Consumer Watchdog in Middle of Fight for Insurance Rate Regulation
by Brian Leubitz
Consumer Watchdog (CW) has more than its share of enemies. While most normal Californians have very little idea who they are, the denizens of the Capitol are not really normal, are they? They have a pretty good idea of who they are.
They have enemies from the 2007 health care fight, where California ended up with no health care reform package, partly because the left didn't want to be complicit with Gov. Schwarzenegger's plan. You see, fellow progressives, we are supposed to stand by while the "adults" do all the negotiating and then cheer when we get some scraps. By adults I mean, the corporate right, the Tea Party, and the center-right Democrats. So, you know, "serious" people.
It turns out that when CW helped out with blowing up that 2007 process, there were some hard feelings. And these things linger in Sacramento. Of course, for Consumer Watchdog, it is hardly the first time they've pissed anybody off.
Fast forward to this year, when AB 52, health insurance rate regulation is up in the Senate. It ultimately fails, and Sen. Ed Hernandez, the chair of the Healthcare committee that ultimately passes it to the full Senate, catches some flack. Hernandez didn't ultimately support the bill in the full Senate, or at least he has said as much. Consumer Watchdog then proceeded to put out a TV spot attacking Sen. Hernandez.
The spot was pretty hardhitting, and Asm. Feuer and IC Dave Jones have distanced themselves from it. However, what is interesting now is that the focus doesn't seem to be on the issue itself anymore, but rather that vague sense of transparency. You see, like the Chamber of Commerce and other organizations, CW keeps some of their contributors private.
Thornier than the fees is the disclosure of individual donors who fund Consumer Watchdog, It is widely believed - and some within Consumer Watchdog have confirmed it over the years - that much of its money comes from the trial bar. The group receives individual donations from the public, money from foundations, money from settlements that go into affiliated foundations for education and outreach that provide money to the main group and money from labor and other groups.
But individually, just who gives what is not available, Court said, "the donors can get harassed by politicians because people like us run ads about their (the politicians') conflict of interest," he said. He said nondisclosure as a civil rights tool, much as nondisclosure was important to the NAACP to protect its donors.
But critics of Consumer Watchdog are not convinced, saying the group is hypocritical for not disclosing donors while demanding full disclosure from those it attacks.(Capitol Weekly)
Or, in other words, you can't advocate for good government unless you are a perfect teacher's pet. But if you are advocating for giveaways to corporations? Well, no need to tell us who you are working for. We sure they are all just "job creators" trying to ...ummm...exploit labor to increase their own capital or something like that. But hey, it's capitalism...so that's awesome!
Do we need some control over the funding of political? Yes, desperately. But the Left can't be forced to give up the tools and play on a different playing field as the Right.
Excuse me while I take this break from your regularly scheduled budget updates, but I felt this was of enough importance to take a small diversion. Remember when California was the bastion of consumer protection? We head state legislators like (now Congresswoman) Jackie Speier writing some really strong consumer protection legislation. And while our Supreme Court was stocked with Republicans, they were the sort that understood how the real world worked. Well, you woke up today in a whole new California, where consumer protection is only something for the simple fools who can't pen an arbitration provision.
In a stunningly corporate-fueled decision, the United States Supreme Court in AT&T vs. Concepcion somehow found that the Federal Arbitration Act (the FAA of 1925(!)) was in conflict with state law ruling that consumers can not be imposed with arbitration provisions as they were unconscionable. That is a legal term, but it essentially means that the provision would be so unfair, and the situation so heavily tilted towards one party that the courts won't enforce the provisions.
And that has essentially been the law in California for years, and this case involving a $30.83 charge from AT&T, is a great example. The Courts have refused to enforce many such arbitration provisions, because quite simply the litigants would not go to court over $30.83. They would not go to arbitration over $30.83. It just isn't worth any individual's time. And quite frankly, every attorney knows that no attorney is going to take a case, even one for $7500, which prevailing parties are awarded at arbitration. And no individual is really going to fight for the $30.83.
And Justice Scalia, who wrote this decision (shocking!), knows this, but he just doesn't like the idea of petty consumers getting in the way of a hard-working corporation's money-making.
That law makes arbitration agreements enforceable on the same terms as other contracts and prohibits states from singling out arbitration for unfavorable treatment, said Scalia, writing for the court's conservative majority. He said the California ruling, which allows customers to pursue class actions in arbitration, "interferes with fundamental attributes of arbitration."
Arbitrating cases for a large number of customers at once "makes the process slower, more costly and more likely to generate procedural morass," said Scalia.
He said class-wide arbitration also "greatly increases the risk to defendants" and may coerce settlements.(SF Chronicle)
Except that the FAA of 1925(!) doesn't do anything of the sort that Scalia is representing. It encourages arbitration and notes that they are valid and enforceable. However, it does give one major exception: "{An arbitration provision} shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract."
And guess what? The unconscionability provision has been a part of law since well before 1925, and should therefore be respected under the FAA of 1925(!). That this ruling is only happening 86 years later should be an indicator of something sketchy.
The other major issue here is that while conservatives are all over states rights when it comes to issues they care about, health care, racial discrimination, that sort of thing, when it comes to corporate profits they've never heard of the concept.
Dissenting Justice Stephen Breyer accused the majority of disregarding traditional state authority over the fairness of contracts while leaving consumers in the lurch.
Bans on class actions "can lead small-dollar claimants to abandon their claims rather than to litigate," said Breyer, joined by Justices Ruth Bader Ginsburg, Sonia Sotomayor and Elena Kagan.(SF Chronicle)
After yesterday's decision, you will be seeing many more arbitration provisions in every agreement that you sign with a big corporation. And really, you won't have a choice about it, because you want the cell phone, or you need the internet service or what not. So you'll sign it. And unless you are willing to personally go to arbitration over $30.83, you will lose pretty much all of your rights under California consumer protection law.
This is a monumentally poor decision, one that will continue the radical shift of power away from the people and to the corporate "persons." California's right to be an innovator of consumer protection has been greatly eroded by a band of 5, and there's not a whole lot we can do about it.
Really, the only way to change this is to pass a law in Congress. And how likely do you think it is that the Tea Party controlled House gives one second's worth of consideration to this states' rights cause? You think the Koch Brothers are slowly rubbing their hands together as they greet another step along the road to a government by, for, and of the corporation?
UPDATE: Sen Al Franken has introduced legislation to overturn this decision. Of course, it will be a long road before it gets signed into law, but along with Rep. Hank Johnson, at least he's walking it.
This has been six months in the making and not for the work of Senator Dean Florez the public would be in the dark on the problems associated with SMARTMETERS and Overcharges/Guestimate Charges. Most certainly the type of support a voter should expect from a representative. Kudo's to Senator Florez (California's Consumer Advocate in the State Legislature).
Florez thanks CPUC for taking positive step toward increased transparency!
SACRAMENTO - Senate Majority Leader Dean Florez (D-Shafter), chairman of the Senate Select Committee on the Smart Grid and a key critic of PG&E's flawed "Smart" Meter roll-out, today thanked the head of the utility's regulatory body for taking a requested step toward increasing transparency in the process.
In an order issued Tuesday by Commissioner Michael Peevey, the California Public Utilities Commission stated that PG&E must make all of its reports on Smart Meter implementation - past and present - open to the public. The order states that the move is necessary in order to have the full information needed to assess Smart Meter accuracy.
For the last six months or so California Senator Dean Florez has held multiple hearings on PG&E Smart Meter accuracy and questionable "sky high" utility bills for many customers AFTER the new meters were installed. PG&E's response each time they were asked to explain why bills suddenly doubled or tripled was always the pretty much the same -- Some "version" of "There is nothing wrong with our Smart Meters and the customer is using too much electricity."
Here is where it gets interesting! Senator Florez has learned some Smart Meters are apparently DEFECTIVE and is not transmitting the data needed to PG&E for proper billing. PG&E simply started estimating the customer bills each month while they try to determine the cause of the defected meter. Based on the official line to Senator Florez and customers from PG&E, that there were no problems with the deployed Smart Meters, at the very time they were apparently aware that some meters were not working properly and put a process in place to deal with the defective meters sets the stage for the hearing on Monday: Smart Grid panel takes on PG&E bill "estimations"
Utility giant admits failure of Smart Meters to transmit data led to practice in question
Senate Majority Leader Dean Florez (D-Shafter) will lead a hearing of the Senate Select Committee on the Smart Grid on Monday in Sacramento, investigating the recent revelation that some utility customers are getting "estimated" bills due to a "Smart" Meter defect. The panel will look into the cost to customers from this practice.
With a much-anticipated public hearing on the horizon, the first signs of Smart Meter testing were reported last week, as PG&E reattached old meters alongside digital Smart Meters on about 150 homes in Kern County to compare the energy usage reported.
The start of testing, repeatedly delayed since it was first promised in October, comes on the heels of an admission by utility giant PG&E that some of its new meters are defective and fail to transmit data, leading to estimated bills for its customers.
Florez has been holding public hearings on Smart Meter installation since reports of skyrocketing bills flooded the Valley last year. Some residents there reported bills that had so much as tripled, even when their homes were vacant.
Intro Editorial: Given that Pepsi has already determined they WILL take steps to remove sugar from their product line, one can make a strong case that Senator Florez, simply by introducing the soda tax legislation in California, has already had a positive impact for the nations consumers. This one act by a responsive corporation translates into less youth with diabetes and that translates into adult lives saved or extended in the long run. Others would do well to follow Pepsi's lead.
The Details
SACRAMENTO - Senate Majority Leader Dean Florez (D-Shafter) today applauded Pepsi Company's announcement that it is working to develop new, non-caloric, natural sweeteners in response to expected new taxes on soda and other sugar-sweetened beverages.
Florez, the author of California Senate Bill 1210, is calling on the soda giant's competitors to follow suit if they want to keep up with consumer trends and issued the following statement:
"I appreciate the fact that Pepsi is trying to move in the right direction by developing new low-calorie drinks. Certainly the threat of new taxes on sugary drinks is having an effect and is changing corporate behavior. It seems they realize that the handwriting is on the wall."
Given The PG&E Pubic Relation Track Record Lately I Am Sure Happy To See That Senator Florez Continues To Looking Out For California Consumers. In all honesty, I hope the PG&E Smart Meter mess is fixed before they come knocking on my door with my Smart Meter! Much of the history of the PG&E Smart Meter mess I posted in the last three months on Calitics. Key Word Smart Meter should get you to the posts.
SACRAMENTO - Amid consumer concerns over the accuracy of so-called "Smart Meters" and ongoing delays in promised independent testing of the devices, the Senate Rules Committee has established a Select Committee on the Smart Grid to provide legislative oversight for implementation of the technology throughout California.
Senate Majority Leader Dean Florez (D-Shafter), who led a series of hearings on Smart Meters last fall as Valley residents' PG&E bills soared inexplicably, will chair the new committee. Some of those who saw their bills triple had even installed energy efficient appliances or received increased bills for homes which were vacant.
Florez has continued to push for public recognition of problems with the meters, which ultimately are supposed to help residents monitor and adjust their energy usage to save money. He called for independent testing and a moratorium on further Smart Meter installations until such testing is complete.
The California Public Utilities Commission agreed to require PG&E to conduct independent testing of the digital meters, but declined to implement a moratorium. Meanwhile, PG&E is attempting to speed up installations while it delays testing.
PG&E indicated in a recent letter to Florez that it would prefer to meet in person rather than respond in writing to his concerns. To that end, Florez will soon hold a Sacramento hearing of the Select Committee on the Smart Grid to discuss the latest on Smart Meters.
Mark DeSaulnier has had a rapid ascent through the state legislature and now, potentially, into Congress. Within three years, this former restaurant owner won elections to the State Assembly (in 2006) and the State Senate (in 2008), with a Congressional primary scheduled for September 1. Prior to that, he was a 3-time member of the Contra Costa County Board of Supervisors and the California Air Resources Board. A former liberal Republican in the mold of Edward Brooke, DeSaulnier switched parties several years ago and compiled a liberal voting record in the State Legislature. His first ad of the campaign covered the topic of health care, and I asked him about this and several other issues in an interview conducted last week. Having taken place before the crucial budget vote, I spent a good deal of time asking DeSaulnier about that, and you can see his responses here. Depending on your perspective, he either did or did not fulfill the promise to vote against "most" of the budget, by the way, voting no on 11 of 26 bills, including all of the more controversial ones.
I'll pick up with a paraphrased transcript of the rest of the interview below:
Over the past twenty years, one of the key gains by the Wall Street Wing of both the Republican and Democratic Parties has been the slow chipping away of consumer rights especially with respect to tort deform. Even in our so-called liberal bastion on the "left coast" we have some really crappy consumer protection laws. And Assemblywoman Nicole Parra (D-Bakersfield) and our Progressive Democratic Governator want to further protect corporations from what they have done in AB1505 by greatly limiting class action lawsuits.
