Common Law - The FindLaw Consumer Protection Law Blog

January 2008 Archives

New Border ID Rules Take Effect

Beginning today, American citizens entering the U.S. by land or sea are required to present a valid U.S. passport or similar proof of both identity and citizenship. The new rule applies to persons age 19 or older seeking entry into the U.S. at the borders. Identification documents must include a photo, name and date of birth. (See Document Options, from the Department of Homeland Security). Children ages 18 and under will only be required to present proof of citizenship, such as a birth certificate. Before the new border identification requirements took effect today, upon entering the U.S. at a border entry point, an individual without documentation could verbally claim to be a U. S. citizen. The Associated Press reports that "officers at the ports will have latitude to admit people who are unaware of the changes once their identities are confirmed."

FBI Launches Mortgage Fraud Investigation

The FBI has launched a criminal investigation into the business practices of 14 companies involved in the lending of "subprime" mortgage loans. Although the FBI has not identified the firms, the New York Times reports that the inquiry "involves companies across the financial industry, including mortgage lenders, loan brokers and Wall Street banks that packaged home loans into securities." Subprime mortgages -- typically given to borrowers with low income or poor credit -- usually carry high interest rates, and have come under increased scrutiny as nationwide foreclosure rates hit record highs. According to the N.Y. Times, the FBI is working with the Securities and Exchange Commission, which is conducting its own inquiry into the packaging and lending of subprime loans, and the valuation of securities backed by those loans.

Foreclosures Up 75 Percent in 2007

Foreclosure filings in the United States increased 75 percent in 2007 when compared with data from 2006, according to Realtytrac, a nationwide real estate data organization. In a Press Release, Realtytrac reports that foreclosure filings nationwide totaled 2,203,295 in 2007, with more than 1 percent of all households in the U.S. in some stage of the foreclosure process during the year. The five states with the highest rates of foreclosure in 2007 were Nevada, Florida, Michigan, California, and Colorado. California had the highest number of foreclosure filings of any state in 2007, with 481,392 filings.

E-File Tips from the IRS

As W-2s arrive in the mail and individuals get ready to file their income tax returns, the Internal Revenue Service (IRS) reminds taxpayers of the benefits of filing their returns electronically ("e-filing"). In another in a series of 2008 Tax Tips, the IRS tells filers that whether they use a professional tax preparer authorized by the IRS or do it themselves from a home computer, E-Filing is faster, more accurate, easier, offers more payment options, and gets your return to you faster. The IRS also offers eligible taxpayers the opportunity to prepare and file their taxes for free online using Free File.

California workers may be fired for medical marijuana use, under a ruling issued Thursday by the California Supreme Court. In a 5-2 decision, the court held that California's Compassionate Use Act of 1996 -- which gives authorized medical marijuana users defenses to certain state criminal charges related to marijuana -- does not protect workers who test positive for marijuana use. The court declared that "nothing in the text or history of the Compassionate Use Act suggests the voters intended the measure to address the respective rights and duties of employers and employees. . .[A]n employer may require preemployment drug tests and take illegal drug use into consideration in making employment decisions."

Economic Stimulus Deal Reached

Congressional leaders and President Bush have agreed on a package of measures intended to stimulate economic growth -- including new tax rebates for individuals and families, investment incentives for businesses, and a plan that would increase mortgage availability. According to a White House Press Release, the agreement "meets the criteria the President set forward last week to provide an effective, robust, and temporary set of incentives to protect the health of our economy and encourage job creation." The Washington Post reports that "Under the plan, as many as 117 million people would get [tax] rebate checks. Individual income tax filers would receive up to $600, working couples would get up to $1,200, and those with children would get an additional $300 per child."

Lead Paint Toy Case Settles for $30M

A nationwide class action lawsuit over excessive amounts of lead paint in "Thomas the Tank Engine" toy sets has settled for $30 million. The suit, filed against toy manufacturer RC2 Corporation in the Circuit Court of Cook County (Illinois), included thousands of class members. In a Press Release announcing the settlement, RC2 stated that the agreement -- which is expected to receive final approval in the next few months -- "would resolve all class claims of persons in the United States who purchased or own recalled Thomas & Friends Wooden Railway products which were recalled in June and September of 2007." The Chicago Sun-Times calls the settlement a "precedent for other suits filed against toy companies in last year's China manufacturers/lead paint scandal." In 2007, the presence of excess levels of lead in paint used on children's toys led to a number of recalls, from companies including Mattel and Fisher-Price.

Supreme Court Refuses Enron Shareholder Case

The U.S. Supreme Court has refused to consider an appeal by former Enron investors who were seeking to recover more than $30 million from a number of Wall Street investment banks. The shareholders alleged that the banks -- including Credit Suisse First Boston and Merril Lynch -- conspired with the now-defunct energy company to hide its liabilities and inflate its value. According to the Associated Press, by refusing to review the investors' lawsuit, the court took away what may have been their only hope of keeping the case alive." Today's Supreme Court action follows a Court opinion issued last week, which limited the ability of stockholders to sue third-party businesses -- including banks -- that may have played a role in facilitating a company's securities fraud. Enron, the seventh largest corporation in the U.S., filed for bankruptcy in 2001 amid rumors of questionable accounting practices.

Coal Company Agrees to $20M Fine for Water Pollution

A U.S. coal company will pay the largest civil fine ever levied under the Clean Water Act, after committing wastewater discharge violations for at least seven years. Massey Energy Company, Inc. has agreed to pay a $20 million penalty as part of a settlement for more than 4,500 Clean Water Act violations that occurred at coal mines in West Virginia and Kentucky, according to a U.S. Environmental Protection Agency Press Release. Under the agreement, Massey has also agreed to spend millions of dollars to prevent approximately 380 million pounds of pollutants from entering U.S. waters annually. According to the EPA, a May 2007 complaint filed by the U.S. Department of Justice alleged that Massey "discharged metals, sediment, and acid mine drainage into hundreds of rivers and streams in West Virginia and Kentucky. Many of the pollutants were discharged in amounts 40 percent or more than allowed. Some pollutants were discharged at levels more than 10 times over the permit limits."

Parents should not give cold medicines to children under two years of age, due to health risks posed by side effects of the medications. In a Public Health Advisory released today, the U.S. Food and Drug Administration (FDA) warns parents that "over-the-counter (OTC) cough and cold medicines should not be used to treat infants and children under 2 years of age because serious and potentially life-threatening side effects can occur." The Public Health Advisory also contains detailed instructions and safety precautions on giving these medications to children over the age of two, because FDA has also received reports of serious side effects from cough and cold medicines in older children. The Chicago Tribune reports that the FDA will decide by this spring whether or not these cold medications are in fact safe enough for use by older children. Today's announcement follows a similar warning issued by FDA in August 2007.

Supreme Court Limits Securities Fraud Suits

A U.S. Supreme Court ruling has limited the ability of stockholders to sue third-party businesses -- including banks, accounting firms, and customers -- that may have played a role in facilitating a company's securities fraud. In a 5-3 decision, the Court held that under federal securities laws, "the investors cannot be said to have relied upon any of the deceptive acts" of these secondary actors in the decision to purchase or sell securities; "and as the requisite reliance cannot be shown," those secondary actors -- here two customers and suppliers of a company in which the investors held common stock -- have no liability to the stockholders. The Washington Post reports that the case "has been seen largely as a stand-in for investors who want to go after banks and others that allegedly allowed the energy trader Enron Corp. to disguise its financial problems prior to a collapse that produced heavy losses for investors."

MySpace Agrees to New Safeguards for Kids

The social networking website MySpace has reached an agreement with the attorneys general of 49 states, on a number of measures that will protect young MySpace users and keep sexual predators from using the site. The New York Times reports that, under the agreement, "MySpace will classify as private all profiles of users under the age of 18, strengthen its response to complaints of inappropriate content on the site; and organize a task force of Internet businesses, nonprofit organizations and technology companies to review and develop online safety tools." The agreement is part of a nationwide push to protect young users of social networking sites. Florida Attorney General Bill McCollum cites statistics showing that 77 million children use the internet every day, and one of every seven kids between 10 and 17 years of age will be sexually solicited online. According to Pennsylvania Attorney General Tom Corbett, at the urging of a number of states, MySpace removed 29,000 registered sex offenders from its site last spring.

Illnesses Lead to Ground Beef Recall

A Minnesota meat company is recalling about 188,000 pounds of ground beef due to possible e. Coli contamination and links to six cases of illness in Wisconsin and California. The affected ground beef -- produced by Rochester Meat Company of Rochester, Minnesota on October 30 and November 6, 2007 -- was not available for purchase by consumers, but was distributed to restaurants and food service organizations nationwide. A News Release from the U.S. Department of Agriculture's Food Safety and Inspection Service (FSIS) contains detailed information about the recall.

IRS E-File Opens for 2008 Filing Season

Taxpayers may use the Internal Revenue Service's E-File service to file their tax year 2007 returns beginning on Friday January 11, 2008. IRS reminds taxpayers that E-File users who choose direct deposit can receive a refund in as little as ten days, since with E-File there is no paper return going to the IRS, and with direct deposit, there is no paper refund going to the taxpayer. The process is completely electronic. E-File also allows taxpayers to file their return and pay later if they owe taxes, and to file both their federal and state returns at the same time (in most states). Most taxpayers are also eligible for Free File, IRS's free federal tax preparation and electronic filing program for taxpayers with an Adjusted Gross Income (AGI) of $54,000 or less in 2007.

Supreme Court Looks at Voter ID Law

The U.S. Supreme Court heard arguments today in a challenge to an Indiana law that requires citizens to present a valid state identification card or U.S. passport in order to vote. According to the Associated Press, "Democrats and civil rights groups challenging the law as unconstitutional call it a thinly veiled effort to discourage elderly, poor and minority voters -- those most likely to lack proper ID and who tend to vote for Democrats." The Los Angeles Times reports that, during questioning of the attorneys during oral arguments, the justices seemed to suggest that the measure would have little impact: "Justice Anthony M. Kennedy characterized the law as posing only 'a minor inconvenience' to a small percentage of voters." The Court is expected to issue a ruling in the case before recessing at the end of June.

Supreme Court Considers Lethal Injection

The U.S. Supreme Court heard oral arguments yesterday in a challenge to the state of Kentucky's lethal injection practices in carrying out capital punishment. Two Kentucky death row inmates allege that the state's "three-drug protocol" method carries too much risk of inflicting excruciating pain and amounts to "cruel and unusual punishment" under the Eighth Amendment. According to the Washington Post, "those objecting to the [three drug] process said it would be better to inject inmates with a single, massive dose of barbiturates, the way animals are euthanized." The Los Angeles Times reports that "in their comments and questions, most of the justices said they were not convinced Kentucky's method was flawed." The Court is expected to issue a ruling in the case before recessing at the end of June.

FBI: Crime Rates Fall

Crime rates in the first half of 2007 dropped nationwide for the first time in two years, according to the Preliminary Semiannual Uniform Crime Report, released Monday by the Federal Bureau of Investigation (FBI). The FBI finds that overall, law enforcement agencies nationwide reported a decrease of 1.8 percent in the number of violent crimes in the first half of 2007 when compared with figures reported for the first six months of 2006. The largest cities in the nation -- those with a population over 1 million -- experienced the most signficant drop in violent crimes like murder and assualt, while violent crime rose in non-metropolitan counties and smaller cities.

FDA Examines Anemia Drug Risks

New data on the risks of anemia drugs is being reviewed by the U.S. Food and Drug Administration (FDA), and the studies show that patients with certain types of cancer face greater danger of tumor growth and death when taking the anemia drugs -- called erythropoiesis-stimulating agents (or ESAs) and marketed under the brand names Aranesp, Epogen, and Procrit. An FDA Press Release states that "taken together, all eight studies show more rapid tumor growth or shortened survival when patients with breast, non-small cell lung, head and neck, lymphoid or cervical cancers received ESAs compared to patients who did not receive this treatment." FDA issued a Public Health Advisory and approved revised boxed warnings for ESAs in 2007, and plans to revisit the risks and benefits of using ESAs in certain chemotherapy patients at a public advisory committee meeting in the next few months.

IRS: Get a Jump Start on Your Taxes

The Internal Revenue Service (IRS) is offering helpful tips on tax preparation and early filing, for taxpayers who want to file their taxes and receive any refunds well before the April deadline. The IRS is advising filers to gather all necessary records in advance -- including W-2s and 1099s -- and to save a copy for their own files. Tax filers should double-check their returns carefully for common errors like incorrect math and misprinted Social Security numbers. The IRS is also suggesting that taxpayers e-file their returns to receive a faster tax refund. See Seven Ways to Get a Jump Start on Your Taxes and Watch for Tax Law Changes for more tips from the IRS. You can also Subscribe to receive the latest tax tips from the IRS via email.

State Minimum Wage Increases Take Effect

Minimum wage increases took effect in a number of states on January 1st, including California, Massachusetts, Missouri, Ohio, and Oregon. (Check out the current minimum wage in your state, as of January 1, 2008) A number of states increase minimum wage annually under a formula that includes factors such as inflation and the cost of living. In other states, laws passed in 2007 mandate that a specific increase in minimum wage take effect on January 1, 2008. At $8.07 per hour for qualifying workers, Washington is the state with the highest minimum wage in the nation. California joins Massachusetts with the second-highest in the nation at $8.00 per hour.