The American Law Institute has been attempting to write a Restatement of the Law of Consumer Contracts since 2012. The proposed Restatement has gone through ten drafts and has generated considerable controversy among the ALI membership as well as opposition from both consumer advocacy organizations and business associations. The project is an impossible dream. Companies continually take advantage of advances in technology to make major changes in the consumer marketplace. Consequently, any Restatement will be seriously out-of-date as soon as it is approved by the ALI. Furthermore, there is a paucity of relevant cases and a lack of consensus among the courts that have issued opinions. Consequently, if approved, a Restatement will significantly influence the future development of case law. This would be unfortunate because there are other factors contributing to the inadequacy of the draft that is currently under review. The Reporters' drafts are based on an incomplete description of the consumer marketplace that fails to reflect the reality in which consumers and businesses engage in online transactions. Scholars have questioned their collection and analysis of case law. The Reporters ignore the insights of social science. They have an unduly constricted view of the factors the ALI should consider in drafting a Restatement. A major flaw is the insistence on black letter rules that embody a blanket consumer assent approach that creates a presumption that consumers engaging in online transactions are bound to standard contract terms. Alternatives to a Restatement should be considered.
Antitrust applies to healthcare. Questioning the wisdom of this universal truth, medical professionals actively insisted and still insist on professional discretion, self-regulations and other practices that violate the antitrust laws. What do medical professionals aim to achieve by resisting the application of antitrust into their profession? What do antitrust enforcers aim to achieve by applying antitrust law to the medical profession? The answer is simple. Among others, both antitrust enforcers and medical professionals aim to ensure quality. Interestingly, albeit their goal is identical, their approach is different. Why? This essay explores this enigma by analyzing some seminal healthcare antitrust cases. It concludes that the U.S. antitrust enforcers by remaining faithful to the narrative that, the more the available choices, the better the quality, miss a crucial point: that the quality of medical treatment also depends on non-economic values such as the notions of safety and trust, essential features of the therapeutic enterprise. This essay proposes that the antitrust enforcers should extend the notion of healthcare quality when they apply antitrust law in the healthcare sector so that this notion encompasses the multiple facets of healthcare quality and the ethical values the doctor - patient relationship crucially depends on. Adopting an alternative, less myopic, approach would allow the antitrust enforcers to create an analytical framework under which the multiple dimensions of healthcare quality could be balanced against harm to competition. More importantly, it would ensure that antitrust enforcers and medical associations do not continuously struggle to impose their own views on what the prevailing facets of healthcare quality should be. In Donabedian’s language, an alternative approach would ensure that all functions of the health system commit to the quality goals that the system as a whole pursues.
In 2006 Congress adopted the Military Lending Act (“MLA”) to protect active duty military service members and their families from high-cost, predatory loans. The core provision of the statute is a usury limit capping interest rates at no more than 36 percent per annum. The United States Department of Defense finalized regulations implementing the MLA in 2007 and then later issued substantially revised regulations in 2015. The MLA is America’s first modern, national usury law that is applicable to all types of creditors and was adopted after the evolution of our national credit card market. After over a decade, the MLA’s consumer protections have proven exceptionally popular among military service members and their support organizations. The law has not generated significant litigation and has not dried up access to mainstream credit products for military families. In this Article we provide a contemporary historical record of the origin and evolution of the law and evaluate lessons learned from its implementation. In particular, we argue the MLA provides a proven template Congress or individual state legislatures could adopt to better protect military veterans and, indeed, all consumers from predatory, high-cost debt. We conclude with an appendix that includes a model statute Congress or state legislatures could consider adopting to expand the MLA’s protections to cover military veterans and all consumers.
Introduction ....................................................................................371 I. Equal Credit Opportunity Act History and Jurisprudence ....372 II. Prohibition of Sexual Orientation Discrimination in Title VII and ECOA .....................................................................373 III. Opposition to Judicial Expansion of ECOA and Title VII Protections ............................................................................377 IV. Advocating for the Best Course of Action .............................381
There has been much debate over the Consumer Financial Protection Bureau’s lack of executive and congressional oversight: its single director removable only for cause and its operations are not subject to appropriations. This paper explains how this very leadership and accountability structure — intended to politically insulate the agency — had the perverse effect of politicizing it. Since Director Cordray’s departure, there has been increased regulatory uncertainty, discouraging financial innovation and harming consumer welfare. This paper recommends that Congress restructure the Bureau into a multi-member, bipartisan commission to provide industry regulatory predictability and ensure that consumer protection retains its independent seat in the financial regulatory system.
In 2010, following the 2008 financial crisis, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act. Among other provisions, the Dodd-Frank Act established the Consumer Financial Protection Bureau as a direct response to the risky and harmful actions by the financial industry that precipitated the Great Recession. With the passage of the Dodd-Frank Act Congress, for the first time, created an independent federal agency with broad new tools and a singular vision: to oversee America's financial markets for violations of consumer financial protection laws. This article reviews the extent to which the Bureau's authorities and subsequent efforts cover the second largest class of consumer debt in this nation — student loan debt. In particular, it focuses on the critical role that student loan servicers play, both as the vehicle through which tens of millions of borrowers participate in this market and the extent to which widespread illegal servicing practices fuel consumer harm and financial distress. The article discusses how the Bureau's oversight, enforcement, and policy initiatives exposed the need for a student loan servicing rule. The article also explores the features of the student loan servicing market that suggest setting strong, baseline standards through rulemaking is necessary to improve practices by the student loan servicing industry and mitigate consumer harm. The article concludes by defining the authority under the which the Bureau can write a student loan servicing rule and envisioning the scope of this rule.
Introduction .................................................................................... 590 I. The History and Development of the On-Sale Bar ................. 592 A. The State of the On-sale Bar Prior to the America Invents Act ............................................................ 593 B. The Development and Implementation of the America Invents Act ............................................. 594 II. Helsinn v. Teva ......................................................................... 596 A. Facts and Procedural History in the Lower Courts ................................................................................ 597 B. The Court’s Opinion .............................................. 598 III. The Holding of Helsinn Runs Contrary to the Drafting History of the America Invents Act ................................... 599 A. The Court’s Decision is Inconsistent with the Plaintext Interpretation of the Post-AIA On-sale Bar Language ............................................................... 600 B. The Court Ignored Congressional Intent Behind the Post-AIA On-sale Bar Language ......................... 601 IV. The Chilling Effect of Helsinn on Research and Development Efforts by Small and Midsize Pharmaceutical Companies ................................................ 603 Conclusion ...................................................................................... 605
Generic drugs have been provided considerable cost-savings to consumers. The Hatch-Waxman Act provides economic incentives to both generic and brand-name manufacturers, but it is a complicated piece of legislation scattered across numerous sections of the United States Code. This obfuscation has led to abuse by brand name and generic drug manufacturers, resulting in anticompetitive behaviors for the consumer. Despite attempts to ameliorate the problem, a review of case law makes plain that the judicial and legislative systems are currently inadequate to address this problem. Litigation typically arises in the context of patented drug filings after a generic drug manufacturer files an Abbreviated New Drug Application for a generic drug modeled after the patented drug, an act of constructive patent infringement. This then initiates paragraph IV patent litigation. In order to avoid a finding of patent invalidity, branded and generic manufacturers have entered into collusive “reverse-payment” agreements in which the branded manufacturer agrees to pay the generic company to stay out of the market. While direct cash payments seem to have been foreclosed in FTC v. Actavis, subsequent iterations of reverse payments have evaded this holding, allowing reverse payments to continue to the frustration of many consumers. Finally, the latest mode of manipulation does not involve monetary transfers, but rather manipulates the FDA system via product hopping, risk evaluation monitoring systems, and sham citizen petitions, to achieve anticompetitive aims. This articles examines the patenting system for generic drugs, the numerous modes of reverse-payment, particularly with the difficulty of prescribing a bright-line approach to often fluid definitions of “reverse payments.” This is the first article to review the array of reverse payment modes, explaining how legislative and judicial efforts to combat these practices have failed, and arguing for a systemic legislative approach to solving this problem.
Scalding criticism of Supreme Court arbitration decisions appeared in the 1990’s and is now widespread. Over twenty years ago, the Supreme Court held that pre-dispute arbitration clauses in adhesion contracts are generally enforceable. Thoughtful scholars then feared threats to consumers’ and employees’ rights, and today similarly warn that the Court’s recent arbitration decisions “will provide companies with free rein to commit fraud, torts, discrimination, and other harmful acts without fear of being sued.” Professors are not the only sources of strong language opposing the Court’s arbitration decisions. Under the heading “Forced Arbitration Destroys Individual Rights,” a 2015 federal court decision declares: “Today, forced arbitration bestrides the legal landscape like a colossus, effectively stamping out the individual’s statutory rights wherever inconvenient to the businesses which impose them. What is striking is that, other than the majority of the Supreme Court, whose questionable jurisprudence erected this legal monolith, no one thinks they got it right.” From this alleged consensus of “No one thinks they got it right,” this Article dissents in significant part. While I have long opposed Supreme Court decisions on arbitration law’s separability doctrine and judicial review of arbitration awards, and would reduce adhesive arbitration agreements’ impact on class actions, I continue to sympathize with some of the Court’s long-controversial arbitration decisions. I choose the word “sympathize” because I believe much of the criticism of the Court’s arbitration decisions does not sufficiently weigh the difficult position the Court was in when deciding those cases. The FAA was enacted in the 1920’s before the landmark federalism case of Erie v. Tompkins, the New Deal’s expansion of the Commerce Clause and thus of federal power to preempt state law, the growth of federal employment and consumer law in the 1960’s and 1970’s, and the ensuing explosion of class actions. Each of these enormous changes to our nation’s legal landscape conflicted with the premises underlying the FAA. While Congress could have amended the FAA to accommodate and be more consistent with these enormous changes, it did not. So, reconciling an old statute with a half century of law in tension with that statute’s premises became the Court’s task. The Courts’ critics generally argue that the drafters and adopters of the FAA did not intend for it to: (1) preempt state law or (2) cover consumer and employment arbitration agreements. This Article responds to those arguments.
