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An outcry has lately arisen over consumer contracts that purport to ban disparagement of the company that proffered the contract or its products, especially since a few such companies, seeking to silence customers vocally dissatisfied with products or services, have proceeded to sue them, threaten them with suit, or report them as credit risks. Although it is doubtful that existing law in fact permits practices of this sort, California proceeded to pass a new law protecting consumers from retaliation by companies they criticize — a law that appears to go much farther than just banning the practices that stirred the furor. [Volokh] Contra: Scott Michelman, CL&P.

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As we’ve reported earlier in a series of posts, an online supplier named KlearGear inserted into its customer agreement a clause prohibiting “any action that negatively impacts KlearGear.com [or] its reputation.” When a couple nonetheless left a negative review, it billed them $3,500 and reported them for nonpayment to credit raters. The couple filed an action to which KlearGear failed to respond, and a court in Salt Lake City has now granted their request for a total of $306,750 including $250,500 in punitive damages, though the collectibility of that sum is unknown. [CL&P]

A few weeks ago a furor broke out after it was reported that a company called KlearGear had billed customers $3,500 for giving it a negative review, pursuant to a non-disparagement clause prohibiting “any action that negatively impacts KlearGear.com [or] its reputation.” Now it seems a company purveying refrigerated wine cabinets is using a similar clause [Matthew Hunt, Scotch Tape and Duct Whisky via WineBerserkers.com]

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December 3 roundup

by Walter Olson on December 3, 2013

  • The law blog that almost brought down ObamaCare [Trevor Burrus, Cato] “In Government, Nothing Succeeds Like Failure,” public policies being hard to adjust when they go astray [Peter Schuck, HuffPo]
  • Sexual harassment claim: “Attorneys awarded more than 600 times damages in Calif. case” [Legal NewsLine]
  • KlearGear, of non-disparagement fame, reaps the online whirlwind [Popehat, Public Citizen, Volokh, earlier]
  • “What if American Exceptionalism, properly understood, really boils down to associational liberty?” [Richard Reinsch, Liberty Law] Do religious-liberty carve-outs in same-sex marriage laws go too far, not far enough, or neither? [Dale Carpenter et al. vs. Richard Garnett et al.]
  • What jury didn’t hear in qui tam award against pipemaker JM Eagle [Daniel Fisher, more]
  • Majority of appointed commissioners on Consumer Product Safety Commission is is no hurry to reduce inordinate CPSIA testing burdens, per retiring commissioner Nancy Nord (more);
  • Woman who claims to own sun says she prevailed in lawsuit brought by man who claims to own universe [Lowering the Bar]

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November 20 roundup

by Walter Olson on November 20, 2013

  • KlearGear and the consumer non-disparagement clause that ate (or tried to eat) Chicago [Popehat and followup]
  • “House Passes Bill That Would Open Asbestos Trusts To Scrutiny” [Daniel Fisher/Forbes, Chamber-backed Legal NewsLine]
  • Randy Maniloff interviews Judge Richard Posner on his new book Reflections on Judging [Coverage Opinions]
  • In a custody fight, anything can happen: “Dad Accused of ‘Unfit Parenting’ for Refusing to Take His Son to McDonalds” [TIME]
  • “Released after serving 10 years on false rape accusation –then wrongly arrested for not registering as sex offender” [Chicago Tribune via @radleybalko]
  • Institute for Justice launches campaign to challenge local restrictions on food with suits over sale of cottage baked goods, front-yard vegetable gardens, advertising of raw milk [AP/Yahoo, "National Food Freedom Initiative"]
  • Alabama regulators add hassle factor when business tries to move into the state [Coyote]

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