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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
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.
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
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
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
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
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.
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
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
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/
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.
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
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
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.
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/
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
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
SHARE THIS ARTICLE
"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
"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
“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/ ]
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 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.
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/
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).
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.
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
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.
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.
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/
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
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
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
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
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/
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.
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
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
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
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 ]
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
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.”
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
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.
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/
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
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.
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.
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
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
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/
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
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
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/
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.
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.
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.
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== ]
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
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
- 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
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.
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.
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.
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.
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.”
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.
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 Youngstown case:
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
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.
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.
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.
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
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
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
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.
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
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.
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
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
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
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
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.
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
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.
“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
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
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/
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)
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
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.
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:
- 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
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
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 discussedconflicts 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 recentnote, 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
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
As explained in my most recent
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.
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
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/
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
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
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/
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
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
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
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
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
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.
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
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
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
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.
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.
#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.
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
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
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.
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
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 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
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
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).
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
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
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
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.
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?
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
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
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/
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
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.
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
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
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
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
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
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.
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
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
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.
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
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 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.
-
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.
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 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
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
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
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.
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
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)
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.
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/
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
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
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
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#
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
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
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.
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
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
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
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
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.
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
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.
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
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
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?
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
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/
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-
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?
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/
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/
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
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.
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
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
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 ]
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
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 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
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
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/
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.
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
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.
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/ )
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.
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
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
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#!
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
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
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
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.
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
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.)
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
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.”
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
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
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
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
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/
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.
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
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
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:
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
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
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
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/
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
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.
POSTED 7:25 AM, SEPTEMBER 6, 2017, BY CNN WIRE
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
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/
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...
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.
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
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/
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
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).
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.
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
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
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:
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
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.
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
[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
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
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
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
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
“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
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.
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
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
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
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
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
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
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
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
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/
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 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.
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
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.”
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
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/
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
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
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
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
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
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
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
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
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.
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
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.
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
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
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."
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:
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
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
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
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
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
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.
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
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.
- 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
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
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.
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
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
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
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
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.
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
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?
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.