Fiat Chrysler Takes Another Hit for Safety Reporting Failures

 

The National Highway Traffic Safety Administration isn't pulling its punches when it comes to safety reporting failures. Earlier this month, the agency hit Fiat Chrysler with its second multi-million dollar fine. The hope is the fines will make the industry more proactive when it comes to consumer safety.

Supreme Court Fails Consumers, Upholds Arbitration Clauses

Arbitration clauses are how big businesses escape class action lawsuits that hold them accountable to their customers. Despite ongoing efforts to ban mandatory arbitration clauses and class-arbitration waivers, this month the Supreme Court came out strongly in favor of the practice, upholding a coercive mandatory arbitration provision against consumers.

In DIRECTV, Inc v Imburgia, California residents signed service contracts with DirecTV that contained a mandatory arbitration provision and a class arbitration waiver. The policy said that if the “law of your state” makes class arbitration waivers unenforceable, then the whole arbitration agreement is unenforceable too.

California, at the time, was one of those states with laws making class-action waivers illegal. Specifically, in 2005, the California Supreme Court decided Discover Bank v Superior Court, which called such agreements “consumer contract[s] of adhesion” and “unconscionable under California law [that] should not be enforced.”

In 2008, two consumers sued DirecTV because of illegal early termination fees. The case dragged on in court for three years.

But then, in 2011, the Supreme Court of the United States, in AT&T Mobility LLC v Concepcion, ruled that the Federal Arbitration Act – a national law that directs how and when arbitration clauses may be used – invalidated the Discover Bank ruling. DirecTV asked the judge to send its case to mediation, but the judge refused. DirecTV appealed that decision all the way to the Supreme Court.

Instead of supporting consumers against the “take-it-or-leave-it” tactics of a major corporation, the Supreme Court said Concepcion applied even to contracts written before it was decided and the “law of your state” could only include state laws not later invalidated by the courts.

Justice Ruth Bader Ginsberg's dissent sums up the situation:

“These decisions have predictably resulted in the deprivation of consumers’ rights to seek redress for losses, and, turning the coin, they have insulated powerful economic interests from liability for violations of consumer protection laws. . . .
“Today, the court holds that consumers lack not only protection against unambiguous class arbitration bans in adhesion contracts. They lack even the benefit of the doubt when anomalous terms in such contracts reasonably could be construed to protect their rights.”

The Supreme Court's decision gives service providers all the cards when it comes to mandatory arbitration. Together with Concepcion, this case has essentially said that states are not allowed to regulate the arbitration provisions of contracts signed by their citizens.

Companies must not have the power to unilaterally mandate arbitration provisions, and in so doing shield themselves from the corrective power of class action lawsuits. Since the Supreme Court has demonstrated it is unwilling to protect consumers, it will have to fall to Congress to amend the Federal Arbitration Act.

Dani K. Liblang is a consumer protection attorney with The Liblang Law Firm, P.C., in Birmingham, Michigan. She represents consumers in product defect and collections cases. If you are being harassed by debt collectors, contact The Liblang Law Firm, P.C., today for a free consultation.

Inspectors Find Credit Card Skimmers at Gas Stations Across Michigan

Identity theft is a real problem for Michigan residents. Hackers and thieves threaten credit card security online and at the register. But this year, the Michigan Department of Agriculture has found remarkable numbers of credit card skimmers at gas station pumps across the state.

Liblang Law Firm Wins Big Appeal on Attorney Fees

 

Consumer protection lawyers rely on court-awarded attorney fees to let them work hard for their clients. So when a trial judge issued an insulting award, The Liblang Law Firm, P.C., took the case over his head. Now a published Court of Appeals decision makes it clear: consumers need the protection of reasonable attorney fees.

Bipartisan Bill Would End Mandatory Arbitration Agreements, But Only for Service Members

Mandatory arbitration agreements have hit the news. Consumers and lawmakers alike are becoming aware of the abuses happening in the collections industry that have been covered up by the arbitration process. Now federal legislators have proposed a bill that would protect consumers' right to court, but only for service members.

Mandatory arbitration agreements show up in everything from mortgage contracts to credit cards agreements. They require consumers to submit any dispute – from billing to illegal collections processes – to private arbitration, rather than going to court.

Large corporations like cell phone companies and collections agencies use mandatory arbitration agreements to cover over a multitude of sins. Often arbitrators are chosen, and paid, by the corporations. That can make it difficult for the lawyer-arbitrators to be neutral and independent.

Other times, the harm done to an individual, and their potential for recovery, are not large enough to justify the cost of preparing for and attending arbitration with an attorney. When consumers try to use a class-action lawsuit to correct the company's poor business practices, mandatory arbitration provisions can destroy the suit before it even begins.

Now legislators on both sides of the political spectrum are recognizing the problem with mandatory arbitration agreements. Democratic senator Jack Reed from Rhode Island and Republican Lindsey Graham of South Carolina have teamed up to co-sponsor a bill that would allow consumers to opt out of arbitration and challenge repossessions or foreclosures in court.

But only for service members.

The bill would amend the Servicemembers Civil Relief Act to make arbitration agreements signed before a dispute arises invalid and unenforceable. Senator Reed told the New York Times:

“Often service members sign contracts that include arbitration clauses buried in the fine print, and this eliminates their access to the courts, which can limit their ability to assert their rights and reach a fair resolution.”

All of that is true. But it is just as true for civilian citizens as servicemen and women. There is nothing about serving in the nation's military that makes soldiers more or less susceptible to the tactics of the collections industry.

Commentators do not believe Senate Bill 2331 is likely to become law. It was referred to committee on November 19, 2015, but is unlikely to succeed there. If the purpose of this bill was publicity of the issue, rather than passage, there is no reason the bill's sponsors could not have called for protections for all Americans, not just service members. At best, this bill will represent an incremental improvement in a system that will need further reform before it provides adequate consumer protection.

Dani K. Liblang is a consumer protection attorney at The Liblang Law Firm, P.C. She defends consumer against harassment by collections companies. If you or someone you know is facing a collections action, contact The Liblang Law Firm, P.C., for a free consultation.

FCC and FTC Team Up for Internet Consumer Protection

The Internet today is everything from a news source, to a personal soapbox, to a shopping hub. With so much of our lives happening online, Internet consumer protection has become crucial. Now the Federal Communication Commission (FCC) and the Federal Trade Commission (FTC) are teaming up to protect consumers from wrongful practices by Internet service providers (ISP).

Internet accessibility and safety have become an increasingly important part of American life. Last year, when Internet service providers threatened to throttle back connection speeds for low-paying consumers, the call went out for a change in the way the industry is regulated.

In February, 2015, the FCC responded, ruling that broadband ISPs were “common carriers” like telephone companies and utility providers. At the open meeting on the decision FCC Commissioner Jessica Rosenworcel said:

“It [the Internet] is our printing press; it is our town square; it is our individual soap box and our shared platform for opportunity. That is why open Internet policies matter. That is why I support network neutrality.”

Under the legislation, ISPs must be a neutral gateway to the Internet. They cannot speed up or slow down the flow of information through their servers.

The ruling also created an overlap between FCC regulations and the Federal Trade Commission – which regulates unfair trade practices of non-common carrier industries. Until February, the FTC was in charge of Internet consumer protection.

To resolve the overlap, the two agencies created the “FCC-FTC Consumer Protection Memorandum of Understanding” (MOU) laying out how they would work together going forward. The MOU says that agencies will coordinate their actions, consult on investigations, and meet to compare marketplace strategies. They also promise to collaborate on consumer education and industry outreach.

The FCC and FTC have also warned ISPs that they will be sharing consumer protection complaints and engaging in joint enforcement actions when carriers cross the line into unfair trade practices. They are already starting. They have collaborated on an ongoing FTC lawsuit against AT&T for throttling “unlimited” plans, exposing the company to a $100 million FCC forfeiture as well.

By coordinating, the FCC will get access to the FTC's years of information and institutional knowledge regarding Internet enforcement issues. The FTC, in exchange, will be able to proceed with its actions without fear of interfering with ongoing FCC investigations.

This improved efficiency can only benefit the consumers both agencies were created to protect. Coordinated enforcement actions by the FTC and the FCC will have more power to persuade service providers to change their practices and treat their customers more fairly.

Dani K. Liblang is a consumer protection attorney at The Liblang Law Firm, P.C., in Birmingham, Michigan. She represents consumers who are being harassed or mistreated by collections companies. If you believe you have been the victim of unfair trade practices, contact The Liblang Law Firm, P.C., today for a free consultation.

Bankruptcy Judge Rules GM May Face Punitive Damages

A recent decision by a federal bankruptcy judge has cleared the way for consumer protection attorneys to seek punitive damages against GM for deaths and injuries caused by the company's ignition failure. GM claims its bankruptcy should shield it from liability, but this judge's decision proves manufacturers can't use bankruptcy to excuse their illegal actions.

When GM declared bankruptcy in 2009, the company that emerged was called “New GM.” But an opinion from federal bankruptcy Judge Robert Gerber, has shown that the New GM still has to deal with the same old problems.

On Monday, November 9, 2015, Judge Gerber ruled that consumers injured by GM's faulty ignition switches could sue New GM for punitive damages. This was an exception to the rule that a bankruptcy shields a person or company from liabilities created before the bankruptcy was initiated.

GM has faced years of scrutiny and legal challenges based on ignition switches that can slip out of position and shut off the engine. When this happens, the car shuts everything down, including power steering, brakes, and air bags. The problem caused a wave of car crashes, killing 169 people and injuring hundreds more.

Earlier this year, GM faced claims by the National Highway Traffic Safety Administration that the company had known of the problem for over a decade before finally initiating a recall in February 2014. NHTSA and GM settled those claims in September, agreeing to pay $900 million in fines and three years of federal monitoring to avoid criminal sanctions.

The federal agency's settlement did nothing for the over 250 wrongful death and personal injury lawsuits still pending as a result of the faulty ignition switches. While GM was quick to point out it had not assumed liability for “Old GM conduct relating to Old GM vehicles,” the judge's ruling acknowledges the reality that the same people had the same knowledge before and after the bankruptcy and still the company did nothing.

Now lemon lawyers like Dani K. Liblang at The Liblang Law Firm, P.C., can present evidence that New GM employees had knowledge “inherited from their tenure at Old GM or documents inherited from Old GM and may be based on knowledge acquired after” the new company was formed. If consumer protection attorneys can show that New GM employees had access to knowledge of the defects and failed to act, the company may still have to pay substantial punitive damages to those injured by their silence.

GM's 2009 bankruptcy doesn't excuse the company from failing to warn its consumers of a deadly defect in its vehicles' ignition systems. This decision gives consumers access to hold the company accountable for its behavior. If you or someone you know has been injured because of a vehicle defect, contact The Liblang Law Firm, P.C., today for a free consultation.