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Pocketbook Justice

Supreme Court Cases That Could Affect Your Wallet

Similarly, Merck & Co. v. Reynolds affects investors because it addresses the statute of limitations in securities fraud cases. This battle arose out of the drugmaker’s false and misleading statements about its best-selling painkiller Vioxx, which was taken off the market in 2004 after being linked to increased risk of cardiovascular problems. Many Merck shareholders saw the value of their holdings plummet following revelations that the firm had misrepresented the drug’s safety and commercial viability. Investors sued Merck and some officials for alleged violations of securities laws. Now the court will address whether a group of those plaintiffs waited too long to sue, given early indications in the media and from within the Food and Drug Administration of problems with Vioxx.

Two consumer rights cases awaiting consideration address other money issues now all too familiar: debt collection and bankruptcy.

Jerman v. Carlisle, McNellie, Rini, et al was triggered by a debt collector erroneously telling a homeowner that she faced foreclosure and had 30 days to dispute her debt, in writing. The homeowner sued the debt collection agency for allegedly violating the Fair Debt Collection Practices Act (FDCPA), claiming the firm used deceptive business practices because the act doesn’t require disputes to be in writing. The debt collector claimed that its mistake was not intentional, giving the firm protection from liability under a provision of the FDCPA—a defense the Supreme Court will consider.

The case is important because last year alone the Federal Trade Commission received more than 104,000 complaints under the FDCPA about the alleged deceptive, unfair or abusive practices of debt collectors. This case could clarify for debtors what constitutes predatory collection practices.

The central issue in Milavetz, Gallop & Milavetz v. United States is whether a law barring attorneys from counseling their clients to incur additional debt before filing bankruptcy is a violation of those attorneys’ First Amendment rights. With bankruptcy rates surging, the inability to get unfettered legal advice could further jeopardize someone’s already teetering economic security.

There is more riding on this session than financial matters. For example, Stolt-Nielsen S.A. v. Animalfeeds International addresses whether a court can order disputes slated for arbitration between two parties to go forward as a class action if the disputes involve contracts that don’t specifically stipulate anything about class actions. Because arbitration clauses are now standard in contracts for everything from cellphones to nursing home admissions, the case will have important consequences for consumers.

All these cases bear watching, although oral arguments may provide few real clues about what the court will later decide. “It’s very difficult to predict the Supreme Court with any certainty ever,” says Stephen Wermiel, adjunct professor at American University Washington College of Law. “And it’s a little harder to predict the court when you have a new justice, even when she fits her predecessor’s ideological slot.”

Overturning the Justices on Age Bias

Cases involving age discrimination received much attention from the nine justices over the past few years. During the last term alone the Supreme Court decided five cases arising under the Age Discrimination in Employment Act (ADEA), including one that made it substantially harder for older workers to prove they’ve been discriminated against because of age.

That much-analyzed case, Gross v. FBL Financial Services, split the court 5 to 4 in June. The case involved Jack Gross, who was 54 in 2003 when, after 28 years of regular promotions and pay raises at FBL in Des Moines, Iowa, he was demoted. Gross sued, claiming violation of the ADEA, and prevailed until the Supreme Court ruling.

“Because of the terrible outcome in last term’s Gross decision, older workers will need to look to Congress first to restore the law to give them at least a fighting chance at prevailing in federal courts,” says Stuart Cohen, senior vice president of legal advocacy at the AARP Foundation.

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