Watchdog Blog

Defensive Medicine: Rhetoric Meets Reality

by Kiren Gopal

In his July 24th piece in the Washington Post, columnist Charles Krauthammer rails against “jackpot justice” and defensive medicine, which he calls “the greatest waste” in our health care system.  He contends that “doctors order [tests] for no good reason other than to protect themselves from lawsuits.”  But his self-righteous claims are more than suspect, considering that overwhelming evidence shows that so-called “defensive medicine” is not a meaningful cause of rising health care costs.  The Congressional Budget Office (CBO), which Krauthammer himself cites in his column to argue that not enough is being done to reduce Medicare spending, has concluded that the link between liability and defensive medicine is “weak or inconclusive” and “at best ambiguous.”  

A reader’s letter responding to Krauthammer’s exaggerated rhetoric presents an additional factor that contributes to health care costs, which he calls “offensive medicine.”  That is, doctors perform more tests and recommend more procedures, primarily because under the reigning fee-for-service model they benefit financially from each test and procedure ordered rather than on patient outcomes.  This and other incentives that the present system engenders have been estimated to cost $700 billion a year – a number that former CBO director Peter Orszag, has discussed often.   

More Money for Mine Safety

by Kiren Gopal

On Tuesday, Public Citizen sent letters to members of Congress and the President, urging more funding to address a startling backlog of cases at the Federal Mine Safety and Health Review Commission.  The commission is an independent adjudicative agency that decides disputes involving the Mine Safety and Health Administration (MSHA), mine operators, and employees.  Since the 2006 mine tragedies in West Virginia and Kentucky, and Congress’ response in the form of the MINER Act, the mining industry has disputed safety violations and civil penalties at an unprecedented rate.  Most of the public’s focus on improving mine safety has remained on MSHA, the enforcement agency.  The commission has not received the requisite attention - and now is experiencing a build up of 13,000 cases, which is expected to balloon to nearly 20,000 by the end of 2010.  

The commission is in desperate need of more administrative law judges and staff, yet the current chairman, a former attorney for the National Mining Association, has failed to request the funding necessary to carry out the agency’s duties.  By way of comparison, the Occupational Safety and Health Review Commission, which has a similar function, has $2.5 million more in current funding while the mine safety commission has 20 times the number of cases.  In the meantime, as thousands of these cases languish, mine operators are off the hook from paying their penalties for maybe years, until their cases are decided.  By contesting and thus avoiding penalties due to the unprecedented delays, mine operators have less of an incentive to take extra safety measures. 

The relatively small amount of money necessary to get the commission functioning properly would be money well spent.  Common sense regulations and fines keep the industry accountable and ensure the workplace safety of America’s miners.  Congress should increase funding for the commission and President Obama should appoint a new chairman to get the agency back on track.  

Enact the Consumer Financial Protection Agency

Our friends at Consumer Federation of America have put together a video to support the creation of the Consumer Financial Protection Agency. Check it out below.

Testifying on Behalf of More Accountability and Transparency

On May 14 at 10:00 AM, Congress Watch Advocacy Director Angela Canterbury testifies in support of the the Whistleblower Protection Enhancement Act of 2009 before the House Committee on Oversight and Reform. We believe that as our country faces challenges of historic proportions, one reform can save billions of taxpayer dollars and help fulfill the imperative for more transparency and accountability:  authentic whistleblower protections for all federal employees. Learn more about whistleblower protections, watch her testify live online and read her written testimony, then take action.

Poll: Americans Oppose Forced Arbitration, Demand Corporations Be Held Accountable

Wide support exists across party lines for Arbitration Fairness Act; consumers, employees from around U.S. lobby lawmakers today

Washington, DC – Americans widely oppose corporations using mandatory binding arbitration clauses in the fine print of consumer and employment contracts, according to national polling of likely voters conducted by Lake Research Partners.

Forced arbitration clauses are hidden in the fine print of everything from cell phone, home, credit card and retirement account terms of agreement to employment and nursing home contracts. Just by taking a job or buying a product or service, consumers and employees are forced to give up their right to take their case to court if they are harmed by a corporation.

Arb Study Points Out System's Lack of Checks and Balances

Opponents of the Arbitration Fairness Act strained to see a glass half full in a new study on consumer arbitrations administered by the American Arbitration Association, but they didn’t realize that the tonic contained a poison pill.

The study – released Wednesday by the Searle Center, a conservative Northwestern University think tank – found that consumers received an award in 53 percent of the cases they initiated and received about 52 percent of the amount they sought in those cases. Businesses received an award in 84 percent of cases they brought and won 93 percent of what they ask for in those cases. This means that businesses got roughly 78 percent of what they sought compared to 28 percent for consumers.

Time to Blow the Whistle on Washington

Beginning on Sunday, an important assembly will convene to urge Congress to take the next step forward in strengthening accountability and transparency in government. The 2009 National Whistleblower Assembly is a gathering of whistleblowers and advocates organized by the Make It Safe Coalition. Over the course of four days, the assembly will lobby members of Congress, share stories, and educate the public. The event takes place in Washington D.C. from Sunday, March 8th - Wednesday, March 11th. 

As we've said over and over again, whistleblowers ensure real accountability, protect our tax dollars in the stimulus and other government spending, and are indispensable to a healthy, non-corrupt government. It's a disgrace that speaking out about government fraud, misconduct, waste and corruption is still such a risky endeavor, especially in these times, after countless studies have verified that whistleblowers are the most effective weapon against fraud.

If you can, please join us in D.C. and take a stand for government accountability and civil servant rights.  But if you can't make it to Washington, you can still help. You can join those making the rounds to members of Congress from home.

For more information about this event and whistleblower and taxpayer rights, visit us here.

Deputy AG-Nominee is "a big believer in whistleblowers"

This just in from Steven Aftergood's "Secrey News" blog with the Federation of American Scientists:

David W. Ogden, who has been nominated to be the next Deputy Attorney General, last week expressed strong support for government whistleblowers who help to expose corruption or malfeasance.

“I am a big believer in whistleblowers,” he said at his February 5 confirmation hearing before the Senate Judiciary Committee, “and in the need to make sure that people feel comfortable coming forward to make complaints.”

“I think what we need is a process that encourages whistleblowing in this administration and any other administration going forward. The business of making sure that we’re doing the right thing is an ongoing business,” Mr. Ogden said in response to a question from Sen. Sheldon Whitehouse.

He said he would work with the Attorney General “to fashion an appropriate process that encourages whistleblowers to raise issues that need to be addressed.”

Mr. Ogden also indicated a willingness to consider public disclosure of certain legal opinions of the Foreign Intelligence Surveillance Court.

Sen. Ron Wyden noted that “there are a lot of important rulings that go to the meaning of surveillance law, and I think that a lot of those kinds of judgments really could be redacted and declassified so that the country could be brought in in a more informed, a more complete way to these national-security debates.”

“I absolutely will commit to take a fresh look at this issue if I’m confirmed,” Mr. Ogden said.

FIS Court opinions that interpret surveillance law were one of several categories of “secret law” that were identified (pdf) in an April 30, 2008 Senate Judiciary Committee hearing on the subject.

Original post available here.

Post Editorial Misses Mark on Whistleblowers: Protections in Stimulus Bill Help Workers Hold Government Accountable

Today our whistleblower coalition responded to the Washington Post's outrageous editorial from February 2, 2009.

A Joint Statement from a Coalition of Public Interest Groups

Monday’s Washington Post editorial, “Wrong Way to Protect,” did a disservice to its readers and the taxpayers when it opposed provisions in the economic stimulus bill that are designed to empower federal whistleblowers.

The editorial argues that the reform should be pursued through ordinary legislative channels rather than included in the stimulus, stating “This is not the way it’s supposed to work.”  This is exactly how it is supposed to work: Federal whistleblower protection legislation has had the benefit of hearings, and has been vetted in both chambers for several years.  This is not an extraneous measure, as the editorial suggests.  In both chambers, the original stimulus bills included whistleblower protections for state and local employees.  Members of the House had the good sense to recognize that the massive stimulus package creates an urgent need for federal employees, who are the taxpayers’ first line of defense against waste and fraud, to be given the same protections afforded state and local employees.  

Public Citizen Applauds House Vote to Encourage Federal Workers to Watchdog Spending of Taxpayer Dollars

We applaud the House of Representatives for answering the call on Wednesday for more meaningful transparency and accountability in the federal spending bill. House lawmakers passed a critical, bipartisan whistleblower protection amendment offered by Reps. Todd Platts (R-Pa.) and Chris Van Hollen (D-Md.) that will strengthen and expand protections for federal workers and contractors who report waste, fraud and abuse. We strongly urge the Senate to include the same commonsense whistleblower protections in its stimulus spending legislation.

This is a true victory for taxpayers who will be well-served if the final stimulus bill empowers hard-working federal employees and contractors who are uniquely positioned to observe and report if funds are mishandled. Workplace retaliation for reporting wrongdoing is real and ruthless. That’s why we have long fought for these critical protections. 

Deadline tonight: Tell your reps to vote for accountability in government

President Obama has asked Congress for a federal spending bill to get the economy moving again. Billions of tax dollars are already being spent in the bailout and billions more are needed to begin to dig us out of this financial crisis. But before we agree to this massive spending bill, we must know that someone will be watching the store. We must ensure that federal employees can blow the whistle waste, fraud or abuse - without fear of retaliation or reprisals!

We now have a chance to protect whistleblowers and make sure there is real accountability in the economic stimulus package! But we have to act quickly!

Two champions of accountability, Representative Chris Van Hollen (D-MD) and Representative Todd Platts (R-PA), have offered an amendment to the stimulus bill that would restore and strengthen protections for federal workers who blow the whistle. This is the same bill that we have long supported and that passed the House with overwhelming support in 2007.

Congress is voting this evening on whether the economic stimulus should include protections for federal workers who blow the whistle on waste, fraud and abuse.

We need you to call your representative now and ask for support for federal government employees! You can find your member of the House here, or simply call the Capitol switchboard (202) 224-3121and ask for your representative.

Please tell your member of Congress to support federal employee whistleblower rights and vote yes on the Platts/Van Hollen Amendment today!

We’ve been fighting for these whistleblower protections for a long time. Passing the stimulus bill passes with these protections in place would be an outstanding victory for all of us who have fought for government accountability over the years. Please call your member of Congress today!

Let us know your thoughts on how your call went! Email us at [email protected].

Update on Consumer and Civil Justice News

Happy holidays. With so many people on hiatus from last week until January 5, we thought a brief recap of some recent consumer and civil justice news might be useful:

• CBS News legal analyst Andrew Cohen responded to an absurd proposal from the U.S. Chamber of Commerce to President-elect Obama: the way to get the country back on track economically is to exempt companies from legal liability. Cohen analogized this selfish and short-sighted appeal to "child who kills his parents and then begs for mercy because he is an orphan." I like to think of it as a drunk driver who gets pulled over and then suggests to the police that the best way to resolve the situation would be to give him his keys back and look the other way while he drives himself home. Cohen recognizes this shameless argument for what it is: nonsense.
• Following the Fed 's recent enactment of new credit card rules, Sen. Robert Menendez (D-N.J.) called on lenders to comply with the reforms ASAP, rather than by the July 2010, date required by the rules. Other lawmakers have pledged to act quickly for more timely and comprehensive reforms. Last weekend, the New York Times editorialized that "promptly passing a credit card reform package" should be a priority for the next Congress.
• Class action lawsuits have been useful to consumers challenging baseless early termination fees (ETFs) in cellular telephone contracts. A recent story in the Times reported on efforts by Sen. Herb Kohl (D-Wis.) to investigate rate setting for cell phone text messaging plans. Perhaps unsurprisingly, those rates appear to be as baseless as ETFs. In another similarity to ETFs, consumers have begun filing class actions over text messaging rates.
• New America Foundation's blog has been following an old but infuriating story about a shady student lending practice in which lenders, like Ohio-based Key Bank, partner with unlicensed and unaccredited trade schools, disburse student loan money to the schools, and then refuse to discharge students of their debts when the schools go out of business. There is an FTC rule designed to protect students in these situations. One way that Key Bank has been evading the rule and other charges of unfairness over its practices is by including Binding Mandatory Arbitration clauses in the promissory notes. Key Bank insists that these are old cases, and it has ceased student loan operations (for the time being), but Key also received $2.5 billion from U.S. taxpayers (via the U.S. Treasury) as part of the bailout package.

Meanwhile, we must wait until after the New Year for word on a potential economic stimulus bill. Until this week, all signs seemed to indicate that authority for judges to modify mortgages would be included as part of the package. Now that congressional Republicans have indicated a willingness to drag their feet, the question appears to be not only whether the provision will be included in the stimulus, but also when the stimulus will be enacted.  Stay tuned.

Happy new year to all!

Whistleblower Trapped in Arbitration

An opinion issued earlier this month by the 2nd U.S. Circuit Court of Appeals shows how willing the courts can be to uphold binding mandatory arbitration clauses even if the courts find elements of them unfair.

The case involved Linda Guyden, who was hired by Aetna Inc. in January 2004 as the company's internal audit director. Guyden soon concluded that Aetna's internal audit department was ineffective, leaving the company susceptible to violating the Sarbanes-Oxley Act of 2002. After receiving unsatisfactory responses from various members of Aetna's senior management team, Guyden took her concerns to the firm's CEO in August 2004. A week later, the firm's chief financial officer gave Guyden a withering performance review that conflicted with a positive review he had given her only a month earlier. Along the way, Guyden won an intra-company battle to hire an outside auditor. In November, ten days before Guyden was slated to present the outside auditor's report to the firm's audit committee, she was fired.

Bush Taxman Calls for Making Corporate Returns Public

In an op-ed in Saturday’s Washington Post, former IRS Commissioner Mark Everson offered an interesting short-order proposal to respond to the financial crisis. Along the way, he articulated a rebuke to the sanctity of corporations that one might not expect to hear from a former Bush administration official.

To increase businesses' transparency, "a proper starting point is to make corporate tax returns available to the public, not just to the IRS," wrote Everson, who served as commissioner of the IRS from 2003 to 2007, following a six-month stint as a deputy director of the Office of Management and Budget.

Bad Court Ruling Could End Checks on Industry Funded 'Science'

Yesterday, the Washington Post noticed a disturbing trend that we have been following for a long time – the corporatization of scientific research ostensibly conducted by unbiased and trustworthy sources like, in this case, the Food and Drug Administration. Science has been twisted to serve corporate ends for decades – see the tobacco industry's "studies" showing that smoking is not dangerous. Most of the time, these justifications for unhealthy or dangerous products are given precisely the credibility they deserve – none. Perhaps realizing this, the new trend is to funnel money behind the scenes to get disreputable science published by reputable sources.

Voters Still in Line Behind Wall Street

Back in early July, we sent a request with a few of our partners in reform to every candidate running for Congress this fall urging them to sign the Voters First Pledge, a simple statement of support for legislation for a new system of pubic funding for congressional campaigns.  So far, nearly 220 candidates have made the pledge - but there are still many others who have yet to tell us where they stand.

So, we've sent yet another letter to candidates who haven't responded and have asked our members and activists to make sure the candidates in their districts know this is an issue they shouldn't ignore.  It's frankly hard to understand why a candidate wouldn't want to commit to change business as usual in Washington today.  The urgent need for reform is summed up neatly in the letter:

As the nation faces its worst financial crisis since the Great Depression, now is the time for bold reforms to both the financial and political systems. Wall Street and powerful financial interests should not be funding campaigns for Congress if we want a political system that truly works for the American people. Public confidence in Congress is at an all-time low, and voters assume that both incumbents and challengers are under the undue influence of special interests.

Seeking big donations does not end with the campaign season - from their first day in office members of Congress must continue to dial for dollars.  The result?  Policies that favor Wall Street and not Main Street.  Public funding of campaigns would allow our elected officials to get off the fundraising treadmill and truly represent the interests of ordinary citizens.

The Other Bad News for Consumers: Forced Arbitration

Due to the extensive coverage of the recent economic meltdown and the presidential race, it's been easy to miss some other news very relevant to consumers and corporate accountability.  Over at Tortdeform, they have some excellent posts about issues covered by the New York Times. 

First, Kia Franklin relayed the news that a recent Department of Health and Human Services study cited 94% of nursing homes for violations of federal health and safety laws.  This underscores the need for legislation banning forced arbitration, which nursing homes use to immunize themselves from the accountability when they violate the law or hurt their residents through negligent treatment or abuse.  (Follow up on the Times story from Tortdeform here.  Read more about the nursing home arbitration bill here.)

Next, Justinian Lane recaps a study by two law professors about the reluctance of companies to use arbitration when dealing with one another.  The professors cited in the story have been following this issue for some time now, and their results have consistently shown the hypocrisy of corporations that tout arbitration as a fair, efficient, less costly method of dispute resolution between companies and consumers, or employers and employees, but not between one another.

A New Era for Consumer Product Safety

It’s been a little over a month since the president signed the Consumer Product Safety Improvement Act of 2008, which reformed product safety law and bestowed more resources and responsibility upon the oversight federal agency, the Consumer Product Safety Commission. The CPSIA is a welcome improvement to product safety regulation, giving the CPSC the resources it needs to protect the public. As we’ve mentioned before, highlights of the bill are that it requires that children’s products be tested before they are sold and bans lead and toxic phthalates in toys; requires the CPSC to create a publicly accessible consumer complaint database; increases civil penalties that CPSC can assess against violators; and protects whistleblowers who report product safety defects. In short, this bill makes big, important changes in product safety law.

So what has the CPSC been up to since the bill’s passage? About two weeks ago, the agency held a public meeting to discuss its work in implementing the new law and built a web site devoted to CPSIA implementation. The web site contains summaries and interpretations of the new requirements, and a helpful timetable referred to as CPSC “Required Actions” under the Act, which lists its tasks (a majority of which is rulemaking) for the coming months and years. Conspicuously absent from its “Required Actions” list, however, is the consumer complaint database – a crucial part of this product safety overhaul.

Protecting the rights of government whistleblowers

originally posted by Alyssa Wolice at CitizenVox

It’s no secret that the government officials you elect to serve the public’s best interests often abuse their power and cost you your hard-earned dollars. So, when the average government employee witnesses the acts of corruption that continue to plague our political system, shouldn’t they have the freedom to speak up and protect the public’s rights without facing the risk of retaliation?

Protect the Elderly from Forced Arbitration

by David Arkush and Christine Hines

Yesterday the Senate Judiciary Committee followed its counterpart in the House and approved an important arbitration bill to protect residents in nursing homes and assisted living facilities, the Fairness in Nursing Home Arbitration Act, S. 2838. The legislation, which a House committee approved in July, will make it easier to hold these facilities accountable for negligent or reckless acts that harm their residents. It prevents nursing homes from forcing residents to agree to arbitration before a dispute arises, allowing residents to turn to the courts in the event their nursing homes cause them serious injuries or death. Without this protection, nursing homes can force residents to take disputes to private arbitrators chosen by the nursing home itself. Guess who wins cases there?

More Information Means Safety for Consumers

Anyone who has been following the progress of the consumer product safety reform legislation, H.R. 4040, closely knows that a proposed database housing consumer complaints has been one of the major points of contention during the legislative process.  (We have previously discussed the database here.)  While the conference committee negotiates the contours of the safety database, we have this story:

In 2002, engineers from the Consumer Product Safety Commission (CPSC) privately warned nail gun makers that the nail gun industry’s efforts to reduce the rising number of injuries with its tools wouldn’t really work; this, according to recently disclosed federal documents.

For some reason, the CPSC engineers’ views, warnings, and requests for additional study of nail guns safety features, were not addressed or disclosed publicly to US consumers.  Meanwhile, thousands of workers and home consumers continued to buy or rent nail guns at giant hardware stores nationwide during the country’s most recent housing boom.  Because of this, those sent to hospitals—both workers and home consumers—with hand, foot, knee, and head injuries that were caused by air-powered nail guns climbed to 42,000 in 2005, up significantly from 12,982 in 2000, according to federal hospital injury data.

This is a perfect example of the necessity of a public repository of consumer safety complaints.  If the proposed database had existed at the time of these nail-gun injuries, the hospital injury data would have been entered in the database and available to the public.  Consumers could have seen the upward trend in nail gun-related injuries and known to avoid that particular product.  This is not a one-time story.  As one of our recent reports demonstrates, industry and the CPSC are failing drastically to warn consumers promptly about serious product hazards.

With a product safety database available on the Internet, consumers will not have to rely as much on the manufacturers or the CPSC to protect them.  They will be able to help themselves by doing their own research.  A free exchange of information will save government resources and make everyone safer.

Civil Justice Is Not About Special Interests

By Graham Steele & David Arkush

Far too often, the press covers civil justice issues purely as battles between special interests -- business versus "the trial lawyers" -- without much discussion on how the policies at issue would affect the public.  We weren't surprised when the Wall Street Journal presented our opposition to pre-dispute binding mandatory arbitration as kowtowing to the trial lawyers.  The editorial board of the WSJ is unabashedly conservative and pro-business, and a battle between powerful, well-resourced special interests provides a compelling narrative.  We were happy to set them straight.  But this story line persists with too many of the civil justice issues that we work on here at Public Citizen -- and in too many publications from which we expect better.

If you read the CL&P blog over the weekend, you saw an example in a brief excerpt of a recent NY Times Magazine article about the "tort war" between the United States Chamber of Commerce and the American Association for Justice (formerly the Association of Trial Lawyers of America).  The article mentions two important pieces of legislation, the Arbitration Fairness Act and the Sunshine in Litigation Act, but discusses them in the frame of the "tort reform battle" rather than reporting on their value to the American public generally:

At the federal level, trial lawyers are pushing for a law that would make it easier for consumers to sue instead of having to submit to binding arbitration, as many contracts — for credit cards, for example — now require. The trial lawyers are also trying to make it harder for defendants to keep legal proceedings secret.

These proposed laws might benefit trial lawyers, but much more important is that they will benefit the public. That's why we're working to pass them:

New Medicare Rule May Improve Patient Safety

Safety incidents for Medicare patients resulted in a shocking 238,337 potentially preventable deaths and cost Medicare $8.8 billion from 2004 to 2006, according to HealthGrades fifth annual Patient Safety in American Hospitals Study [pdf]. But improvements may be on the way. Starting in October, Medicare will stop reimbursing hospitals for procedures in which inexcusable errors are made.

The HealthGrades Study measured the incidence of 16 patient safety indicators among Medicare patients at virtually all of the nation’s nearly 5,000 nonfederal hospitals. The patient safety indicators used had been developed by the U.S. Department of Health and Human Services’ Agency for Healthcare Research and Quality (AHRQ).

In 1999, the Institute of Medicine estimated that as many as 98,000 people die every year and countless others suffer injuries because of medical errors. At that time, IOM believed that it was a reasonable goal to cut medical error-related deaths and injuries by 50 percent over the next five years. While the HealthGrades study reported some progress in reducing overall death rates among Medicare patients that experienced one or more patient safety incidents (-5 percent), some indicators showed an increase. The incidence of bed sores; post-op respiratory failure; post-op pulmonary embolism or deep vein thrombosis (clot); post-op sepsis (infection); and post-op abdominal wound separation/splitting actually increased when compared to 2004. Unfortunately, as the HealthGrades study demonstrates, progress in reducing the toll of medical errors has been uneven at best.

Stupak’s Effort to Arm the FDA with Subpoena Power Over Company Records

After years of discussion, Rep. Bart Stupak, the Michigan Democrat who runs the investigations panel of the House Commerce Committee, has, again, wisely urged the FDA to support Congress’s addition of subpoena power to FDA’s arsenal of tools needed to make our food and drug supply safe. Some food and drug industry folks immediately criticized the idea, claiming the result would simply be more bureaucratic meddling in their affairs. To date, there has been no official response from the FDA.

Recent episodes of contaminated foods and drugs again raise disturbing questions about whether the Food and Drug Administration has the tools and resources necessary to protect the public. Often the agency, it seems, is the last to learn of hazards threatening us all.

The FDA does no testing of its own, and in making decisions it must rely on the test results submitted by manufacturers. Dr. Sidney Wolfe, director of Public Citizen’s Health Resource Group, previously noted that “the FDA is extraordinarily dependent on the companies to be honest.”

If the FDA is really serious about cracking down on unsafe products, why doesn’t it accept Stupak’s offer to authorize the subpoena power?  Some fear that the FDA no longer has consumer protection as its first priority, but has been co-opted by the industry it is supposed to oversee.

Time for Congress to Pass Strong Consumer Protection Law

By Joe Newman
Cross-posted from CitizenVOX

Right now, leaders in the House and Senate are preparing to make decisions behind the scenes that will have a tremendous impact on consumer protection in this country. If they can put aside partisan differences and ignore the lobbyists from the manufacturing industry, they have a chance to craft a bill that should help to stem the flood of life-threatening, hazardous products that led to a record number of recalls last year. On Thursday, parents and consumer activists rallied near the Capitol to urge Congress to pass the strongest protections possible. It’s especially an important issue for parents. Last year some 25 million hazardous toys and children’s products, many laden with high concentrations of lead, were recalled.

The U.S. Senate and House of Representatives have each passed a version of the Consumer Product Safety Reform Act (S. 2663/H.R. 4040) and senior members from both houses of Congress are meeting in conference to negotiate a compromise bill.

The Senate and House bills take important steps toward better protecting American consumers by giving the CPSC more resources, improving product testing standards and increasing the penalties manufacturers face for violating the law, among other improvements.

You can take action by writing your member of Congress and urging them to pass the strongest bill possible.

Where Customers are Never Right

Over at Creditcards.com -- a website that helps people pick (you guessed it) credit cards -- there is an article warning consumers about binding mandatory arbitration.  They highlight the dangers of forced arbitration and its differences from the civil justice system. 

One of the most alarming is that unlike court judges, arbitrators do not have to obey the rule of law.  They can ignore key evidence and flout the law because their decisions are usually secret (unless both parties agree to make them public) and are rarely appealable to a real court.  It’s no surprise then that Public Citizen’s report, The Arbitration Trap, uncovered that consumers lose 94 percent of the time in arbitrations in California.

Want to avoid forced arbitration?  Your only choices are to get an AARP card (if you happen to be a senior citizen) or join one of the credit unions that doesn't require it. 

If you get trapped in arbitration, read their tips to help keep things fair.

Nursing Home Arbitration

The Wall Street Journal recently published ($) an excellent front-page article describing one of the more egregious incarnations of binding mandatory arbitration – nursing home admission agreements. The money quote:

Nursing homes' average costs to settle cases have begun dropping, according to an industry study, even as claims of poor treatment are on the rise. The industry notes arbitration is slicing the number of patients winning big punitive judgments, the added penalties for severe negligence that can pump up the size of jury awards. Meanwhile consumer advocates, plaintiffs’ lawyers and even some arbitrators are decrying the practice.

The article goes on to describe the case of one Mary Hight, whose nursing home wouldn’t call an ambulance despite her being dehydrated and ill for days. Her daughter, Janice Cowart, resorted to pushing her uphill to a nearby hospital, where she died the next day. Even though the “arbitrator found the home was negligent both in allowing Ms. Hight to become dehydrated and failing to get her to an emergency room,” he only awarded $90,000. After legal fees from the arbitration, “We didn’t get one cent,” said John Estep, Janice Cowart’s brother.

Manufacturers Lose Bid to Evade New Lobbying Law

The National Association of Manufacturers (NAM) lost round one of their attempt to overturn the part of last year's landmark lobbying reform law which requires it to reveal the businesses funding the goliath lobbying organization.  Public Citizen, the Campaign Legal Center, and Democracy 21 filed an amicus brief [pdf] explaining how the disclosure requirement is constitutional, and should be kept intact.  U.S. District Judge Kollar-Kotelly agreed with us.

Judge Kollar-Kotelly dismissed NAM’s constitutional challenge, stating in her opinion:

The Court has conducted a searching review of the NAM’s opening brief, the Opposition filed by Defendant Taylor and the Opposition filed by the Legislative Defendants, the two amici briefs filed in this case by Citizens for Reform and Ethics in Washington (''CREW'') and Campaign Legal Center, Democracy 21, and Public Citizen (jointly the ''CLC Amici''), and the NAM’s Reply brief, as well as the relevant statutes and case law.

Will the Pro-Civil Justice Candidates Please Stand Up?

Public Citizen is proud to join the Drum Major Institute and its coalition of organizations to support the “Pro Civil Justice Presidential Platform.”  Our goal is to get the attention of the presidential candidates and ask them to support our civil justice platform:

•Provide counsel for people who cannot afford it any important case;
•Ban forced arbitration in consumer contracts;
•Stop federal preemption of state consumer protection laws;
•Reduce secret settlements that keep health and safety information from the public;
•Ensure injured patients’ right to justice; and
•Effectively regulate the insurance industry to curb unfair practices.

These issues have been conspicuously absent from the candidates’ stump speeches.  We are not sure why, but we are going to find out.

Unsealing Safety

It would have been easy to miss a recent New York Times article about a class-action lawsuit brought by disgruntled consumers against Microsoft for misleadingly marketing Microsoft Vista as being ready for use on certain computers for which it was clearly not ready.  This case became more interesting when discovery led Microsoft to disclose a series e-mails to the company from some customers, who also happened to be Microsoft executives, documenting their own troubles with Vista. (Microsoft’s own Vice President in charge of Windows product management complained that incompatibilities with Vista turned his laptop into “a $2,100 e-mail machine[.]”)

Civil litigation serves the public good in a variety of ways: it helps to create accountability to the public in business, and deters potential bad behavior.  This case is also a prime example of how lawsuits increase transparency.  In the absence of formal legislative hearings, litigation gives the public a unique opportunity to peek into the inner workings of corporations that make obfuscation a routine business practice with the help of restrictive secrecy policies and high-powered PR masters.  Without a class action suit against Microsoft, the public likely never would have learned of the 200 or so e-mail messages and internal reports documenting the Vista marketing strategy and cataloging the various difficulties that Microsoft's own executives had with the program.

What is the Hold Up with Product Safety?

The Consumer Product Safety Commission (CPSC) has been "working on" several rules to ensure product safety since at least 2004 (two since 1994!). These rules cover hazards that the agency itself blames for more than 900 deaths and more than $460 million in property damage every year.

These unfinished rules would help protect the public from:

• Bed rails, crib slats and baby bath seats that can suffocate, strangle or drown infants;
• Excessively flammable upholstery, bed linens and clothes that are among the leading causes of fire-related death in U.S. homes; and
• Cigarette lighters that, by the CPSC’s own analysis, fail to meet an industry-created voluntary standard at least 60 percent of the time.

Current law requires the agency to produce a final rule within 14 months of adopting an Advance Notice of Proposed Rulemaking (ANPR), a standard the agency has met only once since President Bush took office in 2001. Since 1990, the CPSC has completed 38 rules; just four of those were during the Bush administration.

Public Citizen’s new report, “Held Back: Incomplete Consumer Product Safety Commission Rules, Class of 2007,” details each of the rules that are in development and the reasons for the delays.

The CPSC is hamstrung by rulemaking procedures that are far more burdensome than those of most federal agencies. The rulemaking procedure established by Congress during the Reagan era requires the agency to provide double the usual amount of notice and opportunity for public comment, to explain repeatedly why it is not deferring to industry’s voluntary proposals, and to prove that any rule imposes as little burden as possible on industry.

Moreover, the agency’s procedures call for it to halt any rulemaking if industry creates a voluntary standard that appears likely to address the problem – even though such voluntary standards are unenforceable. Not surprisingly, industry often derails the CPSC’s efforts by strategically adopting voluntary rules.

These problems point to the need for Congress to reform the CPSC to fulfill its mission of protecting the public from hazardous products.  The Senate is considering a bill now that would give the CPSC some much-needed muscle.  You can write your senators here now.

Learn more and read the report at www.ToyingWithSafety.org.

Industry and Republican Allies Gear up to Fight Moderate Consumer Health and Safety Bill

by David Arkush and Graham Steele

Republicans and Democrats in the Senate recently spent weeks negotiating a moderate, bipartisan consumer product safety bill, the “CPSC [Consumer Product Safety Commission] Reform Act of 2007” (S. 2663). After these negotiations concluded, and with the bill cued go to the Senate floor soon, industry is making a last-ditch effort to derail or further weaken it. This week, Senator Jim DeMint (R-SC) and a few other Senate Republicans, apparently playing the role of mouthpiece for industry, circulated a strategy packet for defeating the CPSC bill. The packet includes a list of “Top Ten Reasons to Oppose the CPSC ‘Reform’ Act,” which is riddled with misstatements about the bill. Apparently, industry knows it can’t win an honest debate against an important consumer safety law, so it’s going dirty.

Time to Put Safety First

Defective and dangerous products - from lead-painted toys to vacuum cleaners that catch fire - are being allowed onto our store shelves and into our homes.  The Consumer Product Safety Commission (CPSC) has failed to do its job and protect American consumers. 

Public Citizen just released a study showing that manufacturers often wait nearly three years before telling the CPSC about defective products that can kill people - and the agency typically takes another seven months to warn the public.  Some of these products include infant swings implicated in six deaths.

We need a strong, effective agency that can warn the public quickly about dangerous and defective products - and enforce the law against violators.  Under current law, the CPSC must ask permission from manufacturers to get vital safety information to the public.  What's more, the agency can't fine companies enough to make sure that they comply with the law.

The status quo is unacceptable - the CPSC should protect American consumers, not manufacturers!

The Senate commerce committee recently reported out the Consumer Product Safety Reform Act of 2007 (S. 2045), a bill that would give the CPSC much-needed muscle.  Now it goes to the full Senate for approval.  But, as happens all too often in Washington, D.C., bills that are carefully honed in committee become unrecognizable after amendments, concessions and the inevitable congressional horse trading take their toll on a proposal’s original intent.

Please urge your senators to ensure that the Senate bill passes intact - without weakening changes - for everyone's health and safety. 

New Study Shows Deadly Delays in Notification of Dangerous, Defective Products

Today we released a new report showing that despite a law requiring manufacturers to provide the Consumer Product Safety Commission (CPSC) with "immediate" notification of dangerous products, there are long delays before the public learns of dangerous, defective products.

The study, Hazardous Waits: CPSC Lets Crucial Time Pass Before Warning Public About Dangerous Products, covers 46 cases since 2002 in which the CPSC fined manufacturers for failing to adhere to the law requiring prompt reporting.  In addition, companies fined for tardy reporting took an average of 993 days - 2.7 years - between learning of a safety defect in their products and notifying the CPSC.

Perhaps as shocking, the CPSC then took an average of 209 additional days before disclosing the information to the public - even though each case concerned a product defect so dangerous that the item was recalled.  Under current law, the CPSC cannot disclose information about dangerous products without court approval or manufacturer agreement.

Among Public Citizen's findings:

• Graco waited 11 years to report its faulty infant swing, which was linked to reports of 181 falls that resulted in six deaths and nine serious injuries, including bone fractures and concussions. Graco made the report only after CPSC staff contacted the company.
• Hoover waited five years to report a vacuum cleaner with a faulty switch that had caused at least 96 fires. The CPSC then took another 279 days before negotiating a recall and informing the public.
• By February 2000, Polaris Industries had received 1,147 reports of faulty oil lines on its ATV, including 42 instances where the hot oil started a fire and 18 cases in which the oil seriously burned a rider.  But the company didn't report the defect to the CPSC for another year.

It's time to change the law to give the CPSC the authority to truly protect consumers.  Read the study and more about the problems with the CPSC.

Halliburton Victim Twice Over

Today, Jamie Leigh Jones will appear before the House Judiciary Committee and tell how she was gang raped by her co-workers in Iraq while working for a Halliburton subsidiary called KBR. Afterwards, her assaulters confined her to a shipping container and warned that if she left Iraq for medical treatment, she’d be fired. That’s where she was found by agents sent by the U.S. embassy to rescue her — after her father called their congressman, Representative Ted Poe (R-Texas).

Now, Jamie Leigh Jones has been victimized twice over. Because KBR/Halliburton requires employees to sign contracts containing a binding mandatory arbitration (BMA) in the fine print, Jones is being denied her constitutional right to bring her perpetrators before a jury and be heard.

But Jamie Leigh Jones will be heard by Congress today — and then, lawmakers should waste no time in re-opening the doors of justice for Jones and the rest of us. It’s time to ban binding mandatory arbitration in employment and consumer contracts once and for all. There may be no other device being used today by Halliburton and other corporate giants that does more to systematically deny rights to workers and consumers.

Congress is beginning to focus.

A Holiday Wish: Safer Toys

The Consumer Product Safety Commission (CPSC) is supposed to monitor and protect us from dangerous toys and thousands of other products.  Instead, it has been notoriously cozy with the manufacturing industry.  The result: deadly toys and products on our shelves and in our homes.

On Thursday, December 12, the House Committee on Energy and Commerce failed to adequately strengthen the “Consumer Product Safety Modernization Act” (H.R 4040).

The House bill does not do nearly enough to strengthen the agency, which presently doesn't have the same power as other regulatory agencies.  Many improvements in authority and standards are needed.  Congress at the very least should require CPSC to give consumers an “early warning” about potentially dangerous products, mandate broader pre-market testing requirements of toys, provide for more timely product recalls, and allow CPSC to stop potentially hazardous imports at ports of entry.

Representatives Edward Markey (D-MA), Jan Schakowsky (D-IL) and Anna Eshoo (D-CA) should be commended for their efforts in trying to improve the bill.  But the committee has rejected their sensible amendments - including one by Eshoo to reduce the allowable level of lead in children's products.  It seems the Democratic leadership on the committee has cut a deal with the Republicans to pass a watered-down, industry-friendly bill. 

Are most of the committee members really more interested in protecting industry profits and their campaign contributions than consumers?

It’s not too late for the committee to put safety first, as they will resume consideration of the bill again Tuesday, Dec. 18.

The Consumer Product Safety Commission has been giving many gifts to industry. Now it’s time for Congress to go back to the workshop and put something better under the tree for consumers.

A Lemon Court

Car dealers aren't doing much for their image these days - so, buyers beware.  Though it's not surprising, Mother Jones reports that car dealers are increasingly turning to a sneaky little device to relieve themselves of accountability when a deal goes bad: binding mandatory arbitration. If you were to try to sue them for say, selling you a lemon, you might find yourself tapped in arbitration.  Binding mandatory arbitration is a losing proposition for consumers, as we found in our recent report on how credit card companies use the predatory practice.

Ironically, these same car dealers fought tooth and nail just a few years ago to ban similar arbitration clauses in their contracts with car manufacturers:

The National Automobile Dealers Association wrote members of Congress in 2000 that if they weren't outlawed for the dealerships, mandatory binding arbitration clauses would allow "multinational motor vehicle manufacturers…to be able to unilaterally deny small business automobile and truck dealers rights under state laws that are designed to bring equity to the relationship between manufacturers and dealers." Congress agreed and passed legislation protecting the dealers.

The good news is that Congress is considering a ban on binding mandatory arbitration in consumer and employment disputes.  Please take a minute now to let your members of Congress know that you want to keep your right to take shady businesses to a public court with a judge or jury, instead of being trapped in a rigged, for-profit system where bad business practices flourish.

RECALL Nancy Nord

While parents were in panic over the lead paint on their children's toys (like "Robot 2000"), what was the head of the government agency in charge of protecting us doing?  Traveling - on the dime of the very industries she is supposed to be regulating.

Nancy Nord, the interim Chairwoman of the Consumer Product Safety Commission (CPSC), has not shied away from that fact that she accepts lavish trips from the industries she regulates and even claims that it is perfectly ethical. 

The CPSC is charged with monitoring thousands of products that we use everyday, including toys, but has been systematically gutted by lack of funding and industry-friendly political appointees.  A proposed bill, the CPSC Reform Act of 2007, would help fix that.  It would more than double the agency's funding, give it new powers to punish those who sell dangerous products, and offer protection to government whistleblowers who courageously report wrongdoing within the agency.

Guess who isn't a fan?

Nord. She is also opposed to a bill that would make her agency more effective and better protect consumers from dangerous products. Could her position having anything to do with a recent free trip to New Orleans?  Or maybe she is just more interested in protecting industry profits than consumers.

You can tell your senators to "RECALL" Nancy Nord and to PASS the CPSC Reform Action of 2007 with additional ethics reforms to prevent staff from accepting industry-sponsored travel.

Comcast Getting Push Back

Last month, when we warned that consumer rights were being threatened by a little pamphlet quietly slipped into cable bills by Comcast, there was an outcry from Comcast customers. Now elected officials in Maryland are taking notice.

Today, the Washington Post reports that the Montgomery County Executive and at least one member of the state legislature are taking extraordinary steps to alert residents about the anti-consumer practice of binding mandatory arbitration:

"Comcast's unilateral action to change the subscriber agreement, with an artificial 30-day deadline, is simply anti-consumer," council member Duchy Trachtenberg (D-At Large), who chairs a management and fiscal policy committee, said in the release.

Jane E. Lawton (D), a state delegate who also serves as county cable administrator, called the policy change "one-sided."

County Executive Isiah Leggett said: "Vendors should not change the terms of service without first receiving the consent of the consumer, and the fact that Comcast has not done this is disturbing."

Comcast isn’t telling where else they are forcing consumers with disputes into binding arbitration without any recourse in the civil justice system.  We have heard reports of the notice being found in cable bills in Florida, D.C., Virginia, Delaware, and Massachusetts. However, Comcast operates in 39 states and the District of Columbia, so chances are other states are affected.      

What can you do? We have opt-out instructions and other ideas on our former blog post.  But you also might contact your county and state representatives and complain loudly about Comcast’s bad business practices.

The Power of People Over Profit

After our activists helped to defeat Michael Baroody as the once-dangerous nominee for the Consumer Product Safety Commission (CPSC), we put out another call asking for letters-to-the-editor on the urgent need to have the agency represent consumers, not manufacturers.  One of our more moving and inspiring responses came from Lisa Lipin, a mother and consumer advocate from Skokie, Illinois.

Lisa has since been published in the Chicago Sun Times (“Bush should put people before profit”):

I am a Chicago mother who became a consumer advocate in June 2003 after my son was nearly strangled by a dangerous toy that already had been recalled in countries around the world.

I have been urging the Consumer Product Safety Commission to ban the Yo-Yo Water Ball for years. I successfully lobbied Illinois lawmakers to ban this toy effective Jan. 1, 2006, with Senate Bill 1960. I gained the support of U.S. Rep. Jan Schakowsky and Senators Richard Durbin and Barack Obama -- all of whom sent letters to the CPSC urging that the agency ban the toy. Unfortunately, the CPSC refuses to take action and sits idle on the issue.

I was so relieved to hear that Michael Baroody, executive vice president of the National Association of Manufacturers, had withdrawn his nomination to head the Consumer Product Safety Commission under immense public pressure. Baroody was clearly the wrong person for this position, given his background as an industry shill who spent the last 13 years of his career trying to disable the CPSC.

However, we must not forget that Baroody represents a regular practice by the Bush administration of promoting unqualified cronies and anti-government hacks to public office.

It is imperative that President Bush nominate a real advocate for consumers, rather than a spokesperson for big-business interests.

It is high time that the administration put people before profit!

The Chicago Parent also picked up a piece by Lisa, in which she challenges: "Who does the Consumer Product Safety Commission protect?" 

We congratulate Lisa on reaching thousands of readers!  We also thank her for being a relentless advocate for the safety of our children and all consumers.

Protect Your Rights – Opt Out of the "Comcastic" Fine Print

This month, Comcast consumers in Maryland had a little pamphlet called "Arbitration Notice" quietly slipped into their cable bill.

All the legalese can be boiled down to one sentence: "You have 30 days to opt-out of being automatically enrolled in our arbitration clause, thereby forfeiting your right to settle disputes with Comcast in a court of law in a trial by judge or jury."

This unfair and stealthy move by Comcast strips consumers of their rights. Access to justice in the courts is a longstanding cornerstone of corporate accountability.  Arbitration, on the other hand, is a private system stacked in favor of corporations – and an arbitrator’s decision, even if it’s wrong or absurd, cannot be appealed on the merits. 

Comcast is not just bullying consumers in Maryland, whose deadline to opt-out is July 15, 2007.  They are forcing consumers elsewhere into giving up their rights.  The mandatory binding arbitration is now a fixture in the Comcast “Terms of Use”.

Here’s how to stand up to Comcast and its corporate bullying:

• Opt Out: Go to Comcast's online opt-out form and preserve your rights (Don't forget to check the opt-out box!).  This will NOT affect your service.
• Make Noise: Call up Comcast – 1-800-COMCAST (1-800-266-2278) – and complain that they are automatically enrolling customers into their arbitration clause.  Demand to be allowed to opt-out of the binding mandatory arbitration clause!
• Tell a friend: email this post to friends and family.

You also can support the newly introduced legislation to ban the most egregious uses of binding mandatory arbitration clauses.  Be sure to tell us about your experiences with Comcast in the comments section below.

A Good Day for Consumer Justice

Many Americans are unknowingly stripped of their rights when they sign up for health insurance, cable television or credit cards.  Buried in the fine print of these contracts are clauses that force harmed consumers into a private system that is stacked in favor of giant corporations - sometimes with devastating consequences (see the comments).  Binding mandatory arbitration clauses are proliferating in contracts everywhere.

But now we can tip the scales back in favor of consumers.  Yesterday, Senator Russ Feingold (D-Wisc.) and Representative Hank Johnson (D-Ga.) introduced a groundbreaking legislation to restore the rights of millions of consumers, the Arbitration Fairness Act.  This measure bans the use of binding mandatory arbitration in employment, consumer, franchise or civil rights disputes.

Public Citizen's President Joan Claybrook had this to say at today's press conference:

Let me be blunt. Privatizing justice benefits big corporate interests like national banks and insurance companies but does not help ordinary people. Corporations have figured out that simply by inserting an arbitration clause in contracts for everyday consumer goods and services or employment, they can usually evade accountability for any harm they cause or laws they break -- laws meant to protect consumers and employees from the misuse and abuse of corporate power in the marketplace.

How? First, the contracts are take-it-or-leave-it, so individuals have no choice but to accept the arbitration clause if they want the product, service or job, even if they are required by law to buy the service, as is the case with auto insurance, or required by life's uncertainties to purchase a much-needed service like health insurance.

The Beginning of the End of the SUV?

Decades of neglecting the rollover threat posed by Ford Explorers may end up having billion-dollar consequences for the automaker, reports the Sacramento Bee. On June 4, trial will begin in a Sacramento California Superior Court in a class-action suit claiming the automaker deceived customers about the safety of its Explorer models, and the damages may be large enough to bankrupt the automaker.

The claim is based on California’s unfair competition and false advertising laws, seeking damages and disgorgement of profits against Ford for marketing the sport-utility vehicle as a replacement for the quintessential family vehicle: the station wagon. Plaintiffs say Ford marketed the Explorer as safe and reliable despite Ford’s knowledge of the vehicle’s inherent rollover risk.

The value of Explorers owned inCalifornia depreciated $1,000 to $1,300 below normal levels after vehicle instability became widely publicized during the Ford/Firestone tire failures. Ford continues the blame faulty tire design for causing its SUVs to rollover, but if the jury is unpersuaded by this argument, Ford could be forced to pay $500 million in damages and an additional disgorgement of Ford’s $2.135 billion profits from California Explorer sales.

This marks the first such case to reach trial, although a similar suit is pending in Illinois.  The class of plaintiffs includes California residents who bought, owned or leased a 1991-2001 model-year Ford Explorer between 1990 and Aug. 9, 2000. Explorer drivers must still own their vehicle or must have sold it or ended their lease after Aug. 9, 2000. All qualifying residents are members of the lawsuit unless they opt out through the court’s Web site.

More on Fox for Henhouse

Yesterday Public Citizen President Joan Claybrook announced our opposition to the nomination of Micheal Baroody as the head of the Consumer Product Safety Commission (CPSC).  We also released a short summary of some of the reasons he's so wrong for the job.

Baroody’s nomination reflects an arrogant Administration attempt to further gut the CPSC by filling positions designed for public-minded honest brokers with the Administration’s corporate cronies. His nomination should be rejected by the Senate.

You might have read our first shot across the bow on this blog a few days ago . . . so stay tuned . . . and thanks for taking action.