Since its release in late February, the White House’s “Discussion Draft: Consumer Privacy Bill of Rights Act of 2015” has drawn a significant amount of friendly fire from privacy activists and even federal privacy regulators. Their criticism insinuates that the Discussion Draft is at best a floor, a starting point for more stringent regulation. That perspective should be quite troubling to those who work in and benefit from the Internet Economy, for as we discuss below, certain aspects of the draft impose burdens on data use that far outpace any that currently prevail or have been proposed at the federal level.
“Privacy Risk.” The data rights and protections the Discussion Draft affords are predicated on consumers suffering a “privacy risk” harm. That harm is defined as “the potential for personal data, on its own or when linked to other information about an individual, to cause emotional distress, or physical, financial, professional or other harm to an individual” (our emphasis). This definition would enshrine into federal law broad, amorphous, and precautionary concepts of harm that are radically out of step with prevailing law. For instance, federal courts have almost uniformly rejected data-privacy-related class-action lawsuits where the injuries alleged reflect plaintiffs’ fears of financial harm or emotional concerns. One very recent example is a Middle District of Pennsylvania ruling, Storm v. Paytime, Inc. and Holt v. Paytime Harrisburg, Inc., in which the court found that plaintiffs who cannot allege harms that are “concrete in both a qualitative and temporal sense” lack standing to sue. An alleged injury that provides the basis for a federal law enforcement action should certainly be no less concrete. Some activists, however, view “privacy risk” as too difficult for consumers or regulators to prove and have called for an even broader concept of injury. Continue reading
In a recent post, we lampooned the “high trans fat intake consumer” the Food and Drug Administration (FDA) invented to advance its de facto ban of partially hydrogenated oils (PHOs) as being a cross between Augustus Gloop and Homer Simpson. The ramifications of such a PHO ban for many processed food makers and their customers, however, are no laughing matter. Among other things, FDA’s final determination could expose the food industry to an avalanche of lawsuits and potentially billions of dollars in liability costs.
The Current Litigation Environment. Plaintiffs’ lawyers have been working feverishly for the past decade to turn lawsuits against “Big Food” into the next big payday. As chronicled on this blog since its inception in 2011, a small but persistent segment of the Litigation Industry has filed hundreds of class-action lawsuits alleging that everything from a perceived excess of empty space in a bag of chips to the printing of “evaporated cane juice” on a label violates state consumer protection laws.
By Litigation Industry standards, this lawsuit product line has not yet met profit expectations. But the lawsuits have successfully established, especially in California, that private litigants can enforce federal food laws and regulations. Continue reading
How federal regulators use—and abuse—science in the regulatory process has a profound impact on regulated businesses and consumers who purchase their products and services. In addition to the financial impact, every time that an agency forces science and the scientific process to serve its ideological or political agendas, rather than be guided by the neutral data, the public becomes less trusting of government pronouncements based on science. Below are some troubling recent examples of regulatory junk science. The first example demonstrates that protections against junk science do exist in the courtroom. The subsequent three examples reflect the lack of similar protections in the rulemaking and adjudication contexts.
Fourth and Sixth Circuits Slap-down EEOC. For the second time in less than a year, a federal appellate court has rebuked the Equal Employment Opportunity Commission (EEOC) for its use of junk science in accusing an employer of discrimination for conducting criminal background checks in its hiring process. EEOC’s litigation crusade against criminal background checks has faltered since its outset, with federal district court judges in Ohio and Maryland separately dismissing Title VII claims in 2013. Last April, just 20 days after hearing oral argument, the U.S. Court of Appeals for the Sixth Circuit affirmed the Ohio trial judge’s decision in EEOC v. Kaplan. The court found the EEOC’s statistical proof of disparate impact—compiled and presented by expert witness Kevin Murphy, an industrial psychologist—unreliable and “based on a homemade methodology” not generally accepted in the scientific community. A WLF Legal Opinion Letter and a WLF Legal Pulse post, both published last spring, offer more detail on the ruling. Continue reading
Over the past several years, WLF has advocated that trial court judges should deny certification of consumer class actions if the lead plaintiffs cannot offer an administratively feasible method for the court to determine who is a “member” of the class. This “ascertainability” issue has arisen in many food-labeling class actions in the Food Court (a/k/a the U.S. District Court for the Northern District of California) and in other federal districts. With the December, 2014 appeal of Judge Charles Breyer’s denial of certification in Jones v. ConAgra, the battle over ascertainability has finally moved from the Food Court to the U.S. Court of Appeals for the Ninth Circuit.
This won’t be the first time that the ascertainability issue has been before the Ninth Circuit. The court has either ducked the issue in the past or issued unpublished rulings that barely reference it. And because Judge Breyer found numerous problems with Mr. Jones’s proposed class under Federal Rule of Civil Procedure 23, the appeals court could affirm the decision here without addressing ascertainability too. A marked split exists within the federal districts that make up the Ninth Circuit, with opinions ranging from Judge Breyer’s cautious acceptance of ascertainability to other trial judges’ melodramatic rejection of it as a class-action killer. An amicus brief in support of Jones’s Ninth Circuit appeal by Public Citizen and Center for Science in the Public Interest attempts to amplify this “sky is falling” rationale for ignoring ascertainability. Continue reading
Last fall, WLF Legal Pulse highlighted some copyright and patent owners’ use of self-help initiatives to bolster their intellectual property rights. The copyright owners discussed in that post—chiefly movie and entertainment studios—face an especially daunting challenge due to the digital nature and distribution of the content they produce. In addition to individual acts of copyright infringement, entertainment providers must confront sophisticated and elusive websites devoted largely to facilitating content piracy. As we discussed in another fall 2014 blog commentary, these “cyberlockers” enjoy an average profit ratio of over 64% thanks in part to legitimate businesses’ advertisements and the payment processing of services like MasterCard and Visa.
For the past several years, advertisers have worked to address ad-support for online piracy. Those efforts have now crystallized into a formal voluntary program announced last week by the Trustworthy Accountability Group (TAG). TAG, which consists of major advertising-related trade associations, launched the Brand Integrity Program Against Piracy. Under the program, TAG will work with independent third parties, such as Ernst & Young, to certify companies that assist advertisers and ad agencies to avoid ad placement on cyberlockers and other undesirable websites. If these companies meet certain effectiveness criteria, TAG will validate them as “Digital Advertising Assurance Providers” (DAAPs). The Business Integrity Program also allows large ad networks and publishers that have already implemented internal controls to self-verify as DAAPs.
TAG developed the voluntary DAAPs certification program without the involvement or encouragement of government regulators. As market actors whose legitimacy and credibility are crucial to their continued success, advertisers and ad agencies understood that ads for multi-billion-dollar brands could not continue to support unlawful activity. Much of that brand value exists thanks in no small part to intellectual property protection. No doubt entertainment content owners underscored that reality when encouraging those trademark owners and their advertisers to take action against content piracy. All those involved in the Brand Integrity Program Against Piracy have a shared stake in its success, and the voluntary nature of the program allows them to quickly adapt their efforts. Such incentives and flexibility do not exist in a one-size-fits-all government regulatory program.
TAG and the other architects of this certification initiative are to be applauded for their announcement. We will monitor further developments with great interest. We also hope that the voluntary, concerted effort sends a strong message to the payment processors whose services continue to assist copyright infringement. The next important move is theirs.
Also published by Forbes.com at WLF’s contributor site
Every five years, the U.S. Department of Health and Human Services (HHS) and the U.S. Department of Agriculture (USDA) jointly issue the latest iteration of the federal government’s formal guidance on healthy eating, the Nutrition Guidelines. These Guidelines not only inform as to how government feeds its millions of employees (including the military) and those who eat in a government facility (i.e. public schools, prisons), but they also influence food-related laws and regulations.
A federal advisory committee is expected to report its recommended updates for the 2015 Guideline to HHS and USDA this month. If the committee’s proceedings and its December 15, 2014 interim report are any indication, the 2015 “My Plate” will feature supersized, empty-calorie portions of activism and food-nanny nagging. We should expect to be lectured on the need to eat “sustainably,” the imperative for mandated “added sugars” food labeling, and the importance of imposing marketing restrictions on certain foods.
The advisory committee. None of this comes as a surprise, given the makeup of the Dietary Guidelines Advisory Committee (DGAC) and the motivations of the regulators at HHS and USDA who appointed its 15 members. Every single member hails from academia, and as one assessment of the DGAC and its work published by Capital Research Center noted,
There is not a single business owner, family physician, working nutritionist, food services executive, or federal nutrition program director in the mix.
When assessing liability risk, businesses, insurers, and others impacted by America’s free-wheeling civil justice system often ask, “What’s the next asbestos?” Regrettably for defendants still wrapped up in what the Supreme Court once called “the elephantine mass” of asbestos litigation, asbestos is still the next asbestos. In 2014, asbestos defendants continued to struggle against the tide of unfavorable judicial rulings, though one positive development this year did offer a great deal of hope to besieged businesses.
A January 9 ruling by U.S. Bankruptcy Court Judge George Hodges found a “startling pattern of misrepresentation” and withholding of exposure evidence in a ten-case sampling from asbestos actions consolidated in his court as In re Garlock Sealing Technologies, LLC, et al. Judge Hodges ordered full discovery in those cases to determine whether allegedly injured plaintiffs had exaggerated the value of their claims and failed to disclose claims they had made to asbestos bankruptcy trusts. A Fall 2014 WLF Conversations With paper, featuring former Attorney General Dick Thornburgh and former Delaware state court judge Peggy Abelman, addressed the larger concerns with such withholding of bankruptcy claims information. A January 21 Featured Expert Column on the WLF Legal Pulse also discussed In re Garlock in detail. Continue reading