By Benjamin Judge, NCL Public Policy Intern

Ever since President Obama signed the Patient Protection and Affordable Care Act into law, there have been several challenges to key portions of the act in district courts across the country. Some of these challenges include, but are not limited to, the individual mandate for each American to have a minimum amount of health insurance, federal funding going towards abortion, and according to one case, allowing soldiers to be quartered in our homes.

Challenges to the law

There have been two major cases in which judges have ruled that the individual mandate is unconstitutional.  In the case of Commonwealth ofVirginia vs. Sebelius, Judge Henry E. Hudson ruled that the mandate was unconstitutional on the grounds that Congress was exceeding its power under the Commerce Clause. Virginia argues that requiring people to buy health insurance is not regulating commerce, but rather, forcing commerce on consumers. The federal government is currently appealing this case and there was a hearing on May 10, 2011 in the 4^th Circuit Court of Appeals.

The other case in which the individual mandate was deemed unconstitutional was State ofFlorida v. U.S. Department of Health and Human Services, where Judge Roger Vinson deemed that the mandate is unconstitutional, and since it cannot be separated from the law, then the entire law is void.  The ruling served as an injunction of the laws implementation.  Judge Vinson went on to say that the case should move on to the Supreme Court where a final decision on the law will be made.  The government appealed and the Eleventh Circuit Court of Appeals held a hearing for the case on June 8, 2011.

Dubious claims

There have also been some court cases that have made very interesting claims. In U.S. Citizens Association v. Obama the plaintiffs claim that, besides the individual mandate being unconstitutional, they are argue that the law violates the third (yes, the amendment regarding quartering of soldiers), fourth, fifth, and ninth amendment by forcing people to divulge private medical information. Although there has not yet been a ruling on this case, the most recent development is that the government’s Motion to Dismiss was denied on November 23, 2010.

Another interesting court case is Independent American Party of Nevada et al v. Obama et al. In this class action lawsuit, the plaintiffs want an injunction against the reform.  The plaintiffs claim that the law violates almost every privacy clause of the Constitution, for example due process and free exercise of religion (a full list can be found here on page three). The plaintiffs also claim that the healthcare law breaks the Thirteenth amendment because “it involuntarily creates a debt and coerces Plaintiffs herein to work off the debt by threat of legal sanction (Source).” The case is currently stalled because the government has not responded to the complaint of the Plaintiffs.

There is a very good chance that some of these cases will spend several more years in the lower courts before eventually going to Supreme Court.  All of the information on the court cases comes from https://www.healthcarelawsuits.org, there are also additional cases if you are interested in reading about more cases.

By Michael Finch, Roosevelt Summer Academy Fellow at NCL

Michael Finch, a Roosevelt Summer Academy fellow at NCL this summer, is a rising senior at Middle Tennessee State University, where he is majoring in Political Science with a concentration in Public Administration and a minor in History. At MTSU, Michael is the Assistant Editor for the student newspaper, Sidelines, and is in the process of co-founding a chapter of the fraternity Sigma Phi Beta.

Mary (not her real name) had a Capital One credit card, and was making timely payments, often above the required minimum. Her balance varied between about $700 and $800, and she was slowly chipping away at it. One month though, she received her statement and saw that her balance had somehow risen to $1000.

Without realizing it, she’d been signed up for the Capital One Payment Protection Plan, which is for cardholders who worry they may become unemployed or disabled in the future and won’t be able to make payments. If they activate Payment Protection, it pays their minimum balance for a predetermined period of time.

The unwanted charges for the plan, along with charges for other services such as CreditInform, had driven Mary over the limit, causing even more fees and explaining her skyrocketing balance. This, unfortunately, is a common situation among cardholders.

How does this happen?

Capital One’s payment protection plan, like many others, costs the cardholder 99 cents for every $100 of balance at the end of the payment period. This means that, over the course of a year, Mary ended up paying Capital One almost $120 in extra fees just for this one service (which she hadn’t knowingly agreed to).

Many consumers, like Mary, are auto-enrolled in payment protection and other services when they open a credit card, or aren’t informed that these services are optional.

After Mary realized she’d been signed up for a plan she wasn’t informed about, she found it difficult to get it canceled. She was told the plan was handled through a third-party company, which proved difficult to get in touch with.

Consumers who were misled or pressured into signing up often have an even harder time getting the plan canceled, because even though unfair practices were used to get them to enroll, credit card companies argue that they were, in fact, informed.

What can be been done?

In January of 2010, a class action lawsuit was filed against Capital One, arguing that the restrictions of its payment protection plan weren’t sufficiently explained before cardholders were enrolled, and that if consumers did choose to activate it, the benefits were too difficult to actually receive. Capital One agreed on a settlement, but the payouts ranged from a meager $15 to $63 per consumer. For cardholders who paid hundreds of dollars in fees they didn’t consent to, or who tried to activate payment protection benefits and were denied on a technicality, these amounts obviously aren’t enough.

Despite lawsuits being filed against Capital One and other credit card companies for the unfair practices that victimized Mary and many like her, they continue.

What needs to change?

One pressing issue is the lack of regulation. Payment protection plans are incredibly similar to “credit insurance” plans. The main difference is that credit insurance plans have far more regulations in place to protect consumers.

Insurance companies are required to pay out 40 percent to 70 percent of the premiums they take in. Because credit card companies disguise their credit insurance as “payment protection plans,” they aren’t obligated under this regulation. According to a July 2003 study by the Center for Economic Justice, payment protection plans only paid out about 5 percent of the premiums they collected. Despite this relatively low payout, payment protection plans are 25 percent more expensive, on average, than credit insurance.

Consumers must be educated about the risks of these payment protection plans, but the responsibility isn’t entirely on them. Credit card companies like Capital One are taking advantage of consumers by using deceptive practices, and this must stop.

By Alex Schneider, NCL Public Policy Intern

In a landmark decision that is sure to have long-lasting implications, the Supreme Court ruled 5-4 that evidence of alleged gender discrimination as presented in the case of Wal-Mart Stores, Inc. v Dukes was not sufficient to allow for a class action lawsuit to continue.  Justice Antonin Scalia, who handed down the majority opinion, agreed with a lower court judge’s opinion that the 1.6 million women who filed the lawsuit “have little in common but their sex and this lawsuit.”

According to the majority, the major fault of the plaintiffs was the inability to show that Wal-Mart headquarters was communicating ‘common direction[s]’ to managers that gender discrimination and bias in promotions was justified.  (The entire decision is available from the website of the Supreme Court.)

But in her dissenting opinion, Ruth Bader Ginsberg rejected the idea that Wal-Mart headquarters was blameless.  Based on available evidence, she wrote, “gender bias suffused Wal-Mart’s corporate culture.”

According to the plaintiffs, of the few male cashiers at Wal-Mart, most were better paid than female cashiers.  And in departmental assignments, which determine pay, women were tasked with selling baby clothes while men worked in the better paid electronics or sports departments.  The Impact Fund representing some of the plaintiffs said that women held only 14% of management positions in 2001.  As Ginsberg cited, one manager reportedly told an employee that “[m]en are here to make a career and women aren’t.”

A controversial outcome

For the National Consumers League and other consumer and worker rights groups that have advocated against gender discrimination, this verdict proves disheartening.

In a blog post written some months back, NCL Executive Director Sally Greenberg explored the implication of the case: “The Wal-Mart case gives the issue of “wage disparity” a woman’s face and in so doing, helps other women, particularly low-wage women earners, to see that positive results can come from their struggle to achieve equal rights in the workplace. This case is a critical bellwether for women in workplaces all over the nation.”

Liz Featherstone emphasizes many of the same themes in a post on NPR’s website, telling of “women like Betty Dukes, the lead plaintiff, a pastor in her Pittsburg, California church who has been telling her “David and Goliath” story to her congregation for years, hoping to inspire them to stand up to injustice in their own lives.”  As Featherstone puts it, “Women — whether or not we work at Wal-Mart — are furious about this Supreme Court ruling.”

Moving forward, a decade later

Since 2001, the plaintiffs have tried to bring this case before a jury, only to have their hopes of success shattered ten years later even before a hearing on the merits of the case.  As noted in the Wall Street Journal, Wal-Mart persevered in the end, having chosen not to follow the advice of its lawyers to settle the case.

The verdict of the Supreme Court in the case is final, and while views of the decision differ widely, forward thinking is necessary.

Wal-Mart has not faced its final test.  While the ruling makes legal proceedings difficult especially given the costs to individuals of filing lawsuits as well as the difficulty of proving wrong-doing after so many years, lawsuits will move forward and Wal-Mart may still be found guilty.  With 1.6 million workers affected and a potential $1,000 loss per worker (according to the New York Times), successful lawsuits could result in over $1 billion in payouts.

But in the end, the final verdict lies with consumers.  After ten years, Wal-Mart claims to have cleaned up its operation and to have increased the representation of women at all levels of management. That’s a good start.  But Wal-Mart should make amends, settle claims, and ensure that those who acted in a discriminatory fashion no longer have a place at the company.

Making amends isn’t easy, and it isn’t cheap.  But it is the right thing to do.  Until then, consumers who are angry with Wal-Mart can show they aren’t willing to give in to its policy of denying that discrimination existed at its stores.  There are ‘low prices’ to be found elsewhere, and consumers don’t have to give Wal-Mart their business.