Ninth Circuit Upholds Consumer Protections

Many companies function on the premise that they know what they’re doing is illegal—but that they’ll only stop doing those things once they get in trouble. Debt collection agencies are a great example of this way of running a business, often breaking the law to coerce victims into paying debts.

The Fair Debt Collection Practices Act is intended to prevent debt collection agencies from harassing debtors but the reality is that the Federal Trade Commission receives thousands of complaints every year about harassment by debt collectors.

In 2013, nearly 24,000 individuals complained to the FTC that debt collectors harassed by repeated and continuous calls and another 8,600 complained about collectors using obscene, profane, or abusive language. But what’s more is the 2,500 individuals who complained that they were threatened with violence by debt collectors. This number doesn’t include likely thousands more victims who didn’t complain to the FTC.

All of these debt collection tactics are illegal under the FDCPA but debt collection agencies often use them anyway. If the victims can prove the debt collection agencies didn’t follow the rules, these debt collection agencies can be fined for violations. However, in a recent court case in California, banks argued that debt collectors can use these tactics—and only need to stop after they’ve been sued.

California has their own debt collection rules that “allows debt collectors to escape liability if they ‘cure’ their violations within a certain period of time.” The Ninth Circuit, however, decided that the banks’ interpretation of the rule that a “cure” is to stop after being sued was incorrect. It’s a win for consumers across the board, not just for fair debt collection practices.

The argument proposed by the Public Justice Foundation is that you can’t un-punch someone after you’ve punched them. As part of the fair collection practices, collectors can’t use physical violence to collect debts, including coming to a debtor’s home and beating them up to get them to pay.

Companies would love if the banks argument had be accepted by the Ninth Circuit because it would have meant they could intentionally and openly violate regulations that protect consumers until someone sued them to stop—and then not have to remedy the harm they did to people in the process. It wouldn’t have taken long for unscrupulous businesses to use the opportunity to make a great deal of money while intentionally harming consumers if the Ninth Circuit had sided with banks.

The same applies when thinking about class actions. If a company’s products hurt thousands of individuals, they shouldn’t be able to “fix” the situation by simply stopping production. That leaves all the individuals they harmed without any cure or remedy for the harm the company caused them.

This is a win for consumers across the United States in a time when many regulations are under attack.

Over Half of Employees Forced into Arbitration

With the explosion of news coverage about sexual harassment in the workplace in recent months, a number of researchers have been looking at what this means for the average worker in the United States. Turns out that over half of non-unionised employees are now covered by mandatory arbitration, according to Cornell University researchers.

Arbitration clauses have come to attention thanks to Equifax and other massive security breaches that leaked thousands of individuals’ private information. They’re also a popular way for nursing homes and other medical facilities to avoid juries and high-dollar judgments against their companies. Arbitration severely limits what victims can do to repair their lives after they’ve been harmed.

Mandatory arbitration for employees is often used as a way for employers to quietly take care of things like sexual harassment but what’s more is that mandatory arbitration is also required when someone has been killed on the job or severely harmed in the workplace due to the employer’s negligence. Most employees don’t know they’re subject to forced arbitration until after an event occurs.

The Association of Attorneys General sent a letter to Congress in February demanding that Congress amend the Federal Arbitration Act (FAA) to stop mandatory arbitration for sexual harassment in the workplace. The Attorneys General write:

Congress today has both opportunity and cause to champion the rights of victims of sexual harassment in the workplace by enacting legislation to free them from the injustice of forced arbitration and secrecy when it comes to seeking redress for egregious misconduct condemned by all concerned Americans.

Senator Kirsten Gillibrand introduced a bill ending forced arbitration for sexual harassment in December of 2017—but no progress has been made on passing the legislation.

Although some workplaces are changing arbitration policies related to sexual harassment claims, such as Microsoft, this leaves most non-unionised employees with little recourse. Instead, workers are forced into the same secrecy and unjust practices of force arbitration that deny them access to the judicial system.

Regardless of the offense, sexual harassment or even death on the job, mandatory arbitration prevents victims from exercising their rights to their day in court. The problem is few employees know they’re signing these “fine print” agreements hidden in employment contracts. What’s more is if more than half of all available positions force arbitration, that gives would-be employees little choice but to accept these terms to gain employment.

Consumer Protections Systematically Being Destroyed

As President Trump’s administration has been rolling back consumer protections that focus on financial institutions and bank regulations, the administration’s common refrain is they’re making access to business capital easier. But with deregulation comes sacrifices and consumers are the ones suffering. So much attention has been focused on the Consumer Financial Protection Bureau, however, many Americans don’t realize how far reaching many of the rollbacks reach into day to day life.

Trump’s changes to the CFPB is under fire after Mick Mulvaney took over the helm as a temporary replacement until Trump appoints a permanent replacement for Director Richard Cordray or a bipartisan commission voted on by Congress replaces him.

The CFPB is emblematic of the changes the Trump administration has brought to Washington. Originally created in 2010 during the wake of the financial lending crisis that lead to the Recession, the CFPB was intended to police predatory lending practices and bring regulation and oversight to the financial sector. Americans strongly agree, with 80% in favor, that the CFPB is necessary.

However, Mulvaney has decided not to pursue lawsuits against alleged predatory lenders—opting instead for inaction. Instead of fulfilling the promise of the CFPB, Mulvaney’s decision for inaction essentially nullifies the Bureau’s existence.

Trump’s rollback of consumer regulations goes much further than just the Consumer Financial Protection Bureau. In fact, according to the Washington Post, “The new direction affects agencies that touch nearly every aspect of consumer life, advocates say — from how Americans access credit and car loans to the safety of cribs and cellphones.”

In a similar vein, Trump has eliminated 22 regulations for each new regulation he’s added since taking office. While some say this has stimulated the economy, this comes at a cost to the average consumer who has been systematically hurt by the Trump administration’s deregulation. There have been so many deregulations that Brookings has created a tool for consumers to track deregulation in the Trump era.

The list of regulations Trump has eliminated span far-reaching effects on the lives of average consumers, ranging from paying 950% interest on some car loans to life-threatening beryllium exposure. Consumers are being put further and further at risk as the Trump administration rolls back regulations—some of which have been on the books for decades.

Consumers are are greater risk due to deregulation and have little recourse than to vote for pro-consumer candidates in this year’s upcoming election.

Court Secrecy Can Harm Consumers

Court records can be sealed to protect the privacy of individuals, like children in custody battles or for sexual harassment claims, but the same right often extends beyond matters of personal privacy and safety, allowing corporations to hide defects that have dire effects.

In recent news, there’s been a good deal of attention on sexual harassment claims that were settled or court documents that were sealed, preventing others who were also victimized by the same perpetrator to know they weren’t the only ones.

Beyond sexual harassment, it’s an all-too common tactic employed by corporations to prevent product recalls—all the while harming countless individuals in the process. As the Public Justice Foundation puts it “A company’s preference that the public not see evidence that might suggest the company knew about a deadly defect and just let people keep dying is not good cause.” Yet the courts often seal documents and prevent the public from finding out about potentially defective and harmful products.

The National Highway Traffic Safety Administration recently opened an investigation into reports of a defect tire from Goodyear, the G159 tire. Yet over the last few years, there’s been a number of lawsuits concerning these same tires and one even alleges that Goodyear’s attorneys used “‘repeated, deliberate decisions’ to ‘make misleading and false in-court statements, and conceal relevant documents,’” according to The Public Justice Foundation.

Thanks to court secrecy, the investigation into these tires by the National Highway Traffic Safety Administration may have been delayed and may have resulted in other injuries. While the investigation is still ongoing into these tires, it’s an example of when court systems’ secrecy has the potential to cause harm to individuals because of defect products.

Many companies request court proceedings and documents to be kept confidential during legal proceedings to protect their businesses—but in some cases this may be to keep news of defective products from reaching the larger public and causing a product recall. Recalls are serious matters for companies, often costing them not only financial cost but positive brand recognition. Smaller companies often can’t overcome the costs of a recall.

As a result, it’s no surprise that some companies will do whatever it takes to prevent a costly recall and using whatever resources are available to do that. The court system is playing an unlikely resource for businesses to prevent recalls from happening thanks to rules that allow companies to bar public access from court documents.

Did you overpay for video production services?

The Department of Justice is opening up a number of investigations into alleged video production and video post-production bid-rigging and price-fixing. According to the Wall Street Journal, a number of companies are under investigation for potentially inflating the prices of third-party contractors in order to route work to their own growing in-house production teams. While there have not yet been any companies named, most of the largest advertising agencies have their own in-house production teams.

We are investigating claims of bid-rigging and price-fixing that may have occurred at large ad agencies, including Interpublic Group of Cos, MDC Partners, Publicis Groupe SA, Omnicom Group Inc., or WPP PLC.

Advertising is a suffering industry, the Wall Street Journal explains, and in June a report from the Association of National Advertisers found during seven-month probe that found nontransparent business practices were leading towards clients being taken advantage of by struggling ad agencies. As well, the AICE, a trade group that represents independent post production companies, released a statement accusing ad companies of using unfair business practices to keep their own postproduction studios rolling.

Check-bids are potentially the root cause of the problem and is the subject of investigation. Ad agencies allegedly coerced independent companies to provide bids that are higher to make their own in-house services more attractive to clients, withholding what work is available for independent companies if check-bids aren’t provided when called for.

As ad agencies have been squeezed to find new revenue streams, many of them have opted to start or purchase production and post production companies. Often these companies are held by the same company as the ad agency and employees may even work in the same space—but often operate under a different name.

If you worked with an ad agency for video production for your marketing campaigns, you may have been a victim to bid-rigging and price-fixing. We want to speak with you about your experiences working with your ad agency as we are building a case.

Equilend Stock Loans Class Action

A new lawsuit has been filed against a large number of the leading banks in the United States, including Bank of America, J.P. Morgan Chase & Co., Merrill Lynch, Morgan Stanley, and Goldman Sachs. The lawsuit alleges that the banks manipulated the stock short sale market to prevent new, more transparent stock lending practices that cut out the middleman and increase competition in the marketplace and deny investors access to open exchanges not controlled by the banks.

If you, your pension, retirement fund, or investment manager used Equilend or were affected by inflated stock lending fees, you may have a claim. We would like to speak with you about your claim as we are building a case against a number of banks that may have denied you a fair and open marketplace for stock lending.

What is the Equilend Stock Loan Class Action About?

Banks act as middlemen for stock lending between lenders and borrowers, often pocket large fees in the process of facilitating lending. Equilend, a service that matches borrowers with lenders, is a little know but lucrative service owned by a number of banks.

By comparison, European systems have an direct, all-to-all stock lending program that some American investment managers pushed for a few years ago—only to be shut down by banks that allegedly refused to meet modern demands for technological improvements seen elsewhere in the world. In the past when stock lenders and borrowers have tried to move away from Equilend and similar services, banks allegedly refused to allow more modern technology that allows for more transparency in fees.

The plaintiffs for the class action, including the Iowa Public Employees’ Retirement System (IPERS), the Orange County Employees Retirement System and the Sonoma County Employees’ Retirement Association, allege that banks intentionally manipulated the market to benefit, at the cost of fair trading for their plans.

In other similar cases, after judge certification the class, the cases settled for millions. In 2013, Countrywide Financial settled with Iowa’s pension fund for $500 million over alleged abuses in the packaging and selling of mortgage bonds that soured in the financial crisis.

For brokers and pensioners alike, reducing the amount of fees paid to third parties for stock lending would increase profits from the trades, allowing for hedge fund managers and those they trade for to be able to see higher returns on their investments. Holding the banks accountable for manipulating the marketplace will help reduce the burden of out of date and old-fashioned fee structure imposed by banks.

We want to speak with you if you believe you may have a claim or have been affected by Equilend’s practices or managed a fund that uses Equilend’s services.

Suing for Incorrect Credit Reporting?

Credit reporting agencies have been under a lot of attention recently thanks for Equifax’s data breach but not all of that attention benefits consumers. Representative Loudermilk from Georgia has introduced a new bill in Congress that moves to limit the Fairness in Credit Reporting Act that gives consumers a path forward when credit agencies don’t use sufficient procedures to ensure accuracy.

There are lots of other reporting agencies that employers, landlords, financial institutions that use credit reporting agencies to run background checks before making decisions. When your future is left up to a report from a third-party, you’d hope it would be right. But for many, credit reports can be very inaccurate.

One in five consumers credit reports have errors, according to a 2012 FTC study. And the repercussions can be widespread for those individuals, especially when the mistakes in background checks are related to things that send a red flag to employers, landlords and banks.

Current laws give consumers an ability to sue reporting agencies when results are inaccurate and the agency didn’t take appropriate steps to ensure accuracy. Congress previously decided that consumers whose information is incorrect should be given compensation of up to $1,000 or have the option to sue for actual damages caused by incorrect reporting, often in the form of a class action. This can mean big payouts for consumers who were denied jobs or mortgages because of inaccurate reports. If many consumers decide to pursue a class action together, the class action could easily recover a multi-million dollar compensation for the participants harmed by a credit reporting agency.

But if Rep. Loudermilk has his way, consumers will be forced to give up rights to seek compensation with a severe cap on class action compensation at $500,000. In other words, in cases where the actual damage caused racks up in the millions, all of the participants will split a maximum of half a million to help them rebuild after being harmed by a inaccurate credit report. The proposed bill essentially makes it impossible for consumers to take consumer reporting agencies to court when they’ve hurt consumers.

Public Justice highlighted one such case that would have been impossible thank to the new bill that paid consumers $18 million after a reporting agency incorrectly reported they were criminals. Instead, under the proposed bill, all of the affected consumers would have only been paid $500,000 in total, regardless of how badly the inaccurate reports affected their lives.

If you’ve been victim to incorrect credit reporting information that cost you a job, approval for a loan, or an apartment, our attorneys would like to speak with you about your experience. Pushing back against bills like these that harm consumer protections is part of the process—but bringing these cases to court is also another way to help consumers protect their rights. Call today to speak with one of our experience consumer protection attorneys.

Arkansas Trial Scheduled for Sygenta Corn Case

A trial date has been set for January 22, 2018 for the Arkansas bellwether trial against Syngenta. This trial comes years after working towards holding Syngenta accountable for contaminating Arkansas’ farmers crops. Emerson Firm, PLLC’s client, Mr. Kenny Falwell, serves as the bellwether trial plaintiff representing Arkansas farmers who have been affected by Syngenta’s genetically modified corn. Mr. Falwell is one of a number of bellwether trial plaintiffs representing farmers in multiple trials across the United States.

There has been a lot of action surrounding the Syngenta class action cases this summer. On June 26th, Syngenta was ordered to pay $217.7 million to a group of Kansas farmers after a Kansas jury issued a verdict after less than a day of deliberations that Syngenta caused five years of depressed corn prices. Not only does this give the Arkansas Syngenta case momentum, it has caused a series of cascading effects.

Just a few days later on July 6th, trial dates were set for the Arkansas and Missouri class cases, the Illinois and Nebraska class case trial, the Iowa and South Dakota class case trial, and the Ohio class trial. However, these are not the only trials Syngenta is facing.

Another individual farmer’s trial was originally set for April in Nebraska but ended in a mistrial when the judge couldn’t find enough jurors. A second trial was scheduled for July 10th but Syngenta settled out of court before the trial for an undisclosed amount with the plaintiff, announced the same day as the other trials were set. This Nebraska case was not a class case, but rather an individual farmer’s case. The Minnesota cases go to trial in August, 2017.

Emerson Firm, PLLC’s client faces the first trial in the class action bellwether cases consolidated by United States District Judge John W. Lungstrum in Kansas City, KS. A bellwether case serves as an indicator for other cases in a large multidistrict litigations. To learn more about the Syngenta Corn Class Action, contact Emerson Firm, PLLC at (501) 286-4622.

Defective Products Could Harm Countless People If H.R 985 Becomes Law

Defective and unsafe products cause thousands of injuries and deaths every year in the United States yet legislators are trying to make it easier for companies to avoid having to take responsibility for the harm their products cause. H.R. 985, an anti-class action bill on its way to the Senate after being approved in the House, would allow companies to keep their unsafe and defective products on the market even if they’re known to cause injuries or even death.

One of the goals of class action lawsuits is to remove defective and unsafe products from the marketplace, preventing further harm to others who could be injured or killed in the future. In 2010, over 38 million Americans sought medical attention after injuries related to consumer products, according to the Consumer Product Safety Commission. Nearly 13 in every 100 people are injured and nearly 12 in every 100,000 people are killed in accidents related to consumer products. Preventing even a small part of these injuries by removing defective and unsafe products is significant, helping countless Americans avoid injury or death from products known to be harmful.

To some it might seem that defective and unsafe products lawsuits are frivolous at first, but understanding the effects of leaving these products on the market proves the importance of class action lawsuits. One recent case is a prime example of the kinds of lawsuits H.R. 985 is trying to stop.

One police officer discovered that his firearm would fire unexpectedly when dropped even with the safety on after his gun fell from his holster while chasing a suspect. No amount of training or gun safety precautions could have prevented the gun from firing and potentially killing an officer or bystanders. Extensive testing reveal that these guns were defective and often fired upon impact, even with the safety on.

One million other Americans and police officers had purchased the same gun model that may have had this same problem. A class action lawsuit helped remove these guns from the marketplace by replacing the pistols at the manufacturer’s cost and alerted purchasers of the defect, helping to prevent injuries or deaths caused by the unsafe guns.

But because no one was injured in the accident, H.R. 985 would prevent any class action lawsuit. Instead, H.R. 985 would require that someone was injured or killed by the defective gun for a lawsuit to take place and would only address that individual’s injuries without any obligation to remove the guns from the market or alert owners of the defects. Not only would these gun owners not know about the defect, the manufacturer would be able to sell more of theses defective products.

If H.R. 985 becomes a law any action to recall or alert owners of a defect will only be taken voluntarily by a manufacturer. A question central to consider about H.R. 985 is whether or not Americans can rely on manufacturers to do the right thing that would be detrimental to their profits. It should come as no shock that companies that produce defective and unsafe products aren’t jumping to do the right thing when it’s their fault.

Calling your Senator to tell them to vote NO on H.R. 985 is an important step in protecting your rights and helping prevent harm from defective products to all Americans. Call your Senator immediately before this bill goes to a vote and tell them you want your family to be protected from defective and unsafe products.

Medical Malpractice Lawsuits Not Linked to Rising Healthcare Costs

Healthcare is a hot topic in the political climate right now and there’s a lot of actions being taken in the United States House of Representatives that reflect changing views on the costs of healthcare and the role medical malpractice lawsuits have. Unfortunately for the American public, lawmakers are under the impression that lawsuits only serve to make healthcare more expensive.

A comprehensive new study shows, however, that medical malpractice lawsuits are not linked to soaring healthcare costs. In 2015, medical malpractice payouts were at an all-time low. Only one-tenth of one percent of all healthcare costs (0.1%) of healthcare costs come from medical malpractice lawsuits.

Detractors who say that the costs of medical liability insurance can also be assured that insurance for healthcare providers is also at a historic low, reaching levels lower than 2003 numbers with only 0.3% of healthcare costs being attributed to medical providers liability insurance.

As well, for how many individuals who suffer from medical malpractice annually, very few of them go on to sue doctors. Looking just at those who were killed by medical malpractice and avoidable errors, 44,000 to 400,000 people are killed a year from these kinds of mistakes. By contrast, an average of fewer than 13,000 malpractice payments a year have been made on behalf of doctors over the past quarter century, according to the study.

In other words, medical malpractice is insignificant to the overall costs of healthcare—and using health care costs as an argument against being able to hold doctors accountable for their mistakes is nothing more than empty rhetoric.

Current Legislation Aims to Take Advantage of Incorrect Perceptions

This isn’t stopping lawmakers, however, as conservative leaders are pushing for H.R. 1215, a bill that caps non-economic damages at $250,000, such as payments for severe pain and suffering someone might experience after a botched operation, regardless of many factors normally included in a lawsuit. The resolution is called “Protecting Access to Care Act” and is using the idea that medical malpractice is increasing the costs of medical care as the basis to strip Americans of their rights and give medical providers, manufacturers and companies the upper hand.

This bill will soon be voted on by the House but there are three other bills that have passed on to the Senate on their way to become law, including, H.R. 725, the “Innocent Party Protection Act”, H.R. 720, the “Lawsuit Abuse Reduction Act”, H.R. 985, the “Fairness in Class Action Litigation Act”. H.R. 906, the “Furthering Asbestos Claims Transparency Act,” was rolled together into H.R. 985.

The names of these bills are intentionally misleading, using names to make it seem like these legislators have their constituents’ needs at heart. In reality, it’s the deep pockets of medical companies and doctors that are the motivating factor. As well, these laws have unclear but intended consequences that very much go against what many of these legislators have been sent to Washington to represent—smaller federal government and more local and state control.

Paul Bland, executive director of Public Justice, and Public Justice staff attorney Leah Nicholls together wrote an article in The Hill underlining some of the consequences of these bills, noting that these bills would “would override and violate at least 18 state constitutions” as well as “override those states’ carefully crafted suite of laws” in states that already have laws to accomplish the policy goals of these bills.

Beyond treading on states’ rights, these bills take away individual freedoms and rights, especially in an age when deregulation is a popular topic. As more protections are removed from individual rights, class actions serve to keep those with more power in check. And yet, legislators who spout campaign slogans about preserving rights for individuals are pushing these bills.

One of the foundations of our country is the right to hold others accountable when we’ve been done wrong. These bills serve to break down individual and local rights in favor of corporate rights.

We urge you to call your representative in the House to tell them to vote NO on H.R. 1215 and your Senator to vote NO on H.R. 725, 720 and 985.