January 20, 2016

Supreme Court Preserves Class Action Rights

The U.S. Supreme Court handed consumers and plaintiffs an important victory today, preserving the right to bring a class action against a corporate attempt to "buy off" the class representative. Writing for a 6-3 majority, Ruth Bader Ginsburg delivered the opinion siding with the plaintiff who challenged a violation of the Telephone Consumer Protection Act ("TCPA").
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The case of Campbell-Ewald v. Gomez seeks to enforce a federal law that protects cell phone users against unwanted marketing and debt collection calls. The defendant Campbell-Ewald is a private contractor acting as a U.S. Navy recruiter. Without any permission or prompting, it sent one or more texts to Jose Gómez recruiting him to join the Navy. Almost 40 years old at the time, Gomez had never consented to receiving the text. To stop this annoying practice, he filed suit alleging the company violated the TCPA, a federal law that forbids unsolicited advertisements placed to cell phones. One of the problems that the law seeks to address is the ease at which a marketing or recruiting firm can blast an advertisement at thousands of people, many of whom must pay to receive cell phone calls or texts. The nature of the law is such that it is most commonly enforced only if claims can be brought as class actions, because each individual's recovery could be too small to make it worth hiring a lawyer to go to court.

Gomez sought to bring the case as a class action against Campbell-Ewald. If he had done this alone, as an individual plaintiff, the defendant would have either ignored him, or made the case so expensive he would likely give up. But facing a potential class action in which it might have to pay statutory damages to numerous class members for every violation of the law, the defendant had to pay attention. The defense strategy was to get rid of Gomez' right to represent the class. So they sent him an offer to settle his case alone for $1,503 hoping to buy him off. He declined to accept the offer, as it would sell out the class and not stop the illegal recruiting practice he was challenging. Campbell-Ewald claimed their offer had disposed of the case.

Justice Ginsburg and the court majority ruled the that businesses like Camapbell-Ewald can't just "moot" a case by simply offering to settle it with the person who first brought it if the person rejected the offer. Although Gomez was seeking to enforce a Federal statute, The TCPA, the defendants offer of settlement was based on the common law of contract.

"Like other unaccepted contract offers, it creates no lasting right or obligation," Justice Ginsburg reasoned. "With the offer off the table, and the defendant's continuing denial of liability, adversity between the parties persists." That remaining controversy was good enough for his claim to remain active in the courts. However, the Court noted that in this particular instance Campbell-Ewald had just offered to pay him the money, and it left open the question of whether the result would have been different if Campbell-Ewald had actually paid up and made Gomez whole, rather than merely having offered to pay.

Attorneys, advocates, academics and the business community were all waiting for this decision to issue, because class action device - and collective redress of corporate misconduct - depends on the willingness of people like Jose Gómez to act as class representatives. If the corporate defendant can manage to remove a class representative from the case -- by separate settlement for example -- the whole class action could evaporate.

Undoubtedly, that was what Campbell-Ewald was hoping for. But, for the time being, it looks like class actions are here to stay.

January 8, 2016

Parando los Vendedores Telefónicos

A veces parece como si nunca van a parar. Llamadas telefónicas automáticas mañana, tarde y noche. Aun peor que escuchar un humano leer de una escritura de ventas es escuchar un mensaje pregrabado a cual uno no puede responder. Por lo menos se puede decir a un ser humano que deje de llamarle. Es más allá que molesto cuando suena el teléfono y una voz computarizada anuncia que ha ganado un crucero, que necesita lavar sus ventanas, que se puede ahorrar dinero en las facturas de servicios públicos, que debe renovar su suscripción a una revista, o que usted no quiere perder la oportunidad de una venta de fin de semana. Los ignora durante la cena y su mensaje de voz se desborda.images.png

Sería bastante mal si se hicieron estas llamadas sólo a teléfonos fijos. Llamadas telefónicas automáticas y mensajes de texto a su teléfono celular, y los faxes no deseados arrojando fuera de su máquina de copia, le cuesta dinero. A menos que si tenga un plan de datos sin límite, es muy posible que se le cobre honorarios o minutos para las llamadas entrantes. Eso añade expensas a molestia.

Las agencias federales como la Comisión Federal de Comercio (FTC) y la Comisión Federal de Comunicaciones (FCC) están haciendo lo mejor que pueden - con recursos limitados y fondos reducidos del Congreso - para hacer cumplir las protecciones para el consumidor contra la intrusión y la molestia de llamadas pregrabadas. Es un gran problema porque marcadores automáticos pueden colocar miles de llamadas a guías telefónicas enteras, sin intervención humana por parte de la persona que llama.

La Ley de Protección Teléfono para el Consumidor (TCPA) también proporciona derechos y recursos a los consumidores que no han consentido a ser llamados por agentes de vendedores telefónicos. A menudo los consumidores no se dan cuenta de que inadvertidamente consintieron en el pasado (por ejemplo, por ignorar un papelito en le sobre de una factura, o la letra pequeña de un recibo de compra, o los "términos y condiciones" en una compra en el internet). La buena noticia es que incluso si usted consintió ser llamado en el pasado, usted puede revocar expresamente el consentimiento. Además de las acciones por parte de las agencias reguladoras, la TCPA permite un derecho privado de acción para los abusos de vendedores telefónicos y que abogados privados lleven los casos a favor de los individuos y las acciones de clase para hacer cumplir la ley. En algunos casos, usted puede tener derecho a $ 500.00 por cada llamada no deseada.

Una forma de evitar las llamadas y para ser claro que nunca consintió a ellos en el primer lugar es asegurarse de que ha tomado medidas para colocar todos sus números de teléfono en la lista federal de “No Llamar.” En el sitio web de la FTC, nada más introduzca su número de teléfono y correo electrónico y siga las instrucciones. Si tiene varias líneas de teléfono, usted puede poner un máximo de tres números, incluyendo las líneas fijas, teléfonos celulares, y números de fax. Es fácil hacerlo aquí.

Traducido por Rosa Baum del artículo de 10 de noviembre 2015 (Nancy Barron), ©Kemnitzer, Barron & Krieg, LLP

December 30, 2015

FTC Campaña Contra Cobradores de Deudas

Abuso de cobro de deudas es un problema grave. Apenas el año pasado la Comisión Federal de Comercio (FTC) recibió 280,000 quejas sobre prácticas de cobro de deudas engañosas. Estos incluyen informes de acoso, abuso, y fraude. Acoso por teléfono es particularmente ofensivo. Mientras que muchos cobradores de deudas están tratando de obtener el pago de las deudas legítimas, muchos otros son simplemente estafadores. .FTC%20%20logo.jpg

Deuda que ha sido incluido en las carteras y se vende a granel, a veces conocido como "deuda de aguas abajo," es particularmente problemático. Lo mismo ocurre cuando los prestamistas pagan agentes conocidos "administradores" para colectar la deuda. En cualquier caso, el prestatario no reconoce el nombre de la persona o entidad que exige el pago. A veces la misma deuda se está siendo recogida por dos personas a la vez. En otros casos, los prestatarios están sujetos a llamadas de los sistemas automatizados o mensajes pre-grabados y otras formas de grabado "robo-llamadas." El sistema está lleno de estafas.

En Noviembre de 2015 la FTC anunció un programa nacional coordinado para luchar contra las prácticas ilegales de cobro de deudas. "Estar en deuda es bastante estresante para muchos estadounidenses sin también ser sometido a intimidación y amenazas falsas", dijo la FTC presidenta Edith Ramírez. "Los deudores tienen ciertos derechos y coleccionistas sin escrúpulos que dan un paso fuera de la ley se enfrentarán a las consecuencias de la conducta ilegal." El programa, conocido como "Operación Protección Colección," es la primera colaboración de este tipo, combinando los recursos policiales federales, estatales y locales. Panea trabajar con fiscales generales estatales.

Mientras que la Comisión Federal de Comercio combina esfuerzos con las fuerzas de la ley, muchas de estas prácticas engañosas dan lugar a los recursos a través de demandas privadas ejercitadas para exigir las leyes federales y estatales para el cobro de deudas justa. Además, la Ley Federal de Protección Telefónico al Consumidor hace ilegal para acosar a los deudores mediante el uso de robo-llamadas o llamadas a los teléfonos celulares sin el consentimiento de los prestatarios. Si usted es víctima de abuso de cobro de deudas o robo-llamadas, debe presentar una queja a la Comisión Federal de Comercio o buscar asesoramiento legal privado. Mientras tanto, puede leer el comunicado de prensa de la FTC aquí.

Traducido por Rosa Baum del artículo de 4 de noviembre 2015 (Nancy Barron), ©Kemnitzer, Barron & Krieg, LLP

December 10, 2015

VW Litigation Consolidated in Northern California

Millions of VW owners are now putative class members in class actions filed throughout the country. The United States Judicial Panel on Multi-District Litigation recently consolidated the cases under the title "In Re Volkswagen "Clean Diesel" Marketing, Sales Practices, and Products Liability Litigation," MDL No. 2672. In a detailed order, the Court transferred the entire litigation to the Federal District Court for the Northern District of California, in San Francisco. The matter will be heard before Judge Charles R. Breyer, a jurist selected for his experience in complex litigation.

The Judicial Panel decides which court to have handle the combined lawsuits based on the number of cases filed in various districts, the location of witnesses, and other factors. This analysis is particularly complicated in this instance, because much of the design, marketing, and testing evidence may well be in Germany where much of the underlying conduct likely occurred. VW has admitted it used cheating devices, which may ultimately simplify some of the evidence, but the case is far from over.

Among hundreds of lawsuits, the parties had advocated for 28 transferee districts located throughout the country. The Judicial Panel found that Northern California was "where significant testing of affected vehicles occurred, and the home of the California Air Resources Board, which played an important initial role in investigating and, ultimately, revealing VW’s use of the defeat devices." vw%20tdi.jpgIt further noted that "There are 30 actions pending in the Northern District of California, including the first-filed case in the nation, and plaintiffs have filed a total of 101 cases in the state of California – nearly a fifth of all cases filed nationwide."

The widespread litigation concerning TDI diesel cars (TDI stands for "turbocharged direct injection") commenced in September 2015, after the E.P.A. issued a Notice of Violation of the Clean Air Act to Volkswagen and affiliated companies such as Audi. The shocking E.P.A. announcement challenged the unauthorized use of a piece of software called a "defeat device" in a vast number of diesel automobiles manufactured since 2009. Although the initial Notice encompassed about 480,000 cars sold in the United States, there are about 11,000,000 affected vehicles worldwide.

The combined class action litigation now pending before a single judge will probably prove to be the most efficient and cost effective means of obtaining relief for most VW owners. It is unknown at the present time just what the courts will do with individual plaintiffs who try to file cases separately on various theories; sometimes such actions have simply been coordinated or consolidated under the umbrella of class litigation. The Judicial Panel evaluating the MDL proceeding made passing reference to cases brought on behalf of VW investors and individual consumers seeking relief from making their loan payments, but declined to address these side issues at the present time.

December 10, 2015

Chrysler Fined Yet Again For False Reporting

Chrysler has found out the hard way that it doesn't pay to lie to the federal government. This week NHTSA threw the book at Chrysler for "significant underreporting" its early crash data. In other words, and in a big way, Chrysler failed to "play fair" and "say you're sorry when you hurt someone" -- some of the essential truths Robert Fulghum wrote about in "All I really Need to Know I Learned in Kindergarten." 6a00e55417fcfd88340105365ad8a9970c-320wi.jpg

Failure to abide by those basic rules of childhood just cost Chrysler $70 million.

Last summer the National Highway Traffic Safety Administration ("NHTSA") and Fiat-Chrysler entered into a consent order by which the auto manufacturer agreed to a whopping $105 million fine. That unprecedented fine was meant to put an end to the agency's investigation of Chrysler's misguided handling of 23 recalls involving more than 11 million vehicles. This time around, NHTSA cited Chrysler's "significant under-reporting" of crash data, including reports of deaths and injuries related to its vehicles. Clearly exasperated and hoping to set an example, NHTSA administrators decided to amend the original fine to bring the total penalties to $175,000,000.

The government said that the increased penalty was needed to address Chrysler's belated admission last September that it had misstated early warning crash data, which car makers must submit in compliance with the Transportation Recall Enhancement, Accountability and Documentation Act of 2000. That important data enables NHTSA to determine whether patterns in the occurrence of accidents reveal defects that warrant recalls. This data is essential to keeping the public safe, as well as to alert individual car owners about problems in their vehicles.

“NHTSA’s enforcement actions in recent months have been designed not only to penalize previous actions, but to increase safety going forward,” NHTSA Administrator Mark Rosekind said in announcing the action this week.

Chrysler’s flawed reporting of early warning data goes back to 2003, according to NHTSA. But Chrysler is not alone. NHTSA has brought enforcement actions for similar early warning data reporting problems against other manufacturers in the last year, including American Honda, which was fined $70 million in January 2015.

November 23, 2015

Is Your Vehicle Part of a Safety Recall?

Safety recalls require vehicle manufacturers to provide free repairs to correct known automotive defects. This includes cars, trucks, motorcycles and motorhomes. These defects often affect the use and value, as well as the safety, of the vehicle. Typically, the manufacturer must notify affected owners by mail. However, the manufacturer only gives notice of the recall to the first purchaser or lessor in most instances. It could do a search of DMV records, but that is an expensive option that the government recall order normally does not require. The public media announces many of the recalls, but certainly not all.

Despite the offer of repairs at no cost, statistics show that most people ignore the recall notices. Shockingly, this is true even where they involve defects that increase the risk of great bodily harm. Maybe the unopened envelope gets put in the junk mail pile. Or, it is inconvenient to schedule a repair appointment. Or, the parts needed for the fix are back-ordered due to demand. It seems such a nuisance in our busy lives. Nonetheless, failure to have the recall performed leaves the car owner and passengers in danger. And, in cases of defective components involving steering, stalling, acceleration and brakes, unperformed recalls leave the entire driving public at risk.

nhsta.jpgSo, what do you do if you bought a truck used from a private party? Or you are the second lessor of an SUV? Or you have moved three times without a forwarding address? Or you think the printed notice was tossed out with the trash?

The National Highway Traffic Safety Administration hosts a webpage to help with this problem. Find your VIN on the registration and research the recall history right here.

November 10, 2015

Stopping the Telemarketers

Sometimes it seems like they will just never stop. Robocalls morning, noon, and night. Even worse than hearing an actual human read from a sales script is hearing a disembodied prerecorded message to which you can't reply. At least you can tell a human to quit calling you. It is beyond annoying when the phone rings and a computerized voice announces you have won a cruise, need your windows washed, can save money on utility bills, must renew a magazine subscription, or don't want to miss out on a weekend sale. You ignore them during dinnertime and your voicemail overflows.images.png

It would be bad enough if these calls were made only to landlines. Robocalls and text messages to your cell phone, and unwanted faxes spewing out of your copy machine, all cost you money on the receiving end. Unless you have an unlimited data plan, you may very well be charged fees or minutes for the incoming calls. That adds expense to annoyance.

Federal agencies like the FTC (Federal Trade Commission) and the FCC (Federal Communications Commission) are doing the best they can - with limited resources and reduced funding from Congress - to enforce consumer protections against the intrusion and nuisance of robocallers. It is a huge problem, because automatic dialers can place thousands of calls to whole phone books, without human intervention on the caller's part.

The Telephone Consumer Protection Act ("TCPA" for short) also provides rights and remedies to consumers who have not consented to be called by telemarketers. Often consumers don't realize that they inadvertently consented in the past (for example, by ignoring a bill stuffer, or the fine print on a sales slip, or "terms & conditions" in an online purchase). The good news is that even if you consented to be called in the past, you can expressly revoke that consent. In addition to actions by the regulatory agencies, the TCPA allows a private right of action for telemarketing abuses and private attorneys bring cases on behalf of individuals and class actions to enforce the law. In some cases you may be entitled to $500.00 per each and every unwanted call.

One way to avoid the calls and to make it crystal clear that that you never consented to them in the first place is to make sure you have taken steps to place all of your phone numbers on the federal Do Not Call list. On the FTC website, just fill in your phone number and email, and follow the instructions. If you have multiple phone lines, you can put in up to three numbers, including land lines, cell phones, and separate fax numbers.It is easy to do this right here.

November 7, 2015

New York Times Exposes Dark Side of Arbitration

The New York Times has published an in-depth, 3-part series lambasting forced arbitration of civil disputes. The piece is the result of months of impressive investigative journalism, during which reporters plowed through documents from more than 25,000 arbitrations that took place from 2010 - 2014. The team of top reporters conducted hundreds of interviews of participants, lawyers, arbitrators, and judges in 35 states. Concluding that the effort had "uncovered many troubling cases," the articles explain the unfairness of the secretive system of private judging in examples from case after case after case. stoparb.jpgThese troubling cases included "everything from botched home renovations to medical malpractice."

Part I of the series, entitled "Arbitration Everywhere, Stacking the Deck of Justice" appeared Sunday November 1, 2015, followed by "In Arbitration, A Privatization of the Justice System" on November 2, and "In Religious Arbitration Scripture Is the Law " November 3. The series begins here.

Together the articles explain in plain language the real harm corporations and other powerful insitutions manage to achieve by controlling the language of fine print in everyday contracts. It should be a huge wake-up call for the American public. The system is designed to strip consumers and employees of their rights to sue corporations for serious misconduct - fraud, car safety defects, sexual harrasment, workplace abuse, harmful drugs, tainted food, you name it. Finally, the mainstream media has taken on corporate power in a way that most politicians have shied away from.

Part III of the series demonstrates a little-known and unsettling twist on the issue. Religious institutions have begun their own private arbitration programs, and not necessarily only for those practicing that faith. What if the fine print of an employment contract said that in the event of a dispute, the parties would submit to arbitration conducted by elders applying sharia law? If that sounds far-fetched, the Times reports that a court enforced a clause requiring people leaving Scientology to arbitrate their claims before a panel of Scientologists. The plaintiff called it a farce. Demand for Christian arbitrations is tucked way in thousands of contracts, not just those involving the churches themselves, but goods and services as diverse as hardwood floors and group homes. It all sounds a bit crazy. However, to the people whom the New York Times interviewed it was no joke, but a bizarre reality.

The entire New York Times series is a must-read, because it reveals a widespread effort on the part of corporations and other institutions to create and control an alternate system of justice, forcing Americans out of courts where the civil justice system has evolved over centuries to provide safeguards against biased judging and corruption. Courts themselves have failed to stop the practice. The political process has failed to stop the practice. But public opinion is beginning to turn, and the New York Times article is a convincing voice for change.

November 4, 2015

FTC Crackdown on Debt Collectors

Debt collection abuse is a serious problem. Just last year the Federal Trade Commission got 280,000 complaints about deceptive debt collection practices. These include reports of harassment, abuse and flat-out fraud. Harassment by telephone is particularly offensive. While many debt collectors are just trying to obtain payment for legitimate debts, many others are simply scam artists.FTC%20%20logo.jpg

Debt that has been bundled into portfolios and sold in bulk, sometimes know as "down-stream debt," is particularly troublesome. The same is true when lenders farm out collection to agents called "servicers." In either case, the borrower does not recognize the name of the person or entity demanding payment. Sometimes the same debt is even being collected by two people at once. In other cases, borrowers are subjected to calls from automated systems or disembodied recorded messages and other forms of "robo-callers." The system is rife with scams.

Today the FTC announced a coordinated nationwide program to combat illegal debt collection practices. “Being in debt is stressful enough for many Americans without also being subjected to intimidation and false threats,” FTC Chairwoman Edith Ramirez said. “Debtors have certain rights and rogue collectors that step outside the law will face the consequences of illegal behavior.”The program, known as “Operation Collection Protection,” is the first collaboration of its kind, combining federal, state and local law enforcement resources. It plans to work with state attorneys general.

While the FTC combines efforts with law enforcement, many of these deceptive practices give rise to remedies through private lawsuits brought to enforce state and federal fair debt collection practices laws. In addition, the federal Telephone Consumer Protection Act makes it illegal to harass debtors through the use of robo-calling or calls to cell phones without the borrowers' consent. If you are the victim of debt collection abuse or robo-calling, make a complaint to the Federal Trade Commission or seek private legal advice. Meanwhile, you can read the FTC press release here

October 30, 2015

When Banks Put Their Own Spin on Money Matters

It starts with the difference between checking and savings accounts. But your bank manager can make even that distinction fuzzy, especially when interest rates are low and minimum balances are high. Of course he will urge you to get a credit card when he secretly gets a commission if you say "yes." The auto finance guy will promote credit as opportunity, without revealing the obligations of debt. Relying on banks to teach financial literacy is a bad idea.

The basics of managing money, creating a personal budget, understanding the arithmetic of interest rates, comprehending the relationship between credit and debt, knowing how and when to negotiate the price of a car - all of this can be overwhelming. Overwhelming at age 18. Or at age 28. Or even atage 58. Too many people go numb at the sight of numbers. But basic financial literacy is essential for living the American life.

The recession that started with the crash of 2008 raised the issue of financial literacy to a new level. But no sooner did the banks receive their bailout funds, than they began to hijack financial literacy programs. Finance companies which were promoting such programs in high schools and colleges across the country had their own interests at stake. Banks and credit card companies wanted to make sure the next generation got just as hooked on easy credit as their parents had done. Instead of teaching kids the dangers of debt, financial institutions turned the curriculum into an infomercial for banking products from which lenders continue to profit.

Washington Post writer Michelle Singletary says, "I go nuts when I see lesson plans that say getting a credit card can help students manage their money. No, it doesn’t. It teaches them the ways of a debtor — even a good one — too early in life." Singletary is absolutely right. A lesson plan like that is almost certainly part of a program promoted, written, or produced by a profit-driven bank.

The best financial literacy program out there is called FoolProof, says Singletary. "It’s such a complete program for teachers (even the grading is done for them), and it clearly favors the consumer protection of students. Too many of the materials I see don’t note enough of the dangers of debt." Teachers can get more information on Foolproof here.

Other resources are available through the website of the Consumer Financial Protection Bureau . But anyone interested in teaching financial literacy needs to take two precautions: (1) consider the source and (2) consider the delivery. The Foolproof program rates high on both counts. The non-profit organization is run by an independent board; and it is funded through private donations, grants, and court-approved cy pres from the residue of consumer class actions. Foolproof's message of fiscal responsibility comes through strong and clear in the voices of young people who ditch legal jargon and tell it like it is.

When banks put their own spin on money matters, their conflict of interest taints the curriculum, instilling the bad habit of perpetual debt. Programs like Foolproof provide an independent alternative. High school and college administrators should choose it and use it.