Chapter 44 Consumer and Environmental Law

§ 1: Consumer Law Areas of Consumer Law Regulated by Statutes: Deceptive Advertising. Labeling and Packaging. Sales. Credit Protections. Consumer Health and Safety. State Consumer Protection.

Deceptive Advertising Puffing. Vague generalities and obvious exaggerations are permissible and not considered deceptive. Bait and Switch. The advertising of a product at an attractively low price to lure customers in to buy more expensive items. Telemarketing and Electronic Advertising. The Telephone Consumer Protection Act (TCPA) prohibits automated solicitation using automatic telephone dialing system or a prerecorded voice.

FTC Actions Against Deceptive Advertising The Federal Trade Commission, charged with enforcing federal laws against deceptive advertising, can, in appropriate circumstances:Federal Trade Commission Issue cease and desist orders. With respect to a particular product or advertisement. With regard to multiple product orders. Impose counter-advertising.

Labeling and Packaging Labeling must be accurate, and must use words that are easily understood by the ordinary consumer. Product labeling and packaging are regulated by: Wool Products Labeling Act of Fur Products Labeling Act of Flammable Fabrics Act of Fair Packaging and Labeling Act of Smokeless Tobacco Health Education Act of Nutrition Labeling and Education Act of of 1990.

Sales Forms of Sales : Door-to-Door Sales. Mail Order Sales. Telephone and Mail-Order Sales. Unsolicited Receipt of Merchandise.

Door-to-Door Sales Most states requires that, for door-to- door sales, consumers have a post-sale “cooling-off” period during which they can cancel their purchase without obligation. Consumers are given the most favorable benefits of the FTC rule and their own state statutes.

Telephone and Mail-Order Sales Telephone and mail order sellers can be subject to federal mail and wire fraud statutes. FTC Rules require mail and telephone merchants to ship orders within the time promised in their catalogues and advertisements, to notify consumers when orders cannot be shipped on time, and to issue timely refunds when orders cannot be shipped. The Postal Reorganization Act of 1970 provides that unsolicited merchandise sent by U.S. mail may be retained, used, discarded, or disposed of in any manner deemed appropriate, without the recipient’s incurring any obligation to the sender.

Credit Protections Consumer Credit is protected by: Truth in Lending Act. Fair Credit Reporting Act. Fair Debt Collection Practices Act. Wage Garnishment.

Truth in Lending Act Requires all consumer lenders to compute the cost of a loan the same way and to advertise it as an Annual Percentage Rate (APR) Through the Equal Credit Opportunity Act, requires that credit be extended without regard to race, sex, color, national origin, age, or marital status Limits consumer liability for credit card debt in cases of stolen cards Through the consumer Leasing Act of 1988, requires that leasors of consumer items valued at less than $25,000 make certain disclosures

Fair Credit Reporting Act Limits the activities of credit reporting agencies. Consumers have the right to access information contained about them in a credit reporting agency’s files and to require credit reporting agencies to delete unverifiable information in a consumer’s credit record.

Fair Debt Collection Practices Act Prohibits Collection Agencies from the following: Type, times, and places that debt collectors can contact debtors. Contacting third parties about payments. Using harassment or intimidation or employing false misleading information. Contact debtor after notice of payment refusal. Requires that collectors provide validation notice to the debtor, at the time of first contact.

Garnishment of Wages Legal procedure by which a creditor may collect on a debt by directly attaching, or seizing, a portion of the debtor’s assets (such as wages that are in the possession of a third party. Debtor is entitled to notice and an opportunity to be heard in a process of garnishment. Wages cannot be garnished beyond 25% of the debtor’s after-tax earnings up to a maximum amount designed to leave the debtor a specified minimum income.

Consumer Health and Safety Federal Food, Drug, and Cosmetic Act. This statute protects consumers against adulterated and misbranded foods and drugs. Consumer Product Safety Act. This act created the Consumer Product Safety Commission which has broad regulatory authority over the safety of consumer products.

§ 2: Environmental Law The principal sources of environmental law are: Common Law Actions. State and Local Regulation. Federal Regulation.

Common Law Actions Nuisance. Person liable if they use their property in a manner that unreasonably interferes with others’ rights to use or enjoy their own property. Negligence and Strict Liability. Business or person alleged failure to use reasonable care toward a party whose injury was foreseeable and, or course, caused by the lack of reasonable care.

State and Local Regulation States regulate the degree to which the environment may be polluted. City, county, and other local governments control some aspects of the environment. Local zoning laws. Methods of waste and garbage removal. Location and conditions of parks, streets and other public areas.

Federal Regulation Federal environmental policy is achieved through federal agencies: Example: Environmental Protection Agency (EPA).Environmental Protection Agency Regulatory agencies must take environmental factors into consideration when making significant decisions.

Federal Regulation National Environmental Policy Act (NEPA). Does not directly deal with pollution control. Require preparation of an environmental impact statement (EIS) when major federal action in the environment is to be undertaken. Media Specific Pollution Control Legislation.

Environmental Impact Statement An EIS must analyze: The impact of the proposed action on the environment. Any adverse effects of the action and alternatives to the action. Any irreversible effects the action might generate.

Air Pollution Clean Air Act. This act provides the basis for issuing regulations to control pollution coming primarily from mobile sources and stationary sources. It prescribes the use of pollution control equipment that represents the maximum achievable control technology.

Water Pollution Clean Water Act goals are: Safe swimming. Protection of fish and wildlife. Elimination of the discharge of pollutants into waterways. Pollution control is largely achieved through the use of the best available control technology.

Noise Pollution Noise Control Act. Establishes noise emissions standards (maximum noise levels below which no harmful effects occur from interference with speech or other activity). Prohibits distributing products manufactured in violation of the noise emission standards.

Toxic Chemicals Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA). Regulates the use of pest control chemicals in the process of food growth to food packaging, to minimize their presence in foods consumed. Toxic Substances Control Act. Requires anyone planning to use chemicals first determine their effect on human health and the environment. Require special labeling, limit the use of substance, set production quotas, or prohibit the use of a substance altogether.

Hazardous Wastes Resource Conservation and Recovery Act. Authorizes the EPA to issue regulations for the monitoring, transporting, storage, treatment, and disposal of hazardous substances. CERCLA. Designed to ensure the clean-up of hazardous waste sites and to assign liability for the costs of the cleanup operations. Liability for cleanup costs can be assigned to any potentially responsible party (PRP).

Case 44.1: FTC v. Growth Plus (Deceptive Telemarketing) FACTS: Canadian companies marketed Canadian lottery packages to consumers in the United States. What they did not tell the consumers is that the sales were illegal. They also misrepresented the buyers’ chances of winning and used high- pressure sales tactics. The FTC sued Growth Plus alleging deceptive advertising and asking for a preliminary injunction

HELD: MOTION GRANTED. FTC made a strong case against the defendants, whose misrepresentations misled consumers. “In this case, the balance of equities weighs heavily in favor of the issuance of preliminary injunctive relief. There is a strong public interest in an immediate halt to illegal sale of lottery tickets accomplished through the use of misleading devices. Case 44.1: FTC v. Growth Plus (Deceptive Telemarketing)

Case 44.2: Snow v. Jesse Riddle P.C. (Fair Debt Collection) FACTS: Snow paid for merchandise with his personal check but the check was dishonored. Circle-K forward the check to its attorney Riddle for collection. Riddle’s letter to Snow stated “the check amount, along with a service fee of $15, must be paid within seven (7) days of this notice. If it is not paid, * * * [a] suit [will] be filed.” Snow paid the check and sued Riddle for violations of FDCPA because it did not contain a “validation notice.” Riddle filed a motion to dismiss.

HELD: FOR RIDDLE. MOTION GRANTED. The purpose of the FDCPA was “to eliminate abusive debt collection practices by debt collectors.” A dishonored check constituted a “debt” within the meaning of the FDCPA. “Under the ‘plain meaning’ test, it would seem to us that a ‘debt’ is created where one obtains goods and gives a dishonored check in return.” Case 44.2: Snow v. Jesse Riddle P.C. (Fair Debt Collection)

Case 44.3: BFI v. Ter Maat (SuperFund) FACTS: BFI’s predecessor had leased a landfill site at which it had illegally dumped a large quantity of particularly toxic wastes. The site was later leased and operated by M.I.G. & AAA, both owned by TerMaat. BFI sued TerMaat to recover the costs of cleanup. Court allocated 22 percent to BFI and 33 percent to M.I.G. and AAA. BFI appealed arguing that the allocation should be based on the volume of wastes for which each party was responsible.

HELD: AFFIRMED. APPORTIONED COSTS WERE FAIR. The court remanded the case for other reasons. “Browning ‑ Ferris’s pollution was serious enough... to require that the site be cleaned up, but the other pollution at the site was also enough. [N]o principle of law, logic, or common sense required the court to allocate [the] total costs among the polluters on the basis of the volume of wastes alone. Case 44.3: BFI v. Ter Maat (SuperFund)