House Tees Up VW Bailout and Other Attacks on Public Protections, Consumer Rights

(Updated 8 January to add vote results): You've probably heard that the House is soon planning to again repeal the Affordable Care Act (Obamacare). That bill will certainly be vetoed. But the House has other anti-consumer, anti-environmental bills scheduled for floor action this week and next. The bills take aim at agency health, financial and safety regulations and also consumer rights to band together as a class to take their grievances against corporate wrongdoers to court. That last bill would immunize Volkswagen from having to compensate VW Diesel owners for being deceptively sold cars designed to "defeat" air pollution requirements.

UPDATE: Today, the House approved on a 211-198 vote (narrowly, as these things go) HR 1927, the so-called Fairness in Class Action Litigation Act (aka VW Bailout). Last night, the House approved HR 1155, the so-called SCRUB Act, on a 245-174 vote. The House also approved on a 244-173 vote, HR 712, the so-called Sunshine for Regulatory Decrees and Settlements Act.  As explained below, on all these votes, “NOE” is the correct public interest vote.

ORIGINAL POST: You’ve probably heard that the House is soon planning to again repeal the Affordable Care Act (Obamacare). That bill will certainly be vetoed. But the House has other anti-consumer, anti-environmental bills scheduled for floor action this week and next. The bills take aim at agency health, financial and safety regulations and also consumer rights to band together as a class to take their grievances against corporate wrongdoers to court. That last bill has also been called a “VW Bailout” bill since it would wipe out all future class action lawsuits, including those against Volkswagen for knowingly selling consumers so-called “clean” cars that were intentionally designed to “defeat” air pollution limits.

Floor action may tee up today with the so-called SCRUB Act, aka the “Searching for and Cutting Regulations that are Unnecessarily Burdensome” Act of 2015. The bill establishes a cost-based review of all regulations biased in favor of powerful special interests and belittling the benefits of health and safety rules. Worse, under its ominous “cut-go” provision, an agency could not establish a new health or safety regulation without first eliminating (cutting) an equivalently-sized existing rule. The PIRG-backed Coalition for Sensible Safeguards opposes HR 1155, the SCRUB Act. As bill opponents stated in the Judiciary Committee report’s Dissenting Views (page 22):

“Regulatory cut-go would prohibit any regulatory agency from issuing any new rule or informal statement, even in the case of an emergency or imminent harm to public health, until the agency first offsets the costs of that new rule or guidance by repealing an existing rule specified by the Commission. This requirement would endanger public health and safety and unnecessarily delay Federal rulemaking by years, wasting untold taxpayer dollars and agency resources. The SCRUB Act is a dangerous solution in search of a problem. Each branch of government already conducts effective oversight through retrospective review of agency rules, narrowing the delegations of authority to agencies, controlling agency appropriations, and conducting oversight of agency activity. Congress also has the specific authority under the Congressional Review Act to disapprove any rule that an agency proposes. Overlooking this array of options that would provide the necessary scalpel for smart regulatory cuts, the SCRUB Act’s meat-cleaver approach is yet another dangerous and unbalanced attempt to derail agencies’ missions to protect the public health and safety. Rather than creating jobs, growing the economy, or making Americans safer, these dangerous procedures would tie agencies’ hands with unnecessary red-tape and waste valuable agency resources and taxpayer dollars.”

The Rules Committee has also approved for immediate floor action H.R. 712, The Sunshine for Regulatory Decrees and Settlements Act of 2015. Here is the Coalition for Sensible Safeguards Factsheet. The bill is designed to impede the ability of consumer and environmental groups to get consent decrees or settlements when they challenge an agency’s violation of law.  The White House has issued a “Statement of Administration Policy” explaining that senior presidential staff would recommend a veto if the bill passes.

But wait, there’s more. The floor package for HR 712 includes HR 690, a seemingly innocous provision requiring that agencies post 50-word summaries of proposed rules. Again, in Dissenting Views by Judiciary Ranking Member John Conyers (MI), he states the very real concern that the provision would be subject to judicial review and therefore “that H.R. 690 would provide yet another way for opponents of a proposed rulemaking to delay or derail its finalization on the ground that a summary was somehow ‘‘not in accordance with law’’ or not in ‘‘observance of procedure,’’ for example.”

But wait, there’s more! The floor package also includes HR 1759, the so-called ALERT (All Economic Regulations Are Transparent) Act. As committee dissenters explain:

“H.R. 1759, the ALERT Act, is another attack on agency rulemakings that is mischaracterized by its proponents as improving transparency. H.R. 1759 would be unnecessarily burdensome for agencies. Agencies already are required to provide status updates twice a year on their plans for proposing and finalizing rules pursuant to the Regulatory Flexibility Act and Executive Order 12866. This bill would require agencies to report monthly. The bill would impose an arbitrary and unnecessary moratorium on rulemakings that would prohibit a rule from taking effect until the Office of Information and Regulatory Affairs (OIRA) has posted certain information online for at least six months.”

VW Bailout? Finally, we call your attention to another PIRG-opposed bill ready for floor action this week, HR 1927, The Fairness in Class Action Litigation Act of 2015. Here is our 70-group letter of opposition to the House today. Under the broadest interpretation of the bill’s intent and effect, it would wipe out the class action mechanism by requiring all victims to suffer the exact same injury or harm in “type and scope.” So if we both have accounts at one bank and our bank’s illegal practices harm me for two years for $100 and you for one year for $50, we could not join the same class. If a VW “Defeat Device” reduces the value of my 2011 diesel by $2000 but your 2010 diesel by only $1000, we couldn’t join the same class, even though class actions are really the only way to hold VW accountable to its customers.  (Of course, HR 1927 affects all consumer, worker and environmental class actions, not only those against VW.) As coalition partner Joanne Doroshow of New York Law School’s Center for Justice and Democracy states: “Classes inherently include a range of affected individuals, and virtually never does every member of the class suffer the same scope of injury even from the same wrongdoing.  H.R. 1927 will wipe out one of the most important tools for justice in America.”

For more on PIRG’s work to hold VW accountable, see our Make VW Pay page.

For many years, the U.S. Chamber of Commerce, the American Bankers Association and other powerful special interests have led an assault on regulations designed to ensure health, financial well-being and environmental protection. The assault on public protections has been buttressed by a parallel attack on the public’s rights to enforce these protections or hold corporate wrongdoers accountable when they cheat.

We continue to believe that strong but fair consumer, health, safety, financial and environmental laws and regulations provide myriad benefits to all Americans, including those corporate “persons” competing fairly in the marketplace and not trying to avoid responsibility for their actions. Then we also need strong federal enforcement of those laws and regulations by expert agencies such as EPA, CPSC and the CFPB, additional enforcement by state attorneys general and other officials and rapid responses by state legislatures to new threats. Finally, we need the right of the public to enforce those laws and regulations in court because federal and state agencies often don’t have the resources to do so. We’ll continue to defend our public protections and our right as consumers to defend them in court.


Ed Mierzwinski

Senior Director, Federal Consumer Program, PIRG

Ed oversees U.S. PIRG’s federal consumer program, helping to lead national efforts to improve consumer credit reporting laws, identity theft protections, product safety regulations and more. Ed is co-founder and continuing leader of the coalition, Americans For Financial Reform, which fought for the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, including as its centerpiece the Consumer Financial Protection Bureau. He was awarded the Consumer Federation of America's Esther Peterson Consumer Service Award in 2006, Privacy International's Brandeis Award in 2003, and numerous annual "Top Lobbyist" awards from The Hill and other outlets. Ed lives in Virginia, and on weekends he enjoys biking with friends on the many local bicycle trails.