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Donald Trump

Why Trump’s auto plan is bad news for consumer protection laws

January 25, 2017 by Jay Stefani Leave a Comment

Photo: Marc Nozell
Photo: Marc Nozell

You don’t have to look far to see where this is going. On Tuesday President Trump met with leaders of the so-called Big Three to discuss the future of the American auto industry, and it appears the future doesn’t include the rights of the average American.

Sitting down with the CEOs of GM, Ford and Fiat Chrysler, Trump implored the nation’s largest auto manufacturers to start building plants in the U.S. He also urged them to hire American workers. In exchange, he promised to cut taxes and ease governmental and environmental regulations, which he believes are strangleholds to homegrown companies looking to invest domestically.

On its face, Trump’s logic is flawed. Manufacturing is significantly cheaper when outsourced to places like Mexico, and as Kristin Dziczek, director of the industry, labor and economics group at the Center for Automotive Research, described to the Washington Post: “the big automakers make investments knowing they will outlive any single president, regardless of what policies or regulations are put in place.”

The irony then of Trump’s plan is that it’s more likely to hurt average Americans than help them. The trick is to read between the lines. Easing regulations is likely code for eliminating accountability, thus giving big companies like Ford, GM and Fiat Chrysler nearly unmitigated protection in the event of a lawsuit.

I’m talking, of course, about liability, “the state of being responsible for something, especially by law”: the GM ignition switch crisis, for example, or the Takata airbag debacle. If you’re looking for blatant obfuscation, Volkswagen recently paid record fines for implementing a system that skewed the results of emissions tests. Our associate attorney, Brett Manchel, briefly touched on the definition of limited liability in a post about Uber’s new Terms of Service agreement. It’s worth reading to give you another perspective of what I’m talking about.

Like all companies subject to consumer protection laws, GM, Takata and Volkswagen have paid handsomely for defects that have either killed someone, or in Volkswagen’s case, killed the environment. It’s a pittance in comparison to lives lost and damage inflicted.

But money is money and no one likes to lose it. If Trump gets his way, we’re approaching a crucial juncture that has the potential to do real damage to consumer protection laws, giving corporations even more advantages than they already have.

Yesterday the New York Times wrote that representatives of the Big Three expressed optimism at the idea of a “a renaissance in American manufacturing,” now coming off a record sales year in 2016. That optimism is likely tempered by the fact that the White House sees big business as victims rather than perpetrators.

One of the nice things about living in a developed nation like the U.S. is that you shouldn’t have to worry about food being safe to eat, water being safe to drink, products safe to use. The reason for that is because regulations are frequently nothing more than safety rules. In case you haven’t already noticed, Trump the businessman doesn’t see it that way.

Jay Stefani is a partner at Levinson and Stefani. Follow him on Twitter. 

Donald Trump is the world’s worst client

June 1, 2016 by Ken Levinson Leave a Comment

Photo: Marc Nozell
Photo: Marc Nozell

The real estate mogul’s behavior is proving to be a legal nightmare

Far be it from me to throw my hat into the ring of Presidential punditry, but Donald Trump has provided an opening.

The presumptive Republican presidential nominee has been fending off serious backlash for Trump University, among other things, which is back in the headlines after a federal judge ordered 1,000 pages of internal Trump U documents be made available to the public. Those documents, unveiled yesterday, reveal what many are now calling a sophisticated scheme that was intended to scam people out of money. The basis for that conclusion comes from the so-called Trump U Playbook, which instructed would-be salespeople how to earn a prospective student’s trust, only to lead them down a shady, destructive financial path.

From the New York Times: “One sales manager for Trump University, Ronald Schnackenberg, recounted how he was reprimanded for not pushing a financially struggling couple hard enough to sign up for a $35,000 real estate class, despite his conclusion that it would endanger their economic future.”

“The language employed by Trump University’s sales team is similar to that of multilevel marketing scams like AdvoCare and Amway, and even certain cults,” wrote Olivia Nuzzi of The Daily Beast, which parceled through the documents yesterday.

New York Attorney General Eric Schneiderman has said that he will prosecute Trump to the full extent that he and the state of New York is able, calling the situation a “straight-up fraud case,” not a political one.

In the meantime, Trump defaulted to his usual shtick by levying insults toward his critics and, more surprisingly, the judge overseeing his case. He made reference to the idea that Judge Gonzalo Curiel has been out to get him. He later derided the Indiana-born Curiel as “Mexican” during a Trump rally and re-ignited his tendency to make racially suggestive commentary, all of it setting yet another dangerous precedent as he trucks along to the Republican nomination.

Even if Trump knew how stupid he sounded before he stood in front of a microphone, it probably wouldn’t have mattered. The intent was to defame, damage and offend his way out of a corner. In a normal world, that would pose problems for any litigant.

But Trump is not normal. Since announcing his run for the presidency, his campaign has capitalized on the pettiness that emboldens him and his followers. It’s become so normalized that the Trump contingent likely can’t recognize the damage Trump is doing to himself or the legal process.

That makes attorneys like me lose sleep at night. Trump has instigated a far more complicated legal battle than he or his lawyers bargained for. Worse, his example has inspired recklessness by challenging his detractors with petty insults rather than evidence. How long before other litigants start doing the same, whether it’s an ill-advised tweet, a Facebook post, or airing their grievances in a public forum? We always encourage our clients to refrain from discussing their case outside the courtroom. I never imagined that might one day include advising people to refrain from personally attacking the judge presiding over our case.

From the outset of the legal profession, attorneys have had to protect clients from hurting themselves. It’s worth thinking about how we can protect them from examples like Donald Trump.

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