Archive for April, 2012

April26

Ugh H.R. 5! Dangerous medical malpractice bill reappears

By: Christine Hines

House Republicans in two different committees yesterday approved a malpractice liability bill, H.R. 5 – again. H.R. 5, a proposal that aims to limit the liability of the health industry and leave injured patients without an adequate avenue for redress, previously passed the full House in March.  This time, lawmakers on the House Energy & Commerce and Judiciary Committees presented the proposal as a fix to the nation’s budget.  Nothing could be further from the truth.

The bill, as we’ve repeatedly said, remains an expensive proposal that will cost lives and money while shielding the entire medical industry – drug and device manufacturers, hospitals, doctors, and nursing homes – from its own reckless conduct.

By restricting patients’ access to court, H.R. 5 will force medical malpractice victims and their families to turn to public, taxpayer-funded programs such as Medicare and Medicaid, and disability benefits for medical care and other financial assistance, because the negligent wrongdoers would be shielded from liability.

This unintended consequence would increase health care costs.

If nothing else, the House majority should pay attention to the money wasted when patients are unnecessarily injured by egregious medical errors or defective medical products. The Department of Health and Human Services pays $4.4 billion a year for the consequences of medical errors.

Some conservatives have even cautioned lawmakers about the bill’s effect on state laws. For decades, states have written their own laws for deciding negligence cases, including medical malpractice claims. A one-size-fits-all-policy on a traditionally state matter would wreak havoc on state laws.

Despite the numerous concerns and calls to drop this bill, the House majority’s ill-conceived and inaptly-named proposal – the Help Efficient, Accessible, Low-Cost, Timely, Healthcare Act – is expected to go up for another House floor vote. (You may wonder why there would be a second House vote on the same bill; this time, it is included in the FY2013 budget reconciliation recommendations, which it what both committees marked up yesterday.)

Indeed, it may fly through the House yet again, but we will have to rally the Senate to turn its back on this shameless and dangerous gift to industry.

Christine Hines is Public Citizen’s consumer and civil justice legal counsel.

Posted in: Activism, Consumer Protection, Litigation, Product Safety, Regulation, Social Justice, Uncategorized1 comments

April25

An Anniversary You’re Forced to Remember

By: Negah Mouzoon

Friday marks the anniversary of a Supreme Court decision that you are probably unaware of, but will be forced to live with if you end up in a dispute with a corporation.

One year after a U.S. Supreme Court decision gave corporations free rein to block class action lawsuits, judges have used the decision in blocking at least 76 potential class action suits from going forward, a new report by Public Citizen and the National Association of Consumer Advocates has found.

The report, Justice Denied, tracks the anti-consumer effects of AT&T Mobility v. Concepcion, in which the Supreme Court ruled that corporations could block consumers’ rights to sue collectively—even in the 19 states that have laws protecting such rights.

What began as a dispute over $30 between Vincent and Liza Concepcion and AT&T has turned into a legal monster worth millions of dollars to corporate bottom lines. The corporate lawyers and Court put profits before people, and a year later we are seeing the ripple effects, as people seeking fairness are losing their legal rights.

The report details three cases in which consumers have felt the direct impact of the ruling.

  • Class Actions Against Career Education Corporation (CEC). Before Concepcion, thousands of students collectively sued Career Education Corp., a company that owns a chain of for-profit culinary schools, for misrepresenting the potential earning power its graduates. The misleading numbers enticed many students to enroll and thus take on debilitating student loans to finance their education. According to the lawsuits, students attending the schools typically emerged with debts in excess of $40,000 and were not able to obtain jobs that paid enough to provide a reasonable chance of repaying their loans. At the time of the lawsuits, CEC did not include a class action ban in its contracts with students. The collective cases proceeded in court and resulted in payments of up to $20,000 per student. While these cases, filed before Concepcion, achieved a meaningful settlement, other cases are still pending. In a post-Concepcion era, however, students with similar collective claims may not be able to pursue redress because it would be too difficult to overcome the class action ban the
    company is now including in its contracts.
  • Putative Class Action Against Nissan. Matthew Wolf, a member of the Army reserves, returned an automobile before the expiration of his lease because he was deployed overseas. The Servicemembers Civil Relief Act (SCRA) clearly permits service members to terminate car leases without penalty and to recoup the pro-rated share of payments they have made in advance. But Nissan refused to reimburse the prepaid amount to the reservist. He sought a class-action lawsuit on behalf of an estimated 1,000 service members in similar situations. But, citing Concepcion, a judge ruled that he could only pursue redress for himself, not on behalf of a class.
  • Putative Class Action Against T-Mobile. Trent Alvarez’s frequent use of his so-called “unlimited” data plan triggered T-Mobile to slow down his service. T-Mobile had inserted a forced arbitration agreement into the contract when Alvarez signed for the phone, but he said he never saw it and filed a class-action complaint against T-Mobile in 2009. The company convinced the judge to suspend the case until Concepcion was decided; the court then rejected Alvarez’s argument that the class-action ban in the arbitration agreement was unenforceable.

These examples are among the dozens of instances documented in the report by Public Citizen and the National Association of Consumer Advocates (NACA), revealing that the decision has already left consumers worse off. Other areas where class action suits have been restricted include cases against payday lenders, debt collectors and banking institutions.

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Posted in: Consumer Protection, Uncategorized0 comments

April24

Got a credit card or bank account? Scrutiny of forced arbitration is good news

By: Christine Hines

We welcome today’s announcement that the Consumer Financial Protection Bureau (CFPB) will study the impact of forced arbitration in consumer financial services contracts, as required by the Dodd-Frank Act. The agency’s decision to begin working on the issue is good news for anyone who has a credit card, short-term loan, bank account or other financial service contract.

The principal goal of forced arbitration is to prevent consumers from joining together in class actions, because in many instances it is not feasible for consumers to pursue claims on an individual basis. Class-action bans allow companies to rip off consumers with virtual impunity, so long as they take relatively small amounts of money from each person. Individual arbitrations tend to be biased against consumers and favor the companies that provide arbitrators with repeat business.

Forced arbitration clauses usually are slipped into the small type of the lengthy documents you get when you apply for a credit card or loan, buy a cell phone or download computer software. We have long said that forced arbitration unreasonably denies consumers the ability to pursue claims against corporate misconduct. Our previous reports have shown that consumers overwhelmingly are on the losing end of contracts and terms of service that contain arbitration clauses.

We expect that any fair examination of forced arbitration will conclude that the practice is devastatingly harmful to consumers. The most critical step, then, will be for the CFPB to ban forced arbitration, ensuring that arbitration is always voluntary for consumers – not a kangaroo court or a tool for law-breaking corporations to insulate themselves from accountability.

Stay tuned for a report Public Citizen will be putting out tied to the anniversary of the AT&T v. Concepcions U.S. Supreme Court case that Public Citizen argued last year and check out our forced arbitration gallery.

Christine Hines is Public Citizen’s consumer and civil justice counsel.

 

Posted in: Activism, Congress, Consumer Protection, Regulation, Social Justice, Uncategorized0 comments

April23

THIS WEEK: Medical devices, scary poultry, trade, the Freeze Act & stand-up comedy?!

By: Rachel Lewis

We are, literally, throughout the world this week (though we plan to call it a wrap with some laughs in Los Angeles this weekend). “Laughs?” you say? We know. We are policy nerds. How could we possibly be funny?! The answer is: We can’t. Luckily though, we have some ALL-STAR comedians to help us out. But more on that later!

Right now, let’s refocus on Melinda St. Louis of Public Citizen’s Global Trade Watch. Melinda is currently participating in the 13th Quadrennial Conference of the United Nations Conference on Trade and Development in Doha, Qatar. There, St. Louis will be featured on a panel ce"Public Citizen Lady Liberty"ntered on state’s rights. Trade agreements should not undermine trading countries own laws. For example, the U.S. should have the right to pass laws banning clove cigarettes that pose significant health threats and are disproportionately targeting American youth, undermining years of work on curbing teen smoking.

In addition to this, Public Citizen is also sponsoring two symposia at Doha. The title of the first, “Safeguarding development and the public interest from investment provisions in trade and investment agreements,” had this Lady Liberty rushing to find a translation. Turns out, this symposium is focused on investor-state clauses, (shorter but still unclear, right?). Take two: Investor-state clauses in trade deals are troubling aspects of trade pacts that essentially give corporations special rights and their own private judicial system. These “investment provisions” are used by companies to sue governments and challenge all sorts of regulations from environmental, to health and even financial regulations  … and that brings us to symposium No. two: “Safeguarding stability: Ensuring coherence between financial re-regulation and global trade rules.” In essence, you know all the Wall Street reform legislation that was enacted by Congress? Well, it appears that U.S. Rep. Darrell Issa (R-Calif.) may not be the only barrier we may run into in getting these reforms enacted and working so that we can protect ourselves from the next economic crash. Gretchen Morgenson of the The New York Times writes of the sad reality that Public Citizen’s Lori Wallach has been ringing an alarm about for some time: “According to the W.T.O., 125 of its 153 member countries have made varying degrees of commitments to the financial services agreement. Now, these pledges could easily be used to undermine new rules intended to make financial systems safer.” For more on this issue please see this portal.

Today, Public Citizen sent a letter to lawmakers on Capitol Hill, urging lawmakers to pass the “Democracy Is Strengthened by Casting Light on Spending in Elections” or DISCLOSE Act. The letter was signed by several dozen groups, ranging from campaign finance reform advocates, and transparency organizations to business ethics and investor groups. The need for disclosure of campaign expenditures is more important than ever following the 2010 U.S. Supreme Court Citizens United v. Federal Election Commission (FEC) ruling that opened the floodgates to unlimited corporate spending to influence elections. When it comes to campaign finance law, the cardinal rule is that citizens are entitled to know the names of donors who are financing campaigns and trying to influence their votes, and the amounts they give. We are pushing for disclosure both on a legislative level and through the unique work of the Corporate Reform Coalition, which has put a spotlight on the role the Securities and Exchange Commission, as the protectors of shareholder interests, ought to be playing in forcing corporations to disclose their political spending.

Of course, the other half of this story is stopping this outrageous spending! With major victories last week both on Capitol Hill and in the state of Vermont, Public Citizen’s Democracy Is For People campaign is plowing forward on the fight for a constitutional amendment to overturn the Citizens United ruling and get our elections and democracy taken off the auction block. In this week’s California Progress Report, Jonah Minkoff-Zern, senior organizer with our Democracy Is For People campaign writes, “Vermont Was Third. Will California Be Next?” Thanks to Jonah’s work alongside Public Citizen activists and allies the answer is likely, yes! Stay tuned to CitizenVox for more in the coming weeks on California.

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Posted in: Activism, Campaign Finance, Congress, Consumer Protection, Energy, Environment, Financial Reform, Pharmaceuticals, Product Safety, Regulation, Social Justice, This Week, Trade, Uncategorized0 comments

April20

The unlearned lessons of the BP disaster

By: Robert Weissman

"Robert Weissman, Public Citizen president"Robert Weissman is president of Public Citizen.

The BP disaster taught us many things: Giant corporations cannot be trusted to behave responsibly, and have the ability to inflict massive damage on people and the environment. We need strong regulatory controls to curb corporate wrongdoing. We need tough penalties to punish corporate wrongdoers. There is no way to do deepwater oil drilling safely. And it is vital that citizens harmed by corporate wrongdoers maintain the right to sue to recover their losses.

Unfortunately, Congress and the Obama administration have refused to learn the lessons from the BP disaster:

1. BP’s reckless actions and inactions caused the Deepwater Horizon disaster — a reminder that corporations cannot be trusted to police their own activities.

BP made a conscious decision not to install a $500,000 safety device that could have prevented the blowout. BP pressured its contractors to skirt safety measures, and those contractors made multiple mistakes leading up to the disaster.

The lesson that corporations can’t be trusted to police themselves should be blindingly obvious. Yet the Obama administration is now proposing to take government inspectors out of poultry processing plants — and give Big Chicken responsibility for ensuring poultry safety.

2. Strong regulatory controls over corporate activity are necessary to ensure health, safety and planetary well-being.

To its credit, the Obama administration acknowledged that the pre-BP disaster oil drilling regulator — the Minerals Management Service, probably the most compromised regulatory agency in Washington — couldn’t be reformed, specifically because it had the duty both to collect oil royalties and regulate oil drilling. It split the agency apart, creating the new Bureau of Ocean Energy Management, Regulation and Enforcement (BOE) to regulate drilling. But Congress has failed to ratify the change in law, which means it could easily be undone by subsequent administrations.

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Posted in: Climate Change, Energy, Environment, Regulation1 comments

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