uAppeals Court Revives Texas Bank’s Lawsuit Challenging Constitutionality Of CFPBr

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  Adam Fagen

  This week, the Consumer Financial Protection Bureau celebrates its fourth anniversary of protecting consumers from harmful practices and shady characters in the financial sector. But instead of buying the regulatory arm a big ol’ birthday cake, a federal appeals court is gifting the Bureau with a revived lawsuit challenging its constitutionality.

  The U.S. Court of Appeals for the District of Columbia Circuit reversed a trial court’s ruling that threw out a lawsuit filed by a Texas bank arguing the structure of the CFPB is unconstitutional.

  State National Bank, which originally filed the suit in June 2012, claims that independent government agencies must be headed by multiple members, rather than a single director.

  The CFPB, created as part of the 2010 Dodd-Frank Act following the financial crisis in 2008, is headed by a single director – in this case Richard Cordray – who was appointed to the position by President Barack Obama in 2011.

  The panel of three judges ruled [PDF] Friday that State National Bank had legal standing to proceed with its case challenging the formation and operation of the Bureau, because the bank is subject to the agency’s oversight and regulations.

  “The Supreme Court has stated that ‘there is ordinarily little question’ that a regulated individual or entity has standing to challenge an allegedly illegal statute or rule under which it is regulated,” Judge Brett Kavanaugh, wrote in the opinion.

  “The Bank is not a mere outsider asserting a constitutional objection to the Bureau. The Bank is regulated by the Bureau. Under the Dodd-Frank Act, the Bureau ‘shall regulate the offering and provision of consumer financial products or services under the Federal consumer financial laws.'”

  Despite the court’s ruling that the bank’s challenge had standing, the Wall Street Journal notes, it did not consider the merits of the bank’s constitutional claims, saying that a trial court should consider it first.

  The revived suit also challenges the constitutionality of Cordray’s initial appointment to the CFPB directorship. In early 2012, while the Senate was in recess, President Obama appointed Cordray to the post, bypassing the usual Senate confirmation process for high-level federal officials. In 2013, Obama renominated Cordray, who subsequently received Senate approval.

  One portion of the lawsuit that did not survive the appeals court was a challenge to the constitutionality of the Financial Stability Oversight Council, which monitors the stability of the U.S. financial system. The appeals court found that State National lacked legal standing to issue this challenge, as the bank has not been designated as “too big to fail,” which would have made it subject to additional regulation.

   

  [via The Wall Street Journal]

  
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by Ashlee Kieler via Consumerist

uApple Music Is Worse Because You Can’t Delete It From Your iDevicer

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  (William Hook)

  My friend Gretchen has a folder on her iPhone’s home screen called “Crapple.” It’s where she sticks all of the apps that Apple adds to her device that she doesn’t use. As Apple has forced apps for their smart watch, HealthKit, bookstore, a separate podcasts app, their own maps app, and now their streaming music store on users, all of these come with apps that you can’t get rid of.

  There’s a problem with pushing too many apps on users: anything that they don’t actually use is just burdensome and takes up hard drive space. For the makers of hardware and software alike, “spotlighting your own apps only works as well as the apps themselves do,” points out Brian Barrett in Wired. Part of the reason why some people switched to the iPhone in the first place was the relative lack of bloatware.

  We’ve written before about the challenges that come along with trying to disentangle yourself from Apple services that you do use, like when iPhone users switch to another phone platform and their text messages still get redirected to iMessage.

  Here’s the problem, which is specific to the current generation of Apple devices: the apps that you can’t get rid of gobble up 3 GB of space, and they still sell a 16 GB phone. If they want their customers to use these apps, they should create something superior instead of making something that people are stuck with forever and ever.

  Apple Music’s Worst Feature? You Can’t Delete It [Wired]

  
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by Laura Northrup via Consumerist

uProsecutors Recommend Life Sentence For Peanut Co. Exec Involved In Salmonella Outbreakr

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  (Great Beyond)

  Stewart Parnell is the former owner of Peanut Corporation of America, the company behind a salmonella outbreak that sickened hundreds and killed nine people in 2008 and 2009. Last year, a federal jury convicted him of knowingly shipping tainted peanut butter, and this week prosecutors in the case recommended he receive a life sentence for his crimes.

  Parnell is scheduled to be sentenced in September, so the U.S. Probation Office has been busy writing up pre-sentencing reports.

  According to a brief [PDF] filed by prosecutors with the court earlier this week, the Probation folks’ calculation “results in a life sentence” recommendation for Parnell.

  Per sentencing guidelines, the Probation Office bumped up Parnell’s offense by six levels because there were more than 250 financial victims. But lawyers for the former peanut exec questioned this recommendation, claiming that the government only produced sufficient evidence of 31 financial victims. Parnell’s team also asserted that prosecutors failed to establish that any individual sustained bodily injury as a result of his conduct.

  In response, prosecutors point to testimony from Dr. Ian Williams, Chief of the Outbreak Response and Prevention Branch at the Centers for Disease Control, in which he explained that 714 illnesses had been tied directly to the Peanut Corp. outbreak through the CDC’s PulseNet.

  And these aren’t merely anecdotal, “I ate some peanut butter and felt sick afterward” incidents. In order to be included in that 714 figure, a patient had to go to a doctor and provide a stool sample. That stool sample would then not only have to be tested and diagnosed with salmonellosis, but also be forwarded to a PulseNet certified lab and run through a different process before the data is uploaded to PulseNet, reviewed and certified by a CDC technician.

  Thus, Dr. Williams figured that for every case of salmonellosis reported to PulseNet and confirmed by the CDC, there are approximately 30 other cases of salmonellosis that aren’t reported. In his testimony, the doctor explained that this outbreak may have left “as many as 20,000 ill people across the United States.”

  Prosecutors also point to a New England Journal of Medicine article, “Salmonella Typhimurium Infections Associated with Peanut Products,” that links the 714 reported illnesses and nine deaths to this outbreak.

  “No fewer than 24 epidemiologists, scientists, and foodborne outbreak experts signed off on this article,” write the prosecutors, who say that objections raised by Parnell and his fellow defendants are “nothing more than an attempt to change the facts that were presented at trial and that the jury found in deciding to convict.”

  In a statement to the AP, Parnell’s attorney calls the life sentence recommendation “truly absurd,” adding that “We hope the judge will see that Stewart Parnell never meant to hurt anyone. He ate the peanut butter himself. He fed it to his children and to his grandchildren.”

  Even a lawyer representing victims of the outbreak acknowledged that “Life in prison, especially in a food case, it’s frankly unprecedented… But the case itself, on a factual basis, is unprecedented.”

  
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by Chris Morran via Consumerist

uFiat Chrysler Recalling 1.4M Vehicles Amid Concern Over Remote Hack Attacksr

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  (Ralph Krawczyk Jr)
  

  With the steely eye of the government fixed firmly on Fiat Chrysler Automobiles NV, the company agreed today to recall 1.4 million vehicles that could be susceptible to remote hack attacks. This, a few days after researchers teamed up with a reporter to show how a Jeep Cherokee could be controlled wirelessly from miles away.

  FCA issued a software patch for its Uconnect onboard system on Thursday, though at that time it didn’t directly acknowledge the Wired.com report of what it was like to be inside a hijacked Jeep.

  The recall includes a software update that addresses certain radios that could be the subject of cyber hacking. FCA notes in a statement on the recall that no vehicles outside the United States are impacted and says the company hasn’t received any related complaints, warranty claims or accidents outside of the media demonstration.

  “The recall aligns with an ongoing software distribution that insulates connected vehicles from remote manipulation which, if unauthorized, constitutes criminal action,” FCA said in a statement.

  Furthermore, FCA says the network-level security measures it implemented as of July 23 prevent “the type of remote manipulation demonstrated in a recent media report.”

  “These measures – which required no customer or dealer actions – block remote access to certain vehicle systems and were fully tested and implemented within the cellular network on July 23, 2015,” FCA says.

  Customers affected by the recall will receive a USB device that they may use to upgrade vehicle software, which provides additional security features independent of the network-level measures.

  Vehicles included in the recall are equipped with 8.4-inch touchscreens among the following populations:
  • 2013-2015 MY Dodge Viper specialty vehicles
  • 2013-2015 Ram 1500, 2500 and 3500 pickups
  • 2013-2015 Ram 3500, 4500, 5500 Chassis Cabs
  • 2014-2015 Jeep Grand Cherokee and Cherokee SUVs
  • 2014-2015 Dodge Durango SUVs
  • 2015 MY Chrysler 200, Chrysler 300 and Dodge Charger sedans
  • 2015 Dodge Challenger sports coupes

  Drivers can also visit FCA’s software update site to input their Vehicle Identification Numbers (VINs) and determine if their vehicles are included in the recall.

  FCA is under a lot of pressure from the National Highway Traffic Safety Administration right now, in light of the company’s handling of almost two dozen recalls covering 11 million vehicles, notes the Detroit News.

  Transportation Secretary Anthony Foxx didn’t have much to say on that front when asked during a reporters round table if a settlement with FCA was coming, saying only, “Give us time.”

  But Foxx did say that the Obama administration will be pushing hard to make sure the nation’s 250 million cars and trucks are not susceptible to cyber hacking.

  “We will push as hard as we can to ensure the security of vehicles is air tight,” Foxx said during the breakfast meeting sponsored by the Christian Science Monitor Friday morning.

  “It’s an issue,” he added, noting that this may become a bigger issues as connected vehicles grow on the nation’s roads. “The time to get on this is right now.”

  In the meantime, senators Ed Markey and Richard Blumenthal introduced an automotive security bill on Tuesday to set new digital security standards for cars and trucks called the Security and Privacy in Your Car, or SPY Act.

  The measure would direct NHTSA and the Federal Trade Commission to establish federal standards to secure cars and protect drivers’ privacy, as well as establishing a rating system — or “cyber dashboard” — that informs consumers about how well the vehicle protects drivers’ security and privacy beyond those minimum standards.

  Statement: Software Update [Fiat Chrysler Automobiles]
  Fiat Chrysler will recall vehicles over hacking worries [Detroit News]

  
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by Mary Beth Quirk via Consumerist

uCourt Says Facebook Can’t Challenge Search Warrants For User Datar

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  (Christoph Aigner)

  If a company like Facebook receives a subpoena for user data in a civil lawsuit, it can make its case to the court about why it should not have to oblige. But when that information request is in the form of a search warrant in a criminal investigation, Facebook doesn’t have that option.

  That’s according to a New York appeals court, which ruled earlier this week that Facebook lacks legal standing to challenge a batch of 381 search warrants seeking data on users related to a criminal disability fraud investigation.

  Facebook went public with its fight against these warrants last year, saying the company had only agreed to comply with the warrants after facing contempt charges.

  The Manhattan District Attorney’s office was seeking detailed user data, including Facebook posts and photos, for more than 100 users, including some retired police officers and firefighters suspected of having feigned mental illnesses in the wake of September 11, 2001.

  Because warrants have to go through the process of having a judge determine whether there is probable cause, their validity can not usually be challenged before the warrant is executed.

  After a lower court found that Facebook lacked standing to fight the warrants, it appealed, claiming that because the warrants were served on Facebook and not directly on the users, they were no different than subpoenas and therefore eligible to be disputed in court before being executed.

  But the appeals court labeled this a “distinction without a difference,” explaining that while “the manner in which the materials are gathered may deviate from the traditional, Facebook’s reason for seeking to quash the warrants does not. What Facebook ultimately seeks is suppression of the materials obtained from it, a determination that would necessarily impact the subsequent criminal actions.”

  The court points out that if it were to accept Facebook’s argument, law enforcement would only be able to serve search warrants on physical locations. The inclusion of Facebook in the warrant process is necessary because the police have no other way of obtaining the evidence they seek to obtain for their investigation.

  “It is… hard to imagine how a law enforcement officer could play a useful role in the Internet service provider’s retrieval of the specified online information,” writes the court.

  Facebook also contended that the Stored Communications Act gives the company the right to challenge these warrants. However, the appeals court held that the SCA only gives Facebook the standing to fight subpoenas and court orders, and that the law “specifically distinguishes these disclosure devices from warrants.”

  The court notes that an order or subpoena obtained pursuant to the SCA requires only that the government show “specific and articulable facts” that there are “reasonable grounds to believe” the information sought will be “relevant and material,” but a warrant requires the government to demonstrate probable cause.

  “Here, a finding of probable cause was made by the reviewing judge, and thus the warrants are akin to SCA warrants, not SCA subpoenas or orders,” explains the court. “Thus, Facebook’s argument that it has the right to contest the warrants based upon the SCA is contradicted by the express terms of the SCA.”

  The court acknowledged the spirit of Facebook’s attempt to challenge these warrants.

  “Our holding today does not mean that we do not appreciate Facebook’s concerns about the scope of the bulk warrants issued here or about the District Attorney’s alleged right to indefinitely retain the seized accounts of the uncharged Facebook users,” reads the ruling. “Facebook users share more intimate personal information through their Facebook accounts than may be revealed through rummaging about one’s home. These bulk warrants demanded ‘all’ communications in 24 broad categories from the 381 targeted accounts. Yet, of the 381 targeted Facebook user accounts only 62 were actually charged with any crime.”

  In a statement to Ars Technica, Facebook said it continues “to believe that overly broad search warrants — granting the government the ability to keep hundreds of people’s account information indefinitely — are unconstitutional and raise important concerns about the privacy of people’s online information.”

  The company is exploring its legal options.

  [via Ars Technica]

  
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by Chris Morran via Consumerist

uFive Airlines Being Probed For Price-Gouging Following Amtrak Accidentr

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  (Eric Spiegel)

  Five airlines are at the center of a newly opened federal investigation into price-gouging for their actions in allegedly raising airfares following the May derailment of an Amtrak train in Philadelphia that killed eight people and injured 200 others.

  The U.S. Department of Transportation sent letters to JetBlue, Southwest, Delta, United and American airlines today seeking pricing information for air travel routes most likely affected by the temporary shutdown of rail travel along Amtrak’s Northeast Corridor.

  “The idea that any business would seek to take advantage of stranded rail passengers in the wake of such a tragic event is unacceptable,” U.S. Transportation Secretary Anthony Foxx said in a statement on the DOT website. “This Department takes all allegations of airline price-gouging seriously, and we will pursue a thorough investigation of these consumer complaints.”

  Service on Amtrak’s Northeast Corridor was halted for several days in the wake of the May 12 crash. Trains began to fully servicing the corridor again on May 19. However, the Department is seeking information on airfare prices for each day between April 28 to May 26, 2015.

  USA Today reports that the Department’s inquiry was initiated after receiving anecdotal evidence from consumers and a request from Connecticut Senator Christopher Murphy following the derailment.

  Murphy sent a letter to the DOT in May saying that many of his constituents had noticed raising airfare prices coinciding with the rail travel interruption.

  “If this drastic and sudden increase in ticket prices is an effort to make money from desperate travelers impacted by this tragedy, you should fully exercise the enforcement powers vested in your agencies,” he wrote at the time, noting that in one instance a ticket from New York’s LaGuardia airport to Washington, D.C., was priced at $2,309.

  The DOT’s letter to the airlines asks for information to be returned within 30 days.

  A spokesperson for American tells USA Today that the airline added capacity but kept the same fare structure in the days following the crash.

  “We are cooperating with the DOT and are confident that there will be no finding of wrongdoing by American,” the airline said.

  Southwest said they had been notified about the investigation and were fully cooperating.

  The three remaining airlines did not return USA Today’s request for comment.

  U.S. DOT Requests Information on Airline Pricing Response to Amtrak Derailment [DOT]
  DOT to investigate airlines for gouging after Amtrak crash [USA Today]

  
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by Ashlee Kieler via Consumerist

uConverse Gives Chuck Taylor Sneakers A Makeover For The First Time In 98 Yearsr

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  (Converse)

  What’s old is new again: Converse has updated the design of its signature Chuck Taylor sneakers for the first time in the shoes’ 98 years on this planet.

  Though hardcore sneaker fans might be gasping for breath and casting about wildly for a chair to sit down in, rest assured that the Chuck Taylor All Star II shoes don’t really look all that different: they’ve still got the Chucks style –“unique white foxing, rubber toe-cap and statement All Star patch,” the press release says, but at the same time they promise to “deliver a comfortable and versatile premium sneaker.”

  Which is promising, as anyone who’s actually tried exercising in Chucks knows, comfort isn’t exactly high on the list of the shoe’s qualities.

  The Chuck II revamp uses Nike technology (the company bought the Converse brand in 2003), featuring “innovative updates” like Nike Lunarlon sockliner (“for superior full foot cushioning and arch support”), a “foam padded collar and non-slip gusseted tongue for 360-degree comfort” and a perforated micro suede liner “for breathability during extended periods of wear.”

  There’s also the “on-trend foxing,” which is that line where the rubber sole meets the shoe’s fabric. If there’s anything the kids are into these days, it’s surely foxing (?).

  It will also change not only what your feet look like, but EVERYTHING YOU KNOW ABOUT EVERYTHING.

  “The Chuck Taylor All Star is one of the most legendary and iconic sneakers of all time,” said Jim Calhoun, Converse President and CEO. “The launch of Chuck II is a ground-breaking moment for Converse as we continue to move the brand forward through creativity and innovation, ushering in not just a new sneaker, but a completely new way of thinking.”

  Fans can get the new Chucks starting July 28 in black, white, red and blue for a suggested price of $70 for low-top and $75 for high-top. In comparison, regular Chucks go for about $50, or $55 for the high-top now.

  
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by Mary Beth Quirk via Consumerist