Army Corps, "the basic premise of the [Clean Water Act Section 404 permit] program is that no discharge of dredged or fill material may be permitted if a practicable alternative exists that is less damaging to the aquatic environment."
The Friends lawsuit is about alternatives. Friends says: We need your donation now. The Friends message came to us from:
Ajay Bhatt
President
Friends of the Capital Crescent Trail
Christine Real de Azua
Member of the Board and co-plaintiff
Friends of the Capital Crescent Trail
Adapted from Friends Mailing:
On August 3, the Federal Court suspended the controversial Purple Line pending a Supplemental Environmental Impact Statement.
The Maryland Transit Administration (MTA) has filed a motion requesting the judge to reconsider his decision. Friends filed an Opposition Memorandum explaining why their motion should be denied, and supporting the arguments on which the Judge Richard Leon made his decision. Economic and transportation experts have written formal declarations in support.
MTA applied this week for the key Army Corps of Engineers permit in order to dredge and fill US waterways for the Purple Line. Such a permit is required because the Purple Line would have significant impact on waters, streams, and wetlands. See the Corps of Engineers Public Notice.
According to the Army Corps, "the basic premise of the [Clean Water Act Section 404 permit] program is that no discharge of dredged or fill material may be permitted if a practicable alternative exists that is less damaging to the aquatic environment."
The Friends lawsuit is about alternatives. Friends says: We need your donation now. The Friends message came to us from:
Ajay Bhatt
President
Friends of the Capital Crescent Trail
Christine Real de Azua
Member of the Board and co-plaintiff
Friends of the Capital Crescent Trail
Senators with Conservative agenda push federal law to limit District of Columbia licensing
Following are excerpts from http://www.lee.senate.gov/public/index.cfm/alternatives-to-licensing-that-lower-obstacles-to-wrok-allow-act
Appeals to public health and safety are often used as a pretext to protect economic incumbents by unjustifiably increasing occupational licensing requirements. Whereas in 1950 only five percent of the workforce nationwide worked in occupations requiring a government license, in 2015 that number had grown to 25 percent—a 500 percent increase. Licensing barriers reduce economic growth and entrepreneurship and disproportionately burden low-wage and young workers, minorities, and immigrants. Yet, most legitimate health and safety concerns can be adequately addressed by less burdensome regulations such as certification, registration, bonding, and insurance requirements.
In the District [of Columbia], for example, time consuming and often expensive licensing requirements are imposed on would be entry-level interior designers, tour guides, cosmetologists, florists, and pest control workers, to name a few—with little or no legitimate public purpose served. For example, an aspiring interior designer must have six years’ education/experience, pay $925 in fees, and pass an exam to work legally in this field.
* * *
The Solution
The Alternatives to Licensing that Lower Obstacles to Work (ALLOW) Act reduces the anticompetitive impact of unjustifiable licensing requirements by making targeted changes to licensure policies. The Act:
Serves as a model for reform in the states by limiting the creation of occupational license requirements in the District [of Columbia] only to those circumstances in which it is the least restrictive means of protecting the public health, safety or welfare, and makes it District policy to limit the enforcement of a license requirement only to the sale of those goods and services expressly listed in the statute or regulations defining an occupation’s “scope of practice.”
Promotes less restrictive requirements, such as public and private certification.
Provides for the creation of a dedicated office in the District [of Columbia] Attorney General’s Office, or within each relevant District agency, responsible for the active supervision of occupational boards. Provides forlegislative oversight, with a “sunrise review” when considering new proposed licensing requirements to evaluate the possible negative impacts on workers and economic growth, along with possible less restrictive regulations. And provides legislative “sunset review,” which applies the same analysis of net benefits and possible alternatives to existing occupational licensing laws in the District, with the goal of reviewing all such laws and proposing appropriate modifications over a five year period.
Following are excerpts from http://www.lee.senate.gov/public/index.cfm/alternatives-to-licensing-that-lower-obstacles-to-wrok-allow-act
Appeals to public health and safety are often used as a pretext to protect economic incumbents by unjustifiably increasing occupational licensing requirements. Whereas in 1950 only five percent of the workforce nationwide worked in occupations requiring a government license, in 2015 that number had grown to 25 percent—a 500 percent increase. Licensing barriers reduce economic growth and entrepreneurship and disproportionately burden low-wage and young workers, minorities, and immigrants. Yet, most legitimate health and safety concerns can be adequately addressed by less burdensome regulations such as certification, registration, bonding, and insurance requirements.
In the District [of Columbia], for example, time consuming and often expensive licensing requirements are imposed on would be entry-level interior designers, tour guides, cosmetologists, florists, and pest control workers, to name a few—with little or no legitimate public purpose served. For example, an aspiring interior designer must have six years’ education/experience, pay $925 in fees, and pass an exam to work legally in this field.
* * *
The Solution
The Alternatives to Licensing that Lower Obstacles to Work (ALLOW) Act reduces the anticompetitive impact of unjustifiable licensing requirements by making targeted changes to licensure policies. The Act:
Serves as a model for reform in the states by limiting the creation of occupational license requirements in the District [of Columbia] only to those circumstances in which it is the least restrictive means of protecting the public health, safety or welfare, and makes it District policy to limit the enforcement of a license requirement only to the sale of those goods and services expressly listed in the statute or regulations defining an occupation’s “scope of practice.”
Promotes less restrictive requirements, such as public and private certification.
Provides for the creation of a dedicated office in the District [of Columbia] Attorney General’s Office, or within each relevant District agency, responsible for the active supervision of occupational boards. Provides forlegislative oversight, with a “sunrise review” when considering new proposed licensing requirements to evaluate the possible negative impacts on workers and economic growth, along with possible less restrictive regulations. And provides legislative “sunset review,” which applies the same analysis of net benefits and possible alternatives to existing occupational licensing laws in the District, with the goal of reviewing all such laws and proposing appropriate modifications over a five year period.
9th Circ. Upholds FERC's $200M Penalty Against Energy Cos.
The Ninth Circuit on Thursday upheld the Federal Energy Regulatory Commission’s findings that companies including Shell Energy North America and BP manipulated prices during California’s energy crisis in 2000, paving the way for the state to recover an additional $200 million from power companies found at fault.
Law 360 (Paywall)
The Ninth Circuit on Thursday upheld the Federal Energy Regulatory Commission’s findings that companies including Shell Energy North America and BP manipulated prices during California’s energy crisis in 2000, paving the way for the state to recover an additional $200 million from power companies found at fault.
Law 360 (Paywall)
How Google and other tech companies avoid paying U.S. and State taxes by means of foreign subsidiaries in places like Ireland
Its an old story. Here's an excerpt from a 2013 article:
The largest tech companies in the Bay Area have avoided paying federal taxes on more than $225 billion they have accumulated through foreign subsidiaries, documents filed with the Securities and Exchange Commission show.
By sheltering their assets overseas, Silicon Valley companies such as Apple, Google, eBay and Hewlett-Packard are able to reduce their annual taxes in some cases by billions of dollars, according to a Center for Investigative Reporting analysis of the 50 largest firms’ financial statements filed in 2012.
https://ww2.kqed.org/news/2013/02/13/cisco-apple-hp-oracle-google-avoid-paying-billions-in-taxes/
Its an old story. Here's an excerpt from a 2013 article:
The largest tech companies in the Bay Area have avoided paying federal taxes on more than $225 billion they have accumulated through foreign subsidiaries, documents filed with the Securities and Exchange Commission show.
By sheltering their assets overseas, Silicon Valley companies such as Apple, Google, eBay and Hewlett-Packard are able to reduce their annual taxes in some cases by billions of dollars, according to a Center for Investigative Reporting analysis of the 50 largest firms’ financial statements filed in 2012.
https://ww2.kqed.org/news/2013/02/13/cisco-apple-hp-oracle-google-avoid-paying-billions-in-taxes/
NY To Investigate Mylan's EpiPen School Discounts
New York Attorney General Eric Schneiderman announced Tuesday his office has launched an antitrust investigation into Mylan. A preliminary review conducted by Schneiderman’s staff found that the company may have included anti-competitive terms into EpiPen sales contracts with several schools throughout the state.
“No child’s life should be put at risk because a parent, school or health care provider cannot afford a simple, life-saving device because of a drug maker’s anti-competitive practices,” Schneiderman said in a statement.
“If Mylan engaged in anti-competitive business practices, or violated antitrust laws with the intent and effect of limiting lower cost competition, we will hold them accountable. Allergy sufferers have enough concerns to worry about — the availability of life-saving medical treatment should not be one of them. I will bring the full resources of my office to this critical investigation.”
Full article: https://www.competitionpolicyinternational.com/us-ny-attorney-general-launches-antitrust-investigation-into-the-maker-of-epipen/
New York Attorney General Eric Schneiderman announced Tuesday his office has launched an antitrust investigation into Mylan. A preliminary review conducted by Schneiderman’s staff found that the company may have included anti-competitive terms into EpiPen sales contracts with several schools throughout the state.
“No child’s life should be put at risk because a parent, school or health care provider cannot afford a simple, life-saving device because of a drug maker’s anti-competitive practices,” Schneiderman said in a statement.
“If Mylan engaged in anti-competitive business practices, or violated antitrust laws with the intent and effect of limiting lower cost competition, we will hold them accountable. Allergy sufferers have enough concerns to worry about — the availability of life-saving medical treatment should not be one of them. I will bring the full resources of my office to this critical investigation.”
Full article: https://www.competitionpolicyinternational.com/us-ny-attorney-general-launches-antitrust-investigation-into-the-maker-of-epipen/
NYT: Automakers complicit in knowing adoption of cheaper but more dangerous Takata ammonium nitrate airbags
Excerpts:
Details of G.M.’s decision-making process almost 20 years ago, which has not been reported previously, suggest that a quest for savings of just a few dollars per airbag compromised a critical safety device, resulting in passenger deaths. The findings also indicate that automakers played a far more active role in the prelude to the crisis: Rather than being the victims of Takata’s missteps, automakers pressed their suppliers to put cost before all else.
“General Motors told us they were going to buy Takata’s inflaters unless we could make a cheaper one [like Takata's],” Ms. Rink [of competitor Autoliv] said. Her team was told that the Takata inflaters were as much as 30 percent cheaper per module, she added, a potential savings of several dollars per airbag. “That set off a big panic on how to compete.”
“We knew that G.M. was getting low-cost inflaters from others,” said Chris Hock, a former member of Mr. Taylor’s team who left Autoliv in April. “That was a dangerous path.”
***
Even with the record recall [of Takata airbags], deadly accidents and research critical of ammonium nitrate, Takata continues to manufacture airbags with the compound — and automakers continue to buy them. The airbags appear in the 2016 models of seven automakers, and they are also being installed in cars as replacement airbags for those being recalled.
Takata said in a statement that it had taken steps to protect the ammonium nitrate it uses against temperature changes, which along with moisture are the main factors contributing to its volatility. The manufacturer said it was also studying, along with safety regulators and some automakers, inflaters with a drying agent “to better understand and quantify their service life.”
***
The former Autoliv scientists said that they considered their verdict against the ammonium nitrate irrefutable, so much so that they understood Autoliv had alerted other automakers to the danger [almost 20 years ago].
An Autoliv spokesman declined to comment on the company’s dealings with its automotive customers, which at the time also included Chrysler, Ford, Honda, Mazda, Mitsubishi and Toyota. Though Autoliv continued to supply those companies, several started using Takata’s new airbags in the early to mid-2000s.
***
Autoliv’s concerns were backed by well-known research. Widely available studies going back decades warned of the tricky properties of ammonium nitrate, which can break down when exposed to moisture or temperature changes — vital factors, federal regulators said, with the defective Takata airbags.
***
“Some of the worst industrial accidents at the worldwide level involve ammonium nitrate,” Luigi T. De Luca, an Italian academic and a leading expert in solid propellant rockets, said in an email.
See http://www.nytimes.com/2016/08/27/business/takata-airbag-recall-crisis.html
Excerpts:
Details of G.M.’s decision-making process almost 20 years ago, which has not been reported previously, suggest that a quest for savings of just a few dollars per airbag compromised a critical safety device, resulting in passenger deaths. The findings also indicate that automakers played a far more active role in the prelude to the crisis: Rather than being the victims of Takata’s missteps, automakers pressed their suppliers to put cost before all else.
“General Motors told us they were going to buy Takata’s inflaters unless we could make a cheaper one [like Takata's],” Ms. Rink [of competitor Autoliv] said. Her team was told that the Takata inflaters were as much as 30 percent cheaper per module, she added, a potential savings of several dollars per airbag. “That set off a big panic on how to compete.”
“We knew that G.M. was getting low-cost inflaters from others,” said Chris Hock, a former member of Mr. Taylor’s team who left Autoliv in April. “That was a dangerous path.”
***
Even with the record recall [of Takata airbags], deadly accidents and research critical of ammonium nitrate, Takata continues to manufacture airbags with the compound — and automakers continue to buy them. The airbags appear in the 2016 models of seven automakers, and they are also being installed in cars as replacement airbags for those being recalled.
Takata said in a statement that it had taken steps to protect the ammonium nitrate it uses against temperature changes, which along with moisture are the main factors contributing to its volatility. The manufacturer said it was also studying, along with safety regulators and some automakers, inflaters with a drying agent “to better understand and quantify their service life.”
***
The former Autoliv scientists said that they considered their verdict against the ammonium nitrate irrefutable, so much so that they understood Autoliv had alerted other automakers to the danger [almost 20 years ago].
An Autoliv spokesman declined to comment on the company’s dealings with its automotive customers, which at the time also included Chrysler, Ford, Honda, Mazda, Mitsubishi and Toyota. Though Autoliv continued to supply those companies, several started using Takata’s new airbags in the early to mid-2000s.
***
Autoliv’s concerns were backed by well-known research. Widely available studies going back decades warned of the tricky properties of ammonium nitrate, which can break down when exposed to moisture or temperature changes — vital factors, federal regulators said, with the defective Takata airbags.
***
“Some of the worst industrial accidents at the worldwide level involve ammonium nitrate,” Luigi T. De Luca, an Italian academic and a leading expert in solid propellant rockets, said in an email.
See http://www.nytimes.com/2016/08/27/business/takata-airbag-recall-crisis.html
Mylan, the company behind EpiPen, fought to keep cheaper generic off the market
NBC, in a video report (see link below) says that Mylan and its business partners fought fiercely behind the scenes to block a cheaper generic from hitting the market. Mylan paid for opposition research on a generic EpiPen proposed by Teva, an Israeli pharmaceutical company, and then submitted it to the Food and Drug Administration in connection with a petition to block Teva's product. Some call the study flawed.
Professor Michael Carrier commented on the petition and research study Mylan filed concerning Teva, pointing out that such industry petitions frequently delay generic entry. The reason is that the FDA is required to review the petition material, no matter whether it is scientifically sound. In some cases, health regulators take weeks, months or even years to respond to the so-called Citizen Petitions.
Michael Carrier reviewed 15 years' worth of Citizen Petitions, and found that only a small minority of the filings actually come from individual citizens. Instead, he found more than two thirds come from brand name companies and most of those petitions seek to block cheaper generics from hitting the market.
"It's really about the brand company delaying the generic from entering the market,” Carrier said. “Because every day that they can delay generic entry could be millions of dollars lining its pockets.”
The video report is at
http://www.nbcnewyork.com/investigations/EpiPen-Cheap-Generic-Teva-Product-Mylan-Investigation-Drug-Cost-391758871.html
NBC, in a video report (see link below) says that Mylan and its business partners fought fiercely behind the scenes to block a cheaper generic from hitting the market. Mylan paid for opposition research on a generic EpiPen proposed by Teva, an Israeli pharmaceutical company, and then submitted it to the Food and Drug Administration in connection with a petition to block Teva's product. Some call the study flawed.
Professor Michael Carrier commented on the petition and research study Mylan filed concerning Teva, pointing out that such industry petitions frequently delay generic entry. The reason is that the FDA is required to review the petition material, no matter whether it is scientifically sound. In some cases, health regulators take weeks, months or even years to respond to the so-called Citizen Petitions.
Michael Carrier reviewed 15 years' worth of Citizen Petitions, and found that only a small minority of the filings actually come from individual citizens. Instead, he found more than two thirds come from brand name companies and most of those petitions seek to block cheaper generics from hitting the market.
"It's really about the brand company delaying the generic from entering the market,” Carrier said. “Because every day that they can delay generic entry could be millions of dollars lining its pockets.”
The video report is at
http://www.nbcnewyork.com/investigations/EpiPen-Cheap-Generic-Teva-Product-Mylan-Investigation-Drug-Cost-391758871.html
What happened to competitors to the high-priced Epipen?
Back in March of this year, Mylan wannabe rival Teva Pharmaceutical ($TEVA) ran into a hurdle that has kept the Mylan Epipen without a competitor. The Israeli generics giant Teva received an FDA rejection for its generic version. In that rejection, regulators flagged "certain major deficiencies." With serious problems to fix, the company expects its copycat to be "significantly delayed"--meaning it's not anticipating a launch before 2017.
That was a a break for Mylan, which didn't have to deal with the $200 million in generics erosion that analysts were expecting.
And it's not the first break the company has caught lately. Back in November of 2015, Sanofi's ($SNY) Auvi-Q--the first real competition to EpiPen in years--ran into trouble, with an injector fault and hefty recall prompting the French drugmaker to pull it from the marketplace. Then, PDL BioPharma CEO John McLaughlin told investors that his company had received word that Sanofi was bailing on its marketing deal for the product altogether, putting the drug's future in limbo.
The good news, if any , is in the potential for a competitive alternative to Epipen.
See http://www.fiercepharma.com/sales-and-marketing/fda-swats-down-teva-s-epipen-copy-putting-mylan-cruise-control
Back in March of this year, Mylan wannabe rival Teva Pharmaceutical ($TEVA) ran into a hurdle that has kept the Mylan Epipen without a competitor. The Israeli generics giant Teva received an FDA rejection for its generic version. In that rejection, regulators flagged "certain major deficiencies." With serious problems to fix, the company expects its copycat to be "significantly delayed"--meaning it's not anticipating a launch before 2017.
That was a a break for Mylan, which didn't have to deal with the $200 million in generics erosion that analysts were expecting.
And it's not the first break the company has caught lately. Back in November of 2015, Sanofi's ($SNY) Auvi-Q--the first real competition to EpiPen in years--ran into trouble, with an injector fault and hefty recall prompting the French drugmaker to pull it from the marketplace. Then, PDL BioPharma CEO John McLaughlin told investors that his company had received word that Sanofi was bailing on its marketing deal for the product altogether, putting the drug's future in limbo.
The good news, if any , is in the potential for a competitive alternative to Epipen.
See http://www.fiercepharma.com/sales-and-marketing/fda-swats-down-teva-s-epipen-copy-putting-mylan-cruise-control
How Taylor Swift's lawyers reacted to alt-right fandom
Usually libel laws come into play when libelous comments come from people hostile to the target of the offending comments. But for pop idol Taylor Swift, the problem is "alt-right" fandom. When a teenager named Emily Pattinson began overlaying quotes by Adolf Hitler on Pinterest photos of Taylor Swift (as a joke, Buzzfeed reported) Swift's lawyer, J. Douglas Baldridge, sent Pinterest a stern letter, asking for the images to be removed. It said, in part:
“The association of Ms. Swift with Adolf Hitler undisputedly is ‘harmful,' ‘abusive,' ‘ethnically offensive,' ‘humiliating to other people,' ‘libelous,' and no doubt ‘otherwise objectionable.' It is of no import that Ms. Swift may be a public figure or that Pinterest conveniently now argues that the Offending Material is mere satire or parody. Public figures have rights. And, there are certain historical figures, such as Adolf Hitler, Charles Manson and the like, who are universally identified in the case law and popular culture as lightning rods for emotional and negative reaction.”
Pinterest refused to take the images down, citing parody laws.
But those same images then appeared on The Daily Stormer, which bills itself as “the world's most visited alt-right website.” Another lawyer letter was sent to the Daily Stormer, which took the images down. The lawyer letter appears on the Stormer site at http://www.dailystormer.com/taylor-swifts-jewish-lawyers-cracking-down-on-the-daily-stormer/ (Warning: the Stormer site is likely to offend anyone who is not a neo-Nazi.)
See more at: http://digitaledition.chicagotribune.com/tribune/article_popover.aspx?guid=d6985681-28cd-46f1-a781-02d63121b8af#sthash.lDZbKI15.dpuf
One writer contributed to the the discussion by suggesting that Taylor Swift is actually Jewish, having changed her name from Swiftowitz. https://medium.com/@resnikoff/nobody-talks-about-the-fact-that-taylor-swift-is-jewish-heres-why-it-matters-64aececd20b#.52qofjoh8
The Swiftowitz article may reinforce the point that in the world of blogs it is possible to say almost anything about anyone.
Posted by Don Allen Resnikoff
Usually libel laws come into play when libelous comments come from people hostile to the target of the offending comments. But for pop idol Taylor Swift, the problem is "alt-right" fandom. When a teenager named Emily Pattinson began overlaying quotes by Adolf Hitler on Pinterest photos of Taylor Swift (as a joke, Buzzfeed reported) Swift's lawyer, J. Douglas Baldridge, sent Pinterest a stern letter, asking for the images to be removed. It said, in part:
“The association of Ms. Swift with Adolf Hitler undisputedly is ‘harmful,' ‘abusive,' ‘ethnically offensive,' ‘humiliating to other people,' ‘libelous,' and no doubt ‘otherwise objectionable.' It is of no import that Ms. Swift may be a public figure or that Pinterest conveniently now argues that the Offending Material is mere satire or parody. Public figures have rights. And, there are certain historical figures, such as Adolf Hitler, Charles Manson and the like, who are universally identified in the case law and popular culture as lightning rods for emotional and negative reaction.”
Pinterest refused to take the images down, citing parody laws.
But those same images then appeared on The Daily Stormer, which bills itself as “the world's most visited alt-right website.” Another lawyer letter was sent to the Daily Stormer, which took the images down. The lawyer letter appears on the Stormer site at http://www.dailystormer.com/taylor-swifts-jewish-lawyers-cracking-down-on-the-daily-stormer/ (Warning: the Stormer site is likely to offend anyone who is not a neo-Nazi.)
See more at: http://digitaledition.chicagotribune.com/tribune/article_popover.aspx?guid=d6985681-28cd-46f1-a781-02d63121b8af#sthash.lDZbKI15.dpuf
One writer contributed to the the discussion by suggesting that Taylor Swift is actually Jewish, having changed her name from Swiftowitz. https://medium.com/@resnikoff/nobody-talks-about-the-fact-that-taylor-swift-is-jewish-heres-why-it-matters-64aececd20b#.52qofjoh8
The Swiftowitz article may reinforce the point that in the world of blogs it is possible to say almost anything about anyone.
Posted by Don Allen Resnikoff
State Medicaid agencies could spend up to $5 million to cover mosquito repellent
With more reports of non-travel related Zika cases popping up in the U.S., state Medicaid agencies are preparing to spend millions to prevent spread of the virus. But some experts say that money could be better spent elsewhere.
* * *
“The vast majority of the U.S. population is at very low risk for acquiring Zika infection in the absence of travel, thus, as a generalization, any widespread prevention spending on individual Medicaid consumers will bring mostly cost and little efficacy,” said Dr. Matt Collins, an infectious diseases fellow at UNC School of Medicine's Division of Infectious Diseases.
The coverage decision comes at a time when costs of the products are increasing. For instance, the price of Off Deep Woods brand spray averaged $6.52 per unit, up 33 cents from the previous year according to Market researcher IRI, which tracks sales in brick-and-mortar retail stores in the U.S. The average price for bug spray purchased online has jumped to $12.66, up 23% over the last year, according to data analytics firm 1010data.
http://www.modernhealthcare.com/article/20160825/NEWS/160829960?utm_source=modernhealthcare&utm_medium=email&utm_content=20160825-NEWS-160829960&utm_campaign=am
With more reports of non-travel related Zika cases popping up in the U.S., state Medicaid agencies are preparing to spend millions to prevent spread of the virus. But some experts say that money could be better spent elsewhere.
* * *
“The vast majority of the U.S. population is at very low risk for acquiring Zika infection in the absence of travel, thus, as a generalization, any widespread prevention spending on individual Medicaid consumers will bring mostly cost and little efficacy,” said Dr. Matt Collins, an infectious diseases fellow at UNC School of Medicine's Division of Infectious Diseases.
The coverage decision comes at a time when costs of the products are increasing. For instance, the price of Off Deep Woods brand spray averaged $6.52 per unit, up 33 cents from the previous year according to Market researcher IRI, which tracks sales in brick-and-mortar retail stores in the U.S. The average price for bug spray purchased online has jumped to $12.66, up 23% over the last year, according to data analytics firm 1010data.
http://www.modernhealthcare.com/article/20160825/NEWS/160829960?utm_source=modernhealthcare&utm_medium=email&utm_content=20160825-NEWS-160829960&utm_campaign=am
Public Citizen and DC Solar United Neighborhoods (DC SUN) follow on DC AG appeal filing and file Joint Petition with DC Court of Appeals for Review of Commission’s Order No. 18148, the PSC approval of the Exelon-Pepco merger
http://edocket.dcpsc.org/edocket/docketsheets_pdf_FS.asp?caseno=FC1119&docketno=1700&flag=D&show_result=Y
http://edocket.dcpsc.org/edocket/docketsheets_pdf_FS.asp?caseno=FC1119&docketno=1700&flag=D&show_result=Y
DC AG seeking DC Court of Appeals reversal of PSC approval of Exelon-Pepco merger
http://edocket.dcpsc.org/edocket/docketsheets_pdf_FS.asp?caseno=FC1119&docketno=1697&flag=D&show_result=Y …
http://edocket.dcpsc.org/edocket/docketsheets_pdf_FS.asp?caseno=FC1119&docketno=1697&flag=D&show_result=Y …
From Consumer Health: CareFirst Rate Hearing
The Maryland Insurance Administration held a second rate review hearing on Monday to address the revised increase on rates requested by CareFirst. Sarah Li, Chief Actuary for the Maryland Insurance Administration, opened the hearing with a number of specific questions including some that advocates share:
- Why are CareFirst's Maryland premiums so much higher than those for DC subscribers?
- Are Marylanders being asked to subsidize DC residents' premiums, as the DC Insurance Commissioner has frozen CareFirst's rates for 2017?
In response, several consumers provided their individual perspectives on the negative impact CareFirst's requested rates would have on their own families and others like them, including small businesses who insure through the individual market. Chris Jakubiak, president of Jakubiak & Associates, Inc., has put off hiring additional employees because of the cost of health insurance, and Dan Meszler, a self-employed engineer, has had to leave the market entirely. Other consumers provided written comments on-line, as did the Health Education and Advocacy Unit of the Attorney General's Office, noting "Consumers who stay in these individual plans ... will never get their money back if excessive increases are allowed based on inaccurate or erroneous data and assumptions."
Consumer Health First first presented its case for rejection of the rate request in its Baltimore Sun OpEd. At Monday's hearing, we strongly urged Commissioner Redmer to not only reject CareFirst's new request, but to cut its initial request. Jeananne Sciabarra, Executive Director, was joined by Jay Angoff of Mehri & Skalet, who prepared our initial analysis. They reiterated the negative impact that the proposed premiums would have on consumers' pocketbooks and then laid out a substantive case for rejecting the CareFirst request. In addition to the affordability issue, they noted:
- Rate increases of this magnitude will push the healthiest consumers from the market altogether, or to other carriers, leaving CareFirst with only the sickest members, thus requiring large increases next year, and so on. In addition, these rates will discourage the young and healthy from entering the market, disrupting one of the core principles of the Affordable Care Act.
- These rate increases contradict the CMS report from last Thursday showing that, nationwide between 2014 and 2015, there has been little change in the cost per enrollee in the ACA individual market.
As Mr. Angoff noted "There is just such a disconnect of such a magnitude between the CMS data and the CareFirst data, it just doesn't make sense."
For a complete summary of Ms. Sciabarra's testimony, click here.
John Oliver on auto loans
Auto lenders can steer vulnerable people into crushing debt. Keegan-Michael Key and Bob Balaban help John Oliver show exactly how. Connect with Last Week Tonight online...
https://www.youtube.com/watch?v=4U2eDJnwz_s
Auto lenders can steer vulnerable people into crushing debt. Keegan-Michael Key and Bob Balaban help John Oliver show exactly how. Connect with Last Week Tonight online...
https://www.youtube.com/watch?v=4U2eDJnwz_s
NYT: States compete for trusts business of the wealthy
Nevada has stoked an aggressive rivalry among a smattering of states to babysit the wealth of the nation’s top 1 percent, pressing public officials to pass laws, streamline regulations, lower fees and replace D.M.V.-level service with concierge treatment.
Yet even as more and more states seek ways to help the richest Americans protect their wealth from creditors, divorcing spouses and children, as well as some federal and state tax collectors, critics worry that the effort to attract the lucrative trust business is turning into a competitive game of giveaway.
“There is no doubt that many, many jurisdictions are committed to being at the bottom,” said Edward McCaffrey, a professor at the University of Southern California Gould School of Law. “I think the real question now is: ‘Where is the bottom?’”
The federal government leaves it to each state to draw up its own trust laws, and several have tried to go as far as they can without inciting accusations that they are abetting tax evasion or hiding assets, he said.
http://www.nytimes.com/2016/08/09/business/states-vie-to-protect-the-wealth-of-the-1-percent.html?ref=business
Nevada has stoked an aggressive rivalry among a smattering of states to babysit the wealth of the nation’s top 1 percent, pressing public officials to pass laws, streamline regulations, lower fees and replace D.M.V.-level service with concierge treatment.
Yet even as more and more states seek ways to help the richest Americans protect their wealth from creditors, divorcing spouses and children, as well as some federal and state tax collectors, critics worry that the effort to attract the lucrative trust business is turning into a competitive game of giveaway.
“There is no doubt that many, many jurisdictions are committed to being at the bottom,” said Edward McCaffrey, a professor at the University of Southern California Gould School of Law. “I think the real question now is: ‘Where is the bottom?’”
The federal government leaves it to each state to draw up its own trust laws, and several have tried to go as far as they can without inciting accusations that they are abetting tax evasion or hiding assets, he said.
http://www.nytimes.com/2016/08/09/business/states-vie-to-protect-the-wealth-of-the-1-percent.html?ref=business
Youtube's Fake "Practical Joke" D-I-Y videos
Maybe you've used Youtube do-it-yourself videos when you repaiired the toilet with new innards from the local hardware store, or when you installed new headlight bulbs in your auto. The advice in the videos was sensible and useful, and it might not occur to you that some Youtube diy videos are practical jokes that purposely provide erroneous information. But a few are. Here are the views of
Troy Cowan, Author of "Izola: The Story of John Wilkes Booth's Wife" about ThioJoe's purposefully misleading videos. [We have not checked whether Cowan's suggestion of jail is well founded in law, but we understand the sentiment]:
Thio Joe is a good looking, intelligent, well-informed young man. Unfortunately, he enjoys tricking people into wasting their time. If his disclaimer were easy to find, I would not be writing this.
Thio Joe’s websites should serve as a warning that there are people that propagate false information. Some do it for profit. Some mislead out of ignorance. As in Thio’s case, he betrays your trust for fun.
Shame on YouTube for allowing the criminal dissemination of false information. In my opinion, both Thio Joe and YouTube’s management belong in jail.
Maybe you've used Youtube do-it-yourself videos when you repaiired the toilet with new innards from the local hardware store, or when you installed new headlight bulbs in your auto. The advice in the videos was sensible and useful, and it might not occur to you that some Youtube diy videos are practical jokes that purposely provide erroneous information. But a few are. Here are the views of
Troy Cowan, Author of "Izola: The Story of John Wilkes Booth's Wife" about ThioJoe's purposefully misleading videos. [We have not checked whether Cowan's suggestion of jail is well founded in law, but we understand the sentiment]:
Thio Joe is a good looking, intelligent, well-informed young man. Unfortunately, he enjoys tricking people into wasting their time. If his disclaimer were easy to find, I would not be writing this.
Thio Joe’s websites should serve as a warning that there are people that propagate false information. Some do it for profit. Some mislead out of ignorance. As in Thio’s case, he betrays your trust for fun.
Shame on YouTube for allowing the criminal dissemination of false information. In my opinion, both Thio Joe and YouTube’s management belong in jail.
From Public Citizen Blog: Are Community Banks Perishing Under Dodd-Frank (the Statute That Created the CFPB)? Not According to White House Economists
Posted: 10 Aug 2016 01:56 PM PDT
Here. Excerpt from the Issue Brief:
Although opponents of financial reform often claim that it has harmed community banks, a closer and more comprehensive review of the economic evidence shows that community banks remain healthy. Critics typically point to declining numbers of community banks as evidence that new regulatory requirements are too restrictive. In reality, due to bank branching patterns, the number of institutions does not provide a comprehensive picture of the health of community banks, and other indicators like lending growth and geographic reach show that community banks remain quite strong. Many community banks—particularly those with assets between $100M and $10B—have continued to grow steadily, as evident by their substantial lending growth, increasing market share in agricultural and mortgage lending, and expansion into new counties. With these trends, access to community banks and the important services that they provide has remained robust across many communities. At the same time, longer-term trends in the banking industry over the past several decades—including bank branching deregulation, merger activity, and other factors—often have created long-term challenges for community banks, particularly for the smallest ones. Macroeconomic conditions in recent years have also contributed to the lower rate of new entry by small banks.
UPDATE: The American Bankers Association disagrees.
Click title for link
Posted: 10 Aug 2016 01:56 PM PDT
Here. Excerpt from the Issue Brief:
Although opponents of financial reform often claim that it has harmed community banks, a closer and more comprehensive review of the economic evidence shows that community banks remain healthy. Critics typically point to declining numbers of community banks as evidence that new regulatory requirements are too restrictive. In reality, due to bank branching patterns, the number of institutions does not provide a comprehensive picture of the health of community banks, and other indicators like lending growth and geographic reach show that community banks remain quite strong. Many community banks—particularly those with assets between $100M and $10B—have continued to grow steadily, as evident by their substantial lending growth, increasing market share in agricultural and mortgage lending, and expansion into new counties. With these trends, access to community banks and the important services that they provide has remained robust across many communities. At the same time, longer-term trends in the banking industry over the past several decades—including bank branching deregulation, merger activity, and other factors—often have created long-term challenges for community banks, particularly for the smallest ones. Macroeconomic conditions in recent years have also contributed to the lower rate of new entry by small banks.
UPDATE: The American Bankers Association disagrees.
Click title for link
Clinton Says She'll Move Beyond Dodd-Frank's Bank Rules
Former Secretary of State Hillary Clinton on Thursday said that she intends to tighten financial regulations if she wins the presidential election in November even as she hopes to roll back red tape in order to spur lending by community banks and credit unions.
Law 360 (paywall)
Former Secretary of State Hillary Clinton on Thursday said that she intends to tighten financial regulations if she wins the presidential election in November even as she hopes to roll back red tape in order to spur lending by community banks and credit unions.
Law 360 (paywall)
The Challenge of Health Records Interoperability
Excerpt from article by Sheetal Shah, MPH, Director of Interoperability at Remedy Partners
The U.S. Department of Health and Human Services in an April 2015 Report to Congress on Health Information Blocking noted that information blocking practiced by some healthcare providers and health IT developers undermines the national goal to achieve secure, appropriate and efficient sharing of electronic health information across the health care continuum.
Reasons for information blocking include concerns about the liability risk of data exchange. The 2015 Nationwide Interoperability Roadmap also points out “providers may believe interoperability will jeopardize competitive advantages they gain from exclusive access to patients' health information,” and technology developers can make it “challenging for providers to extract and share data, for instance, in order to prevent providers from easily switching to a competitor's product.”
Interoperability promises to be an issue at the forefront of healthcare transformation in 2016. The Medicare Access and CHIP Reauthorization Act (MACRA), signed by the President in April 2015, will take important steps toward streamlining and expanding the use of value-based payment and quality reporting programs. As it phases in, MACRA will consolidate current physician reporting programs, including the Medicare EHR Incentive Program, Physician Quality Reporting System (PQRS), and the Value Modifier into a unified Merit-Based Incentive Payment System (MIPS) and create incentives for providers to participate in eligible alternative payment models.
As these programs integrate providers across care settings, they will reach a provider base that includes critical providers ineligible for the Medicare and Medicaid EHR Incentive Program, such as many post-acute care and behavioral and mental health providers. In addition, the link to value-based payment promises to incentivize providers to invest in resolving interoperability challenges in their communities.5
The U.S. healthcare system is evolving. Coordinating care among all of a patient's providers, as well as including the patient in their care, is pivotal to improving the quality of care. To enable interoperability, Remedy Partners has developed Episode Connect which has integrated with every major EHR and is the only enterprise software that functions as a robust operating system for managing bundled payment programs.
It is imperative for providers across the healthcare continuum to consistently send and receive accurate and meaningful patient data. Otherwise we will fail to realize the benefits of interoperability: improvements in clinical decision-making and patient safety, operational process improvement, and support for value-based care.
http://www.modernhealthcare.com/article/20160713/SPONSORED/160719952?utm_source=modernhealthcare&utm_medium=email&utm_content=20160713-SPONSORED-160719952&utm_campaign=am
Excerpt from article by Sheetal Shah, MPH, Director of Interoperability at Remedy Partners
The U.S. Department of Health and Human Services in an April 2015 Report to Congress on Health Information Blocking noted that information blocking practiced by some healthcare providers and health IT developers undermines the national goal to achieve secure, appropriate and efficient sharing of electronic health information across the health care continuum.
Reasons for information blocking include concerns about the liability risk of data exchange. The 2015 Nationwide Interoperability Roadmap also points out “providers may believe interoperability will jeopardize competitive advantages they gain from exclusive access to patients' health information,” and technology developers can make it “challenging for providers to extract and share data, for instance, in order to prevent providers from easily switching to a competitor's product.”
Interoperability promises to be an issue at the forefront of healthcare transformation in 2016. The Medicare Access and CHIP Reauthorization Act (MACRA), signed by the President in April 2015, will take important steps toward streamlining and expanding the use of value-based payment and quality reporting programs. As it phases in, MACRA will consolidate current physician reporting programs, including the Medicare EHR Incentive Program, Physician Quality Reporting System (PQRS), and the Value Modifier into a unified Merit-Based Incentive Payment System (MIPS) and create incentives for providers to participate in eligible alternative payment models.
As these programs integrate providers across care settings, they will reach a provider base that includes critical providers ineligible for the Medicare and Medicaid EHR Incentive Program, such as many post-acute care and behavioral and mental health providers. In addition, the link to value-based payment promises to incentivize providers to invest in resolving interoperability challenges in their communities.5
The U.S. healthcare system is evolving. Coordinating care among all of a patient's providers, as well as including the patient in their care, is pivotal to improving the quality of care. To enable interoperability, Remedy Partners has developed Episode Connect which has integrated with every major EHR and is the only enterprise software that functions as a robust operating system for managing bundled payment programs.
It is imperative for providers across the healthcare continuum to consistently send and receive accurate and meaningful patient data. Otherwise we will fail to realize the benefits of interoperability: improvements in clinical decision-making and patient safety, operational process improvement, and support for value-based care.
http://www.modernhealthcare.com/article/20160713/SPONSORED/160719952?utm_source=modernhealthcare&utm_medium=email&utm_content=20160713-SPONSORED-160719952&utm_campaign=am
FTC Sues 1-800 Contacts, Charging that It Harms Competition in Online Search Advertising Auctions and Restricts Truthful Advertising to Consumers
Bidding Agreements Are an Unfair Method of Competition, Agency Alleges
The Federal Trade Commission has sued 1-800 Contacts, the largest online retailer of contact lenses in the United States, alleging that it unlawfully orchestrated and now maintains a web of anticompetitive agreements with rival online contact lens sellers that suppress competition in certain online search advertising auctions and that restrict truthful and non-misleading internet advertising to consumers, resulting in some consumers paying higher retail prices for contact lenses.
According to the Federal Trade Commission’s administrative complaint, 1-800 Contacts entered into bidding agreements with at least 14 competing online contact lens retailers that eliminate competition in auctions to place advertisements on the search results page generated by online search engines such as Google and Bing. The complaint alleges that these bidding agreements unreasonably restrain price competition in internet search auctions, and restrict truthful and non-misleading advertising to consumers, constituting an unfair method of competition in violation of federal law.
See https://www.ftc.gov/news-events/press-releases/2016/08/ftc-sues-1-800-contacts-charging-it-harms-competition-online
Bidding Agreements Are an Unfair Method of Competition, Agency Alleges
The Federal Trade Commission has sued 1-800 Contacts, the largest online retailer of contact lenses in the United States, alleging that it unlawfully orchestrated and now maintains a web of anticompetitive agreements with rival online contact lens sellers that suppress competition in certain online search advertising auctions and that restrict truthful and non-misleading internet advertising to consumers, resulting in some consumers paying higher retail prices for contact lenses.
According to the Federal Trade Commission’s administrative complaint, 1-800 Contacts entered into bidding agreements with at least 14 competing online contact lens retailers that eliminate competition in auctions to place advertisements on the search results page generated by online search engines such as Google and Bing. The complaint alleges that these bidding agreements unreasonably restrain price competition in internet search auctions, and restrict truthful and non-misleading advertising to consumers, constituting an unfair method of competition in violation of federal law.
See https://www.ftc.gov/news-events/press-releases/2016/08/ftc-sues-1-800-contacts-charging-it-harms-competition-online
Teva’s Cephalon to pay $125m settlement with 48 states over generic delays
US State of Georgia Attorney General Sam Olens yesterday announced that Georgia has joined 47 other states in a $125 million settlement with drug manufacturer Cephalon and affiliated companies, now part of Teva Pharmaceutical Industries.
The settlement ends a multistate investigation into anti-competitive conduct by Cephalon to protect the monopoly profits it earned from its landmark wakefulness drug, Provigil. Cephalon’s conduct delayed generic versions of its sleep disorder drug Provigil from entering the market for several years.
As patent and regulatory barriers that prevented generic competition to Provigil neared expiration, Cephalon intentionally defrauded the Patent and Trademark Office to secure an additional patent, which a court subsequently deemed invalid and unenforceable, said AG Olens. Before that court finding, Cephalon was able to delay generic competition for nearly six years by filing patent infringement lawsuits against all potential generic competitors.
Cephalon settled those lawsuits in 2005 and early 2006 by paying the generic competitors to delay sale of their generic versions of Provigil until at least April 2012. Because of that delayed entry, consumers, states and others paid hundreds of millions more for Provigil than they would have had generic versions of the drug launched by early 2006, as expected.
This multistate settlement was facilitated by litigation brought against Cephalon by the Federal Trade Commission. In May 2015, the FTC settled its suit against Cephalon for injunctive relief and $1.2 billion, which was paid into an escrow account. The FTC settlement allowed for those escrow funds to be distributed for settlement of certain related cases and government investigations, such as those of the 48 states.
Full Content: The Pharma Letter ; preceding summary by CPI
US State of Georgia Attorney General Sam Olens yesterday announced that Georgia has joined 47 other states in a $125 million settlement with drug manufacturer Cephalon and affiliated companies, now part of Teva Pharmaceutical Industries.
The settlement ends a multistate investigation into anti-competitive conduct by Cephalon to protect the monopoly profits it earned from its landmark wakefulness drug, Provigil. Cephalon’s conduct delayed generic versions of its sleep disorder drug Provigil from entering the market for several years.
As patent and regulatory barriers that prevented generic competition to Provigil neared expiration, Cephalon intentionally defrauded the Patent and Trademark Office to secure an additional patent, which a court subsequently deemed invalid and unenforceable, said AG Olens. Before that court finding, Cephalon was able to delay generic competition for nearly six years by filing patent infringement lawsuits against all potential generic competitors.
Cephalon settled those lawsuits in 2005 and early 2006 by paying the generic competitors to delay sale of their generic versions of Provigil until at least April 2012. Because of that delayed entry, consumers, states and others paid hundreds of millions more for Provigil than they would have had generic versions of the drug launched by early 2006, as expected.
This multistate settlement was facilitated by litigation brought against Cephalon by the Federal Trade Commission. In May 2015, the FTC settled its suit against Cephalon for injunctive relief and $1.2 billion, which was paid into an escrow account. The FTC settlement allowed for those escrow funds to be distributed for settlement of certain related cases and government investigations, such as those of the 48 states.
Full Content: The Pharma Letter ; preceding summary by CPI
Daily fantasy sports is now legal — and regulated — in New York
On Aug. 3, 2016, the state enacted a law that allows DFS sites to serve New Yorkers once again.
During much of the turmoil the daily fantasy sports industry experienced in late 2015 and into 2016, New York has been the epicenter.
The legal issues experienced by the likes of DraftKings and FanDuel pretty much started with Attorney General Eric Schneiderman issuing cease-and-desist orders in November, and they have expanded across the country.
New York is one of the largest markets for paid-entry DFS, so the return of NY for DFS sites is a big deal ahead of NFL season.
http://www.legalsportsreport.com/ny/
On Aug. 3, 2016, the state enacted a law that allows DFS sites to serve New Yorkers once again.
During much of the turmoil the daily fantasy sports industry experienced in late 2015 and into 2016, New York has been the epicenter.
The legal issues experienced by the likes of DraftKings and FanDuel pretty much started with Attorney General Eric Schneiderman issuing cease-and-desist orders in November, and they have expanded across the country.
New York is one of the largest markets for paid-entry DFS, so the return of NY for DFS sites is a big deal ahead of NFL season.
http://www.legalsportsreport.com/ny/
Puerto Rico as the Greece of the US
Policy experts have written about the problems of poor countries in the EU, and how a single currency and draconian austerity policies limiting government expenditures are harsh toward poor countries like Greece, Spain, and Italy. Often the policy experts say that the single currency solution works better in the US because of differing elements of political integration among the states.
But New York Times writer Mary Walsh sees similarities between Greece and Puerto Rico:
The similarities with Greece are uncanny: a sunny vacation paradise that suddenly goes bust, a huge debt taken out in a currency — the euro, the dollar — that’s too strong for the local economy. The similarities with Greece are uncanny: a sunny vacation paradise that suddenly goes bust, a huge debt taken out in a currency — the euro, the dollar — that’s too strong for the local economy.
The article is at http://www.nytimes.com/2016/08/07/business/dealbook/life-in-the-miasma-of-puerto-ricos-debt.html?_r=0
Policy experts have written about the problems of poor countries in the EU, and how a single currency and draconian austerity policies limiting government expenditures are harsh toward poor countries like Greece, Spain, and Italy. Often the policy experts say that the single currency solution works better in the US because of differing elements of political integration among the states.
But New York Times writer Mary Walsh sees similarities between Greece and Puerto Rico:
The similarities with Greece are uncanny: a sunny vacation paradise that suddenly goes bust, a huge debt taken out in a currency — the euro, the dollar — that’s too strong for the local economy. The similarities with Greece are uncanny: a sunny vacation paradise that suddenly goes bust, a huge debt taken out in a currency — the euro, the dollar — that’s too strong for the local economy.
The article is at http://www.nytimes.com/2016/08/07/business/dealbook/life-in-the-miasma-of-puerto-ricos-debt.html?_r=0
DOJ makes a dramatic change for Music Licensing Official
The Dept. of Justice’s antitrust office has issued a statement explaining the reasons it believes 100 percent licensing, or “full-works licensing,” is required under the BMI consent decree.
click title for CPI link
The Dept. of Justice’s antitrust office has issued a statement explaining the reasons it believes 100 percent licensing, or “full-works licensing,” is required under the BMI consent decree.
click title for CPI link
Donald Trump Can’t Escape Trump U. Class Action
A California federal judge on Tuesday 8-2-2016 denied Donald Trump's bid to dodge a class action targeting the advertising strategies of defunct, for-profit education company Trump University and issued a separate order denying media companies’ requests to make public the presidential candidate’s videotaped depositions.
From Law 360
A California federal judge on Tuesday 8-2-2016 denied Donald Trump's bid to dodge a class action targeting the advertising strategies of defunct, for-profit education company Trump University and issued a separate order denying media companies’ requests to make public the presidential candidate’s videotaped depositions.
From Law 360
Judge refuses Uber arbitration bid in price fixing case
By CPI on July 31, 2016
U.S. District Judge Jed Rakoff in Manhattan said that Uber Technologies Inc. can’t require a Connecticut customer, Spencer Meyer, who accused the company of price-fixing, to resolve the fight in arbitration. Rakoff denied Uber’s request to throw out the antitrust lawsuit over the company’s practice of raising prices during periods of high demand and have the matter sent to an arbitrator.
The ruling comes as Uber has sought to enforce its arbitration agreements with drivers in several states.
Rakoff ruled Uber’s registration process didn’t provide sufficient notice to Meyer that he was waiving his right to have his claim heard by a jury in court.
https://www.competitionpolicyinternational.com/us-federal-judge-says-uber-stays-in-court/
By CPI on July 31, 2016
U.S. District Judge Jed Rakoff in Manhattan said that Uber Technologies Inc. can’t require a Connecticut customer, Spencer Meyer, who accused the company of price-fixing, to resolve the fight in arbitration. Rakoff denied Uber’s request to throw out the antitrust lawsuit over the company’s practice of raising prices during periods of high demand and have the matter sent to an arbitrator.
The ruling comes as Uber has sought to enforce its arbitration agreements with drivers in several states.
Rakoff ruled Uber’s registration process didn’t provide sufficient notice to Meyer that he was waiving his right to have his claim heard by a jury in court.
https://www.competitionpolicyinternational.com/us-federal-judge-says-uber-stays-in-court/
Drinking water and the law
Law prof Margot Pollans has written Drinking Water Protection and Agricultural Exceptionalism Here's the abstract:
Providing safe drinking water is a basic responsibility of government. The US system is inefficient, unfair, and sets up local water utilities to fail. Under the Safe Drinking Water Act these utilities bear primary responsibility for providing safe water, but the Act provides few tools for utilities to engage in pollution prevention and instead emphasizes water filtration and treatment. At the same time, the Clean Water Act, which regulates water pollution, broadly exempts nonpoint source pollution in general and agricultural water contamination in particular from its strict requirements. As a result, water utilities are often the first line of defense against agricultural water contamination’s many human health harms. This allocation of responsibility is inefficient and unfair. It is inefficient because it prioritizes end-of-line clean up even where pollution prevention would be less expensive. It also fails to account for the ancillary benefits of pollution prevention, including, among other things, protection of aquatic habitats. This allocation of responsibility is inequitable not only because of its disparate impact on low-income and minority communities but also because of its arbitrary application of the polluter pays principle. Although there are some limited legal mechanisms by which water utilities can shift costs and clean up responsibility to farmers, the legal regime creates a default in favor of end-of-line cleanup. To address these concerns, this Article calls for a suite of legal reforms that would both empower water utilities to adequately protect their source waters and revoke the special status of farms in environmental law.
Law prof Margot Pollans has written Drinking Water Protection and Agricultural Exceptionalism Here's the abstract:
Providing safe drinking water is a basic responsibility of government. The US system is inefficient, unfair, and sets up local water utilities to fail. Under the Safe Drinking Water Act these utilities bear primary responsibility for providing safe water, but the Act provides few tools for utilities to engage in pollution prevention and instead emphasizes water filtration and treatment. At the same time, the Clean Water Act, which regulates water pollution, broadly exempts nonpoint source pollution in general and agricultural water contamination in particular from its strict requirements. As a result, water utilities are often the first line of defense against agricultural water contamination’s many human health harms. This allocation of responsibility is inefficient and unfair. It is inefficient because it prioritizes end-of-line clean up even where pollution prevention would be less expensive. It also fails to account for the ancillary benefits of pollution prevention, including, among other things, protection of aquatic habitats. This allocation of responsibility is inequitable not only because of its disparate impact on low-income and minority communities but also because of its arbitrary application of the polluter pays principle. Although there are some limited legal mechanisms by which water utilities can shift costs and clean up responsibility to farmers, the legal regime creates a default in favor of end-of-line cleanup. To address these concerns, this Article calls for a suite of legal reforms that would both empower water utilities to adequately protect their source waters and revoke the special status of farms in environmental law.
States join DOJ in insurance anti-merger lawsuit
The DOJ aims to stop the Aetna and Humana $37 billion merger and the $48 billion partnership of Cigna and Anthem, claiming concerns that they will reduce competition in the Medicare Advantage market.
The US Justice Department has officially filed lawsuits to block the proposed multi-billion-dollar mergers between four major health insurance companies, claiming these deals violate antitrust laws and will harm competition and affordability for consumers.
Some of the states joining in the case are Delaware, Georgia, Illinois, Iowa, Ohio, Pennsylvania and Virginia, along with the District of Columbia.
https://www.competitionpolicyinternational.com/us-states-join-doj-in-insurance-anti-merger-lawsuit/
The DOJ aims to stop the Aetna and Humana $37 billion merger and the $48 billion partnership of Cigna and Anthem, claiming concerns that they will reduce competition in the Medicare Advantage market.
The US Justice Department has officially filed lawsuits to block the proposed multi-billion-dollar mergers between four major health insurance companies, claiming these deals violate antitrust laws and will harm competition and affordability for consumers.
Some of the states joining in the case are Delaware, Georgia, Illinois, Iowa, Ohio, Pennsylvania and Virginia, along with the District of Columbia.
https://www.competitionpolicyinternational.com/us-states-join-doj-in-insurance-anti-merger-lawsuit/
D.C. United has awarded a $150 million contract to Turner Construction Co.to build its Buzzard Point soccer stadium in DC
This is an important step toward the Major League Soccer team's goal of starting the 2018 season in the Capitol Riverfront.
The New York-based contractor, whose projects include Yankee Stadium in the Bronx and Lambeau Field's redevelopment in Green Bay, Wisconsin, is expected to start construction later this year. Kansas City-based Populous designed the 19,000-seat soccer-only stadium.
Turner posted $476 million in metro-area revenue last year, making it theregion's sixth-largest general contractor. It collaborated with Smoot Construction on the restoration of the Capitol dome and is building the Conrad Hotel at CityCenterDC.
The total stadium cost is expected to be about $300 million when land acquisition, remediation, site work and surrounding infrastructure are included. D.C. has agreed to pay $150 million for those costs while the team — owned by Erick Thohir, Jason Levien and William Chang — is covering the hard construction costs.
http://www.bizjournals.com/washington/breaking_ground/2016/07/d-c-united-picks-contractor-for-new-stadium-work.html
This is an important step toward the Major League Soccer team's goal of starting the 2018 season in the Capitol Riverfront.
The New York-based contractor, whose projects include Yankee Stadium in the Bronx and Lambeau Field's redevelopment in Green Bay, Wisconsin, is expected to start construction later this year. Kansas City-based Populous designed the 19,000-seat soccer-only stadium.
Turner posted $476 million in metro-area revenue last year, making it theregion's sixth-largest general contractor. It collaborated with Smoot Construction on the restoration of the Capitol dome and is building the Conrad Hotel at CityCenterDC.
The total stadium cost is expected to be about $300 million when land acquisition, remediation, site work and surrounding infrastructure are included. D.C. has agreed to pay $150 million for those costs while the team — owned by Erick Thohir, Jason Levien and William Chang — is covering the hard construction costs.
http://www.bizjournals.com/washington/breaking_ground/2016/07/d-c-united-picks-contractor-for-new-stadium-work.html
Massachusetts Attorney General Maura Healey, New York State Attorney General Eric Schneiderman, and Maryland Attorney General Brian Frosh have filed new law suits against VW
New York Attorney General Eric T. Schneiderman, Massachusetts Attorney General Maura Healey and Maryland Attorney General Brian Frosh recently announced lawsuits today against Volkswagen AG and its affiliates Audi AG and Porsche AG, as well as their American subsidiaries, for the automakers’ sale of diesel automobiles (including over 25,000 in New York, 15,000 in Massachusetts and 12,935 in Maryland) that were fitted with illegal “defeat devices” that concealed illegal amounts of harmful emissions these cars spewed– and then allegedly attempting to cover-up their behavior.
“The allegations against Volkswagen, Audi and Porsche reveal a culture of deeply-rooted corporate arrogance, combined with a conscious disregard for the rule of law and the protection of public health and the environment,” Attorney General Schneiderman said. “These suits should serve as a siren in every corporate board room, that if any company engages in this type of calculated and systematic illegality, we will bring the full force of the law—and seek the stiffest possible sanctions—to protect our citizens.”
“Volkswagen, Audi and Porsche defrauded thousands of Massachusetts consumers, polluted our air, and damaged our environment and then, to make matters worse, plotted a massive cover-up to mislead environmental regulators,” Attorney General Healey said. “With today’s action, we want to make clear to all auto manufacturers that violating laws designed to protect our environment and our public health is unacceptable and will be punished with significant penalties.”
See http://www.ag.ny.gov/press-release/ny-ag-schneiderman-massachusetts-ag-healey-maryland-ag-frosh-announce-suits-against
These suits follow the car companies’ partial settlements of claims for consumer relief and consumer deception penalties, as well as their agreement to establish a fund to mitigate the environmental damage caused by their admitted misconduct. Those earlier settlements did not resolve any of the claims for civil penalties that New York, Massachusetts and other states, as well as the EPA, may bring for the companies’ flagrant violations of state and federal environmental laws and regulations, nor did the settlements cover all of the vehicles equipped with emission control defeat devices.
Following is part of a press release by the DC Attorney General concerning the earlier settlements:
Tuesday, June 28, 2016
Affected Consumers to Receive $5,100 and Choice of Vehicle Buyback or Modification
Contact:
Rob Marus, Communications Director: (202) 724-5646; robert.marus@dc.gov
Andrew Phifer, Public Affairs Specialist: (202) 741-7652; andrew.phifer@dc.gov
WASHINGTON, DC – Attorney General Karl A. Racine announced today that the District and 42 states have reached a $570 million settlement with Volkswagen AG; Audi AG; Volkswagen Group of America, Inc.; Porsche AG; and Porsche Cars, North America, Inc. (collectively referred to as Volkswagen). The settlement resolves allegations that Volkswagen violated District and state consumer protection laws by marketing, selling and leasing diesel motor vehicles equipped with illegal emission defeat devices.
The Office of the Attorney General (OAG) for the District of Columbia served on the Executive Committee that led the states’ investigation into Volkswagen. The agreement resolving the investigation, which includes monetary penalties and an injunction preventing Volkswagen from further violating the law, is part of a series of settlements that punish Volkswagen for its misconduct and provide cash payments to affected consumers.
In a separate settlement, Volkswagen agreed to buy back or modify certain diesel vehicles and pay restitution to consumers.
“This is an important victory for consumers in one of the worst cases of corporate wrongdoing we have ever seen,” Attorney General Racine said. “The District and our partner states, along with our federal partners, have sent a strong message that even large global companies must abide by federal and state laws designed to protect consumers from deceptive marketing.”
The DC press release: http://oag.dc.gov/release/attorney-general-racine-announces-570-million-national-settlement-volkswagen-25-million
New York Attorney General Eric T. Schneiderman, Massachusetts Attorney General Maura Healey and Maryland Attorney General Brian Frosh recently announced lawsuits today against Volkswagen AG and its affiliates Audi AG and Porsche AG, as well as their American subsidiaries, for the automakers’ sale of diesel automobiles (including over 25,000 in New York, 15,000 in Massachusetts and 12,935 in Maryland) that were fitted with illegal “defeat devices” that concealed illegal amounts of harmful emissions these cars spewed– and then allegedly attempting to cover-up their behavior.
“The allegations against Volkswagen, Audi and Porsche reveal a culture of deeply-rooted corporate arrogance, combined with a conscious disregard for the rule of law and the protection of public health and the environment,” Attorney General Schneiderman said. “These suits should serve as a siren in every corporate board room, that if any company engages in this type of calculated and systematic illegality, we will bring the full force of the law—and seek the stiffest possible sanctions—to protect our citizens.”
“Volkswagen, Audi and Porsche defrauded thousands of Massachusetts consumers, polluted our air, and damaged our environment and then, to make matters worse, plotted a massive cover-up to mislead environmental regulators,” Attorney General Healey said. “With today’s action, we want to make clear to all auto manufacturers that violating laws designed to protect our environment and our public health is unacceptable and will be punished with significant penalties.”
See http://www.ag.ny.gov/press-release/ny-ag-schneiderman-massachusetts-ag-healey-maryland-ag-frosh-announce-suits-against
These suits follow the car companies’ partial settlements of claims for consumer relief and consumer deception penalties, as well as their agreement to establish a fund to mitigate the environmental damage caused by their admitted misconduct. Those earlier settlements did not resolve any of the claims for civil penalties that New York, Massachusetts and other states, as well as the EPA, may bring for the companies’ flagrant violations of state and federal environmental laws and regulations, nor did the settlements cover all of the vehicles equipped with emission control defeat devices.
Following is part of a press release by the DC Attorney General concerning the earlier settlements:
Tuesday, June 28, 2016
Affected Consumers to Receive $5,100 and Choice of Vehicle Buyback or Modification
Contact:
Rob Marus, Communications Director: (202) 724-5646; robert.marus@dc.gov
Andrew Phifer, Public Affairs Specialist: (202) 741-7652; andrew.phifer@dc.gov
WASHINGTON, DC – Attorney General Karl A. Racine announced today that the District and 42 states have reached a $570 million settlement with Volkswagen AG; Audi AG; Volkswagen Group of America, Inc.; Porsche AG; and Porsche Cars, North America, Inc. (collectively referred to as Volkswagen). The settlement resolves allegations that Volkswagen violated District and state consumer protection laws by marketing, selling and leasing diesel motor vehicles equipped with illegal emission defeat devices.
The Office of the Attorney General (OAG) for the District of Columbia served on the Executive Committee that led the states’ investigation into Volkswagen. The agreement resolving the investigation, which includes monetary penalties and an injunction preventing Volkswagen from further violating the law, is part of a series of settlements that punish Volkswagen for its misconduct and provide cash payments to affected consumers.
In a separate settlement, Volkswagen agreed to buy back or modify certain diesel vehicles and pay restitution to consumers.
“This is an important victory for consumers in one of the worst cases of corporate wrongdoing we have ever seen,” Attorney General Racine said. “The District and our partner states, along with our federal partners, have sent a strong message that even large global companies must abide by federal and state laws designed to protect consumers from deceptive marketing.”
The DC press release: http://oag.dc.gov/release/attorney-general-racine-announces-570-million-national-settlement-volkswagen-25-million
AAI Says DOJ's Actions in Beer and Health Insurance are Essential Steps in Antitrust Enforcement
From AAI: The U.S. Department of Justice (DOJ) took critical, needed steps this week to address three anticompetitive mega-mergers. "The DOJ's actions signal enforcement that takes seriously the importance of protecting consumers by promoting competition, innovation, and market entry," said AAI President and economist Diana Moss. "The Antitrust Division has fulfilled its important role as 'referee' in the markets."
The AAI advocated for strong antitrust enforcement in the proposed mergers of beer giants AB InBev-MillerCoors and health insurers Anthem-Cigna and Aetna-Humana. The AAI alsotestified before the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights on the proposed beer merger.
Moss noted the government's strong complaints in the health insurance and beer mergers. "These mergers were presumptively illegal and would have harmed consumers, competition, and innovation," said Moss. The Anthem-Cigna and Aetna-Humana mergers would have narrowed the field of health insurance rivals from five to three, potentially raising prices to consumers, reducing quality and choice, and triggering additional, reactive consolidation in the healthcare supply chain.
From AAI: The U.S. Department of Justice (DOJ) took critical, needed steps this week to address three anticompetitive mega-mergers. "The DOJ's actions signal enforcement that takes seriously the importance of protecting consumers by promoting competition, innovation, and market entry," said AAI President and economist Diana Moss. "The Antitrust Division has fulfilled its important role as 'referee' in the markets."
The AAI advocated for strong antitrust enforcement in the proposed mergers of beer giants AB InBev-MillerCoors and health insurers Anthem-Cigna and Aetna-Humana. The AAI alsotestified before the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights on the proposed beer merger.
Moss noted the government's strong complaints in the health insurance and beer mergers. "These mergers were presumptively illegal and would have harmed consumers, competition, and innovation," said Moss. The Anthem-Cigna and Aetna-Humana mergers would have narrowed the field of health insurance rivals from five to three, potentially raising prices to consumers, reducing quality and choice, and triggering additional, reactive consolidation in the healthcare supply chain.
The NCAA, limitations on student athlete compensation, and the Rule of Reason: an essay by Herbert Hovencamp
This brief essay considers the use of antitrust’s rule of reason in assessing challenges to rule making by the NCAA. In particular, it looks at the O’Bannon case, which involved challenges to NCAA rules limiting the compensation of student athletes under the NCAA rubric that protects the “amateur” status of collegiate athletes.
+ READ MORE at https://www.competitionpolicyinternational.com/the-ncaa-and-the-rule-of-reason/
This brief essay considers the use of antitrust’s rule of reason in assessing challenges to rule making by the NCAA. In particular, it looks at the O’Bannon case, which involved challenges to NCAA rules limiting the compensation of student athletes under the NCAA rubric that protects the “amateur” status of collegiate athletes.
+ READ MORE at https://www.competitionpolicyinternational.com/the-ncaa-and-the-rule-of-reason/
Krugman: Strong stock market may not indicate a strong economy
Excerpt: The truth, in any case, is that there are three big points of slippage between stock prices and the success of the economy in general. First, stock prices reflect profits, not overall incomes. Second, they also reflect the availability of other investment opportunities — or the lack thereof. Finally, the relationship between stock prices and real investment that expands the economy’s capacity has gotten very tenuous.
Full op-ed at http://www.nytimes.com/2016/07/15/opinion/bull-market-blues.html
Excerpt: The truth, in any case, is that there are three big points of slippage between stock prices and the success of the economy in general. First, stock prices reflect profits, not overall incomes. Second, they also reflect the availability of other investment opportunities — or the lack thereof. Finally, the relationship between stock prices and real investment that expands the economy’s capacity has gotten very tenuous.
Full op-ed at http://www.nytimes.com/2016/07/15/opinion/bull-market-blues.html
HSBC Bankers Said to Be Facing Charges in $3.4 Billion Currency Case
Federal prosecutors are expected to charge two HSBC bankers with engaging in a front-running scheme related to a $3.4 billion foreign exchange transaction in 2011.
Mark Johnson, the global head of HSBC’s foreign exchange cash trading desk, and Stuart Scott, the former head of the bank’s Europe desk, will be charged with wire fraud conspiracy related to the currency transaction, which involved exchanging dollars for British pounds for an oil and gas company, said a person with direct knowledge of the matter who spoke on the condition of anonymity.
Mr. Johnson, who is a British citizen, was arrested by federal agents Tuesday night at Kennedy International Airport as he was boarding a flight to London, this person said. Mr. Johnson is expected to appear before a federal court in Brooklyn Wednesday afternoon.
Federal prosecutors are expected to assert that Mr. Johnson and Mr. Scott used the information about their client’s currency transaction to trade ahead, pocketing a $3 million profit for the bank. The bank also made $5 million in fees from the transaction. The client is not named, but it is an oil and gas company that needed to undertake the currency exchange after the sale of a subsidiary in India.
Federal prosecutors in Brooklyn and at the Justice Department in Washington will be bringing the charges.
http://www.nytimes.com/2016/07/21/business/dealbook/hsbc-foreign-exchange-investigation-currency.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=second-column-region®ion=top-news&WT.nav=top-news
Federal prosecutors are expected to charge two HSBC bankers with engaging in a front-running scheme related to a $3.4 billion foreign exchange transaction in 2011.
Mark Johnson, the global head of HSBC’s foreign exchange cash trading desk, and Stuart Scott, the former head of the bank’s Europe desk, will be charged with wire fraud conspiracy related to the currency transaction, which involved exchanging dollars for British pounds for an oil and gas company, said a person with direct knowledge of the matter who spoke on the condition of anonymity.
Mr. Johnson, who is a British citizen, was arrested by federal agents Tuesday night at Kennedy International Airport as he was boarding a flight to London, this person said. Mr. Johnson is expected to appear before a federal court in Brooklyn Wednesday afternoon.
Federal prosecutors are expected to assert that Mr. Johnson and Mr. Scott used the information about their client’s currency transaction to trade ahead, pocketing a $3 million profit for the bank. The bank also made $5 million in fees from the transaction. The client is not named, but it is an oil and gas company that needed to undertake the currency exchange after the sale of a subsidiary in India.
Federal prosecutors in Brooklyn and at the Justice Department in Washington will be bringing the charges.
http://www.nytimes.com/2016/07/21/business/dealbook/hsbc-foreign-exchange-investigation-currency.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=second-column-region®ion=top-news&WT.nav=top-news
Fake Wi-Fi networks expose convention delegates' hackability
Attendees to the Republican National Convention fell for a number of fake Wi-Fi networks set up by Avast Software to show how easily those using the networks could be hacked. The daylong experiment at Quicken Loans Arena and Cleveland airport snagged 1,200 victims with site names such as Google Starbucks, I vote Trump! free Internet, and Xfinitywifi.
From Tech Insider http://www.techinsider.io/avast-security-fake-wifi-2016-7
Attendees to the Republican National Convention fell for a number of fake Wi-Fi networks set up by Avast Software to show how easily those using the networks could be hacked. The daylong experiment at Quicken Loans Arena and Cleveland airport snagged 1,200 victims with site names such as Google Starbucks, I vote Trump! free Internet, and Xfinitywifi.
From Tech Insider http://www.techinsider.io/avast-security-fake-wifi-2016-7
Why should public money be used to build sports stadiums?
Many economists maintain that states and cities that help pay for new stadiums and arenas rarely get their money’s worth. Teams tout new jobs created by the arenas but construction jobs are temporary, and ushers and concession workers work far less than 40 hours a week. Continue reading →Why should public money be used to build sports stadiums?
Continue reading → (http://www.pbs.org/newshour/rundown/public-money-used-build-sports-stadiums/)
From the New York Times: A BANK TOO BIG TO JAIL
If you’ve ever wondered why the 2008 financial crisis generated almost no criminal prosecutions of large banks and their top executives, you should read the congressional report, “Too Big to Jail,” Gretchen Morgenson writes in Fair Game.
The report examines the Justice Department’s settlement with HSBC in 2012 after accusations that it laundered nearly $900 million for drug traffickers and processed transactions on behalf of countries subject to United States sanctions. It shows how regulators and prosecutors turned a potential criminal prosecution of HSBC into a watered-down settlement that insulated its executives and failed to take into account the full scope of the bank’s violations.
The bank and its American Subsidiary, HSBC Bank USA, agreed to pay almost $2 billion under the settlement, striking a deferred prosecution arrangement that remains in place. Under such deals, the government agrees to delay or forgo prosecution of a company if it promises to change its behavior.
The report concluded that the Justice Department’s leadership overruled an internal recommendation to prosecute HSBC, citing concerns “that prosecuting the bank ‘could result in a global financial disaster.'”
If you’ve ever wondered why the 2008 financial crisis generated almost no criminal prosecutions of large banks and their top executives, you should read the congressional report, “Too Big to Jail,” Gretchen Morgenson writes in Fair Game.
The report examines the Justice Department’s settlement with HSBC in 2012 after accusations that it laundered nearly $900 million for drug traffickers and processed transactions on behalf of countries subject to United States sanctions. It shows how regulators and prosecutors turned a potential criminal prosecution of HSBC into a watered-down settlement that insulated its executives and failed to take into account the full scope of the bank’s violations.
The bank and its American Subsidiary, HSBC Bank USA, agreed to pay almost $2 billion under the settlement, striking a deferred prosecution arrangement that remains in place. Under such deals, the government agrees to delay or forgo prosecution of a company if it promises to change its behavior.
The report concluded that the Justice Department’s leadership overruled an internal recommendation to prosecute HSBC, citing concerns “that prosecuting the bank ‘could result in a global financial disaster.'”
A U.S. appeals court in New York has reversed part of a bankruptcy court ruling that protected GM from some lawsuits over an ignition-switch defect
The 2nd U.S. Circuit Court of Appeals in Manhattan said barring plaintiffs from suing the automaker over crashes and lost vehicle value stemming from the faulty switch would violate their constitutional rights to due process, since they had not been notified of the defect prior to GM's 2009 bankruptcy.
The ruling effectively rebuffs GM's attempts to shield itself from hundreds of customer lawsuits over faulty ignition switches, and other vehicles components, on grounds that they were automatically barred by the company's 2009 bankruptcy sale to a new corporate entity.
"Due process applies even in a company's moment of crisis," the opinion stated.
From http://www.autonews.com/article/20160713/OEM11/160719947/gm-must-face-some-revived-claims-over-ignition-switches-u-s-court?utm_source=natlnewsletter&utm_medium=email&utm_content=auto&utm_campaign=WashingtonDC_20160714_0815
The 2nd U.S. Circuit Court of Appeals in Manhattan said barring plaintiffs from suing the automaker over crashes and lost vehicle value stemming from the faulty switch would violate their constitutional rights to due process, since they had not been notified of the defect prior to GM's 2009 bankruptcy.
The ruling effectively rebuffs GM's attempts to shield itself from hundreds of customer lawsuits over faulty ignition switches, and other vehicles components, on grounds that they were automatically barred by the company's 2009 bankruptcy sale to a new corporate entity.
"Due process applies even in a company's moment of crisis," the opinion stated.
From http://www.autonews.com/article/20160713/OEM11/160719947/gm-must-face-some-revived-claims-over-ignition-switches-u-s-court?utm_source=natlnewsletter&utm_medium=email&utm_content=auto&utm_campaign=WashingtonDC_20160714_0815
From PBS: Will the U.S. create a single-payer health system?
Most health policy analysts — including those who are sympathetic to the idea — say moving from the current U.S. public-private hybrid health system to one fully funded by the government in one step is basically impossible. Continue reading →
Most health policy analysts — including those who are sympathetic to the idea — say moving from the current U.S. public-private hybrid health system to one fully funded by the government in one step is basically impossible. Continue reading →
FROM NCLC: Toxic Transactions: How Land Installment Contracts Once Again Threaten Communities of Color
This NCLC report documents a new wave of predatory real estate lending, previously peddled to African-Americans during the 1930s to 1960s, as Wall Street investment companies move to profit off foreclosed homes. The report urges the Consumer Financial Protection Bureau (CFPB) to issue rules to protect vulnerable consumers across the nation.
Published: July 14, 2016
This NCLC report documents a new wave of predatory real estate lending, previously peddled to African-Americans during the 1930s to 1960s, as Wall Street investment companies move to profit off foreclosed homes. The report urges the Consumer Financial Protection Bureau (CFPB) to issue rules to protect vulnerable consumers across the nation.
Published: July 14, 2016
WNBC New York Recoups $1 Million for Consumers
In the three years since launching its consumer investigative unit, NBC's New York O&O WNBC has retrieved more than $1 million for all those folks out there who have been wronged. Toss in the money that WNJU, the company's New York Telemundo station, has recovered for its viewers, and the number rises to $2.5 million, the company said.
<http://www.cfmediaview.com/lp1.aspx?v=6_2270444555_99972_517>
From Public Citizen: John Oliver on some consumer law issues
Click the highlighted items following for John Oliver on (1) debt buyers, (2) credit reports, and (3) student loans.
Click the highlighted items following for John Oliver on (1) debt buyers, (2) credit reports, and (3) student loans.
Pepco looking to hike rates in D.C.
The D.C.-based utility company has asked the District government for an $85.5 million rate increase for D.C. residents, months after its $6.8 billion merger with Chicago-based Exelon Corp. The Public Service Commission will ultimately decide whether to approve the increase. Suburban residents won't see a rate increase until 2019.
Full article: http://www.bizjournals.com/washington/morning_call/2016/07/pepco-requests-rate-hike-in-the-district.html
The D.C.-based utility company has asked the District government for an $85.5 million rate increase for D.C. residents, months after its $6.8 billion merger with Chicago-based Exelon Corp. The Public Service Commission will ultimately decide whether to approve the increase. Suburban residents won't see a rate increase until 2019.
Full article: http://www.bizjournals.com/washington/morning_call/2016/07/pepco-requests-rate-hike-in-the-district.html
A reminder from earlier this year: Maryland chooses private team to build, operate light-rail Purple Line
Maryland Gov. Larry Hogan (R) announced earlier this year that the state has chosen a team of private companies to build, operate and maintain a light-rail Purple Line in the Washington suburbs for $3.3 billion over 36 years.
Under the winning bid — proposed by the team Purple Line Transit Partners and led by construction giant Fluor Corporation — the six-year construction project would begin late this year, and the 16-mile line would open for service by spring 2022.
If approved by the state’s Board of Public Works on April 6, the contract would allow the Maryland Transit Administration to secure about $900 million in recommended federal construction aid. That would put the final funding in place to build the region’s first suburb-to-suburb rail link. The Purple Line also would be the first rail line to connect spokes of the Metrorail system, which was designed to carry federal workers between suburbs and the city.
It would be only the second U.S. transit project to involve private financing; the other is in Denver.
Full article: https://www.washingtonpost.com/local/trafficandcommuting/maryland-chooses-private-team-to-build-operate-light-rail-purple-line/2016/03/02/d4dadd9e-d107-11e5-88cd-753e80cd29ad_story.html
Maryland Gov. Larry Hogan (R) announced earlier this year that the state has chosen a team of private companies to build, operate and maintain a light-rail Purple Line in the Washington suburbs for $3.3 billion over 36 years.
Under the winning bid — proposed by the team Purple Line Transit Partners and led by construction giant Fluor Corporation — the six-year construction project would begin late this year, and the 16-mile line would open for service by spring 2022.
If approved by the state’s Board of Public Works on April 6, the contract would allow the Maryland Transit Administration to secure about $900 million in recommended federal construction aid. That would put the final funding in place to build the region’s first suburb-to-suburb rail link. The Purple Line also would be the first rail line to connect spokes of the Metrorail system, which was designed to carry federal workers between suburbs and the city.
It would be only the second U.S. transit project to involve private financing; the other is in Denver.
Full article: https://www.washingtonpost.com/local/trafficandcommuting/maryland-chooses-private-team-to-build-operate-light-rail-purple-line/2016/03/02/d4dadd9e-d107-11e5-88cd-753e80cd29ad_story.html
Are ATM operators ready for EMV chip-card upgrades?
But while ATM hardware certification is largely finished, processors are still not all ready to handle EMV transactions at the ATM.
ISO EMV readiness right now is a work in progress and merchant-owned retail ATMs are still largely magnetic stripe.
So should ISOs and merchants rush to upgrade their ATMs to EMV prior to the Oct. 1 deadline?
Or, as with point of sale, will the card brands cap the number and dollar amount of chargebacks to non-EMV ATMs — or implement new safeguards — vindicating the "wait-and-see" approach of some deployers?
EMV may be coming to the U.S. but it would appear that the liability shift monster has been defanged and declawed. [Operators who miss deadlines may become liable for fraudulaent transactions.]
Full article: http://www.atmmarketplace.com/articles/emv-liability-shifts-a-backward-stampede-by-the-networks/?utm_source=Email_marketing&utm_campaign=EMNAAMC07072016005200&cmp=1&utm_medium=HTMLemail_
But while ATM hardware certification is largely finished, processors are still not all ready to handle EMV transactions at the ATM.
ISO EMV readiness right now is a work in progress and merchant-owned retail ATMs are still largely magnetic stripe.
So should ISOs and merchants rush to upgrade their ATMs to EMV prior to the Oct. 1 deadline?
Or, as with point of sale, will the card brands cap the number and dollar amount of chargebacks to non-EMV ATMs — or implement new safeguards — vindicating the "wait-and-see" approach of some deployers?
EMV may be coming to the U.S. but it would appear that the liability shift monster has been defanged and declawed. [Operators who miss deadlines may become liable for fraudulaent transactions.]
Full article: http://www.atmmarketplace.com/articles/emv-liability-shifts-a-backward-stampede-by-the-networks/?utm_source=Email_marketing&utm_campaign=EMNAAMC07072016005200&cmp=1&utm_medium=HTMLemail_
Justices Receive Another Petition on Surcharge Laws
Manatt Phelps & Phillips LLP
USA July 7 2016Could the U.S. Supreme Court take up the issue of state surcharge laws? The plaintiffs challenging the Texas law banning surcharges on credit card purchases certainly hope so, having filed a certiorari petition in Rowell v. Pettijohnafter their loss before the Fifth Circuit Court of Appeals.
What happened
A group of merchants filed suit arguing that the Texas surcharge law violates their free speech rights. While the law permits customers to be charged different prices depending on whether they pay with cash or use a credit card, merchants are prohibited from labeling the price difference as a "surcharge" for credit cards. Instead, merchants must describe the difference as a cash discount.
For example, "a merchant who charges two different prices for a widget depending on how the customer pays (for example, $100 for cash and $102 for credit) may say that the widget costs $102 and that there is a $2 discount for paying in cash," the merchants explained in their cert petition. "But if the merchant instead says that the widget costs $100 and there is a $2 surcharge for using credit to account for the swipe fee, the merchant has run afoul of the law."
Retailers ranging from a self-storage facility to a landscaping business told the court that the law is clearly a restriction on their free speech rights because any law regulating the ability of a merchant to truthfully convey price information runs headlong into the protections of the First Amendment. A federal district court and a panel of the Fifth Circuit disagreed, upholding the law as a limitation on conduct, not speech, and therefore constitutional.
"[T]he merchants simply object to their inability to characterize price differentials as a 'surcharge,' juxtaposed with a 'discount,' " a majority of the panel wrote, noting that the Texas law allows a merchant to "dual-price as it wishes," and achieve "the same ultimate economic result" whether expressed as a cash discount or credit card surcharge, concluding that the law "does not implicate the First Amendment."
Seeking review from the U.S. Supreme Court, the merchants filed a writ of certiorari, offering the Justices the following question to answer: "Do these state no-surcharge laws unconstitutionally restrict speech conveying price information (as the Eleventh Circuit has held), or do they regulate
only economic conduct (as the Second and Fifth Circuits have held)?"
In their petition, the Texas merchants emphasized that the Fifth Circuit's decision broadened a circuit split and has left the industry with a lack of clarity. Ten states have passed so-called surcharge bans. Courts in California and Florida have struck down the laws, with the Eleventh Circuit affirming the Florida decision, finding the state's law anunconstitutional restriction on speech.
However, other courts have reached the opposite conclusion. In addition to the Fifth Circuit decision, the Second Circuit affirmed a New York federal court finding that its state surcharge ban was valid.
Full article: http://www.lexology.com/library/detail.aspx?g=42cc9782-1c63-4b0e-bbd8-04518dabaf66
Manatt Phelps & Phillips LLP
USA July 7 2016Could the U.S. Supreme Court take up the issue of state surcharge laws? The plaintiffs challenging the Texas law banning surcharges on credit card purchases certainly hope so, having filed a certiorari petition in Rowell v. Pettijohnafter their loss before the Fifth Circuit Court of Appeals.
What happened
A group of merchants filed suit arguing that the Texas surcharge law violates their free speech rights. While the law permits customers to be charged different prices depending on whether they pay with cash or use a credit card, merchants are prohibited from labeling the price difference as a "surcharge" for credit cards. Instead, merchants must describe the difference as a cash discount.
For example, "a merchant who charges two different prices for a widget depending on how the customer pays (for example, $100 for cash and $102 for credit) may say that the widget costs $102 and that there is a $2 discount for paying in cash," the merchants explained in their cert petition. "But if the merchant instead says that the widget costs $100 and there is a $2 surcharge for using credit to account for the swipe fee, the merchant has run afoul of the law."
Retailers ranging from a self-storage facility to a landscaping business told the court that the law is clearly a restriction on their free speech rights because any law regulating the ability of a merchant to truthfully convey price information runs headlong into the protections of the First Amendment. A federal district court and a panel of the Fifth Circuit disagreed, upholding the law as a limitation on conduct, not speech, and therefore constitutional.
"[T]he merchants simply object to their inability to characterize price differentials as a 'surcharge,' juxtaposed with a 'discount,' " a majority of the panel wrote, noting that the Texas law allows a merchant to "dual-price as it wishes," and achieve "the same ultimate economic result" whether expressed as a cash discount or credit card surcharge, concluding that the law "does not implicate the First Amendment."
Seeking review from the U.S. Supreme Court, the merchants filed a writ of certiorari, offering the Justices the following question to answer: "Do these state no-surcharge laws unconstitutionally restrict speech conveying price information (as the Eleventh Circuit has held), or do they regulate
only economic conduct (as the Second and Fifth Circuits have held)?"
In their petition, the Texas merchants emphasized that the Fifth Circuit's decision broadened a circuit split and has left the industry with a lack of clarity. Ten states have passed so-called surcharge bans. Courts in California and Florida have struck down the laws, with the Eleventh Circuit affirming the Florida decision, finding the state's law anunconstitutional restriction on speech.
However, other courts have reached the opposite conclusion. In addition to the Fifth Circuit decision, the Second Circuit affirmed a New York federal court finding that its state surcharge ban was valid.
Full article: http://www.lexology.com/library/detail.aspx?g=42cc9782-1c63-4b0e-bbd8-04518dabaf66
Basis for the Financial Stability Oversight Council’s Rescission of Its Determination Regarding GE Capital Global Holdings
INTRODUCTION
Council Rescission of Determination On July 8, 2013, the Financial Stability Oversight Council (Council) made a final determination, pursuant to section 113 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), that material financial distress at General Electric Capital Corporation (GECC), the predecessor of GE Capital Global Holdings, LLC (GE Capital), 1 could pose a threat to U.S. financial stability and that GE Capital shall be subject to supervision by the Board of Governors of the Federal Reserve System (Board of Governors) and enhanced prudential standards. The Council released a public explanation of the basis for its final determination (Basis for Final Determination). At the time of the Council’s final determination, GE Capital, a wholly owned subsidiary of General Electric Corporation (GE), was one of the largest financial services companies in the United States, ranked by assets. GE Capital was also a significant source of credit to the U.S. economy, providing financing to more than 243,000 commercial customers, 201,000 small businesses through retail programs, and 57 million consumers in the United States. Since the Council’s final determination, GE Capital has fundamentally changed its business. Through a series of divestitures, a transformation of its funding model, and a corporate reorganization, the company has become a much less significant participant in financial markets and the economy. GE Capital has decreased its total assets by over 50 percent, shifted away from short-term funding, and reduced its interconnectedness with large financial institutions. Further, the company no longer owns any U.S. depository institutions and does not provide financing to consumers or small business customers in the United States.
For these reasons and those discussed below, the Council voted on June 28, 2016, to rescind its final determination that material financial distress at GE Capital could pose a threat to U.S. financial stability and that GE Capital shall be subject to supervision by the Board of Governors and enhanced prudential standards. In its annual reevaluation, the Council considered a broad range of information available through public and regulatory sources, as well as information provided by GE Capital and its regulators. The Council’s decision to rescind its final determination was based on extensive quantitative and qualitative analyses regarding GE Capital.
[footnotes omitted]
full document: https://www.treasury.gov/initiatives/fsoc/designations/Documents/GE%20Capital%20Public%20Rescission%20Basis.pdf?_cldee=ZG9ucmVzbmlrb2ZmQGRvbnJlc25pa29mZmxhdy5jb20%3d&utm_source=ClickDimensions&utm_medium=email&utm_campaign=Project%20Update%20%7C%20Financial%20Regulatory%20Reform%20Initiative
INTRODUCTION
Council Rescission of Determination On July 8, 2013, the Financial Stability Oversight Council (Council) made a final determination, pursuant to section 113 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), that material financial distress at General Electric Capital Corporation (GECC), the predecessor of GE Capital Global Holdings, LLC (GE Capital), 1 could pose a threat to U.S. financial stability and that GE Capital shall be subject to supervision by the Board of Governors of the Federal Reserve System (Board of Governors) and enhanced prudential standards. The Council released a public explanation of the basis for its final determination (Basis for Final Determination). At the time of the Council’s final determination, GE Capital, a wholly owned subsidiary of General Electric Corporation (GE), was one of the largest financial services companies in the United States, ranked by assets. GE Capital was also a significant source of credit to the U.S. economy, providing financing to more than 243,000 commercial customers, 201,000 small businesses through retail programs, and 57 million consumers in the United States. Since the Council’s final determination, GE Capital has fundamentally changed its business. Through a series of divestitures, a transformation of its funding model, and a corporate reorganization, the company has become a much less significant participant in financial markets and the economy. GE Capital has decreased its total assets by over 50 percent, shifted away from short-term funding, and reduced its interconnectedness with large financial institutions. Further, the company no longer owns any U.S. depository institutions and does not provide financing to consumers or small business customers in the United States.
For these reasons and those discussed below, the Council voted on June 28, 2016, to rescind its final determination that material financial distress at GE Capital could pose a threat to U.S. financial stability and that GE Capital shall be subject to supervision by the Board of Governors and enhanced prudential standards. In its annual reevaluation, the Council considered a broad range of information available through public and regulatory sources, as well as information provided by GE Capital and its regulators. The Council’s decision to rescind its final determination was based on extensive quantitative and qualitative analyses regarding GE Capital.
[footnotes omitted]
full document: https://www.treasury.gov/initiatives/fsoc/designations/Documents/GE%20Capital%20Public%20Rescission%20Basis.pdf?_cldee=ZG9ucmVzbmlrb2ZmQGRvbnJlc25pa29mZmxhdy5jb20%3d&utm_source=ClickDimensions&utm_medium=email&utm_campaign=Project%20Update%20%7C%20Financial%20Regulatory%20Reform%20Initiative
US Supreme Court court agrees to review ATM fee antitrust lawsuit
The US Supreme Court has agreed to hear appeals by Visa Inc, Mastercard Inc and several US banks seeking to throw out lawsuits claiming they conspired to inflate the prices of ATM access fees in violation of antitrust law.
The high court will hear the companies’ bid to overturn an August 2015 ruling by the US Court of Appeals for the District of Columbia Circuit that revived three related class action lawsuits.
The appeals court said a district court erred when it concluded that consumers had no standing to sue and had not adequately alleged antitrust violations. It remanded the three consolidated lawsuits to the district court for further proceedings.
The decision revived two class action suits brought by consumers and another one brought by independent ATM operators.
Their lawsuits accused Visa and MasterCard of adopting rules protecting themselves from competition with a lower-cost ATM network. The rules blocked ATM operators from charging less when ATM transactions were processed by networks competing with Visa and Mastercard, the lawsuits said.
The rules also benefited major banks, which were equity shareholders of Visa and Mastercard, the lawsuits said.
Full Content: Daily Mail
Disclosure: Don Resnikoff is affiliated with the firm representing ATM operators.
AAI TELLS COURT TO DISMISS STATE ACTION APPEAL (TELADOC V. TEXAS MEDICAL BOARD)
JUN 29 2016
RICK BRUNELL
RANDY STUTZ
AMICUS PROGRAM
EXEMPTIONS AND IMMUNITIES, HEALTH AND PHARMA
The American Antitrust Institute (AAI) filed an amicus brief in the Fifth Circuit Court of Appeals urging the court to dismiss an appeal of a lower court ruling denying state action “immunity” to the Texas Medical Board in connection with an antitrust challenge to the Board’s rules limiting telemedicine in Texas. If the court does not dismiss the appeal, AAI's brief offers guidance on how the “clear articulation” and “active supervision” prongs of the state action defense should be applied to regulatory boards controlled by market participants in light of the Supreme Court’s recent decision in North Carolina State Board of Dental Examiners.
According to the brief, orders rejecting a state action defense should not be automatically appealable under the collateral order doctrine. Rather, they should be treated like most other interlocutory orders, which can be appealed only under certain conditions, in the court’s discretion. The brief argues that to the extent Fifth Circuit case law permits automatic appeals of state action denials involving a certain category of public officials, state boards controlled by market participants are not in that category.
If the Court of Appeals decides to hear the appeal, the AAI urges the court to carefully apply the requirement that the State clearly articulate a policy to allow the anticompetitive conduct at issue. A prior Fifth Circuit decision, relied on by the Board, holds that a board’s general authority to regulate a profession clearly articulates such a policy. The AAI argues that this case has been effectively overruled, however, and that the requisite legislative intent to displace competition is not clearly articulated in a general grant of authority. The anticompetitive conduct must instead be the “inherent, logical, or ordinary result” of the agency’s authorizing legislation. The brief expresses doubt as to whether the Board has met that standard, particularly since the Board’s rules seem to ignore a legislative dictate to consider less restrictive alternatives.
As for active supervision, the AAI argues that, in theory, judicial review of agency rules may constitute active supervision if judicial review is sufficiently rigorous and may be readily obtained prior to the rule going into effect. While there is some prospect that judicial review under Texas law would meet this standard, the brief contends that it is unclear whether such rigorous review would be likely and hence the Board failed to satisfy its burden of proof on this point.
The brief was written by AAI’s Rick Brunell and Randy Stutz, with able assistance from research fellows Michael Altebrando and Kyle Virtue and intern Jonathan Wright.
Download Teledoc Amicus Brief (256.19 KB)
JUN 29 2016
RICK BRUNELL
RANDY STUTZ
AMICUS PROGRAM
EXEMPTIONS AND IMMUNITIES, HEALTH AND PHARMA
The American Antitrust Institute (AAI) filed an amicus brief in the Fifth Circuit Court of Appeals urging the court to dismiss an appeal of a lower court ruling denying state action “immunity” to the Texas Medical Board in connection with an antitrust challenge to the Board’s rules limiting telemedicine in Texas. If the court does not dismiss the appeal, AAI's brief offers guidance on how the “clear articulation” and “active supervision” prongs of the state action defense should be applied to regulatory boards controlled by market participants in light of the Supreme Court’s recent decision in North Carolina State Board of Dental Examiners.
According to the brief, orders rejecting a state action defense should not be automatically appealable under the collateral order doctrine. Rather, they should be treated like most other interlocutory orders, which can be appealed only under certain conditions, in the court’s discretion. The brief argues that to the extent Fifth Circuit case law permits automatic appeals of state action denials involving a certain category of public officials, state boards controlled by market participants are not in that category.
If the Court of Appeals decides to hear the appeal, the AAI urges the court to carefully apply the requirement that the State clearly articulate a policy to allow the anticompetitive conduct at issue. A prior Fifth Circuit decision, relied on by the Board, holds that a board’s general authority to regulate a profession clearly articulates such a policy. The AAI argues that this case has been effectively overruled, however, and that the requisite legislative intent to displace competition is not clearly articulated in a general grant of authority. The anticompetitive conduct must instead be the “inherent, logical, or ordinary result” of the agency’s authorizing legislation. The brief expresses doubt as to whether the Board has met that standard, particularly since the Board’s rules seem to ignore a legislative dictate to consider less restrictive alternatives.
As for active supervision, the AAI argues that, in theory, judicial review of agency rules may constitute active supervision if judicial review is sufficiently rigorous and may be readily obtained prior to the rule going into effect. While there is some prospect that judicial review under Texas law would meet this standard, the brief contends that it is unclear whether such rigorous review would be likely and hence the Board failed to satisfy its burden of proof on this point.
The brief was written by AAI’s Rick Brunell and Randy Stutz, with able assistance from research fellows Michael Altebrando and Kyle Virtue and intern Jonathan Wright.
Download Teledoc Amicus Brief (256.19 KB)
CMS updates rule allowing claims data to be sold
Data mining of patient medical records kept by the federal government will get a boost by the CMS, following the release of finalized changes to the so-called Qualified Entity Program.
The final rule released Friday authorizes certain CMS-approved organizations – including for-profit companies – to buy Medicare claims and other federal data at a price that matches the governments' cost in processing the data. These “qualified entities” can then combine it with patient data from insurance companies, providers and other sources, and then resell that data to those organizations and others, including employers and devicemakers.
Full article: http://www.modernhealthcare.com/article/20160701/NEWS/160709998?utm_source=modernhealthcare&utm_medium=email&utm_content=20160701-NEWS-160709998&utm_campaign=mh-alert
Data mining of patient medical records kept by the federal government will get a boost by the CMS, following the release of finalized changes to the so-called Qualified Entity Program.
The final rule released Friday authorizes certain CMS-approved organizations – including for-profit companies – to buy Medicare claims and other federal data at a price that matches the governments' cost in processing the data. These “qualified entities” can then combine it with patient data from insurance companies, providers and other sources, and then resell that data to those organizations and others, including employers and devicemakers.
Full article: http://www.modernhealthcare.com/article/20160701/NEWS/160709998?utm_source=modernhealthcare&utm_medium=email&utm_content=20160701-NEWS-160709998&utm_campaign=mh-alert
Kraft, Mondelez must face wheat price-rigging lawsuit says judge
By CPI on June 28, 2016
A federal judge in Chicago on Monday refused to dismiss a lawsuit in which wheat futures and options traders accused Kraft Heinz Co and Mondelez International Inc of illegally manipulating the grain’s price at their expense.
US District Judge Edmond Chang said traders may pursue claims that a large and, in their view, unnecessary late 2011 purchase by Kraft Foods Inc of wheat futures contracts violated the Sherman antitrust law and the Commodity Exchange Act.
In a 66-page decision, Chang also dismissed claims that the defendants conducted offsetting “wash trades” over roughly a decade to create an illusion of greater market activity. He said the traders can try to bring those claims again.
Full Content: Philly
By CPI on June 28, 2016
A federal judge in Chicago on Monday refused to dismiss a lawsuit in which wheat futures and options traders accused Kraft Heinz Co and Mondelez International Inc of illegally manipulating the grain’s price at their expense.
US District Judge Edmond Chang said traders may pursue claims that a large and, in their view, unnecessary late 2011 purchase by Kraft Foods Inc of wheat futures contracts violated the Sherman antitrust law and the Commodity Exchange Act.
In a 66-page decision, Chang also dismissed claims that the defendants conducted offsetting “wash trades” over roughly a decade to create an illusion of greater market activity. He said the traders can try to bring those claims again.
Full Content: Philly
States review law on non-compete agreements
an estimated 30 million Americans — nearly one fifth of the nation’s work force — are hobbled by so-called noncompete agreements, fine print in their employment contracts that keeps them from working for corporate rivals in their next job.
Now a number of states are looking to untangle workers from these agreements. The Massachusetts House of Representatives is scheduled to vote this week on a noncompete reform bill. The state is also the location of a union organizing campaign on the noncompete practices of the EMC Corporation, a large technology company based in Hopkinton, Mass., that is known for its aggressive application of these employment contracts.
Other states are also taking steps as noncompete agreements have spread to summer interns and sandwich shop employees. Hawaii banned noncompete agreements for technology jobs last year, while New Mexico passed a law prohibiting noncompetes for health care workers. And Oregon and Utah have limited the duration of noncompete arrangements.
At the federal level, the White House published a report on noncompete contracts in May that concluded “noncompetes can impose substantial costs on workers, consumers and the economy more generally.” The Treasury Department also issued a report this year criticizing the excessive use of the contracts.
Article: http://www.nytimes.com/2016/06/29/technology/to-compete-better-states-are-trying-to-curb-noncompete-pacts.html?hpw&rref=business&action=click&pgtype=Homepage&module=well-region®ion=bottom-well&WT.nav=bottom-well
an estimated 30 million Americans — nearly one fifth of the nation’s work force — are hobbled by so-called noncompete agreements, fine print in their employment contracts that keeps them from working for corporate rivals in their next job.
Now a number of states are looking to untangle workers from these agreements. The Massachusetts House of Representatives is scheduled to vote this week on a noncompete reform bill. The state is also the location of a union organizing campaign on the noncompete practices of the EMC Corporation, a large technology company based in Hopkinton, Mass., that is known for its aggressive application of these employment contracts.
Other states are also taking steps as noncompete agreements have spread to summer interns and sandwich shop employees. Hawaii banned noncompete agreements for technology jobs last year, while New Mexico passed a law prohibiting noncompetes for health care workers. And Oregon and Utah have limited the duration of noncompete arrangements.
At the federal level, the White House published a report on noncompete contracts in May that concluded “noncompetes can impose substantial costs on workers, consumers and the economy more generally.” The Treasury Department also issued a report this year criticizing the excessive use of the contracts.
Article: http://www.nytimes.com/2016/06/29/technology/to-compete-better-states-are-trying-to-curb-noncompete-pacts.html?hpw&rref=business&action=click&pgtype=Homepage&module=well-region®ion=bottom-well&WT.nav=bottom-well
State laws that stop surprise medical bills from out-of-network physicians associated with hospital care
[New Jersey is] one of 28 states considering protections for patients against surprise medical bills. 4 Others – Illinois, Florida, New York and Connecticut – have already passed laws. . . . State Senator Joe Vitale is a sponsor of New Jersey’s bill. It would mandate most doctors to participate in same networks as the hospital, require doctors and hospitals to notify patients if they are not in network, ban doctors from balance billing and set up an arbitration system to press providers to defend their bills, and insurers to defend their rates.
From article and video at http://www.pbs.org/newshour/bb/unexpected-medical-bills-can-cost-american-consumers-thousands/
California's insurance commissioner urges national antitrust regulators to block health insurer Aetna Inc's proposed $34 billion acquisition of Humana Inc.
David Jones, whose state Department of Insurance does not have authority to block the deal, said the acquisition would be anti-competitive in California and nationwide and contribute to higher prices for insurance.
Jones' comments came just days after California's other insurance regulator said it had approved the Aetna-Humana deal with conditions, including that Aetna keep down premium increases and invest $50 million in communities.
"We received approval earlier this week from the California Department of Managed Health Care, the only regulatory agency in the state with official oversight of our acquisition," Aetna spokesman T.J. Crawford said.
From article at http://www.reuters.com/article/us-humana-m-a-aetna-idUSKCN0Z920Y
David Jones, whose state Department of Insurance does not have authority to block the deal, said the acquisition would be anti-competitive in California and nationwide and contribute to higher prices for insurance.
Jones' comments came just days after California's other insurance regulator said it had approved the Aetna-Humana deal with conditions, including that Aetna keep down premium increases and invest $50 million in communities.
"We received approval earlier this week from the California Department of Managed Health Care, the only regulatory agency in the state with official oversight of our acquisition," Aetna spokesman T.J. Crawford said.
From article at http://www.reuters.com/article/us-humana-m-a-aetna-idUSKCN0Z920Y
Legislation would block "bot" event ticket sales
Introduced in February 2015 by U.S. Representatives Paul D. Tonko (D-N.Y.) andMarsha Blackburn (R-Tenn.), the BOTS Act would make the use of computer software to circumvent security measures employed by ticketing sites an “unfair and deceptive practice” -- essentially a Federal offense -- under the Federal Trade Commission Act. It also would create a private right of action whereby parties harmed by bots can sue in federal court to recover damages.
“Ticket scammers go online as soon as a ‘window’ opens and use botting software to scoop up the tickets, then take them to the secondary market and triple the price,” says Blackburn. Organizations supporting the BOTS Act include The Recording Academy, Pandora/Ticketfly and Live Nation Entertainment/Ticketmaster. Blackburn says she hopes to have the bill signed into law by the end of summer.
More comprehensive and controversial is the BOSS Act, introduced by U.S. Rep. Bill Pascrell (D-N.J.) in 2009 after Ticketmaster received complaints for redirecting fans to its secondary site TicketsNow for Springsteen concerts, and reintroduced May 17, the eve of another Springsteen on-sale. The bill was heard on May 24 by the House's Energy and Commerce Committee, where it gained the support of the Federal Trade Commission, whose chairwoman, Edith Ramirez, recommended further action on both bills.
What makes Pascrell's bill different is that it also calls into question the practices of the primary industry by asking how many tickets are actually put up for sale (as opposed to holding them back for presales, fan clubs, sponsors and giveaways). Consequently, it has not gained widespread industry support. “The retail companies that do this stuff don’t feel they need to be regulated,” Pascrell says. “The fact that they’re mostly self-regulated has led to the problem. This isn't just the guy selling tickets on the corner anymore. It's a multibillion-dollar industry full of corruption, kickbacks and backroom deals."
From article at http://www.billboard.com/articles/business/7416096/ticket-bots-illegal-software-music-stars
Senate committee reaches agreement on national GMO-labeling law
Posted: 24 Jun 2016 09:50 AM PDT
NPR reports:
Just a week before a Vermont law kicks in requiring labels on food containing genetically modified ingredients, U.S. Senate agriculture leaders announced a deal Thursday that takes the power out of states' hands — and sets a mandatory national system for GM disclosures on food products.
Sen. Pat Roberts, R-Kansas, the chairman of the U.S. Senate Committee on Agriculture, Nutrition, and Forestry, unveiled the plan that had been negotiated for weeks with U.S. Sen. Debbie Stabenow, D-Michigan.
....
Under the plan, food companies would be required to disclose which products contain genetically modified ingredients. But companies would have a range of options in just how they make that disclosure: They could place text on food packaging, provide a QR (Quick Response) code, or direct consumers to a phone number or a website with more information.
The full story is here.
Digital Music Copyright Act Reform
180+ music artists have sent an open letter to US Congress pleading for urgent DMCA reforms. (Click highlighted lnguage to see it.)This was part of a continued effort to prevent online platforms, like YouTube, from exploiting the work of artists. The letter came after a similar call for reform back in April, one in which 400 artists, songwriters, music managers and music organisations sent a letter to the US Copyright Office demanding DMCA revisions.
http://www.digitalmusicnews.com/2016/06/22/battle-for-dmca-reform-heats-up-youtube-under-fire/
180+ music artists have sent an open letter to US Congress pleading for urgent DMCA reforms. (Click highlighted lnguage to see it.)This was part of a continued effort to prevent online platforms, like YouTube, from exploiting the work of artists. The letter came after a similar call for reform back in April, one in which 400 artists, songwriters, music managers and music organisations sent a letter to the US Copyright Office demanding DMCA revisions.
http://www.digitalmusicnews.com/2016/06/22/battle-for-dmca-reform-heats-up-youtube-under-fire/
DCPSC denies applications for reconsideration of PSC approval of the Exelon Merger
In orders dated June 17, 2016, the DCPSC denied the Applications for Reconsideration of Order No. 18148 filed by GRID2.0 Working Group; DC Public Power; the Office of People’s Counsel; the District of Columbia Government; and DC Solar United Neighborhood jointly with Public Citizen, Inc.. Also, the DCPSC granted GRID2.0 Working Group and DC Solar United Neighborhood and Public Citizen’s separate Requests to File Reply Comments and denied DC Public Power’s Renewed Motion to Intervene and Consider Alternative Settlement Provisions.
The denials could be prelude to eventual court challenges of the PSC decision approving the merger
The Orders can be found at http://www.dcpsc.org/edocket/docketsheets_pdf_FS.asp?caseno=FC1119&docketno=1683&flag=C&show_result=Y
In orders dated June 17, 2016, the DCPSC denied the Applications for Reconsideration of Order No. 18148 filed by GRID2.0 Working Group; DC Public Power; the Office of People’s Counsel; the District of Columbia Government; and DC Solar United Neighborhood jointly with Public Citizen, Inc.. Also, the DCPSC granted GRID2.0 Working Group and DC Solar United Neighborhood and Public Citizen’s separate Requests to File Reply Comments and denied DC Public Power’s Renewed Motion to Intervene and Consider Alternative Settlement Provisions.
The denials could be prelude to eventual court challenges of the PSC decision approving the merger
The Orders can be found at http://www.dcpsc.org/edocket/docketsheets_pdf_FS.asp?caseno=FC1119&docketno=1683&flag=C&show_result=Y
The New York legislature passed a bill legalizing and regulating the fantasy sports industry early on Saturday morning, 6-17
This might be the beginning of the end of a months-long legal battle in the state.The daily fantasy sports bill — passed on the final day of the legislature’s session — still needs the signature of Gov. Andrew Cuomo to become law in New York.
If signed, FanDuel, DraftKings and other fantasy sports sites will be able to operate again in New York, as part of a settlement with NY Attorney General Eric Schneiderman.
Earlier in the day, the Assembly passed the legislation by a wide margin.
Article: http://www.legalsportsreport.com/10514/new-york-passes-fantasy-sports-bill/
This might be the beginning of the end of a months-long legal battle in the state.The daily fantasy sports bill — passed on the final day of the legislature’s session — still needs the signature of Gov. Andrew Cuomo to become law in New York.
If signed, FanDuel, DraftKings and other fantasy sports sites will be able to operate again in New York, as part of a settlement with NY Attorney General Eric Schneiderman.
Earlier in the day, the Assembly passed the legislation by a wide margin.
Article: http://www.legalsportsreport.com/10514/new-york-passes-fantasy-sports-bill/
From Friends of the Crescent Trail: Anti-Purple Rail Line lawsuit progress
This Wednesday the Federal judge heard the lawsuit challenging the Purple Line, and invited a new next step.
The judge zeroed in on two counts:
First, the refusal by MTA to provide information repeatedly requested by the public about how it derived its optimistic ridership estimates for the project.
Second, the interconnection with the Metro system, its current safety and budget crisis, and the federal transportation law requirement that, when states are seeking federal transit funding, local resources must be available to maintain and operate the region's existing and planned transportation network to which the project would be added.
The judge invited each side to submit within the next two weeks one additional brief. The judge will reach his decision sometime after receiving the new briefs from both sides.
See the Washington Post story on this hearing (June 16 edition)
This Wednesday the Federal judge heard the lawsuit challenging the Purple Line, and invited a new next step.
The judge zeroed in on two counts:
First, the refusal by MTA to provide information repeatedly requested by the public about how it derived its optimistic ridership estimates for the project.
Second, the interconnection with the Metro system, its current safety and budget crisis, and the federal transportation law requirement that, when states are seeking federal transit funding, local resources must be available to maintain and operate the region's existing and planned transportation network to which the project would be added.
The judge invited each side to submit within the next two weeks one additional brief. The judge will reach his decision sometime after receiving the new briefs from both sides.
See the Washington Post story on this hearing (June 16 edition)
Is YouTube paying attention to demands for fair pay?
YouTube has been under fire for some time over low royalty payments and not fairly paying artists, amongst other things. As that complaint chorus intensifies, YouTube has found it necessary to respond to the public complaints over fair pay.
YouTube’s response…
“The voices of the artists are being heard, and we’re working through details with the labels and independent music organizations who directly manage the deals with us. Having said that, YouTube has paid out over $3 billion to the music industry, despite being a platform that caters to largely light music listeners who spend an average of one hour per month consuming music – far less than an average Spotify or Apple Music user.
Any comparisons of revenue from these platforms are apples and oranges.”
Here are a few complaints YouTube has had the past year over fair pay…
In May, Canadian singer-songwriter Nelly Furtado, slammed the streaming service and its owner — Google — in a blog post for The Guardian, for having ”a lack of transparency and a lot of spin going on.”
In April, an EU official tells YouTube to stop exploiting artists. EU digital chief Andrus Ansip, demanded changes to the way that YouTube compensates artists.
Full article: http://www.digitalmusicnews.com/2016/06/14/youtube-responds-artists-fair-pay/
YouTube has been under fire for some time over low royalty payments and not fairly paying artists, amongst other things. As that complaint chorus intensifies, YouTube has found it necessary to respond to the public complaints over fair pay.
YouTube’s response…
“The voices of the artists are being heard, and we’re working through details with the labels and independent music organizations who directly manage the deals with us. Having said that, YouTube has paid out over $3 billion to the music industry, despite being a platform that caters to largely light music listeners who spend an average of one hour per month consuming music – far less than an average Spotify or Apple Music user.
Any comparisons of revenue from these platforms are apples and oranges.”
Here are a few complaints YouTube has had the past year over fair pay…
In May, Canadian singer-songwriter Nelly Furtado, slammed the streaming service and its owner — Google — in a blog post for The Guardian, for having ”a lack of transparency and a lot of spin going on.”
In April, an EU official tells YouTube to stop exploiting artists. EU digital chief Andrus Ansip, demanded changes to the way that YouTube compensates artists.
Full article: http://www.digitalmusicnews.com/2016/06/14/youtube-responds-artists-fair-pay/
Confusion over whether Orlando providers needed HIPAA waiver
By Joseph Conn | June 13, 2016
Following Sunday's mass shooting that left 50 people dead and dozens of others wounded, there were reports that the White House waived federal privacy law restrictions that prevent healthcare organizations in Orlando from openly discussing patients cases.
But no waiver was given nor was one required, according to HHS.
"HIPAA allows health care professionals the flexibility to disclose limited health information to the public or media in appropriate circumstances,” according to Kevin Griffis, assistant secretary for public affairs at HHS. “These disclosures, which are made when it is determined to be in the best interest of a patient, are permissible without a waiver to help identify incapacitated patients, or to locate family members of patients to share information about their condition. Disclosures are permissible to same sex, as well as opposite sex, partners."
Full article: http://www.modernhealthcare.com/article/20160613/NEWS/160619969?utm_source=modernhealthcare&utm_medium=email&utm_content=20160613-NEWS-160619969&utm_campaign=am
By Joseph Conn | June 13, 2016
Following Sunday's mass shooting that left 50 people dead and dozens of others wounded, there were reports that the White House waived federal privacy law restrictions that prevent healthcare organizations in Orlando from openly discussing patients cases.
But no waiver was given nor was one required, according to HHS.
"HIPAA allows health care professionals the flexibility to disclose limited health information to the public or media in appropriate circumstances,” according to Kevin Griffis, assistant secretary for public affairs at HHS. “These disclosures, which are made when it is determined to be in the best interest of a patient, are permissible without a waiver to help identify incapacitated patients, or to locate family members of patients to share information about their condition. Disclosures are permissible to same sex, as well as opposite sex, partners."
Full article: http://www.modernhealthcare.com/article/20160613/NEWS/160619969?utm_source=modernhealthcare&utm_medium=email&utm_content=20160613-NEWS-160619969&utm_campaign=am
More banks are showing interest in developing their own branded mobile wallets, and Visa has launched a platform to make that possible
From American Banker:
Visa's service, called the Visa Digital Commerce App, allows financial institutions to offer contactless payments, security alerts, card controls and account balance information. The product is launching with more than 40 banks already signed on to use it.
Third-party mobile wallets such as Apple Pay, Samsung Pay and Android Pay, have not provided the features or the user base that they initially expected, giving banks an opportunity to regain control of consumer spending.
DAR Comment: The Visa App appears to reinforce Visa's dominant role in payment systems, at the expense of electronic payment alternatives that are independent of Visa, MasterCard, or American Express.
American Banker article: http://www.americanbanker.com/news/bank-technology/banks-turning-to-visa-to-develop-mobile-wallets-1081447-1.html?utm_medium=email&ET=americanbanker:e6932875:4145571a:&utm_source=newsletter&utm_campaign=daily%20briefing-jun%2014%202016&st=email&eid=c9462b432ff5c8513e739b4675e68c47
From American Banker:
Visa's service, called the Visa Digital Commerce App, allows financial institutions to offer contactless payments, security alerts, card controls and account balance information. The product is launching with more than 40 banks already signed on to use it.
Third-party mobile wallets such as Apple Pay, Samsung Pay and Android Pay, have not provided the features or the user base that they initially expected, giving banks an opportunity to regain control of consumer spending.
DAR Comment: The Visa App appears to reinforce Visa's dominant role in payment systems, at the expense of electronic payment alternatives that are independent of Visa, MasterCard, or American Express.
American Banker article: http://www.americanbanker.com/news/bank-technology/banks-turning-to-visa-to-develop-mobile-wallets-1081447-1.html?utm_medium=email&ET=americanbanker:e6932875:4145571a:&utm_source=newsletter&utm_campaign=daily%20briefing-jun%2014%202016&st=email&eid=c9462b432ff5c8513e739b4675e68c47
Influence, money fueled Exelon-Pepco merger
BY ANDREW KREIGHBAUM
Tuesday, June 7th, 2016
WAMU-FM and The Investigative Reporting Workshop at American University collaborated on this in-depth look at the Exelon-Pepco merger, including how much top stakeholders made. Reporter Patrick Madden contributed to this report. The full report is here: http://investigativereportingworkshop.org/investigations/merger/story/pepco-exelon-merger/
Excerpt:
Last fall, D.C. Mayor Muriel Bowser boasted that a deal negotiated to back nuclear generator Exelon’s merger with Pepco would bring the District $78 million in financial commitments and a more dependable public utility.
But by March she would do an about-face, declaring the final merger approved by regulators a bad deal for residents.
In the intervening months, Exelon poured money into shaping opinion in the public sphere and in the corridors of city hall on a deal that would create the largest power company in the country. The companies used all of the tools at their disposal — advertising, lobbying and leveraging support from community organizations and key public figures — to advocate for the $6.8 billion deal.
BY ANDREW KREIGHBAUM
Tuesday, June 7th, 2016
WAMU-FM and The Investigative Reporting Workshop at American University collaborated on this in-depth look at the Exelon-Pepco merger, including how much top stakeholders made. Reporter Patrick Madden contributed to this report. The full report is here: http://investigativereportingworkshop.org/investigations/merger/story/pepco-exelon-merger/
Excerpt:
Last fall, D.C. Mayor Muriel Bowser boasted that a deal negotiated to back nuclear generator Exelon’s merger with Pepco would bring the District $78 million in financial commitments and a more dependable public utility.
But by March she would do an about-face, declaring the final merger approved by regulators a bad deal for residents.
In the intervening months, Exelon poured money into shaping opinion in the public sphere and in the corridors of city hall on a deal that would create the largest power company in the country. The companies used all of the tools at their disposal — advertising, lobbying and leveraging support from community organizations and key public figures — to advocate for the $6.8 billion deal.
D.C. lawmakers approve a measure raising the hourly minimum wage to $15
Lawmakers in New York and California have passed similar proposals in recent months.
In an unanimous vote, the Washington, D.C. City Council approved a bill that would gradually increase the city’s minimum wage to $15 an hour by 2020. From there, future increases would be linked to inflation, the Washington Post reported. In the same time frame, the base pay for tipped workers will also increase from $2.77 an hour to $5 an hour.
Restitution Ordered For Bad Financial Advice
Morgan Stanley Smith Barney has been ordered to pay two former professional athletes $819,300 because one of its brokers recommended worthless investments to the athletes, the Financial Industry Regulatory Authority announced Tuesday.
Keyon Dooling, an NBA player, and John St. Clair, an NFL player, were advised to invest in Global Village Concerns, a start-up sports apparel company. In addition, it was recommended Dooling invest in Club Play, a Miami Beach nightclub. Both investments became worthless, a Finra arbitration panel says.
Restitution was ordered for the athletes because of the negligent supervision of the broker by Morgan Stanley, Finra says. The broker, Aaron Parthemer, was barred from the securities industry by Finra in an earlier action.
Full article: http://www.fa-mag.com/news/pro-athletes-receive-restitution-for-bad-advice-27080.html?print
The U.S. Justice Department and the N.C. Attorney General’s Office have filed a joint lawsuit against Carolinas HealthCare System, accusing it of illegally reducing competition in the Charlotte metro market.
The lawsuit carries a local ripple effect, given that Carolinas’ top competitor is Novant Health Inc. of Winston-Salem, which declined to comment on the complaint.
Also being sued is the Charlotte-Mecklenburg Hospital Authority. The entities are being accused of violating the federal Sherman Act by using restrictions that “unreasonably restrain trade.”
The complaint asks a federal judge in the Western District of N.C. to bar the system from “using unlawful contract restrictions that prohibit commercial health insurers in the Charlotte area from offering patients financial benefits to use less-expensive health care services offered by CHS’ competitors.”
Full article: http://www.journalnow.com/news/local/carolinas-healthcare-faces-federal-lawsuit-on-competition-practices-in-charlotte/article_457a6ad8-d06a-5c81-b9ae-5eb2fe0effac.html
The lawsuit carries a local ripple effect, given that Carolinas’ top competitor is Novant Health Inc. of Winston-Salem, which declined to comment on the complaint.
Also being sued is the Charlotte-Mecklenburg Hospital Authority. The entities are being accused of violating the federal Sherman Act by using restrictions that “unreasonably restrain trade.”
The complaint asks a federal judge in the Western District of N.C. to bar the system from “using unlawful contract restrictions that prohibit commercial health insurers in the Charlotte area from offering patients financial benefits to use less-expensive health care services offered by CHS’ competitors.”
Full article: http://www.journalnow.com/news/local/carolinas-healthcare-faces-federal-lawsuit-on-competition-practices-in-charlotte/article_457a6ad8-d06a-5c81-b9ae-5eb2fe0effac.html
USDOJ Releases about local vehicle odometer tampering
Click items below to read:
Former Employee of Virginia DMV Contractor Pleads Guilty to Participating in Odometer Fraud Scheme (May 26, 2016)
Used Motor Vehicle Dealer and Former State Employee Arrested in Georgia for Odometer Tampering Scheme (May 5, 2016)
John Oliver on "Bad Debt" buyers
https://www.youtube.com/watch?v=hxUAntt1z2c
Satirical pick-up of the theme of the Jake Halpern book about debt collectors who buy frequently unsupported debt claims for pennies and then pursue them, frequently in ways that skirt the law.
Click items below to read:
Former Employee of Virginia DMV Contractor Pleads Guilty to Participating in Odometer Fraud Scheme (May 26, 2016)
Used Motor Vehicle Dealer and Former State Employee Arrested in Georgia for Odometer Tampering Scheme (May 5, 2016)
John Oliver on "Bad Debt" buyers
https://www.youtube.com/watch?v=hxUAntt1z2c
Satirical pick-up of the theme of the Jake Halpern book about debt collectors who buy frequently unsupported debt claims for pennies and then pursue them, frequently in ways that skirt the law.
Go figure: $20 tv infomercial razor versus $2.19 razor from China via Ebay
W.C. Fields was ahead of his time when he sold patent medicine for hoarseness. https://www.youtube.com/watch?v=YpjpST98FVc Today we have tv "infomercials," often fascinating entrepreneurial efforts.
One infomercial example is The One - Classic Razor - The Best Way To Shave For Over 100 Years See Adwww.onerazor.com/RickHarrison
Only $19.99 + Bonus Blades.
Endorsed by Rick Harrison · Bonus 12 Blades · Twist Open to Clean
As an alternative to the Endorsed by Rick Harrison As Seen On TV classic razor, you might consider this:
Men's Classic Traditional Double Edge Chrome Shaving Safety Razor, Shaver Blades $2.19, free shipping from China.
Describe:
100% Brand New
Traditional style safety razor is an excellent razor to shave with smoothly
Provides a very close shave
Package including:
1 x Safety Razor
1 x Blade
See at http://www.ebay.com/itm/Mens-Classic-Traditional-Double-Edge-Chrome-Shaving-Safety-Razor-Shaver-Blades-/231765083547
Disclaimer by poster, DAR: I have not actually examined or compared the Endorsed by Rick Harrison As Seen on TV Classic Razor and the Men's Classic Traditional Double Edge Chrome Shaving Safety Razor shipped from China through Ebay, so no comparison of the qualities of the products is offered beyond the obvious one that both are described as Classic Razors using single edge blades. I can say that it is hard not to worry about the production costs, including human labor, associated with the manufacture and overseas shipping of a classic razor for a price of $2.19, including shipping. I can only hope that the Rick Harrison product earns more for its producers, and provides the human beings in the producing
factories with a living wage.
Posted by Don Resnikoff
W.C. Fields was ahead of his time when he sold patent medicine for hoarseness. https://www.youtube.com/watch?v=YpjpST98FVc Today we have tv "infomercials," often fascinating entrepreneurial efforts.
One infomercial example is The One - Classic Razor - The Best Way To Shave For Over 100 Years See Adwww.onerazor.com/RickHarrison
Only $19.99 + Bonus Blades.
Endorsed by Rick Harrison · Bonus 12 Blades · Twist Open to Clean
As an alternative to the Endorsed by Rick Harrison As Seen On TV classic razor, you might consider this:
Men's Classic Traditional Double Edge Chrome Shaving Safety Razor, Shaver Blades $2.19, free shipping from China.
Describe:
100% Brand New
Traditional style safety razor is an excellent razor to shave with smoothly
Provides a very close shave
Package including:
1 x Safety Razor
1 x Blade
See at http://www.ebay.com/itm/Mens-Classic-Traditional-Double-Edge-Chrome-Shaving-Safety-Razor-Shaver-Blades-/231765083547
Disclaimer by poster, DAR: I have not actually examined or compared the Endorsed by Rick Harrison As Seen on TV Classic Razor and the Men's Classic Traditional Double Edge Chrome Shaving Safety Razor shipped from China through Ebay, so no comparison of the qualities of the products is offered beyond the obvious one that both are described as Classic Razors using single edge blades. I can say that it is hard not to worry about the production costs, including human labor, associated with the manufacture and overseas shipping of a classic razor for a price of $2.19, including shipping. I can only hope that the Rick Harrison product earns more for its producers, and provides the human beings in the producing
factories with a living wage.
Posted by Don Resnikoff
With FRCivP 41, Committee Proposes to Grant New Hacking Powers to the Government
The proposal comes from the advisory committee on criminal rules for the Judicial Conference of the United States. The amendment [PDF] would update Rule 41 of the Federal Rules of Criminal Procedure, creating a sweeping expansion of law enforcement’s ability to engage in hacking and surveillance. The Supreme Court just passed the proposal to Congress, which has until December 1 to disavow the change or it becomes the rule governing every federal court across the country. This is part of a statutory process through which federal courts may create new procedural rules, after giving public notice and allowing time for comment, under a “rules enabling act.”
From article at https://www.eff.org/deeplinks/2016/04/rule-41-little-known-committee-proposes-grant-new-hacking-powers-government
The proposal comes from the advisory committee on criminal rules for the Judicial Conference of the United States. The amendment [PDF] would update Rule 41 of the Federal Rules of Criminal Procedure, creating a sweeping expansion of law enforcement’s ability to engage in hacking and surveillance. The Supreme Court just passed the proposal to Congress, which has until December 1 to disavow the change or it becomes the rule governing every federal court across the country. This is part of a statutory process through which federal courts may create new procedural rules, after giving public notice and allowing time for comment, under a “rules enabling act.”
From article at https://www.eff.org/deeplinks/2016/04/rule-41-little-known-committee-proposes-grant-new-hacking-powers-government
Public Citizen Blog: California Ruling Against Facebook on Right of Publicity Blows Huge Hole in Section 230 Immunity
by Paul Alan Levy
A California Superior Court judge has issued a decision that threatens to blow a gaping hole in the protection that online hosts for critical speech have enjoyed under section 230 of the Communications Decency Act and, therefore, in public’s ability to post critical speech. In Cross v. Facebook, Judge Donald Ayoob granted only in part Facebook’s demurrer and special motion to dismiss a complaint by a musical performer; the denial part is a doozy. He held that plaintiff had shown a probability of success on the merits of claims that the placement of advertising on hosted critical pages about the plaintiff makes a commercial use of the plaintiff's name and likeness and hence could both violate his statutory right of publicity and constitute common-law misappropriation under California law.
Full Levy article: http://pubcit.typepad.com/clpblog/2016/06/california-ruling-against-facebook-blows-huge-hole-in-section-230-immunity.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+ConsumerLawPolicyBlog+%28Consumer+Law+%26+Policy+Blog%29
World Bank Study: Lack of strong antitrust protections in media ownership in the United States allows the biggest record labels to wield control over industry practices and individual listening
Edited Excerpts: It is also, arguably, why YouTube, Spotify, and others “are able to get away with such disadvantageous deals.” In 2014, independent music body Impala could not help but file “a complaint with the European Commission alleging that Google subsidiary YouTube [was] abusing its dominant position.” In what appears to be a threatening policy, YouTube, “threatened to take videos from small labels off its site completely if they don’t sign up for its forthcoming music subscription service.” That is why the telecom ownership antitrust protections that hindered the Comcast/Time Warner Cable merger in 2015 could be seen as an important step for allowing independent musicians (and other artists) to compete fairly online. Although such activity is cited in high-income countries, there is no question that, given the nature of global commerce, such activities can affect even less-known artists from low- and middle-income countries. Therefore, the question of strong antitrust provisions to protect artists from all walks of life deserves greater analysis. In addition, there is a need to implement international licensing metadata standards, which would make it easier for royalty income to flow back to artists and rights holders across the world.
Study url:
http://poseidon01.ssrn.com/delivery.php?ID=409065022090123093011073070091117107100012095020070029025083064086096068094097072085122016002103042099002112081006017085117028051037093012023084066091014110029019111081085052073114022026125018118028007021126124125110102110116007088003105003004102097126&EXT=pdf
Edited Excerpts: It is also, arguably, why YouTube, Spotify, and others “are able to get away with such disadvantageous deals.” In 2014, independent music body Impala could not help but file “a complaint with the European Commission alleging that Google subsidiary YouTube [was] abusing its dominant position.” In what appears to be a threatening policy, YouTube, “threatened to take videos from small labels off its site completely if they don’t sign up for its forthcoming music subscription service.” That is why the telecom ownership antitrust protections that hindered the Comcast/Time Warner Cable merger in 2015 could be seen as an important step for allowing independent musicians (and other artists) to compete fairly online. Although such activity is cited in high-income countries, there is no question that, given the nature of global commerce, such activities can affect even less-known artists from low- and middle-income countries. Therefore, the question of strong antitrust provisions to protect artists from all walks of life deserves greater analysis. In addition, there is a need to implement international licensing metadata standards, which would make it easier for royalty income to flow back to artists and rights holders across the world.
Study url:
http://poseidon01.ssrn.com/delivery.php?ID=409065022090123093011073070091117107100012095020070029025083064086096068094097072085122016002103042099002112081006017085117028051037093012023084066091014110029019111081085052073114022026125018118028007021126124125110102110116007088003105003004102097126&EXT=pdf
A jury in a California District Federal court threw out Oracle’s claim that Google stole code and abused copyrighted information.
The judge declared that the search giant’s use of code in Android was fair use, not theft, which frees the tech giant of any liability whatsoever.
Oracle originally filed the lawsuit in 2010, claiming that Google had stolen key elements from their application and incorporated these features into Android. The battle has been raging ever since, and Oracle was seeking just short of $9 billion for the improper use of their code.
In 2014, a federal appeals court determined that Oracle may have a viable copyright claim on the API code. But, the courts have sided with search engine giant after their convincing excuse of ‘fair use’, ultimately allowing use of the code without invalidating Oracle’s copyright.
In a statement, Robert Van Nest Google’s lead lawyer said, ”we’re grateful for the jury’s verdict.”
A Google spokesperson added…
“Today’s verdict that Android makes fair use of Java APIs represents a win for the Android ecosystem, for the Java programming community, and for software developers who rely on open and free programming languages to build innovative consumer products.” Comments from Oracle were very much opposed. Dorian Daley, Oracle’s general counsel, offered the following retort:
”We strongly believe that Google developed Android by illegally copying core Java technology to rush into the mobile device market. Oracle brought this lawsuit to put a stop to Google’s illegal behavior. We believe there are numerous grounds for appeal and we plan to bring this case back to the Federal Circuit on appeal.”
From: http://www.digitalmusicnews.com/2016/05/27/google-avoids-9-billion-oracle-lawsuit-fair-use-claim/
The judge declared that the search giant’s use of code in Android was fair use, not theft, which frees the tech giant of any liability whatsoever.
Oracle originally filed the lawsuit in 2010, claiming that Google had stolen key elements from their application and incorporated these features into Android. The battle has been raging ever since, and Oracle was seeking just short of $9 billion for the improper use of their code.
In 2014, a federal appeals court determined that Oracle may have a viable copyright claim on the API code. But, the courts have sided with search engine giant after their convincing excuse of ‘fair use’, ultimately allowing use of the code without invalidating Oracle’s copyright.
In a statement, Robert Van Nest Google’s lead lawyer said, ”we’re grateful for the jury’s verdict.”
A Google spokesperson added…
“Today’s verdict that Android makes fair use of Java APIs represents a win for the Android ecosystem, for the Java programming community, and for software developers who rely on open and free programming languages to build innovative consumer products.” Comments from Oracle were very much opposed. Dorian Daley, Oracle’s general counsel, offered the following retort:
”We strongly believe that Google developed Android by illegally copying core Java technology to rush into the mobile device market. Oracle brought this lawsuit to put a stop to Google’s illegal behavior. We believe there are numerous grounds for appeal and we plan to bring this case back to the Federal Circuit on appeal.”
From: http://www.digitalmusicnews.com/2016/05/27/google-avoids-9-billion-oracle-lawsuit-fair-use-claim/
FT: Google, Facebook, Twitter and Microsoft have signed up to new EU rules on taking down illegal hate speech
The “code of conduct” will require companies to “review the majority” of flagged hate speech within 24 hours — and remove it, if necessary — and even develop “counter narratives” to combat the growing problemGoogle, Facebook, Twitter and Microsoft have signed up to new EU rules on taking down illegal hate speech as lawmakers and internet giants try to cope with violent racist abuse and technically savvy terrorists online.
The “code of conduct” will require companies to “review the majority” of flagged hate speech within 24 hours — and remove it, if necessary — and even develop “counter narratives” to combat the growing problem.
Article: https://next.ft.com/content/e8fb1690-26fc-11e6-8ba3-cdd781d02d89
The “code of conduct” will require companies to “review the majority” of flagged hate speech within 24 hours — and remove it, if necessary — and even develop “counter narratives” to combat the growing problemGoogle, Facebook, Twitter and Microsoft have signed up to new EU rules on taking down illegal hate speech as lawmakers and internet giants try to cope with violent racist abuse and technically savvy terrorists online.
The “code of conduct” will require companies to “review the majority” of flagged hate speech within 24 hours — and remove it, if necessary — and even develop “counter narratives” to combat the growing problem.
Article: https://next.ft.com/content/e8fb1690-26fc-11e6-8ba3-cdd781d02d89
Montgomery County MD liquor control hikes wholesale wine prices
The Department of Liquor Control will increase the markup of some fine wines by 10 percent, and the changes are going into effect Wednesday, June 1. Many retail stores and restaurants in Montgomery County say the increase will shrink selection. The DLC, which brings in about $30 million annually to the county, regulates alcohol distribution. (Shades of Prohibition.)
http://www.bethesdamagazine.com/Bethesda-Beat/Web-2016/DLC-To-Make-Changes-to-Wine-Wholesale-Prices/
The Department of Liquor Control will increase the markup of some fine wines by 10 percent, and the changes are going into effect Wednesday, June 1. Many retail stores and restaurants in Montgomery County say the increase will shrink selection. The DLC, which brings in about $30 million annually to the county, regulates alcohol distribution. (Shades of Prohibition.)
http://www.bethesdamagazine.com/Bethesda-Beat/Web-2016/DLC-To-Make-Changes-to-Wine-Wholesale-Prices/
The EU is set to issue the biggest cartel fine in its history, punishing Europe’s largest truckmakers over charges that they fixed prices and delayed the introduction of new emission technologies.
Margrethe Vestager, EU competition commissioner, issued the original charge sheet against DAF, Daimler, Iveco, Scania, MAN and Volvo/Renault in 2014. Four of those companies have now set aside provisions amounting to $2.6bn.
We are not aware of any similar prosecutions in the U.S.
Article: https://next.ft.com/content/eba2818c-23f8-11e6-9d4d-c11776a5124d?ftcamp=crm/email//nbe/USMorningHeadlines/product
Margrethe Vestager, EU competition commissioner, issued the original charge sheet against DAF, Daimler, Iveco, Scania, MAN and Volvo/Renault in 2014. Four of those companies have now set aside provisions amounting to $2.6bn.
We are not aware of any similar prosecutions in the U.S.
Article: https://next.ft.com/content/eba2818c-23f8-11e6-9d4d-c11776a5124d?ftcamp=crm/email//nbe/USMorningHeadlines/product
NYT: How industry sharing of suppliers like auto airbags complicates recalls
Many industries’ reliance on fewer, more widely shared suppliers, also make today’s recalls larger and more complicated than before.
It’s the multiplier effect,” said Kevin Pollack, a vice president at Stericycle, which helps companies manage recalls. “An issue with one subingredient or component can cause a recall that spans many companies and geographies because of the interconnected nature of supply chains.”
The National Highway Traffic Safety Administration, which has decades of experience in handling deadly product flaws, calls the continuing Takata airbag recall the most complex it has ever overseen. The scope is huge: 14 automakers and as many as one in every four of the 250 million vehicles on America’s roads are affected, the fix is tricky and the stakes are high. After prolonged exposure to heat and humidity, the defective airbags can explode, hurtling chunks of metal into the vehicle’s cabin. At least 13 deaths worldwide have been linked to the flaw.
Nearly 29 million Takata airbag inflaters have been recalled in the United States, and at least 35 million more are scheduled for recall, but manufacturers don’t have the parts to replace all of them yet.
See article: http://www.nytimes.com/2016/05/30/business/product-recalls-rise-with-better-detection-and-fewer-suppliers.html
Many industries’ reliance on fewer, more widely shared suppliers, also make today’s recalls larger and more complicated than before.
It’s the multiplier effect,” said Kevin Pollack, a vice president at Stericycle, which helps companies manage recalls. “An issue with one subingredient or component can cause a recall that spans many companies and geographies because of the interconnected nature of supply chains.”
The National Highway Traffic Safety Administration, which has decades of experience in handling deadly product flaws, calls the continuing Takata airbag recall the most complex it has ever overseen. The scope is huge: 14 automakers and as many as one in every four of the 250 million vehicles on America’s roads are affected, the fix is tricky and the stakes are high. After prolonged exposure to heat and humidity, the defective airbags can explode, hurtling chunks of metal into the vehicle’s cabin. At least 13 deaths worldwide have been linked to the flaw.
Nearly 29 million Takata airbag inflaters have been recalled in the United States, and at least 35 million more are scheduled for recall, but manufacturers don’t have the parts to replace all of them yet.
See article: http://www.nytimes.com/2016/05/30/business/product-recalls-rise-with-better-detection-and-fewer-suppliers.html
US billionaire Peter Thiel has confirmed that he secretly financed a lawsuit against the Gawker media site.
The lawsuit was brought by Terry Bollea, a professional wrestler known as Hulk Hogan, over a video that showed him having sex with a friend’s wife and led to a $140m judgment against the site. Mr. Thiel’s intervention is seen by some as pursuing a personal vendetta, using Hogan as a foil. That has raised many questions over privacy and press freedom. Does it set a dangerous precedent?
See video report at http://www.pbs.org/newshour/rundown/what-does-the-billionaire-funded-gawker-suit-mean-for-media/
The lawsuit was brought by Terry Bollea, a professional wrestler known as Hulk Hogan, over a video that showed him having sex with a friend’s wife and led to a $140m judgment against the site. Mr. Thiel’s intervention is seen by some as pursuing a personal vendetta, using Hogan as a foil. That has raised many questions over privacy and press freedom. Does it set a dangerous precedent?
See video report at http://www.pbs.org/newshour/rundown/what-does-the-billionaire-funded-gawker-suit-mean-for-media/
State welfare for hedge funds? Biggest Hedge Fund Set to Get $22 Million From Connecticut
The commitment is part of a state effort to keep companies from leaving after a tax increase last year
http://www.nytimes.com/2016/05/28/business/dealbook/biggest-hedge-fund-set-to-get-22-million-from-connecticut.html?ref=business
The commitment is part of a state effort to keep companies from leaving after a tax increase last year
http://www.nytimes.com/2016/05/28/business/dealbook/biggest-hedge-fund-set-to-get-22-million-from-connecticut.html?ref=business
CUNY as poster child for troubled low cost state and local colleges
The troubles at City College, and throughout the entire CUNY system, are representative of a funding crisis that has been building at public universities across the country. Even as the role of higher education as an engine of economic mobility has become increasingly vital, governments have been pulling back their support.
Since the 2008 recession, states have reduced spending on public higher education by 17 percent per student, while tuition has risen by 33 percent, according to a recent report by the nonpartisan Center on Budget and Policy Priorities. Arizona is spending 56 percent less, while students are paying 88 percent more. In Louisiana, students are spending 80 percent more on tuition, while state funding has been cut by 39 percent.
From NYT: http://www.nytimes.com/2016/05/29/nyregion/dreams-stall-as-cuny-citys-engine-of-mobility-sputters.html?ref=todayspaper&_r=0
The troubles at City College, and throughout the entire CUNY system, are representative of a funding crisis that has been building at public universities across the country. Even as the role of higher education as an engine of economic mobility has become increasingly vital, governments have been pulling back their support.
Since the 2008 recession, states have reduced spending on public higher education by 17 percent per student, while tuition has risen by 33 percent, according to a recent report by the nonpartisan Center on Budget and Policy Priorities. Arizona is spending 56 percent less, while students are paying 88 percent more. In Louisiana, students are spending 80 percent more on tuition, while state funding has been cut by 39 percent.
From NYT: http://www.nytimes.com/2016/05/29/nyregion/dreams-stall-as-cuny-citys-engine-of-mobility-sputters.html?ref=todayspaper&_r=0
Some comments on state and federal regulation of financial services, payment systems
Letter to Comptroller General Gene Dodaro requesting study of electronic payment regulations
By Senators Tom Carper (D-DE), Chris Coons (D-DE), and Gary Peters (D-MI)
“The payments industry includes banks, credit unions, credit card networks, payments processors, merchants, payment network operators, telecommunications companies and technology innovators, among others. These companies are overseen by a disparate group of regulators including federal bank regulators, state regulators, and other federal agencies. … [W]e are seeking to better understand current regulations and ongoing efforts at the state and federal levels related to mobile payments.” Read the letter.
Letter to Comptroller General Gene Dodaro seeking a study of the impacts of regulations on fintech
By 10 bipartisan members of the U.S. House of Representatives
“It is rare for a heavily regulated industry like financial services to move at the ‘speed of the Internet,’ but that’s exactly what’s happening with the rapid change brought about by fintech innovators. While this change is exciting and presents great benefits for consumers, Congress and federal regulators have an obligation to be educated and aware of how the transformation of financial services comports with established rules and regulations.” Read the letter.
Letter to Comptroller General Gene Dodaro requesting study of electronic payment regulations
By Senators Tom Carper (D-DE), Chris Coons (D-DE), and Gary Peters (D-MI)
“The payments industry includes banks, credit unions, credit card networks, payments processors, merchants, payment network operators, telecommunications companies and technology innovators, among others. These companies are overseen by a disparate group of regulators including federal bank regulators, state regulators, and other federal agencies. … [W]e are seeking to better understand current regulations and ongoing efforts at the state and federal levels related to mobile payments.” Read the letter.
Letter to Comptroller General Gene Dodaro seeking a study of the impacts of regulations on fintech
By 10 bipartisan members of the U.S. House of Representatives
“It is rare for a heavily regulated industry like financial services to move at the ‘speed of the Internet,’ but that’s exactly what’s happening with the rapid change brought about by fintech innovators. While this change is exciting and presents great benefits for consumers, Congress and federal regulators have an obligation to be educated and aware of how the transformation of financial services comports with established rules and regulations.” Read the letter.
Uber and Lyft have a powerful new enemy in Washington
At the annual conference of the New America think tank, Elizabeth Warren slammed ride-hailing companies Uber and Lyft for undermining the economic safety net of worker protections built over the last century. See her speech at an annual conference for the New America Foundation
The idea of investing capital to help finance a lawsuit
The May 16 passage of a provision of the 2012 JOBS Act could pave the way for lawsuit-investing pitches at the retail investor level.
There is no denying the risks that a lawsuit could lose or result in a minimal settlement. But when the latest figures are showing annualized returns in the 90% range, advisers should expect the noise surrounding litigation finance to keep getting louder.
Article: http://www.investmentnews.com/article/20160520/FREE/160519906/returns-are-big-but-the-jury-is-still-out-on-lawsuit-investing?utm_source=natlnewsletter&utm_medium=email&utm_content=national&utm_campaign=WashingtonDC_20160523_0817
The May 16 passage of a provision of the 2012 JOBS Act could pave the way for lawsuit-investing pitches at the retail investor level.
There is no denying the risks that a lawsuit could lose or result in a minimal settlement. But when the latest figures are showing annualized returns in the 90% range, advisers should expect the noise surrounding litigation finance to keep getting louder.
Article: http://www.investmentnews.com/article/20160520/FREE/160519906/returns-are-big-but-the-jury-is-still-out-on-lawsuit-investing?utm_source=natlnewsletter&utm_medium=email&utm_content=national&utm_campaign=WashingtonDC_20160523_0817
Exelon developments from posting by Anya Schoolman of DC Sun
The DCPSC announced that it is extending the 30-day deadline to rule on all the applications for reconsideration of the Merger until June 22. DC SUN, the AG representing DC government and OPC have all sought reconsideration of the decision to approve the merger with the PSC revised settlement conditions. This is not unexpected. The PSC is aware that it will need to defend its actions in court and so is taking more time to respond to the issues that have been raised.
In other news...
Exelon in IL - When Exelon last week unveiled its new plan to preserve two Illinois nuclear plants in danger of closure, the company touted concessions to its traditional environmentalist adversaries, including $140 million in spending annually on new solar power projects in the state.
But when green groups and renewable power companies read the actual language of Exelon's bill a few days later, it turned out the measure would only generate about $7 million a year. That would effectively kill Illinois' clean-energy law, which has a goal of gradually boosting the state's reliance on wind, solar and other renewable electricity sources over time.
Exelon acknowledged what environmentalists said about the bill language. But the company said that wasn't its intention and maintained a drafting error was to blame.http://www.chicagobusiness.com/article/20160512/NEWS11/160519950/oops-exelons-compromise-energy-bill-nearly-zeroes-out-green-power-funding
The DCPSC announced that it is extending the 30-day deadline to rule on all the applications for reconsideration of the Merger until June 22. DC SUN, the AG representing DC government and OPC have all sought reconsideration of the decision to approve the merger with the PSC revised settlement conditions. This is not unexpected. The PSC is aware that it will need to defend its actions in court and so is taking more time to respond to the issues that have been raised.
In other news...
Exelon in IL - When Exelon last week unveiled its new plan to preserve two Illinois nuclear plants in danger of closure, the company touted concessions to its traditional environmentalist adversaries, including $140 million in spending annually on new solar power projects in the state.
But when green groups and renewable power companies read the actual language of Exelon's bill a few days later, it turned out the measure would only generate about $7 million a year. That would effectively kill Illinois' clean-energy law, which has a goal of gradually boosting the state's reliance on wind, solar and other renewable electricity sources over time.
Exelon acknowledged what environmentalists said about the bill language. But the company said that wasn't its intention and maintained a drafting error was to blame.http://www.chicagobusiness.com/article/20160512/NEWS11/160519950/oops-exelons-compromise-energy-bill-nearly-zeroes-out-green-power-funding
DC Bar event: State of Play on Administrative Procedures Act Reform
Date & Time: Tuesday, June 14, 2016 from 12:00 pm to 1:30 pm
This is a free event, registration is required. Please RSVP to Melissa Karcz at Melissa.Karcz@hoganlovells.com
Discussion on the state of play in the efforts to reform the Administrative Procedure Act (APA). Panelists include: Daniel Flores, Chief Counsel, Subcommittee on Regulatory Reform, Commercial and Antitrust Law, Committee on the Judiciary, U.S. House of Representatives; John Walke, Director, Clean Air Project, Climate & Clean Air Program; and William Kovacs, Senior Vice President, Environment, Technology & Regulatory Affairs, US Chamber of Commerce. Justin Savage, a Partner at Hogan Lovells US LLP, will moderate.
This announcement only program is sponsored by the D.C. Bar Administrative Law and Agency Practice Section. Cosponsored by the Antitrust and Consumer Law Section, the Environment, Energy and Natural Resources Section, the Health Law Section and the International Law Section.
Location
Dirksen Senate Office Building
First St, NE
Senate Environment and Public Works Comm. Rm. #406
Washington DC 20002
Map it
Contact Information
Sections Office
Email: SectionsEvents@dcbar.org
Phone: 202-626-3463
Fax: 202-824-1877
Date & Time: Tuesday, June 14, 2016 from 12:00 pm to 1:30 pm
This is a free event, registration is required. Please RSVP to Melissa Karcz at Melissa.Karcz@hoganlovells.com
Discussion on the state of play in the efforts to reform the Administrative Procedure Act (APA). Panelists include: Daniel Flores, Chief Counsel, Subcommittee on Regulatory Reform, Commercial and Antitrust Law, Committee on the Judiciary, U.S. House of Representatives; John Walke, Director, Clean Air Project, Climate & Clean Air Program; and William Kovacs, Senior Vice President, Environment, Technology & Regulatory Affairs, US Chamber of Commerce. Justin Savage, a Partner at Hogan Lovells US LLP, will moderate.
This announcement only program is sponsored by the D.C. Bar Administrative Law and Agency Practice Section. Cosponsored by the Antitrust and Consumer Law Section, the Environment, Energy and Natural Resources Section, the Health Law Section and the International Law Section.
Location
Dirksen Senate Office Building
First St, NE
Senate Environment and Public Works Comm. Rm. #406
Washington DC 20002
Map it
Contact Information
Sections Office
Email: SectionsEvents@dcbar.org
Phone: 202-626-3463
Fax: 202-824-1877
Users of Walmart prepaid card run into trouble checking balances and accessing funds
Frustrated consumers took to Facebook and Twitter to air their grievances, with some complaining that they have been unable to access their funds for two days or longer. The complaints involve the Walmart MoneyCard, a reloadable prepaid card that is issued by Green Dot Bank.
In an emailed statement, Green Dot said that its new transaction-processing partner, MasterCard Payment Transaction Services, is experiencing slowdowns in some systems. Green Dot acknowledged that customers cannot currently access their card balances online or over the phone, but said that they can still check balances by mobile apps or text message.
It also disputed claims that users cannot access their funds.
Full article: http://www.americanbanker.com/news/bank-technology/prepaid-users-to-walmart-green-dot-we-cant-access-our-money-1081075-1.html?utm_medium=email&ET=americanbanker:e6753490:4145571a:&utm_source=newsletter&utm_campaign=daily%20briefing-may%2019%202016&st=email&eid=c9462b432ff5c8513e739b4675e68c47
Frustrated consumers took to Facebook and Twitter to air their grievances, with some complaining that they have been unable to access their funds for two days or longer. The complaints involve the Walmart MoneyCard, a reloadable prepaid card that is issued by Green Dot Bank.
In an emailed statement, Green Dot said that its new transaction-processing partner, MasterCard Payment Transaction Services, is experiencing slowdowns in some systems. Green Dot acknowledged that customers cannot currently access their card balances online or over the phone, but said that they can still check balances by mobile apps or text message.
It also disputed claims that users cannot access their funds.
Full article: http://www.americanbanker.com/news/bank-technology/prepaid-users-to-walmart-green-dot-we-cant-access-our-money-1081075-1.html?utm_medium=email&ET=americanbanker:e6753490:4145571a:&utm_source=newsletter&utm_campaign=daily%20briefing-may%2019%202016&st=email&eid=c9462b432ff5c8513e739b4675e68c47
Justices Say Federal Securities Laws Don’t Limit State Suits
The U.S. Supreme Court unanimously ruled that federal securities laws don't preempt certain claims from being brought in state court, in a decision that allows a shareholder suit against a Merrill Lynch unit and other Wall Street firms to proceed in New Jersey state court on claims they engaged in a manipulative short-selling campaign against them.
High Court's Spokeo Punt Sets Bar For Class Action Injuries
The U.S. Supreme Court shut down consumers' efforts to sue businesses for technical violations of the Fair Credit Reporting Act and other consumer protection statutes, but its silence on whether claims against Spokeo fit the bill leaves both sides with ammunition in fights over statutory claims where plaintiffs allege intangible injuries.
The U.S. Supreme Court unanimously ruled that federal securities laws don't preempt certain claims from being brought in state court, in a decision that allows a shareholder suit against a Merrill Lynch unit and other Wall Street firms to proceed in New Jersey state court on claims they engaged in a manipulative short-selling campaign against them.
High Court's Spokeo Punt Sets Bar For Class Action Injuries
The U.S. Supreme Court shut down consumers' efforts to sue businesses for technical violations of the Fair Credit Reporting Act and other consumer protection statutes, but its silence on whether claims against Spokeo fit the bill leaves both sides with ammunition in fights over statutory claims where plaintiffs allege intangible injuries.
Trump on Amazon antitrust exposure
For video see: http://www.cnbc.com/2016/05/13/trump-says-amazon-has-a-huge-antitrust-problem.html
Trump says Amazon has a "huge" antitrust problem. Commenters point out that while Trump's comments may be campaign rhetoric in response to unfavorable Washington Post news coverage (Amazon's Bezos owns the Post), Trump ans President would be able to encourage USDOJ investigation.
For video see: http://www.cnbc.com/2016/05/13/trump-says-amazon-has-a-huge-antitrust-problem.html
Trump says Amazon has a "huge" antitrust problem. Commenters point out that while Trump's comments may be campaign rhetoric in response to unfavorable Washington Post news coverage (Amazon's Bezos owns the Post), Trump ans President would be able to encourage USDOJ investigation.
Federal Court rules that Obama administration illegally spent money for Affordable Care Act
A federal judge has decided that the Obama administration unconstitutionally spent money to pay for part of the Affordable Care Act.
The decision can be found here: decision
House Republicans alleged in a lawsuit that the administration illegally spent money that Congress never appropriated for the ACA's cost-sharing provisions. Those provisions include reduced deductibles, copayments and coinsurance many Americans receive, depending on income, for plans purchased through the ACA's insurance exchanges.
Commenters observe that the decision creates uncertainty that is a blow to the share prices of hospitals and health insurers.
See http://www.modernhealthcare.com/article/20160512/NEWS/160519949?utm_source=modernhealthcare&utm_medium=email&utm_content=20160512-NEWS-160519949&utm_campaign=am
A federal judge has decided that the Obama administration unconstitutionally spent money to pay for part of the Affordable Care Act.
The decision can be found here: decision
House Republicans alleged in a lawsuit that the administration illegally spent money that Congress never appropriated for the ACA's cost-sharing provisions. Those provisions include reduced deductibles, copayments and coinsurance many Americans receive, depending on income, for plans purchased through the ACA's insurance exchanges.
Commenters observe that the decision creates uncertainty that is a blow to the share prices of hospitals and health insurers.
See http://www.modernhealthcare.com/article/20160512/NEWS/160519949?utm_source=modernhealthcare&utm_medium=email&utm_content=20160512-NEWS-160519949&utm_campaign=am
Brookings on the Panama Papers and reforms to discourage financial secrecy that hides illegal behavior
Excerpt:
The U.S. and the U.K. (with its offshores), should heed the calls for dismantling secrecy and tax havens. Seeds of effort, such as the U.S. government’s decisionto require banks to know the identities of the individuals behind shell companies, are now coming to light, but broader efforts, including legislation, will also be required.
Beneficial ownership transparency should become standard operating procedure, with governments following the example of the U.K., the Netherlands, and others in setting up public registries, and joining the movement toward a global registry.
See http://www.brookings.edu/blogs/future-development/posts/2016/05/09-corruption-panama-papers-kaufmann-gillies?utm_campaign=Brookings+Brief&utm_source=hs_email&utm_medium=email&utm_content=29403025&_hsenc=p2ANqtz-8cSpVyuOGNWwh84wUqtedW2BA0LqcZuwBatA8uUhActnTuswTCB7WjTKpRldPN8eNTFdnnk3GVbqOTLVrZnFGDtzY_hQ&_hsmi=29403025
Excerpt:
The U.S. and the U.K. (with its offshores), should heed the calls for dismantling secrecy and tax havens. Seeds of effort, such as the U.S. government’s decisionto require banks to know the identities of the individuals behind shell companies, are now coming to light, but broader efforts, including legislation, will also be required.
Beneficial ownership transparency should become standard operating procedure, with governments following the example of the U.K., the Netherlands, and others in setting up public registries, and joining the movement toward a global registry.
See http://www.brookings.edu/blogs/future-development/posts/2016/05/09-corruption-panama-papers-kaufmann-gillies?utm_campaign=Brookings+Brief&utm_source=hs_email&utm_medium=email&utm_content=29403025&_hsenc=p2ANqtz-8cSpVyuOGNWwh84wUqtedW2BA0LqcZuwBatA8uUhActnTuswTCB7WjTKpRldPN8eNTFdnnk3GVbqOTLVrZnFGDtzY_hQ&_hsmi=29403025
Brookings: Delaware as an example of a U.S. secrecy and tax haven
For those seeking secret shelters and corporate shells, the U.S. is one of the world’s most appealing destinations: Setting up a shell corporation in Delaware, for instance, requires less background information than obtaining a driver’s license. This opacity, coupled with the size of the U.S. as a haven, means that it has been ranked the third most secretive jurisdiction among close to 100 assessed by the Financial Secrecy Index. Panama is 13th.
See http://www.brookings.edu/blogs/future-development/posts/2016/05/09-corruption-panama-papers-kaufmann-gillies?utm_campaign=Brookings+Brief&utm_source=hs_email&utm_medium=email&utm_content=29403025&_hsenc=p2ANqtz-8cSpVyuOGNWwh84wUqtedW2BA0LqcZuwBatA8uUhActnTuswTCB7WjTKpRldPN8eNTFdnnk3GVbqOTLVrZnFGDtzY_hQ&_hsmi=29403025
The Financial Times: South Dakota trustee procedures help make US a magnet for offshore wealth
Excerpt:
Sioux Falls, South Dakota has become a magnet for the ultra-wealthy who set up trusts to protect their fortunes from taxes and future ex-spouses. Assets held in South Dakotan trusts have grown from $32.8bn in 2006 to more than $226bn in 2014, according to the state’s division of banking. The number of trust companies has jumped from 20 in 2006 to 86 this year.
The state’s role as a prairie tax haven has gained unwanted attention since the release of the Panama Papers, an investigation by the International Consortium of Investigative Journalists. The leak of more than 11m documents from a Panamanian law firm — some of which will be put on to a public database today — has drawn attention to the anonymity that is available in the US.
After years of threatening Swiss and other foreign banks that helped Americans hide their money, the US stands accused of providing similar services for the rest of the world. “America is the new Switzerland,” says David Wilson, partner of Schellenberg Wittmer, a Swiss law firm. “In the industry we have known this for several years.”
The US has a long history of attracting funds from undisclosed foreign sources. In 2011, The Florida Bankers Association told Congress there were hundreds of billions of foreign deposits in US banks because “for more than 90 years the US government has encouraged foreigners to put their money in US banks by exempting these deposits from taxes and reporting”.
The growth has been fuelled by international disclosure rules introduced in 2014 to crack down on tax havens — and adopted almost everywhere except the US, which had introduced its own regulations. But these rules have gaps that preserved the advantages of trusts such as the ones on offer in South Dakota. Rules proposed by the White House last week to force companies to disclose more information about their owners are unlikely to erode those advantages.
Trusts are able to avoid scrutiny under both US and international rules as long as the owner appoints a local trustee and a foreign “protector” to direct the trustees. South Dakotan companies actively promote the secrecy offered by opening a trust in the state.
“Many of the offshore jurisdictions are becoming less appealing for international families looking for secrecy”, says the website of the South Dakota Trust Company, one of the most prominent.
The full FT article is at http://www.ft.com/cms/s/0/cc46c644-12dd-11e6-839f-2922947098f0.html#ixzz48BFZAbXb
From Pew Trusts: CFPB payday lending rules a foundation for state law reform
Today, payday and auto title lenders operate in 39 states; in 25 of them, lenders already issue installment loans or lines of credit that would pass the CFPB’s proposed ability-to-repay rules even though many have annual percentage rates exceeding 300 percent and include unaffordable loan terms. These loans lack the safeguards that well-structured installment loans should have, including affordable loan payments and limits on cost and duration.
The CFPB’s rules would not prevent the spread of all potentially harmful loans because the bureau lacks the power to regulate interest rates. In fact, the agency’s March 2015 outline of its proposed payday loan rules provided a clear pathway for lenders to continue making high-cost loans where allowed by state law. Further, high-cost payday and auto title installment lending is likely to expand beyond the 25 states where it exists today as lenders continue to push the limits of state laws orseek to amend state laws in their favor.
However, this probability raises important questions: What will these longer-term loans look like, and how will the CFPB ensure the safety and fairness of these loans for the millions of people who will use them?
The answers will depend on whether the CFPB stamps out common harmful practices; provides a strong regulatory framework on which state lawmakers can build.
Article: http://www.pewtrusts.org/en/research-and-analysis/analysis/2016/03/29/how-the-cfpb-framework-could-affect-the-small-loan-marketplace
Today, payday and auto title lenders operate in 39 states; in 25 of them, lenders already issue installment loans or lines of credit that would pass the CFPB’s proposed ability-to-repay rules even though many have annual percentage rates exceeding 300 percent and include unaffordable loan terms. These loans lack the safeguards that well-structured installment loans should have, including affordable loan payments and limits on cost and duration.
The CFPB’s rules would not prevent the spread of all potentially harmful loans because the bureau lacks the power to regulate interest rates. In fact, the agency’s March 2015 outline of its proposed payday loan rules provided a clear pathway for lenders to continue making high-cost loans where allowed by state law. Further, high-cost payday and auto title installment lending is likely to expand beyond the 25 states where it exists today as lenders continue to push the limits of state laws orseek to amend state laws in their favor.
However, this probability raises important questions: What will these longer-term loans look like, and how will the CFPB ensure the safety and fairness of these loans for the millions of people who will use them?
The answers will depend on whether the CFPB stamps out common harmful practices; provides a strong regulatory framework on which state lawmakers can build.
Article: http://www.pewtrusts.org/en/research-and-analysis/analysis/2016/03/29/how-the-cfpb-framework-could-affect-the-small-loan-marketplace
Uber and Lyft are to pull out of Austin, Texas, rather than complying with a local requirement to run fingerprint-based background checks on drivers.
The showdown underscores how Uber is not shying away from aggressive tactics, even as it simultaneously tries to strike a more conciliatory tone with regulators in other markets.
The issue of fingerprinting and background checks has become a lightning rod for Uber in several markets, as the company strongly opposes fingerprint-based checks.
The service suspension in Austin sets the stage for a similar confrontation in nearby Houston, also an important market for Uber, where the company has threatened to pull out if the city does not remove fingerprint requirements.
In Austin, voters rejected a proposal backed by Uber and Lyft that would have removed the fingerprinting requirement. The ballot measure failed despite Uber and Lyft spending a combined $8m canvassing for support.
Article: http://www.ft.com/cms/s/0/ac63c10c-1566-11e6-9d98-00386a18e39d.html#ixzz48AAg7ZYP
The showdown underscores how Uber is not shying away from aggressive tactics, even as it simultaneously tries to strike a more conciliatory tone with regulators in other markets.
The issue of fingerprinting and background checks has become a lightning rod for Uber in several markets, as the company strongly opposes fingerprint-based checks.
The service suspension in Austin sets the stage for a similar confrontation in nearby Houston, also an important market for Uber, where the company has threatened to pull out if the city does not remove fingerprint requirements.
In Austin, voters rejected a proposal backed by Uber and Lyft that would have removed the fingerprinting requirement. The ballot measure failed despite Uber and Lyft spending a combined $8m canvassing for support.
Article: http://www.ft.com/cms/s/0/ac63c10c-1566-11e6-9d98-00386a18e39d.html#ixzz48AAg7ZYP
Seven of the world's biggest banks have agreed to pay $324 million to settle a private U.S. lawsuit by municipalities and pension funds accusing them of rigging an interest rate benchmark used in the $553 trillion derivatives market.
The settlement, which requires court approval, resolves antitrust claims against Bank of America, Barclays, Citigroup, Credit Suisse, Deutsche Bank, JPMorgan Chase, and Royal Bank of Scotland.
Several pension funds and municipalities accused 14 banks, including those that settled, of conspiring to rig the "ISDAfix" benchmark for their own gain from at least 2009 to 2012.
Companies and investors use ISDA fix to price swaps transactions, commercial real estate mortgages and structured debt securities.
The alleged illegal activity included the execution of rapid trades just before the rate was set each day, called "banging the close," causing the British brokerage ICAP to delay trades until they moved ISDA fix where they wanted, and posting rates that did not reflect market activity.
Under the settlement, payments would include $52 million from JPMorgan; $50 million each from Bank of America, Credit Suisse, Deutsche Bank and RBS; $42 million from Citigroup and $30 million from Barclays.
The remaining defendants are BNP Paribas, Goldman Sachs, HSBC, Morgan Stanley, Nomura Holdings, UBS, Wells Fargo & Co and ICAP, lawyers for the plaintiffs said.
Tuesday's accord came five weeks after U.S. District Judge Jesse Furman in Manhattan refused to dismiss the lawsuit.
U.S. and European regulators have also examined whether ISDAfix was set properly, and Barclays agreed last May to pay a $115 million fine to settle a U.S. Commodity Futures Trading Commission probe.
The private lawsuit is one of many pending in Manhattan federal court accusing banks of conspiring to rig rate benchmarks, securities prices or commodities prices.
The case is Alaska Electrical Pension Fund et al v. Bank of America Corp et al, U.S. District Court, Southern District of New York, No. 14-07126.
Source: http://www.nbcnews.com/business/business-news/seven-major-banks-agree-pay-324m-rate-rigging-lawsuit-n567611
After years of negotiations, is is the US-EU trade deal TTIP dying a slow death because of the environmental and consumer issues identified by Greenpeace?
From France24.com
The vast trade deal between the EU and the US known as TTIP has been through 13 rounds of negotiations spanning three years, but in the wake of leaked documents by Greenpeace and grumblings from Europe, is the deal now dead in the water?
TTIP – or the Transatlantic Trade and Investment Partnership – would create a vast free trade area that the European Commission claims could boost the EU’s economy by €119 billion a year, and the US’s by €95 billion.
But there has been stern opposition to the agreement from critics who argue that it would see consumer protection, environmental and health regulations severely eroded while handing unprecedented power to big businesses.
Those concerns were amplified leak of a raft of classified documents by Greenpeace covering negotiating drafts and internal positions from the talks.
Greenpeace claimed the documents showed that TTIP “is threatening to have far reaching implications for the environment and the lives of more than 800 million citizens in the EU and US”.
Now, those fears seem to be filtering through to at least some of the EU’s leaders.
On Tuesday, French President François Hollande said his government would refuse to back the deal "at this stage" because his country opposes "unregulated free trade”. "Never would we accept the undermining of the essential principles of our agriculture, our culture, of mutual access to public markets," he said.
See http://www.france24.com/en/20160503-ttip-us-eu-greenpeace-after-years-negotiations-dying-slow-death
From France24.com
The vast trade deal between the EU and the US known as TTIP has been through 13 rounds of negotiations spanning three years, but in the wake of leaked documents by Greenpeace and grumblings from Europe, is the deal now dead in the water?
TTIP – or the Transatlantic Trade and Investment Partnership – would create a vast free trade area that the European Commission claims could boost the EU’s economy by €119 billion a year, and the US’s by €95 billion.
But there has been stern opposition to the agreement from critics who argue that it would see consumer protection, environmental and health regulations severely eroded while handing unprecedented power to big businesses.
Those concerns were amplified leak of a raft of classified documents by Greenpeace covering negotiating drafts and internal positions from the talks.
Greenpeace claimed the documents showed that TTIP “is threatening to have far reaching implications for the environment and the lives of more than 800 million citizens in the EU and US”.
Now, those fears seem to be filtering through to at least some of the EU’s leaders.
On Tuesday, French President François Hollande said his government would refuse to back the deal "at this stage" because his country opposes "unregulated free trade”. "Never would we accept the undermining of the essential principles of our agriculture, our culture, of mutual access to public markets," he said.
See http://www.france24.com/en/20160503-ttip-us-eu-greenpeace-after-years-negotiations-dying-slow-death
US Federal Communications Commission has voted to approve Charter Communications Inc’s acquisitions of Time Warner Cable Inc and Bright House Networks,
The deals, which would create the second-largest broadband provider and third-largest video provider in the United States, now need approval from regulators in California. A state administrative judge there recommended last month that California’s public utilities commission approve the deal. That decision is expected at a hearing on Thursday.
The US Justice Department gave antitrust approval to the acquisitions with conditions on April 25.
Full articles: https://www.competitionpolicyinternational.com/us-fcc-backs-charter-purchase-of-time-warner-cable-bright-house-sources/
Also http://www.nytimes.com/2016/05/07/technology/fcc-backs-charters-acquisition-of-cable-companies.html?mabReward=CTM&moduleDetail=recommendations-0&action=click&contentCollection=Business%20Day®ion=Footer&module=WhatsNext&version=WhatsNext&contentID=WhatsNext&src=recg&pgtype=article
The deals, which would create the second-largest broadband provider and third-largest video provider in the United States, now need approval from regulators in California. A state administrative judge there recommended last month that California’s public utilities commission approve the deal. That decision is expected at a hearing on Thursday.
The US Justice Department gave antitrust approval to the acquisitions with conditions on April 25.
Full articles: https://www.competitionpolicyinternational.com/us-fcc-backs-charter-purchase-of-time-warner-cable-bright-house-sources/
Also http://www.nytimes.com/2016/05/07/technology/fcc-backs-charters-acquisition-of-cable-companies.html?mabReward=CTM&moduleDetail=recommendations-0&action=click&contentCollection=Business%20Day®ion=Footer&module=WhatsNext&version=WhatsNext&contentID=WhatsNext&src=recg&pgtype=article
Public Citizen blog: CFPB issues proposed rule on forced arbitration clauses that ban class actions
The CFPB has released its much-awaited proposed rule on forced arbitration clauses -- arguably the single biggest step the Bureau can take to level the playing field for American consumers.
If adopted after notice-and-comment, the CFPB's new rule would prohibit forced arbitration clauses that prevent consumers from banding together to hold companies accountable in court, effectively nullifying the impact of the Supreme Court's AT&T Mobility v. Concepcion decision in the market for consumer financial services. The proposed rule would also require companies with arbitration clauses to send the CFPB the claims, awards, and other information filed in arbitration cases, to allow the Bureau to monitor what up to now has largely been a secret system of corporate tribunals.
You can read the Bureau's entire 376-page proposal here. It contains an extensive history of class actions and arbitration, a summary of the Bureau's study on arbitration clauses, and a sustained defense of the policy merits of the Bureau's proposal.
The proposal will be announced by Rich Cordray at a field hearing in Albuquerque, New Mexico on Friday morning, May 6.
For the full Public Citizen positing click the title
The CFPB has released its much-awaited proposed rule on forced arbitration clauses -- arguably the single biggest step the Bureau can take to level the playing field for American consumers.
If adopted after notice-and-comment, the CFPB's new rule would prohibit forced arbitration clauses that prevent consumers from banding together to hold companies accountable in court, effectively nullifying the impact of the Supreme Court's AT&T Mobility v. Concepcion decision in the market for consumer financial services. The proposed rule would also require companies with arbitration clauses to send the CFPB the claims, awards, and other information filed in arbitration cases, to allow the Bureau to monitor what up to now has largely been a secret system of corporate tribunals.
You can read the Bureau's entire 376-page proposal here. It contains an extensive history of class actions and arbitration, a summary of the Bureau's study on arbitration clauses, and a sustained defense of the policy merits of the Bureau's proposal.
The proposal will be announced by Rich Cordray at a field hearing in Albuquerque, New Mexico on Friday morning, May 6.
For the full Public Citizen positing click the title
American Hospital Association: Experts on AHA panel say insurer mergers bad for providers, consumers
WASHINGTON, D.C. -- Payers and providers remain deeply divided over health insurance company consolidation--a fact highlighted during an executive briefing at the American Hospital Association's annual meeting..
Of particular concern, according to the panelists, are the two major pending health insurer mergers--Aetna-Humana and Anthem-Cigna--which would whittle the five largest for-profit payers down to three.
"The unprecedented level of consolidation that these deals threaten could make health insurance more expensive and less accessible to consumers," moderator and AHA board member Thomas Miller said. "We are also very concerned that these deals could hinder the momentum that hospitals have established to move the nation's healthcare system forward."
The AHA has been a fierce opponent of the two deals, as its leaders have testified against the mergers at hearings on Capitol Hill as well assent detailed letters to the Department of Justice arguing against the transactions.
These efforts are justified, argued Northwestern University professor Leemore Dafny (right), because while there is no definitive academic research proving that past insurer mergers have created cost efficiencies or improved quality and innovation, there is evidence that provider reimbursement decreases and that insurance premiums go up.
>>Read the full report
Greenpeace says US-EU trade deal risks the environment and consumer safety, releases classified documents
The campaign group published 248 pages online to “shine a light” on the closed-door talks to forge a Transatlantic Trade and Investment Partnership (TTIP), which would be the world’s largest bilateral trade and investment agreement.
See http://www.france24.com/en/20160502-greenpeace-leaks-transatlantic-trade-deal-papers
The campaign group published 248 pages online to “shine a light” on the closed-door talks to forge a Transatlantic Trade and Investment Partnership (TTIP), which would be the world’s largest bilateral trade and investment agreement.
See http://www.france24.com/en/20160502-greenpeace-leaks-transatlantic-trade-deal-papers
From Public Citizen Blog:
Are there too many occupational licensing laws?
A piece in Fivethirtyeight last week highlights the challenges occupational licensing laws pose for younger job-seekers. These are
rules, usually at the state or local level, that require workers to get a government-issued license to hold certain jobs. That makes sense for doctors and accountants, but the requirements are increasingly spreading to barbers, cosmetologists and even landscapers. (The New York Department of Labor lists 130 occupations that require licenses.) In many cases the rules seem designed less to protect consumers than to protect politically connected workers and businesses who want to deter potential competition — what economists call “rent-seeking.”
Read more here.
Washington Business Journal: Mayor helps break ground on new D.C. United stadium -- talk of $1 billion benefit
A new era began at Buzzard Point after D.C. Mayor Muriel Bowser helped launch construction of the 20,000-seat soccer forum. Bowser expects the project to create 1,000 construction jobs and Deputy Mayor Brian Kenner said it will generate $1 billion in economic activity in the area in coming years. (Click title for Washington Business Journal)
DAR note: Not all analysts agree that sports stadiums are a source of municipal benefit, although they are very popular with local political leaders:
Sports stadiums do not generate significant local economic growth; Stanford economist Roger Noll says professional sports stadiums do not generate local economic growth as advertised.
.
https://news.stanford.edu/2015/07/30/stadium-economics-noll-073015/
Are pro sports teams economic winners for cities?
http://www.marketplace.org/2015/03/19/business/are-pro-sports-teams-economic-winners-cities
Sports Stadiums Have No Impact on Municipal Economies ...
- http://www.dailykos.com/story/2015/2/20/1365048/-Sports-Stadiums-Have-No-Impact-on-Municipal-Economies-So-Why-is-it-We-Still-Subsidize-the-NFL
From Modern Healthcare:
Breaking the system: State budget battles gut healthcare for the most vulnerable
Even as the White House touts the Affordable Care Act's successful coverage of nearly 20 million people, residents across the country are struggling to access and afford healthcare and social service programs.
READ MORE
States Mull New Regulations for Online Business Lenders
Illinois, California and New York are all taking initial steps to try to crack down on borrower abuses in the fast-growing digital lending marketplace. The states are facing pressure to intervene because federal agencies have yet to take decisive action.
Full article (paywall): http://www.americanbanker.com/news/marketplace-lending/states-mull-new-regulations-for-online-business-lenders-1080617-1.html?utm_medium=email&ET=americanbanker:e6579483:4145571a:&utm_source=newsletter&utm_campaign=daily%20briefing-apr%2025%202016&st=email&eid=c9462b432ff5c8513e739b4675e68c47
Illinois, California and New York are all taking initial steps to try to crack down on borrower abuses in the fast-growing digital lending marketplace. The states are facing pressure to intervene because federal agencies have yet to take decisive action.
Full article (paywall): http://www.americanbanker.com/news/marketplace-lending/states-mull-new-regulations-for-online-business-lenders-1080617-1.html?utm_medium=email&ET=americanbanker:e6579483:4145571a:&utm_source=newsletter&utm_campaign=daily%20briefing-apr%2025%202016&st=email&eid=c9462b432ff5c8513e739b4675e68c47
DC Attorney General Application for Reconsideration of the DCPSC Order approving the Exelon-PHI merger
Excerpt:
By unilaterally modifying the terms of the Non-Unanimous Settlement Agreement (NSA) and approving the terms of the Revised Non-Unanimous Settlement Agreement (RNSA) as a resolution on the merits, the Commission committed a series of procedural and substantive errors that require it to reconsider and vacate Order No. 18148. After reopening Formal Case 1119 “solely for the very limited purpose of considering whether the Settlement Agreement filed by the Settling Parties is in the public interest” and “for no other purpose,” the Commission proposed and then, without the Settling Parties’ consent, approved alternative terms it would have preferred to see in the settlement. If allowed to stand, this Order denies the District Government and most of the other Settling Parties their due process rights.
DAR comment: The AG application offers reasons why the PSC approval of the Exelon merger would not survive Court review. That raises the question of whether the AG will seek Court review of the PSC merger approval if the PSC refuses to change its decision. A question not germane to the AG application, but important to broad public interest concerns, is about the due process rights of entities that, unlike the AG, were not designated by the DCPSC as "parties." Several entities not designated as "parties," including Public Citizen, have expressed concerns about the propriety of the DCPSC's approval of the Exelon-PHI merger. There is a question about the rights of Public Citizen and similar entities not dubbed "parties" to challenge the merger. Complicating the answer is the ability of federal and state AGs, and affected non-public entities, to bring a merger challenge based on antitrust laws. It is not clear that an antitrust action is precluded by regulatory preemption, even at this late date, although there may be various practical obstacles.
The AG application is at http://www.dcpsc.org/edocket/docketsheets_pdf_FS.asp?caseno=FC1119&docketno=1630&flag=D&show_result=Y
Excerpt:
By unilaterally modifying the terms of the Non-Unanimous Settlement Agreement (NSA) and approving the terms of the Revised Non-Unanimous Settlement Agreement (RNSA) as a resolution on the merits, the Commission committed a series of procedural and substantive errors that require it to reconsider and vacate Order No. 18148. After reopening Formal Case 1119 “solely for the very limited purpose of considering whether the Settlement Agreement filed by the Settling Parties is in the public interest” and “for no other purpose,” the Commission proposed and then, without the Settling Parties’ consent, approved alternative terms it would have preferred to see in the settlement. If allowed to stand, this Order denies the District Government and most of the other Settling Parties their due process rights.
DAR comment: The AG application offers reasons why the PSC approval of the Exelon merger would not survive Court review. That raises the question of whether the AG will seek Court review of the PSC merger approval if the PSC refuses to change its decision. A question not germane to the AG application, but important to broad public interest concerns, is about the due process rights of entities that, unlike the AG, were not designated by the DCPSC as "parties." Several entities not designated as "parties," including Public Citizen, have expressed concerns about the propriety of the DCPSC's approval of the Exelon-PHI merger. There is a question about the rights of Public Citizen and similar entities not dubbed "parties" to challenge the merger. Complicating the answer is the ability of federal and state AGs, and affected non-public entities, to bring a merger challenge based on antitrust laws. It is not clear that an antitrust action is precluded by regulatory preemption, even at this late date, although there may be various practical obstacles.
The AG application is at http://www.dcpsc.org/edocket/docketsheets_pdf_FS.asp?caseno=FC1119&docketno=1630&flag=D&show_result=Y
Uber law suit settlement fails to settle independent contractor vs. employee dispute (but Uber will pay $80 million or so to drivers and legal counsel)
From the Insurance Journal article:
Uber Technologies Inc. resolved the biggest threat to its business by settling with California drivers suing to be treated more like traditional employees, a move that could have broad-ranging implications for companies across the sharing economy.
The agreement calls for Uber to pay as much as $100 million to drivers in California and Massachusetts and allows them to solicit tips from riders, but keeps them classified as contract workers instead of formal employees, according to statements by a lawyer for the drivers and the company.
The California drivers’ lawsuit was one of the biggest and most advanced challenges to Uber’s ride-sharing business model, which is still under attack worldwide by the taxi industry, local governments, unions and even passengers.
The settlement means that ’“Uber avoids . . .an adverse finding that these folks are employees,” James Evans, a lawyer who defends companies against employment suits, said about Uber’s efforts to settle the matter. “They leave it an open issue, and that’s desirable from their standpoint. This maintains the status quo, without figuring out if these people should be treated differently or not.”
The class-action lawsuit, set for trial June 20 in San Francisco, had grown to cover about 240,000 current and former Uber drivers in California over claims they were wrongly classified as independent contractors and should be reimbursed for expenses and tips. Those claims under state law would have totaled hundreds of millions of dollars if the world’s biggest ride-hailing service lost at trial. Additional penalties against the company might have added several hundred million dollars more to the cost of a losing verdict.
Under the agreement filed Thursday, which requires court approval, Uber will initially pay $84 million to the drivers, with another $16 million contingent on the ride-share service going public and its valuation continuing to grow, according to the company’s statement.
Despite the failure of the settlement to resolve the major issue of whether Uber drivers are misclassified as independent contractors, a quarter of the payout will go toward attorney fees, according to Shannon Liss-Riordan, the drivers’ lawyer. That appears to be $20 million or so for the attorneys.
Click for Full Article from Insurance Journal
From ABA Journal: Exxon sues law firm that sought climate change documents
BY DEBRA CASSENS WEISS
A law firm representing the attorney general of the U.S. Virgin Islands is facing a lawsuit that claims its subpoena for climate-change documents from Exxon Mobil is an abuse of process.
Exxon filed the suit last week against Cohen Milstein Sellers & Toll and U.S. Virgin Islands Attorney General Claude Walker, the Am Law Daily (sub. req.) reports.
The suit (PDF) claims Walker gave Cohen Milstein the authority to act as a prosecutor, yet it isn’t disinterested in the case because it may be earning a contingency fee. The suit alleges constitutional violations of the right to free speech, due process and protection against unreasonable searches and seizures. Exxon filed the suit in Tarrant County, Texas.
Walker was among a coalition of 20 state attorneys general who announced at a March press conference that they planned to investigate energy companies. Their work is similar to the crusades against tobacco companies, according to the Am Law Daily.
The Exxon subpoena alleged the company misrepresented its knowledge that its activities contribute to climate change, amounting to a civil RICO violation. The allegation “amounts to little more than a weak pretext for an unlawful exercise of government power,” Exxon’s suit says.
Cohen Milstein chairman Joseph Sellers told the Am Law Daily that he couldn’t comment on the litigation. He added, however, that “many of the facts alleged about our firm are incorrect.” Walker said in a statement that he has a duty to protect Virgin Islands residents, and using a private law firm is “entirely proper.”
Article at: http://www.abajournal.com/news/article/exxon_sues_law_firm_seeking_climate_change_documents
WSJ: The Prince of Copyright Enforcement
Article excerpts:
Iin the legal arena, “the artist formerly known as Prince” was known as perhaps the recording industry’s most tenacious defender of copyright protections.
The artist and music companies representing him pushed the boundaries of copyright law with disputes that set legal precedents and polarized fans.
It was just last year when a federal appeals court in California ruled in the famous “dancing baby” case that centered on a 29-second home video of a baby dancing to the Prince song “Let’s Go Crazy.” The court ruled against Universal Music Corp., which enforced Prince’s copyrights, concluding that the company failed to consider whether the content in the video qualifies as fair use before trying to scrub the Internet of it.
Prince was also one of the first major artists to slap Twitter with takedown notices demanding the removal of Vine video clips, which were no more than six seconds long.
Full article: http://blogs.wsj.com/law/2016/04/21/the-prince-of-copyright-enforcement/
Washington Business Journal: Fresh off its completed ( if not entirely settled) merger with Exelon Corp., Pepco is asking for rate increases for its Maryland customers.
On Tuesday the utility filed a request to raise rates on its Maryland customers about 10 percent on the average monthly bill, which is about $152, or about $15.80 per customer. The new rates would bring in almost $127 million.
Complete article: http://www.bizjournals.com/washington/news/2016/04/19/pepco-asks-for-rate-increase-in-maryland-plans-for.html
On Tuesday the utility filed a request to raise rates on its Maryland customers about 10 percent on the average monthly bill, which is about $152, or about $15.80 per customer. The new rates would bring in almost $127 million.
Complete article: http://www.bizjournals.com/washington/news/2016/04/19/pepco-asks-for-rate-increase-in-maryland-plans-for.html
DCPSC proceedings on Exelon-PHI merger: Clarification of procedures on stay of the DCPSC order
Consumer advocates often worry that legal proceedings on matters of public interest are complex and unfriendly to consumers and consumer advocacy. More specifically, antitrust challenges to mergers in court can be complex and inaccessible to consumer interests, and PSC regulatory proceedings on mergers can seem more arcane and even more complex and inaccessible.
With considerations of simplicity and consumer access in mind, it is interesting to consider the response of Joint Applicants in the DCPSC's
Exelon merger proceeding to DC Sun's "request for clarification" concerning stay procedures. (The main idea, it seems fair to say, is that DC Sun wants a stay of the DCPSC order concerning the merger, and Exelon does not.)
Here is an excerpt from the response of the Joint Applicants:
DC Sun's Request is procedurally improper and substantively meritless. After the Grid 2.0 Working Group ("Grid 2.0") submitted an impermissible reply in support of its Application for Reconsideration, DC Sun filed a "Request for Clarification"—also provided for nowhere in the Commission's rules and outside of the five-day deadline for responses to reconsideration applications—asking the Commission to "clarify ... that Order 18148 is stayed pending the resolution of Grid 2.0's application." DC Sun makes that request despite the Joint Applicants' consent to the lifting of the automatic stay pursuant to D.C. Code § 34-604(b), which specifies that "upon written consent of the utiUty [an] order or decision shall not be stayed." The Joint Applicants hereby respond, to the extent the Commission deems a response necessary.
DC Sun principally contends a utility can never invoke § 34-604(b)'s consent provision, because the Commission's regulations do not reiterate that provision. But that claim is contrary to decades of Commission precedent, which has repeatedly recognized and applied the consent provision. This precedent is well-founded. The Commission's regulations, though they do not restate the statutory provision, nowhere limit it. Nor could they, given the hornbook law that regulations are invalid if "inconsistent with the statute." DC Sun also invokes Grid 2.0's argument that Pepco can not rely on the consent provision because "it exists only for the benefit of a utility that is challenging a Commission order," and Pepco cannot "waive another party's stay." But again, the statute refutes this argument: It provides, without qualification, that a Commission decision "shall not be stayed" "upon written consent of the utility."
For the whole of the response of Joint Applicants to DC Sun's request for clarification, see http://www.dcpsc.org/edocket/docketsheets_pdf_FS.asp?caseno=FC1119&docketno=1622&flag=D&show_result=Y
Consumer advocates often worry that legal proceedings on matters of public interest are complex and unfriendly to consumers and consumer advocacy. More specifically, antitrust challenges to mergers in court can be complex and inaccessible to consumer interests, and PSC regulatory proceedings on mergers can seem more arcane and even more complex and inaccessible.
With considerations of simplicity and consumer access in mind, it is interesting to consider the response of Joint Applicants in the DCPSC's
Exelon merger proceeding to DC Sun's "request for clarification" concerning stay procedures. (The main idea, it seems fair to say, is that DC Sun wants a stay of the DCPSC order concerning the merger, and Exelon does not.)
Here is an excerpt from the response of the Joint Applicants:
DC Sun's Request is procedurally improper and substantively meritless. After the Grid 2.0 Working Group ("Grid 2.0") submitted an impermissible reply in support of its Application for Reconsideration, DC Sun filed a "Request for Clarification"—also provided for nowhere in the Commission's rules and outside of the five-day deadline for responses to reconsideration applications—asking the Commission to "clarify ... that Order 18148 is stayed pending the resolution of Grid 2.0's application." DC Sun makes that request despite the Joint Applicants' consent to the lifting of the automatic stay pursuant to D.C. Code § 34-604(b), which specifies that "upon written consent of the utiUty [an] order or decision shall not be stayed." The Joint Applicants hereby respond, to the extent the Commission deems a response necessary.
DC Sun principally contends a utility can never invoke § 34-604(b)'s consent provision, because the Commission's regulations do not reiterate that provision. But that claim is contrary to decades of Commission precedent, which has repeatedly recognized and applied the consent provision. This precedent is well-founded. The Commission's regulations, though they do not restate the statutory provision, nowhere limit it. Nor could they, given the hornbook law that regulations are invalid if "inconsistent with the statute." DC Sun also invokes Grid 2.0's argument that Pepco can not rely on the consent provision because "it exists only for the benefit of a utility that is challenging a Commission order," and Pepco cannot "waive another party's stay." But again, the statute refutes this argument: It provides, without qualification, that a Commission decision "shall not be stayed" "upon written consent of the utility."
For the whole of the response of Joint Applicants to DC Sun's request for clarification, see http://www.dcpsc.org/edocket/docketsheets_pdf_FS.asp?caseno=FC1119&docketno=1622&flag=D&show_result=Y
Public Citizen comment: Elizabeth Warren's Devastating Cross-Examination of Leonard Chanin at the Senate Banking Committee Hearing
by Jeff Sovern (From Public Citizen)
On April 5, the Senate Banking Committee held a hearing titled Assessing the Effects of Consumer Finance Regulations. I've been listening to the hearing, which has three witnesses--selected by the GOP majority--who spent much of their time attacking the CFPB, and one witness- chosen by the Democratic minority-- who supported the CFPB. One of the witnesses critical of the CFPB was Leonard Chanin, currently of Morrison and Foerster LLP. When it was her turn to question the witnesses, Senator Warren conducted an extraordinary takedown of Chanin. I recommend watching the Q&A. It's available at various places, including here on Youtube. Those who don't have time to watch the video and want to read a transcript can find one here, but the transcript might not have the same impact. Really, to have the full impact, you have to listen to the entire hearing, because like the thirteenth stroke of a clock, the exchange calls into question all that came before it, including the criticism of the CFPB. But that's a big time commitment, so just give the Q&A a listen.
A couple of comments on Chanin's defense for the Fed's failure to act from 1994, when Congress gave the Fed the power to act, until 2008, when the economy tanked: Chanin said that no statistical evidence existed to show a meltdown in the mortgage market. Even assuming that to be true, shouldn't the Fed have conducted its own information-gathering? And does Chanin believe that regulators should not prevent predatory lending until there is statistical evidence of a mortgage meltdown? How is it that the investors portrayed in The Big Short figured out that there was a problem when they didn't have access to the Fed's information-gathering resources but the Fed didn't? Should the Fed really take nearly a decade and a half to figure out that something is wrong with predatory lending? And isn't the fact that it didn't another argument for the CFPB?
by Jeff Sovern (From Public Citizen)
On April 5, the Senate Banking Committee held a hearing titled Assessing the Effects of Consumer Finance Regulations. I've been listening to the hearing, which has three witnesses--selected by the GOP majority--who spent much of their time attacking the CFPB, and one witness- chosen by the Democratic minority-- who supported the CFPB. One of the witnesses critical of the CFPB was Leonard Chanin, currently of Morrison and Foerster LLP. When it was her turn to question the witnesses, Senator Warren conducted an extraordinary takedown of Chanin. I recommend watching the Q&A. It's available at various places, including here on Youtube. Those who don't have time to watch the video and want to read a transcript can find one here, but the transcript might not have the same impact. Really, to have the full impact, you have to listen to the entire hearing, because like the thirteenth stroke of a clock, the exchange calls into question all that came before it, including the criticism of the CFPB. But that's a big time commitment, so just give the Q&A a listen.
A couple of comments on Chanin's defense for the Fed's failure to act from 1994, when Congress gave the Fed the power to act, until 2008, when the economy tanked: Chanin said that no statistical evidence existed to show a meltdown in the mortgage market. Even assuming that to be true, shouldn't the Fed have conducted its own information-gathering? And does Chanin believe that regulators should not prevent predatory lending until there is statistical evidence of a mortgage meltdown? How is it that the investors portrayed in The Big Short figured out that there was a problem when they didn't have access to the Fed's information-gathering resources but the Fed didn't? Should the Fed really take nearly a decade and a half to figure out that something is wrong with predatory lending? And isn't the fact that it didn't another argument for the CFPB?
High Court Backs Invalidation Of Md. Power Plant Subsidy
The U.S. Supreme Court has backed a lower court ruling that threw out power plant construction subsidies offered by the state of Maryland, concluding the incentives usurp the Federal Energy Regulatory Commission's authority over wholesale electricity markets.
The U.S. Supreme Court has backed a lower court ruling that threw out power plant construction subsidies offered by the state of Maryland, concluding the incentives usurp the Federal Energy Regulatory Commission's authority over wholesale electricity markets.
U.S Treasury fights secret business ownership
From U.S. Treasury article by: Josh Drobnyk
The concerns over tax and sanctions evasion raised by last week’s release of the so-called Panama Papers underscore the importance of a much broader set of issues that Treasury has been working to address for many years – both on our own and alongside international partners.
A Top Administration Priority: Enhancing Financial Transparency
We estimate that more than $300 billion dollars of illicit proceeds are generated in the United States annually, with criminals using companies here and abroad to launder funds – a vulnerability that we identified in our 2015 National Money Laundering Risk Assessment.
On the domestic side, Treasury is finalizing a Customer Due Diligence (CDD) rule and we are committed to working with Congress to pass meaningful Beneficial Ownership legislation, both essential pieces to combat the misuse of companies to engage in illicit activities. Together, these initiatives target two different points of access to the international financial system – when accounts are opened in financial institutions, and when companies are formed or when company ownership is transferred. To be effective, legislation must require that all companies know and disclose adequate and accurate beneficial ownership information at the time of creation, regularly update this information upon any change, and face penalties for failure to comply. The misuse of legal entities to obscure beneficial ownership is a significant weakness in an otherwise strong and resilient U.S. financial system, and it can only be resolved with meaningful congressional action.
Full article: https://www.treasury.gov/connect/blog/Pages/Targeting-Tax-and-Sanctions-Evasion,-Money-Laundering,-and-Other-Illicit-Activitiesx.aspx
From U.S. Treasury article by: Josh Drobnyk
The concerns over tax and sanctions evasion raised by last week’s release of the so-called Panama Papers underscore the importance of a much broader set of issues that Treasury has been working to address for many years – both on our own and alongside international partners.
A Top Administration Priority: Enhancing Financial Transparency
We estimate that more than $300 billion dollars of illicit proceeds are generated in the United States annually, with criminals using companies here and abroad to launder funds – a vulnerability that we identified in our 2015 National Money Laundering Risk Assessment.
On the domestic side, Treasury is finalizing a Customer Due Diligence (CDD) rule and we are committed to working with Congress to pass meaningful Beneficial Ownership legislation, both essential pieces to combat the misuse of companies to engage in illicit activities. Together, these initiatives target two different points of access to the international financial system – when accounts are opened in financial institutions, and when companies are formed or when company ownership is transferred. To be effective, legislation must require that all companies know and disclose adequate and accurate beneficial ownership information at the time of creation, regularly update this information upon any change, and face penalties for failure to comply. The misuse of legal entities to obscure beneficial ownership is a significant weakness in an otherwise strong and resilient U.S. financial system, and it can only be resolved with meaningful congressional action.
Full article: https://www.treasury.gov/connect/blog/Pages/Targeting-Tax-and-Sanctions-Evasion,-Money-Laundering,-and-Other-Illicit-Activitiesx.aspx
From Dow-Jones: Vermont Seeks Documents on GMOs from Seed, Food Companies
Vermont's attorney general has asked a federal court to force big seed and food companies to turn over internal research on genetically modified crops, escalating a legal battle as the state defends its controversial law requiring labels for GMO ingredients.
State Attorney General William Sorrell filed motions this week in several U.S. district courts seeking to compel Monsanto Co., DuPont Co., Syngenta AG and other seed firms to produce studies or research related to "potential health or environmental impacts" of the crops, as well as pesticides used on them. Mr. Sorrell also sought from ConAgra Foods Inc. and Kellogg Co. "consumer survey research" conducted over the past decade on GMO foods and on the use of "natural" labels on such products.
Vermont passed a law in 2014 requiring labels for some food products that are made from biotech crops. Seed companies alter the DNA of crops like corn, soybeans and canola oil to make the plants resistant to herbicides and destructive insects, which some consumer and environmental groups claim can harm biodiversity and speed weeds' resistance to chemical sprays.
Vermont's attorney general has asked a federal court to force big seed and food companies to turn over internal research on genetically modified crops, escalating a legal battle as the state defends its controversial law requiring labels for GMO ingredients.
State Attorney General William Sorrell filed motions this week in several U.S. district courts seeking to compel Monsanto Co., DuPont Co., Syngenta AG and other seed firms to produce studies or research related to "potential health or environmental impacts" of the crops, as well as pesticides used on them. Mr. Sorrell also sought from ConAgra Foods Inc. and Kellogg Co. "consumer survey research" conducted over the past decade on GMO foods and on the use of "natural" labels on such products.
Vermont passed a law in 2014 requiring labels for some food products that are made from biotech crops. Seed companies alter the DNA of crops like corn, soybeans and canola oil to make the plants resistant to herbicides and destructive insects, which some consumer and environmental groups claim can harm biodiversity and speed weeds' resistance to chemical sprays.
Florida governor signs law shielding patients from surprise medical bills
Republican Gov. Rick Scott of Florida signed a bipartisan bill that will exempt patients from having to pay balance bills from out-of-network providers in certain situations.
From Modern Healthcare -- READ MORE
Republican Gov. Rick Scott of Florida signed a bipartisan bill that will exempt patients from having to pay balance bills from out-of-network providers in certain situations.
From Modern Healthcare -- READ MORE
Microsoft law suit argues it’s unconstitutional for the government to bar companies from telling customers when federal agents have examined their data
Click here to see the complaint: federal court MS Complaint.
The issue: how easily, and secretly, the government should be able to gain access to individuals’ information in the cloud-computing era.
Agents of the government now have the ability to keep secret their searches of information stored in the massive data centers that power cloud computing.
Click here to see the complaint: federal court MS Complaint.
The issue: how easily, and secretly, the government should be able to gain access to individuals’ information in the cloud-computing era.
Agents of the government now have the ability to keep secret their searches of information stored in the massive data centers that power cloud computing.
New York Times:"Goldman's Settlement on Mortgages Is Less Than Meets the Eye"
Goldman won't be paying anywhere near $5 billion. This is just more of the same non-punishment and non-accountability that has characterized DOJ's prior settlements with Wall Street's biggest, most powerful and well connected too-big-to-fail banks.
This settlement is really a victory for Goldman that rewards past crime and will thereby incentivize future crime:
Goldman won't be paying anywhere near $5 billion. This is just more of the same non-punishment and non-accountability that has characterized DOJ's prior settlements with Wall Street's biggest, most powerful and well connected too-big-to-fail banks.
This settlement is really a victory for Goldman that rewards past crime and will thereby incentivize future crime:
- First, Goldman got to keep all the ill-gotten gains for the last nine years since its illegal actions and gets to buy its get-out-of-jail free card today with shareholders' money.
- Second, $5 billion is meaningless unless it is publicly disclosed how much money Goldman made from its illegal conduct and the total amount of investor losses from its illegal conduct.
- Third, DOJ helped Goldman cover up its illegal actions by carefully crafting a Swiss cheese "statement of facts" designed more to conceal than reveal Goldman's illegal actions. This prevents not only accountability of what Goldman actually did but also scrutiny of what DOJ did or did not do, frustrating public accountability of it as well. (This is presumably also one of the reasons that DOJ refuses to seek court approval of these settlements: no pesky independent judges scrutinizing their actions and no public disclosure of what was or wasn't done and why.)
- Fourth, by allowing Goldman to merely "acknowledge" the so-called "statement of facts" rather than requiring Goldman to admit them, DOJ prevents injured investors from using the settlement to try to recover their losses from Goldman's illegal conduct.
- Fifth, the settlement covers Goldman's illegal conduct in 2005-2007 when it's net revenue in just one of those years (2006) was $37.7 billion and its net earnings were $9.5 billion.
- Sixth, every single individual at Goldman who received a bonus from this illegal conduct not only keeps the entire bonus but suffers no penalty at all. Once again, individual accountability is entirely absent from this settlement.
- Seventh, more than half of the $5 billion appears likely to be tax deductible, meaning U.S. taxpayers once again end up on the hook.
Florida congressman labels D.C. Metro a ‘screwed-up mess’; board chairman says federal government not paying fair share
Top Metro officials and members of Congress faced off at a hearing on April 13, where the Metro board’s chairman called for the government to contribute more to the transit agency and a House member criticized Metro as a “screwed-up mess.” The Metro Board chairman shouted out that the federal government is shortchanging the agency.
Deaths have occurred because of deferred WMATA maintenance problems discussed at the hearing, particularly failure to replace frayed and defective electrical cables.
Article and short video at https://www.washingtonpost.com/local/trafficandcommuting/metro-chief-and-federal-transit-officials-face-grilling-before-congressional-panel/2016/04/13/ab9f9174-0184-11e6-9d36-33d198ea26c5_story.html?hpid=hp_local-news_metrohearing-12pm%3Ahomepage%2Fstory
Top Metro officials and members of Congress faced off at a hearing on April 13, where the Metro board’s chairman called for the government to contribute more to the transit agency and a House member criticized Metro as a “screwed-up mess.” The Metro Board chairman shouted out that the federal government is shortchanging the agency.
Deaths have occurred because of deferred WMATA maintenance problems discussed at the hearing, particularly failure to replace frayed and defective electrical cables.
Article and short video at https://www.washingtonpost.com/local/trafficandcommuting/metro-chief-and-federal-transit-officials-face-grilling-before-congressional-panel/2016/04/13/ab9f9174-0184-11e6-9d36-33d198ea26c5_story.html?hpid=hp_local-news_metrohearing-12pm%3Ahomepage%2Fstory
D.C. judge's opinion overruling federal oversight of MetLife Inc.
Judge Rosemary Collyer's recent opinion was a victory for MetLife Inc. in its legal battle with federal regulators seeking to brand the insurer a threat to the financial system and to ramp up government oversight of the company and its operations. In her opinion, Judge Collyer castigated the government for the way it reached its decision and broadly called into question the process it used to bring large insurers under the Federal Reserve’s thumb.
She took regulators to task for what she called an “unreasonable” decision that didn’t consider potential costs and relied on a process she said was “fatally flawed.”
Judge Collyer said the government’s findings included assumptions that weren’t backed up by analysis of potential losses at MetLife and its counterparties. “Every possible effect of MetLife’s imminent insolvency was summarily deemed grave enough to damage the economy,” she wrote.
For those and other reasons Judge Collyer overturned regulators’ determination that distress at MetLife could put the economy at risk.
A link to her opinion is here: written opinion in the MetLifecase The government is expected to appeal.
A WSJ article is at http://www.wsj.com/articles/metlife-fsoc-agree-to-unseal-court-opinion-without-redactions-1460037711
Judge Rosemary Collyer's recent opinion was a victory for MetLife Inc. in its legal battle with federal regulators seeking to brand the insurer a threat to the financial system and to ramp up government oversight of the company and its operations. In her opinion, Judge Collyer castigated the government for the way it reached its decision and broadly called into question the process it used to bring large insurers under the Federal Reserve’s thumb.
She took regulators to task for what she called an “unreasonable” decision that didn’t consider potential costs and relied on a process she said was “fatally flawed.”
Judge Collyer said the government’s findings included assumptions that weren’t backed up by analysis of potential losses at MetLife and its counterparties. “Every possible effect of MetLife’s imminent insolvency was summarily deemed grave enough to damage the economy,” she wrote.
For those and other reasons Judge Collyer overturned regulators’ determination that distress at MetLife could put the economy at risk.
A link to her opinion is here: written opinion in the MetLifecase The government is expected to appeal.
A WSJ article is at http://www.wsj.com/articles/metlife-fsoc-agree-to-unseal-court-opinion-without-redactions-1460037711
Fraudulent robocalls claiming to be affiliated with the Internal Revenue Service
Using calls masked by US phone numbers, fraud campaigns seek to get anxious taxpayers to fall for their schemes by claiming to be directly from the IRS or from organizations seeking to collect on the IRS' behalf. The scams hit millions, using April tax paranoia to fuel fraudulent robocalls claiming to be affiliated with the Internal Revenue Service. Using calls masked by US phone numbers, these fraud campaigns seek to get anxious taxpayers to fall for their schemes by claiming to be directly from the IRS or from organizations seeking to collect on the IRS' behalf. The scams hit millions of phone numbers over the past few weeks.
Article at http://arstechnica.com/information-technology/2016/04/three-overseas-fraud-rings-running-massive-fake-irs-robocall-campaigns/
Using calls masked by US phone numbers, fraud campaigns seek to get anxious taxpayers to fall for their schemes by claiming to be directly from the IRS or from organizations seeking to collect on the IRS' behalf. The scams hit millions, using April tax paranoia to fuel fraudulent robocalls claiming to be affiliated with the Internal Revenue Service. Using calls masked by US phone numbers, these fraud campaigns seek to get anxious taxpayers to fall for their schemes by claiming to be directly from the IRS or from organizations seeking to collect on the IRS' behalf. The scams hit millions of phone numbers over the past few weeks.
Article at http://arstechnica.com/information-technology/2016/04/three-overseas-fraud-rings-running-massive-fake-irs-robocall-campaigns/
CFPB Director Cordray appears before Senate committee
The U.S. Senate COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS met on April 7 for a hearing entitled “The Consumer Financial Protection Bureau’s Semi-Annual Report to Congress.” The witness was The Honorable Richard Cordray, Director, Consumer Financial Protection.
The Senate Committee is a friendlier forum for the CFPB than the corresponding House Committee. (DAR previously noted that the reception provided to Director Cordray by the House Committee was worrying for consumer advocates.)
The archived webcast of Director Cordray's appearance before the Senate Commitee can be found at:
Bureau.http://www.banking.senate.gov/public/index.cfm/2016/4/the-consumer-financial-protection-bureau-s-semi-annual-report-to-congress
The U.S. Senate COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS met on April 7 for a hearing entitled “The Consumer Financial Protection Bureau’s Semi-Annual Report to Congress.” The witness was The Honorable Richard Cordray, Director, Consumer Financial Protection.
The Senate Committee is a friendlier forum for the CFPB than the corresponding House Committee. (DAR previously noted that the reception provided to Director Cordray by the House Committee was worrying for consumer advocates.)
The archived webcast of Director Cordray's appearance before the Senate Commitee can be found at:
Bureau.http://www.banking.senate.gov/public/index.cfm/2016/4/the-consumer-financial-protection-bureau-s-semi-annual-report-to-congress
Hospital ransomware: a law enforcement problem
As hospital IT teams spend much of their time and money figuring out how to meaningfully deploy electronic health records and harness the data for emerging payment and delivery models, the bad guys continue to hone their technology and calibrate their attacks, creating boom times for data defenders. With at least six hospitals targeted in the past month, healthcare leaders are scrambling for protection.
Commercially available protections include legal services, security consultancy, training, systems testing, cyber insurance, security software that runs on and defends computer systems, and remote-hosted software and services that can include fully staffed security operations centers that provide computerized and human watchdogs on the lookout for cyberthreats 24/7.
“Business is booming,” said Eldon Sprickerhoff, founder and chief security strategist at eSentire, a Canadian provider of remote-hosted security services.
DAR Comment: Plainly there is a challenge here for government law enforcement.
Full article: http://www.modernhealthcare.com/article/20160409/MAGAZINE/304099988?utm_source=modernhealthcare&utm_medium=email&utm_content=20160409-MAGAZINE-304099988&utm_campaign=am
As hospital IT teams spend much of their time and money figuring out how to meaningfully deploy electronic health records and harness the data for emerging payment and delivery models, the bad guys continue to hone their technology and calibrate their attacks, creating boom times for data defenders. With at least six hospitals targeted in the past month, healthcare leaders are scrambling for protection.
Commercially available protections include legal services, security consultancy, training, systems testing, cyber insurance, security software that runs on and defends computer systems, and remote-hosted software and services that can include fully staffed security operations centers that provide computerized and human watchdogs on the lookout for cyberthreats 24/7.
“Business is booming,” said Eldon Sprickerhoff, founder and chief security strategist at eSentire, a Canadian provider of remote-hosted security services.
DAR Comment: Plainly there is a challenge here for government law enforcement.
Full article: http://www.modernhealthcare.com/article/20160409/MAGAZINE/304099988?utm_source=modernhealthcare&utm_medium=email&utm_content=20160409-MAGAZINE-304099988&utm_campaign=am
UDC group promotes discussion of displacement of elderly, disabled and indigent residents of The Washington Home in NW DC due to a purchase of the property by the Sidwell Friends School.
From Joe Libertelli of UDC:
Displacement was not the only solution. And it still is not. Our aim is to bring stakeholders to the table and have a conversation about potential solutions that can achieve the goals of all sides.
Participants at this roundtable will include a resident of The Washington Home, family members of other residents, Sidwell alumni, tenants’ rights advocates, medical professionals, elected officials, and students and professors from the UDC Clarke School of Law Housing and Consumer Legal Clinic.
There is a movement growing around intergenerational communities and what they might look like. One exciting possibility for avoiding full displacement of The Washington Home’s residents is depicted in the link, below, to a short trailer for a film, Present Perfect, which shows the Intergenerational Learning Center in Seattle Washington where for 25 years young children have been schooled on a nursing home site. The school and the film have been the subject of a recent Ted Talk and much press, including on the Today Show. The Director of ILC, Marie Hoover, will join us for this conversation to share what she, ILC, the students and parents have all learned over decades about intergenerational communities and how they can benefit both the seniors and the students.
See http://www.presentperfectfilm.com and also see The Atlantic: http://www.theatlantic.com/education/archive/2016/01/the-preschool-inside-a-nursing-home/424827/
The residents at The Washington Home need us to come together on this vital issue for them and all seniors in the District. Please join us at the table.
Tuesday, April 19
6:30–8:30 pm
Moot Court Room 518
UDC David A. Clarke School of Law
4340 Connecticut Ave., NW
Washington, DC 20008
Free, but please register HERE
Background info:
Washington Post story on the purchase: https://www.washingtonpost.com/local/education/a-land-deal-for-an-elite-private-school-will-displace-sick-poor-people/2015/09/20/2c433fda-5e1d-11e5-8e9e-dce8a2a2a679_story.html
From Joe Libertelli of UDC:
Displacement was not the only solution. And it still is not. Our aim is to bring stakeholders to the table and have a conversation about potential solutions that can achieve the goals of all sides.
Participants at this roundtable will include a resident of The Washington Home, family members of other residents, Sidwell alumni, tenants’ rights advocates, medical professionals, elected officials, and students and professors from the UDC Clarke School of Law Housing and Consumer Legal Clinic.
There is a movement growing around intergenerational communities and what they might look like. One exciting possibility for avoiding full displacement of The Washington Home’s residents is depicted in the link, below, to a short trailer for a film, Present Perfect, which shows the Intergenerational Learning Center in Seattle Washington where for 25 years young children have been schooled on a nursing home site. The school and the film have been the subject of a recent Ted Talk and much press, including on the Today Show. The Director of ILC, Marie Hoover, will join us for this conversation to share what she, ILC, the students and parents have all learned over decades about intergenerational communities and how they can benefit both the seniors and the students.
See http://www.presentperfectfilm.com and also see The Atlantic: http://www.theatlantic.com/education/archive/2016/01/the-preschool-inside-a-nursing-home/424827/
The residents at The Washington Home need us to come together on this vital issue for them and all seniors in the District. Please join us at the table.
Tuesday, April 19
6:30–8:30 pm
Moot Court Room 518
UDC David A. Clarke School of Law
4340 Connecticut Ave., NW
Washington, DC 20008
Free, but please register HERE
Background info:
Washington Post story on the purchase: https://www.washingtonpost.com/local/education/a-land-deal-for-an-elite-private-school-will-displace-sick-poor-people/2015/09/20/2c433fda-5e1d-11e5-8e9e-dce8a2a2a679_story.html
D.C. judge reversal pulls $15 minimum wage closer to reality
A petition for a referendum to bump up the District's minimum wage to $15 an hour will advance. In January, Judge Maurice Ross agreed with Harry Wingo, who was then head of the Chamber of Commerce, that the Board of Elections couldn't approve the petition because the board was improperly constituted. On April 4, the judge flipped his decision and has allowed the petition to go forward. (Washington Business Journal http://www.bizjournals.com/washington/news/2016/04/05/d-c-inches-closer-to-a-vote-on-a-15-minimum-wage.html )
A petition for a referendum to bump up the District's minimum wage to $15 an hour will advance. In January, Judge Maurice Ross agreed with Harry Wingo, who was then head of the Chamber of Commerce, that the Board of Elections couldn't approve the petition because the board was improperly constituted. On April 4, the judge flipped his decision and has allowed the petition to go forward. (Washington Business Journal http://www.bizjournals.com/washington/news/2016/04/05/d-c-inches-closer-to-a-vote-on-a-15-minimum-wage.html )
Paypal announcement on withdrawal from North Carolina because of new state gender discrimination laws:
From the Paypal Statement:
Two weeks ago, PayPal announced plans to open a new global operations center in Charlotte and employ over 400 people in skilled jobs. In the short time since then, legislation has been abruptly enacted by the State of North Carolina that invalidates protections of the rights of lesbian, gay, bisexual, and transgender citizens and denies these members of our community equal rights under the law.
The new law perpetuates discrimination and it violates the values and principles that are at the core of PayPal’s mission and culture. As a result, PayPal will not move forward with our planned expansion into Charlotte.
This decision reflects PayPal’s deepest values and our strong belief that every person has the right to be treated equally, and with dignity and respect. These principles of fairness, inclusion and equality are at the heart of everything we seek to achieve and stand for as a company. And they compel us to take action to oppose discrimination.
Entire statement: https://www.paypal.com/stories/us/paypal-withdraws-plan-for-charlotte-expansion
From the Paypal Statement:
Two weeks ago, PayPal announced plans to open a new global operations center in Charlotte and employ over 400 people in skilled jobs. In the short time since then, legislation has been abruptly enacted by the State of North Carolina that invalidates protections of the rights of lesbian, gay, bisexual, and transgender citizens and denies these members of our community equal rights under the law.
The new law perpetuates discrimination and it violates the values and principles that are at the core of PayPal’s mission and culture. As a result, PayPal will not move forward with our planned expansion into Charlotte.
This decision reflects PayPal’s deepest values and our strong belief that every person has the right to be treated equally, and with dignity and respect. These principles of fairness, inclusion and equality are at the heart of everything we seek to achieve and stand for as a company. And they compel us to take action to oppose discrimination.
Entire statement: https://www.paypal.com/stories/us/paypal-withdraws-plan-for-charlotte-expansion
Cyber thieves spirited $US101 million ($134m) out of Bangladesh’s account at the Federal Reserve Bank of New York
Now the focus is shifting to possible gaps in the US central bank’s efforts to pursue its concerns about payment orders that are now known to have been fraudulent.
The thieves used Bangladesh Bank’s codes on a secure interbank messaging system to tell the Fed to transfer nearly $US1 billion via 35 separate orders to banks in Sri Lanka and The Philippines.
A timeline pieced together shows the Fed flagged a dozen of those orders as suspicious hours after they arrived and repeatedly tried to reach officials in Bangladesh. But when they didn’t answer, it waited over the weekend before trying to stop payment on another five transfers it already had authorised the Thursday before.
In the end, only the Sri Lanka payment was successfully reversed, returning $US20m to Bangladesh’s account. The bulk of the remaining $US81m ultimately ended up with at least one casino and two gambling-junket operators in The Philippines, according to The Philippines’s Anti-Money-Laundering Council. The money was apparently used to buy gambling chips, said the executive director of the council.
“What is especially thought-provoking here is that stops and recalls on these transfers weren’t issued for days after initial doubts were raised,” said US Democratic Representative Carolyn B. Maloney of New York, who sent a letter to the Fed last month requesting information on the central bank’s procedures. “Why not have someone monitoring these accounts or available over the weekend to speak with Bangladesh Bank?”
A spokeswoman for the New York Fed declined to comment on protocols the Fed followed for maintaining contact with foreign central-bank account holders after hours. The Fed has said the payment instructions it approved were fully authenticated by third-party messaging provider Swift — a closed network used by financial institutions to authorise financial transactions through secure messages — and that there was no evidence the Fed’s systems were compromised.
A Swift spokeswoman has said there was no indication the network was breached, and it was working with Bangladesh Bank to resolve an internal operational issue.
In February, $US101m went missing from Bangladesh’s account at the Federal Reserve Bank of New York. Authorities are still piecing together what happened. This is what we know.
The heist is now the focus of probes by the Federal Bureau of Investigation, officials in Bangladesh, politicians in The Philippines and the US congress. Investigators brought in from computer security firm FireEye said the attackers lurked in Bangladesh Bank’s systems for days, logging keystrokes to get the codes they needed. Bangladeshi investigators have said the thieves timed their attack to exploit the weekend, which falls on Friday and Saturday in Bangladesh.
The Bangladeshi central bank has questioned why the unusual transfer requests, many asking for money to be routed to personal bank accounts, didn’t ring alarm bells inside the New York Fed before the bank executed five of the 35 payment orders.
http://www.theaustralian.com.au/business/wall-street-journal/bangladesh-bank-heist-focus-on-gaps-in-feds-alert-system/news-story/9534973bace7875978aae5de6b824e46
Now the focus is shifting to possible gaps in the US central bank’s efforts to pursue its concerns about payment orders that are now known to have been fraudulent.
The thieves used Bangladesh Bank’s codes on a secure interbank messaging system to tell the Fed to transfer nearly $US1 billion via 35 separate orders to banks in Sri Lanka and The Philippines.
A timeline pieced together shows the Fed flagged a dozen of those orders as suspicious hours after they arrived and repeatedly tried to reach officials in Bangladesh. But when they didn’t answer, it waited over the weekend before trying to stop payment on another five transfers it already had authorised the Thursday before.
In the end, only the Sri Lanka payment was successfully reversed, returning $US20m to Bangladesh’s account. The bulk of the remaining $US81m ultimately ended up with at least one casino and two gambling-junket operators in The Philippines, according to The Philippines’s Anti-Money-Laundering Council. The money was apparently used to buy gambling chips, said the executive director of the council.
“What is especially thought-provoking here is that stops and recalls on these transfers weren’t issued for days after initial doubts were raised,” said US Democratic Representative Carolyn B. Maloney of New York, who sent a letter to the Fed last month requesting information on the central bank’s procedures. “Why not have someone monitoring these accounts or available over the weekend to speak with Bangladesh Bank?”
A spokeswoman for the New York Fed declined to comment on protocols the Fed followed for maintaining contact with foreign central-bank account holders after hours. The Fed has said the payment instructions it approved were fully authenticated by third-party messaging provider Swift — a closed network used by financial institutions to authorise financial transactions through secure messages — and that there was no evidence the Fed’s systems were compromised.
A Swift spokeswoman has said there was no indication the network was breached, and it was working with Bangladesh Bank to resolve an internal operational issue.
In February, $US101m went missing from Bangladesh’s account at the Federal Reserve Bank of New York. Authorities are still piecing together what happened. This is what we know.
The heist is now the focus of probes by the Federal Bureau of Investigation, officials in Bangladesh, politicians in The Philippines and the US congress. Investigators brought in from computer security firm FireEye said the attackers lurked in Bangladesh Bank’s systems for days, logging keystrokes to get the codes they needed. Bangladeshi investigators have said the thieves timed their attack to exploit the weekend, which falls on Friday and Saturday in Bangladesh.
The Bangladeshi central bank has questioned why the unusual transfer requests, many asking for money to be routed to personal bank accounts, didn’t ring alarm bells inside the New York Fed before the bank executed five of the 35 payment orders.
http://www.theaustralian.com.au/business/wall-street-journal/bangladesh-bank-heist-focus-on-gaps-in-feds-alert-system/news-story/9534973bace7875978aae5de6b824e46
Nordstrom, apparel maker reach “Made in USA” settlement
In a class action suit filed two years ago by California consumers, Nordstrom and AG Adriano Goldschmied Apparel have reportedly reached settlement for violating California and Federal consumer protection laws.
The case stemmed from consumers discovering the premium denim and apparel they purchased at a San Diego Nordstrom marketed as “Made in USA” was not actually made in this country. The specific product that triggered the suit was a style of AG jeans called “The Protege.”
The Complaint avers, “Consumers are particularly vulnerable to these deceptive and fraudulent practices. Most consumers possess very limited knowledge of the likelihood that products, including the component parts therein, claimed to be made in the United States are in fact made in foreign countries. This is a material factor in many individuals’ purchasing decisions, as they believe they are supporting American companies and American jobs.” The Complaint also points out that “Consumers generally believe that ‘Made in U.S.A.’ products are higher quality than their foreign-manufactured counterparts.”
As it turned out, “Made in USA” was a false designation and misrepresentation of AG clothes that were actually not substantially made in this country, including the component parts of fabric, buttons, and thread, which were in fact made outside of the USA, violating California and Federal consumer protection laws.
Full article: http://us.fashionmag.com/news/Nordstrom-AG-reach-Made-in-USA-settlement,677348.html#.VwO7C_krKkk
In a class action suit filed two years ago by California consumers, Nordstrom and AG Adriano Goldschmied Apparel have reportedly reached settlement for violating California and Federal consumer protection laws.
The case stemmed from consumers discovering the premium denim and apparel they purchased at a San Diego Nordstrom marketed as “Made in USA” was not actually made in this country. The specific product that triggered the suit was a style of AG jeans called “The Protege.”
The Complaint avers, “Consumers are particularly vulnerable to these deceptive and fraudulent practices. Most consumers possess very limited knowledge of the likelihood that products, including the component parts therein, claimed to be made in the United States are in fact made in foreign countries. This is a material factor in many individuals’ purchasing decisions, as they believe they are supporting American companies and American jobs.” The Complaint also points out that “Consumers generally believe that ‘Made in U.S.A.’ products are higher quality than their foreign-manufactured counterparts.”
As it turned out, “Made in USA” was a false designation and misrepresentation of AG clothes that were actually not substantially made in this country, including the component parts of fabric, buttons, and thread, which were in fact made outside of the USA, violating California and Federal consumer protection laws.
Full article: http://us.fashionmag.com/news/Nordstrom-AG-reach-Made-in-USA-settlement,677348.html#.VwO7C_krKkk
CFPB's Richard Cordray testifies to the Senate Committee: The Consumer Financial Protection Bureau's Semi-Annual Report to Congress
April 7, 2016 10:00 AM
538 Dirksen
This is likely to be a friendlier encounter than Director Cordray's visit with the House Committee. The Committee posting follows:
The COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS will meet OPEN SESSION to conduct a hearing entitled “The Consumer Financial Protection Bureau’s Semi-Annual Report to Congress.” The witness will be: The Honorable Richard Cordray, Director, Consumer Financial Protection Bureau.
All hearings are webcast live and will not be available until the hearing starts. Individuals with disabilities who require an auxiliary aid or service, including closed captioning service for webcast hearings, should contact the committee clerk at 202-224-7391 at least three business days in advance of the hearing date.
Permalink: http://www.banking.senate.gov/public/index.cfm/2016/4/the-consumer-financial-protection-bureau-s-semi-annual-report-to-congress
April 7, 2016 10:00 AM
538 Dirksen
This is likely to be a friendlier encounter than Director Cordray's visit with the House Committee. The Committee posting follows:
The COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS will meet OPEN SESSION to conduct a hearing entitled “The Consumer Financial Protection Bureau’s Semi-Annual Report to Congress.” The witness will be: The Honorable Richard Cordray, Director, Consumer Financial Protection Bureau.
All hearings are webcast live and will not be available until the hearing starts. Individuals with disabilities who require an auxiliary aid or service, including closed captioning service for webcast hearings, should contact the committee clerk at 202-224-7391 at least three business days in advance of the hearing date.
Permalink: http://www.banking.senate.gov/public/index.cfm/2016/4/the-consumer-financial-protection-bureau-s-semi-annual-report-to-congress
Senate Hearing 4-5-2016:
Assessing the Effects of Consumer Finance Regulations
An earlier posting discussed the hostile response of a House Committee to consumer finance regulations and the CFPB's Richard Cordray. Following is an announcement of a Senate Committee hearing on 4-5-2016 which is likely to be more friendly. It will be followed by a session on Thursday 4-7-2016 with CFPB Director Cordray which is also likely to be more friendly, and more pleasing to many consumer advocates. (See separate posting):
The COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS will meet in OPEN SESSION to conduct a hearing on “Assessing the Effects of Consumer Finance Regulations.” The witnesses will be: Mr. Leonard Chanin, Of Counsel, Morrison and Foerster LLP; Mr. David Hirschmann, President and CEO of the U.S. Chamber of Commerce Center for Capital Markets Competitiveness; and Mr. Todd Zywicki, Foundation Professor of Law and Executive Director of the Law and Economics Center, George Mason University School of Law; and Reverend Wilie Gable, Jr., Doctor of Ministry and Chairman of the Board, National Baptist Convention USA, Housing and Economic Development Commission, and Pastor, Progressive Baptist Church.
All hearings are webcast live and will not be available until the hearing starts. Individuals with disabilities who require an auxiliary aid or service, including closed captioning service for webcast hearings, should contact the committee clerk at 202-224-7391 at least three business days in advance of the hearing date.
Witness Panel 1
Permalink: http://www.banking.senate.gov/public/index.cfm/2016/4/assessing-the-effects-of-consumer-finance-regulations
Assessing the Effects of Consumer Finance Regulations
An earlier posting discussed the hostile response of a House Committee to consumer finance regulations and the CFPB's Richard Cordray. Following is an announcement of a Senate Committee hearing on 4-5-2016 which is likely to be more friendly. It will be followed by a session on Thursday 4-7-2016 with CFPB Director Cordray which is also likely to be more friendly, and more pleasing to many consumer advocates. (See separate posting):
The COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS will meet in OPEN SESSION to conduct a hearing on “Assessing the Effects of Consumer Finance Regulations.” The witnesses will be: Mr. Leonard Chanin, Of Counsel, Morrison and Foerster LLP; Mr. David Hirschmann, President and CEO of the U.S. Chamber of Commerce Center for Capital Markets Competitiveness; and Mr. Todd Zywicki, Foundation Professor of Law and Executive Director of the Law and Economics Center, George Mason University School of Law; and Reverend Wilie Gable, Jr., Doctor of Ministry and Chairman of the Board, National Baptist Convention USA, Housing and Economic Development Commission, and Pastor, Progressive Baptist Church.
All hearings are webcast live and will not be available until the hearing starts. Individuals with disabilities who require an auxiliary aid or service, including closed captioning service for webcast hearings, should contact the committee clerk at 202-224-7391 at least three business days in advance of the hearing date.
Witness Panel 1
- Mr. Leonard Chanin
Of Counsel
Morrison and Foerster LLP
Chanin Testimony 4-5-16.pdf (71.6 KBs) - Mr. David Hirschmann
President and CEO
U.S. Chamber of Commerce Center for Capital Markets Competitiveness
Hirschmann Testimony 4-5-16.pdf (322.6 KBs) - Mr. Todd Zywicki
Foundation Professor of Law and Executive Director of the Law and Economics Center
George Mason University School of Law
Zywicki Testimony 4-5-16.pdf (550.6 KBs) - Reverend Willie Gable Jr.
Doctor of Ministry and Chairman of the Board
National Baptist Convention USA, Housing and Economic Development Commission
GableTestimony 4-5-16.pdf (159.0 KBs)
Permalink: http://www.banking.senate.gov/public/index.cfm/2016/4/assessing-the-effects-of-consumer-finance-regulations
On legislation to protect students at for profit schools from Maryland Consumer Rights Coalition
Legislation to put in place stronger rules and regulations for prospective students (SB427/HB741) is moving forward in Congress. It passed out of the Senate 44-1.
However, we now have to fight off amendments to weaken the legislation. The legislation forbids for-profit and private career schools from enrolling students into programs where the student won’t be able to get a job upon completion because the program isn’t accredited or doesn’t meet licensing standards for Maryland. The rationale: we should not enroll students into high-cost programs that they must pay back - yet won’t lead to employment.
A bad amendment will be introduced today (4-4--2016) which would weaken this key provision. The amendment would ALLOW for profit schools to knowingly enroll students in programs that won’t lead to employment as long as the prospective student signs a disclosure form provided by the school.
We do not believe that schools should be enrolling students in programs that do not lead to employment opportunities. And we do not believe that a disclosure is enough to protect prospective students and enable them to make an informed decision. A disclosure form does not help pay off high cost student loans. A job does but these programs do not lead to jobs.
YOU can help us pass a strong bill by calling or emailing NOW and asking members of the House Appropriations Committee to “Vote No” on the proposed amendment.
Sample phone script
Hello Delegate.
My name is ________. I am a constituent and am calling to ask you to vote NO on any proposed amendments that would weaken SB427/HB741. I do NOT believe that for profit schools should enroll students into programs that can’t lead to employment. A disclosure form is NOT a solution. Please pass SB427 without any amendments to weaken it.
Legislation to put in place stronger rules and regulations for prospective students (SB427/HB741) is moving forward in Congress. It passed out of the Senate 44-1.
However, we now have to fight off amendments to weaken the legislation. The legislation forbids for-profit and private career schools from enrolling students into programs where the student won’t be able to get a job upon completion because the program isn’t accredited or doesn’t meet licensing standards for Maryland. The rationale: we should not enroll students into high-cost programs that they must pay back - yet won’t lead to employment.
A bad amendment will be introduced today (4-4--2016) which would weaken this key provision. The amendment would ALLOW for profit schools to knowingly enroll students in programs that won’t lead to employment as long as the prospective student signs a disclosure form provided by the school.
We do not believe that schools should be enrolling students in programs that do not lead to employment opportunities. And we do not believe that a disclosure is enough to protect prospective students and enable them to make an informed decision. A disclosure form does not help pay off high cost student loans. A job does but these programs do not lead to jobs.
YOU can help us pass a strong bill by calling or emailing NOW and asking members of the House Appropriations Committee to “Vote No” on the proposed amendment.
Sample phone script
Hello Delegate.
My name is ________. I am a constituent and am calling to ask you to vote NO on any proposed amendments that would weaken SB427/HB741. I do NOT believe that for profit schools should enroll students into programs that can’t lead to employment. A disclosure form is NOT a solution. Please pass SB427 without any amendments to weaken it.
Congressional Committee's opposition to CFPB and consumer protection efforts
A House committee report concludes that the CFPB is actually harming the very consumers it intends to protect. In case CFPB Director Richard Cordray missed the point, members of the House Financial Services Committee told him at a recent hearing that the consumer-protection bureau
is abusing and exceeding its already immense powers. The Committee's on-line report advises that Chairman Hensarling said that "Congress has made Mr. Cordray a dictator. And when it comes to the well-being and liberty of American consumers, he is not a particularly benevolent one.”
The Committee's report is at http://financialservices.house.gov/news/documentsingle.aspx?DocumentID=400469 It is a reminder to consumer advocates that government protection of consumers remains a highly charged political issue, and that the very idea of consumer protection is bitterly opposed by powerful political forces. Mr. Cordray's experience with the House committee hearing has a nightmare-like quality, and Mr. Cordray endurance deserves the appreciation of consumer advocates who support the CFPB.
Posted by Don Allen Resnikoff
A House committee report concludes that the CFPB is actually harming the very consumers it intends to protect. In case CFPB Director Richard Cordray missed the point, members of the House Financial Services Committee told him at a recent hearing that the consumer-protection bureau
is abusing and exceeding its already immense powers. The Committee's on-line report advises that Chairman Hensarling said that "Congress has made Mr. Cordray a dictator. And when it comes to the well-being and liberty of American consumers, he is not a particularly benevolent one.”
The Committee's report is at http://financialservices.house.gov/news/documentsingle.aspx?DocumentID=400469 It is a reminder to consumer advocates that government protection of consumers remains a highly charged political issue, and that the very idea of consumer protection is bitterly opposed by powerful political forces. Mr. Cordray's experience with the House committee hearing has a nightmare-like quality, and Mr. Cordray endurance deserves the appreciation of consumer advocates who support the CFPB.
Posted by Don Allen Resnikoff
Deregulation of wireline phone system looms -- meanwhile, can you be forced to give up your wireline service?
A D.C. resident tells the story of changing aspects of her Verizon phone service with the company, resulting in a consequence she did not want: here traditional wireline service was discontinued, and she was involuntarily changed over to Fios internet service she finds much less desirable.
The resident's story is local, but reflects a broader national issue. Telephone service providers wish to replace the country's traditional phone system with one that works entirely over Internet Protocol networks. The companies argue that the technology transition should be accompanied by deregulation that would strip the companies of obligations that date back to AT&T dominance. FCC Chairman Tom Wheeler wrote in a blog post some time ago that the regulatory goal is to "ensure the continuation of the Network Compact" with universal service for all Americans, consumer protections, public safety services, and competition.
The broad consumer protection issue is whether telephone companies can can stop maintaining the Public Switched Telephone Network (PSTN) without a plan to preserve current service levels. A narrower and more local issue is whether in the meanwhile the companies will be allowed to pressure consumers to give up their traditional wireline service.
See http://arstechnica.com/tech-policy/2014/01/att-plan-to-shut-off-public-switched-telephone-network-moves-ahead-at-fcc/
Also, http://arstechnica.com/tech-policy/2014/05/verizon-att-forcing-customers-off-landline-phones-complaint-says/
A D.C. resident tells the story of changing aspects of her Verizon phone service with the company, resulting in a consequence she did not want: here traditional wireline service was discontinued, and she was involuntarily changed over to Fios internet service she finds much less desirable.
The resident's story is local, but reflects a broader national issue. Telephone service providers wish to replace the country's traditional phone system with one that works entirely over Internet Protocol networks. The companies argue that the technology transition should be accompanied by deregulation that would strip the companies of obligations that date back to AT&T dominance. FCC Chairman Tom Wheeler wrote in a blog post some time ago that the regulatory goal is to "ensure the continuation of the Network Compact" with universal service for all Americans, consumer protections, public safety services, and competition.
The broad consumer protection issue is whether telephone companies can can stop maintaining the Public Switched Telephone Network (PSTN) without a plan to preserve current service levels. A narrower and more local issue is whether in the meanwhile the companies will be allowed to pressure consumers to give up their traditional wireline service.
See http://arstechnica.com/tech-policy/2014/01/att-plan-to-shut-off-public-switched-telephone-network-moves-ahead-at-fcc/
Also, http://arstechnica.com/tech-policy/2014/05/verizon-att-forcing-customers-off-landline-phones-complaint-says/
ACLU Comment on FBI Effort to Force Apple to Unlock iPhone
The American Civil Liberties Union has said it supported Apple’s now mooted legal fight against a court order to help the government unlock an iPhone belonging to one of the people responsible for the San Bernardino shootings.
Alex Abdo, staff attorney with the ACLU Speech, Privacy, and Technology Project, had this comment:
“This is an unprecedented, unwise, and unlawful move by the government. The Constitution does not permit the government to force companies to hack into their customers' devices. Apple is free to offer a phone that stores information securely, and it must remain so if consumers are to retain any control over their private data.
“The government's request also risks setting a dangerous precedent. If the FBI can force Apple to hack into its customers' devices, then so too can every repressive regime in the rest of the world. Apple deserves praise for standing up for its right to offer secure devices to all of its customers.”
This statement is at:
https://www.aclu.org/news/aclu-comment-fbi-effort-force-apple-unlock-iphone
The American Civil Liberties Union has said it supported Apple’s now mooted legal fight against a court order to help the government unlock an iPhone belonging to one of the people responsible for the San Bernardino shootings.
Alex Abdo, staff attorney with the ACLU Speech, Privacy, and Technology Project, had this comment:
“This is an unprecedented, unwise, and unlawful move by the government. The Constitution does not permit the government to force companies to hack into their customers' devices. Apple is free to offer a phone that stores information securely, and it must remain so if consumers are to retain any control over their private data.
“The government's request also risks setting a dangerous precedent. If the FBI can force Apple to hack into its customers' devices, then so too can every repressive regime in the rest of the world. Apple deserves praise for standing up for its right to offer secure devices to all of its customers.”
This statement is at:
https://www.aclu.org/news/aclu-comment-fbi-effort-force-apple-unlock-iphone
Unlocking cell phones a state law enforcement issue as well as a national issue
The issue of unlocking the famous San Bernadino Apple phone is now in repose, but it involves law enforcement issues of interest at a state as well as a federal level. For example, a California state legislator introduced a bill that would ban the retail sale of smartphones with a full-disk encryption feature—a security measure designed to ensure that no one can decrypt and read your phone’s contents except you. A similar New York state assembly proposal is also intended to ensure that law enforcement can access the phones of criminals or victims when their devices are seized as evidence.
The proposed state-level bans would permit the sort of law enforcement access to encrypted smartphones that opponents argue will unacceptably weaken every device’s data protections. The opponents' argument (see the adjoining posting providing an ACLU position, albeit on the factually somewhat different San Bernadino cell phone issue) may include the point that because cell phones are a computerized internet device they are entitled as a matter of law to a degree of protection from law enforcement scrutiny that is different than for an ordinary physical facility such as a securely locked science laboratory.
Posted by Don Allen Resnikoff
The issue of unlocking the famous San Bernadino Apple phone is now in repose, but it involves law enforcement issues of interest at a state as well as a federal level. For example, a California state legislator introduced a bill that would ban the retail sale of smartphones with a full-disk encryption feature—a security measure designed to ensure that no one can decrypt and read your phone’s contents except you. A similar New York state assembly proposal is also intended to ensure that law enforcement can access the phones of criminals or victims when their devices are seized as evidence.
The proposed state-level bans would permit the sort of law enforcement access to encrypted smartphones that opponents argue will unacceptably weaken every device’s data protections. The opponents' argument (see the adjoining posting providing an ACLU position, albeit on the factually somewhat different San Bernadino cell phone issue) may include the point that because cell phones are a computerized internet device they are entitled as a matter of law to a degree of protection from law enforcement scrutiny that is different than for an ordinary physical facility such as a securely locked science laboratory.
Posted by Don Allen Resnikoff
Fantasy Sports final regulations in Mass. limit participation by those under 21
The regulations published by the State AG are here:
http://www.mass.gov/ago/consumer-resources/consumer-information/dfs/final-3-25-dfs-regulation.pdf
The regulations published by the State AG are here:
http://www.mass.gov/ago/consumer-resources/consumer-information/dfs/final-3-25-dfs-regulation.pdf
THE GRID 2.0 WORKING GROUP APPLICATION FOR RECONSIDERATION OF PSC ORDER NO. 18148 (Approving the Exelon-PHI merger)
Excerpt:
Pursuant to 15 DCMR § 140.1 (2015), The Grid 2.0 Working Group (GRID2.0) submits this application for reconsideration of Commission Order No. 181481 approving the Joint Applicants’ “merger” application. By Commission rule, this application “act[s] as a stay upon the execution” of Order No. 18148 until the Commission takes final action on this application. The process by which the Commission reached a final decision on the Joint Application began with procedural flaws and culminated in disagreements between Commissioners about the standard under which it should evaluate the Non-Unanimous Settlement Agreement (“NSA”). The Commission should conclude on reconsideration that the record in FC 1119 does not support a finding that the NSA, as revised by the Commission on two occasions (the “RRNSA”) , is in the public interest. It should also find that the many procedural defects in the process leading to Order No. 18148, specifically the decision to proceed on a compressed schedule at the behest of Joint Applicants, ran afoul of explicit statutory notice requirements to which this proceeding is subject.
See: http://www.dcpsc.org/edocket/docketsheets_pdf_FS.asp?caseno=FC1119&docketno=1606&flag=D&show_result=Y
Note (by Don Allen Resnikoff): Timely application for reconsideration is a prerequisite for a possible Court challenge.
Excerpt:
Pursuant to 15 DCMR § 140.1 (2015), The Grid 2.0 Working Group (GRID2.0) submits this application for reconsideration of Commission Order No. 181481 approving the Joint Applicants’ “merger” application. By Commission rule, this application “act[s] as a stay upon the execution” of Order No. 18148 until the Commission takes final action on this application. The process by which the Commission reached a final decision on the Joint Application began with procedural flaws and culminated in disagreements between Commissioners about the standard under which it should evaluate the Non-Unanimous Settlement Agreement (“NSA”). The Commission should conclude on reconsideration that the record in FC 1119 does not support a finding that the NSA, as revised by the Commission on two occasions (the “RRNSA”) , is in the public interest. It should also find that the many procedural defects in the process leading to Order No. 18148, specifically the decision to proceed on a compressed schedule at the behest of Joint Applicants, ran afoul of explicit statutory notice requirements to which this proceeding is subject.
See: http://www.dcpsc.org/edocket/docketsheets_pdf_FS.asp?caseno=FC1119&docketno=1606&flag=D&show_result=Y
Note (by Don Allen Resnikoff): Timely application for reconsideration is a prerequisite for a possible Court challenge.
The House approved legislation Wednesday to eliminate differences in the merger and acquisition review processes by the Federal Trade Commission and the Department of Justice -- but regulatory reviews of mergers like that by DCPSC of Exelon-PHI continue to exist in a different world
The House voted 235 to 171 in favor of the bill, known as the Standard Merger and Acquisition Reviews Through Equal Rules Act or the SMARTER Act.
Just five Democrats voted in favor of the legislation, while Rep. Walter Jones, R-NC, was the only Republican to vote against the bill.
The SMARTER Act requires the FTC and the Justice Department to abide by the same merger standards when reviewing proposed mergers for compliance with antitrust laws.
The bill’s sponsor Rep. Blake Farenthold, R-Tex., said the agencies currently use different procedures to challenge a merger, which he claims causes unequal burdens on merging parties.
Meanwhile, regulatory decisions on mergers like that by DSPSC of the Exelon-PHI merger continue to exist in a different procedural world, where court review is narrow, applying standards different and more limited than usual merger litigation in the courts.
See https://www.competitionpolicyinternational.com/us-houses-passes-bill-to-align-ftc-doj-merger-standards/
Posted by Don Allen Resnikoff
Philadelphia Taxi Association files antitrust lawsuit against Uber
Philadelphia Taxi Association, comprising a number of area cab and limousine companies, has filed an antitrust lawsuit against San Francisco-based Uber Technologies, Inc.
In a lawsuit filed March 15, the plaintiffs in this action charge Uber with violating both the Sherman Antitrust Act and the Clayton Antitrust Act through operating a monopoly for public service transportation in Philadelphia, and intentional interference with contractual relationships and unfair competition.
The plaintiffs now seek to recover funds they claim they have lost and continue to lose due to Uber’s alleged unfair business practices.
Article: http://pennrecord.com/stories/510702887-philadelphia-taxi-association-files-antitrust-lawsuit-versus-uber
Philadelphia Taxi Association, comprising a number of area cab and limousine companies, has filed an antitrust lawsuit against San Francisco-based Uber Technologies, Inc.
In a lawsuit filed March 15, the plaintiffs in this action charge Uber with violating both the Sherman Antitrust Act and the Clayton Antitrust Act through operating a monopoly for public service transportation in Philadelphia, and intentional interference with contractual relationships and unfair competition.
The plaintiffs now seek to recover funds they claim they have lost and continue to lose due to Uber’s alleged unfair business practices.
Article: http://pennrecord.com/stories/510702887-philadelphia-taxi-association-files-antitrust-lawsuit-versus-uber
Dear Governor Snyder:
We, the Flint Water Advisory Task Force (FWATF), offer in this report our findings and recommendations regarding the Flint water crisis. We have come to our conclusions largely through interviews of individuals involved and review of related documents now available in the public record. Our report includes 36 findings and 44 recommendations, offered to fulfill our charge of determining the causes of the Flint water crisis, identifying remedial measures for the Flint community, and safeguarding Michigan residents. We hope that our report serves three fundamental purposes: 1. Clarify and simplify the narrative regarding the roles of the parties involved, and assign accountability clearly and unambiguously. 2. Highlight the causes for the failures of government that precipitated the crisis and suggest measures to prevent such failures in the future. 3. Prescribe recommendations to care for the Flint community and to use the lessons of Flint’s experience to better safeguard Michigan residents.
Report is at http://www.michigan.gov/documents/snyder/FWATF_FINAL_REPORT_21March2016_517805_7.pdf
We, the Flint Water Advisory Task Force (FWATF), offer in this report our findings and recommendations regarding the Flint water crisis. We have come to our conclusions largely through interviews of individuals involved and review of related documents now available in the public record. Our report includes 36 findings and 44 recommendations, offered to fulfill our charge of determining the causes of the Flint water crisis, identifying remedial measures for the Flint community, and safeguarding Michigan residents. We hope that our report serves three fundamental purposes: 1. Clarify and simplify the narrative regarding the roles of the parties involved, and assign accountability clearly and unambiguously. 2. Highlight the causes for the failures of government that precipitated the crisis and suggest measures to prevent such failures in the future. 3. Prescribe recommendations to care for the Flint community and to use the lessons of Flint’s experience to better safeguard Michigan residents.
Report is at http://www.michigan.gov/documents/snyder/FWATF_FINAL_REPORT_21March2016_517805_7.pdf
DCPSC allows Exelon-PHI merger, with the Chair dissenting
Order No. 18148 dated March 23, 2016: The Joint Application for approval of a change of control of Pepco submitted on June 18, 2014, as amended by Attachment B of this Order, is APPROVED as being in the public interest pursuant to D.C. Code §§ 34-504 and 34-1001
See the Order at http://dcpsc.org/edocket/docketsheets_pdf_FS.asp?caseno=FC1119&docketno=1601&flag=C&show_result=Y
Order No. 18148 dated March 23, 2016: The Joint Application for approval of a change of control of Pepco submitted on June 18, 2014, as amended by Attachment B of this Order, is APPROVED as being in the public interest pursuant to D.C. Code §§ 34-504 and 34-1001
See the Order at http://dcpsc.org/edocket/docketsheets_pdf_FS.asp?caseno=FC1119&docketno=1601&flag=C&show_result=Y
Forwarding 3-22-2016 message from DC SUN:
The D.C. Public Service Commission (PSC) has just placed a ruling on the Exelon merger on its agenda for tomorrow.
We think the Commission may issue its final decision in the Exelon-Pepco case. However, they may be tempted to extend the process yet again! It is critical that we show them that opposition to the merger continues to grow!
We may be celebrating tomorrow, but if we are not, we need you to show the PSC that D.C. residents don’t want this bad deal.
Either way—we need you to join us tomorrow at the PSC!
The meeting will be held at the Commission's office, 1325 G Street, N.W., Suite 800, at 11 a.m. *It should last 20-30 minutes.
Show the Commissioners that the momentum is on our side. The people of D.C. don’t want Exelon’s bad deal.
Please come early to make sure you get a seat!
Thank you,
Anya Schoolman
President, DC SUN
*DAR: Looks like the meeting is moved to 1 PM. See http://dcpsc.org/pdf_files/publicmeeting/OM_Agenda_Mar23_16.pdf
From Public Citizen Blog: Supreme Court asks for U.S. view of rate-cap cert petition
Posted: 21 Mar 2016 01:43 PM PDT
Last year, we praised a Second Circuit decision holding that the National Bank Act doesn't preempt New York usury law in a claim against a debt buyer. In response to a cert petition, the Supreme Court has now asked for the Administration's views on the case. You can read more about it (from an industry source) here.
Click title for Public Citizen URL
Posted: 21 Mar 2016 01:43 PM PDT
Last year, we praised a Second Circuit decision holding that the National Bank Act doesn't preempt New York usury law in a claim against a debt buyer. In response to a cert petition, the Supreme Court has now asked for the Administration's views on the case. You can read more about it (from an industry source) here.
Click title for Public Citizen URL
DraftKings, FanDuel Agree To Stop Paid Contests In NY, AG Says:
see http://nypost.com/2016/03/21/draftkings-and-fanduel-agree-to-stop-paid-contests-in-new-york/ …
see http://nypost.com/2016/03/21/draftkings-and-fanduel-agree-to-stop-paid-contests-in-new-york/ …
Excerpts from the DC Sun recap of the DCPSC Exelon-PHI merger proceedings
On February 26, the Public Service Commission rejected the settlement Exelon reached with the Mayor’s office and other D.C. government agencies.
In their rejection, Commissioners offered an alternative settlement. Had the settling parties (including Exelon-Pepco, the Mayor’s Office, Office of the People’s Counsel, and others) approved the Commission offered settlement, the merger would have gone through.
The Commission’s proposal proved to be a non-starter with the settling parties. The Mayor’s office, Office of the People’s Counsel, the D.C. Attorney General, and DC Water have all announced their opposition to the Public Service Commission’s settlement.
Exelon and Pepco then proposed a reworked settlement. The D.C. Government,Office of the People’s Counsel and other settling parties rejected this divisive proposal in filings last Friday.
Now the decision rests again with the Public Service Commission. Their options are to reverse their own ruling and support the initial settlement, accept a proposal from Exelon and Pepco that has no support from the other settling parties, or reject Exelon and Pepco’s bad deal once and for all.
From the Office of People’s Counsel. We are “ready to move on and address other challenges and opportunities facing the District.” It is time to move on from Exelon and toward an affordable, reliable, and sustainable energy system for all District residents.
Click here for full March 17 article by Ben Delman, which includes full-throated comment in support of the Office of People's Counsel's suggestion: link
Brookings:
Five ways to improve water infrastructure in Flint and beyond
Joseph Kane and Lynn Broaddus
Flint, Michigan is just one of many places in America facing significant water infrastructure issues. State and local governments across the country can take several steps to avoid similar crises.
Click title for link to article
Five ways to improve water infrastructure in Flint and beyond
Joseph Kane and Lynn Broaddus
Flint, Michigan is just one of many places in America facing significant water infrastructure issues. State and local governments across the country can take several steps to avoid similar crises.
Click title for link to article
Critics claim that ridesharing companies stiff drivers by labeling them as contractors rather than full employees, but how much are they losing out on, really?
Quite a bit, if you ask those drivers' lawyers. In the wake of Lyft's proposed lawsuit settlement over worker statuses in California, the attorneys have produced a court-ordered estimate showing that the average driver would have made an additional $835 in expense reimbursements over the past 4 years if treated as full-fledged staff.
article at http://www.engadget.com/2016/03/20/lyft-driver-income-estimates/
Quite a bit, if you ask those drivers' lawyers. In the wake of Lyft's proposed lawsuit settlement over worker statuses in California, the attorneys have produced a court-ordered estimate showing that the average driver would have made an additional $835 in expense reimbursements over the past 4 years if treated as full-fledged staff.
article at http://www.engadget.com/2016/03/20/lyft-driver-income-estimates/
Do Drug-Company Payments Mirror Doctors' Brand-Name Prescribing?
See:
http://www.npr.org/sections/health-shots/2016/03/17/470679452/drug-company-payments-mirror-doctors-brand-name-prescribing
See:
http://www.npr.org/sections/health-shots/2016/03/17/470679452/drug-company-payments-mirror-doctors-brand-name-prescribing
Elizabeth Warren on corporate influence on agency rulemaking
Senator Warren delivered a speech on excessive corporate influence in the rulemaking process and argued for not only increased transparency, but a call to "balance the scales" between public and private interests.
"[C]orporate influence works its magic even better in the shadows - and that's where rulemaking occurs."
"[W]hen it comes to undue industry influence, our rule-making process is broken from start to finish. At every stage - from the months before a rule is proposed to the final decision of a court hearing a challenge to that rule - the existing process is loaded with opportunities for powerful industry groups to tilt the scales in their favor."
"Corporate players are savvy.... [They] bury agencies in detailed, self-serving comments [that] slows the process massively, and their overall dominance of the notice-and-comment process results in rules that are longer, more complicated, and more to the liking of the most powerful players in the game."
"Even if the agency manages to jump through all the hoops and withstands all the pressures and actually issues a final rule, companies sue.... But, here again, the rules governing judicial review favor those who would stop the agency from acting in the public interest."
"[O]ver time, bludgeoning agencies into submission undercuts the public interest. The goal should be to have a system where influence over new rules is measured not by the size of the bankroll, but by the strength of the argument."
Editorial comment: The issue relates to local as well as federal agencies. DAR
Senator Warren delivered a speech on excessive corporate influence in the rulemaking process and argued for not only increased transparency, but a call to "balance the scales" between public and private interests.
"[C]orporate influence works its magic even better in the shadows - and that's where rulemaking occurs."
"[W]hen it comes to undue industry influence, our rule-making process is broken from start to finish. At every stage - from the months before a rule is proposed to the final decision of a court hearing a challenge to that rule - the existing process is loaded with opportunities for powerful industry groups to tilt the scales in their favor."
"Corporate players are savvy.... [They] bury agencies in detailed, self-serving comments [that] slows the process massively, and their overall dominance of the notice-and-comment process results in rules that are longer, more complicated, and more to the liking of the most powerful players in the game."
"Even if the agency manages to jump through all the hoops and withstands all the pressures and actually issues a final rule, companies sue.... But, here again, the rules governing judicial review favor those who would stop the agency from acting in the public interest."
"[O]ver time, bludgeoning agencies into submission undercuts the public interest. The goal should be to have a system where influence over new rules is measured not by the size of the bankroll, but by the strength of the argument."
Editorial comment: The issue relates to local as well as federal agencies. DAR
Looking Back: FTC Brushes Aside AG, Regulators to Attack Local Hospital Merger
By Carl Hittinger and Jeffry Duffy
The Federal Trade Commission (FTC) continued its relentless focus on combinations in the healthcare industry last month when it filed an administrative complaint challenging a merger of two West Virginia hospitals, In the Matter of Cabell Huntington Hospital (FTC Docket No. 9366). Given the FTC’s recent successes in thwarting other healthcare mergers it saw as anticompetitive, it is not surprising that the agency is taking on this particular fight. What is somewhat surprising, though, is that the FTC is doing so against the wishes of West Virginia’s antitrust enforcer, Attorney General Patrick Morrisey. As a close reading of the complaint reveals, the FTC not only criticizes the hospital merger itself but essentially indicts West Virginia’s regulation of healthcare facilities as inherently anticompetitive. As such, it raises serious questions of comity and federalism, as well as the future of the much-touted federal and state antitrust partnership, which will merit careful consideration as the case progresses.
The merger in question is a proposed acquisition of St. Mary’s Medical Center by Cabell Huntington Hospital. Both facilities are in Huntington, West Virginia, approximately three miles from each other. Cabell and St. Mary’s have a combined market share of over 75 percent of inpatient hospital services in a geographic market consisting of three West Virginia counties and one Ohio county (the so-called four-county Huntington area). In the same geographic area, the two hospitals likewise have a dominant combined market share in outpatient surgical services, according to the FTC.
The FTC’s analysis of the proposed transaction under the U.S. Department of Justice/FTC Horizontal Merger Guidelines is relatively simple and straightforward. The two hospitals have competed energetically with each other for many years on price, quality, and range of services. Making the two hospitals one would, in the agency’s view, destroy both price competition and all forms of non-price competition. The other hospitals in the area – none of which has more than a 5 percent share in the relevant service markets – are incapable of stepping in to restore competition, according to the FTC. Because of high barriers to entry and unfavorable demographics in the Huntington area, no new entrant is likely to build a competing facility within any reasonable time frame, if ever. And any efficiencies claimed for the merger, the FTC argues, are “unsubstantiated” and do not outweigh the harm to competition. Further, the FTC argues that the Herfindahl-Hirschman Index – the FTC’s favored method of quantifying market concentration in the healthcare industry – far exceeds the standard thresholds that justify a presumption that a merger will impermissibly increase the market power of the resulting entity. Thus, the commission (with only four commissioners at present) unanimously concludes, the merger of Cabell and St. Mary’s is presumptively illegal and should be stopped.
Full article: http://www.antitrustadvocate.com/2015/12/17/ftc-brushes-aside-ag-regulators-to-attack-local-hospital-merger/?utm_source=BakerHostetler+-+Antitrust+Advocate&utm_medium=email&utm_campaign=8e19a6fe49-RSS_EMAIL_CAMPAIGN&utm_term=0_a95f379648-8e19a6fe49-70980973
By Carl Hittinger and Jeffry Duffy
The Federal Trade Commission (FTC) continued its relentless focus on combinations in the healthcare industry last month when it filed an administrative complaint challenging a merger of two West Virginia hospitals, In the Matter of Cabell Huntington Hospital (FTC Docket No. 9366). Given the FTC’s recent successes in thwarting other healthcare mergers it saw as anticompetitive, it is not surprising that the agency is taking on this particular fight. What is somewhat surprising, though, is that the FTC is doing so against the wishes of West Virginia’s antitrust enforcer, Attorney General Patrick Morrisey. As a close reading of the complaint reveals, the FTC not only criticizes the hospital merger itself but essentially indicts West Virginia’s regulation of healthcare facilities as inherently anticompetitive. As such, it raises serious questions of comity and federalism, as well as the future of the much-touted federal and state antitrust partnership, which will merit careful consideration as the case progresses.
The merger in question is a proposed acquisition of St. Mary’s Medical Center by Cabell Huntington Hospital. Both facilities are in Huntington, West Virginia, approximately three miles from each other. Cabell and St. Mary’s have a combined market share of over 75 percent of inpatient hospital services in a geographic market consisting of three West Virginia counties and one Ohio county (the so-called four-county Huntington area). In the same geographic area, the two hospitals likewise have a dominant combined market share in outpatient surgical services, according to the FTC.
The FTC’s analysis of the proposed transaction under the U.S. Department of Justice/FTC Horizontal Merger Guidelines is relatively simple and straightforward. The two hospitals have competed energetically with each other for many years on price, quality, and range of services. Making the two hospitals one would, in the agency’s view, destroy both price competition and all forms of non-price competition. The other hospitals in the area – none of which has more than a 5 percent share in the relevant service markets – are incapable of stepping in to restore competition, according to the FTC. Because of high barriers to entry and unfavorable demographics in the Huntington area, no new entrant is likely to build a competing facility within any reasonable time frame, if ever. And any efficiencies claimed for the merger, the FTC argues, are “unsubstantiated” and do not outweigh the harm to competition. Further, the FTC argues that the Herfindahl-Hirschman Index – the FTC’s favored method of quantifying market concentration in the healthcare industry – far exceeds the standard thresholds that justify a presumption that a merger will impermissibly increase the market power of the resulting entity. Thus, the commission (with only four commissioners at present) unanimously concludes, the merger of Cabell and St. Mary’s is presumptively illegal and should be stopped.
Full article: http://www.antitrustadvocate.com/2015/12/17/ftc-brushes-aside-ag-regulators-to-attack-local-hospital-merger/?utm_source=BakerHostetler+-+Antitrust+Advocate&utm_medium=email&utm_campaign=8e19a6fe49-RSS_EMAIL_CAMPAIGN&utm_term=0_a95f379648-8e19a6fe49-70980973
Advantage Payment Systems, LLC, a Nevada company charged with overcharging to process electronic payments, will pay $22,000 to settle claims that the company violated Vermont consumer protection laws, and will cease business in the state.
From AG press release:
“Vermont currently has the strongest law in the nation to combat predatory high-interest, unlicensed loans – loans that historically were called payday loans,” said Attorney General William H. Sorrell. “This is another settlement confirming that payment processors and others who assist illegal lenders are held responsible for the harms caused by illegal loans.” More information on illegal lending and the Attorney General’s efforts can be found here.
Between 2012-2013, Advantage Payment Systems processed debits from over 500 consumer bank accounts in Vermont on behalf of at least 36 online lenders of high-interest loans. The annual interest often exceeded 100-300% even though Vermont law prohibits annual interest above 24%. None of the 36 lenders had a license to make loans in Vermont. As of September 2013, Advantage Payment Systems ceased processing payments in Vermont involving any online consumer loans.
Under the terms of the settlement, Advantage Payment Systems will pay $22,000 to the State of Vermont, of which $12,000 will be paid to the Vermont Financial Literacy Commission Fund to assist improving the financial literacy and financial capability of Vermont’s citizens. The amount to the Fund represents the amount Advantage Payment Systems debited from a large number of bank accounts for which it had no personal contact information for the Vermont consumer.
Consumers who have borrowed from any lender not listed as licensed with the Vermont Department of Financial Regulation can file a complaint with the Attorney General’s Consumer Assistance Program, or mail a complaint to “Consumer Assistance Program,” 146 University Place, Burlington, VT 05405.
See: http://ago.vermont.gov/focus/news/payment-processor-of-high-interest-internet-loans-will-pay-$22000-to-settle-consumer-protection-claims.php
From AG press release:
“Vermont currently has the strongest law in the nation to combat predatory high-interest, unlicensed loans – loans that historically were called payday loans,” said Attorney General William H. Sorrell. “This is another settlement confirming that payment processors and others who assist illegal lenders are held responsible for the harms caused by illegal loans.” More information on illegal lending and the Attorney General’s efforts can be found here.
Between 2012-2013, Advantage Payment Systems processed debits from over 500 consumer bank accounts in Vermont on behalf of at least 36 online lenders of high-interest loans. The annual interest often exceeded 100-300% even though Vermont law prohibits annual interest above 24%. None of the 36 lenders had a license to make loans in Vermont. As of September 2013, Advantage Payment Systems ceased processing payments in Vermont involving any online consumer loans.
Under the terms of the settlement, Advantage Payment Systems will pay $22,000 to the State of Vermont, of which $12,000 will be paid to the Vermont Financial Literacy Commission Fund to assist improving the financial literacy and financial capability of Vermont’s citizens. The amount to the Fund represents the amount Advantage Payment Systems debited from a large number of bank accounts for which it had no personal contact information for the Vermont consumer.
Consumers who have borrowed from any lender not listed as licensed with the Vermont Department of Financial Regulation can file a complaint with the Attorney General’s Consumer Assistance Program, or mail a complaint to “Consumer Assistance Program,” 146 University Place, Burlington, VT 05405.
See: http://ago.vermont.gov/focus/news/payment-processor-of-high-interest-internet-loans-will-pay-$22000-to-settle-consumer-protection-claims.php
Court enters partial summary judgment on D.C. class action brought by plaintiffs Terrefe Berhanu, Ethio, Inc., and Ezema against Capitol Petroleum Group, LLC, Anacostia Realty,LLC, and Springfield Petroleum Realty
Excerpt:
SUPERIOR COURT OF THE DISTRICT OF COLUMBIA
CIVIL DIVISION ORDER
This District of Columbia Antitrust Act and Retail Service Station Act (“RSSA”) class action comes before this court on defendants Capitol Petroleum Group, LLC, Anacostia Realty,LLC, and Springfield Petroleum Realty, LLC’s motion for summary judgment; plaintiffs Terrefe Berhanu, Ethio, Inc., and Ezema, Inc.’s opposition; and defendants’ reply. For the reasons stated herein, the court grants the motion in part. [Motion granted on RSSA count 3; antitrust counts 1 and 2 stand.]
Background
The Complaint alleges the following pertinent facts. Defendants are gasoline wholesalerswho supply Exxon-branded, Shell-branded, Valero-branded, and other brands of gasoline to over sixty percent of the gasoline service stations in the District of Columbia. Plaintiffs are retail sellers of gasoline who sell defendants’ products. Defendants and defendants’ jointly-owned and operated companies use their business acumen, market power, and bullying tactics to compel retail sellers, including plaintiffs, to purchase gasoline from them exclusively at artificially-inflated prices. Defendants’ practice of requiring sellers to enter into exclusive dealing arrangements has not only prevented retail sellers from seeking lower-priced gasoline from other distributors, but has also effectively barred distributors of minor-brand and unbranded gasoline from entering the District of Columbia market. The defendants deny these allegations
* * *
To establish a prima facie RSSA claim, plaintiffs must show that they have a marketing agreement with defendants. Even if plaintiffs were correct that the RSSA does not require thatthey be parties to a written marketing agreement, the court finds that defendants have demonstrated that they are entitled to summary judgment because theyhave shown that it is undisputed they were not parties to any marketing agreement, oral or otherwise, with plaintiffs. Mamo attests that none of the defendants has a marketing agreement or any other contractual, leasehold, or business relationship with plaintiffs. Berhanu’s affidavit, however, does not even address whether plaintiffs have a marketing agreement with defendants, much less refute Mamo’s assertion, and plaintiffs have not come forward with any evidence whatsoever regardingthe existence of such an agreement. Consequently, the court finds that itis appropriateto enter summary judgment in defendants’ favor on plaintiffs’ RSSA claim.
.
Full Order at https://www.scribd.com/doc/304652383/3-10-2016-Ethio-Order-on-SJ-2
Excerpt:
SUPERIOR COURT OF THE DISTRICT OF COLUMBIA
CIVIL DIVISION ORDER
This District of Columbia Antitrust Act and Retail Service Station Act (“RSSA”) class action comes before this court on defendants Capitol Petroleum Group, LLC, Anacostia Realty,LLC, and Springfield Petroleum Realty, LLC’s motion for summary judgment; plaintiffs Terrefe Berhanu, Ethio, Inc., and Ezema, Inc.’s opposition; and defendants’ reply. For the reasons stated herein, the court grants the motion in part. [Motion granted on RSSA count 3; antitrust counts 1 and 2 stand.]
Background
The Complaint alleges the following pertinent facts. Defendants are gasoline wholesalerswho supply Exxon-branded, Shell-branded, Valero-branded, and other brands of gasoline to over sixty percent of the gasoline service stations in the District of Columbia. Plaintiffs are retail sellers of gasoline who sell defendants’ products. Defendants and defendants’ jointly-owned and operated companies use their business acumen, market power, and bullying tactics to compel retail sellers, including plaintiffs, to purchase gasoline from them exclusively at artificially-inflated prices. Defendants’ practice of requiring sellers to enter into exclusive dealing arrangements has not only prevented retail sellers from seeking lower-priced gasoline from other distributors, but has also effectively barred distributors of minor-brand and unbranded gasoline from entering the District of Columbia market. The defendants deny these allegations
* * *
To establish a prima facie RSSA claim, plaintiffs must show that they have a marketing agreement with defendants. Even if plaintiffs were correct that the RSSA does not require thatthey be parties to a written marketing agreement, the court finds that defendants have demonstrated that they are entitled to summary judgment because theyhave shown that it is undisputed they were not parties to any marketing agreement, oral or otherwise, with plaintiffs. Mamo attests that none of the defendants has a marketing agreement or any other contractual, leasehold, or business relationship with plaintiffs. Berhanu’s affidavit, however, does not even address whether plaintiffs have a marketing agreement with defendants, much less refute Mamo’s assertion, and plaintiffs have not come forward with any evidence whatsoever regardingthe existence of such an agreement. Consequently, the court finds that itis appropriateto enter summary judgment in defendants’ favor on plaintiffs’ RSSA claim.
.
Full Order at https://www.scribd.com/doc/304652383/3-10-2016-Ethio-Order-on-SJ-2
About the California "right to die" law
California patients like her who are 18 or older and want to take advantage of the End of Life Option Act are likely to face challenges in finding cooperative physicians, hospice workers, pharmacists and other healthcare providers, at least initially. Terminally ill patients who live in communities where the sole or dominant provider organizations areCatholic-owned or -affiliated will face even tougher problems because those systems will not allow their physicians and staff to help patients exercise their rights under the law. Patients in more conservative, rural parts of the state also may face hurdles. Unlike in other states, Compassion & Choices, the group that led the effort to pass the law, says it will not steer patients to participating doctors, though it will list participating health systems on its website.
But two giant California systems, Kaiser Permanente and Sutter Health, told Modern Healthcare that they and their physicians and staff will participate in the law, though their individual providers have the right to opt out.
There also are questions about health insurance coverage for aid-in-dying services and drugs. Congress barred Medicare, the Veterans Health Administration and other federal programs from paying for these services, while California's Medicaid program and most private insurers have not yet clarified their payment policies. The drugs alone can cost several hundred to several thousand dollars.
Full article: http://www.modernhealthcare.com/article/20160311/NEWS/303129980?utm_source=modernhealthcare&utm_campaign=am&utm_medium=email&utm_content=20160311-NEWS-303129980
California patients like her who are 18 or older and want to take advantage of the End of Life Option Act are likely to face challenges in finding cooperative physicians, hospice workers, pharmacists and other healthcare providers, at least initially. Terminally ill patients who live in communities where the sole or dominant provider organizations areCatholic-owned or -affiliated will face even tougher problems because those systems will not allow their physicians and staff to help patients exercise their rights under the law. Patients in more conservative, rural parts of the state also may face hurdles. Unlike in other states, Compassion & Choices, the group that led the effort to pass the law, says it will not steer patients to participating doctors, though it will list participating health systems on its website.
But two giant California systems, Kaiser Permanente and Sutter Health, told Modern Healthcare that they and their physicians and staff will participate in the law, though their individual providers have the right to opt out.
There also are questions about health insurance coverage for aid-in-dying services and drugs. Congress barred Medicare, the Veterans Health Administration and other federal programs from paying for these services, while California's Medicaid program and most private insurers have not yet clarified their payment policies. The drugs alone can cost several hundred to several thousand dollars.
Full article: http://www.modernhealthcare.com/article/20160311/NEWS/303129980?utm_source=modernhealthcare&utm_campaign=am&utm_medium=email&utm_content=20160311-NEWS-303129980
Maryland AG Challenges Resale Price Maintenance Agreement
Article By
James Buchanan Camden
McDermott Will & Emery
-
On February 29, 2016, the Attorney General of Maryland filed a complaint alleging that Johnson & Johnson Vision Care, Inc. (Johnson & Johnson) violated the Maryland state antitrust law by entering into an agreement with a retailer regarding a resale price maintenance (RPM) policy.
The complaint alleged that Johnson & Johnson initially instituted an RPM policy in response to objections from eye care professionals that they were losing business to discount retail stores, including Costco Wholesale Corporation (Costco), who were charging less than the eye care professionals to fill prescriptions for Johnson & Johnson’s contact lenses. Once Johnson & Johnson implemented its RPM policy, which fixed minimum retail prices for all retailer sellers of its contact lenses, Costco complained to Johnson & Johnson that the policy prevented Costco from offering discounted pricing on the lenses that its customers had come to expect. In response to Costco’s complaint, Johnson & Johnson entered into negotiations with Costco regarding the terms of its RPM policy. Ultimately, Johnson & Johnson agreed with Costco to amend its RPM policy to permit Costco to provide gift cards and other discounts to Costco customers who purchased Johnson & Johnson’s contact lenses from Costco. Johnson & Johnson then entered into similar RPM policy amendments with certain other retailers.
Johnson & Johnson’s per se violation of Maryland’s antitrust law, according to the complaint, turns on the allegation that Johnson & Johnson negotiated a modified RPM policy with Costco instead of unilaterally implementing and enforcing an RPM policy. The Supreme Court of the United States established in U.S. v. Colgate & Co. that a manufacturer may unilaterally institute and enforce a pricing policy. However, for nearly a century, it was a per se violation of federal antitrust laws to enter into an agreement with a retailer regarding an RPM policy. That changed in 2007, when the Supreme Court held in Leegin Creative Leather Products Inc. v. PSKS Inc. that RPM agreements are not per se violations of federal antitrust law. However, in response to Leegin, Maryland’s state legislature amended the Maryland antitrust law to clarify that agreements with retailers regarding RPM policies remained per se illegal under Maryland state law. Therefore, today, “to be legal in Maryland, a resale price maintenance policy must result from the purely unilateral decision of a manufacturer, without negotiation as to its terms, and must be enforced unilaterally.”
- See more at: http://www.natlawreview.com/article/maryland-ag-challenges-resale-price-maintenance-agreement#sthash.bCZeV1aH.dpuf
Article By
James Buchanan Camden
McDermott Will & Emery
-
On February 29, 2016, the Attorney General of Maryland filed a complaint alleging that Johnson & Johnson Vision Care, Inc. (Johnson & Johnson) violated the Maryland state antitrust law by entering into an agreement with a retailer regarding a resale price maintenance (RPM) policy.
The complaint alleged that Johnson & Johnson initially instituted an RPM policy in response to objections from eye care professionals that they were losing business to discount retail stores, including Costco Wholesale Corporation (Costco), who were charging less than the eye care professionals to fill prescriptions for Johnson & Johnson’s contact lenses. Once Johnson & Johnson implemented its RPM policy, which fixed minimum retail prices for all retailer sellers of its contact lenses, Costco complained to Johnson & Johnson that the policy prevented Costco from offering discounted pricing on the lenses that its customers had come to expect. In response to Costco’s complaint, Johnson & Johnson entered into negotiations with Costco regarding the terms of its RPM policy. Ultimately, Johnson & Johnson agreed with Costco to amend its RPM policy to permit Costco to provide gift cards and other discounts to Costco customers who purchased Johnson & Johnson’s contact lenses from Costco. Johnson & Johnson then entered into similar RPM policy amendments with certain other retailers.
Johnson & Johnson’s per se violation of Maryland’s antitrust law, according to the complaint, turns on the allegation that Johnson & Johnson negotiated a modified RPM policy with Costco instead of unilaterally implementing and enforcing an RPM policy. The Supreme Court of the United States established in U.S. v. Colgate & Co. that a manufacturer may unilaterally institute and enforce a pricing policy. However, for nearly a century, it was a per se violation of federal antitrust laws to enter into an agreement with a retailer regarding an RPM policy. That changed in 2007, when the Supreme Court held in Leegin Creative Leather Products Inc. v. PSKS Inc. that RPM agreements are not per se violations of federal antitrust law. However, in response to Leegin, Maryland’s state legislature amended the Maryland antitrust law to clarify that agreements with retailers regarding RPM policies remained per se illegal under Maryland state law. Therefore, today, “to be legal in Maryland, a resale price maintenance policy must result from the purely unilateral decision of a manufacturer, without negotiation as to its terms, and must be enforced unilaterally.”
- See more at: http://www.natlawreview.com/article/maryland-ag-challenges-resale-price-maintenance-agreement#sthash.bCZeV1aH.dpuf
Antitrust Enforcement Agencies Issue Joint Statement Encouraging Repeal of Virginia’s Certificate of Need Program
Article By
Daniel C. Fundakowski
M. Brian Hall, IV
Epstein Becker & Green, P.C
On October 26, 2015, the Federal Trade Commission and the Antitrust Division of the U.S. Department of Justice (collectively the “Agencies”) issued a joint statement to the Virginia Certificate of Public Need Work Group encouraging the Work Group and the Virginia General Assembly to repeal or restrict the state’s certificate of need process. The Virginia COPN Work Group was tasked by the Virginia General Assembly to review the current COPN process and recommend any changes that should be made to it.
Full Text Here >
Article By
Daniel C. Fundakowski
M. Brian Hall, IV
Epstein Becker & Green, P.C
On October 26, 2015, the Federal Trade Commission and the Antitrust Division of the U.S. Department of Justice (collectively the “Agencies”) issued a joint statement to the Virginia Certificate of Public Need Work Group encouraging the Work Group and the Virginia General Assembly to repeal or restrict the state’s certificate of need process. The Virginia COPN Work Group was tasked by the Virginia General Assembly to review the current COPN process and recommend any changes that should be made to it.
Full Text Here >
DC OAG press release: Office of the Attorney General Underscores Support Only for Original Settlement Negotiated for Pepco-Exelon Merger: Filing with Public Service Commission Means District Does Not Support Alternative Settlements
WASHINGTON, D. C. – Attorney General Karl A. Racine today [3-11-2016] filed the District’s response to the Public Service Commission’s offer of proposed alternative settlement terms for a Pepco-Exelon merger by underscoring the District’s support solely for the original settlement the parties reached last October. That agreement, which the Office of the Attorney General (OAG) helped negotiate, protected residential ratepayers from rate increases through the end of March, 2019 and offered millions of dollars to promote sustainable energy programs, green jobs training, and many other community benefits.
“We continue to believe that, of the settlement terms so far offered to enable this merger, only the original settlement sufficiently upholds the public interest,” said Attorney General Racine.
On February 26, the District’s Public Service Commission (PSC) rejected the October agreement and proposed an alternative agreement. Attorney General Racine and other District officials expressed opposition to that agreement. On March 7, Pepco and Exelon submitted a request presenting the PSC with three options: (1) adopting the original October settlement agreement; (2) adopting the alternative agreement PSC proposed in February; or (3) adopting another alternative offered by Pepco and Exelon. OAG’s filing today underscores that the District only supports the first option.
WASHINGTON, D. C. – Attorney General Karl A. Racine today [3-11-2016] filed the District’s response to the Public Service Commission’s offer of proposed alternative settlement terms for a Pepco-Exelon merger by underscoring the District’s support solely for the original settlement the parties reached last October. That agreement, which the Office of the Attorney General (OAG) helped negotiate, protected residential ratepayers from rate increases through the end of March, 2019 and offered millions of dollars to promote sustainable energy programs, green jobs training, and many other community benefits.
“We continue to believe that, of the settlement terms so far offered to enable this merger, only the original settlement sufficiently upholds the public interest,” said Attorney General Racine.
On February 26, the District’s Public Service Commission (PSC) rejected the October agreement and proposed an alternative agreement. Attorney General Racine and other District officials expressed opposition to that agreement. On March 7, Pepco and Exelon submitted a request presenting the PSC with three options: (1) adopting the original October settlement agreement; (2) adopting the alternative agreement PSC proposed in February; or (3) adopting another alternative offered by Pepco and Exelon. OAG’s filing today underscores that the District only supports the first option.
From the Commonwealth Fund:
Are Health Care Mergers Good for Consumers?
As more and more health insurers and providers merge, it’s important to look at the potential impact on the cost and quality of health care.
In the latest episode of New Directions in Health Care, The Commonwealth Fund’s podcast, Sandy Hausman talks with the Fund’s Eric Schneider, M.D., and Northwestern University’s Leemore Dafny about the need for federal regulators to consider how consolidation and loss of competition can drive up prices, even as it opens up opportunities for more-coordinated care. They also discuss the need for greater price and cost transparency to ensure consumers are protected.
Click here to Listen Now
Click title for link to the Commonwealth Fund
Are Health Care Mergers Good for Consumers?
As more and more health insurers and providers merge, it’s important to look at the potential impact on the cost and quality of health care.
In the latest episode of New Directions in Health Care, The Commonwealth Fund’s podcast, Sandy Hausman talks with the Fund’s Eric Schneider, M.D., and Northwestern University’s Leemore Dafny about the need for federal regulators to consider how consolidation and loss of competition can drive up prices, even as it opens up opportunities for more-coordinated care. They also discuss the need for greater price and cost transparency to ensure consumers are protected.
Click here to Listen Now
Click title for link to the Commonwealth Fund
From Modern Healthcare:Cigna could save $350 million from new Medicare Advantage policy shift
By Bob Herman | March 9, 2016
The CMS has scrapped a policy that reduced star ratings for Medicare Advantage plans facing sanctions for poor compliance.
The move, which was quietly released by the CMS in a memo (PDF) and shocked many in the industry, will immediately protect hundreds of millions of dollars at Cigna Corp., which had its Medicare Advantage planssanctioned in January.
“It does seem pretty unusual to make this kind of dramatic change in a memo,” said Tom Kornfield, a vice president at consulting firm Avalere Health and former CMS official. “It sort of comes out of nowhere.”
Richard Lieberman, a Medicare Advantage data consultant at Mile High Healthcare Analytics, said the CMS' decision could be characterized as “a huge gift or even corporate welfare” even though it could help insurers that quickly resolve problems.
Full article: http://www.modernhealthcare.com/article/20160309/NEWS/160309838?utm_source=modernhealthcare&utm_medium=email&utm_content=20160309-NEWS-160309838&utm_campaign=am
From Public Citizen blog: FDA and pharma company Amarin settle lawsuit on "off-label" promotion
The Food and Drug Administration and Amarin, the manufacturer of a prescription fish-oil drug, have settled Amarin's lawsuit challenging the FDA's authority to restrict the company from touting its product for an unapproved use.
The Washington Post reports that the FDA said the settlement is “specific to this particular case and situation,” and did not mark a new legal precedent." But the settlement leaves in place a district court decision that is skeptical of the FDA's authority to protect patients when drug companies want to promote drugs for uses that have not been approved as safe and effective.
The settlement is here. New York Times coverage of the settlement is here.
Our previous posts about Amarin's first amendment theory and the implications for public health are here, here, and here.
Click title above to go to Public Citizen URL
The Food and Drug Administration and Amarin, the manufacturer of a prescription fish-oil drug, have settled Amarin's lawsuit challenging the FDA's authority to restrict the company from touting its product for an unapproved use.
The Washington Post reports that the FDA said the settlement is “specific to this particular case and situation,” and did not mark a new legal precedent." But the settlement leaves in place a district court decision that is skeptical of the FDA's authority to protect patients when drug companies want to promote drugs for uses that have not been approved as safe and effective.
The settlement is here. New York Times coverage of the settlement is here.
Our previous posts about Amarin's first amendment theory and the implications for public health are here, here, and here.
Click title above to go to Public Citizen URL
Exelon’s Hail Mary pass: asks the DCPSC to adopt the Revised Nonunanimous Settlement Agreement (“RNSA”) even though all settling “parties” don’t agree
The Exelon filing of 3-7-2016 asks the PSC to bypass the PSC’s previously announced procedures contemplating unanimous agreement by settling “parties”
Excerpt of Joint Applicant filing at http://dcpsc.org/edocket/docketsheets_pdf_FS.asp?caseno=FC1119&docketno=1556&flag=D&show_result=Y
The Joint Applicants have carefully reviewed the RNSA and are ready to proceed with the Merger in accordance with its terms. The other Settling Parties, however, have been unable to agree to the Commission’s conditions . . . . The Commission has available to it three avenues to do so [decide in favor of the merger] —all of which are acceptable to the Joint Applicants. Specifically, the Commission can approve the Merger in accordance with the terms of the Settlement Agreement, the terms of the RNSA, or on the terms of a middle ground proposal, all as discussed further below.
* * *
In short, the Joint Applicants request that the Commission adopt the terms of the Settlement Agreement as a resolution on the merits and approve the Merger without any further steps. . . . As an alternative to adoption of the terms of the Settlement Agreement, the Joint Applicants request that the Commission adopt the terms of the RNSA as a resolution on the merits and approve the Merger without any further steps. . . . Commission precedent permits the Commission to now approve the Merger conditioned by the terms of the RNSA as a resolution on the merits without any further steps.
The Exelon filing of 3-7-2016 asks the PSC to bypass the PSC’s previously announced procedures contemplating unanimous agreement by settling “parties”
Excerpt of Joint Applicant filing at http://dcpsc.org/edocket/docketsheets_pdf_FS.asp?caseno=FC1119&docketno=1556&flag=D&show_result=Y
The Joint Applicants have carefully reviewed the RNSA and are ready to proceed with the Merger in accordance with its terms. The other Settling Parties, however, have been unable to agree to the Commission’s conditions . . . . The Commission has available to it three avenues to do so [decide in favor of the merger] —all of which are acceptable to the Joint Applicants. Specifically, the Commission can approve the Merger in accordance with the terms of the Settlement Agreement, the terms of the RNSA, or on the terms of a middle ground proposal, all as discussed further below.
* * *
In short, the Joint Applicants request that the Commission adopt the terms of the Settlement Agreement as a resolution on the merits and approve the Merger without any further steps. . . . As an alternative to adoption of the terms of the Settlement Agreement, the Joint Applicants request that the Commission adopt the terms of the RNSA as a resolution on the merits and approve the Merger without any further steps. . . . Commission precedent permits the Commission to now approve the Merger conditioned by the terms of the RNSA as a resolution on the merits without any further steps.
DC Sun's reaction to the Exelon 3-7-2016 filing
Exelon is at it again. Today the company filed a last-ditch, desperation effort to salvage its sinking deal. Importantly, the company was unable to get any of the settling parties to agree to its new offer. Exelon has arrogantly asked the Public Service Commission to accept one of three bad deals:
Exelon’s latest bad offer demonstrates the company’s arrogance in dealing with D.C residents. It would mean rate increases before 2019 and less money to make D.C.’s electric system more sustainable.
Exelon has had its chance. Mayor Bowser stand up for D.C. and tell Exelon to go away.
Thank you,
Anya Schoolman
President, DC SUN
anya.schoolman@gmail.com
Exelon is at it again. Today the company filed a last-ditch, desperation effort to salvage its sinking deal. Importantly, the company was unable to get any of the settling parties to agree to its new offer. Exelon has arrogantly asked the Public Service Commission to accept one of three bad deals:
- Accept the settlement the Public Service Commission already rejected;
- Accept the alternative settlement Mayor Bowser, Attorney General Racine, the Office of People’s Counsel, and D.C. Water rejected; or
- Accept Exelon’s desperation play of re-arranging existing funds not agreed to by any of the parties.
Exelon’s latest bad offer demonstrates the company’s arrogance in dealing with D.C residents. It would mean rate increases before 2019 and less money to make D.C.’s electric system more sustainable.
Exelon has had its chance. Mayor Bowser stand up for D.C. and tell Exelon to go away.
Thank you,
Anya Schoolman
President, DC SUN
anya.schoolman@gmail.com
Strong views on Exelon/PHI merger proposal at http://chesapeakeclimate.org/blog/exelon-pepco-saga-drags-on-new-questions-surface-shady-politics/
An excerpt from the blog by Kelly Trout:
District residents can’t be blamed for feeling a bit of déjà vu.As of this morning, Exelon and Pepco have affirmed that they continue to hold negotiations behind closed doors with D.C. officials to revive their now thrice-dead merger deal.
As this divisive, expensive, and scandal-marred chapter for the District drags on, District residents deserve clear answers about whose interests are truly being served. In fact, documents recently released to the Chesapeake Climate Action Network under the Freedom of Information Act -- after lots of foot-dragging by D.C. officials -- leave us asking these key questions:
Documents finally released by the Office of the City Administrator -- albeit with lots of suspect redactions -- indicate that Mayor Muriel Bowser misled the public about who negotiated her settlement deal last fall and give more indication of a quid pro quo.
FOIA documents suggest that Exelon and Pepco’s main points of contact were actually Deputy Director of the Mayor’s Office of Legal Counsel, Ronald Ross, and his boss, Director of the Mayor’s Office of Legal Counsel, Mark Tuohey -- not City Administrator Rashad Young or Tommy Wells, head of the Department of Energy and Environment, as the mayor’s office has claimed. No emails surrendered by the City Administrator’s office show Young initiating or otherwise leading settlement communications.
In fact, Ross and Tuohey are the DC officials who receive “financial information” for settlement purposes at 10:55 p.m. on Saturday, September 19th -- the day after Mayor Bowser and Pepco announced their highly unusual $25 million naming rights deal. That deal paved the way for Mayor Bowser’s prized soccer stadium project. Did it also pave the way for Mayor Bowser to settle with Exelon and ink the deal rejected last Friday as not in the public interest? The released emails suggest a correlation.
Why would the Mayor’s office not reveal the real negotiators? Notably, Ross is tied to Pepco through his former boss, Kevin Fitzgerald, who was also involved in settlement negotiations. Both worked together at the law firm Troutman Sanders. Furthermore, Ross and Tuohey served together on the D.C. Sports and Entertainment Commission, the infamous body that got D.C. taxpayers to pay hundreds of millions of dollars to build a baseball stadium.
Posted by Don Allen Resnikoff
An excerpt from the blog by Kelly Trout:
District residents can’t be blamed for feeling a bit of déjà vu.As of this morning, Exelon and Pepco have affirmed that they continue to hold negotiations behind closed doors with D.C. officials to revive their now thrice-dead merger deal.
As this divisive, expensive, and scandal-marred chapter for the District drags on, District residents deserve clear answers about whose interests are truly being served. In fact, documents recently released to the Chesapeake Climate Action Network under the Freedom of Information Act -- after lots of foot-dragging by D.C. officials -- leave us asking these key questions:
- Why did the Mayor apparently mislead the public about who negotiated her settlement deal last fall?
- Why was key settlement information sent by Exelon to the Mayor’s office the day after Pepco inked its $25 million “Soccergate” deal?
- What is happening behind closed doors right now, and will shady politics win the day again?
Documents finally released by the Office of the City Administrator -- albeit with lots of suspect redactions -- indicate that Mayor Muriel Bowser misled the public about who negotiated her settlement deal last fall and give more indication of a quid pro quo.
FOIA documents suggest that Exelon and Pepco’s main points of contact were actually Deputy Director of the Mayor’s Office of Legal Counsel, Ronald Ross, and his boss, Director of the Mayor’s Office of Legal Counsel, Mark Tuohey -- not City Administrator Rashad Young or Tommy Wells, head of the Department of Energy and Environment, as the mayor’s office has claimed. No emails surrendered by the City Administrator’s office show Young initiating or otherwise leading settlement communications.
In fact, Ross and Tuohey are the DC officials who receive “financial information” for settlement purposes at 10:55 p.m. on Saturday, September 19th -- the day after Mayor Bowser and Pepco announced their highly unusual $25 million naming rights deal. That deal paved the way for Mayor Bowser’s prized soccer stadium project. Did it also pave the way for Mayor Bowser to settle with Exelon and ink the deal rejected last Friday as not in the public interest? The released emails suggest a correlation.
Why would the Mayor’s office not reveal the real negotiators? Notably, Ross is tied to Pepco through his former boss, Kevin Fitzgerald, who was also involved in settlement negotiations. Both worked together at the law firm Troutman Sanders. Furthermore, Ross and Tuohey served together on the D.C. Sports and Entertainment Commission, the infamous body that got D.C. taxpayers to pay hundreds of millions of dollars to build a baseball stadium.
Posted by Don Allen Resnikoff
Washington Business Journal Reports: D.C. Mayor Muriel Bowser has rejected the latest merger agreement for Pepco Holdings Inc. and Exelon Corp., a move that along with similar statements from other D.C. officials appears likely to torpedo the deal altogether
The rejection comes as D.C. People's Counsel, the chief advocate for D.C.'s electricity ratepayers, also said she would not support the new proposal, which was recently revised by the D.C. Public Service Commission. And D.C. Attorney General Karl Racine on Tuesday told The Washington Post that he does not believe the commission’s plan is viable.
See http://www.bizjournals.com/washington/news/2016/03/01/mayor-bowser-office-of-the-peoples-counsel-reject.html
How is it that the Mayor and City Officials are in a position to "torpedo" the "deal?" The answer is in the procedures followed by the DC Public Service Commission, and the language of the order they entered.
The most recent Commission order refers to a "Nonunanimous Full Settlement Agreement and Stipulation" submitted by Potomac Electric Power Company (“Pepco”), Exelon Corporation (“Exelon”), Pepco Holdings, Inc. (“PHI”), Exelon Energy Delivery Company, LLC, and New Special Purpose Entity, LLC (the “Joint Applicants”); the Office of People’s Counsel of the District of Columbia (“OPC”); Apartment and Office Building Association of Metropolitan Washington (“AOBA”); the District of Columbia Government (“District Government”); the District of Columbia Water and Sewer Authority (“DC Water”); and the National Consumer Law Center; National Housing Trust; the National Housing Trust-Enterprise Preservation Corporation (“NCLC/NHT”). The NSA was admitted on to the record of the case as Joint Applicants Exhibit NSA-1 on December 2, 2015.
The recent Commission Order, which can be found at http://dcpsc.org/pdf_files/commorders/orderpdf/orderno_18109_FC1119.pdf, explains that having rejected the merger proposal and "Nonunanimous Full Settlement Agreement and Stipulation," two of the three PSC commissioners, Commissioners Fort and Phillips, as a procedural matter, vote to proceed pursuant to Commission Rule 130.17(b) with regard to alternative terms proposed by the Commission.
As explained in the introductory portion of a lengthy order: "The Settling Parties are directed to file a Notice with the Commission Secretary, no later than fourteen (14) days from the date of this order, indicating whether they accept the Revised NSA at Attachment A or request further relief under Commission Rule 130.17(b).2 If all the Settling Parties accept the Revised NSA at Attachment A, then the Joint Application as amended by the Revised NSA is approved as in the public interest by the Commission without further Commission action. 4. If the Settling Parties propose other relief under Commission Rule 130.17(b), the Nonsettling Parties may file comments on the request for other relief, within seven (7) days from the date the Settling Parties’ file for other relief." [emphasis added]
In summary, based on a decision by two of the three PSC commissioners, the merger was approved subject to agreement by all of the the settling "parties" to alternate terms specified by the Commission. The "parties" include the actual merging entities (who obviously can decide whether to accept or reject new conditions on their merger) , along with others designated by the Commission as parties: the Office of People’s Counsel of the District of Columbia; Apartment and Office Building Association of Metropolitan Washington; the District of Columbia Government, represented by the Office of the Attorney General; the District of Columbia Water and Sewer Authority; the National Consumer Law Center; National Housing Trust; and the National Housing Trust-Enterprise Preservation Corporation.
There are a number of comments that could be made about the procedures followed by the Commission. One is simply that the procedures are different from those that would be followed in a government antitrust case in court, of the type advocated by the American Antitrust Institute with regard to the Exelon/PHI merger proposal. For one, issues of standing -- who can participate as a party -- would be decided as a matter of law including questions of Constitutional requirements for standing, and questions of fact concerning injury. In the court context it might be that those allowed to act as parties and those refused that status might be the same as decided by the DCPSC, but perhaps not.
Posted by Don Allen Resnikoff
House Speaker Paul Ryan sides with detractors of DOL fiduciary rule
A recent blog post on Ryan's website characterizes the Department of Labor proposal as "Obamacare for financial planning." It goes on to say the rule, which would raise investment advice standards for retirement accounts, would create higher costs and harm smaller firms. Two bills that would stop the regulation are headed toward a House vote. (Investment News)
A recent blog post on Ryan's website characterizes the Department of Labor proposal as "Obamacare for financial planning." It goes on to say the rule, which would raise investment advice standards for retirement accounts, would create higher costs and harm smaller firms. Two bills that would stop the regulation are headed toward a House vote. (Investment News)
Coalition of consumer groups supports the request of Public Citizen that the US Department of Education require educational institutions to agree, as a condition on receipt of Title IV assistance under the Higher Education Act (HEA), not to include pre-dispute arbitration clauses in enrollment and other contracts with students
The practice is also known as “forced arbitration.” Under these clauses, students lose their right to court proceedings and a jury and are instead forced into privately-administered arbitration to challenge any wrongdoing committed by the school. The consumer organizations' letter explains that this process functionally deprives students of their right to relief for the harm they have suffered. As amply set forth in a Public Citizen petition (see below), the Department has the authority to adopt such a rule under the HEA and it would be consistent with the Federal Arbitration Act (FAA), 9 U.S.C. § 1 et seq. Such a rule would aid the Department in meeting its obligations to protect students and to root out fraudulent conduct by schools participating in Title IV programs. The consumer groups express deep concern about predatory schools in the for-profit college industry that defraud students and families while profiting from federal aid. These schools offer low-quality, highpriced programs, shortchange students in their support service offerings, and often misrepresent their abysmal graduation and job-placement rates. These schools frequently target low-income students, racial and ethnic minorities, and veterans who are often the first in their family to go to college. Students who enroll in these schools often drop out when they realize they have been misled, and those who stay generally realize no benefit for their degree. In either case, the schools’ wrongdoing leaves many students with federal student loan debt that they cannot repay. Incredibly, even while many of these schools cheat their students out of a meaningful education, forced arbitration allows them to escape civil liability for their wrongdoing. Forced arbitration clauses are buried in the fine print of student enrollment contracts and students are often unaware that these schools have taken away their rights.
See Citizen Petition from Public Citizen to the U.S. Department of Education Acting Secretary Dr. John B. King, Jr., Feb. 24, 2016, available at http://www.citizen.org/documents/Citizen-Petition-to-ED-TitleIV-Arbitration-Clauses.pdf
The practice is also known as “forced arbitration.” Under these clauses, students lose their right to court proceedings and a jury and are instead forced into privately-administered arbitration to challenge any wrongdoing committed by the school. The consumer organizations' letter explains that this process functionally deprives students of their right to relief for the harm they have suffered. As amply set forth in a Public Citizen petition (see below), the Department has the authority to adopt such a rule under the HEA and it would be consistent with the Federal Arbitration Act (FAA), 9 U.S.C. § 1 et seq. Such a rule would aid the Department in meeting its obligations to protect students and to root out fraudulent conduct by schools participating in Title IV programs. The consumer groups express deep concern about predatory schools in the for-profit college industry that defraud students and families while profiting from federal aid. These schools offer low-quality, highpriced programs, shortchange students in their support service offerings, and often misrepresent their abysmal graduation and job-placement rates. These schools frequently target low-income students, racial and ethnic minorities, and veterans who are often the first in their family to go to college. Students who enroll in these schools often drop out when they realize they have been misled, and those who stay generally realize no benefit for their degree. In either case, the schools’ wrongdoing leaves many students with federal student loan debt that they cannot repay. Incredibly, even while many of these schools cheat their students out of a meaningful education, forced arbitration allows them to escape civil liability for their wrongdoing. Forced arbitration clauses are buried in the fine print of student enrollment contracts and students are often unaware that these schools have taken away their rights.
See Citizen Petition from Public Citizen to the U.S. Department of Education Acting Secretary Dr. John B. King, Jr., Feb. 24, 2016, available at http://www.citizen.org/documents/Citizen-Petition-to-ED-TitleIV-Arbitration-Clauses.pdf
Elizabeth Warren’s 12-page report on corporate criminality titled: Rigged Justice: 2016 – How Weak Enforcement Lets Corporate Offenders Off Easy
Excerpt: The Securities and Exchange Commission (SEC) is particularly feeble, often failing to use the full range of its enforcement toolbox. Not only does the agency fail to demand accountability, the SEC frequently uses its prosecutorial discretion to grant waivers to big companies so that those companies can continue to enjoy special privileges despite often-repeated misconduct that legally disqualifies them from receiving such benefits. Lax enforcement at other agencies, such as the Occupational Health and Safety Administration (OSHA), stems primarily from a lack of important legal tools and persistent underfunding by Congress that often turn the legal rules into little more than suggestions that companies can freely ignore. The contrast between the treatment of highly paid executives and everyone else couldn’t be sharper. The U.S. has a larger prison population than any nation in the world. People are locked up for long stretches for crimes that involve thousands—or even hundreds—of dollars. Even the settlement process is different. For most people accused of a crime, prosecutors may be willing to plead out the cases, but they typically require admission of guilt and, if the crime involves more than a trivial amount of money, time in jail. Various three-strikes rules frequently put people away for life for non-violent crimes involving modest amounts of money. Politicians routinely get elected promising to be “tough on crime,” and both federal and state governments devote immense resources to put and keep criminals in prison. The Obama Administration has made repeated promises to strengthen enforcement and hold corporate criminals accountable, and the DOJ announced in September that it would place greater emphasis on charging individuals responsible for corporate crimes. Nonetheless, both before and after this DOJ announcement, accountability for corporate crimes is shockingly weak.
Click title above for a link to the full report
Excerpt: The Securities and Exchange Commission (SEC) is particularly feeble, often failing to use the full range of its enforcement toolbox. Not only does the agency fail to demand accountability, the SEC frequently uses its prosecutorial discretion to grant waivers to big companies so that those companies can continue to enjoy special privileges despite often-repeated misconduct that legally disqualifies them from receiving such benefits. Lax enforcement at other agencies, such as the Occupational Health and Safety Administration (OSHA), stems primarily from a lack of important legal tools and persistent underfunding by Congress that often turn the legal rules into little more than suggestions that companies can freely ignore. The contrast between the treatment of highly paid executives and everyone else couldn’t be sharper. The U.S. has a larger prison population than any nation in the world. People are locked up for long stretches for crimes that involve thousands—or even hundreds—of dollars. Even the settlement process is different. For most people accused of a crime, prosecutors may be willing to plead out the cases, but they typically require admission of guilt and, if the crime involves more than a trivial amount of money, time in jail. Various three-strikes rules frequently put people away for life for non-violent crimes involving modest amounts of money. Politicians routinely get elected promising to be “tough on crime,” and both federal and state governments devote immense resources to put and keep criminals in prison. The Obama Administration has made repeated promises to strengthen enforcement and hold corporate criminals accountable, and the DOJ announced in September that it would place greater emphasis on charging individuals responsible for corporate crimes. Nonetheless, both before and after this DOJ announcement, accountability for corporate crimes is shockingly weak.
Click title above for a link to the full report
From AARP: Scammers who charge Medicare for unneeded or overpriced medical devices
Since 2007, strike force operations have brought charges against almost 2,100 defendants responsible for more than $6.5 billion in bogus Medicare billings. The strike forces initially focused heavily on high-priced durable medical equipment, in particular motorized wheelchairs and scooters, which had become something of a fraud fad. Doctors took kickbacks from distributors to prescribe power chairs for healthy, ambulatory patients. The distributors, in turn, provided no-frills wheelchairs but sent Medicare a bill for models costing thousands of dollars more. As strike forces tightened the screws, annual Medicare spending on motorized chairs declined precipitously, from $686 million in 2007 to $190 million in 2013.
While a lot of dirt is being flushed out of the pipeline, no one harbors any illusions about completely cleaning up Medicare fraud. "It's where the money is," says the FBI's Jennifer Leonard. "It's a growth industry for opportunists."
The future of fraud detection presumably lies in the evolution of data analytics, which should make it possible to quickly flag suspicious Medicare billing activity and identify bad players. But Dennis Jay of the Coalition Against Insurance Fraud predicts the battle won't be won without a substantial public awareness component. A large majority of Americans need to realize Medicare fraud isn't a victimless crime, that this is a social contract every citizen has an obligation to preserve and protect.
Full article: http://www.aarp.org/health/medicare-insurance/info-2015/medicare-scams-spread.html
From the Health Care Blog: Congress Needs to do Something About Electronic Health Care Data Blocking Now
By ADRIAN GROPPER, MD and DEBORAH PEEL, MD
It’s time for Congress update HIPAA. Believe it or not, HIPAA still allows hospitals and other electronic health record (EHR) systems to require paper forms before they release data under patient direction. Along with an allowed 30-day delay in access to electronic health records, this data blocking makes second opinions and price comparisons practically inaccessible. Over $30B in stimulus funds have been spent on EHRs and now it is still up to Congress to give to patients full digital access to digital data.
Data blocking is the result of deliberate barriers designed into current EHRs that prevent patients being able to use their own data in efficient and innovative ways. It is practiced by both EHR vendors and healthcare institutions to avoid competition by favoring the services they control. As hospitals consolidate into massive “integrated delivery networks”, the business logic for data blocking becomes clear and irrefutable. Data blocking ensures the largest health delivery networks will get larger and control pricing. The bigger they are, the more data they have about each patient and the more money each patient’s data is worth to outside interests like pharmaceutical companies and data brokers. The results are ruinous healthcare costs and hidden discrimination in insurance, credit, employment, and other key life opportunities.
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Mayo's Epic implementation will cost upwards of $1B over 5 years
Written by Max Green | March 01, 2016
With news of Rochester, Minn.-based Mayo Clinic's selection of Epic's Electronic Health Records system came word the hospital would team up with the vendor to build a hardware infrastructure for the implementation that would cost about $6 million. Now, Mayo is reporting it expects to spend more than $1 billion over the next five years to get the EHR up and running, according to the Minneapolis/St. Paul Business Journal.
Mayo is making the switch to Epic from Cerner and GE. Although the system's annual report didn't include contract details, it expects to drop $1.5 billion on the implementation and infrastructure in the coming years.
URL http://www.beckershospitalreview.com/healthcare-information-technology/mayo-s-epic-implementation-will-cost-upwards-of-1b-over-5-years.html
Written by Max Green | March 01, 2016
With news of Rochester, Minn.-based Mayo Clinic's selection of Epic's Electronic Health Records system came word the hospital would team up with the vendor to build a hardware infrastructure for the implementation that would cost about $6 million. Now, Mayo is reporting it expects to spend more than $1 billion over the next five years to get the EHR up and running, according to the Minneapolis/St. Paul Business Journal.
Mayo is making the switch to Epic from Cerner and GE. Although the system's annual report didn't include contract details, it expects to drop $1.5 billion on the implementation and infrastructure in the coming years.
URL http://www.beckershospitalreview.com/healthcare-information-technology/mayo-s-epic-implementation-will-cost-upwards-of-1b-over-5-years.html
- Bloomberg: Exelon Corp.is weighing new terms for its $6.8 billion takeover of Pepco Holdings Inc. after Washington regulators rejected its latest proposal for the deal.
After nearly two years trying to gain regulatory approvals for the tie-up and two denials, Exelon must now weigh new conditions that one analyst characterized as “minor.” Chief Executive Officer Chris Crane said on Feb. 3 that without a decision from Washington by March 4, Exelon would walk away from the deal. A sign-off from Washington is the last one needed by the companies.
"The amendments are a clear path for approval and provide more clarity than we expected," Shahriar Pourreza, a utility analyst for Guggenheim Securities LLC, wrote Friday in a research note. Exelon will agree to the terms "given how the amendments seem relatively minor."
Chicago-based Exelon is reviewing the new provisions to decide if they are acceptable, spokesman Paul Elsberg said in a statement. “Once we have had a chance to study the order and confer with the settling parties, we will have more to say about what it means and our next steps," Elsberg said.
Crane wants to add Pepco’s predictable utility revenue to help reduce his company’s reliance on power sold into competitive wholesale markets by Exelon’s nuclear power plants, the largest collection in the nation. Some of Exelon’s reactors have been losing money due to low prices.
Commissioner Joanne Doddy Fort and Commissioner Willie Phillips voted in favor of considering the alternative terms, which would allow the transaction go forward if the parties agree. Chairman Betty Ann Kane dissented, saying the alternative proposal was not in the public interest.
Utility ConsolidationOther opponents of the takeover decried the new proposal.
"This is a huge loss for consumers, a discouraging setback for the institutions to protect them and a sad commentary on how things are done in the District," said Allison Fisher, public outreach director for Public Citizen.
http://www.bloomberg.com/news/articles/2016-02-26/exelon-pepco-merger-settlement-rejected-dc-mulls-alternative
The DCPSC opinion and order of 2-26-2016 is here: http://dcpsc.org/pdf_files/commorders/orderpdf/orderno_18109_FC1119.pdf
When a car dealer advertises an "internet price"
DAR note: The following is from a piece by Tom McFarland, at URL http://thegarage.jalopnik.com/how-negotiable-is-a-dealerships-internet-price-1620563037 Some of the dealer practices McFarland discusses are certainly misleading or confusing, including "fine print" and opaque conditions on an internet offer, such as the buyer needing to meet special and initially undisclosed requirements like being a recent college graduate, or in the military, or currently owning the same brand. But the misleading offers seem to have been "lawyered" in such a way that a consumer action about initially undisclosed conditions and add-on pricing may be difficult.
I looked for a piece like McFarland's because I've recently experienced the internet "fine print" opaque conditions problem when shopping for a car. I confess to being caught off guard, despite my lawyer training, when I was told by auto salespeople that to get the internet price on the company web site I needed to be in the military, a recent college graduate, or a currrent owner of the same brand. One reason for my surprise is that when I bought a car from a D.C. area Fitzgerald dealership some years ago, the internet price posted on the dealership website really was an available "drive-away"price, based on manufacturer incentives applicable to all buyers, and clearly and explicitly including costs like freight. I can only hope that my positive past buying experience is not unusual among car dealers.
Out of curiosity I recently looked at a Fitzgerald web posting, which represents that the straightforward approach I experienced years ago is still company policy. It represents that the posted internet price "includes freight, the manufacturers’ warranty and any manufacturer’s loaner car benefits. It also includes manufacturer rebates and incentives, including customer satisfaction, available to all consumers. [emphasis mine] You may qualify for additional rebates and incentives such as college graduate, military, or owner loyalty (current owners of a particular brand vehicle) and 'conquest' incentives (this discount applies to all first-time brand buyers). . . . [T]here are no additional fees to pay except governmental charges where you title the vehicle (taxes, title and tags fees) and the Dealer Processing Charge [not speciified, which is imperfect, but probably several hundred dollars]."
I can only hope that many dealers have similar policies of transparent advertising, or better, rather than my recent unhappy experience with dealer web postings showing misleadingly low "internet prices" based on incentives not available to most buyers. For the record, having been reminded that car shopping can be very annoying, my wife and I are still driving our now 10 year old functional if unstylish minvan.
DAR
From the McFarland article:
Most dealerships know that car-buyers are going to the web to comparison price shop. Some of the smarter ones will advertise a price lower than their competitors hoping that you will call them first. Sometimes it really is the lowest possible price that that dealer is willing to sell the car, however if you shop smart, you may be able to keep a little more money in your pocket.
The first thing you need to know is what are the conditions of that "internet price"? Does it already include manufacturer incentives? If so, do you qualify for all of them? I have seen several dealerships advertise a great deal, but in order to get it you would have to be: a recent college graduate, active or retired military, and already have a car from that brand in your household. So be sure to read the fine print [if there is any print at all-DAR], and get that price in writing.
So lets say that internet price does not come with any qualifying conditions, the next thing you need to find out is are those discounts being made up for elsewhere. Often dealers will advertise the lowest price but will tack on extra fees thus neutralizing the deal. This is why it is important to get an itemized out-the-door quote.
In regards to whether or not there is more negotiation to be had is to know what others are offering for the same car with the same equipment at the same MSRP. It is crucial to be comparing apples to apples here. If you shop for quotes and others come back lower (remember out-the-door not just vehicle price) then you may have some leverage to get some further discount. If no other dealers can beat the price you have been given, chances are that dealer is offering you the best deal they can.
DAR note: The following is from a piece by Tom McFarland, at URL http://thegarage.jalopnik.com/how-negotiable-is-a-dealerships-internet-price-1620563037 Some of the dealer practices McFarland discusses are certainly misleading or confusing, including "fine print" and opaque conditions on an internet offer, such as the buyer needing to meet special and initially undisclosed requirements like being a recent college graduate, or in the military, or currently owning the same brand. But the misleading offers seem to have been "lawyered" in such a way that a consumer action about initially undisclosed conditions and add-on pricing may be difficult.
I looked for a piece like McFarland's because I've recently experienced the internet "fine print" opaque conditions problem when shopping for a car. I confess to being caught off guard, despite my lawyer training, when I was told by auto salespeople that to get the internet price on the company web site I needed to be in the military, a recent college graduate, or a currrent owner of the same brand. One reason for my surprise is that when I bought a car from a D.C. area Fitzgerald dealership some years ago, the internet price posted on the dealership website really was an available "drive-away"price, based on manufacturer incentives applicable to all buyers, and clearly and explicitly including costs like freight. I can only hope that my positive past buying experience is not unusual among car dealers.
Out of curiosity I recently looked at a Fitzgerald web posting, which represents that the straightforward approach I experienced years ago is still company policy. It represents that the posted internet price "includes freight, the manufacturers’ warranty and any manufacturer’s loaner car benefits. It also includes manufacturer rebates and incentives, including customer satisfaction, available to all consumers. [emphasis mine] You may qualify for additional rebates and incentives such as college graduate, military, or owner loyalty (current owners of a particular brand vehicle) and 'conquest' incentives (this discount applies to all first-time brand buyers). . . . [T]here are no additional fees to pay except governmental charges where you title the vehicle (taxes, title and tags fees) and the Dealer Processing Charge [not speciified, which is imperfect, but probably several hundred dollars]."
I can only hope that many dealers have similar policies of transparent advertising, or better, rather than my recent unhappy experience with dealer web postings showing misleadingly low "internet prices" based on incentives not available to most buyers. For the record, having been reminded that car shopping can be very annoying, my wife and I are still driving our now 10 year old functional if unstylish minvan.
DAR
From the McFarland article:
Most dealerships know that car-buyers are going to the web to comparison price shop. Some of the smarter ones will advertise a price lower than their competitors hoping that you will call them first. Sometimes it really is the lowest possible price that that dealer is willing to sell the car, however if you shop smart, you may be able to keep a little more money in your pocket.
The first thing you need to know is what are the conditions of that "internet price"? Does it already include manufacturer incentives? If so, do you qualify for all of them? I have seen several dealerships advertise a great deal, but in order to get it you would have to be: a recent college graduate, active or retired military, and already have a car from that brand in your household. So be sure to read the fine print [if there is any print at all-DAR], and get that price in writing.
So lets say that internet price does not come with any qualifying conditions, the next thing you need to find out is are those discounts being made up for elsewhere. Often dealers will advertise the lowest price but will tack on extra fees thus neutralizing the deal. This is why it is important to get an itemized out-the-door quote.
In regards to whether or not there is more negotiation to be had is to know what others are offering for the same car with the same equipment at the same MSRP. It is crucial to be comparing apples to apples here. If you shop for quotes and others come back lower (remember out-the-door not just vehicle price) then you may have some leverage to get some further discount. If no other dealers can beat the price you have been given, chances are that dealer is offering you the best deal they can.
Public Citizen blog:
CFPB orders Citibank to provide relief to consumers for illegal debt sales and collection practices
The Consumer Financial Protection Bureau has taken two separate actions against Citibank for illegal debt sales and debt collection practices.
In the first action, the CFPB ordered Citibank to provide nearly $5 million in consumer relief and pay a $3 million penalty for selling credit card debt with inflated interest rates and for failing to forward consumer payments promptly to debt buyers.The order is here.
In the second action, taken against both Citibank and two debt collection law firms used by Citibank, arose from the firms' falsification of court documents filed in debt collection cases in New Jersey state courts. The CFPB ordered Citibank and the law firms to comply with a court order that Citibank refund $11 million to consumers and forgo collecting about $34 million from nearly 7,000 consumers. The two law firms must also pay penalties. The consent orders are here, here, and here.
The CFPB's press release is here.
Click title for the Public Citizen blog
Public Citizen: Deny federal funding to schools forcing students into arbitration
by Julie A. Murray
Public Citizen has submitted a citizen petition to the Department of Education asking it to issue a rule that requires colleges to agree, as a condition on receipt of certain federal funding such as Stafford loans and Pell grants, not to include pre-dispute arbitration clauses in enrollment or other agreements with students. Forced arbitration clauses are a tool of choice among for-profit schools, which rely heavily on federal funding and have recently been at the center of numerous government investigations and lawsuits alleging fraud and other wrongdoing.
For full article click title above and go to Public Citizen site
AG, Natixis SA and four other banks and brokerages agreed to pay just over $100 million to settle investor claims that they conspired to rig prices for municipal securities
If approved by a federal judge, the settlements would end seven years of private class action litigation, and result in more than $226 million of payouts from 11 defendants.
The plaintiffs, including the City of Baltimore and the Central Bucks School District in Pennsylvania, accused the defendants of conspiring to fix prices for municipal derivatives, causing them to receive lower interest rates than they would have gotten in a competitive marketplace.
Complete article: https://www.competitionpolicyinternational.com/us-ubs-others-reach-100-million-muni-bond-rigging-settlements/
If approved by a federal judge, the settlements would end seven years of private class action litigation, and result in more than $226 million of payouts from 11 defendants.
The plaintiffs, including the City of Baltimore and the Central Bucks School District in Pennsylvania, accused the defendants of conspiring to fix prices for municipal derivatives, causing them to receive lower interest rates than they would have gotten in a competitive marketplace.
Complete article: https://www.competitionpolicyinternational.com/us-ubs-others-reach-100-million-muni-bond-rigging-settlements/
The FTC has reached a consent decree with Koons, a car dealer that is charged with selling "certified" used cars with unrepaired defects
The FTC has put out the consent decree for public comment. See https://ftcpublic.commentworks.com/FTC/InitiativeDocFiles/771/Notice or click here: consent decree.
The FTC explains, in part:
The respondent is a car dealership that sells used motor vehicles. According to the FTC complaint, respondent has represented that the used motor vehicles it sells have been subject to rigorous inspection, including for safety issues, but has failed to disclose that the used motor vehicles it sells are subject to open recalls for safety issues. For instance, the respondent has posted advertisements on the Web site www.koons.com which prominently featured the ‘‘Koons Used Car Advantage’’ and included the representation that ‘‘[b]acked by the Koons Used Car Advantage, each vehicle we carry has been carefully selected and tested. . . .’’ The Web site listed among the ‘‘Koons Used Car Advantage Guarantees’’ the following representation: ‘‘Every certified Koons Outlet vehicle must pass a rigorous and extensive quality inspection before it can be sold. Our certified mechanics check all major mechanical and electrical systems and every power accessory as part of our rigid quality controls.’’
Even though it makes such claims, the respondent has allegedly advertised on its Web sites numerous certified used vehicles that were subject to open recalls for safety issues. In numerous instances, when the respondent allegedly advertised certified used vehicles that are subject to open recalls for safety issues, it provided no accompanying clear and conspicuous disclosure of this fact.
A discussion from Public Citizen of the sufficiency of remedies in such cases is at http://pubcit.typepad.com/clpblog/2016/02/ftc-consent-decree-would-allow-dealers-to-sell-certified-cars-with-safety-defects.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+ConsumerLawPolicyBlog+%28Consumer+Law+%26+Policy+Blog%29
The FTC has put out the consent decree for public comment. See https://ftcpublic.commentworks.com/FTC/InitiativeDocFiles/771/Notice or click here: consent decree.
The FTC explains, in part:
The respondent is a car dealership that sells used motor vehicles. According to the FTC complaint, respondent has represented that the used motor vehicles it sells have been subject to rigorous inspection, including for safety issues, but has failed to disclose that the used motor vehicles it sells are subject to open recalls for safety issues. For instance, the respondent has posted advertisements on the Web site www.koons.com which prominently featured the ‘‘Koons Used Car Advantage’’ and included the representation that ‘‘[b]acked by the Koons Used Car Advantage, each vehicle we carry has been carefully selected and tested. . . .’’ The Web site listed among the ‘‘Koons Used Car Advantage Guarantees’’ the following representation: ‘‘Every certified Koons Outlet vehicle must pass a rigorous and extensive quality inspection before it can be sold. Our certified mechanics check all major mechanical and electrical systems and every power accessory as part of our rigid quality controls.’’
Even though it makes such claims, the respondent has allegedly advertised on its Web sites numerous certified used vehicles that were subject to open recalls for safety issues. In numerous instances, when the respondent allegedly advertised certified used vehicles that are subject to open recalls for safety issues, it provided no accompanying clear and conspicuous disclosure of this fact.
A discussion from Public Citizen of the sufficiency of remedies in such cases is at http://pubcit.typepad.com/clpblog/2016/02/ftc-consent-decree-would-allow-dealers-to-sell-certified-cars-with-safety-defects.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+ConsumerLawPolicyBlog+%28Consumer+Law+%26+Policy+Blog%29
From Pubic Citizen Blog: Citron Article on State AGs and Privacy Law Development
Danielle Keats Citron of Maryland, Yale and Stanford has written Privacy Enforcement Pioneers: The Role of State Attorneys General in the Development of Privacy Law, Forthcoming in the Notre Dame Law Review, Here's the abstract:
Accounts of privacy law have focused on legislation, federal agencies, and the self-regulation of privacy professionals. Crucial agents of regulatory change, however, have been ignored: the state attorneys general. This article is the first in-depth study of the privacy norm entrepreneurship of state attorneys general. Because so little has been written about this phenomenon, I engaged with primary sources — first interviewing state attorneys general and current and former career staff, and then examining documentary evidence received through FOIA requests submitted to AG offices around the country.
Much as Justice Louis Brandeis imagined states as laboratories of the law, offices of state attorneys general have been laboratories of privacy enforcement. State attorneys general have been nimble privacy enforcement pioneers where federal agencies have been more conservative or constrained by politics. Their local knowledge, specialization, multi-state coordination, and broad legal authority have allowed them to experiment in ways that federal agencies cannot. These characteristics have enabled them to establish baseline fair information protections; expand the frontiers of privacy law to cover sexual intimacy and youth; and pursue enforcement actions that have harmonized privacy policy.
Although certain systemic practices enhance AG privacy policy making, others blunt its impact, including an over reliance on informal agreements that lack law’s influence and a reluctance to issue closing letters identifying data practices that comply with the law. This article offers ways state attorneys general can function more effectively through informal and formal proceedings. It addresses concerns about the potential pile-up of enforcement activity, federal preemption, and the dormant Commerce Clause. It urges state enforcers to act more boldly in the face of certain shadowy data practices
Danielle Keats Citron of Maryland, Yale and Stanford has written Privacy Enforcement Pioneers: The Role of State Attorneys General in the Development of Privacy Law, Forthcoming in the Notre Dame Law Review, Here's the abstract:
Accounts of privacy law have focused on legislation, federal agencies, and the self-regulation of privacy professionals. Crucial agents of regulatory change, however, have been ignored: the state attorneys general. This article is the first in-depth study of the privacy norm entrepreneurship of state attorneys general. Because so little has been written about this phenomenon, I engaged with primary sources — first interviewing state attorneys general and current and former career staff, and then examining documentary evidence received through FOIA requests submitted to AG offices around the country.
Much as Justice Louis Brandeis imagined states as laboratories of the law, offices of state attorneys general have been laboratories of privacy enforcement. State attorneys general have been nimble privacy enforcement pioneers where federal agencies have been more conservative or constrained by politics. Their local knowledge, specialization, multi-state coordination, and broad legal authority have allowed them to experiment in ways that federal agencies cannot. These characteristics have enabled them to establish baseline fair information protections; expand the frontiers of privacy law to cover sexual intimacy and youth; and pursue enforcement actions that have harmonized privacy policy.
Although certain systemic practices enhance AG privacy policy making, others blunt its impact, including an over reliance on informal agreements that lack law’s influence and a reluctance to issue closing letters identifying data practices that comply with the law. This article offers ways state attorneys general can function more effectively through informal and formal proceedings. It addresses concerns about the potential pile-up of enforcement activity, federal preemption, and the dormant Commerce Clause. It urges state enforcers to act more boldly in the face of certain shadowy data practices
Center for American Progress Presents: The Next Five Years of Financial Services, Consumer Protection, and Mobility
Responsible lending practices have historically expanded economic opportunity for American families. Yet as the Great Recession dramatically demonstrated, poorly structured or lightly regulated financial products can also destabilize and take wealth out of communities. Financial reforms, culminating in the Dodd-Frank Act of 2010, have swung the pendulum back toward greater consumer protections. Moving forward, concerns remain about how the financial sector can support mobility again, particularly given rapid demographic and technological change.
Responsible lending practices have historically expanded economic opportunity for American families. Yet as the Great Recession dramatically demonstrated, poorly structured or lightly regulated financial products can also destabilize and take wealth out of communities. Financial reforms, culminating in the Dodd-Frank Act of 2010, have swung the pendulum back toward greater consumer protections. Moving forward, concerns remain about how the financial sector can support mobility again, particularly given rapid demographic and technological change.
- On Tuesday, February 23, the Center for American Progress will host a conversation with leading experts on recent developments in the consumer financial marketplace, the financial challenges communities continue to face, and the steps regulators and policymakers should take over the next five years to ensure better outcomes for consumers.
Click here to bookmark the link to the live webcast
New president of the Federal Reserve Bank of Minneapolis says: break up big banks
“I believe the biggest banks are still too big to fail and continue to pose a significant, ongoing risk to our economy,” Mr. Kashkari said at the Brookings Institution, delivering his first public speech as the new president of the Federal Reserve Bank of Minneapolis.
“There are lines in your speech I can imagine a Bernie Sanders or Elizabeth Warren saying,” David Wessel, a former economics editor at The Wall Street Journal who moderated the Brookings event, told Mr. Kashkari during a panel discussion after the speech. “It’s not what one expects from a Goldman Sachs Republican.”
See article at http://www.nytimes.com/2016/02/17/business/dealbook/federal-reserves-kashkari-says-banks-still-too-big-to-fail.html?_r=0
Youtube video of the speech is here: https://www.minneapolisfed.org/news-and-events/presidents-speeches/lessons-from-the-crisis-ending-too-big-to-fail
Some lines from the speech:
I believe we must begin this work now and give serious consideration to a range of options, including the following:
o Breaking up large banks into smaller, less connected, less important entities.
o Turning large banks into public utilities by forcing them to hold so much capital that they virtually can’t fail (with regulation akin to that of a nuclear power plant).
oTaxing leverage throughout the financial system to reduce systemic risks wherever they lie.
posted by Don Allen Resnikoff 2-17-2016
“I believe the biggest banks are still too big to fail and continue to pose a significant, ongoing risk to our economy,” Mr. Kashkari said at the Brookings Institution, delivering his first public speech as the new president of the Federal Reserve Bank of Minneapolis.
“There are lines in your speech I can imagine a Bernie Sanders or Elizabeth Warren saying,” David Wessel, a former economics editor at The Wall Street Journal who moderated the Brookings event, told Mr. Kashkari during a panel discussion after the speech. “It’s not what one expects from a Goldman Sachs Republican.”
See article at http://www.nytimes.com/2016/02/17/business/dealbook/federal-reserves-kashkari-says-banks-still-too-big-to-fail.html?_r=0
Youtube video of the speech is here: https://www.minneapolisfed.org/news-and-events/presidents-speeches/lessons-from-the-crisis-ending-too-big-to-fail
Some lines from the speech:
I believe we must begin this work now and give serious consideration to a range of options, including the following:
o Breaking up large banks into smaller, less connected, less important entities.
o Turning large banks into public utilities by forcing them to hold so much capital that they virtually can’t fail (with regulation akin to that of a nuclear power plant).
oTaxing leverage throughout the financial system to reduce systemic risks wherever they lie.
posted by Don Allen Resnikoff 2-17-2016
United Nations’ aviation agency approves binding but questionable agreement to cover emissions for aircraft
New efficiency standards will apply to all new commercial jets delivered after 2028, as well as existing jets produced from 2023.
The rub is that the long-awaited standard is lower than what the industry is on track to achieve anyway in the next decade.
About two decades after aviation started talking about limiting carbon emissions, and after six years of negotiations, the result is lower than “business as usual.”
Many participants said the UN's International Civil Aviation Organization could raise its standard in the future. But so far, aviation has contributed little to the effort to tackle climate change. As the Center for Biological Diversitysaid in a report, “That failure undermines global climate efforts and is neither fair nor justifiable.”
Click here for NYT Story: Continue reading
New efficiency standards will apply to all new commercial jets delivered after 2028, as well as existing jets produced from 2023.
The rub is that the long-awaited standard is lower than what the industry is on track to achieve anyway in the next decade.
About two decades after aviation started talking about limiting carbon emissions, and after six years of negotiations, the result is lower than “business as usual.”
Many participants said the UN's International Civil Aviation Organization could raise its standard in the future. But so far, aviation has contributed little to the effort to tackle climate change. As the Center for Biological Diversitysaid in a report, “That failure undermines global climate efforts and is neither fair nor justifiable.”
Click here for NYT Story: Continue reading
Congressional subcommittee hearing subtitled “The CFPB’s Assault on Access to Credit and Trampling of State and Tribal Sovereignty.”
Some members of the House Financial Services Committee paint the agency’s efforts to rein in predatory lending as an attack on the very people the CFPB is trying to protect.Last year, the CFPB announced it was beginning the process of drafting rules intended to crack down on harmful short-term payday lending (which is illegal in many states), vehicle title loans, paycheck deposit advances, and other high-cost installment and open-ended loans.
The guidelines, which have to yet to be finalized, are intended to make sure that loans can be repaid, thus reducing the likelihood of borrowers falling into to the cycle of having to borrow more money to repay the old debt.
But the hearing before the Financial Institutions and Consumer Credit subcommittee turned contentious, with accusations that the CFPB is attempting to strip states of regulatory authority and destroy the institution of small-dollar lending in the United States.
Full article: http://consumerist.com/2016/02/11/bank-backed-lawmakers-accuse-cfpb-of-hurting-consumers-by-trying-to-regulate-payday-loans/
Some members of the House Financial Services Committee paint the agency’s efforts to rein in predatory lending as an attack on the very people the CFPB is trying to protect.Last year, the CFPB announced it was beginning the process of drafting rules intended to crack down on harmful short-term payday lending (which is illegal in many states), vehicle title loans, paycheck deposit advances, and other high-cost installment and open-ended loans.
The guidelines, which have to yet to be finalized, are intended to make sure that loans can be repaid, thus reducing the likelihood of borrowers falling into to the cycle of having to borrow more money to repay the old debt.
But the hearing before the Financial Institutions and Consumer Credit subcommittee turned contentious, with accusations that the CFPB is attempting to strip states of regulatory authority and destroy the institution of small-dollar lending in the United States.
Full article: http://consumerist.com/2016/02/11/bank-backed-lawmakers-accuse-cfpb-of-hurting-consumers-by-trying-to-regulate-payday-loans/
Uber settles consumer fee class action cases
This article by Scott Graham explains that Uber has settled a couple of cases about the way it advertises its $1-$2 so-called "safe ride" fee. Here are some excerpts:
The on-demand ride service Uber Technologies Inc. has agreed to pay $28.5 million to settle two San Francisco class actions over the way it advertises its services. Uber announced on its website Thursday that it is asking U.S. District Judge Jon Tigar for approval to settle Philliben v. Uber and Mena v. Uber. The cases were brought by Uber passengers over the company's "safe ride fee," which Uber claimed went to support its "industry leading" background-check process. ... [The plaintiff-passengers] argued that Uber's background checks are in fact "woefully inadequate and fall well short" of what's required of taxi drivers and other commercial providers of transportation. The fee of roughly $1 to $2 is charged to passengers on premium Uber rides such as UberX and UberXL, according to the latest complaint filed in the cases.
Washington Business Journal: Chicago-based energy giant Exelon Corp. (NYSE: EXC) has spent about $259 million in its ongoing and increasingly long pursuit of a merger with D.C.-based Pepco Holdings Inc. (NYSE: POM), according to Securities and Exchange Commission filings.
About $121 million of that was for already-incurred integration costs and another $138 million was for financing costs related to the $6.8 billion transaction. The figures are through the end of 2015, so the final costs are likely to be higher.
CEO Chris Crane said in an earnings call that the PSC has agreed to issue a final ruling before March 4, the deadline the companies have set before either can back out of the deal. There are no PCS meetings scheduled between now and then, but the commission can could still schedule one with sufficient public notice.
http://www.bizjournals.com/washington/news/2016/02/11/heres-how-much-exelon-has-spent-pursuing-its-6-8.html#i1
Nine Senators, led by Sherrod Brown (D-OH) and Dick Durbin (D-IL), call on the U.S. Department of Education to cut off federal student aid to colleges and universities that bar their students from going to court to pursue claims against their schools
Addressing the same issue, some of the negotiators participating in the Department's ongoing negotiated rulemaking on higher education issues are putting a similar proposal on the table ahead of next week's meeting.
In their letter to Under Secretary of Education Ted Mitchell, the senators note that many for-profit colleges, and almost no non-profit colleges, use enrollment agreements containing mandatory arbitration clauses -- fine print provisions that require students to pursue any legal claims against their schools before a private arbitrator, rather than in a courtroom.
The text of the letter can be found in this Huffington Post article: http://www.huffingtonpost.com/davidhalperin/senators-education-dept-s_b_9213618.html
Addressing the same issue, some of the negotiators participating in the Department's ongoing negotiated rulemaking on higher education issues are putting a similar proposal on the table ahead of next week's meeting.
In their letter to Under Secretary of Education Ted Mitchell, the senators note that many for-profit colleges, and almost no non-profit colleges, use enrollment agreements containing mandatory arbitration clauses -- fine print provisions that require students to pursue any legal claims against their schools before a private arbitrator, rather than in a courtroom.
The text of the letter can be found in this Huffington Post article: http://www.huffingtonpost.com/davidhalperin/senators-education-dept-s_b_9213618.html
The Maryland Consumer Rights Coalition has issued a research report, Making the Grade? An Analysis of For-Profit and Career Schools in Maryland.
The report looks at the high cost of education, high debt burden, high default rates, completion and employment rates, unfair or deceptive marketing and targeting of communities of color and veterans by these schools in Maryland.
Read the full report online here.
The report looks at the high cost of education, high debt burden, high default rates, completion and employment rates, unfair or deceptive marketing and targeting of communities of color and veterans by these schools in Maryland.
Read the full report online here.
PEW brief points out gaps in regulation of mobile payments:
- No law dictates whether a mobile device should be treated as legally equivalent to a credit card or, instead, as an “access device” (such as a debit card), which carry different consumer protections.
- Consumers have no guarantee that they will receive clear and noticeable disclosures for mobile payments terms and conditions. When they charge mobile payments to credit cards or other open-ended credit accounts, TILA Regulation Z requires “conspicuous” disclosure of rates, fees, and other cost information but does not define “conspicuous” or explain how to apply the standard to payments made using mobile phones.
- Consumers increasingly use general purpose reloadable prepaid cards, which can also be used when making mobile payments, but no law regulates these cards. The lack of regulations requiring card issuers to provide uniform, clear, and conspicuous disclosures means consumers may not be aware that they are not covered by the same protections that apply to credit and debit cards. The CFPB required new disclosures in its proposed rules, but these regulations are not expected to go into effect until at least 2016.
- Software licenses such as those used for mobile apps are not explicitly included under the UCC. Mobile payments users often implicitly agree to these agreements merely through use of the app, unaware that key consumer protection provisions of the UCC do not apply to these licenses.
U.S. Supreme Court blocks a new federal regulation that would cut emissions from power plants
Puts a hold on President Barack Obama’s most ambitious effort to combat climate change.
The justices heeded calls from utilities, coal miners and more than two dozen states to halt the Environmental Protection Agency rule while court challenges go forward. Foes say the agency is overstepping its authority and intruding on states’ rights.
The five Republican members of the Supreme Court handed down a series of orders Tuesday night [click here: orders for link], halting environmental regulations that were expected to “avoid thousands of premature deaths [click preceding for EPA link] and mean thousands fewer asthma attacks and hospitalizations in 2030 and every year beyond,” according to the Environmental Protection Agency.
The Court offered no insight into its reasoning beyond its vote.
Supreme Court intervention casts doubt on the legal prospects for the program, suggesting doubts among a majority of the nine justices.
See http://www.bloomberg.com/politics/articles/2016-02-09/obama-s-clean-power-plan-put-on-hold-by-u-s-supreme-court
Also http://thinkprogress.org/justice/2016/02/09/3747944/breaking-the-supreme-court-just-gave-the-finger-to-president-obamas-environmental-policies/
Puts a hold on President Barack Obama’s most ambitious effort to combat climate change.
The justices heeded calls from utilities, coal miners and more than two dozen states to halt the Environmental Protection Agency rule while court challenges go forward. Foes say the agency is overstepping its authority and intruding on states’ rights.
The five Republican members of the Supreme Court handed down a series of orders Tuesday night [click here: orders for link], halting environmental regulations that were expected to “avoid thousands of premature deaths [click preceding for EPA link] and mean thousands fewer asthma attacks and hospitalizations in 2030 and every year beyond,” according to the Environmental Protection Agency.
The Court offered no insight into its reasoning beyond its vote.
Supreme Court intervention casts doubt on the legal prospects for the program, suggesting doubts among a majority of the nine justices.
See http://www.bloomberg.com/politics/articles/2016-02-09/obama-s-clean-power-plan-put-on-hold-by-u-s-supreme-court
Also http://thinkprogress.org/justice/2016/02/09/3747944/breaking-the-supreme-court-just-gave-the-finger-to-president-obamas-environmental-policies/
Banks must do more to make sure they are not unnecessarily thwarting customers who want to open mainstream bank accounts
The Consumer Financial Protection Bureau has told the nation’s retail banks and credit unions that they must act to provide accurate information to specialized screening companies, which track a consumer’s record of overdrawn and closed checking accounts.
http://www.nytimes.com/2016/02/06/your-money/banks-are-warned-against-hindering-customers-seeking-accounts.html?ribbon-ad-idx=3&rref=your-money&module=Ribbon&version=context®ion=Header&action=click&contentCollection=Your%20Money&pgtype=article
The Consumer Financial Protection Bureau has told the nation’s retail banks and credit unions that they must act to provide accurate information to specialized screening companies, which track a consumer’s record of overdrawn and closed checking accounts.
http://www.nytimes.com/2016/02/06/your-money/banks-are-warned-against-hindering-customers-seeking-accounts.html?ribbon-ad-idx=3&rref=your-money&module=Ribbon&version=context®ion=Header&action=click&contentCollection=Your%20Money&pgtype=article
NYT: Tips on negotiating your cable or telephone bill
The tips come from BillFixers, a small company that will pretend to be you on the phone -- a debatable tactic. But the suggestions do reflect a sometimes harsh reality about how cable and telephone companies operate in the real world. The better solution, of course, would be more transparent consumer-related conduct by the companies.
■ Start with the “Cancel My Service” option on your service provider’s phone tree. The representatives themselves echo this, saying things like “If you have trouble, just come to retention,” and “Seriously, call us back before your 12-month discount is up!” It’s a game, and they want you to come out and play.
■ But play nice. “The main thing is to be superfriendly,” Ben Kurland [of BillFixers] said. “The reps get yelled at all day, every day, and they hold a lot of power.” Also, his brother, Julian, noted that if you aren’t courteous, you never know when, say, your DVR might accidentally disappear from your service.
■ Come to the call prepared, since the representatives may want to know what prices you are seeing elsewhere. If you’re getting solicitations from competitors, keep them. If not, look up offers online.
■ If you have a television subscription of some sort, the companies will often offer HBO or other premium channels free for some period of time. Don’t like television? Ask for something else instead. When customers are thinking about canceling, companies are often willing to offer faster Internet speeds or other upgrades.
■ Ask for a new-customer discount if all else fails. Time Warner Cable gave one to a long-tenured customer on one call I listened to. Mr. Amirshahi, the company spokesman, said that calling an old customer “new” is not a lie since the service packages change constantly.
■ Customer service professionals often have the ability to hand out a one-time credit to aggrieved customers or just ones who are down on their luck. So ask for one, even if it’s on top of a newly lowered monthly bill. Hats off to AT&T Wireless, which gave $100 to a BillFixers customer after Peter Zimbicki, a senior associate at BillFixers who was pretending to be the customer, claimed that he’d had a lot of unexpected bills recently.
■ Be patient: “I have plenty of time.” This encourages cable or wireless employees to spend a few more minutes scraping together whatever discounts they can.
■ Ask whether any lower price requires a contract, commitment or any other word that sounds similar. BillFixers avoids new contracts; best not to be locked in, so you can negotiate again next year.
■ Once you have a firm offer, write down the details and call back. It isn’t real until you can get another representative to repeat the new price.
■ After a year, do all of this again and repeat ad nauseam.
From: http://www.nytimes.com/2016/02/06/your-money/tips-on-reducing-cable-and-phone-bills-from-ethically-ambiguous-experts.html?src=me
The tips come from BillFixers, a small company that will pretend to be you on the phone -- a debatable tactic. But the suggestions do reflect a sometimes harsh reality about how cable and telephone companies operate in the real world. The better solution, of course, would be more transparent consumer-related conduct by the companies.
■ Start with the “Cancel My Service” option on your service provider’s phone tree. The representatives themselves echo this, saying things like “If you have trouble, just come to retention,” and “Seriously, call us back before your 12-month discount is up!” It’s a game, and they want you to come out and play.
■ But play nice. “The main thing is to be superfriendly,” Ben Kurland [of BillFixers] said. “The reps get yelled at all day, every day, and they hold a lot of power.” Also, his brother, Julian, noted that if you aren’t courteous, you never know when, say, your DVR might accidentally disappear from your service.
■ Come to the call prepared, since the representatives may want to know what prices you are seeing elsewhere. If you’re getting solicitations from competitors, keep them. If not, look up offers online.
■ If you have a television subscription of some sort, the companies will often offer HBO or other premium channels free for some period of time. Don’t like television? Ask for something else instead. When customers are thinking about canceling, companies are often willing to offer faster Internet speeds or other upgrades.
■ Ask for a new-customer discount if all else fails. Time Warner Cable gave one to a long-tenured customer on one call I listened to. Mr. Amirshahi, the company spokesman, said that calling an old customer “new” is not a lie since the service packages change constantly.
■ Customer service professionals often have the ability to hand out a one-time credit to aggrieved customers or just ones who are down on their luck. So ask for one, even if it’s on top of a newly lowered monthly bill. Hats off to AT&T Wireless, which gave $100 to a BillFixers customer after Peter Zimbicki, a senior associate at BillFixers who was pretending to be the customer, claimed that he’d had a lot of unexpected bills recently.
■ Be patient: “I have plenty of time.” This encourages cable or wireless employees to spend a few more minutes scraping together whatever discounts they can.
■ Ask whether any lower price requires a contract, commitment or any other word that sounds similar. BillFixers avoids new contracts; best not to be locked in, so you can negotiate again next year.
■ Once you have a firm offer, write down the details and call back. It isn’t real until you can get another representative to repeat the new price.
■ After a year, do all of this again and repeat ad nauseam.
From: http://www.nytimes.com/2016/02/06/your-money/tips-on-reducing-cable-and-phone-bills-from-ethically-ambiguous-experts.html?src=me
Tax refund anticipation loans live on in new disguises
Taxpayers might keep more of their own tax refund money in their pockets this year because banks no longer can make the costly loans often advertised by tax preparation companies as rapid refunds. But consumers watch out: other quickie loan products might be even worse.
Read more: http://www.creditcards.com/credit-card-news/refund-anticipation-loans-not-really-gone-1273.php#ixzz3zg3LpS9T
Taxpayers might keep more of their own tax refund money in their pockets this year because banks no longer can make the costly loans often advertised by tax preparation companies as rapid refunds. But consumers watch out: other quickie loan products might be even worse.
Read more: http://www.creditcards.com/credit-card-news/refund-anticipation-loans-not-really-gone-1273.php#ixzz3zg3LpS9T
NYPD Uses Nuisance Abatement Laws to Kick People Out of Homes
New York City officials said reforms were needed after our investigation showed that the police have been locking out residents who haven’t been charged with a crime.
A wide swath of public officials are calling for change in response to a Daily News and ProPublica investigation about the NYPD’s use of an obscure type of lawsuit to boot hundreds of people from homes. The cases are happening almost exclusively in minority neighborhoods.
The Daily News and ProPublica story found the NYPD has used the nuisance abatement law, enacted in the 1970s to clean up Times Square, to lock families out of their homes over investigations that often never led to a criminal conviction.
Full story https://www.propublica.org/article/officials-outraged-after-shocking-report-nypd-kicking-people-out-of-homes
New York City officials said reforms were needed after our investigation showed that the police have been locking out residents who haven’t been charged with a crime.
A wide swath of public officials are calling for change in response to a Daily News and ProPublica investigation about the NYPD’s use of an obscure type of lawsuit to boot hundreds of people from homes. The cases are happening almost exclusively in minority neighborhoods.
The Daily News and ProPublica story found the NYPD has used the nuisance abatement law, enacted in the 1970s to clean up Times Square, to lock families out of their homes over investigations that often never led to a criminal conviction.
Full story https://www.propublica.org/article/officials-outraged-after-shocking-report-nypd-kicking-people-out-of-homes
Chicago columnist says "Legalize and then tax fantasy sports gambling"
See:
http://www.chicagotribune.com/suburbs/daily-southtown/news/ct-sta-kadner-madigan-sports-gambling-st-1229-20151228-column.html
Do you agree? Let us have your comments.
See:
http://www.chicagotribune.com/suburbs/daily-southtown/news/ct-sta-kadner-madigan-sports-gambling-st-1229-20151228-column.html
Do you agree? Let us have your comments.
Citigroup Inc. will no longer process transactions for New York residents on daily fantasy sports sites run by DraftKings and FanDuel
Citigroup is waiting until there is more legal clarity on the matter, as the companies face enforcement actions by the state attorney general as well as a slew of lawsuits that were recently consolidated.
"We have taken steps to block transactions at DraftKings and FanDuel by New York residents pending a final decision by the courts," Citigroup spokeswoman Jennifer Bombardier said in a statement to Law360 Friday.
DraftKings Inc. and FanDuel Inc. are facing a legal enforcement action by New York Attorney General Eric Schneiderman alleging that their daily fantasy sports, or DFS, contests are illegal gambling under New York law, and seeking to shutter them in the state. A New York judge issued a preliminary injunction ordering the companies to stop taking deposits in the state, but that has since been stayed pending an appeal.
From Law 360 (paywall); also http://nysepost.com/citigroup-blocks-draftkings-fanduel-transactions-in-n-y-118209
Citigroup is waiting until there is more legal clarity on the matter, as the companies face enforcement actions by the state attorney general as well as a slew of lawsuits that were recently consolidated.
"We have taken steps to block transactions at DraftKings and FanDuel by New York residents pending a final decision by the courts," Citigroup spokeswoman Jennifer Bombardier said in a statement to Law360 Friday.
DraftKings Inc. and FanDuel Inc. are facing a legal enforcement action by New York Attorney General Eric Schneiderman alleging that their daily fantasy sports, or DFS, contests are illegal gambling under New York law, and seeking to shutter them in the state. A New York judge issued a preliminary injunction ordering the companies to stop taking deposits in the state, but that has since been stayed pending an appeal.
From Law 360 (paywall); also http://nysepost.com/citigroup-blocks-draftkings-fanduel-transactions-in-n-y-118209
New bill would limit forced arbitration
Senator Patrick Leahy (VT) and Senator Al Franken (MN) introduced a bill Thursday that would strictly limit the companies' ability to impose arbitration clauses on consumers and workers. The Restoring Statutory Rights Act would prevent civil rights cases, employment disputes and other crucial lawsuits from being forced into arbitration.
A New York Times article on the bill is here.
Public Citizen's statement about the bill is here. The statement suggests that the bill is an important step in the right direction. The bill does, however, protect use of forced arbitration in commercial and some other situations, which leaves room for debate about whether the bill could be stronger.
Posted by DAR 2-6-2016
Senator Patrick Leahy (VT) and Senator Al Franken (MN) introduced a bill Thursday that would strictly limit the companies' ability to impose arbitration clauses on consumers and workers. The Restoring Statutory Rights Act would prevent civil rights cases, employment disputes and other crucial lawsuits from being forced into arbitration.
A New York Times article on the bill is here.
Public Citizen's statement about the bill is here. The statement suggests that the bill is an important step in the right direction. The bill does, however, protect use of forced arbitration in commercial and some other situations, which leaves room for debate about whether the bill could be stronger.
Posted by DAR 2-6-2016
BBC News reports: HSBC has reached a $470m settlement with the US government and states related to dubious mortgage lending and foreclosure practices that contributed to the financial crisis
The agreement includes a $100m fine and $370m in consumer relief to borrowers.
Investigations began in 2010 after HSBC was found to be signing off foreclosure documents without proper review.
In a statement, the bank's chief executive Kathy Madison called the agreement a "positive result."
The consumer relief will require the bank to cut the loan amount on mortgages for homeowners close to default. HBSC will also be required to change internal practices like foreclosing on homeowners who are being considered for a loan modification.
"The agreement is part of our ongoing effort to address root causes of the financial crisis," said the head of the Justice Department's Civil Division Benjamin Mizer.
The deal settles claims with 49 states, the District of Columbia and the federal government.
The agreement includes a $100m fine and $370m in consumer relief to borrowers.
Investigations began in 2010 after HSBC was found to be signing off foreclosure documents without proper review.
In a statement, the bank's chief executive Kathy Madison called the agreement a "positive result."
The consumer relief will require the bank to cut the loan amount on mortgages for homeowners close to default. HBSC will also be required to change internal practices like foreclosing on homeowners who are being considered for a loan modification.
"The agreement is part of our ongoing effort to address root causes of the financial crisis," said the head of the Justice Department's Civil Division Benjamin Mizer.
The deal settles claims with 49 states, the District of Columbia and the federal government.
FTC Commissioner Ohlhausen Testifies Before Senate Judiciary Subcommittee Regarding Occupational Licensing and the State Action Doctrine
In testimony presented to a U.S. Senate Judiciary subcommittee, Commissioner Maureen K. Ohlhausen noted that while occupational licensing can help protect consumers from health and safety risks and support other valuable public policy goals, unwarranted restrictions can harm competition, leaving consumers with higher-priced, lower-quality, and less convenient services.
“From, a competition standpoint, occupational regulation can be especially worrisome when regulatory authority is delegated to a board composed of members of the occupation it regulates,” Commissioner Ohlhausen said.
https://www.ftc.gov/public-statements/2016/02/prepared-statement-federal-trade-commission-license-compete-occupational
In testimony presented to a U.S. Senate Judiciary subcommittee, Commissioner Maureen K. Ohlhausen noted that while occupational licensing can help protect consumers from health and safety risks and support other valuable public policy goals, unwarranted restrictions can harm competition, leaving consumers with higher-priced, lower-quality, and less convenient services.
“From, a competition standpoint, occupational regulation can be especially worrisome when regulatory authority is delegated to a board composed of members of the occupation it regulates,” Commissioner Ohlhausen said.
https://www.ftc.gov/public-statements/2016/02/prepared-statement-federal-trade-commission-license-compete-occupational
Washington State Bar suspends some ethics opinions because of antitrust concerns
By Debra Cassens Weiss
The Washington State Bar Association has directed its ethics committee to stop issuing ethics opinions that could be interpreted as having a restraint on trade in the legal services market.
Debra Carnes, the bar’s chief communications officer, says the move is temporary, according to the ABA BNA Lawyers’ Manual on Professional Conduct. The bar suspended the opinions so it could “proceed very deliberately” in the wake of the U.S. Supreme Court’s ruling in a case involving teeth whitening, Carnes told the publication.
The February decision allowed an antitrust action against a state dentistry board for its clampdown on nondentists who whiten teeth. The court said that when a state board is controlled by active market participants in the market it regulates, state-action antitrust immunity can’t be invoked unless the challenged restraint of trade is affirmatively expressed by state policy, and the policy is actively supervised by the state.
The decision is North Carolina State Board of Dental Examiners v. Federal Trade Commission.
See http://www.abajournal.com/news/article/washington_state_bar_suspends_some_ethics_opinions_because_of_antitrust_con/?utm_source=maestro&utm_medium=email&utm_campaign=weekly_email
By Debra Cassens Weiss
The Washington State Bar Association has directed its ethics committee to stop issuing ethics opinions that could be interpreted as having a restraint on trade in the legal services market.
Debra Carnes, the bar’s chief communications officer, says the move is temporary, according to the ABA BNA Lawyers’ Manual on Professional Conduct. The bar suspended the opinions so it could “proceed very deliberately” in the wake of the U.S. Supreme Court’s ruling in a case involving teeth whitening, Carnes told the publication.
The February decision allowed an antitrust action against a state dentistry board for its clampdown on nondentists who whiten teeth. The court said that when a state board is controlled by active market participants in the market it regulates, state-action antitrust immunity can’t be invoked unless the challenged restraint of trade is affirmatively expressed by state policy, and the policy is actively supervised by the state.
The decision is North Carolina State Board of Dental Examiners v. Federal Trade Commission.
See http://www.abajournal.com/news/article/washington_state_bar_suspends_some_ethics_opinions_because_of_antitrust_con/?utm_source=maestro&utm_medium=email&utm_campaign=weekly_email
North Dakota files a motion with the Supreme Court to halt the implementation of President Obama's Clean Power Plan
The motion says the Plan is a "draconian mandate" that unfairly targets the state's energy resources.
North Dakota, the seat of the shale oil boom in the Midwest, says even though dozens of states filed for a stay earlier this week, the state is a unique case that must be considered separately.
From http://www.washingtonexaminer.com/north-dakota-says-its-being-unfairly-targeted-by-epa-climate-rule/article/2581895
The motion says the Plan is a "draconian mandate" that unfairly targets the state's energy resources.
North Dakota, the seat of the shale oil boom in the Midwest, says even though dozens of states filed for a stay earlier this week, the state is a unique case that must be considered separately.
From http://www.washingtonexaminer.com/north-dakota-says-its-being-unfairly-targeted-by-epa-climate-rule/article/2581895
DC Court ruling takes referendum for minimum wage hike off ballot
A District of Columbia judge ruled the public will not get to vote on a proposal to raise the minimum wage to $15 an hour. Last July, the D.C. Board of Elections approved language for a ballot initiative to allow a public vote. However, the judge invalidated that approval because the terms of two board members had expired. (WAMU/Crainmail)
A District of Columbia judge ruled the public will not get to vote on a proposal to raise the minimum wage to $15 an hour. Last July, the D.C. Board of Elections approved language for a ballot initiative to allow a public vote. However, the judge invalidated that approval because the terms of two board members had expired. (WAMU/Crainmail)
The attorney general of Massachusetts inquiry: has Gilead Sciences violated state consumer protection laws by charging too much for hepatitis C drugs?
The notification, which was contained in a letter to the company from the attorney general, Maura Healey, is the latest challenge to the practices of Gilead, which has become the largest and most profitable biotechnology company by dominating the market for drugs used to treat both H.I.V. and hepatitis C.
NYT: http://www.nytimes.com/2016/01/28/business/gilead-faces-fights-over-hepatitis-c-and-hiv-drugs.html?ref=business&_r=0
The notification, which was contained in a letter to the company from the attorney general, Maura Healey, is the latest challenge to the practices of Gilead, which has become the largest and most profitable biotechnology company by dominating the market for drugs used to treat both H.I.V. and hepatitis C.
NYT: http://www.nytimes.com/2016/01/28/business/gilead-faces-fights-over-hepatitis-c-and-hiv-drugs.html?ref=business&_r=0
FTC alleges DeVry school ads misled students
Posted: 27 Jan 2016 10:50 AM PST
From the Federal Trade Commission:
The [FTC] has filed suit against the operators of DeVry University, alleging that DeVry’s advertisements deceived consumers about the likelihood that students would find jobs in their fields of study, and would earn more than those graduating with bachelor's degrees from other colleges or universities.
In its complaint against DeVry, the FTC alleges that the defendants’ claim that 90 percent of DeVry graduates actively seeking employment landed jobs in their field within six months of graduation was deceptive. The complaint charges that another key claim made by DeVry, that its graduates had 15 percent higher incomes one year after graduation on average than the graduates of all other colleges or universities, also was deceptive.
The full FTC press release is here.
Posted: 27 Jan 2016 10:50 AM PST
From the Federal Trade Commission:
The [FTC] has filed suit against the operators of DeVry University, alleging that DeVry’s advertisements deceived consumers about the likelihood that students would find jobs in their fields of study, and would earn more than those graduating with bachelor's degrees from other colleges or universities.
In its complaint against DeVry, the FTC alleges that the defendants’ claim that 90 percent of DeVry graduates actively seeking employment landed jobs in their field within six months of graduation was deceptive. The complaint charges that another key claim made by DeVry, that its graduates had 15 percent higher incomes one year after graduation on average than the graduates of all other colleges or universities, also was deceptive.
The full FTC press release is here.
Maryland Consumer Rights Coalition -- a role model
From a MCRC mailling:
Maryland's General Assembly convened on January 13, 2016. Over the next 90 days, state legislators will consider more than 2000 bills. During this period. MCRC staff will be on the ground in Annapolis fighting for strong laws to protect consumers and trying to stop bills that would legalize predatory practices.
MCRC's legislative agenda will protect consumers from unfair housing foreclosures, debt collectionpractices, and predatory lead paint settlements. We will also be supporting affordable access to auto insurance and the promotion of a critical homeowners tax credit for low-income property-owners in Maryland. Finally, we hope to help pass bills that will restrict exploitative behaviors of for-profit colleges and career schools, as well as restricted ticketing services.
We also plan to oppose legislation that will allow unscrupulous car dealers to sell vehicles withlethal safety defects.
From a MCRC mailling:
Maryland's General Assembly convened on January 13, 2016. Over the next 90 days, state legislators will consider more than 2000 bills. During this period. MCRC staff will be on the ground in Annapolis fighting for strong laws to protect consumers and trying to stop bills that would legalize predatory practices.
MCRC's legislative agenda will protect consumers from unfair housing foreclosures, debt collectionpractices, and predatory lead paint settlements. We will also be supporting affordable access to auto insurance and the promotion of a critical homeowners tax credit for low-income property-owners in Maryland. Finally, we hope to help pass bills that will restrict exploitative behaviors of for-profit colleges and career schools, as well as restricted ticketing services.
We also plan to oppose legislation that will allow unscrupulous car dealers to sell vehicles withlethal safety defects.
High Court Revives FERC Power Demand Rule
The U.S. Supreme Court has resurrected the Federal Energy Regulatory Commission's rule that consumers be paid for using less power during high-demand periods, overturning a D.C. Circuit ruling that the rule usurps state authority over retail electricity markets.
The U.S. Supreme Court has resurrected the Federal Energy Regulatory Commission's rule that consumers be paid for using less power during high-demand periods, overturning a D.C. Circuit ruling that the rule usurps state authority over retail electricity markets.
US: Charter-Time Warner critics join forces to fight merger
By CPI
Telecom companies including Dish Network, along with trade and advocacy groups, launched a coalition on Thursday to oppose a pair of proposed cable deals they claim would control broadband access to nearly 90 percent of homes in the US and damage options for consumers.
The Stop Mega Cable Coalition argues that regulators should reject the pair of mergers proposed by Charter Communications, which would make it the second-largest video and broadband provider in the US. The new coalition argues on its site that the combined company would have the incentive and ability to “undermine new and emerging streaming video services, starve out independent programmers and worsen customer service, all while raising prices.”
From https://www.competitionpolicyinternational.com/us-charter-time-warner-critics-join-forces-to-fight-merger/
By CPI
Telecom companies including Dish Network, along with trade and advocacy groups, launched a coalition on Thursday to oppose a pair of proposed cable deals they claim would control broadband access to nearly 90 percent of homes in the US and damage options for consumers.
The Stop Mega Cable Coalition argues that regulators should reject the pair of mergers proposed by Charter Communications, which would make it the second-largest video and broadband provider in the US. The new coalition argues on its site that the combined company would have the incentive and ability to “undermine new and emerging streaming video services, starve out independent programmers and worsen customer service, all while raising prices.”
From https://www.competitionpolicyinternational.com/us-charter-time-warner-critics-join-forces-to-fight-merger/
The New York Public Service Commission has approved a 10-year, $5.3 billion Clean Energy Fund to accelerate the state’s switch to cleaner resources and fight climate change (14-M-0094).
The fund is a centerpiece of Gov. Andrew Cuomo’s Reforming the Energy Vision initiative that is meant to shift the state to cleaner and more distributed energy resources.
NYPSC Chair Audrey Zibelman said the commission’s action was a milestone in the nearly two-year effort. “I really feel like we’re turning the chapter to the next stage of REV,” she said.
New York set a new windpower record last Tuesday, generating 1,571 MW at 5 p.m. — 9% of the state’s electric generation and 90% of the 1,746 MW of installed wind capacity.The commission also advanced the docket for the creation of a Clean Energy Standard that would mandate 50% of New York’s electricity come from “clean” energy sources by 2030. The NYPSC is under a Cuomo mandate to create the regulatory framework for the CES by June. Part of that mandate includes creation of financial incentives to keep New York’s upstate nuclear power plants viable until the renewable resources reach their target in 14 years. (See related story, Plan Would Pay New York Nuclear Plants for Zero Emissions.)
From https://www.rtoinsider.com/nypsc-clean-energy-fund-21448/
The fund is a centerpiece of Gov. Andrew Cuomo’s Reforming the Energy Vision initiative that is meant to shift the state to cleaner and more distributed energy resources.
NYPSC Chair Audrey Zibelman said the commission’s action was a milestone in the nearly two-year effort. “I really feel like we’re turning the chapter to the next stage of REV,” she said.
New York set a new windpower record last Tuesday, generating 1,571 MW at 5 p.m. — 9% of the state’s electric generation and 90% of the 1,746 MW of installed wind capacity.The commission also advanced the docket for the creation of a Clean Energy Standard that would mandate 50% of New York’s electricity come from “clean” energy sources by 2030. The NYPSC is under a Cuomo mandate to create the regulatory framework for the CES by June. Part of that mandate includes creation of financial incentives to keep New York’s upstate nuclear power plants viable until the renewable resources reach their target in 14 years. (See related story, Plan Would Pay New York Nuclear Plants for Zero Emissions.)
From https://www.rtoinsider.com/nypsc-clean-energy-fund-21448/
From ABA Antitrust Committee: The U.S. District Court for the District of Columbia grants the plaintiff’s motion to remand her class action against Soul Circus to D.C. Superior Court.
The U.S. District Court for the District of Columbia grants the plaintiff’s motion to remand her class action to D.C. Superior Court. Plaintiff brought a class action under the D.C. Consumer Protection Procedures Act (“CPPA”) against the operator of a touring circus, alleging its claim that it was opposed to cruelty or mistreatment of animals were false. The court held that the federal damages threshold was not met because CPPA damages could not be aggregated for diversity jurisdiction purposes where the consumers lacked a common and undivided interest. The court held that, under the Class Action Fairness Act, the defendant’s damages calculation was speculative and unsupported because it included claims of ticket purchasers outside of the plaintiff’s class definition and assumed that multiple CPPA violations arose out of a single purchase. (Sloan v. Soul Circus, Inc., No. 15-01389, 2015 WL 9272838 (D.D.C. Dec. 18, 2015)).
The U.S. District Court for the District of Columbia grants the plaintiff’s motion to remand her class action to D.C. Superior Court. Plaintiff brought a class action under the D.C. Consumer Protection Procedures Act (“CPPA”) against the operator of a touring circus, alleging its claim that it was opposed to cruelty or mistreatment of animals were false. The court held that the federal damages threshold was not met because CPPA damages could not be aggregated for diversity jurisdiction purposes where the consumers lacked a common and undivided interest. The court held that, under the Class Action Fairness Act, the defendant’s damages calculation was speculative and unsupported because it included claims of ticket purchasers outside of the plaintiff’s class definition and assumed that multiple CPPA violations arose out of a single purchase. (Sloan v. Soul Circus, Inc., No. 15-01389, 2015 WL 9272838 (D.D.C. Dec. 18, 2015)).
Return of high pressure time share sales
After crashing in the financial collapse, timeshare sales are rising again, and with them high-pressure sales practices such as those Ms. Gutierrez described. Perhaps acknowledging these problems, some in the industry have cautioned in recent months that regulators from the Consumer Financial Protection Bureau could increase their oversight. New rules would affect all operators, including big players like Diamond, Interval Leisure Group, Marriott Vacations Worldwide and Wyndham Worldwide.
http://www.nytimes.com/2016/01/24/business/diamond-resorts-accused-of-using-hard-sell-to-push-time-shares.html?ref=business
After crashing in the financial collapse, timeshare sales are rising again, and with them high-pressure sales practices such as those Ms. Gutierrez described. Perhaps acknowledging these problems, some in the industry have cautioned in recent months that regulators from the Consumer Financial Protection Bureau could increase their oversight. New rules would affect all operators, including big players like Diamond, Interval Leisure Group, Marriott Vacations Worldwide and Wyndham Worldwide.
http://www.nytimes.com/2016/01/24/business/diamond-resorts-accused-of-using-hard-sell-to-push-time-shares.html?ref=business
NYT to Michigan: deal with Flint
The conditions on the ground in Flint still do not seem to have sunk in at the Michigan statehouse. Thousands of residents are still relying on trucked-in water, as if they were in a war-zone refugee camp, while worrying that their children may suffer developmental and other health problems from a water system poisoned by lead. Gov. Rick Snyder has been busy apologizing, but the tiny steps he is taking to repair the damage shrink beside the urgency of the problem.
http://www.nytimes.com/2016/01/24/opinion/sunday/fix-flints-water-system-now.html?action=click&pgtype=Homepage&clickSource=story-heading&module=opinion-c-col-left-region®ion=opinion-c-col-left-region&WT.nav=opinion-c-col-left-region
The conditions on the ground in Flint still do not seem to have sunk in at the Michigan statehouse. Thousands of residents are still relying on trucked-in water, as if they were in a war-zone refugee camp, while worrying that their children may suffer developmental and other health problems from a water system poisoned by lead. Gov. Rick Snyder has been busy apologizing, but the tiny steps he is taking to repair the damage shrink beside the urgency of the problem.
http://www.nytimes.com/2016/01/24/opinion/sunday/fix-flints-water-system-now.html?action=click&pgtype=Homepage&clickSource=story-heading&module=opinion-c-col-left-region®ion=opinion-c-col-left-region&WT.nav=opinion-c-col-left-region
Bitcoin and musicians
Hang out at any music industry conference these days, and everyone’s talking about Bitcoin, blockchain, and the powerful possibilities for a crypto-currency to transform the entire music industry. Imogen Heap, one of its biggest proponents, is now releasing her music via Blockchain technology, and indies, DIY artists, and music entrepreneurs view the cypto-currency as a solution endless transparency problems plaguing major label contracts, streaming payouts, and even live music.
Benji Rogers, CEO and founder of Pledge Music, a fan-funded artist platform, is one of several entrepreneurs modeling a future based on the new currency. “No new technology encapsulates the potential for positive change for this suffering music industry more than the Blockchain,” Rogers recently declared, before outlining a detailed idea that even includes a Bitcoin-based audio codec.
Excerpt from http://www.digitalmusicnews.com/2016/01/19/bitcoin-has-totally-failed-says-a-top-bitcoin-engineer/
Hang out at any music industry conference these days, and everyone’s talking about Bitcoin, blockchain, and the powerful possibilities for a crypto-currency to transform the entire music industry. Imogen Heap, one of its biggest proponents, is now releasing her music via Blockchain technology, and indies, DIY artists, and music entrepreneurs view the cypto-currency as a solution endless transparency problems plaguing major label contracts, streaming payouts, and even live music.
Benji Rogers, CEO and founder of Pledge Music, a fan-funded artist platform, is one of several entrepreneurs modeling a future based on the new currency. “No new technology encapsulates the potential for positive change for this suffering music industry more than the Blockchain,” Rogers recently declared, before outlining a detailed idea that even includes a Bitcoin-based audio codec.
Excerpt from http://www.digitalmusicnews.com/2016/01/19/bitcoin-has-totally-failed-says-a-top-bitcoin-engineer/
Good job Pepco
Pepco touted tens of millions of dollars in maintenance and upgrades to its system, which covers 640 square miles and serves 2.3 million people. The improvements, it said, hardened the grid to severe weather.
In the past four years, the company said it had trimmed more than 9,000 miles of trees near vulnerable lines. It upgraded 1,300 underground lines and more than 350 feeders, the wires that connect substations and transformers. It replaced old lines with thicker ones that are less susceptible to failure by contact. And it invested in projects to expand the system’s load-carrying capacity and to route electricity around problem areas.
Excerpt from https://www.washingtonpost.com/local/plaudits-for-embattled-power-companies-yes-this-time-at-least/2016/01/24/afd5cfb4-c2a6-11e5-8965-0607e0e265ce_story.html?hpid=hp_hp-top-table-main_powerloss_10am%3Ahomepage%2Fstory
Pepco touted tens of millions of dollars in maintenance and upgrades to its system, which covers 640 square miles and serves 2.3 million people. The improvements, it said, hardened the grid to severe weather.
In the past four years, the company said it had trimmed more than 9,000 miles of trees near vulnerable lines. It upgraded 1,300 underground lines and more than 350 feeders, the wires that connect substations and transformers. It replaced old lines with thicker ones that are less susceptible to failure by contact. And it invested in projects to expand the system’s load-carrying capacity and to route electricity around problem areas.
Excerpt from https://www.washingtonpost.com/local/plaudits-for-embattled-power-companies-yes-this-time-at-least/2016/01/24/afd5cfb4-c2a6-11e5-8965-0607e0e265ce_story.html?hpid=hp_hp-top-table-main_powerloss_10am%3Ahomepage%2Fstory
Survey shows bank fees at new highs
The Bankrate.com survey: http://www.bankrate.com/finance/checking/checking-account-fees-surge-to-new-highs-1.aspx
Both Bernie Sanders and Hillary Clintion may know about the high bank fees: both recently made the fees campaign points.
The Bankrate.com survey: http://www.bankrate.com/finance/checking/checking-account-fees-surge-to-new-highs-1.aspx
Both Bernie Sanders and Hillary Clintion may know about the high bank fees: both recently made the fees campaign points.
Baseball, from ABA Antitrust/Consumer Law Digest:
Baseball Set to Go to Trial for Millions of Fans, Billions of Dollars . . .
Bloomberg – The trial against Major League Baseball begins today in federal court, as MLB will attempt to defend itself against the allegations that it is illegally restraining competition by limiting the markets in which its 30 teams can make broadcast deals.
. . . And Then Settles Just Hours Before Trial to Begin
The Washington Post – A lawyer for fans interested in less expensive alternatives to purchasing packages to watch their favorite baseball teams says a settlement has been reached with Major League Baseball, just hours before the trial on the matter was scheduled to start.
Baseball Set to Go to Trial for Millions of Fans, Billions of Dollars . . .
Bloomberg – The trial against Major League Baseball begins today in federal court, as MLB will attempt to defend itself against the allegations that it is illegally restraining competition by limiting the markets in which its 30 teams can make broadcast deals.
. . . And Then Settles Just Hours Before Trial to Begin
The Washington Post – A lawyer for fans interested in less expensive alternatives to purchasing packages to watch their favorite baseball teams says a settlement has been reached with Major League Baseball, just hours before the trial on the matter was scheduled to start.
Shopping while black or a member of another minority
Researchers at Villanova University published a study last month in the Journal of Consumer Affairs called "Shopping While Nonwhite: Racial Discrimination among Minority Consumers." Driven by both recent racial profiling incidents at major retailers and the lack of discrimination research on the subject, Villanova's Aronté Bennett, Ronald Hill, and Kara Daddario asked Americans questions about shopping and then listed the results broken out by ethnic group; Quartz created charts to show the study's results. They found that non-white study recipients were much more likely to pick up on discrimination, and the black study participants were the most likely group to experience discrimination and to expect it.
The researchers hope this study will help consumers understand the problem, and that government agencies like the US Federal Trade Commission will update anti-discrimination laws to deal with covert discrimination. "We have a hard time recognizing these experiences that other people have, because we don't notice them. Many consumers, minority and otherwise, don't think that minorities are experiencing discrimination as a whole," Villanova's Aronté Bennett said.
Excerpted from http://www.racked.com/2015/1/16/7560601/shopping-while-black-study-charts
Posted 1-18-2016 (MLK Day)
Researchers at Villanova University published a study last month in the Journal of Consumer Affairs called "Shopping While Nonwhite: Racial Discrimination among Minority Consumers." Driven by both recent racial profiling incidents at major retailers and the lack of discrimination research on the subject, Villanova's Aronté Bennett, Ronald Hill, and Kara Daddario asked Americans questions about shopping and then listed the results broken out by ethnic group; Quartz created charts to show the study's results. They found that non-white study recipients were much more likely to pick up on discrimination, and the black study participants were the most likely group to experience discrimination and to expect it.
The researchers hope this study will help consumers understand the problem, and that government agencies like the US Federal Trade Commission will update anti-discrimination laws to deal with covert discrimination. "We have a hard time recognizing these experiences that other people have, because we don't notice them. Many consumers, minority and otherwise, don't think that minorities are experiencing discrimination as a whole," Villanova's Aronté Bennett said.
Excerpted from http://www.racked.com/2015/1/16/7560601/shopping-while-black-study-charts
Posted 1-18-2016 (MLK Day)
Bitcoin controversy threatens the future of the technology
Part of the appeal of Bitcoin has been its promise to provide the software basis for a more reliable and trustworthy alternative to existing currencies and financial networks, including Visa and MasterCard. But controversy among Bitcoin developers threatens the future of the technology, according to the NYT article at http://www.nytimes.com/2016/01/17/business/dealbook/the-bitcoin-believer-who-gave-up.html?ref=business&_r=0
Part of the appeal of Bitcoin has been its promise to provide the software basis for a more reliable and trustworthy alternative to existing currencies and financial networks, including Visa and MasterCard. But controversy among Bitcoin developers threatens the future of the technology, according to the NYT article at http://www.nytimes.com/2016/01/17/business/dealbook/the-bitcoin-believer-who-gave-up.html?ref=business&_r=0
California Case Requires Arbitration Despite Lack of Actual Controversy
By: Lyndsey A. Torp and Sean M. Sherlock
For parties to litigate a contract dispute in a court of law, the parties’ disagreement must have ripened into an actual controversy presenting more than a mere academic difference of opinion. But under a recent California Court of Appeal opinion, no actual controversy is required to compel arbitration over a disagreement. Bunker Hill Park Limited v. U.S. Bank National Association, — Cal.Rptr.3d —, 2014 WL 6684796 (Cal.App. 2 Dist.). To avoid being compelled to arbitrate purely academic disagreements, parties should draft their arbitration clauses to limit arbitrable disputes to those that have ripened into actual controversies.… Read More »
- See more at: http://www.swlaw.com/blog/real-estate-litigation/category/guaranty-contracts/#sthash.zMBORd8u.dpuf
From DMN: Twitter is being accused of copyright infringement, ignoring DMCA takedown requests
Like so many user-generated sites, Twitter is often used to host or link to copyright infringing material. As part of the Digital Millennium Copyright Act, or DMCA, Twitter is obligated to promptly take down infringing material if it receives a takedown request from right holders.
And what happens if those requests aren’t acted upon? Over the past several months, Twitter has reportedly processed thousands of requests and adhered to the majority of them. But a new lawsuit filed in a California federal court has shed light on the company’s possible inconsistencies in their takedown efforts.
http://www.digitalmusicnews.com/2016/01/14/twitter-sued-for-ignoring-dmca-takedown-requests/
From Brookings: Flint’s water crisis highlights need for infrastructure investment and innovation
Flint’s water infrastructure has reached a crisis point, as residents cope with high levels of lead pollutionand questions mount over contamination and negligent oversight. Aiming to cut costs in a state of financial emergency almost two years ago, the city began drawing water from the local Flint River rather than continuing to depend on traditional sources linked to Detroit, almost immediately leading to a variety of health and environmental concerns. Although Flint switched back to Detroit water this past fall, the city’s situation remains dire.
Full article: http://www.brookings.edu/blogs/the-avenue/posts/2016/01/13-flint-water-crisis-infrastructure-kane-puentes?utm_campaign=Brookings+Brief&utm_source=hs_email&utm_medium=email&utm_content=25285634&_hsenc=p2ANqtz-_5J6ZPNm_vq3zEA_fXxZr9a6Z5PGDZgBfTekNowK4RBX4apkLTqHSmJA5EgqDWb9tIGYtaQpwv8aeRArZ7abgNz9iOAQ&_hsmi=25285634l
From Public Citizen: FTC report on pay-for-delay deals by pharmaceutical companies
The Federal Trade Commission reports that pharmaceutical companies entered into substantially fewer potential pay-for-delay patent dispute settlements in fiscal year 2014.
Under such settlements, brand-name drug companies pay generic companies to delay entry of less costly drugs onto the market. InFTC v. Actavis (2013), the U.S. Supreme Court held that a brand-name drug manufacturer’s payment to a generic competitor to settle patent litigation can violate U.S. antitrust laws.
The number of these potentially anticompetitive agreements has fallen significantly following the Supreme Court decision in Actavis. The FTC found that the total number of such deals filed with the FTC has dropped to 21 in FY 2014 from 29 in FY 2013, and 40 in FY 2012 prior to the Actavis ruling.
The report is here. The FTC's press release is here.
The Federal Trade Commission reports that pharmaceutical companies entered into substantially fewer potential pay-for-delay patent dispute settlements in fiscal year 2014.
Under such settlements, brand-name drug companies pay generic companies to delay entry of less costly drugs onto the market. InFTC v. Actavis (2013), the U.S. Supreme Court held that a brand-name drug manufacturer’s payment to a generic competitor to settle patent litigation can violate U.S. antitrust laws.
The number of these potentially anticompetitive agreements has fallen significantly following the Supreme Court decision in Actavis. The FTC found that the total number of such deals filed with the FTC has dropped to 21 in FY 2014 from 29 in FY 2013, and 40 in FY 2012 prior to the Actavis ruling.
The report is here. The FTC's press release is here.
Chobani Simply 100 ad campaign sparks legal spat with Dannon
By Elaine Watson+, 11-Jan-2016
Chobani’s provocative new ad campaign for Simply 100 – which directly attacks the ingredient choices of two rival brands – has landed it in legal hot water, with Dannon’s lawyers demanding an immediate halt to the campaign and Chobani responding with a lawsuit.
http://www.foodnavigator-usa.com/Manufacturers/Chobani-Simply-100-ad-campign-lands-it-in-legal-hotwater
Briefing schedule set for District's appeal from the Superior Court's decision dismissing its case against ExxonMobil
The District's appeal was held in abeyance or stayed for about a year-and-a-half, but the Court of Appeals issued an order last month vacating the stay and setting a briefing schedule.
See the order at https://www.scribd.com/doc/294865497/DC-v-Exxonmobil-Order-121015
"Big Short" movie review from Better Markets blog
Want to know how Wall Street crashed the global economy in an understandable and entertaining way? You must see the movie The Big Short: This movie cuts through disinformation and complexity the Wall Street fog machine has generated to keep Americans from knowing how the 2008 financial crisis really happened. The Big Short, an adaptation of author Michael Lewis' book by the same name, tells the story of several really smart but oddball outsiders who spotted the housing bubble in the lead up to the crash and then bet on it all crashing. It shows the recklessness and illegal acts of the too-big-to-fail banks and out-of-control executives that pushed our financial system to the brink. It has all the makings of a blockbuster - big-name actors, a great script, and a talented director - while also being an incredibly important film.
Wall Street and its allies have spent millions to try and make banking and finance seem too difficult for every day, hardworking Americans to understand. This is part of Wall Street's strategy to mislead and confuse the public and elected officials. But this film strips away that created-complexity, tells a simple story of greed and criminality, and highlights how the crash has impacted every American in lost jobs, homes, savings and so much more. Watch the movie trailer here, follow the film on twitter at @thebigshort, and follow the director Adam McKay at @GhostPanther.
Want to know how Wall Street crashed the global economy in an understandable and entertaining way? You must see the movie The Big Short: This movie cuts through disinformation and complexity the Wall Street fog machine has generated to keep Americans from knowing how the 2008 financial crisis really happened. The Big Short, an adaptation of author Michael Lewis' book by the same name, tells the story of several really smart but oddball outsiders who spotted the housing bubble in the lead up to the crash and then bet on it all crashing. It shows the recklessness and illegal acts of the too-big-to-fail banks and out-of-control executives that pushed our financial system to the brink. It has all the makings of a blockbuster - big-name actors, a great script, and a talented director - while also being an incredibly important film.
Wall Street and its allies have spent millions to try and make banking and finance seem too difficult for every day, hardworking Americans to understand. This is part of Wall Street's strategy to mislead and confuse the public and elected officials. But this film strips away that created-complexity, tells a simple story of greed and criminality, and highlights how the crash has impacted every American in lost jobs, homes, savings and so much more. Watch the movie trailer here, follow the film on twitter at @thebigshort, and follow the director Adam McKay at @GhostPanther.
Credit card legislation saves money for consumers
A finance paper published last year makes clear that struggling with credit cards is not unusual. The study examined 2008–2012 data from a mammoth database of 160 million credit card accounts at America’s eight largest banks to analyze the practical impact of the Credit Card Accountability Responsibility and Disclosure (CARD) Act, which Congress passed in 2009. The authors found that the CARD Act was a triumph of financial regulation.
The legislation saved consumers $11.9 billion per year
"The CARD Act did two main things," according to Neale Mahoney, a co-author of the study. "First, it restricted a number of credit card fees. Second, it required credit card issuers to provide information on annual statements that was designed to ‘nudge’ consumers into making larger monthly payments on their cards."
Mahoney and his co-authors found that the legislation saved consumers $11.9 billion per year, largely by reducing fees imposed on the least sophisticated consumers who have the lowest credit scores.
For full article: See http://www.vox.com/2016/1/8/10732880/credit-card-regulation-savings
A finance paper published last year makes clear that struggling with credit cards is not unusual. The study examined 2008–2012 data from a mammoth database of 160 million credit card accounts at America’s eight largest banks to analyze the practical impact of the Credit Card Accountability Responsibility and Disclosure (CARD) Act, which Congress passed in 2009. The authors found that the CARD Act was a triumph of financial regulation.
The legislation saved consumers $11.9 billion per year
"The CARD Act did two main things," according to Neale Mahoney, a co-author of the study. "First, it restricted a number of credit card fees. Second, it required credit card issuers to provide information on annual statements that was designed to ‘nudge’ consumers into making larger monthly payments on their cards."
Mahoney and his co-authors found that the legislation saved consumers $11.9 billion per year, largely by reducing fees imposed on the least sophisticated consumers who have the lowest credit scores.
For full article: See http://www.vox.com/2016/1/8/10732880/credit-card-regulation-savings
From Public Citizen blog: Ninth Circuit upholds Facebook settlement
Posted: 06 Jan 2016 12:50 PM PST
The Facebook minors'-privacy case is a class action over Facebook's use of members' images in ads without their consent. Public Citizen represented parents who objected to the proposed settlement because it permitted Facebook to continue using their children's images in ads without parental consent -- a practice that violates the law in seven states (CA, FL, NY, OK, TN, VA, WI). After the district court approved the settlement, the parents appealed.
Today the Ninth Circuit affirmed in a cursory decision. The court didn't engage with our arguments that the settlement was unlawful; it said only that the district court did not abuse its discretion by approving the settlement because "[i]t is . . . not clear whether the settlement at issue . . . violates state law." This conclusory statement is surprising in light of the plain text of the state laws at issue. For instance, in California, “Any person who knowingly uses another’s name, voice, signature, photograph, or likeness, in any manner, on or in products, merchandise, or goods, or for purposes of advertising or selling, or soliciting purchases of, products, merchandise, goods or services, without such person’s prior consent, or, in the case of a minor, the prior consent of his parent or legal guardian, shall be liable . . . .” Cal. Civ. Code § 3344(a) (emphasis added). The laws of Florida, New York, Oklahoma, Tennessee, Virginia and Wisconsin are to similar effect, and there are additional criminal prohibitions on this practice in New York, Oklahoma, and Tennessee. What more did the court need? Its decision, disappointingly, did not say.
Click title for the Public Citizen posting
$15 minimum wage for NYC workers
From the NY Times:
Mayor Bill de Blasio is set to announce on Wednesday a $15-an-hour minimum wage for New York City’s public work force that city officials said would be among the highest of its kind in the country.
Under the mayor’s plan, which matches a similar increase for state employees enacted by Gov. Andrew M. Cuomo last year, about 50,000 city workers — including crossing guards, prekindergarten teachers, custodial workers and others — would see their pay reach the $15-an-hour level by the end of 2018.
Read more here.
Scope of State Preemption in Proposed Federal Data Security Legislation is Uncertain
By David Bender
According to a recent analysis by the Congressional Research Service (“CRS”), the extent of state law preemption in recent federal legislative proposals relating to data security is unclear. Several bills introduced in the 114th Congress would impose federal data security or breach notification requirements on covered entities, similar to existing requirements in nearly every state.
The CRS report notes that all of the current bills on this topic include express preemption clauses, but the scope of that preemption will ultimately be a matter of interpretation, particularly in bills that include saving clauses that preserve certain aspects of state law.
Full article: http://www.insideprivacy.com/united-states/congress/scope-of-preemption-in-proposed-data-security-legislation-is-uncertain/
By David Bender
According to a recent analysis by the Congressional Research Service (“CRS”), the extent of state law preemption in recent federal legislative proposals relating to data security is unclear. Several bills introduced in the 114th Congress would impose federal data security or breach notification requirements on covered entities, similar to existing requirements in nearly every state.
The CRS report notes that all of the current bills on this topic include express preemption clauses, but the scope of that preemption will ultimately be a matter of interpretation, particularly in bills that include saving clauses that preserve certain aspects of state law.
Full article: http://www.insideprivacy.com/united-states/congress/scope-of-preemption-in-proposed-data-security-legislation-is-uncertain/
Uber Sued by Drivers Excluded from Class-Action Lawsuit
Los Angeles Times - Last year a federal judge decided that those who drove for Uber through limo companies and those who signed up to drive using corporate or fictitious names were to be excluded from a worker misclassification class action lawsuit against Uber. Those groups have now filed their own lawsuit, alleging that Uber misclassified them as independent contractors.
Los Angeles Times - Last year a federal judge decided that those who drove for Uber through limo companies and those who signed up to drive using corporate or fictitious names were to be excluded from a worker misclassification class action lawsuit against Uber. Those groups have now filed their own lawsuit, alleging that Uber misclassified them as independent contractors.
Editor's pick for top stories of 2015: Exelon/PHI merger
Looking back through the articles we’ve published in recent months, I think the top stories of 2015 concern the Exelon/PHI merger applications and the review of the applications by the District of Columbia Public Service Commission. The outcome of the DCPSC proceedings, which now seem to lean in the direction of approval of the merger, will certainly have an important effect on the prices D.C. consumers pay for electricity, and the quality of the service they receive.
But additional issues are involved. The Washington Post has asked about the effect of political influence on the approval process. The Washington Post observed that “the political action committee formed to advance the agenda of Mayor Muriel E. Bowser (D) has been disbanded, but it continues to do damage. . . . [W]e learned that the head of the now-defunct FreshPAC had been hired to lobby the government by a power company seeking approval for a controversial merger. The revelation raises new questions about the mayor’s handling of the matter. Unless Ms. Bowser wants her otherwise promising start in office tarnished, she should provide information that shows exactly how decisions were reached and make clear she understands why the arrangement was problematic. Earle “Chico” Horton III, who chaired FreshPAC, was hired by Exelon in late September to lobby D.C. leaders for approval of a $6.8 billion merger with Pepco, WAMU’s Patrick Madden reported.” The full WP editorial is at https://www.washingtonpost.com/opinions/freshpacs-chairman-lobbying-for-exelon-was-legal-but-unseemly/2015/12/17/b403d4de-a508-11e5-b53d-972e2751f433_story.html See also https://www.washingtonpost.com/local/dc-politics/one-year-in-mayor-bowser-has-a-tough-road-ahead/2016/01/02/36e48b96-af04-11e5-b820-eea4d64be2a1_story.html?hpid=hp_local-news_bowseryear-805pm%3Ahomepage%2Fstory
Similarly, a recent op-ed in the Post says that "Now, by supporting Exelon’s takeover of Pepco, the mayor has shunted aside the interests of consumers and the environment in one fell swoop. Despite her promised ratepayer protection fund, Bowser’s deal would allow Exelon to hike rates in a few years and by as much as 45 percent, according to analysis by the Community Power Network." Also, "The mayor’s office also faces accusations of approving the deal as a means offunding the proposed D.C. United stadium, raising questions about Bowser’s priorities." https://www.washingtonpost.com/opinions/a-history-of-bowing-to-energy-companies/2015/12/31/5a99c648-a836-11e5-9b92-dea7cd4b1a4d_story.html
Another issue is whether antitrust principles involving troublesome use of market power will be respected in the DCPSC process. Will allowing the Exelon/PHI merger allow Exelon to exercise great market power in the way the American Antitrust Institute suggests in its open letter to the USDOJ? The letter is at URL http://antitrustinstitute.org/sites/default/files/Exelon-Pepco_AAI%20letter_2-25-15.pdf The AAI letter asks, among other things, whether by combining the Exelon generation and transmission systems with (PHI) Pepco’s retail distribution systems, the proposed acquisition will enhance the ability of the combined company to vertically foreclose rivals. AAI argues that unlike the current free-standing Pepco utility, which is without generation capacity, the combined company would have a powerful incentive to deny rivals in the market for high voltage transmission access to customers of its Pepco affiliate. That would be because of Exelon’s desire to serve Pepco’s area with its own high voltage transmission and generation capacity – much of which is expensive and hard to sell nuclear generated. As such, the merged utility will pose a formidable barrier to entry to both incumbents and new market participants that require interconnection in order to participate in wholesale electricity markets.
Yet another issue --and perhaps the most important -- is whether the DCPSC procedures are fair. Public Citizen argued to the DCPSC that after initially deciding to reject the Exelon application to acquire PHI, the DCPSC permitted new proceedings on a revised Exelon application with the same merger parties but terms and conditions quite different from the original one. Public Citizen argued that the procedures being followed by the DCPSC mean there is a severe risk that the settlement will not be subjected to full and fair scrutiny and “that the public will lack adequate--or even legally required--opportunities to weigh in.”
Each of these issues has an importance beyond the particular proceeding. Government review of major mergers should generally be free of any hint of political impropriety; antitrust principles should be carefully considered, including possible vertical foreclosure of rival suppliers by an acquirer that needs an outlet for its expensive and hard-to-sell nuclear generated power; and regulatory review procedures should be scrupulously fair, particularly to consumers.
Posted by Don Allen Resnikoff
Looking back through the articles we’ve published in recent months, I think the top stories of 2015 concern the Exelon/PHI merger applications and the review of the applications by the District of Columbia Public Service Commission. The outcome of the DCPSC proceedings, which now seem to lean in the direction of approval of the merger, will certainly have an important effect on the prices D.C. consumers pay for electricity, and the quality of the service they receive.
But additional issues are involved. The Washington Post has asked about the effect of political influence on the approval process. The Washington Post observed that “the political action committee formed to advance the agenda of Mayor Muriel E. Bowser (D) has been disbanded, but it continues to do damage. . . . [W]e learned that the head of the now-defunct FreshPAC had been hired to lobby the government by a power company seeking approval for a controversial merger. The revelation raises new questions about the mayor’s handling of the matter. Unless Ms. Bowser wants her otherwise promising start in office tarnished, she should provide information that shows exactly how decisions were reached and make clear she understands why the arrangement was problematic. Earle “Chico” Horton III, who chaired FreshPAC, was hired by Exelon in late September to lobby D.C. leaders for approval of a $6.8 billion merger with Pepco, WAMU’s Patrick Madden reported.” The full WP editorial is at https://www.washingtonpost.com/opinions/freshpacs-chairman-lobbying-for-exelon-was-legal-but-unseemly/2015/12/17/b403d4de-a508-11e5-b53d-972e2751f433_story.html See also https://www.washingtonpost.com/local/dc-politics/one-year-in-mayor-bowser-has-a-tough-road-ahead/2016/01/02/36e48b96-af04-11e5-b820-eea4d64be2a1_story.html?hpid=hp_local-news_bowseryear-805pm%3Ahomepage%2Fstory
Similarly, a recent op-ed in the Post says that "Now, by supporting Exelon’s takeover of Pepco, the mayor has shunted aside the interests of consumers and the environment in one fell swoop. Despite her promised ratepayer protection fund, Bowser’s deal would allow Exelon to hike rates in a few years and by as much as 45 percent, according to analysis by the Community Power Network." Also, "The mayor’s office also faces accusations of approving the deal as a means offunding the proposed D.C. United stadium, raising questions about Bowser’s priorities." https://www.washingtonpost.com/opinions/a-history-of-bowing-to-energy-companies/2015/12/31/5a99c648-a836-11e5-9b92-dea7cd4b1a4d_story.html
Another issue is whether antitrust principles involving troublesome use of market power will be respected in the DCPSC process. Will allowing the Exelon/PHI merger allow Exelon to exercise great market power in the way the American Antitrust Institute suggests in its open letter to the USDOJ? The letter is at URL http://antitrustinstitute.org/sites/default/files/Exelon-Pepco_AAI%20letter_2-25-15.pdf The AAI letter asks, among other things, whether by combining the Exelon generation and transmission systems with (PHI) Pepco’s retail distribution systems, the proposed acquisition will enhance the ability of the combined company to vertically foreclose rivals. AAI argues that unlike the current free-standing Pepco utility, which is without generation capacity, the combined company would have a powerful incentive to deny rivals in the market for high voltage transmission access to customers of its Pepco affiliate. That would be because of Exelon’s desire to serve Pepco’s area with its own high voltage transmission and generation capacity – much of which is expensive and hard to sell nuclear generated. As such, the merged utility will pose a formidable barrier to entry to both incumbents and new market participants that require interconnection in order to participate in wholesale electricity markets.
Yet another issue --and perhaps the most important -- is whether the DCPSC procedures are fair. Public Citizen argued to the DCPSC that after initially deciding to reject the Exelon application to acquire PHI, the DCPSC permitted new proceedings on a revised Exelon application with the same merger parties but terms and conditions quite different from the original one. Public Citizen argued that the procedures being followed by the DCPSC mean there is a severe risk that the settlement will not be subjected to full and fair scrutiny and “that the public will lack adequate--or even legally required--opportunities to weigh in.”
Each of these issues has an importance beyond the particular proceeding. Government review of major mergers should generally be free of any hint of political impropriety; antitrust principles should be carefully considered, including possible vertical foreclosure of rival suppliers by an acquirer that needs an outlet for its expensive and hard-to-sell nuclear generated power; and regulatory review procedures should be scrupulously fair, particularly to consumers.
Posted by Don Allen Resnikoff
Recent Washington Post Op-Ed on Exelon-PHI merger offers reprise of DC litigation against gasoline companies
By Robert Weiner and Brendan Agnew
Big energy interests winning against D.C. residents is becoming a familiar story.
In 2013, District Attorney General Irvin B. Nathan sued ExxonMobil, Capitol Petroleum and others for allegedly manipulating prices at the pumps in the District. Exxon’s oil-refining subsidiaries had struck exclusive supply deals with about 60 percent of the city’s gas stations, including almost all of the Exxon, Shell and Valero stations, effectively shutting out competition and allowing them to set retail prices as high as they’d like, the suit argued.
The D.C. Superior Court granted ExxonMobil’s motion to dismiss the case in 2014. ExxonMobil argued that under the District’s Retail Service Station Act, the attorney general had “neither expressed nor implied statutory authority” to investigate gas prices. The regional gasoline distributorships were allowed to keep their supply arrangements. Meanwhile, D.C. gas prices hover above the national average as other regions experience dropping prices.
Because the problem is D.C. law, the law could be changed by the council. D.C. Councilmember Mary M. Cheh (D-Ward 3) proposed an amendment to the law, but the council never voted on it.
For full version see see https://www.washingtonpost.com/opinions/a-history-of-bowing-to-energy-companies/2015/12/31/5a99c648-a836-11e5-9b92-dea7cd4b1a4d_story.html
By Robert Weiner and Brendan Agnew
Big energy interests winning against D.C. residents is becoming a familiar story.
In 2013, District Attorney General Irvin B. Nathan sued ExxonMobil, Capitol Petroleum and others for allegedly manipulating prices at the pumps in the District. Exxon’s oil-refining subsidiaries had struck exclusive supply deals with about 60 percent of the city’s gas stations, including almost all of the Exxon, Shell and Valero stations, effectively shutting out competition and allowing them to set retail prices as high as they’d like, the suit argued.
The D.C. Superior Court granted ExxonMobil’s motion to dismiss the case in 2014. ExxonMobil argued that under the District’s Retail Service Station Act, the attorney general had “neither expressed nor implied statutory authority” to investigate gas prices. The regional gasoline distributorships were allowed to keep their supply arrangements. Meanwhile, D.C. gas prices hover above the national average as other regions experience dropping prices.
Because the problem is D.C. law, the law could be changed by the council. D.C. Councilmember Mary M. Cheh (D-Ward 3) proposed an amendment to the law, but the council never voted on it.
For full version see see https://www.washingtonpost.com/opinions/a-history-of-bowing-to-energy-companies/2015/12/31/5a99c648-a836-11e5-9b92-dea7cd4b1a4d_story.html
NYT: A local government/federal solution to veterans without homes: help them get homes
In 2015 alone, New York City placed more than 1,000 veterans in permanent housing, according to city officials.
The city’s efforts are part of a broader federal initiative, started under President Obama and aimed at ending veteran homelessness in the United States. The federal housing agency, working in partnership with the Department of Veterans Affairs, has now distributed 79,000 rental assistance vouchers to veterans across the country dating to 2008.
The city’s success has far outpaced the 36 percent decrease that federal officials have recorded across the country.
But other cities have made even bigger gains, according to federal officials. The interagency council recognized New York for its success with chronically homeless veterans, defined as people who have been without permanent housing for at least a year, or have experienced homelessness at least four times over three years.
The council has credited Houston, Las Vegas and New Orleans, among several cities, for going further and effectively ending overall veteran homelessness, meaning they have identified all homeless veterans, not just the chronic cases, and placed them in homes.
Full article: http://www.nytimes.com/2016/01/01/nyregion/homeless-veterans-becoming-scarcer-in-new-york-city.html?_r=0
Some new state laws for 2016 -- from ABC news
GUN CONTROL:
In California there are multiple new laws on gun control. One tightens a ban on firearms in and around schools. Under the new law, state colleges and K-12 schools are now gun-free zones, even to concealed-carry license holders. Another allows people to request that a judge order weapons be taken away from relatives who are believed to pose a threat.
In Texas, the right to openly carry guns is expanding.
PUBLIC HEALTH:
California joins West Virginia and Mississippi as the only states without a personal-belief exemption for parents who do not want to vaccinate their children. Children whose parents refuse to have them immunized against several diseases are not allowed to enroll in public or private school and instead have to be homeschooled. There is an exemption for children with serious health problems.
MINIMUM WAGE:
The minimum wage rises in many cities and states with the new year. Some of the wage increases are coming under laws passed years ago that phased in the increases over a period of years. Some are automatic increases tied to the cost of living.
The wages rise in California, Connecticut, Hawaii, Maryland, Massachusetts, Michigan, Rhode Island, Vermont and West Virginia on Friday. States with automatic annual increases effective Jan. 1 are Arizona, Colorado, Montana, New Jersey, Ohio and South Dakota. In California, the state minimum wage went up from $9 to $10 an hour, although it's higher than that in most Bay Area cities.
See http://abc7news.com/news/over-800-new-state-laws-take-effect-on-new-years-day/1143305/
GUN CONTROL:
In California there are multiple new laws on gun control. One tightens a ban on firearms in and around schools. Under the new law, state colleges and K-12 schools are now gun-free zones, even to concealed-carry license holders. Another allows people to request that a judge order weapons be taken away from relatives who are believed to pose a threat.
In Texas, the right to openly carry guns is expanding.
PUBLIC HEALTH:
California joins West Virginia and Mississippi as the only states without a personal-belief exemption for parents who do not want to vaccinate their children. Children whose parents refuse to have them immunized against several diseases are not allowed to enroll in public or private school and instead have to be homeschooled. There is an exemption for children with serious health problems.
MINIMUM WAGE:
The minimum wage rises in many cities and states with the new year. Some of the wage increases are coming under laws passed years ago that phased in the increases over a period of years. Some are automatic increases tied to the cost of living.
The wages rise in California, Connecticut, Hawaii, Maryland, Massachusetts, Michigan, Rhode Island, Vermont and West Virginia on Friday. States with automatic annual increases effective Jan. 1 are Arizona, Colorado, Montana, New Jersey, Ohio and South Dakota. In California, the state minimum wage went up from $9 to $10 an hour, although it's higher than that in most Bay Area cities.
See http://abc7news.com/news/over-800-new-state-laws-take-effect-on-new-years-day/1143305/
FTC ends year with a series of local hospital merger challenges
The FTC has recently moved to stop three hospital system mergers. The FTC is challenging (1) theproposed merger of West Virginia hospitals Cabell Huntington Hospital and St. Mary’s Medical Center; (2) Penn State Hershey Medical Center’s proposed merger with PinnacleHealth System (along with the State of Pennsylvania); and (3) the proposed merger of Advocate Health Care Network and NorthShore University HealthSystem
The FTC has recently moved to stop three hospital system mergers. The FTC is challenging (1) theproposed merger of West Virginia hospitals Cabell Huntington Hospital and St. Mary’s Medical Center; (2) Penn State Hershey Medical Center’s proposed merger with PinnacleHealth System (along with the State of Pennsylvania); and (3) the proposed merger of Advocate Health Care Network and NorthShore University HealthSystem
The Exelon/PHI electric utility merger as an antitrust problem
Local groups like are Public Citizen are dealing with the District of Columbia Exelon/PHI electric utility merger by moving to intervene (so far unsuccessfully) before the DC Public Service Commission as it reviews the merger. Public Citizen, which is unfriendly toward the merger, has hinted that it can appeal to a court if the PSC acts unfairly. But if a recent position paper by the American Antitrust Institute is correct that the merger violates antitrust law principles, that raises the question of whether Public Citizen (or some other non-government entity representing consumers) has another alternative: sue in court on antitrust theory.
An article written a few years ago by M. Sean Royall and Adam Di Vincenzo suggests that the answer may be yes. They explain that direct purchasers of a merging parties’ products and services are generally thought to suffer antitrust injury if a merger violates Section 7 of the Clayton Act, and so are entitled to sue.
Of course, special and more difficult standing requirements apply to non-profit entities, but those requirements may not be an insurmountable hurdle where a non-profit can allege damage to its mission. Some relevant local D.C. cases are D.C. Appleseed Ctr. for Law & Justice, Inc. v. D.C. Dep’t of Ins., 54 A.3d 1188 (D.C. 2012), and Equal Rights Center v. Properties Intern., No. 13-CV-999, 110 A.3d 599 (D.C. 2015)
Royall and DiVincenzo explain, however, that despite lower antitrust injury hurdles confronting customers, customer-driven merger lawsuits have been uncommon. Even customers that strongly oppose a merger may not be motivated to incur the costs of pursuing a private action. The authors’ focus is on individual plaintiffs rather than non-profit entities, but cost and complexity may be a deterrent relevant to both non-profit consumer groups as well as particular customers.
The Royall and DiVencenzo article is at http://www.gibsondunn.com/publications/Documents/WhenMergersBecomePrivateMatter-AntitrustPrimer-Royall-DiVincenzo0312.pdf
The American Antitrust Institute has argued that the proposed acquisition of Pepco and Pepco Holdings, Inc. by Exelon raises serious antitrust issues. AAI urged that the Antitrust Division of the US Department of Justice investigate and effectively address the antitrust issues. The same request would logically apply to antitrust enforcers at the state level, and to potential consumer plaintiffs.
Antitrust concerns were expressed in the AAI’s February 25, 2015 letter to the USDOJ regarding the proposed acquisition. See URL http://antitrustinstitute.org/sites/default/files/Exelon-Pepco_AAI%20letter_2-25-15.pdf
Some antitrust issues flagged by the AAI:
With regard to vertical effects, the antitrust issue raised by AAI is whether by combining the Exelon generation and transmission systems with Pepco’s retail distribution systems, the proposed acquisition will enhance the ability of the combined company to vertically foreclose rivals. AAI argues that unlike the current free-standing Pepco utility, which is without generation capacity, the combined company would have a powerful incentive to deny rivals in the market for high voltage transmission access to customers of its Pepco affiliate. That would be because of Exelon’s desire to serve Pepco’s area with its own high voltage transmission and generation capacity. As such, the merged utility will pose a formidable barrier to entry to both incumbents and new market participants that require interconnection in order to participate in wholesale electricity markets.
With regard to horizontal effects, the antitrust issue raised by AAI is whether Exelon’s affiliate BGE and Pepco are each other’s most obvious and formidable competitors—or potential competitors—for retail electric distribution services within a properly defined market.
With regard to possible pro-competitive effects, AAI argues that the proposed acquisition is unlikely to result in any significant efficiencies that would benefit electricity consumers or ameliorate concerns over likely anticompetitive effects. AAI finds no compelling arguments that the merger will result in enhanced economies of scale or scope with respect to its combination of electricity generation and distribution capabilities. Moreover, any scale economies associated with combining the two companies’ high voltage transmission capabilities are, arguably, likely to have already been exhausted and would, in any event, be exploited by operation of the integrated transmission system by PJM Interconnection, the regional transmission organization that coordinates the movement of wholesale electricity in all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia.
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AAI argues that the enhanced market power created by a possible merger has not been adequately addressed by any current federal or state regulatory body, and the implication is that decision making by the DC Public Service Commission will not improve that record of inadequate regulatory control. AAI argues that antitrust remedies have an important role to play, and that regulation alone is unlikely to effectively curtail a newly merged Exelon-Pepco’s significant ability to inhibit entry into relevant markets and to deter new entry from its rivals. (Obviously, approval of the merger by the DCPSC would indicate disagreement by the Commission concerning its ability to deal with market power issues.)
AAI’s view is that there should be important complementarity between antitrust and other types of regulation.
Note: Part of Public Citizen's submission to the PSC arguing for Public Citizen intervention is at http://www.dcpsc.org/edocket/docketsheets_pdf_FS.asp?caseno=FC1119&docketno=1217&flag=D&show_result=Y
The DCPSC decision denying intervention is at http://www.dcpsc.org/edocket/docketsheets_pdf_FS.asp?caseno=FC1119&docketno=1408&flag=C&show_result=Y
Posted by Don Allen Resnikoff
Local groups like are Public Citizen are dealing with the District of Columbia Exelon/PHI electric utility merger by moving to intervene (so far unsuccessfully) before the DC Public Service Commission as it reviews the merger. Public Citizen, which is unfriendly toward the merger, has hinted that it can appeal to a court if the PSC acts unfairly. But if a recent position paper by the American Antitrust Institute is correct that the merger violates antitrust law principles, that raises the question of whether Public Citizen (or some other non-government entity representing consumers) has another alternative: sue in court on antitrust theory.
An article written a few years ago by M. Sean Royall and Adam Di Vincenzo suggests that the answer may be yes. They explain that direct purchasers of a merging parties’ products and services are generally thought to suffer antitrust injury if a merger violates Section 7 of the Clayton Act, and so are entitled to sue.
Of course, special and more difficult standing requirements apply to non-profit entities, but those requirements may not be an insurmountable hurdle where a non-profit can allege damage to its mission. Some relevant local D.C. cases are D.C. Appleseed Ctr. for Law & Justice, Inc. v. D.C. Dep’t of Ins., 54 A.3d 1188 (D.C. 2012), and Equal Rights Center v. Properties Intern., No. 13-CV-999, 110 A.3d 599 (D.C. 2015)
Royall and DiVincenzo explain, however, that despite lower antitrust injury hurdles confronting customers, customer-driven merger lawsuits have been uncommon. Even customers that strongly oppose a merger may not be motivated to incur the costs of pursuing a private action. The authors’ focus is on individual plaintiffs rather than non-profit entities, but cost and complexity may be a deterrent relevant to both non-profit consumer groups as well as particular customers.
The Royall and DiVencenzo article is at http://www.gibsondunn.com/publications/Documents/WhenMergersBecomePrivateMatter-AntitrustPrimer-Royall-DiVincenzo0312.pdf
The American Antitrust Institute has argued that the proposed acquisition of Pepco and Pepco Holdings, Inc. by Exelon raises serious antitrust issues. AAI urged that the Antitrust Division of the US Department of Justice investigate and effectively address the antitrust issues. The same request would logically apply to antitrust enforcers at the state level, and to potential consumer plaintiffs.
Antitrust concerns were expressed in the AAI’s February 25, 2015 letter to the USDOJ regarding the proposed acquisition. See URL http://antitrustinstitute.org/sites/default/files/Exelon-Pepco_AAI%20letter_2-25-15.pdf
Some antitrust issues flagged by the AAI:
With regard to vertical effects, the antitrust issue raised by AAI is whether by combining the Exelon generation and transmission systems with Pepco’s retail distribution systems, the proposed acquisition will enhance the ability of the combined company to vertically foreclose rivals. AAI argues that unlike the current free-standing Pepco utility, which is without generation capacity, the combined company would have a powerful incentive to deny rivals in the market for high voltage transmission access to customers of its Pepco affiliate. That would be because of Exelon’s desire to serve Pepco’s area with its own high voltage transmission and generation capacity. As such, the merged utility will pose a formidable barrier to entry to both incumbents and new market participants that require interconnection in order to participate in wholesale electricity markets.
With regard to horizontal effects, the antitrust issue raised by AAI is whether Exelon’s affiliate BGE and Pepco are each other’s most obvious and formidable competitors—or potential competitors—for retail electric distribution services within a properly defined market.
With regard to possible pro-competitive effects, AAI argues that the proposed acquisition is unlikely to result in any significant efficiencies that would benefit electricity consumers or ameliorate concerns over likely anticompetitive effects. AAI finds no compelling arguments that the merger will result in enhanced economies of scale or scope with respect to its combination of electricity generation and distribution capabilities. Moreover, any scale economies associated with combining the two companies’ high voltage transmission capabilities are, arguably, likely to have already been exhausted and would, in any event, be exploited by operation of the integrated transmission system by PJM Interconnection, the regional transmission organization that coordinates the movement of wholesale electricity in all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia.
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AAI argues that the enhanced market power created by a possible merger has not been adequately addressed by any current federal or state regulatory body, and the implication is that decision making by the DC Public Service Commission will not improve that record of inadequate regulatory control. AAI argues that antitrust remedies have an important role to play, and that regulation alone is unlikely to effectively curtail a newly merged Exelon-Pepco’s significant ability to inhibit entry into relevant markets and to deter new entry from its rivals. (Obviously, approval of the merger by the DCPSC would indicate disagreement by the Commission concerning its ability to deal with market power issues.)
AAI’s view is that there should be important complementarity between antitrust and other types of regulation.
Note: Part of Public Citizen's submission to the PSC arguing for Public Citizen intervention is at http://www.dcpsc.org/edocket/docketsheets_pdf_FS.asp?caseno=FC1119&docketno=1217&flag=D&show_result=Y
The DCPSC decision denying intervention is at http://www.dcpsc.org/edocket/docketsheets_pdf_FS.asp?caseno=FC1119&docketno=1408&flag=C&show_result=Y
Posted by Don Allen Resnikoff
WSJ: State run guardian systems sometimes abuse rather than help the vulnerable
For decades, states have granted courts the power to appoint guardians or conservators for elderly or disabled people unable to tend to their basic needs. Most appointed guardians are family members, but judges can turn to a growing industry of professional, unrelated guardians.
The caretakers’ authority varies by case and jurisdiction, but often they are granted broad authority over a ward’s finances, medical care and living conditions. Unlike a power of attorney, which one person can grant to another and revoke at any time, guardianship is established by a judge and can only be revoked by the court.
But guardianship systems across the country are plagued by allegations of financial exploitation and abuse, despite waves of overhaul efforts. As a result, critics say, many elderly people with significant assets become ensnared in a system that seems mainly to succeed at generating billings. “These laws which were designed to protect the vulnerable are being used against them to exploit them,” says Dr. Sam Sugar, founder of Americans Against Abusive Probate Guardianship, an advocacy group.
Full article: http://www.wsj.com/articles/abuse-plagues-system-of-legal-guardians-for-adults-1446225524
For decades, states have granted courts the power to appoint guardians or conservators for elderly or disabled people unable to tend to their basic needs. Most appointed guardians are family members, but judges can turn to a growing industry of professional, unrelated guardians.
The caretakers’ authority varies by case and jurisdiction, but often they are granted broad authority over a ward’s finances, medical care and living conditions. Unlike a power of attorney, which one person can grant to another and revoke at any time, guardianship is established by a judge and can only be revoked by the court.
But guardianship systems across the country are plagued by allegations of financial exploitation and abuse, despite waves of overhaul efforts. As a result, critics say, many elderly people with significant assets become ensnared in a system that seems mainly to succeed at generating billings. “These laws which were designed to protect the vulnerable are being used against them to exploit them,” says Dr. Sam Sugar, founder of Americans Against Abusive Probate Guardianship, an advocacy group.
Full article: http://www.wsj.com/articles/abuse-plagues-system-of-legal-guardians-for-adults-1446225524
DCPSC rejects Public Citizen's request to intervene in PSC review of Exelon-PHI-Pepco merger.
Part of Public Citizen's submission to the PSC is at http://www.dcpsc.org/edocket/docketsheets_pdf_FS.asp?caseno=FC1119&docketno=1217&flag=D&show_result=Y
PC arguments include: The revised Exelon merger proposal is a new application giving rise to new rights to intervene; procedural fairness -- full and fair public scrutiny -- is legally required.
From the earlier filing: Public Citizen has shown ample cause to intervene. The Commission is permitting new proceedings on an application quite different from the original one; there is no longer adequate representation of Dishict consumers or the public interest in this case; and there is a severe risk that the settlement will not be subjected to full and fair scrutiny and that the public will lack adequate--or even legally required--opportunities to weigh in.
In its decision rejecting Public Citizen intervention, the DCPSC was unmoved by the argument that it is committing procedural error that could be addressed in judicial review:
[I]n its Reply, Public Ciuzen asserts that by bending the rules in favor of the Joint Applicants to allow the Settlement Agreemento be considered by reopening the Formal Case No. I I 19 record, but declining to bend the rules to permit Public Citizen's late intervention, the Commission is making errors of law that may warrant reversal by a reviewing court and that Public Ciuzen is seeking to intervene "to help the Commission craft an open, fair proceeding." However, contrary to Public Citizen's assertion, we have not acted in an arbitrary fashion and we have fully explained our rationale for making the discretionary decisions that Public Citizen now attacks.
The DCPSC decision is at http://www.dcpsc.org/edocket/docketsheets_pdf_FS.asp?caseno=FC1119&docketno=1408&flag=C&show_result=Y
Posted by Don Allen Resnikoff
Part of Public Citizen's submission to the PSC is at http://www.dcpsc.org/edocket/docketsheets_pdf_FS.asp?caseno=FC1119&docketno=1217&flag=D&show_result=Y
PC arguments include: The revised Exelon merger proposal is a new application giving rise to new rights to intervene; procedural fairness -- full and fair public scrutiny -- is legally required.
From the earlier filing: Public Citizen has shown ample cause to intervene. The Commission is permitting new proceedings on an application quite different from the original one; there is no longer adequate representation of Dishict consumers or the public interest in this case; and there is a severe risk that the settlement will not be subjected to full and fair scrutiny and that the public will lack adequate--or even legally required--opportunities to weigh in.
In its decision rejecting Public Citizen intervention, the DCPSC was unmoved by the argument that it is committing procedural error that could be addressed in judicial review:
[I]n its Reply, Public Ciuzen asserts that by bending the rules in favor of the Joint Applicants to allow the Settlement Agreemento be considered by reopening the Formal Case No. I I 19 record, but declining to bend the rules to permit Public Citizen's late intervention, the Commission is making errors of law that may warrant reversal by a reviewing court and that Public Ciuzen is seeking to intervene "to help the Commission craft an open, fair proceeding." However, contrary to Public Citizen's assertion, we have not acted in an arbitrary fashion and we have fully explained our rationale for making the discretionary decisions that Public Citizen now attacks.
The DCPSC decision is at http://www.dcpsc.org/edocket/docketsheets_pdf_FS.asp?caseno=FC1119&docketno=1408&flag=C&show_result=Y
Posted by Don Allen Resnikoff
Washington Post editorial on politics and the Exelon- PHI electric utility merger deal
THE POLITICAL action committee formed to advance the agenda of Mayor Muriel E. Bowser (D) has been disbanded, but it continues to do damage. On Thursday we learned that the head of the now-defunct FreshPAC had beenhired to lobby the government by a power company seeking approval for a controversial merger. The revelation raises new questions about the mayor’s handling of the matter. Unless Ms. Bowser wants her otherwise promising start in office tarnished, she should provide information that shows exactly how decisions were reached and make clear she understands why the arrangement was problematic.
Earle “Chico” Horton III, who chaired FreshPAC, was hired by Exelon in late September to lobby D.C. leaders for approval of a $6.8 billion merger with Pepco, WAMU’s Patrick Madden reported.
The full editorial: https://www.washingtonpost.com/opinions/freshpacs-chairman-lobbying-for-exelon-was-legal-but-unseemly/2015/12/17/b403d4de-a508-11e5-b53d-972e2751f433_story.html
THE POLITICAL action committee formed to advance the agenda of Mayor Muriel E. Bowser (D) has been disbanded, but it continues to do damage. On Thursday we learned that the head of the now-defunct FreshPAC had beenhired to lobby the government by a power company seeking approval for a controversial merger. The revelation raises new questions about the mayor’s handling of the matter. Unless Ms. Bowser wants her otherwise promising start in office tarnished, she should provide information that shows exactly how decisions were reached and make clear she understands why the arrangement was problematic.
Earle “Chico” Horton III, who chaired FreshPAC, was hired by Exelon in late September to lobby D.C. leaders for approval of a $6.8 billion merger with Pepco, WAMU’s Patrick Madden reported.
The full editorial: https://www.washingtonpost.com/opinions/freshpacs-chairman-lobbying-for-exelon-was-legal-but-unseemly/2015/12/17/b403d4de-a508-11e5-b53d-972e2751f433_story.html
Washington Post: GSA urges regulators to reject current Pepco-Exelon merger deal
The U.S. agency that pays the government’s electric bills and is the largest consumer of energy in the nation’s capital has urged D.C. regulators to reject a multibillion-dollar utility industry merger unless it provides a better deal for U.S. taxpayers, according to a new filing in the case.
Attorneys for the General Services Administration wrote that the proposed merger of D.C.-based Pepco and Chicago-based nuclear energy giant Exelon fails a key test: to treat large energy users — like the federal government — fairly. The deal subsidizes the rates of residential customers at the expense of federal taxpayers and, therefore, “should be found not to be in the public interest” unless changes are made, the agency said in the filings reviewed by The Washington Post.
WP article: https://www.washingtonpost.com/local/dc-politics/gsa-urges-regulators-to-reject-current-pepco-exelon-merger-deal/2015/12/17/bea86cfa-a4f0-11e5-b53d-972e2751f433_story.html
The U.S. agency that pays the government’s electric bills and is the largest consumer of energy in the nation’s capital has urged D.C. regulators to reject a multibillion-dollar utility industry merger unless it provides a better deal for U.S. taxpayers, according to a new filing in the case.
Attorneys for the General Services Administration wrote that the proposed merger of D.C.-based Pepco and Chicago-based nuclear energy giant Exelon fails a key test: to treat large energy users — like the federal government — fairly. The deal subsidizes the rates of residential customers at the expense of federal taxpayers and, therefore, “should be found not to be in the public interest” unless changes are made, the agency said in the filings reviewed by The Washington Post.
WP article: https://www.washingtonpost.com/local/dc-politics/gsa-urges-regulators-to-reject-current-pepco-exelon-merger-deal/2015/12/17/bea86cfa-a4f0-11e5-b53d-972e2751f433_story.html
From Baker Hostetler: FTC Brushes Aside AG, Regulators to Attack Local Hospital Merger
By Carl Hittinger and Jeffry Duffy
The Federal Trade Commission (FTC) continued its relentless focus on combinations in the healthcare industry last month when it filed an administrative complaint challenging a merger of two West Virginia hospitals, In the Matter of Cabell Huntington Hospital (FTC Docket No. 9366). Given the FTC’s recent successes in thwarting other healthcare mergers it saw as anticompetitive, it is not surprising that the agency is taking on this particular fight. What is somewhat surprising, though, is that the FTC is doing so against the wishes of West Virginia’s antitrust enforcer, Attorney General Patrick Morrisey. As a close reading of the complaint reveals, the FTC not only criticizes the hospital merger itself but essentially indicts West Virginia’s regulation of healthcare facilities as inherently anticompetitive. As such, it raises serious questions of comity and federalism, as well as the future of the much-touted federal and state antitrust partnership, which will merit careful consideration as the case progresses.
The full post is at: http://www.antitrustadvocate.com/2015/12/17/ftc-brushes-aside-ag-regulators-to-attack-local-hospital-merger/?utm_source=BakerHostetler+-+Antitrust+Advocate&utm_medium=email&utm_campaign=6d8e423a10-RSS_EMAIL_CAMPAIGN&utm_term=0_a95f379648-6d8e423a10-70980973
By Carl Hittinger and Jeffry Duffy
The Federal Trade Commission (FTC) continued its relentless focus on combinations in the healthcare industry last month when it filed an administrative complaint challenging a merger of two West Virginia hospitals, In the Matter of Cabell Huntington Hospital (FTC Docket No. 9366). Given the FTC’s recent successes in thwarting other healthcare mergers it saw as anticompetitive, it is not surprising that the agency is taking on this particular fight. What is somewhat surprising, though, is that the FTC is doing so against the wishes of West Virginia’s antitrust enforcer, Attorney General Patrick Morrisey. As a close reading of the complaint reveals, the FTC not only criticizes the hospital merger itself but essentially indicts West Virginia’s regulation of healthcare facilities as inherently anticompetitive. As such, it raises serious questions of comity and federalism, as well as the future of the much-touted federal and state antitrust partnership, which will merit careful consideration as the case progresses.
The full post is at: http://www.antitrustadvocate.com/2015/12/17/ftc-brushes-aside-ag-regulators-to-attack-local-hospital-merger/?utm_source=BakerHostetler+-+Antitrust+Advocate&utm_medium=email&utm_campaign=6d8e423a10-RSS_EMAIL_CAMPAIGN&utm_term=0_a95f379648-6d8e423a10-70980973
Maryland probes buying of settlement payouts by ‘unregistered shell’ firms
Companies that purchase settlement payouts belonging to some of the state’s more vulnerable residents are under scrutiny by the Maryland attorney general’s office for using what it calls “unregistered shell companies” in these deals — a violation of state corporate law.
In papers filed in court in the past month, the office has contested six proposed transactions that unregistered corporations filed in state court to buy payments from what are known as structured settlements, spurring the withdrawal of five of the petitions.
Full article: https://www.washingtonpost.com/local/social-issues/maryland-probes-buying-of-settlement-payouts-by-unregistered-shell-firms/2015/12/18/e0602792-a299-11e5-9c4e-be37f66848bb_story.html?hpid=hp_local-news_leadshell-837p%3Ahomepage%2Fstory
Companies that purchase settlement payouts belonging to some of the state’s more vulnerable residents are under scrutiny by the Maryland attorney general’s office for using what it calls “unregistered shell companies” in these deals — a violation of state corporate law.
In papers filed in court in the past month, the office has contested six proposed transactions that unregistered corporations filed in state court to buy payments from what are known as structured settlements, spurring the withdrawal of five of the petitions.
Full article: https://www.washingtonpost.com/local/social-issues/maryland-probes-buying-of-settlement-payouts-by-unregistered-shell-firms/2015/12/18/e0602792-a299-11e5-9c4e-be37f66848bb_story.html?hpid=hp_local-news_leadshell-837p%3Ahomepage%2Fstory
From DMN: Cox Communications has lost a large copyright infringement lawsuit
The Virginia-based access provider has been embroiled in massive litigation over its customers’ illegal downloading for the past year, with arguments see-sawing over whether Cox should be liable. Cox, like many other ISPs, has argued that it merely offers a passageway to the internet, good or bad, and its compliance with the Digital Millennium Copyright Act offers it ‘safe harbor’ from illegal downloading and sharing.
Ultimately, the court found the situation to be more complicated than that, with Cox now ruled guilty of both contributory and willful contributory copyright infringement by a federal jury. The jury award is $25 million, though that probably represents a small prelude to damages that could ultimately push into the hundreds of millions.
Cox is preparing its response, including an outright appeal. “We are unhappy with the decision, will review the ruling in detail and are considering our options, including appeal,” a Cox spokesperson tersely relayed.
Full article: http://www.digitalmusicnews.com/2015/12/17/breaking-cox-communications-loses-in-jury-trial-willful-infringement-found/
The Virginia-based access provider has been embroiled in massive litigation over its customers’ illegal downloading for the past year, with arguments see-sawing over whether Cox should be liable. Cox, like many other ISPs, has argued that it merely offers a passageway to the internet, good or bad, and its compliance with the Digital Millennium Copyright Act offers it ‘safe harbor’ from illegal downloading and sharing.
Ultimately, the court found the situation to be more complicated than that, with Cox now ruled guilty of both contributory and willful contributory copyright infringement by a federal jury. The jury award is $25 million, though that probably represents a small prelude to damages that could ultimately push into the hundreds of millions.
Cox is preparing its response, including an outright appeal. “We are unhappy with the decision, will review the ruling in detail and are considering our options, including appeal,” a Cox spokesperson tersely relayed.
Full article: http://www.digitalmusicnews.com/2015/12/17/breaking-cox-communications-loses-in-jury-trial-willful-infringement-found/
From Law360: O'Bannon Student-Athlete Pay Case Denied Rehearing By 9th Circ.
The Ninth Circuit refused to rehear its earlier decision that student athletes don't have to be paid beyond the cost of attending college.
The Ninth Circuit refused to rehear its earlier decision that student athletes don't have to be paid beyond the cost of attending college.
From AntitrustConnect Blog: Horizontal agreement found lacking In re Musical Instruments and Equipment Antitrust Litigation
In In re Musical Instruments and Equipment Antitrust Litigation, (798 F.3d 1186), the Ninth Circuit affirmed a dismissal of a putative class action against several guitar manufacturers, the largest guitar retailer, and a trade association. The complaint alleged a hub-and-spoke conspiracy orchestrated (pun intended) by the retailer, Guitar Center, and aided by speeches made and meetings organized by executives at the National Association of Music Merchants (NAMM). The alleged conspiracy was to ensure that all the manufacturers adopted and maintained a minimum advertised price (MAP) policy.
The court focused on the “rim” of the alleged “hub-and-spoke” conspiracy: the alleged horizontal agreement among the guitar manufacturers. Plaintiffs used the usual method of showing a horizontal agreement, alleging parallel action and “plus factors” to explain why the action was more likely the result of an agreement than independent decisions. While the court was skeptical that the complaint contained proper allegations of parallel conduct—all the manufacturers did adopt MAP policies, but only over the course of several years—it focused more on the alleged “plus factors.”
First, plaintiffs alleged that each manufacturer’s adoption of a MAP was against its self-interest unless it knew the others would adopt a similar policy. The court accepted that possibility but found it contradicted by other parts of the complaint that alleged “pressure by Guitar Center” to adopt a MAP policy and each manufacturer’s acquiescence “in exchange for Guitar Center’s agreement to purchase large volumes.” Such action made it more likely that each manufacturer adopted its MAP policy to please a key retailer, not as part of an agreement with its competitors.
Second, plaintiffs pointed to Guitar Center’s and NAMM’s public advocacy for MAP policies at NAMM meetings over the years. The court found that “mere participation in trade-organization meetings where information is exchanged and strategies are advocated does not suggest an illegal agreement,” as such activity is “standard fare for trade associations.” Because the court could not find a properly-pled agreement among the guitar manufacturers, it affirmed dismissal of the complaint.
Aton Arbisser, Kaye Scholer LLP, Reacts To Supreme Court's DirecTV Arbitration Decision (from Law 360)
"Today’s decision underscores that the Supreme Court continues on its strong, pro-arbitration path regardless of the skepticism of state courts. The majority recognized, however, that state courts can invalidate class action waivers if they can find a ground applicable to contracts generally. For businesses, the takeaway is simple. Use class action waivers in your arbitration clauses and avoid raising red flags."
"Today’s decision underscores that the Supreme Court continues on its strong, pro-arbitration path regardless of the skepticism of state courts. The majority recognized, however, that state courts can invalidate class action waivers if they can find a ground applicable to contracts generally. For businesses, the takeaway is simple. Use class action waivers in your arbitration clauses and avoid raising red flags."
Maryland Panel To Discuss Issues On Daily Fantasy Sports
A Maryland legislative panel is scheduled to discuss concerns about daily fantasy sports. The Joint Committee on Gaming Oversight is scheduled to meet in Annapolis Monday, December 14.
In 2012, Maryland enacted a law legalizing fantasy sports betting. But it was largely tailored to apply to small social groups that play all season long, not the new industry that regulators in other states have been grappling with in recent months.
http://baltimore.cbslocal.com/2015/12/13/maryland-panel-to-discuss-issues-on-daily-fantasy-sports
A Maryland legislative panel is scheduled to discuss concerns about daily fantasy sports. The Joint Committee on Gaming Oversight is scheduled to meet in Annapolis Monday, December 14.
In 2012, Maryland enacted a law legalizing fantasy sports betting. But it was largely tailored to apply to small social groups that play all season long, not the new industry that regulators in other states have been grappling with in recent months.
http://baltimore.cbslocal.com/2015/12/13/maryland-panel-to-discuss-issues-on-daily-fantasy-sports
From Public Citizen: Cert. grant about use of state letterhead by private debt collector
The Supreme Court has granted cert. in Sheriff v. Gillie, an FDCPA case out of the Sixth Circuit. As described by the court of appeals:
Plaintiffs brought this action under the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq., alleging that Defendants utilized a deceptive, misleading, or false representation or means in attempting to collect consumer debts Plaintiffs owed to entities owned and operated by the State of Ohio. The Attorney General intervened on behalf of Defendants, asserting that the alleged misrepresentation—consisting of sending debt-collection notices on the Attorney General’s letterhead—was not a misrepresentation at all and was, in fact, authorized by the Attorney General.
Here’s the Sixth Circuit’s summary of its decision:
Because a jury could reasonably find that the use of the Ohio Attorney General’s letterhead by the “special counsel” acting as independent debt collectors, in the manner and under the circumstances present here, to result in deceptive, misleading and false representations in violation of the Fair Debt Collection Practices Act, we hereby VACATE the summary judgment in favor of Defendants and REMAND this case to the district court with instructions for the district court to submit to the jury the question as to whether these letters were actually confusing to the least sophisticated consumer.
The questions presented in the petition are:
Click title above for Public Citizen's publication
The Supreme Court has granted cert. in Sheriff v. Gillie, an FDCPA case out of the Sixth Circuit. As described by the court of appeals:
Plaintiffs brought this action under the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq., alleging that Defendants utilized a deceptive, misleading, or false representation or means in attempting to collect consumer debts Plaintiffs owed to entities owned and operated by the State of Ohio. The Attorney General intervened on behalf of Defendants, asserting that the alleged misrepresentation—consisting of sending debt-collection notices on the Attorney General’s letterhead—was not a misrepresentation at all and was, in fact, authorized by the Attorney General.
Here’s the Sixth Circuit’s summary of its decision:
Because a jury could reasonably find that the use of the Ohio Attorney General’s letterhead by the “special counsel” acting as independent debt collectors, in the manner and under the circumstances present here, to result in deceptive, misleading and false representations in violation of the Fair Debt Collection Practices Act, we hereby VACATE the summary judgment in favor of Defendants and REMAND this case to the district court with instructions for the district court to submit to the jury the question as to whether these letters were actually confusing to the least sophisticated consumer.
The questions presented in the petition are:
- Are special counsel—lawyers appointed by the Attorney General to undertake his duty to collect debts owed to the State—state “officers” within the meaning of 15 U.S.C. § 1692a(6)(C)?
- Is it materially misleading under 15 U.S.C. § 1692e for special counsel to use Attorney General letterhead to convey that they are collecting debts owed to the State on behalf of the Attorney General?
Click title above for Public Citizen's publication
From Washington Legal Foundation: Federal Preemption vs. State Authority over Municipal Broadband
Click title for WLF site
The article (click PDF below) Features
Jay B. Stephens │ Chairman, WLF Legal Policy Advisory Board
The Hon. Ajit Pai │ Federal Communications Commission
David Parkhurst │ National Governors Association
Two stakeholders in the legal and policy debate over government ownership and regulation of broadband networks discuss the impact of a federal agency’s preemption order as well as the arguments North Carolina and Tennessee will make before the U.S. Court of Appeals for the Sixth Circuit in the constitutional challenge they filed to overturn the order…PDF
Click title for WLF site
The article (click PDF below) Features
Jay B. Stephens │ Chairman, WLF Legal Policy Advisory Board
The Hon. Ajit Pai │ Federal Communications Commission
David Parkhurst │ National Governors Association
Two stakeholders in the legal and policy debate over government ownership and regulation of broadband networks discuss the impact of a federal agency’s preemption order as well as the arguments North Carolina and Tennessee will make before the U.S. Court of Appeals for the Sixth Circuit in the constitutional challenge they filed to overturn the order…PDF
From Center for Food Safety: Congress could block labeling of genetically engineered food
CFS worked hard to pass GE food labeling laws in Vermont, Connecticut and Maine—and to push for mandatory federal labeling--but now Congress is poised to keep GE labeling from ever happening.
Several months ago, Members of the House of Representatives voted for a controversial bill that would prohibit any state or federal labeling of genetically engineered (GE) foods, even in states which already have labeling laws on the books – hence the bill’s nickname: the “Deny Americans the Right to Know Act” or “DARK Act”.
Right now, Senators are discussing overturning state labeling laws and instead pushing high-tech gimmicks like “QR Codes” as a replacement for the clear labeling of GE foods that these other countries have – and they’re even talking about sneaking QR codes or other means of stopping state labeling laws into next week's must-pass federal spending bill!
See http://salsa3.salsalabs.com/o/1881/p/dia/action3/common/public/?action_KEY=17886
CFS worked hard to pass GE food labeling laws in Vermont, Connecticut and Maine—and to push for mandatory federal labeling--but now Congress is poised to keep GE labeling from ever happening.
Several months ago, Members of the House of Representatives voted for a controversial bill that would prohibit any state or federal labeling of genetically engineered (GE) foods, even in states which already have labeling laws on the books – hence the bill’s nickname: the “Deny Americans the Right to Know Act” or “DARK Act”.
Right now, Senators are discussing overturning state labeling laws and instead pushing high-tech gimmicks like “QR Codes” as a replacement for the clear labeling of GE foods that these other countries have – and they’re even talking about sneaking QR codes or other means of stopping state labeling laws into next week's must-pass federal spending bill!
See http://salsa3.salsalabs.com/o/1881/p/dia/action3/common/public/?action_KEY=17886
U.S. Treasury auction-rigging lawsuits
Twenty-five civil securities and antitrust class action cases alleging that big banks are rigging U.S. Treasury auctions will be heard by a federal judge in New York's Southern District, according to a court filing on Tuesday.
The pending class action against banks and brokerages that act as primary dealers, such as Goldman Sachs, Barclays and Deutsche Bank comes as the U.S. government is conducting a separate early-stage probe into the same activity, according to several people familiar with the matter.
The U.S. Justice Department and the Commodity Futures Trading Commission both sent banks requests for documents in the late summer, one of those people told Reuters.
The New York Department of Financial Services has sent similar inquiries concerning the Treasury auction process to the banks it oversees, two other people told Reuters.
See http://www.reuters.com/article/banks-treasuries-lawsuit-idUSL1N13Y00Y20151209#QHkGrb4SqVVf7UhG.97
Twenty-five civil securities and antitrust class action cases alleging that big banks are rigging U.S. Treasury auctions will be heard by a federal judge in New York's Southern District, according to a court filing on Tuesday.
The pending class action against banks and brokerages that act as primary dealers, such as Goldman Sachs, Barclays and Deutsche Bank comes as the U.S. government is conducting a separate early-stage probe into the same activity, according to several people familiar with the matter.
The U.S. Justice Department and the Commodity Futures Trading Commission both sent banks requests for documents in the late summer, one of those people told Reuters.
The New York Department of Financial Services has sent similar inquiries concerning the Treasury auction process to the banks it oversees, two other people told Reuters.
See http://www.reuters.com/article/banks-treasuries-lawsuit-idUSL1N13Y00Y20151209#QHkGrb4SqVVf7UhG.97
From Consumers Union: Did Your Bank Send You a Letter Letting You Opt Out of Arbitration?
In late August, Citibank began sending letters to its credit card and bank account customers allowing them to opt out of forced arbitration. Forced arbitration clauses, also called mandatory or predispute arbitration clauses, are usually buried in the fine print of lengthy contract agreements and limit your ability to take legal action against a company if you have a disagreement with it in the future.
The move comes just a few months after the Consumer Financial Protection Bureau released a lengthy report on the use of forced arbitration clauses in financial services agreements, and announced it intended to pass rules limiting the use of these clauses, which could happen as early as next year.
Consumers Union, the advocacy arm of Consumer Reports, thinks lawmakers should be fighting against forced arbitration, rather than stalling the CPFB. "Congress should not block the CFPB as it works to rein in forced arbitration abuses in the area of consumer financial services," says George Slover, CU's senior policy counsel. "An opt-out letter is not going to be enough to fix the forced arbitration problem. And ultimately Congress needs to pass legislation to protect consumers against this unfair practice."
Full article:http://finance.yahoo.com/news/did-bank-send-letter-letting-110004294.ht
In late August, Citibank began sending letters to its credit card and bank account customers allowing them to opt out of forced arbitration. Forced arbitration clauses, also called mandatory or predispute arbitration clauses, are usually buried in the fine print of lengthy contract agreements and limit your ability to take legal action against a company if you have a disagreement with it in the future.
The move comes just a few months after the Consumer Financial Protection Bureau released a lengthy report on the use of forced arbitration clauses in financial services agreements, and announced it intended to pass rules limiting the use of these clauses, which could happen as early as next year.
Consumers Union, the advocacy arm of Consumer Reports, thinks lawmakers should be fighting against forced arbitration, rather than stalling the CPFB. "Congress should not block the CFPB as it works to rein in forced arbitration abuses in the area of consumer financial services," says George Slover, CU's senior policy counsel. "An opt-out letter is not going to be enough to fix the forced arbitration problem. And ultimately Congress needs to pass legislation to protect consumers against this unfair practice."
Full article:http://finance.yahoo.com/news/did-bank-send-letter-letting-110004294.ht
Improving and Expanding Health Insurance Coverage through state Flexibility
In a report authored by Daschle and Gingrich (click title for copy) the authors discuss the importance of: (1) expanding coverage to the uninsured; (2) reducing health care costs; and (3) improving the quality of health care delivery. They call on federal and state policymakers to identify opportunities to maintain and expand coverage, streamline the process, and provide increased choice to families and individuals through increased state flexibility.
Related recommendations are at http://bipartisanpolicy.org/library/health-insurance-coverage-state-flexibility/?_cldee=ZG9ucmVzbmlrb2ZmQGRvbnJlc25pa29mZmxhdy5jb20%3d&utm_source=ClickDimensions&utm_medium=email&utm_campaign=Press%20Update%20%7C%20Health%20Project
In a report authored by Daschle and Gingrich (click title for copy) the authors discuss the importance of: (1) expanding coverage to the uninsured; (2) reducing health care costs; and (3) improving the quality of health care delivery. They call on federal and state policymakers to identify opportunities to maintain and expand coverage, streamline the process, and provide increased choice to families and individuals through increased state flexibility.
Related recommendations are at http://bipartisanpolicy.org/library/health-insurance-coverage-state-flexibility/?_cldee=ZG9ucmVzbmlrb2ZmQGRvbnJlc25pa29mZmxhdy5jb20%3d&utm_source=ClickDimensions&utm_medium=email&utm_campaign=Press%20Update%20%7C%20Health%20Project
NY Attorney General Schneiderman Champions Climate With Investigation of ExxonMobil
From NRDC blog: NY AG Schneiderman has launched an official investigation into whether ExxonMobil repeatedly and deliberately mislead investors by downplaying the risks the company faced as a result of climate change.
Click title above for the NRDC blog
ExxonMobil fights back, using charges of "journalistic misconduct." Click below to see ThinkProgress discussion
ExxonMobil Accuses Columbia Of Journalistic Misconduct In Light Of Climate Reports
From NRDC blog: NY AG Schneiderman has launched an official investigation into whether ExxonMobil repeatedly and deliberately mislead investors by downplaying the risks the company faced as a result of climate change.
Click title above for the NRDC blog
ExxonMobil fights back, using charges of "journalistic misconduct." Click below to see ThinkProgress discussion
ExxonMobil Accuses Columbia Of Journalistic Misconduct In Light Of Climate Reports
Public Citizen files to intervene in DCPSC review of Exelon-PHI-Pepco merger.
See Public Citizen's most recent submission to the PSC at http://www.dcpsc.org/edocket/docketsheets_pdf_FS.asp?caseno=FC1119&docketno=1217&flag=D&show_result=Y
Arguments include: The revised Exelon merger proposal is a new application giving rise to new rights to intervene; procedural fairness -- full and fair public scrutiny -- is legally required.
From the filing: Public Citizen has shown ample cause to intervene. The Commission is permitting new proceedings on an application quite different from the original one; there is no longer adequate representation of Dishict consumers or the public interest in this case; and there is a severe risk that the settlement will not be subjected to full and fair scrutiny and that the public will lack adequate--or even legally required--opportunities to weigh in.
Posted by Don Allen Resnikoff
See Public Citizen's most recent submission to the PSC at http://www.dcpsc.org/edocket/docketsheets_pdf_FS.asp?caseno=FC1119&docketno=1217&flag=D&show_result=Y
Arguments include: The revised Exelon merger proposal is a new application giving rise to new rights to intervene; procedural fairness -- full and fair public scrutiny -- is legally required.
From the filing: Public Citizen has shown ample cause to intervene. The Commission is permitting new proceedings on an application quite different from the original one; there is no longer adequate representation of Dishict consumers or the public interest in this case; and there is a severe risk that the settlement will not be subjected to full and fair scrutiny and that the public will lack adequate--or even legally required--opportunities to weigh in.
Posted by Don Allen Resnikoff
California Supreme Court: State-law suit alleging food is mislabled as "organic" is not federally preempted
The decision in Quesada v. Herb Thyme Farms is here.
The decision in Quesada v. Herb Thyme Farms is here.
Some recent multi-state AG actions
November 16 – For-Profit Higher Education Company Must Change Practices, Forgive Loans.
A global settlement was reached with Education Management Corporation (EDMC) to resolve a whistleblower lawsuit alleging the company violated federal and state law by submitting fraudulent claims. Nationwide, the settlement requires EDMC to forgive $102.8 million in outstanding loan debt held by more than 80,000 former students. EDMC, a for-profit education company, based in Pittsburgh, Pennsylvania, operates 110 schools in 32 states and Canada through four education systems. After receiving numerous complaints from current and former EDMC students, 39 state attorneys general plus the District of Columbia, initiated a multi-state investigation in January of last year. Attorneys and investigators reviewed allegations that EDMC used deceptive and high-pressure sales tactics, made false claims regarding program accreditation, misrepresented job placement data to students and prospective 9 students, and maintained an unfair refund policy. See http://www.ago.wv.gov/pressroom/2015/Pages/Attorney-General-Morrisey-Reaches-Multistate-Agreement-with-EDMC-to-Change-Practices,-Forgive-Loans.aspx
November 13 – Connecticut, FTC and Pennsylvania joined in Enforcement Action against Alleged Tech Support Scam.
A federal court has granted a request to shut down a tech support scam operating out of Essex, Conn., and two locations in Pennsylvania that allegedly scammed consumers out of more than $17 million by pretending to represent Microsoft, Apple and other major tech companies. Connecticut, the Federal Trade Commission (FTC), and Pennsylvania filed a joint complaint alleging that the defendants used Internet advertisements and popups that appeared to be from well-known technology companies to lure consumers into calling them. See https://www.attorneygeneral.gov/Media_and_Resources/Press_Releases/Press_Release/?pid=2221
November 9 – National Settlement with AstraZeneca Pharmaceuticals, LP and Cephalon, Inc. to Resolve Overcharging Allegations.
A federal-state settlement with AstraZeneca Pharmaceuticals, LP and Cephalon, Inc., has been reached to resolve allegations that the companies inappropriately overcharged state Medicaid programs for drugs. AstraZeneca, a London and Delaware-based pharmaceutical manufacturer, has paid the states and the federal government $46.5 million to resolve allegations against the company. Cephalon, a Pennsylvania-based subsidiary of Teva Pharmaceuticals Industries, Ltd., has paid the states and the federal government $7.5 million to settle similar allegations. See http://www.ct.gov/ag/cwp/view.asp?Q=573310&A=2341
November 16 – For-Profit Higher Education Company Must Change Practices, Forgive Loans.
A global settlement was reached with Education Management Corporation (EDMC) to resolve a whistleblower lawsuit alleging the company violated federal and state law by submitting fraudulent claims. Nationwide, the settlement requires EDMC to forgive $102.8 million in outstanding loan debt held by more than 80,000 former students. EDMC, a for-profit education company, based in Pittsburgh, Pennsylvania, operates 110 schools in 32 states and Canada through four education systems. After receiving numerous complaints from current and former EDMC students, 39 state attorneys general plus the District of Columbia, initiated a multi-state investigation in January of last year. Attorneys and investigators reviewed allegations that EDMC used deceptive and high-pressure sales tactics, made false claims regarding program accreditation, misrepresented job placement data to students and prospective 9 students, and maintained an unfair refund policy. See http://www.ago.wv.gov/pressroom/2015/Pages/Attorney-General-Morrisey-Reaches-Multistate-Agreement-with-EDMC-to-Change-Practices,-Forgive-Loans.aspx
November 13 – Connecticut, FTC and Pennsylvania joined in Enforcement Action against Alleged Tech Support Scam.
A federal court has granted a request to shut down a tech support scam operating out of Essex, Conn., and two locations in Pennsylvania that allegedly scammed consumers out of more than $17 million by pretending to represent Microsoft, Apple and other major tech companies. Connecticut, the Federal Trade Commission (FTC), and Pennsylvania filed a joint complaint alleging that the defendants used Internet advertisements and popups that appeared to be from well-known technology companies to lure consumers into calling them. See https://www.attorneygeneral.gov/Media_and_Resources/Press_Releases/Press_Release/?pid=2221
November 9 – National Settlement with AstraZeneca Pharmaceuticals, LP and Cephalon, Inc. to Resolve Overcharging Allegations.
A federal-state settlement with AstraZeneca Pharmaceuticals, LP and Cephalon, Inc., has been reached to resolve allegations that the companies inappropriately overcharged state Medicaid programs for drugs. AstraZeneca, a London and Delaware-based pharmaceutical manufacturer, has paid the states and the federal government $46.5 million to resolve allegations against the company. Cephalon, a Pennsylvania-based subsidiary of Teva Pharmaceuticals Industries, Ltd., has paid the states and the federal government $7.5 million to settle similar allegations. See http://www.ct.gov/ag/cwp/view.asp?Q=573310&A=2341
From Jones Day: Is USDOJ antitrust enforcement about to get tougher?
What Does the Yates Memo Mean for Antitrust Cases?
MELISSA R. GINSBERG | DEIRDRE A. McEVOY
November 24, 2015
http://www.antitrustupdateblog.com/blog/what-does-the-yates-memo-mean-for-antitrust-cases/Just over two months ago, the United States Department of Justice made waves when a memorandum from Deputy Attorney General Sally Quillian Yates (the “Yates Memo”) announced an increased focus on individual accountability to combat corporate misconduct. The Yates Memo explains DOJ’s view that individual accountability is important because it deters future illegal activity, incentivizes changes in corporate behavior, ensures the proper parties are held responsible for their actions, and promotes the public’s confidence in the justice system.
What Does the Yates Memo Mean for Antitrust Cases?
MELISSA R. GINSBERG | DEIRDRE A. McEVOY
November 24, 2015
http://www.antitrustupdateblog.com/blog/what-does-the-yates-memo-mean-for-antitrust-cases/Just over two months ago, the United States Department of Justice made waves when a memorandum from Deputy Attorney General Sally Quillian Yates (the “Yates Memo”) announced an increased focus on individual accountability to combat corporate misconduct. The Yates Memo explains DOJ’s view that individual accountability is important because it deters future illegal activity, incentivizes changes in corporate behavior, ensures the proper parties are held responsible for their actions, and promotes the public’s confidence in the justice system.
US: Big banks accused of rate swap collusion
A class action lawsuit, filed recently, accuses 10 of Wall Street’s biggest banks and two trading platforms of conspiring to limit competition in the US$320trn market for interest rate swaps.
The class action lawsuit, filed in US District Court in Manhattan, accuses Goldman Sachs, Bank of America Merrill Lynch, JP Morgan Chase, Citigroup, Credit Suisse, Barclays, BNP Paribas, UBS, Deutsche Bank, and the RBS of colluding to prevent the trading of interest rate swaps on electronic exchanges, like those on which stocks are traded.
As a result, the lawsuit alleges, banks have successfully prevented new competition from non banks in the lucrative market for dealing interest rate swaps, the world’s most commonly traded derivative.
The banks “have been able to extract billions of dollars in monopoly rents, year after year, from the class members in this case,” the lawsuit alleges.
The suit was brought by The Public School Teachers’ Pension and Retirement Fund of Chicago, which purchased interest rate swaps from multiple banks to help the hedge against interest rate risk. The plaintiffs are represented by the law firm of Quinn, Emanuel, Urquhart, & Sullivan, which has taken the lead in a string of antitrust suits against banks.
Full article: https://www.competitionpolicyinternational.com/us-big-banks-accused-of-rate-swap-collusion
A class action lawsuit, filed recently, accuses 10 of Wall Street’s biggest banks and two trading platforms of conspiring to limit competition in the US$320trn market for interest rate swaps.
The class action lawsuit, filed in US District Court in Manhattan, accuses Goldman Sachs, Bank of America Merrill Lynch, JP Morgan Chase, Citigroup, Credit Suisse, Barclays, BNP Paribas, UBS, Deutsche Bank, and the RBS of colluding to prevent the trading of interest rate swaps on electronic exchanges, like those on which stocks are traded.
As a result, the lawsuit alleges, banks have successfully prevented new competition from non banks in the lucrative market for dealing interest rate swaps, the world’s most commonly traded derivative.
The banks “have been able to extract billions of dollars in monopoly rents, year after year, from the class members in this case,” the lawsuit alleges.
The suit was brought by The Public School Teachers’ Pension and Retirement Fund of Chicago, which purchased interest rate swaps from multiple banks to help the hedge against interest rate risk. The plaintiffs are represented by the law firm of Quinn, Emanuel, Urquhart, & Sullivan, which has taken the lead in a string of antitrust suits against banks.
Full article: https://www.competitionpolicyinternational.com/us-big-banks-accused-of-rate-swap-collusion
Challenging high pharma prices by challenging pharma patents
-- from the New York Times
J. Kyle Bass made a fortune in the financial crisis when his hedge fund, Hayman Capital Management, bet big against subprime mortgages. Now Mr. Bass is wagering against pharmaceutical companies that he says exploit the patent system, keeping drug prices — and their profits — in the stratosphere.
He has a formidable colleague in the effort: Erich Spangenberg, a man who became reviled in Silicon Valley for bringing lawsuits against technology companies that he contended had infringed on a patent.
Through the Coalition for Affordable Drugs, a company they formed this year, Mr. Bass and Mr. Spangenberg identify pharmaceutical patents that they consider weak or abusive. Then they request that a unit of the United States Patent and Trademark Office review the legitimacy of the patents.
By mid-November, the firm had filed 33 requests for patent reviews, targeting 13 drugs from a dozen companies.
URL:http://www.nytimes.com/2015/11/29/business/working-to-lower-drug-costs-by-challenging-questionable-patents.html?ref=business&_r=0
-- from the New York Times
J. Kyle Bass made a fortune in the financial crisis when his hedge fund, Hayman Capital Management, bet big against subprime mortgages. Now Mr. Bass is wagering against pharmaceutical companies that he says exploit the patent system, keeping drug prices — and their profits — in the stratosphere.
He has a formidable colleague in the effort: Erich Spangenberg, a man who became reviled in Silicon Valley for bringing lawsuits against technology companies that he contended had infringed on a patent.
Through the Coalition for Affordable Drugs, a company they formed this year, Mr. Bass and Mr. Spangenberg identify pharmaceutical patents that they consider weak or abusive. Then they request that a unit of the United States Patent and Trademark Office review the legitimacy of the patents.
By mid-November, the firm had filed 33 requests for patent reviews, targeting 13 drugs from a dozen companies.
URL:http://www.nytimes.com/2015/11/29/business/working-to-lower-drug-costs-by-challenging-questionable-patents.html?ref=business&_r=0
Judge rules that Cox Communications has forfeited its right to DMCA ‘safe harbor’ protections against copyright infringement claims because of its failure to terminate the accounts of repeat infringers.
From Digital Music News
The ruling pertains to a summary judgment motion by plaintiffs BMG Rights Management and Round Hill Music. “For several years, Cox had an ‘under the table’ policy of purporting to terminate repeat infringers while actually retaining them as high speed internet customers,” the plaintiffs argued in papers recently filed. “The ‘terminations’ were in name only as Cox immediately reactivated these infringers without ever canceling their accounts. . . . “As a matter of law, allowing known, repeat, flagrant infringers to continue to use the network does not satisfy the DMCA’s requirement of an appropriate repeat infringer termination policy,” the Plaintiffs wrote.
The Court agreed: “There is no genuine issue of material fact as to whether defendants reasonably implemented a repeat-infringer policy as required by Section 512 of the DMCA.” US District Court judge Liam O’Grady effectively stripped Cox of the DMCA shield. “The court grants the motion with respect to defendants’ safe-harbor defense under the Digital Millennium Copyright Act (“DMCA”),” Grady opined (full ruling below). “There is no genuine issue of material fact as to whether defendants reasonably implemented a repeat-infringer policy as required by Section 512 of the DMCA.”
The opinion is at https://www.scribd.com/doc/290652786/BMG-v-Cox-Summary-Judgment-Decisions
From Digital Music News
The ruling pertains to a summary judgment motion by plaintiffs BMG Rights Management and Round Hill Music. “For several years, Cox had an ‘under the table’ policy of purporting to terminate repeat infringers while actually retaining them as high speed internet customers,” the plaintiffs argued in papers recently filed. “The ‘terminations’ were in name only as Cox immediately reactivated these infringers without ever canceling their accounts. . . . “As a matter of law, allowing known, repeat, flagrant infringers to continue to use the network does not satisfy the DMCA’s requirement of an appropriate repeat infringer termination policy,” the Plaintiffs wrote.
The Court agreed: “There is no genuine issue of material fact as to whether defendants reasonably implemented a repeat-infringer policy as required by Section 512 of the DMCA.” US District Court judge Liam O’Grady effectively stripped Cox of the DMCA shield. “The court grants the motion with respect to defendants’ safe-harbor defense under the Digital Millennium Copyright Act (“DMCA”),” Grady opined (full ruling below). “There is no genuine issue of material fact as to whether defendants reasonably implemented a repeat-infringer policy as required by Section 512 of the DMCA.”
The opinion is at https://www.scribd.com/doc/290652786/BMG-v-Cox-Summary-Judgment-Decisions
From Digital Music News:
Movement to reform DMCA to "take down and stay down"
The time and cost to defend one’s copyright on the internet is significant. Many believe that the remedy for all of this is that “take down” needs to be converted to “take down and stay down.” This simply means that once a DMCA notice is filed, all files with that ID will be taken down, across all websites, and new postings that match that ID will be blocked.
‘Take down and stay down’ would eliminate the problem of repeated notice for the same files on the same website. With this reform in place, the amount of DMCA notices filed will go down, which means Google would use fewer resources processing them. Additionally, small independent businesses will not have to spend valuable time and resources to send out notices for the same content on the same website, over and over again.
Many believe that ‘Stay down’ should be added to the current section 512 DMCA takedown notification as a way to return control to the creators. A petition is currently circulating to help put this new reform in place.
The petition can be found on takedownstaydown.org.
DMN article at http://www.digitalmusicnews.com/2015/11/24/petition-to-prevent-copyright-infringement/
Movement to reform DMCA to "take down and stay down"
The time and cost to defend one’s copyright on the internet is significant. Many believe that the remedy for all of this is that “take down” needs to be converted to “take down and stay down.” This simply means that once a DMCA notice is filed, all files with that ID will be taken down, across all websites, and new postings that match that ID will be blocked.
‘Take down and stay down’ would eliminate the problem of repeated notice for the same files on the same website. With this reform in place, the amount of DMCA notices filed will go down, which means Google would use fewer resources processing them. Additionally, small independent businesses will not have to spend valuable time and resources to send out notices for the same content on the same website, over and over again.
Many believe that ‘Stay down’ should be added to the current section 512 DMCA takedown notification as a way to return control to the creators. A petition is currently circulating to help put this new reform in place.
The petition can be found on takedownstaydown.org.
DMN article at http://www.digitalmusicnews.com/2015/11/24/petition-to-prevent-copyright-infringement/
Fantasy Sports -- Mass. and NY take different approaches
From the NY Times:
New York State’s attorney general, Eric T. Schneiderman, filed lawsuits against the two leading daily fantasy sports companies, FanDuel and DraftKings, asking for an injunction to stop them from operating, saying that they are violating the prohibition on gambling that is part of the state’s constitution.
Like many such legal disputes, this one centers on a seemingly simple phrase in the definition of gambling in New York State’s penal law: “A person engages in gambling when he stakes or risks something of value upon the outcome of a contest of chance or a future contingent event not under his control or influence.” Chance means that “the outcome depends in a material degree upon an element of chance, notwithstanding that skill of the contestants may also be a factor therein.”
In a memorandum filed as part of the case, Mr. Schneiderman asserts that daily fantasy sports “is nothing more than a rebranding of sports betting” which is “plainly illegal.” He stepped up the criticism in an editorial in The New York Daily News when he called the argument that the contests did not qualify as gambling because they involved a measure of skill “nonsense.”
Massachusetts has gone in a different direction that may signal a better way to deal with issues related to daily fantasy sports contests. The state attorney general, Maura Healey, proposed regulations that would curtail how the companies operate to address potential problems related to gambling and maintaining the integrity of the contests.
The new rules would prohibit minors from playing the games and require companies to take steps to limit abusive practices by gamblers, such as setting deposit limits and not marketing to those who identify themselves as having gambling problems. Contests based on college or high school athletes would be prohibited, and companies could not advertise or promote themselves at amateur or school venues.
More drastic measures could affect how profitable the daily fantasy sports companies could be if the regulations were adopted broadly. The proposal would limit players to one account per company and require “reasonable measures” to verify their identity to limit anyone from playing through multiple accounts, including efforts to block proxy servers that might hide who is actually entering contests. Nor could a company extend credit to a player, further distinguishing this type of play from Las Vegas-style gambling. The rules would also limit deposits to $1,000 per month unless the company verifies a player’s ability to sustain higher losses, another step to keep participants from risking too much.
An issue that has come up with the daily fantasy sports contests is the fact that the top players win the bulk of the prizes, including many who are employees of other companies running contests. Ms. Healey’s proposal would prohibit employees and those with access to inside information about how teams are being put together from participating, along with professional athletes and their agents.
Read the NYT story
From the NY Times:
New York State’s attorney general, Eric T. Schneiderman, filed lawsuits against the two leading daily fantasy sports companies, FanDuel and DraftKings, asking for an injunction to stop them from operating, saying that they are violating the prohibition on gambling that is part of the state’s constitution.
Like many such legal disputes, this one centers on a seemingly simple phrase in the definition of gambling in New York State’s penal law: “A person engages in gambling when he stakes or risks something of value upon the outcome of a contest of chance or a future contingent event not under his control or influence.” Chance means that “the outcome depends in a material degree upon an element of chance, notwithstanding that skill of the contestants may also be a factor therein.”
In a memorandum filed as part of the case, Mr. Schneiderman asserts that daily fantasy sports “is nothing more than a rebranding of sports betting” which is “plainly illegal.” He stepped up the criticism in an editorial in The New York Daily News when he called the argument that the contests did not qualify as gambling because they involved a measure of skill “nonsense.”
Massachusetts has gone in a different direction that may signal a better way to deal with issues related to daily fantasy sports contests. The state attorney general, Maura Healey, proposed regulations that would curtail how the companies operate to address potential problems related to gambling and maintaining the integrity of the contests.
The new rules would prohibit minors from playing the games and require companies to take steps to limit abusive practices by gamblers, such as setting deposit limits and not marketing to those who identify themselves as having gambling problems. Contests based on college or high school athletes would be prohibited, and companies could not advertise or promote themselves at amateur or school venues.
More drastic measures could affect how profitable the daily fantasy sports companies could be if the regulations were adopted broadly. The proposal would limit players to one account per company and require “reasonable measures” to verify their identity to limit anyone from playing through multiple accounts, including efforts to block proxy servers that might hide who is actually entering contests. Nor could a company extend credit to a player, further distinguishing this type of play from Las Vegas-style gambling. The rules would also limit deposits to $1,000 per month unless the company verifies a player’s ability to sustain higher losses, another step to keep participants from risking too much.
An issue that has come up with the daily fantasy sports contests is the fact that the top players win the bulk of the prizes, including many who are employees of other companies running contests. Ms. Healey’s proposal would prohibit employees and those with access to inside information about how teams are being put together from participating, along with professional athletes and their agents.
Read the NYT story
Fed's Tarullo: bank stress tests to be tougher; bank capital requirements more rigorous
Bloomberg video:
http://www.bloomberg.com/news/videos/2015-11-23/fed-s-tarullo-some-capital-requirement-increase-coming
Bloomberg video:
http://www.bloomberg.com/news/videos/2015-11-23/fed-s-tarullo-some-capital-requirement-increase-coming
From Public Citizen: Paul Levy on
Chiming in to Support ISP That Is Defending Reviewers' Right to Remain Anonymous
In an amicus brief filed earlier this year, Public Citizen and Twitter have urged the California Court of Appeal for the First District to join with the Court of Appeal for the Sixth District in ruling that plaintiffs seeking to identify anonymous online critics whose statements they claim are defamatory or otherwise wrongful must produce evidence and not merely allegations in support of their claims.
Paul Levy's full article is well worth reading. It is at http://pubcit.typepad.com/clpblog/2015/06/chiming-in-support-of-isp-that-is-defending-reviewers-right-to-remain-anonymous.html
Chiming in to Support ISP That Is Defending Reviewers' Right to Remain Anonymous
In an amicus brief filed earlier this year, Public Citizen and Twitter have urged the California Court of Appeal for the First District to join with the Court of Appeal for the Sixth District in ruling that plaintiffs seeking to identify anonymous online critics whose statements they claim are defamatory or otherwise wrongful must produce evidence and not merely allegations in support of their claims.
Paul Levy's full article is well worth reading. It is at http://pubcit.typepad.com/clpblog/2015/06/chiming-in-support-of-isp-that-is-defending-reviewers-right-to-remain-anonymous.html
From: NACS Online: State AGs Advocate for Credit Card Chip and PIN Over Chip and Sign
Nine state attorneys general are asking card issuers to adopt chip and PIN technology in the United States as soon as possible.
November 17, 2015 HARTFORD, Ct. – Nine state attorneys general from Connecticut, Illinois, Maine, Massachusetts, New York, Rhode Island, Vermont, Washington and the District of Columbia are urging the largest credit card issuers to move to full chip and PIN technology as soon as possible. The attorneys general said that doing so would be in the best interest of consumers, who are now routinely impacted by breaches involving credit and debit cards, and of local businesses, which are at risk of increased financial risks as well as harm to their reputations and loss of consumer trust if they experience a breach.
"Over the last few years, breaches at major retailers that involved credit and debit card information have really shown a giant spotlight at the inherent weakness and vulnerability of magnetic strip cards even when the cards are lost or stolen," Connecticut Attorney General George Jepsen said. "We know, based on experiences in other countries, that chip and PIN cards offer greater security to consumers—security that I believe far outweighs any initial burden or confusion that always comes when we need to get used to a new way of doing things, like using a credit card.”
Full article: http://www.nacsonline.com/News/Daily/Pages/ND1117151.aspx#.Vk8aHL_zjcs
The AG letter is here: http://www.ct.gov/ag/lib/ag/press_releases/2015/20151116_chipandpinmultistateletter.pdf
Comment by DAR: The style of the AG letter is one of request, without a suggestion that Visa, MC, Chase, and Bank of America are doing something illegal. However, I gather that Visa and MC rules now will shift liability for fraud from the network to the retailer. If the network is providing less than the best easily available technology to the retailer, then the retailer has a grievance. But is it a grievance that gives rise to a cause of action, say by a retailer with actual or potential liability for fraud where chip and sign rather than chip and pin is all that is available to the retailer? Also, does any network offer chip and pin? If not, isn't that odd?
Nine state attorneys general are asking card issuers to adopt chip and PIN technology in the United States as soon as possible.
November 17, 2015 HARTFORD, Ct. – Nine state attorneys general from Connecticut, Illinois, Maine, Massachusetts, New York, Rhode Island, Vermont, Washington and the District of Columbia are urging the largest credit card issuers to move to full chip and PIN technology as soon as possible. The attorneys general said that doing so would be in the best interest of consumers, who are now routinely impacted by breaches involving credit and debit cards, and of local businesses, which are at risk of increased financial risks as well as harm to their reputations and loss of consumer trust if they experience a breach.
"Over the last few years, breaches at major retailers that involved credit and debit card information have really shown a giant spotlight at the inherent weakness and vulnerability of magnetic strip cards even when the cards are lost or stolen," Connecticut Attorney General George Jepsen said. "We know, based on experiences in other countries, that chip and PIN cards offer greater security to consumers—security that I believe far outweighs any initial burden or confusion that always comes when we need to get used to a new way of doing things, like using a credit card.”
Full article: http://www.nacsonline.com/News/Daily/Pages/ND1117151.aspx#.Vk8aHL_zjcs
The AG letter is here: http://www.ct.gov/ag/lib/ag/press_releases/2015/20151116_chipandpinmultistateletter.pdf
Comment by DAR: The style of the AG letter is one of request, without a suggestion that Visa, MC, Chase, and Bank of America are doing something illegal. However, I gather that Visa and MC rules now will shift liability for fraud from the network to the retailer. If the network is providing less than the best easily available technology to the retailer, then the retailer has a grievance. But is it a grievance that gives rise to a cause of action, say by a retailer with actual or potential liability for fraud where chip and sign rather than chip and pin is all that is available to the retailer? Also, does any network offer chip and pin? If not, isn't that odd?
One convenience/gas chain's costs for switching to EMV credit cards that are not as secure as possible: FROM TESTIMONY OF JARED SCHEELER, MANAGING DIRECTOR, THE HUB CONVENIENCE STORES, INC., ON BEHALF OF THE NATIONAL ASSOCIATION OF CONVENIENCE STORES
As a small business owner, I am absolutely committed to improving payment card security. I have no problem making investments in effective fraud-prevention measures because retailers already pay the price for the unsecure payment card system. Unfortunately, as discussed in further detail below, this very costly transition to EMV will not reduce fraud as much as it could and should, and my business will continue to suffer from a deeply flawed system.
Banks often claim that they are on the hook for fraud losses. They also claim that they provide a “payment guarantee” to their retailer customers. Frankly, I find these claims offensive because they are false. Let’s be clear, I pay for fraud several times over:
First, I pre-pay for fraud with exorbitant swipe fees, which the card networks have justified as necessary to cover the cost of fraud and fraud prevention. The Federal Reserve’s rules on debit card swipe fees specifically provide for merchants like me to pay 5 basis points (0.05% of the transaction amount) on every transaction to cover banks’ fraud losses. That amount is now higher than the full amount of debit card fraud suffered by the majority of banks covered by the Fed’s rules. And, credit card swipe fees and debit swipe fees for banks not covered by the rules are much higher – ensuring merchants pay for more than 100% of fraud upfront.
Second, I pay for fraud in chargebacks. Despite banks’ false claims of providing a “payment guarantee” to me and other retailers, when a fraudulent charge is made, my company is “charged back” for the amount of the fraudulent transaction about three out of four times. In fact, every year our company pays $600 per store in chargebacks.
Third, if a merchant suffers a data breach, Visa and MasterCard rules require the merchant to pay for any increase in fraud for those breached accounts.
* * *
EMV will not reduce fraud nearly as much as it should: Disappointingly, the card companies have mandated an EMV transition that does not
include a simple and very effective security measure that would substantially reduce fraud losses for everyone, including small business owners like me. Instead of migrating to chip-and-PIN technology in the U.S., the card companies have opted for a transition to chip-without-PIN. This
is true in spite of the fact that the rest of the world has been moving to chip-and-PIN and that the data the card industry has used to justify the move in the United States relies on the use of chipand- PIN, not chip-without-PIN.
URL: http://www.nacsonline.com/News/Press_Releases/2015/Documents/PR102115_Scheeler-Testimony-EMV-HSB-Hearing.pdf
As a small business owner, I am absolutely committed to improving payment card security. I have no problem making investments in effective fraud-prevention measures because retailers already pay the price for the unsecure payment card system. Unfortunately, as discussed in further detail below, this very costly transition to EMV will not reduce fraud as much as it could and should, and my business will continue to suffer from a deeply flawed system.
Banks often claim that they are on the hook for fraud losses. They also claim that they provide a “payment guarantee” to their retailer customers. Frankly, I find these claims offensive because they are false. Let’s be clear, I pay for fraud several times over:
First, I pre-pay for fraud with exorbitant swipe fees, which the card networks have justified as necessary to cover the cost of fraud and fraud prevention. The Federal Reserve’s rules on debit card swipe fees specifically provide for merchants like me to pay 5 basis points (0.05% of the transaction amount) on every transaction to cover banks’ fraud losses. That amount is now higher than the full amount of debit card fraud suffered by the majority of banks covered by the Fed’s rules. And, credit card swipe fees and debit swipe fees for banks not covered by the rules are much higher – ensuring merchants pay for more than 100% of fraud upfront.
Second, I pay for fraud in chargebacks. Despite banks’ false claims of providing a “payment guarantee” to me and other retailers, when a fraudulent charge is made, my company is “charged back” for the amount of the fraudulent transaction about three out of four times. In fact, every year our company pays $600 per store in chargebacks.
Third, if a merchant suffers a data breach, Visa and MasterCard rules require the merchant to pay for any increase in fraud for those breached accounts.
* * *
EMV will not reduce fraud nearly as much as it should: Disappointingly, the card companies have mandated an EMV transition that does not
include a simple and very effective security measure that would substantially reduce fraud losses for everyone, including small business owners like me. Instead of migrating to chip-and-PIN technology in the U.S., the card companies have opted for a transition to chip-without-PIN. This
is true in spite of the fact that the rest of the world has been moving to chip-and-PIN and that the data the card industry has used to justify the move in the United States relies on the use of chipand- PIN, not chip-without-PIN.
URL: http://www.nacsonline.com/News/Press_Releases/2015/Documents/PR102115_Scheeler-Testimony-EMV-HSB-Hearing.pdf
From Public Citizen blog: DOJ announces series of dietary supplement cases
Posted: 18 Nov 2015 06:24 AM PST
The Department of Justice has announced:
As part of a nationwide sweep, the Department of Justice and its federal partners have pursued civil and criminal cases against more than 100 makers and marketers of dietary supplements. The actions discussed today resulted from a year-long effort, beginning in November 2014, to focus enforcement resources in an area of the dietary supplement market that is causing increasing concern among health officials nationwide. In each case, the department or one of its federal partners allege the sale of supplements that contain ingredients other than those listed on the product label or the sale of products that make health or disease treatment claims that are unsupported by adequate scientific evidence.
Among the cases announced today is a criminal case charging USPlabs LLC and several of its corporate officers. USPlabs was known for its widely popular workout and weight loss supplements, which it sold under names such as Jack3d and OxyElite Pro.
...
During the period of the sweep, 117 individuals and entities were pursued through criminal and civil enforcement actions. Of these, 89 were the subject of cases filed since November 2014.
The DOJ press release has details.
Posted: 18 Nov 2015 06:24 AM PST
The Department of Justice has announced:
As part of a nationwide sweep, the Department of Justice and its federal partners have pursued civil and criminal cases against more than 100 makers and marketers of dietary supplements. The actions discussed today resulted from a year-long effort, beginning in November 2014, to focus enforcement resources in an area of the dietary supplement market that is causing increasing concern among health officials nationwide. In each case, the department or one of its federal partners allege the sale of supplements that contain ingredients other than those listed on the product label or the sale of products that make health or disease treatment claims that are unsupported by adequate scientific evidence.
Among the cases announced today is a criminal case charging USPlabs LLC and several of its corporate officers. USPlabs was known for its widely popular workout and weight loss supplements, which it sold under names such as Jack3d and OxyElite Pro.
...
During the period of the sweep, 117 individuals and entities were pursued through criminal and civil enforcement actions. Of these, 89 were the subject of cases filed since November 2014.
The DOJ press release has details.
Victims of debt collection scheme in New York win 59 million dollar settlement
http://www.nytimes.com/2015/11/14/nyregion/victims-of-debt-collection-scheme-in-new-york-win-59-million-in-settlement.html?emc=edit_tnt_20151113&nlid=5930843&tntemail0=y&_r=2
http://www.nytimes.com/2015/11/14/nyregion/victims-of-debt-collection-scheme-in-new-york-win-59-million-in-settlement.html?emc=edit_tnt_20151113&nlid=5930843&tntemail0=y&_r=2
NCLC and NACA have launched a petition to capitalize on the New York Times’ arbitration series
The petition is here: http://chn.ge/1YgV9Yh.
NCLC and NACA ask that you sign and shar with colleagues, clients, family, friends.
The petition is here: http://chn.ge/1YgV9Yh.
NCLC and NACA ask that you sign and shar with colleagues, clients, family, friends.
From Reuters: Canada prosecutors stay price fixing charges against Nestle
TORONTO | BY JEFFREY HODGSON
Canadian prosecutors have stayed proceedings against the local arm of Nestle SA in a multi-year investigation into alleged price-fixing of chocolate products, the country's competition watchdog said on Wednesday. They also stayed charges against the Canada unit's former chief executive, Robert Leonidas.
"Today's decision marks the end of the chocolate price-fixing matter," the Competition Bureau said in a statement. It did not give a reason for the stay.
Canada had charged Nestle and others in 2013 with colluding to fix the price of chocolate. At the time, the Competition Bureau recommended lenient treatment for the Canadian arm of Hershey Co, which cooperated with the investigation and reached a deal to plead guilty to a single count of price fixing. Nestle said at they time they intended to "vigorously defend" themselves against the allegations.
The Competition Bureau spent years probing the allegations of price fixing in a case that also resulted in a class-action suit. Hershey, Mars Inc and Nestle all agreed to settlements as part of that suit.
Read more at Reutershttp://www.reuters.com/article/2015/11/18/nestle-canada-idUSL1N13D0Z620151118#qjlLpzejiu85PLWa.99
Previously, as noted above, US class actions against the chocolate companies were settled, and proceeds of the settlements distributed. See http://www.chocolateclassaction.com/
TORONTO | BY JEFFREY HODGSON
Canadian prosecutors have stayed proceedings against the local arm of Nestle SA in a multi-year investigation into alleged price-fixing of chocolate products, the country's competition watchdog said on Wednesday. They also stayed charges against the Canada unit's former chief executive, Robert Leonidas.
"Today's decision marks the end of the chocolate price-fixing matter," the Competition Bureau said in a statement. It did not give a reason for the stay.
Canada had charged Nestle and others in 2013 with colluding to fix the price of chocolate. At the time, the Competition Bureau recommended lenient treatment for the Canadian arm of Hershey Co, which cooperated with the investigation and reached a deal to plead guilty to a single count of price fixing. Nestle said at they time they intended to "vigorously defend" themselves against the allegations.
The Competition Bureau spent years probing the allegations of price fixing in a case that also resulted in a class-action suit. Hershey, Mars Inc and Nestle all agreed to settlements as part of that suit.
Read more at Reutershttp://www.reuters.com/article/2015/11/18/nestle-canada-idUSL1N13D0Z620151118#qjlLpzejiu85PLWa.99
Previously, as noted above, US class actions against the chocolate companies were settled, and proceeds of the settlements distributed. See http://www.chocolateclassaction.com/
Pilgrim Pipeline Submits Use and Occupancy Permit Application in New York
November 18, 2015 11:17 AM Eastern Standard TimeCANTON, Conn.--(BUSINESS WIRE)--Pilgrim Pipeline Holdings, LLC announced today that it has filed a use and occupancy permit application in New York to construct the Pilgrim Pipeline. The proposed 178-mile pipeline project consists of two separate, parallel underground lines running between supply and distribution terminals in Albany and Linden, New Jersey. The pipeline would carry refined products like gasoline, diesel, kerosene and home heating oil to the north and crude oil southbound. The pipeline would handle an estimated 200,000 barrels in each direction each day (a total of 73 million barrels annually), roughly the amount of fuels currently transported along the Hudson by other modes of transportation.
From Pilgrim: “This step begins a comprehensive process of review and public comment in New York. Applications for permits will be filed in New Jersey later this year.”
November 18, 2015 11:17 AM Eastern Standard TimeCANTON, Conn.--(BUSINESS WIRE)--Pilgrim Pipeline Holdings, LLC announced today that it has filed a use and occupancy permit application in New York to construct the Pilgrim Pipeline. The proposed 178-mile pipeline project consists of two separate, parallel underground lines running between supply and distribution terminals in Albany and Linden, New Jersey. The pipeline would carry refined products like gasoline, diesel, kerosene and home heating oil to the north and crude oil southbound. The pipeline would handle an estimated 200,000 barrels in each direction each day (a total of 73 million barrels annually), roughly the amount of fuels currently transported along the Hudson by other modes of transportation.
From Pilgrim: “This step begins a comprehensive process of review and public comment in New York. Applications for permits will be filed in New Jersey later this year.”
Feds crack down on supplement industry, go after deceptive products
USDOJ is pursuing criminal and civil cases against more than 100 makers and marketers.
Question: Are analogues to the relevant criminal and civil charges available to state AGs?
See the article at http://arstechnica.com/science/2015/11/feds-crack-down-on-supplement-industry-go-after-deceptive-products/
USDOJ is pursuing criminal and civil cases against more than 100 makers and marketers.
Question: Are analogues to the relevant criminal and civil charges available to state AGs?
See the article at http://arstechnica.com/science/2015/11/feds-crack-down-on-supplement-industry-go-after-deceptive-products/
Encrypted messaging apps like WhatsApp face new inquiries over possible security gaps that led to the Paris attacks
CIA director Brennan and others urge restrictions on such encryption apps Video at http://america.aljazeera.com/watch/shows/live-news/2015/11/was-technology-used-in-the-planning-of-the-paris-attacks.html |
From Covington privacy blog: Third Circuit Resurrects State Law Claims Against Google in Safari Cookie Tracking Lawsuit
Posted on 2015-11-16 18:22:18-05
Last week, the Third Circuit revived a multi-district privacy lawsuit against Google, finding that the trial court erred in dismissing the plaintiffs’ privacy claims under California state law. The case centers around the plaintiffs’ allegations that Google violated state and federal law by circumventing the Safari browser’s default “cookie blocker” settings to track users’ online... Continue Reading
Posted on 2015-11-16 18:22:18-05
Last week, the Third Circuit revived a multi-district privacy lawsuit against Google, finding that the trial court erred in dismissing the plaintiffs’ privacy claims under California state law. The case centers around the plaintiffs’ allegations that Google violated state and federal law by circumventing the Safari browser’s default “cookie blocker” settings to track users’ online... Continue Reading
DOJ won’t help FCC fight state laws that harm municipal broadband --Justice Department takes no position in states' lawsuit
The US Department of Justice is not supporting the Federal Communications Commission in its legal fight against state laws that restrict municipal broadband projects.
The FCC voted in February—with public support from President Obama—to preempt state laws in North Carolina and Tennessee that prevent municipal broadband providers from expanding outside their territories. The states sued to preserve their laws, which protect private broadband providers from government competition.
But while Obama supported the FCC's decision, the Justice Department won't help defend it in court. In a very short filing, a DOJ attorney told a federal appeals court that "Respondent United States of America takes no position in these cases."
The North Carolina and Tennessee lawsuits were filed against the FCC and the United States of America—the FCC is continuing to defend its decision.
From article: http://arstechnica.com/tech-policy/2015/11/doj-wont-help-fcc-fight-state-laws-that-harm-municipal-broadband/
The US Department of Justice is not supporting the Federal Communications Commission in its legal fight against state laws that restrict municipal broadband projects.
The FCC voted in February—with public support from President Obama—to preempt state laws in North Carolina and Tennessee that prevent municipal broadband providers from expanding outside their territories. The states sued to preserve their laws, which protect private broadband providers from government competition.
But while Obama supported the FCC's decision, the Justice Department won't help defend it in court. In a very short filing, a DOJ attorney told a federal appeals court that "Respondent United States of America takes no position in these cases."
The North Carolina and Tennessee lawsuits were filed against the FCC and the United States of America—the FCC is continuing to defend its decision.
From article: http://arstechnica.com/tech-policy/2015/11/doj-wont-help-fcc-fight-state-laws-that-harm-municipal-broadband/
The Fanduel lawsuit in response to the NYAG "fantasy sports" Cease and Desist order:
thttps://www.scribd.com/doc/289895470/Fanduel-complaint
thttps://www.scribd.com/doc/289895470/Fanduel-complaint
From Public Citizen blog: NYT reporters discuss reporting for their arbitration series
Check out this podcast, in which the reporters behind the NYT's broad and thoughtful three-part series on arbitration last week, discuss their experience reporting the story.
Click title above for the Public Citizen blog
Check out this podcast, in which the reporters behind the NYT's broad and thoughtful three-part series on arbitration last week, discuss their experience reporting the story.
Click title above for the Public Citizen blog
NY AG Schneiderman's 's cease and desist letter to fantasy sports site Fanduel
You can fnd it at: http://www.nytimes.com/interactive/2015/11/10/sports/document-final-nyag-fanduel-letter-11-10-2015-signed.html?_r=0
You can fnd it at: http://www.nytimes.com/interactive/2015/11/10/sports/document-final-nyag-fanduel-letter-11-10-2015-signed.html?_r=0
Video clip: New York state Attorney General Eric Schneiderman's explains probe into fantasy sports sites
http://www.cbsnews.com/news/ag-daily-fantasy-sports-sites-are-illegal-in-new-york/
The New York Times points out that the New York probe may lead to investigations in other states:
http://www.nytimes.com/2015/11/11/sports/football/draftkings-fanduel-new-york-attorney-general-tells-fantasy-sites-to-stop-taking-bets-in-new-york.html?ref=business
From Public Citizen blog: Tyson Foods v. Bouaphakeo argued in the Supreme Court
On November 10, the Supreme Court considered whether a group of workers at an Iowa meat-processing plant appropriately proceeded as a class on their federal and state wage-and-hour claims where their proof of the amount of hours worked was based in part on an expert time study because the company failed to keep legally required records of the time the employees worked.
The case (in which Public Citizen was co-counsel for the plaintiffs) has important implications for both class action law and wage-and-hour law.
SCOTUSBlog covers the argument here. You can read our [Public Citizen] brief and find more information about the case here. The transcript of the argument is here.
Click the title for Public Citizen's blog.
On November 10, the Supreme Court considered whether a group of workers at an Iowa meat-processing plant appropriately proceeded as a class on their federal and state wage-and-hour claims where their proof of the amount of hours worked was based in part on an expert time study because the company failed to keep legally required records of the time the employees worked.
The case (in which Public Citizen was co-counsel for the plaintiffs) has important implications for both class action law and wage-and-hour law.
SCOTUSBlog covers the argument here. You can read our [Public Citizen] brief and find more information about the case here. The transcript of the argument is here.
Click the title for Public Citizen's blog.
From Public Citizen blog: LA Times's David Lazarus: Using TiVo? Your personal choices may be going straight to advertisers
The LA Times story is Here.
Here's the beginning of the story:
If you're a TiVo user, your digital video recorder may be ratting you out to advertisers.
In the latest example of consumer privacy being threatened by Big Data, TiVo's number-crunching subsidiary this week announced a partnership with media heavyweight Viacom that helps advertisers target TV viewers with specific commercials.
Click title for the Public Citizen blog post
The LA Times story is Here.
Here's the beginning of the story:
If you're a TiVo user, your digital video recorder may be ratting you out to advertisers.
In the latest example of consumer privacy being threatened by Big Data, TiVo's number-crunching subsidiary this week announced a partnership with media heavyweight Viacom that helps advertisers target TV viewers with specific commercials.
Click title for the Public Citizen blog post
W.Va. hospitals 'committed' to deal opposed by FTC
Two West Virginia hospitals say they “remain committed” to a deal that the Federal Trade Commission has vowed to stop in spite of conditions set by the state's attorney general intended to protect consumers.
Federal antitrust officials filed a complaint alleging the deal by Cabell Huntington Hospital to acquire nearby rival St. Mary's Medical Center would create a “near monopoly” in four West Virginia and Ohio counties for acute-care services and outpatient surgery. The hospitals would have 75% of the market share, the FTC said in a news release.
From article in Modern Healthcare, at http://www.modernhealthcare.com/article/20151106/NEWS/151109909?utm_source=modernhealthcare&utm_medium=email&utm_content=20151106-NEWS-151109909&utm_campaign=mh-alert
Two West Virginia hospitals say they “remain committed” to a deal that the Federal Trade Commission has vowed to stop in spite of conditions set by the state's attorney general intended to protect consumers.
Federal antitrust officials filed a complaint alleging the deal by Cabell Huntington Hospital to acquire nearby rival St. Mary's Medical Center would create a “near monopoly” in four West Virginia and Ohio counties for acute-care services and outpatient surgery. The hospitals would have 75% of the market share, the FTC said in a news release.
From article in Modern Healthcare, at http://www.modernhealthcare.com/article/20151106/NEWS/151109909?utm_source=modernhealthcare&utm_medium=email&utm_content=20151106-NEWS-151109909&utm_campaign=mh-alert
Charlie Rose interviewed FCC's Chair Tom Wheeler recently
Click here to see the interview: Tom Wheeler (http://www.charlierose.com/watch/60643448)
It is an interview well worth watching. Wheeler is a fascinating character. He comes across as very smart. And he presents ideas as FCC chair that are very appealing to progressives: net neutrality, and a strong focus on fostering competition, etc. He is pround of the role he played blocking the actions of State governments that sought to stop internet innovations by municipalities and other local government entities (which sometimes involve coordination with Google in the role of internet upstart). Yet his background iincludes lobbying for industry groups, including the cable industry he now doesn't want to have in the role of internet gate keeper. It is easy to imagine that he was as cool and effective in his role representing industry leaders as he appears to be now. He may be the ultimate inside baseball guy, but its not clear that should be considered disabling.
Posted by Don Allen Resnikoff
Cablevision Systems, Time Warner Cable and Verizon Communications cooperate with New York state attorney general Eric Schneiderman's probe into whether they are providing the speeds for which subscribers are paying
The investigation’s focus includes interconnection arrangements between ISPs and content providers such as Netflix,according to Reuters. Per a copy of a letter, posted by Ars Technica, ISps are also being asked identify, since January 2, 2013, when an interconnection partner requested augmentation of interconnection capacity that the ISP did not implement within ninety days, and to explain why capacity was not augmented.
Among the three ISPs that received letters, Verizon and Time Warner Cable have paid interconnection deals with Netflix; Cablevision is a partner in Open Connect, Netflix’s private CDN program that relies on single-purpose edge caches. The FCC's new network neutrality rules allow for a case-by-case complaint process with respect to interconnection issues.
See http://www.multichannel.com/news/distribution/isps-ny-state-speed-probe-bring-it/394843
The investigation’s focus includes interconnection arrangements between ISPs and content providers such as Netflix,according to Reuters. Per a copy of a letter, posted by Ars Technica, ISps are also being asked identify, since January 2, 2013, when an interconnection partner requested augmentation of interconnection capacity that the ISP did not implement within ninety days, and to explain why capacity was not augmented.
Among the three ISPs that received letters, Verizon and Time Warner Cable have paid interconnection deals with Netflix; Cablevision is a partner in Open Connect, Netflix’s private CDN program that relies on single-purpose edge caches. The FCC's new network neutrality rules allow for a case-by-case complaint process with respect to interconnection issues.
See http://www.multichannel.com/news/distribution/isps-ny-state-speed-probe-bring-it/394843
Ohio voters: no on marjuana; also no on monopolies
Ohio voters rejected a first-of-its-kind proposal Tuesday that would have legalized both medical and recreational marijuana, following an expensive campaign, a legal fight over its ballot wording and an investigation into the proposal's petition signatures. At the same time, voters approved a measure to prevent monopolies from being inserted into the state constitution.
See http://www.wlwt.com/news/three-statewide-issues-await-ohio-voters-at-the-polls/36228676
Ohio voters rejected a first-of-its-kind proposal Tuesday that would have legalized both medical and recreational marijuana, following an expensive campaign, a legal fight over its ballot wording and an investigation into the proposal's petition signatures. At the same time, voters approved a measure to prevent monopolies from being inserted into the state constitution.
See http://www.wlwt.com/news/three-statewide-issues-await-ohio-voters-at-the-polls/36228676
Entergy Closing FitzPatrick Nuclear Plant in New York--citing unfavorable market conditions and high costs for nuclear power
Entergy Corp. will close its FitzPatrick Nuclear Power Plant in central New York state by early 2017, less than a month after the company said it would shutter its Pilgrim Nuclear Power Station in Massachusetts.
In a press release the company said the economics of the plant, including low energy prices, are the cause of its decision.
Additional information is available at www.entergy.com and www.FitzPatrickPower.com/Operational-Update.
Entergy previously announced that it plans to close the Pilgrim plant by June of 2019 and it is also in the process of decommissioning its Vermont Yankee plant.
Law 360 comments: "But economic winds are buffeting the U.S. nuclear sector as much as environmental winds. In an era of low-priced power fueled by a glut of cheap gas and increasingly competitive renewable sources such as solar and wind, nuclear power is too costly."
Are there lessons in this experience for DC and other regions?
Posted by Don Allen Resnikoff
Entergy Corp. will close its FitzPatrick Nuclear Power Plant in central New York state by early 2017, less than a month after the company said it would shutter its Pilgrim Nuclear Power Station in Massachusetts.
In a press release the company said the economics of the plant, including low energy prices, are the cause of its decision.
Additional information is available at www.entergy.com and www.FitzPatrickPower.com/Operational-Update.
Entergy previously announced that it plans to close the Pilgrim plant by June of 2019 and it is also in the process of decommissioning its Vermont Yankee plant.
Law 360 comments: "But economic winds are buffeting the U.S. nuclear sector as much as environmental winds. In an era of low-priced power fueled by a glut of cheap gas and increasingly competitive renewable sources such as solar and wind, nuclear power is too costly."
Are there lessons in this experience for DC and other regions?
Posted by Don Allen Resnikoff
Status of not-for-profit litigation to stop Purple Line light rail in DC area
Purple Line Opponents Expand Federal Lawsuit
From article by Andrew Metcalf, Bethesda Magazine
Earlier this year, two Chevy Chase residents and the Friends of the Capital Crescent Trail advocacy group expanded their federal lawsuit against the federal government over the Purple Line to include stormwater runoff impacts, lack of public access to information and possible congestion problems related to the light-rail line.
Plaintiffs amended their complaint and are claiming the federal government didn’t adequately address several issues in its environmental impact statement, which was approved in March 2014 and permits federal funding to be used for the project.
The lawsuit was filed by Chevy Chase residents John Fitzgerald, a lawyer, and Christine Real de Azua, an energy and environment consultant, in addition to the Friends advocacy group that has long opposed the Purple Line.
The amended complaint claims that significant amounts of stormwater could enter the Rock Creek and Anacostia watersheds as a result of the project; that noise and traffic congestion, particularly in “minority and low-income communities,” has not been properly assessed; and that proprietary information was used as a basis for the Purple Line’s ridership estimates, which has hampered the public’s ability to comment on the project.
“Our lawsuit, in fact, raises some of the very same questions that we hope Governor Larry Hogan and his team are examining right now, including full costs and risks, and the assessment of reasonable alternatives,” Ajay Bhatt, president of Friends of the Capital Crescent Trail, said in the release. The complaint states that several of the most congested routes in the county run north-south and would not be alleviated by the east-west rail line that would run from New Carrollton in Prince George's County to Bethesda.
See http://www.bethesdamagazine.com/Bethesda-Beat/2015/Purple-Line-Opponents-Expand-Federal-Lawsuit/
For the complaint, click here: Amended Purple Line Federal Lawsuit Complaint
Purple Line Opponents Expand Federal Lawsuit
From article by Andrew Metcalf, Bethesda Magazine
Earlier this year, two Chevy Chase residents and the Friends of the Capital Crescent Trail advocacy group expanded their federal lawsuit against the federal government over the Purple Line to include stormwater runoff impacts, lack of public access to information and possible congestion problems related to the light-rail line.
Plaintiffs amended their complaint and are claiming the federal government didn’t adequately address several issues in its environmental impact statement, which was approved in March 2014 and permits federal funding to be used for the project.
The lawsuit was filed by Chevy Chase residents John Fitzgerald, a lawyer, and Christine Real de Azua, an energy and environment consultant, in addition to the Friends advocacy group that has long opposed the Purple Line.
The amended complaint claims that significant amounts of stormwater could enter the Rock Creek and Anacostia watersheds as a result of the project; that noise and traffic congestion, particularly in “minority and low-income communities,” has not been properly assessed; and that proprietary information was used as a basis for the Purple Line’s ridership estimates, which has hampered the public’s ability to comment on the project.
“Our lawsuit, in fact, raises some of the very same questions that we hope Governor Larry Hogan and his team are examining right now, including full costs and risks, and the assessment of reasonable alternatives,” Ajay Bhatt, president of Friends of the Capital Crescent Trail, said in the release. The complaint states that several of the most congested routes in the county run north-south and would not be alleviated by the east-west rail line that would run from New Carrollton in Prince George's County to Bethesda.
See http://www.bethesdamagazine.com/Bethesda-Beat/2015/Purple-Line-Opponents-Expand-Federal-Lawsuit/
For the complaint, click here: Amended Purple Line Federal Lawsuit Complaint
On line credit card fraud can become a stolen goods case for local authorities
From an article by Lorenzo Soriiano in PaymentsSource:
Fraudulent credit-card transactions occur when stolen card information is used to make online purchases. Online merchants typically experience two main types of fraud losses: merchandise value and original charge amount.
In general, cardholders have up to 120 days to dispute a fraudulent charge. However, most online merchants process online orders within one to two business days. Before the real cardholder has a chance to notice the fraudulent transaction, the merchandise has already left the warehouse.
For merchants selling low to mid-priced products, recovering these products through the shipping carrier may cost more money than the value of the product. For higher priced in-transit items, products may be recovered, but with additional fees. If a product has already been delivered, the primary way to start the process of merchandise recovery is to file a police report.
* * *
Once a cardholder notices a fraudulent charge, he or she can file a dispute with their card issuer. If the issuer determines the dispute is valid, the consumer then files a dispute with the merchant’s bank. Once the merchant receives a chargeback, the consumer is debited the disputed amount. The merchant’s bank will request specific documentation from the merchant in order to try and reverse the chargeback. If they are unable to provide the documents requested, the cardholder filing the dispute keeps the refund.
To combat fraudulent transactions, online merchants may require customers to provide detailed verification information. This includes additional data points such as a cardholder’s name, billing address and the card’s security code. Additionally, merchants can activate 3D Secure (3DS) technology, which requires online shoppers to enter a separate password for additional security.
For full article see:
http://www.paymentssource.com/news/paythink/online-merchants-need-an-emv-era-fraud-plan-3022661-1.html?utm_medium=email&ET=paymentssource:e5461205:4145571a:&utm_source=newsletter&utm_campaign=payments%20update-nov%203%202015&st=email
From an article by Lorenzo Soriiano in PaymentsSource:
Fraudulent credit-card transactions occur when stolen card information is used to make online purchases. Online merchants typically experience two main types of fraud losses: merchandise value and original charge amount.
In general, cardholders have up to 120 days to dispute a fraudulent charge. However, most online merchants process online orders within one to two business days. Before the real cardholder has a chance to notice the fraudulent transaction, the merchandise has already left the warehouse.
For merchants selling low to mid-priced products, recovering these products through the shipping carrier may cost more money than the value of the product. For higher priced in-transit items, products may be recovered, but with additional fees. If a product has already been delivered, the primary way to start the process of merchandise recovery is to file a police report.
* * *
Once a cardholder notices a fraudulent charge, he or she can file a dispute with their card issuer. If the issuer determines the dispute is valid, the consumer then files a dispute with the merchant’s bank. Once the merchant receives a chargeback, the consumer is debited the disputed amount. The merchant’s bank will request specific documentation from the merchant in order to try and reverse the chargeback. If they are unable to provide the documents requested, the cardholder filing the dispute keeps the refund.
To combat fraudulent transactions, online merchants may require customers to provide detailed verification information. This includes additional data points such as a cardholder’s name, billing address and the card’s security code. Additionally, merchants can activate 3D Secure (3DS) technology, which requires online shoppers to enter a separate password for additional security.
For full article see:
http://www.paymentssource.com/news/paythink/online-merchants-need-an-emv-era-fraud-plan-3022661-1.html?utm_medium=email&ET=paymentssource:e5461205:4145571a:&utm_source=newsletter&utm_campaign=payments%20update-nov%203%202015&st=email
Purina advertises dog food to combat mental aging
In the real world, the world beyond the purview of the Onion satirical newspaper or the Daily Show, the Purina company has addressed the problem of dementia, at least for dogs. Purina TV and print advertising explain that "Bright Mind" dog food is the result of "proprietary research" concerning use of "enhanced botanical oils" to nourish the older dogs' minds. Purina publishes testimonials from happy customers, who are not the dogs that eat the food, of course, but the dogs' owners, who might be older people who possibly may have their own alertness issues.
Could Purina be guilty of exaggerated advertising claims? I wouldn't want to say that, since I am not well educated on the proprietary research showing the mental acuity benefits of Purina dog food. And it is clear that the Purina company is aware of the legal pitfalls of false advertising. Last year Nestlé Purina launched a legal offensive against Blue Buffalo, accusing the rival pet-food maker of lying to customers about its use of natural ingredients.
The Purina company filed a federal lawsuit against its competitor, saying independent tests show that Blue Buffalo uses chicken byproducts and corn in its products — despite claims to the contrary. Purina sued The Blue Buffalo Co. for false advertising, disparagement and unjust enrichment. So surely the Purina company is aware of the need to avoid false advertising leading to unjust enrichment.
Here is an excerpt from a Purina ad from a Purina web site. It is a true excerpt, not something from the Onion or a similar source:
NOURISHING YOUR DOG'S MIND From less interaction with you, to lower engagement in daily activities, there are many signs your dog may be aging. Purina® Pro Plan® Bright Mind was created out of proprietary research that shows enhanced botanical oils provide an efficient fuel source for the brain in dogs age 7 and older – helping naturally nourish their minds to help them think more like they did when they were younger.
Posted by Don Allen Resnikoff
In the real world, the world beyond the purview of the Onion satirical newspaper or the Daily Show, the Purina company has addressed the problem of dementia, at least for dogs. Purina TV and print advertising explain that "Bright Mind" dog food is the result of "proprietary research" concerning use of "enhanced botanical oils" to nourish the older dogs' minds. Purina publishes testimonials from happy customers, who are not the dogs that eat the food, of course, but the dogs' owners, who might be older people who possibly may have their own alertness issues.
Could Purina be guilty of exaggerated advertising claims? I wouldn't want to say that, since I am not well educated on the proprietary research showing the mental acuity benefits of Purina dog food. And it is clear that the Purina company is aware of the legal pitfalls of false advertising. Last year Nestlé Purina launched a legal offensive against Blue Buffalo, accusing the rival pet-food maker of lying to customers about its use of natural ingredients.
The Purina company filed a federal lawsuit against its competitor, saying independent tests show that Blue Buffalo uses chicken byproducts and corn in its products — despite claims to the contrary. Purina sued The Blue Buffalo Co. for false advertising, disparagement and unjust enrichment. So surely the Purina company is aware of the need to avoid false advertising leading to unjust enrichment.
Here is an excerpt from a Purina ad from a Purina web site. It is a true excerpt, not something from the Onion or a similar source:
NOURISHING YOUR DOG'S MIND From less interaction with you, to lower engagement in daily activities, there are many signs your dog may be aging. Purina® Pro Plan® Bright Mind was created out of proprietary research that shows enhanced botanical oils provide an efficient fuel source for the brain in dogs age 7 and older – helping naturally nourish their minds to help them think more like they did when they were younger.
Posted by Don Allen Resnikoff
From Public Citizen blog: New York Times does a deep dive into the rise of forced arbitration
New York Times must-read story: "Arbitration Everywhere, Stacking the Deck of Justice." The piece weaves together the history of the silent legal coup achieved by the Chamber and the Roberts Court. It focuses firmly on the principal effect of forced arbitration: the suppression of class-action claims.
This coverage comes at a particularly relevant moment, as the Consumer Financial Protection Bureau prepares to roll out a proposed rulemaking on arbitration that could actually fix the problem--at least in the realm of consumer financial contracts. We'll need all the help we can get to prevent Wall Street's friends in Congress from scuttling the new rule.
Click title for Public Citizen blog
New York Times must-read story: "Arbitration Everywhere, Stacking the Deck of Justice." The piece weaves together the history of the silent legal coup achieved by the Chamber and the Roberts Court. It focuses firmly on the principal effect of forced arbitration: the suppression of class-action claims.
This coverage comes at a particularly relevant moment, as the Consumer Financial Protection Bureau prepares to roll out a proposed rulemaking on arbitration that could actually fix the problem--at least in the realm of consumer financial contracts. We'll need all the help we can get to prevent Wall Street's friends in Congress from scuttling the new rule.
Click title for Public Citizen blog
From American Banker: Final Student Banking Rule Draws Fire, Praise
The Department of Education has finalized a set of rules that will restrict certain banking practices for federal student loan servicers.
READ MORE »
From American Banker: Big Banks Sign On to Safer Account Standards for Underserved
Several large banks have already embraced standards released Tuesday by a consumer advocacy group laying out how institutions can offer safe, entry-level financial services.
READ MORE »
The Department of Education has finalized a set of rules that will restrict certain banking practices for federal student loan servicers.
READ MORE »
From American Banker: Big Banks Sign On to Safer Account Standards for Underserved
Several large banks have already embraced standards released Tuesday by a consumer advocacy group laying out how institutions can offer safe, entry-level financial services.
READ MORE »
Fifth circuit on choice of state law for nonsolicitation and noncompetition contract clauses
The Fifth Circuit holds that provisions in the contracts of Oklahomans working for a Texas bank that stipulated the use of Texas state law for resolving disputes apply to the deals’ nonsoliciting clauses, but not to their noncompetition clauses.
See opinion at https://www.scribd.com/doc/288201728/Oklahoma-Choice-of-Law
From ABA Journal: Some law schools graduate many students who can't pass Bar exams
A new report by Law School Transparency sees troubled times ahead for graduates of many law schools because more students are being admitted with lower scores on the Law School Admission Test. The LSAT is the best predictor, before law school, of bar passage, Law School Transparency says.
The report categorizes LSAT scores of 147 to 149 as denoting a high risk of bar failure, scores of 145 and 146 as denoting a very high risk of bar failure, and scores of 120 to 144 as denoting an extreme risk of bar failure.
In 2014, 74 law schools admitted classes consisting of at least 25 percent of students at high or greater risk of failing the bar, compared to 30 schools in 2010. Every for-profit law school enrolled classes consisting of at least 50 percent at-risk students. Infilaw-owned schools enrolled classes consisting of between 75 percent and 100 percent at-risk students. The report predicts that bar passage rates will drop significantly over the next three years as a result.
Law School Transparency’s chart lists seven schools with admitted classes consisting of at least 50 percent of students with an “extreme” risk of failing the bar: Charlotte School of Law, North Carolina Central University, Southern University Law Center, Florida Coastal School of Law, Appalachian School of Law, Ave Maria School of Law and Arizona Summit School of Law.
“We expect many schools to claim that they are placing bets on students seeking opportunities other schools won’t provide,” Law School Transparency says, “but the reality is that these schools are placing a bet that the profession, accreditors, and government will stand idly by.”
The report recommends a required “ultimate bar passage rate of 85 percent within two years of graduation” for law schools to retain accreditation.
A New York Times editorial points to bar pass results in an article that accuses for-profit law schools of “vacuuming up hordes of young people, charging them outrageously high tuition and, after many of the students fail to become lawyers, sticking taxpayers with the tab for their loan defaults.”
See http://www.abajournal.com/news/article/this_law_school_had_a_30_bar_pass_rate_is_it_a_sign_of_more_widespread_fail/?utm_source=maestro&utm_medium=email&utm_campaign=weekly_email
A new report by Law School Transparency sees troubled times ahead for graduates of many law schools because more students are being admitted with lower scores on the Law School Admission Test. The LSAT is the best predictor, before law school, of bar passage, Law School Transparency says.
The report categorizes LSAT scores of 147 to 149 as denoting a high risk of bar failure, scores of 145 and 146 as denoting a very high risk of bar failure, and scores of 120 to 144 as denoting an extreme risk of bar failure.
In 2014, 74 law schools admitted classes consisting of at least 25 percent of students at high or greater risk of failing the bar, compared to 30 schools in 2010. Every for-profit law school enrolled classes consisting of at least 50 percent at-risk students. Infilaw-owned schools enrolled classes consisting of between 75 percent and 100 percent at-risk students. The report predicts that bar passage rates will drop significantly over the next three years as a result.
Law School Transparency’s chart lists seven schools with admitted classes consisting of at least 50 percent of students with an “extreme” risk of failing the bar: Charlotte School of Law, North Carolina Central University, Southern University Law Center, Florida Coastal School of Law, Appalachian School of Law, Ave Maria School of Law and Arizona Summit School of Law.
“We expect many schools to claim that they are placing bets on students seeking opportunities other schools won’t provide,” Law School Transparency says, “but the reality is that these schools are placing a bet that the profession, accreditors, and government will stand idly by.”
The report recommends a required “ultimate bar passage rate of 85 percent within two years of graduation” for law schools to retain accreditation.
A New York Times editorial points to bar pass results in an article that accuses for-profit law schools of “vacuuming up hordes of young people, charging them outrageously high tuition and, after many of the students fail to become lawyers, sticking taxpayers with the tab for their loan defaults.”
See http://www.abajournal.com/news/article/this_law_school_had_a_30_bar_pass_rate_is_it_a_sign_of_more_widespread_fail/?utm_source=maestro&utm_medium=email&utm_campaign=weekly_email
LegalZoom resolves $10.5M antitrust suit against North Carolina State Bar
LegalZoom has settled its protracted legal dispute with the North Carolina State Bar with a consent agreement that permits the company to continue operating there, Forbes reports. The online legal document company has been expanding quickly to provide other services, including prepaid legal services plans.
The agreement comes on the heels of a lawsuit against the bar filed in federal court in North Carolina in June, seeking $10.5 million in antitrust damages. LegalZoom’s suit was based on a U.S. Supreme Court antitrust ruling earlier this year against the state’s self-regulating body for dentists, which had come down on teeth whitening by non-dentists.
The state bar has battled the company since 2008, after first clearing it to operate there in 2003. Legal challenges in other states had fallen away over the years, with only North Carolina’s continuing.
Under the agreement, LegalZoom will vet its documents with North Carolina lawyers, and inform its customers that the blank templates aren’t a substitute for in-person advice from an attorney. The state bar also agrees to support proposed legislation that would clarify the definition of “unauthorized practice of law,” which currently is open to various interpretations and was used by the bar to challenge LegalZoom. Both parties agreed to support legislation permitting interactive legal-help websites, so long as they abide by the basic terms of the settlement agreement.
Full article at http://www.abajournal.com/news/article/legalzoom_resolves_10.5m_antitrust_suit_against_north_carolina_state_bar/?utm_source=maestro&utm_medium=email&utm_campaign=tech_monthly
LegalZoom has settled its protracted legal dispute with the North Carolina State Bar with a consent agreement that permits the company to continue operating there, Forbes reports. The online legal document company has been expanding quickly to provide other services, including prepaid legal services plans.
The agreement comes on the heels of a lawsuit against the bar filed in federal court in North Carolina in June, seeking $10.5 million in antitrust damages. LegalZoom’s suit was based on a U.S. Supreme Court antitrust ruling earlier this year against the state’s self-regulating body for dentists, which had come down on teeth whitening by non-dentists.
The state bar has battled the company since 2008, after first clearing it to operate there in 2003. Legal challenges in other states had fallen away over the years, with only North Carolina’s continuing.
Under the agreement, LegalZoom will vet its documents with North Carolina lawyers, and inform its customers that the blank templates aren’t a substitute for in-person advice from an attorney. The state bar also agrees to support proposed legislation that would clarify the definition of “unauthorized practice of law,” which currently is open to various interpretations and was used by the bar to challenge LegalZoom. Both parties agreed to support legislation permitting interactive legal-help websites, so long as they abide by the basic terms of the settlement agreement.
Full article at http://www.abajournal.com/news/article/legalzoom_resolves_10.5m_antitrust_suit_against_north_carolina_state_bar/?utm_source=maestro&utm_medium=email&utm_campaign=tech_monthly
Chase introducing Chase Pay app next year powered by CurrentC | MacNN
(Click the title to link to the article)
Chase Bank is linking with MCX and CurrentC technology in a way that appears to cut out Visa and MasterCard when customers pay for retail transactions. So it seems like potentially a big boost for MCX, presently only a small rival to Visa and MC payment systems.
CurrentC is a payment alternative that was developed by large retailers who dislike costly payment networks such as those owned by Visa and MasterCard.
CurrentC uses modern technology to offer consumers ways to get the advantages of the paper check through the use of paperless electronic checks and debit cards and other electronic payment systems that use “ACH” payment system technology to move money directly from the consumer’s bank account to the merchant’s or other payee’s account. The ACH Network provides an electronic funds transfer network for direct account-to-account consumer, business, and government payments. The ACH Network is governed by the not-for-profit Electronic Payments Association (“NACHA’) Operating Rules. See https://www.nacha.org/ach-network
From a consumer’s perspective, debit cards that use the ACH network seem to function much like Visa or MasterCard debit cards, but in fact, they are actually processed by financial institutions like Chase in a manner similar to the way that paper or electronic checks are processed, in the sense that they are not processed by a network such as that of Visa or MasterCard. (See http://www.kc.frb.org/Publicat/PSR/Briefings/PSR-BriefingDec07.pdf for an explanation.)
It would seem that ACH based payment systems that are the modern electronic equivalent of checks have the potential to undermine the considerable market power that Visa and MasterCard exercise through the use of their networks. But at present, there appears to be little evidence of this occurring.
Of course, just because an idea seems like it ought to be attractive to consumers and do well in the market does not mean it will. People with considerable product development and promotional skills are needed to make a product succeed. Favorable circumstances and luck may also play a role. The graphic interface for computers and the computer mouse were ideas with great potential that succeeded because Steve Jobs knew how to develop and promote them. The modern programmable computer became commercially important because people like Presper Eckert and John Mauchly and others not only had access to great inventions, but also the necessary product development and promotional skills to get the inventions accepted in the marketplace. Maybe CurrentC needs to find a Steve Jobs to promote its ideas. Or maybe support of Chase and a few other banks will do it.
For Chase's own view of its partnership with CurrentC ake a look at Chase Pay is a Mobile and e-Commerce Payment Solution | Chase Pay
When the site opens click on the earphone image and you'll get a complete narrated slide show. The presentation explains that a virtue of the Chase/CurrentC partnership business model is that no Visa or MasterCard network will be needed.
Don
Posted by Don Resnikoff
Virginia's Health-Care Law Stifles Competition, Federal Agencies Say
The Washington Post - Two federal agencies yesterday panned a Virginia law that requires state pre-approval for hospital expansions, surgery centers and some medical equipment, wading into an issue likely to be a political flash point in the coming legislative session. The Federal Trade Commission and the antitrust division of the U.S. Justice Department issued a joint statement saying that certificate-of-public-need laws "curb competition, limit consumer choice and stifle innovation."
Click the title above to see the article
The Washington Post - Two federal agencies yesterday panned a Virginia law that requires state pre-approval for hospital expansions, surgery centers and some medical equipment, wading into an issue likely to be a political flash point in the coming legislative session. The Federal Trade Commission and the antitrust division of the U.S. Justice Department issued a joint statement saying that certificate-of-public-need laws "curb competition, limit consumer choice and stifle innovation."
Click the title above to see the article
From Public Citizen blog: Paul Alan Levy on a company's use of a nondisparagement clause to bully dissatisfied customers
A company wrote to a complaining customer:
"You directly violated our legal agreement by attempting to post an online review. As such, we are setting the plans in motion for a multi-million dollar defamation case against you. . . . unless you withdraw your unwarranted BBB complaint or any illegal online reviews, we will proceed at lightening [sic] speed in a defamation case against you to minimize as much damage as possible. We have your signed legal agreement clearly stating you will NOT post online reviews."
To read Paul Alan Levy's treatment of this problem click here: Use of a Nondisparagement Clause to Bully Dissatisfied Customers
A company wrote to a complaining customer:
"You directly violated our legal agreement by attempting to post an online review. As such, we are setting the plans in motion for a multi-million dollar defamation case against you. . . . unless you withdraw your unwarranted BBB complaint or any illegal online reviews, we will proceed at lightening [sic] speed in a defamation case against you to minimize as much damage as possible. We have your signed legal agreement clearly stating you will NOT post online reviews."
To read Paul Alan Levy's treatment of this problem click here: Use of a Nondisparagement Clause to Bully Dissatisfied Customers
States and others sue to stop Obama Clean Air initiative
From onEarth, the magazine of the Natural Resources Defense Council:
The Clean Power Plan, President Obama’s big initiative to fight climate change by cutting carbon pollution from power plants, is officially the law of the land—for now, at least. The U.S. Environmental Protection Agency published the plan in the Federal Register this morning, a move that opens the door to legal challenges to the rule.
The upcoming flood of lawsuits won’t officially be the first. Fifteen states jumped the gun, moving on August 13 for an emergency stay of the plan, but that case will likely be consolidated with the new challenges.
At least the flood of legal action should be easy to keep track of. First, they'll all be heard in the same court, since the D.C. Circuit Court of Appeals is empowered to consider all lawsuits under the Clean Air Act. Second, the parties will, for the most part, be the usual suspects: coal-producing states, coal-burning utilities, coal companies…you get the idea. Finally, we already know the arguments the challengers will make—they filed a lawsuit attempting to block the EPA from even announcing the Clean Power Plan. Before rejecting that plea as premature in June, the D.C. Circuit heard the coal-lovers’ best arguments.
The entire article is at http://www.onearth.org/earthwire/clean-power-plan-legal-challenge
From onEarth, the magazine of the Natural Resources Defense Council:
The Clean Power Plan, President Obama’s big initiative to fight climate change by cutting carbon pollution from power plants, is officially the law of the land—for now, at least. The U.S. Environmental Protection Agency published the plan in the Federal Register this morning, a move that opens the door to legal challenges to the rule.
The upcoming flood of lawsuits won’t officially be the first. Fifteen states jumped the gun, moving on August 13 for an emergency stay of the plan, but that case will likely be consolidated with the new challenges.
At least the flood of legal action should be easy to keep track of. First, they'll all be heard in the same court, since the D.C. Circuit Court of Appeals is empowered to consider all lawsuits under the Clean Air Act. Second, the parties will, for the most part, be the usual suspects: coal-producing states, coal-burning utilities, coal companies…you get the idea. Finally, we already know the arguments the challengers will make—they filed a lawsuit attempting to block the EPA from even announcing the Clean Power Plan. Before rejecting that plea as premature in June, the D.C. Circuit heard the coal-lovers’ best arguments.
The entire article is at http://www.onearth.org/earthwire/clean-power-plan-legal-challenge
Walmart pressured by FTC to remove misleading "made in America" labels
The FTC said in a letter to Walmart‘s associate general counsel posted on the FTC’s website on Tuesday, that it would not pursue action against Walmart because the retailer had taken voluntary steps to “prevent consumer deception.” Those included removing “Made in USA” logos from product listings on its website and removing U.S. country of origin claims that appeared in product descriptions or titles. In some cases it is also making more detailed disclosures regarding the percentage of U.S. content contained in the product.
The FTC said in a letter to Walmart‘s associate general counsel posted on the FTC’s website on Tuesday, that it would not pursue action against Walmart because the retailer had taken voluntary steps to “prevent consumer deception.” Those included removing “Made in USA” logos from product listings on its website and removing U.S. country of origin claims that appeared in product descriptions or titles. In some cases it is also making more detailed disclosures regarding the percentage of U.S. content contained in the product.
From Digital Music News: Google Refuses to Block the Pirate Bay on ‘Free Speech Principles’
In a recent, open letter submitted by Google to Daniel H. Marti, United States Intellectual Property Enforcement Coordinator.
“It has been suggested that Internet platforms should remove entire sites from search results, rather than relying on copyright owners to identify specific infringing pages for removal. Unfortunately, whole-site removal is ineffective and can easily result in censorship of lawful material.
Blogging sites contain millions of pages from hundreds of thousands of users as do social networking sites, e-commerce sites, and cloud computing services. All can inadvertently contain material that is infringing.
Article here.
From Public Citizen Blog: Fourth Circuit: major loan servicer is not arm of the state, can be sued
In two cases today (one of them litigated by Public Citizen), the Fourth Circuit held that the Pennsylvania Higher Education Assistance Agency (PHEAA) is not entitled to claim Pennsylvania's sovereign immunity because PHEAA is not an arm of the state. In fact, PHEAA is effectively an independent business, which holds, services or guarantees more than $100 billion in loans to students all over the country. Its chief financial officer has estimated that it is the tenth largest loan servicer in the country with respect to federal loans alone.
The Fourth Circuit's decisions today rejected the argument that PHEAA's affiliation with Pennsylvania renders it immune from suit; accordingly, PHEAA can be held accountable in court for wrongdoing. Central to the court's reasoning were the facts that PHEAA “is financially independent from the Commonwealth,” it “exercises control over its commercially generated revenues” and it “sets policy and makes the substantive fiscal and operational decisions” for itself.
The case litigated by Public Citizen (which we've discussed before, here) is the Fair Credit Reporting Act case of a Virginia resident whose credit was marred when PHEAA misattributed to him defaulted student loans that weren't his, and subsequently refused to correct its error. The district court had granted immunity to PHEAA; the court of appeals today reversed and sent the case back for trial.
The other case decided today, in which the court reached the same result regarding PHEAA's status, is a whistleblower's suit claiming that PHEAA defrauded the federal government.
Here is Public Citizen's case page containing both decisions and additional background. Here is our [PC] press release.
A good set of rulings for corporate accountability.
Posted by Scott Michelman on Wednesday, October 21, 2015 at 12:46 PM | Permalink | Com
In two cases today (one of them litigated by Public Citizen), the Fourth Circuit held that the Pennsylvania Higher Education Assistance Agency (PHEAA) is not entitled to claim Pennsylvania's sovereign immunity because PHEAA is not an arm of the state. In fact, PHEAA is effectively an independent business, which holds, services or guarantees more than $100 billion in loans to students all over the country. Its chief financial officer has estimated that it is the tenth largest loan servicer in the country with respect to federal loans alone.
The Fourth Circuit's decisions today rejected the argument that PHEAA's affiliation with Pennsylvania renders it immune from suit; accordingly, PHEAA can be held accountable in court for wrongdoing. Central to the court's reasoning were the facts that PHEAA “is financially independent from the Commonwealth,” it “exercises control over its commercially generated revenues” and it “sets policy and makes the substantive fiscal and operational decisions” for itself.
The case litigated by Public Citizen (which we've discussed before, here) is the Fair Credit Reporting Act case of a Virginia resident whose credit was marred when PHEAA misattributed to him defaulted student loans that weren't his, and subsequently refused to correct its error. The district court had granted immunity to PHEAA; the court of appeals today reversed and sent the case back for trial.
The other case decided today, in which the court reached the same result regarding PHEAA's status, is a whistleblower's suit claiming that PHEAA defrauded the federal government.
Here is Public Citizen's case page containing both decisions and additional background. Here is our [PC] press release.
A good set of rulings for corporate accountability.
Posted by Scott Michelman on Wednesday, October 21, 2015 at 12:46 PM | Permalink | Com
The cost of dying in DC, and in other places around the country
A joint project by Funeral Consumers Alliance and Consumer Federation of America examines funeral home pricing. (In the past funeral home pricing and pricing transparency have been investigated by the FTC and other government agencies.) Survey samples include 15 funeral homes each, in 10 cities around the country: Atlanta, Denver, the District of Columbia, Indianapolis, Mercer County New Jersey, Minneapolis, Orange County California, Seattle, Tucson.
Here is a brief excerpt from the DC report:
The survey tracks how many funeral homes fully disclose prices on their websites. In addition, it gives the range of costs for three common funeral arrangments (direct cremation, immediate burial, full-service funeral). We compiled the costs of some of the most common types of funerals from the information on each funeral home’s price list. The costs for exactly the same service varied widely all within the DC metropolitan area. This highlights the importance of shopping around before a death occurs. Even though most consumers regularly compare prices when looking at big ticket purchases, most families don’t shop around for funerals. A typical household defaults to the funeral home they used for the last
death in the family, assuming incorrectly that whatever that business charges must be the “normal” going rate. This can cost a family thousands of dollars more than they need to pay.
Editorial note (DAR): Just after a loved one's death is hardly the best time for comparison shopping and unraveling pricing that mat be less than transparent. A practical solution is to get the help of a friend of the family, perhaps a lawyer.
The FCA/CFA survey results are at https://www.funerals.org/publications-and-resources/cat_view/38-consumer-protection/89-2015-online-funeral-pricing-national-survey
A joint project by Funeral Consumers Alliance and Consumer Federation of America examines funeral home pricing. (In the past funeral home pricing and pricing transparency have been investigated by the FTC and other government agencies.) Survey samples include 15 funeral homes each, in 10 cities around the country: Atlanta, Denver, the District of Columbia, Indianapolis, Mercer County New Jersey, Minneapolis, Orange County California, Seattle, Tucson.
Here is a brief excerpt from the DC report:
The survey tracks how many funeral homes fully disclose prices on their websites. In addition, it gives the range of costs for three common funeral arrangments (direct cremation, immediate burial, full-service funeral). We compiled the costs of some of the most common types of funerals from the information on each funeral home’s price list. The costs for exactly the same service varied widely all within the DC metropolitan area. This highlights the importance of shopping around before a death occurs. Even though most consumers regularly compare prices when looking at big ticket purchases, most families don’t shop around for funerals. A typical household defaults to the funeral home they used for the last
death in the family, assuming incorrectly that whatever that business charges must be the “normal” going rate. This can cost a family thousands of dollars more than they need to pay.
Editorial note (DAR): Just after a loved one's death is hardly the best time for comparison shopping and unraveling pricing that mat be less than transparent. A practical solution is to get the help of a friend of the family, perhaps a lawyer.
The FCA/CFA survey results are at https://www.funerals.org/publications-and-resources/cat_view/38-consumer-protection/89-2015-online-funeral-pricing-national-survey
New York Times on fantasy sport legality and the interplay of federal and state law:
Daily fantasy sports contests fall into a gray area of the law because they involve a mix of skill — selecting the players for the team — and chance. So whether they are illegal depends on how broadly state laws prohibiting certain forms of gambling are interpreted.
Fantasy sports are specifically exempted from the definition of a “bet or wager” in the Unlawful Internet Gambling Enforcement Act, which prohibits accepting payments for gambling that occurs over the Internet when it would be illegal under federal or state law in the place where it was made. The statute was attached at the last minute as a rider to port-security legislation in 2006, aiming at online foreign poker sites that were quickly gaining popularity.
The law does not define what constitutes gambling, instead targeting the use of payment systems, like credit cards or electronic fund transfers, used to finance the games. The exemption for fantasy sports does not legalize them, only that using banks and electronic payments to participate in a game does not run afoul of this particular law.
And in an interesting twist, the statute also exempts securities transactions, perhaps showing that Wall Street trading is not really all that far from Las Vegas casinos.
Another federal law that takes aim at gambling is the Wire Act, adopted in 1961 at the urging of then-Attorney General Robert F. Kennedy as a means to fight the bookmaking operations of crime syndicates, such as the Mafia. It prohibits using a “wire communication facility” for the transmission of bets or wagers “on any sporting event or contest.” The statute has a safe harbor allowing a bet if it was legal both where it was placed and received, which means state law can determine whether there was a violation.
Another statute focusing on organized crime’s involvement in betting is the Illegal Gambling Business Act, adopted in 1970. The law makes it a crime to operate an “illegal gambling business” that involves at least five people, and is in operation for more than 30 days or has gross revenue of $2,000 a day. The statute is broader than the Wire Act by reaching any form of gambling, and like other federal laws, it relies on state law to determine whether the wager was illegal.
Other laws dependent on state gambling laws to prove a federal offense include the Travel Act and the Racketeer Influenced and Corrupt Organizations Act, better known as Rico.
The fantasy sports companies could come within the federal gambling statutes if their operations run afoul of a state law. Participating in daily fantasy contests is banned in five states: Arizona, Iowa, Louisiana, Montana, and Washington. Last Friday, the Nevada attorney general issued a memorandum to the Gaming Control Board declaring that daily fantasy sports “constitute gambling games, sports pools, and/or lotteries,” and therefore the companies are subject to the licensing requirements under state law. Of course, Nevada has a stake in limiting competition for the sports books at its casinos, a major source of revenue for them.
Offering participation in a daily fantasy contest to residents of states that view it as gambling does not necessarily mean the companies are violating state law. But the F.B.I. may be trying to build a case by looking at where the participants are coming from to see if the states prohibit them from doing so.
Full article: http://www.nytimes.com/2015/10/20/business/dealbook/the-paths-for-an-investigation-of-fantasy-sports.html?ref=business
Editorial comment: Should five states, Arizona, Iowa, Louisiana, Montana, and Washington, be the only states where participating in daily fantasy contests is banned? DAR
Daily fantasy sports contests fall into a gray area of the law because they involve a mix of skill — selecting the players for the team — and chance. So whether they are illegal depends on how broadly state laws prohibiting certain forms of gambling are interpreted.
Fantasy sports are specifically exempted from the definition of a “bet or wager” in the Unlawful Internet Gambling Enforcement Act, which prohibits accepting payments for gambling that occurs over the Internet when it would be illegal under federal or state law in the place where it was made. The statute was attached at the last minute as a rider to port-security legislation in 2006, aiming at online foreign poker sites that were quickly gaining popularity.
The law does not define what constitutes gambling, instead targeting the use of payment systems, like credit cards or electronic fund transfers, used to finance the games. The exemption for fantasy sports does not legalize them, only that using banks and electronic payments to participate in a game does not run afoul of this particular law.
And in an interesting twist, the statute also exempts securities transactions, perhaps showing that Wall Street trading is not really all that far from Las Vegas casinos.
Another federal law that takes aim at gambling is the Wire Act, adopted in 1961 at the urging of then-Attorney General Robert F. Kennedy as a means to fight the bookmaking operations of crime syndicates, such as the Mafia. It prohibits using a “wire communication facility” for the transmission of bets or wagers “on any sporting event or contest.” The statute has a safe harbor allowing a bet if it was legal both where it was placed and received, which means state law can determine whether there was a violation.
Another statute focusing on organized crime’s involvement in betting is the Illegal Gambling Business Act, adopted in 1970. The law makes it a crime to operate an “illegal gambling business” that involves at least five people, and is in operation for more than 30 days or has gross revenue of $2,000 a day. The statute is broader than the Wire Act by reaching any form of gambling, and like other federal laws, it relies on state law to determine whether the wager was illegal.
Other laws dependent on state gambling laws to prove a federal offense include the Travel Act and the Racketeer Influenced and Corrupt Organizations Act, better known as Rico.
The fantasy sports companies could come within the federal gambling statutes if their operations run afoul of a state law. Participating in daily fantasy contests is banned in five states: Arizona, Iowa, Louisiana, Montana, and Washington. Last Friday, the Nevada attorney general issued a memorandum to the Gaming Control Board declaring that daily fantasy sports “constitute gambling games, sports pools, and/or lotteries,” and therefore the companies are subject to the licensing requirements under state law. Of course, Nevada has a stake in limiting competition for the sports books at its casinos, a major source of revenue for them.
Offering participation in a daily fantasy contest to residents of states that view it as gambling does not necessarily mean the companies are violating state law. But the F.B.I. may be trying to build a case by looking at where the participants are coming from to see if the states prohibit them from doing so.
Full article: http://www.nytimes.com/2015/10/20/business/dealbook/the-paths-for-an-investigation-of-fantasy-sports.html?ref=business
Editorial comment: Should five states, Arizona, Iowa, Louisiana, Montana, and Washington, be the only states where participating in daily fantasy contests is banned? DAR
by Paul Alan Levy
The problem of false reviews bedevils web sites that invite customer reviews as a basis for other consumers to judge goods and services available to them on the market. Disgruntled merchants can be counted on bring defamation claims against false negative reviewers, but few merchants feel they have any incentive to sue customers who falsely praise them. And we ought to worry about the distortions of the marketplace of ideas that would be created when it is only critics who face legal pressures not to lie.
The FTC has blogger guidelines that require companies which give incentives to others to offer their endorsements, including endorsements posted online, to insist that the posters disclose their incentives so that consumers can take those financial incentives into account in deciding whether to trust the reviews. But those guidelines are not meant to be enforced against the bloggers expressing their opinions, but only against companies that hand out incentives.
Operators of the sites that host consumer commentaries have struggled to find ways to create meaningful disincentives for the false positive review. Yelp, for example, has collaborated with local consumer protection authorities to pursue merchants who arrange for the posting of false positive reviews.
Amazon recently filed suit in Washington state court against 1114 anonymous individuals who, according to Amazon’s complaint, have advertised their willingness take money for using their Amazon accounts to post fake reviews praising products available for sale on Amazon. Because of my close association with the Dendrite standard for deciding whether to compel identification of defendants who have been sued for wrongful speech, which the Washington Court of Appeals adopted earlier this year in Thomson v. Avvo where we represented a Doe defendant who had used Avvo to criticize her former divorce lawyer, I have been asked for my view of Amazon's suit against these anonymous speakers.
Amazon’s complaint alleges breach of contract (that is, violating Amazon’s Terms of Service that forbid the posting of reviews in exchange for compensation) and deceptive commercial practices under Washington law, as well as related tort claims. We have had concern about the use of subpoenas to enforce non-disparagement clauses, considering the strong public policies against using such contracts to prevent honest criticism. But it is hard to see any sound public policy objections to Amazon’s prohibition of pay-for-posting reviews. So at least as against the Doe defendants who actually posted false reviews in return for payment, these legal theories strike me as tenable, and Amazon claims to have evidence supporting its claims against those defendants.
Its theories against defendants who have only offered to post false positive reviews, without having yet succeeded in getting paid for these services, might be more problematic. (Is there a valid claim under state law for merely offering to breach a contract not to post paid reviews?).
click title for Public Citizen URL
From Public Citizen blog: Experts Disagree Over Whether Earth is Flat and CFPB Has Power to Regulate Arbitration Clauses
by Jeff Sovern
Did Congress give the CFPB the power to ban or regulate arbitration clauses in consumer financial contracts? Not according to a Pepper Hamilton partner, according to a pair of recent reports. Here's an excerpt from a piece at credit.com. The CFPB’s Arbitration Ban Could Be the Next Supreme Court Showdown:
“It comes down simply to whether the (bureau) can now make rules that run directly counter to clear Supreme Court findings [interpreting the Federal Arbitration Act],” said Matt Adler, a law professor at the University of Virginia and chair of the arbitration practice at Pepper Hamilton law firm.
* * *
Now comes the CFPB, offering its own ban on class-action waivers — seemingly in direct contradiction of these Supreme Court rulings.
“It’s really going to come down to whether an agency rule can overcome those cases. There’s absolutely going to be test litigation,” Adler said.
His opinion was clear-cut — absent an explicit amendment to the 1925 Federal Arbitration Act, the CFPB rule won’t survive.
“I think you’re going to need a Congressional Amendment,” he said. “The court will most certainly not roll over in face of an agency rule.”
And here's what an American Banker article, Fierce Battle Ahead for CFPB Arbitration Plan, had to say:
Matthew Adler, a partner at Pepper Hamilton, said a 2013 Supreme Court decision in a case involving American Express made it difficult to invalidate such arbitration clauses without a legislative amendment to the Federal Arbitration Act. Adler said the provisions in the Dodd-Frank do not go that far.
"It's going to be very difficult, without Congress amending the Federal Arbitration Act to invalidate class action waivers, for an administrative agency to do that on its own," said Adler.
As any first-semester law student knows, the starting place to answer a question involving a statute is the statute itself. So let's go to the Dodd-Frank Act, 12 USC § 5518(b):
The [Consumer Financial Protection] Bureau, by regulation, may prohibit or impose conditions or limitations on the use of an agreement between a covered person and a consumer for a consumer financial product or service providing for arbitration of any future dispute between the parties . . . .
I cannot imagine how that statute could be interpreted so as not to give the CFPB the power to "prohibit or impose conditions or limitations" on arbitration clauses in contracts within the Bureau's jurisdiction. Because Dodd-Frank was enacted decades after the FAA, it is obvious that Dodd-Frank was intended to supersede the FAA as to the authority Dodd-Frank grants the Bureau. Put another way, Dodd-Frank amends the FAA. As a result, it takes precedence over cases, even decided by the Supreme Court, interpreting the FAA, just as any congressional amendment to a statute can overturn Supreme Court decisions interpreting the statute in question--as has happened many times.
click title for Public Citizen URL
DC Public Power Press Release:
DCPP Proposes to Acquire Pepco’s D.C.-based Assets and Offers Over $1.0 Billion in Benefits for the District
DCPP’s proposal to the District of Columbia Public Service Commission would enable Exelon and PHI to complete their merger while creating an independently owned electric grid for the District to be managed by a local not-for-profit grid operator.
(Washington, D.C. - October 19, 2015) - On Friday, October 16, 2015, DC Public Power (DCPP), a not-for-profit public interest organization, submitted a filing with the DC Public Service Commission (PSC) that opposes the reopening of the PSC’s decision on the proposed Exelon/Pepco merger in Formal Case #1119. The filing also notified the PSC of DCPP’s intent to acquire Pepco Holdings’ D.C.-based assets. DCPP’s proposal will lower rates and create total public benefits with an approximate value of $1.2 billion over a period of 20 years.
“As a non-profit, our intention is to ensure that the District’s interests, and those of its citizens and ratepayers, come first,” said DC Public Power board member and Secretary, John Chelen. “To make sure that they are, our proposal creates an ownership and governance model that benefits everyone: residents, businesses, property owners and institutions alike. Moreover, it makes certain that D.C.’s electrical grid, which is at the core of our livelihoods and economy, is managed locally and in the public interest. What we are proposing has already been agreed to by “Settling Parties” through a clause in the settlement agreement that provides for divestiture to ensure compliance with its terms and performance.”
“DCPP's proposal severs the investor-owned model that is irreconcilable with the District’s goals for distributed power, micro-grids, maximization of alternatives, energy efficiency and innovation,” said Michael Overturf, President of DCPP’s Board. “It replaces it with a public interest ownership and governance model that will deliver over $1 billion in cost savings to ratepayers, exceeding anything Exelon can offer.”
Overturf also emphasized that the public interest model will enable the District to access best-in-class grid management and operation services and increase reliability at a lower cost than Exelon/Pepco can achieve. “As a not-for-profit entity, DC Public Power will not be dependent upon maximizing the amount of energy that transacts over the grid and on delivering a rate of return on shareholder capital. DCPP will be able to implement more efficient and lower cost energy solutions for D.C. residents, ratepayers, businesses and institutions.”
“While the ability to support the deployment of distributed generation and other renewable solutions is hard-wired into DCPP’s DNA, Exelon and PHI have an inherent conflict in deploying renewables,” Overturf continued. “As an investor-owned utility, Exelon’s revenues are dependent on the flow of electricity to a home or business. Distributed generation, such as solar, slows down this flow, and as a result, lowers Exelon’s revenue. DCPP’s plan unlocks the opportunity and benefits of public and private investment in distributed generation, renewables, and sustainability.”
As a registered not-for-profit organization, IRS reporting requirements will make DCPP’s financial records publicly accessible and subject to oversight. Additionally, to expand community and ratepayer participation and accountability, DCPP plans to reserve board seats for ratepayers and stakeholders, and invite a range of community representatives, stakeholders and experts on its board of advisors.
About DC Public Power
DC Public Power is a not-for-profit organization committed to energy independence for Washington, D.C. Our goal is to deliver electricity to the District at the lowest market rates, while increasing energy efficiency and improving reliability. DC Public Power is located in Washington, D.C., and is committed to local control, a competitive local economy, sustainable energy, and local jobs through a 21st century electric grid. For more information, visit http://www.dcpublicpower.org.
Link to DCPP's PSC filing: http://www.dcpsc.org/edocket/docketsheets_pdf_FS.asp?caseno=FC1119&docketno=966&flag=D&show_result=Y
This posting in by Don Allen Resnikoff. Disclosure: Don Allen Resnikoff LLC has in the past acted as counsel representing DCPP.
DCPP Proposes to Acquire Pepco’s D.C.-based Assets and Offers Over $1.0 Billion in Benefits for the District
DCPP’s proposal to the District of Columbia Public Service Commission would enable Exelon and PHI to complete their merger while creating an independently owned electric grid for the District to be managed by a local not-for-profit grid operator.
(Washington, D.C. - October 19, 2015) - On Friday, October 16, 2015, DC Public Power (DCPP), a not-for-profit public interest organization, submitted a filing with the DC Public Service Commission (PSC) that opposes the reopening of the PSC’s decision on the proposed Exelon/Pepco merger in Formal Case #1119. The filing also notified the PSC of DCPP’s intent to acquire Pepco Holdings’ D.C.-based assets. DCPP’s proposal will lower rates and create total public benefits with an approximate value of $1.2 billion over a period of 20 years.
“As a non-profit, our intention is to ensure that the District’s interests, and those of its citizens and ratepayers, come first,” said DC Public Power board member and Secretary, John Chelen. “To make sure that they are, our proposal creates an ownership and governance model that benefits everyone: residents, businesses, property owners and institutions alike. Moreover, it makes certain that D.C.’s electrical grid, which is at the core of our livelihoods and economy, is managed locally and in the public interest. What we are proposing has already been agreed to by “Settling Parties” through a clause in the settlement agreement that provides for divestiture to ensure compliance with its terms and performance.”
“DCPP's proposal severs the investor-owned model that is irreconcilable with the District’s goals for distributed power, micro-grids, maximization of alternatives, energy efficiency and innovation,” said Michael Overturf, President of DCPP’s Board. “It replaces it with a public interest ownership and governance model that will deliver over $1 billion in cost savings to ratepayers, exceeding anything Exelon can offer.”
Overturf also emphasized that the public interest model will enable the District to access best-in-class grid management and operation services and increase reliability at a lower cost than Exelon/Pepco can achieve. “As a not-for-profit entity, DC Public Power will not be dependent upon maximizing the amount of energy that transacts over the grid and on delivering a rate of return on shareholder capital. DCPP will be able to implement more efficient and lower cost energy solutions for D.C. residents, ratepayers, businesses and institutions.”
“While the ability to support the deployment of distributed generation and other renewable solutions is hard-wired into DCPP’s DNA, Exelon and PHI have an inherent conflict in deploying renewables,” Overturf continued. “As an investor-owned utility, Exelon’s revenues are dependent on the flow of electricity to a home or business. Distributed generation, such as solar, slows down this flow, and as a result, lowers Exelon’s revenue. DCPP’s plan unlocks the opportunity and benefits of public and private investment in distributed generation, renewables, and sustainability.”
As a registered not-for-profit organization, IRS reporting requirements will make DCPP’s financial records publicly accessible and subject to oversight. Additionally, to expand community and ratepayer participation and accountability, DCPP plans to reserve board seats for ratepayers and stakeholders, and invite a range of community representatives, stakeholders and experts on its board of advisors.
About DC Public Power
DC Public Power is a not-for-profit organization committed to energy independence for Washington, D.C. Our goal is to deliver electricity to the District at the lowest market rates, while increasing energy efficiency and improving reliability. DC Public Power is located in Washington, D.C., and is committed to local control, a competitive local economy, sustainable energy, and local jobs through a 21st century electric grid. For more information, visit http://www.dcpublicpower.org.
Link to DCPP's PSC filing: http://www.dcpsc.org/edocket/docketsheets_pdf_FS.asp?caseno=FC1119&docketno=966&flag=D&show_result=Y
This posting in by Don Allen Resnikoff. Disclosure: Don Allen Resnikoff LLC has in the past acted as counsel representing DCPP.
AT&T, Verizon named in FCC probe of $20 billion data market
"The Bureau concludes that the record raises sufficient questions regarding the lawfulness of certain terms and conditions contained in certain special access tariff pricing plans offered by AT&T, CenturyLink, Frontier and Verizon to warrant their investigation," says the FCC.
Full content: The Kansas City Star
- Verizon and AT&T are under fire from the Federal Communications Commission, which is investigating both companies for allegedly "locking out" smaller competitors in the special access sector of the massive data industry. Other companies included in the probe are CenturyLink and Frontier.
"The Bureau concludes that the record raises sufficient questions regarding the lawfulness of certain terms and conditions contained in certain special access tariff pricing plans offered by AT&T, CenturyLink, Frontier and Verizon to warrant their investigation," says the FCC.
Full content: The Kansas City Star
BEFORE THE PUBLIC SERVICE COMMISSION OF THE DISTRICT OF COLUMBIA
IN THE MATTER OF THE MERGER OF EXELON CORPORATION,
PEPCO HOLDINGS, INC., POTOMAC ELECTRIC POWER COMPANY, EXELON ENERGY
DELIVERY COMPANY, LLC AND NEW SPECIAL PURPOSE ENTITY
LLC
Formal Case No. 1119
NONSETTLING PARTIES’ OPPOSITION TO JOINT APPLICANTS’ MOTION TO REOPEN THE RECORD
Excerpt: DC Solar United Neighborhoods (“DC SUN”), GRID2.0 Working Group (“GRID2.0”),Mid-Atlantic Renewable Energy Coalition (“MAREC”), and Maryland DC Virginia Solar Energy Industries Association (“MDV-SEIA”) (collectively, the “Nonsettling Parties”) oppose the Joint Applicants’ motion to reopen the record in this proceeding to consider new conditions for their deal that some – but by no means all – of the current parties have agreed to accept.
First, the motion should be denied because the Commission’s rules do not permit settlements to be submitted after a “final decision,” which, in this case, was the Commission’s August 27, 2015 order denying the Joint Applicants’ request to approve Exelon’s acquisition of Pepco.
Commission Rule 130.10 properly protects the interests of parties and prospective parties to participate in a full examination of what amounts to a new application, and the Commission should reject the Joint Applicants’ invitation to waive this important safeguard.
Second, the Commission is not bound by the Joint Applicants’ self-imposed 150-day deadline for consummating their deal. As the Commission has observed, “[t]his proceeding has generated more interest and more active participation by parties and interested persons than any
other proceeding in the Commission’s more than a century of operations,” and “[t]his decision” is particularly important because it “is forever.”
Even after the Joint Applicants disclosed the proposed settlement terms, the public continues to share the Commission’s concern that the “potential conflicts of interest inherent in Pepco’s role and its parent company’s policy positions and interests might inhibit our local distribution company from moving forward to embrace a cleaner and greener environment.”
* * * *
The Joint Applicants propose to ram the new terms though the Commission by truncating the discovery period, eliminating any testimony from nonsettling parties, and denying hearings to obtain public comment – all in the name of meeting an imaginary drop-dead date.
The Commission must allot whatever time is required to permit full public participation and to scrutinize the terms of the deal that was negotiated with no input from the nonsettling parties or customers.
The full filing is at http://www.dcpsc.org/edocket/docketsheets_pdf_FS.asp?caseno=FC1119&docketno=967&flag=D&show_result=Y
IN THE MATTER OF THE MERGER OF EXELON CORPORATION,
PEPCO HOLDINGS, INC., POTOMAC ELECTRIC POWER COMPANY, EXELON ENERGY
DELIVERY COMPANY, LLC AND NEW SPECIAL PURPOSE ENTITY
LLC
Formal Case No. 1119
NONSETTLING PARTIES’ OPPOSITION TO JOINT APPLICANTS’ MOTION TO REOPEN THE RECORD
Excerpt: DC Solar United Neighborhoods (“DC SUN”), GRID2.0 Working Group (“GRID2.0”),Mid-Atlantic Renewable Energy Coalition (“MAREC”), and Maryland DC Virginia Solar Energy Industries Association (“MDV-SEIA”) (collectively, the “Nonsettling Parties”) oppose the Joint Applicants’ motion to reopen the record in this proceeding to consider new conditions for their deal that some – but by no means all – of the current parties have agreed to accept.
First, the motion should be denied because the Commission’s rules do not permit settlements to be submitted after a “final decision,” which, in this case, was the Commission’s August 27, 2015 order denying the Joint Applicants’ request to approve Exelon’s acquisition of Pepco.
Commission Rule 130.10 properly protects the interests of parties and prospective parties to participate in a full examination of what amounts to a new application, and the Commission should reject the Joint Applicants’ invitation to waive this important safeguard.
Second, the Commission is not bound by the Joint Applicants’ self-imposed 150-day deadline for consummating their deal. As the Commission has observed, “[t]his proceeding has generated more interest and more active participation by parties and interested persons than any
other proceeding in the Commission’s more than a century of operations,” and “[t]his decision” is particularly important because it “is forever.”
Even after the Joint Applicants disclosed the proposed settlement terms, the public continues to share the Commission’s concern that the “potential conflicts of interest inherent in Pepco’s role and its parent company’s policy positions and interests might inhibit our local distribution company from moving forward to embrace a cleaner and greener environment.”
* * * *
The Joint Applicants propose to ram the new terms though the Commission by truncating the discovery period, eliminating any testimony from nonsettling parties, and denying hearings to obtain public comment – all in the name of meeting an imaginary drop-dead date.
The Commission must allot whatever time is required to permit full public participation and to scrutinize the terms of the deal that was negotiated with no input from the nonsettling parties or customers.
The full filing is at http://www.dcpsc.org/edocket/docketsheets_pdf_FS.asp?caseno=FC1119&docketno=967&flag=D&show_result=Y
FTC Statement: Staff Guidance on Active Supervision of State Regulatory Boards Controlled by Market Participants
From the FTC statement:
I. Introduction
States craft regulatory policy through a variety of actors, including state legislatures, courts, agencies, and regulatory boards. While most regulatory actions taken by state actors will not implicate antitrust concerns, some will. Notably, states have created a large number of
regulatory boards with the authority to determine who may engage in an occupation (e.g. , by issuing or withholding a license), and also to set the rules and regulations governing that occupation. Licensing, once limited to a few learned professions such as doctors and lawyers, is
now required for over 800 occupations including (in some states) locksmiths, beekeepers, auctioneers, interior designers, fortune tellers, tour guides, and shampooers.
In general, a state may avoid all conflict with the federal antitrust laws by creating regulatory boards that serve only in an advisory capacity, or by staffing a regulatory board exclusively with persons who have no financial interest in the occupation that is being regulated. However, across the United States, “licensing boards are largely dominated by active members of their respective industries . . .”
That is, doctors commonly regulate doctors, beekeepers commonly regulate beekeepers, and tour guides commonly
regulate tour guides.
Earlier this year, the U.S. Supreme Court upheld the Federal Trade Commission’s determination that the North Carolina State Board of Dental Examiners (“NC Board”) violated the federal antitrust laws by preventing non-dentists from providing teeth whitening services in competition with the state’s licensed dentists. N.C. State Bd. of Dental Exam’rs v. FTC , 135 S. Ct. 1101 (2015).
The FTC statement is at https://www.ftc.gov/system/files/attachments/competition-policy-guidance/active_supervision_of_state_boards.pdf?utm_source=govdelivery
From the FTC statement:
I. Introduction
States craft regulatory policy through a variety of actors, including state legislatures, courts, agencies, and regulatory boards. While most regulatory actions taken by state actors will not implicate antitrust concerns, some will. Notably, states have created a large number of
regulatory boards with the authority to determine who may engage in an occupation (e.g. , by issuing or withholding a license), and also to set the rules and regulations governing that occupation. Licensing, once limited to a few learned professions such as doctors and lawyers, is
now required for over 800 occupations including (in some states) locksmiths, beekeepers, auctioneers, interior designers, fortune tellers, tour guides, and shampooers.
In general, a state may avoid all conflict with the federal antitrust laws by creating regulatory boards that serve only in an advisory capacity, or by staffing a regulatory board exclusively with persons who have no financial interest in the occupation that is being regulated. However, across the United States, “licensing boards are largely dominated by active members of their respective industries . . .”
That is, doctors commonly regulate doctors, beekeepers commonly regulate beekeepers, and tour guides commonly
regulate tour guides.
Earlier this year, the U.S. Supreme Court upheld the Federal Trade Commission’s determination that the North Carolina State Board of Dental Examiners (“NC Board”) violated the federal antitrust laws by preventing non-dentists from providing teeth whitening services in competition with the state’s licensed dentists. N.C. State Bd. of Dental Exam’rs v. FTC , 135 S. Ct. 1101 (2015).
The FTC statement is at https://www.ftc.gov/system/files/attachments/competition-policy-guidance/active_supervision_of_state_boards.pdf?utm_source=govdelivery
The CFPB notices bad behavior concerns about student loan servicers
From the CFPB report (URL below):
Comments from individual student loan borrowers describe how they encounter servicing problems or practices that discourage utilization of alternative repayment plans, including income-driven repayment plans. A number of comments describe how some borrowers may end up in default when they are unable to obtain an alternative repayment plan. Comments also describe how some servicing practices subsequently can result in payment shock, lost benefits, and increased interest charges for borrowers enrolled in these plans. Commenters detail problems related to customer service, including issues for borrowers seeking to resolve servicing errors. Commenters describe how these problems create barriers for borrowers experiencing financial hardship who are seeking to avoid default, and may cause significant credit reporting harm.
Commenters describe how payment processing and servicing transfer practices create problems for borrowers trying to repay student debt. Public comments from individual borrowers describe how these practices cause payment processing problems, increase interest charges and late fees, prolong repayment, and create confusion for student loan borrowers. Loan servicers also comment that the complexity of the student loan programs may contribute to these problems.
Commenters, including student loan borrowers, student loan market participants, state law enforcement officials and banking regulators, policy experts, and organizations representing consumers, workers, people of color, and institutions of higher education, call on policymakers to develop student loan servicing standards.
http://files.consumerfinance.gov/f/201509_cfpb_student-loan-servicing-report.pdf
See also the NY Times article at http://www.nytimes.com/2015/10/11/business/a-student-loan-system-stacked-against-the-borrower.html?ref=business
From the CFPB report (URL below):
Comments from individual student loan borrowers describe how they encounter servicing problems or practices that discourage utilization of alternative repayment plans, including income-driven repayment plans. A number of comments describe how some borrowers may end up in default when they are unable to obtain an alternative repayment plan. Comments also describe how some servicing practices subsequently can result in payment shock, lost benefits, and increased interest charges for borrowers enrolled in these plans. Commenters detail problems related to customer service, including issues for borrowers seeking to resolve servicing errors. Commenters describe how these problems create barriers for borrowers experiencing financial hardship who are seeking to avoid default, and may cause significant credit reporting harm.
Commenters describe how payment processing and servicing transfer practices create problems for borrowers trying to repay student debt. Public comments from individual borrowers describe how these practices cause payment processing problems, increase interest charges and late fees, prolong repayment, and create confusion for student loan borrowers. Loan servicers also comment that the complexity of the student loan programs may contribute to these problems.
Commenters, including student loan borrowers, student loan market participants, state law enforcement officials and banking regulators, policy experts, and organizations representing consumers, workers, people of color, and institutions of higher education, call on policymakers to develop student loan servicing standards.
http://files.consumerfinance.gov/f/201509_cfpb_student-loan-servicing-report.pdf
See also the NY Times article at http://www.nytimes.com/2015/10/11/business/a-student-loan-system-stacked-against-the-borrower.html?ref=business
One city's home grown solution to very fast internet
Chattanooga is one of the only places on Earth where residents and businesses can access Internet at speeds as fast as 1 gigabit per second — about 50 times faster than the U.S. average. And because the government-regulated power utility runs the gigabit Internet here, the high speeds come at a price that is affordable.
Chattanooga’s Internet, named the Gig, has won the small, postindustrial city a host of accolades and attention from the tech industry, entrepreneurs and the press since it was started as part of a project to modernize the area’s electric grid by local power company EPB in 2009.
Politicians have credited the Gig with creating upward of 1,000 jobs in Chattanooga, and some have even wondered if Chattanooga could be the country’s next Silicon Valley.
In an age of consolidation among Internet providers and coming changes to Net neutrality that could let big cable corporations like Comcast charge more to reach certain parts of the Internet, supporters of the Gig say municipally run broadband can provide a counterbalance to increased corporate dominance.
Systems like the Gig might not be practical everywhere in the United States, but its backers say it can at least set the bar for what Internet access could look like in America for decades to come.
“Whenever a corporation like Comcast wants to do something like raise prices, we can point at Chattanooga and say, ‘Why can’t we have something like that?’” said Christopher Mitchell, head of the community broadband networks initiative at the nonprofit Institute for Local Self-Reliance. “It establishes a baseline or at least an aspirational standard.”
On the ground in Chattanooga, the effects of the Gig are visible at nearly every corner. The city, once considered one of the most polluted and dangerous small cities in the nation, is now home to dozens of tech startups, venture capital firms, branding agencies and incubators as well as the kinds of restaurants, coffee shops and bars that usually follow the young and monied.
However, the path to the Chattanooga solution is not necessarily easy. Nineteen states have laws significantly restricting or effectively banning municipal broadband. And each year new bills surface in statehouses across the country in attempts to increase that number. Supporters of these laws argue that capital-intensive projects like fiber broadband are too risky for local communities to pursue, given that taxpayers are left to foot the bill should a project fail.
See http://america.aljazeera.com/articles/2015/3/6/state-roadblocks-widen-digital-divide-to-protect-cable-industry.html
Chattanooga is one of the only places on Earth where residents and businesses can access Internet at speeds as fast as 1 gigabit per second — about 50 times faster than the U.S. average. And because the government-regulated power utility runs the gigabit Internet here, the high speeds come at a price that is affordable.
Chattanooga’s Internet, named the Gig, has won the small, postindustrial city a host of accolades and attention from the tech industry, entrepreneurs and the press since it was started as part of a project to modernize the area’s electric grid by local power company EPB in 2009.
Politicians have credited the Gig with creating upward of 1,000 jobs in Chattanooga, and some have even wondered if Chattanooga could be the country’s next Silicon Valley.
In an age of consolidation among Internet providers and coming changes to Net neutrality that could let big cable corporations like Comcast charge more to reach certain parts of the Internet, supporters of the Gig say municipally run broadband can provide a counterbalance to increased corporate dominance.
Systems like the Gig might not be practical everywhere in the United States, but its backers say it can at least set the bar for what Internet access could look like in America for decades to come.
“Whenever a corporation like Comcast wants to do something like raise prices, we can point at Chattanooga and say, ‘Why can’t we have something like that?’” said Christopher Mitchell, head of the community broadband networks initiative at the nonprofit Institute for Local Self-Reliance. “It establishes a baseline or at least an aspirational standard.”
On the ground in Chattanooga, the effects of the Gig are visible at nearly every corner. The city, once considered one of the most polluted and dangerous small cities in the nation, is now home to dozens of tech startups, venture capital firms, branding agencies and incubators as well as the kinds of restaurants, coffee shops and bars that usually follow the young and monied.
However, the path to the Chattanooga solution is not necessarily easy. Nineteen states have laws significantly restricting or effectively banning municipal broadband. And each year new bills surface in statehouses across the country in attempts to increase that number. Supporters of these laws argue that capital-intensive projects like fiber broadband are too risky for local communities to pursue, given that taxpayers are left to foot the bill should a project fail.
See http://america.aljazeera.com/articles/2015/3/6/state-roadblocks-widen-digital-divide-to-protect-cable-industry.html
New California law requires half of all electricity to come from renewable sources
Under new legislation signed into law by Governor Jerry Brown, California will need to generate half of its electricity from renewable sources such as solar and wind by 2030. At the same time, the state will need to double energy efficiency in homes, offices and factories.
See lhttp://www.latimes.com/politics/la-pol-sac-jerry-brown-climate-change-renewable-energy-20151007-story.html
Chemerinsky on the SCOTUS and consumer standing issues:
Spokeo Inc. v. Thomas Robins is a case with potentially enormous implications for consumer litigation. Spokeo published an online directory and mistakenly listed Robins as employed. Robins sued under the federal Fair Credit Reporting Act, which allows an award of between $100 and $1,000 for a violation. The district court dismissed saying that Robins failed to show an injury which is required for standing. But the San Francisco based 9th U.S. Circuit Court of Appeals reversed and said that Congress, by statute, had created a right and authorized suits to enforce it.
Spokeo argues that Congress may not confer Article III standing upon a plaintiff who suffers no concrete harm—and who therefore could not otherwise invoke the jurisdiction of a federal court—by authorizing a private right of action based on a bare violation of a federal statute. Robins, by contrast, contends that he was injured by the publication of false information and that Congress may create a right, the infringement of which is sufficient for standing. The case could have great effects on the ability of plaintiffs to sue in federal court under many federal statutes.
From http://www.abajournal.com/news/article/chemerinsky_a_new_term/?utm_source=maestro&utm_medium=email&utm_campaign=weekly_email
Spokeo Inc. v. Thomas Robins is a case with potentially enormous implications for consumer litigation. Spokeo published an online directory and mistakenly listed Robins as employed. Robins sued under the federal Fair Credit Reporting Act, which allows an award of between $100 and $1,000 for a violation. The district court dismissed saying that Robins failed to show an injury which is required for standing. But the San Francisco based 9th U.S. Circuit Court of Appeals reversed and said that Congress, by statute, had created a right and authorized suits to enforce it.
Spokeo argues that Congress may not confer Article III standing upon a plaintiff who suffers no concrete harm—and who therefore could not otherwise invoke the jurisdiction of a federal court—by authorizing a private right of action based on a bare violation of a federal statute. Robins, by contrast, contends that he was injured by the publication of false information and that Congress may create a right, the infringement of which is sufficient for standing. The case could have great effects on the ability of plaintiffs to sue in federal court under many federal statutes.
From http://www.abajournal.com/news/article/chemerinsky_a_new_term/?utm_source=maestro&utm_medium=email&utm_campaign=weekly_email
From Public Citizen blog: Lower-income Americans tend to fare worse in car crashes
The Washington Post reports on a new study in the American Journal of Epidemiology supporting the conclusion that "The most disadvantaged are more likely — and have grown even more likely over time — to die in car crashes than people who are well-off." Indeed, "the inequality of traffic fatalities is getting worse, even as it looks nationwide as if our roads are getting safer."
Why? The Post explains:
The underlying issue here is not that a college degree makes you a better driver. Rather, the least-educated tend to live with a lot of other conditions that can make getting around more dangerous. They own cars that are older and have lower crash-test ratings. Those with less education are also likely to earn less and to have the money for fancy safety features such as side airbags, automatic warnings and rear cameras.
The number of trauma centers, the researchers point out, has also declined in poor and rural communities, which could affect the health care people have access to after a collision. And poor places suffer from other conditions that can make the roads themselves less safe. In many cities, poor communities lack crosswalks over major roads. The residents who live there may have less political power to fight for design improvements like stop signs, sidewalks and speed bumps. As a result, pedestrian fatalities in particular are higher in poor communities.
An important conclusion embedded in this study of rich and poor is that "fancy safety features" work. More of them should be standard -- not just as a matter of auto safety, but to address a deadly collateral consequence of income inequality.
Read the Post story here and a link to the study it discusses here.
The Washington Post reports on a new study in the American Journal of Epidemiology supporting the conclusion that "The most disadvantaged are more likely — and have grown even more likely over time — to die in car crashes than people who are well-off." Indeed, "the inequality of traffic fatalities is getting worse, even as it looks nationwide as if our roads are getting safer."
Why? The Post explains:
The underlying issue here is not that a college degree makes you a better driver. Rather, the least-educated tend to live with a lot of other conditions that can make getting around more dangerous. They own cars that are older and have lower crash-test ratings. Those with less education are also likely to earn less and to have the money for fancy safety features such as side airbags, automatic warnings and rear cameras.
The number of trauma centers, the researchers point out, has also declined in poor and rural communities, which could affect the health care people have access to after a collision. And poor places suffer from other conditions that can make the roads themselves less safe. In many cities, poor communities lack crosswalks over major roads. The residents who live there may have less political power to fight for design improvements like stop signs, sidewalks and speed bumps. As a result, pedestrian fatalities in particular are higher in poor communities.
An important conclusion embedded in this study of rich and poor is that "fancy safety features" work. More of them should be standard -- not just as a matter of auto safety, but to address a deadly collateral consequence of income inequality.
Read the Post story here and a link to the study it discusses here.
Paul Bland on Spotfiy's Arbitration Clause: Spotify Hits a Sour Note with Secretive Fine Print
Here, in the Daily Kos. An excerpt:
If Spotify does something illegal, no one can ever know that a consumer is challenging it. And then, if an arbitrator did find that Spotify acted illegally (which is asking a lot, since Spotify will pick the private arbitration company that will, in turn, select the arbitrator to hear the case), whatever the result is must be kept secret.
Here, in the Daily Kos. An excerpt:
If Spotify does something illegal, no one can ever know that a consumer is challenging it. And then, if an arbitrator did find that Spotify acted illegally (which is asking a lot, since Spotify will pick the private arbitration company that will, in turn, select the arbitrator to hear the case), whatever the result is must be kept secret.
From Consumer Reports: Arbitration Clauses
Excerpt:
We believe that consumers should not be forced into arbitration. The Consumer Financial Protection Bureau should use its authority to stop forced arbitration in financial services; it recently announced it's holding a hearing on October 7 in Denver to discuss the topic, and may make an announcement then. Congress should enact legislation to make arbitration voluntary in other consumer contracts.
Click for full report Here.
Excerpt:
We believe that consumers should not be forced into arbitration. The Consumer Financial Protection Bureau should use its authority to stop forced arbitration in financial services; it recently announced it's holding a hearing on October 7 in Denver to discuss the topic, and may make an announcement then. Congress should enact legislation to make arbitration voluntary in other consumer contracts.
Click for full report Here.
From Digital Music News: Are ISPs Responsible for Copyright Infringement?
One of the most important cases in the history of music copyright and content protection is happening right now, with a decision expected in months. Yet very few are even aware of its existence.
The case involves Cox Communications, the third-largest ISP in the United States, and, depending on who you talk to, one of the largest facilitators of piracy in the world. That’s the accusation of litigating rights owners BMG Rights Management and Round Hill Music, who’ve finally rallied the courage (and resources) to haul the powerful broadband industry into court.
Because alongside all the legal Netflix streaming and iTunes downloading, there’s still a massive-and-increasing level of piracy happening online, largely through BitTorrent. But talk to Cox — and Comcast, Time Warner, Verizon, and others — and you’ll find that this really isn’t their problem.
Article continues here.
One of the most important cases in the history of music copyright and content protection is happening right now, with a decision expected in months. Yet very few are even aware of its existence.
The case involves Cox Communications, the third-largest ISP in the United States, and, depending on who you talk to, one of the largest facilitators of piracy in the world. That’s the accusation of litigating rights owners BMG Rights Management and Round Hill Music, who’ve finally rallied the courage (and resources) to haul the powerful broadband industry into court.
Because alongside all the legal Netflix streaming and iTunes downloading, there’s still a massive-and-increasing level of piracy happening online, largely through BitTorrent. But talk to Cox — and Comcast, Time Warner, Verizon, and others — and you’ll find that this really isn’t their problem.
Article continues here.
AAI SUPPORTS SCRUTINY OF DRUG “PRODUCT HOPPING” IN DORYX CASE (MYLAN PHARMACEUTICALS V. WARNER CHILCOTT)
RICHARD BRUNELL, AAI AMICUS PROGRAM
The American Antitrust Institute (AAI) has filed an amicus brief urging the Third Circuit Court of Appeals to follow a recent decision of the Second Circuit and hold that “product hopping” by brand-name drug manufacturers is not immune from antitrust review.
Product hopping is a scheme by which a brand drug manufacturer seeks to thwart FDA-approved generic competition by switching patients to a reformulated version of the drug shortly before generics enter the market. The AAI brief asks the Third Circuit to reverse a district court holding that Warner Chilcott’s reformulations of the dosage and form of the brand drug Doryx (a tetracycline used to treat severe acne) and withdrawals of earlier versions could not violate Section 2 of the Sherman Act, even if the primary purpose and effect was to defeat generic competition via generic substitution laws.
The brief explains why the case law and the peculiar characteristics of pharmaceutical markets require antitrust scrutiny of product hopping. Product hopping prevents meaningful generic entry because it undermines the state drug product substitution laws that enable generic competition. Those laws, which allow the pharmacist (with the consumer’s consent) to substitute a cheaper generic for a brand prescription, only apply when the brand and the generic are essentially identical.
If the prescription is written for a reformulation (a different form or a different dosage), consumers cannot buy the cheaper generic. As a result of product hopping, the brand drug company is able to extend its monopoly even after the original brand drug goes off patent or otherwise loses its exclusivity. Consumers and insurance plans pay millions of dollars more for drugs that may offer little or no additional therapeutic benefit.
In its brief, the AAI tells the Third Circuit that the lower court erred in reasoning that product hopping is not anticompetitive when generic manufacturers are not completely blocked from entering the market.
For more, go to http://www.antitrustinstitute.org/content/aai-supports-scrutiny-drug-product-hopping-doryx-case-mylan-pharmaceuticals-v-warner
RICHARD BRUNELL, AAI AMICUS PROGRAM
The American Antitrust Institute (AAI) has filed an amicus brief urging the Third Circuit Court of Appeals to follow a recent decision of the Second Circuit and hold that “product hopping” by brand-name drug manufacturers is not immune from antitrust review.
Product hopping is a scheme by which a brand drug manufacturer seeks to thwart FDA-approved generic competition by switching patients to a reformulated version of the drug shortly before generics enter the market. The AAI brief asks the Third Circuit to reverse a district court holding that Warner Chilcott’s reformulations of the dosage and form of the brand drug Doryx (a tetracycline used to treat severe acne) and withdrawals of earlier versions could not violate Section 2 of the Sherman Act, even if the primary purpose and effect was to defeat generic competition via generic substitution laws.
The brief explains why the case law and the peculiar characteristics of pharmaceutical markets require antitrust scrutiny of product hopping. Product hopping prevents meaningful generic entry because it undermines the state drug product substitution laws that enable generic competition. Those laws, which allow the pharmacist (with the consumer’s consent) to substitute a cheaper generic for a brand prescription, only apply when the brand and the generic are essentially identical.
If the prescription is written for a reformulation (a different form or a different dosage), consumers cannot buy the cheaper generic. As a result of product hopping, the brand drug company is able to extend its monopoly even after the original brand drug goes off patent or otherwise loses its exclusivity. Consumers and insurance plans pay millions of dollars more for drugs that may offer little or no additional therapeutic benefit.
In its brief, the AAI tells the Third Circuit that the lower court erred in reasoning that product hopping is not anticompetitive when generic manufacturers are not completely blocked from entering the market.
For more, go to http://www.antitrustinstitute.org/content/aai-supports-scrutiny-drug-product-hopping-doryx-case-mylan-pharmaceuticals-v-warner
California Air Board Plans 'Major Enforcement Action' Against VW
California is preparing a series of actions against automaker Volkswagen over its admitted cheating on tailpipe emissions tests, the state's top air official said on Thursday.
"Right now we are organizing ourselves for a major enforcement action," said Mary Nichols, chair of the California Air Resources Board.
See Reuters http://www.nbcnews.com/business/autos/california-air-board-plans-major-enforcement-action-against-vw-n433251
California is preparing a series of actions against automaker Volkswagen over its admitted cheating on tailpipe emissions tests, the state's top air official said on Thursday.
"Right now we are organizing ourselves for a major enforcement action," said Mary Nichols, chair of the California Air Resources Board.
See Reuters http://www.nbcnews.com/business/autos/california-air-board-plans-major-enforcement-action-against-vw-n433251
From Public Citizen blog: Continuing price spikes for generic drugs
Several news outlets reported this week on the huge price jump in the cost of a generic drug: Turing Pharmaceuticals increased the cost of the drug Daraprim more than 4n000 percent, from $13.50 a tablet to $750, overnight. See stories here and here.
The prices of numerous generic drugs have risen sharply over the past year or two. Concern among members of Congress prompted an investigation in October 2014, which is ongoing.
The headline in a Washington Post blogpost suggested that the huge Daraprim price jump "might finally spur action on soaring health-care costs." Time will tell.
Several news outlets reported this week on the huge price jump in the cost of a generic drug: Turing Pharmaceuticals increased the cost of the drug Daraprim more than 4n000 percent, from $13.50 a tablet to $750, overnight. See stories here and here.
The prices of numerous generic drugs have risen sharply over the past year or two. Concern among members of Congress prompted an investigation in October 2014, which is ongoing.
The headline in a Washington Post blogpost suggested that the huge Daraprim price jump "might finally spur action on soaring health-care costs." Time will tell.
Virginia attorney general to crack down on shady car-title lending practices
Both enforcement and public education are on the agenda for the Commonwealth's Attorney General Mark Herring. Listen to the NPR story here. (Posted by Public Citizen -- click title)
Both enforcement and public education are on the agenda for the Commonwealth's Attorney General Mark Herring. Listen to the NPR story here. (Posted by Public Citizen -- click title)
From Paul Levy at Public Citizen blog: Can you make your own candidate support t-shirt (or a parody) and not break the law?
K. Clyde Vanel, whose law firm’s web site portrays him an IP law expert, sent a demand to CafePress, claiming that the items that come up on a search of CafePress’s web site using the search string "Ben Carson gifts" constituted “trademark infringement, copyright infringement, misappropriation of name and likeness, privacy rights infringement.” He went on to tell CaféPress, “The aforementioned action is a violation of the Digital Millennium Copyright Act, The Lanham Act, Federal Trademark Infringement, Federal Copyright Infringement, state misappropriation and privacy laws.” And he concluded with a demand, in all capital letters, that all “unauthorized Ben Carson for President products” be removed from the CafePress site.
But the legal claims are those of a buffoon. Supporting Ben Carson’s candidacy invades his privacy? The phrase “Ben Carson for President” is copyrightable? Nobody else can utter those words lest they infringe his trademark or violate his right of publicity?
This sort of IP silliness comes up in every presidential campaign, it seems. This season, we have already had to deal with a threat by the “Ready for Hillary” organization threatening a T-shirt seller who had the temerity to create shirts adapting the group's stylized logo but changing the wording to “Ready for Oligarchy,” referring to the then-assumption that the race would be fought in November 2016 between Hillary Clinton and Jeb Bush. We stepped up to defend the parodist, and CafePress, which had initially taken the shirts down in response to a demand letter,promptly agreed to restore them. The pro-Clinton PAC met our three-day deadline to retract or get sued for a declaratory judgment of non-infringement.
None of the CafePress items use the logo form that the Carson campaign has adopted, and has applied to register as a trademark. If that logo were used, we would at least have some issues worth consideration. But here, we just have mindless bullying that strikes me as counterproductive even apart from the Streisand Effect.
Last night I sent a reply to the lawyer who signed his name to Carson’s nonsense. I hope he will have the good sense to follow Ready for Hillary's example.
Posted by Paul Levy on Thursday, September 17, 2015 at 11:18 AM http://pubcit.typepad.com/clpblog/2015/09/you-dont-have-to-be-brain-surgeon-to-understand-how-silly-ben-carsons-legal-threats-are-.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+ConsumerLawPolicyBlog+%28Consumer+Law+%26+Policy+Blog%29
K. Clyde Vanel, whose law firm’s web site portrays him an IP law expert, sent a demand to CafePress, claiming that the items that come up on a search of CafePress’s web site using the search string "Ben Carson gifts" constituted “trademark infringement, copyright infringement, misappropriation of name and likeness, privacy rights infringement.” He went on to tell CaféPress, “The aforementioned action is a violation of the Digital Millennium Copyright Act, The Lanham Act, Federal Trademark Infringement, Federal Copyright Infringement, state misappropriation and privacy laws.” And he concluded with a demand, in all capital letters, that all “unauthorized Ben Carson for President products” be removed from the CafePress site.
But the legal claims are those of a buffoon. Supporting Ben Carson’s candidacy invades his privacy? The phrase “Ben Carson for President” is copyrightable? Nobody else can utter those words lest they infringe his trademark or violate his right of publicity?
This sort of IP silliness comes up in every presidential campaign, it seems. This season, we have already had to deal with a threat by the “Ready for Hillary” organization threatening a T-shirt seller who had the temerity to create shirts adapting the group's stylized logo but changing the wording to “Ready for Oligarchy,” referring to the then-assumption that the race would be fought in November 2016 between Hillary Clinton and Jeb Bush. We stepped up to defend the parodist, and CafePress, which had initially taken the shirts down in response to a demand letter,promptly agreed to restore them. The pro-Clinton PAC met our three-day deadline to retract or get sued for a declaratory judgment of non-infringement.
None of the CafePress items use the logo form that the Carson campaign has adopted, and has applied to register as a trademark. If that logo were used, we would at least have some issues worth consideration. But here, we just have mindless bullying that strikes me as counterproductive even apart from the Streisand Effect.
Last night I sent a reply to the lawyer who signed his name to Carson’s nonsense. I hope he will have the good sense to follow Ready for Hillary's example.
Posted by Paul Levy on Thursday, September 17, 2015 at 11:18 AM http://pubcit.typepad.com/clpblog/2015/09/you-dont-have-to-be-brain-surgeon-to-understand-how-silly-ben-carsons-legal-threats-are-.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+ConsumerLawPolicyBlog+%28Consumer+Law+%26+Policy+Blog%29
A Broader Look at Patent Royalties and Antitrust
Erik N. Hovenkamp (Northwestern University)
Abstract: It is well known in antitrust economics that competitors can rely on patent licensing with high royalties as a surrogate for price fixing. This paper addresses a number of alternative situations in which patent royalty agreements may raise antitrust concerns, even if the royalty rate is ostensibly reasonable. For example, a royalty charged to a competitor creates an "alignment effect" by giving the licensor a stake in its rival's success. This is the same problem that arises when a firm buys stock in a competitor (a potential antitrust violation). By aligning the firms' interests, this blunts competition and benefits both parties independently of the underlying exchange. Thus, for example, if a firm charges a rival $5 per unit for an invention that lowers production costs by the same $5, then even the rival-licensee strictly benefits, because its net costs are unchanged, but now the market is less competitive. More generally, the alignment effect may lead welfare to decline overall even if the royalty rate is strictly lower than the licensing value (e.g. $4), just as a merger may reduce welfare even if it produces some cost efficiencies.
Additionally, offsetting (i.e. reciprocal) license payments between competitors often warrant scrutiny even if each royalty appears individually reasonable. Even under cross-licensing, offsetting payments are never necessary for the parties to reach a mutually-beneficial agreement, which is generally the relevant antitrust question. Instead, the practical effect of offsetting royalties is to replicate a collusive agreement to restrain consumer pass-through, ensuring the firms retain more of the licensing surplus. The results shed new light on the competitive impact of patent pools, which typically create widespread royalty offset and alignment between competing members, even if patents are complementary.
Click title above for link
Some of Wall Street’s biggest financial institutions -- including Goldman Sachs Group Inc.,
JPMorgan Chase & Co., Citigroup Inc. and HSBC Holdings Plc -- have
agreed to a $1.87 billion settlement to resolve allegations they
conspired to limit competition in the lucrative credit-default swaps
market.
The banks reached an agreement in principle with a group of investors that includes the Los Angeles County Employees Retirement Association.
This is a matter that apparently has not been prosecuted by federal or state antitrust authorities.
http://www.bloomberg.com/news/articles/2015-09-11/wall-street-banks-reach-settlement-on-cds-lawsuit-lawyer-says
The banks reached an agreement in principle with a group of investors that includes the Los Angeles County Employees Retirement Association.
This is a matter that apparently has not been prosecuted by federal or state antitrust authorities.
http://www.bloomberg.com/news/articles/2015-09-11/wall-street-banks-reach-settlement-on-cds-lawsuit-lawyer-says
Antitrust problem with electronic medical records? Complaint by former hospital CEO Levy taken from his blog:
Here's how it works. Partners enters into a contract with Epic for the construction of an EHR for its facilities. The two organizations go to the Partners-affiliated, but independent, medical practice groups and tell them that they have to install the Epic EHR--even if the EHR they have had for years is perfectly adequate for their purposes. If a doctors' practice asks why they can't keep their old system, Epic makes clear that interoperability between its system and the practice's legacy system is not feasible. Meanwhile, to clinch the conversion, Partners also informs the local practices that failure to install the Epic system will foreclose those practices from participating in the favorable insurance contracting relationships it enjoys.
It is in this manner that the Epic-Partners actions box out the competition in this market, acting on the pair's mutual self-interest. They are complicit with each other in helping to ensure that PHS keeps its network strong by holding on to physician groups and that Epic expands its market power by expelling established competitors. This may not be your usual type of anti-trust activity, but it is anti-trust activity nonetheless. And you can bet it is happening in other states as well.
In the past, Attorneys General have joined forces on matters of interest to many states--public health, environmental protection, and the like. Here, we have a pattern of behavior that seeks to limit competition in an arena of great importance to the public well-being. I hope that our new AG puts this case on her list of priorities for her term of office and seeks allies from other states to join her.
Here's how it works. Partners enters into a contract with Epic for the construction of an EHR for its facilities. The two organizations go to the Partners-affiliated, but independent, medical practice groups and tell them that they have to install the Epic EHR--even if the EHR they have had for years is perfectly adequate for their purposes. If a doctors' practice asks why they can't keep their old system, Epic makes clear that interoperability between its system and the practice's legacy system is not feasible. Meanwhile, to clinch the conversion, Partners also informs the local practices that failure to install the Epic system will foreclose those practices from participating in the favorable insurance contracting relationships it enjoys.
It is in this manner that the Epic-Partners actions box out the competition in this market, acting on the pair's mutual self-interest. They are complicit with each other in helping to ensure that PHS keeps its network strong by holding on to physician groups and that Epic expands its market power by expelling established competitors. This may not be your usual type of anti-trust activity, but it is anti-trust activity nonetheless. And you can bet it is happening in other states as well.
In the past, Attorneys General have joined forces on matters of interest to many states--public health, environmental protection, and the like. Here, we have a pattern of behavior that seeks to limit competition in an arena of great importance to the public well-being. I hope that our new AG puts this case on her list of priorities for her term of office and seeks allies from other states to join her.
New real estate contract forms for DC and Maryland
The Greater Capital Area Association of Realtors (GCAAR) has created a new form contract for Montgomery County and the District, which make up GCAAR’s jurisdiction.
The new form, the GCAAR sales contract, “has eliminated the redundancy found in prior versions, shortened the length of the Jurisdictional Addenda . . . to improve the agent and customer experience,” according to the group’s training instructions.
Those who object to the voluminous amounts of paper used in real estate transactions will be pleased to learn that when the new forms are used, there will be eight fewer pages in Montgomery County and up to four fewer pages in the District.
See http://www.washingtonpost.com/realestate/housing-counsel-a-new-deal-in-dc-montgomery-real-estate-contracts/2015/08/31/3a14e472-4a6f-11e5-846d-02792f854297_story.html
The Greater Capital Area Association of Realtors (GCAAR) has created a new form contract for Montgomery County and the District, which make up GCAAR’s jurisdiction.
The new form, the GCAAR sales contract, “has eliminated the redundancy found in prior versions, shortened the length of the Jurisdictional Addenda . . . to improve the agent and customer experience,” according to the group’s training instructions.
Those who object to the voluminous amounts of paper used in real estate transactions will be pleased to learn that when the new forms are used, there will be eight fewer pages in Montgomery County and up to four fewer pages in the District.
See http://www.washingtonpost.com/realestate/housing-counsel-a-new-deal-in-dc-montgomery-real-estate-contracts/2015/08/31/3a14e472-4a6f-11e5-846d-02792f854297_story.html
Xbox One Promoter Settles FTC Charges That it Deceived Consumers
A California-based online entertainment network has agreed to settle Federal Trade Commission charges that it engaged in deceptive advertising by paying “influencers” to post YouTube videos endorsing Microsoft’s Xbox One system and several games. The influencers paid by Machinima, Inc., failed to adequately disclose that they were being paid for their seemingly objective opinions, the FTC charged.
Under the proposed settlement, Machinima is prohibited from engaging in similar deceptive conduct in the future, and the company is required to ensure its influencers clearly disclose when they have been compensated in exchange for their endorsements.
Lawmakers pressure Fiat Chrysler to support ban on renting recalled vehicles
The Hill Reports that Sen. Barbara Boxer (D-Calif.) and Rep. Lois Capps (D-Calif.) are pressuring automaker Fiat Chrysler to support a bill that would ban car rental companies from distributing recalled vehicles. Fiat Chrysler was recently fined $105 million by the National Highway Traffic Safety Administration for allegedly failing to properly notify drivers, car dealerships and federal regulators about recalls that affected about 11 million vehicles. The company has also been accused of neglecting to repair cars in a timely fashion, as required by a 1966 law.
The full story is here.
A California-based online entertainment network has agreed to settle Federal Trade Commission charges that it engaged in deceptive advertising by paying “influencers” to post YouTube videos endorsing Microsoft’s Xbox One system and several games. The influencers paid by Machinima, Inc., failed to adequately disclose that they were being paid for their seemingly objective opinions, the FTC charged.
Under the proposed settlement, Machinima is prohibited from engaging in similar deceptive conduct in the future, and the company is required to ensure its influencers clearly disclose when they have been compensated in exchange for their endorsements.
Lawmakers pressure Fiat Chrysler to support ban on renting recalled vehicles
The Hill Reports that Sen. Barbara Boxer (D-Calif.) and Rep. Lois Capps (D-Calif.) are pressuring automaker Fiat Chrysler to support a bill that would ban car rental companies from distributing recalled vehicles. Fiat Chrysler was recently fined $105 million by the National Highway Traffic Safety Administration for allegedly failing to properly notify drivers, car dealerships and federal regulators about recalls that affected about 11 million vehicles. The company has also been accused of neglecting to repair cars in a timely fashion, as required by a 1966 law.
The full story is here.
Student loan defaults are concentrated among the millions of students who drop out without a degree
So argues this article by Susan Dynarski. (click to the left for the article).
So argues this article by Susan Dynarski. (click to the left for the article).
Hospitals Say Aetna-Humana Deal Endangers Medicare Advantage
Forbes - The nation's powerful hospital lobby, the American Hospital Association, urged the U.S. Justice Department to closely scrutinize the proposed $37 billion acquisition by Aetna of Humana, saying it threatens competition in the business of providing health benefits to seniors in the growing privately run portion of the Medicare program.
Click title above for link
Forbes - The nation's powerful hospital lobby, the American Hospital Association, urged the U.S. Justice Department to closely scrutinize the proposed $37 billion acquisition by Aetna of Humana, saying it threatens competition in the business of providing health benefits to seniors in the growing privately run portion of the Medicare program.
Click title above for link
From Modern Healthcare: Competitor sues Florida system Health First
By Lisa Schencker
A public hospital has joined a number of Florida providers alleging integrated system Health First is engaging in unfair business practices.
The lawsuits come amid increasing numbers of health systems moving toward integration across the country, and some say what's happening in Florida is an example of what can occur when integrated systems grab too much market power. Others, though, say the facts of the Health First lawsuits are unique to that market.
The full article is at http://www.modernhealthcare.com/article/20150902/NEWS/150909986?utm_source=modernhealthcare&utm_medium=email&utm_content=externalURL&utm_campaign=am
By Lisa Schencker
A public hospital has joined a number of Florida providers alleging integrated system Health First is engaging in unfair business practices.
The lawsuits come amid increasing numbers of health systems moving toward integration across the country, and some say what's happening in Florida is an example of what can occur when integrated systems grab too much market power. Others, though, say the facts of the Health First lawsuits are unique to that market.
The full article is at http://www.modernhealthcare.com/article/20150902/NEWS/150909986?utm_source=modernhealthcare&utm_medium=email&utm_content=externalURL&utm_campaign=am
A major change in chip-card liability coming Oct. 1
New EMV chip technology rolling out in the United States is designed to protect in-store payments by generating unique, one-time codes for transactions. It's supposed to cut down on hacks and credit-card fraud. But card issuers and merchants who do not pay to upgrade their point-of-sale systems to accept the new chip cards will assume liability for any fraudulent transaction after Oct. 1.
In the big hackings of years past, think Target and Michael's, the banks have been pretty much on the hook for their customers' losses. But, with the smart-cards on offer, the banks are putting the liability on businesses.
The take-away for consumers: If you use your card and are hacked at a merchant who has not upgraded, maybe your favorite food-truck lunch place, your remedy is against the merchant, no longer the bank.
See http://www.cnbc.com/2015/08/05/smarter-credit-cards-befuddle-small-businesses.html
New EMV chip technology rolling out in the United States is designed to protect in-store payments by generating unique, one-time codes for transactions. It's supposed to cut down on hacks and credit-card fraud. But card issuers and merchants who do not pay to upgrade their point-of-sale systems to accept the new chip cards will assume liability for any fraudulent transaction after Oct. 1.
In the big hackings of years past, think Target and Michael's, the banks have been pretty much on the hook for their customers' losses. But, with the smart-cards on offer, the banks are putting the liability on businesses.
The take-away for consumers: If you use your card and are hacked at a merchant who has not upgraded, maybe your favorite food-truck lunch place, your remedy is against the merchant, no longer the bank.
See http://www.cnbc.com/2015/08/05/smarter-credit-cards-befuddle-small-businesses.html
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Does your rock band need to pay a royalty to Warner Brothers for playing "Happy Birthday" at a Bar Mitzvah?
Its the kind of intellectual property claim that can seem weird to a non-lawyer. Warner Music Group says they own the copyright to “Happy Birthday,” a song whose value has been estimated at roughly $5 million. That copyright claim is one of the reasons why you rarely hear “Happy Birthday” sung in a movie or television show, and why Warner is being actively litigated against for unfairly claiming ownership of a song in the public domain.
Now, according to the publication Digital Music News, that issue is about to get more complicated. Deep in the vaults of the University of Louisville, a librarian has now discovered what appears to be the original manuscript of “Happy Birthday,” or at least the earliest known version. The sheet music dates back to the 1890s, and is for a song originally titled “Good Morning to All,” which eventually morphed into the song, “Happy Birthday”.
There are some changes, however: the melody in the original manuscript is slightly different than the eventual, “Happy Birthday” melody we all know.
See http://www.digitalmusicnews.com/2015/09/01/breaking-original-1890s-manuscript-of-happy-birthday-discovered/
Its the kind of intellectual property claim that can seem weird to a non-lawyer. Warner Music Group says they own the copyright to “Happy Birthday,” a song whose value has been estimated at roughly $5 million. That copyright claim is one of the reasons why you rarely hear “Happy Birthday” sung in a movie or television show, and why Warner is being actively litigated against for unfairly claiming ownership of a song in the public domain.
Now, according to the publication Digital Music News, that issue is about to get more complicated. Deep in the vaults of the University of Louisville, a librarian has now discovered what appears to be the original manuscript of “Happy Birthday,” or at least the earliest known version. The sheet music dates back to the 1890s, and is for a song originally titled “Good Morning to All,” which eventually morphed into the song, “Happy Birthday”.
There are some changes, however: the melody in the original manuscript is slightly different than the eventual, “Happy Birthday” melody we all know.
See http://www.digitalmusicnews.com/2015/09/01/breaking-original-1890s-manuscript-of-happy-birthday-discovered/
Contact lens makers fight in a federal appeals case against a Utah law banning minimum prices
The nation's largest contact lens companies — Alcon Laboratories, Johnson & Johnson and Bausch & Lomb — asked the 10th Circuit Court of Appeals in Denver to strike down the measure. They said the law was crafted to help a homegrown discounter, 1-800 Contacts, but has the effect of changing lens pricing nationwide.
"It says to 1-800 Contacts, you can sell to a consumer in Florida, and you can utterly disregard what the manufacturer says the price should be," said David Marriott, lawyer for Alcon.
Full content: Seattlepi.com
The nation's largest contact lens companies — Alcon Laboratories, Johnson & Johnson and Bausch & Lomb — asked the 10th Circuit Court of Appeals in Denver to strike down the measure. They said the law was crafted to help a homegrown discounter, 1-800 Contacts, but has the effect of changing lens pricing nationwide.
"It says to 1-800 Contacts, you can sell to a consumer in Florida, and you can utterly disregard what the manufacturer says the price should be," said David Marriott, lawyer for Alcon.
Full content: Seattlepi.com
CA Uber Drivers Win Class Certification In Tips Suit
Many of us may think that "tip included" for Uber cab drivers means tips that go to the drivers. Bit apparently not. Uber drivers brought an action in California about it. The drivers' counsel has persuaded a California federal judge to certify a class of drivers who claim they were mislabeled as independent contractors and cheated out of tips.
See http://uberlawsuit.com/
Many of us may think that "tip included" for Uber cab drivers means tips that go to the drivers. Bit apparently not. Uber drivers brought an action in California about it. The drivers' counsel has persuaded a California federal judge to certify a class of drivers who claim they were mislabeled as independent contractors and cheated out of tips.
See http://uberlawsuit.com/
The Enduring Ambiguities of Antitrust Liability for Worker Collective Action
Article by Sanjukta Paul (University of California)
Abstract: This Article examines the regulation, by antitrust law, of collective action by low-wage workers who are classified as independent contractors, and who therefore presumptively do not receive the benefit of the labor exemption from antitrust law. Such workers find themselves in the position of most workers prior to the New Deal: at once lacking labor protections, yet exposed to antitrust liability for organizing to improve their conditions. I argue that this default rule is the legacy of a problematic history that is taken for granted by the contemporary antitrust framework.
Click title above for URL link
Article by Sanjukta Paul (University of California)
Abstract: This Article examines the regulation, by antitrust law, of collective action by low-wage workers who are classified as independent contractors, and who therefore presumptively do not receive the benefit of the labor exemption from antitrust law. Such workers find themselves in the position of most workers prior to the New Deal: at once lacking labor protections, yet exposed to antitrust liability for organizing to improve their conditions. I argue that this default rule is the legacy of a problematic history that is taken for granted by the contemporary antitrust framework.
Click title above for URL link
The National Association of Convenience Stores advocacy: Oppose Language that Weakens Debit Reforms
From NACS: The 2010 passage of the Durbin Amendment to the Dodd-Frank Ac reformed debit card swipe fees and provided much needed relief for retailers and their customers. On July 23, 2015, the Senate Appropriations Committee passed the FY 2016 Financial Services and General Government Appropriations bill with language that would significantly roll back those very reforms that have helped our industry. In just two minutes, you can send a letter NACS has drafted on your behalf to your Senators urging them to remove this harmful language.
Click below for the NACS letter:
Take Action
From NACS: The 2010 passage of the Durbin Amendment to the Dodd-Frank Ac reformed debit card swipe fees and provided much needed relief for retailers and their customers. On July 23, 2015, the Senate Appropriations Committee passed the FY 2016 Financial Services and General Government Appropriations bill with language that would significantly roll back those very reforms that have helped our industry. In just two minutes, you can send a letter NACS has drafted on your behalf to your Senators urging them to remove this harmful language.
Click below for the NACS letter:
Take Action
Is your local electric utility impeding your installation of rooftop solar? DCPSC investigating
Apparently that is a common problem across the country. See he Washington Post article at http://www.washingtonpost.com/national/health-science/utilities-sensing-threat-put-squeeze-on-booming-solar-roof-industry/2015/03/07/2d916f88-c1c9-11e4-
Homeowner litigation challenging utility actions against rooftop solar can be difficult because the actions of a local PSC may give cover to utility actions. But that may not always be an obstacle. In May, SolarCity Corp., a marketer of rooftop solar panels, filed a complaint in federal district court in Arizona, alleging that the Salt River Project Agricultural Improvement and Power District and Salt River Valley Water Users’ Association are monopolizing or attempting to monopolize the market for retail electricity by eliminating subsidies for solar power and replacing them with an electric rate structure that makes rooftop solar prohibitively expensive to operate. SolarCity Corp. v. Salt River Project et al., Case No. 2:15-CV-00374-DLR (D. Ariz). See the article on the case by Arthur Adelberg at http://www.law360.com/articles/689204/solar-panel-antitrust-case-may-test-monopolization-law
In the District of Columbia, the DCPSC's and the local Department of Energy are investigating Pepco's interconnection practices as they relate to local rooftop type solar and backyard wind electrical generation. The investigations appear to be based on a report which indicates that Pepco is the slowest utility in the country for connecting solar power to the grid, which supports those who think Pepco is foot dragging.
PSC proceedings docket is at: http://www.dcpsc.org/edocket/docketsheets.asp?cbofc&CaseNumber=1050&ItemNumber=&orderno=&PartyFiling=&Filing&yr_filing=&Keywords=&FromDate=&ToDate=&toggle_text=Full+Text&show_result=Y&hdn_orderNumber=&hdn_chk_whole_search=&hdn_Assesment
Both the People's Counsel and local DOE submissions in the DCPSC proceedings suggest new rules from the PSC to squelch Pepco bad behavior that discourages locally generated solar energy. A question for legal analysis concerns the available legal redress for customers who install rooftop solar and experience delays and other costly behaviors from Pepco. Is PSC action the exclusive remedy? Is private litigation available, or can it be blocked because of the possibility of government action?
The full opinion and order of the DCPSC denying the merger application of Exelon-PHI is here:
http://dcpsc.org/edocket/docketsheets_pdf_FS.asp?caseno=FC1119&docketno=946&flag=C&show_result=Y
http://dcpsc.org/edocket/docketsheets_pdf_FS.asp?caseno=FC1119&docketno=946&flag=C&show_result=Y
From Law 360 article -- DCPSC decision on Exelon-PHI:
In a joint statement, Exelon and Pepco said they were disappointed with the outcome, noting that they planned to review their next possible steps before deciding how to proceed.
"We are disappointed with the commission's decision and believe it fails to recognize the benefits of the merger to the District of Columbia and its residents and businesses. We continue to believe our proposal is in the public interest and provides direct immediate and long-term benefits to customers, enhances reliability and preserves our role as a community partner," the statement said.
The deal, which was announced in April 2014, was set to bring together Exelon utilities Baltimore Gas and Electric Co., Commonwealth Edison Co. and Peco Energy Co. with Pepco Holdings utilities Atlantic City Electric, Delmarva Power and Control Inc. and The Potomac Electric Power Co. The six utilities provide power for customers in five mid-Atlantic states stretching from New Jersey to Virginia, as well as in Chicago and most of northern Illinois and Washington, D.C.
The proposed merger drew scrutiny from several community organizations, including D.C. Sun, a group of local residents that joined together prior to the deal to promote the use of renewable energy.
The group was worried that because Exelon has energy generation assets, the company could have a conflict of interest, according to Randy Speck, a Kaye Scholer LLP special counsel who represented D.C. Sun pro bono.
"Our concern was that rather than having a utility that was focused on and supportive of the expansion of renewable generation, we would have, under their proposed merger, a utility that has at least divided loyalties," he said.
Complete article at http://www.law360.com/energy/articles/695069/dc-regulators-veto-6-8b-exelon-pepco-deal (by subscription)
In a joint statement, Exelon and Pepco said they were disappointed with the outcome, noting that they planned to review their next possible steps before deciding how to proceed.
"We are disappointed with the commission's decision and believe it fails to recognize the benefits of the merger to the District of Columbia and its residents and businesses. We continue to believe our proposal is in the public interest and provides direct immediate and long-term benefits to customers, enhances reliability and preserves our role as a community partner," the statement said.
The deal, which was announced in April 2014, was set to bring together Exelon utilities Baltimore Gas and Electric Co., Commonwealth Edison Co. and Peco Energy Co. with Pepco Holdings utilities Atlantic City Electric, Delmarva Power and Control Inc. and The Potomac Electric Power Co. The six utilities provide power for customers in five mid-Atlantic states stretching from New Jersey to Virginia, as well as in Chicago and most of northern Illinois and Washington, D.C.
The proposed merger drew scrutiny from several community organizations, including D.C. Sun, a group of local residents that joined together prior to the deal to promote the use of renewable energy.
The group was worried that because Exelon has energy generation assets, the company could have a conflict of interest, according to Randy Speck, a Kaye Scholer LLP special counsel who represented D.C. Sun pro bono.
"Our concern was that rather than having a utility that was focused on and supportive of the expansion of renewable generation, we would have, under their proposed merger, a utility that has at least divided loyalties," he said.
Complete article at http://www.law360.com/energy/articles/695069/dc-regulators-veto-6-8b-exelon-pepco-deal (by subscription)
Editorial comment on the DCPSC decision denying the Exelon-PHI merger application
Sometimes mergers are not just about abstruse economic analysis, but involve vehement public debate. An interesting example is the Exelon-PHI (Pepco) merger proposal in the District of Columbia.
The merger application was the subject of sophisticated economic analysis by the American Antitrust Institute. Earlier this year the AAI sent a letter to the USDOJ Antitrust Division. The letter (http://antitrustinstitute.org/sites/default/files/Exelon-Pepco_AAI%20letter_2-25-15.pdf) explained to USDOJ that, among other things, a merged Exelon-Pepco would possess an enhanced ability and pre-existing, powerful incentive to engage in vertical foreclosure and block entry by rivals. Also, AAI’s Diana Moss spoke at a local D.C. forum on the proposed merger and explained the antitrust issues.
On Tuesday, August 25, the District of Columbia Public Service Commission denied the Exelon-PHI application to merge. D.C. was the last of several jurisdictions to decide about the merger application, and the only one to deny permission
The DCPSC decision is by a regulatory body applying a public interest rather than an antitrust standard, of course, but many of the regulatory considerations overlap with the antitrust concerns addressed by AAI. The DCPSC was concerned, for example, about commenters' observations of the ability of a vertically integrated Exelon-PHI to block competitive supply from coming into D.C. (The DCPSC full opinion expresses the belief, contrary to the AAI view, that regulation could suffice to solve competition concerns.) And to the point about public interest in such issues, the Commission was explicitly aware of what it characterized as very strongly expressed public concerns about the merger. It may be that the reason the Exelon-PHI merger application in D.C. was rejected has something to do with well focused and forcefully articulated local public interest and opposition.
Don Allen Resnikoff
Sometimes mergers are not just about abstruse economic analysis, but involve vehement public debate. An interesting example is the Exelon-PHI (Pepco) merger proposal in the District of Columbia.
The merger application was the subject of sophisticated economic analysis by the American Antitrust Institute. Earlier this year the AAI sent a letter to the USDOJ Antitrust Division. The letter (http://antitrustinstitute.org/sites/default/files/Exelon-Pepco_AAI%20letter_2-25-15.pdf) explained to USDOJ that, among other things, a merged Exelon-Pepco would possess an enhanced ability and pre-existing, powerful incentive to engage in vertical foreclosure and block entry by rivals. Also, AAI’s Diana Moss spoke at a local D.C. forum on the proposed merger and explained the antitrust issues.
On Tuesday, August 25, the District of Columbia Public Service Commission denied the Exelon-PHI application to merge. D.C. was the last of several jurisdictions to decide about the merger application, and the only one to deny permission
The DCPSC decision is by a regulatory body applying a public interest rather than an antitrust standard, of course, but many of the regulatory considerations overlap with the antitrust concerns addressed by AAI. The DCPSC was concerned, for example, about commenters' observations of the ability of a vertically integrated Exelon-PHI to block competitive supply from coming into D.C. (The DCPSC full opinion expresses the belief, contrary to the AAI view, that regulation could suffice to solve competition concerns.) And to the point about public interest in such issues, the Commission was explicitly aware of what it characterized as very strongly expressed public concerns about the merger. It may be that the reason the Exelon-PHI merger application in D.C. was rejected has something to do with well focused and forcefully articulated local public interest and opposition.
Don Allen Resnikoff
From Public Citizen blog: Structured settlements --Taking advantage of lead-poisoning victims
The Washington Post published an eye-opening expose concerning the practice of buying monetary settlements for lead poisoning from the victims for a fraction of what they are worth -- as little as 9 cents on the dollar. As the Post documents, the victims are often cash-strapped, have little education and sometimes mental disabilities, and don't understand what has happened before it's too late. For instance:
Rose sold everything to Access Funding — 420 monthly lead checks between 2017 and 2052. They amounted to a total of nearly $574,000 and had a present value of roughly $338,000. In return, Access Funding paid her less than $63,000. Rose, who spoke to The Washington Post on the condition that her full name not be used, had just tumbled into the little-noticed, effectively unregulated netherworld of structured settlements.
Read the whole story here.
Click title above for blog posting
The Washington Post published an eye-opening expose concerning the practice of buying monetary settlements for lead poisoning from the victims for a fraction of what they are worth -- as little as 9 cents on the dollar. As the Post documents, the victims are often cash-strapped, have little education and sometimes mental disabilities, and don't understand what has happened before it's too late. For instance:
Rose sold everything to Access Funding — 420 monthly lead checks between 2017 and 2052. They amounted to a total of nearly $574,000 and had a present value of roughly $338,000. In return, Access Funding paid her less than $63,000. Rose, who spoke to The Washington Post on the condition that her full name not be used, had just tumbled into the little-noticed, effectively unregulated netherworld of structured settlements.
Read the whole story here.
Click title above for blog posting
From Baker-Hostetler: Supreme Court Decision in North Carolina State Board of Dental
Examiners v. Federal Trade Commission Prompts Legal Challenges to State
Professional Boards
In June a Texas federal district court judge granted a motion by Teladoc, Inc. (Teladoc) for a preliminary injunction enjoining the Texas Medical Board (TMB) “from taking any action to implement, enact, and enforce” a TMB rule requiring doctors to conduct an in-person exam prior to telephonic diagnosis and treatment of patients, regardless of whether the exam is medically necessary. (Background on this and other disputes involving Teladoc and TMB is available here and here. See http://www.antitrustadvocate.com/2015/06/26/aint-wastin-time-no-more-doctors-vets-and-lawyers-in-the-antitrust-crosshairs/?utm_source=BakerHostetler+-+Antitrust+Advocate&utm_medium=email&utm_campaign=d0d3fc8342-RSS_EMAIL_CAMPAIGN&utm_term=0_a95f379648-d0d3fc8342-70980973
In June a Texas federal district court judge granted a motion by Teladoc, Inc. (Teladoc) for a preliminary injunction enjoining the Texas Medical Board (TMB) “from taking any action to implement, enact, and enforce” a TMB rule requiring doctors to conduct an in-person exam prior to telephonic diagnosis and treatment of patients, regardless of whether the exam is medically necessary. (Background on this and other disputes involving Teladoc and TMB is available here and here. See http://www.antitrustadvocate.com/2015/06/26/aint-wastin-time-no-more-doctors-vets-and-lawyers-in-the-antitrust-crosshairs/?utm_source=BakerHostetler+-+Antitrust+Advocate&utm_medium=email&utm_campaign=d0d3fc8342-RSS_EMAIL_CAMPAIGN&utm_term=0_a95f379648-d0d3fc8342-70980973
Foster Farms, the State of Oregon, and PBS's "The Trouble With Chicken"
From PBS, 8-25-2015 at http://www.pbs.org/wgbh/pages/frontline/health-science-technology/trouble-with-chicken/editors-note-foster-farms-and-the-trouble-with-chicken/ :
Shortly after our original broadcast of The Trouble With Chicken, we received a letter from a lawyer representing Foster Farms. The letter disputed a finding by the Oregon Public Health Division — which we reported — that one person had died in a 2004 Salmonella Heidelberg outbreak that the state linked to Foster Farms.
The company’s attorney wrote, “even if Foster Farms was the source of an outbreak in 2004 (which Foster Farms denies), that fact does not justify attributing a death to Foster Farms.” The attorney also said that Oregon had not informed the company of the 2004 death.
For nearly a year before the broadcast, we sought to interview a representative from Foster Farms, but the company repeatedly declined our requests. We did, however, report in the film that at the time of the 2004 outbreak, Foster Farms had done its own testing and came to a different conclusion than Oregon. The company denied any responsibility for the outbreak and we included their position in our film.
We took the company’s letter seriously and prior to rebroadcasting the film, we went back to the state of Oregon with Foster Farms’ claims. The Public Health Division reviewed their records again, and we consulted with the officials directly involved in the investigation at the time. They reaffirmed their original conclusion that the death was in fact part of the outbreak they linked to Foster Farms.
State and local public health departments are the agencies responsible for investigating outbreaks of food-borne illnesses and determining the number of sicknesses and deaths. In conducting these investigations they rely, in part, on a CDC established protocol of molecular testing, or DNA fingerprinting, to help determine the source of contamination. The results are reported into a national database and are used by federal investigators and regulators to intervene and help stop outbreaks.
In considering the complaint the company is now raising, we consulted again with officials at the USDA’s Food Safety and Inspection Service (FSIS), as well as authorities at the CDC. These officials noted the rigor of the testing protocols and the reporting system. One of the senior CDC officials also pointed out that Oregon’s outbreak investigators at the time were extremely effective and reliable.
In the recent correspondence with us, Foster Farms’ lawyer demanded a retraction. But following our conversations with officials in Oregon, as well as Washington State, and at the CDC and USDA, we saw no reason to make changes to our film. It accurately reflects the investigative findings of the responsible state health authorities and it fairly notes Foster Farms’ disagreement with those findings.
We invited Foster Farms once again to discuss their position with us, but they would not do so. As we said to the company’s lawyer, it seems that their dispute is with Oregon, not with the journalists reporting the state’s findings.
From PBS, 8-25-2015 at http://www.pbs.org/wgbh/pages/frontline/health-science-technology/trouble-with-chicken/editors-note-foster-farms-and-the-trouble-with-chicken/ :
Shortly after our original broadcast of The Trouble With Chicken, we received a letter from a lawyer representing Foster Farms. The letter disputed a finding by the Oregon Public Health Division — which we reported — that one person had died in a 2004 Salmonella Heidelberg outbreak that the state linked to Foster Farms.
The company’s attorney wrote, “even if Foster Farms was the source of an outbreak in 2004 (which Foster Farms denies), that fact does not justify attributing a death to Foster Farms.” The attorney also said that Oregon had not informed the company of the 2004 death.
For nearly a year before the broadcast, we sought to interview a representative from Foster Farms, but the company repeatedly declined our requests. We did, however, report in the film that at the time of the 2004 outbreak, Foster Farms had done its own testing and came to a different conclusion than Oregon. The company denied any responsibility for the outbreak and we included their position in our film.
We took the company’s letter seriously and prior to rebroadcasting the film, we went back to the state of Oregon with Foster Farms’ claims. The Public Health Division reviewed their records again, and we consulted with the officials directly involved in the investigation at the time. They reaffirmed their original conclusion that the death was in fact part of the outbreak they linked to Foster Farms.
State and local public health departments are the agencies responsible for investigating outbreaks of food-borne illnesses and determining the number of sicknesses and deaths. In conducting these investigations they rely, in part, on a CDC established protocol of molecular testing, or DNA fingerprinting, to help determine the source of contamination. The results are reported into a national database and are used by federal investigators and regulators to intervene and help stop outbreaks.
In considering the complaint the company is now raising, we consulted again with officials at the USDA’s Food Safety and Inspection Service (FSIS), as well as authorities at the CDC. These officials noted the rigor of the testing protocols and the reporting system. One of the senior CDC officials also pointed out that Oregon’s outbreak investigators at the time were extremely effective and reliable.
In the recent correspondence with us, Foster Farms’ lawyer demanded a retraction. But following our conversations with officials in Oregon, as well as Washington State, and at the CDC and USDA, we saw no reason to make changes to our film. It accurately reflects the investigative findings of the responsible state health authorities and it fairly notes Foster Farms’ disagreement with those findings.
We invited Foster Farms once again to discuss their position with us, but they would not do so. As we said to the company’s lawyer, it seems that their dispute is with Oregon, not with the journalists reporting the state’s findings.
Actavis Accused of Blocking Generic Namenda
On Wednesday, August 19, 2015, Plaintiff Sergeants Benevolent Association Health and Welfare Fund filed a class action complaint in the Southern District of New York against Actavis Plc’s Forest Laboratories unit, accusing the company of conspiring with other drugmakers to prevent generic competition for its Alzheimer’s drug Namenda. The Fund alleges that Actavis improperly received a patent extension for Namenda to 2015 from 2010 and dropped patent infringement suits against generic drugmakers in exchange for agreements with the firms to delay generic offerings of Namenda.
The case is Sergeants Benevolent Association Health and Welfare Fund v. Actavis Plc, No. 1:15-cv-06549 (S.D.N.Y.)
Concordia and Par Settle with FTC Over ADHD Drug Deal
On Tuesday, August 18, 2015, Concordia Pharmaceuticals Inc. and Par Pharmaceutical Companies Inc. have settled a complaint brought by the Federal Trade Commission over Kapvay, a generic drug used to treat Attention Deficit Hyperactivity Disorder (“ADHD”). According to the FTC, the two companies had signed an illegal agreement in which Concordia agreed not to sell its generic version of the ADHD drug in exchange for a share in Par’s ADHD drug revenues. Concordia and Par were the only two companies licensed to sell generic Kapvay up until May 2015. In signing the agreement, Concordia and Par reduced the number of competing ADHD products available to consumers and deprived consumers of lower prices that would typically result with generic competition. Under the new agreement, the parties can no longer enforce the parts of their agreement that limit competition.
· Click to see: FTC Press Release
On Wednesday, August 19, 2015, Plaintiff Sergeants Benevolent Association Health and Welfare Fund filed a class action complaint in the Southern District of New York against Actavis Plc’s Forest Laboratories unit, accusing the company of conspiring with other drugmakers to prevent generic competition for its Alzheimer’s drug Namenda. The Fund alleges that Actavis improperly received a patent extension for Namenda to 2015 from 2010 and dropped patent infringement suits against generic drugmakers in exchange for agreements with the firms to delay generic offerings of Namenda.
The case is Sergeants Benevolent Association Health and Welfare Fund v. Actavis Plc, No. 1:15-cv-06549 (S.D.N.Y.)
Concordia and Par Settle with FTC Over ADHD Drug Deal
On Tuesday, August 18, 2015, Concordia Pharmaceuticals Inc. and Par Pharmaceutical Companies Inc. have settled a complaint brought by the Federal Trade Commission over Kapvay, a generic drug used to treat Attention Deficit Hyperactivity Disorder (“ADHD”). According to the FTC, the two companies had signed an illegal agreement in which Concordia agreed not to sell its generic version of the ADHD drug in exchange for a share in Par’s ADHD drug revenues. Concordia and Par were the only two companies licensed to sell generic Kapvay up until May 2015. In signing the agreement, Concordia and Par reduced the number of competing ADHD products available to consumers and deprived consumers of lower prices that would typically result with generic competition. Under the new agreement, the parties can no longer enforce the parts of their agreement that limit competition.
· Click to see: FTC Press Release
From Public Citizen blog: A Pair of Arbitration Papers
Richard Frankel of Drexel has written Concepcion
and Mis-Concepcion: Why Unconscionability Survives the Supreme Court's
Arbitration Jurisprudence, 17 Journal of Dispute Resolution. Stephen J. Ware of Kansas has authored The Politics of Arbitration Law and Centrist Proposals for Reform.
See Public Citizen blog discussion at http://pubcit.typepad.com/clpblog/2015/08/a-pair-of-arbitration-papers.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+ConsumerLawPolicyBlog+%28Consumer+Law+%26+Policy+Blog%29
See Public Citizen blog discussion at http://pubcit.typepad.com/clpblog/2015/08/a-pair-of-arbitration-papers.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+ConsumerLawPolicyBlog+%28Consumer+Law+%26+Policy+Blog%29
One way to avoid legal issues associated with student debt: better tuition aid for students in need
The PBS news hour is doing a series on steps to provide college tuition assistance to needy but capable students. This segment explores how some schools, like Franklinand Marshall in Pennsylvania, have made a jump to need-based aid only.
Hari Sreenivasan is the reporter.
http://www.pbs.org/newshour/bb/financial-aid-go-college-students-need/
The PBS news hour is doing a series on steps to provide college tuition assistance to needy but capable students. This segment explores how some schools, like Franklinand Marshall in Pennsylvania, have made a jump to need-based aid only.
Hari Sreenivasan is the reporter.
http://www.pbs.org/newshour/bb/financial-aid-go-college-students-need/
From Public Citizen blog: Federal Trade Commission issues statement of principles on "unfair competition" enforcement
The Federal Trade Commission (FTC) today issued a statement of principles on enforcement of its "unfair competition" authority under section 5 of the Federal Trade Commission Act. Four commissioners voted for the statement, and one commissioner dissented.
Go here to get all of the agency's info on the topic.
The Federal Trade Commission (FTC) today issued a statement of principles on enforcement of its "unfair competition" authority under section 5 of the Federal Trade Commission Act. Four commissioners voted for the statement, and one commissioner dissented.
Go here to get all of the agency's info on the topic.
Litigation against airlines follows USDOJ investigation
Shortly after the Department of Justice announced in early July that it had opened an investigation into alleged collusion between major airlines to keep ticket prices high two groups of passengers filed lawsuits against the major U.S. carriers. Since then, the legal system has been inundated with strikingly similar complaints from travelers.
According to the Dallas Morning News, 75 different lawsuits have been filed against Delta, America, United, and Southwest since July 1, when the DOJ revealed its antitrust probe.
The legal actions, which have been filed across all corners of the U.S., use the DOJ’s investigation as a basis for allegations that the airlines colluded to keep fares high through a series of mega-mergers.
See http://consumerist.com/2015/08/13/consumers-have-filed-75-antitrust-lawsuits-against-delta-american-united-southwest-airlines-since-july/
Shortly after the Department of Justice announced in early July that it had opened an investigation into alleged collusion between major airlines to keep ticket prices high two groups of passengers filed lawsuits against the major U.S. carriers. Since then, the legal system has been inundated with strikingly similar complaints from travelers.
According to the Dallas Morning News, 75 different lawsuits have been filed against Delta, America, United, and Southwest since July 1, when the DOJ revealed its antitrust probe.
The legal actions, which have been filed across all corners of the U.S., use the DOJ’s investigation as a basis for allegations that the airlines colluded to keep fares high through a series of mega-mergers.
See http://consumerist.com/2015/08/13/consumers-have-filed-75-antitrust-lawsuits-against-delta-american-united-southwest-airlines-since-july/
From Public Citizen blog: Arbitration and the American Bar Association's One-Sided Webinar
Posted on Public Citizen blog 12 Aug 2015
by Jeff Sovern
The American Bar Association's Business Law Section Consumer Financial Services Committee held a webinar earlier today in which the topic was listed as "The CFPB Begins Arbitration Rulemaking, But Its Own Study Shows that Arbitration Benefits Consumers." The sole speakers, other than the moderator, were Ballard Spahr's Alan Kaplinsky and Mark Levin. Ballard Spahr has a particular point of view on the CFPB arbitration study, as indicated in the comments the firm submitted to the Bureau on behalf of the American Bankers Association, the Consumer Bankers Association, and the Financial Services Roundtable last month. That viewpoint certainly should be expressed, and the Committee's webinars are an appropriate forum for it. But shouldn't the contrary view also be voiced at such webinars? Why didn't the Committee also put on at least one speaker to support the CFPB study? Is the Committee serving lawyers well when it presents only one side of a debate?
I should add that I found the webinar informative, as I often find the Committee's webinars, which are a valuable service. But it would have been more informative if it had been more balanced.
by Jeff Sovern
The American Bar Association's Business Law Section Consumer Financial Services Committee held a webinar earlier today in which the topic was listed as "The CFPB Begins Arbitration Rulemaking, But Its Own Study Shows that Arbitration Benefits Consumers." The sole speakers, other than the moderator, were Ballard Spahr's Alan Kaplinsky and Mark Levin. Ballard Spahr has a particular point of view on the CFPB arbitration study, as indicated in the comments the firm submitted to the Bureau on behalf of the American Bankers Association, the Consumer Bankers Association, and the Financial Services Roundtable last month. That viewpoint certainly should be expressed, and the Committee's webinars are an appropriate forum for it. But shouldn't the contrary view also be voiced at such webinars? Why didn't the Committee also put on at least one speaker to support the CFPB study? Is the Committee serving lawyers well when it presents only one side of a debate?
I should add that I found the webinar informative, as I often find the Committee's webinars, which are a valuable service. But it would have been more informative if it had been more balanced.
Executive says decision to joint venture new fertilizer plant is a positive development from an antitrust perspective
CHS Inc., the largest U.S. farming cooperative, agreed to form a venture with fertilizer producer CF Industries Holdings Inc. while scrapping a planned crop-nutrient factory in North Dakota. CHS will acquire a stake in a CF subsidiary for $2.8 billion, guaranteeing it an annual supply of as much as 1.7 million tons of nitrogen-based fertilizer, the companies said Wednesday in a statement. The cooperative chose the CF deal over building its Spiritwood plant because of faster returns from the venture’s “meaningful” fertilizer position, CHS Chief Executive Officer Carl Casale said by telephone.
“We don’t have to wait four years for it to be up and running,” said Casale, 54. “CF was a better alternative for our owners.”
The U.S. nitrogen-fertilizer industry is going through a period of upheaval as it expands capacity, spurred on by cheap natural gas, a raw material used in the production process. Last week, Deerfield, Illinois-based CF agreed to buy assets from OCI NV of the Netherlands for about $5.4 billion in cash and shares to create the world’s largest publicly traded producer of nitrogen crop nutrients.
For CF, the deal with CHS should alleviate any antitrust concerns surrounding the OCI transaction, CF Chief Executive Officer Tony Will said on a conference call.
The tie-up announced Wednesday is tantamount to creating “another live competitor in the market space, just as though” CHS had acquired a plant from somebody else, Will said. The CHS accord also improves CF’s flexibility to finance the OCI deal.
See http://www.bloomberg.com/news/articles/2015-08-12/chs-strikes-2-8-billion-fertilizer-deal-with-cf
CHS Inc., the largest U.S. farming cooperative, agreed to form a venture with fertilizer producer CF Industries Holdings Inc. while scrapping a planned crop-nutrient factory in North Dakota. CHS will acquire a stake in a CF subsidiary for $2.8 billion, guaranteeing it an annual supply of as much as 1.7 million tons of nitrogen-based fertilizer, the companies said Wednesday in a statement. The cooperative chose the CF deal over building its Spiritwood plant because of faster returns from the venture’s “meaningful” fertilizer position, CHS Chief Executive Officer Carl Casale said by telephone.
“We don’t have to wait four years for it to be up and running,” said Casale, 54. “CF was a better alternative for our owners.”
The U.S. nitrogen-fertilizer industry is going through a period of upheaval as it expands capacity, spurred on by cheap natural gas, a raw material used in the production process. Last week, Deerfield, Illinois-based CF agreed to buy assets from OCI NV of the Netherlands for about $5.4 billion in cash and shares to create the world’s largest publicly traded producer of nitrogen crop nutrients.
For CF, the deal with CHS should alleviate any antitrust concerns surrounding the OCI transaction, CF Chief Executive Officer Tony Will said on a conference call.
The tie-up announced Wednesday is tantamount to creating “another live competitor in the market space, just as though” CHS had acquired a plant from somebody else, Will said. The CHS accord also improves CF’s flexibility to finance the OCI deal.
See http://www.bloomberg.com/news/articles/2015-08-12/chs-strikes-2-8-billion-fertilizer-deal-with-cf
Fear of cable cord-cutting trend affects stock prices
Hollywood Reporter: Investors now are looking for bold moves to fix vulnerabilities in TV, in particular cord-cutting and the emergence of "skinny bundles," new pay TV offerings that provide fewer channels at a lower price. "Sector sentiment has changed — some would say permanently," warns Craig Moffett of MoffettNathanson. Echoes Todd Juenger of Sanford C. Bernstein, "No one wants to get back involved until they find a bottom." Because of cord-cutting, Juenger expects 1 to 2 percent subscriber erosion per year for fully distributed networks. Morgan Stanley's Benjamin Swinburne adds that the mini-crash is evidence that the market is fully aware that "cord-cutting is real."
Comment: In the future, cable, over-the-ait TV, and internet TV may compete, but only to the extent permitted by federal and local regulators. Erosion of one to two percent a year for cable means cable cutting is actually a slow moving trend.
From: http://www.hollywoodreporter.com/news/wall-street-turns-tv-how-814700
Posted by DAR
Hollywood Reporter: Investors now are looking for bold moves to fix vulnerabilities in TV, in particular cord-cutting and the emergence of "skinny bundles," new pay TV offerings that provide fewer channels at a lower price. "Sector sentiment has changed — some would say permanently," warns Craig Moffett of MoffettNathanson. Echoes Todd Juenger of Sanford C. Bernstein, "No one wants to get back involved until they find a bottom." Because of cord-cutting, Juenger expects 1 to 2 percent subscriber erosion per year for fully distributed networks. Morgan Stanley's Benjamin Swinburne adds that the mini-crash is evidence that the market is fully aware that "cord-cutting is real."
Comment: In the future, cable, over-the-ait TV, and internet TV may compete, but only to the extent permitted by federal and local regulators. Erosion of one to two percent a year for cable means cable cutting is actually a slow moving trend.
From: http://www.hollywoodreporter.com/news/wall-street-turns-tv-how-814700
Posted by DAR
New York Times on Starbucks pricing and principles of supply and demand
Coffee commodity prices are down, but prices for cups of coffee at Starbucks retail stores are up. This could be confusing for those who did not graduate from Father Guido Sarducci's 5-minute university, which emphasizes the concept of supply and demand. The New York Times explains it in an article Why Starbucks Prices Went Up as Coffee Beans Got Cheaper (click for the article). Over all, Starbucks says customer bills are increased by 1 percent. The explanation: Starbucks wants to make a profit, and it charges customers more because it can. Its retail stores are very popular. But if you graduated from Sarducci University you already knew that. But what about the generally very poor farmers who produce the coffee -- how are they doing and is Starbucks helping them? Comments about that are mixed, and it seems to be agreed that many coffee farmers are desperately poor. Here is an article that is generally complimentary about Starbuck's role:
http://www.seattletimes.com/business/starbucks/starbucks-pours-another-30m-into-coffee-farmer-loans/
Coffee commodity prices are down, but prices for cups of coffee at Starbucks retail stores are up. This could be confusing for those who did not graduate from Father Guido Sarducci's 5-minute university, which emphasizes the concept of supply and demand. The New York Times explains it in an article Why Starbucks Prices Went Up as Coffee Beans Got Cheaper (click for the article). Over all, Starbucks says customer bills are increased by 1 percent. The explanation: Starbucks wants to make a profit, and it charges customers more because it can. Its retail stores are very popular. But if you graduated from Sarducci University you already knew that. But what about the generally very poor farmers who produce the coffee -- how are they doing and is Starbucks helping them? Comments about that are mixed, and it seems to be agreed that many coffee farmers are desperately poor. Here is an article that is generally complimentary about Starbuck's role:
http://www.seattletimes.com/business/starbucks/starbucks-pours-another-30m-into-coffee-farmer-loans/
Pew on prepaid cards
"The [Pew] report finds that many 'unbanked' consumers, those without bank accounts, are using prepaid cards like checking accounts, underscoring the need for the Consumer Financial Protection Bureau (CFPB) to finalize rules it has proposed that would extend greater safeguards to prepaid card users."
Check it out here.
For Public Citizen write-up click the title above.
"The [Pew] report finds that many 'unbanked' consumers, those without bank accounts, are using prepaid cards like checking accounts, underscoring the need for the Consumer Financial Protection Bureau (CFPB) to finalize rules it has proposed that would extend greater safeguards to prepaid card users."
Check it out here.
For Public Citizen write-up click the title above.
2nd Circ. Won't Rehear Namenda Product-Hopping Antitrust Case
From LAW360
The Second Circuit refused Friday to rehear Actavis PLC's challenge to a preliminary injunction New York's attorney general won forcing the company to keep an older version of Namenda on the market until generic versions of the Alzheimer's treatment can launch. (Taking Namenda of the market would have the effect of blocking generics.)
From LAW360
The Second Circuit refused Friday to rehear Actavis PLC's challenge to a preliminary injunction New York's attorney general won forcing the company to keep an older version of Namenda on the market until generic versions of the Alzheimer's treatment can launch. (Taking Namenda of the market would have the effect of blocking generics.)
The antitrust argument against the Exelon-Pepco merger
Earlier this year the AAI sent a letter to the USDOJ Antitrust Division discussing USDOJ’s power to go ahead with antitrust enforcement despite FERC’s approval of the merger. The Wednesday, February 25 letter explained to USDOJ that, among other things, a merged Exelon-Pepco would possess an enhanced ability and pre-existing, powerful incentive to engage in vertical foreclosure and block entry by rivals. The deal would give Chicago-based Exelon and Pepco more than a 23 percent of the stake in PJM Interconnection, the organization that oversees electricity transmission for the Mid-Atlantic. Utilities within PJM design the rules for third-party generation, which has created fear among renewable power advocates that non-fossil fuel and non-nuclear energy could get shut out of the grid.
See also the interview of Diana Moss at https://thecapitolforum.com/portfolio/the-capitol-forum-interview-series-with-diana-moss-aai/
The logic that applies to the USDOJ in relation to FERC may also apply to state level antitrust enforcement in the face of local PSC approval of the merger.
Earlier this year the AAI sent a letter to the USDOJ Antitrust Division discussing USDOJ’s power to go ahead with antitrust enforcement despite FERC’s approval of the merger. The Wednesday, February 25 letter explained to USDOJ that, among other things, a merged Exelon-Pepco would possess an enhanced ability and pre-existing, powerful incentive to engage in vertical foreclosure and block entry by rivals. The deal would give Chicago-based Exelon and Pepco more than a 23 percent of the stake in PJM Interconnection, the organization that oversees electricity transmission for the Mid-Atlantic. Utilities within PJM design the rules for third-party generation, which has created fear among renewable power advocates that non-fossil fuel and non-nuclear energy could get shut out of the grid.
See also the interview of Diana Moss at https://thecapitolforum.com/portfolio/the-capitol-forum-interview-series-with-diana-moss-aai/
The logic that applies to the USDOJ in relation to FERC may also apply to state level antitrust enforcement in the face of local PSC approval of the merger.
Regulators Investigate For-Profit College Chain Apollo for 'Deceptive' Marketing
Bloomberg - Apollo Education Group Inc., owner of the University of Phoenix for-profit college chain, fell as much as 9.4 percent after U.S. regulators began investigating possible unfair advertising and marketing. The Federal Trade Commission demanded information on enrollment, recruiting, financial aid, tuition and other business practices from 2011 to the present, Phoenix-based Apollo said in a filing with the Securities and Exchange Commission.
Click title above for full Bloomberg article
Bloomberg - Apollo Education Group Inc., owner of the University of Phoenix for-profit college chain, fell as much as 9.4 percent after U.S. regulators began investigating possible unfair advertising and marketing. The Federal Trade Commission demanded information on enrollment, recruiting, financial aid, tuition and other business practices from 2011 to the present, Phoenix-based Apollo said in a filing with the Securities and Exchange Commission.
Click title above for full Bloomberg article
Banks hit by market manipulation antitrust suit
24 financial institutions, including Barclays Capital Inc., Goldman Sachs & Co. and UBS Securities LLC were hit with a class action by investors in New York federal court on Tuesday. The action claims the banks colluded to manipulate the U.S. Treasury securities market.
See complaint at https://www.scribd.com/doc/273047023/7-28-Class-Action-Antitrust-v-Banks
24 financial institutions, including Barclays Capital Inc., Goldman Sachs & Co. and UBS Securities LLC were hit with a class action by investors in New York federal court on Tuesday. The action claims the banks colluded to manipulate the U.S. Treasury securities market.
See complaint at https://www.scribd.com/doc/273047023/7-28-Class-Action-Antitrust-v-Banks
From Brookings: Can D.C. afford a $15/hour minimum wage?
Earlier this week, the Washington Post reported that D.C. city officials have cleared the way for a voter initiative in November 2016 to raise the city’s hourly minimum wage to $15. The proposal is already pitting labor unions and other progressive groups who back the rise against restaurant owners and the D.C. Chamber of Commerce, who warn that the hike would force job cuts and business closings.
If D.C. moves to $15, it would join a growing list of big cities that have recently raised their minimum wages by significant amounts, including Seattle, San Francisco, Los Angeles, and Chicago. On Wednesday, a New York State commission endorsed a proposal for a $15/hour minimum wage for fast-food restaurant workers. The new D.C. proposal actually comes on the heels of a minimum wage hike the city adopted in late 2013, from $8.25 to $11.50.
We can’t know for sure what effects the proposed hike would have on employment. Economists are divided on the question, though the preponderance of evidence points to small effects on jobs from previous increases. We don’t yet have evidence on whether recent significant city-level increases have impacted job availability. Any such costs, of course, need to be weighed against the benefits of higher earnings for minimum-wage workers.
What we do know, however, is that D.C. is in perhaps a better position to absorb this wage hike without significant negative effects than any other jurisdiction in the country.
For the entire Brookings post by Alan Berube, see http://www.brookings.edu/blogs/the-avenue/posts/2015/07/24-dc-afford-15-an-hour-berube?utm_campaign=Brookings+Brief&utm_source=hs_email&utm_medium=email&utm_content=20849485&_hsenc=p2ANqtz--GK_SRmj_vq9EM8ptNlWlZi4_huu-r4UG2gtJ56DZj5HHTSUNeat8EmusXscMe0hg9-NklOvusJQcGjjIRIFTUvPpo9w&_hsmi=20849485
Earlier this week, the Washington Post reported that D.C. city officials have cleared the way for a voter initiative in November 2016 to raise the city’s hourly minimum wage to $15. The proposal is already pitting labor unions and other progressive groups who back the rise against restaurant owners and the D.C. Chamber of Commerce, who warn that the hike would force job cuts and business closings.
If D.C. moves to $15, it would join a growing list of big cities that have recently raised their minimum wages by significant amounts, including Seattle, San Francisco, Los Angeles, and Chicago. On Wednesday, a New York State commission endorsed a proposal for a $15/hour minimum wage for fast-food restaurant workers. The new D.C. proposal actually comes on the heels of a minimum wage hike the city adopted in late 2013, from $8.25 to $11.50.
We can’t know for sure what effects the proposed hike would have on employment. Economists are divided on the question, though the preponderance of evidence points to small effects on jobs from previous increases. We don’t yet have evidence on whether recent significant city-level increases have impacted job availability. Any such costs, of course, need to be weighed against the benefits of higher earnings for minimum-wage workers.
What we do know, however, is that D.C. is in perhaps a better position to absorb this wage hike without significant negative effects than any other jurisdiction in the country.
For the entire Brookings post by Alan Berube, see http://www.brookings.edu/blogs/the-avenue/posts/2015/07/24-dc-afford-15-an-hour-berube?utm_campaign=Brookings+Brief&utm_source=hs_email&utm_medium=email&utm_content=20849485&_hsenc=p2ANqtz--GK_SRmj_vq9EM8ptNlWlZi4_huu-r4UG2gtJ56DZj5HHTSUNeat8EmusXscMe0hg9-NklOvusJQcGjjIRIFTUvPpo9w&_hsmi=20849485
OK, the City raised minimum wage requirements, but what about enforcement?
Here is part of the answer from the Los Angeles Bureau of Contract Administration:
Investigation Process: The BCA will follow the investigation model implemented successfully in San Francisco. Complaints will be acknowledged in writing within one working day and staff will conduct a site visit at the place of business within three working days. This site visit will include employee and employer interviews, observations, and an audit of relevant documentation including payrolls, time cards, and employer policies. A “Request for Information” letter, if necessary, will be sent to secure additional documentation not available during the site visit, such as payrolls or time cards. The employer will have 10 working days to respond. Requests may also be made to employees to provide supporting documentation such as time cards, pay stubs, or work hour logs. Documents will be accepted through a variety of methods including mail, fax, or electronic means. Additional investigation activities will occur as appropriate, including return visits to the work site, monitoring employee work schedules, records analysis, and follow up interviews. Although it’s anticipated that the bulk of the investigation activities will be performed by the BCA staff, some investigations may require assistance from the City Attorney’s Office. Furthermore, some cases may benefit from the involvement of CBOs, particularly in areas such as translation, collecting information from employees, and interviewing employees for hearings or trials.
The full BCA memo is at http://clkrep.lacity.org/onlinedocs/2014/14-1371-S1_rpt_BCA_06-24-2015.pdf
Here is part of the answer from the Los Angeles Bureau of Contract Administration:
Investigation Process: The BCA will follow the investigation model implemented successfully in San Francisco. Complaints will be acknowledged in writing within one working day and staff will conduct a site visit at the place of business within three working days. This site visit will include employee and employer interviews, observations, and an audit of relevant documentation including payrolls, time cards, and employer policies. A “Request for Information” letter, if necessary, will be sent to secure additional documentation not available during the site visit, such as payrolls or time cards. The employer will have 10 working days to respond. Requests may also be made to employees to provide supporting documentation such as time cards, pay stubs, or work hour logs. Documents will be accepted through a variety of methods including mail, fax, or electronic means. Additional investigation activities will occur as appropriate, including return visits to the work site, monitoring employee work schedules, records analysis, and follow up interviews. Although it’s anticipated that the bulk of the investigation activities will be performed by the BCA staff, some investigations may require assistance from the City Attorney’s Office. Furthermore, some cases may benefit from the involvement of CBOs, particularly in areas such as translation, collecting information from employees, and interviewing employees for hearings or trials.
The full BCA memo is at http://clkrep.lacity.org/onlinedocs/2014/14-1371-S1_rpt_BCA_06-24-2015.pdf
New York and the $15 wage minimum
A panel appointed by Gov. Andrew M. Cuomo has recommended that the minimum wage be raised for employees of fast-food chain restaurants throughout the state to $15 an hour over the next few years. Wages would be raised faster in New York City than in the rest of the state to account for the higher cost of living there. The panel’s recommendations, which are expected to be put into effect by an order of the state’s acting commissioner of labor, represent a major triumph for advocates.
Continue reading the main NY Times story
From AAI: Commentary by Grimes and Sagers on Regulators' Approval of AT&T's Acquisition of DIRECTV
A Step Backward for Competition
In a brief one-page announcement, the Chairman of the Federal Communications Commission announced that he has circulated an order to the Commission calling for approval, with conditions that sacrifice competition for difficult-to-enforce regulation, of AT&T's acquisition of rival DIRECTV. In an even shorter three-sentence statement, the head of the U.S. Department of Justice (DOJ) Antitrust Division announced that the acquisition would "not pose a significant risk to competition" and would not be opposed.
The agency decisions are short sighted. They will ensure a world of less competition and more regulation. Because competition is by far the best way of assuring meaningful choices, effective service, and low prices, the decisions are bad news for consumers.
For more see http://www.antitrustinstitute.org/content/attdirecttv
A Step Backward for Competition
In a brief one-page announcement, the Chairman of the Federal Communications Commission announced that he has circulated an order to the Commission calling for approval, with conditions that sacrifice competition for difficult-to-enforce regulation, of AT&T's acquisition of rival DIRECTV. In an even shorter three-sentence statement, the head of the U.S. Department of Justice (DOJ) Antitrust Division announced that the acquisition would "not pose a significant risk to competition" and would not be opposed.
The agency decisions are short sighted. They will ensure a world of less competition and more regulation. Because competition is by far the best way of assuring meaningful choices, effective service, and low prices, the decisions are bad news for consumers.
For more see http://www.antitrustinstitute.org/content/attdirecttv
From Bloomberg News: Bank of America Corp., Goldman Sachs Group Inc. and JPMorgan Chase & Co. among 22 financial companies accused of colluding to manipulate auctions of U.S. Treasury securities
A pension fund for Boston public employees alleged the so-called primary dealers used electronic chatrooms and instant messages to inflate the prices of treasuries they sold to investors and to deflate the prices they paid for those treasuries at auction.
“As a result of defendants’ unlawful manipulation of the treasuries market, the prices of when-issued treasury securities were artificially high and the prices of treasury securities at auction were artificially low,” the fund said in a complaint filed Thursday in federal court in Manhattan. “This scheme maximized defendants’ profits at the expense of their customers and others in the market.”
The U.S. Justice Department has begun looking at possible collusion in the $12.7 trillion U.S. Treasury market after securing guilty pleas and $6 billion in fines from global banks in a similar investigation of currency rigging.
http://www.bloomberg.com/news/articles/2015-07-24/treasury-securities-dealers-accused-of-collusion-in-lawsuit
A pension fund for Boston public employees alleged the so-called primary dealers used electronic chatrooms and instant messages to inflate the prices of treasuries they sold to investors and to deflate the prices they paid for those treasuries at auction.
“As a result of defendants’ unlawful manipulation of the treasuries market, the prices of when-issued treasury securities were artificially high and the prices of treasury securities at auction were artificially low,” the fund said in a complaint filed Thursday in federal court in Manhattan. “This scheme maximized defendants’ profits at the expense of their customers and others in the market.”
The U.S. Justice Department has begun looking at possible collusion in the $12.7 trillion U.S. Treasury market after securing guilty pleas and $6 billion in fines from global banks in a similar investigation of currency rigging.
http://www.bloomberg.com/news/articles/2015-07-24/treasury-securities-dealers-accused-of-collusion-in-lawsuit
From Modern Healthcare: Anthem to acquire Cigna in $54.2B deal
This is the largest such deal ever in health insurance. Anthem will acquire Cigna for $188 per share, the health insurance companies said. The transaction is part of the mass-scale merger race that is fundamentally changing the industry and fueling concerns over costs and competition.
http://www.modernhealthcare.com/article/20150724/NEWS/150729899?utm_source=modernhealthcare&utm_medium=email&utm_content=20150724-NEWS-150729899&utm_campaign=am
This is the largest such deal ever in health insurance. Anthem will acquire Cigna for $188 per share, the health insurance companies said. The transaction is part of the mass-scale merger race that is fundamentally changing the industry and fueling concerns over costs and competition.
http://www.modernhealthcare.com/article/20150724/NEWS/150729899?utm_source=modernhealthcare&utm_medium=email&utm_content=20150724-NEWS-150729899&utm_campaign=am
FCC considering how to regulate online video distribution
An article in Law 360 by Margaret Harding explains: a fight is brewing over how the agency should regulate — if at all — online video distribution under rules that predate today's digital marketplace.
Chairman Tom Wheeler put forth a proposal last year that would allow some online video distributors access to the same programming as cable and satellite companies. Wheeler has said he expects to move forward with a report and order on the issue this fall.
Commissioner Ajit Pai, the National Cable & Telecommunications Association, Amazon Inc. and others have already lined up in opposition to the proposed change. And a recent California federal court decision split from copyright precedent by ruling an Internet video provider could qualify for a compulsory license for television content.
While some, including Wheeler, argue that Congress intended for its early '90s competition-prompting video rules to be flexible enough to apply to new technology, others say the decades-old regulations are barely applicable in the current market and shouldn’t be expanded.
The article (subcription required) is at http://www.law360.com/competition/articles/682946?nl_pk=c8faf85d-e0ef-4454-8b63-23033da4e00a&utm_source=newsletter&utm_medium=email&utm_campaign=competition
An article in Law 360 by Margaret Harding explains: a fight is brewing over how the agency should regulate — if at all — online video distribution under rules that predate today's digital marketplace.
Chairman Tom Wheeler put forth a proposal last year that would allow some online video distributors access to the same programming as cable and satellite companies. Wheeler has said he expects to move forward with a report and order on the issue this fall.
Commissioner Ajit Pai, the National Cable & Telecommunications Association, Amazon Inc. and others have already lined up in opposition to the proposed change. And a recent California federal court decision split from copyright precedent by ruling an Internet video provider could qualify for a compulsory license for television content.
While some, including Wheeler, argue that Congress intended for its early '90s competition-prompting video rules to be flexible enough to apply to new technology, others say the decades-old regulations are barely applicable in the current market and shouldn’t be expanded.
The article (subcription required) is at http://www.law360.com/competition/articles/682946?nl_pk=c8faf85d-e0ef-4454-8b63-23033da4e00a&utm_source=newsletter&utm_medium=email&utm_campaign=competition
AAI says Staples/Office Depot Merger Raises Significant Competitive Issues
The American Antitrust Institute (AAI) has issued a white paper titled The Proposed Merger of Staples and Office Depot: Lessons from History and New Competitive Concerns. The paper urges the Federal Trade Commission (FTC) to carefully scrutinize the competitive impact of the proposed Staples/Office Depot merger.
The American Antitrust Institute (AAI) has issued a white paper titled The Proposed Merger of Staples and Office Depot: Lessons from History and New Competitive Concerns. The paper urges the Federal Trade Commission (FTC) to carefully scrutinize the competitive impact of the proposed Staples/Office Depot merger.
NY State asks about bank data security practices
In a letter to Symphony Communication Services, the New York Department of Financial Services asked it to clarify how its security tools would allow banks to erase their data trails, potentially falling foul of laws on record-keeping. The letter mentioned follow up with four consortium members that the NYDFS regulates — Bank of New York Mellon, Credit Suisse, Deutsche Bank and Goldman Sachs — to ask them how they plan to use the new service.
The regulator said it wished to find out how banks would ensure that messages created using Symphony would be retained, and “whether their use of Symphony’s encryption technology can be used to prevent review by compliance personnel or regulators”. It also flagged concerns over the open-source features of the product, wondering if they could be used to “circumvent” oversight.
The other members of the consortium are Bank of America Merrill Lynch, BlackRock, Citadel, Citigroup, HSBC, Jefferies, JPMorgan, Maverick Capital, Morgan Stanley and Wells Fargo. Together they have chipped in about $70m to get Symphony started. Another San Francisco-based fund run by a former colleague of Mr Gurle’s, Merus Capital, has a 5 per cent interest.
Full article at http://www.ft.com/cms/s/0/d43e6bc2-30a7-11e5-91ac-a5e17d9b4cff.html#axzz3gilz3b32
Discover Bank to pay $18.5 million for illegal student-loan servicing practices
From the Consumer Financial Protection Bureau's press release:
Discover’s Illegal Servicing Practices Affected Private Student Loan Borrowers Transferred from Citibank
Today the Consumer Financial Protection Bureau (CFPB) took action against Discover Bank and its affiliates for illegal private student loan servicing practices. The CFPB found that Discover overstated the minimum amounts due on billing statements and denied consumers information they needed to obtain federal income tax benefits. The company also engaged in illegal debt collection tactics, including calling consumers early in the morning and late at night. The CFPB’s order requires Discover to refund $16 million to consumers, pay a $2.5 million penalty, and improve its billing, student loan interest reporting, and collection practices.
The full release is here. The consent order is here. (Links from Public Citizen Blog posting.)
From the Consumer Financial Protection Bureau's press release:
Discover’s Illegal Servicing Practices Affected Private Student Loan Borrowers Transferred from Citibank
Today the Consumer Financial Protection Bureau (CFPB) took action against Discover Bank and its affiliates for illegal private student loan servicing practices. The CFPB found that Discover overstated the minimum amounts due on billing statements and denied consumers information they needed to obtain federal income tax benefits. The company also engaged in illegal debt collection tactics, including calling consumers early in the morning and late at night. The CFPB’s order requires Discover to refund $16 million to consumers, pay a $2.5 million penalty, and improve its billing, student loan interest reporting, and collection practices.
The full release is here. The consent order is here. (Links from Public Citizen Blog posting.)
Dodd and Frank speak at Better Markets program
Representative Frank highlighted the Dodd-Frank law's popularity, saying, "There have been no votes on repealing the financial reform bill because they know it is popular."
Senator Dodd discussed many of the law's important provisions, saying, "Transparency, particularly in the derivatives market, has been a major achievement."
You can watch the discussion with Senator Dodd and Representative Frank here.
Representative Frank highlighted the Dodd-Frank law's popularity, saying, "There have been no votes on repealing the financial reform bill because they know it is popular."
Senator Dodd discussed many of the law's important provisions, saying, "Transparency, particularly in the derivatives market, has been a major achievement."
You can watch the discussion with Senator Dodd and Representative Frank here.
Corrected posting: FTC agrees to Dollar Tree-Dollar Store buyout deal, with spin-off of some stores; 17 State AGs file suit
We previously posted that the U.S. Federal Trade Commission accepted an agreement so that Dollar Tree Inc. can complete its buyout of rival Family Dollar Stores. Dollar Tree will sell 330 stores to a private equity firm. 17 state AGs have also filed litigation challenging the deal.
See State AG Complaint: https://www.scribd.com/doc/270676221/Dollar-Tree-Complaint-State-AGs
See FTC Consent: https://www.scribd.com/doc/270675888/FTC-Dollar-Tree-Consent-Orders
On July 20 a State AG staff attorney wrote to us to point out that "The 17 state AGs who filed the complaint against the Dollar Tree-Dollar Store buyout do not actually disagree with the FTC’s settlement. They filed the complaint as part of the process of resolving their state claims in coordination with the FTC’s settlement."
We are happy to have that clarification and correct the article.
Posted by DAR
We previously posted that the U.S. Federal Trade Commission accepted an agreement so that Dollar Tree Inc. can complete its buyout of rival Family Dollar Stores. Dollar Tree will sell 330 stores to a private equity firm. 17 state AGs have also filed litigation challenging the deal.
See State AG Complaint: https://www.scribd.com/doc/270676221/Dollar-Tree-Complaint-State-AGs
See FTC Consent: https://www.scribd.com/doc/270675888/FTC-Dollar-Tree-Consent-Orders
On July 20 a State AG staff attorney wrote to us to point out that "The 17 state AGs who filed the complaint against the Dollar Tree-Dollar Store buyout do not actually disagree with the FTC’s settlement. They filed the complaint as part of the process of resolving their state claims in coordination with the FTC’s settlement."
We are happy to have that clarification and correct the article.
Posted by DAR
Aspen Foods is recalling nearly two million pounds of frozen chicken products
The recall occurred after three people in Minnesota became ill with infections from salmonella.
The recall includes breaded, raw stuffed chicken breasts that were manufactured from April 15 to July 10, according to an announcement on Wednesday from the Department of Agriculture.
The varieties affected include cordon bleu, broccoli and cheese, chicken Kiev, chicken parmesan and buffalo-style. Packages subject to the recall can be identified by the code “P-1358” in the U.S.D.A.’s inspection mark.
Some of the recalled products have been sold in stores nationwide, including Kroger and Walmart. Customers or survivors who bought the products at either company can return them for a full refund.
Continue reading the NYT story
CDC provides technical consultation and assistance to state and local public health agencies during foodborne disease outbreaks. CDC provides diagnostic support to confirm foodborne outbreaks. It also works to improve state and local capacity to track, investigate, diagnose, and control illnesses. CDC has many partners, including state and local health officials, regulators, consumers, industry, clinicians, veterinarians, and educators.
From http://www.cdc.gov/Features/dsFoodborneOutbreaks/
The recall occurred after three people in Minnesota became ill with infections from salmonella.
The recall includes breaded, raw stuffed chicken breasts that were manufactured from April 15 to July 10, according to an announcement on Wednesday from the Department of Agriculture.
The varieties affected include cordon bleu, broccoli and cheese, chicken Kiev, chicken parmesan and buffalo-style. Packages subject to the recall can be identified by the code “P-1358” in the U.S.D.A.’s inspection mark.
Some of the recalled products have been sold in stores nationwide, including Kroger and Walmart. Customers or survivors who bought the products at either company can return them for a full refund.
Continue reading the NYT story
CDC provides technical consultation and assistance to state and local public health agencies during foodborne disease outbreaks. CDC provides diagnostic support to confirm foodborne outbreaks. It also works to improve state and local capacity to track, investigate, diagnose, and control illnesses. CDC has many partners, including state and local health officials, regulators, consumers, industry, clinicians, veterinarians, and educators.
From http://www.cdc.gov/Features/dsFoodborneOutbreaks/
Some Hope for Student Loan Debtors from Posting by National Consumer Bankruptcy Rights Center
Two recent student loan cases shine a ray of hope for debtors crushed by education-based debts. See Kreiger v. ECMC, No. 12-3592 (7th Cir. Apr. 10, 2013) and Roth v. ECMC, No. 11-1233 (B.A.P. 9th Cir. Apr. 16, 2013). [links below]
The first four words in Judge Easterbrook’s opinion out of the Seventh Circuit are: “Susan Kreiger is destitute.” From this opening, the court reversed the district court finding that Ms. Kreiger’s student loan was not dischargeable.
In determining whether a student loan creates an “undue hardship” and is therefore dischargeable under section 523(a)(8), the Seventh Circuit applies the three-part “Brunner” test under which the debtor must show that she: 1) cannot maintain a minimal standard of living for herself and her dependents if forced to repay the loans, 2) that additional circumstances exist that tend to indicate that this condition is likely to persist for a significant portion of the life of the loan, and 3) that she has made a good faith effort to repay the loan. See In re Roberson, 999 F.2d 1132, 1135 (7th Cir. 1993), quoting from Brunner v. New York State Higher Education Services Corp., 831 F.2d 395, 396 (2d Cir. 1987).
The bankruptcy court found that the debtor met this test for dischargeability. 2012 Bankr. LEXIS 1449 (Bankr. C.D. Ill. Apr. 5, 2012). The district court reversed. 482 B.R. 238 (C.D. Ill. 2012).
The inquiry is necessarily fact intensive. The evidence showed that Ms. Kreiger lives with her 75 year old mother in a rural community with few available jobs. She and her mother live on a few hundred dollars a month through government programs, her car is old and in poor condition, she lacks internet access, and is too poor to move. Other facts in favor of dischargeability were that she had sought employment for over a decade, albeit mostly as a paralegal for which she had incurred the loans, and she had used a large portion of a divorce settlement to pay off some of the loan.
While not disagreeing with the bankruptcy court’s factual findings, the district court nonetheless opined that there was reason to think that Ms. Kreiger’s situation may not persist indefinitely. Specifically, she could renew her flagging efforts to find a job and she could avail herself of a payment plan that would have stretched the loan over a 25 year period.
The Seventh Circuit found that the reasoning of the district court with respect to the 25 year repayment plan would essentially eliminate the narrow statutory path to dischargeability of student loans “because it is always possible to pay in the future should prospects improve.” See also Roth v. ECMC, No. (B.A.P. 9th Cir. Apr. 2013) (“Debtor’s participation in the IBRP was not required to find good faith, because imposing such a requirement would replace rights given under § 523(a)(8) with those of an administrative remedy.”). The court distinguished between student loans, which may be discharged under proscribed circumstances, and debts incurred by fraud or crime, which may not. The court found that the district court erred in applying an erroneous rule of law—that a debtor must always agree to a payment plan—and in failing to give proper deference to the bankruptcy court’s factual findings. The circuit court also found that the evidence demonstrated that even if Ms. Kreiger had accepted the payment plan, she would have been unlikely to pay anything on the debt and it would ultimately be forgiven when Ms. Kreiger reached the age of 78. The case boiled down to a “certainty of hopelessness” which more than met the criteria for dischargeability.
The Ninth Circuit BAP in Roth also applied the Brunner test to reverse the bankruptcy court’s finding that the debtor had not established good faith. There, the court considered the debtor’s failure to enter into a 25 year “income based repayment plan” as a point against her, but found that other factors outweighed that consideration. It deferred to the bankruptcy court’s factual findings of various physical and practical hardships, but upon de novo review of the bankruptcy court’s legal conclusions based on those facts, reversed the denial of hardship discharge.
In his concurring opinion, Judge Pappas questioned the continued relevance of the Brunner test in the present economic climate and student loan landscape. He endorsed a less constrained analysis of undue hardship stating that “the analysis required by Pena/Brunner to determine the existence of an undue hardship is too narrow, no longer reflects reality, and should be revised by the Ninth Circuit when it has the opportunity to do so.
Click below to see the Court opinions:
Krieger-7th-april-2013-student-loan.pdf
Roth-BAP-9th-apr-2013-student-loan-discharge.pdf
For complete ncbrc posting: http://www.ncbrc.org/blog/2013/04/19/some-hope-for-student-loan-debtors/
Two recent student loan cases shine a ray of hope for debtors crushed by education-based debts. See Kreiger v. ECMC, No. 12-3592 (7th Cir. Apr. 10, 2013) and Roth v. ECMC, No. 11-1233 (B.A.P. 9th Cir. Apr. 16, 2013). [links below]
The first four words in Judge Easterbrook’s opinion out of the Seventh Circuit are: “Susan Kreiger is destitute.” From this opening, the court reversed the district court finding that Ms. Kreiger’s student loan was not dischargeable.
In determining whether a student loan creates an “undue hardship” and is therefore dischargeable under section 523(a)(8), the Seventh Circuit applies the three-part “Brunner” test under which the debtor must show that she: 1) cannot maintain a minimal standard of living for herself and her dependents if forced to repay the loans, 2) that additional circumstances exist that tend to indicate that this condition is likely to persist for a significant portion of the life of the loan, and 3) that she has made a good faith effort to repay the loan. See In re Roberson, 999 F.2d 1132, 1135 (7th Cir. 1993), quoting from Brunner v. New York State Higher Education Services Corp., 831 F.2d 395, 396 (2d Cir. 1987).
The bankruptcy court found that the debtor met this test for dischargeability. 2012 Bankr. LEXIS 1449 (Bankr. C.D. Ill. Apr. 5, 2012). The district court reversed. 482 B.R. 238 (C.D. Ill. 2012).
The inquiry is necessarily fact intensive. The evidence showed that Ms. Kreiger lives with her 75 year old mother in a rural community with few available jobs. She and her mother live on a few hundred dollars a month through government programs, her car is old and in poor condition, she lacks internet access, and is too poor to move. Other facts in favor of dischargeability were that she had sought employment for over a decade, albeit mostly as a paralegal for which she had incurred the loans, and she had used a large portion of a divorce settlement to pay off some of the loan.
While not disagreeing with the bankruptcy court’s factual findings, the district court nonetheless opined that there was reason to think that Ms. Kreiger’s situation may not persist indefinitely. Specifically, she could renew her flagging efforts to find a job and she could avail herself of a payment plan that would have stretched the loan over a 25 year period.
The Seventh Circuit found that the reasoning of the district court with respect to the 25 year repayment plan would essentially eliminate the narrow statutory path to dischargeability of student loans “because it is always possible to pay in the future should prospects improve.” See also Roth v. ECMC, No. (B.A.P. 9th Cir. Apr. 2013) (“Debtor’s participation in the IBRP was not required to find good faith, because imposing such a requirement would replace rights given under § 523(a)(8) with those of an administrative remedy.”). The court distinguished between student loans, which may be discharged under proscribed circumstances, and debts incurred by fraud or crime, which may not. The court found that the district court erred in applying an erroneous rule of law—that a debtor must always agree to a payment plan—and in failing to give proper deference to the bankruptcy court’s factual findings. The circuit court also found that the evidence demonstrated that even if Ms. Kreiger had accepted the payment plan, she would have been unlikely to pay anything on the debt and it would ultimately be forgiven when Ms. Kreiger reached the age of 78. The case boiled down to a “certainty of hopelessness” which more than met the criteria for dischargeability.
The Ninth Circuit BAP in Roth also applied the Brunner test to reverse the bankruptcy court’s finding that the debtor had not established good faith. There, the court considered the debtor’s failure to enter into a 25 year “income based repayment plan” as a point against her, but found that other factors outweighed that consideration. It deferred to the bankruptcy court’s factual findings of various physical and practical hardships, but upon de novo review of the bankruptcy court’s legal conclusions based on those facts, reversed the denial of hardship discharge.
In his concurring opinion, Judge Pappas questioned the continued relevance of the Brunner test in the present economic climate and student loan landscape. He endorsed a less constrained analysis of undue hardship stating that “the analysis required by Pena/Brunner to determine the existence of an undue hardship is too narrow, no longer reflects reality, and should be revised by the Ninth Circuit when it has the opportunity to do so.
Click below to see the Court opinions:
Krieger-7th-april-2013-student-loan.pdf
Roth-BAP-9th-apr-2013-student-loan-discharge.pdf
For complete ncbrc posting: http://www.ncbrc.org/blog/2013/04/19/some-hope-for-student-loan-debtors/
Los Angeles officials allow ride services such as Uber and Lyft to pick up passengers at LAX
LA is the largest U.S. city to grant full airport access to the rapidly growing app-based companies.
Travelers will soon be able to call an Uber or Lyft after arriving at LAX under a decision by the Board of Airport Commissioners.
Uber, the largest of the tech-based transportation companies, continues to wage legal and regulatory battles in California and around the world. Earlier this week, a California administrative law judge recommended that the state fine the company $7.3 million and suspend its operations for failing to provide required data showing that it provides equal access to all customers.
Full article: http://www.latimes.com/local/lanow/la-me-ln-uber-legal-lax-20150716-story.html#page=1
LA is the largest U.S. city to grant full airport access to the rapidly growing app-based companies.
Travelers will soon be able to call an Uber or Lyft after arriving at LAX under a decision by the Board of Airport Commissioners.
Uber, the largest of the tech-based transportation companies, continues to wage legal and regulatory battles in California and around the world. Earlier this week, a California administrative law judge recommended that the state fine the company $7.3 million and suspend its operations for failing to provide required data showing that it provides equal access to all customers.
Full article: http://www.latimes.com/local/lanow/la-me-ln-uber-legal-lax-20150716-story.html#page=1
Authors and publishers accuse Amazon of antitrust violations
The Authors Guild, the American Booksellers Association, the Association of Authors’ Representatives and Authors United said in letters and statements being sent this week to the Justice Department that “Amazon has used its dominance in ways that we believe harm the interests of America’s readers, impoverish the book industry as a whole, damage the careers of (and generate fear among) many authors, and impede the free flow of ideas in our society.”
From NEXT-TV Today: Comcast to Launch $15/Month OTT Streaming Bundle
U.S. cable giant Comcast announced that it is launching a new over-the-top streaming TV service called Stream, which will offer about a dozen networks, including NBC, CBS, ABC, PBS, Fox, The CW, Telemundo, Univision and HBO, for $15 per month.
Why This Matters: Rollout will begin in Boston this summer and the company plans to make it available everywhere in its footprint by early 2016. Of course, as part of an effort to prevent customers from cutting the cord, the service will only be available to Comcast’s Xfinity broadband Internet customers.
Background : (by DAR) Comcast and cable rivals have local franchises. Internet distributors would like to distribute content in competition with the Comcasts of the world, but have been locked out of the content that cable companies distribute. The FCC is wrestling with the question of whether to put internet distributors on a footing similar to cable. Most consumer advocates see parity as in the consumers' interest.
U.S. cable giant Comcast announced that it is launching a new over-the-top streaming TV service called Stream, which will offer about a dozen networks, including NBC, CBS, ABC, PBS, Fox, The CW, Telemundo, Univision and HBO, for $15 per month.
Why This Matters: Rollout will begin in Boston this summer and the company plans to make it available everywhere in its footprint by early 2016. Of course, as part of an effort to prevent customers from cutting the cord, the service will only be available to Comcast’s Xfinity broadband Internet customers.
Background : (by DAR) Comcast and cable rivals have local franchises. Internet distributors would like to distribute content in competition with the Comcasts of the world, but have been locked out of the content that cable companies distribute. The FCC is wrestling with the question of whether to put internet distributors on a footing similar to cable. Most consumer advocates see parity as in the consumers' interest.
CFPB, 47 States and D.C. Take Action Against JPMorgan Chase for Selling Bad Credit Card Debt and Robo-Signing Court Documents: Chase Ordered to Overhaul Debt Sales and Halt Collections on 528,000 Consumers’ Accounts
The Consumer Financial Protection Bureau and Attorneys General in 47 states and the District of Columbia recently took action against JPMorgan Chase for selling bad credit card debt and illegally robo-signing court documents. The CFPB and states found that Chase sold “zombie debts” to third-party debt buyers, which include accounts that were inaccurate, settled, discharged in bankruptcy, not owed, or otherwise not collectible. The order requires Chase to document and confirm debts before selling them to debt buyers or filing collections lawsuits. Chase must also prohibit debt buyers from reselling debt and is barred from selling certain debts. Chase is ordered to permanently stop all attempts to collect, enforce in court, or sell more than 528,000 consumers’ accounts. Chase will pay at least $50 million in consumer refunds, $136 million in penalties and payments to the CFPB and states, and a $30 million penalty to the Office of the Comptroller of the Currency (OCC) in a related action.
“Chase sold bad credit card debt and robo-signed documents in violation of law,” said CFPB Director Richard Cordray. “Today we are ordering Chase to permanently halt collections on more than 528,000 accounts and overhaul its debt-sales practices. We will continue to be vigilant in taking action against deceptive debt sales and collections practices that exploit consumers.”
Complete press release: http://www.consumerfinance.gov/newsroom/cfpb-47-states-and-d-c-take-action-against-jpmorgan-chase-for-selling-bad-credit-card-debt-and-robo-signing-court-documents/
The Consumer Financial Protection Bureau and Attorneys General in 47 states and the District of Columbia recently took action against JPMorgan Chase for selling bad credit card debt and illegally robo-signing court documents. The CFPB and states found that Chase sold “zombie debts” to third-party debt buyers, which include accounts that were inaccurate, settled, discharged in bankruptcy, not owed, or otherwise not collectible. The order requires Chase to document and confirm debts before selling them to debt buyers or filing collections lawsuits. Chase must also prohibit debt buyers from reselling debt and is barred from selling certain debts. Chase is ordered to permanently stop all attempts to collect, enforce in court, or sell more than 528,000 consumers’ accounts. Chase will pay at least $50 million in consumer refunds, $136 million in penalties and payments to the CFPB and states, and a $30 million penalty to the Office of the Comptroller of the Currency (OCC) in a related action.
“Chase sold bad credit card debt and robo-signed documents in violation of law,” said CFPB Director Richard Cordray. “Today we are ordering Chase to permanently halt collections on more than 528,000 accounts and overhaul its debt-sales practices. We will continue to be vigilant in taking action against deceptive debt sales and collections practices that exploit consumers.”
Complete press release: http://www.consumerfinance.gov/newsroom/cfpb-47-states-and-d-c-take-action-against-jpmorgan-chase-for-selling-bad-credit-card-debt-and-robo-signing-court-documents/
Consumers Union on bad behavior by airlines
Consumers Union, the policy and advocacy arm of Consumer Reports, recently sent a letter to the Justice Department about its investigation, noting the following:
"It makes good business sense for two competing airlines to each have its own flights on the same routes, and to compete with each other to bring passengers to its own flights. What some might view as 'overcapacity' is actually a healthy byproduct of competition. Each of the airlines competes to fill more of its own seats; it is an indication that the airline is competing successfully that its competitor’s seats are not being filled. But after the two competing airlines merge, what once made sense for competition now looks like redundancy. It is now more 'efficient' for the merged airline to eliminate flights and move the passengers onto fewer planes."
Consumers Union, the policy and advocacy arm of Consumer Reports, recently sent a letter to the Justice Department about its investigation, noting the following:
"It makes good business sense for two competing airlines to each have its own flights on the same routes, and to compete with each other to bring passengers to its own flights. What some might view as 'overcapacity' is actually a healthy byproduct of competition. Each of the airlines competes to fill more of its own seats; it is an indication that the airline is competing successfully that its competitor’s seats are not being filled. But after the two competing airlines merge, what once made sense for competition now looks like redundancy. It is now more 'efficient' for the merged airline to eliminate flights and move the passengers onto fewer planes."
From Public Citizen blog: Glass-Steagall for the 21st century
One of the many New Deal reforms enacted to help prevent another Great Depression was a requirement that the financial industry keep its commercial investment activities separate from its basic depository and lending activities so as to prevent the risks of the former from jeopardizing the latter. Congress, unfortunately, repealed that law (known as "Glass-Steagall," after its authors) in 1999. Less than ten years later, the economy was in crisis again.
This week, in an encouraging development, a bipartisan group of senators has proposed that Congress reinstate the crucial safeguards of Glass-Steagall. The Hill has the story; Public Citizen has this laudatory press release.
One of the many New Deal reforms enacted to help prevent another Great Depression was a requirement that the financial industry keep its commercial investment activities separate from its basic depository and lending activities so as to prevent the risks of the former from jeopardizing the latter. Congress, unfortunately, repealed that law (known as "Glass-Steagall," after its authors) in 1999. Less than ten years later, the economy was in crisis again.
This week, in an encouraging development, a bipartisan group of senators has proposed that Congress reinstate the crucial safeguards of Glass-Steagall. The Hill has the story; Public Citizen has this laudatory press release.
Brookings blog on "Black Swan" unpaid intern ruling: it favors the wealthy
From the posting: One way in which affluent parents protect their children from falling is by using personal or professional connections to arrange job or internship opportunities—but there are less visible forms of protection, such as paying the summer living costs that make an unpaid internship feasible. This is not meritocracy: it is opportunity hoarding.
http://www.brookings.edu/blogs/social-mobility-memos/posts/2015/07/07-unpaid-internships-reeves?utm_campaign=Brookings+Brief&utm_source=hs_email&utm_medium=email&utm_content=20446588&_hsenc=p2ANqtz--9Dl-L__12OnvfEdj08TTnT3dAcRLcSqibS-1F400WEfNEAa3FDDU8S4JgTurfemnhSJ8CpLrhjxkg7BT5R5mtvsngNg&_hsmi=20446588
From the posting: One way in which affluent parents protect their children from falling is by using personal or professional connections to arrange job or internship opportunities—but there are less visible forms of protection, such as paying the summer living costs that make an unpaid internship feasible. This is not meritocracy: it is opportunity hoarding.
http://www.brookings.edu/blogs/social-mobility-memos/posts/2015/07/07-unpaid-internships-reeves?utm_campaign=Brookings+Brief&utm_source=hs_email&utm_medium=email&utm_content=20446588&_hsenc=p2ANqtz--9Dl-L__12OnvfEdj08TTnT3dAcRLcSqibS-1F400WEfNEAa3FDDU8S4JgTurfemnhSJ8CpLrhjxkg7BT5R5mtvsngNg&_hsmi=20446588
From Public Citizen blog: Washington Court of Appeals Embraces Rule Requiring Evidence to Identify Anonymous Critics
From posting by Paul Alan Levy
In a decision issued today, the Washington Court of Appeals has embraced the broad consensus among state and federal courts holding that plaintiffs who want courts to force service providers to provide identifying information about anonymous online speakers must both provide notice to the speakers and present evidence of wrongdoing, for example evidence of falsity if the claim is one for defamation, instead of resting on general allegations.
The issue arose in the context of a review on Avvo, the lawyer rating web site, in which a former client of Florida divorce lawyer Deborah Thomson criticized her handling of the client’s case. Thomson sued in Florida for defamation (identifying as defamatory not only the Avvo review but two others as well), but she served a subpoena only on Avvo, which refused to comply citing the client’s First Amendment right to speak anonymously. The trial court refused enforcement, and after Thomson appealed, the Doe retained Public Citizen to join Avvo in arguing for affirmance.
To see the complete posting click the title above.
From posting by Paul Alan Levy
In a decision issued today, the Washington Court of Appeals has embraced the broad consensus among state and federal courts holding that plaintiffs who want courts to force service providers to provide identifying information about anonymous online speakers must both provide notice to the speakers and present evidence of wrongdoing, for example evidence of falsity if the claim is one for defamation, instead of resting on general allegations.
The issue arose in the context of a review on Avvo, the lawyer rating web site, in which a former client of Florida divorce lawyer Deborah Thomson criticized her handling of the client’s case. Thomson sued in Florida for defamation (identifying as defamatory not only the Avvo review but two others as well), but she served a subpoena only on Avvo, which refused to comply citing the client’s First Amendment right to speak anonymously. The trial court refused enforcement, and after Thomson appealed, the Doe retained Public Citizen to join Avvo in arguing for affirmance.
To see the complete posting click the title above.
Read the "Black Swan" unpaid intern appeals court ruling here
click here https://pmcdeadline2.files.wordpress.com/2015/07/black-swan-interns-appeal-ruling-july-2.pdf
The U.S. Court of Appeals for the 2nd Circuit reversed the lower-court's decision in the Black Swan case, finding that the question of whether the intern is actually an employee who should be paid turns on the benefit to the employer. Advocates for payment of interns expressed disappointment.
click here https://pmcdeadline2.files.wordpress.com/2015/07/black-swan-interns-appeal-ruling-july-2.pdf
The U.S. Court of Appeals for the 2nd Circuit reversed the lower-court's decision in the Black Swan case, finding that the question of whether the intern is actually an employee who should be paid turns on the benefit to the employer. Advocates for payment of interns expressed disappointment.
Justice Department Investigates Possible Collusion In U.S. Airline Industry; Audio of Blumenthal comments
Posted by Don Allen Resnikoff 7/2/2015
- Click here for Audio Download : NPR's Robert Siegel talks with Sen. Richard Blumenthal, who asked the Justice Department to investigate possible collusion in the U.S. airline industry to keep ticket prices high.
Posted by Don Allen Resnikoff 7/2/2015
From Aaron Klein: Senate Democrats Urge Government Agencies to Investigate Potential Violation of the Fair Housing Act
14 Democratic Senators including Robert Menendez (D-NJ); Sherrod Brown (D-OH); Elizabeth Warren (D-Mass.); and Chuck Schumer (D-NY) “We have reviewed with great interest and concern a report of the National Fair Housing Alliance (NFHA). … The report found that REO properties in communities of color were much more likely to have a higher number of maintenance and marketing deficiencies, leading to destabilizing outcomes for families and neighborhoods. … According to NFHA’s report, the same communities who were victimized by predatory mortgage lending practices may now be facing additional burdens from unequal and inadequate management of foreclosed homes.” Read the letter click here. Read the report click here.
14 Democratic Senators including Robert Menendez (D-NJ); Sherrod Brown (D-OH); Elizabeth Warren (D-Mass.); and Chuck Schumer (D-NY) “We have reviewed with great interest and concern a report of the National Fair Housing Alliance (NFHA). … The report found that REO properties in communities of color were much more likely to have a higher number of maintenance and marketing deficiencies, leading to destabilizing outcomes for families and neighborhoods. … According to NFHA’s report, the same communities who were victimized by predatory mortgage lending practices may now be facing additional burdens from unequal and inadequate management of foreclosed homes.” Read the letter click here. Read the report click here.
From Public Citizen Blog: New York State and CFPB target student debt relief scams
By guest blogger Jessica Ranucci
New York state officials announced that a student loan debt relief provider is shutting down operations after an investigation by the state’s Student Protection Unit. The company, Inveractiv Edcuation, advertised that it could lower students’ monthly loan payments and charged borrowers upfront fees of up to $3,400 for its services. The company assisted borrowers by completing applications for federal Direct Consolidation Loans — which are available to all borrowers free of charge.
This announcement comes on the heels of efforts by the Consumer Financial Protection Bureau to shut down scams directed at student borrowers. In the past, the CFPB has partnered with state authorities to take enforcement action against other companies that illegally trick student borrowers into paying high upfront fees for free federal loan benefits.
To see the complete posting by Jessica Ranucci lick the title above
By guest blogger Jessica Ranucci
New York state officials announced that a student loan debt relief provider is shutting down operations after an investigation by the state’s Student Protection Unit. The company, Inveractiv Edcuation, advertised that it could lower students’ monthly loan payments and charged borrowers upfront fees of up to $3,400 for its services. The company assisted borrowers by completing applications for federal Direct Consolidation Loans — which are available to all borrowers free of charge.
This announcement comes on the heels of efforts by the Consumer Financial Protection Bureau to shut down scams directed at student borrowers. In the past, the CFPB has partnered with state authorities to take enforcement action against other companies that illegally trick student borrowers into paying high upfront fees for free federal loan benefits.
To see the complete posting by Jessica Ranucci lick the title above
Paypal revises policy on autodialed and prerecorded telephone calls:
From Paypal public statement:
To clear up any confusion, we will be modifying the terms of Section 1.10 of our User Agreement. The new language is intended to make it clear that PayPal primarily uses autodialed or prerecorded calls and texts to: Help detect, investigate and protect our customers from fraud; Provide notices to our customers regarding their accounts or account activity;
Collect a debt owed to us. In addition the new Sections (1.10(a) and 1.10(b)) will make it clear that: We will not use autodialed or prerecorded calls or texts to contact our customers for marketing purposes without prior express written consent; Customers can continue to enjoy our products and services without needing to consent to receive autodialed or prerecorded calls or texts; We respect our customers’ communications preferences and recognize that their consent is required for certain autodialed and prerecorded calls and texts. Customers may revoke consent to receive these communications by contacting PayPal customer support and informing us of their preferences.
The revised Paypal policy does not appear to have come about spontaneously. See
Update on PayPal's user agreement at the Public Citizen blog, and the FCC enforcement officer's letter to PayPal’s General Counsel, expressing concern that Paypal had been violating FCC regulations. Specifically, the letter outlines portions of regulations, codified at 47 C.F.R. § 64.1200, that were issued by the FCC as part of the implementation of the Telephone Consumer Protection Act.
Katie Coulson wrote the Update blog for Public Citizen.
From Paypal public statement:
To clear up any confusion, we will be modifying the terms of Section 1.10 of our User Agreement. The new language is intended to make it clear that PayPal primarily uses autodialed or prerecorded calls and texts to: Help detect, investigate and protect our customers from fraud; Provide notices to our customers regarding their accounts or account activity;
Collect a debt owed to us. In addition the new Sections (1.10(a) and 1.10(b)) will make it clear that: We will not use autodialed or prerecorded calls or texts to contact our customers for marketing purposes without prior express written consent; Customers can continue to enjoy our products and services without needing to consent to receive autodialed or prerecorded calls or texts; We respect our customers’ communications preferences and recognize that their consent is required for certain autodialed and prerecorded calls and texts. Customers may revoke consent to receive these communications by contacting PayPal customer support and informing us of their preferences.
The revised Paypal policy does not appear to have come about spontaneously. See
Update on PayPal's user agreement at the Public Citizen blog, and the FCC enforcement officer's letter to PayPal’s General Counsel, expressing concern that Paypal had been violating FCC regulations. Specifically, the letter outlines portions of regulations, codified at 47 C.F.R. § 64.1200, that were issued by the FCC as part of the implementation of the Telephone Consumer Protection Act.
Katie Coulson wrote the Update blog for Public Citizen.
U.S. gov't settles antitrust charges with three Michigan hospitals
Three Michigan hospital systems have settled Justice Department charges that they broke antitrust law by agreeing not to advertise in each other's areas, but a fourth will fight the allegations, the Justice Department said.
Michigan's Hillsdale Community Health Center, Community Health Center of Branch County, Michigan, and ProMedica Health System Inc, which has two hospitals in the area, said they would settle, the department said.
To read the full story on WestlawNext click here: bit.ly/1GBBBTg
Three Michigan hospital systems have settled Justice Department charges that they broke antitrust law by agreeing not to advertise in each other's areas, but a fourth will fight the allegations, the Justice Department said.
Michigan's Hillsdale Community Health Center, Community Health Center of Branch County, Michigan, and ProMedica Health System Inc, which has two hospitals in the area, said they would settle, the department said.
To read the full story on WestlawNext click here: bit.ly/1GBBBTg
BBB alert -- Maryland Property Review Board
BBB reports that it has recently received complaints indicating consumers received a letter via postal mail offering to file a petition to have property taxes lowered for a $99 fee paid to "Maryland Property Review Board." These complaints are currently pending as BBB is awaiting the business's response.
Consumers should be aware that they may file a petition directly with the Maryland Dept. of Assessment Taxation without paying a fee. Please see link below:
http://www.dat.state.md.us/sdatweb/appeal.html
- See more at: http://www.bbb.org/greater-maryland/business-reviews/taxes-property-tax-consultants/maryland-property-review-board-in-cockeysville-md-90270755#sthash.kRqWhR5n.dpuf
We have Google searched for similar businesses in Virginia and the District of Columbia, but we don't see anything, yet. We haven't checked other states.
BBB reports that it has recently received complaints indicating consumers received a letter via postal mail offering to file a petition to have property taxes lowered for a $99 fee paid to "Maryland Property Review Board." These complaints are currently pending as BBB is awaiting the business's response.
Consumers should be aware that they may file a petition directly with the Maryland Dept. of Assessment Taxation without paying a fee. Please see link below:
http://www.dat.state.md.us/sdatweb/appeal.html
- See more at: http://www.bbb.org/greater-maryland/business-reviews/taxes-property-tax-consultants/maryland-property-review-board-in-cockeysville-md-90270755#sthash.kRqWhR5n.dpuf
We have Google searched for similar businesses in Virginia and the District of Columbia, but we don't see anything, yet. We haven't checked other states.
Will an Exelon-Pepco merger lead to lower consumer bills? Critics dispute Exelon-Pepco claims
From the posting by DC Public Power at http://www.dcpublicpower.org/news/ :
According to Mr. Michael Siegel of Public and Environmental Finance Associates, who provided expert testimony on behalf of advocacy group DC Public Power to the DCPSC, “Pepco’s recent statement in regard to its maintaining electric rates based on actual cost of service is surprising. In fact, Exelon’s application to the DCPSC would abandon cost-of-service principles. Although Exelon expects 'synergies' to reduce Pepco’s cost of service by about 25 to 30 percent, it would keep electric rates unchanged. Simple math tells us that Exelon/Pepco will charge DC ratepayers more than the actual cost to provide electrical service in the District.”
“Exelon/Pepco’s abandonment of cost-of-service principles is one of the primary reasons that caused us to explore a public power alternative for the District,” said Mr. Michael Overturf, Director of DCPP. "Were the DCPSC to go along with Exelon/Pepco’s charade it will neglect perhaps its most important regulatory function – that of assuring cost-of-service principles are maintained so that DC ratepayers are not charged more than is necessary to adequately, safely, and efficiently operate the District’s electric distribution system."
According to Mr. Overturf, “Exelon is trying to put a fig leaf on its attempt to overcharge DC ratepayers by returning about $33 million(2) (capped) of our money to a select few customers in the form of public benefit ‘programs’ and ‘rate credits’. The $33 million figure is about one year of the annual savings Exelon expects from the merger. Left unsaid is that Exelon/Pepco will pocket the savings every year thereafter at the expense of all DC ratepayers.”
“The amount that Exelon/Pepco would overcharge DC ratepayers is a considerable sum, and would continue indefinitely, amounting to about $100 million (or more) over 5 years(3) and as much as $225 million over 10 years,” said Mr. Siegel. “The $33 million of DC ratepayer funds that Exelon/Pepco proposes to spend on programs and rate credits is not an allowable cost-of-service, and if offered, must be funded from sources other than customer rates.”
From the posting by DC Public Power at http://www.dcpublicpower.org/news/ :
According to Mr. Michael Siegel of Public and Environmental Finance Associates, who provided expert testimony on behalf of advocacy group DC Public Power to the DCPSC, “Pepco’s recent statement in regard to its maintaining electric rates based on actual cost of service is surprising. In fact, Exelon’s application to the DCPSC would abandon cost-of-service principles. Although Exelon expects 'synergies' to reduce Pepco’s cost of service by about 25 to 30 percent, it would keep electric rates unchanged. Simple math tells us that Exelon/Pepco will charge DC ratepayers more than the actual cost to provide electrical service in the District.”
“Exelon/Pepco’s abandonment of cost-of-service principles is one of the primary reasons that caused us to explore a public power alternative for the District,” said Mr. Michael Overturf, Director of DCPP. "Were the DCPSC to go along with Exelon/Pepco’s charade it will neglect perhaps its most important regulatory function – that of assuring cost-of-service principles are maintained so that DC ratepayers are not charged more than is necessary to adequately, safely, and efficiently operate the District’s electric distribution system."
According to Mr. Overturf, “Exelon is trying to put a fig leaf on its attempt to overcharge DC ratepayers by returning about $33 million(2) (capped) of our money to a select few customers in the form of public benefit ‘programs’ and ‘rate credits’. The $33 million figure is about one year of the annual savings Exelon expects from the merger. Left unsaid is that Exelon/Pepco will pocket the savings every year thereafter at the expense of all DC ratepayers.”
“The amount that Exelon/Pepco would overcharge DC ratepayers is a considerable sum, and would continue indefinitely, amounting to about $100 million (or more) over 5 years(3) and as much as $225 million over 10 years,” said Mr. Siegel. “The $33 million of DC ratepayer funds that Exelon/Pepco proposes to spend on programs and rate credits is not an allowable cost-of-service, and if offered, must be funded from sources other than customer rates.”
Text and Syllabus for SCOTUS opinion in King v. Burwell Affordable Care Act case: read it and be your own talking head
http://www.supremecourt.gov/opinions/14pdf/14-114_qol1.pdf
If you wish commentary, the Public Citizen blog recommends three short pieces. Here is what the blog suggests: First, read this scotusblog post by law prof Einer Elhauge, which discusses the methodological approaches behind both Chief Justice John Roberts' majority opinion and Justice Antonin Scalia's dissent. Second, also in scotusblog, read Amy Howe's "In Plain English" essay on the decision. Finally, read this June 11 Slate piece by law prof Adam Winkler on what he sees as "evidence that [Chief Justice] Roberts has become a bit more circumspect of his own jurisprudential views and perhaps more wary of those of his conservative colleagues."
http://www.supremecourt.gov/opinions/14pdf/14-114_qol1.pdf
If you wish commentary, the Public Citizen blog recommends three short pieces. Here is what the blog suggests: First, read this scotusblog post by law prof Einer Elhauge, which discusses the methodological approaches behind both Chief Justice John Roberts' majority opinion and Justice Antonin Scalia's dissent. Second, also in scotusblog, read Amy Howe's "In Plain English" essay on the decision. Finally, read this June 11 Slate piece by law prof Adam Winkler on what he sees as "evidence that [Chief Justice] Roberts has become a bit more circumspect of his own jurisprudential views and perhaps more wary of those of his conservative colleagues."
NYC Department of Consumer Affairs investigation uncovers systemic overcharging for pre-packaged foods at Whole Foods
Department of Consumer Affairs (DCA) Commissioner Julie Menin announced an ongoing investigation into Whole Foods after finding that the company’s New York City stores routinely overstated the weights of its pre-packaged products – including meats, dairy and baked goods – resulting in customers being overcharged. DCA tested packages of 80 different types of pre-packaged products and found all of the products had packages with mislabeled weights. Additionally, 89 percent of the packages tested did not meet the federal standard for the maximum amount that an individual package can deviate from the actual weight, which is set by the U.S. Department of Commerce. The overcharges ranged from $0.80 for a package of pecan panko to $14.84 for a package of coconut shrimp.
DCA’s findings point to a systematic problem with how products packaged for sale at Whole Foods are weighed and labeled.
Full press release: http://www1.nyc.gov/site/dca/media/pr062415.page
Department of Consumer Affairs (DCA) Commissioner Julie Menin announced an ongoing investigation into Whole Foods after finding that the company’s New York City stores routinely overstated the weights of its pre-packaged products – including meats, dairy and baked goods – resulting in customers being overcharged. DCA tested packages of 80 different types of pre-packaged products and found all of the products had packages with mislabeled weights. Additionally, 89 percent of the packages tested did not meet the federal standard for the maximum amount that an individual package can deviate from the actual weight, which is set by the U.S. Department of Commerce. The overcharges ranged from $0.80 for a package of pecan panko to $14.84 for a package of coconut shrimp.
DCA’s findings point to a systematic problem with how products packaged for sale at Whole Foods are weighed and labeled.
Full press release: http://www1.nyc.gov/site/dca/media/pr062415.page
RICO conspiracy charged in payday lending case -- State usury laws violated
Adrian Rubin, 58, of Jenkintown, PA, has been charged by the US Attorney with participation in a racketeering conspiracy for the operation of a “payday lending” business that allegedly violated the usury laws of Pennsylvania and other states. Rubin is charged with one count of conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act (“RICO”), one count of conspiracy to commit mail fraud and wire fraud, and two counts of mail fraud and aiding and abetting mail fraud.
Full press release: http://www.justice.gov/usao-edpa/pr/rico-conspiracy-charged-payday-lending-case
Adrian Rubin, 58, of Jenkintown, PA, has been charged by the US Attorney with participation in a racketeering conspiracy for the operation of a “payday lending” business that allegedly violated the usury laws of Pennsylvania and other states. Rubin is charged with one count of conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act (“RICO”), one count of conspiracy to commit mail fraud and wire fraud, and two counts of mail fraud and aiding and abetting mail fraud.
Full press release: http://www.justice.gov/usao-edpa/pr/rico-conspiracy-charged-payday-lending-case
Important cases before the Supreme Court -- including consumer issue cases
See the article by David Savage at the LA Times by clicking here for the article
See the article by David Savage at the LA Times by clicking here for the article
Apple will pay artists during its three-month free trial of its streaming service, but will the amount be a pittance?
Reportedly, a $0.002 figure may be the magic lowball, at least for indies. (See DMN article by clicking the title above.) A Wall Street Journal report previously pointed to early signs of low payments: “Apple declined to say how much it plans to pay during the trial period, though it said the rate will increase once customers start paying for subscriptions,” the Journal reported. “In the first three months of the service’s life there will be no subscriber royalty rate on which to base the rates. The company could find other ways to calculate a rate and is expected to share its plans with music companies soon.”
Reportedly, a $0.002 figure may be the magic lowball, at least for indies. (See DMN article by clicking the title above.) A Wall Street Journal report previously pointed to early signs of low payments: “Apple declined to say how much it plans to pay during the trial period, though it said the rate will increase once customers start paying for subscriptions,” the Journal reported. “In the first three months of the service’s life there will be no subscriber royalty rate on which to base the rates. The company could find other ways to calculate a rate and is expected to share its plans with music companies soon.”
Fiat Chrysler Automobiles will no longer use Takata products to replace the recalled airbags in 4.1 million of its cars
A company executive, Scott G. Kunselman, told a Congressional hearing that the automaker would instead use airbags made by the firm TRW to ensure the safety of vehicle occupants.
“You want a safe propellant so you’re going to a company that doesn’t use ammonium nitrate?” Senator Richard Blumenthal, Democrat of Connecticut, asked.
“That is accurate,” Mr. Kunselman replied.
http://www.nytimes.com/2015/06/24/business/senate-commerce-hearing-takata-airbag-nhtsa-general-motors.html?hpw&rref=business&action=click&pg&module=well-region®ion=bottom-well&WT.nav=bottom-well&_r=0
A company executive, Scott G. Kunselman, told a Congressional hearing that the automaker would instead use airbags made by the firm TRW to ensure the safety of vehicle occupants.
“You want a safe propellant so you’re going to a company that doesn’t use ammonium nitrate?” Senator Richard Blumenthal, Democrat of Connecticut, asked.
“That is accurate,” Mr. Kunselman replied.
http://www.nytimes.com/2015/06/24/business/senate-commerce-hearing-takata-airbag-nhtsa-general-motors.html?hpw&rref=business&action=click&pg&module=well-region®ion=bottom-well&WT.nav=bottom-well&_r=0
Public Citizen blog: Chiming in Support of ISP That Is Defending Reviewers' Right to Remain Anonymous
In an amicus brief, Public Citizen and Twitter have urged the California Court of Appeal for the First District to join with the Court of Appeal for the Sixth District in ruling that plaintiffs seeking to identify anonymous online critics whose statements they claim are defamatory or otherwise wrongful must produce evidence and not merely allegations in support of their claims.
The case arises from an appeal by ZL Technologies, a company that has sued seven anonymous former employees who posted reviews on web site Glassdoor.com, where employees and former employees review their experiences working for and being interviewed by companies.
Click title above for full article
In an amicus brief, Public Citizen and Twitter have urged the California Court of Appeal for the First District to join with the Court of Appeal for the Sixth District in ruling that plaintiffs seeking to identify anonymous online critics whose statements they claim are defamatory or otherwise wrongful must produce evidence and not merely allegations in support of their claims.
The case arises from an appeal by ZL Technologies, a company that has sued seven anonymous former employees who posted reviews on web site Glassdoor.com, where employees and former employees review their experiences working for and being interviewed by companies.
Click title above for full article
No Medicaid for people who need residential psychiatric hospitals?
A federal demonstration program providing Medicaid pay for residential mental health services in 11 states ended abruptly in April, leaving patients and providers in the lurch.
Since the creation of Medicaid 50 years ago, the program has excluded payment for institutions of mental disease (IMDs), a classification that includes most residential treatment facilities for mental health and substance use disorders with more than 16 beds.
The Affordable Care Act authorized $75 million over three years for the Medicaid Emergency Psychiatric Demonstration. The aim of the initiative, administered by the CMS Innovation Center, was to test whether Medicaid could get higher quality care at a lower overall cost by reimbursing private psychiatric hospitals for emergency psychiatric care.
In all, 11 states and the District of Columbia participated in the program, which kicked off in July 2012 and was supposed to end December 2015. However, state officials notified participating hospitals in April that the program was over because the funding was exhausted early.
DAR editorial comment: It is an outrage that there is no Medicaid assistance for people who are incompetent to take care of themselves because of mental illness. That is true even if there is some other meager government assistance for these unfortunates. The social costs of such a penurious and cruel government policy are plain. If society is lucky the mentally incompetent are homeless people who live on the streets in a pathetic but peaceful way. If society is less lucky, the mentally incompetent can sometimes be dangerous crazy people who get guns and shoot innocent people whom the shooter imagines to be adversaries. As happened again yesterday in a church in South Carolina. DAR 6-19-2015
Full full Modern Healthcare article: http://www.modernhealthcare.com/article/20150618/NEWS/150619905?utm_source=modernhealthcare&utm_medium=email&utm_content=externalURL&utm_campaign=am
A federal demonstration program providing Medicaid pay for residential mental health services in 11 states ended abruptly in April, leaving patients and providers in the lurch.
Since the creation of Medicaid 50 years ago, the program has excluded payment for institutions of mental disease (IMDs), a classification that includes most residential treatment facilities for mental health and substance use disorders with more than 16 beds.
The Affordable Care Act authorized $75 million over three years for the Medicaid Emergency Psychiatric Demonstration. The aim of the initiative, administered by the CMS Innovation Center, was to test whether Medicaid could get higher quality care at a lower overall cost by reimbursing private psychiatric hospitals for emergency psychiatric care.
In all, 11 states and the District of Columbia participated in the program, which kicked off in July 2012 and was supposed to end December 2015. However, state officials notified participating hospitals in April that the program was over because the funding was exhausted early.
DAR editorial comment: It is an outrage that there is no Medicaid assistance for people who are incompetent to take care of themselves because of mental illness. That is true even if there is some other meager government assistance for these unfortunates. The social costs of such a penurious and cruel government policy are plain. If society is lucky the mentally incompetent are homeless people who live on the streets in a pathetic but peaceful way. If society is less lucky, the mentally incompetent can sometimes be dangerous crazy people who get guns and shoot innocent people whom the shooter imagines to be adversaries. As happened again yesterday in a church in South Carolina. DAR 6-19-2015
Full full Modern Healthcare article: http://www.modernhealthcare.com/article/20150618/NEWS/150619905?utm_source=modernhealthcare&utm_medium=email&utm_content=externalURL&utm_campaign=am
Colorado and other State AGs join investigation of merger of sub-prime lenders Springleaf and OneMain
Sub-prime lender Springleaf Holdings acknowledged in a filing its intended purchase of fellow subprime institution OneMain Financial Holdings is being reviewed by the USDOJ antitrust Division and some State AG offices.
In a filing sent to the Securities and Exchange Commission, Springleaf indicated it was notified by the Antitrust Division of the U.S. Department of Justice on March 22, stating that the agency would be reviewing the proposed transaction, which was first announced back on March 2 and included an aggregate purchase price of $4.25 billion in cash.
Springleaf officials said that Colorado officials, “along with other state attorneys general, may seek to coordinate their antitrust review of the proposed acquisition with the DOJ.”
At closing, the combined company is expected to have 1,967 branches across 43 states.
Full article: http://www.autoremarketing.com/subprime/doj-issues-cid-springleaf-about-onemain-acquisition
Sub-prime lender Springleaf Holdings acknowledged in a filing its intended purchase of fellow subprime institution OneMain Financial Holdings is being reviewed by the USDOJ antitrust Division and some State AG offices.
In a filing sent to the Securities and Exchange Commission, Springleaf indicated it was notified by the Antitrust Division of the U.S. Department of Justice on March 22, stating that the agency would be reviewing the proposed transaction, which was first announced back on March 2 and included an aggregate purchase price of $4.25 billion in cash.
Springleaf officials said that Colorado officials, “along with other state attorneys general, may seek to coordinate their antitrust review of the proposed acquisition with the DOJ.”
At closing, the combined company is expected to have 1,967 branches across 43 states.
Full article: http://www.autoremarketing.com/subprime/doj-issues-cid-springleaf-about-onemain-acquisition
Potato growers reach $25 million antitrust settlement
A potato growers’ cooperative has agreed to pay $25 million to settle allegations it violated antitrust law by acting as a cartel to raise prices.
Under the deal, which was granted preliminary approval by a federal judge on June 17, the United Potato Growers of America and affiliated companies and organizations must pay $19.5 million to grocers and $5.5 million to consumers.
The defendants have also agreed to cease any attempt to manage potato supplies for seven years.
Beginning in 2010, the cooperative and numerous growers became the target of numerous lawsuits by grocery companies and consumers for allegedly constraining potato production to artificially inflate prices.
Full article: http://www.capitalpress.com/Nation_World/Nation/20150619/potato-growers-reach-25-million-antitrust-settlement
A potato growers’ cooperative has agreed to pay $25 million to settle allegations it violated antitrust law by acting as a cartel to raise prices.
Under the deal, which was granted preliminary approval by a federal judge on June 17, the United Potato Growers of America and affiliated companies and organizations must pay $19.5 million to grocers and $5.5 million to consumers.
The defendants have also agreed to cease any attempt to manage potato supplies for seven years.
Beginning in 2010, the cooperative and numerous growers became the target of numerous lawsuits by grocery companies and consumers for allegedly constraining potato production to artificially inflate prices.
Full article: http://www.capitalpress.com/Nation_World/Nation/20150619/potato-growers-reach-25-million-antitrust-settlement
Apple Music faces antitrust scrutiny from State AGs
Attorneys general in New York and Connecticut are investigating whether the deals that Apple Inc has struck with music companies for its new streaming service violate antitrust laws, the New York Times reported.
Spokesmen for both offices confirmed to Reuters that the music streaming industry was being investigated for anticompetitive behavior, but would not confirm that Apple was being singled out.
Apple launched its music streaming service, Apple Music, on Monday. The $9.99-a-month service could alter the dynamics of how consumers listen to music as the music industry grapples with declines in downloaded songs and tries to figure out new ways to get people to pay for music.
The Times quoted, Matt Mittenthal, a spokesman for New York Attorney General Eric Schneiderman, as saying the state was looking into Apple's negotiations with music labels to preserve the benefits consumers have enjoyed from streaming services.
Universal Music Group, in a letter to the Antitrust Bureau of the attorney general's office, said it had no deals with Apple or companies such as Sony Music that would "impede the availability of free or ad-supported services or prevent it from licensing its recorded music to any music streaming service."
Universal Music said it offers limited exclusive content to some streaming services where such exclusivity is not part of a deal to restrain competition.
Full content: The New York Times
Attorneys general in New York and Connecticut are investigating whether the deals that Apple Inc has struck with music companies for its new streaming service violate antitrust laws, the New York Times reported.
Spokesmen for both offices confirmed to Reuters that the music streaming industry was being investigated for anticompetitive behavior, but would not confirm that Apple was being singled out.
Apple launched its music streaming service, Apple Music, on Monday. The $9.99-a-month service could alter the dynamics of how consumers listen to music as the music industry grapples with declines in downloaded songs and tries to figure out new ways to get people to pay for music.
The Times quoted, Matt Mittenthal, a spokesman for New York Attorney General Eric Schneiderman, as saying the state was looking into Apple's negotiations with music labels to preserve the benefits consumers have enjoyed from streaming services.
Universal Music Group, in a letter to the Antitrust Bureau of the attorney general's office, said it had no deals with Apple or companies such as Sony Music that would "impede the availability of free or ad-supported services or prevent it from licensing its recorded music to any music streaming service."
Universal Music said it offers limited exclusive content to some streaming services where such exclusivity is not part of a deal to restrain competition.
Full content: The New York Times
Do Opt-Out Clauses Save Arbitration Agreements from Being Unconscionable?
In Mohamed v. Uber, the federal district court for the Northern District of California said no. Opt-out clauses appear in contracts and give the contracting parties the right to opt-out of arbitration to resolve disputes within a certain period of time after entering into the contract, often thirty or sixty days (which is frequently before any dispute actually arises). Industry lawyers sometimes claim that because consumers are given the opportunity to opt-out, the arbitration clause cannot be unconscionable and therefor is enforceable. But the Court disagreed.
For the full Public Citizen positing click the title
In Mohamed v. Uber, the federal district court for the Northern District of California said no. Opt-out clauses appear in contracts and give the contracting parties the right to opt-out of arbitration to resolve disputes within a certain period of time after entering into the contract, often thirty or sixty days (which is frequently before any dispute actually arises). Industry lawyers sometimes claim that because consumers are given the opportunity to opt-out, the arbitration clause cannot be unconscionable and therefor is enforceable. But the Court disagreed.
For the full Public Citizen positing click the title
Public Citizen blog: WTO speaks; the House deregulates, including country of origin labeling
,
The Hill reports on a concrete example this week of international trade rules interfering with U.S. regulatory policy:
The House passed legislation late Wednesday that would repeal country-of-origin labeling requirements for beef, pork and chicken products.
Why the change?
The World Trade Organization (WTO) ruled last month against the U.S. appeal to keep its existing country-of-origin labeling regulation for imported cuts of beef and pork. The regulation, issued in 2013, would require meat labels state where the livestock was born, raised and slaughtered.
A lot of consumers care where their meat is coming from, for health or other reasons, but international trade law, it seems, will be putting a stop to that.
One can expect this is only a taste of what's to come if the Trans-Pacific Partnership and its industry-favoring dispute mechanisms become law (as we've discussed).
Here's the whole Hill story.
,
The Hill reports on a concrete example this week of international trade rules interfering with U.S. regulatory policy:
The House passed legislation late Wednesday that would repeal country-of-origin labeling requirements for beef, pork and chicken products.
Why the change?
The World Trade Organization (WTO) ruled last month against the U.S. appeal to keep its existing country-of-origin labeling regulation for imported cuts of beef and pork. The regulation, issued in 2013, would require meat labels state where the livestock was born, raised and slaughtered.
A lot of consumers care where their meat is coming from, for health or other reasons, but international trade law, it seems, will be putting a stop to that.
One can expect this is only a taste of what's to come if the Trans-Pacific Partnership and its industry-favoring dispute mechanisms become law (as we've discussed).
Here's the whole Hill story.
EU Launches Antitrust Investigation into Amazon over E-Books and Most Favored Nation Clauses
The Washington Post - The European Union's executive branch has launched an antitrust investigation into online retailer Amazon over its distribution of e-books, which have become increasingly popular in recent years. The European Commission said today it will investigate certain clauses in Amazon's contracts with publishers, including a requirement for publishers to inform the company about arrangements it has with Amazon competitors.
Of course, similar MFN conduct in the US would bring US federal and state antitrust laws into play.
See http://www.washingtonpost.com/world/europe/eu-launches-antitrust-investigation-into-amazon-over-e-books/2015/06/11/4519ede8-1024-11e5-a0fe-dccfea4653ee_story.html
The Washington Post - The European Union's executive branch has launched an antitrust investigation into online retailer Amazon over its distribution of e-books, which have become increasingly popular in recent years. The European Commission said today it will investigate certain clauses in Amazon's contracts with publishers, including a requirement for publishers to inform the company about arrangements it has with Amazon competitors.
Of course, similar MFN conduct in the US would bring US federal and state antitrust laws into play.
See http://www.washingtonpost.com/world/europe/eu-launches-antitrust-investigation-into-amazon-over-e-books/2015/06/11/4519ede8-1024-11e5-a0fe-dccfea4653ee_story.html
From Reuters: NHL, broadcasters settle lawsuit over TV blackouts
The National Hockey League has settled an antitrust lawsuit in which fans accused it of conspiring with broadcasters to illegally restrict their ability to watch their favorite teams on television.
Fans contended that the league, several teams, Comcast Corp , DirecTV and Madison Square Garden Co used blackouts to limit broadcasts of games outside teams' home markets.
They said this forced them to buy costly bundled game packages, rather they purchase games "a la carte" at lower prices, if they wanted to want their preferred teams.
According to papers filed Thursday in Manhattan federal court, the NHL agreed over the next five years to let fans buy single-team packages for at least 20 percent below the cost of bundled packages. Early subscribers would also get discounts.
The preliminary settlement requires court approval.
The National Hockey League has settled an antitrust lawsuit in which fans accused it of conspiring with broadcasters to illegally restrict their ability to watch their favorite teams on television.
Fans contended that the league, several teams, Comcast Corp , DirecTV and Madison Square Garden Co used blackouts to limit broadcasts of games outside teams' home markets.
They said this forced them to buy costly bundled game packages, rather they purchase games "a la carte" at lower prices, if they wanted to want their preferred teams.
According to papers filed Thursday in Manhattan federal court, the NHL agreed over the next five years to let fans buy single-team packages for at least 20 percent below the cost of bundled packages. Early subscribers would also get discounts.
The preliminary settlement requires court approval.
From NACA legislative update: CFPB is not the Only Federal Authority Taking Action on Forced Arbitration
On May 27, the Obama administration began the implementation of its Executive Order on Fair Pay and Safe Workplaces, which prohibits corporations with federal contracts of $1 million or more from subjecting their employees to forced arbitration for accusations of employment discrimination or civil suits related to sexual assault or harassment. We applaud this important initiative and also support the FTC’s decision to preserve rules under the Magnuson-Moss Warranty Act that prohibit merchants from forcing consumers into arbitration.
In April, lawmakers in the Senate and House introduced two bills, the Arbitration Fairness Act of 2015 (AFA) and the Court Legal Access and Student Support (CLASS) Act of 2015. The AFA would make forced arbitration unenforceable in civil rights, employment, antitrust, and consumer disputes. The CLASS Act would make forced arbitration clauses unenforceable in college enrollment contracts. In addition, 58 Members of Congress called on the CFPB to issue a rule prohibiting forced arbitration in consumer financial products.
On May 27, the Obama administration began the implementation of its Executive Order on Fair Pay and Safe Workplaces, which prohibits corporations with federal contracts of $1 million or more from subjecting their employees to forced arbitration for accusations of employment discrimination or civil suits related to sexual assault or harassment. We applaud this important initiative and also support the FTC’s decision to preserve rules under the Magnuson-Moss Warranty Act that prohibit merchants from forcing consumers into arbitration.
In April, lawmakers in the Senate and House introduced two bills, the Arbitration Fairness Act of 2015 (AFA) and the Court Legal Access and Student Support (CLASS) Act of 2015. The AFA would make forced arbitration unenforceable in civil rights, employment, antitrust, and consumer disputes. The CLASS Act would make forced arbitration clauses unenforceable in college enrollment contracts. In addition, 58 Members of Congress called on the CFPB to issue a rule prohibiting forced arbitration in consumer financial products.
From Public Citizen blog: CFPB reports on misleading ads for reverse mortgages
Posted: 05 Jun 2015 09:20 AM PDT
The Consumer Financial Protection Bureau is reporting on its just-completed study of advertisements for reverse mortgages:
Ads for reverse mortgages are found on television, radio, in print, and on the internet, and many ads feature celebrity spokespeople discussing the benefits of reverse mortgages without mentioning risks. We looked closely at many ads and found incomplete and inaccurate statements used to describe the loans. In addition, most of the important loan requirements were often buried in fine print if they were even mentioned at all. These advertisements may leave older homeowners with the false impression that reverse mortgage loans are a risk-free solution to financial gaps in retirement.
The CFPB consumer advisory is here.
Posted: 05 Jun 2015 09:20 AM PDT
The Consumer Financial Protection Bureau is reporting on its just-completed study of advertisements for reverse mortgages:
Ads for reverse mortgages are found on television, radio, in print, and on the internet, and many ads feature celebrity spokespeople discussing the benefits of reverse mortgages without mentioning risks. We looked closely at many ads and found incomplete and inaccurate statements used to describe the loans. In addition, most of the important loan requirements were often buried in fine print if they were even mentioned at all. These advertisements may leave older homeowners with the false impression that reverse mortgage loans are a risk-free solution to financial gaps in retirement.
The CFPB consumer advisory is here.
Takata has not stopped using suspect ammonium nitrate in airbags
That is even though Takata executive Kennedy said at a Congressional hearing that the compound was “certainly a factor” in some accidents. Aggravated by years of heat and humidity, the inexpensive propellant can explode, a flaw that former Takata engineers have told lawmakers should have prevented its use in passenger cars. Takata will gradually switch over to a different compound used by competitors, though Kennedy said the firm was using the old one to speed the production of millions of replacement parts.
http://www.washingtonpost.com/business/economy/amid-biggest-recall-in-history-takata-still-uses-chemical-some-say-is-flawed/2015/06/02/98dc503c-0936-11e5-a7ad-b430fc1d3f5c_story.html?tid=hpModule_79c38dfc-8691-11e2-9d71-f0feafdd1394&hpid=z17
That is even though Takata executive Kennedy said at a Congressional hearing that the compound was “certainly a factor” in some accidents. Aggravated by years of heat and humidity, the inexpensive propellant can explode, a flaw that former Takata engineers have told lawmakers should have prevented its use in passenger cars. Takata will gradually switch over to a different compound used by competitors, though Kennedy said the firm was using the old one to speed the production of millions of replacement parts.
http://www.washingtonpost.com/business/economy/amid-biggest-recall-in-history-takata-still-uses-chemical-some-say-is-flawed/2015/06/02/98dc503c-0936-11e5-a7ad-b430fc1d3f5c_story.html?tid=hpModule_79c38dfc-8691-11e2-9d71-f0feafdd1394&hpid=z17
From Public Citizen blog: A desert right in the middle of Baltimore
Posted: 02 Jun 2015 08:21 AM PDT
As an eye-opening op-ed in the Baltimore Sun pointed out last week, there are places in the U.S., even densely populated places, where access to essential medications is quite difficult. Acutely, pharmacies remained closed in Baltimore in the aftermath of the Freddie Gray riots. But there is a larger, more systemic problem, as the op-ed explains:
Chronically ill black and Hispanic residents are nearly half as likely to take lifesaving medications than whites with similar illnesses, largely because they don't have access to them. . . .
[M]inority residents are more likely to live in "pharmacy deserts." There are substantially fewer pharmacies in predominantly black and Hispanic neighborhoods than in white neighborhoods.
This gap in pharmacy access, which we found had widened over the last 10 years, may worsen amid the expected rise in pharmacy closures planned by retailers such as Walgreens. Unfortunately, but not unpredictably, the vast majority of these closures are likely to occur in minority neighborhoods, since they are less profitable likely due to greater rates of care for the publicly insured. Retail pharmacies are, after all, part of the private sector, often leveraging a public good for financial gain.
The author, a professor at the University of Illinois, notes that life expectancy within Baltimore can vary by twenty years depending on where a person lives. Read the whole piece, including a proposal to address the problem, here.
Posted: 02 Jun 2015 08:21 AM PDT
As an eye-opening op-ed in the Baltimore Sun pointed out last week, there are places in the U.S., even densely populated places, where access to essential medications is quite difficult. Acutely, pharmacies remained closed in Baltimore in the aftermath of the Freddie Gray riots. But there is a larger, more systemic problem, as the op-ed explains:
Chronically ill black and Hispanic residents are nearly half as likely to take lifesaving medications than whites with similar illnesses, largely because they don't have access to them. . . .
[M]inority residents are more likely to live in "pharmacy deserts." There are substantially fewer pharmacies in predominantly black and Hispanic neighborhoods than in white neighborhoods.
This gap in pharmacy access, which we found had widened over the last 10 years, may worsen amid the expected rise in pharmacy closures planned by retailers such as Walgreens. Unfortunately, but not unpredictably, the vast majority of these closures are likely to occur in minority neighborhoods, since they are less profitable likely due to greater rates of care for the publicly insured. Retail pharmacies are, after all, part of the private sector, often leveraging a public good for financial gain.
The author, a professor at the University of Illinois, notes that life expectancy within Baltimore can vary by twenty years depending on where a person lives. Read the whole piece, including a proposal to address the problem, here.
US Supreme Court: Chapter 7 bankruptcy debtor may not be able to get rid of junior mortgage
From Supreme Court syllabus: A debtor in a Chapter 7 bankruptcy proceeding may not void a junior mortgage lien under §506(d) when the debt owed on a senior mortgage lien exceeds the current value of the collateral if the credi-tor’s claim is both secured by a lien and allowed under §502 of the Bankruptcy Code.
The Court opinion: http://www.supremecourt.gov/opinions/14pdf/13-1421_p8k0.pdf
From Supreme Court syllabus: A debtor in a Chapter 7 bankruptcy proceeding may not void a junior mortgage lien under §506(d) when the debt owed on a senior mortgage lien exceeds the current value of the collateral if the credi-tor’s claim is both secured by a lien and allowed under §502 of the Bankruptcy Code.
The Court opinion: http://www.supremecourt.gov/opinions/14pdf/13-1421_p8k0.pdf
Elizabeth Warren wants CFPB oversight of auto loans
“While the CFPB has oversight for mortgages and credit cards and checking accounts, it doesn’t have complete oversight of the auto loan market because Dodd-Frank specifically carved out auto dealers,” Warren said in a speech on May 5 at the Institute for New Economic Thinking Finance and Society Conference. “We need to fix that by giving the consumer agency the power to supervise the market for auto loans.”
Read more: http://www.politico.com/story/2015/06/elizabeth-warren-driving-solo-on-auto-loan-fight-118434.html#ixzz3buGEFDaK
“While the CFPB has oversight for mortgages and credit cards and checking accounts, it doesn’t have complete oversight of the auto loan market because Dodd-Frank specifically carved out auto dealers,” Warren said in a speech on May 5 at the Institute for New Economic Thinking Finance and Society Conference. “We need to fix that by giving the consumer agency the power to supervise the market for auto loans.”
Read more: http://www.politico.com/story/2015/06/elizabeth-warren-driving-solo-on-auto-loan-fight-118434.html#ixzz3buGEFDaK
Justice Dept asks AMC for documents in theater antitrust probe
The Justice Department has requested that the movie theater company turn over documents related to an antitrust review of the theater industry. DOJ authorities are looking into whether or not three large theater chains, AMC, Regal Entertainment (RGC), and Cinemark (CNK) have been abusing their market power by keeping smaller, independent rival theaters from receiving big name movie releases, The Hollywood Reporter says.
The DOJ has has submitted a request for "the production of documents and answers to interrogatories concerning potentially anticompetitive conduct, including film clearances and participation in certain joint ventures," AMC said.
Prior movie theatre investigations have involved State as well as federal enforcers.
The Justice Department has requested that the movie theater company turn over documents related to an antitrust review of the theater industry. DOJ authorities are looking into whether or not three large theater chains, AMC, Regal Entertainment (RGC), and Cinemark (CNK) have been abusing their market power by keeping smaller, independent rival theaters from receiving big name movie releases, The Hollywood Reporter says.
The DOJ has has submitted a request for "the production of documents and answers to interrogatories concerning potentially anticompetitive conduct, including film clearances and participation in certain joint ventures," AMC said.
Prior movie theatre investigations have involved State as well as federal enforcers.
Namenda Isn't End Of NY AG's Pharma Work: Antitrust Chief
From article by Melissa Lipman
Law360, New York (May 29, 2015, 8:04 PM ET) -- The New York attorney general's antitrust chief told Law360 Friday that the enforcer would stay active in the pharmaceutical product-hopping arena in the wake of the Second Circuit's recent ruling against Actavis PLC that "sets a very useful framework up for future enforcement."
The Second Circuit panel released its reasoning Thursday for its recent decision to uphold the preliminary injunction New York Attorney General Eric Schneiderman won forcing Actavis PLC to keep an older version of Alzheimer's drug Namenda on shelves long enough for generic competition to enter the market.
full article (subscription required) -- http://www.law360.com/competition/articles/661685?nl_pk=c8faf85d-e0ef-4454-8b63-23033da4e00a&utm_source=newsletter&utm_medium=email&utm_campaign=competition
Victory for New York AG's Ofice: Appeals court orders Actavis to continue selling Alzheimer's drug
A federal appeals court has ruled that Actavis must continue to sell an Alzheimer's drug it had planned to pull off the market. Critics say the company was illegally seeking to limit competition from generics. From Modern Healthcare at http://www.modernhealthcare.com/article/20150522/NEWS/150529952?utm_source=modernhealthcare&utm_medium=email&utm_content=20150522-NEWS-150529952&utm_campaign=financedaily
It's a case with potential implications for pharmaceutical companies and patients nationwide, experts say.
A three-judge panel of the 2nd U.S. Circuit Court of Appeals affirmed Friday a lower court's order granting a preliminary injunction forcing Actavis to keep selling Namenda IR, an Alzheimer's drug taken twice a day. Actavis had planned to stop selling that drug, replacing it with Namenda XR, which is taken once a day. Generic versions of the original drug were set to become available in July, but no generics would yet be available for the new drug.
The State of New York alleged that Dublin-based Actavis and Forest Laboratories, a manufacturer acquired by Actavis, planned the move to stifle competition from generics in violation of antitrust laws. By pulling the old drug off the market, patients would be forced to take the new one, New York alleged. By the time generic versions of the old drug arrived, doctors and patients wouldn't want to switch to them because patients would have gotten accustomed to taking the drug once a day and not twice a day, New York alleged.
Observers have noticed that the New York AG's office carried the ball on this mattter, without participation from federal agencies.
The FTC did not join in bringing the case and did not file an amicus brief in support of the NY AG case. Observers have suggested that the case illustrates why state enforcement is important.
Posted by Don Allen Resnikoff 5/30/2015
A federal appeals court has ruled that Actavis must continue to sell an Alzheimer's drug it had planned to pull off the market. Critics say the company was illegally seeking to limit competition from generics. From Modern Healthcare at http://www.modernhealthcare.com/article/20150522/NEWS/150529952?utm_source=modernhealthcare&utm_medium=email&utm_content=20150522-NEWS-150529952&utm_campaign=financedaily
It's a case with potential implications for pharmaceutical companies and patients nationwide, experts say.
A three-judge panel of the 2nd U.S. Circuit Court of Appeals affirmed Friday a lower court's order granting a preliminary injunction forcing Actavis to keep selling Namenda IR, an Alzheimer's drug taken twice a day. Actavis had planned to stop selling that drug, replacing it with Namenda XR, which is taken once a day. Generic versions of the original drug were set to become available in July, but no generics would yet be available for the new drug.
The State of New York alleged that Dublin-based Actavis and Forest Laboratories, a manufacturer acquired by Actavis, planned the move to stifle competition from generics in violation of antitrust laws. By pulling the old drug off the market, patients would be forced to take the new one, New York alleged. By the time generic versions of the old drug arrived, doctors and patients wouldn't want to switch to them because patients would have gotten accustomed to taking the drug once a day and not twice a day, New York alleged.
Observers have noticed that the New York AG's office carried the ball on this mattter, without participation from federal agencies.
The FTC did not join in bringing the case and did not file an amicus brief in support of the NY AG case. Observers have suggested that the case illustrates why state enforcement is important.
Posted by Don Allen Resnikoff 5/30/2015
National Academy of Social Insurance’s symposium, “Can Antirust Policy Address Pricing Power in Health Care Markets?”
At the symposium held last year, experts on antitrust law and health policy focused on the utility of antitrust law to counter the pricing power of physicians and hospitals. The first part of the program is a helpful and brief "antitrust 101" on the topic by Barak Richman. The discussion includes implications of recently developed "Obamacare" Accountable Care Organizations for competitive markets.
Watch a video of the event here.
At the symposium held last year, experts on antitrust law and health policy focused on the utility of antitrust law to counter the pricing power of physicians and hospitals. The first part of the program is a helpful and brief "antitrust 101" on the topic by Barak Richman. The discussion includes implications of recently developed "Obamacare" Accountable Care Organizations for competitive markets.
Watch a video of the event here.
NY Times: Chrysler makes surprise public relations move, refuses to fix some recalled Jeeps
Experian, Equifax and TransUnion settle with 31 state AGs concerning treatment of disputed credit reports
The three largest companies to collect and disseminate credit information for millions of Americans – Experian, Equifax and TransUnion – must significantly change the way they treat disputed information on credit reports as part of a massive multi-state settlement announced this week.
The credit reporting agencies (CRAs) entered into a settlement with 31 states attorneys general on Wednesday that requires them to pay $6 million to the states and revamp their business practices including fixing disputed information on credit reports more quickly, waiting longer to add potentially damaging information on medical debt and scrutinizing data furnished by outside entities.
“Today is a good day for all consumers,” Ohio Attorney General Mike DeWine, who led the charge, said in a statement. “We are announcing a comprehensive multi-state settlement that will help protect consumers from credit reports that are wrong, out of date, or even mixed up with someone else’s report, and it will reduce the chance that a consumer is wrongly denied a house loan, a car loan, or even a job, because of an inaccurate credit report.”
Full article in Consumerist: http://consumerist.com/2015/05/21/credit-bureaus-must-pay-6m-fix-errors-more-quickly-under-31-state-agreement/
The three largest companies to collect and disseminate credit information for millions of Americans – Experian, Equifax and TransUnion – must significantly change the way they treat disputed information on credit reports as part of a massive multi-state settlement announced this week.
The credit reporting agencies (CRAs) entered into a settlement with 31 states attorneys general on Wednesday that requires them to pay $6 million to the states and revamp their business practices including fixing disputed information on credit reports more quickly, waiting longer to add potentially damaging information on medical debt and scrutinizing data furnished by outside entities.
“Today is a good day for all consumers,” Ohio Attorney General Mike DeWine, who led the charge, said in a statement. “We are announcing a comprehensive multi-state settlement that will help protect consumers from credit reports that are wrong, out of date, or even mixed up with someone else’s report, and it will reduce the chance that a consumer is wrongly denied a house loan, a car loan, or even a job, because of an inaccurate credit report.”
Full article in Consumerist: http://consumerist.com/2015/05/21/credit-bureaus-must-pay-6m-fix-errors-more-quickly-under-31-state-agreement/
Aggressive approach to hospital merger enforcement
by Charles Johnson
Excerpt: In 2002 the FTC announced a "merger retrospective," examining consummated hospital mergers to ascertain their actual effects on competition, after which it emerged with a new approach to merger enforcement. The commission resolved to challenge completed mergers, where the effects were demonstrable, rather than seeking to enjoin mergers before they were completed, and to focus on the bargaining power of each hospital system in its negotiations with managed care organizations (MCOs). This new approach placed the FTC on a path to renewed success, and it opened the doors to additional developments, including private treble-damage class actions.
Click title above for the full article
Farmer Sues Perdue poultry company for Violation of FSMA Whistleblower Protection Law
In February, the Government Accountability Project Food Integrity Campaign (FIC, a program of the Government Accountability Project) filed a whistleblower retaliation complaint on behalf of its client, Perdue contract farmer Craig Watts. Mr. Watts alleges that the poultry company initiated intimidation tactics against Watts after he publicized animal welfare concerns.
The litigation has now attracted substantial media attention, in part because of a Youtube video gone viral. https://www.youtube.com/watch?v=YE9l94b3x9U
- See more at: http://whistleblower.org/blog/100319-historic-filing-farmer-sues-perdue-violation-fsma-whistleblower-protection-law#sthash.y68q6qms.dpuf
In February, the Government Accountability Project Food Integrity Campaign (FIC, a program of the Government Accountability Project) filed a whistleblower retaliation complaint on behalf of its client, Perdue contract farmer Craig Watts. Mr. Watts alleges that the poultry company initiated intimidation tactics against Watts after he publicized animal welfare concerns.
The litigation has now attracted substantial media attention, in part because of a Youtube video gone viral. https://www.youtube.com/watch?v=YE9l94b3x9U
- See more at: http://whistleblower.org/blog/100319-historic-filing-farmer-sues-perdue-violation-fsma-whistleblower-protection-law#sthash.y68q6qms.dpuf
FTC, All 50 States and D.C. Charge Cancer Charities With Bilking
Consumers
FTC, All 50 States and D.C. charge four cancer charities with bilking over $187 Million from consumers. The Complaint alleges thst defendants falsely claimed donations would help pay for pain medication, hospice care and other services, but spent donations on cars, trips, sports tickets, and professional fundraisers.
https://www.ftc.gov/news-events/press-releases/2015/05/ftc-all-50-states-dc-charge-four-cancer-charities-bilking-over
Consumers
FTC, All 50 States and D.C. charge four cancer charities with bilking over $187 Million from consumers. The Complaint alleges thst defendants falsely claimed donations would help pay for pain medication, hospice care and other services, but spent donations on cars, trips, sports tickets, and professional fundraisers.
https://www.ftc.gov/news-events/press-releases/2015/05/ftc-all-50-states-dc-charge-four-cancer-charities-bilking-over
Critics suggest more coordination among states on regulation of charities
The recent FTC and multi-state action against some suspect cancer charities has drawn praise, but a a New York Times article points out that regulation of charities at the state level is a hodgepodge. The article says, in part, that: . Some states oversee them through the offices of their attorneys general, others through tax authorities.Some people, however, including Mr. Zerbe, the former Senate staff member, said that many other states largely ignore problems with charities.
“Twenty of the states on any given day are O.K., and 30 are nowhere to be found,” said Mr. Zerbe, who now is a lawyer at Alliantgroup, a tax consulting firm in Washington.
The article is at: http://www.nytimes.com/2015/05/22/business/patchwork-oversight-allows-dubious-charities-to-operate.html?ref=business
The recent FTC and multi-state action against some suspect cancer charities has drawn praise, but a a New York Times article points out that regulation of charities at the state level is a hodgepodge. The article says, in part, that: . Some states oversee them through the offices of their attorneys general, others through tax authorities.Some people, however, including Mr. Zerbe, the former Senate staff member, said that many other states largely ignore problems with charities.
“Twenty of the states on any given day are O.K., and 30 are nowhere to be found,” said Mr. Zerbe, who now is a lawyer at Alliantgroup, a tax consulting firm in Washington.
The article is at: http://www.nytimes.com/2015/05/22/business/patchwork-oversight-allows-dubious-charities-to-operate.html?ref=business
From Public Citizen blog: CFPB -- Pay Pal illegally signed-up consumers for unwanted online credit
Read the complaint and the consent order (which requires judicial approval). The beginning of the Consumer Financial Protection Bureau's press release summarizes:
Today the Consumer Financial Protection Bureau (CFPB) filed a complaint and proposed consent order in federal court against PayPal, Inc. for illegally signing up consumers for its online credit product, PayPal Credit, formerly known as Bill Me Later. The CFPB alleges that PayPal deceptively advertised promotional benefits that it failed to honor, signed consumers up for credit without their permission, made them use PayPal Credit instead of their preferred payment method, and then mishandled billing disputes. Under the proposed order, PayPal would pay $15 million in consumer redress and a $10 million penalty, and it would be required to improve its disclosures and procedures.
Read the complaint and the consent order (which requires judicial approval). The beginning of the Consumer Financial Protection Bureau's press release summarizes:
Today the Consumer Financial Protection Bureau (CFPB) filed a complaint and proposed consent order in federal court against PayPal, Inc. for illegally signing up consumers for its online credit product, PayPal Credit, formerly known as Bill Me Later. The CFPB alleges that PayPal deceptively advertised promotional benefits that it failed to honor, signed consumers up for credit without their permission, made them use PayPal Credit instead of their preferred payment method, and then mishandled billing disputes. Under the proposed order, PayPal would pay $15 million in consumer redress and a $10 million penalty, and it would be required to improve its disclosures and procedures.
From DC Public Power.org: A Consumer-Owned Utility in DC is the best response to a possible Exelon-Pepco merger,
regardless of what the DC Public Service Commission decides. Join DCPublicPower.org for an exploration of the opportunity to take charge of our energy future and create the electric utility we want as DC residents and ratepayers.
Wednesday, May 27, 2015 ~ Free ~
University of DC (UDC) School of Law
4340 Connecticut Avenue, NW (west side), 4th Floor
5 pm Hors D'oeuvres
6 - 8:30 pm Program, Q and A
8:30 pm Reception
RSVP: DCPublicPower.org/TownHall
For the full email circulated by DCPublicPower.org see https://www.scribd.com/doc/265938908/Dc-Public-Power
regardless of what the DC Public Service Commission decides. Join DCPublicPower.org for an exploration of the opportunity to take charge of our energy future and create the electric utility we want as DC residents and ratepayers.
Wednesday, May 27, 2015 ~ Free ~
University of DC (UDC) School of Law
4340 Connecticut Avenue, NW (west side), 4th Floor
5 pm Hors D'oeuvres
6 - 8:30 pm Program, Q and A
8:30 pm Reception
RSVP: DCPublicPower.org/TownHall
For the full email circulated by DCPublicPower.org see https://www.scribd.com/doc/265938908/Dc-Public-Power
Maryland will not block Exelon Corp.'s $6.8 billion acquisition of Pepco Holdings Inc.
The deal survives a tight 3-2 decision issued Friday by the state's Public Service Commission in Baltimore.
The commission's approval includes 46 conditions and comes after months of testimony.
Full article: http://www.bizjournals.com/baltimore/news/2015/05/15/maryland-psc-approves-exelon-pepco-deal-with-46.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+vertical_10+%28Venture+Capital+Industry+News%29
The deal survives a tight 3-2 decision issued Friday by the state's Public Service Commission in Baltimore.
The commission's approval includes 46 conditions and comes after months of testimony.
Full article: http://www.bizjournals.com/baltimore/news/2015/05/15/maryland-psc-approves-exelon-pepco-deal-with-46.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+vertical_10+%28Venture+Capital+Industry+News%29
Washington State recovers $63 million from LCD manufacturers price-fixing case
Washington State Attorney General Bob Ferguson announced that y his office expects to recover a total of $63 million from nine LCD manufacturers, whose price-fixing conspiracy drove up prices consumers paid on items like TVs, laptops and cell phones.
If approved, it will be one of the largest recoveries for Washington by the Attorney General’s Antitrust Division in state history.
The AG's office asserted that For eight years, consumers in Washington and throughout the world were significantly overcharged every time they bought a product with a liquid crystal display, or LCD, screen because of a conspiracy by the world’s largest LCD manufacturers.
http://q13fox.com/2015/05/15/63-million-settlement-coming-to-washington-consumers/
Public Citizen Welcomes Vitter-Warren “Bailout Prevention Act”
Statement of Bartlett Naylor, Financial Policy Advocate, Public Citizen’s Congress Watch Division
Note: U.S. Sens. David Vitter (R-La.) and Elizabeth Warren (D-Mass.) introduced the Bailout Prevention Act. The legislation provides that any bank bailout loan must carry an interest rate of five percent greater than prevailing Treasury securities of similar duration. Any firm receiving a bailout must demonstrate that its assets are greater than its liabilities.
The Federal Reserve provided major banks tens of trillions of cheap dollars to survive the financial crash of 2008. That’s not only unfair to millions of Americans who lost their jobs, homes and savings after not receiving a zero-interest government bailout. It’s also a moral hazard that simply invites the mega-banks to gamble again.
Co-sponsorship by this interesting duo emphasizes the merits of this simple reform.
NY Times: prosecutors’ offices across the country investigating whether faulty sub-prime auto borrower information has ended up in securitization deals
The intense demand for subprime auto securities may also be fueling a more troubling development: a rise in loans that contain falsified income or employment information. The Justice Department in Washington is coordinating an investigation among prosecutors’ offices across the country into whether such faulty information ended up in securitization deals, according to people briefed on the inquiries.
http://dealbook.nytimes.com//2015/01/26/investment-riches-built-on-auto-loans-to-poor/
The intense demand for subprime auto securities may also be fueling a more troubling development: a rise in loans that contain falsified income or employment information. The Justice Department in Washington is coordinating an investigation among prosecutors’ offices across the country into whether such faulty information ended up in securitization deals, according to people briefed on the inquiries.
http://dealbook.nytimes.com//2015/01/26/investment-riches-built-on-auto-loans-to-poor/
NY Times reports: light penalties for big banks that fixed foreign currency prices
"As much as prosecutors want to punish banks for misdeeds, they are also mindful that too harsh a penalty could imperil banks that are at the heart of the global economy, a balancing act that could produce pleas that are more symbolic than sweeping."
http://www.nytimes.com/2015/05/14/business/dealbook/5-big-banks-expected-to-plead-guilty-to-felony-charges-but-punishments-may-be-tempered.html?ref=business&_r=0
"As much as prosecutors want to punish banks for misdeeds, they are also mindful that too harsh a penalty could imperil banks that are at the heart of the global economy, a balancing act that could produce pleas that are more symbolic than sweeping."
http://www.nytimes.com/2015/05/14/business/dealbook/5-big-banks-expected-to-plead-guilty-to-felony-charges-but-punishments-may-be-tempered.html?ref=business&_r=0
A point we missed earlier: when CVS dropped tobacco for health reasons, it did not drop alcohol, or sugar products
From a 2014 AP report:
While CVS Caremark Corp. is removing tobacco in an effort to focus more on being a health care provider, don't expect it or other companies with a similar focus to cut out other vices.
CVS chief medical officer, Dr. Troyen Brennan, said the company has no plans to remove alcohol.
"At this point, we're dealing with cigarettes, which are unalterably unhealthy for people and different from any other substance that people either drink or eat," he said.
Posted by Don Allen Resnikoff 5-14-15
From a 2014 AP report:
While CVS Caremark Corp. is removing tobacco in an effort to focus more on being a health care provider, don't expect it or other companies with a similar focus to cut out other vices.
CVS chief medical officer, Dr. Troyen Brennan, said the company has no plans to remove alcohol.
"At this point, we're dealing with cigarettes, which are unalterably unhealthy for people and different from any other substance that people either drink or eat," he said.
Posted by Don Allen Resnikoff 5-14-15
Amtrak support a shared responsibility of federal, state, and local government
With better government funding, Amtrak might have been able to afford automatic speed override technology that would have prevented the recent Amtrak train crash tragedy in Philadelphia. Government responsibility is not only federal, however, but is shared among federal, state, and local governments, as explained in a 2013 Brookings study: It is important to note that state support for intermetropolitan rail goes well beyond their operational support for certain Amtrak routes. Often states provide capital assistance for shared services like commuter rail, emerging high-speed rail, or other services like marketing and advertising. Some states, such as California, also subsidize feeder bus services from rail stations to access rural areas. In addition, metropolitan areas and localities can provide direct support, mostly through capital grants and contributions, for station rehabilitation.
http://www.brookings.edu/~/media/research/files/reports/2013/03/01%20passenger%20rail%20puentes%20tomer/passenger%20rail%20puentes%20tomer.pdf
Posted by Don Allen Resnikoff 5-14-15
With better government funding, Amtrak might have been able to afford automatic speed override technology that would have prevented the recent Amtrak train crash tragedy in Philadelphia. Government responsibility is not only federal, however, but is shared among federal, state, and local governments, as explained in a 2013 Brookings study: It is important to note that state support for intermetropolitan rail goes well beyond their operational support for certain Amtrak routes. Often states provide capital assistance for shared services like commuter rail, emerging high-speed rail, or other services like marketing and advertising. Some states, such as California, also subsidize feeder bus services from rail stations to access rural areas. In addition, metropolitan areas and localities can provide direct support, mostly through capital grants and contributions, for station rehabilitation.
http://www.brookings.edu/~/media/research/files/reports/2013/03/01%20passenger%20rail%20puentes%20tomer/passenger%20rail%20puentes%20tomer.pdf
Posted by Don Allen Resnikoff 5-14-15
Kentucky Attorney General files suit against Marathon Petroleum
Kentucky Attorney General Jack Conway, a Democrat first elected in 2007, filed a lawsuit against Marathon Petroleum Corp in federal court.
* Suit alleges Marathon violated state and federal antitrust laws by abusing the monopoly created when Marathon and Ashland Oil merged in 1998. Marathon runs only refinery in Kentucky.
* Suit alleges that Marathon discourages competition by requiring independent retailers to sign unlawful supply agreements that eliminate wholesale competition, by forming exchange agreements with horizontal competitors that keep other suppliers from entering the Kentucky market.
* Suit alleges the company reduces competition by adding deed restrictions to some of the property parcels it sells. The restrictions prohibit the purchaser of the property from selling gas or operating a convenience store.
SOURCE: Kentucky Attorney General's Office here{55F72683-6DC6-4889-9E78-9C50E4C6100F}&activity
Kentucky Attorney General Jack Conway, a Democrat first elected in 2007, filed a lawsuit against Marathon Petroleum Corp in federal court.
* Suit alleges Marathon violated state and federal antitrust laws by abusing the monopoly created when Marathon and Ashland Oil merged in 1998. Marathon runs only refinery in Kentucky.
* Suit alleges that Marathon discourages competition by requiring independent retailers to sign unlawful supply agreements that eliminate wholesale competition, by forming exchange agreements with horizontal competitors that keep other suppliers from entering the Kentucky market.
* Suit alleges the company reduces competition by adding deed restrictions to some of the property parcels it sells. The restrictions prohibit the purchaser of the property from selling gas or operating a convenience store.
SOURCE: Kentucky Attorney General's Office here{55F72683-6DC6-4889-9E78-9C50E4C6100F}&activity
FTC encourages Michigan to allow direct sales of motor vehicles:
From the FTC letter: FTC staff view [Michigan] Senate Bill 268 as likely to promote competition and benefit consumers, compared to a blanket ban on direct manufacturer sales to consumers. The bill would permit manufacturers of a category of vehicles known as “autocycles,” under limited circumstances, the flexibility to choose whether to sell such vehicles directly to consumers, through dealers, or through some combination of the two. In our view, however, the bill does not go far enough. Rather, the narrow scope of the bill would largely perpetuate the current law’s protectionism for independent franchised dealers, to the detriment of Michigan car buyers. FTC staff believe Michigan’s consumers would more fully benefit from a complete repeal of the prohibition on direct sales by all manufacturers, rather than the enactment of any limited, selective set of exceptions.
The letter is at: http://assets.law360news.com/0654000/654183/FTC%20268.pdf
From the FTC letter: FTC staff view [Michigan] Senate Bill 268 as likely to promote competition and benefit consumers, compared to a blanket ban on direct manufacturer sales to consumers. The bill would permit manufacturers of a category of vehicles known as “autocycles,” under limited circumstances, the flexibility to choose whether to sell such vehicles directly to consumers, through dealers, or through some combination of the two. In our view, however, the bill does not go far enough. Rather, the narrow scope of the bill would largely perpetuate the current law’s protectionism for independent franchised dealers, to the detriment of Michigan car buyers. FTC staff believe Michigan’s consumers would more fully benefit from a complete repeal of the prohibition on direct sales by all manufacturers, rather than the enactment of any limited, selective set of exceptions.
The letter is at: http://assets.law360news.com/0654000/654183/FTC%20268.pdf
DC Attorney General Karl Racine files complaint charging renovator for shoddy and illegal work in DC
In the complaint, Racine says defendant Hofgard renovated and sold 15 homes since 2013 that had not been properly permitted or inspected. Work was conducted without permits and by unlicensed contractors, he says, and the Hofgards ignored repeated attempts by D.C. regulators that they stop.
"They represent that the properties are safe and sound and have been fully renovated and they mark up the price. People are left holding the bag, oftentimes having to go back and fix things that were represented to be fixed and otherwise live in a state not knowing if a new patio is going to hold. These are serious offenses," said Racine in an interview with WAMU.
See Hofgard Complaint FINAL
From WAMU http://wamu.org/news/15/05/07/dc_files_suit_against_virginia_couple_over_shoddy_house_flipping
In the complaint, Racine says defendant Hofgard renovated and sold 15 homes since 2013 that had not been properly permitted or inspected. Work was conducted without permits and by unlicensed contractors, he says, and the Hofgards ignored repeated attempts by D.C. regulators that they stop.
"They represent that the properties are safe and sound and have been fully renovated and they mark up the price. People are left holding the bag, oftentimes having to go back and fix things that were represented to be fixed and otherwise live in a state not knowing if a new patio is going to hold. These are serious offenses," said Racine in an interview with WAMU.
See Hofgard Complaint FINAL
From WAMU http://wamu.org/news/15/05/07/dc_files_suit_against_virginia_couple_over_shoddy_house_flipping
A DC Charter school founder Kent Amos and his management company have agreed to pay $3 million to settle a DC Attorney General's lawsuit that alleged he used the company to divert taxpayer funds from the school for his personal gain.
The Washington Post reports: A consent agreement was filed in court by the District of Columbia, Amos, the Dorothy I. Height Community Academy Public Charter Schools, and the management company, of which Amos is president. According to the agreement — which is expected to become effective as soon as a judge signs it — the money will go to the school or to its “successors.”
[Read the settlement agreement here.]
The Washington Post reports: A consent agreement was filed in court by the District of Columbia, Amos, the Dorothy I. Height Community Academy Public Charter Schools, and the management company, of which Amos is president. According to the agreement — which is expected to become effective as soon as a judge signs it — the money will go to the school or to its “successors.”
[Read the settlement agreement here.]
Supreme Court decision could play into Texas telemedicine fight
Frpm article by Lisa Schencker
Telemedicine company Teladoc's recent lawsuit against the Texas Medical Board is one of the first cases that could be affected by a recent U.S. Supreme Court ruling about state regulatory boards' immunity—or lack thereof—from antitrust laws.
Teladoc sued the Texas Medical Board on April 29 in federal court over a new rule that requires physicians to either meet with patients in person before treating them remotely or have other providers physically present with patients when treating them remotely for the first time. Teladoc, which uses technology to facilitate patient-doctor visits, alleges the rule violates antitrust laws because it would restrict the company's ability to compete—and as a result raise prices and reduce access to physicians in the state.
A spokeswoman for the Texas Medical Board said Friday that she couldn't comment on pending litigation. But the board characterized the new rules in an April 14 news release as an expansion of telemedicine opportunities “representing the best balance of convenience and safety by ensuring quality healthcare for the citizens of Texas.”
full article:
http://www.modernhealthcare.com/article/20150508/NEWS/150509908?utm_source=modernhealthcare&utm_medium=email&utm_content=20150508-NEWS-150509908&utm_campaign=financedaily
Frpm article by Lisa Schencker
Telemedicine company Teladoc's recent lawsuit against the Texas Medical Board is one of the first cases that could be affected by a recent U.S. Supreme Court ruling about state regulatory boards' immunity—or lack thereof—from antitrust laws.
Teladoc sued the Texas Medical Board on April 29 in federal court over a new rule that requires physicians to either meet with patients in person before treating them remotely or have other providers physically present with patients when treating them remotely for the first time. Teladoc, which uses technology to facilitate patient-doctor visits, alleges the rule violates antitrust laws because it would restrict the company's ability to compete—and as a result raise prices and reduce access to physicians in the state.
A spokeswoman for the Texas Medical Board said Friday that she couldn't comment on pending litigation. But the board characterized the new rules in an April 14 news release as an expansion of telemedicine opportunities “representing the best balance of convenience and safety by ensuring quality healthcare for the citizens of Texas.”
full article:
http://www.modernhealthcare.com/article/20150508/NEWS/150509908?utm_source=modernhealthcare&utm_medium=email&utm_content=20150508-NEWS-150509908&utm_campaign=financedaily
California High Court OKs State Antitrust Pay-For-Delay Challenges
The California Supreme Court has ruled that so-called pay-for-delay pharmaceutical patent settlements can be challenged under state antitrust law, reviving drug buyers' claims that Bayer Corp. illegally paid generic manufacturers $400 million to delay launching their own version of blockbuster antibiotic Cipro.
http://www.antitrustupdateblog.com/blog/california-supreme-court-crafts-structured-rule-reason-test-evaluating-pay-delay-settlements/
Also, the court opinion: http://www.courts.ca.gov/opinions/documents/S198616.PDF
The California Supreme Court has ruled that so-called pay-for-delay pharmaceutical patent settlements can be challenged under state antitrust law, reviving drug buyers' claims that Bayer Corp. illegally paid generic manufacturers $400 million to delay launching their own version of blockbuster antibiotic Cipro.
http://www.antitrustupdateblog.com/blog/california-supreme-court-crafts-structured-rule-reason-test-evaluating-pay-delay-settlements/
Also, the court opinion: http://www.courts.ca.gov/opinions/documents/S198616.PDF
City of LA sues Wells Fargo Bank for customer abuse
The City's Complaint alleges that Wells Fargo Bank employees have opened unauthorized accounts for customers, sticking them with bogus fees and damaging their credit. The city of Los Angeles lawsuit echoes an LA Times investigation. The civil Complaint, filed in state court in Los Angeles by City Atty. Mike Feuer, says that the largest California-based bank encouraged its employees to engage “in unfair, unlawful and fraudulent conduct” through a pervasive culture of high-pressure sales. Employees misused customers' confidential information and often failed to close unauthorized accounts even when customers complained, the suit alleges.
Some employees went so far as to raid client accounts for money to open additional accounts, the suit alleges.
http://www.latimes.com/business/la-fi-wells-fargo-suit-20150505-story.html#page=1
The City's Complaint alleges that Wells Fargo Bank employees have opened unauthorized accounts for customers, sticking them with bogus fees and damaging their credit. The city of Los Angeles lawsuit echoes an LA Times investigation. The civil Complaint, filed in state court in Los Angeles by City Atty. Mike Feuer, says that the largest California-based bank encouraged its employees to engage “in unfair, unlawful and fraudulent conduct” through a pervasive culture of high-pressure sales. Employees misused customers' confidential information and often failed to close unauthorized accounts even when customers complained, the suit alleges.
Some employees went so far as to raid client accounts for money to open additional accounts, the suit alleges.
http://www.latimes.com/business/la-fi-wells-fargo-suit-20150505-story.html#page=1
From Ellen Taverna at NACA: The CFPB’s study offers concrete evidence that not only do forced arbitration clauses impose conditions that restrict consumers’ rights and block their access to courts, but very few consumers actually go to individual arbitration to settle disputes.
NACA says: With forced arbitration, corporations and big banks have granted themselves a license to steal and evade the law. And they are getting away with it. But with your help, this can be stopped.
Click here for more from NACA: Tell the CFPB: Stop this abusive practice and prohibit forced arbitration now!
NACA says: With forced arbitration, corporations and big banks have granted themselves a license to steal and evade the law. And they are getting away with it. But with your help, this can be stopped.
Click here for more from NACA: Tell the CFPB: Stop this abusive practice and prohibit forced arbitration now!
Walmart rolls out an in-store money transfer service for customers
The new financial product, Walmart-2-Walmart Money Transfer Service, is a partnership with financial services firm Ria that will allow customers to transfer funds between more than 4,000 Walmart stores in the U.S. The company says its prices will undercut those offered by competing services. “Walmart-2-Walmart brings new competition and transparent, everyday low prices to a market that has become complicated and costly for our customers.”
News reports indicate that competitors Western Union and Moneygram have reacted to the new competition by lowering prices.
http://www.slate.com/blogs/moneybox/2014/04/18/walmart_money_transfers_walmart_2_walmart_will_offer_store_to_store_transactions.html
The new financial product, Walmart-2-Walmart Money Transfer Service, is a partnership with financial services firm Ria that will allow customers to transfer funds between more than 4,000 Walmart stores in the U.S. The company says its prices will undercut those offered by competing services. “Walmart-2-Walmart brings new competition and transparent, everyday low prices to a market that has become complicated and costly for our customers.”
News reports indicate that competitors Western Union and Moneygram have reacted to the new competition by lowering prices.
http://www.slate.com/blogs/moneybox/2014/04/18/walmart_money_transfers_walmart_2_walmart_will_offer_store_to_store_transactions.html
Washington, DC Attorney General Karl A. Racine has released his Fiscal Year 2016 Budget proposal
A DC AG statement explains that the budget would leverage the office’s ability to recover funds for District residents in order to implement four initiatives that voters in all wards of the city embraced when they elected him to be the District of Columbia’s first elected Attorney General. “In the District’s election for the city’s first independent chief legal officer, voters spoke clearly in support of more consumer protection and community outreach, better enforcement of laws designed to preserve affordable housing, reforms to our juvenile-justice system designed to strengthen public safety, and a fairer and more transparent system of government contracting,” Attorney General Racine said. “This Fiscal Year 2016 Budget Submission uses a fraction of the dollars we bring to the District to make our city better, safer, and stronger.”
For the complete statement: http://oag.dc.gov/release/budget-proposal-would-protect-oag-independence-consumers-affordable-housing-public-safety
CFPB and State of Maryland Take Action Against “Pay-To-Play” Mortgage Kickback Scheme
Loan Officers and Former Title Company Executives Who Traded Cash and Marketing Services for Illegal Referrals Will Be Banned, Pay Redress and Penalties
The Consumer Financial Protection Bureau (CFPB) and the Maryland Attorney General took action against the participants in a mortgage-kickback scheme. In a complaint filed in federal court, the CFPB and Maryland allege that the Maryland-based title company’s executives and the named loan officers traded cash and marketing services in exchange for mortgage referrals.
http://www.consumerfinance.gov/newsroom/cfpb-and-state-of-maryland-take-action-against-pay-to-play-mortgage-kickback-scheme/
Loan Officers and Former Title Company Executives Who Traded Cash and Marketing Services for Illegal Referrals Will Be Banned, Pay Redress and Penalties
The Consumer Financial Protection Bureau (CFPB) and the Maryland Attorney General took action against the participants in a mortgage-kickback scheme. In a complaint filed in federal court, the CFPB and Maryland allege that the Maryland-based title company’s executives and the named loan officers traded cash and marketing services in exchange for mortgage referrals.
http://www.consumerfinance.gov/newsroom/cfpb-and-state-of-maryland-take-action-against-pay-to-play-mortgage-kickback-scheme/
States await new Medicaid Managed Care Regulations
From Kaiser Foundation article: States design, administer, and oversee their own Medicaid managed care programs within minimum federal requirements set forth in federal Medicaid law and further elaborated in regulations.5 The federal regulations, last updated in 2002, set forth state responsibilities and requirements in areas including enrollee rights and protections, quality assessment and performance improvement (including provider access standards), external quality review, grievances and appeals, program integrity, and sanctions. The Centers for Medicare and Medicaid Services (CMS) is slated to issue a Notice of Proposed Rulemaking (NPRM) this Spring, revising and updating the current regulations. Numerous stakeholders submitted input and recommendations to CMS to consider in drafting the new rules, and the public will have an opportunity to comment on it before CMS finalizes the regulations.
Agency officials have offered some indications about what issues the new rules might address, including rate-setting, stronger beneficiary protections, and easing beneficiary transitions between Medicaid MCOs, Medicare Advantage plans, and Marketplace qualified health plans.6 The new rules also may address areas that have emerged since the last revision, such as managed LTSS.
Full article:http://kff.org/medicaid/issue-brief/awaiting-new-medicaid-managed-care-rules-key-issues-to-watch/
From Kaiser Foundation article: States design, administer, and oversee their own Medicaid managed care programs within minimum federal requirements set forth in federal Medicaid law and further elaborated in regulations.5 The federal regulations, last updated in 2002, set forth state responsibilities and requirements in areas including enrollee rights and protections, quality assessment and performance improvement (including provider access standards), external quality review, grievances and appeals, program integrity, and sanctions. The Centers for Medicare and Medicaid Services (CMS) is slated to issue a Notice of Proposed Rulemaking (NPRM) this Spring, revising and updating the current regulations. Numerous stakeholders submitted input and recommendations to CMS to consider in drafting the new rules, and the public will have an opportunity to comment on it before CMS finalizes the regulations.
Agency officials have offered some indications about what issues the new rules might address, including rate-setting, stronger beneficiary protections, and easing beneficiary transitions between Medicaid MCOs, Medicare Advantage plans, and Marketplace qualified health plans.6 The new rules also may address areas that have emerged since the last revision, such as managed LTSS.
Full article:http://kff.org/medicaid/issue-brief/awaiting-new-medicaid-managed-care-rules-key-issues-to-watch/
American Express must promptly rewrite its contracts so merchants can encourage customers to use less-expensive credit or debit cards.
U.S. District Judge Nicholas Garaufis so ruled in a 20-page opinion: "The written notice shall inform the merchant that it can file a complaint or inquiry with the Department of Justice if the merchant believes it was threatened with termination or terminated for having engaged in steering or because American Express wrongly determined that the merchant was disparaging or mischaracterizing American Express's brand," The order states.
From: http://www.courthousenews.com/2015/05/01/amex-faces-deadline-to-relax-merchant-rules.htm
U.S. District Judge Nicholas Garaufis so ruled in a 20-page opinion: "The written notice shall inform the merchant that it can file a complaint or inquiry with the Department of Justice if the merchant believes it was threatened with termination or terminated for having engaged in steering or because American Express wrongly determined that the merchant was disparaging or mischaracterizing American Express's brand," The order states.
From: http://www.courthousenews.com/2015/05/01/amex-faces-deadline-to-relax-merchant-rules.htm
Legslation to block forced arbiitration
U.S. Senator Al Franken (D-Minn) and Rep. Hank Johnson (D-Ga) have reintroduced a bill that would block companies and institutions from preemptively forcing employees, customers and others to arbitrate antitrust suits, civil rights claims and other disputes.
See article by Carol Thompson http://veritasnews.com/lawmakers-reintroduce-arbitration-fairness-act/
From Public Citizen blog: Maryland Trial Judge Wrongly Enjoined Criticism of Convergex Caribbean
From the posting: In a brief filed in the Maryland Court of Special Appeals, we have asked the Court to enforce the Supreme Court’s rule forbidding temporary injunctions to protect the reputation of a business against allegedly defamatory criticisms. The facts of the case show the wisdom of the rule.
https://us-mg6.mail.yahoo.com/neo/launch?.rand=22f7qm8egd7v6#3982658446
From the posting: In a brief filed in the Maryland Court of Special Appeals, we have asked the Court to enforce the Supreme Court’s rule forbidding temporary injunctions to protect the reputation of a business against allegedly defamatory criticisms. The facts of the case show the wisdom of the rule.
https://us-mg6.mail.yahoo.com/neo/launch?.rand=22f7qm8egd7v6#3982658446
Sen.ior aides to DC Mayor Muriel E. Bowser propose delaying her controversial request to dilute the power of the city’s first elected attorney general, Karl A. Racine
The Washington Post reports that Racine welcomed the news even as the two sides sparred over competing allegations of power grabs.
The Post: Bowser’s proposal followed a parade of dozens of lawyers and other witnesses who lined up to testify before the D.C. Council in support of the attorney general’s autonomy to oversee city matters. Many blasted Bowser’s attempt to give her office more oversight of land deals and contract reviews as contrary to the will of 76 percent of District voters, who supported the creation of an elected attorney general.
Our editorial position for this consumer newsletter supports substantial funding for the Attorney General, including for consumer protection and antitrust enforcement, and powers for the Attorney General over such matters as procurement contracts, in order to prevent corrupt practices.
Posted by Don Allen Resnikoff 4-23-2015
http://www.washingtonpost.com/local/dc-politics/dc-mayor-attorney-general-embrace-truce-at-least-temporarily/2015/04/22/6032babe-e91f-11e4-9767-6276fc9b0ada_story.html?hpid=z3
The Washington Post reports that Racine welcomed the news even as the two sides sparred over competing allegations of power grabs.
The Post: Bowser’s proposal followed a parade of dozens of lawyers and other witnesses who lined up to testify before the D.C. Council in support of the attorney general’s autonomy to oversee city matters. Many blasted Bowser’s attempt to give her office more oversight of land deals and contract reviews as contrary to the will of 76 percent of District voters, who supported the creation of an elected attorney general.
Our editorial position for this consumer newsletter supports substantial funding for the Attorney General, including for consumer protection and antitrust enforcement, and powers for the Attorney General over such matters as procurement contracts, in order to prevent corrupt practices.
Posted by Don Allen Resnikoff 4-23-2015
http://www.washingtonpost.com/local/dc-politics/dc-mayor-attorney-general-embrace-truce-at-least-temporarily/2015/04/22/6032babe-e91f-11e4-9767-6276fc9b0ada_story.html?hpid=z3
Divided Supreme Court Allows State Law Antitrust Claims to Proceed Against Pipelines, Rejects Field Preemption Argument
by Jeffrey May Wolters Kluwer Law & Business
In a decision that’s received relatively little attention, a divided U.S. Supreme Court earlier this week held that the Natural Gas Act did not “field” preempt state law antitrust law claims raised by large retail buyers of natural gas seeking damages from pipelines for their purported price manipulation.
Click title above for full article
by Jeffrey May Wolters Kluwer Law & Business
In a decision that’s received relatively little attention, a divided U.S. Supreme Court earlier this week held that the Natural Gas Act did not “field” preempt state law antitrust law claims raised by large retail buyers of natural gas seeking damages from pipelines for their purported price manipulation.
Click title above for full article
URL for UDC Law program on Pepco-Exelon -- from Joe Libertelli
Here is the link to the video taken on April 8 at the UDC David A. Clarke School of Law of our Forum on the proposed Exelon takeover of PEPCO.
https://youtu.be/pLwGjuUI8eo
For info on the event including speakers, please see http://www.law.udc.edu/events/event_details.asp?id=617520
Here is the link to the video taken on April 8 at the UDC David A. Clarke School of Law of our Forum on the proposed Exelon takeover of PEPCO.
https://youtu.be/pLwGjuUI8eo
For info on the event including speakers, please see http://www.law.udc.edu/events/event_details.asp?id=617520
Oklahoma’s government confirms that hundreds of earthquakes rocking the state are largely caused by oil and gas operations
The position marks a sharp turnaround for state officials, who for years expressed skepticism that Oklahoma’s earthquake swarm could be linked to the rampant underground disposal of waste water from oil and gas wells.
The state’s energy and environment office on Tuesday launched a website, called Earthquakes in Oklahoma, which embraces the scientific consensus that injecting billions of gallons of wastewater near fault zones is triggering temblors in areas with little history of seismic activity. Until this week, officials had maintained that the spike in earthquakes was probably a natural phenomenon.
Oklahoma experienced 585 earthquakes of magnitude 3.0 or greater last year -- up from just 103 temblors of that size in 2013, according to the Oklahoma Geological Survey. Before 2008, when oil and gas drilling accelerated in Oklahoma, the state experienced only about two magnitude 3.0 earthquakes each year.
Full article: http://www.ibtimes.com/oklahoma-earthquake-swarm-2015-sharp-turnaround-oklahoma-officials-confirm-link-1892086
The position marks a sharp turnaround for state officials, who for years expressed skepticism that Oklahoma’s earthquake swarm could be linked to the rampant underground disposal of waste water from oil and gas wells.
The state’s energy and environment office on Tuesday launched a website, called Earthquakes in Oklahoma, which embraces the scientific consensus that injecting billions of gallons of wastewater near fault zones is triggering temblors in areas with little history of seismic activity. Until this week, officials had maintained that the spike in earthquakes was probably a natural phenomenon.
Oklahoma experienced 585 earthquakes of magnitude 3.0 or greater last year -- up from just 103 temblors of that size in 2013, according to the Oklahoma Geological Survey. Before 2008, when oil and gas drilling accelerated in Oklahoma, the state experienced only about two magnitude 3.0 earthquakes each year.
Full article: http://www.ibtimes.com/oklahoma-earthquake-swarm-2015-sharp-turnaround-oklahoma-officials-confirm-link-1892086
New York's expanded review of electronic trading could delay federal level final foreign exchange settlements with two major banks
Benjamin Lawsky, superintendent of New York's Department of Financial Services, said his office is examining electronic foreign exchange trading at German banking giant Deutsche Bank and British-based Barclays. The examinations could last months, Lawsky said during a Dow Jones financial conference.
He raised the possibility that the electronic trading could be "carved out" from an expected broad settlement of evidence that Barclays and other global banks attempted to manipulate currency prices in the world's $5.3-trillion-a-day foreign exchange market.
The U.S. Department of Justice notified Barclays, JPMorgan Chase, Citigroup and Royal Bank of Scotland they must enter guilty pleas to criminal charges as a part of any settlement, The New York Times reported in February. USDOJ investigators want those four banks and Swiss banking giant UBS to pay an estimated $1 billion each in a global settlement expected as soon as May, the Financial Times reported Monday.
"There are regulators who want to get these things settled, and I get that," said Lawsky. "There is something to the finality of letting firms move beyond it (the investigation.) But we also need to finish our work."
http://www.usatoday.com/story/money/2015/04/21/foreign-exchange-investigation-lawsky/26121911/
Benjamin Lawsky, superintendent of New York's Department of Financial Services, said his office is examining electronic foreign exchange trading at German banking giant Deutsche Bank and British-based Barclays. The examinations could last months, Lawsky said during a Dow Jones financial conference.
He raised the possibility that the electronic trading could be "carved out" from an expected broad settlement of evidence that Barclays and other global banks attempted to manipulate currency prices in the world's $5.3-trillion-a-day foreign exchange market.
The U.S. Department of Justice notified Barclays, JPMorgan Chase, Citigroup and Royal Bank of Scotland they must enter guilty pleas to criminal charges as a part of any settlement, The New York Times reported in February. USDOJ investigators want those four banks and Swiss banking giant UBS to pay an estimated $1 billion each in a global settlement expected as soon as May, the Financial Times reported Monday.
"There are regulators who want to get these things settled, and I get that," said Lawsky. "There is something to the finality of letting firms move beyond it (the investigation.) But we also need to finish our work."
http://www.usatoday.com/story/money/2015/04/21/foreign-exchange-investigation-lawsky/26121911/
AARP-backed bill would have N.Y. hospitals training family caregivers
New York could become the eighth state to mandate that hospitals offer training to family and friends who care for patients after they are discharged from the hospital.
The Caregiver Advise, Record and Enable Act, also known as the CARE Act, would allow patients to designate an informal caregiver in their medical record and require hospitals to provide instruction and demonstration to help the person care for the patient after discharge.
AARP, the advocacy group for senior citizens, has made the CARE Act its top priority in state legislatures for 2015.
http://www.modernhealthcare.com/article/20150423/NEWS/150429953?utm_source=modernhealthcare&utm_medium=email&utm_content=externalURL&utm_campaign=am
New York could become the eighth state to mandate that hospitals offer training to family and friends who care for patients after they are discharged from the hospital.
The Caregiver Advise, Record and Enable Act, also known as the CARE Act, would allow patients to designate an informal caregiver in their medical record and require hospitals to provide instruction and demonstration to help the person care for the patient after discharge.
AARP, the advocacy group for senior citizens, has made the CARE Act its top priority in state legislatures for 2015.
http://www.modernhealthcare.com/article/20150423/NEWS/150429953?utm_source=modernhealthcare&utm_medium=email&utm_content=externalURL&utm_campaign=am
New York Times: In genetic testing for cancer, competition matters; but former monopolist Myriad controls its testing data in ways that make other genetic researchers scramble
The Times article explains that company offerings of new inexpensive gene testing options speak to the surge in competition in genetic risk screening for cancer since 2013, when the Supreme Court invalidated the gene patents that gave Myriad Genetics a monopoly on BRCA gene testing.
But former monopolist Myriad holds on to the proprietary testing data it accumulated, and does not share it for reasons of "competitive advantage," ie., making money. Such data is important to researchers seeking to correlate genetic variants with particular cancer risks. Myriad's competitors are now pooling data they have accumulated in order to improve their ability to correlate genetic variants with risks, in some cases hoping to reduce the advantage Myriad has because of the extent of its proprietary data.
http://bits.blogs.nytimes.com/2015/04/21/daily-report-new-genetic-tests-for-breast-cancer-hold-promise/
The Times article explains that company offerings of new inexpensive gene testing options speak to the surge in competition in genetic risk screening for cancer since 2013, when the Supreme Court invalidated the gene patents that gave Myriad Genetics a monopoly on BRCA gene testing.
But former monopolist Myriad holds on to the proprietary testing data it accumulated, and does not share it for reasons of "competitive advantage," ie., making money. Such data is important to researchers seeking to correlate genetic variants with particular cancer risks. Myriad's competitors are now pooling data they have accumulated in order to improve their ability to correlate genetic variants with risks, in some cases hoping to reduce the advantage Myriad has because of the extent of its proprietary data.
http://bits.blogs.nytimes.com/2015/04/21/daily-report-new-genetic-tests-for-breast-cancer-hold-promise/
From AAI: Supreme Court Follows AAI Legal Theory in State Preemption Decision in Oneok v. Learjet
From the AAI web posting: The American Antitrust Institute (AAI) applauds the Supreme Court’s ruling today in Oneok v. Learjet upholding the application of state antitrust laws to market manipulation by natural gas companies. The AAI developed the legal theory on which the Supreme Court’s decision rested.
The Court held that the Natural Gas Act and regulation by the Federal Energy Regulatory Commission (FERC) does not “field” preempt state antitrust claims by retail natural gas purchasers seeking to recover damages for price fixing arising out of the manipulation of natural gas price indices during the Western energy crisis of 2000-2002.
The rationale for the Court’s decision was first raised in an amicus brief filed by AAI in the Ninth Circuit Court of Appeals, which found no preemption on different grounds.
“This is a tremendous victory for state antitrust law and a sensible accommodation between regulation and antitrust,” said the AAI Vice President and General Counsel Richard Brunell.
The AAI posting is at http://www.antitrustinstitute.org/content/supreme-court-follows-aai-legal-theory-preemption-decision-oneok-v-learjet
From the AAI web posting: The American Antitrust Institute (AAI) applauds the Supreme Court’s ruling today in Oneok v. Learjet upholding the application of state antitrust laws to market manipulation by natural gas companies. The AAI developed the legal theory on which the Supreme Court’s decision rested.
The Court held that the Natural Gas Act and regulation by the Federal Energy Regulatory Commission (FERC) does not “field” preempt state antitrust claims by retail natural gas purchasers seeking to recover damages for price fixing arising out of the manipulation of natural gas price indices during the Western energy crisis of 2000-2002.
The rationale for the Court’s decision was first raised in an amicus brief filed by AAI in the Ninth Circuit Court of Appeals, which found no preemption on different grounds.
“This is a tremendous victory for state antitrust law and a sensible accommodation between regulation and antitrust,” said the AAI Vice President and General Counsel Richard Brunell.
The AAI posting is at http://www.antitrustinstitute.org/content/supreme-court-follows-aai-legal-theory-preemption-decision-oneok-v-learjet
Mitria Wilson: Regulation of Non-Depositories Key to Consumer Protections
According to recent Congressional testimony, non-depository financial institutions that offer products like mortgages, title insurance, indirect auto lending, and both payday and car-title loans need increased federal regulatory oversight to make sure that consumers are protected. Mitria Wilson, vice-president of government affairs and senior counsel with the Center For Responsible Lending, explained that to the House Sub-Committee on Consumer Credit and Financial Institutions. Read the entire testimony.
According to recent Congressional testimony, non-depository financial institutions that offer products like mortgages, title insurance, indirect auto lending, and both payday and car-title loans need increased federal regulatory oversight to make sure that consumers are protected. Mitria Wilson, vice-president of government affairs and senior counsel with the Center For Responsible Lending, explained that to the House Sub-Committee on Consumer Credit and Financial Institutions. Read the entire testimony.
Another California Department of Business Oversight initiative on payday lending
The Department has announced an initiative to ensure major Internet search engine firms block advertising in California by unlicensed payday lenders.The DBO effort covers Bing (Microsoft), Yahooand Google.Yahoo is covered because Bing controls Yahoo’s search pages.“Unlicensed payday lenderswho operate online rank as one of the most significant consumer protection threats the DBO fights,” said Commissioner Jan Lynn Owen. “They prey on our most vulnerable consumers and break our laws designed to protect borrowers from paying excessive fees and getting trapped in a debt spiral. Curbing their search engine advertising through this protocol with Microsoft and Google will help us fightthe problem.”
http://www.dbo.ca.gov/Press/press_releases/2015/Search_Engine_initiative_04-07-15.pdf
The Department has announced an initiative to ensure major Internet search engine firms block advertising in California by unlicensed payday lenders.The DBO effort covers Bing (Microsoft), Yahooand Google.Yahoo is covered because Bing controls Yahoo’s search pages.“Unlicensed payday lenderswho operate online rank as one of the most significant consumer protection threats the DBO fights,” said Commissioner Jan Lynn Owen. “They prey on our most vulnerable consumers and break our laws designed to protect borrowers from paying excessive fees and getting trapped in a debt spiral. Curbing their search engine advertising through this protocol with Microsoft and Google will help us fightthe problem.”
http://www.dbo.ca.gov/Press/press_releases/2015/Search_Engine_initiative_04-07-15.pdf
No-bid public school contract in Chicago catches attention of both local and federal investigators
Federal and local authorities are investigating whether Chicago Public Schools improperly awarded a contract to a training academy that formerly employed the head of the school system, Catalyst Chicago reported on Wednesday.
The investigation focuses on a $20.5 million no-bid contract awarded to a development academy for principals and other school officials by CPS in 2013.
A topic for further research concerns the federal and local statutes that may have been violated, since that would determine the remedies and penalties that could result from the investigation.
http://www.huffingtonpost.com/2015/04/15/cps-federal-investigation_n_7074964.html
http://catalyst-chicago.org/2015/04/feds-investigate-20-million-supes-contract-byrd-bennett-ties/
Federal and local authorities are investigating whether Chicago Public Schools improperly awarded a contract to a training academy that formerly employed the head of the school system, Catalyst Chicago reported on Wednesday.
The investigation focuses on a $20.5 million no-bid contract awarded to a development academy for principals and other school officials by CPS in 2013.
A topic for further research concerns the federal and local statutes that may have been violated, since that would determine the remedies and penalties that could result from the investigation.
http://www.huffingtonpost.com/2015/04/15/cps-federal-investigation_n_7074964.html
http://catalyst-chicago.org/2015/04/feds-investigate-20-million-supes-contract-byrd-bennett-ties/
WashPost editoriial -- The D.C. Council yet again undermines the city’s procurement process :
THE D.C. Council has rejected a Tennessee company’s bid to provide health care at the city’s jail, but the real losers are D.C. citizens. Once again, politics and influence were allowed to corrupt the professional procurement process that should determine who gets the District’s business. What’s most depressing — no, maddening — is that those responsible for this travesty include the very council members who campaigned on a promise of good government, including non-interference in contracts.
In a 6-to-5 vote Tuesday, the council nullified the outcome of a competitive bidding process conducted by procurement specialists over 18 months under two mayoral administrations. The specialists had awarded a $66.1 million, three-year contract to Corizon Health Inc.
http://www.washingtonpost.com/opinions/bad-for-business/2015/04/17/a909d06a-e47e-11e4-81ea-0649268f729e_story.html
THE D.C. Council has rejected a Tennessee company’s bid to provide health care at the city’s jail, but the real losers are D.C. citizens. Once again, politics and influence were allowed to corrupt the professional procurement process that should determine who gets the District’s business. What’s most depressing — no, maddening — is that those responsible for this travesty include the very council members who campaigned on a promise of good government, including non-interference in contracts.
In a 6-to-5 vote Tuesday, the council nullified the outcome of a competitive bidding process conducted by procurement specialists over 18 months under two mayoral administrations. The specialists had awarded a $66.1 million, three-year contract to Corizon Health Inc.
http://www.washingtonpost.com/opinions/bad-for-business/2015/04/17/a909d06a-e47e-11e4-81ea-0649268f729e_story.html
From Public Citizen blog: Sen. Warren lays out agenda for tackling "unfinished business of financial reform"
The Dodd-Frank law shouldn't be the end of Congress's financial reform efforts, argued Sen. Elizabeth Warren in a speech today at the Levy Economics Institute. Sen. Warren called for specific additional regulatory measures, including the breaking up of big banks, closing regulatory loopholes, imposing tougher punishments for wrongdoing, and limiting the Fed's emergency lending powers to discourage excessive risk-taking, among other proposals.
You can read more about the speech, including some of the details of Sen. Warren's proposals, in American Banker, here. Or. in the alternative, here.
You can read the text of the full speech here.
The Dodd-Frank law shouldn't be the end of Congress's financial reform efforts, argued Sen. Elizabeth Warren in a speech today at the Levy Economics Institute. Sen. Warren called for specific additional regulatory measures, including the breaking up of big banks, closing regulatory loopholes, imposing tougher punishments for wrongdoing, and limiting the Fed's emergency lending powers to discourage excessive risk-taking, among other proposals.
You can read more about the speech, including some of the details of Sen. Warren's proposals, in American Banker, here. Or. in the alternative, here.
You can read the text of the full speech here.
On the role of State AGs in the U.S. investigation of Google: Eleven Attorneys General Argued That Mississippi Has Authority to Investigate Google
The investigation of Google in the U.S. by the FTC and States is over, at least for now, but it is interesting that State AG's played a role. Diickstein Shapiro's State AG blog ( http://www.stateagmonitor.com/2015/02/19/state-ags-in-the-news-169/ ) noted the following argument by the AGs in support of their authority to investigate:
The investigation of Google in the U.S. by the FTC and States is over, at least for now, but it is interesting that State AG's played a role. Diickstein Shapiro's State AG blog ( http://www.stateagmonitor.com/2015/02/19/state-ags-in-the-news-169/ ) noted the following argument by the AGs in support of their authority to investigate:
- Eleven AGs, led by Kentucky AG Jack Conway, filed an amici brief in federal court in support of Mississippi AG Jim Hood’s attempt to investigate Google, Inc. for alleged violations of the Mississippi Consumer Protection Act through the issuance of an administrative subpoena. Kentucky AG Jack Conway was lead AG on the brief.
- The subpoena demanded that Google produce information related to AG Hood’s allegations that the company does not take appropriate measures to limit illegal activity on the internet, and derives revenue from such activities, including the exchange of pirated materials and the promotion of illegal drugs. Google objected to the subpoena and filed a lawsuit in federal court seeking an injunction to block the subpoena and the investigation.
- Google argued that the 1996 Communications Decency Act shields online companies like Google from liability arising out of materials posted by third parties, essentially providing immunity from the AG’s investigation. In their brief, the eleven amici AGs respond that even if Google is ultimately immune, that would be a defense to a lawsuit, and not to an AG investigation. Moreover, the AGs argue that the proper response when objecting to an administrative subpoena is through the state court system, not a federal lawsuit.
- The case is Google, Inc. v. Hood, 3:14-CV-00981.
Legal expert Jonathan Rubin Points Out Some Astonishing—and Astonishingly Wrong—Remarks about the Antitrust Case against Google in Europe:
After the news broke on April 15 that the European Commission had sent a Statement of Objections to Google alleging antitrust violations in how it presented its general search results commentators said some astonishing things.
Jim Cramer said on CNBC that the FTC didn’t sue Google a few years ago on largely the same allegations for violating the antitrust laws because Google understood Washington “pretty well,” and was “pretty good as schmoozing.” But in Europe, according to Cramer, Google is a taker of market share, not a maker of jobs. “You have to be a job-maker in Europe,” said Cramer, like Cisco in France, in order not to get tagged with an antitrust case from the European Commission.
“We like monopolies,” Cramer said. “In Europe, they don’t like monopolies.”
To see Rubin's reaction to the comments by Cramer and others, click the title above
After the news broke on April 15 that the European Commission had sent a Statement of Objections to Google alleging antitrust violations in how it presented its general search results commentators said some astonishing things.
Jim Cramer said on CNBC that the FTC didn’t sue Google a few years ago on largely the same allegations for violating the antitrust laws because Google understood Washington “pretty well,” and was “pretty good as schmoozing.” But in Europe, according to Cramer, Google is a taker of market share, not a maker of jobs. “You have to be a job-maker in Europe,” said Cramer, like Cisco in France, in order not to get tagged with an antitrust case from the European Commission.
“We like monopolies,” Cramer said. “In Europe, they don’t like monopolies.”
To see Rubin's reaction to the comments by Cramer and others, click the title above
Editorial Comment by DAR: One-sided antitrust articles in the New York Times
The New York Times for 4/15/2015 has a tech article (not editorial) by Farhad Manjoo, explaining in relation to the EU and Google matter that on the one hand, "With more than a decade of hindsight, the theories supporting the case against Microsoft have all but fallen apart, and the pursuit of the company that makes Windows may suggest a reason for skepticism about this fight against Google." Majoo never shows the other hand. There is little if any recognition of any contrary point of view, such as the ideas in the recent book by Andy Gavil and Harry First. (The Microsoft Antitrust Cases: Competition Policy for the Twenty-first Century)
I've seen similar articles in the Times presenting just one side of complex antitrust litigation stories, for example, the USDOJ win over American Express involving credit cards and pricing to merchants. A New York Times "news" article strongly supported a series of highly debatable factual arguments focused on perverse merchant and consumer behavior that will supposedly cause American Express to prevail on appeal. There was little hint of possible debate about the proferred facts.
I would be OK with the New York Times running news articles stating the pro-defendant side of antitrust debates, including the side that favors Google or American Express, so long as there is a recognition of another side, particularly the plaintiff side.
I am generally an admirer of the New York Times, so seeing several one-sided articles on antitrust topics worries me. Andy Gavil and Harry First and others like them deserve to have their views fairly presented in New York Times articles like today's article by Farhad Manjoo.
I invite submissions by people with differing views. Send them to
donresnikoff@donresnikofflaw.com
Posted by Don Allen Resnikoff
The New York Times for 4/15/2015 has a tech article (not editorial) by Farhad Manjoo, explaining in relation to the EU and Google matter that on the one hand, "With more than a decade of hindsight, the theories supporting the case against Microsoft have all but fallen apart, and the pursuit of the company that makes Windows may suggest a reason for skepticism about this fight against Google." Majoo never shows the other hand. There is little if any recognition of any contrary point of view, such as the ideas in the recent book by Andy Gavil and Harry First. (The Microsoft Antitrust Cases: Competition Policy for the Twenty-first Century)
I've seen similar articles in the Times presenting just one side of complex antitrust litigation stories, for example, the USDOJ win over American Express involving credit cards and pricing to merchants. A New York Times "news" article strongly supported a series of highly debatable factual arguments focused on perverse merchant and consumer behavior that will supposedly cause American Express to prevail on appeal. There was little hint of possible debate about the proferred facts.
I would be OK with the New York Times running news articles stating the pro-defendant side of antitrust debates, including the side that favors Google or American Express, so long as there is a recognition of another side, particularly the plaintiff side.
I am generally an admirer of the New York Times, so seeing several one-sided articles on antitrust topics worries me. Andy Gavil and Harry First and others like them deserve to have their views fairly presented in New York Times articles like today's article by Farhad Manjoo.
I invite submissions by people with differing views. Send them to
donresnikoff@donresnikofflaw.com
Posted by Don Allen Resnikoff
Phoebe Putney, NC Board: Winning Legal Battles, Not Hearts and Minds
See the article at http://antitrustconnect.com/2015/04/13/phoebe-putney-nc-board-winning-legal-battles-not-hearts-and-minds/#respond
- An article by Steven J. Cernak, Schiff Hardin LLP
See the article at http://antitrustconnect.com/2015/04/13/phoebe-putney-nc-board-winning-legal-battles-not-hearts-and-minds/#respond
NY Times editorial: Conflicts of interest weaken FDA regulation of dietary supplements
The editorial begins:
The Food and Drug Administration’s lethargic regulation of dietary supplements containing a dangerous stimulant described in recent reports in The Times is a classic example of what happens when industry representatives infiltrate the agency that is supposed to regulate them. The worrisome ingredient is BMPEA, a chemical nearly identical to amphetamine that is added to weight-loss and workout products in an effort to enhance their effect. Whether it does so is unclear, since there have never been tests of its effectiveness and safety in humans.
After describing the revolving door through which industry insiders come and go from key FDA positions, the editorial concludes:
[C]onsumer advocates are surely right that putting the industry in charge of supplement regulation is like appointing the fox to guard the henhouse. Clearly, the F.D.A. should not allow industry insiders to fill key positions.
Read "Conflicts of Interest at the FDA" in full, here.
The editorial begins:
The Food and Drug Administration’s lethargic regulation of dietary supplements containing a dangerous stimulant described in recent reports in The Times is a classic example of what happens when industry representatives infiltrate the agency that is supposed to regulate them. The worrisome ingredient is BMPEA, a chemical nearly identical to amphetamine that is added to weight-loss and workout products in an effort to enhance their effect. Whether it does so is unclear, since there have never been tests of its effectiveness and safety in humans.
After describing the revolving door through which industry insiders come and go from key FDA positions, the editorial concludes:
[C]onsumer advocates are surely right that putting the industry in charge of supplement regulation is like appointing the fox to guard the henhouse. Clearly, the F.D.A. should not allow industry insiders to fill key positions.
Read "Conflicts of Interest at the FDA" in full, here.
US: California PUC Commissioner opposes Comcast-TWC
The California Public Utilities Commission is still vetting an administrative judge recommendation that approved the Comcast-TWC deal with conditions, but PUC commissioner Mike Florio isn't waiting for the vote, already signaling in an "alternative proposed decision" Friday that he would deny it.
Florio concluded that the merger "will likely reduce competition in the markets for wholesale inputs such as special access used by competitive service providers [and] constraining consumer options for those competitive services" and that "no conditions could mitigate all of the negative impacts of the proposed transaction."
Full Content: Los Angeles Times
The California Public Utilities Commission is still vetting an administrative judge recommendation that approved the Comcast-TWC deal with conditions, but PUC commissioner Mike Florio isn't waiting for the vote, already signaling in an "alternative proposed decision" Friday that he would deny it.
Florio concluded that the merger "will likely reduce competition in the markets for wholesale inputs such as special access used by competitive service providers [and] constraining consumer options for those competitive services" and that "no conditions could mitigate all of the negative impacts of the proposed transaction."
Full Content: Los Angeles Times
From Public Citizen Blog: Jeff Gelles Column: Lawsuits were stymied, but CFPB finally puts halt to rent-a-D.A. scheme
Here. Excerpt:
The ominous letter from the prosecutor's office was addressed to her grandfather, Albert Lachowicz, but it came to Jennifer Paczan because she was handling his finances.* * *
The letter was signed by Beaver County District Attorney Anthony J. Berosh, and was on the D.A.'s letterhead. It said Berosh's office had received reports alleging that Lachowicz had engaged in "criminal activity" by "issuing a fraudulent check."
Paczan, then a student at the University of Pittsburgh, knew that hadn't happened.* * *
So why was she getting a threat from the D.A. - followed several weeks later by another letter from Berosh topped even more ominously, "Warning of Criminal Charges"?
It turned out she wasn't. Instead, both came from a California company, National Corrective Group, that was behind an elaborate scheme to profit from simple mistakes made by people like Paczan.
* * *
The worst part of this story? That the scheme worked only thanks to the complicity of hundreds of local prosecutors around the country, who were invited to join in profiting from the deceptions. You might even call it "rent a D.A."
Here. Excerpt:
The ominous letter from the prosecutor's office was addressed to her grandfather, Albert Lachowicz, but it came to Jennifer Paczan because she was handling his finances.* * *
The letter was signed by Beaver County District Attorney Anthony J. Berosh, and was on the D.A.'s letterhead. It said Berosh's office had received reports alleging that Lachowicz had engaged in "criminal activity" by "issuing a fraudulent check."
Paczan, then a student at the University of Pittsburgh, knew that hadn't happened.* * *
So why was she getting a threat from the D.A. - followed several weeks later by another letter from Berosh topped even more ominously, "Warning of Criminal Charges"?
It turned out she wasn't. Instead, both came from a California company, National Corrective Group, that was behind an elaborate scheme to profit from simple mistakes made by people like Paczan.
* * *
The worst part of this story? That the scheme worked only thanks to the complicity of hundreds of local prosecutors around the country, who were invited to join in profiting from the deceptions. You might even call it "rent a D.A."
Are solar power alternatives really an option for a retail power seller not vertically integrated with a power generator?
At a recent UDC program on the PEPCO-Exelon merger proposal, some speakers criticized the proposed merger from the perspective of antitrust, consumer protection, and local regulatory requirements. Currently PEPCO is a buyer of electricity, not a producer. Exelon is vertically integrated, and is a major producer of electricity. Speakers argued that a merger will result in PEPCO buying electricity from Exelon, and being less open than at present to buying electricity from alternative competing sources. Speakers discussed the promise of a future where there are multiple producers using solar, wind, or other “green” technologies, and worried that Exelon/PEPCO will use market power to keep alternate competitive sources out of the market, leading to high prices and less desirable energy sourcing.
Are alternative energy sources really an option for an unmerged, independent PEPCO? An article in the NYT for April 19 suggests yes, based on recent experience in Hawaii. The article explains:
Other states and countries, including California, Arizona, Japan and Germany, are struggling to adapt to the growing popularity of making electricity at home, which puts new pressures on old infrastructure like circuits and power lines and cuts into electric company revenue.
As a result, many utilities are trying desperately to stem the rise of solar, either by reducing incentives, adding steep fees or effectively pushing home solar companies out of the market. In response, those solar companies are fighting back through regulators, lawmakers and the courts.
The shift in the electric business is no less profound than those that upended the telecommunications and cable industries in recent decades
See http://www.nytimes.com/2015/04/19/business/energy-environment/solar-power-battle-puts-hawaii-at-forefront-of-worldwide-changes.html?&moduleDetail=section-news-1&action=click&contentCollection=Technology®ion=Footer&module=MoreInSection&pg
At a recent UDC program on the PEPCO-Exelon merger proposal, some speakers criticized the proposed merger from the perspective of antitrust, consumer protection, and local regulatory requirements. Currently PEPCO is a buyer of electricity, not a producer. Exelon is vertically integrated, and is a major producer of electricity. Speakers argued that a merger will result in PEPCO buying electricity from Exelon, and being less open than at present to buying electricity from alternative competing sources. Speakers discussed the promise of a future where there are multiple producers using solar, wind, or other “green” technologies, and worried that Exelon/PEPCO will use market power to keep alternate competitive sources out of the market, leading to high prices and less desirable energy sourcing.
Are alternative energy sources really an option for an unmerged, independent PEPCO? An article in the NYT for April 19 suggests yes, based on recent experience in Hawaii. The article explains:
Other states and countries, including California, Arizona, Japan and Germany, are struggling to adapt to the growing popularity of making electricity at home, which puts new pressures on old infrastructure like circuits and power lines and cuts into electric company revenue.
As a result, many utilities are trying desperately to stem the rise of solar, either by reducing incentives, adding steep fees or effectively pushing home solar companies out of the market. In response, those solar companies are fighting back through regulators, lawmakers and the courts.
The shift in the electric business is no less profound than those that upended the telecommunications and cable industries in recent decades
See http://www.nytimes.com/2015/04/19/business/energy-environment/solar-power-battle-puts-hawaii-at-forefront-of-worldwide-changes.html?&moduleDetail=section-news-1&action=click&contentCollection=Technology®ion=Footer&module=MoreInSection&pg
Speakers criticized the proposed merger from the perspective of antitrust, consumer protection, and local regulatory requirements. Currently PEPCO is a buyer of electricity, not a producer. Exelon is vertically integrated, and is a major producer of electricity. Speakers argued that a merger will result in PEPCO buying electricity from Exelon, and being less open than at present to buying electricity from alternative competing sources. Speakers discussed the promise of a future where there are multiple producers using solar, wind, or other “green” technologies, and worried that Exelon/PEPCO will use market power to keep alternate competitive sources out of the market, leading to high prices and less desirable energy sourcing.
Several speakers spoke of broad popular opposition to the merger. Scott Hempling pointed out that state level regulatory agenccies have no obligation to respond to popular will, but that legislative bodies do. He recommended that popular pressure on legislatures could be effective, because legislative bodies can take such steps as setting standards for regulatory action, or considering local government takeover of electricity distribution.
The faculty advisor for the UDC sponsoring group is Joe Libertelli, who coached the student organizers, introduced the speakers, carried the microphone to audience participants, and purchased and personally served refreshments at the post-event reception.
Posted by Don Allen Resnikoff
PSC chair rebuts criticism that a merger between Exelon and Pepco will do harm to local competition:
http://www.baltimoresun.com/news/opinion/oped/bs-ed-electric-merger-20150407-story.html
UDC law student Jessica Christy blogs in opposition to Exelon/PEPCO merger:
http://dc.ecowomen.org/2015/03/20/utility-giant-exelon-seeks-pepco-holdings-merger/
_________
Nonbank lenders make mortgage loans as large banks pull back. But are nonbanks sound?
Julia Gordon, a senior director of housing and consumer finance at the Center for American Progress, said that nonbank lenders have stepped in to lend at a critical time when large banks have pulled back.
As far as the risk that to taxpayers, "as long as we have strong counterparty requirements that we enforce, this isn't something to wring our hands about, it's just something to work on," Gordon said.
Ginnie Mae has tightened its minimum net worth for lenders to $2.5 million plus 0.35% of outstanding single-family obligations. Ginnie issuers also have to have liquid assets of either $1 million or 0.10% of their outstanding single-family securities, whichever is greater. (Ginnie guarantees the timely payment of principal and interest on securities backed by loans that are ultimately guaranteed FHA and other government agencies.)
Ted Tozer, Ginnie's president, has made a point of praising nondepositories for providing access to credit when large banks pulled back. But Tozer also is closely watching how nonbanks handle operational risks and defaulted loans.
From article at http://www.nationalmortgagenews.com/news/origination/nonbank-mortgage-lenders-bite-back-1048217-1.html
Julia Gordon, a senior director of housing and consumer finance at the Center for American Progress, said that nonbank lenders have stepped in to lend at a critical time when large banks have pulled back.
As far as the risk that to taxpayers, "as long as we have strong counterparty requirements that we enforce, this isn't something to wring our hands about, it's just something to work on," Gordon said.
Ginnie Mae has tightened its minimum net worth for lenders to $2.5 million plus 0.35% of outstanding single-family obligations. Ginnie issuers also have to have liquid assets of either $1 million or 0.10% of their outstanding single-family securities, whichever is greater. (Ginnie guarantees the timely payment of principal and interest on securities backed by loans that are ultimately guaranteed FHA and other government agencies.)
Ted Tozer, Ginnie's president, has made a point of praising nondepositories for providing access to credit when large banks pulled back. But Tozer also is closely watching how nonbanks handle operational risks and defaulted loans.
From article at http://www.nationalmortgagenews.com/news/origination/nonbank-mortgage-lenders-bite-back-1048217-1.html
A small bank view of "too big to fail"
From an article by Camden R. Fine, president and chief executive of the Independent Community Bankers of America, discussing comments of JP Morgan's Jamie Dimon:
Danger lies in Dimon's point that the largest banks are not the riskiest. He suggests the megabank model is nothing to worry about, even though its taxpayer-funded backstop incentivizes large institutions to continue growing and taking outsized financial risks. His point — in fact, his plea, to shareholders who might prefer to split up the massive institution into smaller, more manageable and more valuable parts — was that they've got a pretty good thing going and shouldn't relinquish the benefits of their sheer size and complexity.
We as a nation cannot allow ourselves to fall back into the too-big-to-fail trap. We must continue to seek ways to end federal subsidies and funding advantages for the largest financial firms that incentivize risky behavior and put taxpayers at risk. And we shouldn't fall victim to the siren song of the Wall Street megabanks, those institutions to which the rules of the free markets do not apply.
http://www.americanbanker.com/bankthink/dimons-defense-of-big-bank-model-an-exercise-in-hubris-1073688-1.html?utm_medium=email&ET=americanbanker%3Ae4986477%3Aa%3A&utm_campaign=-apr%209%202015&utm_source=newsletter&st=email
From an article by Camden R. Fine, president and chief executive of the Independent Community Bankers of America, discussing comments of JP Morgan's Jamie Dimon:
Danger lies in Dimon's point that the largest banks are not the riskiest. He suggests the megabank model is nothing to worry about, even though its taxpayer-funded backstop incentivizes large institutions to continue growing and taking outsized financial risks. His point — in fact, his plea, to shareholders who might prefer to split up the massive institution into smaller, more manageable and more valuable parts — was that they've got a pretty good thing going and shouldn't relinquish the benefits of their sheer size and complexity.
We as a nation cannot allow ourselves to fall back into the too-big-to-fail trap. We must continue to seek ways to end federal subsidies and funding advantages for the largest financial firms that incentivize risky behavior and put taxpayers at risk. And we shouldn't fall victim to the siren song of the Wall Street megabanks, those institutions to which the rules of the free markets do not apply.
http://www.americanbanker.com/bankthink/dimons-defense-of-big-bank-model-an-exercise-in-hubris-1073688-1.html?utm_medium=email&ET=americanbanker%3Ae4986477%3Aa%3A&utm_campaign=-apr%209%202015&utm_source=newsletter&st=email
From Public Citizen blog: Facebook is tracking even non-users
Reports Law360 last week: "Facebook Unlawfully Tracking All Visitors, Report Says." The report in question was prepared by the Iterdisciplinary Center for Law and ICT at the University of Leuven in Belgium, and it accuses the social networking behemoth of violating EU privacy law by tracking the activities of individuals who are not users of Facebook but merely visitors to any site belonging to the facebook.com domain. As Law360 explains:
According to the report, the site places a cookie on nonusers' devices that contains a unique identifier and has an expiration date of two years, and uses a “range of additional cookies” for visitors who are already users of the site. . . .
The cookies deliver to the company a wealth of information about users' activities, such as the URL of webpages they have visited and information about the browser and operating system, the report added.
Read the full story here.
Reports Law360 last week: "Facebook Unlawfully Tracking All Visitors, Report Says." The report in question was prepared by the Iterdisciplinary Center for Law and ICT at the University of Leuven in Belgium, and it accuses the social networking behemoth of violating EU privacy law by tracking the activities of individuals who are not users of Facebook but merely visitors to any site belonging to the facebook.com domain. As Law360 explains:
According to the report, the site places a cookie on nonusers' devices that contains a unique identifier and has an expiration date of two years, and uses a “range of additional cookies” for visitors who are already users of the site. . . .
The cookies deliver to the company a wealth of information about users' activities, such as the URL of webpages they have visited and information about the browser and operating system, the report added.
Read the full story here.
D.C.'s attorney general seeks bigger budget
Karl A. Racine wants his office to retain part of what it collects through legal settlements and awards.
We agree. See Taking the Stand: Why the D.C. Council Should Bring Back the Antitrust Enforcement Fund From Washington Lawyer, May 2012, http://www.dcbar.org/bar-resources/publications/washington-lawyer/articles/may-2012-taking-the-stand.cfm
For the full Washington Post article, click the title above.
Karl A. Racine wants his office to retain part of what it collects through legal settlements and awards.
We agree. See Taking the Stand: Why the D.C. Council Should Bring Back the Antitrust Enforcement Fund From Washington Lawyer, May 2012, http://www.dcbar.org/bar-resources/publications/washington-lawyer/articles/may-2012-taking-the-stand.cfm
For the full Washington Post article, click the title above.
How the new D.C. Board of Ethics and Government Accountability is reshaping the way D.C. government employees and elected officials are trained, advised, and sanctioned for ethics lapses
From the article by Bob Spagnoletti and Darrin Sobin: The Ethics Act was a landmark piece of legislation. It was a comprehensive attempt to bring District government ethics under one roof and address each of the core components of an effective enforcement mechanism. The Ethics Act pulled together existing rules and laws and called it the “Code of Conduct,” expanded existing financial disclosure requirements, and, most importantly, created BEGA [Board of Ethics and Government Accountability] and imbued it with true independence and enforcement authority.
https://www.dcbar.org/bar-resources/publications/washington-lawyer/articles/april-2015-ethics-reform.cfm
From the article by Bob Spagnoletti and Darrin Sobin: The Ethics Act was a landmark piece of legislation. It was a comprehensive attempt to bring District government ethics under one roof and address each of the core components of an effective enforcement mechanism. The Ethics Act pulled together existing rules and laws and called it the “Code of Conduct,” expanded existing financial disclosure requirements, and, most importantly, created BEGA [Board of Ethics and Government Accountability] and imbued it with true independence and enforcement authority.
https://www.dcbar.org/bar-resources/publications/washington-lawyer/articles/april-2015-ethics-reform.cfm
The European Commission is looking into Apple’s streaming service negotiations with record labels
Reports say that the Commission has contacted multiple labels and digital music companies. They’ve sent questionnaires asking about the negotiations that are taking place. The Commission reportedly is concerned that Apple could pressure labels into pulling music from free ad-supported services. Apple policies affecting Europe may also affect the US, and US consumers.
Click to see Financial Times.
Reports say that the Commission has contacted multiple labels and digital music companies. They’ve sent questionnaires asking about the negotiations that are taking place. The Commission reportedly is concerned that Apple could pressure labels into pulling music from free ad-supported services. Apple policies affecting Europe may also affect the US, and US consumers.
Click to see Financial Times.
Office Depot changed bylaws to discourage local lawsuits over Staples merger, lawyers say
As it announced its Staples merger, Office Depot changed bylaws to discourage local shareholder lawsuits, lawyers say. The suits claim Office Depot didn't look for best value for shareholders in merger. The shareholder lawsuits were filed in Palm Beach County Circuit.
But the same day it announced the merger, Office Depot changed its corporate bylaws so that shareholders who want to file lawsuits challenging the merger have to do so in Delaware. Office Depot is based in Boca Raton, Florida, but is incorporated in Delaware.
Defendants, which include Office Depot CEO Roland Smith and other company directors, have moved to dismiss the cases on the grounds that it should have been filed in Delaware.
"No Florida court has ever addressed whether a board can force shareholders into a specific court at the same time they agree on a merger," said Davidson, a lawyer with Robbins Geller Rudman & Dowd.
"Why did shareholders file in Palm Beach County?? Because that's where Office Depot is based." Davidson said.
From an article at http://www.sun-sentinel.com/business/consumer/fl-office-depot-shareholder-lawsuits-bylaws-20150403-story.html
Should States prohibit powdered alcohol?
The same month federal regulators approved the sale of powdered alcohol, Texas has joined a growing number of states moving quickly to outlaw the new product that health officials say could make it easier for minors to conceal and consume alcohol.
The House Licensing and Administrative Procedures Committee approved a bill Monday by state Rep. Charlie Geren, R-Fort Worth, that bans the sale and possession of powdered alcohol, or “Palcohol,” in Texas. The powder is sold in a small pouch — in an amount equivalent to a shot — for consumers to mix into a glass of water, soda, juice or other beverage to create an instant mixed drink.
At a committee meeting last week, Geren said allowing powdered alcohol in the state could lead to alcohol abuse by minors.
From article at http://www.texastribune.org/2015/03/30/powdered-alcohol-ban-sent-full-house/
As it announced its Staples merger, Office Depot changed bylaws to discourage local shareholder lawsuits, lawyers say. The suits claim Office Depot didn't look for best value for shareholders in merger. The shareholder lawsuits were filed in Palm Beach County Circuit.
But the same day it announced the merger, Office Depot changed its corporate bylaws so that shareholders who want to file lawsuits challenging the merger have to do so in Delaware. Office Depot is based in Boca Raton, Florida, but is incorporated in Delaware.
Defendants, which include Office Depot CEO Roland Smith and other company directors, have moved to dismiss the cases on the grounds that it should have been filed in Delaware.
"No Florida court has ever addressed whether a board can force shareholders into a specific court at the same time they agree on a merger," said Davidson, a lawyer with Robbins Geller Rudman & Dowd.
"Why did shareholders file in Palm Beach County?? Because that's where Office Depot is based." Davidson said.
From an article at http://www.sun-sentinel.com/business/consumer/fl-office-depot-shareholder-lawsuits-bylaws-20150403-story.html
Should States prohibit powdered alcohol?
The same month federal regulators approved the sale of powdered alcohol, Texas has joined a growing number of states moving quickly to outlaw the new product that health officials say could make it easier for minors to conceal and consume alcohol.
The House Licensing and Administrative Procedures Committee approved a bill Monday by state Rep. Charlie Geren, R-Fort Worth, that bans the sale and possession of powdered alcohol, or “Palcohol,” in Texas. The powder is sold in a small pouch — in an amount equivalent to a shot — for consumers to mix into a glass of water, soda, juice or other beverage to create an instant mixed drink.
At a committee meeting last week, Geren said allowing powdered alcohol in the state could lead to alcohol abuse by minors.
From article at http://www.texastribune.org/2015/03/30/powdered-alcohol-ban-sent-full-house/
Washington, D.C. Schools Chancellor Kaya Henderson’s plan to invest $20 million to help black and Latino male students arouses legal controversy
The plan, called “Empowering Boys of Color,” is part of citywide effort by D.C. Mayor Muriel Bowser to help minority boys and includes building an all-boys high school in Anacostia
Earlier this month D.C. Council member Mary Cheh asked Attorney General Racine whether Bowser’s plan is legal. The Attorney General has not yet responded.
A recent letter from the American Civil Liberties Union D.C. chapter says the measure could violate the Civil Rights Act of 1964 and the Equal Protection Clause in the Constitution.
“Racial justice in education should be about addressing systemic inequalities and about lifting up all students to close the achievement gap,” the letter states.
Education Watchdog article: http://watchdog.org/202867/aclu-questions-d-c-s-20-million-investment-help-black-latino-boys/
ACLU letter: http://aclu-nca.org/sites/default/files/docs/Letter%20to%20Mayor%20Bowser%20%5B2.23.2015%5D.pdf
The plan, called “Empowering Boys of Color,” is part of citywide effort by D.C. Mayor Muriel Bowser to help minority boys and includes building an all-boys high school in Anacostia
Earlier this month D.C. Council member Mary Cheh asked Attorney General Racine whether Bowser’s plan is legal. The Attorney General has not yet responded.
A recent letter from the American Civil Liberties Union D.C. chapter says the measure could violate the Civil Rights Act of 1964 and the Equal Protection Clause in the Constitution.
“Racial justice in education should be about addressing systemic inequalities and about lifting up all students to close the achievement gap,” the letter states.
Education Watchdog article: http://watchdog.org/202867/aclu-questions-d-c-s-20-million-investment-help-black-latino-boys/
ACLU letter: http://aclu-nca.org/sites/default/files/docs/Letter%20to%20Mayor%20Bowser%20%5B2.23.2015%5D.pdf
Reflections on the Supreme Court’s North Carolina Dental Decision and the FTC’s Campaign to Rein in State Action Immunity by Maureen K. Ohlhausen, Commissioner, U.S. Federal Trade Commission
Quote within talk: We have seen many examples of licensure restrictions that likely impede competition and hamper entry into professional and services markets, yet offer few, if any, significant consumer benefits. In these situations, regulations may lead to higher prices, lower quality services and products, and less convenience for consumers. In the long term, they can cause lasting damage to competition and the competitive process . . . .
https://www.ftc.gov/system/files/documents/public_statements/634091/150331heritagencdental.pdf
Why are some States suing Corinthian private colleges?
Here is part of the explanation from a statement of the California Attorney General:
The Attorney General’s lawsuit alleges that Corinthian has violated consumer protection and securities laws. For example, Corinthian misrepresented job placement rates to students and investors, advertised for programs that it did not offer, and subjected students to unlawful debt collection practices. The Attorney General filed the lawsuit in October 2013, and the case is still in progress. To learn more about the complaint, you can visit the Attorney General’s Press Release. To download a copy of the most recent complaint, you can visit First Amended Complaint.
Here is part of the explanation from a statement of the California Attorney General:
The Attorney General’s lawsuit alleges that Corinthian has violated consumer protection and securities laws. For example, Corinthian misrepresented job placement rates to students and investors, advertised for programs that it did not offer, and subjected students to unlawful debt collection practices. The Attorney General filed the lawsuit in October 2013, and the case is still in progress. To learn more about the complaint, you can visit the Attorney General’s Press Release. To download a copy of the most recent complaint, you can visit First Amended Complaint.
From UDC Environmental Law Society: Program on Exelon Takeover of PEPCO
Please join the UDCEnvironmental Law Society at UDC Law on Wedneday, 4/8, at 7 PM for an exploration of a cutting-edge issue for the District and the region: “Is the Exelon Takeover of PEPCO in the Public Interest?” There will be two panel discussions beginning at 7 pm in the School of Law ’s Moot Court Room, 5th floor, 4340 CT Ave., NW. The first panel, still “under construction,” will include Tim Judson, Executive Director of the Nuclear Information & Resource Service.
The second panel will feature alumnae DC People’s Counsel, Sandra Mattavous-Frye, ’83 and MD People’s Counsel, Paula Carmody, ’80 as well as Delaware Intervener, Jeremy Firestone, JD, PhD and utility law expert Scott Hempling, Esq.
Both panels will be moderated by UDC Environmental Law Society members.
A reception will follow. Location and other details on registration form
Free, but please register: http://www.law.udc.edu/event/Exelon.
Please join the UDCEnvironmental Law Society at UDC Law on Wedneday, 4/8, at 7 PM for an exploration of a cutting-edge issue for the District and the region: “Is the Exelon Takeover of PEPCO in the Public Interest?” There will be two panel discussions beginning at 7 pm in the School of Law ’s Moot Court Room, 5th floor, 4340 CT Ave., NW. The first panel, still “under construction,” will include Tim Judson, Executive Director of the Nuclear Information & Resource Service.
The second panel will feature alumnae DC People’s Counsel, Sandra Mattavous-Frye, ’83 and MD People’s Counsel, Paula Carmody, ’80 as well as Delaware Intervener, Jeremy Firestone, JD, PhD and utility law expert Scott Hempling, Esq.
Both panels will be moderated by UDC Environmental Law Society members.
A reception will follow. Location and other details on registration form
Free, but please register: http://www.law.udc.edu/event/Exelon.
NYC DEPARTMENT OF CONSUMER AFFAIRS CREATES NEW CAR LOAN INITIATIVE TO HELP CURB PREDATORY SUBPRIME LOANS AND ABUSIVE DEALER FINANCING PRACTICES FOR USED CAR BUYERS WITH LOW INCOMES
From NYC press release: Department of Consumer Affairs (DCA) Commissioner Julie Menin has announced a new initiative to create a safer loan product for qualified secondhand auto borrowers and to help them avoid financial ruin by predatory loans. Often, borrowers with low credit scores are targeted and sold predatory loans characterized by higher interest rates and less favorable terms. Studies show that these loans, which are similar to those that were blamed for the country’s mortgage crisis, are growing at a staggering rate of more than 130 percent in recent years. In addition, many consumers who obtain these loans believe the dealer has negotiated the best rate for them and are unaware they are actually paying to increase the dealer’s profit margin. Dealer markups provide an incentive to sell consumers unwanted add-ons to increase the amount of financing on a loan and the related mark-up.
With the concerns that some dealerships may be engaged in illegal predatory practices, such as selling unwanted add-ons and arranging high-interest subprime loans without informing consumers of critical information, DCA is calling on banks and credit unions to submit auto loan proposals designed for low-income purchasers. DCA issued a Request for Expression of Interest (RFEI), which is an invitation to an industry to create a product under certain guidelines or submit an existing safe and affordable car loan that meets the outlined guidelines.
http://www.nyc.gov/html/dca/html/pr2015/pr_032315.shtml
NY Times: contact lens price setting
One by one over the last year and a half, all four of the major contact lens manufacturers have enacted pricing policies that seek to limit what contact lens discounters can charge for certain products, setting minimum retail prices and threatening to cut off supply if dealers do not comply.
http://www.nytimes.com/2015/03/27/business/contact-lens-makers-and-discounters-tussle-over-price-setting.html?ref=business
One by one over the last year and a half, all four of the major contact lens manufacturers have enacted pricing policies that seek to limit what contact lens discounters can charge for certain products, setting minimum retail prices and threatening to cut off supply if dealers do not comply.
http://www.nytimes.com/2015/03/27/business/contact-lens-makers-and-discounters-tussle-over-price-setting.html?ref=business
Have you noticed that (regulated) internet service from your cable provider is so expensive that you might as well take the slightly more expensive tv service bundle rather than "cutting the cord?"
Sanford Bernstein media analyst Todd Juenger noticed the same thing. He held his second cord-cutting focus group – this time in San Francisco – and found that some so-called "at-risk" cord cutters keep their pay-TV and Internet bundles mainly because it’s cheaper than standalone Internet service.
See article by Michael Farrell
http://www.broadcastingcable.com/news/currency/analyst-bundles-could-curb-cord-cutting/139151
Sanford Bernstein media analyst Todd Juenger noticed the same thing. He held his second cord-cutting focus group – this time in San Francisco – and found that some so-called "at-risk" cord cutters keep their pay-TV and Internet bundles mainly because it’s cheaper than standalone Internet service.
See article by Michael Farrell
http://www.broadcastingcable.com/news/currency/analyst-bundles-could-curb-cord-cutting/139151
South Korea regulator levies $3.2 million fines against Japan Auto Parts for price fixing
South Korea's antitrust regulator will fine five auto parts firms, including Japan's Denso Corp, NGK Spark Plug and their local units, a total of 3.5 billion won for fixing prices and rigging bids for engine parts.
In a statement, the Fair Trade Commission said the five firms colluded on bid prices and winners for parts tenders made by South Korea's biggest automakers Hyundai Motor and Kia Motors from 2008 and 2011.
We don't know whether affected Hyundai and Kia models were sold in the US.
https://www.competitionpolicyinternational.com/south-korea-regulator-levies-3-2-million-fines-against-japan-auto-parts-for-price-fixing?utm_source=March+27+2015&utm_campaign=April+30%2C+2013&utm_medium=email
South Korea's antitrust regulator will fine five auto parts firms, including Japan's Denso Corp, NGK Spark Plug and their local units, a total of 3.5 billion won for fixing prices and rigging bids for engine parts.
In a statement, the Fair Trade Commission said the five firms colluded on bid prices and winners for parts tenders made by South Korea's biggest automakers Hyundai Motor and Kia Motors from 2008 and 2011.
We don't know whether affected Hyundai and Kia models were sold in the US.
https://www.competitionpolicyinternational.com/south-korea-regulator-levies-3-2-million-fines-against-japan-auto-parts-for-price-fixing?utm_source=March+27+2015&utm_campaign=April+30%2C+2013&utm_medium=email
Ohio high Court issues limited ruling in Ohio oil and gas preemption case
Article By Terrence M. Fay and Joel D. Eagle │ Thompson Hine LLP
The Ohio Supreme Court’s recent decision to block an Ohio locality’s anti-natural gas fracturing ordinance ifollows lead og New York courts. The ruling’s narrow focus limits state preemption of local rules on oil and gas production, with ordinary local rules on zonong being left in the province of the local authorities. PDF
Article By Terrence M. Fay and Joel D. Eagle │ Thompson Hine LLP
The Ohio Supreme Court’s recent decision to block an Ohio locality’s anti-natural gas fracturing ordinance ifollows lead og New York courts. The ruling’s narrow focus limits state preemption of local rules on oil and gas production, with ordinary local rules on zonong being left in the province of the local authorities. PDF
AAI President Diana Moss on Heinz-Kraft Merger
From Washington Post's Heinz will buy Kraft Foods in mega-merger for American food: "All these food-space mergers give (buyers) the illusion of choice. They're thinking, 'Oh gosh, look at all these brands,'" said Diana Moss, president of the American Antitrust Institute. "But what the consumer doesn't see is the smaller and smaller number of manufacturers maintaining those brands. It doesn't mean they compete with each other - they don't - and that gives them significant power to raise prices and reduce choice."
From Washington Post's Heinz will buy Kraft Foods in mega-merger for American food: "All these food-space mergers give (buyers) the illusion of choice. They're thinking, 'Oh gosh, look at all these brands,'" said Diana Moss, president of the American Antitrust Institute. "But what the consumer doesn't see is the smaller and smaller number of manufacturers maintaining those brands. It doesn't mean they compete with each other - they don't - and that gives them significant power to raise prices and reduce choice."
Consumer Financial Protection Bureau proposals would end payday debt traps
Proposals would equire lenders to take steps to make sure consumers can repay their loans. The strong consumer protections being considered would apply to payday loans, vehicle title loans, deposit advance products, and certain high-cost installment loans and open-end loans.
You can find a factsheet summarizing the proposals under consideration at http://files.consumerfinance.gov/f/201503_cfpb-proposal-under-consideration.pdf
Proposals would equire lenders to take steps to make sure consumers can repay their loans. The strong consumer protections being considered would apply to payday loans, vehicle title loans, deposit advance products, and certain high-cost installment loans and open-end loans.
You can find a factsheet summarizing the proposals under consideration at http://files.consumerfinance.gov/f/201503_cfpb-proposal-under-consideration.pdf
Conflict in federal and State safety standards for laminate flooring
Laminate flooring is manufactured by gluing together various materials, and then adhering a thin layer of wood or synthetic material on top.To measure compliance with state safety standards, California shaves off the top layer of a board and tests the core of a product.
Lumber Liquidators disputes the state’s testing procedures, arguing that the company’s flooring should be tested with the top layer on, the way the products are used in the home. “It is our firm belief that finished product testing, rather than deconstruction, is the best approach to determine consumer safety,” the company said in a statement.
The federal product safety commission appears to agree. Mr. Kaye said that the commission would test products as they are used indoors, and would not rely on California’s method of deconstructive testing.
“Our obligation is to assess how much exposure a consumer has to formaldehyde from the product, said ” Scott Wolfson, a spokesman for the agency.
http://www.nytimes.com/2015/03/26/business/lumber-liquidators-faces-us-safety-inquiry.html?ref=business
House Democrats: SEC Vote to Preempt State Investor Protections “Disappointing”
Following the Securities and Exchange Commission’s (SEC) vote to finalize a rule expanding an exemption allowing businesses to raise up to $50 million from the public markets, six leading Democratic lawmakers on the Financial Services Committee expressed concern with the consequences of preempting critical investor protections at the state level.
Click title for full press release
Following the Securities and Exchange Commission’s (SEC) vote to finalize a rule expanding an exemption allowing businesses to raise up to $50 million from the public markets, six leading Democratic lawmakers on the Financial Services Committee expressed concern with the consequences of preempting critical investor protections at the state level.
Click title for full press release
House Republican budget would reduce federal government employees retirement earnings and potentially increase the amount they have to contribute to their health-care plan - cite lower State benefits as a benchmark
Supporters of the GOP plan say that it achieves important savings across the government and that the changes in the retirement and health-care plans would bring federal employees more in line with local and state civil servants. Retirement and health care benefits for State employees are often less favorable than for federal employees.
The House GOP budget would lower the rate of return for the most popular fund within the Thrift Savings Plan, a retirement program available only to federal employees and members of the uniformed services. The savings would result from offering a lower interest rate on the G Fund, which invests in short-term U.S. Treasury securities.
Some spokespersons for federal employees indicated a preference for not having pension benefits reduced and health care costs increased. Those spokespersons were not impressed with the idea of taking lesser State benefits as a benchmark.
http://www.washingtonpost.com/blogs/federal-eye/wp/2015/03/24/federal-worker-groups-slam-grossly-unfair-and-misguided-gop-budget/
Supporters of the GOP plan say that it achieves important savings across the government and that the changes in the retirement and health-care plans would bring federal employees more in line with local and state civil servants. Retirement and health care benefits for State employees are often less favorable than for federal employees.
The House GOP budget would lower the rate of return for the most popular fund within the Thrift Savings Plan, a retirement program available only to federal employees and members of the uniformed services. The savings would result from offering a lower interest rate on the G Fund, which invests in short-term U.S. Treasury securities.
Some spokespersons for federal employees indicated a preference for not having pension benefits reduced and health care costs increased. Those spokespersons were not impressed with the idea of taking lesser State benefits as a benchmark.
http://www.washingtonpost.com/blogs/federal-eye/wp/2015/03/24/federal-worker-groups-slam-grossly-unfair-and-misguided-gop-budget/
Message on forced arbitration from Ellen Taverna,
Legislative Director, National Association of Consumer Advocates (NACA)
Follow the URL link for the final letter from 107 national, state and local groups [including DCConsumerrightscoalition.org] to Director Cordray, urging the CFPB to initiate rulemaking to prohibit forced arbitration clauses in contracts for consumer financial services and products under its jurisdiction. Thank you to everyone that signed on to the letter. Please share widely! Here is a link: http://bit.ly/1Ge8t8z
Best, Ellen
Legislative Director, National Association of Consumer Advocates (NACA)
Follow the URL link for the final letter from 107 national, state and local groups [including DCConsumerrightscoalition.org] to Director Cordray, urging the CFPB to initiate rulemaking to prohibit forced arbitration clauses in contracts for consumer financial services and products under its jurisdiction. Thank you to everyone that signed on to the letter. Please share widely! Here is a link: http://bit.ly/1Ge8t8z
Best, Ellen
Sorkin of NY Times reflects popular view: airline mergers lead to high prices
Sorkin: Just over two years ago, one of the nation’s airline trade organizations called the industry “hypercompetitive” and declared “airfare remains a bargain.” At the time, the Justice Department was weighing the competitive implications of a merger between American Airlines and US Airways, around two years after the merger of United and Continental.
Fast-forward to the present.
Far from “hypercompetitive,” the airline industry is increasingly looking like an uncompetitive oligopoly.
For proof, look no further than airline ticket prices.
Full article: http://www.nytimes.com/2015/03/24/business/dealbook/as-oil-prices-fall-air-fares-still-stay-high.html?hp&action=click&pg&module=first-column-region®ion=top-news&WT.nav=top-news&_r=0
Sorkin: Just over two years ago, one of the nation’s airline trade organizations called the industry “hypercompetitive” and declared “airfare remains a bargain.” At the time, the Justice Department was weighing the competitive implications of a merger between American Airlines and US Airways, around two years after the merger of United and Continental.
Fast-forward to the present.
Far from “hypercompetitive,” the airline industry is increasingly looking like an uncompetitive oligopoly.
For proof, look no further than airline ticket prices.
Full article: http://www.nytimes.com/2015/03/24/business/dealbook/as-oil-prices-fall-air-fares-still-stay-high.html?hp&action=click&pg&module=first-column-region®ion=top-news&WT.nav=top-news&_r=0
The U.S. Supreme Court agrees to review a California state appeals court’s refusal to send class action complaint against Direct TV to arbitration
Plaintiffs argue that Direct TV arbitration clause deferred to California state law, which made the clause unenforceable.
Plaintiffs argue that Direct TV arbitration clause deferred to California state law, which made the clause unenforceable.
Potato cartel case continues
Associated Wholesale Grocers filed an antitrust lawsuit against United Potato Growers in 2010, claiming that the group acts as a potato "cartel" that controls 80 percent of the potato industry and uses physical and non-physical intimidation to compel independent growers to join.
The antitrust complaint claims the defendants conspired to fix, raise, maintain and stabilize the prices paid for fresh and processed potatoes, and that the cartel acts in "classic cartel behavior."
Full Content: Courthouse News Service
Associated Wholesale Grocers filed an antitrust lawsuit against United Potato Growers in 2010, claiming that the group acts as a potato "cartel" that controls 80 percent of the potato industry and uses physical and non-physical intimidation to compel independent growers to join.
The antitrust complaint claims the defendants conspired to fix, raise, maintain and stabilize the prices paid for fresh and processed potatoes, and that the cartel acts in "classic cartel behavior."
Full Content: Courthouse News Service
Modern Healthcare: Affordable Care Act credited with $7.4 billion drop in uncompensated care
Hospitals' uncompensated-care costs in Medicaid expansion states were reduced by $5 billion in 2014, according to an HHS report.
The costs of uncompensated care declined $2.4 billion in states that did not expand the program, resulting in a total drop of $7.4 billion, down 21% from 2013.
In these states, the uninsured populations dropped as some residents gained insurance through the law's insurance exchanges and others who were already eligible for Medicaid enrolled as a result of the intense enrollment efforts tied to the coverage expansions, a dynamic known as the woodwork effect.
Still, HHS estimates hospitals could have saved an additional $1.4 billion if the remaining states had raised Medicaid eligibility.
http://www.modernhealthcare.com/article/20150323/NEWS/150329976?utm_source=modernhealthcare&utm_medium=email&utm_content=externalURL&utm_campaign=am
Hospitals' uncompensated-care costs in Medicaid expansion states were reduced by $5 billion in 2014, according to an HHS report.
The costs of uncompensated care declined $2.4 billion in states that did not expand the program, resulting in a total drop of $7.4 billion, down 21% from 2013.
In these states, the uninsured populations dropped as some residents gained insurance through the law's insurance exchanges and others who were already eligible for Medicaid enrolled as a result of the intense enrollment efforts tied to the coverage expansions, a dynamic known as the woodwork effect.
Still, HHS estimates hospitals could have saved an additional $1.4 billion if the remaining states had raised Medicaid eligibility.
http://www.modernhealthcare.com/article/20150323/NEWS/150329976?utm_source=modernhealthcare&utm_medium=email&utm_content=externalURL&utm_campaign=am
NFL to suspend TV blackout policy
The FCC previously ceased backing the blackout rule, although the league was still able to enforce it legally. The blackout rule keeps the broadcasts of games off TV in local markets when the home team doesn't sell enough tickets.
The league has suspended the policy for one year. The NFL "will evaluate the impact of the suspension after the season."
Full Content: The Wall Street Journal
The FCC previously ceased backing the blackout rule, although the league was still able to enforce it legally. The blackout rule keeps the broadcasts of games off TV in local markets when the home team doesn't sell enough tickets.
The league has suspended the policy for one year. The NFL "will evaluate the impact of the suspension after the season."
Full Content: The Wall Street Journal
Monsanto's Glyphosate (Roundup), found likely to have cancer potential
The determination, published by researchers for the International Agency for Research on Cancer in a U.K. medical journal, is likely to fuel further debate over the safety of the heavily used agricultural chemical, which Monsanto sells under the Roundup brand.
Consumer and environmental groups have long warned of health problems that they say could arise from applying the weedkiller on farms, while agricultural companies have touted the product’s safety and environmental impact as preferable to other, harsher chemicals. Officials at Monsanto and agricultural-chemical trade groups contested Friday’s finding, saying decades of research had proved glyphosate’s safety.
Glyphosate is the most-used herbicide in the U.S., according to the Environmental Protection Agency. Farmers have ramped up its use over the past two decades with the advent of genetically modified crops, including corn and soybeans, which can withstand sprayings of the chemical. Herbicide-tolerant biotech plants were grown on 94% of U.S. soybean fields and 89% of U.S. corn fields last year, according to the U.S. Department of Agriculture.
http://www.wsj.com/articles/health-agency-says-widely-used-herbicide-likely-carcinogenic-1426885547?mod=trending_now_1
The determination, published by researchers for the International Agency for Research on Cancer in a U.K. medical journal, is likely to fuel further debate over the safety of the heavily used agricultural chemical, which Monsanto sells under the Roundup brand.
Consumer and environmental groups have long warned of health problems that they say could arise from applying the weedkiller on farms, while agricultural companies have touted the product’s safety and environmental impact as preferable to other, harsher chemicals. Officials at Monsanto and agricultural-chemical trade groups contested Friday’s finding, saying decades of research had proved glyphosate’s safety.
Glyphosate is the most-used herbicide in the U.S., according to the Environmental Protection Agency. Farmers have ramped up its use over the past two decades with the advent of genetically modified crops, including corn and soybeans, which can withstand sprayings of the chemical. Herbicide-tolerant biotech plants were grown on 94% of U.S. soybean fields and 89% of U.S. corn fields last year, according to the U.S. Department of Agriculture.
http://www.wsj.com/articles/health-agency-says-widely-used-herbicide-likely-carcinogenic-1426885547?mod=trending_now_1
Federal cyber security bill: State AG pushback
American Banker reports that federal data security legislation has aroused State AG opposition.
Addressing a House proposal to create a national breach notification standard, a Massachusetts official warned lawmakers that the bill — authorizing the Federal Trade Commission to enforce new data security rules — could water down consumer protections and trump state authority.
"We understand federal standardization is the thrust of this bill," said Sara Cable, assistant attorney general in Massachusetts, before the House Energy and Commerce subcommittee on commerce, manufacturing and trade. "We do, however, have serious concerns that the standards set by this bill are too low, preempt too much and hamstring the ability of my office and that of the other attorney general offices across the country to continue our important work of protecting our consumers."
http://www.americanbanker.com/news/law-regulation/battle-over-cyber-bill-reveals-fissure-between-states-and-dc-1073316-1.html?zkPrintable=true
American Banker reports that federal data security legislation has aroused State AG opposition.
Addressing a House proposal to create a national breach notification standard, a Massachusetts official warned lawmakers that the bill — authorizing the Federal Trade Commission to enforce new data security rules — could water down consumer protections and trump state authority.
"We understand federal standardization is the thrust of this bill," said Sara Cable, assistant attorney general in Massachusetts, before the House Energy and Commerce subcommittee on commerce, manufacturing and trade. "We do, however, have serious concerns that the standards set by this bill are too low, preempt too much and hamstring the ability of my office and that of the other attorney general offices across the country to continue our important work of protecting our consumers."
http://www.americanbanker.com/news/law-regulation/battle-over-cyber-bill-reveals-fissure-between-states-and-dc-1073316-1.html?zkPrintable=true
Baltimore Sun questions Exelon-Pepco merger proposal -- MD AG files brief in opposition to the merger
From the Baltimore Sun: Now Exelon is seeking to buy Pepco Holdings Inc., which owns the electric distribution utilities in Maryland's Washington suburbs and the Eastern Shore, and that is another matter entirely. Exelon's purchase of BGE may not have been the disaster some predicted (at least so far), but the PHI deal involves substantially different issues with the potential to impact not just the customers of the utilities that are subject to acquisition but ratepayers throughout the state and region. In a brief filed this month in opposition to the merger, Attorney General Brian E. Frosh raised substantial questions about the concentration of market power and influence that the deal would create, and Exelon has so far not provided satisfactory answers to them.
http://www.baltimoresun.com/news/opinion/editorial/bs-ed-exelon-pepco-20150315-story.html
From the Washington Post:
District should reject Exelon-Pepco merger, energy think tank says in report
From the Baltimore Sun: Now Exelon is seeking to buy Pepco Holdings Inc., which owns the electric distribution utilities in Maryland's Washington suburbs and the Eastern Shore, and that is another matter entirely. Exelon's purchase of BGE may not have been the disaster some predicted (at least so far), but the PHI deal involves substantially different issues with the potential to impact not just the customers of the utilities that are subject to acquisition but ratepayers throughout the state and region. In a brief filed this month in opposition to the merger, Attorney General Brian E. Frosh raised substantial questions about the concentration of market power and influence that the deal would create, and Exelon has so far not provided satisfactory answers to them.
http://www.baltimoresun.com/news/opinion/editorial/bs-ed-exelon-pepco-20150315-story.html
From the Washington Post:
District should reject Exelon-Pepco merger, energy think tank says in report
Florida Attorney General Pam Biondi sues Singles Plus
Singles Plus, a South Carolina company, is charged with making false claims about its success rates, matches and overall screening process.
See http://www.lawfuel.com/singles-plus
Singles Plus, a South Carolina company, is charged with making false claims about its success rates, matches and overall screening process.
See http://www.lawfuel.com/singles-plus
The New York attorney general's antitrust suit against Actavis for attempting to force patients to switch to its new Alzheimer's medication, Namenda XR.
Actavus is alleged to have limited availability of the current versio of Namenda, slated to go off patent in July.
Actavis argues that the injunction benefits its generic rivals and actually stymies future innovation.
New York won an injunction in December that blocked the firm from limiting access to Namenda, a ruling appealed by the drug maker and now before the U.S. Court of Appeals for the Second Circuit. A decision could come as soon as next month and may help define how far firms can go to shield brand-name profits from generic rivals.
Full Content: Philly.com
Actavus is alleged to have limited availability of the current versio of Namenda, slated to go off patent in July.
Actavis argues that the injunction benefits its generic rivals and actually stymies future innovation.
New York won an injunction in December that blocked the firm from limiting access to Namenda, a ruling appealed by the drug maker and now before the U.S. Court of Appeals for the Second Circuit. A decision could come as soon as next month and may help define how far firms can go to shield brand-name profits from generic rivals.
Full Content: Philly.com
Bank of New York Mellon Will Settle Currency Trade Case for $714 Million
The Bank of New York Mellon will pay $714 million to settle accusations that it cheated government pension funds and other investors for more than a decade. It is part of a deal requiring the bank to dismiss some employees and make fuller public disclosures of its foreign exchange operation.
The settlement resolves lawsuits filed in 2011 by Preet Bharara, the United States attorney in Manhattan, and Eric T. Schneiderman, the New York attorney general.
http://www.nytimes.com/2015/03/20/business/dealbook/bank-of-new-york-mellon-to-pay-714-million-in-foreign-exchange-settlement.html?ref=business&_r=0
The Bank of New York Mellon will pay $714 million to settle accusations that it cheated government pension funds and other investors for more than a decade. It is part of a deal requiring the bank to dismiss some employees and make fuller public disclosures of its foreign exchange operation.
The settlement resolves lawsuits filed in 2011 by Preet Bharara, the United States attorney in Manhattan, and Eric T. Schneiderman, the New York attorney general.
http://www.nytimes.com/2015/03/20/business/dealbook/bank-of-new-york-mellon-to-pay-714-million-in-foreign-exchange-settlement.html?ref=business&_r=0
From Public Citizen blog: Neighborhood pollution in D.C. court
In an encouraging sign that courts are taking health and safety seriously in the neighborhood context, the D.C. Superior Court has issued an injunction against a man whose smoking fills his neighbors’ home with smoke, which has woken them up at night coughing and subjects their 18-month-old daughter to secondhand smoke, according to the nuisance claim the neighbors filed against the smoker. The Washington Post notes that the suit is part of a growing trend pitting smoking and non-smoking neighbors against each other, and the story cites cases from California and New York that resulted in relief for the victims of smoke pollution.
It’s hard not to sympathize a bit with the defendant, who wants to be left alone to do what he chooses in his home. But, according to the story, he has ignored the neighbors’ pleas to fix cracks in the common wall that create the smoke seepage. The argument that your home is your castle loses its force when what happens in your castle harms those beyond its walls.
You can read the story here.
In an encouraging sign that courts are taking health and safety seriously in the neighborhood context, the D.C. Superior Court has issued an injunction against a man whose smoking fills his neighbors’ home with smoke, which has woken them up at night coughing and subjects their 18-month-old daughter to secondhand smoke, according to the nuisance claim the neighbors filed against the smoker. The Washington Post notes that the suit is part of a growing trend pitting smoking and non-smoking neighbors against each other, and the story cites cases from California and New York that resulted in relief for the victims of smoke pollution.
It’s hard not to sympathize a bit with the defendant, who wants to be left alone to do what he chooses in his home. But, according to the story, he has ignored the neighbors’ pleas to fix cracks in the common wall that create the smoke seepage. The argument that your home is your castle loses its force when what happens in your castle harms those beyond its walls.
You can read the story here.
JUSTICE DEPARTMENT AND NEW YORK ATTORNEY GENERAL
SECURE SETTLEMENT WITH NEW YORK CITY TOUR BUS JOINT VENTURE
Settlement Remedies Harm to Competition in New York City Hop-On, Hop-Off Bus Tour Market and Requires Defendants to Disgorge $7.5 Million in Illegal Profits
From USDOJ press release: The Department of Justice and New York State Attorney General today announced that they have reached a settlement with Coach USA Inc., City Sights LLC and their joint venture, Twin America LLC, to remedy competitive concerns in the New York City hop-on, hop-off bus tour market. The settlement requires the defendants to relinquish all of City Sights’s Manhattan bus stop authorizations and disgorge $7.5 million in ill-gotten profits that the defendants obtained by operating Twin America in violation of the antitrust laws.
The settlement resolves a lawsuit filed on Dec. 11, 2012, in the U.S. District Court of the Southern District of New York alleging that the March 2009 formation of Twin America violated the antitrust laws and resulted in higher prices for hop-on, hop-off bus tours in New York City.
http://www.justice.gov/atr/public/press_releases/2015/312541.htm
SECURE SETTLEMENT WITH NEW YORK CITY TOUR BUS JOINT VENTURE
Settlement Remedies Harm to Competition in New York City Hop-On, Hop-Off Bus Tour Market and Requires Defendants to Disgorge $7.5 Million in Illegal Profits
From USDOJ press release: The Department of Justice and New York State Attorney General today announced that they have reached a settlement with Coach USA Inc., City Sights LLC and their joint venture, Twin America LLC, to remedy competitive concerns in the New York City hop-on, hop-off bus tour market. The settlement requires the defendants to relinquish all of City Sights’s Manhattan bus stop authorizations and disgorge $7.5 million in ill-gotten profits that the defendants obtained by operating Twin America in violation of the antitrust laws.
The settlement resolves a lawsuit filed on Dec. 11, 2012, in the U.S. District Court of the Southern District of New York alleging that the March 2009 formation of Twin America violated the antitrust laws and resulted in higher prices for hop-on, hop-off bus tours in New York City.
http://www.justice.gov/atr/public/press_releases/2015/312541.htm
The New York Times reports on financial companies' use of forced arbitration provisions to eliminate service members' rights.
Over the years, Congress has given service members a number of protections — some dating to the Civil War — from repossessions and foreclosures.
Efforts to maintain that special status for service members has run into resistance from the financial industry, including many of the same banks that promote the work they do for veterans. While using mandatory arbitration, some companies repeatedly violate the federal protections, leaving troops and their families vulnerable to predatory lending, the military lawyers and government officials say.
“Mandatory arbitration threatens to take these laws and basically tear them up,” said Col. John S. Odom Jr., a retired Air Force lawyer now in private practice in Shreveport, La.
The full article is here.
Over the years, Congress has given service members a number of protections — some dating to the Civil War — from repossessions and foreclosures.
Efforts to maintain that special status for service members has run into resistance from the financial industry, including many of the same banks that promote the work they do for veterans. While using mandatory arbitration, some companies repeatedly violate the federal protections, leaving troops and their families vulnerable to predatory lending, the military lawyers and government officials say.
“Mandatory arbitration threatens to take these laws and basically tear them up,” said Col. John S. Odom Jr., a retired Air Force lawyer now in private practice in Shreveport, La.
The full article is here.
CFPB Launches Public Inquiry to Inform Agency Review of the Credit Card Market
The Consumer Financial Protection Bureau (CFPB) announced it is seeking public comment on how the credit card market is functioning and the impact of credit card protections on consumers and issuers. This public inquiry will focus on issues including credit card terms, the use of consumer disclosures, credit card debt collection practices, and rewards programs, among others.
In 2009, Congress passed the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act, with the goal of bringing fairness and transparency to the credit card market. The CARD Act requires that the CFPB conduct a review of the consumer credit market every two years. As part of that review, the Bureau is seeking public comment from consumers, credit card issuers, industry analysts, consumer advocates, and others on the state of the credit card market.
http://www.consumerfinance.gov/newsroom/cfpb-launches-public-inquiry-to-inform-agency-review-of-the-credit-card-market/
The Consumer Financial Protection Bureau (CFPB) announced it is seeking public comment on how the credit card market is functioning and the impact of credit card protections on consumers and issuers. This public inquiry will focus on issues including credit card terms, the use of consumer disclosures, credit card debt collection practices, and rewards programs, among others.
In 2009, Congress passed the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act, with the goal of bringing fairness and transparency to the credit card market. The CARD Act requires that the CFPB conduct a review of the consumer credit market every two years. As part of that review, the Bureau is seeking public comment from consumers, credit card issuers, industry analysts, consumer advocates, and others on the state of the credit card market.
http://www.consumerfinance.gov/newsroom/cfpb-launches-public-inquiry-to-inform-agency-review-of-the-credit-card-market/
NY Times on Applepay vulnerability
It is not clear, however, that Apple is the naked emperor. More likely it is at least as much the banks’ fault, if not more.
Apple Pay itself should, in theory, cut down on fraud because it makes stealing credit card information almost impossible. Each time a transaction takes place, Apple generates the equivalent of a new credit card number so the merchant never actually sees a customer’s information.
The vulnerability in Apple Pay is in the way that it — and card issuers — “onboard” new credit cards into the system. Because Apple wanted its system to have the simplicity for which it has become famous and wanted to make the sign-up process “frictionless,” the company required little beyond basic credit card information about a user. Nor did it provide much information to the banks, like full phone numbers and addresses, that might help them detect fraud early.
The banks, desperate to become their customers’ default card on Apple Pay — most add only one to their iPhones — did little to build their own defenses or to push Apple to provide more detailed information about its customers. Some bank executives acknowledged that they were were so scared of Apple that they didn’t speak up. The banks didn’t press the company for fear that they would not be included among the initial issuers on Apple Pay. Within weeks of Apple Pay’s introduction, a second set of banks joined: Barclays, Navy Federal Credit Union, PNC Bank, USAA and U.S. Bank.
It also appears that banks set up a flawed process to deal with the credit cards that it did flag. Affected users were directed to a customer care phone center, not a fraud prevention center. A customer care center’s mission is to help customers use their cards, leading more fraudulent cards to be approved for use on Apple Pay.
Full article: http://www.nytimes.com/2015/03/17/business/banks-find-fraud-abounds-in-apple-pay.html?hpw&rref=technology&action=click&pg&module=well-region®ion=bottom-well&WT.nav=bottom-well&_r=0
It is not clear, however, that Apple is the naked emperor. More likely it is at least as much the banks’ fault, if not more.
Apple Pay itself should, in theory, cut down on fraud because it makes stealing credit card information almost impossible. Each time a transaction takes place, Apple generates the equivalent of a new credit card number so the merchant never actually sees a customer’s information.
The vulnerability in Apple Pay is in the way that it — and card issuers — “onboard” new credit cards into the system. Because Apple wanted its system to have the simplicity for which it has become famous and wanted to make the sign-up process “frictionless,” the company required little beyond basic credit card information about a user. Nor did it provide much information to the banks, like full phone numbers and addresses, that might help them detect fraud early.
The banks, desperate to become their customers’ default card on Apple Pay — most add only one to their iPhones — did little to build their own defenses or to push Apple to provide more detailed information about its customers. Some bank executives acknowledged that they were were so scared of Apple that they didn’t speak up. The banks didn’t press the company for fear that they would not be included among the initial issuers on Apple Pay. Within weeks of Apple Pay’s introduction, a second set of banks joined: Barclays, Navy Federal Credit Union, PNC Bank, USAA and U.S. Bank.
It also appears that banks set up a flawed process to deal with the credit cards that it did flag. Affected users were directed to a customer care phone center, not a fraud prevention center. A customer care center’s mission is to help customers use their cards, leading more fraudulent cards to be approved for use on Apple Pay.
Full article: http://www.nytimes.com/2015/03/17/business/banks-find-fraud-abounds-in-apple-pay.html?hpw&rref=technology&action=click&pg&module=well-region®ion=bottom-well&WT.nav=bottom-well&_r=0
NJ Senate passes bill permitting direct Tesla sales, without franchise dealers
The New Jersey Senate has passed legislation allowing Tesla Motors to sell its electric vehicles directly to consumers. Previously Tesla was required to sell cars only through dealerships.
The New Jersey Senate has passed legislation allowing Tesla Motors to sell its electric vehicles directly to consumers. Previously Tesla was required to sell cars only through dealerships.
Are Visa and MasterCard holding back payment system innovation?
Commenter Mark Horwedel suggests a yes answer. An excerpt from his comment follows:
Today, central planning for U.S. payments comes in the form of the leading card networks. The networks maintain a stranglehold over payments owing from the market power they exert over merchants and the discipline they demand from their bank constituents. U.S. banks are fearful of venturing beyond the pale in fear of upsetting the flow of supra-competitive interchange on their card products.
A good example of the banks' preoccupation with card-like revenue is the recent effort by NACHA to modernize the ACH. They have proposed adding a few more "batch" processes to a system that has remained basically unchanged for over 40 years, along with a new form of interchange designed to pay the banks to modernize their systems.
That new form interchange includes revenues from the "opportunity cost" of shifting away from the existing high-cost, supra-competitive interchange fees. Imagine if all U.S. industry looked to public and private interests to help maintain relevance without the risk of competition, rather than relying on individual competition between industry participants to weed out the bad and encourage the good.
The U.S. banking system has become a system based upon propping up the laggards, with a lowest common denominator mentality. Is the next step one in which the banks ask the federal government to buy up all their overbuilt branch networks?
The full content is at http://www.americanbanker.com/bankthink/the-fed-should-champion-and-lead-faster-payments-push-1073214-1.html?utm_campaign=daily%20briefing-mar%2013%202015&utm_medium=email&utm_source=newsletter&ET=americanbanker%3Ae3995559%3A4145571a%3A&st=email
Posted by Don Allen Resnikoff
Commenter Mark Horwedel suggests a yes answer. An excerpt from his comment follows:
Today, central planning for U.S. payments comes in the form of the leading card networks. The networks maintain a stranglehold over payments owing from the market power they exert over merchants and the discipline they demand from their bank constituents. U.S. banks are fearful of venturing beyond the pale in fear of upsetting the flow of supra-competitive interchange on their card products.
A good example of the banks' preoccupation with card-like revenue is the recent effort by NACHA to modernize the ACH. They have proposed adding a few more "batch" processes to a system that has remained basically unchanged for over 40 years, along with a new form of interchange designed to pay the banks to modernize their systems.
That new form interchange includes revenues from the "opportunity cost" of shifting away from the existing high-cost, supra-competitive interchange fees. Imagine if all U.S. industry looked to public and private interests to help maintain relevance without the risk of competition, rather than relying on individual competition between industry participants to weed out the bad and encourage the good.
The U.S. banking system has become a system based upon propping up the laggards, with a lowest common denominator mentality. Is the next step one in which the banks ask the federal government to buy up all their overbuilt branch networks?
The full content is at http://www.americanbanker.com/bankthink/the-fed-should-champion-and-lead-faster-payments-push-1073214-1.html?utm_campaign=daily%20briefing-mar%2013%202015&utm_medium=email&utm_source=newsletter&ET=americanbanker%3Ae3995559%3A4145571a%3A&st=email
Posted by Don Allen Resnikoff
Does popularity of mobile phone app Applepay mean reinforced market power for Visa and MasterCard?
See Apple Pay vs. CurrentC; will Merchants lose out again to Visa and MasterCard? by Avivah Litan The author suggests a yes answer, and that Apple Pay continues the same sort of antitrust concerns merchants have had about Visa and MC in the past. This is an area in which USDOJ, State enforcers, and private plaintiffs have been active, arguably with limited success.
View on blogs.gartner.com
Posted by Don Allen Resnikoff
See Apple Pay vs. CurrentC; will Merchants lose out again to Visa and MasterCard? by Avivah Litan The author suggests a yes answer, and that Apple Pay continues the same sort of antitrust concerns merchants have had about Visa and MC in the past. This is an area in which USDOJ, State enforcers, and private plaintiffs have been active, arguably with limited success.
View on blogs.gartner.com
Posted by Don Allen Resnikoff
From the NY Times: Exploitative subprime auto loans
Across the country, there is a booming business in lending to the working poor — those Americans with impaired credit who need cars to get to work. But this market is as much about Wall Street’s perpetual demand for high returns as it is about used cars. An influx of investor money is making more loans possible, but all that money may also be enabling excessive risk-taking that could have repercussions throughout the financial system, analysts and regulators caution.
The full article is at http://dealbook.nytimes.com/2015/01/26/investment-riches-built-on-auto-loans-to-poor/?ref=business&_r=0
Across the country, there is a booming business in lending to the working poor — those Americans with impaired credit who need cars to get to work. But this market is as much about Wall Street’s perpetual demand for high returns as it is about used cars. An influx of investor money is making more loans possible, but all that money may also be enabling excessive risk-taking that could have repercussions throughout the financial system, analysts and regulators caution.
The full article is at http://dealbook.nytimes.com/2015/01/26/investment-riches-built-on-auto-loans-to-poor/?ref=business&_r=0
From Public Citizen Consumer Law & Policy Blog: Senate bill would let students discharge loans in bankruptcy
"Since 2005, student borrowers have been unable to discharge their private student loans through the process of bankruptcy. But that could soon change after a group of [13] senators introduced a bill aimed at addressing the current student debt crisis by restoring the bankruptcy code to hold private student loans in the same regard as other private unsecured debts," the Consumerist explains.
The bill is here.
The summary prepared by the Senate sponsors is here.
NACA letter to the CFPB urging it to prohibit the use of forced arbitration in clauses in consumer finance contracts.
The CFPB released its final report on arbitration and it was unequivocally clear that consumers are harmed by forced arbitration. Now that the study is complete the CFPB is authorized to begin the rulemaking process. NACA (National Association of Consumer Advocates) has proposed a letter to CFPB on the topic and asks interested people to sign on. The DC Consumer Rights Coalition has signed on. The letter sends a message to the CFPB to prohibit forced arbitration as soon as possible.
Sign ons for this letter are due by Wednesday, March 18. SIGN ON HERE.
Contact person for NACA:
Ellen Taverna
Legislative Director
National Association of Consumer Advocates (NACA)
1215 17th Street, NW, 5th Floor
Washington, DC 20036
(202) 452-1989 ext. 109
Ellen@consumeradvocates.org
www.consumeradvocates.org
"Since 2005, student borrowers have been unable to discharge their private student loans through the process of bankruptcy. But that could soon change after a group of [13] senators introduced a bill aimed at addressing the current student debt crisis by restoring the bankruptcy code to hold private student loans in the same regard as other private unsecured debts," the Consumerist explains.
The bill is here.
The summary prepared by the Senate sponsors is here.
NACA letter to the CFPB urging it to prohibit the use of forced arbitration in clauses in consumer finance contracts.
The CFPB released its final report on arbitration and it was unequivocally clear that consumers are harmed by forced arbitration. Now that the study is complete the CFPB is authorized to begin the rulemaking process. NACA (National Association of Consumer Advocates) has proposed a letter to CFPB on the topic and asks interested people to sign on. The DC Consumer Rights Coalition has signed on. The letter sends a message to the CFPB to prohibit forced arbitration as soon as possible.
Sign ons for this letter are due by Wednesday, March 18. SIGN ON HERE.
Contact person for NACA:
Ellen Taverna
Legislative Director
National Association of Consumer Advocates (NACA)
1215 17th Street, NW, 5th Floor
Washington, DC 20036
(202) 452-1989 ext. 109
Ellen@consumeradvocates.org
www.consumeradvocates.org
From NY State press release: NYDFS ANNOUNCES COMMERZBANK TO PAY $1.45 BILLION, TERMINATE EMPLOYEES, INSTALL INDEPENDENT MONITOR FOR BANKING LAW VIOLATIONS
Bank Ignored Compliance Staff Warnings of Potential “Fraud, Asset Stripping, Market Manipulation, and Derivative Tax Offences”
Compliance Personnel Altered Bank Transaction Monitoring System; Calibrated System Based on a Desire Not to Generate “Too Many Alerts”
Commerzbank Employee: Bank’s Lax Compliance “A Time Bomb Ready to Go Off”
Benjamin M. Lawsky, New York Superintendent of Financial Services, announced that Commerzbank will pay a $1.45 billion penalty, terminate individual employees who engaged in misconduct, and install an independent monitor for Banking Law violations in connection with transactions on behalf of Iran, Sudan, and a Japanese corporation that engaged in accounting fraud. The overall $1.45 billion penalty includes $610 million to the Department of Financial Services (DFS); $300 million to the U.S. Attorney’s Office for the Southern District of New York; $200 million to the Federal Reserve; $172 million to the Manhattan District Attorney’s Office and $172 million to the U.S. Department of Justice.
Full press release: http://www.dfs.ny.gov/about/press2015/pr1503121.htm
Bank Ignored Compliance Staff Warnings of Potential “Fraud, Asset Stripping, Market Manipulation, and Derivative Tax Offences”
Compliance Personnel Altered Bank Transaction Monitoring System; Calibrated System Based on a Desire Not to Generate “Too Many Alerts”
Commerzbank Employee: Bank’s Lax Compliance “A Time Bomb Ready to Go Off”
Benjamin M. Lawsky, New York Superintendent of Financial Services, announced that Commerzbank will pay a $1.45 billion penalty, terminate individual employees who engaged in misconduct, and install an independent monitor for Banking Law violations in connection with transactions on behalf of Iran, Sudan, and a Japanese corporation that engaged in accounting fraud. The overall $1.45 billion penalty includes $610 million to the Department of Financial Services (DFS); $300 million to the U.S. Attorney’s Office for the Southern District of New York; $200 million to the Federal Reserve; $172 million to the Manhattan District Attorney’s Office and $172 million to the U.S. Department of Justice.
Full press release: http://www.dfs.ny.gov/about/press2015/pr1503121.htm
400-page net neutrality order released by the US Federal Communications Commission
The order includes a legal defense of the commission’s vote last month to reclassify broadband as a regulated telecommunications service.
The order, released in the wake of the commission’s vote to approve net neutrality rules in late February, establishes “clear and enforceable rules” to protect consumers, an FCC official said.
The actual changes to the Code of Federal Regulations that the FCC approved amount to eight pages, running from pages 283 to 290 in Appendix A of the order: See all 400 pages here https://www.scribd.com/doc/258494173/FCC-15-24A1
Full Content: The Washington Post
The order includes a legal defense of the commission’s vote last month to reclassify broadband as a regulated telecommunications service.
The order, released in the wake of the commission’s vote to approve net neutrality rules in late February, establishes “clear and enforceable rules” to protect consumers, an FCC official said.
The actual changes to the Code of Federal Regulations that the FCC approved amount to eight pages, running from pages 283 to 290 in Appendix A of the order: See all 400 pages here https://www.scribd.com/doc/258494173/FCC-15-24A1
Full Content: The Washington Post
Children's Health Insurance Program (CHIP) Should Be Extended --New Report by Bipartisan Policy Center
From BPC press release:
The State Children’s Health Insurance Program (CHIP) should be extended for a minimum of two years at the current authorized 2015 level of $21.1 billion per year with the long-term goal of unifying families under the same health insurance program or plan. Those are some of the recommendations released today by the Bipartisan Policy Center (BPC) as policymakers consider ways to extend CHIP funding and preserve health insurance for the estimated 8.13 million people who receive coverage under the program.
While the Patient Protection and Affordable Care Act (ACA) reauthorized CHIP through 2019, the law does not provide new funding for the program beyond September 2015. BPC’s recommendations for addressing this problem are highlighted in its upcoming report, The Role and Future of the Children’s Health Insurance Program. The report focuses on issues that impact coverage for lower-income children, including: changes in federal funding, interactions with the ACA, challenges facing state budgets in 2016, and the administrative complexities families face when enrolling in and navigating the health care system.
From BPC press release:
The State Children’s Health Insurance Program (CHIP) should be extended for a minimum of two years at the current authorized 2015 level of $21.1 billion per year with the long-term goal of unifying families under the same health insurance program or plan. Those are some of the recommendations released today by the Bipartisan Policy Center (BPC) as policymakers consider ways to extend CHIP funding and preserve health insurance for the estimated 8.13 million people who receive coverage under the program.
While the Patient Protection and Affordable Care Act (ACA) reauthorized CHIP through 2019, the law does not provide new funding for the program beyond September 2015. BPC’s recommendations for addressing this problem are highlighted in its upcoming report, The Role and Future of the Children’s Health Insurance Program. The report focuses on issues that impact coverage for lower-income children, including: changes in federal funding, interactions with the ACA, challenges facing state budgets in 2016, and the administrative complexities families face when enrolling in and navigating the health care system.
Most researchers fail to report clinical trial results as required by law
By Sabriya Rice, Modern Healthcare:
Anyone looking for the outcomes of thousands of closed or completed clinical trials isn't likely to find them, despite government mandates requiring the data be made available.
More than 80% of trials that should have posted results had not done so within one year of completion, and government funded research was the least likely to share findings, according research looking at clinical trial data between 2008 and 2012.
The inability to access trial data has been a bane of researchers, especially those trying to compare the effectiveness and optimal use of newer, more expensive therapies.
Full article: http://www.modernhealthcare.com/article/20150312/NEWS/150319970?utm_source=modernhealthcare&utm_medium=email&utm_content=externalURL&utm_campaign=am
By Sabriya Rice, Modern Healthcare:
Anyone looking for the outcomes of thousands of closed or completed clinical trials isn't likely to find them, despite government mandates requiring the data be made available.
More than 80% of trials that should have posted results had not done so within one year of completion, and government funded research was the least likely to share findings, according research looking at clinical trial data between 2008 and 2012.
The inability to access trial data has been a bane of researchers, especially those trying to compare the effectiveness and optimal use of newer, more expensive therapies.
Full article: http://www.modernhealthcare.com/article/20150312/NEWS/150319970?utm_source=modernhealthcare&utm_medium=email&utm_content=externalURL&utm_campaign=am
Blue Cross and Blue Shield of Massachusetts wants to expand its use of global budgets outside of managed care
But the plan's success will depend on how many doctors are willing to accept the risk.
Doctors across the country have criticized Medicare's accountable care contracts that make physicians responsible for curbing health spending without allowing them to influence where and when patients get care. But the Massachusetts Blues in recent weeks began to approach the state's medical groups with a similar proposal.
The company plans to introduce global budgets in its preferred provider organization health plans. The new model comes seven years after the insurer first offered global budgets in its managed care plans under what it calls Alternative Quality Contracts.
http://www.modernhealthcare.com/article/20150312/NEWS/150319971?utm_source=modernhealthcare&utm_medium=email&utm_content=externalURL&utm_campaign=am
But the plan's success will depend on how many doctors are willing to accept the risk.
Doctors across the country have criticized Medicare's accountable care contracts that make physicians responsible for curbing health spending without allowing them to influence where and when patients get care. But the Massachusetts Blues in recent weeks began to approach the state's medical groups with a similar proposal.
The company plans to introduce global budgets in its preferred provider organization health plans. The new model comes seven years after the insurer first offered global budgets in its managed care plans under what it calls Alternative Quality Contracts.
http://www.modernhealthcare.com/article/20150312/NEWS/150319971?utm_source=modernhealthcare&utm_medium=email&utm_content=externalURL&utm_campaign=am
NY AG reaches agreement with credit reporting agencies on error correction procedures
The nation’s giant credit reporting agencies — which keep records on more than 200 million individuals and influence their ability to get credit — have agreed to overhaul their approach to fixing errors and their treatment of medical debts on consumers’ reports.
Eric Scheneiderman, the New York State attorney general, announced Monday that his office had reached the settlement with the agencies.
“Credit reports touch every part of our lives,” Mr. Schneiderman said in a statement. “They affect whether we can obtain a credit card, take out a college loan, rent an apartment or buy a car — and sometimes even whether we can get jobs.”
The credit bureaus — Experian, Equifax and TransUnion — have long been criticized for the convoluted process that consumers must endure to get their credit reports fixed, among other things. Under the agreement, they will improve their dispute resolution process, which is largely automated, and instead use specially trained employees.
http://www.nytimes.com/2015/03/10/business/big-credit-reporting-agencies-to-overhaul-error-fixing-process.html?ref=business
The nation’s giant credit reporting agencies — which keep records on more than 200 million individuals and influence their ability to get credit — have agreed to overhaul their approach to fixing errors and their treatment of medical debts on consumers’ reports.
Eric Scheneiderman, the New York State attorney general, announced Monday that his office had reached the settlement with the agencies.
“Credit reports touch every part of our lives,” Mr. Schneiderman said in a statement. “They affect whether we can obtain a credit card, take out a college loan, rent an apartment or buy a car — and sometimes even whether we can get jobs.”
The credit bureaus — Experian, Equifax and TransUnion — have long been criticized for the convoluted process that consumers must endure to get their credit reports fixed, among other things. Under the agreement, they will improve their dispute resolution process, which is largely automated, and instead use specially trained employees.
http://www.nytimes.com/2015/03/10/business/big-credit-reporting-agencies-to-overhaul-error-fixing-process.html?ref=business
From American Banker: Should local government be in the banking business? Cato says no. North Dakota says yes.
A fresh wave of cities and states are considering public banking, but the Cato Institute's Mark Calabria says that government-owned banks are a cure worse than the disease. For one thing, he says, they're prone to corruption and mismanagement; for another, history shows that their "lending decisions become increasingly driven by politics rather than economics." But commenter "masaccio" argues that public banks are still a better alternative than megabanks: "At least the public banks can be made transparent by enforceable laws." And commenter "McVoice" leapt to the defense of the state-owned Bank of North Dakota, arguing that its partnerships with community banks allow small lenders to "make significantly larger-sized loans with more lines of business than their counterparts in other states."
A fresh wave of cities and states are considering public banking, but the Cato Institute's Mark Calabria says that government-owned banks are a cure worse than the disease. For one thing, he says, they're prone to corruption and mismanagement; for another, history shows that their "lending decisions become increasingly driven by politics rather than economics." But commenter "masaccio" argues that public banks are still a better alternative than megabanks: "At least the public banks can be made transparent by enforceable laws." And commenter "McVoice" leapt to the defense of the state-owned Bank of North Dakota, arguing that its partnerships with community banks allow small lenders to "make significantly larger-sized loans with more lines of business than their counterparts in other states."
From Public Citizen blog: Calls for CFPB to issue strong rules on payday lending
The Hill reports:
The chairs of the congressional progressive, Hispanic and Black caucuses are urging financial regulators to crack down on payday loans.
In a joint letter to Consumer Financial Protection Bureau Director Richard Cordray, Congressional Progressive Caucus Co-Chairs Keith Ellison (D-Minn.) and Raúl Grijalva (D-Ariz.), Hispanic Caucus Chair Linda Sánchez (D-Calif.) and Black Caucus Chair G.K. Butterfield (D-N.C.) called for strong rules to stem predatory practices that are based on exorbitant interest rates and high fees.
The letter is posted here.
A March 2014 CFPB report on payday loans found that a majority of the loans are rolled over or renewed within 14 days and that borrowers often pay more in fees than the amount originally borrowed.
The CFPB is expected to issue regulations for payday loans in the next month or two. Last month, the New York Times reported on the topics that the regulations are expected to address.
The Hill reports:
The chairs of the congressional progressive, Hispanic and Black caucuses are urging financial regulators to crack down on payday loans.
In a joint letter to Consumer Financial Protection Bureau Director Richard Cordray, Congressional Progressive Caucus Co-Chairs Keith Ellison (D-Minn.) and Raúl Grijalva (D-Ariz.), Hispanic Caucus Chair Linda Sánchez (D-Calif.) and Black Caucus Chair G.K. Butterfield (D-N.C.) called for strong rules to stem predatory practices that are based on exorbitant interest rates and high fees.
The letter is posted here.
A March 2014 CFPB report on payday loans found that a majority of the loans are rolled over or renewed within 14 days and that borrowers often pay more in fees than the amount originally borrowed.
The CFPB is expected to issue regulations for payday loans in the next month or two. Last month, the New York Times reported on the topics that the regulations are expected to address.
Ag coop merger concerns South Dakota farmers
News of a proposed merger of Wheat Growers and North Central Farmers Elevator has left some ag producers concerned about competition.
“I’ve received a lot of calls wondering what is going on,” said Doug Sombke, a Conde farmer and South Dakota Farmers Union president. “Most can see the logistics for agronomy being beneficial. But, as far as marketing their grain, it will not be better for them.”
Citing the potential for millions of dollars in savings and a better chance to compete with multi-national agribusinesscorporations, the co-ops jointly announced a planned merge into one mega-cooperative.
http://www.aberdeennews.com/news/local/wheat-growers-north-central-merger-proposal-sparks-competition-concerns/article_1c27fd12-e299-5724-9e58-d5ef07197d3c.html
News of a proposed merger of Wheat Growers and North Central Farmers Elevator has left some ag producers concerned about competition.
“I’ve received a lot of calls wondering what is going on,” said Doug Sombke, a Conde farmer and South Dakota Farmers Union president. “Most can see the logistics for agronomy being beneficial. But, as far as marketing their grain, it will not be better for them.”
Citing the potential for millions of dollars in savings and a better chance to compete with multi-national agribusinesscorporations, the co-ops jointly announced a planned merge into one mega-cooperative.
http://www.aberdeennews.com/news/local/wheat-growers-north-central-merger-proposal-sparks-competition-concerns/article_1c27fd12-e299-5724-9e58-d5ef07197d3c.html
Private litigation over Las Vegas newspaper merger is over
A recent change in ownership of the company that owns the Las Vegas Review-Journal ended a federal antitrust suit from its competitor.
US District Judge James Mahan issued a final ruling denying attorneys' fees and costs to former Review-Journal owner Stephens Media, after dismissing the antitrust suit against it as moot.
Review-Journal owner Brian Greenspun in August 2013 accused Stephens Media of violating the Clayton Antitrust Act and Nevada's Unfair Trade Practice Act when it tried to buy the Las Vegas Sun.
Mahan on Tuesday found that Stephens Media gave no "statutory or contractual basis for the court to impose attorney's fees" and denied the motion.
Full Content: Courthouse News Service
A recent change in ownership of the company that owns the Las Vegas Review-Journal ended a federal antitrust suit from its competitor.
US District Judge James Mahan issued a final ruling denying attorneys' fees and costs to former Review-Journal owner Stephens Media, after dismissing the antitrust suit against it as moot.
Review-Journal owner Brian Greenspun in August 2013 accused Stephens Media of violating the Clayton Antitrust Act and Nevada's Unfair Trade Practice Act when it tried to buy the Las Vegas Sun.
Mahan on Tuesday found that Stephens Media gave no "statutory or contractual basis for the court to impose attorney's fees" and denied the motion.
Full Content: Courthouse News Service
A New York state appeals court has approved Bank of America’s $8.5 billion deal with investors over bad mortgages
The decision potentially putting to rest a legal dispute that dates to 2011.
The decision is likely to resolve one of the second-largest U.S. bank's last and largest legal liabilities related to the financial crisis.
The ruling by the appeals court reversed a decision made by a New York State Supreme Court judge in January 2014, which concluded that Bank of America did not have to repurchase the faulty loans because the trustee, Bank of New York-Mellon, did not evaluate them properly.
Bank of America had agreed to the 2011 settlement with 22 bondholder groups including Blackrock Inc. and Pacific Investment Management Co. The deal was over claims that the lender’s Countrywide unit bungled servicing and didn’t repurchase shoddy mortgages.
http://www.mpamag.com/mortgage-originator/finally-judge-approves-8-5b-bofa-mortgage-bond-settlement--21605.aspx
The decision potentially putting to rest a legal dispute that dates to 2011.
The decision is likely to resolve one of the second-largest U.S. bank's last and largest legal liabilities related to the financial crisis.
The ruling by the appeals court reversed a decision made by a New York State Supreme Court judge in January 2014, which concluded that Bank of America did not have to repurchase the faulty loans because the trustee, Bank of New York-Mellon, did not evaluate them properly.
Bank of America had agreed to the 2011 settlement with 22 bondholder groups including Blackrock Inc. and Pacific Investment Management Co. The deal was over claims that the lender’s Countrywide unit bungled servicing and didn’t repurchase shoddy mortgages.
http://www.mpamag.com/mortgage-originator/finally-judge-approves-8-5b-bofa-mortgage-bond-settlement--21605.aspx
From Modern Health Care: Hospitals
struggle to plan during King v. Burwell wait
By Melanie Evans and Beth Kutscher |
Hospitals are just beginning to hash out contingency plans as the waiting begins for the U.S. Supreme Court to decide whether to end insurance subsidies in most of the country.
Some of the financial gains that hospitals have experienced from having a greater number of insured patients may be erased if the court rejects the use of subsidies for individuals who purchase health plans from the federal exchange.
The loss of subsidies would affect about 7.5 million people in at least 34 states if the plaintiffs prevail in King v. Burwell. The subsidies offset nearly three-quarters of household premium costs.
* * *
If those patients lose their subsidies, Mike Lappin of Aurora Health Care said, Aurora would likely see a rebound in unpaid medical bills and financial aid requests—both of which declined after many of the state's uninsured residents gained coverage with the help of the subsidies. Patients who lose insurance, he added, are likely to delay care until a health emergency sends them to the hospital. “That's not a great situation for anyone,” he said.
Trinity Health, a national not-for-profit health system based in Livonia, Mich., said it would work with Congress, the CMS and state leaders to help patients keep their insurance if the Supreme Court strikes down the subsidies.
"We're mindful that 4.2 million people in the states where we serve are at risk of losing their health insurance and we are, therefore, engaged in King v. Burwell scenario planning on several fronts,” said Tina Grant, Trinity's vice president of public policy and state advocacy. “For us, the public policy space is the most pressing. Should the Supreme Court rule in favor of plaintiffs, we are hopeful that a legislative patch will follow shortly to prevent coverage gaps."
The system was among the not-for-profit hospital operators to modify its charity care policy to limit financial aid for patients who are eligible for Affordable Care Act subsidies. "If a lack of subsidies prevents people from enrolling, or forces them to drop coverage, we have reviewed our current charity care policy and are confident that we are well-positioned to accommodate those individuals," Grant said.
http://www.modernhealthcare.com/article/20150305/NEWS/150309938/hospitals-struggle-to-plan-during-king-v-burwell-wait
By Melanie Evans and Beth Kutscher |
Hospitals are just beginning to hash out contingency plans as the waiting begins for the U.S. Supreme Court to decide whether to end insurance subsidies in most of the country.
Some of the financial gains that hospitals have experienced from having a greater number of insured patients may be erased if the court rejects the use of subsidies for individuals who purchase health plans from the federal exchange.
The loss of subsidies would affect about 7.5 million people in at least 34 states if the plaintiffs prevail in King v. Burwell. The subsidies offset nearly three-quarters of household premium costs.
* * *
If those patients lose their subsidies, Mike Lappin of Aurora Health Care said, Aurora would likely see a rebound in unpaid medical bills and financial aid requests—both of which declined after many of the state's uninsured residents gained coverage with the help of the subsidies. Patients who lose insurance, he added, are likely to delay care until a health emergency sends them to the hospital. “That's not a great situation for anyone,” he said.
Trinity Health, a national not-for-profit health system based in Livonia, Mich., said it would work with Congress, the CMS and state leaders to help patients keep their insurance if the Supreme Court strikes down the subsidies.
"We're mindful that 4.2 million people in the states where we serve are at risk of losing their health insurance and we are, therefore, engaged in King v. Burwell scenario planning on several fronts,” said Tina Grant, Trinity's vice president of public policy and state advocacy. “For us, the public policy space is the most pressing. Should the Supreme Court rule in favor of plaintiffs, we are hopeful that a legislative patch will follow shortly to prevent coverage gaps."
The system was among the not-for-profit hospital operators to modify its charity care policy to limit financial aid for patients who are eligible for Affordable Care Act subsidies. "If a lack of subsidies prevents people from enrolling, or forces them to drop coverage, we have reviewed our current charity care policy and are confident that we are well-positioned to accommodate those individuals," Grant said.
http://www.modernhealthcare.com/article/20150305/NEWS/150309938/hospitals-struggle-to-plan-during-king-v-burwell-wait
Apple Inc. ’s mobile-payment system hit by fraudulent transactions using credit data stolen in breaches of retailers
Data includes Home Depot Inc. and Target Corp.
About 80% of the unauthorized purchases have been for big-ticket items purchased with smartphones at Apple’s own stores.
http://www.wsj.com/articles/apple-pay-stung-bylow-techfraudsters-1425603036
Data includes Home Depot Inc. and Target Corp.
About 80% of the unauthorized purchases have been for big-ticket items purchased with smartphones at Apple’s own stores.
http://www.wsj.com/articles/apple-pay-stung-bylow-techfraudsters-1425603036
New Jersey’s proposed $225 million settlement with Exxon Mobil Corp. for years of environmental damage under scrutiny
From WSJ Marketwatch:
Legislators and environmentalists called for separate probes and rejection of the deal.
During a court battle spanning a decade, state officials had argued for $8.9 billion. Exxon XOM, -0.50% officials called that unreasonable. The Christie administration defended the settlement Thursday and released some details.
The state called the damage “staggering and unprecedented,” citing environmental experts and others in the litigation. A judge had been expected to rule on damages later this year. Christie’s administration sought a delay while it apparently negotiated with Exxon.
The Christie administration said the settlement was the largest environmental settlement in the state’s history and that it was committed to the environment. The settlement came within a year of Exxon Mobil giving $500,000 to the Republican Governors Association, which Mr. Christie led in 2014, trumpeting its record fundraising numbers.
Vhttp://www.marketwatch.com/story/new-jerseys-exxon-settlement-set-for-more-scrutiny-2015-03-0514103531
From WSJ Marketwatch:
Legislators and environmentalists called for separate probes and rejection of the deal.
During a court battle spanning a decade, state officials had argued for $8.9 billion. Exxon XOM, -0.50% officials called that unreasonable. The Christie administration defended the settlement Thursday and released some details.
The state called the damage “staggering and unprecedented,” citing environmental experts and others in the litigation. A judge had been expected to rule on damages later this year. Christie’s administration sought a delay while it apparently negotiated with Exxon.
The Christie administration said the settlement was the largest environmental settlement in the state’s history and that it was committed to the environment. The settlement came within a year of Exxon Mobil giving $500,000 to the Republican Governors Association, which Mr. Christie led in 2014, trumpeting its record fundraising numbers.
Vhttp://www.marketwatch.com/story/new-jerseys-exxon-settlement-set-for-more-scrutiny-2015-03-0514103531
Opinion: Adequate funding is required for the AG to carry out consumer protection enforcement
We previously cited the Washington Post opinion article talking about political infighting concerning the roles of the DC Attorney General and the Office of Legal Counsel. From the article: There’s no question, however, that a train wreck is ahead. The council should repeal immediately the legislation that created the Office of Legal Counsel, returning staff and resources to [AG] Racine. Council members also may want to provide the AG with some budgetary independence.
The article noted some of D.C Attorney General Racine's priorities, including, among others, consumer protection
The wrangling about the role of the Office of Legal Counsel seems unfortunate -- the AG's authority should be respected. From a consumer protection advocacy perspective, a key need is for the legislative body, the D.C. Council, to provide adequate funding for consumer protection. The AG's consumer protection litigated cases generate enough revenue from fines, penalties, fees and other litigation-based money recoveries to fund vigorous enforcement. Until a few years ago such such recoveries were used to support funds created by statute and decdicated to consumer and antitrust enforcement. Now those statutes are repealed, and the recoveries go into a general fund, allocated by the Council to the AG. In theory that's fine -- the DC Council could decide to plow back the AG's money recoveries into substantial new enforcement. But from a consumer advocacy perspective it needs to be one or the other, so money is available for vigorous consumer protection and antitrust enforcement.
There may be reasons for limiting consumer protection enforcement and holding back adequate funding, but from a consumer advocacy perspective they are not likely to be good reasons.
http://www.washingtonpost.com/opinions/a-headache-for-dcs-elected-attorney-general/2015/02/18/b74a7d9e-b6b3-11e4-aa05-1ce812b3fdd2_story.html
Posted by Don Allen Resnikoff, 3-1-2015
We previously cited the Washington Post opinion article talking about political infighting concerning the roles of the DC Attorney General and the Office of Legal Counsel. From the article: There’s no question, however, that a train wreck is ahead. The council should repeal immediately the legislation that created the Office of Legal Counsel, returning staff and resources to [AG] Racine. Council members also may want to provide the AG with some budgetary independence.
The article noted some of D.C Attorney General Racine's priorities, including, among others, consumer protection
The wrangling about the role of the Office of Legal Counsel seems unfortunate -- the AG's authority should be respected. From a consumer protection advocacy perspective, a key need is for the legislative body, the D.C. Council, to provide adequate funding for consumer protection. The AG's consumer protection litigated cases generate enough revenue from fines, penalties, fees and other litigation-based money recoveries to fund vigorous enforcement. Until a few years ago such such recoveries were used to support funds created by statute and decdicated to consumer and antitrust enforcement. Now those statutes are repealed, and the recoveries go into a general fund, allocated by the Council to the AG. In theory that's fine -- the DC Council could decide to plow back the AG's money recoveries into substantial new enforcement. But from a consumer advocacy perspective it needs to be one or the other, so money is available for vigorous consumer protection and antitrust enforcement.
There may be reasons for limiting consumer protection enforcement and holding back adequate funding, but from a consumer advocacy perspective they are not likely to be good reasons.
http://www.washingtonpost.com/opinions/a-headache-for-dcs-elected-attorney-general/2015/02/18/b74a7d9e-b6b3-11e4-aa05-1ce812b3fdd2_story.html
Posted by Don Allen Resnikoff, 3-1-2015
New York State bank regulator on money laundering and security requirements
Benjamin M. Lawsky, New York’s superintendent of Financial Services, said in a speech that his office is considering requiring senior bank executives to personally attest to the adequacy of their systems guarding against money laundering. He also wants banks to receive warranties from third-party vendors that those providers have cybersecurity protections in place, among other requirements.
http://www.wsj.com/articles/lawsky-proposes-new-cybersecurity-money-laundering-rules-for-banks-1424885911
Benjamin M. Lawsky, New York’s superintendent of Financial Services, said in a speech that his office is considering requiring senior bank executives to personally attest to the adequacy of their systems guarding against money laundering. He also wants banks to receive warranties from third-party vendors that those providers have cybersecurity protections in place, among other requirements.
http://www.wsj.com/articles/lawsky-proposes-new-cybersecurity-money-laundering-rules-for-banks-1424885911
From AAI: Praise for Supreme Court’s State-Action Decision
The American Antitrust Institute (AAI) applauds the Supreme Court’s ruling in North Carolina State Board of Dental Examiners v. Federal Trade Commission. The AAI had filed a brief supporting the position adopted by the Court.
The Court held that “a state board on which a controlling number of decision makers are active market participants in the occupation the board regulates must satisfy Midcal’s active supervision requirement in order to invoke state-action antitrust immunity.”
“This is a tremendous victory for the FTC,” said the AAI Vice President and General Counsel Richard Brunell.
See http://antitrustinstitute.org/content/aai-praises-supreme-courts-state-action-decision
The American Antitrust Institute (AAI) applauds the Supreme Court’s ruling in North Carolina State Board of Dental Examiners v. Federal Trade Commission. The AAI had filed a brief supporting the position adopted by the Court.
The Court held that “a state board on which a controlling number of decision makers are active market participants in the occupation the board regulates must satisfy Midcal’s active supervision requirement in order to invoke state-action antitrust immunity.”
“This is a tremendous victory for the FTC,” said the AAI Vice President and General Counsel Richard Brunell.
See http://antitrustinstitute.org/content/aai-praises-supreme-courts-state-action-decision
From the ABA: FTC Cracks Down on Marketers of "Melanoma Detection" Apps
Federal Trade Commission - The Federal Trade Commission has challenged marketers for deceptively claiming their mobile apps could detect symptoms of melanoma, even in its early stages.
Click title for link
From The ABA: CFPB Seeks to Improve Process for Industry Submission of Consumer Credit Card Agreements
Consumer Financial Protection Bureau - The Consumer Financial Protection Bureau has issued a proposal aimed at improving the way that companies submit consumer credit card agreements to the Bureau.
Click title for link
Federal Trade Commission - The Federal Trade Commission has challenged marketers for deceptively claiming their mobile apps could detect symptoms of melanoma, even in its early stages.
Click title for link
From The ABA: CFPB Seeks to Improve Process for Industry Submission of Consumer Credit Card Agreements
Consumer Financial Protection Bureau - The Consumer Financial Protection Bureau has issued a proposal aimed at improving the way that companies submit consumer credit card agreements to the Bureau.
Click title for link
From Public Citizen blog: Joint Enforcement Action: Maryland Attorney General and CFPB Act On Illegal Mortgage Kickbacs
By Peter A. Holland:
In a time of limited resources, perhaps a new model is emerging of joint CFPB/State Attorney General enforcement actions. The recent joint action by the Bureau and Maryland Attorney General Brian Frosh provides a nice case study.
Recently, Maryland Attorney General Brian Frosh and the Consumer Financial Protection Bureau took an action against a mortgage kickback scheme involving former Maryland title company Genuine Title, LLC and employees at national banks Wells Fargo and JPMorgan Chase. “Homeowners were steered toward this title company, not because they were the best or most affordable, but because they were providing kickbacks to loan officers . . . this type of quid pro quo is illegal, and it's unfair to other businesses." Said Maryland Attorney General Brian Frosh. The complaint in the case is available here.
For full article: http://feedproxy.google.com/~r/ConsumerLawPolicyBlog/~3/U_b1QfFplYg/joint-enforcement-action-maryland-attorney-general-and-cfpb-act-on-illegal-mortgage-kickbacks.html?utm_source=feedburner&utm_medium=email
By Peter A. Holland:
In a time of limited resources, perhaps a new model is emerging of joint CFPB/State Attorney General enforcement actions. The recent joint action by the Bureau and Maryland Attorney General Brian Frosh provides a nice case study.
Recently, Maryland Attorney General Brian Frosh and the Consumer Financial Protection Bureau took an action against a mortgage kickback scheme involving former Maryland title company Genuine Title, LLC and employees at national banks Wells Fargo and JPMorgan Chase. “Homeowners were steered toward this title company, not because they were the best or most affordable, but because they were providing kickbacks to loan officers . . . this type of quid pro quo is illegal, and it's unfair to other businesses." Said Maryland Attorney General Brian Frosh. The complaint in the case is available here.
For full article: http://feedproxy.google.com/~r/ConsumerLawPolicyBlog/~3/U_b1QfFplYg/joint-enforcement-action-maryland-attorney-general-and-cfpb-act-on-illegal-mortgage-kickbacks.html?utm_source=feedburner&utm_medium=email
Washington Post: Will DC's new AG's enforcement goals be undermined by political infighting?
From the WP article: “Under the home-rule charter the AG is the chief legal officer, and only it is empowered to represent the city or advocate for the public interest in court,” [AG] Racine told me during a recent conversation. We spoke about his vision for his tenure, which he said includes juvenile-justice reform, greater emphasis on consumer protections and an aggressive campaign to prevent waste, fraud and abuse of government resources.
More from the article: There’s no question, however, that a train wreck is ahead. The council should repeal immediately the legislation that created the Office of Legal Counsel, returning staff and resources to Racine. Council members also may want to provide the AG with some budgetary independence.
http://www.washingtonpost.com/opinions/a-headache-for-dcs-elected-attorney-general/2015/02/18/b74a7d9e-b6b3-11e4-aa05-1ce812b3fdd2_story.html
From the WP article: “Under the home-rule charter the AG is the chief legal officer, and only it is empowered to represent the city or advocate for the public interest in court,” [AG] Racine told me during a recent conversation. We spoke about his vision for his tenure, which he said includes juvenile-justice reform, greater emphasis on consumer protections and an aggressive campaign to prevent waste, fraud and abuse of government resources.
More from the article: There’s no question, however, that a train wreck is ahead. The council should repeal immediately the legislation that created the Office of Legal Counsel, returning staff and resources to Racine. Council members also may want to provide the AG with some budgetary independence.
http://www.washingtonpost.com/opinions/a-headache-for-dcs-elected-attorney-general/2015/02/18/b74a7d9e-b6b3-11e4-aa05-1ce812b3fdd2_story.html
ABA Book Review: A Harsh Report Card on the Merger Enforcement Process
Robert Skitol describes some of the key findings in John Kwoka’s new book assessing the U.S. antitrust agencies’
merger enforcement record. Based on his findings that a significant number of both cleared and challenged mergers
result in anticompetitive price increases, Kwoka calls for the agencies to undertake more retrospective analyses
of their merger review programs.
http://www.americanbar.org/content/dam/aba/publishing/antitrust_source/feb15_full_source.authcheckdam.pdf
Robert Skitol describes some of the key findings in John Kwoka’s new book assessing the U.S. antitrust agencies’
merger enforcement record. Based on his findings that a significant number of both cleared and challenged mergers
result in anticompetitive price increases, Kwoka calls for the agencies to undertake more retrospective analyses
of their merger review programs.
http://www.americanbar.org/content/dam/aba/publishing/antitrust_source/feb15_full_source.authcheckdam.pdf
From Public Citizen blog: Study of Public Participation in Rulemaking and Plain Language
Cynthia R. Farina, Mary Newhart, and Cheryl L. Blake, all of Cornell, have written The Problem with Words: Plain Language and Public Participation in Rulemaking, George Washington Law Review (2015 Forthcoming). Here's part of the abstract:
The connection between more understandable rule making materials and broader, better public participation seems obvious, Yet the series of Presidential and statutory plain-language directives issues over the last 5 decades have not even mentioned the relationship of comprehensibility to participation — until very recently. In 2012, the Office of Information and Regulatory Affairs (OIRA) issued “guidance” instructing that “straightforward executive summaries” be included in “lengthy or complex rules.” OIRA reasoned that “[p]ublic participation cannot occur … if members of the public are unable to obtain a clear sense of the content of [regulatory] requirements.”
The plain language concern is, of course, not just a federal issue, but applies to state and municipal action as well.
Cynthia R. Farina, Mary Newhart, and Cheryl L. Blake, all of Cornell, have written The Problem with Words: Plain Language and Public Participation in Rulemaking, George Washington Law Review (2015 Forthcoming). Here's part of the abstract:
The connection between more understandable rule making materials and broader, better public participation seems obvious, Yet the series of Presidential and statutory plain-language directives issues over the last 5 decades have not even mentioned the relationship of comprehensibility to participation — until very recently. In 2012, the Office of Information and Regulatory Affairs (OIRA) issued “guidance” instructing that “straightforward executive summaries” be included in “lengthy or complex rules.” OIRA reasoned that “[p]ublic participation cannot occur … if members of the public are unable to obtain a clear sense of the content of [regulatory] requirements.”
The plain language concern is, of course, not just a federal issue, but applies to state and municipal action as well.
Rural Health Care and State Antitrust Reform
Article by Michael S. Jacobs (DePaul University) Author's abstract:
Two premises underlie state health care antitrust law reform measures. The first presumes that the federal antitrust laws prevent efficiency-enhancing collaborations and that, by displacing the federal regime, states can encourage health care firms to generate cost savings that they in turn will pass on to consumers. The second presumes that rural markets in particular will benefit from the continued presence of their "traditional" health care providers now threatened with extinction and that provider cooperation laws will resuscitate firms that would otherwise perish.
These are laudable goals, but they are ill conceived and mutually inconsistent. As I shall argue in the following pages, these new laws are unresponsive to the major problems of rural communities, unnecessary to facilitate provider cooperation, and administratively unworkable. They benefit existing, inefficient providers and work against the emergence of new forms of health care. They threaten to harm consumers, especially "marginal" ones. Moreover, the appearance of these laws coincides with two developments that seem to make antitrust reform superfluous. Since 1993, federal agencies have gone to extraordinary lengths to spell out their enforcement policies in the health care field and to assure health care providers that the large majority of their collaborative efforts will pass unchallenged. At the same time, federal courts have substantially changed their view of health care markets, effectively making it much more difficult for enforcement agencies to bring successful challenges to mergers and joint ventures.
To download paper: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2563803
Article by Michael S. Jacobs (DePaul University) Author's abstract:
Two premises underlie state health care antitrust law reform measures. The first presumes that the federal antitrust laws prevent efficiency-enhancing collaborations and that, by displacing the federal regime, states can encourage health care firms to generate cost savings that they in turn will pass on to consumers. The second presumes that rural markets in particular will benefit from the continued presence of their "traditional" health care providers now threatened with extinction and that provider cooperation laws will resuscitate firms that would otherwise perish.
These are laudable goals, but they are ill conceived and mutually inconsistent. As I shall argue in the following pages, these new laws are unresponsive to the major problems of rural communities, unnecessary to facilitate provider cooperation, and administratively unworkable. They benefit existing, inefficient providers and work against the emergence of new forms of health care. They threaten to harm consumers, especially "marginal" ones. Moreover, the appearance of these laws coincides with two developments that seem to make antitrust reform superfluous. Since 1993, federal agencies have gone to extraordinary lengths to spell out their enforcement policies in the health care field and to assure health care providers that the large majority of their collaborative efforts will pass unchallenged. At the same time, federal courts have substantially changed their view of health care markets, effectively making it much more difficult for enforcement agencies to bring successful challenges to mergers and joint ventures.
To download paper: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2563803
Advocates Urge FTC to Reject Post-MOM Brands Cereal Merger
From Food and Water Watch: 22 consumer, community, farm, faith, food and hunger organizations sent a letter to the U.S. Federal Trade Commission (FTC) and the 50 state attorneys general urging a full investigation into the recently proposed merger between breakfast cereal manufacturers Post Holdings, Inc. and MOM Brands.
The letter outlines the existing lack of competition in the cereal industry, with the top four firms selling 80 percent of ready-to-eat breakfast cereals in 2014. The proposed merger would make the marketplace even more consolidated, with the four largest firms selling nearly 90 percent of all cereal.
Both companies manufacture private label, or grocery-store brand, generic cereal. The merged company will not only control more than one-sixth of the branded marketplace, it will control a portion of the lowest-cost cereals as well. Both Post and MOM Brands have higher-value, “natural” brands and MOM Brands is a significant manufacturer of discount copycat brands of cereal.
“The cereal aisle is one of the least competitive places in the grocery store,” said Wenonah Hauter, executive director of Food & Water Watch. “This proposed merger would join traditional brands, private label, and discount brands, taking choices away from consumers, especially those who are trying to stretch their grocery dollars by shopping for discount brands.”
For complete article: http://www.foodandwaterwatch.org/pressreleases/advocates-urge-ftc-to-reject-post-mom-brands-cereal-merger/
From Food and Water Watch: 22 consumer, community, farm, faith, food and hunger organizations sent a letter to the U.S. Federal Trade Commission (FTC) and the 50 state attorneys general urging a full investigation into the recently proposed merger between breakfast cereal manufacturers Post Holdings, Inc. and MOM Brands.
The letter outlines the existing lack of competition in the cereal industry, with the top four firms selling 80 percent of ready-to-eat breakfast cereals in 2014. The proposed merger would make the marketplace even more consolidated, with the four largest firms selling nearly 90 percent of all cereal.
Both companies manufacture private label, or grocery-store brand, generic cereal. The merged company will not only control more than one-sixth of the branded marketplace, it will control a portion of the lowest-cost cereals as well. Both Post and MOM Brands have higher-value, “natural” brands and MOM Brands is a significant manufacturer of discount copycat brands of cereal.
“The cereal aisle is one of the least competitive places in the grocery store,” said Wenonah Hauter, executive director of Food & Water Watch. “This proposed merger would join traditional brands, private label, and discount brands, taking choices away from consumers, especially those who are trying to stretch their grocery dollars by shopping for discount brands.”
For complete article: http://www.foodandwaterwatch.org/pressreleases/advocates-urge-ftc-to-reject-post-mom-brands-cereal-merger/
From Public Citizen blog: Should Macao Music Group Be Able to Identify Twitter Users Criticizing Its CEO?
We [Public Citizen] recently filed an amicus brief about the standards for subpoenas identifying anonymous Internet users accused of defamatory or otherwise wrongful communications in a surprising venue - the United States District Court for the Northern District of California. The underlying case was filed in the Western District of Washington by Macao Music Group, an offshore conglomerate of companies making pro audio and music equipment, and by a Washington state subsidiary, against the anonymous authors of a pair of parody Twitter accounts named "FakeUli" and "NotUliBehringer," playing on the name of Macao's CEO, Uli Behringer.
The complaint in the case asserts that various tweets accused Behringer of consorting with prostitutes, and accused the companies of making shoddy products and encouraging domestic violence and child abuse. Plaintiffs then issued a subpoena in the Northern District of California. Twitter, however, resisted the subpoena on the ground that there was no proof of wrongdoing, and plaintiffs moved to compel, telling the Court about the Dendrite line of cases (with emphasis on one of the cases, Salehoo v Doe, decided in the forum court, the Western District of Washington, and arguing that those standards were met because the statements were so plainly defamatory. Twitter took no position on whether the standard had been met, but simply urged the Court not to compel compliance with the subpoena unless the Court was satisfied that the Dendrite standard had been satisfied.
For full article click title or see http://pubcit.typepad.com/clpblog/
We [Public Citizen] recently filed an amicus brief about the standards for subpoenas identifying anonymous Internet users accused of defamatory or otherwise wrongful communications in a surprising venue - the United States District Court for the Northern District of California. The underlying case was filed in the Western District of Washington by Macao Music Group, an offshore conglomerate of companies making pro audio and music equipment, and by a Washington state subsidiary, against the anonymous authors of a pair of parody Twitter accounts named "FakeUli" and "NotUliBehringer," playing on the name of Macao's CEO, Uli Behringer.
The complaint in the case asserts that various tweets accused Behringer of consorting with prostitutes, and accused the companies of making shoddy products and encouraging domestic violence and child abuse. Plaintiffs then issued a subpoena in the Northern District of California. Twitter, however, resisted the subpoena on the ground that there was no proof of wrongdoing, and plaintiffs moved to compel, telling the Court about the Dendrite line of cases (with emphasis on one of the cases, Salehoo v Doe, decided in the forum court, the Western District of Washington, and arguing that those standards were met because the statements were so plainly defamatory. Twitter took no position on whether the standard had been met, but simply urged the Court not to compel compliance with the subpoena unless the Court was satisfied that the Dendrite standard had been satisfied.
For full article click title or see http://pubcit.typepad.com/clpblog/
Warren: Wall Street using small banks to weaken rules
Sen. Elizabeth Warren (D-Mass.) says big banks are using small banks to weaken financial regulations. The accusation came during a Senate Banking hearing on February 10 that sought to examine ways to provide regulatory relief to community banks and credit unions.
Warren said big Wall Street firms bent on beating back rules set forth in the Dodd-Frank financial reform law are behind the push.:"The big banks are going to keep using the small banks as cover for their special rollbacks," Warren said. "That's what they did before the [2008 economic] crisis and that's what they've been doing after the crisis. We shouldn't fall for that trick." Other Senators had differing views.
http://blogs.wsj.com/washwire/2015/02/10/senators-warn-wall-street-no-free-ride-on-small-bank-bills/
Sen. Elizabeth Warren (D-Mass.) says big banks are using small banks to weaken financial regulations. The accusation came during a Senate Banking hearing on February 10 that sought to examine ways to provide regulatory relief to community banks and credit unions.
Warren said big Wall Street firms bent on beating back rules set forth in the Dodd-Frank financial reform law are behind the push.:"The big banks are going to keep using the small banks as cover for their special rollbacks," Warren said. "That's what they did before the [2008 economic] crisis and that's what they've been doing after the crisis. We shouldn't fall for that trick." Other Senators had differing views.
http://blogs.wsj.com/washwire/2015/02/10/senators-warn-wall-street-no-free-ride-on-small-bank-bills/
Santa Fe City Council OKs $50K contract for study on public bank
The Santa Fe NM City Council has approved a $50,000 contract with a local firm that will investigate the business, financial and economic feasibility of a public bank in Santa Fe. The council voted 5-2 in support of the contract with Building Solutions LLC.
Click title to see the full article
The Santa Fe NM City Council has approved a $50,000 contract with a local firm that will investigate the business, financial and economic feasibility of a public bank in Santa Fe. The council voted 5-2 in support of the contract with Building Solutions LLC.
Click title to see the full article
Public Citizen Blog: Texas Real Estate Firm Cannot Compel Yelp to
Identify Anonymous Critic
From posting by Paul Alan Levy -- click title for the complete blog
A trial judge in Texas has turned down a motion to compel Yelp to comply with a subpoena seeking identifying information about an unhappy consumer who complained about alleged misconduct by a Texas real estate firm, the Rhodes Team, and its agent, one Jeremy Wages, who allegedly did not stay in touch with the consumer or give good information about how much his or her house was worth; the consumer claims that, as a result, the house was sold for too low a price. The complete review is on page 3 of this brief.
Apparently trying to draw on the recent decision of the Virginia Court of Appeals in Yelp v. Hadeed Carpet Cleaning, currently pending on appeal before the Virginia Supreme Court, the complaint tried to set forth a cookie-cutter version of Hadeed’s claim, asserting in an exceptionally nonspecific way that plaintiffs had looked through their database of customers and could not identify the anonymous critic as being a real customer, and on that basis claimed that the review must contain false statements. Representing Yelp, we presented the Dendrite argument, noting both that the plaintiffs had presented no evidence of falsity and that, in any event, they were suing on a criticism that was more than a year old (hence outside the statute of limitations for libel claims). We also argued that plaintiffs had no right to pursue their subpoena in Texas because Yelp is not resident there and the Texas Rules of Civil Procedure, coupled with the Texas version of the Uniform Interstate Deposition and Discovery Act require subpoenas to an out-of-state witness like Yelp to be pursued in California, where it is based. It was, indeed, remarkable the number of procedural rules plaintiffs had violated in bringing their motion to compel.
Plaintiff Wilson's briefs are here.
However, the judge never got to the First Amendment anonymity issue, but went off on the jurisdictional issue, and in an unusual way. The judge noticed that the Texas rule on special appearances allows only “parties” or indeed “defendants” to file a special appearance, and he asked for supplemental briefing on whether a “special appearance” was the proper way for Yelp to object to the Court’s jurisdiction. In the end, the judge went with the literal language of the rule and held that, as a nonparty, Yelp could not use the special appearance process, but at the same time he quashed the subpoena for improper service and denied the motion to compel.
From posting by Paul Alan Levy -- click title for the complete blog
A trial judge in Texas has turned down a motion to compel Yelp to comply with a subpoena seeking identifying information about an unhappy consumer who complained about alleged misconduct by a Texas real estate firm, the Rhodes Team, and its agent, one Jeremy Wages, who allegedly did not stay in touch with the consumer or give good information about how much his or her house was worth; the consumer claims that, as a result, the house was sold for too low a price. The complete review is on page 3 of this brief.
Apparently trying to draw on the recent decision of the Virginia Court of Appeals in Yelp v. Hadeed Carpet Cleaning, currently pending on appeal before the Virginia Supreme Court, the complaint tried to set forth a cookie-cutter version of Hadeed’s claim, asserting in an exceptionally nonspecific way that plaintiffs had looked through their database of customers and could not identify the anonymous critic as being a real customer, and on that basis claimed that the review must contain false statements. Representing Yelp, we presented the Dendrite argument, noting both that the plaintiffs had presented no evidence of falsity and that, in any event, they were suing on a criticism that was more than a year old (hence outside the statute of limitations for libel claims). We also argued that plaintiffs had no right to pursue their subpoena in Texas because Yelp is not resident there and the Texas Rules of Civil Procedure, coupled with the Texas version of the Uniform Interstate Deposition and Discovery Act require subpoenas to an out-of-state witness like Yelp to be pursued in California, where it is based. It was, indeed, remarkable the number of procedural rules plaintiffs had violated in bringing their motion to compel.
Plaintiff Wilson's briefs are here.
However, the judge never got to the First Amendment anonymity issue, but went off on the jurisdictional issue, and in an unusual way. The judge noticed that the Texas rule on special appearances allows only “parties” or indeed “defendants” to file a special appearance, and he asked for supplemental briefing on whether a “special appearance” was the proper way for Yelp to object to the Court’s jurisdiction. In the end, the judge went with the literal language of the rule and held that, as a nonparty, Yelp could not use the special appearance process, but at the same time he quashed the subpoena for improper service and denied the motion to compel.
From Public Citizen blog: CFPB issues report and consumer advisory on reverse mortgages
The Consumer Financial Protection Bureau has released "a report highlighting the top complaints for reverse mortgages. According to the report, consumers are frustrated with their loan terms, servicer runarounds, and foreclosure problems. To help consumers who already have a reverse mortgage, the CFPB [also issued] an advisory with tips on how to plan ahead to protect loved ones from financial hardship brought on by a reverse mortgage." Read the CFPB press release, with links to the report and the advisory.
The Consumer Financial Protection Bureau has released "a report highlighting the top complaints for reverse mortgages. According to the report, consumers are frustrated with their loan terms, servicer runarounds, and foreclosure problems. To help consumers who already have a reverse mortgage, the CFPB [also issued] an advisory with tips on how to plan ahead to protect loved ones from financial hardship brought on by a reverse mortgage." Read the CFPB press release, with links to the report and the advisory.
Ohio closes Google antitrust investigation
Ohio has closed an antitrust investigation into Google’s business practices that dates back more than three years. The Ohio attorney general’s office told Google this past November it was closing the investigation, Google disclosed in a regulatory filing Monday.
Full Content: IT World
Ohio has closed an antitrust investigation into Google’s business practices that dates back more than three years. The Ohio attorney general’s office told Google this past November it was closing the investigation, Google disclosed in a regulatory filing Monday.
Full Content: IT World
MANHATTAN DA’S OFFICE PRESS RELEASE: DOI, NYPD ANNOUNCE ARRESTS AND CRIMINAL CHARGES IN WIDESPREAD BRIBERY SCHEMES INVOLVING DOB AND HPD EMPLOYEES
Defendants Include 11 DOB Employees, 5 HPD Employees, and Property Managers, Contractors, and Expeditors Approximately $450,000 in Bribes Made in Connection with More Than 100 Residential and Commercial Properties in Manhattan, Brooklyn, and Queens
WATCH THE PRESS CONFERENCE [click here]
Defendant Information
Manhattan District Attorney Cyrus R. Vance, Jr., New York City Department of Investigation (“DOI”) Commissioner Mark G. Peters, and New York City Police Commissioner William J. Bratton today announced the indictment of 50 defendants involved in widespread housing fraud and bribery schemes in Manhattan, Brooklyn, and Queens. The defendants include 11 New York City Department of Buildings (“DOB”) employees and five New York City Department of Housing Preservation and Development (“HPD”) employees. The defendants are charged in 26 New York State Supreme Court indictments filed in New York and Kings Counties with crimes including Bribery, Bribe Receiving, Falsifying Business Records, Tampering with Public Records, and Official Misconduct.
The nearly two-year-long investigation, initiated by DOI and the Manhattan District Attorney’s Office’s Rackets Bureau in 2013, began as an inquiry into the bribery of a single DOB inspector. DOI, the District Attorney’s Office, and the NYPD utilized court-authorized wiretapping; analysis of DOB, HPD, financial, and phone records; and surveillance over the course of the investigation. The investigation revealed evidence of approximately $450,000 worth of alleged bribes in numerous, distinct schemes between 16 DOB and HPD employees and 22 property managers and owners, six expeditors, two contractors, and one engineer. Indictments filed in Kings County Supreme Court will be handled by Manhattan prosecutors, pursuant to a cross-designation authorized by Brooklyn District Attorney Ken Thompson.
“Bribery schemes compromised two important City agencies and fair competition in our robust housing and real estate development markets,” said District Attorney Vance. “Today’s cases demonstrate that the same surging demand that drives the pace of development can inspire the taking of shortcuts, and the taking of bribes. Working proactively with our partners at DOI and the NYPD, we are rooting out corruption at all levels, and bringing those who abuse their positions of power to justice.”
http://manhattanda.org/node/5265/print
Defendants Include 11 DOB Employees, 5 HPD Employees, and Property Managers, Contractors, and Expeditors Approximately $450,000 in Bribes Made in Connection with More Than 100 Residential and Commercial Properties in Manhattan, Brooklyn, and Queens
WATCH THE PRESS CONFERENCE [click here]
Defendant Information
Manhattan District Attorney Cyrus R. Vance, Jr., New York City Department of Investigation (“DOI”) Commissioner Mark G. Peters, and New York City Police Commissioner William J. Bratton today announced the indictment of 50 defendants involved in widespread housing fraud and bribery schemes in Manhattan, Brooklyn, and Queens. The defendants include 11 New York City Department of Buildings (“DOB”) employees and five New York City Department of Housing Preservation and Development (“HPD”) employees. The defendants are charged in 26 New York State Supreme Court indictments filed in New York and Kings Counties with crimes including Bribery, Bribe Receiving, Falsifying Business Records, Tampering with Public Records, and Official Misconduct.
The nearly two-year-long investigation, initiated by DOI and the Manhattan District Attorney’s Office’s Rackets Bureau in 2013, began as an inquiry into the bribery of a single DOB inspector. DOI, the District Attorney’s Office, and the NYPD utilized court-authorized wiretapping; analysis of DOB, HPD, financial, and phone records; and surveillance over the course of the investigation. The investigation revealed evidence of approximately $450,000 worth of alleged bribes in numerous, distinct schemes between 16 DOB and HPD employees and 22 property managers and owners, six expeditors, two contractors, and one engineer. Indictments filed in Kings County Supreme Court will be handled by Manhattan prosecutors, pursuant to a cross-designation authorized by Brooklyn District Attorney Ken Thompson.
“Bribery schemes compromised two important City agencies and fair competition in our robust housing and real estate development markets,” said District Attorney Vance. “Today’s cases demonstrate that the same surging demand that drives the pace of development can inspire the taking of shortcuts, and the taking of bribes. Working proactively with our partners at DOI and the NYPD, we are rooting out corruption at all levels, and bringing those who abuse their positions of power to justice.”
http://manhattanda.org/node/5265/print
FTC prevails in 9th Circuit concerning St. Lukes hospital merger
Federal Trade Commission Chairwoman Edith Ramirez issued the following statement in response to a ruling by by the U.S. Court of Appeals for the Ninth Circuit [click to view], regarding the FTC’s case challenging Idaho-based St. Luke’s Health System’s acquisition of Saltzer Medical Group:
“Today’s decision by the Ninth Circuit is a win for consumers and healthcare competition in the Nampa, Idaho area. If left unchallenged, St. Luke’s acquisition of Saltzer would have created a dominant provider of physician services for adults seeking primary care in Nampa, leading to higher costs for consumers and employers there. The acquisition would have delivered no benefit to consumers that could not be achieved in ways other than the anticompetitive merger.”
Today’s decision affirms the decision by the U.S. District Court in the District of Idaho, which held that the acquisition violated Section 7 of the Clayton Act and the Idaho Competition Act, and ordered St. Luke’s to fully divest itself of Saltzer’s physicians and assets.
Federal Trade Commission Chairwoman Edith Ramirez issued the following statement in response to a ruling by by the U.S. Court of Appeals for the Ninth Circuit [click to view], regarding the FTC’s case challenging Idaho-based St. Luke’s Health System’s acquisition of Saltzer Medical Group:
“Today’s decision by the Ninth Circuit is a win for consumers and healthcare competition in the Nampa, Idaho area. If left unchallenged, St. Luke’s acquisition of Saltzer would have created a dominant provider of physician services for adults seeking primary care in Nampa, leading to higher costs for consumers and employers there. The acquisition would have delivered no benefit to consumers that could not be achieved in ways other than the anticompetitive merger.”
Today’s decision affirms the decision by the U.S. District Court in the District of Idaho, which held that the acquisition violated Section 7 of the Clayton Act and the Idaho Competition Act, and ordered St. Luke’s to fully divest itself of Saltzer’s physicians and assets.
New DC AG Karl Racine outlines his priorities in interview with Washington Lawyer's David O'Boyle
What are the top three priorities for your term?
We ran on a pretty clear set of several coequal priorities. A priority that we have focused on are the issues around juvenile justice. What we want to do is continue to do what the office has done so well, and that is to keep the community safe. At the same time, we have an obligation to make sure that the office is prosecuting cases in ways that make sure the kids who can benefit from services that can keep them out of the criminal justice system get those services. We’re going to spend a lot of time trying to refocus our energies in the area of restorative justice—get kids out of the system. That’s one priority.
Number two, we want to enhance the work that the office has done in the area of consumer protection. The office has very talented lawyers, some of whom have done extremely good jobs in the area of consumer protection. We think that that section needs to be bolstered because the citizens of the city all too often are victimized by unsavory business practices—debt collection and payday lenders, for example, and other areas that we think are ripe for aggressive enforcement and the initiation of civil lawsuits.
Number three, we live in an era where the citizens want and deserve to have honest government. Questions have been raised in the District of Columbia where public officials have been indicted or accused of violations. We want to work hard to make sure that all the agencies in the District are well trained, and where we see lapses and breaches in the provision of honest services, we want to be very aggressive in cleaning that up. The District should have a procurement business that is transparent and accountable, and that’s what we intend to do.
See https://www.dcbar.org/bar-resources/publications/washington-lawyer/articles/february-2015-karl-racine.cfm
What are the top three priorities for your term?
We ran on a pretty clear set of several coequal priorities. A priority that we have focused on are the issues around juvenile justice. What we want to do is continue to do what the office has done so well, and that is to keep the community safe. At the same time, we have an obligation to make sure that the office is prosecuting cases in ways that make sure the kids who can benefit from services that can keep them out of the criminal justice system get those services. We’re going to spend a lot of time trying to refocus our energies in the area of restorative justice—get kids out of the system. That’s one priority.
Number two, we want to enhance the work that the office has done in the area of consumer protection. The office has very talented lawyers, some of whom have done extremely good jobs in the area of consumer protection. We think that that section needs to be bolstered because the citizens of the city all too often are victimized by unsavory business practices—debt collection and payday lenders, for example, and other areas that we think are ripe for aggressive enforcement and the initiation of civil lawsuits.
Number three, we live in an era where the citizens want and deserve to have honest government. Questions have been raised in the District of Columbia where public officials have been indicted or accused of violations. We want to work hard to make sure that all the agencies in the District are well trained, and where we see lapses and breaches in the provision of honest services, we want to be very aggressive in cleaning that up. The District should have a procurement business that is transparent and accountable, and that’s what we intend to do.
See https://www.dcbar.org/bar-resources/publications/washington-lawyer/articles/february-2015-karl-racine.cfm
DC Bar Sections Office Program: A Conversation with D.C.'s New Attorney General Karl Racine
Date & Time: Tuesday, March 3, 2015 from 12:00 pm to 1:30 pm
Event Description
This is a free program, registration is required. Membership in the Bar is NOT required.
Join in a one-on-one conversation with D.C.’s first ever elected Attorney General, Karl Racine. Come hear about his plans, vision and anticipated challenges for his office in 2015.
Location
D.C. Bar Conference Center
1101 K Street, NW, Conference Center
(Metro Center Station)
Washington DC 20005
Map it
Contact Information
Sections Office
Email: SectionsEvents@dcbar.org
Phone: 202-626-3463
Fax: 202-824-1877
For electronic registration: https://www.dcbar.org/marketplace/event-details.cfm?productCD=3401513SECW&
Printable registration form
Date & Time: Tuesday, March 3, 2015 from 12:00 pm to 1:30 pm
Event Description
This is a free program, registration is required. Membership in the Bar is NOT required.
Join in a one-on-one conversation with D.C.’s first ever elected Attorney General, Karl Racine. Come hear about his plans, vision and anticipated challenges for his office in 2015.
Location
D.C. Bar Conference Center
1101 K Street, NW, Conference Center
(Metro Center Station)
Washington DC 20005
Map it
Contact Information
Sections Office
Email: SectionsEvents@dcbar.org
Phone: 202-626-3463
Fax: 202-824-1877
For electronic registration: https://www.dcbar.org/marketplace/event-details.cfm?productCD=3401513SECW&
Printable registration form
Arkansas settles claims it withheld Vertex's Kalydeco on price
Arkansas Medicaid officials have wrapped up a legal dispute over Vertex's ($VRTX) cystic fibrosis drug Kalydeco, settling to resolve claims the state denied patients the treatment based on its high price tag. And while it's good news for the drugmaker, this may be just the first in a series of cost-control battles to follow.
Three patients brought the suit last year, alleging Arkansas had for two years violated their civil rights by denying them the $311,000 orphan drug, The Wall Street Journal reports. While all three met the FDA's eligibility criteria, state officials had tightened the reins on the pricey treatment's use, adding a requirement that patients couldn't receive the drug unless their health had deteriorated after taking older treatments.
As part of the settlement, Arkansas is revising its criteria for renewing prescriptions, making it easier for patients to maintain their access to the CF-fighter. While patients seeking prescription reauthorization were previously required to prove Kalydeco improved their lung function, helped them gain weight or cut down their hospitalizations, under the new policy, patients only have to show upside in one of these measures or provide other evidence of clinical benefit, the WSJ says.
Click title for link
Arkansas Medicaid officials have wrapped up a legal dispute over Vertex's ($VRTX) cystic fibrosis drug Kalydeco, settling to resolve claims the state denied patients the treatment based on its high price tag. And while it's good news for the drugmaker, this may be just the first in a series of cost-control battles to follow.
Three patients brought the suit last year, alleging Arkansas had for two years violated their civil rights by denying them the $311,000 orphan drug, The Wall Street Journal reports. While all three met the FDA's eligibility criteria, state officials had tightened the reins on the pricey treatment's use, adding a requirement that patients couldn't receive the drug unless their health had deteriorated after taking older treatments.
As part of the settlement, Arkansas is revising its criteria for renewing prescriptions, making it easier for patients to maintain their access to the CF-fighter. While patients seeking prescription reauthorization were previously required to prove Kalydeco improved their lung function, helped them gain weight or cut down their hospitalizations, under the new policy, patients only have to show upside in one of these measures or provide other evidence of clinical benefit, the WSJ says.
Click title for link
Lender CashCall to Pay Restitution, $1 Million in Penalties and Costs to Settle Case with California agency
The California Department of Business Oversight (DBO) has announced a settlement with CashCall, Inc. that requires the lender to provide restitution to thousands of California borrowers, reform its business practices, and pay the DBO $1 million in penalties and cost reimbursement.
“CashCall engaged in a large-scale predatory lending scheme,” said DBO Commissioner Jan Lynn Owen. “This settlement holds the company accountable for its unlawful conduct and compensates the victims of these unscrupulous practices.”
The settlement resolves allegations filed by DBO last year that CashCall unlawfully deceived consumers, filed false reports with the Commissioner and made false representations to the Commissioner.
CashCall will pay wronged borrowers $125 each in restitution.
See http://www.dbo.ca.gov/Press/press_releases/2015/CashCall.asp
The California Department of Business Oversight (DBO) has announced a settlement with CashCall, Inc. that requires the lender to provide restitution to thousands of California borrowers, reform its business practices, and pay the DBO $1 million in penalties and cost reimbursement.
“CashCall engaged in a large-scale predatory lending scheme,” said DBO Commissioner Jan Lynn Owen. “This settlement holds the company accountable for its unlawful conduct and compensates the victims of these unscrupulous practices.”
The settlement resolves allegations filed by DBO last year that CashCall unlawfully deceived consumers, filed false reports with the Commissioner and made false representations to the Commissioner.
CashCall will pay wronged borrowers $125 each in restitution.
See http://www.dbo.ca.gov/Press/press_releases/2015/CashCall.asp
Bank customer phishers hone scams with texts, phone calls
Fraudsters are getting more creative and effective at phishing attacks on banks.
Criminals who used to focus on email fraud are turning to text messages and phone calls to trick unsuspecting bank customers. And with the help of Big Data and social media, fraudsters are becoming more informed about their consumer and business targets, the better to masquerade as executives, suppliers or customers.
For more: http://www.americanbanker.com/news/bank-technology/phishers-hone-their-scams-with-texts-phone-calls-big-data-1072535-1.html
Fraudsters are getting more creative and effective at phishing attacks on banks.
Criminals who used to focus on email fraud are turning to text messages and phone calls to trick unsuspecting bank customers. And with the help of Big Data and social media, fraudsters are becoming more informed about their consumer and business targets, the better to masquerade as executives, suppliers or customers.
For more: http://www.americanbanker.com/news/bank-technology/phishers-hone-their-scams-with-texts-phone-calls-big-data-1072535-1.html
NY's Lawsky to banks: speed up payment systems
Benjamin Lawsky, New York's top financial regulator, sharply criticized banks for their failure to speed up the payment system, warning that the government may step in if they continue to lag behind.
"If banks do not make significant progress soon, regulators should consider actively pushing for, or even perhaps mandating, improvements," Lawsky, the superintendent of the New York Department of Financial Services, said Thursday at a Bipartisan Policy Center event in Washington.
See http://www.americanbanker.com/news/law-regulation/lawsky-to-banks-speed-up-payments-innovation-or-else-1071753-1.html
Benjamin Lawsky, New York's top financial regulator, sharply criticized banks for their failure to speed up the payment system, warning that the government may step in if they continue to lag behind.
"If banks do not make significant progress soon, regulators should consider actively pushing for, or even perhaps mandating, improvements," Lawsky, the superintendent of the New York Department of Financial Services, said Thursday at a Bipartisan Policy Center event in Washington.
See http://www.americanbanker.com/news/law-regulation/lawsky-to-banks-speed-up-payments-innovation-or-else-1071753-1.html
NY Fails In Bid To Enforce $25B Mortgage Settlement
The New York attorney general's bid to enforce the terms of a $25 billion State mortgage settlement with five banks was shot down on Monday when a D.C. federal judge ruled that the allegations of noncompliance against Wells Fargo & Co. were insubstantial.
The New York attorney general's bid to enforce the terms of a $25 billion State mortgage settlement with five banks was shot down on Monday when a D.C. federal judge ruled that the allegations of noncompliance against Wells Fargo & Co. were insubstantial.
The FTC has recently taken against two car title lenders for deceptive advertising
In administrative complaints, the FTC charged that lenders First American Title Lending of Georgia, LLC, and Finance Select, Inc. advertised zero percent interest rates for a 30-day car title loan without disclosing important loan conditions or the increased finance charge imposed after the introductory period ended, the FTC explained in its press release.
In administrative complaints, the FTC charged that lenders First American Title Lending of Georgia, LLC, and Finance Select, Inc. advertised zero percent interest rates for a 30-day car title loan without disclosing important loan conditions or the increased finance charge imposed after the introductory period ended, the FTC explained in its press release.
S&P settles with States and US on mortgage ratings
Ratings firm Standard & Poor's will pay $1.5 billion to resolve a series of lawsuits over its ratings on mortgage securities that soured in the runup to the 2008 financial crisis, the company said on Tuesday.
The settlement comes after more than two years of litigation as S&P fought allegations it issued overly rosy ratings in order to win more business.
S&P parent McGraw Hill Financial Inc (MHFI.N) said it will pay $687.5 million to the U.S. Department of Justice, and $687.5 million to 19 states and the District of Columbia, which had filed similar lawsuits over the ratings.
http://www.reuters.com/article/2015/02/03/us-s-p-settlement-idUSKBN0L71C120150203
Ratings firm Standard & Poor's will pay $1.5 billion to resolve a series of lawsuits over its ratings on mortgage securities that soured in the runup to the 2008 financial crisis, the company said on Tuesday.
The settlement comes after more than two years of litigation as S&P fought allegations it issued overly rosy ratings in order to win more business.
S&P parent McGraw Hill Financial Inc (MHFI.N) said it will pay $687.5 million to the U.S. Department of Justice, and $687.5 million to 19 states and the District of Columbia, which had filed similar lawsuits over the ratings.
http://www.reuters.com/article/2015/02/03/us-s-p-settlement-idUSKBN0L71C120150203
JPMorgan Chase & Co. will pay $99.5 million to settle class action price fixing litigation
The action alleged that the bank was part of a conspiracy to rig the approximately $5 trillion-per-day foreign exchange market.
The action alleged that the bank was part of a conspiracy to rig the approximately $5 trillion-per-day foreign exchange market.
Verizon relents on "supercookies"
Verizon Wireless, which has been under fire by privacy advocates since late last year, has decided to make a major revision to its mobile ad-targeting program. Users who do not want to be tracked with an identifier that Verizon uses for ad-targeting purposes will soon be able to completely opt out.
http://bits.blogs.nytimes.com/2015/01/30/verizon-wireless-to-allow-complete-opt-out-of-mobile-supercookies/?hpw&rref=technology&action=click&pg&module=well-region®ion=bottom-well&WT.nav=bottom-well&_r=0
Verizon Wireless, which has been under fire by privacy advocates since late last year, has decided to make a major revision to its mobile ad-targeting program. Users who do not want to be tracked with an identifier that Verizon uses for ad-targeting purposes will soon be able to completely opt out.
http://bits.blogs.nytimes.com/2015/01/30/verizon-wireless-to-allow-complete-opt-out-of-mobile-supercookies/?hpw&rref=technology&action=click&pg&module=well-region®ion=bottom-well&WT.nav=bottom-well&_r=0
Professors write to FTC on net neutrality
Professors write to the FTC about the appropriate roles of the FTC and FCC in ensuring an open Internet (net neutrality). See link below.
"We write to explain why a ban on paid prioritizationunderTitle II, coupledwith appropriate forbearance,would promote competitionand other important values such as innovation, free speech, and economic growth."
http://www.pijip.org/wp-content/uploads/2015/01/Net-Neutrality-Prof-Letter-01292015.pdf
Professors write to the FTC about the appropriate roles of the FTC and FCC in ensuring an open Internet (net neutrality). See link below.
"We write to explain why a ban on paid prioritizationunderTitle II, coupledwith appropriate forbearance,would promote competitionand other important values such as innovation, free speech, and economic growth."
http://www.pijip.org/wp-content/uploads/2015/01/Net-Neutrality-Prof-Letter-01292015.pdf
Circuit opinion in POM’s appeal of the FTC’s order against POM for some of its marketing practices.
"The FTC Act proscribes—and the First Amendment does not protect—deceptive and misleading advertisements."
Click here for the opinion
"The FTC Act proscribes—and the First Amendment does not protect—deceptive and misleading advertisements."
Click here for the opinion
The National Association of Consumer Advocates (NACA) and the National Consumer Law Center (NCLC) (on behalf of its low-income clients) urge you to sign this petition below to the Federal Communications Commission (FCC) urging the FCC not to open the floodgates for “wrong number” robocalls to cell phones.
No Robocalls to Cell Phones - Protect Your Rights and Privacy!
Recently NCLC and NACA issued a press release urging the FCC not to relax rules regarding robocalls to consumers. Over 80 national, state and community organizations joined a letter to the FCC urging the commission to keep important consumer and privacy protections for cell phone users.
Thank you for supporting our advocacy efforts!
Contact:
Ellen Taverna
Legislative Director
National Association of Consumer Advocates (NACA)
1215 17th Street, NW, 5th Floor
Washington, DC 20036
(202) 452-1989 ext. 109
Ellen@consumeradvocates.org
www.consumeradvocates.org
Laura H. Phillips Laura K. Layton (Drinker Biddle & Reath LLP) disccuss petitions of callers concerning Telephone Consumers Protections Act
Lots of caller entities would like workarounds so they can make calls. Click the title for an article that will tell you who they are and what they want.
Lots of caller entities would like workarounds so they can make calls. Click the title for an article that will tell you who they are and what they want.
National Association of Attorneys General petitions FCC about consumer call blocking:
National Association of Attorneys General petitions FCC about consumer call blocking:
- Petition
- Summary: The National Association of Attorneys General wrote a letter “on behalf of the millions of Americans regularly receiving unwanted and harassing telemarketing calls” and signed by thirty-nine Attorneys General asking for the FCC’s opinion about the legality of call-blocking technology.
- Public Notice by FCC
- Summary: The FCC seeks comment on three issues identified by the Attorneys General: (1) legal and regulatory prohibitions, if any, that prevent telephone carriers from implementing call-blocking technology, (2) whether telephone carriers can legally block certain types of calls at a customer’s request if technologically able to identify incoming calls as originating from a telemarketer, and (3) whether the description of the FCC’s position as “strict oversight in ensuring the unimpeded delivery of telecommunications traffic” is accurate, and the basis for the FCC’s claim that telephone carriers may not “block, choke, reduce or restrict telecommunications traffic in any way.”
China argues that State-mandated price fixing of vitamin C does not violate US Antitrust law
Hebei Welcome Pharmaceutical Co. and its state-owned parent, North China Pharmaceutical Group Corp., were required by law to coordinate export prices and volumes, the ministry said in a filing to the U.S. Court of Appeals in Manhattan, which is scheduled to hear the Chinese companies’ request to throw out a price-fixing verdict concerning vitamin C. The ministry also sent a diplomatic note to the U.S. State Department saying it was “deeply troubled” by the case:
“Antitrust liability under U.S. law does not extend to one circumstance where that conflict would be especially acute: where a foreign sovereign compelled a private party to engage in anticompetitive conduct within that sovereign’s borders,” lawyers for the ministry said in the filing. “The district court’s approach and result have deeply troubled the Chinese government.”
Hebei Welcome Pharmaceutical Co. and its state-owned parent, North China Pharmaceutical Group Corp., were required by law to coordinate export prices and volumes, the ministry said in a filing to the U.S. Court of Appeals in Manhattan, which is scheduled to hear the Chinese companies’ request to throw out a price-fixing verdict concerning vitamin C. The ministry also sent a diplomatic note to the U.S. State Department saying it was “deeply troubled” by the case:
“Antitrust liability under U.S. law does not extend to one circumstance where that conflict would be especially acute: where a foreign sovereign compelled a private party to engage in anticompetitive conduct within that sovereign’s borders,” lawyers for the ministry said in the filing. “The district court’s approach and result have deeply troubled the Chinese government.”
Epic's footprint in hospital electronic records gets yet bigger
More than 350 healthcare organizations caring for 54 percent of patients in the U.S. currently use Epic's software. With a new contract with the Mayo Clinic, the new contract, approximately one million more patients at Mayo Clinic locations in Minnesota, Florida and Arizona will have their records stored on Epic's platform, according to a Wisconsin State Journal report.
There is debate concerning Epic's use of proprietary software that impedes sharing of patient information among care institutions, raising the question of whether Epic may become a dominant company in the manner of Microsoft in desktop computer applications.
More than 350 healthcare organizations caring for 54 percent of patients in the U.S. currently use Epic's software. With a new contract with the Mayo Clinic, the new contract, approximately one million more patients at Mayo Clinic locations in Minnesota, Florida and Arizona will have their records stored on Epic's platform, according to a Wisconsin State Journal report.
There is debate concerning Epic's use of proprietary software that impedes sharing of patient information among care institutions, raising the question of whether Epic may become a dominant company in the manner of Microsoft in desktop computer applications.
TravelAdvisor Fined by Italian Authority
Italy's competition watchdog has fined travel website TripAdvisor USD $700,000 for publishing misleading information in its reviews.
It following a complaint from consumers and hotel owners in Italy.
The Rome-based regulator said the US company and its Italian arm should stop "publishing misleading information about the sources of its reviews", adding that the practice started in September 2011.
The authority gave TripAdvisor 90 days to respond, saying its move was aimed at ensuring consumers do not make decisions based on information that does not correspond to reality.
Full Content: Tourism Review
Italy's competition watchdog has fined travel website TripAdvisor USD $700,000 for publishing misleading information in its reviews.
It following a complaint from consumers and hotel owners in Italy.
The Rome-based regulator said the US company and its Italian arm should stop "publishing misleading information about the sources of its reviews", adding that the practice started in September 2011.
The authority gave TripAdvisor 90 days to respond, saying its move was aimed at ensuring consumers do not make decisions based on information that does not correspond to reality.
Full Content: Tourism Review
From Public Citizen blog: FTC sues Texas debt collector for false threats of legal action
The FTC filed a complaint in a Texas federal court against Commercial Recovery Systems for threatening consumers that unless they paid their debts, they would be sued or have their wages garnished. The problem? These representations weren't true.
You can read the entire release here and the complaint here.
The FTC filed a complaint in a Texas federal court against Commercial Recovery Systems for threatening consumers that unless they paid their debts, they would be sued or have their wages garnished. The problem? These representations weren't true.
You can read the entire release here and the complaint here.
Read the federal government's brief in King v. Burwell (the Affordable Care Act subsidies case)
From Public Citizen blog:King v. Burwell is the case currently before the Supreme Court that asks whether the Affordable Care Act (ACA) authorizes health-care insurance subsidies for all otherwise qualified people nationwide or only for people who live in states that run their own health care "exchanges." Exchanges are ACA-defined marketplaces in which people buy health insurance. Under the ACA, states can run their own exchanges or have the federal government run their exchanges for them. About a third of the states have set up their own exchanges; in the others, the federal government runs the exchange for the state.
Read all the briefs here.
From Public Citizen blog:King v. Burwell is the case currently before the Supreme Court that asks whether the Affordable Care Act (ACA) authorizes health-care insurance subsidies for all otherwise qualified people nationwide or only for people who live in states that run their own health care "exchanges." Exchanges are ACA-defined marketplaces in which people buy health insurance. Under the ACA, states can run their own exchanges or have the federal government run their exchanges for them. About a third of the states have set up their own exchanges; in the others, the federal government runs the exchange for the state.
Read all the briefs here.
State law restrictions on Happy Hour
Virginia will expand bar owners' rights to advertise Happy Hour drink specials. http://www.washingtonpost.com/local/virginia-politics/virginia-happy-hours-could-become-less-secretive-if-new-booze-law-passes/2015/01/24/1ef297fa-9833-11e4-927a-4fa2638cd1b0_story.html A bar owner today may not, for example, post a sign saying "Happy Hour Special: Don's favorite IPA $1.95"
Twelve states ban happy hours, according to the National Center for State Courts. But in the metropolitan Washington area, Virginia stands alone; both D.C. and Maryland put no restrictions on them. And of the states that allow happy hours, Virginia is one of only two that restricts both timing and pricing.
More detail for travelers:
Happy Hours are Banned in 12 states: Alaska, Delaware, Hawaii, Illinois, Indiana, Maine, Massachusetts, North Carolina, Oklahoma, Rhode Island, Utah, Vermont.
8 States put Temporal Restrictions on Happy Hours: Alabama, Louisiana, Ohio, Oregon, Pennsylvania, South Carolina, Texas, Virginia.
8 States put Discount Amount Restrictions on Happy Hours: Arkansas, Kansas, New Mexico, New York, South Carolina,
Tennessee, Virginia, Washington
6 States only ban unlimited drinks: Arizona, Connecticut, Michigan, Nebraska, New Hampshire, New Jersey
18 States with no Bans or Restrictions on Happy Hours: California, Colorado, District of Columbia, Florida, Georgia,
Idaho, Iowa, Kentucky, Maryland, Minnesota, Mississippi, Missouri, Montana, Nevada, North Dakota, South
Dakota, West Virginia, Wisconsin, Wyoming.
Source: http://home.trafficresourcecenter.org/~/media/Microsites/Files/traffic-safety/Issue%20Brief%207%20Happy%20Hour.ashx
We don't have data on problems that occur in no regulation states compared to states that regulate Happy Hour. Ironically, some say that the Happy Hour idea originated in Prohibition times when the 18th Amendment and the Volstead Act were passed broadly banning alcohol consumption. People would host "cocktail hours", also known as "happy hours", at a speakeasy (an illegal drinking establishment) before eating at restaurants where alcohol could not be served.
Posted by Don Allen Resnikoff
Virginia will expand bar owners' rights to advertise Happy Hour drink specials. http://www.washingtonpost.com/local/virginia-politics/virginia-happy-hours-could-become-less-secretive-if-new-booze-law-passes/2015/01/24/1ef297fa-9833-11e4-927a-4fa2638cd1b0_story.html A bar owner today may not, for example, post a sign saying "Happy Hour Special: Don's favorite IPA $1.95"
Twelve states ban happy hours, according to the National Center for State Courts. But in the metropolitan Washington area, Virginia stands alone; both D.C. and Maryland put no restrictions on them. And of the states that allow happy hours, Virginia is one of only two that restricts both timing and pricing.
More detail for travelers:
Happy Hours are Banned in 12 states: Alaska, Delaware, Hawaii, Illinois, Indiana, Maine, Massachusetts, North Carolina, Oklahoma, Rhode Island, Utah, Vermont.
8 States put Temporal Restrictions on Happy Hours: Alabama, Louisiana, Ohio, Oregon, Pennsylvania, South Carolina, Texas, Virginia.
8 States put Discount Amount Restrictions on Happy Hours: Arkansas, Kansas, New Mexico, New York, South Carolina,
Tennessee, Virginia, Washington
6 States only ban unlimited drinks: Arizona, Connecticut, Michigan, Nebraska, New Hampshire, New Jersey
18 States with no Bans or Restrictions on Happy Hours: California, Colorado, District of Columbia, Florida, Georgia,
Idaho, Iowa, Kentucky, Maryland, Minnesota, Mississippi, Missouri, Montana, Nevada, North Dakota, South
Dakota, West Virginia, Wisconsin, Wyoming.
Source: http://home.trafficresourcecenter.org/~/media/Microsites/Files/traffic-safety/Issue%20Brief%207%20Happy%20Hour.ashx
We don't have data on problems that occur in no regulation states compared to states that regulate Happy Hour. Ironically, some say that the Happy Hour idea originated in Prohibition times when the 18th Amendment and the Volstead Act were passed broadly banning alcohol consumption. People would host "cocktail hours", also known as "happy hours", at a speakeasy (an illegal drinking establishment) before eating at restaurants where alcohol could not be served.
Posted by Don Allen Resnikoff
Takata auto seat belt price fixing
If you didn't like Takata's role as supplier of defective auto air bags, you also probably won't like their role as auto seat belt price fixer. Here is an excerpt from a USDOJ press release:
A Detroit federal grand jury returned a one-count indictment against an executive of a Japanese manufacturer of automotive parts for his participation in a conspiracy to fix prices of seatbelts, the Department of Justice announced today.
The indictment, filed today in the U.S. District Court for the Eastern District of Michigan, charges Hiromu Usuda, an executive at Takata Corp., with conspiring to rig bids for, and to fix, stabilize and maintain the prices of, seatbelts sold to Toyota Motor Corp., Honda Motor Company Ltd., Nissan Motor Co. Ltd., Mazda Motor Corp., Fuji Heavy Industries Ltd. – more commonly known by its brand name, Subaru – and/or certain of their subsidiaries, for installation in vehicles manufactured and sold in the United States and elsewhere. Usuda served as Group and Department Manager in the Customer Relations Division at Takata, from January 2005 until at least February 2011.
If you didn't like Takata's role as supplier of defective auto air bags, you also probably won't like their role as auto seat belt price fixer. Here is an excerpt from a USDOJ press release:
A Detroit federal grand jury returned a one-count indictment against an executive of a Japanese manufacturer of automotive parts for his participation in a conspiracy to fix prices of seatbelts, the Department of Justice announced today.
The indictment, filed today in the U.S. District Court for the Eastern District of Michigan, charges Hiromu Usuda, an executive at Takata Corp., with conspiring to rig bids for, and to fix, stabilize and maintain the prices of, seatbelts sold to Toyota Motor Corp., Honda Motor Company Ltd., Nissan Motor Co. Ltd., Mazda Motor Corp., Fuji Heavy Industries Ltd. – more commonly known by its brand name, Subaru – and/or certain of their subsidiaries, for installation in vehicles manufactured and sold in the United States and elsewhere. Usuda served as Group and Department Manager in the Customer Relations Division at Takata, from January 2005 until at least February 2011.
Charitable groups help states with environmental efforts
Two charitable groups will spend $48 million over the next three years to help states figure out how to reduce emissions from electricity production, an effort to seize the possibilities that are opening up as the cost of clean power falls.
The plan is to be announced Wednesday morning in New York. Half the money will come from Bloomberg Philanthropies, the charitable organization set up by Michael R. Bloomberg, former mayor of New York City, and half will come from Mark Heising and Elizabeth Simons, a California couple who have taken a strong interest in reducing the risks of climate change.
In interviews, people involved in the project said the goal was to provide technical assistance, including economic forecasting and legal analysis, for a dozen or so states that are willing to consider ambitious clean-energy plans.
See http://www.nytimes.com/2015/01/21/business/energy-environment/for-states-48-million-to-help-cut-emissions.html?ref=business
Two charitable groups will spend $48 million over the next three years to help states figure out how to reduce emissions from electricity production, an effort to seize the possibilities that are opening up as the cost of clean power falls.
The plan is to be announced Wednesday morning in New York. Half the money will come from Bloomberg Philanthropies, the charitable organization set up by Michael R. Bloomberg, former mayor of New York City, and half will come from Mark Heising and Elizabeth Simons, a California couple who have taken a strong interest in reducing the risks of climate change.
In interviews, people involved in the project said the goal was to provide technical assistance, including economic forecasting and legal analysis, for a dozen or so states that are willing to consider ambitious clean-energy plans.
See http://www.nytimes.com/2015/01/21/business/energy-environment/for-states-48-million-to-help-cut-emissions.html?ref=business
Google, Viacom child web tracking suits dismissed
A New Jersey federal judge has permanently ended multidistrict litigation accusing Google Inc. and Viacom Inc. of illegally tracking children's Internet and video-viewing activities, ruling a revised complaint still failed to meet the requirements for federal video privacy or state wiretapping laws.
U.S. District Judge Stanley R. Chesler dismissed the consolidated suit with prejudice, denying the minors and their parents’ arguments that the data Viacom collected and shared with Google could tie specific users to what videos they watched on child-focused sites, including Nick.com. The claim was that Google could use IP addresses and data from cookies placed by Viacom to identify their children based on Google's vast network of other web services that collect users' full names, such as Gmail.
Judge Chesler ruled that the plaintiffs needed to show how the information collected through Nick.com and other sites could be used on its own to link a user to specific videos, not by taking advantage of other data collected by Google. The claim also failed because the complaint never alleged any of the plaintiffs actually had a Google account that could be used to piece together personal information.
For order see https://www.scribd.com/doc/253283700/Order
A New Jersey federal judge has permanently ended multidistrict litigation accusing Google Inc. and Viacom Inc. of illegally tracking children's Internet and video-viewing activities, ruling a revised complaint still failed to meet the requirements for federal video privacy or state wiretapping laws.
U.S. District Judge Stanley R. Chesler dismissed the consolidated suit with prejudice, denying the minors and their parents’ arguments that the data Viacom collected and shared with Google could tie specific users to what videos they watched on child-focused sites, including Nick.com. The claim was that Google could use IP addresses and data from cookies placed by Viacom to identify their children based on Google's vast network of other web services that collect users' full names, such as Gmail.
Judge Chesler ruled that the plaintiffs needed to show how the information collected through Nick.com and other sites could be used on its own to link a user to specific videos, not by taking advantage of other data collected by Google. The claim also failed because the complaint never alleged any of the plaintiffs actually had a Google account that could be used to piece together personal information.
For order see https://www.scribd.com/doc/253283700/Order
BNY Mellon Sued Over Foreclosure On Army Reservist's Home
A U.S. Army Reserve sergeant has filed a putative class action against the Bank of New York Mellon in Pennsylvania federal court for allegedly violating a law protecting service members by foreclosing on her home while acting as a mortgage-backed securities trustee, leading to its sale while she was serving in Afghanistan.
The complaint, filed Thursday by Sgt. Amanda Wensel, alleges the bank violated the Servicemembers Civil Relief Act, which limits a lender's ability to foreclose on an active duty service member's property, for seizing her home and personal property while she was on active duty between 2011 and 2013.
“As a result of the defendant's illegal and improper conduct,” the complaint says, “Sgt. Wensel and members of the class have lost their real property, along with any equity they had in it and have incurred additional and unnecessary expenses as a result.”
A U.S. Army Reserve sergeant has filed a putative class action against the Bank of New York Mellon in Pennsylvania federal court for allegedly violating a law protecting service members by foreclosing on her home while acting as a mortgage-backed securities trustee, leading to its sale while she was serving in Afghanistan.
The complaint, filed Thursday by Sgt. Amanda Wensel, alleges the bank violated the Servicemembers Civil Relief Act, which limits a lender's ability to foreclose on an active duty service member's property, for seizing her home and personal property while she was on active duty between 2011 and 2013.
“As a result of the defendant's illegal and improper conduct,” the complaint says, “Sgt. Wensel and members of the class have lost their real property, along with any equity they had in it and have incurred additional and unnecessary expenses as a result.”
High Court Rejects Challenge To Fed’s Debit Card Fee Rules
Law360, New York (January 20, 2015, 10:08 AM ET) -- The U.S. Supreme Court on Tuesday said it would not hear retailers’ challenge to the Federal Reserve’s debit card interchange fee rules, effectively ending their fight over the Dodd-Frank Act’s so-called Durbin amendment.
The denial of the petition for certiorari filed by the convenience store industry group NACS, the National Retail Federation and other industry groups in their last-ditch bid to overturn the Fed's swipe fee rules will allow the regulations, which establish a cap of 21 cents plus an adjustment for fraud losses of 0.05 percent of the transaction value on all debit card transactions, to stand.
Law360, New York (January 20, 2015, 10:08 AM ET) -- The U.S. Supreme Court on Tuesday said it would not hear retailers’ challenge to the Federal Reserve’s debit card interchange fee rules, effectively ending their fight over the Dodd-Frank Act’s so-called Durbin amendment.
The denial of the petition for certiorari filed by the convenience store industry group NACS, the National Retail Federation and other industry groups in their last-ditch bid to overturn the Fed's swipe fee rules will allow the regulations, which establish a cap of 21 cents plus an adjustment for fraud losses of 0.05 percent of the transaction value on all debit card transactions, to stand.
Nebraska State bill would hold ATM users harmless
A bill submitted to the Nebraska legislature by state senator Bob Krist, an Independent, seeks to change the state's provisions for ATM licensing.
According to a Stateside Alert, the bill (L.B. 348 — ATM Licensing) before Nebraska lawmakers would establish the following:
[T]hat a group of two or more financial institutions, or a combination of a financial institution or financial institutions and a third party or parties, may contract for the operation of ATMs. Provides that every ATM must either provide or offer a receipt. Provides that no account holder shall be liable for any loss occurring as the result of any tampering or manipulation of an ATM unless such account holder performs or authorizes such tampering or manipulation.
Provides that no agreement to operate or share an ATM may prohibit, limit or restrict the right of an operator or owner of an ATM to charge a fee. Provides that nothing in this measure may be construed to prohibit, limit, or restrict the right of an operator or owner of an ATM from voluntarily entering into an agreement to participate in a surcharge fee network.
A bill submitted to the Nebraska legislature by state senator Bob Krist, an Independent, seeks to change the state's provisions for ATM licensing.
According to a Stateside Alert, the bill (L.B. 348 — ATM Licensing) before Nebraska lawmakers would establish the following:
[T]hat a group of two or more financial institutions, or a combination of a financial institution or financial institutions and a third party or parties, may contract for the operation of ATMs. Provides that every ATM must either provide or offer a receipt. Provides that no account holder shall be liable for any loss occurring as the result of any tampering or manipulation of an ATM unless such account holder performs or authorizes such tampering or manipulation.
Provides that no agreement to operate or share an ATM may prohibit, limit or restrict the right of an operator or owner of an ATM to charge a fee. Provides that nothing in this measure may be construed to prohibit, limit, or restrict the right of an operator or owner of an ATM from voluntarily entering into an agreement to participate in a surcharge fee network.
CareMed Accuses Express Scripts of Monopolizing Local Pharmacy Market (from AT-HCIC weekly newsletter)
On Wednesday, January 14, retail specialty pharmacy CareMed Pharmaceutical Services filed a lawsuit against pharmacy benefit manager Express Scripts Inc., alleging that Express Scripts attempted to monopolize a local Missouri pharmacy market. CareMed argues that Express Scripts wrongfully terminated its contract with CareMed shortly after CareMed announced that it would pay the federal government $10 million to settle a False Claims Act suit accusing the company of double-billing insurers and lying on the phone to secure early authorization of drug coverage. Express Scripts allegedly acted on a news release from the U.S. Department of Justice, reasoning that the contract was terminable because CareMed pled guilty to fraud. CareMed argues that it did not plead guilty to fraud and made only limited admissions in connection with the False Claims Act suit, meaning the contract was not properly terminable. Express Scripts, which allegedly manages drug benefits for over 200 million Americans, purportedly hoped to lure away CareMed’s 8,000 customers to its own specialty pharmacy. The complaint seeks an injunction as well as damages.
· The case is Sorkin’s Rx Ltd. v. Express Scripts Inc. et al., No. 4:15-cv-00114 (E.D. Mo.)
Medical Equipment Supplier Accused of Leveraging Dominance in Hospital Bed Market
(from AT-HCIC weekly newsletter)
On Tuesday, January 13, medical equipment rental company Universal Hospital Services, Inc. sued competing supplier Hill-Rom Holdings, Inc., alleging that Hill-Rom uses its dominance in the market for hospital beds to shut out rivals by promising beds at steep discounts to hospitals that also promise to rent Hill-Rom equipment. According to the lawsuit, Hill-Rom has executed this monopolistic strategy by negotiating sole-source agreements with group purchasing organizations and hospital networks that provide for steep discounts on the sale of hospital beds and also include commitments that the hospitals will rent equipment from Hill-Rom. UHS alleges that other rental equipment providers that do not sell hospital beds cannot compete without offering their rental products below cost. Among other things, UHS seeks injunctive relief and treble damages.
· The case is Universal Hosp. Servs., Inc. v. Hill-Rom Holdings, Inc. et al., No. 5:15-cv-32 (W.D. Tex.)
On Wednesday, January 14, retail specialty pharmacy CareMed Pharmaceutical Services filed a lawsuit against pharmacy benefit manager Express Scripts Inc., alleging that Express Scripts attempted to monopolize a local Missouri pharmacy market. CareMed argues that Express Scripts wrongfully terminated its contract with CareMed shortly after CareMed announced that it would pay the federal government $10 million to settle a False Claims Act suit accusing the company of double-billing insurers and lying on the phone to secure early authorization of drug coverage. Express Scripts allegedly acted on a news release from the U.S. Department of Justice, reasoning that the contract was terminable because CareMed pled guilty to fraud. CareMed argues that it did not plead guilty to fraud and made only limited admissions in connection with the False Claims Act suit, meaning the contract was not properly terminable. Express Scripts, which allegedly manages drug benefits for over 200 million Americans, purportedly hoped to lure away CareMed’s 8,000 customers to its own specialty pharmacy. The complaint seeks an injunction as well as damages.
· The case is Sorkin’s Rx Ltd. v. Express Scripts Inc. et al., No. 4:15-cv-00114 (E.D. Mo.)
Medical Equipment Supplier Accused of Leveraging Dominance in Hospital Bed Market
(from AT-HCIC weekly newsletter)
On Tuesday, January 13, medical equipment rental company Universal Hospital Services, Inc. sued competing supplier Hill-Rom Holdings, Inc., alleging that Hill-Rom uses its dominance in the market for hospital beds to shut out rivals by promising beds at steep discounts to hospitals that also promise to rent Hill-Rom equipment. According to the lawsuit, Hill-Rom has executed this monopolistic strategy by negotiating sole-source agreements with group purchasing organizations and hospital networks that provide for steep discounts on the sale of hospital beds and also include commitments that the hospitals will rent equipment from Hill-Rom. UHS alleges that other rental equipment providers that do not sell hospital beds cannot compete without offering their rental products below cost. Among other things, UHS seeks injunctive relief and treble damages.
· The case is Universal Hosp. Servs., Inc. v. Hill-Rom Holdings, Inc. et al., No. 5:15-cv-32 (W.D. Tex.)
Zombie cookies: How Verizon Wireless’s ‘supercookies’ make it even harder to avoid being tracked online
See http://www.washingtonpost.com/blogs/the-switch/wp/2015/01/17/zombie-cookies-how-verizon-wirelesss-supercookies-make-it-even-harder-to-avoid-being-tracked-online/
See http://www.washingtonpost.com/blogs/the-switch/wp/2015/01/17/zombie-cookies-how-verizon-wirelesss-supercookies-make-it-even-harder-to-avoid-being-tracked-online/
Public interest groups support consumer and privacy protections of the Telephone Consumer Protection Act
NACA, NCLC and over 75 consumer & other public interest groups have submitted a letter to the FCC urging the Commission not to weaken the consumer and privacy protections of the Telephone Consumer Protection Act (TCPA).
Here is a link to the press release http://bit.ly/1znaHQX, which includes a link to the group letter: http://bit.ly/1AYovzy .
NACA, NCLC and over 75 consumer & other public interest groups have submitted a letter to the FCC urging the Commission not to weaken the consumer and privacy protections of the Telephone Consumer Protection Act (TCPA).
Here is a link to the press release http://bit.ly/1znaHQX, which includes a link to the group letter: http://bit.ly/1AYovzy .
Baseball’s antitrust exemption upheld in appeals court
Baseball scored a legal win concerning its exemption from antitrust laws. But there may be an appeal to the Supreme Court by San Jose, Calif. The 9th U.S. Circuit Court of Appeals upheld Major League Baseball's exemption from antitrust laws in a suit filed by San Jose that seeks to clear the way for the Oakland A's to move south to Silicon Valley.
A distinction between the San Jose suit and other exemption litigation is that it goes to the core of organized baseball's activity -- team location, as opposed to secondary activities like management of TV rights. Baseball's grip on secondary activities may be less secure. Think about the U.S. Supreme Court's logic in American Needle.
Baseball scored a legal win concerning its exemption from antitrust laws. But there may be an appeal to the Supreme Court by San Jose, Calif. The 9th U.S. Circuit Court of Appeals upheld Major League Baseball's exemption from antitrust laws in a suit filed by San Jose that seeks to clear the way for the Oakland A's to move south to Silicon Valley.
A distinction between the San Jose suit and other exemption litigation is that it goes to the core of organized baseball's activity -- team location, as opposed to secondary activities like management of TV rights. Baseball's grip on secondary activities may be less secure. Think about the U.S. Supreme Court's logic in American Needle.
California state court suit charges CVS with misleading promotion of nutritional supplement
Meredith v. CVS Health, a lawsuit filed in California state court, alleges that CVS promotes a nutritional supplement to help treat or prevent macular degeneration based on a National Institutes for Health study, even though the supplement doesn't contain the ingredients that NIH found might be beneficial. The Center for Science in the Public Interest is involved in the suit. Go here to see what CSPI has to say.
Meredith v. CVS Health, a lawsuit filed in California state court, alleges that CVS promotes a nutritional supplement to help treat or prevent macular degeneration based on a National Institutes for Health study, even though the supplement doesn't contain the ingredients that NIH found might be beneficial. The Center for Science in the Public Interest is involved in the suit. Go here to see what CSPI has to say.
Attorneys for state government asking the Illinois Supreme Court to reinstate law curbing public employee pensions
AG says constitutional protections of retirement benefits are not absolute
Attorney General Lisa Madigan’s office argues that the government’s so-called emergency police powers — the ability to take action to ensure the functions of government — trump the protections of the state constitution’s pension clause. The arguments by Illinois Attorney General Lisa Madigan's office are the first in what is expected to be a lengthy back-and-forth with lawyers for public workers and retirees over the fate of the December 2013 law. Illinois' worst-in-the-nation $105 billion unfunded public pension liability remains one of the most significant issues hovering over the state's shaky finances under new Gov. Bruce Rauner.
See http://www.chicagotribune.com/news/local/politics/ct-illinois-pension-reform-met0114-20150113-story.html
AG says constitutional protections of retirement benefits are not absolute
Attorney General Lisa Madigan’s office argues that the government’s so-called emergency police powers — the ability to take action to ensure the functions of government — trump the protections of the state constitution’s pension clause. The arguments by Illinois Attorney General Lisa Madigan's office are the first in what is expected to be a lengthy back-and-forth with lawyers for public workers and retirees over the fate of the December 2013 law. Illinois' worst-in-the-nation $105 billion unfunded public pension liability remains one of the most significant issues hovering over the state's shaky finances under new Gov. Bruce Rauner.
See http://www.chicagotribune.com/news/local/politics/ct-illinois-pension-reform-met0114-20150113-story.html
Local Maine health initiative earns accolades
A Maine community’s community-based health care model — The Franklin Model — is the subject of what is being called a tremendously important JAMA study titled “Community-Wide Cardiovascular Disease Prevention Programs and Health Outcomes in a Rural County 1970-2010.”
Included in the JAMA report is an editorial recommending the Franklin approach be studied for possible replication in rural areas of the United States and other parts of the world.
In fact, FMH Chief Operating Officer Gerald Cayer, one of 10 study co-authors, said the proof of improved health under the Franklin approach is so clear and the process so well-documented in the JAMA study that it supports the idea “that this approach is replicable and may be a piece of the surprising solution for fixing our health care system.”
At a news conference announcing details of the JAMA study Tuesday at Franklin Memorial Hospital, Dixon said the idea of teams reaching out to their neighbors to improve health care seemed straightforward and attainable in the 1970s, but “it was a deceptively difficult task” to document the work and prove that their approach works. And in the early years, not everyone in the county supported their efforts.
See http://www.sunjournal.com/news/franklin/2015/01/14/franklin-county-health-initiative-praised-national-medical-journal/1641559
A Maine community’s community-based health care model — The Franklin Model — is the subject of what is being called a tremendously important JAMA study titled “Community-Wide Cardiovascular Disease Prevention Programs and Health Outcomes in a Rural County 1970-2010.”
Included in the JAMA report is an editorial recommending the Franklin approach be studied for possible replication in rural areas of the United States and other parts of the world.
In fact, FMH Chief Operating Officer Gerald Cayer, one of 10 study co-authors, said the proof of improved health under the Franklin approach is so clear and the process so well-documented in the JAMA study that it supports the idea “that this approach is replicable and may be a piece of the surprising solution for fixing our health care system.”
At a news conference announcing details of the JAMA study Tuesday at Franklin Memorial Hospital, Dixon said the idea of teams reaching out to their neighbors to improve health care seemed straightforward and attainable in the 1970s, but “it was a deceptively difficult task” to document the work and prove that their approach works. And in the early years, not everyone in the county supported their efforts.
See http://www.sunjournal.com/news/franklin/2015/01/14/franklin-county-health-initiative-praised-national-medical-journal/1641559
GAO reports: A lack of clarity about how state charity regulators can use IRS data
Impedes state regulators’ ability to leverage IRS’s examination work
IRS and Treasury officials are reviewing the statutory protections of taxpayer data and whether there is flexibility in regard to how state regulators can use federal tax data. IRS officials are also working on a new MOU that will clarify how state charity regulators can communicate to charities about information they have received from IRS. Once completed, these actions have the potential to enable greater collaboration between IRS and state charity regulators.
See http://www.gao.gov/assets/670/667595.pdf
Impedes state regulators’ ability to leverage IRS’s examination work
IRS and Treasury officials are reviewing the statutory protections of taxpayer data and whether there is flexibility in regard to how state regulators can use federal tax data. IRS officials are also working on a new MOU that will clarify how state charity regulators can communicate to charities about information they have received from IRS. Once completed, these actions have the potential to enable greater collaboration between IRS and state charity regulators.
See http://www.gao.gov/assets/670/667595.pdf
EU Fines Servier and Other Generic Producers $583 Million Over Pay-For-Delay Deals
Focusing on an issue that has bee controversial in the US, the European Union’s competition regulator fined French pharmaceutical company Servier and five other generic producers $583 million for entering into anticompetitive agreements that delayed cheaper versions of perindopril, Servier’s blockbuster blood pressure medicine.See European Commission Press Release
Focusing on an issue that has bee controversial in the US, the European Union’s competition regulator fined French pharmaceutical company Servier and five other generic producers $583 million for entering into anticompetitive agreements that delayed cheaper versions of perindopril, Servier’s blockbuster blood pressure medicine.See European Commission Press Release
Supreme Court: consumer may exercise Truth in Lending Act right to rescind just by giving notice; lawsuit not required
Resolving a split among the federal courts of appeals in favor of consumers, the Supreme Court held today in Jesinoski v. Countrywide Home Loans, Inc., that a consumer may exercise the right to rescind a loan under the federal Truth in Lending Act simply by notifying the creditor rather than (as the creditor contended and as several federal courts had held) by filing a lawsuit. The unanimous opinion by Justice Scalia relied on the plain language of the statute, which provides that a borrower “shall have the right to rescind . . . by notifying the creditor, in accordance with regulations of the Board, of his intention to do so.” Obviously, it's much easier to provide notice than to file a lawsuit, so this is a clear win for consumers (an increasingly rare event at the Supreme Court these days). The full opinion is here.
Resolving a split among the federal courts of appeals in favor of consumers, the Supreme Court held today in Jesinoski v. Countrywide Home Loans, Inc., that a consumer may exercise the right to rescind a loan under the federal Truth in Lending Act simply by notifying the creditor rather than (as the creditor contended and as several federal courts had held) by filing a lawsuit. The unanimous opinion by Justice Scalia relied on the plain language of the statute, which provides that a borrower “shall have the right to rescind . . . by notifying the creditor, in accordance with regulations of the Board, of his intention to do so.” Obviously, it's much easier to provide notice than to file a lawsuit, so this is a clear win for consumers (an increasingly rare event at the Supreme Court these days). The full opinion is here.
CA study says that a refundable Earned Income Tax Credit (EITC) in California would help the poor:
From the executuve summary: Half of all states and the District of Columbia have created their own EITCs that build on the federal credit of the same name. The federal EITC is a refundable tax credit that encourages and rewards work by allowing low- and moderate-income individuals and families to keep more of their earnings and afford the basics. The federal EITC is one of the most effective policy tools for reducing poverty, and it lifts millions of children out of poverty every year. In addition, research shows that the EITC produces long-term benefi ts for families and children, such as improved health and educational outcomes and higher earnings in subsequent years.
See:http://www.cbp.org/pdfs/2014/141204_State_EITC_BB.pdf
From the executuve summary: Half of all states and the District of Columbia have created their own EITCs that build on the federal credit of the same name. The federal EITC is a refundable tax credit that encourages and rewards work by allowing low- and moderate-income individuals and families to keep more of their earnings and afford the basics. The federal EITC is one of the most effective policy tools for reducing poverty, and it lifts millions of children out of poverty every year. In addition, research shows that the EITC produces long-term benefi ts for families and children, such as improved health and educational outcomes and higher earnings in subsequent years.
See:http://www.cbp.org/pdfs/2014/141204_State_EITC_BB.pdf
Proposed federal data breach law v. existing state laws
President Obama ls calling for federal legislation intended to force American companies to be more forthcoming when credit card data and other consumer information are lost in an online breach like the kind that hit Sony, Target and Home Depot last year. The Personal Data Notification and Protection Act would demand a single, national standard requiring companies to inform their customers within 30 days of discovering their data has been hacked. The President is also proposing the Student Data Privacy Act, which would prohibit technology firms from profiting from information collected in schools as teachers adopt tablets, online services and Internet-connected software. In addition he is announcing voluntary agreements by companies to safeguard home energy data and to provide easy access to credit scores as an “early warning system” for identity theft.
Some cConsumer and privacy groups remain concerned that any federal standard could be weaker than the robust state laws passed in recent years. California, for example, recently passed a state law protecting student data.
“The problem is that the effect will likely be to pre-empt the stronger state laws,” said Marc Rotenberg, the president of the Electronic Privacy Information Center, who favors disclosure faster than 30 days. “We want a federal baseline, and leave the states with the freedom to establish stronger standards.”
Chris Calabrese, the senior policy director for the Center for Democracy and Technology, said that his group had not rejected the idea of a federal law, but that it depended on how it was written. “There is a lot of concern in the advocacy community about the possibility of a federal law being watered down,” Mr. Calabrese said.
See http://journalfocus.com/2015/01/obama-to-call-for-laws-covering-data-hacking-and-student-privacy/
President Obama ls calling for federal legislation intended to force American companies to be more forthcoming when credit card data and other consumer information are lost in an online breach like the kind that hit Sony, Target and Home Depot last year. The Personal Data Notification and Protection Act would demand a single, national standard requiring companies to inform their customers within 30 days of discovering their data has been hacked. The President is also proposing the Student Data Privacy Act, which would prohibit technology firms from profiting from information collected in schools as teachers adopt tablets, online services and Internet-connected software. In addition he is announcing voluntary agreements by companies to safeguard home energy data and to provide easy access to credit scores as an “early warning system” for identity theft.
Some cConsumer and privacy groups remain concerned that any federal standard could be weaker than the robust state laws passed in recent years. California, for example, recently passed a state law protecting student data.
“The problem is that the effect will likely be to pre-empt the stronger state laws,” said Marc Rotenberg, the president of the Electronic Privacy Information Center, who favors disclosure faster than 30 days. “We want a federal baseline, and leave the states with the freedom to establish stronger standards.”
Chris Calabrese, the senior policy director for the Center for Democracy and Technology, said that his group had not rejected the idea of a federal law, but that it depended on how it was written. “There is a lot of concern in the advocacy community about the possibility of a federal law being watered down,” Mr. Calabrese said.
See http://journalfocus.com/2015/01/obama-to-call-for-laws-covering-data-hacking-and-student-privacy/
California A.G.’s Office Joins Whistleblower Case Charging BP wth natural gas overcharge
The lawsuit alleges that BP is the exclusive supplier of natural gas to the State of California’s Natural Gas Services (“NGS”) program, through which California governmental entities buy hundreds of millions of dollars’ worth of natural gas every year. BP’s contracts with California contain explicit caps on the amount that BP can charge California for natural gas. The complaint contends that in violation of those contractual caps, BP has routinely charged California many times the amount that non-governmental customers were charged. Click below to view a copy of the First Amended Complaint.
First Amended Complaint
Should US Supreme Court reject preemption of State Antitrust Law with regard to manipulation of natural gas prices?
In an amicus brief filed in the US Supreme Court, the American Antitrust Institute (AAI) urged the Court to uphold a Ninth Circuit ruling that state antitrust claims in the natural gas market are not preempted by regulation of the market by the Federal Energy Regulatory Commission (FERC). The case involves claims by industrial, commercial and other direct purchasers of natural gas alleging that natural gas suppliers engaged in a price-fixing conspiracy by artificially inflating prices reported to trade-market indices to which the purchasers¹ contracts were pegged. The market manipulation contributed to the California energy crisis of 2000 and 2001.
The gas companies' theory of preemption, supported by the US Solicitor General, is that because FERC had jurisdiction to address the companies' index-reporting practices under the Natural Gas Act, state antitrust claims were preempted, notwithstanding that the claims did not conflict with any FERC policies or that plaintiffs could not have obtained any monetary relief from FERC.
The AAI argued in its brief that the gas companies' "field preemption" argument made no sense because, unlike state utility regulation, state antitrust law is not directed at the natural gas market. Rather, antitrust laws are basic to the operation of the free market in all industries. The brief argued that antitrust law complemented FERC oversight, and was particularly important in markets like natural gas that have been significantly deregulated.
The AAI also argued that state antitrust law is an important component of the United States antitrust regime and, contrary to the contention of the gas companies, posed no risks of "balkanized" standards, particularly when it comes to price fixing. Several states also filed an amicus brief arguing against preemption.
See http://www.antitrustinstitute.org/content/aai-tells-supreme-court-reject-preemption-state-antitrust-law-oneok-v-learjet
The AAI amicus is discussed in this recent news story: http://www.jsonline.com/business/businesses-seek-repayment-years-after-natural-gas-price-manipulation-b99422671z1-288175411.html
Tech Crunch reports: Utah Insurance Commissioner seeks to block free insurance service app (shades of regulating the Uber car service)
From the Tech Crunch article: It turns out the Utah insurance community doesn’t like competing with free, and the commission there is pushing back as a result. The letter from insurance commissioner Kiser (embedded below) states that by providing free, up-front services to all, Zenefits is violating Utah inducement and rebating laws for those who choose to have it manage their insurance as well. For violating those laws, the department claims Zenefits can be assessed a penalty of $5,000 per violation and twice the profit gained from those violations. The total amount based on the department’s initial assessment would mean Zenefits could be penalized $97,000 if it fails to comply with local laws. But the penalty itself is a small amount compared to the change in its business model if the local insurance department were to have its way. To comply with state laws, the department is urging Zenefits to stop advertising that it offers free HR cloud management services. More importantly, however, the regulator argues Zenefits should have to charge a “fair market value” for its services to ensure fair competition with other insurance licensees in the state. That’s not something Zenefits wants to do, of course, and the company says it will fight the department’s ruling in the courts to ensure it isn’t shut down in the meantime. Zenefits is also urging Utah Governor Gary Herbert to intervene as part of his commitment to support tech innovation in the state.
The Utah insurance commission letter can be found here, with the Tech Crunch article: http://techcrunch.com/2014/12/01/zenefits-utah/
In an amicus brief filed in the US Supreme Court, the American Antitrust Institute (AAI) urged the Court to uphold a Ninth Circuit ruling that state antitrust claims in the natural gas market are not preempted by regulation of the market by the Federal Energy Regulatory Commission (FERC). The case involves claims by industrial, commercial and other direct purchasers of natural gas alleging that natural gas suppliers engaged in a price-fixing conspiracy by artificially inflating prices reported to trade-market indices to which the purchasers¹ contracts were pegged. The market manipulation contributed to the California energy crisis of 2000 and 2001.
The gas companies' theory of preemption, supported by the US Solicitor General, is that because FERC had jurisdiction to address the companies' index-reporting practices under the Natural Gas Act, state antitrust claims were preempted, notwithstanding that the claims did not conflict with any FERC policies or that plaintiffs could not have obtained any monetary relief from FERC.
The AAI argued in its brief that the gas companies' "field preemption" argument made no sense because, unlike state utility regulation, state antitrust law is not directed at the natural gas market. Rather, antitrust laws are basic to the operation of the free market in all industries. The brief argued that antitrust law complemented FERC oversight, and was particularly important in markets like natural gas that have been significantly deregulated.
The AAI also argued that state antitrust law is an important component of the United States antitrust regime and, contrary to the contention of the gas companies, posed no risks of "balkanized" standards, particularly when it comes to price fixing. Several states also filed an amicus brief arguing against preemption.
See http://www.antitrustinstitute.org/content/aai-tells-supreme-court-reject-preemption-state-antitrust-law-oneok-v-learjet
The AAI amicus is discussed in this recent news story: http://www.jsonline.com/business/businesses-seek-repayment-years-after-natural-gas-price-manipulation-b99422671z1-288175411.html
Tech Crunch reports: Utah Insurance Commissioner seeks to block free insurance service app (shades of regulating the Uber car service)
From the Tech Crunch article: It turns out the Utah insurance community doesn’t like competing with free, and the commission there is pushing back as a result. The letter from insurance commissioner Kiser (embedded below) states that by providing free, up-front services to all, Zenefits is violating Utah inducement and rebating laws for those who choose to have it manage their insurance as well. For violating those laws, the department claims Zenefits can be assessed a penalty of $5,000 per violation and twice the profit gained from those violations. The total amount based on the department’s initial assessment would mean Zenefits could be penalized $97,000 if it fails to comply with local laws. But the penalty itself is a small amount compared to the change in its business model if the local insurance department were to have its way. To comply with state laws, the department is urging Zenefits to stop advertising that it offers free HR cloud management services. More importantly, however, the regulator argues Zenefits should have to charge a “fair market value” for its services to ensure fair competition with other insurance licensees in the state. That’s not something Zenefits wants to do, of course, and the company says it will fight the department’s ruling in the courts to ensure it isn’t shut down in the meantime. Zenefits is also urging Utah Governor Gary Herbert to intervene as part of his commitment to support tech innovation in the state.
The Utah insurance commission letter can be found here, with the Tech Crunch article: http://techcrunch.com/2014/12/01/zenefits-utah/
FTC report on mobile shopping apps
The FTC issued a report several months ago that discusses mobile shopping apps. Here are some of the report's suggestions:
●First, when offering consumers the ability to make payments through mobile devices, companies should disclose consumers’ rights and liability limits for unauthorized, fraudulent, or erroneous transactions. While a few of the in-store purchase apps that staff reviewed extended liability-limiting protections to consumers through pre-download representations, many provided no such disclosures. Some placed all liability for unauthorized charges on the consumer. Consumers should be able to know what their potential liability is for unauthorized transactions, what, if any, protections are available based on the method of payment, and whether procedures are available for resolving disputes, before committing to use one of these services.
●Second, companies should clearly describe how they collect, use, and share consumer data. While almost all of the apps that staff reviewed had privacy policies purporting to address how they handle consumer data, these policies often used vague terms, reserving broad rights to collect, use, and share consumer data without explaining how the apps actually handle consumers’ information. More detailed explanations would help consumers evaluate and compare the data practices of different services in order to make informed decisions about the apps they install.
●Third, companies should ensure that their strong data security promises translate into strong data security practices. Many of the surveyed apps promised to implement “technical,” “organizational,” or “physical” safeguards, such as data encryption, to ensure the security of consumers’ data. Staff encourages all app developers (and indeed all companies in this ecosystem) to provide strong protections for the data they collect, especially in light of the technological advances found in today’s smartphones that offer the potential for increased data security. And, certainly, companies must honor any commitments they make about the security they provide.
Staff also makes recommendations to consumers that use shopping apps.
The report is at http://www.ftc.gov/system/files/documents/reports/whats-deal-federal-trade-commission-study-mobile-shopping-apps-august-2014/140801mobileshoppingapps.pdf?utm_source=govdelivery
The FTC issued a report several months ago that discusses mobile shopping apps. Here are some of the report's suggestions:
●First, when offering consumers the ability to make payments through mobile devices, companies should disclose consumers’ rights and liability limits for unauthorized, fraudulent, or erroneous transactions. While a few of the in-store purchase apps that staff reviewed extended liability-limiting protections to consumers through pre-download representations, many provided no such disclosures. Some placed all liability for unauthorized charges on the consumer. Consumers should be able to know what their potential liability is for unauthorized transactions, what, if any, protections are available based on the method of payment, and whether procedures are available for resolving disputes, before committing to use one of these services.
●Second, companies should clearly describe how they collect, use, and share consumer data. While almost all of the apps that staff reviewed had privacy policies purporting to address how they handle consumer data, these policies often used vague terms, reserving broad rights to collect, use, and share consumer data without explaining how the apps actually handle consumers’ information. More detailed explanations would help consumers evaluate and compare the data practices of different services in order to make informed decisions about the apps they install.
●Third, companies should ensure that their strong data security promises translate into strong data security practices. Many of the surveyed apps promised to implement “technical,” “organizational,” or “physical” safeguards, such as data encryption, to ensure the security of consumers’ data. Staff encourages all app developers (and indeed all companies in this ecosystem) to provide strong protections for the data they collect, especially in light of the technological advances found in today’s smartphones that offer the potential for increased data security. And, certainly, companies must honor any commitments they make about the security they provide.
Staff also makes recommendations to consumers that use shopping apps.
The report is at http://www.ftc.gov/system/files/documents/reports/whats-deal-federal-trade-commission-study-mobile-shopping-apps-august-2014/140801mobileshoppingapps.pdf?utm_source=govdelivery
NYC: Debt collector to pay $1 million in restitution for collections on illegal payday loans
The New York City Department of Consumer Affairs announced this week that it has reached a settlement with collection company National Credit Adjusters (NCA) over collections on illegal payday loans. The Kansas-based company will pay approximately $1 million in restitution and the Department estimates over 4,600 New Yorkers will be eligible for compensation. NCA will also ask credit reporting agencies to delete negative information and pay hundreds of thousands of dollars in fines.
New York is one of 15 states that prohibit high-interest short-term loans, according to the Department.
Read the Department's press release here.
The New York City Department of Consumer Affairs announced this week that it has reached a settlement with collection company National Credit Adjusters (NCA) over collections on illegal payday loans. The Kansas-based company will pay approximately $1 million in restitution and the Department estimates over 4,600 New Yorkers will be eligible for compensation. NCA will also ask credit reporting agencies to delete negative information and pay hundreds of thousands of dollars in fines.
New York is one of 15 states that prohibit high-interest short-term loans, according to the Department.
Read the Department's press release here.
NY AG Urges Second Circuit to Deny Actavis Request for Stay Pending Appeal
The New York attorney general has filed its opposition to Actavis and its New York-based subsidiary Forest Laboratories LLC’s motion to the Second Circuit for an emergency stay of the preliminary injunction issued by the lower court preventing Actavis from pulling Namenda IR from the market while Actavis and Forest pursue an appeal. Last month, U.S. District Judge Robert W. Sweet blocked Actavis and Forest from pulling the older version of Namenda from the market as the New York AG pursues antitrust claims against Actavis for allegedly forcing patients to switch to a new, extended-release version of the medication called Namenda XR.
The New York attorney general has filed its opposition to Actavis and its New York-based subsidiary Forest Laboratories LLC’s motion to the Second Circuit for an emergency stay of the preliminary injunction issued by the lower court preventing Actavis from pulling Namenda IR from the market while Actavis and Forest pursue an appeal. Last month, U.S. District Judge Robert W. Sweet blocked Actavis and Forest from pulling the older version of Namenda from the market as the New York AG pursues antitrust claims against Actavis for allegedly forcing patients to switch to a new, extended-release version of the medication called Namenda XR.
- The case is The People of the State of New York v. Actavis PLC et al., No. 1:14-cv-07473 (S.D.N.Y.). The appeal is The People of the State of New York v. Actavis PLC et al., No. 14-4624 (2d Cir.)
From Public Citizen Blog --- Privacy/technology litigation round up
A couple of significant pro-consumer, pro-privacy rulings over the last two weeks of 2014:
First, a federal district court in Minnesota rejected the argument that putative class of Target consumers harmed by the retail giant's data breach lacked standing to sue over the breach. As Law360 reports, the court "concluded that the plaintiffs' assertions that the breach had caused them to pay unlawful charges, restricted or blocked access to their bank accounts, made them unable to pay other bills, and caused them to pay unfair late charges and new card fees were sufficient to allow them to proceed with their claims at this early stage in the litigation." Read the story here. For a relevant discussion of the harms caused by data breaches, read Public Citizen's amicus brief in FTC v. Wyndham, pending in the Third Circuit.
Second, a federal district court in California rejected a motion to dismiss a class action against Facebook for intercepting the content of users' electronic messages in order to determine if users "like" a webpage (for purposes of Facebook's "like" counter) and in order to help Facebook send users targeted advertising. The putative class in the case, Campbell v. Facebook, alleges violations of both state and federal privacy law. Judge Hamilton's thoughtful opinion rejected the argument that Facebook's snooping into its users' messages is part of its "ordinary course of business" and therefore exempt from privacy protections: “An electronic communications service provider cannot simply adopt any revenue-generating practice and deem it ‘ordinary’ by its own subjective standard. The court instead finds that any interception falling within the exception must be related or connected to an electronic communication provider’s service, even if it does not actually facilitate the service.” Coverage in the Recorder is here, and the opinion is here.
A couple of significant pro-consumer, pro-privacy rulings over the last two weeks of 2014:
First, a federal district court in Minnesota rejected the argument that putative class of Target consumers harmed by the retail giant's data breach lacked standing to sue over the breach. As Law360 reports, the court "concluded that the plaintiffs' assertions that the breach had caused them to pay unlawful charges, restricted or blocked access to their bank accounts, made them unable to pay other bills, and caused them to pay unfair late charges and new card fees were sufficient to allow them to proceed with their claims at this early stage in the litigation." Read the story here. For a relevant discussion of the harms caused by data breaches, read Public Citizen's amicus brief in FTC v. Wyndham, pending in the Third Circuit.
Second, a federal district court in California rejected a motion to dismiss a class action against Facebook for intercepting the content of users' electronic messages in order to determine if users "like" a webpage (for purposes of Facebook's "like" counter) and in order to help Facebook send users targeted advertising. The putative class in the case, Campbell v. Facebook, alleges violations of both state and federal privacy law. Judge Hamilton's thoughtful opinion rejected the argument that Facebook's snooping into its users' messages is part of its "ordinary course of business" and therefore exempt from privacy protections: “An electronic communications service provider cannot simply adopt any revenue-generating practice and deem it ‘ordinary’ by its own subjective standard. The court instead finds that any interception falling within the exception must be related or connected to an electronic communication provider’s service, even if it does not actually facilitate the service.” Coverage in the Recorder is here, and the opinion is here.
Nebraska and Oklahoma AGs challenge Colorado on marijuana
From Dickstein Shapiro's State AG Monitor --
AGs from Nebraska and Oklahoma filed a motion in the U.S. Supreme Court seeking leave to bring a lawsuit challenging Colorado’s Amendment 64, and related implementing regulations, which have established a regulatory framework allowing for the personal sale and consumption of marijuana. (Pursuant to Article III, § 2, cl.2 of the U.S. Constitution, and 28 U.S.C. § 1251(a), the Supreme Court has original and exclusive jurisdiction over cases and controversies between two or more states.) The AG plaintiffs argue that Amendment 64 to the Colorado Constitution violates the U.S. Controlled Substances Act (CSA) and is therefore unconstitutional under the Supremacy Clause.See http://www.stateagmonitor.com/2014/12/22/marijuana-wars-reach-scotus/
From Dickstein Shapiro's State AG Monitor --
AGs from Nebraska and Oklahoma filed a motion in the U.S. Supreme Court seeking leave to bring a lawsuit challenging Colorado’s Amendment 64, and related implementing regulations, which have established a regulatory framework allowing for the personal sale and consumption of marijuana. (Pursuant to Article III, § 2, cl.2 of the U.S. Constitution, and 28 U.S.C. § 1251(a), the Supreme Court has original and exclusive jurisdiction over cases and controversies between two or more states.) The AG plaintiffs argue that Amendment 64 to the Colorado Constitution violates the U.S. Controlled Substances Act (CSA) and is therefore unconstitutional under the Supremacy Clause.See http://www.stateagmonitor.com/2014/12/22/marijuana-wars-reach-scotus/
On local regulation that impedes competition, and the thoughts of George Will
It seems easy to agree to the FTC’s expressed pragmatic views on local regulation that impedes competition. The FTC's formulation focuses on the key modern analytical question -- is regulation necessary to achieve some benefit that justifies interfering with unfettered competition:
A forward looking regulatory framework should allow new and innovative forms of competition to enter the marketplace unless regulation is necessary to achieve some countervailing pro-competitive or other benefit, such as protecting the public from significant harm. Consumers benefit from competition between traditional and new products and services, and from new methods of delivering services. Regulations therefore need to be reviewed and revised periodically to facilitate and encourage the emergence of new forms of competition.
http://www.ftc.gov/sites/default/files/documents/advocacy_documents/ftc-staff-comments-district-columbia-taxicab-commission-concerning-proposed-rulemakings-passenger/130612dctaxicab.pdf
George Will has written a column about local Certificate of Need regulations that go amok when they are misused by competitors to block entry by competitors that would help consumers, such as consumers of moving services. http://www.washingtonpost.com/opinions/george-will-a-strike-against-rent-seeking/2014/12/31/ba5a1686-9109-11e4-ba53-a477d66580ed_story.ht
To an extent the Will outlook matches the common sense comments of the FTC about local regulation that blocks competition. But to an extent Will takes us into unusual waters. He relies on an article in George Mason University’s Civil Rights Law Journal for the idea that the case law on civil liberties should revert to what it was in the early 1900s, when the courts were unsympathetic to any government restrictions on commerce (Lochner v New York ,198 U.S. 45 (1905)). That idea ignores later case law developments that permitted such limits on civil liberties arguments as permitting minimum wage laws.
Also, Will resorts to political-label name calling. People who disagree with Will supposedly suffer from “what Friedrich Hayek called socialism’s knowledge problem: For government to supplant markets in the efficient allocation of wealth and opportunity, governments must have infinite information to make them clairvoyant.”
Whether civil rights thinking should supplant antitrust thinking as articulated by the FTC is a fair point for discussion, as is the question of whether people who disagree with Will are befuddled socialists. There is something to be said for talking about antitrust as politics even when the discussion ignores prevailing case law. But such discussions, as valuable as they may be, are some steps removed from the pragmatic approach to modern professional antitrust practice articulated by the FTC.
By Don Allen Resnikoff
It seems easy to agree to the FTC’s expressed pragmatic views on local regulation that impedes competition. The FTC's formulation focuses on the key modern analytical question -- is regulation necessary to achieve some benefit that justifies interfering with unfettered competition:
A forward looking regulatory framework should allow new and innovative forms of competition to enter the marketplace unless regulation is necessary to achieve some countervailing pro-competitive or other benefit, such as protecting the public from significant harm. Consumers benefit from competition between traditional and new products and services, and from new methods of delivering services. Regulations therefore need to be reviewed and revised periodically to facilitate and encourage the emergence of new forms of competition.
http://www.ftc.gov/sites/default/files/documents/advocacy_documents/ftc-staff-comments-district-columbia-taxicab-commission-concerning-proposed-rulemakings-passenger/130612dctaxicab.pdf
George Will has written a column about local Certificate of Need regulations that go amok when they are misused by competitors to block entry by competitors that would help consumers, such as consumers of moving services. http://www.washingtonpost.com/opinions/george-will-a-strike-against-rent-seeking/2014/12/31/ba5a1686-9109-11e4-ba53-a477d66580ed_story.ht
To an extent the Will outlook matches the common sense comments of the FTC about local regulation that blocks competition. But to an extent Will takes us into unusual waters. He relies on an article in George Mason University’s Civil Rights Law Journal for the idea that the case law on civil liberties should revert to what it was in the early 1900s, when the courts were unsympathetic to any government restrictions on commerce (Lochner v New York ,198 U.S. 45 (1905)). That idea ignores later case law developments that permitted such limits on civil liberties arguments as permitting minimum wage laws.
Also, Will resorts to political-label name calling. People who disagree with Will supposedly suffer from “what Friedrich Hayek called socialism’s knowledge problem: For government to supplant markets in the efficient allocation of wealth and opportunity, governments must have infinite information to make them clairvoyant.”
Whether civil rights thinking should supplant antitrust thinking as articulated by the FTC is a fair point for discussion, as is the question of whether people who disagree with Will are befuddled socialists. There is something to be said for talking about antitrust as politics even when the discussion ignores prevailing case law. But such discussions, as valuable as they may be, are some steps removed from the pragmatic approach to modern professional antitrust practice articulated by the FTC.
By Don Allen Resnikoff
NY Times: State caps on money recoveries discouraged litigation on GM ignition defects
Wisconsin's caps discouraged litigation; Georgia's lack of caps allowed liability litigation to go forward, according to the NY Times article:
Companies, lawyers and judges have long faced criticism for suppressing information contained in lawsuits about product dangers. However, legal experts said that factors such as tort reform and rising lawsuit costs might be further dimming the legal system’s role in bringing such risks to light. Those experts said that the incentives for plaintiffs’ lawyers to invest large sums of money in a case that may or not serve as a kind of legal canary in a coal mine have been diminished. “It is harder to win,” added John C. P. Goldberg, a law professor at Harvard University. Some lawyers say the changed financial calculus has affected the kinds of cases being pursued. “You cannot afford to take an auto products case unless there is a death or serious injury,” said James E. Butler Jr., a plaintiff’s lawyer whose firm was involved in a case against G.M. that the company later counted as one of those linked to the faulty ignition switch.
In the end, the defect’s public disclosure — and the recall of 2.2 million G.M. vehicles in the United States — was set in motion by a lawsuit filed in Georgia, a state that does not place strict caps on damages in product liability lawsuits. “It increases the ability of a plaintiff to bring a claim,” said the lawyer, Lance Cooper of Marietta, Ga., who filed a lawsuit in 2011 in the case of 29-year-old Brooke Melton, who died in a Chevrolet Cobalt crash.
http://www.nytimes.com/2014/12/30/business/victims-of-gm-deadly-defect-fall-through-legal-cracks.html?hp&action=click&pg&module=second-column-region®ion=top-news&WT.nav=top-news
Wisconsin's caps discouraged litigation; Georgia's lack of caps allowed liability litigation to go forward, according to the NY Times article:
Companies, lawyers and judges have long faced criticism for suppressing information contained in lawsuits about product dangers. However, legal experts said that factors such as tort reform and rising lawsuit costs might be further dimming the legal system’s role in bringing such risks to light. Those experts said that the incentives for plaintiffs’ lawyers to invest large sums of money in a case that may or not serve as a kind of legal canary in a coal mine have been diminished. “It is harder to win,” added John C. P. Goldberg, a law professor at Harvard University. Some lawyers say the changed financial calculus has affected the kinds of cases being pursued. “You cannot afford to take an auto products case unless there is a death or serious injury,” said James E. Butler Jr., a plaintiff’s lawyer whose firm was involved in a case against G.M. that the company later counted as one of those linked to the faulty ignition switch.
In the end, the defect’s public disclosure — and the recall of 2.2 million G.M. vehicles in the United States — was set in motion by a lawsuit filed in Georgia, a state that does not place strict caps on damages in product liability lawsuits. “It increases the ability of a plaintiff to bring a claim,” said the lawyer, Lance Cooper of Marietta, Ga., who filed a lawsuit in 2011 in the case of 29-year-old Brooke Melton, who died in a Chevrolet Cobalt crash.
http://www.nytimes.com/2014/12/30/business/victims-of-gm-deadly-defect-fall-through-legal-cracks.html?hp&action=click&pg&module=second-column-region®ion=top-news&WT.nav=top-news
NY Times on efforts to change the way state attorneys general interact with lobbyists, campaign donors and other corporate representatives.
The NY Times reports: This month, during a closed-door meeting of the National Association of Attorneys General, officials voted to stop accepting corporate sponsorships. In Missouri, a bill has been introduced that would require the attorney general, as well as certain other state officials, to disclose within 48 hours any political contribution worth more than $500. And in Washington State, legislation is being drafted to bar attorneys general who leave office from lobbying their former colleagues for a year.
Perhaps most significant, a White House ethics lawyer in the administration of George W. Bush has asked the American Bar Association to change its national code of conduct to prohibit attorneys general from discussing continuing investigations or other official matters while participating in fund-raising events at resort destinations, as they often now do. Those measures could be adopted in individual states.
See http://www.nytimes.com/2014/12/27/us/bipartisan-effort-to-restrict-lobbyists-influence-of-attorneys-general.html?hp&action=click&pg&module=first-column-region®ion=top-news&WT.nav=top-news&_r=0
The NY Times reports: This month, during a closed-door meeting of the National Association of Attorneys General, officials voted to stop accepting corporate sponsorships. In Missouri, a bill has been introduced that would require the attorney general, as well as certain other state officials, to disclose within 48 hours any political contribution worth more than $500. And in Washington State, legislation is being drafted to bar attorneys general who leave office from lobbying their former colleagues for a year.
Perhaps most significant, a White House ethics lawyer in the administration of George W. Bush has asked the American Bar Association to change its national code of conduct to prohibit attorneys general from discussing continuing investigations or other official matters while participating in fund-raising events at resort destinations, as they often now do. Those measures could be adopted in individual states.
See http://www.nytimes.com/2014/12/27/us/bipartisan-effort-to-restrict-lobbyists-influence-of-attorneys-general.html?hp&action=click&pg&module=first-column-region®ion=top-news&WT.nav=top-news&_r=0
Case law on State AG's right to hire outside counsel for affirmative litigation
An ABA article discusses three cases that involve significant developments relating to AGs’ hiring of contingency-fee counsel. The article explains that although the cases hail from different jurisdictions, they will most likely serve as persuasive authority for other courts. The recent trend appears to favor AGs. Nevertheless, the cases illustrate challenges that AGs can expect related to their authority to retain private counsel. To that end, AGs are best served to prepare to defend their authority and demonstrate full control over the litigation.
The article is by Carolyn Anderson and June Hoidal of the firm Zimmerman Reed in Minneapolis, Minnesota.,
The article is at http://www.americanbar.org/publications/state_local_law_news/2013-14/fall-2013/three_courts_weigh_on_ags_authority_retain_outside_counsel.html
An ABA article discusses three cases that involve significant developments relating to AGs’ hiring of contingency-fee counsel. The article explains that although the cases hail from different jurisdictions, they will most likely serve as persuasive authority for other courts. The recent trend appears to favor AGs. Nevertheless, the cases illustrate challenges that AGs can expect related to their authority to retain private counsel. To that end, AGs are best served to prepare to defend their authority and demonstrate full control over the litigation.
The article is by Carolyn Anderson and June Hoidal of the firm Zimmerman Reed in Minneapolis, Minnesota.,
The article is at http://www.americanbar.org/publications/state_local_law_news/2013-14/fall-2013/three_courts_weigh_on_ags_authority_retain_outside_counsel.html
LA Times supports CA law requiring space for egg-laying chickens
From LA Times editorial: Next month, all of California's 15 million egg-laying hens must be freed from the cramped, restrictive battery cages that have long been used on most egg farms. In the future, they will have enough space to stand up, lie down, turn around, and spread their wings without touching another bird.lRelated Opinion L.A.Hens win: Out-of-state egg farmers must comply with California lawSee all related8 Just because they are certain to end up on a dinner plate or in a barn producing eggs or milk doesn't obviate the need to treat them humanely during their short lives. Proposition 2, which passed in 2008 by a landslide 63.5% of the vote, also covers gestating pigs and veal calves, but there are few pig and veal operations in the state, so the law's biggest effect is on the hens. A separate law requires all out-of-state egg producers that sell to California (which gets about a third of its eggs from farmers outside the state) to comply with the same housing standards for hens.
Not surprisingly, egg producers have sued, variously arguing that Proposition 2 is vaguely worded or that the companion law unconstitutionally interferes with interstate commerce. All the suits have been dismissed. Two — including one brought by a group of state attorneys general led by Chris Koster of Missouri — are under appeal.
See http://www.latimes.com/opinion/editorials/la-ed-hens-eggs-california-proposition2-ab1437-20141226-story.html
From LA Times editorial: Next month, all of California's 15 million egg-laying hens must be freed from the cramped, restrictive battery cages that have long been used on most egg farms. In the future, they will have enough space to stand up, lie down, turn around, and spread their wings without touching another bird.lRelated Opinion L.A.Hens win: Out-of-state egg farmers must comply with California lawSee all related8 Just because they are certain to end up on a dinner plate or in a barn producing eggs or milk doesn't obviate the need to treat them humanely during their short lives. Proposition 2, which passed in 2008 by a landslide 63.5% of the vote, also covers gestating pigs and veal calves, but there are few pig and veal operations in the state, so the law's biggest effect is on the hens. A separate law requires all out-of-state egg producers that sell to California (which gets about a third of its eggs from farmers outside the state) to comply with the same housing standards for hens.
Not surprisingly, egg producers have sued, variously arguing that Proposition 2 is vaguely worded or that the companion law unconstitutionally interferes with interstate commerce. All the suits have been dismissed. Two — including one brought by a group of state attorneys general led by Chris Koster of Missouri — are under appeal.
See http://www.latimes.com/opinion/editorials/la-ed-hens-eggs-california-proposition2-ab1437-20141226-story.html
State AG group appeals CA decision requiring space for egg-laying chickens
Six states are back in federal court to challenge a California ban on the sale of eggs from hens kept in cramped cages. The governor of Iowa and the attorneys general of Missouri, Nebraska, Oklahoma, Alabama and Kentucky filed a notice Oct. 24 that they will appeal a U.S. district court’s dismissal of their case. They had argued that the law forces farmers in other states to make costly changes in their operations and violates the U.S. Constitution.
“We don’t want a trade war in America but we think that California is dead wrong on this,” said Iowa Gov. Terry Branstad, a Republican. Iowa is the country’s top egg-producing state.
“In Alabama, consumers are free to make their own choice of which eggs to buy at their grocery stores, and it is preposterous and quite simply wrong for California to tell Alabama how we must produce eggs,” Alabama Attorney General Luther Strange said in a statement. “If California can get away with this, it won’t be long before the environmentalists in California tell us how we must build cars, grow crops, and raise cattle, too.”
In 2008, California voters approved a ballot initiative, Proposition 2, prohibiting the state’s farmers from confining hens in a way that prevents them from turning around freely, lying down, standing up and fully extending their limbs. Two years later, California lawmakers banned the sale of eggs—from any state—that have been produced by hens in conventional or “battery” cages.
From: http://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2014/11/04/interstate-egg-fight-erupts-over-cramped-hen-cages
Six states are back in federal court to challenge a California ban on the sale of eggs from hens kept in cramped cages. The governor of Iowa and the attorneys general of Missouri, Nebraska, Oklahoma, Alabama and Kentucky filed a notice Oct. 24 that they will appeal a U.S. district court’s dismissal of their case. They had argued that the law forces farmers in other states to make costly changes in their operations and violates the U.S. Constitution.
“We don’t want a trade war in America but we think that California is dead wrong on this,” said Iowa Gov. Terry Branstad, a Republican. Iowa is the country’s top egg-producing state.
“In Alabama, consumers are free to make their own choice of which eggs to buy at their grocery stores, and it is preposterous and quite simply wrong for California to tell Alabama how we must produce eggs,” Alabama Attorney General Luther Strange said in a statement. “If California can get away with this, it won’t be long before the environmentalists in California tell us how we must build cars, grow crops, and raise cattle, too.”
In 2008, California voters approved a ballot initiative, Proposition 2, prohibiting the state’s farmers from confining hens in a way that prevents them from turning around freely, lying down, standing up and fully extending their limbs. Two years later, California lawmakers banned the sale of eggs—from any state—that have been produced by hens in conventional or “battery” cages.
From: http://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2014/11/04/interstate-egg-fight-erupts-over-cramped-hen-cages
David Boies' letter for Sony to Twitter on stolen information
From the letter, which refers to State as well as federal laws:
SPE does not consent to Twitter’s or any Twitter account holder’s possession, review, copying, dissemination, publication, uploading, downloading, or making any use of the Stolen Information, and [writes to] to request your cooperation in suspending the Account Holder’s Twitter account and the account of any other user seeking to disseminate the Stolen Information via Twitter. We understand that the Account Holder’s publication of this Stolen Information is (and any other account holder’s similar use would be) in violation of numerous provisions of Twitter’s Terms of Use, including the prohibitions against (i) publishing copyrighted materials and “other people's private and confidential information…without their express authorization and permission,” and (ii) use of Twitter “for any unlawful purposes or in furtherance of illegal activities.” The possession, use, and publishing of the Stolen Information implicates numerous federal and California state laws, including, but not limited to, the Computer Fraud & Abuse Act (18 U.S.C. § 1030), the Copyright Act (17 U.S.C. §§ 501, et seq.), the California Comprehensive Computer Data Access & Fraud Act (Cal. Penal Code § 502), California's Stolen Property Law (Cal. Penal Code § 496), the Uniform Trade Secrets Act (Cal. Civ. Code §§ 3426, et seq.), and the California Unfair Competition Law (Cal. Bus. & Prof. Code §§ 17200, et seq.), among others, especially when such actions are taken knowingly in furtherance of federal and state crimes committed by the perpetrators, including extortion.
The letter is posted at https://www.scribd.com/doc/250802459/Sony-Letter-to-Twitter
From the letter, which refers to State as well as federal laws:
SPE does not consent to Twitter’s or any Twitter account holder’s possession, review, copying, dissemination, publication, uploading, downloading, or making any use of the Stolen Information, and [writes to] to request your cooperation in suspending the Account Holder’s Twitter account and the account of any other user seeking to disseminate the Stolen Information via Twitter. We understand that the Account Holder’s publication of this Stolen Information is (and any other account holder’s similar use would be) in violation of numerous provisions of Twitter’s Terms of Use, including the prohibitions against (i) publishing copyrighted materials and “other people's private and confidential information…without their express authorization and permission,” and (ii) use of Twitter “for any unlawful purposes or in furtherance of illegal activities.” The possession, use, and publishing of the Stolen Information implicates numerous federal and California state laws, including, but not limited to, the Computer Fraud & Abuse Act (18 U.S.C. § 1030), the Copyright Act (17 U.S.C. §§ 501, et seq.), the California Comprehensive Computer Data Access & Fraud Act (Cal. Penal Code § 502), California's Stolen Property Law (Cal. Penal Code § 496), the Uniform Trade Secrets Act (Cal. Civ. Code §§ 3426, et seq.), and the California Unfair Competition Law (Cal. Bus. & Prof. Code §§ 17200, et seq.), among others, especially when such actions are taken knowingly in furtherance of federal and state crimes committed by the perpetrators, including extortion.
The letter is posted at https://www.scribd.com/doc/250802459/Sony-Letter-to-Twitter
NY State financial regulator settles action against Ocwen
New York's action against Ocwen is the latest in a history of aggressive New York State regulation of finance. New York’s top financial regulator said that as its business grew, Ocwen subjected borrowers to the same problems as the big banks: missing paperwork, improper foreclosures and robo-signings. On Monday, Mr. Erbey agreed to step down as chairman of Ocwen, one of the nation’s largest mortgage servicers, as a part of a settlement with Benjamin M. Lawsky, New York’s superintendent of financial services.
http://dealbook.nytimes.com/2014/12/22/ocwen-chairman-to-step-down-in-settlement-with-new-york-regulator/
New York's action against Ocwen is the latest in a history of aggressive New York State regulation of finance. New York’s top financial regulator said that as its business grew, Ocwen subjected borrowers to the same problems as the big banks: missing paperwork, improper foreclosures and robo-signings. On Monday, Mr. Erbey agreed to step down as chairman of Ocwen, one of the nation’s largest mortgage servicers, as a part of a settlement with Benjamin M. Lawsky, New York’s superintendent of financial services.
http://dealbook.nytimes.com/2014/12/22/ocwen-chairman-to-step-down-in-settlement-with-new-york-regulator/
NY Times on sub-prime auto loans
From the Times article: Explosive growth is being driven by some of the same dynamics that were at work in subprime mortgages. A wave of money is pouring into subprime autos, as the high rates and steady profits of the loans attract investors. Just as Wall Street stoked the boom in mortgages, some of the nation’s biggest banks and private equity firms are feeding the growth in subprime auto loans by investing in lenders and making money available for loans.
And, like subprime mortgages before the financial crisis, many subprime auto loans are bundled into complex bonds and sold as securities by banks to insurance companies, mutual funds and public pension funds — a process that creates ever-greater demand for loans.
See http://dealbook.nytimes.com/2014/07/19/in-a-subprime-bubble-for-used-cars-unfit-borrowers-pay-sky-high-rates/?action=click&pg&module=c-column-middle-span-region®ion=c-column-middle-span-region&WT.nav=c-column-middle-span-region&_r=0
From the Times article: Explosive growth is being driven by some of the same dynamics that were at work in subprime mortgages. A wave of money is pouring into subprime autos, as the high rates and steady profits of the loans attract investors. Just as Wall Street stoked the boom in mortgages, some of the nation’s biggest banks and private equity firms are feeding the growth in subprime auto loans by investing in lenders and making money available for loans.
And, like subprime mortgages before the financial crisis, many subprime auto loans are bundled into complex bonds and sold as securities by banks to insurance companies, mutual funds and public pension funds — a process that creates ever-greater demand for loans.
See http://dealbook.nytimes.com/2014/07/19/in-a-subprime-bubble-for-used-cars-unfit-borrowers-pay-sky-high-rates/?action=click&pg&module=c-column-middle-span-region®ion=c-column-middle-span-region&WT.nav=c-column-middle-span-region&_r=0
Wash Post opposes legislative control of particular local government procurement decisions
The Post editorial board writes:: PROCUREMENT SPECIALISTS for the D.C. government conducted seven rounds of bidding over 18 months before recommending that a contract for health care at the D.C. jail be awarded to a Tennessee company. Now that decision may be upended in the face of a fierce lobbying campaign by the losing bidder. It is a depressingly familiar development in the world of D.C. contracting, underscoring yet again why the D.C. Council shouldn’t be allowed to meddle. “What’s the point of having such a thorough and complete process and then ignoring that process?” was the apt question posed by corrections chief Thomas Faust as opposition grew to a $66.1 million contract tentatively awarded to Corizon Health Inc.
See the editorial at http://www.washingtonpost.com/opinions/keep-the-dc-council-out-of-decisions-on-contracts/2014/12/25/9feb2726-862e-11e4-b9b7-b8632ae73d25_story.html?hpid=z6
The Post editorial board writes:: PROCUREMENT SPECIALISTS for the D.C. government conducted seven rounds of bidding over 18 months before recommending that a contract for health care at the D.C. jail be awarded to a Tennessee company. Now that decision may be upended in the face of a fierce lobbying campaign by the losing bidder. It is a depressingly familiar development in the world of D.C. contracting, underscoring yet again why the D.C. Council shouldn’t be allowed to meddle. “What’s the point of having such a thorough and complete process and then ignoring that process?” was the apt question posed by corrections chief Thomas Faust as opposition grew to a $66.1 million contract tentatively awarded to Corizon Health Inc.
See the editorial at http://www.washingtonpost.com/opinions/keep-the-dc-council-out-of-decisions-on-contracts/2014/12/25/9feb2726-862e-11e4-b9b7-b8632ae73d25_story.html?hpid=z6
Pa. State penalizes shale gas drilling operator for landslide that diverted streams
Vantage Energy Appalachia LLC will pay a $999,900 penalty for more than a dozen Pennsylvania environmental law violations resulting from illegal waste disposal and a landslide that covered and diverted two small streams near its Porter Street well pad in Franklin Township, Greene County.
The state Department of Environmental Protection said the penalty is part of a consent order that requires the Engelwood, Colorado-based gas drilling company to fully restore the impacted unnamed tributaries of Grimes Run, which flows into the Monongahela River, and remediate the surface and groundwater in the area. All remediation work must be completed by the end of 2015.
Full article: http://www.post-gazette.com/powersource/companies-powersource/2014/12/22/Vantage-Energy-Appalachia-penalty-Franklin-Township-Greene-County-Pennsylvania/stories/201412220201
Vantage Energy Appalachia LLC will pay a $999,900 penalty for more than a dozen Pennsylvania environmental law violations resulting from illegal waste disposal and a landslide that covered and diverted two small streams near its Porter Street well pad in Franklin Township, Greene County.
The state Department of Environmental Protection said the penalty is part of a consent order that requires the Engelwood, Colorado-based gas drilling company to fully restore the impacted unnamed tributaries of Grimes Run, which flows into the Monongahela River, and remediate the surface and groundwater in the area. All remediation work must be completed by the end of 2015.
Full article: http://www.post-gazette.com/powersource/companies-powersource/2014/12/22/Vantage-Energy-Appalachia-penalty-Franklin-Township-Greene-County-Pennsylvania/stories/201412220201
States want subpoena to insurance company auditor quashed in private civil action
In an amicus brief, the insurance departments of California, Florida, Illinois, New Hampshire, New Jersey, North Dakota and Pennsylvania argued that the subpoena violates state confidentiality statutes.
“The state insurer examination statutes prohibit subpoenas for examination records in private civil litigation,” the brief said. “Such records are 'confidential' and 'shall not be subject to subpoena.' The state statutes thus provide a privilege and bar discovery of such records.”
The amicus brief for the national Association of Insurance Commissioners is at http://www.naic.org/documents/legal_amicus_2014_sterling_heights_v_prudential.pdf
In an amicus brief, the insurance departments of California, Florida, Illinois, New Hampshire, New Jersey, North Dakota and Pennsylvania argued that the subpoena violates state confidentiality statutes.
“The state insurer examination statutes prohibit subpoenas for examination records in private civil litigation,” the brief said. “Such records are 'confidential' and 'shall not be subject to subpoena.' The state statutes thus provide a privilege and bar discovery of such records.”
The amicus brief for the national Association of Insurance Commissioners is at http://www.naic.org/documents/legal_amicus_2014_sterling_heights_v_prudential.pdf
Vermont pulls the plug on single-payer healthcare
From Modern Healthcare article: Vermont Gov. Peter Shumlin stunned the healthcare policy world last week when he announced the state was scrapping plans to create a single-payer system. The state said the economics didn't work, but not everyone is convinced.
“This is all politics,” said Gerald Friedman, a healthcare economist at the University of Massachusetts at Amherst. “The most interesting thing in the governor's statement is how little has changed in the economics.”
Shumlin has long advocated for a publicly funded healthcare system and even embraced it as part of his first gubernatorial win in 2010. When the state ratified the law establishing a single-payer-like system in 2011, many viewed Vermont as an incubator of whether it could succeed in the U.S. But until recently, officials didn't really explain the major question that was on everyone's minds: How exactly would the state pay for this system?
Vermont's plan was supposed to work like this: All Vermont businesses would be subject to an 11.5% payroll tax, similar to how the federal government taxes them to support Medicare. For companies that currently offer private health insurance to their employees, the payroll tax would replace those private expenses. State residents would also pay a sliding-scale income tax. The income tax would be capped at 9.5%, and no Vermont resident would pay more than $27,500 per year toward the healthcare system. In exchange, all 626,000 Vermonters would have insurance policies that cover 94% of their healthcare costs.
Full article: http://www.modernhealthcare.com/article/20141223/NEWS/312239965?utm_source=AltURL&utm_medium=email&utm_campaign=am%3Fmh
From Modern Healthcare article: Vermont Gov. Peter Shumlin stunned the healthcare policy world last week when he announced the state was scrapping plans to create a single-payer system. The state said the economics didn't work, but not everyone is convinced.
“This is all politics,” said Gerald Friedman, a healthcare economist at the University of Massachusetts at Amherst. “The most interesting thing in the governor's statement is how little has changed in the economics.”
Shumlin has long advocated for a publicly funded healthcare system and even embraced it as part of his first gubernatorial win in 2010. When the state ratified the law establishing a single-payer-like system in 2011, many viewed Vermont as an incubator of whether it could succeed in the U.S. But until recently, officials didn't really explain the major question that was on everyone's minds: How exactly would the state pay for this system?
Vermont's plan was supposed to work like this: All Vermont businesses would be subject to an 11.5% payroll tax, similar to how the federal government taxes them to support Medicare. For companies that currently offer private health insurance to their employees, the payroll tax would replace those private expenses. State residents would also pay a sliding-scale income tax. The income tax would be capped at 9.5%, and no Vermont resident would pay more than $27,500 per year toward the healthcare system. In exchange, all 626,000 Vermonters would have insurance policies that cover 94% of their healthcare costs.
Full article: http://www.modernhealthcare.com/article/20141223/NEWS/312239965?utm_source=AltURL&utm_medium=email&utm_campaign=am%3Fmh
The FCC says the name of Washington NFL team, “Redskins," does not violate broadcast indecency rules
The agency approved a license renewal for a radio station owned by team owner Daniel Snyder, rejecting a petition filed by George Washington law professor John Banzhaf III and three others. Banzhaf had argued that the name is a “derogatory racial and ethnic slur” that’s deeply offensive to American Indians and tantamount to obscenity and profanity.
The FCC OKed the decision signed by FCC Audio Division Chief Peter Doyle saying that the term “Redskin” is not obscene nor profane.
- See more at: http://www.tvtechnology.com/article/fcc-rejects-arguments-against-nfl-redskins-name-/273836#sthash.qDC9s0No.dpuf
The agency approved a license renewal for a radio station owned by team owner Daniel Snyder, rejecting a petition filed by George Washington law professor John Banzhaf III and three others. Banzhaf had argued that the name is a “derogatory racial and ethnic slur” that’s deeply offensive to American Indians and tantamount to obscenity and profanity.
The FCC OKed the decision signed by FCC Audio Division Chief Peter Doyle saying that the term “Redskin” is not obscene nor profane.
- See more at: http://www.tvtechnology.com/article/fcc-rejects-arguments-against-nfl-redskins-name-/273836#sthash.qDC9s0No.dpuf
CA State prosecutors sue Uber car service
Two California prosecutors sued Uber and settled with Lyft car service on behalf of the state of California, citing multiple business violations that focus on the companies’ messaging to its riders as well as their airport practices. Lyft settled the suit for $500,000, while Uber “has not been cooperative,” said San Francisco District Attorney George Gascon. The Uber lawsuit lays out five areas where the company allegedly broke the law: it made “untrue or misleading” statements about the strength of its driver background checks, it charged UberX riders a $1 “Safe Rides Fee” related to those background checks, it calculated fares without going through the proper state agencies, it operated illegally at California airports, and it fraudulently charged airport fees to riders that it did not then pay to airports.
Full article: http://www.forbes.com/sites/ellenhuet/2014/12/09/sf-la-district-attorneys-sue-uber-and-lyft-over-misleading-business-violations/
Two California prosecutors sued Uber and settled with Lyft car service on behalf of the state of California, citing multiple business violations that focus on the companies’ messaging to its riders as well as their airport practices. Lyft settled the suit for $500,000, while Uber “has not been cooperative,” said San Francisco District Attorney George Gascon. The Uber lawsuit lays out five areas where the company allegedly broke the law: it made “untrue or misleading” statements about the strength of its driver background checks, it charged UberX riders a $1 “Safe Rides Fee” related to those background checks, it calculated fares without going through the proper state agencies, it operated illegally at California airports, and it fraudulently charged airport fees to riders that it did not then pay to airports.
Full article: http://www.forbes.com/sites/ellenhuet/2014/12/09/sf-la-district-attorneys-sue-uber-and-lyft-over-misleading-business-violations/
Google sues State of Mississippi over State's Investigation of Google
Mississippi and other States have been investigating Google. Now Google's push-back includes a law suit against the State that, in the words of the AG, is " trying to stop the State of Mississippi for daring to ask some questions. We expect more from one of the wealthiest corporations in the world." The press release from AG Jim Hood is here: http://yallpolitics.com/index.php/yp/post/39931/
Mississippi and other States have been investigating Google. Now Google's push-back includes a law suit against the State that, in the words of the AG, is " trying to stop the State of Mississippi for daring to ask some questions. We expect more from one of the wealthiest corporations in the world." The press release from AG Jim Hood is here: http://yallpolitics.com/index.php/yp/post/39931/
From American Banker:
Big Banks' Swaps Push-Out Repeal Is a Pyrrhic Victory (Cornelius Hurley)
Big banks succeeded in repealing the swaps push-out rule enacted under the Dodd-Frank Act by holding the government funding resolution hostage. But in so doing, they inadvertently thrust the issue of taxpayer subsidies back into the spotlight — where it belonged from the beginning.
The swaps push-out provision of Dodd-Frank would have required the five big banks that account for 95% of swaps activity to move a portion of that business out of their taxpayer-supported banks and lodge it in their nonbank, uninsured affiliates. It is widely understood that removing the safety net of Federal Deposit Insurance Corp. coverage would have increased the cost of this activity and reduced its profitability for the five banks.
Even the most casual observer of our financial system can smell a subsidy as pungent as this. It was only a matter of time before progressive icon Sen. Elizabeth Warren pounced on this issue, warning of the prospect of a "Citigroup Shutdown."
One would have thought that the big banks that benefit in so many ways from their size would be more subdued when dealing with their government subsidy, lest they reframe the TBTF debate.
For the complete Hurley article: http://www.americanbanker.com/bankthink/big-banks-swaps-push-out-repeal-is-a-pyrrhic-victory-1071724-1.html?utm_campaign=daily%20briefing-dec%2019%202014&utm_medium=email&utm_source=newsletter&ET=americanbanker%3Ae3518582%3A4145571a%3A&st=email
Big Banks' Swaps Push-Out Repeal Is a Pyrrhic Victory (Cornelius Hurley)
Big banks succeeded in repealing the swaps push-out rule enacted under the Dodd-Frank Act by holding the government funding resolution hostage. But in so doing, they inadvertently thrust the issue of taxpayer subsidies back into the spotlight — where it belonged from the beginning.
The swaps push-out provision of Dodd-Frank would have required the five big banks that account for 95% of swaps activity to move a portion of that business out of their taxpayer-supported banks and lodge it in their nonbank, uninsured affiliates. It is widely understood that removing the safety net of Federal Deposit Insurance Corp. coverage would have increased the cost of this activity and reduced its profitability for the five banks.
Even the most casual observer of our financial system can smell a subsidy as pungent as this. It was only a matter of time before progressive icon Sen. Elizabeth Warren pounced on this issue, warning of the prospect of a "Citigroup Shutdown."
One would have thought that the big banks that benefit in so many ways from their size would be more subdued when dealing with their government subsidy, lest they reframe the TBTF debate.
For the complete Hurley article: http://www.americanbanker.com/bankthink/big-banks-swaps-push-out-repeal-is-a-pyrrhic-victory-1071724-1.html?utm_campaign=daily%20briefing-dec%2019%202014&utm_medium=email&utm_source=newsletter&ET=americanbanker%3Ae3518582%3A4145571a%3A&st=email
New York Department of Financial Services leader complains about lack of innovation in payments systems
At a recent Bipartisan Policy Center program, part of the comments made by Benjamin M. Lawsky, Superintendent, New York Department of Financial Services, focused on lack of innovation in payments systems. The American Banker called that part of Lawsky's comments "strident." He argued that financial institutions have let the technology of the payments system atrophy. "At a certain point, enough is enough, . . .Four decades of slow-to-non-existent progress in the bank payments system seems like fair warning." He compared banks' approach to former movie rental giant Blockbuster, which went bankrupt after it failed to innovate and was disintermediated by companies like Netflix. His comments can be seen and heard at Payments Policy in the 21st Century: The Promise of Innovation and the Challenge of Regulation | Bipartisan Policy Center beginning at about one hour, with comments on innovation beginning at about 1:25.
Lawsky blamed the lack of innovation in a "legacy" payments system on the "monopoly-like" environment in which banks participate. He suggested that lagging innovation is so serious that regulators may need to take some role that would facilitate innovation. His comments are provocative, although the question of what regulatory role would be productive is obviously difficult.
At a recent Bipartisan Policy Center program, part of the comments made by Benjamin M. Lawsky, Superintendent, New York Department of Financial Services, focused on lack of innovation in payments systems. The American Banker called that part of Lawsky's comments "strident." He argued that financial institutions have let the technology of the payments system atrophy. "At a certain point, enough is enough, . . .Four decades of slow-to-non-existent progress in the bank payments system seems like fair warning." He compared banks' approach to former movie rental giant Blockbuster, which went bankrupt after it failed to innovate and was disintermediated by companies like Netflix. His comments can be seen and heard at Payments Policy in the 21st Century: The Promise of Innovation and the Challenge of Regulation | Bipartisan Policy Center beginning at about one hour, with comments on innovation beginning at about 1:25.
Lawsky blamed the lack of innovation in a "legacy" payments system on the "monopoly-like" environment in which banks participate. He suggested that lagging innovation is so serious that regulators may need to take some role that would facilitate innovation. His comments are provocative, although the question of what regulatory role would be productive is obviously difficult.
Should State AGs employ private counsel to assist with affirmative litigation?
Some consumer advocates support State AG employment of private attorneys on a contingent or hourly fee basis to assist with affirmative litigation in the public interest. For example, one of the candidates for DC Attorney General (not the winning candidate) suggested that the DC Attorney General should be permitted to employ outside counsel as a means of augmenting a small staff available for deserving affirmative litigation. Others see the employment of autiside counsel as a pernicious practice in which AGs are persuaded to support private counsel with self-serving rather than public interest goals. The latter point of view is very well represented in an article in the New York Times: http://www.nytimes.com/2014/12/19/us/politics/lawyers-create-big-paydays-by-coaxing-attorneys-general-to-sue-.html?hp&action=click&pg&module=second-column-region®ion=top-news&WT.nav=top-news&_r=0
Some consumer advocates support State AG employment of private attorneys on a contingent or hourly fee basis to assist with affirmative litigation in the public interest. For example, one of the candidates for DC Attorney General (not the winning candidate) suggested that the DC Attorney General should be permitted to employ outside counsel as a means of augmenting a small staff available for deserving affirmative litigation. Others see the employment of autiside counsel as a pernicious practice in which AGs are persuaded to support private counsel with self-serving rather than public interest goals. The latter point of view is very well represented in an article in the New York Times: http://www.nytimes.com/2014/12/19/us/politics/lawyers-create-big-paydays-by-coaxing-attorneys-general-to-sue-.html?hp&action=click&pg&module=second-column-region®ion=top-news&WT.nav=top-news&_r=0
From Public Citizen blog: Non-disparagement clause hall of shame -- businesses behaving badly
In a must-read for consumers who value their right to criticize companies they do business with, Techdirt has compiled this list of businesses that employ contract language to try to silence criticism from customers. These companies threaten fines from $2,500 up to a mindboggling $100,000 for customer criticism.
Click title for complete article
In a must-read for consumers who value their right to criticize companies they do business with, Techdirt has compiled this list of businesses that employ contract language to try to silence criticism from customers. These companies threaten fines from $2,500 up to a mindboggling $100,000 for customer criticism.
Click title for complete article
Will new Uber-like local technology upend Amazon's strong position in retail delivery?
It is always interesting when a threat to a powerful company comes from an upstart technology rather than government intervention. That might be happening to Amazon. A NY Times article suggests that like many of the local and big-box retailers it has displaced over the last decade and a half, Amazon could itself become increasingly vulnerable to the threat of technological upheaval.
Smart phones are at the heart of the service offered by Postmates, one of several start-ups that are working with retailers and helping to change shopping experiences. “Everything that we’re doing is anti-Amazon,” said Bastian Lehmann, the co-founder of Postmates.
Postmates runs a network of couriers who, like Uber drivers, are dispatched by phones to deliver food, apparel, toothpaste and other goods from local stores in 18 American cities. The company recently announced a plan for retailers to build Postmates’ technology into their own technology systems, a way to give small stores the kind of logistical efficiencies that were previously available only to giants like Amazon.
As local retailers adopt such mobile innovations, customers will be able to search stores’ inventories, purchase goods for same-day delivery, and navigate and search for help and reviews inside a crowded store. None of these technologies pose an existential threat to Amazon, but by giving physical stores some of the conveniences that Amazon has long had, they may limit its potential reach.
For the complete article, see http://www.nytimes.com/2014/12/18/technology/personaltech/amazon-not-as-unstoppable-as-it-may-appear.html?_r=0
It is always interesting when a threat to a powerful company comes from an upstart technology rather than government intervention. That might be happening to Amazon. A NY Times article suggests that like many of the local and big-box retailers it has displaced over the last decade and a half, Amazon could itself become increasingly vulnerable to the threat of technological upheaval.
Smart phones are at the heart of the service offered by Postmates, one of several start-ups that are working with retailers and helping to change shopping experiences. “Everything that we’re doing is anti-Amazon,” said Bastian Lehmann, the co-founder of Postmates.
Postmates runs a network of couriers who, like Uber drivers, are dispatched by phones to deliver food, apparel, toothpaste and other goods from local stores in 18 American cities. The company recently announced a plan for retailers to build Postmates’ technology into their own technology systems, a way to give small stores the kind of logistical efficiencies that were previously available only to giants like Amazon.
As local retailers adopt such mobile innovations, customers will be able to search stores’ inventories, purchase goods for same-day delivery, and navigate and search for help and reviews inside a crowded store. None of these technologies pose an existential threat to Amazon, but by giving physical stores some of the conveniences that Amazon has long had, they may limit its potential reach.
For the complete article, see http://www.nytimes.com/2014/12/18/technology/personaltech/amazon-not-as-unstoppable-as-it-may-appear.html?_r=0
West Virginia company execs indicted for massive water polluting event
Four Freedom Industries executives have been indicted for criminal violations of the Clean Water Act and negligent operation of their Elk River facility. They are charged for a massive chemical spill in West Virginia.
See indictment here:
Farrell Indictment
Four Freedom Industries executives have been indicted for criminal violations of the Clean Water Act and negligent operation of their Elk River facility. They are charged for a massive chemical spill in West Virginia.
See indictment here:
Farrell Indictment
State money transmitter licensing laws as consumer protection statutes
According to an American Banker article, State money transmitter licensing laws are among the most important rules that address the dangers posed by payments, especially in the non-bank payments area. 48 states have them. They are the mechanism that allows non-banks such as Western Union, PayPal or Google to hold or move money on consumers' behalves.
But, getting these licenses is difficult, expensive and time-consuming. Obtaining all necessary licenses often costs between $1-2 million, and the process can take more than two years to complete. It's a federal crime to do money transmission business without these licenses.
See http://www.americanbanker.com/bankthink/surprise-state-licensing-laws-could-help-payments-innovation-1071697-1.html?utm_campaign=daily%20briefing-dec%2018%202014&utm_medium=email&utm_source=newsletter&ET=americanbanker%3Ae3512234%3A4145571a%3A&st=email
According to an American Banker article, State money transmitter licensing laws are among the most important rules that address the dangers posed by payments, especially in the non-bank payments area. 48 states have them. They are the mechanism that allows non-banks such as Western Union, PayPal or Google to hold or move money on consumers' behalves.
But, getting these licenses is difficult, expensive and time-consuming. Obtaining all necessary licenses often costs between $1-2 million, and the process can take more than two years to complete. It's a federal crime to do money transmission business without these licenses.
See http://www.americanbanker.com/bankthink/surprise-state-licensing-laws-could-help-payments-innovation-1071697-1.html?utm_campaign=daily%20briefing-dec%2018%202014&utm_medium=email&utm_source=newsletter&ET=americanbanker%3Ae3512234%3A4145571a%3A&st=email
Some State AGs move against Google -- with encouragement from Google adversaries
State attorneys general have broad authority to investigate companies involved in practices that cause consumers harm. A year ago, Google paid a $17 million fine — a tiny amount for the giant company — spread among more than 30 states after an investigation related to an accusation that it had violated the privacy of certain Internet users.
Jon Bruning, the Republican attorney general of Nebraska, and Jim Hood, Mississippi’s attorney general, who has become one of the most active officials against Google, say they are simply trying to enforce the laws in their states. They say Google, one of the most powerful companies of the Internet era, is dragging its feet on complying with their requests to filter illegal Internet pharmacies and other illicit content from its search results.
A New York Times article argues that the Motion Picture Association of America — the Hollywood industry group — and an organization backed by Microsoft, Expedia and Oracle, among others, have aggressively lobbied attorneys general to build cases against Google in recent years.
See http://www.nytimes.com/2014/12/17/technology/googles-critics-enlist-state-attorneys-general-in-their-fight.html?ref=technology
State attorneys general have broad authority to investigate companies involved in practices that cause consumers harm. A year ago, Google paid a $17 million fine — a tiny amount for the giant company — spread among more than 30 states after an investigation related to an accusation that it had violated the privacy of certain Internet users.
Jon Bruning, the Republican attorney general of Nebraska, and Jim Hood, Mississippi’s attorney general, who has become one of the most active officials against Google, say they are simply trying to enforce the laws in their states. They say Google, one of the most powerful companies of the Internet era, is dragging its feet on complying with their requests to filter illegal Internet pharmacies and other illicit content from its search results.
A New York Times article argues that the Motion Picture Association of America — the Hollywood industry group — and an organization backed by Microsoft, Expedia and Oracle, among others, have aggressively lobbied attorneys general to build cases against Google in recent years.
See http://www.nytimes.com/2014/12/17/technology/googles-critics-enlist-state-attorneys-general-in-their-fight.html?ref=technology
Fracking regulation in Texas -- issues involve local initiatives
Texas State lawmakers, the oil and gas industry and national environmental groups have become acutely aware of Denton, home to two universities, 277 gas wells and now, thanks to a ragtag group of local activists, Texas’ first ban on fracking. Thrust into the saga is George P. Bush, who in January will take the helm of the Texas General Land Office, an otherwise obscure office that manages mineral rights on millions of acres of state-owned property. In his first political office, Jeb’s eldest so will inherit one of two major lawsuits filed against Denton, home to a sliver of that mineral portfolio.
“We don’t need a patchwork approach to drilling regulations across the state,” Bush, a former energy investment consultant, told the Texas Tribune in July as the anti-fracking campaign gained steam.
Read more: http://www.politico.com/magazine/story/2014/12/texas-fracking-ban-113575.html#ixzz3MCzMluDZ
Texas State lawmakers, the oil and gas industry and national environmental groups have become acutely aware of Denton, home to two universities, 277 gas wells and now, thanks to a ragtag group of local activists, Texas’ first ban on fracking. Thrust into the saga is George P. Bush, who in January will take the helm of the Texas General Land Office, an otherwise obscure office that manages mineral rights on millions of acres of state-owned property. In his first political office, Jeb’s eldest so will inherit one of two major lawsuits filed against Denton, home to a sliver of that mineral portfolio.
“We don’t need a patchwork approach to drilling regulations across the state,” Bush, a former energy investment consultant, told the Texas Tribune in July as the anti-fracking campaign gained steam.
Read more: http://www.politico.com/magazine/story/2014/12/texas-fracking-ban-113575.html#ixzz3MCzMluDZ
The Cuomo administration decides to ban hydraulic fracking in NY State
The NY State Health Department Report on Fracking is here: http://www.nytimes.com/interactive/2014/12/18/nyregion/new-york-state-fracking-report.html
The NY State Health Department Report on Fracking is here: http://www.nytimes.com/interactive/2014/12/18/nyregion/new-york-state-fracking-report.html
CFPB Sues Sprint Over Illegal Cellphone Fees
The Consumer Financial Protection Bureau has filed a lawsuit against Sprint Corp., alleging it illegally processed improper third-party billing charges. The CFPB claims that Sprint allowed vendors to place "tens of millions of dollars" in unauthorized charges on cell phone bills and ignored consumer complaints about the third-party charges. Some consider CFPB's move into cellphone matters to be a new precedent.
See http://www.americanbanker.com/news/law-regulation/cfpb-sues-sprint-over-illegal-cell-phone-fees-1071709-1.html?utm_medium=email&ET=americanbanker%3Ae97638%3Aa%3A&utm_campaign=-dec%2017%202014&utm_source=newsletter&st=email
The Consumer Financial Protection Bureau has filed a lawsuit against Sprint Corp., alleging it illegally processed improper third-party billing charges. The CFPB claims that Sprint allowed vendors to place "tens of millions of dollars" in unauthorized charges on cell phone bills and ignored consumer complaints about the third-party charges. Some consider CFPB's move into cellphone matters to be a new precedent.
See http://www.americanbanker.com/news/law-regulation/cfpb-sues-sprint-over-illegal-cell-phone-fees-1071709-1.html?utm_medium=email&ET=americanbanker%3Ae97638%3Aa%3A&utm_campaign=-dec%2017%202014&utm_source=newsletter&st=email
Florida AG and CFPB action against student debt relief scams
The CFPB, in a joint filing with Florida’s Attorney General, shut down student debt relief company College Education Services and separately filed a lawsuit against Student Loan Processing.US for illegally marketing student debt relief services. The two student “debt relief” scams illegally tricked borrowers into paying upfront fees for federal loan benefits. The Bureau is issuing a consumer advisory today warning student loan borrowers to be wary of paying high fees for free federal loan benefits.
See http://www.consumerfinance.gov/newsroom/cfpb-takes-action-to-end-student-debt-relief-scams/
The CFPB, in a joint filing with Florida’s Attorney General, shut down student debt relief company College Education Services and separately filed a lawsuit against Student Loan Processing.US for illegally marketing student debt relief services. The two student “debt relief” scams illegally tricked borrowers into paying upfront fees for federal loan benefits. The Bureau is issuing a consumer advisory today warning student loan borrowers to be wary of paying high fees for free federal loan benefits.
See http://www.consumerfinance.gov/newsroom/cfpb-takes-action-to-end-student-debt-relief-scams/
From Simon Johnson: Repeal of Swaps Push-Out Requirements (Section 716 of Dodd-Frank) is a bad idea:
Section 716 of the Dodd-Frank financial reform act requires that some derivative transactions be “pushed-out” from those part of banks that have deposit insurance (run by the Federal Deposit Insurance Corporation) and other forms of backstop (provided by the Federal Reserve). This is a sensible provision that, if properly implemented, would help keep our financial system safer, protect taxpayers and reduce the likely need for bailouts.
Now, at the behest of the biggest Too Big To Fail banks and as part of the House’s spending bill (now recently approved by both the House and Senate), this “push out” requirement is on its way out.
* * *
Click the title for the entire Simon Johnson piece, written shortly before the House approved repeal of the push out requirement. See also the speech on Tuesday, December 9th, by Senator Elizabeth Warren.
Section 716 of the Dodd-Frank financial reform act requires that some derivative transactions be “pushed-out” from those part of banks that have deposit insurance (run by the Federal Deposit Insurance Corporation) and other forms of backstop (provided by the Federal Reserve). This is a sensible provision that, if properly implemented, would help keep our financial system safer, protect taxpayers and reduce the likely need for bailouts.
Now, at the behest of the biggest Too Big To Fail banks and as part of the House’s spending bill (now recently approved by both the House and Senate), this “push out” requirement is on its way out.
* * *
Click the title for the entire Simon Johnson piece, written shortly before the House approved repeal of the push out requirement. See also the speech on Tuesday, December 9th, by Senator Elizabeth Warren.
From Public Citizen blog:
The State AG enforcers, consumer lending, and the Great Recession
That is the topic of this article by law professor Mark Totten. Here is part of the abstract:
No one played a more vital role responding to the worst economic crisis since the Great Depression than a small band of state attorneys general (AGs). Yet this story has never been told nor its implications considered. For more than a decade these AGs brought enforcement actions across the residential mortgage lending industry, reaching the origination, servicing, and securitization processes. From roughly 2000 to 2008, they targeted several of the largest subprime lenders for predatory and discriminatory lending. And they moved in the face of federal inaction — at times, even opposition. With the economic crisis everywhere visible by early 2009, they turned toward abuses in mortgage servicing and securitization. While they often collaborated with their federal counterparts during this time period, these AGs continued to lead and shape the enforcement agenda. This narrative demonstrates that states are integral to the task of consumer financial protection.
The State AG enforcers, consumer lending, and the Great Recession
That is the topic of this article by law professor Mark Totten. Here is part of the abstract:
No one played a more vital role responding to the worst economic crisis since the Great Depression than a small band of state attorneys general (AGs). Yet this story has never been told nor its implications considered. For more than a decade these AGs brought enforcement actions across the residential mortgage lending industry, reaching the origination, servicing, and securitization processes. From roughly 2000 to 2008, they targeted several of the largest subprime lenders for predatory and discriminatory lending. And they moved in the face of federal inaction — at times, even opposition. With the economic crisis everywhere visible by early 2009, they turned toward abuses in mortgage servicing and securitization. While they often collaborated with their federal counterparts during this time period, these AGs continued to lead and shape the enforcement agenda. This narrative demonstrates that states are integral to the task of consumer financial protection.
NY Unveils Sweeping New Debt Collection Rules
New York State has adopted new regulations that will require debt collectors to provide more information to debtors about the money they allegedly owe and the potential expiration of the statute of limitations on those debts. Commenters suggest that the regulations are a model other States might consider. A good quick summary of the new regs is at http://www.ballardspahr.com/alertspublications/legalalerts/2014-12-05-new-york-issues-far-reaching-debt-collection-regulations.aspx The new regs appear at http://www.dfs.ny.gov/legal/regulations/adoptions/dfsf23t.pdf
New York State has adopted new regulations that will require debt collectors to provide more information to debtors about the money they allegedly owe and the potential expiration of the statute of limitations on those debts. Commenters suggest that the regulations are a model other States might consider. A good quick summary of the new regs is at http://www.ballardspahr.com/alertspublications/legalalerts/2014-12-05-new-york-issues-far-reaching-debt-collection-regulations.aspx The new regs appear at http://www.dfs.ny.gov/legal/regulations/adoptions/dfsf23t.pdf
Consumer questions for DC's newly elected AG, Karl Racine
As repoted in the Washington Post, Karl Racine, a 51-year-old Democrat, bested his four competitors with a commanding 37 percent of more than 145,000 votes to become the first elected D.C. attorney general. Racine has served in the past as a public defender, White House lawyer and managing partner of one of the city’s largest corporate firms.
The Post pointed out that “as the first elected attorney general, Racine will help transform what has been regarded as an important but largely low-profile administrative job into a premier political seat in the nation’s capitol.”
The candidate debates between Racine and his rivals for the AG office included relatively little focus on consumer issues. But there is little doubt that as AG Mr. Racine will need to deal with questions of interest to consumer advocates. Following are a few:
Attorney General’s resources: Are resources for enforcement of consumer and antitrust laws sufficient, including number of lawyers and others? As Attorney General will you advocate for more resources?
Dedicated funding: Do you agree with the D.C. Council’s elimination of dedicated funding for consumer and antitrust law enforcement?
Procurement issues: What do you think the Attorney General’s role should be in insuring honest and efficient procurement practices for DC government?
Gasoline litigation: What is your position on actions Attorney General Nathan has taken with regard to allegations of concentration of market power in the hands of a few gasoline distributors? (The Washington Post editorial board and some public figures have opposed the AG actions.) Attorney General Nathan brought litigation and made public statements alleging that market concentration causes high local retail gasoline prices. The litigation was dismissed by the DC Superior Ccourt because of lack of standing under the RSSA statute. Are you considering other enforcement steps concerning gasoline, such as an antitrust action? Do you agree with the Washington Post editorial board that the AG litigation was a bad idea? (Disclosure: The writer of this post has retail gasoline station clients and has a bias.)
Debt collection legislative proposals: Do you support legislative proposals that would require debt collection entities to disclose detailed information when they demand payment or go to court? Such proposals have been floated in DC. New York state recently passed such legislation.
Compelled arbiration: Do you support prohibiting compelled arbitration as an alternative to litigation by consumers?
Posted by Don Allen Resnikoff
As repoted in the Washington Post, Karl Racine, a 51-year-old Democrat, bested his four competitors with a commanding 37 percent of more than 145,000 votes to become the first elected D.C. attorney general. Racine has served in the past as a public defender, White House lawyer and managing partner of one of the city’s largest corporate firms.
The Post pointed out that “as the first elected attorney general, Racine will help transform what has been regarded as an important but largely low-profile administrative job into a premier political seat in the nation’s capitol.”
The candidate debates between Racine and his rivals for the AG office included relatively little focus on consumer issues. But there is little doubt that as AG Mr. Racine will need to deal with questions of interest to consumer advocates. Following are a few:
Attorney General’s resources: Are resources for enforcement of consumer and antitrust laws sufficient, including number of lawyers and others? As Attorney General will you advocate for more resources?
Dedicated funding: Do you agree with the D.C. Council’s elimination of dedicated funding for consumer and antitrust law enforcement?
Procurement issues: What do you think the Attorney General’s role should be in insuring honest and efficient procurement practices for DC government?
Gasoline litigation: What is your position on actions Attorney General Nathan has taken with regard to allegations of concentration of market power in the hands of a few gasoline distributors? (The Washington Post editorial board and some public figures have opposed the AG actions.) Attorney General Nathan brought litigation and made public statements alleging that market concentration causes high local retail gasoline prices. The litigation was dismissed by the DC Superior Ccourt because of lack of standing under the RSSA statute. Are you considering other enforcement steps concerning gasoline, such as an antitrust action? Do you agree with the Washington Post editorial board that the AG litigation was a bad idea? (Disclosure: The writer of this post has retail gasoline station clients and has a bias.)
Debt collection legislative proposals: Do you support legislative proposals that would require debt collection entities to disclose detailed information when they demand payment or go to court? Such proposals have been floated in DC. New York state recently passed such legislation.
Compelled arbiration: Do you support prohibiting compelled arbitration as an alternative to litigation by consumers?
Posted by Don Allen Resnikoff
NY Times: Energy Firms in Secret Alliance With G.O.P. State Attorneys General
Republican attorneys general have formed alliances with some of the top energy producers, an investigation by The New York Times has found. A letter to the Environmental Protection Agency from Attorney General Scott Pruitt of Oklahoma accused Federal regulators of grossly overestimating the amount of air pollution caused by energy companies drilling new natural gas wells in his state. The three-page letter was written by lawyers for Devon Energy, one of Oklahoma’s biggest oil and gas companies, and was delivered to him by Devon’s chief of lobbying.
Out of public view, corporate representatives and Republican attorneys general are coordinating legal strategy and other efforts to fight federal regulations. Never before have attorneys general joined on this scale with corporate interests to challenge Washington and file lawsuits in federal court.
“When you use a public office, pretty shamelessly, to vouch for a private party with substantial financial interest without the disclosure of the true authorship, that is a dangerous practice,” said David B. Frohnmayer, a Republican who served a decade as attorney general in Oregon.
The article is at http://www.nytimes.com/2014/12/07/us/politics/energy-firms-in-secretive-alliance-with-attorneys-general.html
Republican attorneys general have formed alliances with some of the top energy producers, an investigation by The New York Times has found. A letter to the Environmental Protection Agency from Attorney General Scott Pruitt of Oklahoma accused Federal regulators of grossly overestimating the amount of air pollution caused by energy companies drilling new natural gas wells in his state. The three-page letter was written by lawyers for Devon Energy, one of Oklahoma’s biggest oil and gas companies, and was delivered to him by Devon’s chief of lobbying.
Out of public view, corporate representatives and Republican attorneys general are coordinating legal strategy and other efforts to fight federal regulations. Never before have attorneys general joined on this scale with corporate interests to challenge Washington and file lawsuits in federal court.
“When you use a public office, pretty shamelessly, to vouch for a private party with substantial financial interest without the disclosure of the true authorship, that is a dangerous practice,” said David B. Frohnmayer, a Republican who served a decade as attorney general in Oregon.
The article is at http://www.nytimes.com/2014/12/07/us/politics/energy-firms-in-secretive-alliance-with-attorneys-general.html
Industry group vs. Democratic AGs who oppose compulsory arbitration for consumers
From CFPB Monitor (a pro-industry group): AFSA responds to state AG call for arbitration limits (click the preceding underlined titlei n blue for the complete article)
The American Financial Services Association (AFSA) has sent a letter to Director Cordray responding to the letter sent to him last month by 16 Democratic state attorneys general calling on the CFPB to limit the use of pre-dispute arbitration in agreements for consumer financial products or services.
In its letter, AFSA challenges the accuracy of various assertions made by the state AGs. Responding to their contention that the Federal Arbitration Act (FAA) was intended to facilitate disputes between commercial entities, AFSA asserts that Congress specifically intended that the FAA apply to individuals.
From CFPB Monitor (a pro-industry group): AFSA responds to state AG call for arbitration limits (click the preceding underlined titlei n blue for the complete article)
The American Financial Services Association (AFSA) has sent a letter to Director Cordray responding to the letter sent to him last month by 16 Democratic state attorneys general calling on the CFPB to limit the use of pre-dispute arbitration in agreements for consumer financial products or services.
In its letter, AFSA challenges the accuracy of various assertions made by the state AGs. Responding to their contention that the Federal Arbitration Act (FAA) was intended to facilitate disputes between commercial entities, AFSA asserts that Congress specifically intended that the FAA apply to individuals.
From Public Citizen blog: Hockett on Using Eminent Domain to Save Underwater Mortgages in NYC
Robert C. Hockett of Cornell has written 'We Don't Follow, We Lead': How New York City Will Save Mortgage Loans by Condemning Them, 124 Yale Law Journal Forum 131 (2014). Here is the abstract:
This brief invited essay lays out in summary form the eminent domain plan for securitized underwater mortgage loans that the author has been advocating and helping to implement for some years now. It does so with particular attention in this case to New York City, which is now actively considering the plan. The essay's first part addresses the plan's necessity. Its second part lays out the plan's basic mechanics. The third part then systematically addresses and dispatches the battery of remarkably weak legal and policy arguments commonly proffered by opponents of the plan.
Robert C. Hockett of Cornell has written 'We Don't Follow, We Lead': How New York City Will Save Mortgage Loans by Condemning Them, 124 Yale Law Journal Forum 131 (2014). Here is the abstract:
This brief invited essay lays out in summary form the eminent domain plan for securitized underwater mortgage loans that the author has been advocating and helping to implement for some years now. It does so with particular attention in this case to New York City, which is now actively considering the plan. The essay's first part addresses the plan's necessity. Its second part lays out the plan's basic mechanics. The third part then systematically addresses and dispatches the battery of remarkably weak legal and policy arguments commonly proffered by opponents of the plan.
A few elite law firms dominate the U.S. Supreme Court's docket -- consumers at disadvantage
According to a special Reuters report, the domination of the Supreme Court docket by firms that commonly represent business interests has a direct, largely unseen effect on consumers seeking to sue corporations: These individuals must select from a much smaller and, in many instances, less successful pool of lawyers to handle their cases.The reason: Many elite law practices won’t take those cases. The activities of the firms’ corporate clients are so broad, and their concerns so intertwined, that the lawyers point to disqualifying conflicts of interest – some specific, some general.An elite firm might refuse to represent an individual suing a corporation on a labor issue, for example, because it fears that winning the case could create a precedent that might hurt top clients in other industries.
“It’s not that there aren’t lawyers at these large firms who aren’t public-spirit minded and don’t want to do these cases. It’s that their business model won’t allow it,” said Joseph Sellers, a lawyer for the mid-sized firm Cohen Milstein, who argued against Wal-Mart at the Supreme Court. “In terms of access to justice, the ability of individuals to get their issues raised in the Supreme Court is more limited,” Sellers said. “Our side just doesn’t have the resources.”
See
http://www.reuters.com/investigates/special-report/scotus/)
According to a special Reuters report, the domination of the Supreme Court docket by firms that commonly represent business interests has a direct, largely unseen effect on consumers seeking to sue corporations: These individuals must select from a much smaller and, in many instances, less successful pool of lawyers to handle their cases.The reason: Many elite law practices won’t take those cases. The activities of the firms’ corporate clients are so broad, and their concerns so intertwined, that the lawyers point to disqualifying conflicts of interest – some specific, some general.An elite firm might refuse to represent an individual suing a corporation on a labor issue, for example, because it fears that winning the case could create a precedent that might hurt top clients in other industries.
“It’s not that there aren’t lawyers at these large firms who aren’t public-spirit minded and don’t want to do these cases. It’s that their business model won’t allow it,” said Joseph Sellers, a lawyer for the mid-sized firm Cohen Milstein, who argued against Wal-Mart at the Supreme Court. “In terms of access to justice, the ability of individuals to get their issues raised in the Supreme Court is more limited,” Sellers said. “Our side just doesn’t have the resources.”
See
http://www.reuters.com/investigates/special-report/scotus/)
Ralph Nader dislikes credit cards and likes paper checks for good reasons -- so can we bring modern electronic check equivalents into the conversation?
In a recent article (URL http://dissidentvoice.org/2014/12/ten-reasons-why-i-dont-have-a-credit-card/ ), consumer advocate Ralph Nader warned consumers about the many problems of using credit cards as a form of payment. Among other things, credit cards require sharing of confidential consumer information, create risk of fraudulent charges, and may involve consumer late payment fees and penalties. Also, credit card networks charge big fees to merchants that get passed on to consumers.
Using cash and checks to pay for consumer purchases is not nearly so problematic. Paying by check is much less likely to ensnare consumers in such pitfalls, because when paying by check funds are transferred directly from the consumer's bank account to the account of a merchant or other payee. Costly and often intrusive payment networks such as those owned by Visa, MasterCard or other large companies are not involved in the transaction.
A point that Nader’s analysis does not address is that modern technology offers consumers ways to get the advantages of the paper check through the use of paperless electronic checks and debit cards and other electronic payment systems that use “ACH” payment system technology to move money directly from the consumer’s bank account to the merchant’s or other payee’s account. The ACH Network provides an electronic funds transfer network for direct account-to-account consumer, business, and government payments. The ACH Network is governed by the not-for-profit Electronic Payments Association (“NACHA’) Operating Rules. See https://www.nacha.org/ach-network
From a consumer’s perspective, debit cards that use the ACH network seem to function much like Visa or MasterCard debit cards, but in fact, they are actually processed by financial institutions in a manner similar to the way that paper or electronic checks are processed, in the sense that they are not processed by a network such as that of Visa or MasterCard. (See http://www.kc.frb.org/Publicat/PSR/Briefings/PSR-BriefingDec07.pdf for an explanation.)
In addition, a cell phone-based technology like CurrentC, developed with encouragement of Walmart, Target, and other large merchants as an alternative to the Apple Pay cell phone based system, functions in a similar way as a check by making use of the ACH payment system. When a consumer uses an ACH-based debit card or cell phone application, then, as is the case when a consumer pays using a paper check, the money goes directly from the consumer's bank account into the account of a merchant or other payee. (It is true, however, that stores and venders who offer ACH payment system debit cards or cell phone-based equivalents may often collect a customer’s personal information in a way that may compromise consumer confidentiality, but such data collection is not inherently a part of employing ACH-based technology.)
For these reasons, Ralph Nader's support of the consumer use of paper checks logically should extend to the use by consumers of ACH-based electronic checks, as well as ACH-payment-system-based debit cards, and similar ACH-based cell phone applications where money goes directly from the consumer's bank account into the account of a merchant or other payee. This is particularly true in situations in which the issuers forgo the opportunity to collect the consumer’s personal information for commercial use.
It would seem that ACH payment systems that are the modern electronic equivalent of checks have the potential to undermine the considerable market power that Visa and MasterCard exercise through the use of their networks. At present, there appears to be little evidence of this occurring, but perhaps that will change over time. It would be interesting to hear the thoughts of expert and informed economists about the future effect of these emergent ACH based consumer payment systems in the markets in which VISA and MasterCard compete.
Walter Isaacson makes points in his recent books that may offer insight into the future of ACH based consumer transactions. He has recently written books on the subject of both innovation in technology markets and on the life and work of Steve Jobs. Isaacson’s work suggests that just because an idea seems like it ought to be attractive to consumers and do well in the market does not mean it will. People with considerable product development and promotional skills are needed to make a product succeed. Favorable circumstances and luck may also play a role. The graphic interface for computers and the computer mouse were ideas with great potential that succeeded because Steve Jobs knew how to develop and promote them. The modern programmable computer became commercially important because people like Presper Eckert and John Mauchly and others not only had access to great inventions, but also the necessary product development and promotional skills to get the inventions accepted in the marketplace.
Posted by Don Resnikoff
In a recent article (URL http://dissidentvoice.org/2014/12/ten-reasons-why-i-dont-have-a-credit-card/ ), consumer advocate Ralph Nader warned consumers about the many problems of using credit cards as a form of payment. Among other things, credit cards require sharing of confidential consumer information, create risk of fraudulent charges, and may involve consumer late payment fees and penalties. Also, credit card networks charge big fees to merchants that get passed on to consumers.
Using cash and checks to pay for consumer purchases is not nearly so problematic. Paying by check is much less likely to ensnare consumers in such pitfalls, because when paying by check funds are transferred directly from the consumer's bank account to the account of a merchant or other payee. Costly and often intrusive payment networks such as those owned by Visa, MasterCard or other large companies are not involved in the transaction.
A point that Nader’s analysis does not address is that modern technology offers consumers ways to get the advantages of the paper check through the use of paperless electronic checks and debit cards and other electronic payment systems that use “ACH” payment system technology to move money directly from the consumer’s bank account to the merchant’s or other payee’s account. The ACH Network provides an electronic funds transfer network for direct account-to-account consumer, business, and government payments. The ACH Network is governed by the not-for-profit Electronic Payments Association (“NACHA’) Operating Rules. See https://www.nacha.org/ach-network
From a consumer’s perspective, debit cards that use the ACH network seem to function much like Visa or MasterCard debit cards, but in fact, they are actually processed by financial institutions in a manner similar to the way that paper or electronic checks are processed, in the sense that they are not processed by a network such as that of Visa or MasterCard. (See http://www.kc.frb.org/Publicat/PSR/Briefings/PSR-BriefingDec07.pdf for an explanation.)
In addition, a cell phone-based technology like CurrentC, developed with encouragement of Walmart, Target, and other large merchants as an alternative to the Apple Pay cell phone based system, functions in a similar way as a check by making use of the ACH payment system. When a consumer uses an ACH-based debit card or cell phone application, then, as is the case when a consumer pays using a paper check, the money goes directly from the consumer's bank account into the account of a merchant or other payee. (It is true, however, that stores and venders who offer ACH payment system debit cards or cell phone-based equivalents may often collect a customer’s personal information in a way that may compromise consumer confidentiality, but such data collection is not inherently a part of employing ACH-based technology.)
For these reasons, Ralph Nader's support of the consumer use of paper checks logically should extend to the use by consumers of ACH-based electronic checks, as well as ACH-payment-system-based debit cards, and similar ACH-based cell phone applications where money goes directly from the consumer's bank account into the account of a merchant or other payee. This is particularly true in situations in which the issuers forgo the opportunity to collect the consumer’s personal information for commercial use.
It would seem that ACH payment systems that are the modern electronic equivalent of checks have the potential to undermine the considerable market power that Visa and MasterCard exercise through the use of their networks. At present, there appears to be little evidence of this occurring, but perhaps that will change over time. It would be interesting to hear the thoughts of expert and informed economists about the future effect of these emergent ACH based consumer payment systems in the markets in which VISA and MasterCard compete.
Walter Isaacson makes points in his recent books that may offer insight into the future of ACH based consumer transactions. He has recently written books on the subject of both innovation in technology markets and on the life and work of Steve Jobs. Isaacson’s work suggests that just because an idea seems like it ought to be attractive to consumers and do well in the market does not mean it will. People with considerable product development and promotional skills are needed to make a product succeed. Favorable circumstances and luck may also play a role. The graphic interface for computers and the computer mouse were ideas with great potential that succeeded because Steve Jobs knew how to develop and promote them. The modern programmable computer became commercially important because people like Presper Eckert and John Mauchly and others not only had access to great inventions, but also the necessary product development and promotional skills to get the inventions accepted in the marketplace.
Posted by Don Resnikoff
Pulse debit network sues Visa
The suit alleges a Visa strategy that makes certain debit transactions mandatory, and making vendors sign rebate agreements in which exorbitant fees will only be waived after reaching certain volume targets. Pulse can't reach those volume targets, so that it faces exclusion as a competitior:
“To maintain its competitive viability, Pulse must continuously invest in its network . . . . As Visa fully implements its new integrated debit strategy and Pulse continues to lose volume due to Visa’s illegal conduct, Visa’s illegal conduct threatens to make Pulse’s continued investment in its debit network no longer economic. Without continued investment, Pulse’s network will be marginalized, lessening the competitive constraint Pulse imposes on Visa.”
See the complaint at https://www.scribd.com/doc/248350919/Pulse-v-Visa-complaint
The suit alleges a Visa strategy that makes certain debit transactions mandatory, and making vendors sign rebate agreements in which exorbitant fees will only be waived after reaching certain volume targets. Pulse can't reach those volume targets, so that it faces exclusion as a competitior:
“To maintain its competitive viability, Pulse must continuously invest in its network . . . . As Visa fully implements its new integrated debit strategy and Pulse continues to lose volume due to Visa’s illegal conduct, Visa’s illegal conduct threatens to make Pulse’s continued investment in its debit network no longer economic. Without continued investment, Pulse’s network will be marginalized, lessening the competitive constraint Pulse imposes on Visa.”
See the complaint at https://www.scribd.com/doc/248350919/Pulse-v-Visa-complaint
Takata airbags, lack of rival airbag suppliers, and thoughts of Barry Lynn (revised)
A recent US Senate hearing focused on the inability of manufacturer Takata to produce enough new auto airbags to quickly replace defective Takata airbags. Apparently Takata is the sole airbag supplier for most big auto companies, with few rivals. This predicament reminded me of Barry Lynn, who has long focused on problems of supply chains where a single supplier becomes virtually a sole source supplier.
A few years ago Barry Lynn wrote about the auto industry, explaining that pooling of supply activities by big auto makers has continued “to a point where any outside supplier would manage to capture nearly complete control over a production activity.” Further, “the resulting structure is unlike any we have seen before. One way to understand this new organization of industrial activity is to conjure a picture of the mythological Greek monster the Hydra. In the case of the auto industry, we see many heads, with names like General Motors, Toyota North America, and Ford. We also increasingly see a single body, composed of an ever shrinking number of ever more specialized firms, like C&A, that dominate supply of some component or family of products, be it piston rings or electronic controls or cockpit assemblies.” The result “poses entirely unprecedented financial and physical dangers, precisely because it proceeds without any direction by any rational governor (private or public). There is no one with any interest in ensuring the safety and stability of the system as a whole.”
It does seem that Takata’s strong control over air bag supply for big auto companies creates safety and supply issues that would be less if there were alternate supply. (From TireBusiness.com: "If Takata asks rival suppliers such as Autoliv Inc. or TRW Automotive to help, auto makers say they would need a year or two just to test their inflators. In letters sent to the National Highway Transportation Safety Administration (NHTSA) this month, BMW AG, General Motors Co. and Mazda Motor Corp. warned that it would be difficult to switch to other suppliers’ inflators. Switching suppliers could take as long as a year, estimated Dino Triantafyllos, Toyota’s North American chief quality officer.")
Barry Lynn characterizes the nearly sole source problem in novel antitrust terms, particularly monopoly, out-of-the-box antitrust thinking which some antitrust academics find debatable. But the Takata story surely indicates some consumer and regulatory problem related to lack of diverse supply that requires a solution, even if there is room for debate about the correct analytical framework.
One regulatory question that drew the attention of U.S. Senators at the recent hearing is conceptually relatively straightforward. Should the large auto companies that put unsafe Takata parts in their cars now be forced by regulators to provide swift remedies to consumers? The alternative to swift remedies is to have consumers driving around for some time in dangerous cars. The problem that Takata or Takata rivals cannot quickly provide safe replacement airbags because of tight supply is a practical problem that arguably was caused by bad planning by the large auto makers, and provides no excuse for failing to quickly provide safe cars to consumers with bad airbags. Forcing auto makers to now make car buyers safe, and to do it quickly, would be a regulatory intervention that forces the auto makers to take responsibility for supply planning mistakes.
Any thoughts about the correct analytical framework, or a remedy?
Posted by Don Resnikoff
A recent US Senate hearing focused on the inability of manufacturer Takata to produce enough new auto airbags to quickly replace defective Takata airbags. Apparently Takata is the sole airbag supplier for most big auto companies, with few rivals. This predicament reminded me of Barry Lynn, who has long focused on problems of supply chains where a single supplier becomes virtually a sole source supplier.
A few years ago Barry Lynn wrote about the auto industry, explaining that pooling of supply activities by big auto makers has continued “to a point where any outside supplier would manage to capture nearly complete control over a production activity.” Further, “the resulting structure is unlike any we have seen before. One way to understand this new organization of industrial activity is to conjure a picture of the mythological Greek monster the Hydra. In the case of the auto industry, we see many heads, with names like General Motors, Toyota North America, and Ford. We also increasingly see a single body, composed of an ever shrinking number of ever more specialized firms, like C&A, that dominate supply of some component or family of products, be it piston rings or electronic controls or cockpit assemblies.” The result “poses entirely unprecedented financial and physical dangers, precisely because it proceeds without any direction by any rational governor (private or public). There is no one with any interest in ensuring the safety and stability of the system as a whole.”
It does seem that Takata’s strong control over air bag supply for big auto companies creates safety and supply issues that would be less if there were alternate supply. (From TireBusiness.com: "If Takata asks rival suppliers such as Autoliv Inc. or TRW Automotive to help, auto makers say they would need a year or two just to test their inflators. In letters sent to the National Highway Transportation Safety Administration (NHTSA) this month, BMW AG, General Motors Co. and Mazda Motor Corp. warned that it would be difficult to switch to other suppliers’ inflators. Switching suppliers could take as long as a year, estimated Dino Triantafyllos, Toyota’s North American chief quality officer.")
Barry Lynn characterizes the nearly sole source problem in novel antitrust terms, particularly monopoly, out-of-the-box antitrust thinking which some antitrust academics find debatable. But the Takata story surely indicates some consumer and regulatory problem related to lack of diverse supply that requires a solution, even if there is room for debate about the correct analytical framework.
One regulatory question that drew the attention of U.S. Senators at the recent hearing is conceptually relatively straightforward. Should the large auto companies that put unsafe Takata parts in their cars now be forced by regulators to provide swift remedies to consumers? The alternative to swift remedies is to have consumers driving around for some time in dangerous cars. The problem that Takata or Takata rivals cannot quickly provide safe replacement airbags because of tight supply is a practical problem that arguably was caused by bad planning by the large auto makers, and provides no excuse for failing to quickly provide safe cars to consumers with bad airbags. Forcing auto makers to now make car buyers safe, and to do it quickly, would be a regulatory intervention that forces the auto makers to take responsibility for supply planning mistakes.
Any thoughts about the correct analytical framework, or a remedy?
Posted by Don Resnikoff
Tim Wu on mega-mergers and degradation of consumer service
From the New Yorker article at http://www.newyorker.com/business/currency/leaving-united-airlines-after-merger
The United merger is a grand example of a consumer sinkhole—a merger that proves to be not just a onetime event but an ongoing disaster for consumers (and shareholders) who suffer for years after. I wasn’t the only one who noticed the airline’s descent. Since 2011, United has piled up a mountain of consumer complaints (according to one report, only Spirit has more per passenger) and has repeatedly tallied some of the worst quality rankings in the nation, trailing even discount airlines like Frontier and AirTran. A Web site named Untied.com collected these complaints; United tried to sue it out of existence.
The sinkhole effect—which is not confined to airlines—means that we need to take a much closer look at mega-mergers in the essential industries whose services are hard to avoid and which have a disproportionate effect on quality of life. Looking at examples from other industries, like hospitals, can be even more alarming. During the early aughts, the Federal Trade Commission analyzed several completed hospital mergers. Those studies revealed two unmistakable results: 1) an increase in prices explainable only by a reduction in competition, and 2) the same or worse outcomes, as measured by indicators that included patient mortality. Other studies have largely confirmed the results. Higher prices and more dead patients; it doesn’t really get worse than that.
The Justice Department and the Federal Trade Commission are supposed to stop mergers that are bad for consumers, but degradation of service, with its direct effects on consumer welfare, does not get enough attention.
From the New Yorker article at http://www.newyorker.com/business/currency/leaving-united-airlines-after-merger
The United merger is a grand example of a consumer sinkhole—a merger that proves to be not just a onetime event but an ongoing disaster for consumers (and shareholders) who suffer for years after. I wasn’t the only one who noticed the airline’s descent. Since 2011, United has piled up a mountain of consumer complaints (according to one report, only Spirit has more per passenger) and has repeatedly tallied some of the worst quality rankings in the nation, trailing even discount airlines like Frontier and AirTran. A Web site named Untied.com collected these complaints; United tried to sue it out of existence.
The sinkhole effect—which is not confined to airlines—means that we need to take a much closer look at mega-mergers in the essential industries whose services are hard to avoid and which have a disproportionate effect on quality of life. Looking at examples from other industries, like hospitals, can be even more alarming. During the early aughts, the Federal Trade Commission analyzed several completed hospital mergers. Those studies revealed two unmistakable results: 1) an increase in prices explainable only by a reduction in competition, and 2) the same or worse outcomes, as measured by indicators that included patient mortality. Other studies have largely confirmed the results. Higher prices and more dead patients; it doesn’t really get worse than that.
The Justice Department and the Federal Trade Commission are supposed to stop mergers that are bad for consumers, but degradation of service, with its direct effects on consumer welfare, does not get enough attention.
Coalition of Attorneys General Calling on Federal Agency to Protect Consumers From Mandatory Arbitration Clauses in Contracts
The federal government should adopt rules that protect consumers from mandatory arbitration clauses in important contracts, Delaware Attorney General Beau Biden and his colleagues in 15 other states wrote in a letter sent this week to the U.S. Consumer Financial Protection Bureau.
“The need for regulations to protect the public interest has never been so great,” the Attorneys General wrote. “Over the past decade, judicial decisions and business practices have diminished consumers’ rights and bargaining power with respect to contracts for financial services. ”
The letter, which was organized by Delaware Attorney General Beau Biden, Massachusetts Attorney General Martha Coakley and Kentucky Attorney General Jack Conway, was sent to the CFPB as part of the agency’s research into mandatory arbitration clauses. The 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act requires the agency to conduct extensive research before determining whether mandatory arbitration clauses are harmful to consumers before issuing any regulations.
In addition to Delaware, Massachusetts and Kentucky, the following states also signed onto the letter: California, Connecticut, Hawaii, Illinois, Iowa, Maine, Maryland, New Mexico, New York, Oregon, Rhode Island, Vermont and Washington.
A copy of the letter is available here on Attorney General Biden’s Web site: http://1.usa.gov/1xGl6WS
The federal government should adopt rules that protect consumers from mandatory arbitration clauses in important contracts, Delaware Attorney General Beau Biden and his colleagues in 15 other states wrote in a letter sent this week to the U.S. Consumer Financial Protection Bureau.
“The need for regulations to protect the public interest has never been so great,” the Attorneys General wrote. “Over the past decade, judicial decisions and business practices have diminished consumers’ rights and bargaining power with respect to contracts for financial services. ”
The letter, which was organized by Delaware Attorney General Beau Biden, Massachusetts Attorney General Martha Coakley and Kentucky Attorney General Jack Conway, was sent to the CFPB as part of the agency’s research into mandatory arbitration clauses. The 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act requires the agency to conduct extensive research before determining whether mandatory arbitration clauses are harmful to consumers before issuing any regulations.
In addition to Delaware, Massachusetts and Kentucky, the following states also signed onto the letter: California, Connecticut, Hawaii, Illinois, Iowa, Maine, Maryland, New Mexico, New York, Oregon, Rhode Island, Vermont and Washington.
A copy of the letter is available here on Attorney General Biden’s Web site: http://1.usa.gov/1xGl6WS
Takata faces criminal GJ investigation in NY concerning its auto airbag design
Takata said that it had received a subpoena for documents related to auto air bag defects from a federal grand jury in the Southern District of New York. The company confirmed that it hired Andrew Levander, a well-known defense lawyer based in New York, as it prepares for a criminal investigation. Critics argue that Takata knowingly used an unstable but low cost propellant in its bags, despite well known safety risks.
See http://www.nytimes.com/2014/11/20/business/takatas-switch-to-cheaper-airbag-propellant-is-at-center-of-crisis.html?action=click&contentCollection=Business%20Day®ion=Footer&module=MoreInSection&pg
Takata said that it had received a subpoena for documents related to auto air bag defects from a federal grand jury in the Southern District of New York. The company confirmed that it hired Andrew Levander, a well-known defense lawyer based in New York, as it prepares for a criminal investigation. Critics argue that Takata knowingly used an unstable but low cost propellant in its bags, despite well known safety risks.
See http://www.nytimes.com/2014/11/20/business/takatas-switch-to-cheaper-airbag-propellant-is-at-center-of-crisis.html?action=click&contentCollection=Business%20Day®ion=Footer&module=MoreInSection&pg
From Public Citizen blog: FTC and Florida AG Put A Stop to Robocalls Used to Fraudulently Pitch Medical Alert Devices to Seniors
A settlement obtained by the Federal Trade Commission and the Office of the Florida Attorney General permanently shuts down an Orlando-based operation that bilked seniors by using pre-recorded robocalls to sell them supposedly free medical alert systems. The FTC's press release is here. The Stipulated Order and Permanent Injunction is here.
A settlement obtained by the Federal Trade Commission and the Office of the Florida Attorney General permanently shuts down an Orlando-based operation that bilked seniors by using pre-recorded robocalls to sell them supposedly free medical alert systems. The FTC's press release is here. The Stipulated Order and Permanent Injunction is here.
Antitrust Issues in Government Contracts: D.C. and Federal Perspectives -- DC Bar Section program announcement
"Please join us for a discussion by enforcers of basics of contracting, competitive conduct and penalties for violations. A private practitioner will respond on ways to comply and avoid charges of bid-rigging and other violations."
Tuesday, December 16, 2014 from 12:00 pm to 1:30 pm
Detail and sign-up here (Bar membership NOT required); remote access webinar sign-up available: http://info3.dcbar.org/t/173417/63268678/9779/15/
New case on rights of disabled and point of sales services
A new case against Williams Sonoma raises issues affecting blind people who must orally reveal their PIN numbers to use point of sales equipment. The allegation is that lack of automated equipment to handle PIN numbers for the blind violates federal and state laws:
“The plaintiff and the class, unlike persons without visual impairments, cannot independently make a debit purchase at defendant’s stores. . . .Defendant . . . .has failed to provide auxiliary aids and services calculated to make its POS devices fully accessible to, and independently usable by, individuals who are blind,”
The complaint seeks damages and a court order that would require the retailer to make changes to its POS devices to bring them into conformance with the ADA and California code.
See the complaint here: https://www.scribd.com/doc/246979031/Williams-Sonoma-POS-accessibility-case
A new case against Williams Sonoma raises issues affecting blind people who must orally reveal their PIN numbers to use point of sales equipment. The allegation is that lack of automated equipment to handle PIN numbers for the blind violates federal and state laws:
“The plaintiff and the class, unlike persons without visual impairments, cannot independently make a debit purchase at defendant’s stores. . . .Defendant . . . .has failed to provide auxiliary aids and services calculated to make its POS devices fully accessible to, and independently usable by, individuals who are blind,”
The complaint seeks damages and a court order that would require the retailer to make changes to its POS devices to bring them into conformance with the ADA and California code.
See the complaint here: https://www.scribd.com/doc/246979031/Williams-Sonoma-POS-accessibility-case
Report on our American Airlines- US Airways merger program
Thanks to Moderator Allen Grunes and panelists Nick Bush, MJ Moltenbrey, Seth Bloom and Diana Moss for an outstanding and well-attended program on November 12 concerning settlement of the USDOJ-multistate litigation challenging the American Airlines/US Airways merger. Thanks too to our Bar co-sponsors. The discussion was intense and interesting, and can’t be summarized in just a few sentences. (Unfortunately, because of technical difficulties we can’t share a recording.)
Diana Moss opened the discussion with an excellent short review of industry background, including company bankruptcies and industry consolidation.
MJ Moltenbrey, whose firm represents American Airlines, explained the merger and the rationale behind it, emphasizing network efficiency gains that she suggested will benefit consumers.
Nick Bush of the DC AG’s office described the merger issues and settlement benefits from the Government’s point of view. He said that slot divestitures at Washington/Reagan are an excellent outcome for local interests.
Diana Moss and Seth Bloom argued that the settlement agreed to by USDOJ and the States falls far short of addressing the allegations of the complaint, for reasons they find it hard to understand. Diana Moss questioned the use of out-of-market remedies in the settlement to address in-market allegations of competitive harm. Both Diana and Seth argued that slot divestitures are an inadequate remedy, and that the merger should have been blocked.
Seth Bloom discussed what he views as the abrogation of the Tunney Act as a means to bring public concerns about a settlement to the attention of the deciding judge.
MJ Moltenbrey argued that the efficiency gains of the merger, particularly network efficiency gains, are a benefit to consumers that would be lost if the merger were blocked. Diana Moss disagreed with the claimed extent of efficiencies, so at the close of discussion she and Seth stayed with their view that the merger should have been blocked, and Nick Bush stayed with the view that the settlement is a good one.
A question from the telephone audience focused on a point that MJ Moltenbrey emphasized – litigation is difficult, and settlements by their nature represent pragmatic compromise by the parties.
Posted by Don Resnikoff
Thanks to Moderator Allen Grunes and panelists Nick Bush, MJ Moltenbrey, Seth Bloom and Diana Moss for an outstanding and well-attended program on November 12 concerning settlement of the USDOJ-multistate litigation challenging the American Airlines/US Airways merger. Thanks too to our Bar co-sponsors. The discussion was intense and interesting, and can’t be summarized in just a few sentences. (Unfortunately, because of technical difficulties we can’t share a recording.)
Diana Moss opened the discussion with an excellent short review of industry background, including company bankruptcies and industry consolidation.
MJ Moltenbrey, whose firm represents American Airlines, explained the merger and the rationale behind it, emphasizing network efficiency gains that she suggested will benefit consumers.
Nick Bush of the DC AG’s office described the merger issues and settlement benefits from the Government’s point of view. He said that slot divestitures at Washington/Reagan are an excellent outcome for local interests.
Diana Moss and Seth Bloom argued that the settlement agreed to by USDOJ and the States falls far short of addressing the allegations of the complaint, for reasons they find it hard to understand. Diana Moss questioned the use of out-of-market remedies in the settlement to address in-market allegations of competitive harm. Both Diana and Seth argued that slot divestitures are an inadequate remedy, and that the merger should have been blocked.
Seth Bloom discussed what he views as the abrogation of the Tunney Act as a means to bring public concerns about a settlement to the attention of the deciding judge.
MJ Moltenbrey argued that the efficiency gains of the merger, particularly network efficiency gains, are a benefit to consumers that would be lost if the merger were blocked. Diana Moss disagreed with the claimed extent of efficiencies, so at the close of discussion she and Seth stayed with their view that the merger should have been blocked, and Nick Bush stayed with the view that the settlement is a good one.
A question from the telephone audience focused on a point that MJ Moltenbrey emphasized – litigation is difficult, and settlements by their nature represent pragmatic compromise by the parties.
Posted by Don Resnikoff
Ebola patients and HIPAA disclosure limits
This week, HHS' Office for Civil Rights released a bulletin reminding providers and others of their responsibilities under the law following Ebola's arrival in America. “The protections of the privacy rule are not set aside during an emergency,” the bulletin says.
HIPAA generally bars doctors, hospitals and insurers from sharing patients' personal information. Hospitals have been allowed only to confirm a patient's general condition—such as good, fair or critical—and, even then, only when asked about a patient by name and only if the patient agrees to be listed on the hospital's directory or is incapacitated and release of that information is deemed in the patient's best interest.
Hospitals can, however, share patient information with public health authorities such as the Centers for Disease Control and Prevention or state health departments so they can take steps to protect the public.
Under HIPAA, providers may share patient information more broadly only if there's an imminent danger, according to the bulletin. Experts agree that doesn't seem to apply in the case of Ebola, which can only be spread through bodily fluids. The bulletin also says the HHS secretary may waive certain provisions of HIPAA's privacy rule during a public health or other emergency, but nothing like that has been declared.
The HIPAA restrictions seem likely to be controversial, having in mind recent strenuous arguments by local officials seeking to limit the rights of Ebola patients e based on public health concerns.
This week, HHS' Office for Civil Rights released a bulletin reminding providers and others of their responsibilities under the law following Ebola's arrival in America. “The protections of the privacy rule are not set aside during an emergency,” the bulletin says.
HIPAA generally bars doctors, hospitals and insurers from sharing patients' personal information. Hospitals have been allowed only to confirm a patient's general condition—such as good, fair or critical—and, even then, only when asked about a patient by name and only if the patient agrees to be listed on the hospital's directory or is incapacitated and release of that information is deemed in the patient's best interest.
Hospitals can, however, share patient information with public health authorities such as the Centers for Disease Control and Prevention or state health departments so they can take steps to protect the public.
Under HIPAA, providers may share patient information more broadly only if there's an imminent danger, according to the bulletin. Experts agree that doesn't seem to apply in the case of Ebola, which can only be spread through bodily fluids. The bulletin also says the HHS secretary may waive certain provisions of HIPAA's privacy rule during a public health or other emergency, but nothing like that has been declared.
The HIPAA restrictions seem likely to be controversial, having in mind recent strenuous arguments by local officials seeking to limit the rights of Ebola patients e based on public health concerns.
Dean Foods wants SCOTUS to review class action dispute
The nation’s largest dairy group is hoping the US Supreme Court will take on its long-standing antitrust dispute and further clarify the standards and requirements for plaintiffs such antitrust cases.
According to reports, Dean Foods believes its case is idea for SCOTUS to build upon earlier precedents set by Bell Atlantic v. Twombly and Comcast v. Behrend, both of which increased the burden placed on antitrust plaintiffs to overcome case dismissals and be granted class certification.
The dispute, Dean Foods Company v. Food Lion, emerged when a class action lawsuit was filed against the dairy conglomerate, accusing it of colluding with the Dairy Farmers of America to reduce competition in the bottled milk market across the southeast US.
Dean Foods is challenging an earlier decision by the US Court of Appeals for the Sixth Circuit, which ruled earlier this year that a Tennessee judge was wrong to dismiss plaintiffs’ claims against Dean and the DFA. The case was tossed after granting a request for summary judgment to the defendants; the Sixth Circuit reversed that decision on grounds that a summary judgment should not have been granted.
Full content: Litigation Daily
The nation’s largest dairy group is hoping the US Supreme Court will take on its long-standing antitrust dispute and further clarify the standards and requirements for plaintiffs such antitrust cases.
According to reports, Dean Foods believes its case is idea for SCOTUS to build upon earlier precedents set by Bell Atlantic v. Twombly and Comcast v. Behrend, both of which increased the burden placed on antitrust plaintiffs to overcome case dismissals and be granted class certification.
The dispute, Dean Foods Company v. Food Lion, emerged when a class action lawsuit was filed against the dairy conglomerate, accusing it of colluding with the Dairy Farmers of America to reduce competition in the bottled milk market across the southeast US.
Dean Foods is challenging an earlier decision by the US Court of Appeals for the Sixth Circuit, which ruled earlier this year that a Tennessee judge was wrong to dismiss plaintiffs’ claims against Dean and the DFA. The case was tossed after granting a request for summary judgment to the defendants; the Sixth Circuit reversed that decision on grounds that a summary judgment should not have been granted.
Full content: Litigation Daily
From Public Citizen Blog: ABA on prosecutor endorsed debt collection
The association's Standing Committee on Ethics and Professional Responsibility issued ABA Formal Ethics Opinion 469, which concludes in no uncertain terms that the so-called "check diversion" programs violate basic standards of professional conduct. In particular, the opinion shines a spotlight on the misuse of the lawyer's name and authority in facilitating these arrangements. The demand letters are effective at scaring consumers because they are sent on prosecutor letterhead and contain threats of criminal prosecution -- threats that no other debt collector could make.
But those threats are false. "Typically," the ABA's opinion explains, "no lawyer in the prosecutor's office reviews the case file to determine whether a crime has been committed and prosecution is warranted or reviews the letter to ensure it complies with the Rules of Professional Conduct prior to the mailing."
The opinion also rightly emphasizes that the demand letters at issue are especially deceptive "because they misuse the criminal justice system by deploying the apparent authority of a prosecutor to intimidate an individual." And, in addition to making misrepresentations, the letters involve prosecutors in aiding and abetting the unauthorized practice of law by private, for-profit collection collectors.
The prosecutor-debt collector arrangements are also "abusive" because they convey "the impression that the machinery of the criminal justice system has been mobilized" against the consumer, who is led to believe that he or she may face jail time unless the collector gets paid.
The association's Standing Committee on Ethics and Professional Responsibility issued ABA Formal Ethics Opinion 469, which concludes in no uncertain terms that the so-called "check diversion" programs violate basic standards of professional conduct. In particular, the opinion shines a spotlight on the misuse of the lawyer's name and authority in facilitating these arrangements. The demand letters are effective at scaring consumers because they are sent on prosecutor letterhead and contain threats of criminal prosecution -- threats that no other debt collector could make.
But those threats are false. "Typically," the ABA's opinion explains, "no lawyer in the prosecutor's office reviews the case file to determine whether a crime has been committed and prosecution is warranted or reviews the letter to ensure it complies with the Rules of Professional Conduct prior to the mailing."
The opinion also rightly emphasizes that the demand letters at issue are especially deceptive "because they misuse the criminal justice system by deploying the apparent authority of a prosecutor to intimidate an individual." And, in addition to making misrepresentations, the letters involve prosecutors in aiding and abetting the unauthorized practice of law by private, for-profit collection collectors.
The prosecutor-debt collector arrangements are also "abusive" because they convey "the impression that the machinery of the criminal justice system has been mobilized" against the consumer, who is led to believe that he or she may face jail time unless the collector gets paid.
CFPB proposes rules for prepaid products
The CFPB is proposing what it calls “Know Before You Owe” disclosures for prepaid products. These are intended to provide standard, easy-to-understand information about a prepaid account. It not only lets the buyer know what they’re getting into with a particular card, it allows them to compare competing products and choose the one that works for them.
Additionally, there is the hope among some advocates that more transparent fee schedules will drive down these fees as issuers try to compete for customers.
“Competition has helped bring down fees and many prepaid cards offer an attractive option for managing your money,” said Christina Tetreault, staff attorney for Consumers Union. “But some cards come with costly fees that aren’t always disclosed clearly and prepaid cards still lack the same legal protections consumers get with debit cards.”
See http://consumerist.com/2014/11/13/new-prepaid-debit-card-rules-would-add-protections-curb-overdraft-abuse/
The CFPB is proposing what it calls “Know Before You Owe” disclosures for prepaid products. These are intended to provide standard, easy-to-understand information about a prepaid account. It not only lets the buyer know what they’re getting into with a particular card, it allows them to compare competing products and choose the one that works for them.
Additionally, there is the hope among some advocates that more transparent fee schedules will drive down these fees as issuers try to compete for customers.
“Competition has helped bring down fees and many prepaid cards offer an attractive option for managing your money,” said Christina Tetreault, staff attorney for Consumers Union. “But some cards come with costly fees that aren’t always disclosed clearly and prepaid cards still lack the same legal protections consumers get with debit cards.”
See http://consumerist.com/2014/11/13/new-prepaid-debit-card-rules-would-add-protections-curb-overdraft-abuse/
From Public Citizen blog: FCC Order on Faxed Ads
The Federal Communications Commission has in recent years received several petitions concerning the Telephone Consumer Protection Act. Responding to some of them, the FCC last week issued an order confirming that all faxed advertisements must include an opt-out notice.
Click for:FCC notice
The Federal Communications Commission has in recent years received several petitions concerning the Telephone Consumer Protection Act. Responding to some of them, the FCC last week issued an order confirming that all faxed advertisements must include an opt-out notice.
Click for:FCC notice
Nearly 4 million people contact FCC on net neutrality, and now President Obama chimes in
From the NY Times: In the last six months, almost four million people have sent comments about net neutrality to the F.C.C., the vast majority of them part of an organized campaign supporting strong rules. And now President Obama has agreed with that approach. In September, representatives from the websites Etsy, Kickstarter and Vimeo, among others, met with Megan J. Smith, Mr. Obama’s chief technology officer, and other senior officials to ask the president to lean on the F.C.C. to impose the stricter rules that would treat broadband as a public utility. Now the President has done that. Internet content companies fear that if broadband providers can charge content companies for premium access to customers, start-ups and other small companies will be shut out.
Broadband companies like Verizon, which successfully challenged the F.C.C.’s last net neutrality rules, said that the president’s plan was unacceptable.
Republican leaders also objected to Mr. Obama’s proposal, including Senator John Thune of South Dakota, who is in line to take over the chairmanship of the Senate Commerce Committee in the Republican-controlled Senate next year. Mr. Thune said the effort “would turn the Internet into a government-regulated utility. . ."
Click here:read the NYT story
From the NY Times: In the last six months, almost four million people have sent comments about net neutrality to the F.C.C., the vast majority of them part of an organized campaign supporting strong rules. And now President Obama has agreed with that approach. In September, representatives from the websites Etsy, Kickstarter and Vimeo, among others, met with Megan J. Smith, Mr. Obama’s chief technology officer, and other senior officials to ask the president to lean on the F.C.C. to impose the stricter rules that would treat broadband as a public utility. Now the President has done that. Internet content companies fear that if broadband providers can charge content companies for premium access to customers, start-ups and other small companies will be shut out.
Broadband companies like Verizon, which successfully challenged the F.C.C.’s last net neutrality rules, said that the president’s plan was unacceptable.
Republican leaders also objected to Mr. Obama’s proposal, including Senator John Thune of South Dakota, who is in line to take over the chairmanship of the Senate Commerce Committee in the Republican-controlled Senate next year. Mr. Thune said the effort “would turn the Internet into a government-regulated utility. . ."
Click here:read the NYT story
AAI points out anticompetitive element in CVS imposition of additional co-pay on customers who use health insurance to fill prescriptions at pharmacies that also sell cigarettes and other tobacco products.
Last month CVS Health Corp. (CVS) announced a new component of its otherwise commendable drive to help discourage smoking. The nation's second largest pharmacy benefit manager (PBM) and retail pharmacy chain will now impose an additional co-pay on customers who use health insurance to fill prescriptions at pharmacies that also sell cigarettes and other tobacco products ("tobacco"). The AAI at http://antitrustinstitute.org/content/cvs-takes-its-anti-smoking-policy-next-level-aai-urges-antitrust-scrutiny-anticompetitive urges the Federal Trade Commission (FTC) to carefully scrutinize this suspect policy, as the facts suggest it may have little to do with ending smoking and tobacco use, and much to do with anticompetitive exclusion of CVS's retail pharmacy rivals.
Last month CVS Health Corp. (CVS) announced a new component of its otherwise commendable drive to help discourage smoking. The nation's second largest pharmacy benefit manager (PBM) and retail pharmacy chain will now impose an additional co-pay on customers who use health insurance to fill prescriptions at pharmacies that also sell cigarettes and other tobacco products ("tobacco"). The AAI at http://antitrustinstitute.org/content/cvs-takes-its-anti-smoking-policy-next-level-aai-urges-antitrust-scrutiny-anticompetitive urges the Federal Trade Commission (FTC) to carefully scrutinize this suspect policy, as the facts suggest it may have little to do with ending smoking and tobacco use, and much to do with anticompetitive exclusion of CVS's retail pharmacy rivals.
American-USAir merger discussed at ABA Antitrust Fall Forum
David Gelfand, the USDOJ Antitrust Division’s new DAAG in charge of litigation, spoke at the recent ABA Fall Forum on the topic of the US Airways/American Airlines merger. (See proposed settlement here} He described the pending consent decree resolving the government’s antitrust concerns as a “fantastic settlement” that was “earned through difficult litigation.” He pointed out that the settlement calls for a very significant divestiture of assets that was the largest ever in the airline industry.
Pennsylvania Senior Deputy Attorney General Jennifer Thomson discussed the federal/state challenge to the combination of US Airways and American Airlines. Thomson said there was an agreement to serve small airports for five years. Because hubs have been abandoned after other airline mergers, Thomson noted that Pennsylvania made these state-specific remedies enforceable by court order.
Credit:Walters-Kluwer blog
David Gelfand, the USDOJ Antitrust Division’s new DAAG in charge of litigation, spoke at the recent ABA Fall Forum on the topic of the US Airways/American Airlines merger. (See proposed settlement here} He described the pending consent decree resolving the government’s antitrust concerns as a “fantastic settlement” that was “earned through difficult litigation.” He pointed out that the settlement calls for a very significant divestiture of assets that was the largest ever in the airline industry.
Pennsylvania Senior Deputy Attorney General Jennifer Thomson discussed the federal/state challenge to the combination of US Airways and American Airlines. Thomson said there was an agreement to serve small airports for five years. Because hubs have been abandoned after other airline mergers, Thomson noted that Pennsylvania made these state-specific remedies enforceable by court order.
Credit:Walters-Kluwer blog
From Public Citizen blog:
The administration versus Sen. Elizabeth Warren on student loan servicers
The U.S. Department of Education, drawing applause from the Treasury Department, has moved to increase funding for student loan servicers. The goal is to improve customer service for students, according to the administration. The catch? Servicers get the money anyway, whether or not service improves.
The Huffington Post explains the concern, and Senator's Warren's position:
In September, under withering questioning from Warren, a top Education Department official conceded that the companies will get more money regardless of any changes they make to their operations. At the time, the senator was incredulous.
“Let me get this straight: You break the law. You don't follow the rules. You treat the borrowers badly," Warren said of the loan servicers. "And you all just renegotiated the contracts to make sure that across the portfolio, [loan servicers] are going to make a little more money if nothing changes?"
Read the full story here.
The administration versus Sen. Elizabeth Warren on student loan servicers
The U.S. Department of Education, drawing applause from the Treasury Department, has moved to increase funding for student loan servicers. The goal is to improve customer service for students, according to the administration. The catch? Servicers get the money anyway, whether or not service improves.
The Huffington Post explains the concern, and Senator's Warren's position:
In September, under withering questioning from Warren, a top Education Department official conceded that the companies will get more money regardless of any changes they make to their operations. At the time, the senator was incredulous.
“Let me get this straight: You break the law. You don't follow the rules. You treat the borrowers badly," Warren said of the loan servicers. "And you all just renegotiated the contracts to make sure that across the portfolio, [loan servicers] are going to make a little more money if nothing changes?"
Read the full story here.
Federal government to expand availability of low down payment mortgage loans
The chief executive of Fannie Mae, the government mortgage entity, said recently that he expected Fannie’s low-down-payment mortgages to cost the borrower less than similar loans available under certain other government programs. But he also said that Fannie’s loans would require private mortgage insurance on top of the down payment, a stipulation that might, in theory, limit the size of the program.
Even as the government is moving ahead with the changes, some housing analysts had concerns, contending that the program could lead to higher defaults.
The chief executive of Fannie Mae, the government mortgage entity, said recently that he expected Fannie’s low-down-payment mortgages to cost the borrower less than similar loans available under certain other government programs. But he also said that Fannie’s loans would require private mortgage insurance on top of the down payment, a stipulation that might, in theory, limit the size of the program.
Even as the government is moving ahead with the changes, some housing analysts had concerns, contending that the program could lead to higher defaults.
Debt collection against older consumers
The Consumer Financial Protection Bureau has issued a report: A snapshot of debt collection complaints submitted by older consumers. Among the report's findings are collection on invalid debts, and threats of draconian action that couldn't be pursued. _
http://feedproxy.google.com/~r/ConsumerLawPolicyBlog/~3/fpviVobAuWw/cfpb-issues-report-on-debt-collection-complaints-of-older-americans.html?utm_source=feedburner&utm_medium=email
The Consumer Financial Protection Bureau has issued a report: A snapshot of debt collection complaints submitted by older consumers. Among the report's findings are collection on invalid debts, and threats of draconian action that couldn't be pursued. _
http://feedproxy.google.com/~r/ConsumerLawPolicyBlog/~3/fpviVobAuWw/cfpb-issues-report-on-debt-collection-complaints-of-older-americans.html?utm_source=feedburner&utm_medium=email
Second Circuit finds no right to private action in State law limiting rental car charges for damages
Second Circuit says statute limiting rental car damage fees does not allow private right of action. The Court Dismissed a private action against Zipcar. See decision at https://www.scribd.com/doc/245363158/Zipcar-rental-damage-fees
Second Circuit says statute limiting rental car damage fees does not allow private right of action. The Court Dismissed a private action against Zipcar. See decision at https://www.scribd.com/doc/245363158/Zipcar-rental-damage-fees
Clarence Ditlow and Ralph Nader on the recent tsunami of auto defects and recalls
Click to read the Ditlow-Nader comments:
http://www.nytimes.com/2014/10/29/opinion/weak-oversight-deadly-cars.html?_r=0
Click to read the Ditlow-Nader comments:
http://www.nytimes.com/2014/10/29/opinion/weak-oversight-deadly-cars.html?_r=0
NACA on forced arbitration by banks
From NACA:. Buried in the fine print of many bank and credit card contracts are dangerous forced arbitration clauses that eliminate access to justice and replace it with a secretive tribunal designed to favor Wall Street. Customers are forced to plead their cases to a private arbitrator who doesn’t even have to follow the law. The arbitrator’s decision is almost impossible to appeal, and any evidence of corporate wrongdoing conveniently remains secret. Let’s put these banks on final notice to stop forced arbitration!The National Association of Consumer Advocates (NACA) and the National Consumer Law Center (NCLC) (on behalf of its low-income clients) urge you to sign our petition below to tell five of America’s biggest banks to stop hiding behind forced arbitration clauses that block consumers from going to court to enforce their legal rights.
Sign this Petition Demanding Wall Street Stop Forcing Consumers to Give Up Their Rights
From NACA:. Buried in the fine print of many bank and credit card contracts are dangerous forced arbitration clauses that eliminate access to justice and replace it with a secretive tribunal designed to favor Wall Street. Customers are forced to plead their cases to a private arbitrator who doesn’t even have to follow the law. The arbitrator’s decision is almost impossible to appeal, and any evidence of corporate wrongdoing conveniently remains secret. Let’s put these banks on final notice to stop forced arbitration!The National Association of Consumer Advocates (NACA) and the National Consumer Law Center (NCLC) (on behalf of its low-income clients) urge you to sign our petition below to tell five of America’s biggest banks to stop hiding behind forced arbitration clauses that block consumers from going to court to enforce their legal rights.
Sign this Petition Demanding Wall Street Stop Forcing Consumers to Give Up Their Rights
Forced-placed mortgage insurance class action settled
A Florida federal judge has granted final approval to HSBC Bank USA NA and three insurers’ $32 million settlement of a class action accusing them of overcharging more than 250,000 homeowners for force-placed insurance. The settlement contains injunctive relief provisions.
Source: Law360
A Florida federal judge has granted final approval to HSBC Bank USA NA and three insurers’ $32 million settlement of a class action accusing them of overcharging more than 250,000 homeowners for force-placed insurance. The settlement contains injunctive relief provisions.
Source: Law360
FDIC reports on the unbanked
The FDIC report suggests that banks can do more to serve the unbanked, and stem the tide of increased use of bank alternatives. A Brief excerpt: Unbanked households are increasingly turning to general purpose reloadable prepaid cards to address their financial transaction needs and are generally obtaining them at non-bank locations. Opportunities may exist to meet these consum-ers’ needs within the banking system. See https://www.fdic.gov/householdsurvey/2013execsumm.pdf
The FDIC report suggests that banks can do more to serve the unbanked, and stem the tide of increased use of bank alternatives. A Brief excerpt: Unbanked households are increasingly turning to general purpose reloadable prepaid cards to address their financial transaction needs and are generally obtaining them at non-bank locations. Opportunities may exist to meet these consum-ers’ needs within the banking system. See https://www.fdic.gov/householdsurvey/2013execsumm.pdf
Good news from the FCC for TV cable cutters?
FCC chairman Tom Wheeler on Tuesday proposed a new rule-making process in which the FCC would consider revising its rules to ensure that over-the-top Internet streaming services are given the same treatment as cable companies and satellite television companies. This could mean that broadcasters would be barred from stopping online video providers from carrying their content and that online video providers would be empowered to negotiate fair licensing deals with content providers.
See http://bgr.com/2014/10/28/cable-vs-netflix-fcc/
FCC chairman Tom Wheeler on Tuesday proposed a new rule-making process in which the FCC would consider revising its rules to ensure that over-the-top Internet streaming services are given the same treatment as cable companies and satellite television companies. This could mean that broadcasters would be barred from stopping online video providers from carrying their content and that online video providers would be empowered to negotiate fair licensing deals with content providers.
See http://bgr.com/2014/10/28/cable-vs-netflix-fcc/
CVS, Walmart, and other merchants promote an alternative to Apple Pay that does not require merchants to pay fees to Visa or MasterCard
The New York Times reports that some large merchants have disabled Apple Pay from working in their stores. The Times article points out that that the merchants favor an alternate rival system, MCX’s system, CurrentC, which will be linked to a consumer’s debit account, bybypassing credit card companies Visa and MasterCard. Merchants using the , MCX alternative could potentially save money on the fees they pay per transaction. TechCrunch, an online magazine, points out that the MCX product offering is much less consumer friendly than Apple Pay:"Users have to open their phone, open CurrentC, open the scanner, scan the code from the cashier, and wait for the transaction to be confirmed. That may present more friction than simply paying with a credit card, and it’s certainly harder than a quick Touch ID verification and tap of Apple Pay."
See http://www.nytimes.com/2014/10/27/technology/personaltech/2-drug-chains-disable-apple-pay-as-a-rival-makes-plans-.html?ref=business
Also http ://techcrunch.com/2014/10/25/currentc/
The New York Times reports that some large merchants have disabled Apple Pay from working in their stores. The Times article points out that that the merchants favor an alternate rival system, MCX’s system, CurrentC, which will be linked to a consumer’s debit account, bybypassing credit card companies Visa and MasterCard. Merchants using the , MCX alternative could potentially save money on the fees they pay per transaction. TechCrunch, an online magazine, points out that the MCX product offering is much less consumer friendly than Apple Pay:"Users have to open their phone, open CurrentC, open the scanner, scan the code from the cashier, and wait for the transaction to be confirmed. That may present more friction than simply paying with a credit card, and it’s certainly harder than a quick Touch ID verification and tap of Apple Pay."
See http://www.nytimes.com/2014/10/27/technology/personaltech/2-drug-chains-disable-apple-pay-as-a-rival-makes-plans-.html?ref=business
Also http ://techcrunch.com/2014/10/25/currentc/
From Public Citizen blog: Article Calls for Federal Usury Cap
Nathalie Martin has written Public Opinion and the Limits of State Law: The Case for a Federal Usury Cap, 34 North Illinois University Law Review (2014).
This Article calls on Congress to set a federal interest rate cap of 36%, applicable to all loans. The s Article among other things describes es the patchwork nature of modem usury law, and the various types of consumer loans where usury laws are relevant,, including high-cost loans like payday and title loans.
Nathalie Martin has written Public Opinion and the Limits of State Law: The Case for a Federal Usury Cap, 34 North Illinois University Law Review (2014).
This Article calls on Congress to set a federal interest rate cap of 36%, applicable to all loans. The s Article among other things describes es the patchwork nature of modem usury law, and the various types of consumer loans where usury laws are relevant,, including high-cost loans like payday and title loans.
AAI urges government investigation into contact lens pricing
The American Antitrust Institute sent a letter to the USDOJ and FTC urging investigation into the use of “unilateral pricing policies”, which have been adopted throughout the contact lens industry. A Senate Judiciary subcommittee held a hearing on the matter earlier this summer.
“By investigating and reversing the proliferation of UPPs in the contact lens market, the antitrust agencies can protect valuable retail competition,” the letter said. “Americans spend more than $4 billion on contact lenses annually and, at least until recently, have saved significant sums of money when they buy supplies from discount retailers.”
The logic of the AAI recommendation applies to State AGs as well as federal authorities.
The American Antitrust Institute sent a letter to the USDOJ and FTC urging investigation into the use of “unilateral pricing policies”, which have been adopted throughout the contact lens industry. A Senate Judiciary subcommittee held a hearing on the matter earlier this summer.
“By investigating and reversing the proliferation of UPPs in the contact lens market, the antitrust agencies can protect valuable retail competition,” the letter said. “Americans spend more than $4 billion on contact lenses annually and, at least until recently, have saved significant sums of money when they buy supplies from discount retailers.”
The logic of the AAI recommendation applies to State AGs as well as federal authorities.
State AGs join GM Subprime Lending Probe
A GM securities filing reveals that State AGs have joined an investigation into subprime auto lending at its financing unit. The filing says that General Motors Financial Co. Inc. received subpoenas from state attorneys general and other regulators ordering it to produce documents related to subprime loans and their securitization.
A GM securities filing reveals that State AGs have joined an investigation into subprime auto lending at its financing unit. The filing says that General Motors Financial Co. Inc. received subpoenas from state attorneys general and other regulators ordering it to produce documents related to subprime loans and their securitization.
From Public Citizen Blog: on line arbitration agreements and class action bans
According to an on-line New York Times column, "The Upshot," about a third of the top 200 on-line retail sites make use of either arbitration agreements or class-action bans (or both). Amazon, eBay, and Dropbox are leading examples, as is the Wall Street Journal. But according to the Times piece, Google, Facebook and the New York Times itself have not yet imposed such requirements
According to an on-line New York Times column, "The Upshot," about a third of the top 200 on-line retail sites make use of either arbitration agreements or class-action bans (or both). Amazon, eBay, and Dropbox are leading examples, as is the Wall Street Journal. But according to the Times piece, Google, Facebook and the New York Times itself have not yet imposed such requirements
The New York State Department of Financial Services hits Ocwen Financial Corp. for sending backdated letters regarding
its mortgage loans
Hundreds of thousands of borrowers may have been hurt by the practice. We are not aware whether other States have taken action to protect their citizens. Here is part of the New York State letter:
In the course of the Department's review of Ocwen's mortgage servicing practices, we have uncovered serious issues with Ocwen's systems and processes, including Ocwen's backdating of potentially hundreds of thousands of letters to borrowers, likely causing them significant harm.
In many cases, borrowers received a letter denying a mortgage loan modification , and the letter that was dated more than 30 days prior to the date that Ocwen mailed the letter. These borrowers were given 30 days from the date of the denial letter to appeal that denial, but those 30 days had already elapsed by the time they received the backdated letter. In other cases, Ocwen's systems show that borrowers facing foreclosure received letters with a date by which to cure their default and avoid foreclosure - and the cure date was months prior to receipt of the letter. The existence and pervasiveness of these issues raise critical questions about Ocwen's ability to perform its core function of servicing loans.
Even worse, Ocwen did nothing to investigate or address the backdating issue when an employee questioned the accuracy of Ocwen's letter dating processes and alerted the company's Vice President of Compliance.
Hundreds of thousands of borrowers may have been hurt by the practice. We are not aware whether other States have taken action to protect their citizens. Here is part of the New York State letter:
In the course of the Department's review of Ocwen's mortgage servicing practices, we have uncovered serious issues with Ocwen's systems and processes, including Ocwen's backdating of potentially hundreds of thousands of letters to borrowers, likely causing them significant harm.
In many cases, borrowers received a letter denying a mortgage loan modification , and the letter that was dated more than 30 days prior to the date that Ocwen mailed the letter. These borrowers were given 30 days from the date of the denial letter to appeal that denial, but those 30 days had already elapsed by the time they received the backdated letter. In other cases, Ocwen's systems show that borrowers facing foreclosure received letters with a date by which to cure their default and avoid foreclosure - and the cure date was months prior to receipt of the letter. The existence and pervasiveness of these issues raise critical questions about Ocwen's ability to perform its core function of servicing loans.
Even worse, Ocwen did nothing to investigate or address the backdating issue when an employee questioned the accuracy of Ocwen's letter dating processes and alerted the company's Vice President of Compliance.
Washington Post on rent-to-own abuses of the poor
See http://www.washingtonpost.com/news/storyline/wp/2014/10/16/she-bought-a-sofa-on-installment-payments-now-its-straining-her-life/
See http://www.washingtonpost.com/news/storyline/wp/2014/10/16/she-bought-a-sofa-on-installment-payments-now-its-straining-her-life/
Report on the recent DC Attorney General candidates’ forum
For consumer advocates, the take-away from the recent DC Attorney General candidates’ forum at UDC’s law school on October 23rd was not encouraging, in this writer’s view. (I encourage expression of other views.) For starters, moderator Mike DeBonis did not give consumer issues high priority, although in fairness he did an excellent job raising an array of important issues. He may be correct in feeling that consumer issues are not primary AG candidate issues, however strongly we feel as consumer advocates.
The question of gasoline pricing and local distributor market power did not come up until nearly the end of the program, when it was presented by moderator DeBonis as a question from the audience.
Candidate Paul Zuckerberg argued vehemently, and in agreement with the Washington Post editorial board, that the recent DC AG action against Exxon and local wholesalers was meritless and a waste of government assets. He said (arguably incorrectly) that a court threw out the case on the merits. The remaining candidates at the forum said nothing on the topic. Those candidates are Lorie Masters, Karl Racine, Edward Smith, and Lateefah Williams.
No direct question was posed about the need for additional AG resources and people to pursue affirmative consumer, antitrust, or fraud cases, but candidate Lorie Masters volunteered that she would like the AG to be able to retain outside counsel to pursue affirmative cases, which some might say assumes a lack of ability of attorneys employed by the AG to pursue such cases.
The main part of the discussion jncluded a focus on ethics and government procurement issues. Karl Racine was questioned by other candidates on possible conflicts of interest and particular dealings related to his law firm’s representation of companies that do business with the District. Paul Zuckerman argued that he would represent “your street, not K Street” interests. Latifah Williams emphasized her grass-roots connections to make a similar point.
Posted by Don Allen Resnikoff
Attorney General Candidates Forum
Date & Time: Thursday, October 23, 2014 from 6:30pm to 8:00pm
Location --
University of the District of Columbia
4340 Connecticut Ave NW (Van Ness-UDC Metro)
David A. Clarke School of Law
Washington DC
This is a free event, RSVP to http://www.law.udc.edu/event/AGForum
Seating is limited. The RSVP does not guarantee a seat, but is merely a means for the organizers to know how many guests to expect. (?) Reception to follow.
Journalist Mike DeBonis will moderate the Forum.
Candidates are Lorie Masters, Karl Racine, Edward Smith, Lateefah Williams, and Paul Zuckerberg.
Hopefully the questions will include questions of concern to consumer advocates. A few examples
that have been touched on in this newsletter:
What is your position on the actions the Attorney General’s Office has taken with regard to concentration
of market power in the hands of a few gasoline distributors, which the Attorney General has alleged causes high retail gasoline prices? What other enforcement steps do you think the Attorney General should take?
Do you feel that the Attorney General’s resources for enforcement of consumer and antitrust laws are sufficient? As Attorney General would you advocate for more resources? Do you agree with the D.C. Council’s elimination of dedicated funding for consumer and antitrust law enforcement? The Attorney General reportedly has increased staffing to monitor DC Government procurement. What do you think the Attorney General’s role should be in insuring honest and efficient procurement practices?
Do you support prohibiting compelled arbitration as an alternative to litigation by consumers?
There are other questions, of course.
Posted by DAR
Date & Time: Thursday, October 23, 2014 from 6:30pm to 8:00pm
Location --
University of the District of Columbia
4340 Connecticut Ave NW (Van Ness-UDC Metro)
David A. Clarke School of Law
Washington DC
This is a free event, RSVP to http://www.law.udc.edu/event/AGForum
Seating is limited. The RSVP does not guarantee a seat, but is merely a means for the organizers to know how many guests to expect. (?) Reception to follow.
Journalist Mike DeBonis will moderate the Forum.
Candidates are Lorie Masters, Karl Racine, Edward Smith, Lateefah Williams, and Paul Zuckerberg.
Hopefully the questions will include questions of concern to consumer advocates. A few examples
that have been touched on in this newsletter:
What is your position on the actions the Attorney General’s Office has taken with regard to concentration
of market power in the hands of a few gasoline distributors, which the Attorney General has alleged causes high retail gasoline prices? What other enforcement steps do you think the Attorney General should take?
Do you feel that the Attorney General’s resources for enforcement of consumer and antitrust laws are sufficient? As Attorney General would you advocate for more resources? Do you agree with the D.C. Council’s elimination of dedicated funding for consumer and antitrust law enforcement? The Attorney General reportedly has increased staffing to monitor DC Government procurement. What do you think the Attorney General’s role should be in insuring honest and efficient procurement practices?
Do you support prohibiting compelled arbitration as an alternative to litigation by consumers?
There are other questions, of course.
Posted by DAR
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Save the date and register: The U.S. Airways-American Airlines merger from the perspective of DC area consumers
The DC Consumer Rights Coalition, in cooperation with the Antitrust and Consumer Law Section of the District of Columbia Bar and the Antitrust Committee of the Bar Association of the District of Columbia, presents a telephone conference
The U.S. Airways-American Airlines Merger: The View from Washington, D.C.
About the program:
The merger of U.S. Airways and American Airlines was significant and highly visible. Following a lengthy investigation and Congressional hearings, the U.S. Department of Justice, several states, and the District of Columbia filed a complaint to block the merger. Before trial got underway, the government accepted a settlement that seemed significantly different from the allegations in the complaint. Was the merger as anticompetitive as the complaint made it out to be? Or was the settlement inadequate, as some critics alleged? And what is the court’s proper role in reviewing merger settlements? Join our expert panel for a
lively discussion of the issues, with a particular focus on the merger’s impact on Washington D.C.
Event Details: Wednesday, November 12, 2014, 3:30 to 5:00 PM
Register (below) and call in information for the teleconference will be e-mailed to you.
There is no charge.
CLICK BELOW/ USE EMAIL ADDRESS TO REGISTER :
programinfodonresnikofflaw@mail.com
PANELISTS:
Nicholas Bush, Assistant Attorney General, Office of the Attorney General,
District of Columbia
MJ Moltenbrey, Partner, Paul Hastings, Counsel to American Airlines
Seth Bloom, Founder, Bloom Strategic Counsel and former General Counsel to
the U.S. Senate Antitrust Subcommittee
Diana Moss, Vice President, American Antirust Institute
Allen Grunes, Co-Founder, The Konkurrenz Group (Moderator)
Don Resnikoff, Law Offices of Don Resnikoff, Program Coordinator
The DC Consumer Rights Coalition, in cooperation with the Antitrust and Consumer Law Section of the District of Columbia Bar and the Antitrust Committee of the Bar Association of the District of Columbia, presents a telephone conference
The U.S. Airways-American Airlines Merger: The View from Washington, D.C.
About the program:
The merger of U.S. Airways and American Airlines was significant and highly visible. Following a lengthy investigation and Congressional hearings, the U.S. Department of Justice, several states, and the District of Columbia filed a complaint to block the merger. Before trial got underway, the government accepted a settlement that seemed significantly different from the allegations in the complaint. Was the merger as anticompetitive as the complaint made it out to be? Or was the settlement inadequate, as some critics alleged? And what is the court’s proper role in reviewing merger settlements? Join our expert panel for a
lively discussion of the issues, with a particular focus on the merger’s impact on Washington D.C.
Event Details: Wednesday, November 12, 2014, 3:30 to 5:00 PM
Register (below) and call in information for the teleconference will be e-mailed to you.
There is no charge.
CLICK BELOW/ USE EMAIL ADDRESS TO REGISTER :
programinfodonresnikofflaw@mail.com
PANELISTS:
Nicholas Bush, Assistant Attorney General, Office of the Attorney General,
District of Columbia
MJ Moltenbrey, Partner, Paul Hastings, Counsel to American Airlines
Seth Bloom, Founder, Bloom Strategic Counsel and former General Counsel to
the U.S. Senate Antitrust Subcommittee
Diana Moss, Vice President, American Antirust Institute
Allen Grunes, Co-Founder, The Konkurrenz Group (Moderator)
Don Resnikoff, Law Offices of Don Resnikoff, Program Coordinator
From Public Citizen blog: Forced arbitration as a campaign issue
Posted: 14 Oct 2014 06:44 AM PDT
Yesterday, the Washington Post endorsed Brian Frosh for Attorney General of Maryland. Among his opponents' weaknesses, according to the Post, is that he "wants to promote arbitration as an alternative to consumers suing businesses."
On the other side of the issue, a congressional candidate in Virginia (running for an open seat in the D.C. suburb of Alexandria) has touted his opposition to forced arbitration, including removing such clauses from both the employment and consumer contracts used by his own car dealership business.
Will be interesting to see if campaign stands like these translate into interest in legislative action on the issue.
Posted: 14 Oct 2014 06:44 AM PDT
Yesterday, the Washington Post endorsed Brian Frosh for Attorney General of Maryland. Among his opponents' weaknesses, according to the Post, is that he "wants to promote arbitration as an alternative to consumers suing businesses."
On the other side of the issue, a congressional candidate in Virginia (running for an open seat in the D.C. suburb of Alexandria) has touted his opposition to forced arbitration, including removing such clauses from both the employment and consumer contracts used by his own car dealership business.
Will be interesting to see if campaign stands like these translate into interest in legislative action on the issue.
Bill reintroduced that would prohibit gasoline distributors from operating retail service stations in the District
DC Council Bill B19-299, the Retail Service Station Amendment Act of 2011, would have prohibited gasoline distributors from also operating retail service stations in the District. That bill has been reintroduced. The DC Council Committee Report on the 2011 bill is at http://dcclims1.dccouncil.us/images/00001/20120206123835.pdf The Report relies in substantial part on supporting testimony by the DC Attorney General and antitrust expert David Balto.
DC Council Bill B19-299, the Retail Service Station Amendment Act of 2011, would have prohibited gasoline distributors from also operating retail service stations in the District. That bill has been reintroduced. The DC Council Committee Report on the 2011 bill is at http://dcclims1.dccouncil.us/images/00001/20120206123835.pdf The Report relies in substantial part on supporting testimony by the DC Attorney General and antitrust expert David Balto.
NACA on forced arbitration by banks:
Check out NACA’s webpage to learn more about its petition with the Fair Arbitration Now Coalition urging the five biggest banks using forced arbitration to remove the provisions from their customer contracts: http://www.naca.net/issues/forced-arbitration/revoke-big-banks-license-steal. This petition is meant to broaden awareness of banks’ use of forced arbitration before the CFPB releases its final arbitration study. NACA’s webpage also includes a link to send a message to Congress about forced arbitration.
Check out NACA’s webpage to learn more about its petition with the Fair Arbitration Now Coalition urging the five biggest banks using forced arbitration to remove the provisions from their customer contracts: http://www.naca.net/issues/forced-arbitration/revoke-big-banks-license-steal. This petition is meant to broaden awareness of banks’ use of forced arbitration before the CFPB releases its final arbitration study. NACA’s webpage also includes a link to send a message to Congress about forced arbitration.
FROM CRL: Appeals court upholds NY State action against high interest consumer loans
The Second Circuit Court of Appeals affirmed an earlier decision by the District Court for the Southern District of New York.
In August 2013, the State of New York issued cease-and-desist orders to more than 35 payday lenders offering and making internet loans to state residents at annual interest rates in excess of 300 percent – more than 10 times higher than what is permitted by New York state law. Beyond tribal lenders, these loans also included foreign ones with stateside headquarters where no interest rate caps existed for short-term loans. New York officials also alerted banks and other financial services companies of the illegal activity and asked them to ensure they were not facilitating electronic transfers of illegal loans.
Two payday lenders associated with two federally-recognized Indian Tribes subsequently sued New York, seeking to prevent the state’s demands for compliance with the law. Instead, the District Court decided that New York’s actions were appropriate.
- See more at: http://www.responsiblelending.org/media-center/press-releases/archives/Federal-Appeals-Court-Upholds-New-York-Ruling-on-Internet-Payday-Loans-Rejects-Industry-Misuse-of-Tribal-Sovereignty.html#sthash.OwTFvdLk.dpuf
The Second Circuit Court of Appeals affirmed an earlier decision by the District Court for the Southern District of New York.
In August 2013, the State of New York issued cease-and-desist orders to more than 35 payday lenders offering and making internet loans to state residents at annual interest rates in excess of 300 percent – more than 10 times higher than what is permitted by New York state law. Beyond tribal lenders, these loans also included foreign ones with stateside headquarters where no interest rate caps existed for short-term loans. New York officials also alerted banks and other financial services companies of the illegal activity and asked them to ensure they were not facilitating electronic transfers of illegal loans.
Two payday lenders associated with two federally-recognized Indian Tribes subsequently sued New York, seeking to prevent the state’s demands for compliance with the law. Instead, the District Court decided that New York’s actions were appropriate.
- See more at: http://www.responsiblelending.org/media-center/press-releases/archives/Federal-Appeals-Court-Upholds-New-York-Ruling-on-Internet-Payday-Loans-Rejects-Industry-Misuse-of-Tribal-Sovereignty.html#sthash.OwTFvdLk.dpuf
States investigate JPMorgan data breach
From Law 360:
Illinois and Connecticut's attorneys general are investigating JP Morgan Chase over a summer cyberattack, representatives for their offices confirmed Friday, a day after the bank revealed that contact information for approximately 76 million households and 7 million small businesses was compromised in the hack.
Illinois Attorney General Lisa Madigan said in a Friday statement provided to Law360 that Chase had only revealed limited details in a Thursday regulatory filing, which also said the cyberattack compromised the names, addresses, phone numbers and email addresses of affected users — but not their account numbers, passwords, user IDs, dates of birth or Social Security numbers.
Connecticut Attorney General George Jepsen said in a Friday statement provided to Law360 that his office has been in touch with JPMorgan over the breach since its disclosure earlier in the year.
From Law 360:
Illinois and Connecticut's attorneys general are investigating JP Morgan Chase over a summer cyberattack, representatives for their offices confirmed Friday, a day after the bank revealed that contact information for approximately 76 million households and 7 million small businesses was compromised in the hack.
Illinois Attorney General Lisa Madigan said in a Friday statement provided to Law360 that Chase had only revealed limited details in a Thursday regulatory filing, which also said the cyberattack compromised the names, addresses, phone numbers and email addresses of affected users — but not their account numbers, passwords, user IDs, dates of birth or Social Security numbers.
Connecticut Attorney General George Jepsen said in a Friday statement provided to Law360 that his office has been in touch with JPMorgan over the breach since its disclosure earlier in the year.
Meet author Jake Halpern on November 5
Bad Paper. (Farrar, Straus and Giroux: October, 2014)
A trip to the underworld of debt collection, where bankers team up with ex-burglars and few rules apply.
This “Off the Record” brown bag lunch program is sponsored by the Antitrust and Consumer Law Section of the District of Columbia Bar in co-sponsorship with DC consumer Rights Coalition
Wednesday, November 5, 2014
12:30-1:30 p.m.
Beveridge & Diamond, P.C.
1350 I St., N.W., Suite 700
(McPherson Square Metro Station)
Washington DC 20005
Registration required: http://www.dcbar.org/marketplace/event-details.cfm?productCD=021502GEN
The Federal Trade Commission receives more complaints about rogue debt collecting than about any activity besides identity theft. Halpern reveals why. Bad Paper is a riveting exposé and a gritty narrative of how scrappy entrepreneurs profit from our debts. Halpern introduces us to a former banking executive and a former armed robber who become partners and goes in quest of “paper” - the uncollected debts that are sold off by banks for pennies on the dollar. As Halpern will discuss, the world of consumer debt collection is a wild and unregulated shadowland, where operators may misrepresent a debtor’s situation, make illegal threats, and even lay claim to debts that are not theirs to collect in the first place. Halpern follows his collectors as they intimidate competitors with weapons, manage high-pressure call centers, and scheme new ways to benefit from American’s debt-industrial complex. He also explores the history of collection agencies and reveals the human cost of a system that leaves hardworking Americans with little opportunity to retire their debts in a reasonable way.
Bad Paper. (Farrar, Straus and Giroux: October, 2014)
A trip to the underworld of debt collection, where bankers team up with ex-burglars and few rules apply.
This “Off the Record” brown bag lunch program is sponsored by the Antitrust and Consumer Law Section of the District of Columbia Bar in co-sponsorship with DC consumer Rights Coalition
Wednesday, November 5, 2014
12:30-1:30 p.m.
Beveridge & Diamond, P.C.
1350 I St., N.W., Suite 700
(McPherson Square Metro Station)
Washington DC 20005
Registration required: http://www.dcbar.org/marketplace/event-details.cfm?productCD=021502GEN
The Federal Trade Commission receives more complaints about rogue debt collecting than about any activity besides identity theft. Halpern reveals why. Bad Paper is a riveting exposé and a gritty narrative of how scrappy entrepreneurs profit from our debts. Halpern introduces us to a former banking executive and a former armed robber who become partners and goes in quest of “paper” - the uncollected debts that are sold off by banks for pennies on the dollar. As Halpern will discuss, the world of consumer debt collection is a wild and unregulated shadowland, where operators may misrepresent a debtor’s situation, make illegal threats, and even lay claim to debts that are not theirs to collect in the first place. Halpern follows his collectors as they intimidate competitors with weapons, manage high-pressure call centers, and scheme new ways to benefit from American’s debt-industrial complex. He also explores the history of collection agencies and reveals the human cost of a system that leaves hardworking Americans with little opportunity to retire their debts in a reasonable way.
Does the antitrust exemption for baseball extend to TV broadcasts of baseball games?
Consumers filed two suits in 2012 -- they are now consolidated -- involving allegations that Comcast, Direct TV, Major League Baseball, and the National Hockey League agreed to “black out” coverage of live sporting events to shield regional television networks from competition. The claimed result was higher prices for consumers.
On Aug. 4, Judge Shira Scheindlin in NY denied defendants' summary judgment motions. She ruled that MLB couldn't rely on a federal antitrust law exemption for the business of public baseball. The reason is that the baseball business does not necessarily include the television broadcast business. A copy of the judge's opinion is here: https://www.scribd.com/word/document_edit/241753801
More recently, Judge Sheindlin denied the defendants an early appeal of her decision to the 2nd Circuit Court of Appeals.
Is this discussion relevant to the Washington/Baltimore area? Yes -- the same entity, MASN, owns the television rights to games of baseball rivals Washington Nationals and the Baltimore Orioles. Some might see this as an antitrust puzzler, thinking that consumers would do better with competition. But a well-publicized 2005 settlement agreement that was not challenged by any government agency gave Baltimore Orioles interests a majority percentage stake in the MASN network.
Recently, a dispute arose about the fair market value of the TV rights controlled by MASN and amounts being paid to the Washington Nationals from 2012 to 2016. What is apparently not being disputed is the idea of the single entity, MASN, controlling the TV rights of competing nearby teams. For a discussion of the Washington Nationals -- Baltimore Orioles -- MASN dispute see http://www.americanlawyer.com/id=1202667214799/Judge-Grants-Injunction-in-Baseball-Telecast-Rights-Case#ixzz3F2Y1rW4W
Consumers filed two suits in 2012 -- they are now consolidated -- involving allegations that Comcast, Direct TV, Major League Baseball, and the National Hockey League agreed to “black out” coverage of live sporting events to shield regional television networks from competition. The claimed result was higher prices for consumers.
On Aug. 4, Judge Shira Scheindlin in NY denied defendants' summary judgment motions. She ruled that MLB couldn't rely on a federal antitrust law exemption for the business of public baseball. The reason is that the baseball business does not necessarily include the television broadcast business. A copy of the judge's opinion is here: https://www.scribd.com/word/document_edit/241753801
More recently, Judge Sheindlin denied the defendants an early appeal of her decision to the 2nd Circuit Court of Appeals.
Is this discussion relevant to the Washington/Baltimore area? Yes -- the same entity, MASN, owns the television rights to games of baseball rivals Washington Nationals and the Baltimore Orioles. Some might see this as an antitrust puzzler, thinking that consumers would do better with competition. But a well-publicized 2005 settlement agreement that was not challenged by any government agency gave Baltimore Orioles interests a majority percentage stake in the MASN network.
Recently, a dispute arose about the fair market value of the TV rights controlled by MASN and amounts being paid to the Washington Nationals from 2012 to 2016. What is apparently not being disputed is the idea of the single entity, MASN, controlling the TV rights of competing nearby teams. For a discussion of the Washington Nationals -- Baltimore Orioles -- MASN dispute see http://www.americanlawyer.com/id=1202667214799/Judge-Grants-Injunction-in-Baseball-Telecast-Rights-Case#ixzz3F2Y1rW4W
Epic as the future Microsoft of digital medical records
A recent New York Times article described Epic as a "Microsoft of the Midwest," pointing to a RAND study describing Epic as a “closed” platform that made it “challenging and costly for hospitals” to interconnect with the clinical or billing software of other companies. The New York Times describes the market position of Epic as very strong, notably including adoption of Epic solutions by a number of large, important hospitals. That includes hospitals in the Washington, DC area. See http://www.nytimes.com/2014/10/01/business/digital-medical-records-become-common-but-sharing-remains-challenging.html?emc=eta1&_r=0
Another article to look at is at Epic in the hot seat over EHR interoperability (Click on title to see it.)
See http://www.ftc.gov/system/files/documents/public_comments/2014/03/00020-88806.pdf for the text of our earlier DC Consumer Rights Coalition comments to the FTC on the same general topic.
A recent New York Times article described Epic as a "Microsoft of the Midwest," pointing to a RAND study describing Epic as a “closed” platform that made it “challenging and costly for hospitals” to interconnect with the clinical or billing software of other companies. The New York Times describes the market position of Epic as very strong, notably including adoption of Epic solutions by a number of large, important hospitals. That includes hospitals in the Washington, DC area. See http://www.nytimes.com/2014/10/01/business/digital-medical-records-become-common-but-sharing-remains-challenging.html?emc=eta1&_r=0
Another article to look at is at Epic in the hot seat over EHR interoperability (Click on title to see it.)
See http://www.ftc.gov/system/files/documents/public_comments/2014/03/00020-88806.pdf for the text of our earlier DC Consumer Rights Coalition comments to the FTC on the same general topic.
Issues with Ticketmaster's restricted paperless tickets
The Maryland Consumer Rights Coalition is campaigning against restricted paperless tickets. Here in bold type is an excerpt of their material:
Ticketmaster and other giant ticket firms are making it harder and harder to do that by selling “paper-less” or “credit-card entry” tickets. When tickets are sold this way, people must present the credit card they used to buy the tickets and a photo ID proving that they’re the purchaser to get into the event.
The tickets are very difficult, sometimes impossible, for anyone else to use. So if your plans change or you can’t make it to the concert or the big game because of a family emergency, you can’t re-sell them or even give them away to friends or relatives. You’re stuck eating the cost of the tickets -- and that’s just not fair.
MCRC believes once you’ve bought the ticket, it’s YOUR decision to do what you want with it – and we’re asking Maryland lawmakers to ban restricted-entry tickets.
Av white paper by James Hurwitz discusses the issue of restricted paperless tickts, and is at http://www.scribd.com/doc/78572546/Restrictive-Paperless-Tickets-A-White-Paper
The Maryland Consumer Rights Coalition is campaigning against restricted paperless tickets. Here in bold type is an excerpt of their material:
Ticketmaster and other giant ticket firms are making it harder and harder to do that by selling “paper-less” or “credit-card entry” tickets. When tickets are sold this way, people must present the credit card they used to buy the tickets and a photo ID proving that they’re the purchaser to get into the event.
The tickets are very difficult, sometimes impossible, for anyone else to use. So if your plans change or you can’t make it to the concert or the big game because of a family emergency, you can’t re-sell them or even give them away to friends or relatives. You’re stuck eating the cost of the tickets -- and that’s just not fair.
MCRC believes once you’ve bought the ticket, it’s YOUR decision to do what you want with it – and we’re asking Maryland lawmakers to ban restricted-entry tickets.
Av white paper by James Hurwitz discusses the issue of restricted paperless tickts, and is at http://www.scribd.com/doc/78572546/Restrictive-Paperless-Tickets-A-White-Paper
The Secret Recordings of a Disenchanted Fed Bank Regulator
The NY Federal Reserve is supposed to monitor big banks. But when Carmen Segarra was hired as an examiner, what she witnessed inside the Fed alarmed her, particularly about regulation of Goldman Sachs. She bought a tiny recorder from the Spy Museum store and started secretly recording. Click the following for ProPublica's print version(X). The public radio version allows you to listen to recording excerpts and is at http://www.thisamericanlife.org/radio-archives/episode/536/the-secret-recordings-of-carmen-segarra .
The NY Federal Reserve is supposed to monitor big banks. But when Carmen Segarra was hired as an examiner, what she witnessed inside the Fed alarmed her, particularly about regulation of Goldman Sachs. She bought a tiny recorder from the Spy Museum store and started secretly recording. Click the following for ProPublica's print version(X). The public radio version allows you to listen to recording excerpts and is at http://www.thisamericanlife.org/radio-archives/episode/536/the-secret-recordings-of-carmen-segarra .
From Public Citizen: Local Government Responses to Underwater Mortgages (click title for Public Citizen blog)
Raymond H. Brescia and Nicholas M. Martin have written The Price of Crisis: Eminent Domain, Local Governments, and the Value of Underwater Mortgages, forthcoming in 24 Temple Political & Civil Rights Law Review (2014). Here's a part the abstract:
Governments at all levels in the U.S. have deployed a range of tactics to address some of the most pernicious effects of the Financial Crisis of 2008: namely, a loss of trillions in homeowner equity as well as the growth of the prevalence of underwater mortgages, where the outstanding principals on the mortgages exceed the value of the underlying properties.
Click the title above to go to the Public Citizen blog for more information.
Raymond H. Brescia and Nicholas M. Martin have written The Price of Crisis: Eminent Domain, Local Governments, and the Value of Underwater Mortgages, forthcoming in 24 Temple Political & Civil Rights Law Review (2014). Here's a part the abstract:
Governments at all levels in the U.S. have deployed a range of tactics to address some of the most pernicious effects of the Financial Crisis of 2008: namely, a loss of trillions in homeowner equity as well as the growth of the prevalence of underwater mortgages, where the outstanding principals on the mortgages exceed the value of the underlying properties.
Click the title above to go to the Public Citizen blog for more information.
Walmart announces new checking service
Walmart's press release describes a service that " doesn’t charge overdraft fees, minimum balance fees or monthly fees with qualifying direct deposits." Reaction to the announcement has been mixed. Frank Keating, the president and C.E.O. of the American Bankers Association, which was one of the most vocal opponents of Walmart’s earlier banking plans, put out this statement: “While our industry is always seeking new ways of reaching the unbanked, we are watching Walmart very carefully. Is a bank or Walmart offering these services? Do consumer protection laws, data security mandates and regulatory oversight apply?” There has also been praise from some consumer advocates seeking to expand access to low-cost, trustworthy financial services. Jennifer Tescher, the president of the nonprofit Center for Financial Services Innovation told a reporter “I think this is incredible news for consumers.”
Do you have an opinion? Let us know by contacting donresnikoff@donresnikofflaw.com
See the New Yorker article at http://www.newyorker.com/business/currency/walmarts-play-unbanked The Walmart press release is at http://news.walmart.com/news-archive/2014/09/24/green-dots-gobank-checking-account-launches-exclusively-at-walmart
Walmart's press release describes a service that " doesn’t charge overdraft fees, minimum balance fees or monthly fees with qualifying direct deposits." Reaction to the announcement has been mixed. Frank Keating, the president and C.E.O. of the American Bankers Association, which was one of the most vocal opponents of Walmart’s earlier banking plans, put out this statement: “While our industry is always seeking new ways of reaching the unbanked, we are watching Walmart very carefully. Is a bank or Walmart offering these services? Do consumer protection laws, data security mandates and regulatory oversight apply?” There has also been praise from some consumer advocates seeking to expand access to low-cost, trustworthy financial services. Jennifer Tescher, the president of the nonprofit Center for Financial Services Innovation told a reporter “I think this is incredible news for consumers.”
Do you have an opinion? Let us know by contacting donresnikoff@donresnikofflaw.com
See the New Yorker article at http://www.newyorker.com/business/currency/walmarts-play-unbanked The Walmart press release is at http://news.walmart.com/news-archive/2014/09/24/green-dots-gobank-checking-account-launches-exclusively-at-walmart
U.S. amicus brief supports right to counsel for poor
Attorney General Eric H. Holder Jr. and the USDOJ file a brief in support a class-action lawsuit that accuses Gov. Andrew M. Cuomo and the State of New York of perpetuating a system that violates the rights of people who cannot afford to hire lawyers. Read the whole story at www.nytimes.com
Attorney General Eric H. Holder Jr. and the USDOJ file a brief in support a class-action lawsuit that accuses Gov. Andrew M. Cuomo and the State of New York of perpetuating a system that violates the rights of people who cannot afford to hire lawyers. Read the whole story at www.nytimes.com
Small ticket merchants complain about Fed implementation of statute limiting interchange fees
From amicus court brief for some small merchants:
The Board’s Final Rule, Regulation II,Debit Card Interchange Fees and Routing, Final Rule, 76 Fed. Reg. 43,394 (July 20, 2011) (“Final Rule”) enabled the dominant debit networks [Visa, MasterCard] to impose substantial price increases for debit-interchange fees on small-ticket transactions—increases that have hit Amici, along with their franchisees and licensees, especially hard during a time of economic distress. The harm to Amici caused by these increases will only intensify over time because Amici are in the fastest-growing debit segment. Amici have no choice but to pay these interchange fee increases because they must accept debit cards to remain in business.The exorbitant debit-interchange fees that Amici are now being forced to pay are concrete examples of not only the market failure that motivated Congress to regulate debit interchange, but also the Board’s failure to follow Congress’s clear directives to implement regulations to prevent further exercises of market power by the dominant debit networks.
The brief is at http://www.scribd.com/doc/240965272/Brief-Amici-Curiae-of-7-Eleven-Inc-Et-Al-in-Support
From amicus court brief for some small merchants:
The Board’s Final Rule, Regulation II,Debit Card Interchange Fees and Routing, Final Rule, 76 Fed. Reg. 43,394 (July 20, 2011) (“Final Rule”) enabled the dominant debit networks [Visa, MasterCard] to impose substantial price increases for debit-interchange fees on small-ticket transactions—increases that have hit Amici, along with their franchisees and licensees, especially hard during a time of economic distress. The harm to Amici caused by these increases will only intensify over time because Amici are in the fastest-growing debit segment. Amici have no choice but to pay these interchange fee increases because they must accept debit cards to remain in business.The exorbitant debit-interchange fees that Amici are now being forced to pay are concrete examples of not only the market failure that motivated Congress to regulate debit interchange, but also the Board’s failure to follow Congress’s clear directives to implement regulations to prevent further exercises of market power by the dominant debit networks.
The brief is at http://www.scribd.com/doc/240965272/Brief-Amici-Curiae-of-7-Eleven-Inc-Et-Al-in-Support
Illinois Supreme Court to hear Philip Morris appeal of a $10.1 billion verdict
Reuters reports that The Illinois Supreme Court has agreed to hear Philip Morris USA's appeal of a $10.1 billion verdict accusing the Altria Group Inc unit of misleading consumers about the risks of smoking "light" cigarettes. An earlier decision of an intermediate Illinois court reinstated the verdict against Philip Morris USA Inc. in the class action alleging PM deceptively marketed light cigarettes. The intermediate court decision is at http://www.scribd.com/doc/240962209/Philip-Morris-Ruling
Reuters reports that The Illinois Supreme Court has agreed to hear Philip Morris USA's appeal of a $10.1 billion verdict accusing the Altria Group Inc unit of misleading consumers about the risks of smoking "light" cigarettes. An earlier decision of an intermediate Illinois court reinstated the verdict against Philip Morris USA Inc. in the class action alleging PM deceptively marketed light cigarettes. The intermediate court decision is at http://www.scribd.com/doc/240962209/Philip-Morris-Ruling
Illinois state courts uphold MERS foreclosure role
Illinois state courts uphold foreclosure by a Deutsche Bank AG and Mortgage Electronic Registration Systems Inc. The Courts ruled that MERS had not operated as an unlicensed debt collector when initiating the foreclosures.
Opinion: http://www.scribd.com/doc/240806686/MERS-Illinois-Opinion
Illinois state courts uphold foreclosure by a Deutsche Bank AG and Mortgage Electronic Registration Systems Inc. The Courts ruled that MERS had not operated as an unlicensed debt collector when initiating the foreclosures.
Opinion: http://www.scribd.com/doc/240806686/MERS-Illinois-Opinion
Are state claims of natural gas price fixing preempted by federal law?
Energy companies Shell Energy North America LP and Duke Energy Trading and Marketing LLC have asked he U.S. Supreme Court to reverse a Ninth Circuit ruling that revived state-law claims in multidistrict litigation over natural gas price-fixing, arguing the claims are preempted by the Natural Gas Act.
See brief at http://www.scribd.com/doc/240735742/oneok
Energy companies Shell Energy North America LP and Duke Energy Trading and Marketing LLC have asked he U.S. Supreme Court to reverse a Ninth Circuit ruling that revived state-law claims in multidistrict litigation over natural gas price-fixing, arguing the claims are preempted by the Natural Gas Act.
See brief at http://www.scribd.com/doc/240735742/oneok
Dairy industry price-fixing class action
A US district judge has granted class certification in a class action accusing raw-milk producers of actions hiking prices of various dairy products. The lawsuit covers 14 states and Washington, D.C. The Complaint, filed in 2011, alleges that the National Milk Producers Federation violated antitrust laws by limiting raw-milk production, purposefully driving up prices of yogurt, sour cream and other products. The allegations include collusive limitations on numbers of production herd cows.
From http://www.courthousenews.com/2014/09/22/71660.htm
A US district judge has granted class certification in a class action accusing raw-milk producers of actions hiking prices of various dairy products. The lawsuit covers 14 states and Washington, D.C. The Complaint, filed in 2011, alleges that the National Milk Producers Federation violated antitrust laws by limiting raw-milk production, purposefully driving up prices of yogurt, sour cream and other products. The allegations include collusive limitations on numbers of production herd cows.
From http://www.courthousenews.com/2014/09/22/71660.htm
WSJ says Feds want to ease mortgage lending standards
The Wall Street Journal says federal officials are considering how to instruct lenders to ease up on tight lending standards for mortgages. On the one hand, they don't want to create another housing bubble. But on the other hand, mortgage lending is so slow because lenders have adopted standards that are even tighter than what Fannie Mae and Freddie Mac demand. Underlying all of this are paltry-to-nonexistent wage growth, high levels of student debt and little savings for a down payment all of which combine to make it difficult for many homeowners to qualify for a mortgage. The issues are relevant to our local real estate markets.
The Wall Street Journal says federal officials are considering how to instruct lenders to ease up on tight lending standards for mortgages. On the one hand, they don't want to create another housing bubble. But on the other hand, mortgage lending is so slow because lenders have adopted standards that are even tighter than what Fannie Mae and Freddie Mac demand. Underlying all of this are paltry-to-nonexistent wage growth, high levels of student debt and little savings for a down payment all of which combine to make it difficult for many homeowners to qualify for a mortgage. The issues are relevant to our local real estate markets.
Center for Responsible Lending materials on DC legislation designed to protect consumers from unscrupulous debt buyers’ abusive collection tactics
The Center for Responsible Lending, along with several other groups - Legal Aid Society of the District of Columbia, District of Columbia Consumer Rights Coalition, Consumers Union, National Association of Consumer Advocates, National Consumers League, and U.S. PIRG - asked Councilmember Vincent Orange, the Chair of the Council’s Committee on Business, Consumer and Regulatory Affairs, to schedule a hearing and committee markup on legislation designed to protect consumers from unscrupulous debt buyers’ abusive collection tactics. The group also urged other members of the council to take a leading role in ensuring debt collectors are transparent with consumers and accountable for abusive actions. -
See more from Center for Responsible Lending at: http://www.responsiblelending.org/media-center/press-releases/archives/Dear-DC-Council-Please-Protect-Consumers-from-Abusive-Debt-Collection.html#sthash.ByIuFAPm.dpuf
The Center for Responsible Lending, along with several other groups - Legal Aid Society of the District of Columbia, District of Columbia Consumer Rights Coalition, Consumers Union, National Association of Consumer Advocates, National Consumers League, and U.S. PIRG - asked Councilmember Vincent Orange, the Chair of the Council’s Committee on Business, Consumer and Regulatory Affairs, to schedule a hearing and committee markup on legislation designed to protect consumers from unscrupulous debt buyers’ abusive collection tactics. The group also urged other members of the council to take a leading role in ensuring debt collectors are transparent with consumers and accountable for abusive actions. -
See more from Center for Responsible Lending at: http://www.responsiblelending.org/media-center/press-releases/archives/Dear-DC-Council-Please-Protect-Consumers-from-Abusive-Debt-Collection.html#sthash.ByIuFAPm.dpuf
The Illinois attorney general files local oil cleanup case
The Illinois Attorney General has filed suit to force Olympic Oil Ltd., a Greif Inc. subsidiary, to clean up thousands of gallons of oil-laden wastewater that has spilled from its suburban Chicago bulk oil terminal in recent months.
“The cause of the discharge is still unknown and an ongoing discharge or threat of discharge to soil and canal remains,” the complaint said. “Defendant has not taken adequate steps to determine what amounts of oil and its constituents remain below surface in the soils and groundwater and whether those contaminants may be migrating into the canal.”suit on Wednesday to force Olympic Oil Ltd., a Greif Inc. subsidiary, to clean up thousands of gallons of oil-laden wastewater that has spilled from its suburban Chicago bulk oil terminal in recent months, saying the facility poses an ongoing threat to the environment.
See the Complaint at http://www.scribd.com/doc/240366656/Olympic-Oil-Complaint-9-18-filed-by-Illinois-AG
The Illinois Attorney General has filed suit to force Olympic Oil Ltd., a Greif Inc. subsidiary, to clean up thousands of gallons of oil-laden wastewater that has spilled from its suburban Chicago bulk oil terminal in recent months.
“The cause of the discharge is still unknown and an ongoing discharge or threat of discharge to soil and canal remains,” the complaint said. “Defendant has not taken adequate steps to determine what amounts of oil and its constituents remain below surface in the soils and groundwater and whether those contaminants may be migrating into the canal.”suit on Wednesday to force Olympic Oil Ltd., a Greif Inc. subsidiary, to clean up thousands of gallons of oil-laden wastewater that has spilled from its suburban Chicago bulk oil terminal in recent months, saying the facility poses an ongoing threat to the environment.
See the Complaint at http://www.scribd.com/doc/240366656/Olympic-Oil-Complaint-9-18-filed-by-Illinois-AG
Huffington Post: How Congress Gave Auto Dealers A Pass
Writers Arthur Delaney and Ryan Grim rite about how the Wall Street reform bill, the Dodd-Frank Act, carved out an exception for the oversight of auto dealers. In speaking with the writers, Chris Kukla discusses the pitfalls of having separate enforcement and regulatory agencies specifically for the auto lending industry.
(Click title for link.)
Writers Arthur Delaney and Ryan Grim rite about how the Wall Street reform bill, the Dodd-Frank Act, carved out an exception for the oversight of auto dealers. In speaking with the writers, Chris Kukla discusses the pitfalls of having separate enforcement and regulatory agencies specifically for the auto lending industry.
(Click title for link.)
Court Halts Payday Loan Cos. Accused Of Bilking $162M (from Law 360)
The Federal Trade Commissionand Consumer Financial Protection Bureau said Wednesday that a Missouri federal court has halted the activities of two online payday lending groups that are accused of using unauthorized loans to withdraw tens of millions of dollars from consumers’ bank accounts.
The court entered temporary restraining orders in the FTC and CFPB suits filed earlier in September against unrelated Kansas City-based defendants — Hydra Group, which allegedly bilked consumers out of $115.4 million over a 15-month period, and a web of defendants including CWB Services LLC that are accused of collecting $47 million from consumers’ accounts over an 11-month period.
Both complaints allege the companies buy financial information from lead generators for payday loans, deposit money into consumers’ bank accounts without authorization and then use the loans as a basis to access the accounts to make unauthorized withdrawals, according to the agencies.
The Federal Trade Commissionand Consumer Financial Protection Bureau said Wednesday that a Missouri federal court has halted the activities of two online payday lending groups that are accused of using unauthorized loans to withdraw tens of millions of dollars from consumers’ bank accounts.
The court entered temporary restraining orders in the FTC and CFPB suits filed earlier in September against unrelated Kansas City-based defendants — Hydra Group, which allegedly bilked consumers out of $115.4 million over a 15-month period, and a web of defendants including CWB Services LLC that are accused of collecting $47 million from consumers’ accounts over an 11-month period.
Both complaints allege the companies buy financial information from lead generators for payday loans, deposit money into consumers’ bank accounts without authorization and then use the loans as a basis to access the accounts to make unauthorized withdrawals, according to the agencies.
From tne Maryland Consumer Rights Coalition
-- Congress considering pay-day lending restrictions
is considering a bill that would cap the interest rate on consumer loans at no more than 36%. The “Protecting Consumers from Unreasonable Credit Rates Act of 2014” (S.673/H.R. 5130), sponsored by Sen. Dick Durbin and Rep. Matthew Cartwright, would help working families across the country avoid debt traps as it gives families added protections against financial abuses and adds to everyone’s economic security.
-- Congress considering pay-day lending restrictions
is considering a bill that would cap the interest rate on consumer loans at no more than 36%. The “Protecting Consumers from Unreasonable Credit Rates Act of 2014” (S.673/H.R. 5130), sponsored by Sen. Dick Durbin and Rep. Matthew Cartwright, would help working families across the country avoid debt traps as it gives families added protections against financial abuses and adds to everyone’s economic security.
New York sues Actavis for generic blocking claims
New York has filed a lawsuit against pharmaceutical giant Actavis over allegations of an anticompetitive moves to block generic competition that forced consumers to pay higher prices for an Alzheimer’s drug, according to reports. NY Attorney General Eric Schneiderman filed a complaint against the company that accuses the company of swapping out one version of its Namenda drug for another that had a longer period of time until its patent expired. That plan, the complaint alleges, is aimed at blocking its generic rival from entering the market and violates both state and federal antitrust law.
According to complaints, Actavis is discontinuing its Namenda drug to release a slow-release version of the same medication; Namenda’s patent is set to expire in October of next year. The tactic is sometimes known as a “forced switch” that forces patients to switch medication, which delays entry of generic competition into the market.
Full content: Bloomberg
New York has filed a lawsuit against pharmaceutical giant Actavis over allegations of an anticompetitive moves to block generic competition that forced consumers to pay higher prices for an Alzheimer’s drug, according to reports. NY Attorney General Eric Schneiderman filed a complaint against the company that accuses the company of swapping out one version of its Namenda drug for another that had a longer period of time until its patent expired. That plan, the complaint alleges, is aimed at blocking its generic rival from entering the market and violates both state and federal antitrust law.
According to complaints, Actavis is discontinuing its Namenda drug to release a slow-release version of the same medication; Namenda’s patent is set to expire in October of next year. The tactic is sometimes known as a “forced switch” that forces patients to switch medication, which delays entry of generic competition into the market.
Full content: Bloomberg
New rules for default judgments against consumers in New York
New York’s Office of Court Administration just announced implementation of strong rules governing applications for default judgments in consumer cases (including an affidavit from an original creditor, even in debt buyer cases). Press release is here: http://www.nycourts.gov/PRESS/PDFs/PR14_06.pdf and the rules are here: http://www.nycourts.gov/RULES/Consumer-Credit-Rules-Affs-Notice-091614.pdf.
The implications for other jurisdictions seem obvious.
Thanks to Carolyn Coffey, MFY Legal Services, Inc., New York, NY, for passing along the information.
New York’s Office of Court Administration just announced implementation of strong rules governing applications for default judgments in consumer cases (including an affidavit from an original creditor, even in debt buyer cases). Press release is here: http://www.nycourts.gov/PRESS/PDFs/PR14_06.pdf and the rules are here: http://www.nycourts.gov/RULES/Consumer-Credit-Rules-Affs-Notice-091614.pdf.
The implications for other jurisdictions seem obvious.
Thanks to Carolyn Coffey, MFY Legal Services, Inc., New York, NY, for passing along the information.
More from Pubic Citizen:
California's new Consumer Free Speech Act: Coming to a State Near You?
by Ted Mermin (Executive Director, Public Good Law Center), guest blogger
As Scott Michelman's earlier post explained, the new California law barring nondisparagement clauses in consumer contracts promises to restrain a pernicious practice before it spreads widely. That in itself is a significant victory well worth celebrating. But here's hoping (and suggesting) that the new law also serve as a model for other states.
The law should be replicable in other jurisdictions. It faced no official opposition and ultimately passed both houses by wide bipartisan margins. After all, who wants to vote against a law that would keep people from being sued for expressing their opinions about something they bought or warning other consumers about potential product safety problems?
We're excited about the law's passage in California. And we're willing to share some of that excitement. Why not bring a little bit of free speech for consumers to a state near you?
More:
Following in the footsteps of California's new law barring the use of non-disparagement clauses and providing a private cause of action for seeking or threatening to enforce one, today Reps. Eric Swalwell and Brad Sherman (both of California) introduced in Congress the "Consumer Review Freedom Act" that would render non-disparagement clauses unenforceable nationwide.
The text is available here.
California's new Consumer Free Speech Act: Coming to a State Near You?
by Ted Mermin (Executive Director, Public Good Law Center), guest blogger
As Scott Michelman's earlier post explained, the new California law barring nondisparagement clauses in consumer contracts promises to restrain a pernicious practice before it spreads widely. That in itself is a significant victory well worth celebrating. But here's hoping (and suggesting) that the new law also serve as a model for other states.
The law should be replicable in other jurisdictions. It faced no official opposition and ultimately passed both houses by wide bipartisan margins. After all, who wants to vote against a law that would keep people from being sued for expressing their opinions about something they bought or warning other consumers about potential product safety problems?
We're excited about the law's passage in California. And we're willing to share some of that excitement. Why not bring a little bit of free speech for consumers to a state near you?
More:
Following in the footsteps of California's new law barring the use of non-disparagement clauses and providing a private cause of action for seeking or threatening to enforce one, today Reps. Eric Swalwell and Brad Sherman (both of California) introduced in Congress the "Consumer Review Freedom Act" that would render non-disparagement clauses unenforceable nationwide.
The text is available here.
From Public Citizen Blog: Seventh Circuit Judge Richard Posner on coupon settlements
As explained in this article by Daniel Fisher, Seventh Circuit judge Richard Posner recently had some tough questions for proponents of a class-action settlement in which the plaintiff-consumers got coupons (that's right, $10 coupons to purchase the defendant's products!) and the plaintiffs’ lawyers got cash (a million bucks in fees). That's nothing new -- that's what coupon settlements always do -- but you may want to listen to the Seventh Circuit argument just for the entertainment value.
Update: Judge Posner also said at argument that the plaintiff in a class action should not be "pals" with (or a former colleague of) the plaintiff's lawyer.
This posting includes an audio/video/photo media file: Download Now
As explained in this article by Daniel Fisher, Seventh Circuit judge Richard Posner recently had some tough questions for proponents of a class-action settlement in which the plaintiff-consumers got coupons (that's right, $10 coupons to purchase the defendant's products!) and the plaintiffs’ lawyers got cash (a million bucks in fees). That's nothing new -- that's what coupon settlements always do -- but you may want to listen to the Seventh Circuit argument just for the entertainment value.
Update: Judge Posner also said at argument that the plaintiff in a class action should not be "pals" with (or a former colleague of) the plaintiff's lawyer.
This posting includes an audio/video/photo media file: Download Now
Are banks in our area discriminating against minorities in mortgage lending?
A New York Times article outlines government accusations of mortgage redlining by banks in California, Rhode Island, and, most recently, upstate New York. The focus of the article is on recent prosecutorial action by New York State's aggressive Attorney General. The size of the banks charged with redlining ranges from the small -- Evans bank in New York -- to large -- JPMorgan. Banks have challenged the accusations of redlining as incorrect. Of course, if the charges are true, then the geographic areas affected are likely to be more extensive than New York, California, and Rhode Island, and might include our local areas.
See http://dealbook.nytimes.com/2014/09/02/new-york-set-to-accuse-evans-bank-of-redlining/?_php=true&_&_r=0
A New York Times article outlines government accusations of mortgage redlining by banks in California, Rhode Island, and, most recently, upstate New York. The focus of the article is on recent prosecutorial action by New York State's aggressive Attorney General. The size of the banks charged with redlining ranges from the small -- Evans bank in New York -- to large -- JPMorgan. Banks have challenged the accusations of redlining as incorrect. Of course, if the charges are true, then the geographic areas affected are likely to be more extensive than New York, California, and Rhode Island, and might include our local areas.
See http://dealbook.nytimes.com/2014/09/02/new-york-set-to-accuse-evans-bank-of-redlining/?_php=true&_&_r=0
From Public Citizen Blog: A snapshot from debtors' court in Georgia
Check out this radio news story from a recent episode of This American Life, with a tale of what happens in court when a debtor being sued insists on seeing evidence of the debt.
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Check out this radio news story from a recent episode of This American Life, with a tale of what happens in court when a debtor being sued insists on seeing evidence of the debt.
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Text of dc consumer rights coalition advocacy letter:
Support for Committee Hearing for the Debt Buying Limitation Act of 2014
August 30, 2014
Councilmember Vincent Orange
Chair, Committee on Business, Consumer and Regulatory Affair
Council of the District of Columbia
1350 Pennsylvania Avenue, N.W.
Washington, D.C. 20004
vorange@dccouncil.us
Re: Support for Committee Hearing for the Debt Buying Limitation Act of 2014
Councilmember Orange:
The DC Consumer Rights Coalition urges an early committee hearing and mark-up for the Debt Buying Limitation Amendment Act of 2014.
The bill addresses the many well-documented situations where debts are pursued for collection against individuals by collection entities that lack basic information about whether the indebtedness even exists. The bill would require that purchasers of consumer debt for collection provide basic evidence proving a debt exists to consumers and the court before filing a lawsuit or proceeding with collection efforts.
The bill requires that debt collectors have sufficient detailed information about the consumer, their debt and their liability for the debt before attempting any collection action, and requires that debt collectors provide adequate proof of debt to courts as a part of any lawsuit against a consumer.
The goal of the Debt Buying Limitation Amendment Act is to insure that debt collectors are transparent with consumers, and hold debt collectors accountable for initiating unwarranted actions. We believe that Washingtonians will be well served by a committee hearing to consider those goals and the language of the proposed legislation
Sincerely,
Don Allen Resnikoff
Tracy Rezvani
D.C. Consumer Rights Coalition
CC:
Councilmember Mary Cheh
mcheh@dccouncil.us
Councilmember David Grosso
dgrosso@dccouncil.us
Councilmember Jim Graham
jgraham@dccouncil.us
Councilmember Yvette Alexander
yalexander@dccouncil.us
Support for Committee Hearing for the Debt Buying Limitation Act of 2014
August 30, 2014
Councilmember Vincent Orange
Chair, Committee on Business, Consumer and Regulatory Affair
Council of the District of Columbia
1350 Pennsylvania Avenue, N.W.
Washington, D.C. 20004
vorange@dccouncil.us
Re: Support for Committee Hearing for the Debt Buying Limitation Act of 2014
Councilmember Orange:
The DC Consumer Rights Coalition urges an early committee hearing and mark-up for the Debt Buying Limitation Amendment Act of 2014.
The bill addresses the many well-documented situations where debts are pursued for collection against individuals by collection entities that lack basic information about whether the indebtedness even exists. The bill would require that purchasers of consumer debt for collection provide basic evidence proving a debt exists to consumers and the court before filing a lawsuit or proceeding with collection efforts.
The bill requires that debt collectors have sufficient detailed information about the consumer, their debt and their liability for the debt before attempting any collection action, and requires that debt collectors provide adequate proof of debt to courts as a part of any lawsuit against a consumer.
The goal of the Debt Buying Limitation Amendment Act is to insure that debt collectors are transparent with consumers, and hold debt collectors accountable for initiating unwarranted actions. We believe that Washingtonians will be well served by a committee hearing to consider those goals and the language of the proposed legislation
Sincerely,
Don Allen Resnikoff
Tracy Rezvani
D.C. Consumer Rights Coalition
CC:
Councilmember Mary Cheh
mcheh@dccouncil.us
Councilmember David Grosso
dgrosso@dccouncil.us
Councilmember Jim Graham
jgraham@dccouncil.us
Councilmember Yvette Alexander
yalexander@dccouncil.us
California requires "kill switches" on smartphones to counter theft
Gov. Jerry Brown signed a bill requiring that the antitheft technology be built into smartphones sold in the state and also outlining how consumers will be able to activate their phone's kill switch upon purchasing it. "California has just put smartphone thieves on notice, said state Sen. Mark Leno, D-San Francisco. "Our efforts will effectively wipe out the incentive to steal smartphones and curb this crime of convenience, which is fueling street crime and violence within our communities." Leno authored the bill. The law mandates that all devices sold in the state after that date must include a "theft-deterrent solution" —or kill switch that is turned on by default.
That solution, according to the bill text, can consist of software, hardware, or both software and hardware, as long as it renders a phone inoperable if the owner misplaces it or has it stolen. The device should "be able to withstand a hard reset [to] prevent reactivation of the smartphone on a wireless network except by an authorized user," the bill says.
Buttressing the arguments of proponents of the new law was a June report which found a decrease in smartphone thefts in New York, San Francisco, and London after Apple added Activation Lock to iOS 7. The security layer requires an Apple ID and password to reactivate the handset once it's been remotely wiped.
The wireless industry trade group CTIA fought the kill-switch bill. The industry group wants kill switches and other antitheft solutions to be optional for manufacturers, not subject to government requirements.
From http://www.pcmag.com/article2/0,2817,2464868,00.asp
Gov. Jerry Brown signed a bill requiring that the antitheft technology be built into smartphones sold in the state and also outlining how consumers will be able to activate their phone's kill switch upon purchasing it. "California has just put smartphone thieves on notice, said state Sen. Mark Leno, D-San Francisco. "Our efforts will effectively wipe out the incentive to steal smartphones and curb this crime of convenience, which is fueling street crime and violence within our communities." Leno authored the bill. The law mandates that all devices sold in the state after that date must include a "theft-deterrent solution" —or kill switch that is turned on by default.
That solution, according to the bill text, can consist of software, hardware, or both software and hardware, as long as it renders a phone inoperable if the owner misplaces it or has it stolen. The device should "be able to withstand a hard reset [to] prevent reactivation of the smartphone on a wireless network except by an authorized user," the bill says.
Buttressing the arguments of proponents of the new law was a June report which found a decrease in smartphone thefts in New York, San Francisco, and London after Apple added Activation Lock to iOS 7. The security layer requires an Apple ID and password to reactivate the handset once it's been remotely wiped.
The wireless industry trade group CTIA fought the kill-switch bill. The industry group wants kill switches and other antitheft solutions to be optional for manufacturers, not subject to government requirements.
From http://www.pcmag.com/article2/0,2817,2464868,00.asp
U.S. Department of Transportation Unveils New, Free, Online Search Tool for Recalls Using Vehicle Identification Number
Consumers will be able to tell whether their vehicle or a used vehicle they are considering is at risk due to an uncompleted recall. The U.S. Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) has unveiled a new, free, online search tool consumers can use to find out if a vehicle is directly impacted by a recall.
The new tool is available on www.safercar.gov/vinlookup and provides consumers with a quick and easy way to identify uncompleted recalls by entering their Vehicle Identification Number (VIN). All major light vehicle and motorcycle brands can be searched.
Consumers will be able to tell whether their vehicle or a used vehicle they are considering is at risk due to an uncompleted recall. The U.S. Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) has unveiled a new, free, online search tool consumers can use to find out if a vehicle is directly impacted by a recall.
The new tool is available on www.safercar.gov/vinlookup and provides consumers with a quick and easy way to identify uncompleted recalls by entering their Vehicle Identification Number (VIN). All major light vehicle and motorcycle brands can be searched.
The American Antitrust Institute (AAI) has filed comments encouraging the Federal Communications Commission to reject the merger application of Comcast and Time Warner Cable
"This deal is not in the pubic interest -- it raises potentially serious problems for competition and consumers," said AAI Vice President and economist Diana Moss. "They range from how Comcast-TWC could exclude video distribution rivals, use its position as ISP "gatekeeper" to limit competition from content, edge, and middle market providers, to exercising greater buyer power."
The AAI comments to the FCC sketch a troubling landscape against which the proposed deal would occur, including high levels of consumer dissatisfaction with Comcast and TWC and a history of swaps that have enabled large cable TV and broadband ISPs to divide markets and solidify their dominance.
"We are looking at this merger through the lens of sea-changes in the landscape of the cable TV and broadband ISP markets," explained Moss. "Multiple deals are on deck, including AT&T-DirecTV, which pose unusual burdens and challenges for the resources of the U.S. Department of Justice and FCC."
See filed comments
Is Premier the worst credit card issuer?
First Premier Bank, based in Sioux Falls, S.D., markets its credit cards to consumers who are financially troubled and have poor credit perhaps due to an illness, a death in the family or a divorce. While other banks may reject their applications for a credit card, First Premier often accepts them and gives people in financial turmoil hope of improving their credit rating. But then it charges them with high fees and onerous interest rates, making it hard, if not impossible, to get out of debt. Many of First Premier’s cards come with a credit limit of only $300 (though some can be as high as $1,000) and myriad fees—annual and monthly, as well as “one-time” fees that can add up to as much as $170 in the first year and $120 in subsequent years. That means that in the first year, cardholders with a $300 credit limit have a net credit limit of only $130.
On top of the fees, First Premier charges a 36 percent interest rate on card balances—more than double the national average credit-card rate of 15 percent, according to CreditCards.com.
“First Premier is one of the worst credit-card issuers out there in my opinion,” says Chi Chi Wu, an attorney at the National Consumer Law Center, a nonprofit policy and advocacy group based in Boston. “Besides the high fees, it is aggressive in trying to keep charging those fees.”
In April, First Premier Bank filed a $5 million lawsuit against Evolution Finance, based in Washington, D.C., and its chief executive officer, Odysseas Papadimitriou. Evolution Finance operates CardHub, a site where you can compare credit-card fees, interest rates, and reward programs across more than 1,000 credit cards. In the lawsuit, First Premier demands that CardHub remove details about its credit card, claiming that an earlier relationship, where First Premier paid CardHub an $8.50 referral fee per new applicant, was now over. CardHub, though, has refused, keeping the bank’s rates on its site to provide consumers with comparative credit-card information.
Premier may, it seems, be operating within the bounds of the Credit Card Act of 2009.
Excerpts are from http://www.consumerreports.org/cro/news/2014/08/how-to-protect-yourself-from-credit-card-bullies/index.htm
First Premier Bank, based in Sioux Falls, S.D., markets its credit cards to consumers who are financially troubled and have poor credit perhaps due to an illness, a death in the family or a divorce. While other banks may reject their applications for a credit card, First Premier often accepts them and gives people in financial turmoil hope of improving their credit rating. But then it charges them with high fees and onerous interest rates, making it hard, if not impossible, to get out of debt. Many of First Premier’s cards come with a credit limit of only $300 (though some can be as high as $1,000) and myriad fees—annual and monthly, as well as “one-time” fees that can add up to as much as $170 in the first year and $120 in subsequent years. That means that in the first year, cardholders with a $300 credit limit have a net credit limit of only $130.
On top of the fees, First Premier charges a 36 percent interest rate on card balances—more than double the national average credit-card rate of 15 percent, according to CreditCards.com.
“First Premier is one of the worst credit-card issuers out there in my opinion,” says Chi Chi Wu, an attorney at the National Consumer Law Center, a nonprofit policy and advocacy group based in Boston. “Besides the high fees, it is aggressive in trying to keep charging those fees.”
In April, First Premier Bank filed a $5 million lawsuit against Evolution Finance, based in Washington, D.C., and its chief executive officer, Odysseas Papadimitriou. Evolution Finance operates CardHub, a site where you can compare credit-card fees, interest rates, and reward programs across more than 1,000 credit cards. In the lawsuit, First Premier demands that CardHub remove details about its credit card, claiming that an earlier relationship, where First Premier paid CardHub an $8.50 referral fee per new applicant, was now over. CardHub, though, has refused, keeping the bank’s rates on its site to provide consumers with comparative credit-card information.
Premier may, it seems, be operating within the bounds of the Credit Card Act of 2009.
Excerpts are from http://www.consumerreports.org/cro/news/2014/08/how-to-protect-yourself-from-credit-card-bullies/index.htm
From Public Citizen: Comment on B of A mortgage fraud settlement
“Public Citizen welcomes the moderately more aggressive posture on the part of the U.S. Department of Justice, which very belatedly has decided to impose fines on the Big Banks that crashed our economy. But we remain concerned that the Bank of America settlement penalties are designed to be easily absorbed by the giant bank and leaves key questions unanswered. Bank of America sold nearly $1 trillion worth of mortgages and more than $200 billion were defective. It is important for Main Street to understand if the Department of Justice tailored their settlement to avoid jeopardizing the bank’s stability.”
“The statement of fact failed to identify the amount of profit the bank gained, or show how the penalty will restore losses to investor victims. Nor did it identify individuals responsible for the fraud. Short of this, the settlement will do little to help Americans believe that equal justice prevails at mega-banks.”
– Lisa Gilbert, director, Public Citizen’s Congress Watch division
See http://www.citizen.org/pressroom/pressroomredirect.cfm?ID=4267
“Public Citizen welcomes the moderately more aggressive posture on the part of the U.S. Department of Justice, which very belatedly has decided to impose fines on the Big Banks that crashed our economy. But we remain concerned that the Bank of America settlement penalties are designed to be easily absorbed by the giant bank and leaves key questions unanswered. Bank of America sold nearly $1 trillion worth of mortgages and more than $200 billion were defective. It is important for Main Street to understand if the Department of Justice tailored their settlement to avoid jeopardizing the bank’s stability.”
“The statement of fact failed to identify the amount of profit the bank gained, or show how the penalty will restore losses to investor victims. Nor did it identify individuals responsible for the fraud. Short of this, the settlement will do little to help Americans believe that equal justice prevails at mega-banks.”
– Lisa Gilbert, director, Public Citizen’s Congress Watch division
See http://www.citizen.org/pressroom/pressroomredirect.cfm?ID=4267
16 States Back FTC’s St. Luke's Merger Challenge
The attorneys general of California, Pennsylvania and more than a dozen other states urged the Ninth Circuit Wednesday to uphold the FTC’s challenge to St. Luke's Health System Ltd.'s acquisition of a major nearby physician practice group.
"The unwillingness or inability of most employees to travel great distances for medical care is exacerbated by the power of physicians to steer employees to certain hospitals and … the ensuing demand for nearby network providers enhances the large health care systems’ bargaining power," the attorneys general wrote. "These developments have all led to higher prices for insurers, resulting in consumers paying higher premiums, deductibles, and copays."
The attorneys general of California, Pennsylvania and more than a dozen other states urged the Ninth Circuit Wednesday to uphold the FTC’s challenge to St. Luke's Health System Ltd.'s acquisition of a major nearby physician practice group.
"The unwillingness or inability of most employees to travel great distances for medical care is exacerbated by the power of physicians to steer employees to certain hospitals and … the ensuing demand for nearby network providers enhances the large health care systems’ bargaining power," the attorneys general wrote. "These developments have all led to higher prices for insurers, resulting in consumers paying higher premiums, deductibles, and copays."
From Public Citizen blog: CFPB fines USA Discounters, retail chain that preys on servicemembers
A few weeks ago, we [Public Citizen] flagged a Post/ProPublica investigative report about a retail chain that takes advantage of servicemembers' transience to trap them in a cycle of debt.
Now, as The Hill reports, the CFPB has moved against the retailer, USA Discounters, fining the chain approximately $400,000 (consisting of $350,000 in restitution and a $50,000 fine) for a practice of selling its customers "protections" that are either already guaranteed by law or that the store never provides.
This is another example of the CFPB's laudable pace of activity (which we've noted here), but it's also noteworthy because it highlights a gap between some of the most exploitative consumer practices and what federal regulators are in a position to police. What (rightfully) drew journalistic attention here -- the venue provisions of USA Discounters' contracts that forces servicemembers to face litigation in southeastern Virginia no matter where in the world they are stationed -- was different than what caused the company legal trouble with the CFPB this week. Although misleading consumers into buying something that they don't need is obviously a problem also, the venue trick appears to do more harm.
A few weeks ago, we [Public Citizen] flagged a Post/ProPublica investigative report about a retail chain that takes advantage of servicemembers' transience to trap them in a cycle of debt.
Now, as The Hill reports, the CFPB has moved against the retailer, USA Discounters, fining the chain approximately $400,000 (consisting of $350,000 in restitution and a $50,000 fine) for a practice of selling its customers "protections" that are either already guaranteed by law or that the store never provides.
This is another example of the CFPB's laudable pace of activity (which we've noted here), but it's also noteworthy because it highlights a gap between some of the most exploitative consumer practices and what federal regulators are in a position to police. What (rightfully) drew journalistic attention here -- the venue provisions of USA Discounters' contracts that forces servicemembers to face litigation in southeastern Virginia no matter where in the world they are stationed -- was different than what caused the company legal trouble with the CFPB this week. Although misleading consumers into buying something that they don't need is obviously a problem also, the venue trick appears to do more harm.
Whole Foods mislabels?
Whole Foods was hit with a putative class action suit in Pennsylvania court alleging that the company misrepresented the amount of sugar in its store-brand Greek yogurt, which has been reported to contain more than five times the amount listed.
The consumers leading the suit say that while the company labeled its Greek yogurt as having only 2 grams of sugar per 170 gram serving, recent tests by Consumer Reports magazine show that the yogurt contains at least 11.4 grams per 170 gram serving.
From Law 360
Whole Foods was hit with a putative class action suit in Pennsylvania court alleging that the company misrepresented the amount of sugar in its store-brand Greek yogurt, which has been reported to contain more than five times the amount listed.
The consumers leading the suit say that while the company labeled its Greek yogurt as having only 2 grams of sugar per 170 gram serving, recent tests by Consumer Reports magazine show that the yogurt contains at least 11.4 grams per 170 gram serving.
From Law 360
NY AG sues payday lenders for usury
State prosecutors in Manhattan are bringing criminal charges against a dozen companies and their owner, Carey Vaughn Brown, accusing them of enabling payday loans that flouted the state’s limits on interest rates in loans to New Yorkers.
“The exploitative practices — including exorbitant interest rates and automatic payments from borrowers’ bank accounts, as charged in the indictment — are sadly typical of this industry as a whole,” saidCyrus R. Vance Jr., the Manhattan district attorney.
State prosecutors in Manhattan are bringing criminal charges against a dozen companies and their owner, Carey Vaughn Brown, accusing them of enabling payday loans that flouted the state’s limits on interest rates in loans to New Yorkers.
“The exploitative practices — including exorbitant interest rates and automatic payments from borrowers’ bank accounts, as charged in the indictment — are sadly typical of this industry as a whole,” saidCyrus R. Vance Jr., the Manhattan district attorney.
Apple settlles State AG e-book claims
Apple Inc. agreed Wednesday 7-16-2914 to pay up to $400 million to settle claims brought by 33 state attorneys general and private class action plaintiffs that the company conspired to fix prices on e-books, bringing potential compensation for e-book purchasers up to $566 million.
Apple agreed to pay $400 million to consumers, as well as $50 million in payments to the states and attorneys' fees, if the lower court's July 2013 liability ruling against the company is affirmed by the Second Circuit, according to a settlement filed in New York federal court.
--From Law 360
Apple Inc. agreed Wednesday 7-16-2914 to pay up to $400 million to settle claims brought by 33 state attorneys general and private class action plaintiffs that the company conspired to fix prices on e-books, bringing potential compensation for e-book purchasers up to $566 million.
Apple agreed to pay $400 million to consumers, as well as $50 million in payments to the states and attorneys' fees, if the lower court's July 2013 liability ruling against the company is affirmed by the Second Circuit, according to a settlement filed in New York federal court.
--From Law 360
Senate Finance Committee questions extremely high cost of new drug treatment Sovaldi for Hepatitis C
The United States Senate Finance Committee is questioning Gilead Sciences Inc. for the extremely high cost of its new drug treatment Sovaldi for Hepatitis C that is about $84,000 for 12-week treatment or $1,000 a pill, setting the highest record in history.
In a letter sent to Dr. John Martin, chairman and chief operating officer at Gilead, two senators, Charles Grassley and Ron Wyden, announced the ongoing investigation and requested the company to provide several documents that would justify the price of the drug in question.
"Although Sovaldi has the potential to help people with HCV, at $1,000 per pill, its pricing has raised serious concerns about the extent to which the market for this drug is operating efficiently and rationally," the senators wrote [pdf]. "Given the impact Sovaldi's cost will have on Medicare, Medicaid and other federal spending, we need a better understanding of how your company arrived at the price for this drug."
http://www.techtimes.com/articles/10298/20140713/u-s-senate-probes-pricing-of-hepatitis-c-drug-sovaldi.htm
The United States Senate Finance Committee is questioning Gilead Sciences Inc. for the extremely high cost of its new drug treatment Sovaldi for Hepatitis C that is about $84,000 for 12-week treatment or $1,000 a pill, setting the highest record in history.
In a letter sent to Dr. John Martin, chairman and chief operating officer at Gilead, two senators, Charles Grassley and Ron Wyden, announced the ongoing investigation and requested the company to provide several documents that would justify the price of the drug in question.
"Although Sovaldi has the potential to help people with HCV, at $1,000 per pill, its pricing has raised serious concerns about the extent to which the market for this drug is operating efficiently and rationally," the senators wrote [pdf]. "Given the impact Sovaldi's cost will have on Medicare, Medicaid and other federal spending, we need a better understanding of how your company arrived at the price for this drug."
http://www.techtimes.com/articles/10298/20140713/u-s-senate-probes-pricing-of-hepatitis-c-drug-sovaldi.htm
New Federal Reserve vice chairman Stanley Fischer:
Fischer clarified his position on several topics in his debut speech on July 10 as vice chairman. He's pro-Volcker rule, anti-breaking up the banks, and doubtful that the too big to fail problem has been solved. He also suggested he might support a plan to require the largest U.S. banks hold extra capital beyond the levels mandated under Basel III. Wall Street Journal, New York Times, Washington Post
Fischer clarified his position on several topics in his debut speech on July 10 as vice chairman. He's pro-Volcker rule, anti-breaking up the banks, and doubtful that the too big to fail problem has been solved. He also suggested he might support a plan to require the largest U.S. banks hold extra capital beyond the levels mandated under Basel III. Wall Street Journal, New York Times, Washington Post
Public Citizen recommends: De Armond on FCRA Preemption and State Regulation of Credit Reports
Elizabeth De Armond of Chicago-Kent has written Preventing Preemption: Finding Space for States to Regulate Consumers’ Credit Reports. Here is the abstract:
The Great Recession awoke state legislators to the power of individuals’ credit reports to hinder economic opportunities. Many legislators would like to assuage the effects of bad historical events on the futures of the citizens that they represent. Among the topics they can address are employers’ use of credit reports, the presence of criminal record information in credit reports, and the toxic effects of identity theft and medical debt on credit reports. However, the federal Fair Credit Reporting Act’s preemptive effects must be acknowledged and negotiated. This article evaluates potential state legislative efforts against the FCRA’s preemption provisions and current Supreme Court preemption doctrine to identify strategies for states that want to create effective legislation to protect their consumers’ credit reputations and expand their constituents’ opportunities going forward.
Elizabeth De Armond of Chicago-Kent has written Preventing Preemption: Finding Space for States to Regulate Consumers’ Credit Reports. Here is the abstract:
The Great Recession awoke state legislators to the power of individuals’ credit reports to hinder economic opportunities. Many legislators would like to assuage the effects of bad historical events on the futures of the citizens that they represent. Among the topics they can address are employers’ use of credit reports, the presence of criminal record information in credit reports, and the toxic effects of identity theft and medical debt on credit reports. However, the federal Fair Credit Reporting Act’s preemptive effects must be acknowledged and negotiated. This article evaluates potential state legislative efforts against the FCRA’s preemption provisions and current Supreme Court preemption doctrine to identify strategies for states that want to create effective legislation to protect their consumers’ credit reputations and expand their constituents’ opportunities going forward.
Fed defends mortgage settlement in new report
The Federal Reserve on July 7, 3014 issued a report defending the much-criticized 2013 mortgage servicing settlement. The report points out that that 13 banks involved in the deal had sent $3.6 billion to borrowers who suffered financial injury due to faulty foreclosure practices:
“In 2011 and 2012, the OCC, the Federal Reserve, and the OTS issued Consent Orders in response to on-site reviews conducted in 2010 and 2011 that found deficiencies and unsafe and unsound practices in mortgage servicing and foreclosure processing at several large residential mortgage servicers. The independent file reviews required by the Consent Orders progressed more slowly than anticipated and were replaced at 15 of 16 servicers by a Payment Agreement that provided approximately $10 billion in cash payments and other assistance to borrowers. Thisapproach provided for payments to borrowers faster than if the IFR had continued, and it resulted in the servicers paying to borrowers more than the totalamount borrowers would likely have received through the IFR process. To date, borrowers have cashed or deposited over 85 percent of the total amount of cash payments that servicers were required to pay under the Payment Agreement.”
See http://www.federalreserve.gov/consumerinfo/independent-foreclosure-review.htm
The Federal Reserve on July 7, 3014 issued a report defending the much-criticized 2013 mortgage servicing settlement. The report points out that that 13 banks involved in the deal had sent $3.6 billion to borrowers who suffered financial injury due to faulty foreclosure practices:
“In 2011 and 2012, the OCC, the Federal Reserve, and the OTS issued Consent Orders in response to on-site reviews conducted in 2010 and 2011 that found deficiencies and unsafe and unsound practices in mortgage servicing and foreclosure processing at several large residential mortgage servicers. The independent file reviews required by the Consent Orders progressed more slowly than anticipated and were replaced at 15 of 16 servicers by a Payment Agreement that provided approximately $10 billion in cash payments and other assistance to borrowers. Thisapproach provided for payments to borrowers faster than if the IFR had continued, and it resulted in the servicers paying to borrowers more than the totalamount borrowers would likely have received through the IFR process. To date, borrowers have cashed or deposited over 85 percent of the total amount of cash payments that servicers were required to pay under the Payment Agreement.”
See http://www.federalreserve.gov/consumerinfo/independent-foreclosure-review.htm
Suntrust Mortgage Agrees to $320 million settlement of charges it misled mortgage servicing customers
July 3, 2014 WASHINGTON – The Department of Justice today announced an agreement with SunTrust Mortgage Inc. that resolves a criminal investigation of SunTrust’s administration of the Home Affordable Modification Program (HAMP).
As detailed in documents filed today, SunTrust misled numerous mortgage servicing customers who sought mortgage relief through HAMP. Specifically, SunTrust made material misrepresentations and omissions to borrowers in HAMP solicitations, and failed to process HAMP applications in a timely fashion. As a result of SunTrust’s mismanagement of HAMP, thousands of homeowners who applied for a HAMP modification with SunTrust suffered serious financial harms.
SunTrust has agreed to pay $320 million to resolve the criminal investigation into SunTrust’s HAMP Program. SunTrust will pay $179 million in restitution to compensate borrowers for damage caused by its mismanagement of HAMP.
See http://www.justice.gov/usao/vaw/news/suntrust_03jul2014.html
July 3, 2014 WASHINGTON – The Department of Justice today announced an agreement with SunTrust Mortgage Inc. that resolves a criminal investigation of SunTrust’s administration of the Home Affordable Modification Program (HAMP).
As detailed in documents filed today, SunTrust misled numerous mortgage servicing customers who sought mortgage relief through HAMP. Specifically, SunTrust made material misrepresentations and omissions to borrowers in HAMP solicitations, and failed to process HAMP applications in a timely fashion. As a result of SunTrust’s mismanagement of HAMP, thousands of homeowners who applied for a HAMP modification with SunTrust suffered serious financial harms.
SunTrust has agreed to pay $320 million to resolve the criminal investigation into SunTrust’s HAMP Program. SunTrust will pay $179 million in restitution to compensate borrowers for damage caused by its mismanagement of HAMP.
See http://www.justice.gov/usao/vaw/news/suntrust_03jul2014.html
Public Citizen's Sovern on CFPB survey
by Jeff Sovern
The CFPB Monitor blog has a post titled Industry trade groups urge OMB not to approve CFPB arbitration telephone survey about a filing by the American Bankers Association, the Consumer Bankers Association and the Financial Services Roundtable. They "strongly recommend that OMB not approve the proposal because it will not produce information of practical utility . . . ." I couldn't disagree more.
The survey will ask respondents what credit card they have. From that, the CFPB should be able to determine if the credit card contract includes an arbitration clause, waives the right to a jury trial, and the right to participate in class actions, among other things, because the Bureau has credit card contracts on file. The survey asks respondents about all those rights. Accordingly, the Bureau should be able to find out how aware consumers are about their surrender of those rights.
See Public Citizen Consumer Law & Policy Blog http://www.clpblog.org/
by Jeff Sovern
The CFPB Monitor blog has a post titled Industry trade groups urge OMB not to approve CFPB arbitration telephone survey about a filing by the American Bankers Association, the Consumer Bankers Association and the Financial Services Roundtable. They "strongly recommend that OMB not approve the proposal because it will not produce information of practical utility . . . ." I couldn't disagree more.
The survey will ask respondents what credit card they have. From that, the CFPB should be able to determine if the credit card contract includes an arbitration clause, waives the right to a jury trial, and the right to participate in class actions, among other things, because the Bureau has credit card contracts on file. The survey asks respondents about all those rights. Accordingly, the Bureau should be able to find out how aware consumers are about their surrender of those rights.
See Public Citizen Consumer Law & Policy Blog http://www.clpblog.org/
Consumer fraud claim against Capitol One goes forward in Virginia
A Virginia federal court allowed a consumer’s claims to be pursued against Capitol One for common-law fraud and constructive fraud, violation of the Truth in Lending Act, and violation of the Arizona Consumer Fraud Act. Plaintiff alleges that she was damaged after she accepted a misleading special credit offer involving a paper-check form of credit advance. The paper check that plaintiff used under the offer was treated by Capitol One as part of her credit account, not associated with any checking account, and so caused surprise Capitol One charges on "regular purchases" in the credit card account.
Federal Judge Brinkema said “It is clear from the evidence in the record that defendant knew consumers like plaintiff, who regularly availed themselves of the grace period by paying off the entire balance for the previous month's purchases, would mistakenly assume 'that balance transfers [related to check-like advances were] completely separate from their purchases and therefore [did] not impact the interest applied to those purchases,'” Judge Brinkema said.
The Court’s ruling turns in part on application of Virginia law, particularly law concerning fraud, but the relevant aspects of Virginia law have analogies in the laws of a number of other states.
For the decision see http://www.scribd.com/doc/232105926/Ecf-Uscourts-Gov-Doc-Pl-Caseid-298824-Cap-One-Fraud-etc
A Virginia federal court allowed a consumer’s claims to be pursued against Capitol One for common-law fraud and constructive fraud, violation of the Truth in Lending Act, and violation of the Arizona Consumer Fraud Act. Plaintiff alleges that she was damaged after she accepted a misleading special credit offer involving a paper-check form of credit advance. The paper check that plaintiff used under the offer was treated by Capitol One as part of her credit account, not associated with any checking account, and so caused surprise Capitol One charges on "regular purchases" in the credit card account.
Federal Judge Brinkema said “It is clear from the evidence in the record that defendant knew consumers like plaintiff, who regularly availed themselves of the grace period by paying off the entire balance for the previous month's purchases, would mistakenly assume 'that balance transfers [related to check-like advances were] completely separate from their purchases and therefore [did] not impact the interest applied to those purchases,'” Judge Brinkema said.
The Court’s ruling turns in part on application of Virginia law, particularly law concerning fraud, but the relevant aspects of Virginia law have analogies in the laws of a number of other states.
For the decision see http://www.scribd.com/doc/232105926/Ecf-Uscourts-Gov-Doc-Pl-Caseid-298824-Cap-One-Fraud-etc
Amazon and most-favored-nation clauses in book contracts, a U.S. issue?
Reports say that the European Union's Directorate General for Competition is talking with UK publishers as part of an investigation into Most Favored Nation (MFN) clauses. See http://www.thebookseller.com/news/amazon-pressing-new-terms-uk.html If MFN clauses are used in the U.S. they could raise antitrust issues under U.S. federal and state antitrust laws. See http://www.justice.gov/atr/public/workshops/mfn/
Reports say that the European Union's Directorate General for Competition is talking with UK publishers as part of an investigation into Most Favored Nation (MFN) clauses. See http://www.thebookseller.com/news/amazon-pressing-new-terms-uk.html If MFN clauses are used in the U.S. they could raise antitrust issues under U.S. federal and state antitrust laws. See http://www.justice.gov/atr/public/workshops/mfn/
D.C. Court strikes regulation of tour guides
In New York the courts struck down regulation of large sugary drink sales, while in D.C. the courts have stricken licensing regulations affecting tour guides. The D.C. Court’s analysis focused on whether particular D.C. tour guide licensing regulations served any defensible public purpose, or were simply silly, imposing arbitrary restrictions. The litigation was supported by the Institute for Justice. The IJ website indicates that it is an organization that supports libertarian causes.
http://www.washingtonpost.com/news/volokh-conspiracy/wp/2014/06/27/dc-circuit-strikes-down-dc-tour-guide-licensing-law/
Posted by DAR 6-29-2014
In New York the courts struck down regulation of large sugary drink sales, while in D.C. the courts have stricken licensing regulations affecting tour guides. The D.C. Court’s analysis focused on whether particular D.C. tour guide licensing regulations served any defensible public purpose, or were simply silly, imposing arbitrary restrictions. The litigation was supported by the Institute for Justice. The IJ website indicates that it is an organization that supports libertarian causes.
http://www.washingtonpost.com/news/volokh-conspiracy/wp/2014/06/27/dc-circuit-strikes-down-dc-tour-guide-licensing-law/
Posted by DAR 6-29-2014
US Supreme Court kills Aereo; local over-the-air TV and cable cord cutting lives on
Today's big news about over-the-air TV is that the U.S. Supreme Court has effectively killed Aereo. See http://www.nytimes.com/2014/06/26/business/media/supreme-court-rules-against-aereo-in-broadcasters-challenge.html?ref=business&_r=0
for a discussion and a copy of the court opinion.
But cable cord cutting and reliance on over-the-air TV lives on, even though the enthusiasm of the over-the-air broadcasters is low. They make money selling to cable and relying on cable transmission. That means that broadcasters are unlikely to side with viewers in any future legal disputes involving over- the-air reception rights. Those disputes are likely to involve technology different from Aereo's and possibly less complex.
In areas like DC the possibilities for cable cord cutting and reliance on over-the-air TV are high. That is because broadcasters send out their signals from local places like River Road in Bethesda. One possibility for viewers is to take internet service, possibly with very basic cable TV, from an internet provider like Comcast or Verizon -- although that still isn't cheap. A substitute for cable content at a cheaper price can come from Hulu Plus, Netflix, Amazon Instant Video, or the iTunes Store. Similar alternatives are available for sports nuts. Roku, Chromecast Dongle, and Apple TV are examples of gadgets that facilitate integrating network streaming content into your TV watching. Most important, viewers who want to cut the cord will need to shop (probably on line) for an indoor antenna -- or perhaps a small outdoor antenna -- that will pull in over-the-air signals from local TV stations. The technology for switching viewing back and forth from internet to over-the-air isn't difficult on typical modern TV receivers. Many switch easily from operating as TV receivers to operating as computer screens.
Since broadcasters are likely to be on the same side as cable operators on future legal questions concerning over-the-air transmissions, it may be that there will be further legal disputes that echo the Aereo dispute. But meanwhile, for viewers in DC there are strong over-the-air broadcast signals that make cable cord cutting a realistic possibility.
Posted by Don Allen Resnikoff 6-26-2014
Today's big news about over-the-air TV is that the U.S. Supreme Court has effectively killed Aereo. See http://www.nytimes.com/2014/06/26/business/media/supreme-court-rules-against-aereo-in-broadcasters-challenge.html?ref=business&_r=0
for a discussion and a copy of the court opinion.
But cable cord cutting and reliance on over-the-air TV lives on, even though the enthusiasm of the over-the-air broadcasters is low. They make money selling to cable and relying on cable transmission. That means that broadcasters are unlikely to side with viewers in any future legal disputes involving over- the-air reception rights. Those disputes are likely to involve technology different from Aereo's and possibly less complex.
In areas like DC the possibilities for cable cord cutting and reliance on over-the-air TV are high. That is because broadcasters send out their signals from local places like River Road in Bethesda. One possibility for viewers is to take internet service, possibly with very basic cable TV, from an internet provider like Comcast or Verizon -- although that still isn't cheap. A substitute for cable content at a cheaper price can come from Hulu Plus, Netflix, Amazon Instant Video, or the iTunes Store. Similar alternatives are available for sports nuts. Roku, Chromecast Dongle, and Apple TV are examples of gadgets that facilitate integrating network streaming content into your TV watching. Most important, viewers who want to cut the cord will need to shop (probably on line) for an indoor antenna -- or perhaps a small outdoor antenna -- that will pull in over-the-air signals from local TV stations. The technology for switching viewing back and forth from internet to over-the-air isn't difficult on typical modern TV receivers. Many switch easily from operating as TV receivers to operating as computer screens.
Since broadcasters are likely to be on the same side as cable operators on future legal questions concerning over-the-air transmissions, it may be that there will be further legal disputes that echo the Aereo dispute. But meanwhile, for viewers in DC there are strong over-the-air broadcast signals that make cable cord cutting a realistic possibility.
Posted by Don Allen Resnikoff 6-26-2014
The text of the New York State Court decision blocking the NYC regulation of large sugary drinks
Language from the opinion:
"We hold that the New York City Board of Health, in adopting the "Sugary Drinks Portion Cap Rule", exceeded the scope of its regulatory authority. By choosing among competing policy goals, without any legislative delegation or guidance, the Board engaged in law-making and thus infringed upon the legislative jurisdiction of the City Council of New York."
A NYT analysis of the opinion: http://www.nytimes.com/2014/06/27/nyregion/city-loses-final-appeal-on-limiting-sales-of-large-sodas.html?_r=1
Text of the opinion:
http://www.nytimes.com/interactive/2013/03/12/nyregion/12soda-decision.html?ref=nyregion
Language from the opinion:
"We hold that the New York City Board of Health, in adopting the "Sugary Drinks Portion Cap Rule", exceeded the scope of its regulatory authority. By choosing among competing policy goals, without any legislative delegation or guidance, the Board engaged in law-making and thus infringed upon the legislative jurisdiction of the City Council of New York."
A NYT analysis of the opinion: http://www.nytimes.com/2014/06/27/nyregion/city-loses-final-appeal-on-limiting-sales-of-large-sodas.html?_r=1
Text of the opinion:
http://www.nytimes.com/interactive/2013/03/12/nyregion/12soda-decision.html?ref=nyregion
NFU Urges DOJ to Block Tyson’s Buyout of Hillshire
The National Farmers Union does not subscribe to the urban notion that rural people are unassertive about their economic interests. The NFU) issued a statement in response to reports that Tyson Foods will acquire Hillshire Brands:
“Tyson Food’s likely purchase of Hillshire benefits corporate owners at the expense of farmers and consumers. Our country is worse off because of the increasingly consolidated food and agriculture marketplace. Farmers and ranchers will have fewer buyers and Tyson will be better able to dictate lower prices paid to producers. Closures of meatpacking and processing facilities, especially in areas where both Tyson and Hillshire are currently operating, will be all but assured.
“We’re already well on our way to having one giant food company and this purchase would send us farther down that path."
For the whole statement click HERE
The National Farmers Union does not subscribe to the urban notion that rural people are unassertive about their economic interests. The NFU) issued a statement in response to reports that Tyson Foods will acquire Hillshire Brands:
“Tyson Food’s likely purchase of Hillshire benefits corporate owners at the expense of farmers and consumers. Our country is worse off because of the increasingly consolidated food and agriculture marketplace. Farmers and ranchers will have fewer buyers and Tyson will be better able to dictate lower prices paid to producers. Closures of meatpacking and processing facilities, especially in areas where both Tyson and Hillshire are currently operating, will be all but assured.
“We’re already well on our way to having one giant food company and this purchase would send us farther down that path."
For the whole statement click HERE
Auto safety and other consumer groups petition the FTC to take action against CarMax for claiming its used cars are safe, but failing to fix safety recalls before marketing them
See https://us-mg6.mail.yahoo.com/neo/launch?.rand=28tk1ngmnslvt
New claims added to LIBOR lawsuit
A federal judge has allowed plaintiffs to add claims to their lawsuit against Barclays, Rabobank and others that accuse the lenders of LIBOR manipulation, reports say.
US District Judge Naomi Reice Buchwald granted the plaintiffs’ request to add charges that the banks manipulated the LIBOR benchmark rate to gain trading advantages, according to reports. The plaintiffs, a group of investment funds, are accusing the banks including Bank of America, Citigroup and Credit Suisse of manipulating LIBOR rates to lower interest and hide rising borrowing costs.
”Put simply, plaintiffs may plead that they either paid too much for Eurodollar futures contracts on certain dates or earned too little by selling them,” Judge Buchwald announced Monday in an opinion.
Full content: Bloomberg
See https://us-mg6.mail.yahoo.com/neo/launch?.rand=28tk1ngmnslvt
New claims added to LIBOR lawsuit
A federal judge has allowed plaintiffs to add claims to their lawsuit against Barclays, Rabobank and others that accuse the lenders of LIBOR manipulation, reports say.
US District Judge Naomi Reice Buchwald granted the plaintiffs’ request to add charges that the banks manipulated the LIBOR benchmark rate to gain trading advantages, according to reports. The plaintiffs, a group of investment funds, are accusing the banks including Bank of America, Citigroup and Credit Suisse of manipulating LIBOR rates to lower interest and hide rising borrowing costs.
”Put simply, plaintiffs may plead that they either paid too much for Eurodollar futures contracts on certain dates or earned too little by selling them,” Judge Buchwald announced Monday in an opinion.
Full content: Bloomberg
More transparency for municipal bond markets?
U.S. Securities and Exchange Commission Chair Mary Jo White has unveiled a d plan to give retail investors greater insight into the prices of municipal and corporate bonds. White has publicly questioned whether the current structure of fixed-income markets, with decentralized, opaque methods of trading, might be more beneficial to market intermediaries than to investors themselves.
White said she is working with the Financial Industry Regulatory Authority and Municipal Securities Rulemaking Board to finalize a best execution rule for the municipal securities market and to develop rules by the end of the year to require the disclosure of markups in so-called riskless principal transactions for corporate and municipal bonds.
“This information should help customers assess the reasonableness of their dealer’s compensation and should deter overcharging,” White said. “The need for markup disclosure is increasingly important as riskless principal transactions become more common in the fixed-income markets.”
U.S. Securities and Exchange Commission Chair Mary Jo White has unveiled a d plan to give retail investors greater insight into the prices of municipal and corporate bonds. White has publicly questioned whether the current structure of fixed-income markets, with decentralized, opaque methods of trading, might be more beneficial to market intermediaries than to investors themselves.
White said she is working with the Financial Industry Regulatory Authority and Municipal Securities Rulemaking Board to finalize a best execution rule for the municipal securities market and to develop rules by the end of the year to require the disclosure of markups in so-called riskless principal transactions for corporate and municipal bonds.
“This information should help customers assess the reasonableness of their dealer’s compensation and should deter overcharging,” White said. “The need for markup disclosure is increasingly important as riskless principal transactions become more common in the fixed-income markets.”
Virginia's governor will expand Medicaid
Virginia Gov. Terry McAuliffe vowed Friday to bypass the General Assembly and expand Medicaid eligibility for about 400,000 low-income residents on his own.
http://www.modernhealthcare.com/article/20140620/NEWS/306209938?AllowView=VDl3UXk1Ty9DUFNCbkJiYkY0M3hlMFdyajBVZENlND0=&utm_source=link-20140620-NEWS-306209938&utm_medium=email&utm_campaign=mh-alert
Virginia Gov. Terry McAuliffe vowed Friday to bypass the General Assembly and expand Medicaid eligibility for about 400,000 low-income residents on his own.
http://www.modernhealthcare.com/article/20140620/NEWS/306209938?AllowView=VDl3UXk1Ty9DUFNCbkJiYkY0M3hlMFdyajBVZENlND0=&utm_source=link-20140620-NEWS-306209938&utm_medium=email&utm_campaign=mh-alert
USDOJ plans to sue Bank of America about mortgage backed securities
The Justice Department has received the green light from a North Carolina judge to go ahead with a lawsuit against Bank of America. The lawsuit alleges "that Bank of America misled investors about the quality of about $850 million in mortgage-backed securities that it sold to investors in 2008."
http://online.wsj.com/articles/judge-allows-justice-departments-lawsuit-against-bank-of-america-in-north-carolina-to-proceed-1403217810
The Justice Department has received the green light from a North Carolina judge to go ahead with a lawsuit against Bank of America. The lawsuit alleges "that Bank of America misled investors about the quality of about $850 million in mortgage-backed securities that it sold to investors in 2008."
http://online.wsj.com/articles/judge-allows-justice-departments-lawsuit-against-bank-of-america-in-north-carolina-to-proceed-1403217810
Apple ebook settlement
With an August trial looming, Apple Inc. agreed Monday to settle hundreds of millions of dollars worth of damages claims from 33 state attorneys general and private class action plaintiffs who had accused the company of conspiring to fix prices on e-books.
With an August trial looming, Apple Inc. agreed Monday to settle hundreds of millions of dollars worth of damages claims from 33 state attorneys general and private class action plaintiffs who had accused the company of conspiring to fix prices on e-books.
US: Retail groups to ask appeals court for swipe-fee settlement rejection
A controversial settlement offered by Visa and MasterCard to retailers that sued the companies over swipe-fees is now being challenged as the National Retail federation and the Retail Industry leaders Association has asked an appeals court to overturn the settlement’s approval.
The retail groups opposed of the $5.7 billion settlement and vowed to appeal it after US District Judge John Gleeson approved the offer last December. Some of the nation’s largest retailers, including Wal-Mart, Amazon, Target and thousands of other stores, opted-out of the settlement offer on the grounds that it did not adequately address the concerns of swipe-fees.
See https://www.competitionpolicyinternational.com/us-retail-groups-officially-request-swipe-fee-settlement-rejection?utm_source=June+17%2C+2014&utm_campaign=April+30%2C+2013&utm_medium=email
A controversial settlement offered by Visa and MasterCard to retailers that sued the companies over swipe-fees is now being challenged as the National Retail federation and the Retail Industry leaders Association has asked an appeals court to overturn the settlement’s approval.
The retail groups opposed of the $5.7 billion settlement and vowed to appeal it after US District Judge John Gleeson approved the offer last December. Some of the nation’s largest retailers, including Wal-Mart, Amazon, Target and thousands of other stores, opted-out of the settlement offer on the grounds that it did not adequately address the concerns of swipe-fees.
See https://www.competitionpolicyinternational.com/us-retail-groups-officially-request-swipe-fee-settlement-rejection?utm_source=June+17%2C+2014&utm_campaign=April+30%2C+2013&utm_medium=email
New York AG issues report on payroll card problems
According to a new report from the office of the New York Attorney General, payroll cards can present serious problems for employees, especially low-wage or limited English proficient (LEP) workers, and those without internet or smartphone access. Virtually all payroll card programs charge fees for card-related activities, and these fees can add up, reducing the meager take-home pay received by the lowest paid workers in the state. The AG join in a legislative proposal to address the problem.
See http://www.ag.ny.gov/press-release/ag-schneiderman-assembly-member-morelle-and-senator-gallivan-propose-payroll-card-act
According to a new report from the office of the New York Attorney General, payroll cards can present serious problems for employees, especially low-wage or limited English proficient (LEP) workers, and those without internet or smartphone access. Virtually all payroll card programs charge fees for card-related activities, and these fees can add up, reducing the meager take-home pay received by the lowest paid workers in the state. The AG join in a legislative proposal to address the problem.
See http://www.ag.ny.gov/press-release/ag-schneiderman-assembly-member-morelle-and-senator-gallivan-propose-payroll-card-act
American Banker asks: Is mobile banking safe?
Is mobile banking safe? It's a question that's been in the back of many people's minds ever since banks introduced apps in 2009. With roughly 102 million Americans using mobile banking, the potential for hackers, phishers and other types of cyberattackers to prey on mobile banking users is vast.
But until last week, no major security event had directly threatened mobile banking users.
On Wednesday, Kaspersky Lab discovered that a breed of malware targeting mobile devices called Svpeng had made its way from Russia to the U.S. The malware looks for specific mobile banking apps on the phone, then locks the phone and demands money to unlock it.
From: http://www.americanbanker.com/issues/179_114/first-major-mobile-banking-security-threat-hits-the-us-1068100-1.html?utm_campaign=abla%20daily%20briefing-jun%2016%202014&utm_medium=email&utm_source=newsletter&ET=americanbanker%3Ae2743239%3A613426a%3A&st=email
Is mobile banking safe? It's a question that's been in the back of many people's minds ever since banks introduced apps in 2009. With roughly 102 million Americans using mobile banking, the potential for hackers, phishers and other types of cyberattackers to prey on mobile banking users is vast.
But until last week, no major security event had directly threatened mobile banking users.
On Wednesday, Kaspersky Lab discovered that a breed of malware targeting mobile devices called Svpeng had made its way from Russia to the U.S. The malware looks for specific mobile banking apps on the phone, then locks the phone and demands money to unlock it.
From: http://www.americanbanker.com/issues/179_114/first-major-mobile-banking-security-threat-hits-the-us-1068100-1.html?utm_campaign=abla%20daily%20briefing-jun%2016%202014&utm_medium=email&utm_source=newsletter&ET=americanbanker%3Ae2743239%3A613426a%3A&st=email
CFPB investigates mobile banking
CFThe Consumer Financial Protection Bureau (CFPB) has announced an inquiry into the opportunities and challenges associated with the use of mobile financial services. As part of the inquiry, the Bureau is exploring how mobile technologies are impacting unbanked and underserved consumers with limited access to traditional banking systems.
“In a world where people can manage their money on the go, there is great potential to serve more consumers and allow them to take greater control of their finances,” said CFPB Director Richard Cordray. “But we need to make sure all consumers are protected whether they are opening their wallets or scanning the screen on their smart phones.”
The Request for Information (RFI) can be found at: http://files.consumerfinance.gov/f/201406_cfpb_request-for-information_mobile.pdf
CFThe Consumer Financial Protection Bureau (CFPB) has announced an inquiry into the opportunities and challenges associated with the use of mobile financial services. As part of the inquiry, the Bureau is exploring how mobile technologies are impacting unbanked and underserved consumers with limited access to traditional banking systems.
“In a world where people can manage their money on the go, there is great potential to serve more consumers and allow them to take greater control of their finances,” said CFPB Director Richard Cordray. “But we need to make sure all consumers are protected whether they are opening their wallets or scanning the screen on their smart phones.”
The Request for Information (RFI) can be found at: http://files.consumerfinance.gov/f/201406_cfpb_request-for-information_mobile.pdf
_A federal judge has rejected a $23 million deal to cover Citgo liability in a proposed settlement over methyl tertiary-butyl ether groundwater contamination
U.S. District Judge Shira A. Scheindlin denied the New Jersey Department of Environmental Protection’s motion for approval of a judicial consent order that listed the terms of the agency’s settlement with Citgo. The judge said that the amoubt calculated by the plaintiffs didn’t account for Citgo’s portion of liability, and that the DEP's calculation wasn’t properly supported by evidence..
“Plaintiffs offer no explanation for these inconsistencies, which raise doubts about the reliability of the entire list,” Judge Scheindlin wrote. “With such an incomplete record, it is impossible for me to determine whether the settlement is reasonable and fair.”
The suit is part of a larger multidistrict litigation over the groundwater contamination.
The contamination involves MTBE, used in U.S. gasoline in the late 1970s and later as an octane enhancer. It is known to be carcinogenic to animals.
See http://www.scribd.com/doc/229351721/Federal-judge-rejects-23-million-settlement-re-Citgo-methyl-tertiary-butyl-ether-groundwater-contamination-d-refineries-in-New-Jersey
U.S. District Judge Shira A. Scheindlin denied the New Jersey Department of Environmental Protection’s motion for approval of a judicial consent order that listed the terms of the agency’s settlement with Citgo. The judge said that the amoubt calculated by the plaintiffs didn’t account for Citgo’s portion of liability, and that the DEP's calculation wasn’t properly supported by evidence..
“Plaintiffs offer no explanation for these inconsistencies, which raise doubts about the reliability of the entire list,” Judge Scheindlin wrote. “With such an incomplete record, it is impossible for me to determine whether the settlement is reasonable and fair.”
The suit is part of a larger multidistrict litigation over the groundwater contamination.
The contamination involves MTBE, used in U.S. gasoline in the late 1970s and later as an octane enhancer. It is known to be carcinogenic to animals.
See http://www.scribd.com/doc/229351721/Federal-judge-rejects-23-million-settlement-re-Citgo-methyl-tertiary-butyl-ether-groundwater-contamination-d-refineries-in-New-Jersey
The AAI on Comcast/Time-Warner
The American Antitrust Institute (AAI) today called on competition enforcers to block the proposed merger of Comcast and Time Warner Cable (TWC). The AAI believes the deal raises potentially serious problems for competition and consumers.
In the new white paper Rolling Up Video Distribution in the U.S.: Why the Comcast-Time Warner Cable Merger Should Be Blocked, AAI Vice President and economist Diana Moss analyzes key competitive problems raised by the merger. The white paper also explains why Comcast-TWC's efficiencies claims are not defensible and makes the case for why grafting the remedies from the Comcast-NBC Universal merger onto Comcast-TWC would spare neither competition nor consumers from harm.
The American Antitrust Institute (AAI) today called on competition enforcers to block the proposed merger of Comcast and Time Warner Cable (TWC). The AAI believes the deal raises potentially serious problems for competition and consumers.
In the new white paper Rolling Up Video Distribution in the U.S.: Why the Comcast-Time Warner Cable Merger Should Be Blocked, AAI Vice President and economist Diana Moss analyzes key competitive problems raised by the merger. The white paper also explains why Comcast-TWC's efficiencies claims are not defensible and makes the case for why grafting the remedies from the Comcast-NBC Universal merger onto Comcast-TWC would spare neither competition nor consumers from harm.
Gas prices in DC zip code 20016
If you live in zip code 20016 in the Northwest part of the District of Columbia you have an income higher than the national average, and you also have local gas stations that charge above the national average, and more than gas stations in other neighborhhoods.
Gaspricewatch.com for 6/10/2014 (look here) reports:
The Exxon station at 4244 Wisconsin Ave NW @Warren St NW, Washington, DC 20016 was recently charging $4.03 a gallon for regular.
The Shell station at 4900 Wisconsin Ave NW @Ellicott St., Washington, DC 20016 was recently charging $4.05 a gallon for regular.
The Exxon station at 4861 Massachusetts Ave NW @Warren St/49th St., NW, Washington, DC 20016 was recently charging $4.14 a gallon for regular.
But since you will be in a car when you buy gas you might save money by traveling to another neighborhood.
The price of regular gas at the W Express station at 1800 18th St., NW S St NW, Washington, DC zip 20009 was recently $3.33 a gallon for regular.
See our earlier postings about gasoline pricing and DC government action.
Posted by DAR 6/10/2014
DC Bar Section Event: The Changing Legal Landscape of Foreclosures in the District of Columbia
Date & Time: Friday, June 13, 2014 from 12:00pm to 2:00pm
It's not just auctions anymore . . . Come hear about how the landscape for conducting foreclosures has changed in the District of Columbia. Panelists will talk about the increased use of judicial proceedings (and the new mediation component for those proceedings), provide updates on the Department of Insurance, Securities and Banking (DISB) mediations, and highlight the ways in which the new federal mortgage servicing rules impact local proceedings. The panel will provide a practical perspective for practitioners in this rapidly changing area.
Panelists: Heather Latino, Legal Aid Society of D.C., Ben Arnold, DISB, and Jean Healey, Consumer Financial Protection Bureau.
Location:
D.C. Bar Conference Center
1101 K Street, NW, Conference Center
(Metro Center Station)
Washington DC 20005
Map it
Contact Information
Sections Office
Email: SectionsEvents@dcbar.org
Phone: 202-626-3463
Fax: 202-824-1877
Date & Time: Friday, June 13, 2014 from 12:00pm to 2:00pm
It's not just auctions anymore . . . Come hear about how the landscape for conducting foreclosures has changed in the District of Columbia. Panelists will talk about the increased use of judicial proceedings (and the new mediation component for those proceedings), provide updates on the Department of Insurance, Securities and Banking (DISB) mediations, and highlight the ways in which the new federal mortgage servicing rules impact local proceedings. The panel will provide a practical perspective for practitioners in this rapidly changing area.
Panelists: Heather Latino, Legal Aid Society of D.C., Ben Arnold, DISB, and Jean Healey, Consumer Financial Protection Bureau.
Location:
D.C. Bar Conference Center
1101 K Street, NW, Conference Center
(Metro Center Station)
Washington DC 20005
Map it
Contact Information
Sections Office
Email: SectionsEvents@dcbar.org
Phone: 202-626-3463
Fax: 202-824-1877
Bank of America is in talks to pay $12 billion to settle Department of Justice and various state probes over legacy mortgage misbehavior
See reports in:
Wall Street Journal, Financial Times, Washington Post
See reports in:
Wall Street Journal, Financial Times, Washington Post
New Jersey attorney general’s office sues third-party energy suppliers
The New Jersey attorney general’s office has sued third-party energy suppliers Palmco Energy NJ LLC, HIKO Energy LLC and Systrum Energy, for falsely assuring them they would save money.
The complaints allege that the companies misled customers into believing they would see receive competitive pricing and reductions in their monthly bills. Instead, the consumers were charged more than by their previous providers.
“These three companies allegedly lured consumers with promised monthly savings that turned out to be fictional,” Acting Attorney General John J. Hoffman said in a statement. “Even worse, consumers who hoped to save money instead saw their bills increase to unconscionable levels.”
The New Jersey attorney general’s office has sued third-party energy suppliers Palmco Energy NJ LLC, HIKO Energy LLC and Systrum Energy, for falsely assuring them they would save money.
The complaints allege that the companies misled customers into believing they would see receive competitive pricing and reductions in their monthly bills. Instead, the consumers were charged more than by their previous providers.
“These three companies allegedly lured consumers with promised monthly savings that turned out to be fictional,” Acting Attorney General John J. Hoffman said in a statement. “Even worse, consumers who hoped to save money instead saw their bills increase to unconscionable levels.”
States win right to local trials of actions against Standard and Poor
A federal judge ruled that 17 states and DC' may have local courts handle their lawsuits in multidistrict litigation alleging credit rating agency Standard & Poor's Financial Services LLC misled the public on mortgage-backed securities.
http://www.scribd.com/doc/228091041/Https-Ecf-Nysd-Uscourts-Gov-Cgi-Bin-Show-Doc-Pl-Caseid-413005-de-Seq-Num-542-Dm-Id-13098669-Doc-Num-94
A federal judge ruled that 17 states and DC' may have local courts handle their lawsuits in multidistrict litigation alleging credit rating agency Standard & Poor's Financial Services LLC misled the public on mortgage-backed securities.
http://www.scribd.com/doc/228091041/Https-Ecf-Nysd-Uscourts-Gov-Cgi-Bin-Show-Doc-Pl-Caseid-413005-de-Seq-Num-542-Dm-Id-13098669-Doc-Num-94
Court Dismissal Of The
D.C. Action Against ExxonMobil And Gasoline Distributors – Further Action Is
Needed to Address Allegations of Price-Inflating Anticompetitive Conduct
By: Don Resnikoff and Tracy Rezvani* 6-1-2014
The D.C. Attorney General has alleged that high local D.C. gasoline prices are caused by anticompetitive exclusive dealing restrictions imposed on retailers by dominant distributors. The allegations should not now be ignored simply because a trial-level court has decided that the legal complaint brought by the Attorney General against ExxonMobil and local distributors under a special local statute was not authorized under that statute. The D.C. Council could easily fix the statute to provide the needed authority. Alternatively, the Attorney General could, depending on the outcome of a possible appeal of the trial court decision, simply file a new antitrust action.
For the rest of the blog, see http://www.scribd.com/doc/227900127/DC-AG-Actions-on-Gasoline-Price-by-Resnikoff-Rezvani
By: Don Resnikoff and Tracy Rezvani* 6-1-2014
The D.C. Attorney General has alleged that high local D.C. gasoline prices are caused by anticompetitive exclusive dealing restrictions imposed on retailers by dominant distributors. The allegations should not now be ignored simply because a trial-level court has decided that the legal complaint brought by the Attorney General against ExxonMobil and local distributors under a special local statute was not authorized under that statute. The D.C. Council could easily fix the statute to provide the needed authority. Alternatively, the Attorney General could, depending on the outcome of a possible appeal of the trial court decision, simply file a new antitrust action.
For the rest of the blog, see http://www.scribd.com/doc/227900127/DC-AG-Actions-on-Gasoline-Price-by-Resnikoff-Rezvani
AG Coakley Sues Fannie Mae and Freddie Mac Over Their Refusal to Engage in Foreclosure Buyback Programs -- Lawsuit Alleges Violation of State’s 2012 Anti-Foreclosure Law –
Saying its refusal to engage in foreclosure buyback programs is unfairly and illegally causing Massachusetts families to lose their homes, Attorney General Martha Coakley has s ued the Federal Housing Finance Agency (FHFA) and the mortgage giants Fannie Mae and Freddie Mac file size 5MB for violating the state’s 2012 foreclosure prevention law.
Filed today in Suffolk Superior Court, the complaint file size 5MB alleges that Fannie Mae and Freddie Mac, currently under FHFA conservatorship, refuse to comply with the August 2012 Massachusetts law An Act to Prevent Unnecessary and Unreasonable Foreclosures. The first-in-the-nation law was proposed by AG Coakley and passed by the Legislature in response to the foreclosure crisis in an effort to prevent unnecessary foreclosures. Among other provisions, it prohibits creditors from blocking home sales to non-profits simply because the non-profit intends to resell the property back to the former homeowner.
See http://www.mass.gov/ago/news-and-updates/press-releases/2014/2014-06-02-fannie-freddie-suit.html
Saying its refusal to engage in foreclosure buyback programs is unfairly and illegally causing Massachusetts families to lose their homes, Attorney General Martha Coakley has s ued the Federal Housing Finance Agency (FHFA) and the mortgage giants Fannie Mae and Freddie Mac file size 5MB for violating the state’s 2012 foreclosure prevention law.
Filed today in Suffolk Superior Court, the complaint file size 5MB alleges that Fannie Mae and Freddie Mac, currently under FHFA conservatorship, refuse to comply with the August 2012 Massachusetts law An Act to Prevent Unnecessary and Unreasonable Foreclosures. The first-in-the-nation law was proposed by AG Coakley and passed by the Legislature in response to the foreclosure crisis in an effort to prevent unnecessary foreclosures. Among other provisions, it prohibits creditors from blocking home sales to non-profits simply because the non-profit intends to resell the property back to the former homeowner.
See http://www.mass.gov/ago/news-and-updates/press-releases/2014/2014-06-02-fannie-freddie-suit.html
The city of Los Angeles accuses JPMorgan Chase & Co. of targeting minority borrowers with predatory loans
May 30 (Bloomberg) -- The city of Los Angeles has filed a lawsuit accusing JPMorgan Chase & Co. of targeting minority borrowers with predatory loans in a lawsuit. A similar suit is pending against Wells Fargo & Co. Los Angeles sued Wells Fargo, Citigroup Inc. and Bank of America Corp. last year, saying the lenders engaged in biased practices since at least 2004 by placing minority borrowers in mortgages they couldn’t afford and driving up the number of foreclosures in their neighborhoods.
May 30 (Bloomberg) -- The city of Los Angeles has filed a lawsuit accusing JPMorgan Chase & Co. of targeting minority borrowers with predatory loans in a lawsuit. A similar suit is pending against Wells Fargo & Co. Los Angeles sued Wells Fargo, Citigroup Inc. and Bank of America Corp. last year, saying the lenders engaged in biased practices since at least 2004 by placing minority borrowers in mortgages they couldn’t afford and driving up the number of foreclosures in their neighborhoods.
USPIRG Comments on legislative proposals to limit the CFPB
Edmund Mierzwinski, U.S. PIRG Consumer Program Director, testified at a hearing entitled “Legislative Proposals to Improve Transparency and Accountability at the CFPB” on Wednesday, May 21, 2014. The testimony was before the Subcommittee on Financial Institutions and Consumer Credit House Committee on Financial Services He said, in part:
After careful review we see no need for any of these 11 proposals before the committee to be considered any further. We urge
their rejection. None are necessary to protect consumers; none provide any necessary oversight function. Some roll back
important authorities of the CFPB, especially its authority to ban or regulate the egregious practice of forced
arbitration, a growing practice which has immunized corporate wrongdoing by making it impossible for
consumers to obtain redress for harms. Others will subject the bureau to enormous regulatory burden and possible
litigation risk, which will concomitantly increase the cost of government.
Further, these bills generally impose heightened requirements that are unique to the bureau, rather than imposing
them all equally on all financial regulators. Instead of enacting these bills, we would urge the committee to more
carefully review and credit the CFPB for its many successes. For example, the CFPB has recovered $1.5 billion
for consumers in unfair credit card add-on fees and, working with other regulators, it has recovered an addition $2
billion for consumers based on mortgage market and other unfair practices. It has protected veterans from forprofit
trade school scams and created a variety of tools for consumers, from students to older Americans, to help
themselves avoid financial pitfalls.
Yet if these bills, and the already-House-passed HR 3193, the “Consumer Financial Freedom and Washington
Accountability Act” rolling back the CFPB’s independence and funding in a variety of ways, were to become law,
financial markets could return to the abysmal conditions consumer faced prior to the 2008 financial collapse that
led to a lingering recession that harmed consumers, communities and responsible businesses.
The DC Cunsumer Rights Coalition supports the US PIRG position, and has signed onto it.
For the testimony see http://financialservices.house.gov/uploadedfiles/hhrg-113-ba15-wstate-emierzwinski-20140521.pdf
Edmund Mierzwinski, U.S. PIRG Consumer Program Director, testified at a hearing entitled “Legislative Proposals to Improve Transparency and Accountability at the CFPB” on Wednesday, May 21, 2014. The testimony was before the Subcommittee on Financial Institutions and Consumer Credit House Committee on Financial Services He said, in part:
After careful review we see no need for any of these 11 proposals before the committee to be considered any further. We urge
their rejection. None are necessary to protect consumers; none provide any necessary oversight function. Some roll back
important authorities of the CFPB, especially its authority to ban or regulate the egregious practice of forced
arbitration, a growing practice which has immunized corporate wrongdoing by making it impossible for
consumers to obtain redress for harms. Others will subject the bureau to enormous regulatory burden and possible
litigation risk, which will concomitantly increase the cost of government.
Further, these bills generally impose heightened requirements that are unique to the bureau, rather than imposing
them all equally on all financial regulators. Instead of enacting these bills, we would urge the committee to more
carefully review and credit the CFPB for its many successes. For example, the CFPB has recovered $1.5 billion
for consumers in unfair credit card add-on fees and, working with other regulators, it has recovered an addition $2
billion for consumers based on mortgage market and other unfair practices. It has protected veterans from forprofit
trade school scams and created a variety of tools for consumers, from students to older Americans, to help
themselves avoid financial pitfalls.
Yet if these bills, and the already-House-passed HR 3193, the “Consumer Financial Freedom and Washington
Accountability Act” rolling back the CFPB’s independence and funding in a variety of ways, were to become law,
financial markets could return to the abysmal conditions consumer faced prior to the 2008 financial collapse that
led to a lingering recession that harmed consumers, communities and responsible businesses.
The DC Cunsumer Rights Coalition supports the US PIRG position, and has signed onto it.
For the testimony see http://financialservices.house.gov/uploadedfiles/hhrg-113-ba15-wstate-emierzwinski-20140521.pdf
The Washington Post opinion on Court dismissal of the DC action
In one person's opinion (DAR) the key errors of the WashingtonPost editorial are to incorrectly explain what the Court says about the merits (the Court does not decide the merits), and to misunderstand the relevant antitrust economics. If the dominant supplier in a concentrated market uses exclusive dealing to prevent retailers from using alternate suppliers, then a price-raising effect is likely.
Whether that is happening for gasoline distribution in D.C. is a fact question, not a matter of opinion. See
http://www.washingtonpost.com/opinions/the-districts-crusade-against-gas-station-magnate-joe-mamo-is-running-on-fumes/2014/05/23/962f6b6a-e297-11e3-810f-764fe508b82d_story.html
In one person's opinion (DAR) the key errors of the WashingtonPost editorial are to incorrectly explain what the Court says about the merits (the Court does not decide the merits), and to misunderstand the relevant antitrust economics. If the dominant supplier in a concentrated market uses exclusive dealing to prevent retailers from using alternate suppliers, then a price-raising effect is likely.
Whether that is happening for gasoline distribution in D.C. is a fact question, not a matter of opinion. See
http://www.washingtonpost.com/opinions/the-districts-crusade-against-gas-station-magnate-joe-mamo-is-running-on-fumes/2014/05/23/962f6b6a-e297-11e3-810f-764fe508b82d_story.html
Court dismisses DC action against ExxonMobil et al. by Order dated 5-6-2014
The DC action against ExxonMobil and local jobbers was dismissed by the Court because of lack of AG standing under the local statute relied on in the Complaint: “Until such time as the [DC] Council changes its position, the Court finds that the Attorney General has no standing to bring actions under that Subchapter of III of the RSSA, more specifically, D.C. Code § 36-303.01(a)(6) and (a)(11)."
For the opinion and order
See http://www.scribd.com/doc/222728637/DC-Exxon-5-6-2014-Order-Granting-MTDs-1
The DC action against ExxonMobil and local jobbers was dismissed by the Court because of lack of AG standing under the local statute relied on in the Complaint: “Until such time as the [DC] Council changes its position, the Court finds that the Attorney General has no standing to bring actions under that Subchapter of III of the RSSA, more specifically, D.C. Code § 36-303.01(a)(6) and (a)(11)."
For the opinion and order
See http://www.scribd.com/doc/222728637/DC-Exxon-5-6-2014-Order-Granting-MTDs-1
The Federal Reserve proposes further bank merger limits
The Fed proposal would limit concentration among big banks by barring mergers resulting in any one institution holding liabilities equal to 10 percent or more of the debts held by all bank holding companies combined.
The rule, under Section 622 of the Dodd-Frank Act, would complement existing regulations that limit concentration of federally insured deposits within any one financial institution: “The concentration limit supplements the nationwide deposit cap in federal banking law by imposing an additional limit on liabilities of financial companies.”
All federally insured banks, bank holding companies, savings and loan holding companies, foreign banking organizations and nonbank financial firms designated as systemically important financial institutions by the Financial Stability Oversight Council would be subject to the regulation.
There is no public indication that the proposal on industry concentration reflects advice or other participation by the Antitrust Division of USDOJ. Arguably Antitrust Division expertise would be helpful in developing effective regulation of bank concentration.
See http://www.federalreserve.gov/newsevents/press/bcreg/20140508a.htm
Posted by DAR 5/9/2014
The Fed proposal would limit concentration among big banks by barring mergers resulting in any one institution holding liabilities equal to 10 percent or more of the debts held by all bank holding companies combined.
The rule, under Section 622 of the Dodd-Frank Act, would complement existing regulations that limit concentration of federally insured deposits within any one financial institution: “The concentration limit supplements the nationwide deposit cap in federal banking law by imposing an additional limit on liabilities of financial companies.”
All federally insured banks, bank holding companies, savings and loan holding companies, foreign banking organizations and nonbank financial firms designated as systemically important financial institutions by the Financial Stability Oversight Council would be subject to the regulation.
There is no public indication that the proposal on industry concentration reflects advice or other participation by the Antitrust Division of USDOJ. Arguably Antitrust Division expertise would be helpful in developing effective regulation of bank concentration.
See http://www.federalreserve.gov/newsevents/press/bcreg/20140508a.htm
Posted by DAR 5/9/2014
DC ConsumerRightsCoalition.org has filed comments with the Federal Trade Commission
Re: Public Workshop “Examining Health Care Competition”
See http://www.ftc.gov/system/files/documents/public_comments/2014/03/00020-88806.pdf for the text of our comments
Video for the FTC workshop 3-21 and 3-22 2014 is at
http://www.ftc.gov/news-events/events-calendar/2014/03/examining-health-care-competition
The health care technology segment was late on 3-21.
Re: Public Workshop “Examining Health Care Competition”
See http://www.ftc.gov/system/files/documents/public_comments/2014/03/00020-88806.pdf for the text of our comments
Video for the FTC workshop 3-21 and 3-22 2014 is at
http://www.ftc.gov/news-events/events-calendar/2014/03/examining-health-care-competition
The health care technology segment was late on 3-21.
No more "too big to jail" banks?
The New York Times reports: Federal prosecutors are nearing criminal charges against some of the world’s biggest banks. That could produce the first guilty plea from a major bank in more than two decades. The times cautions that effective prosecution is obstructed by regulatory inefficiency:
"American and European banks are divided among a patchwork of agencies in New York and Washington — the path to filing charges could still be difficult."
Read the whole story here.
The New York Times reports: Federal prosecutors are nearing criminal charges against some of the world’s biggest banks. That could produce the first guilty plea from a major bank in more than two decades. The times cautions that effective prosecution is obstructed by regulatory inefficiency:
"American and European banks are divided among a patchwork of agencies in New York and Washington — the path to filing charges could still be difficult."
Read the whole story here.
DC Bar Section will present program on recent changes in local mortgage foreclosure procedures
The Antitrust and Consumer Law Section od the DC Bar will present a program: “The Changing Landscape of Foreclosures in the District of Columbia” on June 13, 2014 at 12:00 at the D.C. Bar office located at 1101 K St. NW, Washington, D.C. 20005. The program will cover important changes to the court process, including greater court involvement. The program will also provide updates on the Department of Insurance, Securities and Banking ("DISB") mediations program for mortgage foreclosures, and discuss the ways in which new federal mortgage servicing rules impact local foreclosure proceedings.
The Antitrust and Consumer Law Section od the DC Bar will present a program: “The Changing Landscape of Foreclosures in the District of Columbia” on June 13, 2014 at 12:00 at the D.C. Bar office located at 1101 K St. NW, Washington, D.C. 20005. The program will cover important changes to the court process, including greater court involvement. The program will also provide updates on the Department of Insurance, Securities and Banking ("DISB") mediations program for mortgage foreclosures, and discuss the ways in which new federal mortgage servicing rules impact local foreclosure proceedings.
Arizona joins States requiring price transparency for hospitals
The Arizona Legislature passed a law last year requiring hospitals, effective Jan. 1, 2014, to publish the prices self-paying patients pay for the 50 most common inpatient and outpatient services. Many states have considered or enacted legislation requiring hospitals to provide patients with more information on the prices of common procedures. Last year, the CMS released data on hospital charges for the 100 most common inpatient and outpatient services, revealing wide variations even in the same market. Arizona's experience that self-pay patients do use posted prices for comparison shopping.
The Arizona Legislature passed a law last year requiring hospitals, effective Jan. 1, 2014, to publish the prices self-paying patients pay for the 50 most common inpatient and outpatient services. Many states have considered or enacted legislation requiring hospitals to provide patients with more information on the prices of common procedures. Last year, the CMS released data on hospital charges for the 100 most common inpatient and outpatient services, revealing wide variations even in the same market. Arizona's experience that self-pay patients do use posted prices for comparison shopping.
Stronger State consumer protection rules in debt collection cases? NY Judge says yes.
New York’s chief judge on Wednesday proposed new filing requirements for debt collectors that he says will bring more fairness to state consumer cases and put them in line with due process. Judge Jonathan Lippman said many debtors discover they’ve been sued only after their bank accounts are frozen or their wages garnished. Most of them have no lawyer and are confused about old, often resold, debts, he said, and many never appear in court. Others are never served notice of a lawsuit and end up losing the case by default, he said.
“It’s very much analogous to mortgage foreclosures in our minds. It’s not fair. It doesn’t comport with due process,” Lippman said, a reference to circumstances that prompted New York court administrators to establish similar requirements in foreclosure cases as a way to protect homeowners who fall behind on mortgage payments.
See http://www.oneidadispatch.com/general-news/20140430/new-york-state-chief-judge-jonathan-lippman-aims-to-bring-fairness-to-consumer-debt-cases
New York’s chief judge on Wednesday proposed new filing requirements for debt collectors that he says will bring more fairness to state consumer cases and put them in line with due process. Judge Jonathan Lippman said many debtors discover they’ve been sued only after their bank accounts are frozen or their wages garnished. Most of them have no lawyer and are confused about old, often resold, debts, he said, and many never appear in court. Others are never served notice of a lawsuit and end up losing the case by default, he said.
“It’s very much analogous to mortgage foreclosures in our minds. It’s not fair. It doesn’t comport with due process,” Lippman said, a reference to circumstances that prompted New York court administrators to establish similar requirements in foreclosure cases as a way to protect homeowners who fall behind on mortgage payments.
See http://www.oneidadispatch.com/general-news/20140430/new-york-state-chief-judge-jonathan-lippman-aims-to-bring-fairness-to-consumer-debt-cases
Bloomberg reports on Excelon-Pepco merger
“This will mitigate Exelon’s exposure to wholesale merchant power markets,” Paul Patterson, a New-York based utility analyst for Glenrock Associates LLC, said today in a phone interview. “Regulated properties such as Pepco are attractive and there are not that many that are available.”
According to Bloomberg, Pepco had been viewed as a likely target because its regulated utilities have earned less than their allowed return on investment, Kit Konolige, an analyst with BGC Financial LP, wrote in an April 29 research note. In addition to Washington, the company operates utilities in Delaware, Maryland and New Jersey, according to its website.
DAR Comment: Could the idea of Pepco as a target because of low regulated rates also mean that Pepco customers are targeted to pay more?
See http://www.bloomberg.com/news/2014-04-30/exelon-said-to-agree-to-acquire-pepco-for-more-than-5-4-billion.html
“This will mitigate Exelon’s exposure to wholesale merchant power markets,” Paul Patterson, a New-York based utility analyst for Glenrock Associates LLC, said today in a phone interview. “Regulated properties such as Pepco are attractive and there are not that many that are available.”
According to Bloomberg, Pepco had been viewed as a likely target because its regulated utilities have earned less than their allowed return on investment, Kit Konolige, an analyst with BGC Financial LP, wrote in an April 29 research note. In addition to Washington, the company operates utilities in Delaware, Maryland and New Jersey, according to its website.
DAR Comment: Could the idea of Pepco as a target because of low regulated rates also mean that Pepco customers are targeted to pay more?
See http://www.bloomberg.com/news/2014-04-30/exelon-said-to-agree-to-acquire-pepco-for-more-than-5-4-billion.html
Corporate lobbyists focus on State consumer protection laws
Businessweek reports on a DC conference of corporate advocates who argue that the plaintiffs’ bar has exploited the state consumer protection laws to bring class-action suits on behalf of hundreds or thousands of putative victims whose actual injuries range from slight to nonexistent.
See http://www.businessweek.com/articles/2014-04-24/business-gears-up-for-assault-on-consumer-protection-laws
Businessweek reports on a DC conference of corporate advocates who argue that the plaintiffs’ bar has exploited the state consumer protection laws to bring class-action suits on behalf of hundreds or thousands of putative victims whose actual injuries range from slight to nonexistent.
See http://www.businessweek.com/articles/2014-04-24/business-gears-up-for-assault-on-consumer-protection-laws
Specialty Hospital of Washington could be forced into bankruptcy by creditors
Mike DeBonis of the Washington Post reports that creditors hope to force two D.C. hospitals into bankruptcy, threatening the city’s only facilities dedicated to the long-term care of those suffering from serious and complex maladies. Specialty Hospital of Washington operates two facilities in the District, the former Rogers Memorial Hospital in Capitol Hill and the former Hadley Memorial Hospital in the Bellevue neighborhood of far Southwest. In addition to long-term care, both specialize in acute care and skilled nursing.
Should a judge grant the petition, other creditors include the District government, which says it is owed as much as $23 million in Medicaid reimbursements.
The parent company was recruited by the District government in 2007 to run the troubled Greater Southeast Community Hospital, which was then renamed United Medical Center. At the time there was controversy among DC politicians and others about whether the private operation of Southeast and other related health care facilities was financially viable, or would result in a failure that would be costly to DC taxpayers. Hindsight suggests that those who predicted failure and taxpayer cost have turned out to be right.
The Washington Post article is at http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0CCoQqQIwAA&url=http%3A%2F%2Fwww.washingtonpost.com%2Flocal%2Fdc-politics%2Fspecialty-hospital-of-washington-could-be-forced-into-bankruptcy-by-creditors%2F2014%2F04%2F26%2Fa49c0d7e-cbaf-11e3-95f7-7ecdde72d2ea_story.html&ei=97FfU4fwJ6rJsQSs6YDgBA&usg=AFQjCNHIdKzhDgCjFjLdYsmbKYGZZwyJ_Q&sig2=gAsYPZcnenWDShkOVwNqBw&bvm=bv.65397613,d.cWc
Mike DeBonis of the Washington Post reports that creditors hope to force two D.C. hospitals into bankruptcy, threatening the city’s only facilities dedicated to the long-term care of those suffering from serious and complex maladies. Specialty Hospital of Washington operates two facilities in the District, the former Rogers Memorial Hospital in Capitol Hill and the former Hadley Memorial Hospital in the Bellevue neighborhood of far Southwest. In addition to long-term care, both specialize in acute care and skilled nursing.
Should a judge grant the petition, other creditors include the District government, which says it is owed as much as $23 million in Medicaid reimbursements.
The parent company was recruited by the District government in 2007 to run the troubled Greater Southeast Community Hospital, which was then renamed United Medical Center. At the time there was controversy among DC politicians and others about whether the private operation of Southeast and other related health care facilities was financially viable, or would result in a failure that would be costly to DC taxpayers. Hindsight suggests that those who predicted failure and taxpayer cost have turned out to be right.
The Washington Post article is at http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0CCoQqQIwAA&url=http%3A%2F%2Fwww.washingtonpost.com%2Flocal%2Fdc-politics%2Fspecialty-hospital-of-washington-could-be-forced-into-bankruptcy-by-creditors%2F2014%2F04%2F26%2Fa49c0d7e-cbaf-11e3-95f7-7ecdde72d2ea_story.html&ei=97FfU4fwJ6rJsQSs6YDgBA&usg=AFQjCNHIdKzhDgCjFjLdYsmbKYGZZwyJ_Q&sig2=gAsYPZcnenWDShkOVwNqBw&bvm=bv.65397613,d.cWc
GAO calls scope of National Mortgage Foreclosure Settlement Agreement into question
The earlier decision by regulators to cut short a review of bank mortgage foreclosure practices left State and Federal regulators with limited information about actual harm to borrowers when they negotiated a $10 billion settlement as part of agreements with 15 banks, according to a draft of a report by the Government Accountability Office reviewed by The New York Times. The District of Columbia is a party to the court-approved agreement.
The Times says that the GAO report shows, for example, that an unidentified bank had an error rate of about 24 percent. This bank had completed far more reviews of borrowers’ files than the group of 11 banks involved the mortgage foreclosure settlement deal, suggesting that if other banks had looked over more of their records, additional errors might have been discovered and the scope of the court-approved settlement might have been broader.
Enforcement action under the court-approved settlement has been limited, but the NY Attorney General has taken recent action on mortgage foreclosure practices by Bank of America and Wells Fargo, as discussed in our earlier report.
The NY Times article is at http://dealbook.nytimes.com/2014/04/28/g-a-o-report-sees-deeper-bank-flaws-in-foreclosures/?_php=true&_&ref=business&utm_campaign=morning%20scan-apr%2029%202014&utm_medium=email&utm_source=newsletter&ET=americanbanker%3Ae2610993%3A613426a%3A&st=email&_r=0
The earlier decision by regulators to cut short a review of bank mortgage foreclosure practices left State and Federal regulators with limited information about actual harm to borrowers when they negotiated a $10 billion settlement as part of agreements with 15 banks, according to a draft of a report by the Government Accountability Office reviewed by The New York Times. The District of Columbia is a party to the court-approved agreement.
The Times says that the GAO report shows, for example, that an unidentified bank had an error rate of about 24 percent. This bank had completed far more reviews of borrowers’ files than the group of 11 banks involved the mortgage foreclosure settlement deal, suggesting that if other banks had looked over more of their records, additional errors might have been discovered and the scope of the court-approved settlement might have been broader.
Enforcement action under the court-approved settlement has been limited, but the NY Attorney General has taken recent action on mortgage foreclosure practices by Bank of America and Wells Fargo, as discussed in our earlier report.
The NY Times article is at http://dealbook.nytimes.com/2014/04/28/g-a-o-report-sees-deeper-bank-flaws-in-foreclosures/?_php=true&_&ref=business&utm_campaign=morning%20scan-apr%2029%202014&utm_medium=email&utm_source=newsletter&ET=americanbanker%3Ae2610993%3A613426a%3A&st=email&_r=0
Netflix opposes Comcast/Time-Warner merger
Netflix has bucked Comcast. The NY Times reports that
Netflix has become the first media company to publicly oppose the Comcast/Time-Warner merger, several months after it agreed to pay Comcast for a more direct connection to the cable operator’s Internet backbone. Reed Hastings, the chief executive of Netflix, criticized the state of American broadband Internet and argued that the arrangement his own company agreed to violated the spirit of net neutrality. See http://www.nytimes.com/2014/04/22/business/media/netflix-says-it-opposes-comcasts-merger-bid.html?ref=business
Netflix has bucked Comcast. The NY Times reports that
Netflix has become the first media company to publicly oppose the Comcast/Time-Warner merger, several months after it agreed to pay Comcast for a more direct connection to the cable operator’s Internet backbone. Reed Hastings, the chief executive of Netflix, criticized the state of American broadband Internet and argued that the arrangement his own company agreed to violated the spirit of net neutrality. See http://www.nytimes.com/2014/04/22/business/media/netflix-says-it-opposes-comcasts-merger-bid.html?ref=business
A G.M. practice of avoiding recalls of defective cars?
The NY Times reports that G.M. has repeatedly used letters, called technical service bulletins, to dealers and sometimes to car owners, as stopgap safety measures instead of ordering timely recalls. Auto safety advocates have argued for many years that auto makers use money-saving but consumer-hostile techniques to ameliorate manufacturing defects without resorting to recalls. In a 1987 report the Center for Auto Safety created national headlines by identifying 10 exemplary secret warranties covering 30 million vehicles and $3 billion in repair costs. Secret warranties are selective adjustment programs that are not widely publicized, and for consumers fall far short of recalls. See http://www.autosafety.org/secret-warranties Also http://www.nytimes.com/2014/04/20/business/sending-alerts-gm-delayed-recall-of-cars.html?hp
The NY Times reports that G.M. has repeatedly used letters, called technical service bulletins, to dealers and sometimes to car owners, as stopgap safety measures instead of ordering timely recalls. Auto safety advocates have argued for many years that auto makers use money-saving but consumer-hostile techniques to ameliorate manufacturing defects without resorting to recalls. In a 1987 report the Center for Auto Safety created national headlines by identifying 10 exemplary secret warranties covering 30 million vehicles and $3 billion in repair costs. Secret warranties are selective adjustment programs that are not widely publicized, and for consumers fall far short of recalls. See http://www.autosafety.org/secret-warranties Also http://www.nytimes.com/2014/04/20/business/sending-alerts-gm-delayed-recall-of-cars.html?hp
Justice Roberts and the power of the Iqbal doctrine against all plaintiffs
A number of commenters, including New York Professor Ruthann Robson, have discussed
the recent U.S. Supreme Court oral argument in Wood v. Moss, a case about free speech rights, and the focus of Justice Roberts on the Iqbal case. Iqbal is much discussed as an obstacle to plaintiff’s consumer and antitrust litigation. Comments by Justice Roberts in the Wood v. Moss argument suggests a very high obstacle to plaintiffs – a merely “obvious” alternative explanation of a defendant’s conduct at the pleading stage may put a plaintiff out of court. Justice Roberts said about Iqbal that the Defendant Government's alternative explanation in its motion to dismiss the complaint "doesn't have to be so compelling. . . . It simply has to be more likely, is the quote from Iqbal on 681, and it has to be an obvious alternative explanation. And that's enough, no matter what you've alleged.”
Posted by DAR
A number of commenters, including New York Professor Ruthann Robson, have discussed
the recent U.S. Supreme Court oral argument in Wood v. Moss, a case about free speech rights, and the focus of Justice Roberts on the Iqbal case. Iqbal is much discussed as an obstacle to plaintiff’s consumer and antitrust litigation. Comments by Justice Roberts in the Wood v. Moss argument suggests a very high obstacle to plaintiffs – a merely “obvious” alternative explanation of a defendant’s conduct at the pleading stage may put a plaintiff out of court. Justice Roberts said about Iqbal that the Defendant Government's alternative explanation in its motion to dismiss the complaint "doesn't have to be so compelling. . . . It simply has to be more likely, is the quote from Iqbal on 681, and it has to be an obvious alternative explanation. And that's enough, no matter what you've alleged.”
Posted by DAR
Connecticut AG challenges hospital-doctor tie-ups
Attorney General George Jepsen today released a report concerning so-called hospital "facility fees" and hospital acquisitions of independent physician practices. The Attorney General urged state lawmakers to approve pending legislation he proposed on these subjects to require improved notification and transparency. A facility fee is a charge levied by a hospital-acquired physician practice or a hospital that is purportedly intended to cover the overhead costs of the hospital. Such fees are in addition to the professional charges billed by the provider. Facility fees can be expensive, surprising and confusing for patients. That is particularly so when patients are charged the fees by previously independent physician practices from whom they received care in the past, but which had subsequently acquired by a hospital.
See http://www.ct.gov/ag/cwp/view.asp?Q=543412&A=2341
Attorney General George Jepsen today released a report concerning so-called hospital "facility fees" and hospital acquisitions of independent physician practices. The Attorney General urged state lawmakers to approve pending legislation he proposed on these subjects to require improved notification and transparency. A facility fee is a charge levied by a hospital-acquired physician practice or a hospital that is purportedly intended to cover the overhead costs of the hospital. Such fees are in addition to the professional charges billed by the provider. Facility fees can be expensive, surprising and confusing for patients. That is particularly so when patients are charged the fees by previously independent physician practices from whom they received care in the past, but which had subsequently acquired by a hospital.
See http://www.ct.gov/ag/cwp/view.asp?Q=543412&A=2341
NY AG pursues high-frequency trading issues
A report by The Wall Street Journal named Jump Trading LLC, Chopper Trading LLC and Tower Research Capital LLC as firms on the receiving end of the NY AG's investigation of high frequency trading, among others. The question is whether those firms have an unfair advantage in the market. The USDOJ is also investigating.
A report by The Wall Street Journal named Jump Trading LLC, Chopper Trading LLC and Tower Research Capital LLC as firms on the receiving end of the NY AG's investigation of high frequency trading, among others. The question is whether those firms have an unfair advantage in the market. The USDOJ is also investigating.
DC Taxicab Commission may be abolished
Ward 3 Council member and GW Law School professor Mary Cheh proposed sweeping legislation Tuesday, April 8, to overhaul the District’s transportation system.
The bill would abolish the D.C. Taxicab Commission and take responsibility for public transit, bicycles and the upcoming H Street streetcar line away from the D.C. Department of Transportation.
The measure would create two new offices: the Department of Parking Management and the District Transit Authority.
Last summer, Cheh co-sponsored a bill with Foggy Bottom’s Council member Jack Evans that favored app-based car services like UberX, Lyft and SideCar in the District and limited Taxi Commission regulations on the companies that some viewed as exclusionary.
See http://blogs.gwhatchet.com/newsroom/2014/04/08/council-member-mary-cheh-introduces-bill-to-overhaul-d-c-transportation-system/
Posted by DR
Ward 3 Council member and GW Law School professor Mary Cheh proposed sweeping legislation Tuesday, April 8, to overhaul the District’s transportation system.
The bill would abolish the D.C. Taxicab Commission and take responsibility for public transit, bicycles and the upcoming H Street streetcar line away from the D.C. Department of Transportation.
The measure would create two new offices: the Department of Parking Management and the District Transit Authority.
Last summer, Cheh co-sponsored a bill with Foggy Bottom’s Council member Jack Evans that favored app-based car services like UberX, Lyft and SideCar in the District and limited Taxi Commission regulations on the companies that some viewed as exclusionary.
See http://blogs.gwhatchet.com/newsroom/2014/04/08/council-member-mary-cheh-introduces-bill-to-overhaul-d-c-transportation-system/
Posted by DR
Banks required to hold greater capital under new "leverage ratio" rules
U.S. regulators have now imposed another curb on risk taking at the largest U.S. banks Tuesday as part of a continuing push to force big banks to gird themselves against periods of market stress. Under the new "leverage ratio," adopted by the Federal Deposit Insurance Corp. and the Federal Reserve, the eight biggest U.S. firms would have to double the amount of capital they hold as protection against every loan, investment, building, security and other asset on their books—not just the risky ones.
See article at http://online.wsj.com/news/articles/SB10001424052702304819004579487731880081844?mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052702304819004579487731880081844.html
U.S. regulators have now imposed another curb on risk taking at the largest U.S. banks Tuesday as part of a continuing push to force big banks to gird themselves against periods of market stress. Under the new "leverage ratio," adopted by the Federal Deposit Insurance Corp. and the Federal Reserve, the eight biggest U.S. firms would have to double the amount of capital they hold as protection against every loan, investment, building, security and other asset on their books—not just the risky ones.
See article at http://online.wsj.com/news/articles/SB10001424052702304819004579487731880081844?mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052702304819004579487731880081844.html
Illinoi Attorney General Lisa Madigan sued four online payday lenders and one load lead generator, alleging the out-of-state companies offered expensive, predatory loans to Illinois residents and aren't licensed to do business in the state.
One of the complaints is here:
http://www.scribd.com/doc/217271164/VIP-PDL-Services-LLC-Illinois-Illinoi-Attorney-General-Lisa-Madigan
One of the complaints is here:
http://www.scribd.com/doc/217271164/VIP-PDL-Services-LLC-Illinois-Illinoi-Attorney-General-Lisa-Madigan
The CFPB and payday lending
On March 25, 2014, the Consumer Financial Protection Bureau (CFPB) released its second report on payday lending. This report followed a white paper on payday lending and deposit advance products that the CFPB issued in April 2013.
The report, which the CFPB styles as a “Data Point,” presents an analysis of more than twelve million storefront payday loans that payday lenders made in 2011 and 2012. The report focuses on the prevalence of consumers’ rolling over and renewing payday loans during a twelve-month period.
See http://www.consumerfinance.gov/newsroom/director-richard-cordray-remarks-at-the-payday-field-hearing/
On March 25, 2014, the Consumer Financial Protection Bureau (CFPB) released its second report on payday lending. This report followed a white paper on payday lending and deposit advance products that the CFPB issued in April 2013.
The report, which the CFPB styles as a “Data Point,” presents an analysis of more than twelve million storefront payday loans that payday lenders made in 2011 and 2012. The report focuses on the prevalence of consumers’ rolling over and renewing payday loans during a twelve-month period.
See http://www.consumerfinance.gov/newsroom/director-richard-cordray-remarks-at-the-payday-field-hearing/
Grunes and Stucke on the Comcast playbook to discourage a Government challenge to the TW merger
In their article about the proposed Comcast/Time-Warner merger (The Beneficent Monopolist, Competition Policy International, April 2014, SSRN: http://ssrn.com/abstract=2416565), Allen Grunes and Maurice Stucke say that Comcast will likely argue in support of the merger that (a) the broadband market is becoming more competitive because of Google Fiber’s entry in a number of markets, and because of competitive mobile broadband wireless offerings; (b) Netflix and traditional media companies have sufficient clout to negotiate with Comcast and the government should not intervene on their behalf; and (c) the “wide array of FCC and antitrust rules and conditions from the NBCUniversal transaction in place . . . more than adequately address any potential vertical foreclosure concerns in the area of video programming.”
The authors rebut these arguments, but along the way make some striking points about the pragmatics of a large company persuading the USDOJ about whether or not to sue. They write: “Comcast knows how to play the monopoly game, which, as Judge Richard Posner points out, involves not only a deadweight loss to society but also the wasteful use of resources by a monopolist to defend its monopoly. The playbook is captured and presented in detail in Susan Crawford’s book Captive Audience, which is worth reading. And Comcast executed the playbook almost flawlessly in connection with its earlier acquisition of NBCUniversal.”
Part of the monopoly playbook the authors describe is a strategy of discouraging complaints to the USDOJ: “Without a serious and sustained effort by at least one significant content company in opposition to the Comcast/TWC merger, the chances of it being blocked would appear slim. Why? Because one likely candidate theory of harm is that the merger increases Comcast’s buyer power and adversely affects content providers. If the ‘victims’ of this harm sit on the sidelines, or offer at most tepid opposition to the merger, then it will be harder for DOJ to enjoin the merger. Here we can see Comcast perhaps going one step further today than it did in its NBCUniversal playbook. In that merger, Comcast apparently made concessions to parties who were unhappy and complained to the DOJ or FCC. Network affiliates, independent producers, and others proved that the squeaky wheel gets the oil. This time around, Comcast would likely be inclined to a more proactive strategy. Don’t wait for complaints. Use a carrot and stick approach to lower the number and volume of complaints the agencies are likely to receive. A carrot: offer deals (sweetheart or otherwise) to likely would-be complainants. The stick Comcast need not publicize: companies that complain about Comcast’s behavior must resort to regulatory arbitration or judicial proceedings. That should serve as a warning.”
This is not a case-law based doctrinal discussion, but practical and frank insight by people who know about how a large company can throw its weight around to get its way in the world of antitrust enforcement. I believe that Grunes and Stucke raise important public policy questions as they discuss big firm "monopoly playbook" strategies that may discourage USDOJ action, and avoid a judicial weighing of the merits of a worrying merger.
Posted by Don Resnikoff
In their article about the proposed Comcast/Time-Warner merger (The Beneficent Monopolist, Competition Policy International, April 2014, SSRN: http://ssrn.com/abstract=2416565), Allen Grunes and Maurice Stucke say that Comcast will likely argue in support of the merger that (a) the broadband market is becoming more competitive because of Google Fiber’s entry in a number of markets, and because of competitive mobile broadband wireless offerings; (b) Netflix and traditional media companies have sufficient clout to negotiate with Comcast and the government should not intervene on their behalf; and (c) the “wide array of FCC and antitrust rules and conditions from the NBCUniversal transaction in place . . . more than adequately address any potential vertical foreclosure concerns in the area of video programming.”
The authors rebut these arguments, but along the way make some striking points about the pragmatics of a large company persuading the USDOJ about whether or not to sue. They write: “Comcast knows how to play the monopoly game, which, as Judge Richard Posner points out, involves not only a deadweight loss to society but also the wasteful use of resources by a monopolist to defend its monopoly. The playbook is captured and presented in detail in Susan Crawford’s book Captive Audience, which is worth reading. And Comcast executed the playbook almost flawlessly in connection with its earlier acquisition of NBCUniversal.”
Part of the monopoly playbook the authors describe is a strategy of discouraging complaints to the USDOJ: “Without a serious and sustained effort by at least one significant content company in opposition to the Comcast/TWC merger, the chances of it being blocked would appear slim. Why? Because one likely candidate theory of harm is that the merger increases Comcast’s buyer power and adversely affects content providers. If the ‘victims’ of this harm sit on the sidelines, or offer at most tepid opposition to the merger, then it will be harder for DOJ to enjoin the merger. Here we can see Comcast perhaps going one step further today than it did in its NBCUniversal playbook. In that merger, Comcast apparently made concessions to parties who were unhappy and complained to the DOJ or FCC. Network affiliates, independent producers, and others proved that the squeaky wheel gets the oil. This time around, Comcast would likely be inclined to a more proactive strategy. Don’t wait for complaints. Use a carrot and stick approach to lower the number and volume of complaints the agencies are likely to receive. A carrot: offer deals (sweetheart or otherwise) to likely would-be complainants. The stick Comcast need not publicize: companies that complain about Comcast’s behavior must resort to regulatory arbitration or judicial proceedings. That should serve as a warning.”
This is not a case-law based doctrinal discussion, but practical and frank insight by people who know about how a large company can throw its weight around to get its way in the world of antitrust enforcement. I believe that Grunes and Stucke raise important public policy questions as they discuss big firm "monopoly playbook" strategies that may discourage USDOJ action, and avoid a judicial weighing of the merits of a worrying merger.
Posted by Don Resnikoff
Federal regulation preempts state law on frequent flyer program
The U.S. Supreme Court has ruled that the Airline Deregulation Act preempts some state-law claims if they seek to expand a contract's obligations under a Delta frequent flier program.
See the opinion at http://www.scribd.com/doc/216103226/Supreme-Court-Frequent-Flyer-State-Premption
The U.S. Supreme Court has ruled that the Airline Deregulation Act preempts some state-law claims if they seek to expand a contract's obligations under a Delta frequent flier program.
See the opinion at http://www.scribd.com/doc/216103226/Supreme-Court-Frequent-Flyer-State-Premption
Mortgage related deficiency debt actions limited by proposed federal legislation
The House has passed HB 274 -- which reduces the time banks have to file a deficiency judgement under contract to two years but lets them retain the option of filing a civil suit for the deficiency for three years.
The Senate has passed SB 708 -- which limits the time for filing under contract to three years.
Since the two versions of the bill differ, they will have to go to conference, where members from the Senate and the House will meet to propose one bill that will go forward for a vote.
--from the Newsletter of the Maryland Consumer Rights Coalition
The House has passed HB 274 -- which reduces the time banks have to file a deficiency judgement under contract to two years but lets them retain the option of filing a civil suit for the deficiency for three years.
The Senate has passed SB 708 -- which limits the time for filing under contract to three years.
Since the two versions of the bill differ, they will have to go to conference, where members from the Senate and the House will meet to propose one bill that will go forward for a vote.
--from the Newsletter of the Maryland Consumer Rights Coalition
NY State may tie up Comcast/Time-Warner merger
The NY Post reports that New York Gov. Cuomo and other state leaders are planning to tie Comcast’s $45 billion acquisition of Time Warner Cable up in knots. Changes to state rules that would give cable regulators more power were put on the table during recent closed-door budget talks. In addition to giving New York state’s Public Service Commission (PSC) added bite, the rule change would put the onus on Comcast to prove that its mega-merger with TWC is in the public interest, the sources said.
The news report suggests the possibility of a disruptive role for states, although it is not clear such disruption will occur, even in New York.
See http://nypost.com/2014/03/19/cuomo-could-unplug-comcast-twc-merger/
The NY Post reports that New York Gov. Cuomo and other state leaders are planning to tie Comcast’s $45 billion acquisition of Time Warner Cable up in knots. Changes to state rules that would give cable regulators more power were put on the table during recent closed-door budget talks. In addition to giving New York state’s Public Service Commission (PSC) added bite, the rule change would put the onus on Comcast to prove that its mega-merger with TWC is in the public interest, the sources said.
The news report suggests the possibility of a disruptive role for states, although it is not clear such disruption will occur, even in New York.
See http://nypost.com/2014/03/19/cuomo-could-unplug-comcast-twc-merger/
Facebook litigation: FTC says CA privacy law not preempted by federal law
The FTC filed a brief weighing in on a key point for the case Batman v. Facebook (also known as Fraley v. Facebook). In it, the FTC says Facebook is wrong to say that, because the Children's Online Privacy and Protection Act (COPPA) only protects the privacy of children under 12, that the law could be interpreted to keep states from enforcing their own laws on teen privacy.
See article at http://www.washingtonpost.com/blogs/the-switch/wp/2014/03/21/facebook-says-states-shouldnt-regulate-online-teen-privacy-the-ftc-disagrees/
The FTC filed a brief weighing in on a key point for the case Batman v. Facebook (also known as Fraley v. Facebook). In it, the FTC says Facebook is wrong to say that, because the Children's Online Privacy and Protection Act (COPPA) only protects the privacy of children under 12, that the law could be interpreted to keep states from enforcing their own laws on teen privacy.
See article at http://www.washingtonpost.com/blogs/the-switch/wp/2014/03/21/facebook-says-states-shouldnt-regulate-online-teen-privacy-the-ftc-disagrees/
D.C. Circuit upholds debit-card transaction fee regs, reversing district court decision
Public Citizen Post 21 Mar 2014 02:32 PM PDT
The D.C. Circuit has upheld the Federal Reserve's debit-card transaction fee regulations, as explained in this article by Zoe Tillman. The circuit court's ruling reverses a decision of Judge Richard Leon of the U.S. District Court for the District of Columbia. Circuit Judge David Tatel explains the parameters of the ruling right up front:
Combining features of credit cards and checks, debit cards have become not just the most popular noncash payment method in the United States but also a source of substantial revenue for banks and companies like Visa and MasterCard that own and operate debit card networks. In 2009 alone, debit card holders used their cards 37.6 billion times, completing transactions worth over $1.4 trillion and yielding over $20 billion in fees for banks and networks. Concerned that these fees were excessive and that merchants, who pay the fees directly, and consumers, who pay a portion of the fees indirectly in the form of higher prices, lacked any ability to resist them, Congress included a provision in the Dodd-Frank financial reform act directing the Board of Governors of the Federal Reserve System to address this perceived market failure. In response, the Board issued regulations imposing a cap on the per-transaction fees banks receive and, in an effort to force networks to compete for merchants’ business, requiring that at least two networks owned and operated by different companies be able to process transactions on each debit card. Merchant groups challenged the regulations, seeking lower fees and even more network competition. The district court granted summary judgment to the merchants, concluding that the rules violate the statute’s plain language. We disagree. Applying traditional tools of statutory interpretation, we hold that the Board’s rules generally rest on reasonable constructions of the statute, though we remand one minor issue—the Board’s treatment of so-called transactions-monitoring costs—to the Board for further explanation.
Public Citizen Post 21 Mar 2014 02:32 PM PDT
The D.C. Circuit has upheld the Federal Reserve's debit-card transaction fee regulations, as explained in this article by Zoe Tillman. The circuit court's ruling reverses a decision of Judge Richard Leon of the U.S. District Court for the District of Columbia. Circuit Judge David Tatel explains the parameters of the ruling right up front:
Combining features of credit cards and checks, debit cards have become not just the most popular noncash payment method in the United States but also a source of substantial revenue for banks and companies like Visa and MasterCard that own and operate debit card networks. In 2009 alone, debit card holders used their cards 37.6 billion times, completing transactions worth over $1.4 trillion and yielding over $20 billion in fees for banks and networks. Concerned that these fees were excessive and that merchants, who pay the fees directly, and consumers, who pay a portion of the fees indirectly in the form of higher prices, lacked any ability to resist them, Congress included a provision in the Dodd-Frank financial reform act directing the Board of Governors of the Federal Reserve System to address this perceived market failure. In response, the Board issued regulations imposing a cap on the per-transaction fees banks receive and, in an effort to force networks to compete for merchants’ business, requiring that at least two networks owned and operated by different companies be able to process transactions on each debit card. Merchant groups challenged the regulations, seeking lower fees and even more network competition. The district court granted summary judgment to the merchants, concluding that the rules violate the statute’s plain language. We disagree. Applying traditional tools of statutory interpretation, we hold that the Board’s rules generally rest on reasonable constructions of the statute, though we remand one minor issue—the Board’s treatment of so-called transactions-monitoring costs—to the Board for further explanation.
D.C. judge expands lawsuit filed by homeless families
A D.C. Superior Court judge has ruled that all homeless families that have
been staying in a makeshift shelter on frigid winter nights can join in a
lawsuit alleging that the city’s emergency housing is inadequate. Judge
Robert D. Okun, siding with four families that filed the initial complaint,
expanded the suit into a class action to include all families residing in the
Benning Park Recreation Center, at 5100 Southern Ave. SE, as well as any others
that might be sent there during a hypothermia alert.
Full article at http://www.washingtonpost.com/local/crime/dc-judge-expands-lawsuit-filed-by-homeless-families/2014/03/20/9b9e117e-b04b-11e3-9627-c65021d6d572_story.html?hpid=z3
A D.C. Superior Court judge has ruled that all homeless families that have
been staying in a makeshift shelter on frigid winter nights can join in a
lawsuit alleging that the city’s emergency housing is inadequate. Judge
Robert D. Okun, siding with four families that filed the initial complaint,
expanded the suit into a class action to include all families residing in the
Benning Park Recreation Center, at 5100 Southern Ave. SE, as well as any others
that might be sent there during a hypothermia alert.
Full article at http://www.washingtonpost.com/local/crime/dc-judge-expands-lawsuit-filed-by-homeless-families/2014/03/20/9b9e117e-b04b-11e3-9627-c65021d6d572_story.html?hpid=z3
States join USDOJ in investigating Comcast merger broadband issues
According to Bloomberg, some States will join the Department of Justice in the antitrust review of the proposed merger between Time Warner Cable and Comcast. According to a statement from the Florida state attorney general’s office, Florida is part of a group of States reviewing the deal. State AGs from Indiana and Pennsylvania are reportedly also examining the transaction, presumably in coordination with other States. Reports also suggest that a main focus of investigation concerns broadband internet service aspects of the merger.
According to Bloomberg, some States will join the Department of Justice in the antitrust review of the proposed merger between Time Warner Cable and Comcast. According to a statement from the Florida state attorney general’s office, Florida is part of a group of States reviewing the deal. State AGs from Indiana and Pennsylvania are reportedly also examining the transaction, presumably in coordination with other States. Reports also suggest that a main focus of investigation concerns broadband internet service aspects of the merger.
DC Council likely to reform tax lien home foreclosure procedures
The Washington Post reports that legislation headed to the D.C. Council this week would deliver some of the strongest protections in the nation for distressed homeowners who have fallen behind on their taxes, including measures to stop private investors from taking homes through foreclosure over small tax debts. The proposal would overhaul the city’s controversial tax lien program, which for years allowed investors to buy liens on delinquent properties and foreclose when owners couldn’t repay their debts, taking all the equity. See http://www.washingtonpost.com/investigations/groundbreaking-protections-proposed-for-dc-homeowners-behind-on-taxes/2014/03/18/b527a5b0-aebb-11e3-9627-c65021d6d572_story.html
Stories in the Washington Post publicized problems with current tax lien foreclosure procedures, and seems to have precipitated reform, but voluntary not-for-profit groups have played a major role that preceded Washington Post involvement. They include AT Home, Legal Aid, AARP Counsel for the Elderly, The DC Bar Antitrust and Consumer Section. The DC Consumer Rights Coalition has supported the reform efforts.
The Washington Post reports that legislation headed to the D.C. Council this week would deliver some of the strongest protections in the nation for distressed homeowners who have fallen behind on their taxes, including measures to stop private investors from taking homes through foreclosure over small tax debts. The proposal would overhaul the city’s controversial tax lien program, which for years allowed investors to buy liens on delinquent properties and foreclose when owners couldn’t repay their debts, taking all the equity. See http://www.washingtonpost.com/investigations/groundbreaking-protections-proposed-for-dc-homeowners-behind-on-taxes/2014/03/18/b527a5b0-aebb-11e3-9627-c65021d6d572_story.html
Stories in the Washington Post publicized problems with current tax lien foreclosure procedures, and seems to have precipitated reform, but voluntary not-for-profit groups have played a major role that preceded Washington Post involvement. They include AT Home, Legal Aid, AARP Counsel for the Elderly, The DC Bar Antitrust and Consumer Section. The DC Consumer Rights Coalition has supported the reform efforts.
Court says DC Mayor may fire judge linked to ethics/procurement allegations
The Washington Post reports that the District’s highest local court said Mayor Vincent C. Gray may proceed in trying to remove the city’s top administrative law judge from office, overruling a lower court’s decision that halted his efforts to fire the controversial but tenured agency head. The D.C. Court of Appeals also said Friday that the city’s ethics board should have the opportunity to rule on Mary Oates Walker’s request to dismiss a 19-count case against her, suggesting the matter is not yet ripe for litigation in the courts. A copy of the oder is at
The Washington Post reports that the District’s highest local court said Mayor Vincent C. Gray may proceed in trying to remove the city’s top administrative law judge from office, overruling a lower court’s decision that halted his efforts to fire the controversial but tenured agency head. The D.C. Court of Appeals also said Friday that the city’s ethics board should have the opportunity to rule on Mary Oates Walker’s request to dismiss a 19-count case against her, suggesting the matter is not yet ripe for litigation in the courts. A copy of the oder is at
Monitor for National Mortgage Settlement says banks have fulfilled their obligations
Joseph A. Smith, Jr., Monitor of the National Mortgage Settlement, has filed with the U.S. District Court for the District of Columbia, final crediting reports on Bank of America, Chase, Citi and Wells Fargo. These reports confirm that the banks have satisfied their consumer relief and refinancing obligations under the Settlement. The Monitor previously certified that the ResCap Parties fulfilled their consumer relief and refinancing requirements. Joseph Smith released the following statement in conjunction with the reports:
“The reports I filed today show that the banks have satisfied their consumer relief and refinancing obligations required by the National Mortgage Settlement. In total, the banks provided more than $50 billion of gross relief, which translates into more than $20 billion in credited relief under the Settlement. More than 600,000 families received some form of relief."
For more on the reports, including copies, see https://www.mortgageoversight.com/reports/final-crediting-report/
The Monitor's report does not seem to jibe with recent independent actions of the NY Attorney General. See the posting of the York State Attorney General at http://www.ag.ny.gov/press-release/ag-schneiderman-sue-wells-fargo-announces-groundbreaking-servicing-agreement-bank describing recent enforcement in New York related to the National Mortgage Settlement.
The enforcement history in New York State involves many tens of millions of dollars of settlement and other money spent on one-by-one consumer advocacy by not-for-profit advocacy groups. The NY AG's Office reports that those one-off advocacy efforts have been systematically frustrated by bank practices that violate the National Mortgage Settlement.
After documenting the repeated complaints of homeowners as collected by not-for-profit advocacy groups, the NY AG approached particular banks, including Bank of America and Wells Fargo, and requested redress for particular homeowner complainants, and reformed National Mortgage Settlement compliance protocols. Bank of America cooperated and signed a binding agreement to reform its practices and redress grievances. A copy is provided with the AG's posting. Wells Fargo declined to cooperate, so the AG filed the Complaint that is provided with the AG's posting.
The AG's agreement with Bank of America and the Complaint against Wells Fargo reflect extensive investigation by the not-for-profits and the NY AG's Office that reveals certain persistent problems. As previously described in these pages in more detail, among the frequently repeated compliance problems observed by the NY AG and NY not-for-profits are access issues: Housing Counselors and Legal Service Providers funded through the Attorney General’s Homeowner Protection Program (HOPP) found that they rarely have access to bank staff with decision making power, or staff who can solve problems with regard to loan modification applications. Unrepresented homeowners are likely to find access even more difficult.
Joseph A. Smith, Jr., Monitor of the National Mortgage Settlement, has filed with the U.S. District Court for the District of Columbia, final crediting reports on Bank of America, Chase, Citi and Wells Fargo. These reports confirm that the banks have satisfied their consumer relief and refinancing obligations under the Settlement. The Monitor previously certified that the ResCap Parties fulfilled their consumer relief and refinancing requirements. Joseph Smith released the following statement in conjunction with the reports:
“The reports I filed today show that the banks have satisfied their consumer relief and refinancing obligations required by the National Mortgage Settlement. In total, the banks provided more than $50 billion of gross relief, which translates into more than $20 billion in credited relief under the Settlement. More than 600,000 families received some form of relief."
For more on the reports, including copies, see https://www.mortgageoversight.com/reports/final-crediting-report/
The Monitor's report does not seem to jibe with recent independent actions of the NY Attorney General. See the posting of the York State Attorney General at http://www.ag.ny.gov/press-release/ag-schneiderman-sue-wells-fargo-announces-groundbreaking-servicing-agreement-bank describing recent enforcement in New York related to the National Mortgage Settlement.
The enforcement history in New York State involves many tens of millions of dollars of settlement and other money spent on one-by-one consumer advocacy by not-for-profit advocacy groups. The NY AG's Office reports that those one-off advocacy efforts have been systematically frustrated by bank practices that violate the National Mortgage Settlement.
After documenting the repeated complaints of homeowners as collected by not-for-profit advocacy groups, the NY AG approached particular banks, including Bank of America and Wells Fargo, and requested redress for particular homeowner complainants, and reformed National Mortgage Settlement compliance protocols. Bank of America cooperated and signed a binding agreement to reform its practices and redress grievances. A copy is provided with the AG's posting. Wells Fargo declined to cooperate, so the AG filed the Complaint that is provided with the AG's posting.
The AG's agreement with Bank of America and the Complaint against Wells Fargo reflect extensive investigation by the not-for-profits and the NY AG's Office that reveals certain persistent problems. As previously described in these pages in more detail, among the frequently repeated compliance problems observed by the NY AG and NY not-for-profits are access issues: Housing Counselors and Legal Service Providers funded through the Attorney General’s Homeowner Protection Program (HOPP) found that they rarely have access to bank staff with decision making power, or staff who can solve problems with regard to loan modification applications. Unrepresented homeowners are likely to find access even more difficult.
Aetna will not proceed with settlement concerning purposefully incorrect out-of-network reimbursement allegations -
(Reuters) Aetna Inc, the third largest U.S. health insurer, has said it would not proceed with a proposed $120 million settlement with healthcare providers and plan members over out-of-network reimbursements.
Aetna, which had agreed to settle in December 2012, said enough claimants had opted out to trigger a provision enabling it to cancel the deal.
Patients and doctors accused the Hartford, Connecticut based insurer of using databases provided by Ingenix, part of UnitedHealth Group Inc since renamed OptumInsight, of using purposefully incorrect payments data to systematically underpay claims involving services and supplies from out-of-network providers.
In 2008, then-New York attorney general, Andrew Cuomo, who is now the state's governor, opened a separate probe into insurer reimbursements that ended in settlements with many national insurers.
Full article: click here
Judge sets final short deadline for comments on American Air merger
Law 360 reports that U.S. District Judge Colleen Kollar-Kotelly, the Washington federal judge overseeing a settlement agreement for the merger of US Airways Group Inc. and American Airlines Inc., on 3-12-2014 gave commenters until April 3 to complain to her about the settlement. The settlement requires the airlines to shed $425 million worth of slots at two major airports, and would extinguish a suit brought by the U.S. Department of Justice in August.
The settlement is of interest to DC residents as slots at Reagan-Washington National are being sold to the highest bidders, which likely means that local routes to places like North Carolina are likely to be lost as a result of the merger. The position of USDOJ is that sale of slots to the highest bidder means the slots will get the most efficient possible use.
Posted by DAR 3-17-2014
Law 360 reports that U.S. District Judge Colleen Kollar-Kotelly, the Washington federal judge overseeing a settlement agreement for the merger of US Airways Group Inc. and American Airlines Inc., on 3-12-2014 gave commenters until April 3 to complain to her about the settlement. The settlement requires the airlines to shed $425 million worth of slots at two major airports, and would extinguish a suit brought by the U.S. Department of Justice in August.
The settlement is of interest to DC residents as slots at Reagan-Washington National are being sold to the highest bidders, which likely means that local routes to places like North Carolina are likely to be lost as a result of the merger. The position of USDOJ is that sale of slots to the highest bidder means the slots will get the most efficient possible use.
Posted by DAR 3-17-2014
Text of legislative proposal to wind down Fannie Mae and Freddie Mac
From housingwire.com:
The much-awaited legislative text of the bipartisan reform initiative of the government-sponsored enterprises, penned by Senate Banking Committee Chairman Tim Johnson (D-SD) and Ranking Member Mike Crapo (R-ID), is now available online. The announcement spurred considerable reaction in housing finance last week and the bill's actual text will likely be no less discussed. The legislative text can be found here, the section-by-section of the legislation can be found here, and a detailed summary can be found here. The primary role of the legislation is to wind down Fannie Mae and Freddie Mac and replace the GSEs with a few unique solutions.
From housingwire.com:
The much-awaited legislative text of the bipartisan reform initiative of the government-sponsored enterprises, penned by Senate Banking Committee Chairman Tim Johnson (D-SD) and Ranking Member Mike Crapo (R-ID), is now available online. The announcement spurred considerable reaction in housing finance last week and the bill's actual text will likely be no less discussed. The legislative text can be found here, the section-by-section of the legislation can be found here, and a detailed summary can be found here. The primary role of the legislation is to wind down Fannie Mae and Freddie Mac and replace the GSEs with a few unique solutions.
New healthcare provider network rules
From Modernhealthcare.com
The Obama administration issued sweeping new proposed rules (PDF) on 3-14-2014 affecting provider networks in insurance exchange plans, consumer access to quality information about plans, selection of plans in the small business exchanges, state rules on enrollment navigators, and reinsurance and medical loss ratios for insurers.
The CMS and HHS said the proposed rules and draft standardized notices that issuers would be required to use when renewing or discontinuing plans will help to ensure consumers understand the changes and choices in the individual and group market.
From Modernhealthcare.com
The Obama administration issued sweeping new proposed rules (PDF) on 3-14-2014 affecting provider networks in insurance exchange plans, consumer access to quality information about plans, selection of plans in the small business exchanges, state rules on enrollment navigators, and reinsurance and medical loss ratios for insurers.
The CMS and HHS said the proposed rules and draft standardized notices that issuers would be required to use when renewing or discontinuing plans will help to ensure consumers understand the changes and choices in the individual and group market.
Mortgage fraud: US Inspector General faults USDOJ reporting on investigative efforts on mortgage fraud
"The Department has stated publicly that mortgage fraud is a high priority, and the creation of the MFWG was an attempt by the Department to more effectively coordinate and oversee the effort to address mortgage fraud. Additionally, the USAOs’ and FBI’s participation on more than 90 local task forces and working groups appeared to further support the fight against mortgage fraud. However, we also found that the FBI did not rank mortgage fraud among its highest ranked priority white collar crimes. We further found that, despite receiving significant additional funding from Congress to pursue mortgage fraud cases, the FBI in adding new staff did not always use these new positions to exclusively investigate mortgage fraud. Moreover, when we attempted to assess the effectiveness of the Department’s efforts in pursuing mortgage fraud cases, we found that DOJ could not provide readily verifiable data related to its criminal and civil enforcement efforts. The DOJ’s release of significantly flawed information at a highly publicized press conference in October 2012 regarding the purported success of the FFETF’s and the DOJ’s recent mortgage fraud initiative reflects the lack of accurate data maintained by the Department regarding its mortgage fraud efforts, as well as the Department’s serious failure to adequately vet information that it was presenting to the public. Only days after the press conference the Department had serious concerns over the accuracy of the reported statistics, yet it was not until August 2013 when the Department informed the public that the October 2012 reported statistics were indeed flawed. Moreover, during those 10 months, the Department continued to issue press releases publicizing statistics it knew were seriously flawed. We believe the Department should have been more forthright at a much earlier date about this flawed information."
See http://www.justice.gov/oig/reports/2014/s1403.pdf
"The Department has stated publicly that mortgage fraud is a high priority, and the creation of the MFWG was an attempt by the Department to more effectively coordinate and oversee the effort to address mortgage fraud. Additionally, the USAOs’ and FBI’s participation on more than 90 local task forces and working groups appeared to further support the fight against mortgage fraud. However, we also found that the FBI did not rank mortgage fraud among its highest ranked priority white collar crimes. We further found that, despite receiving significant additional funding from Congress to pursue mortgage fraud cases, the FBI in adding new staff did not always use these new positions to exclusively investigate mortgage fraud. Moreover, when we attempted to assess the effectiveness of the Department’s efforts in pursuing mortgage fraud cases, we found that DOJ could not provide readily verifiable data related to its criminal and civil enforcement efforts. The DOJ’s release of significantly flawed information at a highly publicized press conference in October 2012 regarding the purported success of the FFETF’s and the DOJ’s recent mortgage fraud initiative reflects the lack of accurate data maintained by the Department regarding its mortgage fraud efforts, as well as the Department’s serious failure to adequately vet information that it was presenting to the public. Only days after the press conference the Department had serious concerns over the accuracy of the reported statistics, yet it was not until August 2013 when the Department informed the public that the October 2012 reported statistics were indeed flawed. Moreover, during those 10 months, the Department continued to issue press releases publicizing statistics it knew were seriously flawed. We believe the Department should have been more forthright at a much earlier date about this flawed information."
See http://www.justice.gov/oig/reports/2014/s1403.pdf
Tyler Patterson's backgrounder on North Carolina v. FTC
The United States Supreme Court has granted a petition for a writ of certiorari in North Carolina Board of Dental Examiners v. FTC, a case that raises very important questions of antitrust law, in particular the extent of the state action doctrine. North Carolina’s Dental Board requested Supreme Court review after a three-judge panel of the Fourth Circuit, in agreement with the FTC, held that the Dental Boards’ decision to limit teeth whitening services to dentists is not immune from federal antitrust scrutiny pursuant to the state action doctrine. The state action doctrine shields the actions of state actors (and state-sanctioned activity) from scrutiny under federal antitrust laws. The most important issue in state action immunity cases is the characterization of the actor, and this will be the central issue of North Carolina Dental. The FTC maintains that the Dental Board does not qualify for immunity from federal antitrust laws because it is comprised almost entirely of private dentists (making it a private actor), while the Board argues that it is entitled to such immunity because it is a state entity, and therefore a public actor. A quick look at the law of the doctrine is important at this juncture.
For the rest of Tyler's backgrounder see http://www.scribd.com/doc/210669463/North-Carolina-Board-of-Dental-Examiners-v-FTC-a-case-that-raises-very-important-questions-Tyler-Patterson
The United States Supreme Court has granted a petition for a writ of certiorari in North Carolina Board of Dental Examiners v. FTC, a case that raises very important questions of antitrust law, in particular the extent of the state action doctrine. North Carolina’s Dental Board requested Supreme Court review after a three-judge panel of the Fourth Circuit, in agreement with the FTC, held that the Dental Boards’ decision to limit teeth whitening services to dentists is not immune from federal antitrust scrutiny pursuant to the state action doctrine. The state action doctrine shields the actions of state actors (and state-sanctioned activity) from scrutiny under federal antitrust laws. The most important issue in state action immunity cases is the characterization of the actor, and this will be the central issue of North Carolina Dental. The FTC maintains that the Dental Board does not qualify for immunity from federal antitrust laws because it is comprised almost entirely of private dentists (making it a private actor), while the Board argues that it is entitled to such immunity because it is a state entity, and therefore a public actor. A quick look at the law of the doctrine is important at this juncture.
For the rest of Tyler's backgrounder see http://www.scribd.com/doc/210669463/North-Carolina-Board-of-Dental-Examiners-v-FTC-a-case-that-raises-very-important-questions-Tyler-Patterson
PNC subpoenaed about mortgage lending practices
PNC Financial disclosed in a regulatory filing that it has received subpoenas from prosecutors over certain mortgage-lending practices. The bank has also received subpoenas from the Justice Department and Consumer Financial Protection Bureau about the return rate for its payment-processor clients. Wall Street Journal, Bloomberg
PNC Financial disclosed in a regulatory filing that it has received subpoenas from prosecutors over certain mortgage-lending practices. The bank has also received subpoenas from the Justice Department and Consumer Financial Protection Bureau about the return rate for its payment-processor clients. Wall Street Journal, Bloomberg
ACA may push doctors into networks: NY Times
Only about 40 percent of family doctors and pediatricians remain independent, according to the American Medical Association — and many feel that harsh economic winds that were already pushing against them have been accelerated by the Affordable Care Act.
Being part of a hospital system relieves a doctor of the daily worries of running a medical business. A hospital system, with far more bargaining power than a private practice, negotiates with insurers on the doctor's behalf, pays his overhead and malpractice insurance, and handles much of the ever-expanding paperwork. It provides him with an X-ray machine and a costly system for keeping digital patient records, a move encouraged by the new law.
Full article: http://www.nytimes.com/2014/03/03/us/new-laws-demands-on-doctors-have-many-seeking-a-network.html?hp
Only about 40 percent of family doctors and pediatricians remain independent, according to the American Medical Association — and many feel that harsh economic winds that were already pushing against them have been accelerated by the Affordable Care Act.
Being part of a hospital system relieves a doctor of the daily worries of running a medical business. A hospital system, with far more bargaining power than a private practice, negotiates with insurers on the doctor's behalf, pays his overhead and malpractice insurance, and handles much of the ever-expanding paperwork. It provides him with an X-ray machine and a costly system for keeping digital patient records, a move encouraged by the new law.
Full article: http://www.nytimes.com/2014/03/03/us/new-laws-demands-on-doctors-have-many-seeking-a-network.html?hp
Debt-Buyer Lawsuits and Inaccurate Data
by Peter A. Holland
Advocates for lower-income families need to be aware that many debt buyers are suing the wrong people, and for the wrong amounts.
Over the past decade, banks have increasingly moved away from collecting defaulted credit card accounts in-house to a model of selling off bad accounts for pennies on the dollar to debt buyers. The accounts are sold “as is,” pursuant to contracts in which the banks state that the debts may not be owed, the amounts claimed may not be accurate, and documentation may be missing.
Despite the broad disclaimers, debt buyers then pursue these accounts and seek to collect 100 percent of the face value of debts for which they paid only 3 percent or 4 percent of face value— sometimes much less.
The people pursued are often the elderly, the poor, and low-income families with limited resources to hire a lawyer or take a day off from work to go to court and challenge dubious claims. Instead, they tend to either enter into a settlement or fail to appear in court. They are then subjected to a default judgment and subsequent wage garnishment (money taken out of their paychecks). The ripple effects of a court judgment and garnishment cannot be overstated: bounced checks, family stress, impaired credit scores, and potential obstacles to the victim’s ability to get a job or an apartment.
Full article, click below:
PDF version of this article
by Peter A. Holland
Advocates for lower-income families need to be aware that many debt buyers are suing the wrong people, and for the wrong amounts.
Over the past decade, banks have increasingly moved away from collecting defaulted credit card accounts in-house to a model of selling off bad accounts for pennies on the dollar to debt buyers. The accounts are sold “as is,” pursuant to contracts in which the banks state that the debts may not be owed, the amounts claimed may not be accurate, and documentation may be missing.
Despite the broad disclaimers, debt buyers then pursue these accounts and seek to collect 100 percent of the face value of debts for which they paid only 3 percent or 4 percent of face value— sometimes much less.
The people pursued are often the elderly, the poor, and low-income families with limited resources to hire a lawyer or take a day off from work to go to court and challenge dubious claims. Instead, they tend to either enter into a settlement or fail to appear in court. They are then subjected to a default judgment and subsequent wage garnishment (money taken out of their paychecks). The ripple effects of a court judgment and garnishment cannot be overstated: bounced checks, family stress, impaired credit scores, and potential obstacles to the victim’s ability to get a job or an apartment.
Full article, click below:
PDF version of this article
FDA announces new food labeling.
The information will now be presented in a way thought to be clearer, but some critics ask for more information, such as whether genetically modified ingredients are included. Others observe that the "buyer beware" notifications (sodium sulfate is an ingredient in your "fresh" packaged supermarket chicken parts) are not good enough -- unhealthy ingredients should be eliminated entirely.
posted by dar 3-1-2014
The information will now be presented in a way thought to be clearer, but some critics ask for more information, such as whether genetically modified ingredients are included. Others observe that the "buyer beware" notifications (sodium sulfate is an ingredient in your "fresh" packaged supermarket chicken parts) are not good enough -- unhealthy ingredients should be eliminated entirely.
posted by dar 3-1-2014
Regulators Shut Two Banks; Bank Closures Reach 5 In 2014
Federal Deposit Insurance Corporation or FDIC announced that Pennsylvania Department of Banking and Securities as well as Office of the Comptroller of the Currency closed Vantage Point Bank and Millennium Bank (MBVA: Quote) respectively.
Meanwhile, FDIC signed a purchase and assumption agreement with First Choice Bank to assume all of the deposits of the Vantage Point Bank. As of December 31, 2013, Vantage Point Bank had approximately $63.5 million in total assets and $62.5 million in total deposits and FDIC forecasts that the cost to the Deposit Insurance Fund will be $8.5 million.
First Choice Bank will pay the FDIC a premium of 1.5 percent to assume all of the deposits of Vantage Point Bank. Additionally, First Choice Bank agreed to purchase essentially all of the failed bank's assets.
Further, FDIC agreed with WashingtonFirst Bank to assume all of the deposits Millennium Bank. Millennium Bank had approximately $130.3 million in total assets and $121.7 million in total deposits, as of December 31, 2013. FDIC estimates that the cost to the Deposit Insurance Fund will be $7.7 million.
WashingtonFirst Bank as well is liable to pay the FDIC a premium of 1.00 percent to assume all of the deposits of Millennium Bank. In addition to assuming all of the deposits of the Millennium Bank, it agreed to purchase essentially all of the failed bank's assets.
From http://www.rttnews.com/2278633/regulators-shut-two-banks-bank-closures-reach-5-in-2014.aspx
Federal Deposit Insurance Corporation or FDIC announced that Pennsylvania Department of Banking and Securities as well as Office of the Comptroller of the Currency closed Vantage Point Bank and Millennium Bank (MBVA: Quote) respectively.
Meanwhile, FDIC signed a purchase and assumption agreement with First Choice Bank to assume all of the deposits of the Vantage Point Bank. As of December 31, 2013, Vantage Point Bank had approximately $63.5 million in total assets and $62.5 million in total deposits and FDIC forecasts that the cost to the Deposit Insurance Fund will be $8.5 million.
First Choice Bank will pay the FDIC a premium of 1.5 percent to assume all of the deposits of Vantage Point Bank. Additionally, First Choice Bank agreed to purchase essentially all of the failed bank's assets.
Further, FDIC agreed with WashingtonFirst Bank to assume all of the deposits Millennium Bank. Millennium Bank had approximately $130.3 million in total assets and $121.7 million in total deposits, as of December 31, 2013. FDIC estimates that the cost to the Deposit Insurance Fund will be $7.7 million.
WashingtonFirst Bank as well is liable to pay the FDIC a premium of 1.00 percent to assume all of the deposits of Millennium Bank. In addition to assuming all of the deposits of the Millennium Bank, it agreed to purchase essentially all of the failed bank's assets.
From http://www.rttnews.com/2278633/regulators-shut-two-banks-bank-closures-reach-5-in-2014.aspx
Big mortgage servicer Ocwen under scrutiny
William C. Erbey's company, Ocwen Financial, now services about one of every four subprime mortgages in the United States.
Regulators and investors, which actually own most of the loans Ocwen services, are also questioning the unusual arrangements between Ocwen and four other publicly traded companies where Mr. Erbey is chairman. The companies do things from buying up delinquent loans to renting out foreclosed houses.
In effect, Mr. Erbey’s enterprise has become a complex financial services group, but without the regulatory scrutiny that a bank must face.
See http://dealbook.nytimes.com/2014/02/27/mortgage-servicers-ties-raise-regulatory-concern/?ref=business
William C. Erbey's company, Ocwen Financial, now services about one of every four subprime mortgages in the United States.
Regulators and investors, which actually own most of the loans Ocwen services, are also questioning the unusual arrangements between Ocwen and four other publicly traded companies where Mr. Erbey is chairman. The companies do things from buying up delinquent loans to renting out foreclosed houses.
In effect, Mr. Erbey’s enterprise has become a complex financial services group, but without the regulatory scrutiny that a bank must face.
See http://dealbook.nytimes.com/2014/02/27/mortgage-servicers-ties-raise-regulatory-concern/?ref=business
Susan Crawford: Comcast's Time Warner Deal Is Bad for America
See why: http://www.bloombergview.com/articles/2014-02-13/comcast-s-time-warner-deal-is-bad-for-america
See why: http://www.bloombergview.com/articles/2014-02-13/comcast-s-time-warner-deal-is-bad-for-america
DCCRC urges CFPB action on debt collection
The Consumer Financial Protection Bureau has issued a Notice of Proposed Rulemaking on Debt Collection. The DC Consumer Rights Coalition endorses the views of US PIRG on the Notice, and joins in them:
We urge the CFPB to go forward with a strong regulation that reforms the activities of debt collectors. For example, the CFPB should:
- Give consumers the right to hold debt collectors accountable for multiple penalties when they make multiple mistakes.
- Protect consumers from unfair medical debt collection practices, especially since many of these debts may actually be owed by hospitals or health insurance companies but are the subject of consumer billing disputes.
- Require debt collectors, including debt buyers, to have much more substantial documentation that a debt is owed before they attempt to collect it.
- Require debt collectors to give fuller, clearer explanations of all consumer rights, including rights to dispute a debt and cease communication, whenever they contact consumers.
- Debt collectors often try to collect debts that are too old and therefore no longer collectible under certain state laws. This practice should also be banned.
Posted by DAR
The Consumer Financial Protection Bureau has issued a Notice of Proposed Rulemaking on Debt Collection. The DC Consumer Rights Coalition endorses the views of US PIRG on the Notice, and joins in them:
We urge the CFPB to go forward with a strong regulation that reforms the activities of debt collectors. For example, the CFPB should:
- Give consumers the right to hold debt collectors accountable for multiple penalties when they make multiple mistakes.
- Protect consumers from unfair medical debt collection practices, especially since many of these debts may actually be owed by hospitals or health insurance companies but are the subject of consumer billing disputes.
- Require debt collectors, including debt buyers, to have much more substantial documentation that a debt is owed before they attempt to collect it.
- Require debt collectors to give fuller, clearer explanations of all consumer rights, including rights to dispute a debt and cease communication, whenever they contact consumers.
- Debt collectors often try to collect debts that are too old and therefore no longer collectible under certain state laws. This practice should also be banned.
Posted by DAR
Illinois is second state to make patent trolling illegal
Tthe Oregon State Legislature has passed a bill that makes “patent trolling” an unlawful trade practice. Under the new law, the Oregon Department of Justice can take enforcement action against those who, without a good faith basis, accuse others of infringing on their patents. The accusations are usually paired with a demand for money, under the guise of a “licensing fee.” Oregon AG Rosenblum said. “I applaud the legislature for taking this action.”
Oregon is only the second state in the country to take legislative action to address patent trolling. Vermont enacted a similar provision in 2013.
Tthe Oregon State Legislature has passed a bill that makes “patent trolling” an unlawful trade practice. Under the new law, the Oregon Department of Justice can take enforcement action against those who, without a good faith basis, accuse others of infringing on their patents. The accusations are usually paired with a demand for money, under the guise of a “licensing fee.” Oregon AG Rosenblum said. “I applaud the legislature for taking this action.”
Oregon is only the second state in the country to take legislative action to address patent trolling. Vermont enacted a similar provision in 2013.
CFPB and four states sue ITT Tech about student loans
American Banker and others report that the Consumer Financial Protection Bureau and four state attorneys general have filed a civil lawsuit against ITT Educational Services, a large for-profit education provider. The subject was student loans.
American Banker and others report that the Consumer Financial Protection Bureau and four state attorneys general have filed a civil lawsuit against ITT Educational Services, a large for-profit education provider. The subject was student loans.
Pacific Legal Foundation challenges State Certificate of Need Laws
From the PLF "backgrounder:" "Sadly, throughout the United States, licensing laws and other restrictions often bar hardworking entrepreneurs from entering trades and professions, and many such laws do not protect the public from dangerous or criminal activities, but exist for the sole purpose of protecting established businesses against competition. The most egregious of these restrictions are “Certificate of Necessity” laws that essentially force new businesses to get permission from their own competitors before they can open their doors. Of the many “Certificate of Necessity” laws in the nation, the very worst is Nevada’s. That state imposes a long, tedious, and explicitly anti-competitive restriction against new
companies that want to offer moving services to residents of the Silver State. On October 3, 2012, Pacific Legal Foundation (PLF) filed a federal civil rights lawsuit on behalf of Reno businessman Maurice Underwood, challenging the constitutionality of that licensing scheme.
See http://blog.pacificlegal.org/wordpress/wp-content/uploads/2012/10/UnderwoodMediaBackgrounder.pdf
From the PLF "backgrounder:" "Sadly, throughout the United States, licensing laws and other restrictions often bar hardworking entrepreneurs from entering trades and professions, and many such laws do not protect the public from dangerous or criminal activities, but exist for the sole purpose of protecting established businesses against competition. The most egregious of these restrictions are “Certificate of Necessity” laws that essentially force new businesses to get permission from their own competitors before they can open their doors. Of the many “Certificate of Necessity” laws in the nation, the very worst is Nevada’s. That state imposes a long, tedious, and explicitly anti-competitive restriction against new
companies that want to offer moving services to residents of the Silver State. On October 3, 2012, Pacific Legal Foundation (PLF) filed a federal civil rights lawsuit on behalf of Reno businessman Maurice Underwood, challenging the constitutionality of that licensing scheme.
See http://blog.pacificlegal.org/wordpress/wp-content/uploads/2012/10/UnderwoodMediaBackgrounder.pdf
CFPB queries Discover Bank (and others) on student loans
In an annual report submitted to the U.S. Securities and Exchange Commission, Discover said “There is significant legislative and regulatory focus on the student loan market, including by the CFPB. This regulatory focus has resulted in an increase in supervisory examinations of the company related to student loans.” Also, "Legislation to address these and other concerns related to student loan servicing practices was introduced in December 2013. The enactment of this legislation may increase the complexity and expense of servicing student loans. The potential impact of these areas of focus on Discover is unclear.”
In an annual report submitted to the U.S. Securities and Exchange Commission, Discover said “There is significant legislative and regulatory focus on the student loan market, including by the CFPB. This regulatory focus has resulted in an increase in supervisory examinations of the company related to student loans.” Also, "Legislation to address these and other concerns related to student loan servicing practices was introduced in December 2013. The enactment of this legislation may increase the complexity and expense of servicing student loans. The potential impact of these areas of focus on Discover is unclear.”
State regulation of bitcoin?
Anita RamasastryAnita RamasastryAnita Ramastary argues in favor of US Treasury Rules, and state level actions, to clarify that Bitcoin may be used for lawful purchases, and that it is subject to regular money-laundering laws. She says that, taken together, these measures are likely a prudent approach to the Bitcoin problem.
See more at: http://verdict.justia.com/2014/02/25/bitcoin-cant-ban-regulate#sthash.DiJdjwqJ.dpuf
Anita RamasastryAnita RamasastryAnita Ramastary argues in favor of US Treasury Rules, and state level actions, to clarify that Bitcoin may be used for lawful purchases, and that it is subject to regular money-laundering laws. She says that, taken together, these measures are likely a prudent approach to the Bitcoin problem.
See more at: http://verdict.justia.com/2014/02/25/bitcoin-cant-ban-regulate#sthash.DiJdjwqJ.dpuf
State AGs advocate for state authority against patent trolls
Law 360 reports that in a briefing to Senate staffers, Colorado Attorney General John Suthers and Vermont Attorney General William H. Sorrell said they supported proposed federal legislation curbing patent trolls' litigation practices, barring unfair and deceptive demand letters, and widening the Federal Trade Commission’s authority over bad faith practices connected to these letters.
However, the attorneys general say they would also appreciate an explicit provision supporting states’ rights to enforce their own consumer protection and bad faith laws against alleged patent trolls, also referred to as patent assertion entities.
Law 360 reports that in a briefing to Senate staffers, Colorado Attorney General John Suthers and Vermont Attorney General William H. Sorrell said they supported proposed federal legislation curbing patent trolls' litigation practices, barring unfair and deceptive demand letters, and widening the Federal Trade Commission’s authority over bad faith practices connected to these letters.
However, the attorneys general say they would also appreciate an explicit provision supporting states’ rights to enforce their own consumer protection and bad faith laws against alleged patent trolls, also referred to as patent assertion entities.
Associate U.S. Attorney General Tony West on the importance of State AG action on bank misconduct
Associate U.S. Attorney General Tony West, addressing a meeting of the National Association of Attorneys General, said that federal and state officials have achieved “significant results” combating bank wrongdoing. West pointed to the settlement he DOJ reached with JPMorgan Chase, concerning the firm's mortgage-backed securities sales and other practices related to home loans.
“The scope and scale of the settlement with JPMorgan would not have been possible without our partnership with states,” West said. “That is because you all bring a whole set of additional enforcement tools to the table that go beyond those we have at the federal level." West's reference was to State consumer protection laws.
http://www.justice.gov/iso/opa/asg/speeches/2014/asg-speech-140224.html
Associate U.S. Attorney General Tony West, addressing a meeting of the National Association of Attorneys General, said that federal and state officials have achieved “significant results” combating bank wrongdoing. West pointed to the settlement he DOJ reached with JPMorgan Chase, concerning the firm's mortgage-backed securities sales and other practices related to home loans.
“The scope and scale of the settlement with JPMorgan would not have been possible without our partnership with states,” West said. “That is because you all bring a whole set of additional enforcement tools to the table that go beyond those we have at the federal level." West's reference was to State consumer protection laws.
http://www.justice.gov/iso/opa/asg/speeches/2014/asg-speech-140224.html
The new Comcast-Netflix deal -- bad for consumers?
“Comcast Corporation (Nasdaq: CMCSA, CMCSK) and Netflix, Inc. (Nasdaq: NFLX) today [2/23/2014] announced a mutually beneficial interconnection agreement that will provide Comcast’s U.S. broadband customers with a high-quality Netflix video experience for years to come.” See http://corporate.comcast.com/news-information/news-feed/comcast-and-netflix Timothy Lee says that the deal “represents a fundamental shift in power in the Internet economy that threatens to undermine the competitive market structure that served Internet users so well for the past two decades.” Also, “further industry consolidation can only make the situation worse. The more concentrated the broadband market becomes, the more leverage broadband providers like Comcast and Verizon will have over backbone providers like Cogent. That gives the FCC a good reason to be skeptical of Comcast's proposed acquisition of its largest rival, Time Warner Cable. Blocking that transaction could save the agency larger headaches in the future.” http://www.washingtonpost.com/blogs/the-switch/wp/2014/02/23/comcasts-deal-with-netflix-makes-network-neutrality-obsolete/?hpid=z4
And there is the potentially important role of USDOJ Antitrust.
posted by Don Resnikoff 2-24-2014
“Comcast Corporation (Nasdaq: CMCSA, CMCSK) and Netflix, Inc. (Nasdaq: NFLX) today [2/23/2014] announced a mutually beneficial interconnection agreement that will provide Comcast’s U.S. broadband customers with a high-quality Netflix video experience for years to come.” See http://corporate.comcast.com/news-information/news-feed/comcast-and-netflix Timothy Lee says that the deal “represents a fundamental shift in power in the Internet economy that threatens to undermine the competitive market structure that served Internet users so well for the past two decades.” Also, “further industry consolidation can only make the situation worse. The more concentrated the broadband market becomes, the more leverage broadband providers like Comcast and Verizon will have over backbone providers like Cogent. That gives the FCC a good reason to be skeptical of Comcast's proposed acquisition of its largest rival, Time Warner Cable. Blocking that transaction could save the agency larger headaches in the future.” http://www.washingtonpost.com/blogs/the-switch/wp/2014/02/23/comcasts-deal-with-netflix-makes-network-neutrality-obsolete/?hpid=z4
And there is the potentially important role of USDOJ Antitrust.
posted by Don Resnikoff 2-24-2014
State AG and CFPB pay day lender litigation recap
In January, New York Attorney General Eric Schneiderman announced a settlement agreement with online payday lenders, including Western Sky Financial, CashCall Inc. and WS Funding.
Also in January, Colorado Attorney General John Suthers announced he had reached a settlement agreement with some of the same lenders.
The CFPB brought litigation in Massachusetts federal court against CashCall Inc., WS Funding, and Delbert Services Corp.
In January, New York Attorney General Eric Schneiderman announced a settlement agreement with online payday lenders, including Western Sky Financial, CashCall Inc. and WS Funding.
Also in January, Colorado Attorney General John Suthers announced he had reached a settlement agreement with some of the same lenders.
The CFPB brought litigation in Massachusetts federal court against CashCall Inc., WS Funding, and Delbert Services Corp.
Court allows disgorgement in NY AG's action
In yet another case which points the way for some other State AG's, a New York appellate court holds that in an action by the Attorney General brought under New York's Executive Law and Martin Act (General Business Law art 23-A), it was error to dismiss a claim for the equitable remedy of disgorgement at the pleading stage (see Matter of People v Applied Card Sys., Inc., 11 NY3d 105, 125-126 [2008], cert denied sub nom Cross Country Bank, Inc. v New York, 555 US 1136 [2009]).
Defendant argues that the remedies provided in both General Business Law § 353 (the Martin Act) and Executive Law § 63 do not include disgorgement. Rather, the statutes specify that the remedies available are injunctive relief, restitution and cancellation of a business certificate. It also avers that restitution may be obtained in a class action settlement that would be duplicative of remedies sought here.
However, where, as here, there is a claim based on fraudulent activity, disgorgement may be available as an equitable remedy, notwithstanding the absence of loss to individuals or independent claims for restitution (see Applied Card Sys., 11 NY3d at 125-126). Disgorgement is distinct from the remedy of restitution because it focuses on the gain to the wrongdoer as opposed to the loss to the victim (id. at 125). Thus, disgorgement aims to deter wrongdoing by preventing the wrongdoer from retaining ill-gotten gains from fraudulent conduct. Accordingly, the remedy of disgorgement does not require a showing or allegation of direct losses to consumers or the public; the source of the ill-gotten gains is "immaterial" (see SEC v Commonwealth Chem. Sec., Inc., 574 F2d 90, 102 [2d Cir 1978]; see also Excelsior 57th Corp. v Lerner, 160 AD2d 407, 408-409 [1st Dept 1990] [in a fiduciary duty context]).
See the entire opinion at
http://www.scribd.com/doc/208356935/People-v-Ernst-Young-LLP-2014-NY-Slip-Op-01257
In yet another case which points the way for some other State AG's, a New York appellate court holds that in an action by the Attorney General brought under New York's Executive Law and Martin Act (General Business Law art 23-A), it was error to dismiss a claim for the equitable remedy of disgorgement at the pleading stage (see Matter of People v Applied Card Sys., Inc., 11 NY3d 105, 125-126 [2008], cert denied sub nom Cross Country Bank, Inc. v New York, 555 US 1136 [2009]).
Defendant argues that the remedies provided in both General Business Law § 353 (the Martin Act) and Executive Law § 63 do not include disgorgement. Rather, the statutes specify that the remedies available are injunctive relief, restitution and cancellation of a business certificate. It also avers that restitution may be obtained in a class action settlement that would be duplicative of remedies sought here.
However, where, as here, there is a claim based on fraudulent activity, disgorgement may be available as an equitable remedy, notwithstanding the absence of loss to individuals or independent claims for restitution (see Applied Card Sys., 11 NY3d at 125-126). Disgorgement is distinct from the remedy of restitution because it focuses on the gain to the wrongdoer as opposed to the loss to the victim (id. at 125). Thus, disgorgement aims to deter wrongdoing by preventing the wrongdoer from retaining ill-gotten gains from fraudulent conduct. Accordingly, the remedy of disgorgement does not require a showing or allegation of direct losses to consumers or the public; the source of the ill-gotten gains is "immaterial" (see SEC v Commonwealth Chem. Sec., Inc., 574 F2d 90, 102 [2d Cir 1978]; see also Excelsior 57th Corp. v Lerner, 160 AD2d 407, 408-409 [1st Dept 1990] [in a fiduciary duty context]).
See the entire opinion at
http://www.scribd.com/doc/208356935/People-v-Ernst-Young-LLP-2014-NY-Slip-Op-01257
Scheduled Senate hearing on wireless competition
The Senate Committee on the Judiciary has scheduled a hearing of the Subcommittee on Antitrust, Competition Policy and Consumer Rights entitled "An Examination of Competition in the Wireless Market" for Wednesday, February 26, 2014 at 10:00 a.m., in Room 226 of the Dirksen Senate Office Building.
The Senate Committee on the Judiciary has scheduled a hearing of the Subcommittee on Antitrust, Competition Policy and Consumer Rights entitled "An Examination of Competition in the Wireless Market" for Wednesday, February 26, 2014 at 10:00 a.m., in Room 226 of the Dirksen Senate Office Building.
Google as an emerging rival to Comcast in broadband internet
Local municipalities can challenge the power of broadband behemoths like Comcast, according to telecommunications expert Susan Crawford. She told AAI's Bert Foer about that in a public interview several months ago. She explained that some municipalities are partnering with Google to set up municipality-wide fast internet service. The potential challenge, although limited to urban areas, is particularly interesting in light of the proposed Comcast merger with Time-Warner. The New York Times has picked up on the point in a short article, explaining that "Google is taking steps to expand Google Fiber, its nascent ultrahigh-speed Internet service, to 34 cities in nine metropolitan areas across the country as it grapples with the challenges of working with local governments. Fiber is supposed to run 100 times faster than typical broadband connections. . . ." In what seems to be an understatement, the article explains that "Google’s plans added a wrinkle to Comcast’s $45 billion takeover of Time Warner Cable. Regulators are expected to closely examine the merger, which would combine the country’s two largest cable companies, which have few major competitors. Now Google is framing itself as a bigger competitor than it was."
“Competition is good in these local markets, and as providers have to compete, they lower their rates on traditional Internet speed and also improve their service offerings,” Julian Castro, mayor of San Antonio, said during a Google call with reporters.
See http://bits.blogs.nytimes.com/2014/02/19/google-fiber-ultrahigh-speed-internet-may-expand-to-34-new-cities/?ref=technology
Local municipalities can challenge the power of broadband behemoths like Comcast, according to telecommunications expert Susan Crawford. She told AAI's Bert Foer about that in a public interview several months ago. She explained that some municipalities are partnering with Google to set up municipality-wide fast internet service. The potential challenge, although limited to urban areas, is particularly interesting in light of the proposed Comcast merger with Time-Warner. The New York Times has picked up on the point in a short article, explaining that "Google is taking steps to expand Google Fiber, its nascent ultrahigh-speed Internet service, to 34 cities in nine metropolitan areas across the country as it grapples with the challenges of working with local governments. Fiber is supposed to run 100 times faster than typical broadband connections. . . ." In what seems to be an understatement, the article explains that "Google’s plans added a wrinkle to Comcast’s $45 billion takeover of Time Warner Cable. Regulators are expected to closely examine the merger, which would combine the country’s two largest cable companies, which have few major competitors. Now Google is framing itself as a bigger competitor than it was."
“Competition is good in these local markets, and as providers have to compete, they lower their rates on traditional Internet speed and also improve their service offerings,” Julian Castro, mayor of San Antonio, said during a Google call with reporters.
See http://bits.blogs.nytimes.com/2014/02/19/google-fiber-ultrahigh-speed-internet-may-expand-to-34-new-cities/?ref=technology
Ranbaxy Pharmaceuticals Inc. (RBXY) and Teva Pharmaceuticals Inc. (TEVA)’s U.S. unit agreed to settle New York state claims that they colluded on generic-drug sales
Ranbaxy and Teva had agreed not to challenge each other on filings for the exclusive right for six months to sell generic copies of brand name drugs after patents for them expired, New York Attorney General Eric Schneiderman said in a statement.
“Agreements between drug manufacturers to protect each other’s market positions violate principles of antitrust law, and can lead to higher drug prices,” Schneiderman said in yesterday’s statement.
The settlement is the latest application of a U.S. Supreme Court decision last year that loosened the rules on lawsuits against drugmakers who pay rivals to postpone low-cost versions of popular medications, known as “pay for delay” agreements, Schneiderman said in a statement.
It is interesting that the claim was asserted by a State AG rather than the federal government or a private litigant, illustrating the potential power of State AGs in pharma collusion matters.
The settlement document is available at http://www.scribd.com/doc/208138464/AOD-Teva-Ranbaxy-Signed
Ranbaxy and Teva had agreed not to challenge each other on filings for the exclusive right for six months to sell generic copies of brand name drugs after patents for them expired, New York Attorney General Eric Schneiderman said in a statement.
“Agreements between drug manufacturers to protect each other’s market positions violate principles of antitrust law, and can lead to higher drug prices,” Schneiderman said in yesterday’s statement.
The settlement is the latest application of a U.S. Supreme Court decision last year that loosened the rules on lawsuits against drugmakers who pay rivals to postpone low-cost versions of popular medications, known as “pay for delay” agreements, Schneiderman said in a statement.
It is interesting that the claim was asserted by a State AG rather than the federal government or a private litigant, illustrating the potential power of State AGs in pharma collusion matters.
The settlement document is available at http://www.scribd.com/doc/208138464/AOD-Teva-Ranbaxy-Signed
Consumer Financial Protection Bureau Warns Mortgage Servicers About Legal Protections for Consumers When Transferring Loans
The Consumer Financial Protection Bureau (CFPB) has issued a bulletin advising mortgage companies about their legal obligations that protect consumers during loan transfers between mortgage servicers. When handing over the processing of loans, mortgage servicers should not lose paperwork, lose track of a homeowner’s loss mitigation plans, or hinder a consumer’s chances of saving their home from unnecessary foreclosure.
See http://www.consumerfinance.gov/newsroom/consumer-financial-protection-bureau-reminds-mortgage-servicers-of-legal-protections-for-consumers-when-transferring-loans/
The Consumer Financial Protection Bureau (CFPB) has issued a bulletin advising mortgage companies about their legal obligations that protect consumers during loan transfers between mortgage servicers. When handing over the processing of loans, mortgage servicers should not lose paperwork, lose track of a homeowner’s loss mitigation plans, or hinder a consumer’s chances of saving their home from unnecessary foreclosure.
See http://www.consumerfinance.gov/newsroom/consumer-financial-protection-bureau-reminds-mortgage-servicers-of-legal-protections-for-consumers-when-transferring-loans/
Mortgage Servicer Abuses
From the NYT at http://dealbook.nytimes.com/2014/02/18/loan-complaints-by-homeowners-rise-once-more/?_php=true&_&hp&_r=0
Shoddy paperwork, erroneous fees and wrongful evictions — the same abuses that dogged the nation’s largest banks and led to a $26 billion settlement with federal authorities in 2012 — are now cropping up among the specialty firms that collect mortgage payments, according to dozens of foreclosure lawsuits and interviews with borrowers, federal and state regulators and housing lawyers.
These companies are known as servicers, but they do far more than transfer payments from borrowers to lenders. They have great power in deciding whether homeowners can win a mortgage modification or must hand over their home in a foreclosure.
From the NYT at http://dealbook.nytimes.com/2014/02/18/loan-complaints-by-homeowners-rise-once-more/?_php=true&_&hp&_r=0
Shoddy paperwork, erroneous fees and wrongful evictions — the same abuses that dogged the nation’s largest banks and led to a $26 billion settlement with federal authorities in 2012 — are now cropping up among the specialty firms that collect mortgage payments, according to dozens of foreclosure lawsuits and interviews with borrowers, federal and state regulators and housing lawyers.
These companies are known as servicers, but they do far more than transfer payments from borrowers to lenders. They have great power in deciding whether homeowners can win a mortgage modification or must hand over their home in a foreclosure.
Class action alleges failure of JP Morgan Chase to timely file satisfaction of mortgage
The class action. filed in Pennsylvania federal court, alleges that the bank systematically fails to timely present to the county clerks of the state of New York proof that mortgages have been satisfied.
“One of the unfortunate consequences of the consolidation of the banking industry is that banks frequently fail to comply with their obligations to timely file mortgage satisfactions,” the complaint says. “Indeed, mortgage satisfactions are often filed months, if not years, after they are due, and sometimes not at all. This is no mere procedural peccadillo.”
See the Complaint at http://www.scribd.com/doc/208068430/Https-Ecf-Pamd-U
The class action. filed in Pennsylvania federal court, alleges that the bank systematically fails to timely present to the county clerks of the state of New York proof that mortgages have been satisfied.
“One of the unfortunate consequences of the consolidation of the banking industry is that banks frequently fail to comply with their obligations to timely file mortgage satisfactions,” the complaint says. “Indeed, mortgage satisfactions are often filed months, if not years, after they are due, and sometimes not at all. This is no mere procedural peccadillo.”
See the Complaint at http://www.scribd.com/doc/208068430/Https-Ecf-Pamd-U
NY AG's recent enforcement of the National Mortgage Settlement
The NY AG's recent enforcement of the National Mortgage Settlement suggests the possibility of similar investigative and enforcement efforts by other States, including enforcement efforts before the federal court in the District of Columbia that would have nationwide benefits.
The posting of the York State Attorney General at http://www.ag.ny.gov/press-release/ag-schneiderman-sue-wells-fargo-announces-groundbreaking-servicing-agreement-bank describes recent enforcement in New York of the National Mortgage Settlement.
The enforcement history in New York State involves many tens of millions of dollars of settlement and other money spent on one-by-one consumer advocacy by not-for-profit advocacy groups. The NY AG's Office reports that those one-off advocacy efforts have been systematically frustrated by bank practices that violate the National Mortgage Settlement. (Our experience with the DC Bar Pro Bono Clinic includes representation of homeowners where the voluntary level of cooperation by the foreclosing bank was unsatisfactory.)
After documenting the repeated complaints of homeowners as collected by not-for-profit advocacy groups, the NY AG approached particular banks, including Bank of America and Wells Fargo, and requested redress for particular homeowner complainants, and reformed National Mortgage Settlement compliance protocols. Bank of America cooperated and signed a binding agreement to reform its practices and redress grievances. A copy is provided with the AG's posting. Wells Fargo declined to cooperate, so the AG filed the Complaint that is provided with the AG's posting.
The AG's agreement with Bank of America and the Complaint against Wells Fargo reflect extensive investigation by the not-for-profits and the NY AG's Office that reveals certain persistent problems. Following are some of the frequently repeated compliance problems observed by the NY AG and NY not-for-profits, as reflected in the Bank of America Agreement and the Wells Fargo Complaint documents.
1. Access issues:
Perhaps more important than anything else, Housing Counselors and Legal Service Providers funded through the Attorney General’s Homeowner Protection Program (HOPP) found that they rarely have access to bank staff with decision making power, or staff who can solve problems with regard to loan modification applications.
2. Complex Document Request Issues:
Consumers and their advocates have consistently complained that banks send confusing and repetitive document requests in response to loan modification applications.
. 3. Lack of Good Communication With Borrowers:
Under current practice, homeowners who are in foreclosure frequently must negotiate loan modification requests through outside bank legal counsel. Foreclosure firms often know little about the loan modification process and fail to transmit loan modification documentation to the bank in a timely fashion.
4. Failure to Expedite Complicated Loan Modification Requests:
Many families facing foreclosure have complex sources of income that factor in to their ability to afford a loan modification. These cases usually require special income documentation that the bank’s Loan Underwriters must specify. Often, banks do not assign these specialized underwriters until fairly late in the process.That causes complex requests for modification to proceed very slowly.
5. Problems With “Do-Overs”
Banks have been selling large portions of their servicing business to private companies, including non-bank servicers. For consumers who are deep into the loan modification application process, these transfers are extremely disruptive, and often require that the borrower start the process over with the new mortgage servicer.
. 6. Failure to Prevent Unnecessary Foreclosures
Families who were at some point denied a loan modification request by a bank based on income may experience a change in their financial circumstances that could present a new opportunity to save their home from foreclosure. The consequence may be that opportunities are missed, and the bank proceeds to foreclosure where it is not appropriate.
. 7. Dilatory Resolution of Complaints of particular homeowners
HOPP grantees worked with the Office of the NY Attorney General to document cases where it believed a bank violated their obligations under the National Mortgage Settlement. Bank of America agreed to conduct a good faith review of such cases to determine if additional documents are necessary and if any modification requests were improperly denied. If such cases are identified, Bank of America will reopen those cases and promptly inform borrowers or their representatives what further documentation is needed to reconsider the modification request. Other banks, particularly Wells Fargo, have not so agreed, and the Complaint against Wells Fargo is intended to secure redress for the grievances of particular homeowners.
The NY AG's recent enforcement of the National Mortgage Settlement suggests the possibility of similar investigative and enforcement efforts by other States, including enforcement efforts before the federal court in the District of Columbia that would have nationwide benefits.
The posting of the York State Attorney General at http://www.ag.ny.gov/press-release/ag-schneiderman-sue-wells-fargo-announces-groundbreaking-servicing-agreement-bank describes recent enforcement in New York of the National Mortgage Settlement.
The enforcement history in New York State involves many tens of millions of dollars of settlement and other money spent on one-by-one consumer advocacy by not-for-profit advocacy groups. The NY AG's Office reports that those one-off advocacy efforts have been systematically frustrated by bank practices that violate the National Mortgage Settlement. (Our experience with the DC Bar Pro Bono Clinic includes representation of homeowners where the voluntary level of cooperation by the foreclosing bank was unsatisfactory.)
After documenting the repeated complaints of homeowners as collected by not-for-profit advocacy groups, the NY AG approached particular banks, including Bank of America and Wells Fargo, and requested redress for particular homeowner complainants, and reformed National Mortgage Settlement compliance protocols. Bank of America cooperated and signed a binding agreement to reform its practices and redress grievances. A copy is provided with the AG's posting. Wells Fargo declined to cooperate, so the AG filed the Complaint that is provided with the AG's posting.
The AG's agreement with Bank of America and the Complaint against Wells Fargo reflect extensive investigation by the not-for-profits and the NY AG's Office that reveals certain persistent problems. Following are some of the frequently repeated compliance problems observed by the NY AG and NY not-for-profits, as reflected in the Bank of America Agreement and the Wells Fargo Complaint documents.
1. Access issues:
Perhaps more important than anything else, Housing Counselors and Legal Service Providers funded through the Attorney General’s Homeowner Protection Program (HOPP) found that they rarely have access to bank staff with decision making power, or staff who can solve problems with regard to loan modification applications.
2. Complex Document Request Issues:
Consumers and their advocates have consistently complained that banks send confusing and repetitive document requests in response to loan modification applications.
. 3. Lack of Good Communication With Borrowers:
Under current practice, homeowners who are in foreclosure frequently must negotiate loan modification requests through outside bank legal counsel. Foreclosure firms often know little about the loan modification process and fail to transmit loan modification documentation to the bank in a timely fashion.
4. Failure to Expedite Complicated Loan Modification Requests:
Many families facing foreclosure have complex sources of income that factor in to their ability to afford a loan modification. These cases usually require special income documentation that the bank’s Loan Underwriters must specify. Often, banks do not assign these specialized underwriters until fairly late in the process.That causes complex requests for modification to proceed very slowly.
5. Problems With “Do-Overs”
Banks have been selling large portions of their servicing business to private companies, including non-bank servicers. For consumers who are deep into the loan modification application process, these transfers are extremely disruptive, and often require that the borrower start the process over with the new mortgage servicer.
. 6. Failure to Prevent Unnecessary Foreclosures
Families who were at some point denied a loan modification request by a bank based on income may experience a change in their financial circumstances that could present a new opportunity to save their home from foreclosure. The consequence may be that opportunities are missed, and the bank proceeds to foreclosure where it is not appropriate.
. 7. Dilatory Resolution of Complaints of particular homeowners
HOPP grantees worked with the Office of the NY Attorney General to document cases where it believed a bank violated their obligations under the National Mortgage Settlement. Bank of America agreed to conduct a good faith review of such cases to determine if additional documents are necessary and if any modification requests were improperly denied. If such cases are identified, Bank of America will reopen those cases and promptly inform borrowers or their representatives what further documentation is needed to reconsider the modification request. Other banks, particularly Wells Fargo, have not so agreed, and the Complaint against Wells Fargo is intended to secure redress for the grievances of particular homeowners.
American Antitrust Institute and Food & Water Watch
Urge DOJ to Block ConAgra-Cargill/CHS Horizon Milling Joint Venture
The American Antitrust Institute (AAI) and Food & Water Watch have reiterated their independent calls for the U.S. Department of Justice (DOJ) to reject any divestiture proposals and instead block the proposed joint venture between ConAgra and Cargill/CHS's Horizon Milling wheat flour milling operations. The united announcement by the AAI and Food &Water Watch comes on the heels of ConAgra's announcement that the companies are purportedly willing to divest four of their flour mills, a proposal the AAI and Food & Water Watch call "inadequate."
"It is long past time for federal antitrust regulators to stop rubber-stamping these food mega-mergers," said Food & Water Watch Executive Director Wenonah Hauter. "The paltry divestment offer by ConAgra and Cargill only rearranges the deck chairs on a titanic merger and leaves consumers and farmers vulnerable to unfair pricing across the country."
In a letter to the DOJ, the AAI and Food &Water Watch noted that the proposed divestiture of four flour mills would not prevent the joint venture from raising prices to consumers or lowering prices paid to wheat growers nationwide. "Four mill divestitures would not come remotely close to remedying the competitive and consumer harm in markets across the U.S.," said AAI Vice President Diana Moss. The letter explains that the joint venture would put the U.S. wheat flour supply chain essentially under the control of two firms - ConAgra-Horizon Milling and Archer Daniels Midland (ADM). "This is a losing proposition for competition and the American consumer," Moss stated.
Urge DOJ to Block ConAgra-Cargill/CHS Horizon Milling Joint Venture
The American Antitrust Institute (AAI) and Food & Water Watch have reiterated their independent calls for the U.S. Department of Justice (DOJ) to reject any divestiture proposals and instead block the proposed joint venture between ConAgra and Cargill/CHS's Horizon Milling wheat flour milling operations. The united announcement by the AAI and Food &Water Watch comes on the heels of ConAgra's announcement that the companies are purportedly willing to divest four of their flour mills, a proposal the AAI and Food & Water Watch call "inadequate."
"It is long past time for federal antitrust regulators to stop rubber-stamping these food mega-mergers," said Food & Water Watch Executive Director Wenonah Hauter. "The paltry divestment offer by ConAgra and Cargill only rearranges the deck chairs on a titanic merger and leaves consumers and farmers vulnerable to unfair pricing across the country."
In a letter to the DOJ, the AAI and Food &Water Watch noted that the proposed divestiture of four flour mills would not prevent the joint venture from raising prices to consumers or lowering prices paid to wheat growers nationwide. "Four mill divestitures would not come remotely close to remedying the competitive and consumer harm in markets across the U.S.," said AAI Vice President Diana Moss. The letter explains that the joint venture would put the U.S. wheat flour supply chain essentially under the control of two firms - ConAgra-Horizon Milling and Archer Daniels Midland (ADM). "This is a losing proposition for competition and the American consumer," Moss stated.
Homosexuality "cure" as violation of state consumer fraud laws
With support from the Southern Poverty Law Center, several former patients of homosexuality "cure" clinics sued in 2012, seeking damages under New Jersey’s Consumer Fraud Act from an “ex-gay” group called Jonah (Jews Offering New Alternatives for Healing). The plaintiffs cited Jonah’s false promise that it could “cure” their homosexuality — for which it charged $100 per individual therapy session. Last July, a state judge refused Jonah’s request to throw out the case, which could soon go to trial.
See http://www.nytimes.com/2014/02/13/opinion/ending-gay-conversion-for-good.html?_r=1
With support from the Southern Poverty Law Center, several former patients of homosexuality "cure" clinics sued in 2012, seeking damages under New Jersey’s Consumer Fraud Act from an “ex-gay” group called Jonah (Jews Offering New Alternatives for Healing). The plaintiffs cited Jonah’s false promise that it could “cure” their homosexuality — for which it charged $100 per individual therapy session. Last July, a state judge refused Jonah’s request to throw out the case, which could soon go to trial.
See http://www.nytimes.com/2014/02/13/opinion/ending-gay-conversion-for-good.html?_r=1
Consumer’s fuel economy advertising claims against auto manufacturer not preempted by federal law
Antitrust Law Daily's Linda O’Brien reports that a consumer’s claims against an automobile manufacturer for failing to disclose that the advertised fuel economy of one of its vehicles was based on Environmental Protection Agency (EPA) data in violation of the Colorado Consumer Protection Act (CCPA) was not preempted by federal law. The decision is by the federal district court in Denver has decided (Gilles v. Ford Motor Company, February 12, 2014, Jackson, R.).
The case is No. 13-cv-00357-RBJ.
Antitrust Law Daily's Linda O’Brien reports that a consumer’s claims against an automobile manufacturer for failing to disclose that the advertised fuel economy of one of its vehicles was based on Environmental Protection Agency (EPA) data in violation of the Colorado Consumer Protection Act (CCPA) was not preempted by federal law. The decision is by the federal district court in Denver has decided (Gilles v. Ford Motor Company, February 12, 2014, Jackson, R.).
The case is No. 13-cv-00357-RBJ.
On the Comcast/Time-Warner Merger
We recommend the NY Times editorial:
"Generally speaking, antitrust regulators are most worried about mergers that create monopolies that can raise the prices of goods and services when customers have few or no other choices. But officials should be just as concerned about deals that turn a business into a dominant buyer that can make or break its suppliers.
An all-powerful cable company, for example, would be able to influence and control what Americans could watch or read by refusing to carry channels or certain Internet services, or it could favor its own content. Comcast, for example, might find it tempting to treat programming from NBC Universal, which it owns, better than shows from rival networks and movie studios."
For the complete editorial see http://www.nytimes.com/2014/02/14/opinion/if-a-cable-giant-becomes-bigger.html?hp&rref=opinion
We recommend the NY Times editorial:
"Generally speaking, antitrust regulators are most worried about mergers that create monopolies that can raise the prices of goods and services when customers have few or no other choices. But officials should be just as concerned about deals that turn a business into a dominant buyer that can make or break its suppliers.
An all-powerful cable company, for example, would be able to influence and control what Americans could watch or read by refusing to carry channels or certain Internet services, or it could favor its own content. Comcast, for example, might find it tempting to treat programming from NBC Universal, which it owns, better than shows from rival networks and movie studios."
For the complete editorial see http://www.nytimes.com/2014/02/14/opinion/if-a-cable-giant-becomes-bigger.html?hp&rref=opinion
Federal judge has dismissed a case against DC Council member Jim Graham concerning a Metro development deal
A Washington City Paper article explains that federal judge Rosemary Collyer has dismissed a case against DC Council member Jim Graham concerning a Metro development deal.
In 2008, Graham, then a member of the Washington Metropolitan Area Transit Authority board that administers Metro, allegedly offered to back a lottery contract bid by a member of development firm Banneker Ventures if the company dropped out of a Metro development deal to make room for one of Graham's campaign donors, developer LaKritz Adler.
In her opinion, U.S. District Court Judge Rosemary M. Collyer writes that Graham's action while on the Metro board falls under sovereign immunity protections, meaning he can't be sued in his personal capacity for actions he took while he was on the board.
The City Paper article includes the Judge’s full opinion.
See http://www.washingtoncitypaper.com/blogs/looselips/2014/02/06/judge-dismisses-lawsuit-against-jim-graham/
A Washington City Paper article explains that federal judge Rosemary Collyer has dismissed a case against DC Council member Jim Graham concerning a Metro development deal.
In 2008, Graham, then a member of the Washington Metropolitan Area Transit Authority board that administers Metro, allegedly offered to back a lottery contract bid by a member of development firm Banneker Ventures if the company dropped out of a Metro development deal to make room for one of Graham's campaign donors, developer LaKritz Adler.
In her opinion, U.S. District Court Judge Rosemary M. Collyer writes that Graham's action while on the Metro board falls under sovereign immunity protections, meaning he can't be sued in his personal capacity for actions he took while he was on the board.
The City Paper article includes the Judge’s full opinion.
See http://www.washingtoncitypaper.com/blogs/looselips/2014/02/06/judge-dismisses-lawsuit-against-jim-graham/
Developments: DC Action against Exxonmobil and distributors
The Court docket shows the following:
01/16/2014
Additional eFiling: District of Columbia's Supplemental Memorandum in Support of its Opposition to Defendants' Motions to Dismiss submitted 01/16/2014
Attorney: BUSH, NICHOLAS A.
The additional filings are accessible at http://www.scribd.com/doc/202563534/Supplemental-Memorandum-of-Law and http://www.scribd.com/doc/202564179/Supplemental-Memorandum-of-Law-Exhibit-A
The supplemental Memorandum argues that DC is entitled to pursue its action against ExxonMobil and distributors using its parens patriae authority. That is said to be true, notwithstanding that a proposed statute (shown in Ex A) would have provided yet broader litigation authority.
The Court docket shows the following:
01/16/2014
Additional eFiling: District of Columbia's Supplemental Memorandum in Support of its Opposition to Defendants' Motions to Dismiss submitted 01/16/2014
Attorney: BUSH, NICHOLAS A.
The additional filings are accessible at http://www.scribd.com/doc/202563534/Supplemental-Memorandum-of-Law and http://www.scribd.com/doc/202564179/Supplemental-Memorandum-of-Law-Exhibit-A
The supplemental Memorandum argues that DC is entitled to pursue its action against ExxonMobil and distributors using its parens patriae authority. That is said to be true, notwithstanding that a proposed statute (shown in Ex A) would have provided yet broader litigation authority.
Cummings says some colleges require unnecessary student aid forms --- and charge a fee for it
Rep. Elijah Cummings said federal law makes it clear that the Free Application for Federal Student Aid, known as the FAFSA, is the only form needed to apply for federal aid. A well-known example of federal aid is the Pell grant for students in financial need.
Often colleges require students to submit additional forms — which carry a fee — to qualify for grants from the institutions themselves or from other entities.
“Congress banned this practice in 1992 because it creates undue hurdles for students seeking federal student aid,” Cummings wrote in a letter to Education Secretary Arne Duncan. Cummings said schools that post misleading or incomplete information should be warned that they are potentially in violation of federal law.
http://www.washingtonpost.com/local/education/congressman-many-colleges-are-misleading-students-about-financial-aid-requirements/2014/02/03/c5bcf13a-8d16-11e3-833c-33098f9e5267_story.html
Rep. Elijah Cummings said federal law makes it clear that the Free Application for Federal Student Aid, known as the FAFSA, is the only form needed to apply for federal aid. A well-known example of federal aid is the Pell grant for students in financial need.
Often colleges require students to submit additional forms — which carry a fee — to qualify for grants from the institutions themselves or from other entities.
“Congress banned this practice in 1992 because it creates undue hurdles for students seeking federal student aid,” Cummings wrote in a letter to Education Secretary Arne Duncan. Cummings said schools that post misleading or incomplete information should be warned that they are potentially in violation of federal law.
http://www.washingtonpost.com/local/education/congressman-many-colleges-are-misleading-students-about-financial-aid-requirements/2014/02/03/c5bcf13a-8d16-11e3-833c-33098f9e5267_story.html
New litigation against Visa and MasterCard over swipe fees
The new litigation includes baseball teams as pliantiffs.
See http://www.scribd.com/doc/206033705/New-litigation-ag
The new litigation includes baseball teams as pliantiffs.
See http://www.scribd.com/doc/206033705/New-litigation-ag
Illinois and other State AGs target identity theft
Illinois AG Madigan said her office has received 31,100 complaints about identity theft since 2006, making it the No. 1 or No. 2 source of complaints in that period.
The lack of appropriate oversight, she said, has brought her office to “repeatedly [find] instances where companies failed to take basic steps to protect consumer data. The notion that companies are already doing everything they can to prevent data breaches is false.”
Madigan said her office, along with the Connecticut attorney general’s office, is leading a multi-state investigation into data breaches at Target, Neiman Marcus and Michaels stores.
http://www.chicago-bureau.org/madigan-congress-federal-oversight-needed-stop-identity-theft/
Illinois AG Madigan said her office has received 31,100 complaints about identity theft since 2006, making it the No. 1 or No. 2 source of complaints in that period.
The lack of appropriate oversight, she said, has brought her office to “repeatedly [find] instances where companies failed to take basic steps to protect consumer data. The notion that companies are already doing everything they can to prevent data breaches is false.”
Madigan said her office, along with the Connecticut attorney general’s office, is leading a multi-state investigation into data breaches at Target, Neiman Marcus and Michaels stores.
http://www.chicago-bureau.org/madigan-congress-federal-oversight-needed-stop-identity-theft/
State AGs target mortgage foreclosure lawyers - CFPB cooperates
An interesting article by Richard Benenson in Law 360 discusses state AG actions against mortgage foreclosure attorneys.
The article cites some interesting source material:
o Press Release, Eric T. Schneiderman, Attorney Gen., N.Y. State Office of the Attorney General, A.G. Schneiderman Announces $ 4 Million Settlement with New York Foreclosure Law Firm Steven J. Baum P.C. and Pillar Processing LLC (Mar. 22, 2012);
o Jenna Greene, Watch Your Back: The banks were supposed to be the CFPB'’s big target, now lawyers, Jan. 1, 2014, CORPORATE COUNSEL;
o Christine Stapleton & Kimberly Miller, New Lawyers Face Probes, Pop Up at Other Firms; The Novices Draw Suspicion in the Foreclosure Filing Mess, PALM BEACH POST, Dec. 26, 2010, 1A; Kimberly Miller, Another South Florida Foreclosure Law Firm Faces State Scrutiny, PALM BEACH POST, Feb. 22, 2011.
See http://www.law360.com/banking/articles/503972?nl_pk=717c9a98-b8e0-48bc-9c96-5ff66a237269&utm_source=newsletter&utm_medium=email&utm_campaign=banking
An interesting article by Richard Benenson in Law 360 discusses state AG actions against mortgage foreclosure attorneys.
The article cites some interesting source material:
o Press Release, Eric T. Schneiderman, Attorney Gen., N.Y. State Office of the Attorney General, A.G. Schneiderman Announces $ 4 Million Settlement with New York Foreclosure Law Firm Steven J. Baum P.C. and Pillar Processing LLC (Mar. 22, 2012);
o Jenna Greene, Watch Your Back: The banks were supposed to be the CFPB'’s big target, now lawyers, Jan. 1, 2014, CORPORATE COUNSEL;
o Christine Stapleton & Kimberly Miller, New Lawyers Face Probes, Pop Up at Other Firms; The Novices Draw Suspicion in the Foreclosure Filing Mess, PALM BEACH POST, Dec. 26, 2010, 1A; Kimberly Miller, Another South Florida Foreclosure Law Firm Faces State Scrutiny, PALM BEACH POST, Feb. 22, 2011.
See http://www.law360.com/banking/articles/503972?nl_pk=717c9a98-b8e0-48bc-9c96-5ff66a237269&utm_source=newsletter&utm_medium=email&utm_campaign=banking
Should states regulate medical biologics? FTC studies the regulatory issues
On February 4 the Federal Trade Commission held a workshop to explore competition issues involving biologic medicines and follow-on biologics. As described in the Federal Register Notice, the workshop focused on a few key issues, inter alia:
Press reports suggest that some pharma companies appearing at the hearing argued for state regulation.
See http://www.ftc.gov/news-events/events-calendar/2014/02/follow-biologics-workshop-impact-recent-legislative-regulatory
On February 4 the Federal Trade Commission held a workshop to explore competition issues involving biologic medicines and follow-on biologics. As described in the Federal Register Notice, the workshop focused on a few key issues, inter alia:
- The potential impact of state regulations affecting competition.
- How regulations, if necessary, might be structured to facilitate competition while still protecting patient health and safety.
- How naming may affect competition.
- The experience of other countries with follow-on biologic competition.
Press reports suggest that some pharma companies appearing at the hearing argued for state regulation.
See http://www.ftc.gov/news-events/events-calendar/2014/02/follow-biologics-workshop-impact-recent-legislative-regulatory
FTC deals with definition of local retail markets
In a case that is interesting because it deals with definition of local retail markets, the Federal Trade Commission has approved a final order settling charges that AB Acquisition, LLC’s purchase of United Supermarkets L.L.C. would be anticompetitive in two local areas of Texas. AB Acquisition LLC is the parent company of Albertson’s LLC, which operates 606 grocery stores nationwide, primarily in the southern and western United States, including 72 under the Albertson’s banner in Texas.
According to the FTC’s complaint, first announced in December 2013, the proposed acquisition would likely reduce supermarket competition in Amarillo and Wichita Falls, Texas, and may harm consumers through higher prices, lower quality, and reduced service levels. Under the FTC’s order settling the charges, AB Acquisition LLC was required to sell its stores in Amarillo and Wichita Falls, to MAL Enterprises, Inc., which operates under the Lawrence Brothers IGA, Cash Saver and Save-A-Lot supermarket banners. The agency did not receive any comments regarding its proposed order during the public comment period.
The Commission vote approving the final order was 4-0. (FTC File No. 131-0227; the staff contact is Alexis Gilman, Bureau of Competition, 202-326-2579) See http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&ved=0CCcQFjAA&url=http%3A%2F%2Fwww.ftc.gov%2Fnews-events%2Fpress-releases%2F2014%2F02%2Fftc-approves-final-order-preserving-supermarket-competition-two&ei=okLyUsy7Gqa0ygHviIGgAg&usg=AFQjCNH6aAXvGklS1-sm4DuI8mP-6gc33g&sig2=CVmL3J2Yr7BX3vsIhe3QbQ&bvm=bv.60799247,d.aWc
In a case that is interesting because it deals with definition of local retail markets, the Federal Trade Commission has approved a final order settling charges that AB Acquisition, LLC’s purchase of United Supermarkets L.L.C. would be anticompetitive in two local areas of Texas. AB Acquisition LLC is the parent company of Albertson’s LLC, which operates 606 grocery stores nationwide, primarily in the southern and western United States, including 72 under the Albertson’s banner in Texas.
According to the FTC’s complaint, first announced in December 2013, the proposed acquisition would likely reduce supermarket competition in Amarillo and Wichita Falls, Texas, and may harm consumers through higher prices, lower quality, and reduced service levels. Under the FTC’s order settling the charges, AB Acquisition LLC was required to sell its stores in Amarillo and Wichita Falls, to MAL Enterprises, Inc., which operates under the Lawrence Brothers IGA, Cash Saver and Save-A-Lot supermarket banners. The agency did not receive any comments regarding its proposed order during the public comment period.
The Commission vote approving the final order was 4-0. (FTC File No. 131-0227; the staff contact is Alexis Gilman, Bureau of Competition, 202-326-2579) See http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&ved=0CCcQFjAA&url=http%3A%2F%2Fwww.ftc.gov%2Fnews-events%2Fpress-releases%2F2014%2F02%2Fftc-approves-final-order-preserving-supermarket-competition-two&ei=okLyUsy7Gqa0ygHviIGgAg&usg=AFQjCNH6aAXvGklS1-sm4DuI8mP-6gc33g&sig2=CVmL3J2Yr7BX3vsIhe3QbQ&bvm=bv.60799247,d.aWc
GoGo in flight wi-fi exclusive dealing case survives
From Antitrust Law Daily:
Allegations that in-flight internet provider Gogo, Inc. entered into illegal exclusive dealing arrangements survives motion to dismiss. Stewart v. Gogo, Inc., April 10, 2013, Chen, E..
Some commenters have pointed out that plaintiff's exclusive dealing case is not an easy one to make out. (But even those commenters must notice that wi-fi on planes is seriously expensive.)
The case is No. C-12-5164 EMC.
From Antitrust Law Daily:
Allegations that in-flight internet provider Gogo, Inc. entered into illegal exclusive dealing arrangements survives motion to dismiss. Stewart v. Gogo, Inc., April 10, 2013, Chen, E..
Some commenters have pointed out that plaintiff's exclusive dealing case is not an easy one to make out. (But even those commenters must notice that wi-fi on planes is seriously expensive.)
The case is No. C-12-5164 EMC.
Democrats push net neutrality bill
Reps. Henry Waxman (D-Calif.) and Anna Eshoo (D-Calif.) and Sen. Ed Markey (D-Mass.) and others callied for the net neutrality rules to be reinstated to prevent Internet service providers from treating websites differently online.
Waxman said: “Our bill very simply ensures that consumers can continue to access the content and applications of their choosing online."
Read more: http://thehill.com/blogs/hillicon-valley/technology/197289-dem-bill-would-reinstate-net-neutrality-rules#ixzz2sMOByY9k
Subsequent reports suggest that the bill has made little progress, and may not move forward.
Reps. Henry Waxman (D-Calif.) and Anna Eshoo (D-Calif.) and Sen. Ed Markey (D-Mass.) and others callied for the net neutrality rules to be reinstated to prevent Internet service providers from treating websites differently online.
Waxman said: “Our bill very simply ensures that consumers can continue to access the content and applications of their choosing online."
Read more: http://thehill.com/blogs/hillicon-valley/technology/197289-dem-bill-would-reinstate-net-neutrality-rules#ixzz2sMOByY9k
Subsequent reports suggest that the bill has made little progress, and may not move forward.
Avoid tax assistance scams
The National Consumer Law Center has issued Tax time consumer troubles, which warns consumers about a host of problems that they may encounter from largely worthless (but expensive) refund-anticipation products and from abuse and incompetence in the tax-preparation industry. See also NCLC's comprehensive report on that industry, which included specific proposals for reform.
The National Consumer Law Center has issued Tax time consumer troubles, which warns consumers about a host of problems that they may encounter from largely worthless (but expensive) refund-anticipation products and from abuse and incompetence in the tax-preparation industry. See also NCLC's comprehensive report on that industry, which included specific proposals for reform.
St. Luke’s acquisition of Saltzer Medical Group ruled in violation of state and federal antitrust laws
The U.S. District Court in Idaho hasissued the attached order ruling that St. Luke’s acquisition of Saltzer Medical Group was in violation of state and federal antitrust laws. The court’s analysis will be set forth in greater detail in publicly filed Findings of Fact and Conclusions of Law.
http://www.ag.idaho.gov/media/newsReleases/2014/nr_01242014.html
http://www.ftc.gov/enforcement/cases-and-proceedings/cases/2013/03/st-lukes-health-system-ltd-and-saltzer-medical-group
A free speech right to criticize your shoddy contractor on Yelp? --Commentary from Public Citizen
Dietz v. Perez: Virginia Jury Finds Both Sides at Fault, Awards No Damages
A bit over a year ago, I [Paul Levy] discussed on this blog a petition that we filed in the Virginia Supreme Court seeking to set aside a preliminary injunction issued by a state trial judge in a defamation suit filed by a Maryland contractor, Christopher Dietz, against a Virginia woman, Jane Perez, who had posted reviews on Yelp and Angie's List complaining about the contractor's shoddy work as well as the disappearance of some jewelry from her home while his staff had keys to the condo. We argued that such an injunction was a prior restraint that was necessarily entered on less than a full record, and the determination of whether any relief was appropriate should await a full trial before a jury of their peers. The Virginia Supreme Court reversed, almost by return mail.
That trial was held this past week, both on Dietz's suit against Perez and Perez's own counterclaims for the damages he caused her. Perez was represented by a pro bono lawyer, the redoubtable Raymond Battocchi. Dietz spent what I am told was "a lot of money" on a succession of private attorneys. The upshot after five days of trial was a split decision -- the jury decided that each side had defamed the other, but decided to award no damages to either.
From Paul Levy's blog at http://pubcit.typepad.com/clpblog/2014/01/dietz-v-perez-virginia-jury-finds-both-sides-at-fault-awards-no-damages.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+ConsumerLawPolicyBlog+%28Consumer+Law+%26+Policy+Blog%29
Dietz v. Perez: Virginia Jury Finds Both Sides at Fault, Awards No Damages
A bit over a year ago, I [Paul Levy] discussed on this blog a petition that we filed in the Virginia Supreme Court seeking to set aside a preliminary injunction issued by a state trial judge in a defamation suit filed by a Maryland contractor, Christopher Dietz, against a Virginia woman, Jane Perez, who had posted reviews on Yelp and Angie's List complaining about the contractor's shoddy work as well as the disappearance of some jewelry from her home while his staff had keys to the condo. We argued that such an injunction was a prior restraint that was necessarily entered on less than a full record, and the determination of whether any relief was appropriate should await a full trial before a jury of their peers. The Virginia Supreme Court reversed, almost by return mail.
That trial was held this past week, both on Dietz's suit against Perez and Perez's own counterclaims for the damages he caused her. Perez was represented by a pro bono lawyer, the redoubtable Raymond Battocchi. Dietz spent what I am told was "a lot of money" on a succession of private attorneys. The upshot after five days of trial was a split decision -- the jury decided that each side had defamed the other, but decided to award no damages to either.
From Paul Levy's blog at http://pubcit.typepad.com/clpblog/2014/01/dietz-v-perez-virginia-jury-finds-both-sides-at-fault-awards-no-damages.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+ConsumerLawPolicyBlog+%28Consumer+Law+%26+Policy+Blog%29
Help for SNAP shoppers at farmer's markets
Buried in more than 900 pages of the new propose farm bill is a small nationwide program that will allow low-income families to double their food stamp (SNAP) benefits at farmers markets.
“This program helps families buy healthy food from their local farmers markets, which also helps family farmers and boosts the economy,” said Sen. Debbie Stabenow (D-Mich.), chairwoman of the Senate Agriculture Committee, who was instrumental in introducing the plan.
The program is expected to provide matching funds to farmers markets, up to $20 million annually for five years, to incentivize SNAP recipients to buy more fresh fruits and vegetables with their benefits.
See full Washington Post article at http://www.washingtonpost.com/lifestyle/food/farm-bill-contains-farmers-market-program-that-food-advocates-for-poor-see-as-hopeful/2014/01/30/b86c9b74-89e3-11e3-833c-33098f9e5267_story.html?tid=hpModule_308f7142-9199-11e2-bdea-e32ad90da239&hpid=z14
In D.C. the FRESHFARM Markets program already accepts SNAP at 6 markets: 5 in DC (by the White House, Dupont Circle, Foggy Bottom, H Street NE and Penn Quarter), and one in Maryland (Silver Spring, MD).
FRESHFARM Markets already offers a Matching Dollar incentive to SNAP, WIC and Senior FMNP customers at the six markets that accept SNAP (listed above). It appears that the the farm bill provisions will aid the existing program.
The FRESHFARM instructions: At the FRESHFARM Market Information tent, tell market staff how much in SNAP, WIC, or Senior FMNP you would like to spend. Market staff will match your redemption with FREE Match wooden tokens (with a maximum of $15 free per visit).
See: http://freshfarmmarkets.org/programs/nutrition_assistance_programs.php
Buried in more than 900 pages of the new propose farm bill is a small nationwide program that will allow low-income families to double their food stamp (SNAP) benefits at farmers markets.
“This program helps families buy healthy food from their local farmers markets, which also helps family farmers and boosts the economy,” said Sen. Debbie Stabenow (D-Mich.), chairwoman of the Senate Agriculture Committee, who was instrumental in introducing the plan.
The program is expected to provide matching funds to farmers markets, up to $20 million annually for five years, to incentivize SNAP recipients to buy more fresh fruits and vegetables with their benefits.
See full Washington Post article at http://www.washingtonpost.com/lifestyle/food/farm-bill-contains-farmers-market-program-that-food-advocates-for-poor-see-as-hopeful/2014/01/30/b86c9b74-89e3-11e3-833c-33098f9e5267_story.html?tid=hpModule_308f7142-9199-11e2-bdea-e32ad90da239&hpid=z14
In D.C. the FRESHFARM Markets program already accepts SNAP at 6 markets: 5 in DC (by the White House, Dupont Circle, Foggy Bottom, H Street NE and Penn Quarter), and one in Maryland (Silver Spring, MD).
FRESHFARM Markets already offers a Matching Dollar incentive to SNAP, WIC and Senior FMNP customers at the six markets that accept SNAP (listed above). It appears that the the farm bill provisions will aid the existing program.
The FRESHFARM instructions: At the FRESHFARM Market Information tent, tell market staff how much in SNAP, WIC, or Senior FMNP you would like to spend. Market staff will match your redemption with FREE Match wooden tokens (with a maximum of $15 free per visit).
See: http://freshfarmmarkets.org/programs/nutrition_assistance_programs.php
From Public Citizen blog: Fourth Circuit: FDCPA Gives Consumers the Right to Oral Disputes
Does federal law require debt collectors to give consumers the right to make oral disputes (as the Second and Ninth Circuits have held), or may debt collectors insist that any disputes be made in writing (as the Third Circuit has held)? Today, the Fourth Circuit issued a short published opinion agreeing with the Second and Ninth Circuits. I argued this case back in October and am pleased to see that the court adopted the straightforward plain-meaning analysis urged in our opening and reply briefs. This posting includes an audio/video/photo media file: Download Now
The blog is at http://pubcit.typepad.com/clpblog/2014/01/fourth-circuit-fdcpa-gives-consumers-the-right-to-make-oral-disputeso-.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+ConsumerLawPolicyBlog+%28Consumer+Law+%26+Policy+Blog%29
Does federal law require debt collectors to give consumers the right to make oral disputes (as the Second and Ninth Circuits have held), or may debt collectors insist that any disputes be made in writing (as the Third Circuit has held)? Today, the Fourth Circuit issued a short published opinion agreeing with the Second and Ninth Circuits. I argued this case back in October and am pleased to see that the court adopted the straightforward plain-meaning analysis urged in our opening and reply briefs. This posting includes an audio/video/photo media file: Download Now
The blog is at http://pubcit.typepad.com/clpblog/2014/01/fourth-circuit-fdcpa-gives-consumers-the-right-to-make-oral-disputeso-.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+ConsumerLawPolicyBlog+%28Consumer+Law+%26+Policy+Blog%29
The NY Times opines on regulation of pay-day style loans
The rules from the F.D.I.C. and the O.C.C. attacked this vicious cycle [of pay day style loans] by requiring the banks to determine if the borrowers could pay their debts, limited them to one loan per monthly statement cycle and said they could not grant a new loan until the previous one was paid off. Several big banks have since announced that they are getting out of the deposit advance business.
But new forms of exploitation will invariably arise unless the Consumer Financial Protection Bureau writes broad affordability rules of its own. These rules, suggested by The Pew Charitable Trusts’ Safe Small-Dollar Loans Research Project, would limit monthly loan payments to 5 percent of the borrowers’ pretax income, spread the costs of fees and interest over the life of the loan and require clear disclosure of all costs. Rules like these will give unsuspecting borrowers even more protection from being ambushed by debt.
http://www.nytimes.com/2014/01/24/opinion/progress-on-predatory-lending.html?action=click&contentCollection=Technology®ion=Footer&module=Recommendation&src=recg&pg
The rules from the F.D.I.C. and the O.C.C. attacked this vicious cycle [of pay day style loans] by requiring the banks to determine if the borrowers could pay their debts, limited them to one loan per monthly statement cycle and said they could not grant a new loan until the previous one was paid off. Several big banks have since announced that they are getting out of the deposit advance business.
But new forms of exploitation will invariably arise unless the Consumer Financial Protection Bureau writes broad affordability rules of its own. These rules, suggested by The Pew Charitable Trusts’ Safe Small-Dollar Loans Research Project, would limit monthly loan payments to 5 percent of the borrowers’ pretax income, spread the costs of fees and interest over the life of the loan and require clear disclosure of all costs. Rules like these will give unsuspecting borrowers even more protection from being ambushed by debt.
http://www.nytimes.com/2014/01/24/opinion/progress-on-predatory-lending.html?action=click&contentCollection=Technology®ion=Footer&module=Recommendation&src=recg&pg
US PIRG among groups opposing proposed farm bill
US PIRG explains that in last-second backroom negotiations, lobbyists from Big Ag convinced key legislators -- namely, Ag Committee Chairs Frank Lucas and Debbie Stabenow -- to strip out improvements from the bill that were demanded by more than 300,000 Americans and 1,000 small farmers. If the bill passes and gets signed into law, billions more of our tax dollars will pay for junk food ingredients like high-fructose corn syrup. US PIRG says the facts are just as ridiculous as ever: three-quarters of these farm subsidies get snapped up by just four percent of farmers, and more than a billion dollars a year go to produce junk food additives.
We support the SNAP food stamp program, and oppose taxpayer subsidies to wealthy corporate farmers.
See http://www.uspirg.org/news/usp/new-farm-bill-contains-massive-taxpayer-handouts-big-ag-last-minute-deal-removed-even
US PIRG explains that in last-second backroom negotiations, lobbyists from Big Ag convinced key legislators -- namely, Ag Committee Chairs Frank Lucas and Debbie Stabenow -- to strip out improvements from the bill that were demanded by more than 300,000 Americans and 1,000 small farmers. If the bill passes and gets signed into law, billions more of our tax dollars will pay for junk food ingredients like high-fructose corn syrup. US PIRG says the facts are just as ridiculous as ever: three-quarters of these farm subsidies get snapped up by just four percent of farmers, and more than a billion dollars a year go to produce junk food additives.
We support the SNAP food stamp program, and oppose taxpayer subsidies to wealthy corporate farmers.
See http://www.uspirg.org/news/usp/new-farm-bill-contains-massive-taxpayer-handouts-big-ag-last-minute-deal-removed-even
CFPB Takes Action Against PHH Corporation for Mortgage Insurance Kickbacks
The Consumer Financial Protection Bureau (CFPB) has initiated an administrative proceeding against PHH Corporation and its affiliates (PHH), alleging PHH harmed consumers through a mortgage insurance kickback scheme that started as early as 1995. The CFPB is seeking a civil fine, a permanent injunction to prevent future violations, and victim restitution.
http://www.consumerfinance.gov/newsroom/cfpb-takes-action-against-phh-corporation-for-mortgage-insurance-kickbacks/
The Consumer Financial Protection Bureau (CFPB) has initiated an administrative proceeding against PHH Corporation and its affiliates (PHH), alleging PHH harmed consumers through a mortgage insurance kickback scheme that started as early as 1995. The CFPB is seeking a civil fine, a permanent injunction to prevent future violations, and victim restitution.
http://www.consumerfinance.gov/newsroom/cfpb-takes-action-against-phh-corporation-for-mortgage-insurance-kickbacks/
Complaint says California HMO and local government suppress competition
A complaint filed in the U. S. District Court for the Eastern District of California (Horisons Unlimited v. Santa Cruz-Monterey-Merced Managed Medical Care Commission d/b/a Central California Alliance for Health., January 27, 2014) alleges anticompetitive conduct by an HMO and county government. The alleged anticompetitive conduct is suppression of practitioner competition.
A complaint filed in the U. S. District Court for the Eastern District of California (Horisons Unlimited v. Santa Cruz-Monterey-Merced Managed Medical Care Commission d/b/a Central California Alliance for Health., January 27, 2014) alleges anticompetitive conduct by an HMO and county government. The alleged anticompetitive conduct is suppression of practitioner competition.
State regulation of bitcoin
Benjamin Lawsky, NY State’s superintendent of financial services, said New York will be the first to propose rules for the new technology’s oversight. State hearings began a day after a Bitcoin promoter was indicted on money-laundering charges.
http://www.bloomberg.com/news/2014-01-29/new-york-state-regulator-promises-tough-bitcoin-rules.html
Benjamin Lawsky, NY State’s superintendent of financial services, said New York will be the first to propose rules for the new technology’s oversight. State hearings began a day after a Bitcoin promoter was indicted on money-laundering charges.
http://www.bloomberg.com/news/2014-01-29/new-york-state-regulator-promises-tough-bitcoin-rules.html
Federal law revives tenant state law clains in California
In Nativi v. Deutsche Bank, the California Court of Appeal applied the federal Protecting Tenants Against Foreclosure Act of 2009 (PTFA) to revive two renters' state-law claims against the bank that bought the property they were renting.
In Nativi v. Deutsche Bank, the California Court of Appeal applied the federal Protecting Tenants Against Foreclosure Act of 2009 (PTFA) to revive two renters' state-law claims against the bank that bought the property they were renting.
New Hampshire legislators Vote to Limit Interest on Title Loans
New Hampshire State legislators have voted in favor of restricting the amount of interest that title loan companies can charge customers in New Hampshire. House Bill 562, approved on a 212-129 vote, stipulates that title loan providers may impose interest of 25 percent at most for the first month and no more than 3 percent a month after that.
http://www.unionleader.com/article/20140116/NEWS06/140119473
New Hampshire State legislators have voted in favor of restricting the amount of interest that title loan companies can charge customers in New Hampshire. House Bill 562, approved on a 212-129 vote, stipulates that title loan providers may impose interest of 25 percent at most for the first month and no more than 3 percent a month after that.
http://www.unionleader.com/article/20140116/NEWS06/140119473
STATE UNFAIR TRADE PRACTICES— from Antitrust Law Daily
Vehicle purchasers stated New Jersey and Georgia consumer protection law claims against BMW of North America, LLC for allegedly omitting information regarding a defect in their vehicles, the federal district court in Newark has held (Skeen v. BMW of North America, LLC, January 24, 2014, Walls, W.). Claims based on affirmative misrepresentations and the Illinois consumer protection law were dismissed without prejudice.
* * *
A homeowner sufficiently plead unfair practices claims against a mortgage loan and banking services provider for violations of the Illinois Consumer Fraud Act (ICFA) in relation to the servicing of his mortgage loan, the federal district court in Chicago has decided (Typpi v. PNC Bank, January 27, 2014, Bucklo, E.). However, the homeowner’s claim of deceptive conduct under the ICFA was dismissed for failure to state a claim.
Vehicle purchasers stated New Jersey and Georgia consumer protection law claims against BMW of North America, LLC for allegedly omitting information regarding a defect in their vehicles, the federal district court in Newark has held (Skeen v. BMW of North America, LLC, January 24, 2014, Walls, W.). Claims based on affirmative misrepresentations and the Illinois consumer protection law were dismissed without prejudice.
* * *
A homeowner sufficiently plead unfair practices claims against a mortgage loan and banking services provider for violations of the Illinois Consumer Fraud Act (ICFA) in relation to the servicing of his mortgage loan, the federal district court in Chicago has decided (Typpi v. PNC Bank, January 27, 2014, Bucklo, E.). However, the homeowner’s claim of deceptive conduct under the ICFA was dismissed for failure to state a claim.
More monopsony power stories in milk
In Allen v. Dairy Farmers of America, Inc., complaining dairy farmers allege a theory of monopsonization based on unilateral and conspiratorial conduct in violation of federal antitrust law. They contended that Dairy Farmers of America, Inc. (DFA), Dairy Marketing Services, LLC (DMS), and others conspired to depress prices for raw Grade A milk paid to farmers and to allocate markets in the Northeast United States. Issues in the linked opinion concern expert testimony
In Allen v. Dairy Farmers of America, Inc., complaining dairy farmers allege a theory of monopsonization based on unilateral and conspiratorial conduct in violation of federal antitrust law. They contended that Dairy Farmers of America, Inc. (DFA), Dairy Marketing Services, LLC (DMS), and others conspired to depress prices for raw Grade A milk paid to farmers and to allocate markets in the Northeast United States. Issues in the linked opinion concern expert testimony
May GMA food labeling case be pursued under state law where federal agency has remained silent?
Defendant Gruma Corp.argues that a proposed food labeling class action in California should be dismissed on jurisdictional grounds, even though the U.S. Food and Drug Administration recently refused to determine whether genetically modified food can be marketed as “natural.”
Plaintiff’s brief argues in opposition:
“Defendant claims Plaintiff’s state law causes of action are subject to the primary jurisdiction doctrine. . . . Courts invoke primary jurisdiction only when there is evidence of some “administrative action” on an issue. . . .The Court need only give the agency a “reasonable opportunity” to resolve an issue that may be within its primary Because the FDA has declined to determine whether and under what circumstances food products containing genetically engineered ingredients may or may not be labeled ‘natural,’ the Court should not invoke the primary jurisdiction doctrine.”
Cox v. Gruma, US District Court, Northern District of California (Oakland) Case4:12-cv-06502-YGR Document72 Filed01/24/14
Defendant Gruma Corp.argues that a proposed food labeling class action in California should be dismissed on jurisdictional grounds, even though the U.S. Food and Drug Administration recently refused to determine whether genetically modified food can be marketed as “natural.”
Plaintiff’s brief argues in opposition:
“Defendant claims Plaintiff’s state law causes of action are subject to the primary jurisdiction doctrine. . . . Courts invoke primary jurisdiction only when there is evidence of some “administrative action” on an issue. . . .The Court need only give the agency a “reasonable opportunity” to resolve an issue that may be within its primary Because the FDA has declined to determine whether and under what circumstances food products containing genetically engineered ingredients may or may not be labeled ‘natural,’ the Court should not invoke the primary jurisdiction doctrine.”
Cox v. Gruma, US District Court, Northern District of California (Oakland) Case4:12-cv-06502-YGR Document72 Filed01/24/14
State AG intervenes in pharma kickback case
The state of Washington on Friday intervened in a False Claims Act whistleblower case against Novartis Pharmaceuticals Corp. for allegedly paying kickbacks to a specialty pharmacy to keep patients on its iron reduction drug Exjade, saying it hopes to recoup the Medicaid funds it lost.
http://www.lexisnexis.com/legalnewsroom/workers-compensation/b/newsheadlines/archive/2014/01/27/wash-joins-suit-over-novartis-exjade-kickbacks.aspx
The state of Washington on Friday intervened in a False Claims Act whistleblower case against Novartis Pharmaceuticals Corp. for allegedly paying kickbacks to a specialty pharmacy to keep patients on its iron reduction drug Exjade, saying it hopes to recoup the Medicaid funds it lost.
http://www.lexisnexis.com/legalnewsroom/workers-compensation/b/newsheadlines/archive/2014/01/27/wash-joins-suit-over-novartis-exjade-kickbacks.aspx
Cobb Theaters has filed a federal antitrust lawsuit in Georgia, alleging AMC has used its worldwide market power to coerce film distributors to deprive competitors of access to studio films
AMC owns about 350 theaters with more than 5,000 screens in North America, and is a major presence in the DC area. It's the second-largest theater circuit in the U.S., and after being acquired by Chinese conglomerate Wanda Group, wields enormous power as the world's largest cinema operator. Now the question is whether AMC is abusing that power. Last July, two U.S. government agencies and three Chinese authorities blessed the merger and presumably reviewed any antitrust concerns.
Cobb, which owns 19 theaters and 231 screens in the Southeast region, isn't satisfied. According to the Cobb complaint, "Dominant exhibitor circuits like AMC derive substantial market power from their ability to provide numerous exhibition locations or runs simultaneously to distributors for the wide release of a film, including locations in non-competitive zones where a distributor has no other alternative exhibitor to play a film."
Excerpted from http://www.hollywoodreporter.com/thr-esq/amc-accused-coercing-film-distributors-673777
AMC owns about 350 theaters with more than 5,000 screens in North America, and is a major presence in the DC area. It's the second-largest theater circuit in the U.S., and after being acquired by Chinese conglomerate Wanda Group, wields enormous power as the world's largest cinema operator. Now the question is whether AMC is abusing that power. Last July, two U.S. government agencies and three Chinese authorities blessed the merger and presumably reviewed any antitrust concerns.
Cobb, which owns 19 theaters and 231 screens in the Southeast region, isn't satisfied. According to the Cobb complaint, "Dominant exhibitor circuits like AMC derive substantial market power from their ability to provide numerous exhibition locations or runs simultaneously to distributors for the wide release of a film, including locations in non-competitive zones where a distributor has no other alternative exhibitor to play a film."
Excerpted from http://www.hollywoodreporter.com/thr-esq/amc-accused-coercing-film-distributors-673777
Microsoft is withdrawing support for XP operating systems in April, but most ATMs still use XP
Aravinda Korala, chief executive officer of ATM software provider KAL, says he expects only 15 percent of bank ATMs in the U.S. to be on Windows 7 by the April deadline. “The ATM world is not really ready, and that’s not unusual,” he says. Microsoft is selling custom tech support agreements to banks that may extend the life of Windows XP, although it is not clear what the scope of the extended support will be.
Will use of old XP technology at bank ATMs put customers at risk? We don’t know, but some reports suggest that extended XP support by Microsoft will be limited.
See http://www.businessweek.com/articles/2014-01-16/atms-face-deadline-to-upgrade-from-windows-xp
Aravinda Korala, chief executive officer of ATM software provider KAL, says he expects only 15 percent of bank ATMs in the U.S. to be on Windows 7 by the April deadline. “The ATM world is not really ready, and that’s not unusual,” he says. Microsoft is selling custom tech support agreements to banks that may extend the life of Windows XP, although it is not clear what the scope of the extended support will be.
Will use of old XP technology at bank ATMs put customers at risk? We don’t know, but some reports suggest that extended XP support by Microsoft will be limited.
See http://www.businessweek.com/articles/2014-01-16/atms-face-deadline-to-upgrade-from-windows-xp
Thousands of primary-care doctors and specialists across the country have been terminated from privately run Medicare Advantage plans
The terminations have sparked a battle between doctors who say patient care is being threatened and insurers that insist they have to reduce costs and streamline their operations. Medical associations, which describe the dismissals as the largest in the program’s history, say the cuts are forcing some patients to leave their doctors in mid-treatment and creating gaps in the types of medical specialists covered in some areas. They’re taking their protests to court, and having some success.
See http://www.washingtonpost.com/national/health-science/doctors-cut-from-medicare-advantage-networks-struggle-with-what-to-tell-patients/2014/01/25/541bfbd8-77b4-11e3-af7f-13bf0e9965f6_story.html?tid=pm_national_pop
The terminations have sparked a battle between doctors who say patient care is being threatened and insurers that insist they have to reduce costs and streamline their operations. Medical associations, which describe the dismissals as the largest in the program’s history, say the cuts are forcing some patients to leave their doctors in mid-treatment and creating gaps in the types of medical specialists covered in some areas. They’re taking their protests to court, and having some success.
See http://www.washingtonpost.com/national/health-science/doctors-cut-from-medicare-advantage-networks-struggle-with-what-to-tell-patients/2014/01/25/541bfbd8-77b4-11e3-af7f-13bf0e9965f6_story.html?tid=pm_national_pop
CFPB Study of mandatory arbitration clauses draws industry concern and consumer advocates' support
In December, the Consumer Financial Protection Bureau published its “Arbitration Study Preliminary Results,” mandated by section 1028(a) of the Dodd-Frank Act ("study"). The study seems to indicate that the Consumer Financial Protection Bureau may either ban or severely limit arbitration provisions in consumer financial service contracts. Industry commenters have been quick to notice and criticize the Study, and consumer advocates need to be as quick in noticing and supporting it. Several preliminary findings of the Study are particularly important to consumer advocates (including advocates of consumer class actions):
In December, the Consumer Financial Protection Bureau published its “Arbitration Study Preliminary Results,” mandated by section 1028(a) of the Dodd-Frank Act ("study"). The study seems to indicate that the Consumer Financial Protection Bureau may either ban or severely limit arbitration provisions in consumer financial service contracts. Industry commenters have been quick to notice and criticize the Study, and consumer advocates need to be as quick in noticing and supporting it. Several preliminary findings of the Study are particularly important to consumer advocates (including advocates of consumer class actions):
- Nearly all the arbitration clauses studied include provisions stating that arbitration may not proceed on a class basis — probably the single most important concern to the industry.
- In the credit card market, larger bank issuers are more likely to include arbitration clauses than smaller bank issuers and credit unions.
- In the checking account market, larger banks tend to include arbitration clauses in their consumer checking contracts, while midsized and smaller banks and credit unions do not.
- In its prepaid card sample, arbitration clauses are included across the market.
- Most arbitration clauses contain small claims court carveouts. Credit card issuers are significantly more likely to sue consumers in small claims court than the other way around.
Verizon buys Intel's "over the top" internet TV service
The New York Times reports that Verizon plans to buy the intellectual property and assets of Intel Media, the digital TV division of Intel, which developed a solution to offer TV channels over the Internet.
The Times explains that when Intel pushed its vision of TV via internet, the cable companies stood in the way. Time Warner Cable and other cable and satellite distributors, protecting their interests, pressured the owners of cable channels to not sign contracts with Intel.
As an earlier New York Times article explained, prospective "over the top" products like Intel TV, delivered through the broadband Internet, have the potential to radically alter the media marketplace in the United States. A service like Intel’s — with dozens of channels, big and small, streaming through a modern interface — could cause more consumers to cancel their cable subscriptions.
In the earlier article about Intel’s efforts, the Times said that to Intel, and to some analysts, the behavior by the existing distributors — in some cases giving financial incentives to friendly channel owners, in other cases including punitive measures in contracts — had an anticompetitive whiff. The earlier Times article quotes Gigi B. Sohn, the president of the public interest group Public Knowledge, as saying “The government has to step up and protect these companies, or the incumbents are going to kill them in their cradles.”
It seems like Intel’s "over the top" competitive effort is in fact now dead in its cradle. It is conceivable, I suppose, that Verizon could itself become a substitute disruptive competitor, and the New York Times article seems to hint at that. The alternate possibility is that Verizon, which offers internet broadband to the home in a manner similar to Comcast, will not be so disruptive, and instead mimic the market behavior of Comcast and Time Warner Cable.
Posted by DAR 1-21-2014
The New York Times reports that Verizon plans to buy the intellectual property and assets of Intel Media, the digital TV division of Intel, which developed a solution to offer TV channels over the Internet.
The Times explains that when Intel pushed its vision of TV via internet, the cable companies stood in the way. Time Warner Cable and other cable and satellite distributors, protecting their interests, pressured the owners of cable channels to not sign contracts with Intel.
As an earlier New York Times article explained, prospective "over the top" products like Intel TV, delivered through the broadband Internet, have the potential to radically alter the media marketplace in the United States. A service like Intel’s — with dozens of channels, big and small, streaming through a modern interface — could cause more consumers to cancel their cable subscriptions.
In the earlier article about Intel’s efforts, the Times said that to Intel, and to some analysts, the behavior by the existing distributors — in some cases giving financial incentives to friendly channel owners, in other cases including punitive measures in contracts — had an anticompetitive whiff. The earlier Times article quotes Gigi B. Sohn, the president of the public interest group Public Knowledge, as saying “The government has to step up and protect these companies, or the incumbents are going to kill them in their cradles.”
It seems like Intel’s "over the top" competitive effort is in fact now dead in its cradle. It is conceivable, I suppose, that Verizon could itself become a substitute disruptive competitor, and the New York Times article seems to hint at that. The alternate possibility is that Verizon, which offers internet broadband to the home in a manner similar to Comcast, will not be so disruptive, and instead mimic the market behavior of Comcast and Time Warner Cable.
Posted by DAR 1-21-2014
Federal District Court in Illinois Certifies Hospital Patient Class In Postmerger Antitrust Lawsuit
January 2 2014
Article by Toby G. Singer, Paula W. Render, Michael A. Gleason and Roberto C. Castillo
Jones Day
On December 10, 2013, the U.S. District Court for the Northern District of Illinois granted class certification to customers claiming that the merger of two Chicago-area hospital groups, Evanston Northwestern Healthcare Corp. (ENH) and Highland Park Hospital, resulted in higher prices for patients. Class action litigation in merger cases is not common, because the remedy for a prospective merger challenge is an injunction, not damages. Because this case is a challenge to a completed transaction, where plaintiffs can allege actual injury not just prospective harm, it could result in a significant monetary recovery for plaintiffs. This is the first private antitrust class action in a hospital merger case.
For complete article:
http://www.mondaq.com/unitedstates/x/283924/Antitrust+Competition/Federal+District+Court+Certifies+Hospital+Patient+Class+In+Postmerger+Antitrust+Lawsuit
January 2 2014
Article by Toby G. Singer, Paula W. Render, Michael A. Gleason and Roberto C. Castillo
Jones Day
On December 10, 2013, the U.S. District Court for the Northern District of Illinois granted class certification to customers claiming that the merger of two Chicago-area hospital groups, Evanston Northwestern Healthcare Corp. (ENH) and Highland Park Hospital, resulted in higher prices for patients. Class action litigation in merger cases is not common, because the remedy for a prospective merger challenge is an injunction, not damages. Because this case is a challenge to a completed transaction, where plaintiffs can allege actual injury not just prospective harm, it could result in a significant monetary recovery for plaintiffs. This is the first private antitrust class action in a hospital merger case.
For complete article:
http://www.mondaq.com/unitedstates/x/283924/Antitrust+Competition/Federal+District+Court+Certifies+Hospital+Patient+Class+In+Postmerger+Antitrust+Lawsuit
A.G. Schneiderman Announces Settlement With Western Sky Financial And Cashcall For Illegal Loans Made Over The Internet Companies Agree To Stop Collecting Illegal Interest, Pay Penalties And Restitution
NEW YORK - Attorney General Eric T. Schneiderman today announced that his office has reached a settlement agreement with Western Sky Financial, LLC, CashCall, Inc., WS Funding, LLC, and their owners, Martin Webb and J. Paul Reddam, for violations of New York’s usury and licensed lender laws in connection with personal loans they made over the Internet. Under the terms of the settlement, the companies and their owners will cease collecting interest on outstanding loans made by Western Sky to New York consumers, provide refunds to New York borrowers who have paid back more than the principal of their loan plus the legal interest rate of 16%, and pay $1.5 million in penalties.
The companies charged New Yorkers annual rates of interest ranging from 89% to more than 355%.
See http://www.ag.ny.gov/press-release/ag-schneiderman-announces-settlement-western-sky-financial-and-cashcall-illegal-loans
NEW YORK - Attorney General Eric T. Schneiderman today announced that his office has reached a settlement agreement with Western Sky Financial, LLC, CashCall, Inc., WS Funding, LLC, and their owners, Martin Webb and J. Paul Reddam, for violations of New York’s usury and licensed lender laws in connection with personal loans they made over the Internet. Under the terms of the settlement, the companies and their owners will cease collecting interest on outstanding loans made by Western Sky to New York consumers, provide refunds to New York borrowers who have paid back more than the principal of their loan plus the legal interest rate of 16%, and pay $1.5 million in penalties.
The companies charged New Yorkers annual rates of interest ranging from 89% to more than 355%.
See http://www.ag.ny.gov/press-release/ag-schneiderman-announces-settlement-western-sky-financial-and-cashcall-illegal-loans
FTC Staff: Massachusetts Should Consider Removing Physician Supervision Requirements for Nurse Practitioners and Nurse Anesthetists For Your Information January 23, 2014 Tags:
Federal Trade Commission staff, in response to a request from Massachusetts State Representative Kay Khan, provided comments on Massachusetts House Bill 2009, stating that, as proposed, the elimination of certain supervision requirements for nurse practitioners (NPs) and nurse anesthetists (NAs) would likely benefit consumers and competition in Massachusetts.
According to the FTC staff comment, H.2009 would permit NPs and NAs to order tests and therapeutics, and issue written prescriptions, without a supervisory agreement with a Massachusetts physician. It also would permit them to administer and dispense certain controlled substances without such supervisory agreements.
For more, see http://www.ftc.gov/news-events/press-releases/2014/01/ftc-staff-massachusetts-should-consider-removing-physician
Federal Trade Commission staff, in response to a request from Massachusetts State Representative Kay Khan, provided comments on Massachusetts House Bill 2009, stating that, as proposed, the elimination of certain supervision requirements for nurse practitioners (NPs) and nurse anesthetists (NAs) would likely benefit consumers and competition in Massachusetts.
According to the FTC staff comment, H.2009 would permit NPs and NAs to order tests and therapeutics, and issue written prescriptions, without a supervisory agreement with a Massachusetts physician. It also would permit them to administer and dispense certain controlled substances without such supervisory agreements.
For more, see http://www.ftc.gov/news-events/press-releases/2014/01/ftc-staff-massachusetts-should-consider-removing-physician
NY AG requires Cigna to pay mental health insurance claims
NEW YORK – After an investigation uncovered the wrongful denial of hundreds of claims for nutritional counseling for mental health conditions, NY Attorney General Eric T. Schneidermanannounced that his office has reached a settlement with Cigna Corporation, requiring the health insurer to reprocess and pay hundreds of claims for nutritional counseling for mental health conditions, in particular eating disorders, to members who were wrongfully denied those benefits.
Under the terms of the settlement, the company agrees to comply with Timothy’s Law, New York legislation enacted in 2006 and named for a 13-year-old Schenectady boy who committed suicide after an insurance company denied ongoing coverage for treatment of serious mental health issues, including hospitalizations.
“State law clearly requires health insurance companies to provide mental health benefits on par with other medical benefits. There is no gray area here,” Attorney General Schneiderman said.
For more detail
NEW YORK – After an investigation uncovered the wrongful denial of hundreds of claims for nutritional counseling for mental health conditions, NY Attorney General Eric T. Schneidermanannounced that his office has reached a settlement with Cigna Corporation, requiring the health insurer to reprocess and pay hundreds of claims for nutritional counseling for mental health conditions, in particular eating disorders, to members who were wrongfully denied those benefits.
Under the terms of the settlement, the company agrees to comply with Timothy’s Law, New York legislation enacted in 2006 and named for a 13-year-old Schenectady boy who committed suicide after an insurance company denied ongoing coverage for treatment of serious mental health issues, including hospitalizations.
“State law clearly requires health insurance companies to provide mental health benefits on par with other medical benefits. There is no gray area here,” Attorney General Schneiderman said.
For more detail
Food & Water Watch Slams Sysco-US Foods Merger
Watchdog warns merger would harm consumers, restaurants and food manufacturers; demands aggressive antitrust enforcement
Washington, D.C. — In response to the latest news of giant food corporations seeking to further consolidate, Food & Water Watch demanded that the U.S. Federal Trade Commission undertake a thorough and comprehensive analysis of the proposed merger between the two biggest U.S. food service distribution firms: Sysco Corp. and US Foods Holding Corp. These companies deliver food to restaurants, schools, hotels and other cafeteria and hospitality establishments.
In a letter sent January 8 to FTC Bureau of Competition Director Deborah Feinstein (and noted in a New York Times editorial on 1-21) Food & Water Watch outlines several antitrust concerns with the proposed corporate union that deserve close scrutiny; requests the agency to oppose the early termination of the antitrust review and urges federal regulators to extend the merger waiting period to thoroughly review the implications of the proposed merger.
See http://www.foodandwaterwatch.org/pressreleases/food-water-watch-slams-sysco-us-foods-merger/
Posted by DAR
Watchdog warns merger would harm consumers, restaurants and food manufacturers; demands aggressive antitrust enforcement
Washington, D.C. — In response to the latest news of giant food corporations seeking to further consolidate, Food & Water Watch demanded that the U.S. Federal Trade Commission undertake a thorough and comprehensive analysis of the proposed merger between the two biggest U.S. food service distribution firms: Sysco Corp. and US Foods Holding Corp. These companies deliver food to restaurants, schools, hotels and other cafeteria and hospitality establishments.
In a letter sent January 8 to FTC Bureau of Competition Director Deborah Feinstein (and noted in a New York Times editorial on 1-21) Food & Water Watch outlines several antitrust concerns with the proposed corporate union that deserve close scrutiny; requests the agency to oppose the early termination of the antitrust review and urges federal regulators to extend the merger waiting period to thoroughly review the implications of the proposed merger.
See http://www.foodandwaterwatch.org/pressreleases/food-water-watch-slams-sysco-us-foods-merger/
Posted by DAR
Availability of mortgages is low
The NY Times reports even as the housing market improves, new home loans are still scarce as interest rates have started to creep up. The nation’s biggest mortgage lender, Wells Fargo, extended $50 billion in mortgages in the fourth quarter, down 60 percent from a year ago. The nation’s largest bank, JPMorgan, for its part, extended $23 billion in mortgages, down 55 percent from a year ago. The declines reflected the waning of the refinancing boom prompted by record low interest rates. Without substantial income from refinancing, the banks’ mortgage businesses will now depend on making fresh loans to purchase houses, a business that, despite some revival, remains tepid.
“Much is riding on the appetite of large banks to make mortgages, both for the broader economic recovery and for Americans looking to own a home — long considered a way of obtaining a firm financial foothold. The results on Tuesday, though, reflect a deep timidity that persists among the banks, which have focused their lending almost exclusively on borrowers with pristine credit. That trepidation is driven by a mixture of factors. Battered by losses on subprime loans, the banks are wary of taking on risk and are skittish about exposing themselves to litigation related to any questionable mortgages.”
ttp://dealbook.nytimes.com/2014/01/14/as-refinancing-wanes-banks-remain-wary-of-new-loans/?action=click&contentCollection=International%20Business®ion=Footer&module=Recommendation&src=recg&pg
The NY Times reports even as the housing market improves, new home loans are still scarce as interest rates have started to creep up. The nation’s biggest mortgage lender, Wells Fargo, extended $50 billion in mortgages in the fourth quarter, down 60 percent from a year ago. The nation’s largest bank, JPMorgan, for its part, extended $23 billion in mortgages, down 55 percent from a year ago. The declines reflected the waning of the refinancing boom prompted by record low interest rates. Without substantial income from refinancing, the banks’ mortgage businesses will now depend on making fresh loans to purchase houses, a business that, despite some revival, remains tepid.
“Much is riding on the appetite of large banks to make mortgages, both for the broader economic recovery and for Americans looking to own a home — long considered a way of obtaining a firm financial foothold. The results on Tuesday, though, reflect a deep timidity that persists among the banks, which have focused their lending almost exclusively on borrowers with pristine credit. That trepidation is driven by a mixture of factors. Battered by losses on subprime loans, the banks are wary of taking on risk and are skittish about exposing themselves to litigation related to any questionable mortgages.”
ttp://dealbook.nytimes.com/2014/01/14/as-refinancing-wanes-banks-remain-wary-of-new-loans/?action=click&contentCollection=International%20Business®ion=Footer&module=Recommendation&src=recg&pg
CAFA news: When the US Supreme Court thinks a state court case can be forced into federal court, and when not
From an article by Jeffrey May, J.D.
One week after ruling that a State of Mississippi action against manufacturers of liquid crystal displays (LCDs) for conspiring to fix prices should not have been removed to federal court as a “mass action” under the Class Action Fairness Act (CAFA), the U.S. Supreme Court has rejected the other petition on its docket questioning the impact of CAFA on state antitrust enforcement actions.
The Court today denied a petition for certiorari filed in January 2014 by LCD panel makers AU Optronics Corporation and LG Display Company, seeking review of a decision of the U.S. Court of Appeals in Richmond, Virginia. That decision (699 F.3d 385, 2012-2 Trade Cases ¶78,100) upheld remand of price fixing suits brought by the State of South Carolina (AU Optronics Corp. v. State of South Carolina, Dkt. 12-911).
Left standing is the Fourth Circuit decision, concluding that the State of South Carolina was entitled to remand of the suits because diversity did not exist under either the traditional framework or the minimal diversity requirements of CAFA. CAFA loosened jurisdiction requirements in order for national “class actions” and “mass actions” to proceed in federal courts.
For full article:
Antitrust Law Daily January 21, 2014
From an article by Jeffrey May, J.D.
One week after ruling that a State of Mississippi action against manufacturers of liquid crystal displays (LCDs) for conspiring to fix prices should not have been removed to federal court as a “mass action” under the Class Action Fairness Act (CAFA), the U.S. Supreme Court has rejected the other petition on its docket questioning the impact of CAFA on state antitrust enforcement actions.
The Court today denied a petition for certiorari filed in January 2014 by LCD panel makers AU Optronics Corporation and LG Display Company, seeking review of a decision of the U.S. Court of Appeals in Richmond, Virginia. That decision (699 F.3d 385, 2012-2 Trade Cases ¶78,100) upheld remand of price fixing suits brought by the State of South Carolina (AU Optronics Corp. v. State of South Carolina, Dkt. 12-911).
Left standing is the Fourth Circuit decision, concluding that the State of South Carolina was entitled to remand of the suits because diversity did not exist under either the traditional framework or the minimal diversity requirements of CAFA. CAFA loosened jurisdiction requirements in order for national “class actions” and “mass actions” to proceed in federal courts.
For full article:
Antitrust Law Daily January 21, 2014
NY AG creates Criminal Enforcement and Financial Crimes Bureau
In a move that illustrates the potential scope of of local AG authority nation-wide, New York's attorney general announced a new Criminal Enforcement and Financial Crimes Bureau. NY AG Schneiderman said:
"Our newly created Criminal Enforcement and Financial Crimes Bureau will ferret out the bad actors in our critically important financial sector in order to protect our economy and investors. Financial industry leaders who play by the rules deserve a level playing field, and those bad actors who seek to take advantage of their competitors and their neighbors must be stopped and punished."
Posted by DAR 1-21-2014
In a move that illustrates the potential scope of of local AG authority nation-wide, New York's attorney general announced a new Criminal Enforcement and Financial Crimes Bureau. NY AG Schneiderman said:
"Our newly created Criminal Enforcement and Financial Crimes Bureau will ferret out the bad actors in our critically important financial sector in order to protect our economy and investors. Financial industry leaders who play by the rules deserve a level playing field, and those bad actors who seek to take advantage of their competitors and their neighbors must be stopped and punished."
Posted by DAR 1-21-2014
Large banks abandon short term deposit advance loans, bowing to federal regulators
Wells Fargo & Co., U.S. Bancorp and Fifth Third Bancorp announced they would stop offering deposit advance loans. No major bank will offer small-dollar, short-term loans. Pressure from regulators is credited for the change. The Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau all pressured the change.
Posted by DAR 1-21-2014
Wells Fargo & Co., U.S. Bancorp and Fifth Third Bancorp announced they would stop offering deposit advance loans. No major bank will offer small-dollar, short-term loans. Pressure from regulators is credited for the change. The Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau all pressured the change.
Posted by DAR 1-21-2014
Government approves fix for Chrysler gas tanks that Ditlow calls a sham
From an AP report:
The government is closing its investigation into older-model Jeeps with fuel tanks that could rupture and cause fires. . . .
The decision ends an unusually public struggle between Chrysler and NHTSA. The agency asked Chrysler to recall 2.7 million Jeeps last June, contending that their gas tanks — which are positioned behind the rear axle — were at risk of rupturing and catching fire in rear-end crashes. Involved were Grand Cherokee SUVs from the 1993 to 2004 model years and Liberty SUVs from 2002 to 2007.
Chrysler initially refused to recall the vehicles. The company said the rate of fuel leaks and fires after crashes was similar to comparable vehicles that were sold during the time in question. It was the first time in two years that an automaker had refused NHTSA’s request for a recall.
Chrysler later agreed to recall 1.56 million of the Jeeps and install trailer hitches on them to help protect the gas tanks. The company sent notices to the remaining customers saying their vehicles were fine if they have factory-installed or Chrysler-made trailer hitches.
* * * *
‘‘It is tragic that NHTSA approved Chrysler’s sham trailer hitch recall for Jeeps that explode in rear impacts,’’ the Center for Auto Safety’s director, Clarence Ditlow, said Friday.
The AP report can be found at http://www.boston.com/cars/news-and-reviews/2014/01/17/government-ending-jeep-investigation/87m2coMZeSA2DTgL2KCvJP/story.html
Posted by DAR 1-20-2014
From an AP report:
The government is closing its investigation into older-model Jeeps with fuel tanks that could rupture and cause fires. . . .
The decision ends an unusually public struggle between Chrysler and NHTSA. The agency asked Chrysler to recall 2.7 million Jeeps last June, contending that their gas tanks — which are positioned behind the rear axle — were at risk of rupturing and catching fire in rear-end crashes. Involved were Grand Cherokee SUVs from the 1993 to 2004 model years and Liberty SUVs from 2002 to 2007.
Chrysler initially refused to recall the vehicles. The company said the rate of fuel leaks and fires after crashes was similar to comparable vehicles that were sold during the time in question. It was the first time in two years that an automaker had refused NHTSA’s request for a recall.
Chrysler later agreed to recall 1.56 million of the Jeeps and install trailer hitches on them to help protect the gas tanks. The company sent notices to the remaining customers saying their vehicles were fine if they have factory-installed or Chrysler-made trailer hitches.
* * * *
‘‘It is tragic that NHTSA approved Chrysler’s sham trailer hitch recall for Jeeps that explode in rear impacts,’’ the Center for Auto Safety’s director, Clarence Ditlow, said Friday.
The AP report can be found at http://www.boston.com/cars/news-and-reviews/2014/01/17/government-ending-jeep-investigation/87m2coMZeSA2DTgL2KCvJP/story.html
Posted by DAR 1-20-2014
Target security breach puts renewed focus on U.S. delays in implementing more secure chip-based credit and debit cards
From http://www.npr.org/blogs/alltechconsidered/2013/12/19/255558139/outdated-magnetic-strips-how-u-s-credit-card-security-lags
Criminals may have stolen information from . A possible weakness? The — which fraudsters can pull credit card numbers and expiration dates from to make counterfeit cards.
Other countries moved beyond this technology years ago. , and are already using chip-based cards, which are considered more secure. (Magnetic stripe technology is decades old.) Cards using the chip-and-PIN system have an embedded microchip. Instead of swiping the part with a magnetic stripe, you put the card into a terminal, then enter a PIN or sign your name. It's more expensive for criminals to forge these cards.
Posted by DAR
From http://www.npr.org/blogs/alltechconsidered/2013/12/19/255558139/outdated-magnetic-strips-how-u-s-credit-card-security-lags
Criminals may have stolen information from . A possible weakness? The — which fraudsters can pull credit card numbers and expiration dates from to make counterfeit cards.
Other countries moved beyond this technology years ago. , and are already using chip-based cards, which are considered more secure. (Magnetic stripe technology is decades old.) Cards using the chip-and-PIN system have an embedded microchip. Instead of swiping the part with a magnetic stripe, you put the card into a terminal, then enter a PIN or sign your name. It's more expensive for criminals to forge these cards.
Posted by DAR
A thumbnail sketch of the U.S. Supreme Court case about Aereo tiny antennas against the TV networks
Consumer access to free TV and good and inexpensive internet access are major issues that pit consumer interests against the interests of large cable companies, telecom companies, and TV networks. See Susan Crawford's excellent book Captive Audience. The New York Times offers a useful quick summary of the case before the Supreme Court that involves Areo, a company that tries to use the legal loophole allowing for free TV through private antennas. (You clearly are allowed to put an antenna on your roof and receive local TV station signals for free.) TV networks say the loophole doesn't apply if the private antenna signal is transmitted by internet, which is what Areo does. As the article suggests, the free TV antenna loophole was put in doubt for Areo's internet-based business by Congressional legislation that allows TV stations to charge cable outlets for content:
For a monthly subscription that starts at $8, Aereo allows subscribers to watch or record broadcast television through the Internet on any device, small or large, no wires or cable boxes required. It does this by assigning each consumer a remote antenna and a DVR. To entertainment companies, this is cheating. Copyright law lets individuals watch anything they pick up by antennas as long as it is for their private use, but the broadcasters say Aereo’s transmissions constitute a “public performance” that requires Aereo to pay for retransmitting them. Aereo, they claim, is violating copyright and stealing their content.
The networks’ concern goes beyond Aereo. If the streaming service wins in court, networks fear that the cable and satellite companies that currently pay them huge retransmission fees might follow Aereo’s lead, a situation broadcasters say would destroy their bottom line.
http://www.nytimes.com/2014/01/20/business/media/chet-kanojia-and-aereo-seek-to-shake-up-television-industry.html?ribbon-ad-idx=3&rref=technology&module=Ribbon&version=origin®ion=Header&action=click&contentCollection=Technology&pg
Posted by DAR
Consumer access to free TV and good and inexpensive internet access are major issues that pit consumer interests against the interests of large cable companies, telecom companies, and TV networks. See Susan Crawford's excellent book Captive Audience. The New York Times offers a useful quick summary of the case before the Supreme Court that involves Areo, a company that tries to use the legal loophole allowing for free TV through private antennas. (You clearly are allowed to put an antenna on your roof and receive local TV station signals for free.) TV networks say the loophole doesn't apply if the private antenna signal is transmitted by internet, which is what Areo does. As the article suggests, the free TV antenna loophole was put in doubt for Areo's internet-based business by Congressional legislation that allows TV stations to charge cable outlets for content:
For a monthly subscription that starts at $8, Aereo allows subscribers to watch or record broadcast television through the Internet on any device, small or large, no wires or cable boxes required. It does this by assigning each consumer a remote antenna and a DVR. To entertainment companies, this is cheating. Copyright law lets individuals watch anything they pick up by antennas as long as it is for their private use, but the broadcasters say Aereo’s transmissions constitute a “public performance” that requires Aereo to pay for retransmitting them. Aereo, they claim, is violating copyright and stealing their content.
The networks’ concern goes beyond Aereo. If the streaming service wins in court, networks fear that the cable and satellite companies that currently pay them huge retransmission fees might follow Aereo’s lead, a situation broadcasters say would destroy their bottom line.
http://www.nytimes.com/2014/01/20/business/media/chet-kanojia-and-aereo-seek-to-shake-up-television-industry.html?ribbon-ad-idx=3&rref=technology&module=Ribbon&version=origin®ion=Header&action=click&contentCollection=Technology&pg
Posted by DAR
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American Airlines to drop routes at Reagan following merger deal with USDOJ and States
The Washington Post reports that American Airlines has said "it would end direct flights from Reagan National Airport to 17 small and midsize cities as part of the deal [involving vacating slots] that paved the way for its merger with US Airways. Analysts said it’s unlikely that the low-cost carriers that bid on the vacated slots will want to fly to less lucrative destinations such as Fayetteville, N.C., Savannah, Ga., and Islip, N.Y. In some cases, those airlines fly a single type of airplane that is too large to serve those markets." http://www.washingtonpost.com/local/trafficandcommuting/american-airlines-ends-direct-service-to-17-cities-from-national-airport-under-merger-deal/2014/01/15/345610f4-7df4-11e3-9556-4a4bf7bcbd84_story.html?tid=auto_ompleteerr
If the analysts referred to are right, then at least for the 17 cities mentioned the merger remedy of vacated slots will lead to a competitive situation much worse than if the government had simply blocked the merger. As a general observation, things don't necessarily work out perfectly where DOJ and the States allow a merger with the remedy of recreating lost competition.
Seven States and the District of Columbia joined the USDOJ Complaint challenging the merger. A question is what their participation was intended to achieve, and what it actually achieved.
Some, including a Forbes journalist, assume that the suing local AGs focused on some narrow form of local benefit. So, for our local area:
“Pennsylvania and Virginia both have relied heavily on US Airways in the past. Pittsburgh’s airport owes its size to US Airways, which used to operate a major hub there before pulling down flights a few years ago. Virginia, meanwhile, was US Airways’ previous home, before it merged with America West and headed west, to Phoenix. Virginia also is home to Reagan National Airport, where US Airways has a big presence.”
http://www.forbes.com/sites/michelinemaynard/2013/09/06/why-states-are-lining-up-to-oppose-the-american-us-airways-merger/
D.C. would appear to have local interests that align with Virginia’s.
There is doubt whether the Forbes journalist reads local AG motives correctly, or even coherently. A simpler and more generous view is that local AGs are more than stalking horses for local business interests, and want more rather than less competition at local airports. They want to do the right thing so that local citizens and others experience low, competitively-set prices on flights to and from local airports to an array of destinations.
On the other hand, it is hard to identify any beneficial effect of the local AGs’ participation. Focusing on the local story, the Reagan National Airports gates and slots development -- American dropping flights no one will pick up -- doesn’t seem to suggest a good competitive outcome for local citizens or anyone else flying in and out of the airport, compared to a blocked merger.
Arguably, our local AGs would have done better to stick with opposition to the merger, and opposition to the settlement rather than collaboration. States have opposed USDOJ antitrust settlements in the past, as in theMicrosoft case, and even if the States' opposition was less than fully successful there it provided an antitrust counterbalance that the USDOJ and the Court needed to deal with.
Posted by DAR 1-19-2014. The views expressed are his, and not necessarily of anyone else.
The Washington Post reports that American Airlines has said "it would end direct flights from Reagan National Airport to 17 small and midsize cities as part of the deal [involving vacating slots] that paved the way for its merger with US Airways. Analysts said it’s unlikely that the low-cost carriers that bid on the vacated slots will want to fly to less lucrative destinations such as Fayetteville, N.C., Savannah, Ga., and Islip, N.Y. In some cases, those airlines fly a single type of airplane that is too large to serve those markets." http://www.washingtonpost.com/local/trafficandcommuting/american-airlines-ends-direct-service-to-17-cities-from-national-airport-under-merger-deal/2014/01/15/345610f4-7df4-11e3-9556-4a4bf7bcbd84_story.html?tid=auto_ompleteerr
If the analysts referred to are right, then at least for the 17 cities mentioned the merger remedy of vacated slots will lead to a competitive situation much worse than if the government had simply blocked the merger. As a general observation, things don't necessarily work out perfectly where DOJ and the States allow a merger with the remedy of recreating lost competition.
Seven States and the District of Columbia joined the USDOJ Complaint challenging the merger. A question is what their participation was intended to achieve, and what it actually achieved.
Some, including a Forbes journalist, assume that the suing local AGs focused on some narrow form of local benefit. So, for our local area:
“Pennsylvania and Virginia both have relied heavily on US Airways in the past. Pittsburgh’s airport owes its size to US Airways, which used to operate a major hub there before pulling down flights a few years ago. Virginia, meanwhile, was US Airways’ previous home, before it merged with America West and headed west, to Phoenix. Virginia also is home to Reagan National Airport, where US Airways has a big presence.”
http://www.forbes.com/sites/michelinemaynard/2013/09/06/why-states-are-lining-up-to-oppose-the-american-us-airways-merger/
D.C. would appear to have local interests that align with Virginia’s.
There is doubt whether the Forbes journalist reads local AG motives correctly, or even coherently. A simpler and more generous view is that local AGs are more than stalking horses for local business interests, and want more rather than less competition at local airports. They want to do the right thing so that local citizens and others experience low, competitively-set prices on flights to and from local airports to an array of destinations.
On the other hand, it is hard to identify any beneficial effect of the local AGs’ participation. Focusing on the local story, the Reagan National Airports gates and slots development -- American dropping flights no one will pick up -- doesn’t seem to suggest a good competitive outcome for local citizens or anyone else flying in and out of the airport, compared to a blocked merger.
Arguably, our local AGs would have done better to stick with opposition to the merger, and opposition to the settlement rather than collaboration. States have opposed USDOJ antitrust settlements in the past, as in theMicrosoft case, and even if the States' opposition was less than fully successful there it provided an antitrust counterbalance that the USDOJ and the Court needed to deal with.
Posted by DAR 1-19-2014. The views expressed are his, and not necessarily of anyone else.
Center for Responsible Lending's mortgage resource
Following adoption of new rules for mortgage lending by the CFPB, the Center for Responsible Lending has launched a web site to provide a resource concerning content of the rules. It is at http://www.responsiblelending.org/mortgage-lending/research-analysis/2014-brings-new-rules-to-mortgage-lending.html?utm_source=whatshot&utm_medium=email&utm_campaign=Mortgage&utm_content=none&utm_term=nonei
Following adoption of new rules for mortgage lending by the CFPB, the Center for Responsible Lending has launched a web site to provide a resource concerning content of the rules. It is at http://www.responsiblelending.org/mortgage-lending/research-analysis/2014-brings-new-rules-to-mortgage-lending.html?utm_source=whatshot&utm_medium=email&utm_campaign=Mortgage&utm_content=none&utm_term=nonei
Judge subjects D.C. AAGs to rigorous grilling at hearing on motions to dismiss of defendants ExxonMobil and DC gasoline distributors
On January 9, 2014, a hearing was held in the Superior Court for the District of Columbia before Judge Craig Iscoe on Defendant ExxonMobil’s Motion to Dismiss the Complaint in District of Columbia v. ExxonMobil, and the parallel motion of local gasoline distributor defendants. The District of Columbia’s case was argued by Assistant Attorneys General Catherine A. Jackson and Nicholas A. Bush. ExxonMobil was represented by Christina G. Sarchio of Orrick, Herrington & Sutcliffe, while the defendant distributors were represented by Alphonse M. Alfano of Bassman, Mitchell & Alfano, Chartered.
A major focus of Judge Iscoe’s questions to counsel concerned the issue of whether the District of Columbia had the legal authority to bring the case in its capacity as parens patriae. Mr. Alfano argued that in order for the District to sue as parens patriae, it must show that it has both standing to sue and also a cause of action expressly given in the statute or an implied right of action. He argued that the District had neither. He bolstered his claim by citing to the legislative history which indicates that the DC Attorney General had attempted to have the statute amended to give the Attorney General the right to enforce its provisions, but that this amendment was voted down. Judge Iscoe agreed with counsel that this fact did suggest that it would not be appropriate for the court to find an implied right of action in favor of the DC Attorney General.
Judge Iscoe asked whether an injunction would do any good because he did not recall seeing anything in the complaint to indicate that there were other wholesalers selling Exxon gasoline at lower prices for the retail stations to switch their business to. Mr. Bush explained that there are other wholesaler dealers of Exxon gasoline willing to sell to DC service stations at lower prices.
At this point, ExxonMobil’s attorney, Ms. Sarchio argued that Exxon should be dismissed from the suit because they currently have no marketing agreements or other contracts with the service station owners and that such contracts are required in order for Exxon to be a proper party to the suit. She also argued that Exxon’s contracts with station owners had never been exclusive because they never promised that Exxon would not open a competing Exxon branded station in the other station’s territory. Mr. Bush responded to this argument by explaining that Exxon was a proper party because it had initially created the system of exclusive dealing contracts and that even after assigning them to the distributors, it still had the power to enforce the contracts through its contracts with its distributors.
At the conclusion of the hearing, Judge Iscoe stated that he would not rule from the bench but consider the matter further before deciding. He gave both parties an opportunity to submit short additional submissions within one week, but said that those submissions should put forth no new arguments. Judge Iscoe complimented the respective parties for the thorough job they did in both preparing the briefs and in arguing what was an especially complicated case. He stated that they had each given him a lot of things to think about.
The Judge's questions reflected arguments made in briefs by defendants concerning the sufficiency of the Complaint. As we have said, ExxonMobil argued in briefs that the AG's case should be dismissed for three principal reasons:
(1) the Attorney General does not have standing or the authority to bring its claim under the Retail Service Station Act, D.C. Code §§ 36-301.01 et seq. (the “RSSA”);
(2) the Attorney General’s complaint fails to state a claim against ExxonMobil because ExxonMobil is not a “distributor” under the RSSA; and
(3) ExxonMobil’s agreements are not the type of agreements the RSSA covers because they are neither marketing agreements with a retail dealer nor exclusive. (That part about lack of exclusivity seems to mean that the agreement language does not require exclusivity, which may not address the question of whether Defendants actually practice exclusivity.)
ExxonMobil views the Complaint's relationship to antitrust harms as supporting dismissal: "This lawsuit comes on the heels of a failed two-year long antitrust investigation instigated by the D.C. Council and commenced by the Attorney General in 2011 to allegedly address perceived concerns about rising gasoline prices in the District."
Exxon distributor Anacostia and related local Defendants argued in their briefs that, among other things, the Complaint should be dismissed because the RSSA entrusts enforcement of the statutory provision at issue solely to the service station dealers whose interests the Act is designed to protect. Also, the Attorney General does not have enforcement authority to protect the public interest using a so-called “parens patriae” action -- action on behalf of the citizens of the District. So, the argument is that the Attorney General lacks "standing" to bring suit.hank
Posted by DAR 1-10-2014, with thanks to Kathy Jones for her written report, which is included in this updated post.
On January 9, 2014, a hearing was held in the Superior Court for the District of Columbia before Judge Craig Iscoe on Defendant ExxonMobil’s Motion to Dismiss the Complaint in District of Columbia v. ExxonMobil, and the parallel motion of local gasoline distributor defendants. The District of Columbia’s case was argued by Assistant Attorneys General Catherine A. Jackson and Nicholas A. Bush. ExxonMobil was represented by Christina G. Sarchio of Orrick, Herrington & Sutcliffe, while the defendant distributors were represented by Alphonse M. Alfano of Bassman, Mitchell & Alfano, Chartered.
A major focus of Judge Iscoe’s questions to counsel concerned the issue of whether the District of Columbia had the legal authority to bring the case in its capacity as parens patriae. Mr. Alfano argued that in order for the District to sue as parens patriae, it must show that it has both standing to sue and also a cause of action expressly given in the statute or an implied right of action. He argued that the District had neither. He bolstered his claim by citing to the legislative history which indicates that the DC Attorney General had attempted to have the statute amended to give the Attorney General the right to enforce its provisions, but that this amendment was voted down. Judge Iscoe agreed with counsel that this fact did suggest that it would not be appropriate for the court to find an implied right of action in favor of the DC Attorney General.
Judge Iscoe asked whether an injunction would do any good because he did not recall seeing anything in the complaint to indicate that there were other wholesalers selling Exxon gasoline at lower prices for the retail stations to switch their business to. Mr. Bush explained that there are other wholesaler dealers of Exxon gasoline willing to sell to DC service stations at lower prices.
At this point, ExxonMobil’s attorney, Ms. Sarchio argued that Exxon should be dismissed from the suit because they currently have no marketing agreements or other contracts with the service station owners and that such contracts are required in order for Exxon to be a proper party to the suit. She also argued that Exxon’s contracts with station owners had never been exclusive because they never promised that Exxon would not open a competing Exxon branded station in the other station’s territory. Mr. Bush responded to this argument by explaining that Exxon was a proper party because it had initially created the system of exclusive dealing contracts and that even after assigning them to the distributors, it still had the power to enforce the contracts through its contracts with its distributors.
At the conclusion of the hearing, Judge Iscoe stated that he would not rule from the bench but consider the matter further before deciding. He gave both parties an opportunity to submit short additional submissions within one week, but said that those submissions should put forth no new arguments. Judge Iscoe complimented the respective parties for the thorough job they did in both preparing the briefs and in arguing what was an especially complicated case. He stated that they had each given him a lot of things to think about.
The Judge's questions reflected arguments made in briefs by defendants concerning the sufficiency of the Complaint. As we have said, ExxonMobil argued in briefs that the AG's case should be dismissed for three principal reasons:
(1) the Attorney General does not have standing or the authority to bring its claim under the Retail Service Station Act, D.C. Code §§ 36-301.01 et seq. (the “RSSA”);
(2) the Attorney General’s complaint fails to state a claim against ExxonMobil because ExxonMobil is not a “distributor” under the RSSA; and
(3) ExxonMobil’s agreements are not the type of agreements the RSSA covers because they are neither marketing agreements with a retail dealer nor exclusive. (That part about lack of exclusivity seems to mean that the agreement language does not require exclusivity, which may not address the question of whether Defendants actually practice exclusivity.)
ExxonMobil views the Complaint's relationship to antitrust harms as supporting dismissal: "This lawsuit comes on the heels of a failed two-year long antitrust investigation instigated by the D.C. Council and commenced by the Attorney General in 2011 to allegedly address perceived concerns about rising gasoline prices in the District."
Exxon distributor Anacostia and related local Defendants argued in their briefs that, among other things, the Complaint should be dismissed because the RSSA entrusts enforcement of the statutory provision at issue solely to the service station dealers whose interests the Act is designed to protect. Also, the Attorney General does not have enforcement authority to protect the public interest using a so-called “parens patriae” action -- action on behalf of the citizens of the District. So, the argument is that the Attorney General lacks "standing" to bring suit.hank
Posted by DAR 1-10-2014, with thanks to Kathy Jones for her written report, which is included in this updated post.
West Virginia moves to Enjoin "Legal Helpers Debt Resolution LLC"
The Attorney General's Complaint alleges violations by the mortgage repair and assistance company of the State's Consumer Credit and Protection Act. The Complaint is available at http://www.scribd.com/doc/196608713/Complaint-WV-Le
Posted by DAR 1-6-2014
The Attorney General's Complaint alleges violations by the mortgage repair and assistance company of the State's Consumer Credit and Protection Act. The Complaint is available at http://www.scribd.com/doc/196608713/Complaint-WV-Le
Posted by DAR 1-6-2014
Ohio milk price case allowed to proceed
Claims by two processed milk retailers in a class action against a milk bottler, raw milk supplier, and milk processor for their participation in a conspiracy to restrict the supply of raw milk in violation of Section 1 of the Sherman Act may proceed, the U.S. Court of Appeals for the 6th CIrcuit has ruled (In re Southeastern Milk Antitrust Litigation, January 3, 2014, Van Tatenhove)
Claims by two processed milk retailers in a class action against a milk bottler, raw milk supplier, and milk processor for their participation in a conspiracy to restrict the supply of raw milk in violation of Section 1 of the Sherman Act may proceed, the U.S. Court of Appeals for the 6th CIrcuit has ruled (In re Southeastern Milk Antitrust Litigation, January 3, 2014, Van Tatenhove)
American Express Gift Card settlement
Consumers who purchased, received, held, or used an American Express gift card between January 1, 2002 and September 21, 2011 may be eligible for up to $40. The company reached a settlement over allegations of failing to disclose the full terms and conditions of the gift cards. Click here for details and claim form. Deadline is Mar. 6, 2014.
Consumers who purchased, received, held, or used an American Express gift card between January 1, 2002 and September 21, 2011 may be eligible for up to $40. The company reached a settlement over allegations of failing to disclose the full terms and conditions of the gift cards. Click here for details and claim form. Deadline is Mar. 6, 2014.
The CFPB to-do list for 2014
Law 360 suggests the following:
With the CFPB's overhaul of the mortgage market largely complete, the federal consumer finance watchdog is turning its attention to other aspects of the market for 2014. And expanding a key mortgage disclosure law is a primary goal.
In early December, the CFPB released a wide-ranging rulemaking agenda for 2014 that included changes to the Home Mortgage Disclosure Act as well as overdraft products, prepaid cards and other products that will bring changes to offerings from banks and nonbanks alike.
The potential change that could see the biggest risks for banks is an expansion of the information that banks and other mortgage lenders will have to collect under the HMDA.
The full article is at http://www.law360.com/banking/articles/494246?nl_pk=717c9a98-b8e0-48bc-9c96-5ff66a237269&utm_source=newsletter&utm_medium=email&utm_campaign=banking
Law 360 suggests the following:
With the CFPB's overhaul of the mortgage market largely complete, the federal consumer finance watchdog is turning its attention to other aspects of the market for 2014. And expanding a key mortgage disclosure law is a primary goal.
In early December, the CFPB released a wide-ranging rulemaking agenda for 2014 that included changes to the Home Mortgage Disclosure Act as well as overdraft products, prepaid cards and other products that will bring changes to offerings from banks and nonbanks alike.
The potential change that could see the biggest risks for banks is an expansion of the information that banks and other mortgage lenders will have to collect under the HMDA.
The full article is at http://www.law360.com/banking/articles/494246?nl_pk=717c9a98-b8e0-48bc-9c96-5ff66a237269&utm_source=newsletter&utm_medium=email&utm_campaign=banking
Preserving Wireless Competition
From a New York Times Editorial: The corporation that controls Sprint, the third-biggest cellphone company in the country after Verizon and AT&T, is reportedly planning to make an offer to buy the smaller rival T-Mobile in a move that would reduce competition in an important industry that already has too little of it.
The Times opposes the merger. We agree. See the Times editorial at http://www.nytimes.com/2014/01/01/opinion/preserving-wireless-competition.html?ref=opinion
From a New York Times Editorial: The corporation that controls Sprint, the third-biggest cellphone company in the country after Verizon and AT&T, is reportedly planning to make an offer to buy the smaller rival T-Mobile in a move that would reduce competition in an important industry that already has too little of it.
The Times opposes the merger. We agree. See the Times editorial at http://www.nytimes.com/2014/01/01/opinion/preserving-wireless-competition.html?ref=opinion
Broadband internet access in D.C.
An article in the New York Times for December 30, 2013 is titled “U.S. Struggles to Keep Pace in Delivering Broadband Service.” (URL http://www.nytimes.com/2013/12/30/technology/us-struggling-to-keep-pace-in-broadband-service.html?ref=business) The New York Times article explains that in the United States, internet broadband speeds vary widely between cities and regions. The fastest speeds are in the Northeastern corridor between Boston and the Washington, D.C., metropolitan region. The three fastest areas — D.C., Massachusetts and Virginia — have average speeds greater than every country except Japan and South Korea.
The Times says that three cities with “superfast broadband,” Bristol, Va., Chattanooga, Tenn., and Lafayette, La. built municipal fiber-optic networks, and those networks can operate just as fast as the swiftest connections in Hong Kong, Seoul and Tokyo.
So, what is the story about D.C. government support of speedy broadband internet services, having in mind that commercially available internet speeds in D.C. are already considered faster than most countries other than Japan and Korea? A D.C. government press release says that “DC-CAN is a 100 gigabits per second, open-access citywide broadband network that the District is building with federal American Recovery and Reinvestment Act (ARRA) grant funds. DC-CAN will bring affordable broadband to community anchor institutions and will pave the way for affordable broadband to residents in underserved areas of the city.”
A picture caption on the http://dcnet.dc.gov web site says that “Community of Hope and other health and education-based District non-profits are using DC-Net Internet services to help change lives.” It seems that broader offerings of high speed, low cost services are contemplated for the future. It is not at all clear that broad community wide offerings like those in Bristol, Chattanooga, or Lafayette are contemplated. The offerings in those cities appear to be competitive with Comcast or Verizon cable/fiber based commercial internet products. (See http://www.muninetworks.org/content/chattanooga-epb-customers-rave-comcast-customers-livid
discussing a customer switch from Comcast to the municipal service.)
A critical discussion of the District’s progress is at http://www.washingtoncitypaper.com/blogs/housingcomplex/2013/05/01/fiber-optical-illusion/
The article explains that
In 2010, the federal government provided the District with a $17.4 million grant through the stimulus act, which the city government supplemented with $7.5 million in matching funds, to build out the D.C. Community Access Network (DC-CAN), the country’s first 100-gigabit municipal fiber network—in other words, the most powerful city-run Internet infrastructure in America. The idea was to help bring the city’s existing fiber network, DC-NET, to underserved areas. That doesn’t mean simply blasting a public Wi-Fi signal at Congress Heights, though. The city isn’t allowed to be a so-called last-mile provider, bringing the Internet directly to consumers, but rather a middle-mile network that Internet service providers like Comcast and Verizon, as well as “community anchor institutions,” can use to bring a powerful Web connection to the masses.
The article then addresses several questions: “First, how did the city do in fulfilling the terms of the grant? And more important: What good is our superlative network if it’s not bringing high-speed Internet access to ordinary D.C. residents?”
Posted by DAR 12-30-2013
An article in the New York Times for December 30, 2013 is titled “U.S. Struggles to Keep Pace in Delivering Broadband Service.” (URL http://www.nytimes.com/2013/12/30/technology/us-struggling-to-keep-pace-in-broadband-service.html?ref=business) The New York Times article explains that in the United States, internet broadband speeds vary widely between cities and regions. The fastest speeds are in the Northeastern corridor between Boston and the Washington, D.C., metropolitan region. The three fastest areas — D.C., Massachusetts and Virginia — have average speeds greater than every country except Japan and South Korea.
The Times says that three cities with “superfast broadband,” Bristol, Va., Chattanooga, Tenn., and Lafayette, La. built municipal fiber-optic networks, and those networks can operate just as fast as the swiftest connections in Hong Kong, Seoul and Tokyo.
So, what is the story about D.C. government support of speedy broadband internet services, having in mind that commercially available internet speeds in D.C. are already considered faster than most countries other than Japan and Korea? A D.C. government press release says that “DC-CAN is a 100 gigabits per second, open-access citywide broadband network that the District is building with federal American Recovery and Reinvestment Act (ARRA) grant funds. DC-CAN will bring affordable broadband to community anchor institutions and will pave the way for affordable broadband to residents in underserved areas of the city.”
A picture caption on the http://dcnet.dc.gov web site says that “Community of Hope and other health and education-based District non-profits are using DC-Net Internet services to help change lives.” It seems that broader offerings of high speed, low cost services are contemplated for the future. It is not at all clear that broad community wide offerings like those in Bristol, Chattanooga, or Lafayette are contemplated. The offerings in those cities appear to be competitive with Comcast or Verizon cable/fiber based commercial internet products. (See http://www.muninetworks.org/content/chattanooga-epb-customers-rave-comcast-customers-livid
discussing a customer switch from Comcast to the municipal service.)
A critical discussion of the District’s progress is at http://www.washingtoncitypaper.com/blogs/housingcomplex/2013/05/01/fiber-optical-illusion/
The article explains that
In 2010, the federal government provided the District with a $17.4 million grant through the stimulus act, which the city government supplemented with $7.5 million in matching funds, to build out the D.C. Community Access Network (DC-CAN), the country’s first 100-gigabit municipal fiber network—in other words, the most powerful city-run Internet infrastructure in America. The idea was to help bring the city’s existing fiber network, DC-NET, to underserved areas. That doesn’t mean simply blasting a public Wi-Fi signal at Congress Heights, though. The city isn’t allowed to be a so-called last-mile provider, bringing the Internet directly to consumers, but rather a middle-mile network that Internet service providers like Comcast and Verizon, as well as “community anchor institutions,” can use to bring a powerful Web connection to the masses.
The article then addresses several questions: “First, how did the city do in fulfilling the terms of the grant? And more important: What good is our superlative network if it’s not bringing high-speed Internet access to ordinary D.C. residents?”
Posted by DAR 12-30-2013
People who don't argue about strange charges on their hospital bills are probably overpaying
Here is some important advice from Clear Health Costs:
Here is some important advice from Clear Health Costs:
- Scrutinize all hospital bills carefully. Some industry sources say 60 percent of hospital bills have an error; some say 100 percent of hospital bills have an error.
- Ask the hospital for an itemized bill with HCPCS or CPT codes, and insist that you need to confirm the accuracy of the bill before you'll pay it.
- Look carefully at the insurance company's explanation of benefits; compare it with the bill. Quite often an E.O.B. is also difficult to read. Question everything that seems unusual.
- If the bill shows something inaccurate, point that out to the billing office and ask for the charge to be removed.
- If the insurance company isn't paying for something, ask them why and ask to see the point in the contract that allows them to refuse to pay.
- Calling both the provider (hospital) and payer (insurance company) will sometimes reveal that the entire bill is an error and you owe nothing. Don't pay until you're sure the bill is accurate.
Cottage industry of questionable practices built on Veteran's Pensions
The New York Times reports that lawyers, financial advisers and insurance brokers have formed a lucrative alliance with retirement communities and assisted living facilities to extract many billions of taxpayer dollars from the V.A. Questionable actors are capitalizing on loose oversight to unlock the V.A. money and enrich themselves, sometimes at veterans’ expense. The V.A. accreditation process is so lax that applicants provide their own background information, including any criminal records. But the V.A. has only four full-time employees evaluating the approximately 5,000 applications that it receives annually. Once people get the V.A.’s stamp of approval, they rarely lose it, even if a customer complains or regulatory actions mount. Last year, the V.A. revoked its accreditation for two of its more than 20,000 advisers.
Some advisers circumvent V.A. rules and charge hundreds or even thousands of dollars for advice that may — or may not — help veterans qualify. Still others offer to train lawyers and advisers about the workings of the V.A.
Full article: http://www.nytimes.com/2013/12/24/business/winning-veterans-trust-and-profiting-from-it.html
The New York Times reports that lawyers, financial advisers and insurance brokers have formed a lucrative alliance with retirement communities and assisted living facilities to extract many billions of taxpayer dollars from the V.A. Questionable actors are capitalizing on loose oversight to unlock the V.A. money and enrich themselves, sometimes at veterans’ expense. The V.A. accreditation process is so lax that applicants provide their own background information, including any criminal records. But the V.A. has only four full-time employees evaluating the approximately 5,000 applications that it receives annually. Once people get the V.A.’s stamp of approval, they rarely lose it, even if a customer complains or regulatory actions mount. Last year, the V.A. revoked its accreditation for two of its more than 20,000 advisers.
Some advisers circumvent V.A. rules and charge hundreds or even thousands of dollars for advice that may — or may not — help veterans qualify. Still others offer to train lawyers and advisers about the workings of the V.A.
Full article: http://www.nytimes.com/2013/12/24/business/winning-veterans-trust-and-profiting-from-it.html
Andrew Marder on the Target theft and PIN and chip card security
Motley Fool's Marder offers a succinct reprise of security issues:
A pile of encrypted PINs is effectively worthless. Target's PIN pads take the number that you put in and turn it into an incredibly complicated other number. To be clear, I don't mean that you put in 5544 and they turn it into 6655. Oh my, no. Instead, your four-digit PIN gets turned into a long string of numbers and letters that means nothing to a person without the correct key. Luckily -- which is to say, by very strict purposeful design -- Target doesn't hold on to those keys. Those are stored with the payment processor. That means that the encrypted PINs that Target lost are worthless. It's like stealing 40 million pounds of coal because you want diamonds.
The biggest loss is the raw card data. According to reports, Target's systems were infected with software that skimmed the numbers off the cards as they were swiped through at cash registers. That allows the people on the receiving end to create physical replicas of the 40 million cards. Those can be used online or in person with a signature, and are the weakest link in the credit card chain.
As many analysts have pointed out, the U.S. is well behind the times on credit card protection. Many other countries have moved on to chip and pin cards, which do not use the easy-to-skim magnetic stripe. America has been a notable holdout. As a result, widespread thefts, like those at Target, are much easier to pull off in the U.S.
The full article is at http://www.fool.com/investing/general/2013/12/27/important-facts-about-the-target-card-theft.aspx#.UsAi67SKXcs
Motley Fool's Marder offers a succinct reprise of security issues:
A pile of encrypted PINs is effectively worthless. Target's PIN pads take the number that you put in and turn it into an incredibly complicated other number. To be clear, I don't mean that you put in 5544 and they turn it into 6655. Oh my, no. Instead, your four-digit PIN gets turned into a long string of numbers and letters that means nothing to a person without the correct key. Luckily -- which is to say, by very strict purposeful design -- Target doesn't hold on to those keys. Those are stored with the payment processor. That means that the encrypted PINs that Target lost are worthless. It's like stealing 40 million pounds of coal because you want diamonds.
The biggest loss is the raw card data. According to reports, Target's systems were infected with software that skimmed the numbers off the cards as they were swiped through at cash registers. That allows the people on the receiving end to create physical replicas of the 40 million cards. Those can be used online or in person with a signature, and are the weakest link in the credit card chain.
As many analysts have pointed out, the U.S. is well behind the times on credit card protection. Many other countries have moved on to chip and pin cards, which do not use the easy-to-skim magnetic stripe. America has been a notable holdout. As a result, widespread thefts, like those at Target, are much easier to pull off in the U.S.
The full article is at http://www.fool.com/investing/general/2013/12/27/important-facts-about-the-target-card-theft.aspx#.UsAi67SKXcs
Underwater homeowners could face extra tax burden in 2014
As reported by the Washington Post, a federal law that spared people who owe more than their homes are worth from being saddled with extra taxes when their banks provide mortgage relief is expiring next week. Congress hasn’t extended it.
Maryland — which has more than 214,000 homes with negative equity — plans to extend a measure exempting its residents from state taxes even if the federal law expires. The state took the same step last year and was one of the few to do so.
Virginia and the District of Columbia, which have a smaller share of underwater homes, do not.
Lawmakers, led by Rep. Elijah E. Cummings (D-Md.), sent a letter urging Congress to pass the bill as soon as possible. A separate letter from the National Association of Attorneys General made the same request.
The full story is at http://www.washingtonpost.com/business/economy/underwater-homeowners-could-face-extra-tax-burden-in-2014/2013/12/25/997c4d52-69ab-11e3-a0b9-249bbb34602c_print.html
As reported by the Washington Post, a federal law that spared people who owe more than their homes are worth from being saddled with extra taxes when their banks provide mortgage relief is expiring next week. Congress hasn’t extended it.
Maryland — which has more than 214,000 homes with negative equity — plans to extend a measure exempting its residents from state taxes even if the federal law expires. The state took the same step last year and was one of the few to do so.
Virginia and the District of Columbia, which have a smaller share of underwater homes, do not.
Lawmakers, led by Rep. Elijah E. Cummings (D-Md.), sent a letter urging Congress to pass the bill as soon as possible. A separate letter from the National Association of Attorneys General made the same request.
The full story is at http://www.washingtonpost.com/business/economy/underwater-homeowners-could-face-extra-tax-burden-in-2014/2013/12/25/997c4d52-69ab-11e3-a0b9-249bbb34602c_print.html
CFPB Orders American Express to Pay $85 Million Refund to Consumers Harmed by Illegal Credit Card Practices Federal Regulators Fine American Express an Additional $27.5 Million
WASHINGTON, D.C. — The Consumer Financial Protection Bureau (CFPB) today announced an enforcement action with orders requiring three American Express subsidiaries to refund an estimated $85 million to approximately 250,000 customers for illegal card practices. This action is the result of a multi-part federal investigation which found that at every stage of the consumer experience, from marketing to enrollment to payment to debt collection, American Express violated consumer protection laws.
“Several American Express companies violated consumer protection laws and those laws were violated at all stages of the game – from the moment a consumer shopped for a card to the moment the consumer got a phone call about long overdue debt,” said CFPB Director Richard Cordray. “Today’s orders require the American Express companies to fully refund about $85 million to consumers and it requires them to make specific changes in their business practices. The American Express companies will identify the harmed customers, notify them, and make sure they get back their money.”
The Federal Deposit Insurance Corporation (FDIC) together with the Utah Department of Financial Institutions discovered the illegal activities during a routine examination of an American Express subsidiary, the American Express Centurion Bank. The FDIC transferred portions of the investigation to the CFPB when the Bureau opened its doors last year and together the agencies pursued the matter. The CFPB later concluded that many of the same violations that occurred at American Express Centurion Bank also took place at American Express Travel Related Services Company, Inc. and American Express Bank, FSB.
CFPB press release at http://www.consumerfinance.gov/newsroom/cfpb-orders-american-express-to-pay-85-million-refund-to-consumers-harmed-by-illegal-credit-card-practices/
WASHINGTON, D.C. — The Consumer Financial Protection Bureau (CFPB) today announced an enforcement action with orders requiring three American Express subsidiaries to refund an estimated $85 million to approximately 250,000 customers for illegal card practices. This action is the result of a multi-part federal investigation which found that at every stage of the consumer experience, from marketing to enrollment to payment to debt collection, American Express violated consumer protection laws.
“Several American Express companies violated consumer protection laws and those laws were violated at all stages of the game – from the moment a consumer shopped for a card to the moment the consumer got a phone call about long overdue debt,” said CFPB Director Richard Cordray. “Today’s orders require the American Express companies to fully refund about $85 million to consumers and it requires them to make specific changes in their business practices. The American Express companies will identify the harmed customers, notify them, and make sure they get back their money.”
The Federal Deposit Insurance Corporation (FDIC) together with the Utah Department of Financial Institutions discovered the illegal activities during a routine examination of an American Express subsidiary, the American Express Centurion Bank. The FDIC transferred portions of the investigation to the CFPB when the Bureau opened its doors last year and together the agencies pursued the matter. The CFPB later concluded that many of the same violations that occurred at American Express Centurion Bank also took place at American Express Travel Related Services Company, Inc. and American Express Bank, FSB.
CFPB press release at http://www.consumerfinance.gov/newsroom/cfpb-orders-american-express-to-pay-85-million-refund-to-consumers-harmed-by-illegal-credit-card-practices/
Ally settles with USDOJ and CFPB over charges of auto loan discrimination
The Department of Justice and the Consumer Financial Protection Bureau (CFPB) today announced the federal government’s largest auto loan discrimination settlement in history to resolve allegations that Detroit-based Ally Financial Inc. and Ally Bank have engaged in an ongoing nationwide pattern or practice of discrimination against African-American, Hispanic and Asian/Pacific Islander borrowers in their auto lending since April 1, 2011. The agreement is the first joint fair lending enforcement action by the department and CFPB.
The press release is at http://www.justice.gov/opa/pr/2013/December/13-crt-1349.html
The consent order is at http://www.scribd.com/doc/193264572/USDOJ-CFPB-Consent-Order-Ally
The Department of Justice and the Consumer Financial Protection Bureau (CFPB) today announced the federal government’s largest auto loan discrimination settlement in history to resolve allegations that Detroit-based Ally Financial Inc. and Ally Bank have engaged in an ongoing nationwide pattern or practice of discrimination against African-American, Hispanic and Asian/Pacific Islander borrowers in their auto lending since April 1, 2011. The agreement is the first joint fair lending enforcement action by the department and CFPB.
The press release is at http://www.justice.gov/opa/pr/2013/December/13-crt-1349.html
The consent order is at http://www.scribd.com/doc/193264572/USDOJ-CFPB-Consent-Order-Ally
City of Miami sues banks for predatory lending to minorities
Miami has sued Wells Fargo & Co., Bank of America Corp. and Citigroup Inc. The suits allege predatory lending to minority homeowners, and violation of the federal Fair Housing Act.
The complaints can be found at
http://www.scribd.com/doc/193259030/City-of-Miami-predatory-lending-complaint-1-12-13-2013
http://www.scribd.com/doc/193259649/City-of-Miami-predatory-lending-complaint-2-12-13-2013
http://www.scribd.com/doc/193259838/City-of-Miami-predatory-lending-complaint-3-12-13-2013
Posted by DAR 12-23-2013
Miami has sued Wells Fargo & Co., Bank of America Corp. and Citigroup Inc. The suits allege predatory lending to minority homeowners, and violation of the federal Fair Housing Act.
The complaints can be found at
http://www.scribd.com/doc/193259030/City-of-Miami-predatory-lending-complaint-1-12-13-2013
http://www.scribd.com/doc/193259649/City-of-Miami-predatory-lending-complaint-2-12-13-2013
http://www.scribd.com/doc/193259838/City-of-Miami-predatory-lending-complaint-3-12-13-2013
Posted by DAR 12-23-2013
CFPB, State Authorities Order Ocwen to Provide $2 Billion in Relief to Homeowners for Servicing Wrongs Largest Nonbank Servicer Will Also Refund $125 Million to Foreclosure Victims and Adhere to Significant New Homeowner Protections
WASHINGTON, D.C. -- Today, the Consumer Financial Protection Bureau (CFPB), authorities in 49 states, and the District of Columbia filed a proposed court order requiring the country’s largest nonbank mortgage loan servicer, Ocwen Financial Corporation, and its subsidiary, Ocwen Loan Servicing, to provide $2 billion in principal reduction to underwater borrowers. The consent order addresses Ocwen’s systemic misconduct at every stage of the mortgage servicing process. Ocwen must also refund $125 million to the nearly 185,000 borrowers who have already been foreclosed upon and it must adhere to significant new homeowner protections.
For full report, see http://www.consumerfinance.gov/newsroom/cfpb-state-authorities-order-ocwen-to-provide-2-billion-in-relief-to-homeowners-for-servicing-wrongs/
WASHINGTON, D.C. -- Today, the Consumer Financial Protection Bureau (CFPB), authorities in 49 states, and the District of Columbia filed a proposed court order requiring the country’s largest nonbank mortgage loan servicer, Ocwen Financial Corporation, and its subsidiary, Ocwen Loan Servicing, to provide $2 billion in principal reduction to underwater borrowers. The consent order addresses Ocwen’s systemic misconduct at every stage of the mortgage servicing process. Ocwen must also refund $125 million to the nearly 185,000 borrowers who have already been foreclosed upon and it must adhere to significant new homeowner protections.
For full report, see http://www.consumerfinance.gov/newsroom/cfpb-state-authorities-order-ocwen-to-provide-2-billion-in-relief-to-homeowners-for-servicing-wrongs/
Target security breach and the insecure technology of US credit cards
The recent well-publicized security breach at Target is a reminder that most US credit cards use magnetic stripe technology that is easy for bad guys to hack. Europeans use more secure “EMV” cards. The initials stand for EuroPay, MasterCard and Visa, companies that in 2002 agreed to a standard for embedded microprocessor chips for cards. The chip encrypts data differently for each transaction, making it more effective in preventing fraud and harder for the bad guys to copy. The card holder inserts an EMV card through a reader, which asks for a personal identification number. Europe has had chip-and-PIN cards since 2004. The US does not yet have them, although some US banks now offer chip cards that do not use PIN technology.
Why have Visa and MasterCard been slow to offer the safer technology in the US? Could lack of competitive pressure and lower cost of magnetic stripe technology be a reason?
Posted by DAR 12-21-2013
The recent well-publicized security breach at Target is a reminder that most US credit cards use magnetic stripe technology that is easy for bad guys to hack. Europeans use more secure “EMV” cards. The initials stand for EuroPay, MasterCard and Visa, companies that in 2002 agreed to a standard for embedded microprocessor chips for cards. The chip encrypts data differently for each transaction, making it more effective in preventing fraud and harder for the bad guys to copy. The card holder inserts an EMV card through a reader, which asks for a personal identification number. Europe has had chip-and-PIN cards since 2004. The US does not yet have them, although some US banks now offer chip cards that do not use PIN technology.
Why have Visa and MasterCard been slow to offer the safer technology in the US? Could lack of competitive pressure and lower cost of magnetic stripe technology be a reason?
Posted by DAR 12-21-2013
We sign on to letter supporting legislation striking limitation of right to sue in court
Excerpt from the letter:
We, the undersigned organizations, strongly support the Arbitration Fairness Act of 2013 (or
“AFA”), S. 878, introduced in the Senate by Senator Al Franken (D-MN). This important
legislation would end the growing predatory practice of forcing non-union employees,
consumers, and small businesses to sign away their Constitutional rights to legal protections and
access to federal and state courts. Predispute binding mandatory (or forced) arbitration clauses
are proliferating in employment contracts (including minimum wage-workers, whistleblowers,
servicemembers, and executives), and in everyday consumer contracts for products and services
such as credit cards, child care, cell phones, car loans, home construction, student loans, rent-to own products, payday, loans, health insurance policies, and nursing homes.
For the complete letter, see http://www.scribd.com/doc/192530123/Final-Arbitration-Fairness-Act-Support-Letter-December-2013
Excerpt from the letter:
We, the undersigned organizations, strongly support the Arbitration Fairness Act of 2013 (or
“AFA”), S. 878, introduced in the Senate by Senator Al Franken (D-MN). This important
legislation would end the growing predatory practice of forcing non-union employees,
consumers, and small businesses to sign away their Constitutional rights to legal protections and
access to federal and state courts. Predispute binding mandatory (or forced) arbitration clauses
are proliferating in employment contracts (including minimum wage-workers, whistleblowers,
servicemembers, and executives), and in everyday consumer contracts for products and services
such as credit cards, child care, cell phones, car loans, home construction, student loans, rent-to own products, payday, loans, health insurance policies, and nursing homes.
For the complete letter, see http://www.scribd.com/doc/192530123/Final-Arbitration-Fairness-Act-Support-Letter-December-2013
Support legislation striking down limitation of right to litigate in court
Last week, a new report from the Consumer Financial Protection Bureau showed that 9 of 10 arbitration clauses in banking and credit contracts forbid consumers from pursuing class actions and that arbitration clauses are almost always harder for consumers to understand than the rest of the contract. Read a summary of the report here.
The Senate Judiciary Committee is considering the Arbitration Fairness Act of 2013. Sponsored by Sen. Al Franken and co-sponsored by 24 Senators, the bill invalidates contracts that require arbitration of consumer, anti-trust, employment, and civil rights disputes before the dispute arises. Although they have both co-sponsored similar bills in the past, today neither of Maryland’s senators has signed-on.
We support the legislation, and encourage others to do the same.
Posted by DAR on 12-17-2013 -- suggested by the Maryland Consumer Rights Coalition posting
CFPB takes action against an online loan servicer CashCall Inc.
On December 16 the Consumer Financial Protection Bureau (CFPB) took its first action against an online loan servicer, CashCall Inc., its owner, its subsidiary, and its affiliate, for collecting money consumers did not owe. The CFPB alleges that the defendants engaged in unfair, deceptive, and abusive practices, including illegally debiting consumer checking accounts for loans that were void. The action is widely considered as reinforcement of state actions against such loan servicers. The CFPB press release, including a link to the Complaint, is at http://www.consumerfinance.gov/newsroom/cfpb-sues-cashcall-for-illegal-online-loan-servicing/
On December 16 the Consumer Financial Protection Bureau (CFPB) took its first action against an online loan servicer, CashCall Inc., its owner, its subsidiary, and its affiliate, for collecting money consumers did not owe. The CFPB alleges that the defendants engaged in unfair, deceptive, and abusive practices, including illegally debiting consumer checking accounts for loans that were void. The action is widely considered as reinforcement of state actions against such loan servicers. The CFPB press release, including a link to the Complaint, is at http://www.consumerfinance.gov/newsroom/cfpb-sues-cashcall-for-illegal-online-loan-servicing/
Developer suit against WMATA and Graham dismissed by Court
"Banneker Ventures, LLC, is a developer who, despite an exclusive right to negotiate, failed to reach a final agreement with Washington Metropolitan Area Transit Authority for the lease and development of certain real property. Banneker sues alleging, inter alia, breach of contract and fraud. Washington Metropolitan Area Transit Authority moves to dismiss for lack of jurisdiction over the tort and quasi-contract claims due to its sovereign immunity and for failure to state a breach of contract claim. The motion will be granted."
The Court's full opinion can be found at http://www.scribd.com/doc/191115309/Collyer-opinion-Banneker-v-Graham-et-al
"Banneker Ventures, LLC, is a developer who, despite an exclusive right to negotiate, failed to reach a final agreement with Washington Metropolitan Area Transit Authority for the lease and development of certain real property. Banneker sues alleging, inter alia, breach of contract and fraud. Washington Metropolitan Area Transit Authority moves to dismiss for lack of jurisdiction over the tort and quasi-contract claims due to its sovereign immunity and for failure to state a breach of contract claim. The motion will be granted."
The Court's full opinion can be found at http://www.scribd.com/doc/191115309/Collyer-opinion-Banneker-v-Graham-et-al
The CFPB considering limits on arbitration clauses
"Today [12-12-2013], the Consumer Financial Protection Bureau released preliminary research on the use of arbitration clauses in connection with consumer financial products and services. The research indicates that arbitration clauses are commonly used by large banks in credit card and checking account agreements and that roughly 9 out of 10 clauses allow banks to prevent consumers from participating in class actions. The research also shows that while tens of millions of consumers are subject to arbitration clauses in the markets the CFPB studied, on average, consumers filed 300 disputes in these markets each year between 2010 and 2012 with the leading arbitration association."
“Many contracts for consumer financial products and services contain arbitration clauses,” said CFPB Director Richard Cordray. “Today’s preliminary results help us better understand how these clauses are affecting consumers’ financial lives so that we can ultimately determine whether action should be taken for their greater protection.”
From http://www.consumerfinance.gov/newsroom/the-cfpb-finds-few-consumers-file-arbitration-cases/ The results of the study are available at: http://files.consumerfinance.gov/f/201312_cfpb_arbitration-study-preliminary-results.pdf
"Today [12-12-2013], the Consumer Financial Protection Bureau released preliminary research on the use of arbitration clauses in connection with consumer financial products and services. The research indicates that arbitration clauses are commonly used by large banks in credit card and checking account agreements and that roughly 9 out of 10 clauses allow banks to prevent consumers from participating in class actions. The research also shows that while tens of millions of consumers are subject to arbitration clauses in the markets the CFPB studied, on average, consumers filed 300 disputes in these markets each year between 2010 and 2012 with the leading arbitration association."
“Many contracts for consumer financial products and services contain arbitration clauses,” said CFPB Director Richard Cordray. “Today’s preliminary results help us better understand how these clauses are affecting consumers’ financial lives so that we can ultimately determine whether action should be taken for their greater protection.”
From http://www.consumerfinance.gov/newsroom/the-cfpb-finds-few-consumers-file-arbitration-cases/ The results of the study are available at: http://files.consumerfinance.gov/f/201312_cfpb_arbitration-study-preliminary-results.pdf
Richard Cordray on the CareCredit Enforcement Action
"Today the Consumer Financial Protection Bureau is ordering GE Capital Retail Bank and its subsidiary, CareCredit, to refund up to $34.1 million to consumers who were victims of deceptive credit card enrollment tactics at doctors’ and dentists’ offices around the country.
When people seek medical care, they are in a particularly vulnerable situation. They are sick or injured, or maybe a loved one is in pain. They are usually filling in and signing multiple forms: insurance forms, HIPAA disclosures, and medical history paperwork. Unlike when they are at a bank or when they receive unsolicited mail, they are not “on guard” financially. They are not thinking carefully about the terms of a financial contract – fees, penalties, interest rates. Their focus is on getting physically better. So it is particularly important that a credit card company offering personal lines of credit to pay for health care is doing everything to the letter of the law – that they are treating people fairly, with dignity, and with the utmost transparency.
The CareCredit card is one of the largest cards in this niche of the credit card market. It is sold and offered by more than 175,000 enrolled providers across the country. Receptionists, office managers, and office staff have been selling it to patients when they were paying for their medical care, waiting to see the doctor or dentist, or maybe in between treatments. While the arrangement guarantees that the health-care provider gets paid, patients sometimes end up with huge credit card bills they cannot afford.
Our investigation showed that many patients thought they were signing up for an interest-free loan. Or they may have thought they were signing up for an in-house payment plan with their doctor. But the card was really a “no interest if paid in full” product that is a much trickier deal. The cards typically charge no interest for a promotional period – which ranges from six to 24 months – but they are accruing interest at a 26.99 percent rate the whole time."
The full statement is at http://www.consumerfinance.gov/newsroom/prepared-remarks-of-cfpb-richard-cordray-director-on-the-carecredit-enforcement-action-press-call/
Posted by DAR 12-12-2013
"Today the Consumer Financial Protection Bureau is ordering GE Capital Retail Bank and its subsidiary, CareCredit, to refund up to $34.1 million to consumers who were victims of deceptive credit card enrollment tactics at doctors’ and dentists’ offices around the country.
When people seek medical care, they are in a particularly vulnerable situation. They are sick or injured, or maybe a loved one is in pain. They are usually filling in and signing multiple forms: insurance forms, HIPAA disclosures, and medical history paperwork. Unlike when they are at a bank or when they receive unsolicited mail, they are not “on guard” financially. They are not thinking carefully about the terms of a financial contract – fees, penalties, interest rates. Their focus is on getting physically better. So it is particularly important that a credit card company offering personal lines of credit to pay for health care is doing everything to the letter of the law – that they are treating people fairly, with dignity, and with the utmost transparency.
The CareCredit card is one of the largest cards in this niche of the credit card market. It is sold and offered by more than 175,000 enrolled providers across the country. Receptionists, office managers, and office staff have been selling it to patients when they were paying for their medical care, waiting to see the doctor or dentist, or maybe in between treatments. While the arrangement guarantees that the health-care provider gets paid, patients sometimes end up with huge credit card bills they cannot afford.
Our investigation showed that many patients thought they were signing up for an interest-free loan. Or they may have thought they were signing up for an in-house payment plan with their doctor. But the card was really a “no interest if paid in full” product that is a much trickier deal. The cards typically charge no interest for a promotional period – which ranges from six to 24 months – but they are accruing interest at a 26.99 percent rate the whole time."
The full statement is at http://www.consumerfinance.gov/newsroom/prepared-remarks-of-cfpb-richard-cordray-director-on-the-carecredit-enforcement-action-press-call/
Posted by DAR 12-12-2013
Judge Grants Class Certification in Evanston Hospital Merger Suit
On Tuesday, December 10, 2013, an Illinois U.S. District Court judge granted class certification to customers claiming the merger of two Chicago-area hospital groups resulted in increased prices for patients. The class action arises from Evanston Northwestern Healthcare Corp.’s 2000 acquisition of rival Highland Park Hospital, forming the four-hospital NorthShore University Health System. The suit was brought in August 2007 on behalf of a proposed class that had purchased inpatient hospital services or hospital-based outpatient services from NorthShore hospitals.
· The case is In re: Evanston Northwestern Healthcare Corp. Antitrust Litigation, No. 07-cv-04446 (N.D. Ill.)
Posted by DAR 12-10-2013 (FROM ABA Health Care and Pharmaceuticals Committee’s Health Care Antitrust Week-In-Review is compiled by Amanda Lewis and Robin van der Meulen.)
On Tuesday, December 10, 2013, an Illinois U.S. District Court judge granted class certification to customers claiming the merger of two Chicago-area hospital groups resulted in increased prices for patients. The class action arises from Evanston Northwestern Healthcare Corp.’s 2000 acquisition of rival Highland Park Hospital, forming the four-hospital NorthShore University Health System. The suit was brought in August 2007 on behalf of a proposed class that had purchased inpatient hospital services or hospital-based outpatient services from NorthShore hospitals.
· The case is In re: Evanston Northwestern Healthcare Corp. Antitrust Litigation, No. 07-cv-04446 (N.D. Ill.)
Posted by DAR 12-10-2013 (FROM ABA Health Care and Pharmaceuticals Committee’s Health Care Antitrust Week-In-Review is compiled by Amanda Lewis and Robin van der Meulen.)
Complaint filed by Colorado Attorney General John W. Suthers against debt collection companies
The Complaint filed by Colorado Attorney General John W. Suthers. The Complaint charges three debt collection companies of engaging in deceptive trade practices and using fraudulent bank documents to collect debts.
See www.scribd.com/doc/190888886/Complaint-filed-by-Colorado-Attorney-General-John-W-Suthers-against-debt-collection-companies
Posted by DAR 12-10-2013
AAI White Paper Calls for Skepticism on Airline Merger Benefits as US Airways-American Consummate Their Marriage
WASHINGTON DC - December 9, 2013 - The American Antitrust Institute (AAI) has released a new White Paper, "Delivering The Benefits? Efficiencies and Airline Mergers." The merger of USAirways-American was consummated today, less than four weeks after the U.S. Department of Justice (DOJ) negotiated an eleventh-hour settlement with the carriers. "Now that the traveling public will be forced to cope with yet another airline mega-merger, the spotlight is on what happens to fares and capacity, and whether carriers deliver on their promises of cost savings and consumer benefits," explained AAI's Vice President, economist Diana Moss.
Settlement of the merger litigation involved provisions affecting use of slots at Washington Reagan National Airport.
See https://us-mg5.mail.yahoo.com/neo/launch?rdsc=100&rand=1975462830#mail
Posted by DAR 12-10-2013
The Complaint filed by Colorado Attorney General John W. Suthers. The Complaint charges three debt collection companies of engaging in deceptive trade practices and using fraudulent bank documents to collect debts.
See www.scribd.com/doc/190888886/Complaint-filed-by-Colorado-Attorney-General-John-W-Suthers-against-debt-collection-companies
Posted by DAR 12-10-2013
AAI White Paper Calls for Skepticism on Airline Merger Benefits as US Airways-American Consummate Their Marriage
WASHINGTON DC - December 9, 2013 - The American Antitrust Institute (AAI) has released a new White Paper, "Delivering The Benefits? Efficiencies and Airline Mergers." The merger of USAirways-American was consummated today, less than four weeks after the U.S. Department of Justice (DOJ) negotiated an eleventh-hour settlement with the carriers. "Now that the traveling public will be forced to cope with yet another airline mega-merger, the spotlight is on what happens to fares and capacity, and whether carriers deliver on their promises of cost savings and consumer benefits," explained AAI's Vice President, economist Diana Moss.
Settlement of the merger litigation involved provisions affecting use of slots at Washington Reagan National Airport.
See https://us-mg5.mail.yahoo.com/neo/launch?rdsc=100&rand=1975462830#mail
Posted by DAR 12-10-2013
Clarke & Zywicki Paper on Payday Lending and Bank Overdraft Protection
See Payday Lending, Bank Overdraft Protection, and Fair Competition at the Consumer Financial Protection Bureau forthcoming in the Review of Banking and Financial Law. Here is the abstract:
The Consumer Financial Protection Bureau (CFPB) is considering new regulation of payday lending and bank overdraft protection. The Dodd-Frank Act, which established the CFPB, recognizes that consumers benefit from competition among providers of consumer credit products. That law requires the CFPB to preserve fair competition by providing consistent regulatory treatment of similar products offered by both bank and nonbank lenders. We illustrate how this mandate for fair competition applies to the regulation of payday lending and bank overdraft protection, products that are offered by different entities but attract an overlapping customer base, compete with each other directly, and raise similar consumer protection concerns. Unequal regulation would provide a competitive advantage for one product over another, resulting in reduced choice and higher prices for consumers, without a corresponding increase in consumer protection. Therefore, as the CFPB considers new regulation of these products, it should be careful to regulate them similarly to preserve fair competition.
Posted by DAR 12-9-2013 -- Credit to the Public Citizen blog where we picked this up.
See Payday Lending, Bank Overdraft Protection, and Fair Competition at the Consumer Financial Protection Bureau forthcoming in the Review of Banking and Financial Law. Here is the abstract:
The Consumer Financial Protection Bureau (CFPB) is considering new regulation of payday lending and bank overdraft protection. The Dodd-Frank Act, which established the CFPB, recognizes that consumers benefit from competition among providers of consumer credit products. That law requires the CFPB to preserve fair competition by providing consistent regulatory treatment of similar products offered by both bank and nonbank lenders. We illustrate how this mandate for fair competition applies to the regulation of payday lending and bank overdraft protection, products that are offered by different entities but attract an overlapping customer base, compete with each other directly, and raise similar consumer protection concerns. Unequal regulation would provide a competitive advantage for one product over another, resulting in reduced choice and higher prices for consumers, without a corresponding increase in consumer protection. Therefore, as the CFPB considers new regulation of these products, it should be careful to regulate them similarly to preserve fair competition.
Posted by DAR 12-9-2013 -- Credit to the Public Citizen blog where we picked this up.
Fifth Circuit Rejects NLRB Ruling Invaliding Class Action Waivers in Arbitration Agreements
On December 3, 2013, the U.S. Court of Appeals for the Fifth Circuit rejected the National Labor Relations Board’s (NLRB) ruling that an employer violates the National Labor Relations Act (NLRA) by requiring employees to waive their rights to pursue class or collective actions as part of an employment arbitration agreement.
See the article by by Steven W. Suflas, Mark J. Levin, and Erin K. Clarke at http://www.ballardspahr.com/alertspublications/legalalerts/2013-12-05-fifth-circuit-rejects-nlrb-ruling-invaliding-class-action-waivers-in-arbitration.aspx
On December 3, 2013, the U.S. Court of Appeals for the Fifth Circuit rejected the National Labor Relations Board’s (NLRB) ruling that an employer violates the National Labor Relations Act (NLRA) by requiring employees to waive their rights to pursue class or collective actions as part of an employment arbitration agreement.
See the article by by Steven W. Suflas, Mark J. Levin, and Erin K. Clarke at http://www.ballardspahr.com/alertspublications/legalalerts/2013-12-05-fifth-circuit-rejects-nlrb-ruling-invaliding-class-action-waivers-in-arbitration.aspx
From NY Times editorial on banks as sometimes similar to pay-day lenders:
"The banking industry, which cannot resist such easy profits, offers “deposit advance” loans that work the same way [as payday loans.]. There is no fixed date for repayment, but the bank repays itself from an electronic deposit that comes into the borrower’s account. A study earlier this year from the Consumer Financial Protection Bureau found that these transactions were eating customers alive. Overdraft fees drain the borrower’s account, forcing him or her to borrow again and again. Moreover, three-quarters of the loan fees came from consumers who borrowed more than 10 times within 12 months.
New guidelines issued by the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency for banks they oversee stop short of completely disallowing deposit advances. But the guidelines should reduce the banks’ profits while making the loans less onerous to borrowers. Banks will have to determine if the borrower has the ability to repay without having to borrow over and over again to meet expenses.
Banks will also be barred from making more than one loan per monthly statement cycle, and from extending a new loan before the previous one has been repaid in full. In addition, the banks will have to furnish the borrower with clear and accurate disclosure of terms.
The Federal Reserve, which oversees other banks that practice this brand of lending, cautioned those banks earlier this year about risks posed by those loans. But it did not issue rules to make them less onerous. It should do so now, following the example set by fellow regulators."
http://www.nytimes.com/2013/12/03/opinion/banks-as-payday-lenders.html
"The banking industry, which cannot resist such easy profits, offers “deposit advance” loans that work the same way [as payday loans.]. There is no fixed date for repayment, but the bank repays itself from an electronic deposit that comes into the borrower’s account. A study earlier this year from the Consumer Financial Protection Bureau found that these transactions were eating customers alive. Overdraft fees drain the borrower’s account, forcing him or her to borrow again and again. Moreover, three-quarters of the loan fees came from consumers who borrowed more than 10 times within 12 months.
New guidelines issued by the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency for banks they oversee stop short of completely disallowing deposit advances. But the guidelines should reduce the banks’ profits while making the loans less onerous to borrowers. Banks will have to determine if the borrower has the ability to repay without having to borrow over and over again to meet expenses.
Banks will also be barred from making more than one loan per monthly statement cycle, and from extending a new loan before the previous one has been repaid in full. In addition, the banks will have to furnish the borrower with clear and accurate disclosure of terms.
The Federal Reserve, which oversees other banks that practice this brand of lending, cautioned those banks earlier this year about risks posed by those loans. But it did not issue rules to make them less onerous. It should do so now, following the example set by fellow regulators."
http://www.nytimes.com/2013/12/03/opinion/banks-as-payday-lenders.html
Zombie debt collection
Neil L. Sobol of Texas A&M has written Protecting Consumers from Zombie-Debt Collectors, forthcoming in the New Mexico Law Review. Here is part of the abstract:
The debt-collection business is booming, led by a dramatic increase in the sale and collection of defaulted debts. Currently, debt buyers annually purchase more than $100 billion in the face value of debts. In the typical purchase, buyers pay only a small fraction of the face value of the debts; in return, they receive extremely limited, often inaccurate information. Many of the debts that buyers seek to recover never existed or are no longer enforceable by operation of law. Consumers who receive communications from debt buyers often complain about mistaken-identity and identity-theft cases where the individuals contacted never incurred the alleged debts. Additionally, buyers may seek recovery of debts that have been paid, settled, discharged in bankruptcy, or have become time-barred because the collection period under the statute of limitations has expired.
By obtaining judgments or persuading consumers to pay a portion of these debts, acknowledge these debts, or enter into new agreements, collectors can transform these debts thought to be “dead” or non-existent, into “living” and enforceable debts. The media have labeled these resurrected debts as “zombie debts.” Just as the zombies in movies come back from the dead to terrorize individuals, dead debts may resurface to cause havoc for consumers. Even if a consumer successfully defeats one zombie-debt collector, the process may restart when the debt is resold.
Neil L. Sobol of Texas A&M has written Protecting Consumers from Zombie-Debt Collectors, forthcoming in the New Mexico Law Review. Here is part of the abstract:
The debt-collection business is booming, led by a dramatic increase in the sale and collection of defaulted debts. Currently, debt buyers annually purchase more than $100 billion in the face value of debts. In the typical purchase, buyers pay only a small fraction of the face value of the debts; in return, they receive extremely limited, often inaccurate information. Many of the debts that buyers seek to recover never existed or are no longer enforceable by operation of law. Consumers who receive communications from debt buyers often complain about mistaken-identity and identity-theft cases where the individuals contacted never incurred the alleged debts. Additionally, buyers may seek recovery of debts that have been paid, settled, discharged in bankruptcy, or have become time-barred because the collection period under the statute of limitations has expired.
By obtaining judgments or persuading consumers to pay a portion of these debts, acknowledge these debts, or enter into new agreements, collectors can transform these debts thought to be “dead” or non-existent, into “living” and enforceable debts. The media have labeled these resurrected debts as “zombie debts.” Just as the zombies in movies come back from the dead to terrorize individuals, dead debts may resurface to cause havoc for consumers. Even if a consumer successfully defeats one zombie-debt collector, the process may restart when the debt is resold.
Barney Frank complains that regulators are watering down the "skin-in-the-game" mortgage lender requirements of Dodd-Frank
From WSJ, by Alan Zibel
An architect of the 2010 Dodd-Frank law is accusing federal regulators of watering down new mortgage rules in the face of opposition from the housing industry.
Former Rep. Barney Frank (D., Mass.) slammed federal regulators for their decision to dial back a proposal to impose new rules on the mortgage-securities market--a key piece of the Dodd-Frank law that bears Mr. Frank's name.
"This is a grave error, and contrary to the assertion that it would best carry out the statutory intent, significantly repudiates it," Mr. Frank wrote in a comment letter being sent to regulators Tuesday.
At issue is a proposal from August by six regulators--including the Federal Reserve and Federal Deposit Insurance Corp.--to revamp proposed rules requiring issuers of mortgage securities to retain 5% of the credit risk on their books. Supporters of this requirement, including Mr. Frank, argue it will force Wall Street to be more cautious when packaging assets such as mortgages into securities.
The entire article is at http://online.wsj.com/article/BT-CO-20131029-712400.html
From WSJ, by Alan Zibel
An architect of the 2010 Dodd-Frank law is accusing federal regulators of watering down new mortgage rules in the face of opposition from the housing industry.
Former Rep. Barney Frank (D., Mass.) slammed federal regulators for their decision to dial back a proposal to impose new rules on the mortgage-securities market--a key piece of the Dodd-Frank law that bears Mr. Frank's name.
"This is a grave error, and contrary to the assertion that it would best carry out the statutory intent, significantly repudiates it," Mr. Frank wrote in a comment letter being sent to regulators Tuesday.
At issue is a proposal from August by six regulators--including the Federal Reserve and Federal Deposit Insurance Corp.--to revamp proposed rules requiring issuers of mortgage securities to retain 5% of the credit risk on their books. Supporters of this requirement, including Mr. Frank, argue it will force Wall Street to be more cautious when packaging assets such as mortgages into securities.
The entire article is at http://online.wsj.com/article/BT-CO-20131029-712400.html
National Consumer Law Center asks CFPB to require a prominent display of a mortgage loan’s full annual percentage rate, a single measure of the cost of credit that incorporates the interest rate, closing costs and other fees.
The NCLC has concerns about new rules from the Consumer Financial Protection Bureau regulating mortgages. A main point is this:
"The APR is a key measure of the total cost of credit, reflecting both fees and interest. Disclosure
of the APR has been linked to a reduction in the cost of credit in the market. An academic study
using a version of the CFPB’s forms showed that putting the APR prominently on the first page
substantially improved consumers’ ability to choose the lowest cost loan. The APR is on the first
page on the current Truth in Lending Act (TILA) disclosure form. But the final version of the
CFPB’s form buries this key disclosure on page 3, making it less likely that most consumers will
find it and recognize its importance. Instead, the first page of the proposed form highlights the
amount of cash the borrower will need to bring to closing — a useful fact, surely, but rarely the
key variable in pricing between two loans. This focus on the cash to close could be abused by
lenders who seek to focus consumers on short-term rewards with come-ons, such as “No Cash to
Close!”, rather than long-term risk and pricing."
The article in the New York Times at http://www.nytimes.com/2013/11/30/opinion/what-you-dont-know-about-mortgages.html?ref=todayspaper contains a link to the NCLC report.
Posted by DAR 11-30-2013
The NCLC has concerns about new rules from the Consumer Financial Protection Bureau regulating mortgages. A main point is this:
"The APR is a key measure of the total cost of credit, reflecting both fees and interest. Disclosure
of the APR has been linked to a reduction in the cost of credit in the market. An academic study
using a version of the CFPB’s forms showed that putting the APR prominently on the first page
substantially improved consumers’ ability to choose the lowest cost loan. The APR is on the first
page on the current Truth in Lending Act (TILA) disclosure form. But the final version of the
CFPB’s form buries this key disclosure on page 3, making it less likely that most consumers will
find it and recognize its importance. Instead, the first page of the proposed form highlights the
amount of cash the borrower will need to bring to closing — a useful fact, surely, but rarely the
key variable in pricing between two loans. This focus on the cash to close could be abused by
lenders who seek to focus consumers on short-term rewards with come-ons, such as “No Cash to
Close!”, rather than long-term risk and pricing."
The article in the New York Times at http://www.nytimes.com/2013/11/30/opinion/what-you-dont-know-about-mortgages.html?ref=todayspaper contains a link to the NCLC report.
Posted by DAR 11-30-2013
Recent developments in local District of Columbia gasoline distribution litigation brought by the AG against ExxonMobil and its DC Distributors
The DC Attorney General's Complaint, filed in August of this year, uses a local statute to accomplish what may be viewed as antitrust and consumer enforcement goals: stop exclusive dealing arrangements imposed by a dominant local gasoline distributor that results in artificially high prices, wholesale and retail.
A lot has happened in the litigation. ExxonMobil has moved to dismiss the AG's Complaint, and so have the local Exxon distributors.
ExxonMobil argues that the AG's case should be dismissed for three principal reasons:
(1) the Attorney General does not have standing or the authority to bring its claim under the Retail Service Station Act, D.C. Code §§ 36-301.01 et seq. (the “RSSA”);
(2) the Attorney General’s complaint fails to state a claim against ExxonMobil because ExxonMobil is not a “distributor” under the RSSA; and
(3) ExxonMobil’s agreements are not the type of agreements the RSSA covers because they are neither marketing agreements with a retail dealer nor exclusive. (That part about lack of exclusivity seems to mean that the agreement language does not require exclusivity, which may not address the question of whether Defendants actually practice exclusivity.)
ExxonMobil views the Complaint's relationship to antitrust harms as supporting dismissal: "This lawsuit comes on the heels of a failed two-year long antitrust investigation instigated by the D.C. Council and commenced by the Attorney General in 2011 to allegedly address perceived concerns about rising gasoline prices in the District."
Exxon distributor Anacostia and related local Defendants argue, among other things, that the Complaint should be dismissed because the RSSA entrusts enforcement of the statutory provision at issue solely to the service station dealers whose interests the Act is designed to protect. Also, the Attorney General does not have enforcement authority to protect the public interest using a so-called “parens patriae” action -- action on behalf of the citizens of the District. So, the argument is that the Attorney General lacks "standing" to bring suit.
The Attorney General has filed opposition papers arguing a right to sue and prevent competitive harm to dealers and the consuming public, and Defendants have filed further replies.
The Court paper are conveniently available on the internet. See the links at http://www.independentgasolinestationowners.com/
Posted by Don Resnikoff 11-27-13. Note from DAR: I assist the DC AG on some matters as a volunteer Special Assistant AG, but I am recused from assisting the AG on the gasoline matters, so I have no knowledge of DC AG activity on the reported case other than what is in the public record.
The Federal Consumer Financial Protection Bureau (CFPB) takes consumer complaints
The Federal Consumer Financial Protection Bureau (CFPB) began taking consumer credit card complaints in 2011, and now accepts complaints about mortgages, bank accounts and services, private student loans, consumer loans, credit reporting, debt collection, and money transfers. Complaints about payday lending were recently added to the list.
The Bureau requests that companies respond to complaints within 15 days and describe the steps they have taken or plan to take. The CFPB expects companies to close all but the most complicated complaints within 60 days. Consumers are given a tracking number after submitting a complaint and can check the status of their complaint by logging on to the CFPB website.
To submit a complaint, consumers can:
The Federal Consumer Financial Protection Bureau (CFPB) began taking consumer credit card complaints in 2011, and now accepts complaints about mortgages, bank accounts and services, private student loans, consumer loans, credit reporting, debt collection, and money transfers. Complaints about payday lending were recently added to the list.
The Bureau requests that companies respond to complaints within 15 days and describe the steps they have taken or plan to take. The CFPB expects companies to close all but the most complicated complaints within 60 days. Consumers are given a tracking number after submitting a complaint and can check the status of their complaint by logging on to the CFPB website.
To submit a complaint, consumers can:
- Go online at www.consumerfinance.gov/complaint
- Call the toll-free phone number at 1-855-411-CFPB (2372) or TTY/TDD phone number at 1-855-729-CFPB (2372)
- Fax the CFPB at 1-855-237-2392
- Mail a letter to: Consumer Financial Protection Bureau, P.O. Box 4503, Iowa City, Iowa 52244
Payment processors and depository financial institutions should not facilitate illegal loans
The Center for Responsible Lending and other consumer organizations argue for further government scrutiny of financial institutions and processors that facilitate payments to online payday lenders who operate illegally. A public statement by the organizations explains that online payday lenders are particularly high-risk merchants. These lenders typically market and originate loans to borrowers that reside in another state. Payday loans and other forms of high-cost lending are illegal in many states, and are legal in other states only if the lender is licensed and the loan complies with state consumer protection and other laws.
Online payday lenders present different legal and consumer protection challenges than storefront high-cost lenders. These online lenders routinely market and originate loans with terms and conditions that violate the law of the state where the borrower resides. These lenders are regularly subject to investigation by state and federal officials and have been subject to numerous cease and desist orders and other enforcement actions. Financial institutions that process payments for lenders operating illegally or subject to ongoing litigation are exposed to significant legal and reputational risk. Nonetheless, high-cost lenders have used choice of law provisions, purported tribal sovereign immunity, preemption claims and other arguments in efforts to circumvent state consumer protection laws such as interest rate caps or restrictions on intensity of use.
As with any other higher-risk activity, financial institutions have a duty to scrutinize their customers and their customer’s customers to ensure that the institution is not being used to process illegal payments. Scrutiny of payment processing for higher-risk merchants is consistent with longstanding supervisory expectations and warnings about relationships with third parties.
For the full statement by the consumer organizations, see
http://www.responsiblelending.org/payday-lending/policy-legislation/regulators/letter_bankinregulators_paymentprocessing.pdf
Posted DAR 11-07-2013
The Center for Responsible Lending and other consumer organizations argue for further government scrutiny of financial institutions and processors that facilitate payments to online payday lenders who operate illegally. A public statement by the organizations explains that online payday lenders are particularly high-risk merchants. These lenders typically market and originate loans to borrowers that reside in another state. Payday loans and other forms of high-cost lending are illegal in many states, and are legal in other states only if the lender is licensed and the loan complies with state consumer protection and other laws.
Online payday lenders present different legal and consumer protection challenges than storefront high-cost lenders. These online lenders routinely market and originate loans with terms and conditions that violate the law of the state where the borrower resides. These lenders are regularly subject to investigation by state and federal officials and have been subject to numerous cease and desist orders and other enforcement actions. Financial institutions that process payments for lenders operating illegally or subject to ongoing litigation are exposed to significant legal and reputational risk. Nonetheless, high-cost lenders have used choice of law provisions, purported tribal sovereign immunity, preemption claims and other arguments in efforts to circumvent state consumer protection laws such as interest rate caps or restrictions on intensity of use.
As with any other higher-risk activity, financial institutions have a duty to scrutinize their customers and their customer’s customers to ensure that the institution is not being used to process illegal payments. Scrutiny of payment processing for higher-risk merchants is consistent with longstanding supervisory expectations and warnings about relationships with third parties.
For the full statement by the consumer organizations, see
http://www.responsiblelending.org/payday-lending/policy-legislation/regulators/letter_bankinregulators_paymentprocessing.pdf
Posted DAR 11-07-2013
Pending consumer bills before the DC Council -- 10/24/2013:
The “Rental Housing Consumer Protection Act of 2013” can be found here:
http://dcclims1.dccouncil.us/images/00001/20130124095402.pdf
The “Insurance Claims Consumer Protection Amendment Act of 2013” can be found here:
http://dcclims1.dccouncil.us/images/00001/20130513104239.pdf
There is also an “Insurance Claims Consumer Protection Second Amendment Act of 2013” but I have not yet analyzed how the two bills differ.
http://dcclims1.dccouncil.us/images/00001/20130402132114.pdf Thanks to Legal Aid's Heather Latino for providing the information.
Thanks to Legal Aid's Heather Latino for providing the information.
Issues with medical care credit cards
Authorities in California, Florida, Michigan and other states indicate that elderly people, many of who are struggling with increasing debt and declining savings, are facing difficulty with medical credit cards and loans. Attorneys general in a several states filed lawsuits against health care professionals who allegedly misled patients regarding the financial terms of care cards, engaged in high-pressure sales tactics, overcharged for treatments and billed for unauthorized work.
“The cards prey on seniors’ trust,” said Lisa Landau, head of the health care unit at the New York attorney general’s office (NYAG office). The NYAG office found that health care providers pressured patients into getting credit cards arrangement with CareCredit, a unit of General Electric and that patients were misled regarding the terms of the high-cost credit cards.
- See more at: http://classactioncentral.com/patients-burdened-debt-health-care-credit-cards-lines-credit/#sthash.1LKaLs6y.dpuf
Authorities in California, Florida, Michigan and other states indicate that elderly people, many of who are struggling with increasing debt and declining savings, are facing difficulty with medical credit cards and loans. Attorneys general in a several states filed lawsuits against health care professionals who allegedly misled patients regarding the financial terms of care cards, engaged in high-pressure sales tactics, overcharged for treatments and billed for unauthorized work.
“The cards prey on seniors’ trust,” said Lisa Landau, head of the health care unit at the New York attorney general’s office (NYAG office). The NYAG office found that health care providers pressured patients into getting credit cards arrangement with CareCredit, a unit of General Electric and that patients were misled regarding the terms of the high-cost credit cards.
- See more at: http://classactioncentral.com/patients-burdened-debt-health-care-credit-cards-lines-credit/#sthash.1LKaLs6y.dpuf
Class action challenges tax lien foreclosure under current D.C. tax lien foreclosure law
The suit alleges that Washington law violates the Fifth Amendment by granting tax lien purchasers the deed and full title to a property upon foreclosure, essentially seizing private property without a just cause.
See the Complaint at http://www.scribd.com/doc/177137947/Class-action-complaint-challenging-D-C-tax-lien-foreclosure-law
There is further information on the website of the firm representing the class plaintiff, Boies, Schiller, and Flexner: http://www.bsfllp.com/news/in_the_news/1001558
The suit alleges that Washington law violates the Fifth Amendment by granting tax lien purchasers the deed and full title to a property upon foreclosure, essentially seizing private property without a just cause.
See the Complaint at http://www.scribd.com/doc/177137947/Class-action-complaint-challenging-D-C-tax-lien-foreclosure-law
There is further information on the website of the firm representing the class plaintiff, Boies, Schiller, and Flexner: http://www.bsfllp.com/news/in_the_news/1001558
October 17, 2013 DC Council hearing on tax lien foreclosure reform -- AT HOME and AARP testimony by Amy Mix, Joanne Savage
The DC Council Committee on Finance and Revenue held a public hearing on on October 17, 2013 onthe following legislation:
We have posted their testimony at http://www.scribd.com/doc/176955611/Mix-Testimony-O and
http://www.scribd.com/doc/176957159/Savage-Testim
We applaud their work, and the work of others supporting tax lien foreclosure reform.
The DC Council Committee on Finance and Revenue held a public hearing on on October 17, 2013 onthe following legislation:
- BiIl 20-23, the Residential Real Property Equity and Transparency Act of 2013
- Bill 20-318, the Senior Citizen Real Property Tax Relief Act of 2013
- Bill 20-476, the District Real Property Tax Sale Act of 2013
We have posted their testimony at http://www.scribd.com/doc/176955611/Mix-Testimony-O and
http://www.scribd.com/doc/176957159/Savage-Testim
We applaud their work, and the work of others supporting tax lien foreclosure reform.
The DC Consumer Rights Coalition supports reform of DC tax lien foreclosure reform
Recent stories in the Washington Post highlight the serious problems with the District's tax lien sales. In response, the DC Council has passed emergency, temporary legislation, and the Mayor has canceled the 2013 sale for some property owners. There is also permanent legislation pending before the Council, with a hearing scheduled for October 17th. This hearing provides an opportunity for significant reform of DC's tax sale system.
Notice of the hearing and copies of the proposed legislation are at:
http://dccouncil.us/events/finance-and-revenue-hearing-on-b20-23-b20-318-and-b20-476
A summary provided by Councilman Evans offers this explanation:
The proposed Residential Real Property Tax Relief Act of 2013 would help the many DC residents who are challenged by spiraling home values afford to keep their homes. It does this by capping the rate of annual assessment increase at 5%, rather than the current 10%, and also by entirely doing away with the current requirement that homeowners pay tax on at least 40% of the assessed value of their home, even if that results in an increase of more than 10% per year.
The second bill, the Residential Real Property Equity and Transparency Act of 2013,was developed in collaboration with American Association of Retired Persons (AARP)and The Alliance to Help Owners Maintain Equity (AT HOME) and would place new requirements on the CFO in order to help prevent the tax sale of our residents’ homes, an event that disproportionally impacts our elderly and economically disadvantaged residents. This bill expands the types of notices and information requirements the CFO must provide homeowners before their home is taken to tax sale, and permits homeowners to enter into installment agreements with the government to avoid tax sale. This bill also expands notices and information on how to redeem property that the CFO must provide homeowners after a tax sale, and establishes fair limits on fees associated with redeeming property sold at tax sale.
The third bill, the Major Real Property Assessment and Appeals Schedule Revision Act of 2013, addresses inefficiencies in the CFO’s valuation and management of commercial real property assessments. It would increase efficiency and accuracy of assessments for income producing commercial properties by adjusting the reporting deadline to occur after the previous year’s income and expense information is due, the first-level appeal deadline accordingly, and require that income and expense information be filed electronically.
Recent stories in the Washington Post highlight the serious problems with the District's tax lien sales. In response, the DC Council has passed emergency, temporary legislation, and the Mayor has canceled the 2013 sale for some property owners. There is also permanent legislation pending before the Council, with a hearing scheduled for October 17th. This hearing provides an opportunity for significant reform of DC's tax sale system.
Notice of the hearing and copies of the proposed legislation are at:
http://dccouncil.us/events/finance-and-revenue-hearing-on-b20-23-b20-318-and-b20-476
A summary provided by Councilman Evans offers this explanation:
The proposed Residential Real Property Tax Relief Act of 2013 would help the many DC residents who are challenged by spiraling home values afford to keep their homes. It does this by capping the rate of annual assessment increase at 5%, rather than the current 10%, and also by entirely doing away with the current requirement that homeowners pay tax on at least 40% of the assessed value of their home, even if that results in an increase of more than 10% per year.
The second bill, the Residential Real Property Equity and Transparency Act of 2013,was developed in collaboration with American Association of Retired Persons (AARP)and The Alliance to Help Owners Maintain Equity (AT HOME) and would place new requirements on the CFO in order to help prevent the tax sale of our residents’ homes, an event that disproportionally impacts our elderly and economically disadvantaged residents. This bill expands the types of notices and information requirements the CFO must provide homeowners before their home is taken to tax sale, and permits homeowners to enter into installment agreements with the government to avoid tax sale. This bill also expands notices and information on how to redeem property that the CFO must provide homeowners after a tax sale, and establishes fair limits on fees associated with redeeming property sold at tax sale.
The third bill, the Major Real Property Assessment and Appeals Schedule Revision Act of 2013, addresses inefficiencies in the CFO’s valuation and management of commercial real property assessments. It would increase efficiency and accuracy of assessments for income producing commercial properties by adjusting the reporting deadline to occur after the previous year’s income and expense information is due, the first-level appeal deadline accordingly, and require that income and expense information be filed electronically.
Groups, including ours, submit statement of comments concerning the Consumer Financial Protection Bureau’s (Bureau) proposed national telephone survey of 1,000 credit card holders as part of its study of predispute binding mandatory (or forced) arbitration
The statement is at URL http://www.scribd.com/doc/158997526/Comments-CFPB-Consumer-Survey-08062013
The statement is at URL http://www.scribd.com/doc/158997526/Comments-CFPB-Consumer-Survey-08062013
The DC Consumer Rights Coalition supports the proposed Arbitration Fairness Act
The DC Consumer Rights Coalition supports the proposed Arbitration Fairness Act which is now being considered by the U.S. Senate. It would put sharp limits on forced arbitration, and limit arbitration to situations where it is agreed to in a way that is truly voluntary.
Forced arbitration has become ubiquitous in consumer and employment contracts, with bad effects. With forced arbitration there is no judge, no jury, no ability to join with others in a class or collective action, no right of appeal and no requirement that the law be followed. Further, there are often no rights to discovery, and the results are also often kept secret under “confidentiality” so that those who violate the laws have their acts hidden from the world and from possible future victims. This is a recipe for evasion of responsibility and evasion from complying with laws of the United States and its States.
When undertaken with the knowing and voluntary consent of the parties after a dispute arises, there is nothing wrong with arbitration. For example, parties may choose to pay an experienced lawyer or a retired judge to arbitrate a personal injury case. They may choose ahead of time whether the arbitrator’s decision will be binding, advisory, or something in between. Likewise, they may choose whether to have discovery, or whether the results will be made public or not.
But in our modern world the vast majority of transactions are presented on a take-it-or-leave-it form. In contrast to voluntary post-dispute arbitration, pre-dispute forced arbitration is most often: (1) hidden in the fine print of printed or internet contracts which nobody reads; (2) most certainly not understood; (3) not undertaken knowingly or voluntarily; and (4) involving arbitrators selected by one participant rather than by mutual (much less knowing) consent.
As a consequence, today the courthouse doors of this country are slammed shut to the majority of consumer and employment disputes. It is now against the law for the overwhelming majority of Americans to use the courts to sue a bank, a car dealer, a finance company, or a large employer in court. That puts the action of these entities literally “above the law.”
We encourage consumers to be advocates for this bill, so it can become law.
Posted by DAR 7-18-2013
The DC Consumer Rights Coalition supports the proposed Arbitration Fairness Act which is now being considered by the U.S. Senate. It would put sharp limits on forced arbitration, and limit arbitration to situations where it is agreed to in a way that is truly voluntary.
Forced arbitration has become ubiquitous in consumer and employment contracts, with bad effects. With forced arbitration there is no judge, no jury, no ability to join with others in a class or collective action, no right of appeal and no requirement that the law be followed. Further, there are often no rights to discovery, and the results are also often kept secret under “confidentiality” so that those who violate the laws have their acts hidden from the world and from possible future victims. This is a recipe for evasion of responsibility and evasion from complying with laws of the United States and its States.
When undertaken with the knowing and voluntary consent of the parties after a dispute arises, there is nothing wrong with arbitration. For example, parties may choose to pay an experienced lawyer or a retired judge to arbitrate a personal injury case. They may choose ahead of time whether the arbitrator’s decision will be binding, advisory, or something in between. Likewise, they may choose whether to have discovery, or whether the results will be made public or not.
But in our modern world the vast majority of transactions are presented on a take-it-or-leave-it form. In contrast to voluntary post-dispute arbitration, pre-dispute forced arbitration is most often: (1) hidden in the fine print of printed or internet contracts which nobody reads; (2) most certainly not understood; (3) not undertaken knowingly or voluntarily; and (4) involving arbitrators selected by one participant rather than by mutual (much less knowing) consent.
As a consequence, today the courthouse doors of this country are slammed shut to the majority of consumer and employment disputes. It is now against the law for the overwhelming majority of Americans to use the courts to sue a bank, a car dealer, a finance company, or a large employer in court. That puts the action of these entities literally “above the law.”
We encourage consumers to be advocates for this bill, so it can become law.
Posted by DAR 7-18-2013
More recent developments in local District of Columbia gasoline pricing:
DC Attorney General Irvin Nathan rebuts Washington Post editorial opposing the DC suit against ExxonMobil and a local distributor
In a letter published by the Washington Post on September 6, Attorney General Irvin Nathan rebutted the Washington Post's editorial criticizing the AG's suit against ExonMobil and local distributors. The letter is at http://www.washingtonpost.com/opinions/exclusive-supply-agreements-for-fuel-drive-prices-in-the-district/2013/09/06/7f164ce2-1591-11e3-961c-f22d3aaf19ab_story.html
The main point of the AG's letter is straightforward. While vertical arrangements may often be benign, market facts matter. Mr. Nathan explains: "Vertically imposed supply restrictions, while perhaps 'benign' in a truly competitive market, have great potential to harm competition and raise consumer prices in one dominated by a single large supplier. The unusually high prices at many D.C. pumps should surprise no one. The District’s lawsuit challenging exclusive supply agreements is brought against a single, large gasoline wholesaler that supplies about 60 percent of the city’s stations, including almost all of the Exxon, Shell and Valero brand stations."
The Washington Post editorial is at http://www.washingtonpost.com/opinions/dc-gas-prices-dont-call-for-a-lawsuit/2013/09/02/7b8504a0-11af-11e3-b4cb-fd7ce041d814_story.html
District of Columbia Sues ExxonMobil and Its DC Distributors, Seeking to End Their Exclusive-Supply Agreements and Lower Retail Gasoline Prices
The DC AG's Complaint, filed 8-27-13, uses a local statute to accomplish what may be viewed as an antitrust goal: stop an exclusive dealing arrangement with a dominant local gasoline distributor that results in artificially high prices, wholesale and retail.
We support attention to the effects of parallel exclusive dealing requirements of the locally dominant Mamo gasoline distributorships and the PMG distributorship, and direct retail activities of those companies. The enforcement concern is that the combination of locked-in station operators and dominant suppliers causes artificially high gasoline prices in DC, wholesale and resale.
The Attorney General's action should have nationwide significance, because there are indications of similar conduct in localities across the country. Some jurisdictions have local special statutes somewhat like DC, but in many jurisdictions any complaints, public or private, would rely on the antitrust laws. I'd like to call out for praise people who have spoken out on local gasoline pricing issues in ways that at times required arguing against conventional wisdom. David Balto wrote an excellent article on the the local gasoline market for the DC Bar magazine, and David and Robert Boyle both gave excellent testimony to the DC Council which involved describing the market.
The DC press release and a link to the DC Complaint are at http://oag.dc.gov/release/district-sues-exxonmobil-and-its-dc-distributors-seeking-end-their-exclusive-supply
The press release also appears below:
WASHINGTON, D.C. – The District of Columbia filed a lawsuit against ExxonMobil Oil Corporation and its gasoline distributors for Washington, D.C., to stop enforcement of exclusive-supply agreements that make one group of affiliated distributors the only suppliers of Exxon-branded gasoline in D.C., Attorney General Irvin B. Nathan announced today. The complaint, filed in D.C. Superior Court, alleges that the exclusive-supply agreements violate the District’s Retail Service Station Act.
The affiliated distributors – Capitol Petroleum Group, LLC, Anacostia Realty, LLC, and Springfield Petroleum Realty, LLC – are the exclusive gasoline suppliers for about 60% of the 107 gasoline stations in D.C., including all 31 Exxon stations, 19 of 20 Shell stations, all 12 Valero stations, and 3 unbranded stations. The District’s lawsuit challenges agreements that make these affiliated distributors the exclusive suppliers of Exxon-branded gasoline for the 27 independently-operated Exxon stations in D.C., or about 25% of the gasoline stations in the city.
The exclusive-supply agreements, or earlier versions of them, were established by ExxonMobil and were transferred in 2009 to the affiliated distributors, along with ExxonMobil’s ownership of the 30 D.C. Exxon stations to which the agreements then pertained. According to the District’s complaint, these supply agreements can now be enforced either by the affiliated distributors or by ExxonMobil through its separate agreements with other area distributors.
The District alleges that the exclusive-supply agreements allow the affiliated distributors to “set the wholesale prices paid for Exxon-branded gasoline in D.C., depriving D.C. residents . . . of the benefits of competition in the wholesale supply of Exxon-branded gasoline.”
“Under the District’s gasoline marketing law, a retail gasoline dealer is free to purchase a brand of gasoline from any supplier of the brand,” Attorney General Nathan said. “Our suit seeks to end these unlawful supply restrictions, increase wholesale competition, and bring down retail prices at the pump.”
Attachment(s): ExxonMobil Complaint431.23 KB
DC Attorney General Irvin Nathan rebuts Washington Post editorial opposing the DC suit against ExxonMobil and a local distributor
In a letter published by the Washington Post on September 6, Attorney General Irvin Nathan rebutted the Washington Post's editorial criticizing the AG's suit against ExonMobil and local distributors. The letter is at http://www.washingtonpost.com/opinions/exclusive-supply-agreements-for-fuel-drive-prices-in-the-district/2013/09/06/7f164ce2-1591-11e3-961c-f22d3aaf19ab_story.html
The main point of the AG's letter is straightforward. While vertical arrangements may often be benign, market facts matter. Mr. Nathan explains: "Vertically imposed supply restrictions, while perhaps 'benign' in a truly competitive market, have great potential to harm competition and raise consumer prices in one dominated by a single large supplier. The unusually high prices at many D.C. pumps should surprise no one. The District’s lawsuit challenging exclusive supply agreements is brought against a single, large gasoline wholesaler that supplies about 60 percent of the city’s stations, including almost all of the Exxon, Shell and Valero brand stations."
The Washington Post editorial is at http://www.washingtonpost.com/opinions/dc-gas-prices-dont-call-for-a-lawsuit/2013/09/02/7b8504a0-11af-11e3-b4cb-fd7ce041d814_story.html
District of Columbia Sues ExxonMobil and Its DC Distributors, Seeking to End Their Exclusive-Supply Agreements and Lower Retail Gasoline Prices
The DC AG's Complaint, filed 8-27-13, uses a local statute to accomplish what may be viewed as an antitrust goal: stop an exclusive dealing arrangement with a dominant local gasoline distributor that results in artificially high prices, wholesale and retail.
We support attention to the effects of parallel exclusive dealing requirements of the locally dominant Mamo gasoline distributorships and the PMG distributorship, and direct retail activities of those companies. The enforcement concern is that the combination of locked-in station operators and dominant suppliers causes artificially high gasoline prices in DC, wholesale and resale.
The Attorney General's action should have nationwide significance, because there are indications of similar conduct in localities across the country. Some jurisdictions have local special statutes somewhat like DC, but in many jurisdictions any complaints, public or private, would rely on the antitrust laws. I'd like to call out for praise people who have spoken out on local gasoline pricing issues in ways that at times required arguing against conventional wisdom. David Balto wrote an excellent article on the the local gasoline market for the DC Bar magazine, and David and Robert Boyle both gave excellent testimony to the DC Council which involved describing the market.
The DC press release and a link to the DC Complaint are at http://oag.dc.gov/release/district-sues-exxonmobil-and-its-dc-distributors-seeking-end-their-exclusive-supply
The press release also appears below:
WASHINGTON, D.C. – The District of Columbia filed a lawsuit against ExxonMobil Oil Corporation and its gasoline distributors for Washington, D.C., to stop enforcement of exclusive-supply agreements that make one group of affiliated distributors the only suppliers of Exxon-branded gasoline in D.C., Attorney General Irvin B. Nathan announced today. The complaint, filed in D.C. Superior Court, alleges that the exclusive-supply agreements violate the District’s Retail Service Station Act.
The affiliated distributors – Capitol Petroleum Group, LLC, Anacostia Realty, LLC, and Springfield Petroleum Realty, LLC – are the exclusive gasoline suppliers for about 60% of the 107 gasoline stations in D.C., including all 31 Exxon stations, 19 of 20 Shell stations, all 12 Valero stations, and 3 unbranded stations. The District’s lawsuit challenges agreements that make these affiliated distributors the exclusive suppliers of Exxon-branded gasoline for the 27 independently-operated Exxon stations in D.C., or about 25% of the gasoline stations in the city.
The exclusive-supply agreements, or earlier versions of them, were established by ExxonMobil and were transferred in 2009 to the affiliated distributors, along with ExxonMobil’s ownership of the 30 D.C. Exxon stations to which the agreements then pertained. According to the District’s complaint, these supply agreements can now be enforced either by the affiliated distributors or by ExxonMobil through its separate agreements with other area distributors.
The District alleges that the exclusive-supply agreements allow the affiliated distributors to “set the wholesale prices paid for Exxon-branded gasoline in D.C., depriving D.C. residents . . . of the benefits of competition in the wholesale supply of Exxon-branded gasoline.”
“Under the District’s gasoline marketing law, a retail gasoline dealer is free to purchase a brand of gasoline from any supplier of the brand,” Attorney General Nathan said. “Our suit seeks to end these unlawful supply restrictions, increase wholesale competition, and bring down retail prices at the pump.”
Attachment(s): ExxonMobil Complaint431.23 KB
Recent developments in local gasoline pricing
The office of the Attorney General for the District of Columbia filed an amicus brief supporting the right of gasoline station operators to shop for the cheapest wholesale gasoline prices, rather than being locked into exclusive dealing requirements by large wholesalers. That right is contained in statutory language as interpreted by the Court in an earlier decision and Order. Gasoline marketer BP and other parties sought to have the ruling set aside in connection with a settlement agreement, but the AG's office objected in its amicus brief. (Download a PDF of the brief by clicking below.)
http://www.independentgasolinestationowners.com/uploads/1/1/2/2/11223706/district_of_columbia_amicus_brief_-_kazemzadeh_2006_ca_009077_b.pdf
The office of the Attorney General for the District of Columbia filed an amicus brief supporting the right of gasoline station operators to shop for the cheapest wholesale gasoline prices, rather than being locked into exclusive dealing requirements by large wholesalers. That right is contained in statutory language as interpreted by the Court in an earlier decision and Order. Gasoline marketer BP and other parties sought to have the ruling set aside in connection with a settlement agreement, but the AG's office objected in its amicus brief. (Download a PDF of the brief by clicking below.)
http://www.independentgasolinestationowners.com/uploads/1/1/2/2/11223706/district_of_columbia_amicus_brief_-_kazemzadeh_2006_ca_009077_b.pdf
The AG's position has prevailed, and a new Court Order has been entered preserving the earlier Court ruling precluding exclusive dealing. This is, we think, good news for gas station owners and consumers, if not for large gasoline companies. Here is the new Court Order. (Download a PDF by clicking below.)
http://www.scribd.com/doc/162751766/Court-Order-Refusing-to-Vacate
BP has appealed. The appeal reinforces the point that BP supports jobber PMG's efforts to prevent gasoline station owners from shopping for lower branded gasoline prices. Here are the appeal papers. (Download a PDF by clicking below.)
http://www.scribd.com/doc/162740434/BP-appeal
http://www.scribd.com/doc/162751766/Court-Order-Refusing-to-Vacate
BP has appealed. The appeal reinforces the point that BP supports jobber PMG's efforts to prevent gasoline station owners from shopping for lower branded gasoline prices. Here are the appeal papers. (Download a PDF by clicking below.)
http://www.scribd.com/doc/162740434/BP-appeal
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Class action waivers
We have taken public positions on class action waivers in consumer contracts. Recently Schwab bowed to public pressure on class action waivers.
SCHWAB
STATEMENT ON CLASS ACTION WAIVERS
SAN FRANCISCO, May 15, 2013 — The Charles Schwab Corporation today made the following statement about class action waivers in Schwab client account agreements:
Effective immediately, Schwab is modifying its account agreements to eliminate the existing class action lawsuit waiver for disputes related to events occurring on or after May 15, 2013 and for the foreseeable future.
While the company believes that dispute resolution is best handled via FINRA arbitration, we have chosen to voluntarily remove the waiver going forward until the issue is resolved by the appropriate regulatory and/or court decisions. Given that the process will likely take considerable time to resolve, and may leave clients with a degree of uncertainty about their dispute resolution options in the meantime, we have elected to remove that uncertainty until the legal and regulatory process is completed.
To help ensure that small investors have access to pursue any claims they consider appropriate within the arbitration forum available to them, we will continue our existing policy of paying for the arbitration fees of any investor electing to pursue an arbitration claim under $25,000 against Schwab.
SAN FRANCISCO, May 15, 2013 — The Charles Schwab Corporation today made the following statement about class action waivers in Schwab client account agreements:
Effective immediately, Schwab is modifying its account agreements to eliminate the existing class action lawsuit waiver for disputes related to events occurring on or after May 15, 2013 and for the foreseeable future.
While the company believes that dispute resolution is best handled via FINRA arbitration, we have chosen to voluntarily remove the waiver going forward until the issue is resolved by the appropriate regulatory and/or court decisions. Given that the process will likely take considerable time to resolve, and may leave clients with a degree of uncertainty about their dispute resolution options in the meantime, we have elected to remove that uncertainty until the legal and regulatory process is completed.
To help ensure that small investors have access to pursue any claims they consider appropriate within the arbitration forum available to them, we will continue our existing policy of paying for the arbitration fees of any investor electing to pursue an arbitration claim under $25,000 against Schwab.
We supported this letter concerning class action waivers in May, 2013
The Honorable Patrick Leahy, Chairman
The Honorable Chuck Grassley, Ranking Member
U.S. Senate Committee on the Judiciary
224 Dirksen Senate Office Building
Washington, DC 20510
Re: Letter in Support of the Arbitration Fairness Act of 2013, S. ###
Dear Chairman Leahy and Ranking Member Grassley:
We, the undersigned organizations, strongly support the Arbitration Fairness Act of 2013 (or “AFA”), S. ###, introduced in the Senate by Senator Al Franken (D-Minn.). This important legislation would end the growing predatory practice of forcing non-union employees and consumers to sign away their Constitutional rights to legal protections and access to federal and state courts by making pre-dispute binding mandatory arbitration (“forced arbitration”) clauses unenforceable in civil rights, employment, antitrust, and consumer disputes. Forced arbitration is proliferating in employment (from minimum wage-workers to whistleblowers to highly compensated executives), and in everyday consumer contracts for products and services such as credit cards, child care, cell phones, car loans, home construction, student loans, health insurance policies, and nursing homes.
The AFA would also restore Congressional intent by limiting the application of the Federal Arbitration Act (FAA) to disputes between commercial entities of generally similar sophistication and bargaining power. A series of recent decisions by the U.S. Supreme Court now mandates that the FAA applies to individual disputes, contrary to the intent of Congress. These decisions have usurped the enforcement of federal and state laws.
Consumer and employment contracts with arbitration clauses are often non-negotiable.
Corporations that place forced arbitration clauses in their standard contracts with consumers and non-union employees shield themselves from accountability for wrongdoing. The contracts typically specify who the arbitrator will be, under what rules the arbitration will take place, the state the arbitration will occur in, and the payment terms for the arbitration. Arbitration clauses are often contained in non-negotiable contracts and a person has no choice but to acquiesce or forgo the goods, services and/or employment altogether.
Forced arbitration erodes traditional legal safeguards as well as substantive civil and employment rights and antitrust and consumer protection laws.
None of the safeguards of our civil justice system are guaranteed for persons attempting to enforce their employment, consumer, anti-trust and civil rights in forced arbitration. There is no impartial judge or jury, but rather arbitrators who rely on major corporations for repeat business. With nearly no oversight or accountability, businesses or their chosen arbitration firms set the rules for the secret proceedings, often limiting the procedural protections and remedies otherwise available to individuals in a court of law. For example, the ability to obtain key evidence necessary to prove one’s case is restricted or eliminated. In addition, the exorbitant filing fees, continuous fees for procedures such as motions and written findings, and “loser pays” rules in arbitration are prohibitive to most individuals, particularly in this weak economy when so many Americans are struggling just to make ends meet.
Forced arbitration also weakens the value of federal and state laws intended to protect consumers and employees by removing their ability to enforce those laws in court. For example, big corporations are able to grant themselves immunity for violating antitrust laws and cheating consumers by eliminating statutory rights in the fine print of their contracts.
Furthermore, a cornerstone of hard-won civil rights protections is the right of victims of workplace discrimination or harassment to have their claims heard by an impartial judge and jury. Increasingly, employers strip this right away and require workers to agree to forced arbitration as a condition of hiring or continued employment. By being forced into binding mandatory arbitration, an estimated 30 million non-union workers have lost essential protections established by our nation’s employment and civil rights laws.[i]
Laws at risk include provisions of the Civil Rights Acts of 1964 and 1991, the Age Discrimination in Employment Act, the Americans with Disabilities Act, the Family and Medical Leave Act, the Fair Labor Standards Act, the Equal Pay Act, the Uniformed Services Employment and Reemployment Rights Act (USERRA), the Sherman Antitrust Act, the Securities Act of 1933, the Securities Exchange Act of 1934, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Servicemembers Civil Relief Act, the National Defense Authorization Act for Fiscal Year 2013 (amending the Military Lending Act), the Lilly Ledbetter Fair Pay Act of 2009, the Telephone Consumer Protection Act, the Fair Debt Collection Practices Act, the Credit Repair Organizations Act, the Electronic Fund Transfer Act, the False Claims Act, the Fair Credit Reporting Act, the Right to Financial Privacy Act, the Real Estate Settlement Procedures Act, the Truth in Lending Act, and the civil provisions of the Racketeer Influenced and Corrupt Organizations Act.
Courts also have held that the FAA trumps state laws, even those intended to protect consumers, such as anti-predatory lending laws. Consequently, unscrupulous companies use forced arbitration in student loans, payday loans, credit card contracts and nursing home contracts, thereby avoiding accountability.
On April 27, 2011, the U.S. Supreme Court dealt a devastating blow to consumers and employees, ruling that companies can ban class actions in the fine print of contracts. In AT&T Mobility, LLC v. Concepcion, the Court held that corporations may use arbitration clauses to ban consumers and employees from exercising their right to join together through class actions to hold powerful corporations accountable. As a result of Concepcion, thousands of valid legal claims by consumers and employees that expose clear abuses and corporate misconduct have been suppressed and prevented from being brought before a court of law. In addition, many class actions have been dismissed and sent to arbitration even when the judge states that the cases may be best suited to proceed as class actions.
The Concepcion ruling makes it all the more vital for Congress to pass the AFA to enable individuals to agree to arbitration – knowingly and voluntarily – to resolve their disputes rather than forcing them into arbitration. The AFA would eliminate the use of these binding pre-dispute clauses in consumer and employment contracts, returning the FAA to its original intent to facilitate private arbitration between sophisticated parties on equal footing.
The AFA would allow consumers and employees to choose arbitration after the dispute arises.
The AFA does not seek to eliminate arbitration and other forms of alternative dispute resolution agreed to voluntarily after a dispute arises. Nor would it affect collective bargaining agreements that require arbitration between unions and employers. Its sole aim is to end the unscrupulous business practice of forcing consumers and employees into biased, costly arbitrations by binding them long before any disputes arise.
We strongly support the Arbitration Fairness Act of 2013, which would restore transparency and access to our civil justice system and preserve important civil rights, employment, anti-trust and consumer protections.
Congress has passed laws to ban forced arbitration for disputes involving auto dealers, poultry and livestock producers, and certain employees of federal contractors. The time has come for Congress to outlaw forced arbitration for America’s consumers and workers.
We urge you and the other members of Congress to pass S. ###.
Posted by Don Resnikoff
The Honorable Chuck Grassley, Ranking Member
U.S. Senate Committee on the Judiciary
224 Dirksen Senate Office Building
Washington, DC 20510
Re: Letter in Support of the Arbitration Fairness Act of 2013, S. ###
Dear Chairman Leahy and Ranking Member Grassley:
We, the undersigned organizations, strongly support the Arbitration Fairness Act of 2013 (or “AFA”), S. ###, introduced in the Senate by Senator Al Franken (D-Minn.). This important legislation would end the growing predatory practice of forcing non-union employees and consumers to sign away their Constitutional rights to legal protections and access to federal and state courts by making pre-dispute binding mandatory arbitration (“forced arbitration”) clauses unenforceable in civil rights, employment, antitrust, and consumer disputes. Forced arbitration is proliferating in employment (from minimum wage-workers to whistleblowers to highly compensated executives), and in everyday consumer contracts for products and services such as credit cards, child care, cell phones, car loans, home construction, student loans, health insurance policies, and nursing homes.
The AFA would also restore Congressional intent by limiting the application of the Federal Arbitration Act (FAA) to disputes between commercial entities of generally similar sophistication and bargaining power. A series of recent decisions by the U.S. Supreme Court now mandates that the FAA applies to individual disputes, contrary to the intent of Congress. These decisions have usurped the enforcement of federal and state laws.
Consumer and employment contracts with arbitration clauses are often non-negotiable.
Corporations that place forced arbitration clauses in their standard contracts with consumers and non-union employees shield themselves from accountability for wrongdoing. The contracts typically specify who the arbitrator will be, under what rules the arbitration will take place, the state the arbitration will occur in, and the payment terms for the arbitration. Arbitration clauses are often contained in non-negotiable contracts and a person has no choice but to acquiesce or forgo the goods, services and/or employment altogether.
Forced arbitration erodes traditional legal safeguards as well as substantive civil and employment rights and antitrust and consumer protection laws.
None of the safeguards of our civil justice system are guaranteed for persons attempting to enforce their employment, consumer, anti-trust and civil rights in forced arbitration. There is no impartial judge or jury, but rather arbitrators who rely on major corporations for repeat business. With nearly no oversight or accountability, businesses or their chosen arbitration firms set the rules for the secret proceedings, often limiting the procedural protections and remedies otherwise available to individuals in a court of law. For example, the ability to obtain key evidence necessary to prove one’s case is restricted or eliminated. In addition, the exorbitant filing fees, continuous fees for procedures such as motions and written findings, and “loser pays” rules in arbitration are prohibitive to most individuals, particularly in this weak economy when so many Americans are struggling just to make ends meet.
Forced arbitration also weakens the value of federal and state laws intended to protect consumers and employees by removing their ability to enforce those laws in court. For example, big corporations are able to grant themselves immunity for violating antitrust laws and cheating consumers by eliminating statutory rights in the fine print of their contracts.
Furthermore, a cornerstone of hard-won civil rights protections is the right of victims of workplace discrimination or harassment to have their claims heard by an impartial judge and jury. Increasingly, employers strip this right away and require workers to agree to forced arbitration as a condition of hiring or continued employment. By being forced into binding mandatory arbitration, an estimated 30 million non-union workers have lost essential protections established by our nation’s employment and civil rights laws.[i]
Laws at risk include provisions of the Civil Rights Acts of 1964 and 1991, the Age Discrimination in Employment Act, the Americans with Disabilities Act, the Family and Medical Leave Act, the Fair Labor Standards Act, the Equal Pay Act, the Uniformed Services Employment and Reemployment Rights Act (USERRA), the Sherman Antitrust Act, the Securities Act of 1933, the Securities Exchange Act of 1934, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Servicemembers Civil Relief Act, the National Defense Authorization Act for Fiscal Year 2013 (amending the Military Lending Act), the Lilly Ledbetter Fair Pay Act of 2009, the Telephone Consumer Protection Act, the Fair Debt Collection Practices Act, the Credit Repair Organizations Act, the Electronic Fund Transfer Act, the False Claims Act, the Fair Credit Reporting Act, the Right to Financial Privacy Act, the Real Estate Settlement Procedures Act, the Truth in Lending Act, and the civil provisions of the Racketeer Influenced and Corrupt Organizations Act.
Courts also have held that the FAA trumps state laws, even those intended to protect consumers, such as anti-predatory lending laws. Consequently, unscrupulous companies use forced arbitration in student loans, payday loans, credit card contracts and nursing home contracts, thereby avoiding accountability.
On April 27, 2011, the U.S. Supreme Court dealt a devastating blow to consumers and employees, ruling that companies can ban class actions in the fine print of contracts. In AT&T Mobility, LLC v. Concepcion, the Court held that corporations may use arbitration clauses to ban consumers and employees from exercising their right to join together through class actions to hold powerful corporations accountable. As a result of Concepcion, thousands of valid legal claims by consumers and employees that expose clear abuses and corporate misconduct have been suppressed and prevented from being brought before a court of law. In addition, many class actions have been dismissed and sent to arbitration even when the judge states that the cases may be best suited to proceed as class actions.
The Concepcion ruling makes it all the more vital for Congress to pass the AFA to enable individuals to agree to arbitration – knowingly and voluntarily – to resolve their disputes rather than forcing them into arbitration. The AFA would eliminate the use of these binding pre-dispute clauses in consumer and employment contracts, returning the FAA to its original intent to facilitate private arbitration between sophisticated parties on equal footing.
The AFA would allow consumers and employees to choose arbitration after the dispute arises.
The AFA does not seek to eliminate arbitration and other forms of alternative dispute resolution agreed to voluntarily after a dispute arises. Nor would it affect collective bargaining agreements that require arbitration between unions and employers. Its sole aim is to end the unscrupulous business practice of forcing consumers and employees into biased, costly arbitrations by binding them long before any disputes arise.
We strongly support the Arbitration Fairness Act of 2013, which would restore transparency and access to our civil justice system and preserve important civil rights, employment, anti-trust and consumer protections.
Congress has passed laws to ban forced arbitration for disputes involving auto dealers, poultry and livestock producers, and certain employees of federal contractors. The time has come for Congress to outlaw forced arbitration for America’s consumers and workers.
We urge you and the other members of Congress to pass S. ###.
Posted by Don Resnikoff
* * * * *
Legislative proposal relevant to class action waivers
Sens. Franken, Blumenthal, Rep. Hank Johnson Announce Legislation Giving Consumers More Power in the Courts against Corporations Wednesday, April 27, 2011
After consumers were dealt a blow today when the Supreme Court ruled that companies can ban class action suits in contracts, U.S. Sens. Al Franken (D-Minn.) and Richard Blumenthal (D-Conn.) and Rep. Hank Johnson (D-Ga.) said today they plan to introduce legislation next week that would restore consumers' rights to seek justice in the courts. Their bill, called the Arbitration Fairness Act, would eliminate forced arbitration clauses in employment, consumer, and civil rights cases, and would allow consumers and workers to choose arbitration after a dispute occurred.
Many businesses rely on mandatory and binding pre-dispute arbitration agreements that force consumers and employees to settle any dispute with a company providing products or services without the benefit of legal recourse.
"This ruling is another example of the Supreme Court favoring corporations over consumers," said Sen. Franken. "The Arbitration Fairness Act would help rectify the Court's most recent wrong by restoring consumer rights. Consumers play an important role in holding corporations accountable, and this legislation will ensure that consumers in Minnesota and nationwide can continue to play this crucial role."
"Powerful companies who take advantage of ordinary consumers must be held accountable," said Sen. Blumenthal. "Today's misguided Supreme Court ruling is a setback for millions of Americans, denying injured consumers access to justice. The Arbitration Fairness Act would reverse this decision and restore the long-held rights of consumers to hold corporations accountable for their misdeeds."
"Forced arbitration agreements undermine our indelible Constitutional right to trial by jury, benefiting powerful businesses at the expense of American consumers and workers," said Rep. Johnson. "Americans with few choices in the marketplace may unknowingly cede their rights when they enter contracts to buy a home or a cell phone, place a loved one in a nursing home, or start a new job. We must fight to defend our rights and re-empower consumers."
In Concepcion v. AT&T, consumers brought a claim against AT&T for false advertising. However, because the value of their case was only $30, their case was consolidated into a class action. AT&T sought to block the lawsuit by pointing to the mandatory arbitration clause in the service contract but lower courts applying state law rightly invalidated the arbitration clause because it banned class actions entirely.
In today's 5-4 decision, the Supreme Court overturned these lower court decisions which sought to protect consumers. The majority of the Court held that the Federal Arbitration Act barred state courts from protecting consumers from these arbitration clauses. The effect of this decision essentially insulates companies from liability when they defraud a large number of customers of a relatively small amount of money.
A longtime advocate for consumers and workers in cases of forced arbitration, in 2009 Sen. Franken passed legislation with bipartisan support that restricts funding to defense contractors who commit employees to mandatory binding arbitration in the case of sexual assault and other civil rights violations. Congressman Johnson, a longtime champion of workers and consumer rights, first introduced the Arbitration Fairness Act in 2007.
Posted by Don Resnikoff
After consumers were dealt a blow today when the Supreme Court ruled that companies can ban class action suits in contracts, U.S. Sens. Al Franken (D-Minn.) and Richard Blumenthal (D-Conn.) and Rep. Hank Johnson (D-Ga.) said today they plan to introduce legislation next week that would restore consumers' rights to seek justice in the courts. Their bill, called the Arbitration Fairness Act, would eliminate forced arbitration clauses in employment, consumer, and civil rights cases, and would allow consumers and workers to choose arbitration after a dispute occurred.
Many businesses rely on mandatory and binding pre-dispute arbitration agreements that force consumers and employees to settle any dispute with a company providing products or services without the benefit of legal recourse.
"This ruling is another example of the Supreme Court favoring corporations over consumers," said Sen. Franken. "The Arbitration Fairness Act would help rectify the Court's most recent wrong by restoring consumer rights. Consumers play an important role in holding corporations accountable, and this legislation will ensure that consumers in Minnesota and nationwide can continue to play this crucial role."
"Powerful companies who take advantage of ordinary consumers must be held accountable," said Sen. Blumenthal. "Today's misguided Supreme Court ruling is a setback for millions of Americans, denying injured consumers access to justice. The Arbitration Fairness Act would reverse this decision and restore the long-held rights of consumers to hold corporations accountable for their misdeeds."
"Forced arbitration agreements undermine our indelible Constitutional right to trial by jury, benefiting powerful businesses at the expense of American consumers and workers," said Rep. Johnson. "Americans with few choices in the marketplace may unknowingly cede their rights when they enter contracts to buy a home or a cell phone, place a loved one in a nursing home, or start a new job. We must fight to defend our rights and re-empower consumers."
In Concepcion v. AT&T, consumers brought a claim against AT&T for false advertising. However, because the value of their case was only $30, their case was consolidated into a class action. AT&T sought to block the lawsuit by pointing to the mandatory arbitration clause in the service contract but lower courts applying state law rightly invalidated the arbitration clause because it banned class actions entirely.
In today's 5-4 decision, the Supreme Court overturned these lower court decisions which sought to protect consumers. The majority of the Court held that the Federal Arbitration Act barred state courts from protecting consumers from these arbitration clauses. The effect of this decision essentially insulates companies from liability when they defraud a large number of customers of a relatively small amount of money.
A longtime advocate for consumers and workers in cases of forced arbitration, in 2009 Sen. Franken passed legislation with bipartisan support that restricts funding to defense contractors who commit employees to mandatory binding arbitration in the case of sexual assault and other civil rights violations. Congressman Johnson, a longtime champion of workers and consumer rights, first introduced the Arbitration Fairness Act in 2007.
Posted by Don Resnikoff
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