Chapter 33Consumer and

Environmental Law

Chapter 33Consumer and

Environmental Law

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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 ObjectivesLearning ObjectivesLearning ObjectivesLearning Objectives

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Consumer Law

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

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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 AdvertisingSame rules applyTo satisfy the “clear and conspicuous” requirement,

disclosures must be close (only hyperlink if lengthy).

Deceptive Advertising

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Deceptive AdvertisingDeceptive Advertising

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.

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FTC Actions Against Deceptive

Advertising

FTC Actions Against Deceptive

AdvertisingThe 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.

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Labeling and PackagingLabeling and PackagingLabeling 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 1939.Fur Products Labeling Act of 1951.Flammable Fabrics Act of 1953.Fair Packaging and Labeling Act of 1966.Smokeless Tobacco Health Education Act of 1986.Nutrition Labeling and Education Act of of 1990.

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SalesSales

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

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Door-to-Door SalesDoor-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.

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Telephone and Mail-Order SalesTelephone 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.

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Credit ProtectionsCredit Protections

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

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Truth in Lending ActTruth 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

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Fair Credit Reporting ActFair 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.

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Fair Debt Collection Practices Act

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.

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Environmental LawEnvironmental Law

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

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Common Law ActionsCommon Law ActionsNuisance.

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.

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State and Local Regulation

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.

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Federal RegulationFederal Regulation

Federal environmental policy is achieved through federal agencies: Example: Environmental Protection Agency [

http://www.epa.gov] (EPA).Regulatory agencies must take environmental

factors into consideration when making significant decisions.

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Federal RegulationFederal 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.

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Environmental Impact Statement

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.

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Air PollutionAir 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.

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Water PollutionWater 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.

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Noise PollutionNoise 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.

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Toxic ChemicalsToxic ChemicalsFederal 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.

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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).