Archive for the ‘Consumer Protection’ Category

By Emily Myers

On April 22, U.S. Rep. Bob Goodlatte (R-Va) introduced H.R. 1927, a bill that would severely limit the ability of citizens who have been harmed or ripped off to band together in a class-action lawsuit. The bill stipulates that in order to be certified as a class, each individual member must prove they have suffered an injury identical in type and extent to the proposed class representative(s). This would create unnecessary red tape for people who have suffered harm at the hands of corporations and institutions and effectively ban them from forming class actions. Historically, class actions have been an efficient and economical way for consumers and citizens to reconcile their disputes with employers and companies. Below are five of the most important class-action lawsuits that would have been threatened by Rep. Goodlatte’s bill.

Anderson v. Pacific Gas & Electric Company

Immortalized in the film Erin Brockovich, Anderson v. Pacific Gas & Electric Co. allowed the residents of Hinkley, California, to be compensated for the medical costs of PG&E’s negligence. PG&E had been knowingly dumping hexavalent chromium, a recognized poison since 1925, into the town’s groundwater. In 1996, the lawsuit was settled for $333 million, the largest civil action settlement at the time. This case would have been virtually impossible to win had the residents of Hinkley been prohibited from banding together. Unless we want to encourage corporations to freely pump carcinogens through our water, we need to protect the right to class-action lawsuits and oppose Rep. Goodlatte’s bill.

Brown v. Board of Education

A class-action lawsuit was behind one of the most important civil rights cases of all times, ensuring that the quality of one’s education would no longer be decided by the color of one’s skin. After the Board of Education in Topeka, Kansas, decided to maintain its racially segregated elementary school system, African-American children of elementary school age brought a class action lawsuit challenging the system in a federal court in Kansas. The case ultimately was heard by the U.S. Supreme Court together with similar class actions filed on behalf of children in South Carolina, Virginia and Delaware. Those fighting for social justice argued that “separate but equal” was a myth because as long as black and white schools remained segregated they would never be equal. On May 17, 1954, The court agreed, and a major milestone in the civil rights movement was reached. If we want to keep moving our society forward to achieve better civil rights protections, we cannot restrict class-action lawsuits.

Anderson et al., v. Cryovac Inc. et al.

You may know this case from the John Travolta movie, A Civil Action, but outside the world of cinema, it had major impact on the lives of Woburn, Massachusetts, residents. The named plaintiff, Anne Anderson, and six other Woburn families sued Beatrice Foods, the John L. Riley Tannery, and W.R. Grace & Company, a New York company that owned and operated the Cryovac Division manufacturing plant, for polluting the town’s drinking water with trichloroethylene, perchloroethylene and other toxic chemicals. Woburn families had suffered immensely at the hands of these companies’ actions. In addition to health problems like skin rashes, vision difficulties, miscarriages and headaches, 12 Woburn children, eight of them living within a half-mile radius, had been diagnosed with a rare form of leukemia. The plaintiff class ultimately was rewarded a settlement of approximately $8 million. The expense of proving companies are responsible for causing an illness is very high since experts are required to help draw the connection to who caused the harm. It’s only efficient to bring such cases as class actions, where multiple persons have suffered some harm caused by the same entity or entities. The fact is, a class action was the best hope for Woburn families, as it is for many people.

Exxon Valdez Oil Spill Litigation

In March of 1989, the Exxon Valdez oil tanker ran aground, spilling 11 million gallons of oil into the Prince William Sound off the coast of Alaska. Until the BP Oil spill in 2010, the Exxon Valdez spill was considered to be the worst environmental disaster in the United States. In addition to the appalling environmental degradation, the livelihoods of local people plummeted as a result of the spill. A class action was filed on behalf of 32,000 fishermen, Alaska natives, landowners, and others. U.S. District Court Judge H. Russell Holland stated that, “Exxon officials knew that carrying huge volumes of crude oil through Prince William Sound was a dangerous business, yet they knowingly permitted a relapsed alcoholic to direct the operation of the Exxon Valdez through Prince William Sound.” After years of appeals and renegotiations, the plaintiff class was awarded $1.515 billion. The negligence of Exxon Mobil leading up to the spill was staggering, and the harm the corporation did needed to be reconciled. Rep. Goodlatte’s bill would prevent people affected by corporate wrongdoing from banding together and seeking justice, as those harmed by the Exxon Valdez spill did.

Lois E. Jenson v. Eveleth Taconite Company

Lois E. Jenson v. Eveleth Taconite Co., depicted in the film North Country, was the first sexual harassment class-action lawsuit. Filed on behalf of Lois E. Jenson and 14 other female workers in the EVTAC mine in Eveleth, Minnesota, in 1988, the conclusion of the case changed worker protection laws on both the state and federal levels and set a precedent for other class actions aiming to end workplace harassment and discrimination. The women involved in the class-action lawsuit were subjected to extreme harassment in the form of stalking, abusive language, threats and intimidation. Since 1984, Lois E. Jenson had repeatedly tried to bring attention to the problem but was met with additional hostile behavior and eventual dismissal. A class-action suit allowed her and 14 other women to be compensated for the traumatizing harassment they endured. In 1994, the case ended with an out-of-court settlement after years of delay by the judges and jury. The 15 women received a monetary settlement from the EVTAC mine of $3.5 million. It’s extremely important that we keep Rep. Goodlatte from turning back the clock on women’s ability to challenge harmful behavior in the workplace like sexual harassment.

Emily Myers is an intern with Public Citizen’s Congress Watch division

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Yesterday, House and Senate Republicans revealed a new tactic in their war against the Clean Power Plan, the EPA proposal to curb carbon pollution: Pass legislation permitting states to “just say no” to the rule, as Majority Leader Mitch McConnell (R-Ky.) has been urging the states to do. Sen. Rob Portman (R-Ohio) and Rep. Ed Whitfield (R-Ky.) each released legislation that would let states opt out of the Clean Power Plan, purportedly to protect their electricity consumers (among other reasons).

Is this the same party that just proposed slashing support for public housing, food assistance, and home energy bills? Yes, and it hasn’t suddenly decided to help struggling American families. These new pieces of legislation are every bit as anti-consumer.

Whitfield released a “discussion draft” that would exempt a state  from the Clean Power Plan if the governor determines that complying would “have a significant adverse effect” on ratepayers by raising electricity rates or on reliability of the state’s electricity grid. Portman filed an amendment to the Senate budget resolution suggesting that states should be allowed to opt out of the Clean Power Plan if, among other things “ a Governor or legislative body of a State determines that the requirements of that section [section 111(d) of the Clean Air Act, which authorizes the Clean Power Plan] would increase retail electricity prices with a disproportionate impact on low-income or fixed-income households . . . .”*

Both pieces of legislation reflect major misunderstandings of the Clean Power Plan, and they would harm consumers considerably. Here’s why:

The Clean Power Plan will benefit consumers by mitigating climate change. Climate change poses a severe threat to American consumers, and in particular to vulnerable populations. A few of the most salient risks include:

  • higher taxes and market prices to cover the costs of widespread damage to infrastructure and other property from extreme weather;
  • diminished quality and higher prices for food and water, heightening food insecurity for America’s most vulnerable populations; and
  • increased illness and disease from extreme heat events, reduced air quality, and increased food-borne, water-borne, and insect-borne pathogens.

The Clean Power Plan will benefit consumers by curbing carbon pollution, which will mitigate these harms. The Plan will also reduce other forms of pollution from the nation’s dirtiest power plants, like emissions of sulfur dioxide, nitrogen oxides, and mercury. As a result, it will boost public health further, reducing both premature deaths and non-fatal cardiovascular disease.

The Clean Power Plan will lower consumers’ electricity bills. The Clean Power Plan should lower consumer costs, not raise them, because it will spur improvements in energy efficiency. Although electricity prices may rise modestly under the Plan, consumers will use less electricity, resulting in lower bills overall. The EPA projects that the Plan will lower consumer bills by 8.4 percent by 2030. A Public Citizen analysis suggests that the EPA  estimate is conservative, overestimating the cost of efficiency programs and underestimating how much progress the states can make on efficiency. Consumer costs are likely to decline by even more than the agency projects.

States should serve their consumers and protect vulnerable populations. If these consumer benefits don’t materialize, then it is likely the states, not the EPA, that will bear responsibility. The states can take a lead role in implementing the Clean Power Plan by writing their own compliance plans. State policymakers can choose to implement the Plan in a manner that benefits or harms consumers and protects or burdens vulnerable populations. State governments have a responsibility to serve their citizens and protect vulnerable communities. The amendment is wrong to excuse the states from those duties and suggest that the responsibility for harming consumers lies with section 111(d) of the Clean Air Act, a statute that protects the public by safeguarding our health.

What’s really going on here is a familiar story: Congressional Republicans are using consumer protection as an excuse to advance the interests of fossil-fuel companies. Undermining the Clean Power Plan would harm American families, making them sicker and raising the cost of basic household needs like food and electricity.

*Technically, the Portman amendment would permit the Chairman of the Budget Committee to revise the allocations in the budget resolution in light of later legislation permitting states to opt out of the Clean Power Plan for the reasons above. Members of Congress often discuss these matters as if they actually make law rather than just contemplate hypothetical future legislation.

 

The Seventh Amendment to the United States Constitution states, “In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved …”

Even though we are all granted the right to a trial by jury in the U.S. Constitution, Big Banks and corporations regularly use fine print in contracts to trick consumers out of their right to a day in court. Forced arbitration means that if consumers are ripped off or otherwise harmed, they must use private arbitration proceedings to air their grievances.

If you’re already angry about forced arbitration and you want to do something to get these predatory terms out of financial products, skip to the end of this post for ways to get involved.

There’s plenty to be mad about. These expensive arbitration “tribunals” have no judge or jury. They are overseen by paid arbitration providers who are selected by the companies. Arbitration firms have a very good reason to guarantee repeat business for themselves by finding in favor of the corporations over the consumers. The findings of arbitration decisions are not public and the appeals process is very limited. Most likely, you will also be required to go to arbitration in another state!

If consumers were interested in choosing arbitration, they would enter into the decision after some harm has come to them. It would need to be an informed decision where they did so with a full understanding of the consequences of their choice to not go to court.

But that’s not how we’re all roped into signing (or even clicking) away our rights. It has been proven that consumers rarely understand that their contracts contain arbitration clauses and have little idea of the repercussions of having their complaints heard in a non-court venue.

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By Robert Craycraft

Asbestos was once used as a flame-retardant and for electrical insulation in buildings, ships and homes. Before it was discovered to cause cancer, millions of American workers and veterans handled and were otherwise exposed to deadly asbestos fibers.

An unknown amount of the hazardous material is still present in our communities. The Centers for Disease Control and Prevention report that roughly 3,000 people continue to die from mesothelioma and asbestosis every year; some experts estimate the death toll is as high as 10,000 annually when other types of asbestos-linked diseases and cancers are included.

In early February, the U.S. House of Representatives Judiciary Committee Subcommittee on Regulatory Reform, Commercial, and Antitrust Law held a hearing on H.R. 526, the Furthering Asbestos Claim Transparency Act (or FACT Act). Generally speaking, the more transparency the better. However, in this case, the asbestos industry is using the guise of “transparency” to push the FACT Act as a way to delay compensation to asbestos victims and their families. The bill would require the trusts that manage victim compensation to retroactively compile information on all claims they’ve paid and to require the trusts to answer any and all information requests by asbestos company defendants.

These paperwork requirements could have the effect of slowing or even stopping the important work of the trusts to compensate victims that have developed deadly diseases like mesothelioma due to exposure to asbestos. Rep. Hank Johnson (D-Ga.) called the FACT Act a “Trojan horse” which “guarantees that the insurance companies pay as little as possible.”

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With help from our friends at The Other 98% (and an activist marching band), we made the petition delivery to Citigroup’s Wall Street headquarters into a spectacle the banksters won’t soon forget.

And a special thanks to our friends at Americans for Financial Reform, the National Association of Consumer Advocates, the American Association for Justice, Consumer Action and the National Consumer Law Center for joining us to gather signatures for this campaign.

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