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When Regulations Don’t Exist, Small Business Suffers

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Political rhetoric blaming government regulations for stifled small business growth is at an all-time high, and it’s no surprise that the U.S. Chamber of Commerce is behind most of it. The Chamber has a long history of opposing regulations under the guise of being a voice for small business. Whether it’s the overtime rule that would provide overtime pay to millions of middle income Americans, the Clean Water Rule to protect our streams and rivers, the Clean Power Plan to limit power plant emissions of greenhouse gases, and the open internet rules to preserve net neutrality, the Chamber has yet to meet a regulation it didn’t want rolled back.

The Chamber also called for the repeal of the Affordable Care Act (ACA), supporting the American Health Care Act, despite the 24 million who would lose health care. But it doesn’t stop there. Tom Donohue and his big business allies would also like to see a repeal of Dodd-Frank Act, and specifically condemned the Volcker Rule to limit speculative trades by banks of the kind that led to the 2008 Financial Crisis and has vowed to fight against the fiduciary rule, which protects retirement savers from dishonest investment advisors.

Not only has the Chamber come out in favor or nearly every CRA challenge we’ve seen since Trump took office, it is also a strong supporter of the Regulatory Accountability Act, which would hamstring future efforts to protect consumers, workers, and the environment by layering on so many additional process requirements that rulemaking to protect the public would essentially come to a halt. Just last week, the Chamber released two video ads, targeting Senators Heitkamp and McCaskill, urging them to support the RAA.

All of this, under the clever, yet dishonest PR scheme that regulations hurt, and never help, small businesses. It makes perfect sense- if the Chamber and big business want to accomplish the corporate windfall that would result from a deregulatory agenda, the best way to do so is to tout themselves as the advocate of Main Street.

However, many of the regulations that Donohue mentions don’t even apply to small businesses, and others, like the Clean Water Rule and the CFPB actually help small businesses.

While these conservative talking points often misleadingly focus on the burdens that regulations place on small business, surveys and poll data show that the very owners of these small businesses generally do not agree with their alleged advocates. According to a poll by Small Business Majority, 86% of small business owners agree some regulation of business is necessary for a modern economy, and 93% of them agree their business can live with some regulation if it is fair, manageable and reasonable. What’s more, 78% of small employers agree regulations are important in protecting small businesses from unfair competition and to level the playing field with big business. Another 79% of small business owners support having clean air and water in their community in order to keep their family, employees and customers healthy, and 61% support standards that move the country towards energy efficiency and clean energy. This runs directly contradictory to the Chamber’s lobbying for the repeal of Stream Protection rule, and the Oil Anti-corruption rule, which would leaving communities susceptible to water pollution by coal miners, and enable oil tycoons to avoid transparency.

Regulations do help small businesses and a lack of regulation can have detrimental effects.  Just yesterday, a small business owner testified before the House Small Business Committee and urged lawmakers to ensure that public protections are in place to give his catering business fundamental confidence that the food and water they serve and consume is safe. Regulations provide the market with a basic level of certainty to ensure we are protected from tainted food, unsafe drugs, poisoned water, and polluted air.

There are other regulations, such as anti-trust laws that address price discrimination and price fixing, that help small business owners by leveling the playing field against larger businesses. The Chamber also fails to mention the many regulations enforced under the Small Business Administration that small businesses are prioritized for a certain set of government contracts.

When regulations don’t exist, it is typically small businesses who suffer most. The Deepwater Horizon explosion in the Gulf of Mexico devastated small businesses in the tourism and fishing industry, and not surprisingly it was the U.S. Chamber of Commerce who went to court on behalf of British Petroleum and sought to keep the local small businesses out of court, all the while claiming to be the voice of Main Street.

While the Chamber is spending big bucks to lobby against commonsense protections, it is crucial to remember that clean air, clean water, and regulation of Wall Street protect the public. Clear rules protect small businesses and manufacturers from powerful interests who use their financial advantage to try to rig the system in their favor.

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Profits Before People: The U.S. Chamber of Commerce’s Litigation Hall of Shame

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In a previous piece, we wrote about the U.S. Chamber of Commerce’s very busy litigation practice, the issues the Chamber litigates most frequently, the government agencies it most often opposes, and the giant multinational corporations its litigation most often supports.

In a newly-released report, we examine a few dozen of the most egregious cases the Chamber has litigated. From financial crisis-related litigation to cases stemming from BP’s Deepwater Horizon oil spill to Keystone XL to fracking to the Clean Power Plan to a case involving the Buckyball magnetic toy that injured over 1,700 children, the Chamber has been actively involved in some of the most notorious civil cases of recent years. Some of the lowlights of the Chamber’s litigation include:

  • Litigation related to the Deepwater Horizon oil spill in the Gulf of Mexico.The Chamber filed an amicus brief on behalf of BP on 4 separate occasions, arguing for legal technicalities that would eliminate or reduce civil fines and penalties that government agencies sought to impose upon BP as well as obstruct class action litigation brought by small businesses against BP.
  • Litigation related to the Buckyball magnetic toy responsible for injuring thousands of children. The Chamber filed an amicus brief in support of the CEO of the company that sold Buckyballs, a toy that injured over 1,700 young children. It argued that he should not be personally liable for recall costs in spite of the fact that he had had ample warning of the danger posed by the toy and had indeed fought recall efforts, resulting in a delay that led to further sales—and further injuries.
  • Litigation related to for-profit Corinthian Colleges’ fraudulently misleading students. The Chamber filed an amicus brief in support of Corinthian Colleges’ effort to prevent former students from suing it in court for fraud despite the fact that Corinthian was already the subject of multiple investigations targeting similar conduct and had already settled a previous fraud case involving similar allegations.
  • Litigation related to the Keystone XL pipeline. The Chamber sided with the Canadian energy giant behind the pipeline over American ranchers and farmers who didn’t want the pipeline being routed through their land.
  • Fracking Litigation. The Chamber fought to strike down municipal zoning ordinances to prevent fracking.
  • The Clean Power Plan. The Chamber sued the EPA to block President Obama’s signature initiative to reduce greenhouse gas emissions at power plants.
  • Minimum Wage Litigation. The Chamber fought to strike down Seattle’s law raising the minimum wage to $15 an hour, claiming that it would be bad for workers.
  • GMO Labeling Litigation. The Chamber filed an amicus brief opposing Vermont’s GMO labeling law, arguing that it did not advance a legitimate state interest and impinged upon corporations’ free speech rights.
  • Alien Tort Statute Litigation. The Chamber filed amicus briefs in cases involving Nigerian and Papua New Guinean plaintiffs who alleged that foreign multinationals had been complicit in gross human rights abuses including rape, pillage, and aerial bombardment of civilians. In both cases, public protests against the industrial sites in question were brutally repressed by the government, allegedly at the behest of and assisted by the corporate defendants.
  • Walmart Gun Sales Litigation. The Chamber filed an amicus brief supporting Walmart’s effort to prevent shareholders from voting on a proxy resolution calling for the company’s board to examine its sale of high capacity firearms.
  • Labor Rights for Gig Economy Workers. The Chamber sued the city of Seattle to block its law allowing Uber and Lyft drivers to unionize.
  • Litigation against Goldman Sachs for fraudulently misleading investors. The Chamber filed an amicus brief supporting Goldman Sachs in its efforts to make it more difficult for defrauded investors including pension funds to sue as a result of huge losses they suffered during the financial crisis.

Taken as a whole, the Chamber’s legal filings show it to be attempting to advance an exceptionally dangerous agenda via the courts. This agenda includes:

  • Invalidating important regulations protecting workers, consumers, and the environment, including rules promoting clean air, clean water, greater information, and prudent banking practices. The Chamber’s opposition to regulation is almost blanket, even extending to cases where the rule at issue would correct obvious market failures.
  • Making it harder to hold corporations accountable. The Chamber seeks to make it more difficult for consumers and small businesses harmed by corporate malfeasance to go to court. It also argues for more limited corporate prosecutions and for smaller penalties. Finally, it argues against U.S. jurisdiction in cases where corporations are accused of human rights abuses overseas. The Chamber’s ultimate goal in these cases is the same: corporate accountability should be minimized and/or eliminated.
  • Putting profits before people. The Chamber takes a very robber baron view of business. Whether defending Wall Street speculation or Big Pharma price gouging or appalling fast food labor practices or new economy exploitation of gig economy workers, the Chamber is unconcerned with how dubious business practices harm workers and consumers.
  • Favoring Big Business over small businesses. While the Chamber claims to be the voice of small businesses in Washington, when it comes to its litigation practice, it can be relied upon to favor the giant multinational corporations that fund it. Whether it’s by arguing for reduced access to the courts, opposing stricter supervision of Wall Street banks designed to reduce the risk of future financial crises, fighting for Big Oil against emissions controls, or supporting Big Pharma’s schemes to keep drug prices sky high, the Chamber always comes down on the side of its deep-pocketed Big Business patrons, ignoring the impact on small businesses.

The Chamber’s use of the courts to advance its Big Business-friendly, anti-consumer, anti-worker, anti-environmental agenda is important in considering the future of the Supreme Court. Some of these cases reached the Supreme Court; others may yet reach the Supreme Court. Progressives should demand that any future justice recognize the tremendous importance of regulations that protect workers, consumers, and the environment and refuse to put profits before people as the Chamber so often argues our courts should do.

Chamber Resolutions

New Year, Same Chamber

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While many Americans are signing up for a gym membership or vowing to read for fun, the U.S. Chamber of Commerce is at it again with a slew of resolutions for the new year that, while they may line the pockets of Big Business and the very rich, promise nothing but trouble for the rest of us and the planet we call home. Without further ado, our list of the Chamber’s new year’s resolutions for 2017:

  1. Shed those last few pounds regulations

Now that several Chamber-alums are occupying key spots on the transition team, the Chamber has set its sights on kicking off the new year with a rollback of federal regulations. The Chamber will continue to flex its dark money-fueled muscle in the hard-fought battle to pass the Midnight Rules Relieve Act (MRAA). The MRAA would allow Congress to revoke a plethora of public protections under the Congressional Review Act with just one vote. This would have severe consequences for our health, safety and economic security and the Chamber’s support of the MRAA demonstrates once again that it sides with big corporations’ bottom lines over people’s well being. Also making the top of their resolution list is the passage of the Regulatory Accountability Act (RAA) which would add dozens of new requirements to the regulatory process and would allow non-expert judges to second-guess the decisions made by an agency’s technical experts, thereby giving industry additional opportunities to attack public protections. New year, same deceptively named legislation!

  1.  Get Outdoors While You Still Can

While we don’t know if 2017 will finally be the year the Chamber makes up its mind on the science of climate change, we do know that their list of resolutions includes killing the Clean Power Plan, the Obama administration’s signature initiative to reduce greenhouse gas emissions from power plants. The Chamber is also advocating to undo the Clean Water Rule, designed to protect streams and wetlands, and by extension, our drinking water. And if that wasn’t enough, the Chamber is also fighting to reverse President Obama’s decision to close much of the Atlantic and Arctic basins to offshore drilling. If the Chamber gets its wish, the great outdoors may not be so great anymore.

  1. Spend Less Money…On Workers

The Chamber has yet again resolved to stand up for the interests of very wealthy individuals at the expense of hardworking Americans. The Chamber will continue to oppose an increase in the minimum wage and implementation of the overtime rule that would make millions of middle income Americans eligible for overtime pay. The Chamber also intends to stiff hardworking Americans by asking for a repeal of several other Obama administration Executive Orders, including (but certainly not limited to!) the Establishing Paid Sick Leave for Federal Contractors EO, which provide workers at companies doing business with the federal government the opportunity to earn up to 7 days of paid sick leave per year. New year, but no new money in your paycheck!

  1. Get Organized Unorganized

Just like some of us resolve every year to spend less money eating out or to stop smoking, the Chamber resolves every year to weaken unions and the protections they offer workers. In 2017, the Chamber has resolved to continue pushing laws weakening unions, seeking to build on “victories” in states such as Wisconsin, Michigan, and Indiana. New year, same war against unions!

  1. Party Like it’s 2007

Ain’t no party like a financial crisis party! In keeping with its role as a lobbyist for Wall Street, the Chamber will continue its fight to roll back the Dodd-Frank Act,  passed in the wake of the financial crisis as a way to prevent future financial crises. Dodd-Frank instituted a host of consumer protections as well as limits on reckless risk taking by banks. One important part of Dodd-Frank that the Chamber adamantly opposes is the Volcker Rule which prohibits big banks from using depositors’ funds for proprietary bets. The Chamber will also continue to oppose the Consumer Financial Protection Bureau’s efforts to combat unfair forced arbitration clauses and class action bans.  These “rip-off” clauses prevent consumers from having their day in court and offer big corporations another way to avoid accountability for corporate wrongdoing as the recent Wells Fargo scandal has shown. Another safeguard that the Chamber seeks to eliminate in 2017 is the fiduciary rule, which protects retirement savers from greedy financial advisors. New year, same defense of Wall Street greed!

So while many of us are wondering if we can really make it to the weekend without a drink or just how far into February our other resolutions will last, we should be more concerned that the Chamber is working to strip us of public protections, all while destroying the only planet we’ve got. Perhaps we should add a resolution to our list: oppose the U.S. Chamber’s harmful agenda.

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Behind The Curtain: How Tom Donohue Says One Thing About Regulations but the Chamber Does Another

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By David King, Intern at U.S. Chamber Watch

 On June 22, 2016, U.S. Chamber of Commerce President Thomas J. Donohue gave a speech entitled “Financing America’s Economic Growth: How Robust Capital Markets Can Help Revitalize Our Economy” at the Nasdaq MarketSite in New York City. He began this speech by recalling that he previously spoke at Nasdaq in 2007, in the months before the Financial Crisis. He claimed that his advice then went unheeded. One is left to wonder exactly to what advice he is referring, as the Chamber has been a longstanding advocate of the type of deregulation that helped lead to the 2008 financial crisis. However, despite his dubious claims of prescience, Donohue offered us a second chance to dissect his well-worn platitudes that mask the Chamber’s aggressive deregulatory agenda.

Claim #1: “We want smart regulation.”

While Donohue may claim to seek “smart” regulations, the reality is that the Chamber almost never supports any new regulations. The Chamber does, however, spend its vast resources fighting against regulations intended to safeguard the American public. Most recently, the Chamber has opposed the Department of Labor’s fiduciary rule requiring money managers to act in their clients’ best interests as well as the Overtime Rule requiring that more salaried workers be paid for any overtime hours they work. Not to mention the Chamber’s epic fight against implementing the Dodd-Frank Wall Street Reform and Consumer Protection Act, including the Volcker rule banning commercial banks from engaging in proprietary trading activity with depositors’ money and rules proposed by the Consumer Financial Protection Bureau (CFPB), like limiting the use of forced arbitration clauses. Claiming that you’re for “smart” regulation when you almost never propose any is nothing more than a smoke screen to hide the Chamber’s reactionary, anti-regulatory agenda.

Claim #2: “If we take away the right to fail, we take away the right to succeed.”

Donohue’s defense of Wall Street ignores the fact that the new regulations born of the financial crisis do not take away the right for banks to fail; they merely attempt to eliminate the right to be too big to fail and therefore require taxpayer dollars for bailouts. While Donohue claims that these newly enacted regulations harm Main Street, the reality is that they shield Main Street from the enormous collateral damage that occurs when Wall Street’s casino games blow up as they did during the financial crisis. Credit for Main Street dries up when banks’ speculative activities run amok, something Donohue tries to gloss over in his speech.

Claim #3: “Too often rules are decided in the backrooms of Washington”

Talk about chutzpah. The Chamber is the nation’s largest lobbyist and is a habitué of Washington backroom deals. What’s more, Donohue has the audacity to demand greater transparency at various regulatory agencies despite the fact that the Chamber itself is quite opaque, refusing to disclose where its own money comes from. The Chamber received nearly $170 million in 2012 from just 1,500 donors. Not a single donor was disclosed. The Chamber’s very own head lobbyist, Bruce Josten, has stated “We never disclose funding or what we’re going to do.” If Donohue is serious about bringing transparency to Washington, then he should start with his own organization.

Claim #4: “I know a thing or two about the Post Office… Having it launch a banking operation is as dumb an idea as I have heard in Washington, a town full of dumb ideas.”

Postal banks are a fixture in many industrialized nations. The U.S. also historically had postal banking. Allowing the Post Office to expand its product line would provide much needed financial services to those who would normally go unbanked. This would be a great thing for consumers, particularly poor consumers who would benefit immensely from being able to avoid payday lenders and their astronomical interest rates. Of course, a Post Office bank would be a terrible thing for payday lenders, so naturally, the Chamber is against it.

Claim #5: “We’re not looking to pick winners and losers.”

Au contraire! Donohue and the Chamber’s agenda is very much looking to pick winners, and the winners in this speech, delivered in the heart of Wall Street are, not surprisingly, Wall Street banks as well as the rest of the financial services industry– the payday lenders, insurance companies, credit card issuers, and student loan issuers. Donohue’s agenda also creates losers, starting with small businesses and consumers who are harmed when the financial services sector is deregulated as Donohue wishes it to be.

Donohue famously stated that he wanted to turn the Chamber into “the biggest gorilla in this town.” When it comes to the Chamber’s anti-regulatory agenda, Donohue is not so candid. While he may claim to support transparency and regulations and to act in the best interests of Main Street, that could not be further from the truth. Donohue and the Chamber’s M.O. should by now be clear: say one thing, do another.

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Arbitration, Part Deux: The Chamber’s Free Market Fail

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Last time, I wrote about how the U.S. Chamber of Commerce’s arguments in favor of forced arbitration fell apart during a U.S. Senate Banking Committee hearing on the Consumer Financial Protection Bureau(CFPB). And this, despite the fact that the hearing was actually more akin to a show trial, stacked with witnesses opposed to the CFPB.

As I pointed out, there’s something very inconsistent and illogical about defending forced arbitration while simultaneously (and erroneously) claiming that arbitration provides better outcomes for consumers. But not only is the Chamber’s argument internally inconsistent, it’s also completely inconsistent with the “free market” economic theory that the Chamber claims to champion.

In order to better understand what I’m getting at here, let’s take a journey back to Economics 101. Free Market economic theory is based upon the assumption of individual rational actors, that is, consumers, workers, managers, and investors who each act in their own individual best interests. Indeed, Adam Smith, the founder of free market economic theory, relied on the concept of individual rational actors as the basis for his famous invisible hand metaphor, beloved by capitalists the world over.

If one accepts free market economic theory, as the Chamber claims to do, then consumers are rational actors, and as rational actors, they would therefore choose arbitration over the court system if arbitration were actually better for them. But the Chamber is defending forced arbitration, suggesting that it actually believes that either consumers aren’t rational or that arbitration isn’t actually a better option for them.

The Chamber’s defense of forced arbitration puts it in a tough spot. While the Chamber likes to think of itself as an avatar of American free market capitalism, its defense of forced arbitration runs counter to the foundations of the very free market economic theory it claims to cherish. In short, it finds itself confronted with the following dilemma: either commit heresy against the gospel of capitalism or admit that forced arbitration is in the best interests of Corporate America and the Big Banks and not of consumers whose power of choice it eliminates.

It is all too fitting that the Chamber appears to have strayed from its faith in free market economic theory at a show trial masquerading as a hearing. Show trials were of course one of the hallmarks of Soviet communist rule, so what better occasion to break from capitalist orthodoxy?   As for which the Chamber ultimately renounces—capitalism or the Big Banks that have been pushing forced arbitration on their customers—the smart money says never bet against the banks.

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Chamber’s Defense of Forced Arbitration Falls Apart

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On Tuesday, the Senate Banking Committee held a hearing that was ostensibly supposed to “assess the effects of consumer finance regulations.” Unfortunately, instead of actually attempting to assess the effects of these regulations, the committee’s Republican leadership seemed far more interested in conducting a show trial of the Consumer Financial Protection Bureau (CFPB), the agency created in the aftermath of the regulatory failures that allowed the 2008 financial crisis to occur.

Even a show trial needs a few witnesses, and the leadership obliged, putting together a panel of four witnesses, three of whom represented the interests of the financial services sector, whose predatory lending practices and rampant speculation caused the financial crisis and whose consumer credit activities are now regulated by the CFPB. Big banks, predatory payday lenders, credit card issuers, and mortgage lenders don’t particularly like the CFPB because it has drastically curtailed shady and dishonest practices in the industry, in the process saving consumers $20 billion in credit card fees alone.

True to form, the three banking industry witnesses all denounced the CFPB. First up was Leonard Chanin, once an official at the Federal Reserve and now a poster boy for the revolving door in his role as counsel to banks at a large corporate law firm. Mr. Chanin might best be qualified as a see no evil, hear no evil witness, since he claimed that the Federal Reserve had no warning of the subprime mortgage crisis. This prompted an incredulous Senator Elizabeth Warren (D-Mass.) to ask if he had his “eyes stitched shut.”

Last to testify was Todd Zywicki, a law professor at George Mason University which, quelle surprise, just happens to receive tens of millions of dollars from the Koch brothers. Even more troubling was Mr. Zywicki’s testimony that he doesn’t represent the banks’ interests, despite working as a director at a consultancy that has done major work for Visa, Bank of America, and Citigroup. Such a blatant conflict of interest does little to inspire confidence in the reliability of Mr. Zywicki’s testimony.

And then of course in the middle there was David Hirschmann, president of the U.S. Chamber of Commerce’s Center for Capital Market Competitiveness. The Chamber has a long history of doing the Big Banks’ dirty work for them, and indeed was central to the lobbying campaign to kill the Dodd-Frank Wall Street Reform Act. Six years may have passed since the passage of Dodd-Frank, but the Chamber still has it out for the CFPB, whose creation was a signature achievement of Dodd-Frank.

Central to Mr. Hirschmann’s testimony was an attack on an expected CFPB rulemaking seeking to limit the use of forced arbitration in contracts for consumer lending products. Forced arbitration is commonly found in contracts for credit cards, bank accounts, and other consumer financial products. If an individual becomes involved in a dispute with her bank, forced arbitration prevents her from being able to bring the dispute before our court system, where it would be heard by a neutral judge and jury. Instead, the dispute must be heard by an arbitrator, who is often chosen by the bank.

Interestingly, Mr. Hirschmann’s written testimony to the Banking Committee begins with a paean to choice. He writes, “Choice empowers consumers” and argues that consumers should be allowed “to make their own decisions, based on accurate, understandable information and free from government dictates.”

And yet providing consumers with choice is exactly what any CFPB rulemaking limiting the use of forced arbitration would likely do. Forced arbitration doesn’t provide consumers with choice; by definition, it denies them a choice. Forced arbitration is itself an industry dictate, it’s by definition forced. So what are we to make of Mr. Hirschmann’s testimony? That choice is good for consumers unless the Big Banks decide it isn’t? That dictates are bad if they come from government, but perfectly fine if they come from industry?

But wait—there’s more.

Mr. Hirschmann spent much of his testimony arguing that arbitration actually provides better outcomes for consumers than does the court system. But if this were true, then why would the Big Banks insist on forced arbitration? Why not let the consumer decide? Perhaps the Chamber is fearful that if consumers—who are both individuals and small businesses—actually did have a choice between the court system and arbitration, many would choose the court system because the court system often provides better outcomes for consumers than does arbitration, as found by a CFPB study comparing the two fora.

While show trials aren’t designed to uncover the truth, as the truth is rarely what interests those who hold them, yesterday’s show trial against the CFPB at least had the merit of exposing the serious logical flaws and internal inconsistencies in the Chamber’s defense of forced arbitration. The Republican leadership may have already determined that the CFPB is guilty; unfortunately for them, their show trial instead proved that the Chamber is incapable of coming up with a serious defense of forced arbitration.

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Not Buying It: Countering the Chamber’s Anti-Class Action Accounts

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Lawmakers should not set great store by the U.S. Chamber of Commerce’s April testimony from attorney John Beisner before the U.S. House of Representatives’ Committee on the Judiciary. In his testimony, Beisner advocated legislation to prevent what he labels “overbroad” or “no-injury” class actions. A new Public Citizen report, “The Fiction of the ‘No-Injury’ Class Action,” counters his argument case by case.

Because class-action lawsuits are often the only feasible way to bring small-dollar claims, class actions are powerful tools for combating corporate wrongdoing and are frequently a target for corporate interests seeking to limit consumers’ access to court remedies.

In one of its many theories about why consumers’ should not be able to hold bad actors accountable, the Chamber’s lobbyists are pushing the idea that consumers who were duped by misrepresentations into buying products or overpaying for products have suffered “no injury.”

Public Citizen’s report has the goods on the real letter of the law: Consumers conned into buying a product that is defective or mislabeled have suffered economic injury. For example, consumers duped into purchasing worthless cold remedies have suffered an obvious injury, but Beisner’s testimony for the Chamber called their lawsuit a “no-injury” class action.

Public Citizen’s report looks past the façade of Beisner’s arguments and reviews each of the class-action lawsuits referenced in his testimony to show that the cases involved real injuries suffered by consumers who bought defective products or made purchases because of misrepresentations. These injuries included the need to repair or replace products to avoid serious injury, as well as economic losses suffered when consumers paid for defective products that were not worth the premium prices charged, purchased worthless products that were not what manufacturers represented them to be, or paid extra for products based on misrepresentations about their nature or quality.

The report also explains that securities law, trademark law, and antitrust law accept that consumers can suffer an economic harm if they purchase a product based on false information or an artificially inflated price. The policy goals that underlie those types of laws likewise apply to consumer misrepresentation suits — protecting purchasers and the integrity of the marketplace.

Let’s make sure Congress doesn’t buy what the Chamber’s trying to sell. The laws and rules that allow consumers to band together in a single suit to seek compensation for harm are essential protections that Congress should strengthen, not weaken.

 

 

Chamber ‘Transparency’ Ruse Would Harm Asbestos Victims

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The U.S. Chamber of Commerce is at it again. In his 2015 State of American Business speech, Chamber President and CEO Tom Donohue reheated his well-worn rhetoric decrying regulation and consumer protections, calling for limits on civil justice, “overly lenient” trade and tax policies, and more — which all amount to more corporate giveaways.

It’s clear that Donohue hopes to capitalize on the $35 million the Chamber spent leading up to last November’s elections — dark money from sources that don’t have to be disclosed.

And it’s almost incredible how brazenly he speaks of cashing in: “The Chamber played a significant role in the midterm elections. We have since been meeting with leaders on Capitol Hill. … We will be very clear about what lawmakers in both parties need to do if they hope to earn or keep our support” (emphasis added).

The Chamber and its Institute for Legal Reform have never been friendly to Public Citizen’s idea of civil justice. Though it is still early in this congressional session, the Chamber is already aggressively pushing its anti-justice agenda through those members of Congress for whom it was a benefactor in the midterms.

It was especially appalling to see Donohue’s promotion of the Furthering Asbestos Claim Transparency (FACT) Act as the sole legal reform proposal mentioned by name in his State of American Business speech. This bill, which Donohue listed on the top of the Chamber’s “get done” list, is a one-sided policy that does nothing for asbestos cancer victims — and instead will harm them.

By pushing the FACT Act on behalf of corporations, the Chamber is attempting to stall justice for victims, many of whom have been diagnosed with mesothelioma, a fatal disease that typically kills affected individuals only months after diagnosis. Mesothelioma and other asbestos cancers have been so clearly linked to exposure to the dangerous product that trust funds have been set up under Title 11 to facilitate victim compensation when defendants are companies that have filed for bankruptcy.

Though there is no evidence of fraud linked to these trusts, the FACT Act would require personal information of all victims who have filed claims to be retroactively disclosed on publicly available databases.

The unnecessary paperwork that would result from this requirement would delay compensation for victims. And in many instances, justice delayed would be justice denied.

In addition to delaying compensation, the publishing of claimants’ personal information — including portions of their Social Security numbers — would raise huge privacy concerns for asbestos victims.

Given the enormous potential for identity theft, it was galling to hear Donohue pay lip service to data security in his yearly soliloquy. Furthermore, publishing personal information on claimants creates other threats of possible abuse of victims’ asbestos-related disease status by employers, insurance companies or others who might discriminate against these individuals.

The Centers for Disease Control and Prevention report that roughly 3,000 people continue to die from mesothelioma and asbestosis every year and some experts estimate the death toll is as high as 12,000-15,000 people per year when other types of asbestos-linked diseases and cancers are included. Approximately one-third of the victims are veterans who were exposed while serving our country. Donohue’s arguments of transparency seem tone deaf, as he advocates for procedural delays that would leave staggering health care and funeral bills.

Adding insult to injury by shredding victims’ privacy and exposing them to identity theft and potential discrimination, the Chamber’s push of the FACT Act would compound victims’ stress with worry of what new hazard may befall them in addition to their disease.

Instead of the FACT Act’s misguided push for “transparency” via asbestos trust claim information disclosures, an appropriate transparency standard would ensure that workers and consumers have all the information necessary to limit their potential exposure to the deadly substance. Specifically, companies should publicly disclose their activities related to the manufacture, processing, distribution, sales, importation, transport or storage of asbestos or asbestos-containing products. That’s why Public Citizen supports Sens. Durbin and Markey’s and Reps. DelBene and Green’s Reducing Exposure to Asbestos Database Act (READ Act, S. 700/H.R. 2030) which would create an information portal for the public to learn about the many asbestos-containing products that are currently bought and sold in the U.S.A.

The real outrage is the double oppression of asbestos victims, and the real need for transparency is disclosure of past and ongoing asbestos exposures.

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The Chamber’s SCOTUS success and why we need a Powell memo for the left

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The U.S. Supreme Court’s recent decisions in Burwell v. Hobby Lobby, a corporate victory of “startling breadth,” and in Harris v. Quinn, are only the latest in a trend at the U.S. Supreme Court over the past six years.

A new report by the Constitutional Accountability Center titled “The U.S. Chamber of Commerce Continues its Winning Ways” shows that the U.S. Chamber of Commerce has gotten its way in an astonishing 80 percent of the cases it has argued over the past three terms, including 69 percent this term and 70 percent since President George W. Bush appointed Justices John Roberts and Samuel Alito to the court.

The Chamber’s 80 percent success rate over the past three terms comprises 32 wins and just eight losses. That’s a streak like the one enjoyed by Lebron James’ 2013 Miami Heat, which had one of the best seasons in NBA history last year, winning 80 percent of its games on its way to a second straight championship.

The Chamber’s winning streak since Alito succeeded Justice Sandra Day O’Connor in 2006, with a 70 percent win rate over that time period, is a distinct phenomenon: the Chamber won only 43 percent of the time in the Burger court (15 of 35 from 1981-1986) and 56 percent in the Rehnquist court (45 of 80 from 1994-2005).

This suggests that the Chamber’s recent record owes more to the current composition of the court than the Chamber’s lawyering, so it’s important not to overstate the Chamber’s influence on what the court actually decides.

The report also notes how aggressively the Chamber works to overturn long held precedents considered unfriendly to business interests. While the Chamber and its Institute for Legal Reform rail against “activist attorneys general” and lawyers “seeking a big, fat payday” to demonize judicial arguments that would rein in corporate abuses, they routinely recommend that the Supreme Court overrule longstanding and settled precedent.

“For instance,” the report reads, “the Chamber argued that the Court should second-guess two centuries of executive practice in [National Labor Relations Board v.] Canning, overrule a quarter-century’s worth of precedent in Halliburton [Co. v. Erica P. John Fund, Inc.], limit the EPA’s authority to regulate greenhouse gases in [Utility Air Regulatory Group v. EPA], and toss out important interstate air pollution rules in EPA v. EME Homer.”

We are now seeing the culmination of decades of Chamber work in the courts, dating back to the infamous 1971 memorandum by corporate tobacco attorney Lewis Powell, that said, in part,

“Strength lies in organization, in careful long-range planning and implementation, in consistency of action over an indefinite period of years, in the scale of financing available only through joint effort, and in the political power available only through united action and national organizations. … The role of the National Chamber of Commerce is therefore vital. … Under our constitutional system, especially with an activist-minded Supreme Court, the judiciary may be the most important instrument for social, economic and political change.”

The same year Powell wrote his memorandum, President Richard Nixon nominated him to the Supreme Court, where he wrote the opinion that the Roberts court used to reach its corrosive Citizens United v. Federal Elections Commission decision, which allowed corporations to spend unlimited sums to influence political campaigns. The Chamber’s decades of lobbying, campaign spending and aggression in the courts are paying off at accelerating rates.

Powell wrote his memorandum in response to a period of success for progressive issues in the courts, college campuses and other arenas of influence. His paper concluded,

“The first step should be a thorough study. But this would be an exercise in futility unless the Board of Directors of the Chamber accepts the fundamental premise of this paper, namely, that business and the enterprise system are in deep trouble, and the hour is late.”

It seems clear that the tables have turned. The Chamber’s resounding successes in the Supreme Court over the past six years spell trouble for the equality and sustainability of our country. It is long past time for the left, both institutional and non-institutional, to redouble its efforts. The hour is late.

Sam Jewler is the communications and research officer for Public Citizen’s Chamber Watch program.

Whose Opportunity Is the U.S. Chamber of Commerce Talking About?

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Posted by Sam Jewler on January 09, 2014

Whose opportunity does U.S. Chamber of Commerce President Tom Donohue talk about when he talks about opportunity?

The Chamber’s policies might give the largest corporations the opportunity to grow, but that is often not the same thing as growth and opportunity for the American people. After-tax corporate profits in the third quarter topped 11 percent of GDP for the first time since the records started in 1947. But everyday Americans aren’t doing so well, with real median household income declining 4.4 percent since 2009.

When the Chamber opposes increasing minimum wages to coincide with growth in productivity and the economy overall, one must ask whose growth and opportunity the Chamber is pushing for.

When the Chamber pushes for construction of the Keystone XL Pipeline, which would ship oil out of the country, likely leading to higher U.S. energy prices and higher profits for companies, while handing much of the environmental risk to the people of the Midwest and South, whose growth and opportunity are we talking about?

In his 2014 State of American Business Address, Donohue referred to the Chamber’s National Litigation Center as a “public interest” law firm – an insidious mischaracterization for a group that that works relentlessly to restrict consumers’ access to courts and ability to hold corporations accountable for bad behavior.

And we have to wonder what the Chamber’s rampant political spending and attempts to undermine laws against bribing foreign officials say about its respect for democracy.

In December 2013, John Cridland, the director-general of the U.S. Chamber’s British counterpart, the Confederation of British Industry, said, “As the financial situation of many firms begins to turn a corner, one of the biggest challenges facing businesses is to deliver growth that will mean better pay and more opportunities for all their employees after a prolonged squeeze. … There are still far too many people stuck in minimum wage jobs without routes to progression – and that’s a serious challenge that businesses and the government must address.”

Until we hear Mr. Donohue say – and act on – something like the CBI’s example, the evidence overshadows his words: The U.S. Chamber of Commerce wants growth and opportunity for the largest corporations. Everything else is public relations.

Sam Jewler is the press officer at Public Citizen’s U.S. Chamber Watch. To learn more about Chamber Watch, follow @uschamberwatch on Twitter, like us on Facebook and sign up for email updates