Chapter 33 Consumer and Environmental Law

2  When is advertising deceptive?  How does the federal Food, Drug and Cosmetic Act protect consumers?  Under what common law theories may polluters be held liable?  What is an environmental impact statement? What is the EPA?  What major statutes regulate air and water pollution? What is Superfund?  When is advertising deceptive?  How does the federal Food, Drug and Cosmetic Act protect consumers?  Under what common law theories may polluters be held liable?  What is an environmental impact statement? What is the EPA?  What major statutes regulate air and water pollution? What is Superfund? Learning Objectives

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

4  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.  Online Deceptive Advertising Same rules apply To satisfy the “clear and conspicuous” requirement, disclosures must be close (only hyperlink if lengthy).  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.  Online Deceptive Advertising Same rules apply To satisfy the “clear and conspicuous” requirement, disclosures must be close (only hyperlink if lengthy). Deceptive Advertising

5  Telemarketing and Electronic Advertising. The Telephone Consumer Protection Act (TCPA) prohibits automated solicitation using automatic telephone dialing system or a prerecorded voice. Consumers have a private civil cause of action and can recover $500 for each violation of actual damages. Court can treble damages if willful violation. Telemarketer must remove a consumer’s name from its list of potential contacts if requested.  Telemarketing and Electronic Advertising. The Telephone Consumer Protection Act (TCPA) prohibits automated solicitation using automatic telephone dialing system or a prerecorded voice. Consumers have a private civil cause of action and can recover $500 for each violation of actual damages. Court can treble damages if willful violation. Telemarketer must remove a consumer’s name from its list of potential contacts if requested.

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

7 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  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.

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

9 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.  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.

10 Telephone and Mail-Order Sales  Sellers can be subject to federal mail and wire fraud statutes.  FTC Rules require: shipment 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.  Sellers can be subject to federal mail and wire fraud statutes.  FTC Rules require: shipment 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.

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

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

13 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.  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.

14 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.  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.

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

16 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.  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.

17 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.  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.

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

19 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.  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.

20 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.  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.

21 Air Pollution  Clean Air Act. This act provides the basis for issuing regulations to control pollution coming primarily from stationary (factories) and mobile (cars) sources of air pollution. It prescribes the use of pollution control equipment that represents the maximum achievable control technology. Violations: civil penalties up to $25,000/day. Willful violations carry criminal penalties and fines.  Clean Air Act. This act provides the basis for issuing regulations to control pollution coming primarily from stationary (factories) and mobile (cars) sources of air pollution. It prescribes the use of pollution control equipment that represents the maximum achievable control technology. Violations: civil penalties up to $25,000/day. Willful violations carry criminal penalties and fines.

22 Water Pollution  Clean Water Act’s goals: Safe swimming and drinking water. Protection of fish and wildlife (wetlands). Elimination of the discharge of pollutants into waterways (navigable waterways).  Pollution control is largely achieved through the use of the best available control technology.  Clean Water Act’s goals: Safe swimming and drinking water. Protection of fish and wildlife (wetlands). Elimination of the discharge of pollutants into waterways (navigable waterways).  Pollution control is largely achieved through the use of the best available control technology.

23 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.  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.

24 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.  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.

25 Hazardous Waste Disposal  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. Joint and Several Liability for cleanup costs can be assigned to any potentially responsible party (PRP).  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. Joint and Several Liability for cleanup costs can be assigned to any potentially responsible party (PRP).