Consumer Finance
USAA Federal Savings Bank Reaches Settlement with Consumer Financial Protection Bureau
Kristina A. Del Vecchio, Joseph & Cohen, PC
The Consumer Financial Protection Bureau (“CFPB”) announced that it reached a settlement and consent order with USAA Federal Savings Bank (“USAA”) for violations of the Electronic Fund Transfer Act (“EFTA”) and its implementing regulation, Regulation E. Specifically, the CFPB alleged that USAA failed to properly enter stop payment orders after account holders notified USAA of their desire to stop payments on preauthorized electronic fund transfers, including by refusing to enter stop payments or requiring consumers to contact the merchants as a prerequisite to implementing stop payment orders. The CFPB also alleged that USAA did not consistently honor oral stop payment requests for 14 days, as it was supposed to do under the EFTA.
The CFPB also reportedly found that USAA failed to initiate and complete reasonable error resolution investigations and until May 2016, USAA lacked a procedure requiring that a reasonable error resolution investigation occur whenever a consumer notified the bank about a suspected error regarding an electronic fund transfer. Finally, the CFPB claimed that USAA engaged in unfair acts or practices by improperly reopening deposit accounts that consumers had previously closed without obtaining authorization and providing timely notice informing consumers when their accounts had been reopened. The consent order requires USAA to provide approximately $12 million in restitution to consumers who were denied a reasonable error resolution investigation and pay a $3.5 million civil money penalty to the CFPB.
Insurance
Eight Circuit Holds Property Damage Insurer Improperly Withheld "Labor Depreciation" from Claim Payments
By Ernest Wagner, Maurice Wutscher LLP
The U.S. Court of Appeals for the Eight Circuit in Stuart v. State Farm Fire and Casualty Company, recently affirmed a trial court's order certifying a class of Arkansas homeowners ("insureds") against an insurer that improperly withheld amounts for labor depreciation when paying covered property damage claims under their insurance policies. The putative class of insureds alleged that between November 21, 2008 and December 6, 2013 their insurer improperly withheld labor depreciation costs when paying them for covered property damage under their insurance policies contrary to Arkansas law during this time.
The Eight Circuit found that certification under Rule 23(b)(3) was appropriate because "the only dispute is over including labor depreciation in the calculation, which is a discrete portion of the formula that is easily segregated and quantified." The Insurer also argued that res judicata bars some of the plaintiffs' claims because they are parties to a separate class settlement, but the Eight Circuit rejected this argument and instructed the trial court to modify the certification order to exclude any plaintiffs that are parties to the settlement from the class definition.
Intellectual Property
US Patent and Trademark Office Issues New Guidance on Patent Eligibility
Sarah Gatti
The United States Patent and Trademark Office instituted new guidance for determining patent eligibility and examining computer-implemented inventions. Specifically, the USPTO issued the 2019 Revised Patent Subject Matter Eligibility Guidance, which revises subject matter eligibility under 35 U.S.C. § 101 following the Alice and Mayo cases. It also issued Examining Computer-Implemented Functional Claim Limitations for Compliance with 35 U.S.C. § 112, which provides analysis on § 112’s application to computer-implemented inventions. Effective as of January 7, 2019, both releases are internal guidance for USPTO’s evaluation of patent claims in the wake of the Alice and Mayo cases.
The 2019 Revised Patent Subject Matter Eligibility Guidance amends the standards for determining patent eligibility based on whether the claim’s subject matter is directed to a judicial exception like abstract ideas, mathematical concepts, mental processes, laws of nature, etc., expanding patent eligibility under Alice and Mayo, by allowing that a recitation of a judicial exception in a claim is not fatal, so long as such judicial exception is integrated into a practical application. The Examining Computer-Implemented Functional Claim Limitations for Compliance with 35 U.S.C. § 112 assists with patent application claims containing functional language, emphasizing issues that arise in analysis of “means plus function” principles and claims where the idea or solution to a problem may be described, but how that solution is accomplished is not.
Antitrust; International Law
EU Fines Mastercard €570 Million for Restricting Merchants’ Access to Cross-Border Card Payment Services
Alicia Downey, Downey Law LLC
On January 22, 2018, the European Commission announced in a press release that it had fined Mastercard €570,566,000 (nearly $650 million) for preventing merchants from taking advantage of lower interchange fees offered by banks located within the Single Market but outside the country where the merchants are located. Prior to December 9, 2015, when the Interchange Fee Regulation introduced caps, retailers in high-interchange fee countries could not benefit from lower interchange fees offered by banks located in another Member State. In April 2013, the Commission opened a formal investigation against Mastercard to assess whether its restrictions against “cross-border acquiring” violated EU antitrust rules. The Commission found that the restrictions caused retailers to pay more for bank services to receive card payments than if they had been free to shop around for lower-priced services, which in turn led to higher prices for consumers, less cross-border competition, and an artificial segmentation of the Single Market.
Antitrust; Business and Commercial Litigation
Preliminary Approval Granted to $80 Million Class Action Settlement Against Dental Suppliers
Alicia Downey, Downey Law LLC
On January 9, 2019, the Eastern District of New York granted preliminary approval of a class settlement in In re Dental Supplies Antitrust Litigation. The consolidated class complaint alleged that, since at least August 31, 2008, the three defendant dental suppliers conspired to fix prices and suppress competition in the distribution of dental supplies and equipment by refusing to deal with group purchasing organizations (GPOs) and preventing customer migration by not hiring each other’s sales reps. Under the settlement, defendants will pay the proposed class of over 100,000 dental offices and laboratories $80 million in exchange for dismissal. Various related federal and state agency challenges and private actions based on similar allegations have settled, while others are still ongoing.
Antitrust
New Chair of House Judiciary Committee’s Antitrust Subcommittee Wants to Focus on Prescription Drug Prices, Health Care, and Big Tech
Alicia Downey, Downey Law LLC
On January 23, 2019, Rep. David N. Cicilline (D-R.I.), announced his appointment as chair of the House Judiciary Committee’s Antitrust, Commercial and Administrative Law Subcommittee. In a written statement Cicilline promised, “We will get real work done to drive down the cost of prescription drugs and health care, hold big tech companies accountable, end anti-competitive conduct in the workplace, and make sure working men and women have access to justice and a voice in Washington.” Earlier last year Cicilline proposed a bill entitled, The Economic Freedom and Financial Security for Working People Act of 2018, to amend the Clayton Act to expressly prohibit corporate mergers that would result in monopsony in labor markets. When asked about the need to rethink antitrust statutes or their enforcement during a press interview a few days before his January 23 announcement, Cicilline commented, “We have to look at the existing antitrust architecture. Most of it was designed at the time of large railroad monopolies. It was a very different economy. I think it is well past time that we update and modernize our antitrust standards. And one of the things we need to look at is whether those standards are still relevant, looking at their impact on communities and wages and labor competition.”
Antitrust; International Law; Corporate Compliance
Can You Do the Competition Bureau of Canada’s Antitrust Compliance Crossword Puzzle?
Alicia Downey, Downey Law LLC
The Canadian competition agency takes a unique and creative approach to reinforcing its detailed guidance for ensuring corporate compliance with competition laws. Visitors who read the guidance posted on the Bureau’s Corporate Compliance webpage and click through to Practical Tools can quiz themselves on their knowledge by filling out the Compliance Crossword. The Crossword Puzzle is also a fun way to test executives and employees undergoing antitrust compliance training. Clue to 7 DOWN, 7 letters: “Fostering a _______ of compliance is the foundation of a credible and effective compliance program.”