Current Events in March 2018

Consumers showed some increased financial discipline last month, taking home more pay but not spending all of it.

A report by the Bureau of Economic Analysis, part of the Commerce Department, shows incomes rose a healthy 0.4 percent in February. Consumer spending increased, but only by 0.2 percent.

Inflation increased in February, but not enough to cause concern. The Personal Consumption Expenditures Price (PCE) index, closely followed by the Federal Reserve as it tracks inflation, rose 0.2 percent during the month. Over the last 12 months, the rate rose slightly, but last month’s increase was the biggest in a year.

Consumers also saved more. The nation's savings rate went up for a second straight month to 3.4 percent, recovering after a consumer spending binge at the end of last year.

Analysts say the numbers suggest consumers are moderating their spending habits after running up huge credit card bills last year.

The Federal Reserve, under new chairman Jerome Powell, is keeping a close eye on inflation this year. The Fed's Open Market Committee hiked its discount rate a quarter point in mid-March, signaling it will do so again if prices begin to rise too quickly.

Poppies International of Battleboro, N.C., is recalling Delizza Belgian Custard Cream Mini Eclairs made from March 5 – 9, 2018.

The product may be contaminated with Listeria monocytogenes.

No illnesses or adverse health effects resulting from these events have been reported to date.

The recalled product contains lot number (L1M1018 Best Before 09/09/19) on the side of each tub by the lid.

What to do

Customers who purchased or received the recalled product should immediately stop using it and return it to the place of purchase for a full refund.

Consumers with questions may contact the company at info@delizza.us or 252-442-4016 Monday through Friday from 9am – 5pm (EST).

Toyota Motor North America is recalling 1,730 model year 2018 Camrys.

The vehicle’s engine may be equipped with pistons from a particular production period produced with a diameter larger than the specification. In certain conditions, this may cause the vehicle to run rough, create an abnormal sound, emit smoke from the exhaust, and illuminate warning lights and messages.

In some cases, a reduction of power may occur and the engine could stop running, increasing the risk of a crash.

What to do

Toyota dealers will check the production date code of the pistons in the engine. If involved pistons are found, the engine will be replaced with a new one at no cost to customers.

All known owners will receive a notification by first class mail by late May.

Consumers with questions may contact Toyota at 1-800-331-4331.

The National Transportation Safety Board (NTSB) has sent investigators to California to look into Friday's fatal crash of a Tesla Model X.

The federal agency doesn't normally investigate fatal car accidents, but because Tesla has an autopilot feature, it is drawing heightened scrutiny. In a Tweet, the NTSB said it is only investigating the post-crash fire and safety issues involved in the removal of the wreckage.

Tesla said it can't confirm whether the vehicle was in autopilot mode at the time of the crash because it hasn't been able to retrieve logs from the car.

"We are currently working closely with the authorities to recover the logs from the computer inside     the vehicle," Tesla said in a statement. "Once that happens and the logs have been reviewed, we hope to have a better understanding of what happened."

Car smashed into a highway barrier

The accident occurred when the car smashed into a highway barrier near Mountain View, Calif. Tesla says its records show Tesla owners have driven this same stretch of highway with autopilot on some 85,000 times since the feature was introduced in 2015.

The company also said the accident was made worse because a highway safety barrier which is designed to reduce the impact of hitting a concrete lane divider, had either been removed or crushed in a prior accident without being replaced. The full force of the collision was between the vehicle and the concrete barrier.

Tesla has stressed on numerous occasions that the autopilot feature on its cars is not autonomous driving technology, but rather is meant to assist drivers. Tesla says drivers should keep both hands on the steering wheel at all times, even when the autopilot is engaged.

A Tesla with the autopilot engaged slammed into a tractor-trailer on a Florida highway in 2016, killing the driver. After an investigation, the NTSB found that Tesla was not at fault, saying the driver had ignored the company's warnings to stay in control of the vehicle at all times.

Google may be on the hook for more than $8 billion in a landmark case over its excessive use of Oracle’s code.

A U.S. court of appeals ruled on Tuesday that Google infringed on its “fair use” of Oracle’s Java shortcuts in building Android devices. The court sent the case to federal court in San Francisco to decide how much Google will have to pony up. When Oracle filed the lawsuit in 2010, it asked for $8.8 billion which, in today’s money, is closer to $10 billion.

The issue that Oracle takes with Google is over a set of “directions” -- called APIs -- that instruct devices on how to perform tasks like accessing the internet. Essentially, an API makes it easier to develop a computer program by providing all the building blocks.

While Oracle made its APIs freely available to developers, the company felt that Google went too far in its use of the code in Android devices, which Oracle felt was a competing product.

"The fact that Android is free of charge does not make Google's use of the Java API packages noncommercial," the Federal Circuit judges ruled. "Giving customers ‘for free something they would ordinarily have to buy’ can constitute commercial use."

Copyright remains the bottom line

The court’s remarks went right at the heart of the matter, noting that Google had leveraged more than $42 billion in revenue from Android-centered advertising and did so without making any changes to Oracle’s copyrighted material.

The original verdict was in Google’s favor, concluding that APIs cannot be copyrighted in the U.S. A panel had initially decided that ruling in Oracle’s favor would have expanded copyright protection far too wide and prevented others from writing their own versions to carry out the same commands.

However, Oracle kept fighting for its rights through appeals court after appeals court until it got the verdict is was hoping for.

"The Federal Circuit's opinion upholds fundamental principles of copyright law and makes clear that Google violated the law,” wrote Dorian Daley, Oracle Executive Vice President, General Counsel and Secretary. “This decision protects creators and consumers from the unlawful abuse of their rights."

How could this fight play out for the consumer?

On the consumer end of this battle, Google and everyone in its corner argue that if the court’s final ruling is in Oracle’s favor, it would impede development of new software and possibly drive up the cost of devices for consumers if developers have to license Oracle’s API.

"We are disappointed the court reversed the jury finding that Java is open and free for everyone," Google retorted in a statement. "This type of ruling will make apps and online services more expensive for users. We are considering our options."

Apple has reportedly been hit with numerous lawsuits following its admission that it deliberately slowed aging iPhones to preserve battery life.

At least 59 separate lawsuits have been filed by iPhone customers since December, when news of the software update that slowed older iPhones first broke, the Wall Street Journal reports.

Apple customers have accused the company of slowing their phones in order to drive sales of new iPhones, according to court records.  

Those who filed claims are seeking an unspecified financial award, attorneys’ fees, and free iPhone battery replacements, as well as a corrective advertising campaign. A legal meeting in Atlanta tomorrow aims to combine all the U.S. cases into one class-action lawsuit.

Negative impact on the brand

Apple has maintained that slowing down the batteries in older iPhones keeps them from automatically shutting down during certain high-speed tasks. However, iPhone customers who filed lawsuits claim the practice is used to encourage people to shell out more money for a newer iPhone model.

Wayne Lam, a smartphone analyst with the research firm IHS Markit, believes the class-action suit “won’t amount to a hill of beans.” Experts say it’s more likely that the lawsuit will damage Apple’s brand, which could lead to even bigger problems for the company.

“It’s the brand damage that is even more risky and expensive for Apple,” said Holger Mueller, a technology analyst with Constellation Research.

The Justice Department and the Securities and Exchange Commission are investigating Apple over potential securities violations related to the way it informed consumers about the update that slowed older iPhones.

After one of its vehicles fatally crashed into a pedestrian in Tempe, Arizona, Uber has decided not to renew its permit to test its self-driving technology on public roads in California. Its existing permit is set to expire Saturday.

The company temporarily suspended its self-driving operations in a number of test cities following the incident, and Arizona Governor Doug Ducey -- who had initially welcomed Uber to the state with “open arms and wide open roads” -- ordered an indefinite suspension of Uber’s public road testing of driverless cars in the state of Arizona.

In a letter sent Monday to Uber CEO Dara Khosrowshahi, Ducey called the incident an "unquestionable failure" to meet public safety expectations.

“In the best interests of the people of my state, I have directed the Arizona Department of Transportation to suspend Uber’s ability to test and operate autonomous vehicles on Arizona’s public roadways,” Ducey wrote.

Halting operations in California

Now, Uber is taking its testing hiatus a step further by choosing not to renew its permit to test on public roads in California.

“We proactively suspended our self-driving operations, including in California, immediately following the Tempe incident,” Uber spokesperson Sarah Abboud said in a statement. “Given this, we decided not to reapply for California DMV permit with the understanding that our self-driving vehicles would not operate on public roads in the immediate future.”

The ride-hailing company said it does not know when it will reapply to test its cars in California.

If Uber wants to renew its permit in the future, California’s Department of Motor Vehicles said in a letter on Tuesday that it will need a new permit and will have to address the results from the investigation into the Arizona crash.

“Any application for a new permit will need to address any follow-up analysis or investigations from the recent crash in Arizona and may also require a meeting with the department,” wrote Brian Soublet, DMV deputy director and chief counsel.

Uber says it is continuing to cooperate with investigators. The National Transportation Safety Board and National Highway Traffic Safety Administration are working with Tempe police on the investigation.

California Jerky Factory of South El Monte, Calif., is recalling approximately 1,238 pounds of beef jerky products because of due to a deviation that may have led to under processing.

There have been no confirmed reports of adverse reactions due to consumption of these products.

The following items, produced and packaged on December 4, 2017, December 5, 2017, January 2, 2018, and January 24, 2018, are being recalled:

• 3-oz. packages containing, “Beef Jerky Store Beef Jerky Original Crispy,” with “EXP” dates of 120418, 120518 and 010219.
• 6-oz. packages containing, “Beef Jerky Store Beef Jerky Original Crispy,” with “EXP” dates of 120418, 120518 and 010219.
• 3-oz. packages containing, “Beef Jerky Store Beef Jerky Teriyaki,” with “EXP” dates of 120418, 120518 and 010219.
• 6-oz. packages containing, “Beef Jerky Store Beef Jerky Teriyaki,” with “EXP” dates of 120418, 120518 and 010219.
• 1.5-oz. packages containing, “California Jerky Factory Crispy Beef Jerky Original,” with “EXP” dates of 120418, 120518 and 010219.
• 3-oz. packages containing, “California Jerky Factory Crispy Beef Jerky Original,” with “EXP” dates of 120418, 120518 and 010219.
• 7-oz. packages containing, “California Jerky Factory Crispy Beef Jerky Original,” with “EXP” dates of 120418, 120518 and 010219.
• 1.5-oz. packages containing, “California Jerky Factory Crispy Beef Jerky Teriyaki,” with “EXP” dates of 120418, 120518 and 010219.
• 3-oz. packages containing, “California Jerky Factory Crispy Beef Jerky Teriyaki,” with “EXP” dates of 120418, 120518 and 010219.
• 7-oz. packages containing, “California Jerky Factory Crispy Beef Jerky Teriyaki,” with “EXP” dates of 120418, 120518 and 010219.
• 10-lb. packages containing, “Eurasia DELIGHT Beef Jerky Du Du Bo Kho,” with “EXP” date 012419.
• 10-lb. packages containing, “Vua Kho Bo Beef Jerky Du Du Bo Kho,” with “EXP” date 012419.
• 10-lb. packages containing, “Vua Kho Bo Beef Jerky Lemon Grass,” with “EXP” date 012419.

The recalled products, bearing establishment number “Est. 18995” inside the USDA mark of inspection, were sent to retail locations in California, Hawaii and Nevada and sold on the internet.

What to do

Customers who purchased the recalled products should not consume them, but discard them or return them to the place of purchase.

Consumers with questions may contact Nghia Pham (Ben) at (626) 417-8486.

Volkswagen Group of America is recalling four model year 2018 Tiguan long wheel base (LWB) vehicles.

The engine support bolts on these vehicles may not have been tightened properly.

If the engine support bolts were not properly tightened, an unexpected engine breakdown or loss of engine power may occur, increasing the risk of a crash.

What to do

Volkswagen will notify owners, and dealers will replace engine support bolts, free of charge.

The recall is expected to begin in March 2018.

Owners may contact Volkswagen customer service at 1-800-893-5298. Volkswagen's number for this recall is 10F7.

Mercedes-Benz USA (MBUSA) is recalling 20 model year 2017 E300 4Matics, E300s, and E43 AMGs fitted with LED headlights.

The headlights may be misadjusted, possibly resulting in the low beam headlights insufficiently illuminating the roadway.

An insufficiently illuminated roadway may increase the risk of a crash.

What to do

MBUSA will notify owners, and dealers will inspect the headlamp adjustment, adjusting it as necessary, free of charge.

The recall was expected to begin March 23, 2018.

Owners may contact MBUSA customer service at 1-800-367-6372.

Arizona Governor Doug Ducey has ordered an indefinite suspension of Uber's public road testing of driverless cars. The decision comes in the wake of a fatal accident involving one of the cars.

Uber voluntarily suspended its tests a day after last week's accident, but the ride-sharing company will not be able to resume its tests until Ducey lifts his suspension.

A 49 year-old female pedestrian was struck and killed as she pushed her bicycle across a four-lane highway at night in Tempe, Ariz. Tempe Police Chief Sylvia Moir said her initial investigation, based on the Uber car's video, showed the woman abruptly stepped in front of the autonomous vehicle.

A different view

Apparently, Ducey had a decidedly different impression after viewing the video. In a letter to Uber, released to the media, the governor called the accident "an unquestionable failure" on the part of the technology.

"In the best interests of the people of my state, I have directed the Arizona Department of Transportation to suspend Uber's ability to test and operate autonomous vehicles on Arizona's public roadways," Ducey wrote.

Arizona initially welcomed Uber with open arms in 2016 when the company ended road tests in California because of a disagreement over regulations. Uber issued a statement Monday saying it hoped to work with the governor's office to clear up any issues.

Consumers aren't asking for self-driving cars

The automotive and technology industries have collaborated to push development of self-driving cars, despite public opinion surveys that consistently show consumers aren't asking for them. In fact, many surveys suggest consumers have qualms about their safety.

In February, a survey conducted by Solace found nearly 60 percent of consumers who drive "connected cars" featuring smart technology said they wouldn't buy a self-driving car, even if money weren't an object (these cars cost around $250,000).

Consumer and highway safety groups charge autonomous vehicles are being rushed onto America's roads without adequate testing. In June 2017, Advocates for Highway and Auto Safety issued a statement urging lawmakers to slow down.

“As the proverbial way is paved for AV (autonomous vehicles), it is critical to ensure public safety and that industry not be given free rein on our roads and highways without a system of basic safeguards and oversight in place,” the group said in a statement. "Also, states should not be preempted from taking action to protect their motorists in the absence of federal oversight and regulation.”

Whether he knows it or not, U.S. Senate Majority leader Mitch McConnell (R-KY) is fighting to legalize a cannabis crop that bears a striking physical resemblance to marijuana.

In a joint announcement with Kentucky's Republican Commissioner of Agriculture Ryan Quarles, McConnell said he wants his home of Kentucky to become a leader in hemp cultivation. The senator and Quarles said in a news release on Monday that they plan to introduce the Hemp Farming Act of 2018, which would remove hemp from the list of illegal controlled substances where its been for decades.

Federal drug laws have long banned the cultivation of hemp, a cannabis crop that looks like marijuana but does not have enough THC to create a high. But advocates and farmers note that it has thousands of potential uses. Much of the agriculture industry has already been lobbying to declassify hemp as a Schedule I controlled substance.

Farming groups support hemp initiative

The Farm Bureau, National Association of State Departments of Agriculture, National Farmers Union, and the National Conference of State Legislatures have all argued in recent years that lawmakers need to remove hemp from the same list that has relegated marijuana to an illegal controlled substance under federal drug laws.

“To negate any talk that this is a left-leaning fringe issue, 14 current and former GOP governors have enacted hemp legislation under their watch – including Vice President Mike Pence,” writes Jim Holte, the former president of the Wisconsin Farm Bureau Federation, in an editorial calling for the decriminalization of hemp.

Over 30 states, including Indiana during Mike Pence’s reign as governor, have passed laws to pilot hemp cultivation in response to an Obama-era measure that defined hemp as a crop distinct from marijuana. Indiana has yet to produce hemp, however, as their pilot program depended on clearance from the feds, which has not yet been given.

The 2014 Farm Bill for the first time in decades said that states are free to regulate the cultivation of hemp -- but the provision came with several caveats. Hemp could only be grown “for agricultural research purposes where permitted under state law,” according to the Obama-era farm bill.

Over 30 states since then have launched pilot programs to grow hemp with some sort of research component, though the state laws vary in strictness because of conflicting interpretations of the federal farm bill.

Some state lawmakers, for instance, have already allowed farmers to begin growing hemp and are speaking optimistically about the revenue they hope the crop will generate. Others, however, are limiting hemp cultivation to strictly research purposes or waiting on additional federal legislation before they implement their programs.

As it turns out, McConnell’s home state of Kentucky has taken one of the more liberal interpretations of Obama’s farm bill. Kentucky’s industrial hemp program has been well underway and the state recently permitted its first CBD oil facility -- which is technically in violation of federal drug laws.

CBD problems

People who find medical benefits from using marijuana but who do not want to experience a high often turn to cannabidiols (CBDs), a product derived from hemp that does not create a high. Anecdotal evidence suggests that consuming CBDs in oil form (such as via a pill or a candy) may benefit people suffering from certain medical conditions, such as epilepsy or depression. However, federal drug laws in the United States currently do not allow researchers to study its potential uses.

The DEA has maintained that CBDs are illegal, even in light of the 2014 Farm BIll. The agency in 2017 issued a statement to the site The Cannabist alerting consumers that it still considered CBD oil to be a Federal I controlled substance that cannot legally be produced in the United States.

“At present, this material is being illegally produced and marketed in the United States in violation of two federal laws,” the agency said..

As with marijuana, many states have defied those federal laws, and some vendors have been in the crosshairs of local police agencies specifically for selling CBD oil. Legal weed dispensaries in Alaska and stores in Tennessee have both been raided by law enforcement agencies  for selling CBD oil -- to the confusion of patients and advocates who contend that the product doesn't even make users high.

Kentucky emerges as leader in hemp industry

Despite the DEA’s stance on CBD oil, numerous states have decided to allow hemp farmers to extract it from their crops, including Kentucky.

Under Kentucky’s popular hemp pilot program, the state department of agriculture last year announced plans to build the first CBD oil processing plant in the United States, which they also claimed will be the world’s largest.

The Kentucky Department of Agriculture issued permits in December to Kings Royal Biotech of Kentucky to produce “pharmaceutical grade” CBD. The firm is partnering with Chinese investors, and the $30 million facility broke ground several weeks ago.

In his announcement of the Industrial Hemp Farming Act of 2018, McConnell pointed to Kentucky as a model for the rest of the country. “The Hemp Farming Act of 2018 will help Kentucky enhance its position as the leading state on hemp production,” McConnell said in his announcement, which did not mention CBD oil specifically.

A message left with McConnell’s office have not yet been returned to ConsumerAffairs.

BMW has been hit with a class-action lawsuit for allegedly cheating emissions tests on diesel vehicles, including its X5 and 330d models.

The lawsuit, which was filed in a New Jersey court on Tuesday, alleges that the German automaker installed emissions-cheating software in tens of thousands of diesel-powered BWW vehicles.

"BMW's representations were misleading for failure to disclose its emissions manipulations," the suit said.

Manipulating exhaust levels

The models under investigation are the 2009-2011 BMW X5 and 2009-2011 BMW 335d. The suit claims the vehicles emit levels of nitrogen oxide "many times higher than their gasoline counterparts."

"The vehicles' promised power, fuel economy, and efficiency are obtained only by turning off or turning down emission controls when the software in these vehicles senses that they are not in an emissions testing environment," the suit said.

The pollution emitted by the vehicles is said to be up to 27 times the legal standard.

“At these levels, these cars aren’t just dirty – they don’t meet standards to be legally driven on U.S. streets and no one would have bought these cars if BMW had told the truth,” stated Steve Berman, managing partner of Hagens Berman.

Shares hit

BMW has not yet issued a public statement on the allegations, but the company has in the past denied its cars are equipped with illegal defeat devices. Shares in BMW reduced sharply following reports that the automaker installed emissions-cheating software in diesel vehicles.

Back in 2015, the company’s German rival Volkswagen admitted to using emissions-cheating software and was forced to shell out $4.3 billion to settle the charges. The automaker agreed to plead guilty to three criminal felony counts and pay a $2.8 billion criminal penalty.

Additionally, VW was forced to pay $15 billion to owners of the Volkswagens, Audis, and Porsches equipped with 2.0-liter TDI Clean Diesel engines and the $1 billion it has agreed to pay to consumers with 3.0-liter diesels.

Waymo, Google’s self-driving car arm, has announced that it plans to turn the new Jaguar I-Pace electric SUV into a self-driving luxury taxi.

The joint venture with Jaguar will start testing in Phoenix, Arizona this year. The high-end SUVs will operate alongside the company’s existing self-driving Chrysler Pacifica Hybrid minivans and Lexus 450h SUVs. Consumers will be able to request rides using a smartphone app.

“We want to build a self-driving car for every passenger and every trip,” Waymo CEO John Krafcik said at a press event at Chelsea Piers in New York City.

The companies said they expect as many as 20,000 of the all-electric crossover SUVs to comprise Waymo’s fleet of autonomous taxis in two years’ time, with the goal of serving a potential 1 million trips a day.

Testing in Arizona

Arizona’s favorable weather conditions have made it an ideal location for companies to test self-driving car services. However, one of Uber’s autonomous vehicles was recently at center of the first fatality resulting from a self-driving vehicle mishap.

A week after the incident, Uber suspended all of its autonomous vehicle testing operations. Arizona governor Doug Ducey ordered an indefinite suspension of Uber's public road testing of driverless cars in the state.

But other companies, including Waymo, are still testing -- and Waymo is the only company that has vehicles on the road with no human backup drivers in the front seats to take over in an emergency.

In response to questions about the accident, Krafcik referred back to Waymo’s previous comments on the matter, which stated that Waymo’s technology is “robust enough” to avoid a crash like Uber’s.

“We made some comments over the weekend over the situation in Arizona, and those comments suffice for now,” said Krafcik. “Today, we’re talking about moving forward into the future with technology we’re very confident in, with the I-PACE, and integration of our driver with I-PACE is a safe benchmark for the world.”

The average Wall Street bonus in 2017 was three times what most U.S. households make all year, according to data released by the New York state comptroller on Monday.

Wall Street bonuses increased 17 percent last year compared to the previous year, hitting an average of $184,220 -- the highest average payout since before the financial crisis.

Experts say bigger bonuses for bankers reflect a revival on Wall Street as the Trump administration begins dialing back federal efforts to rein in pay by the Securities and Exchange Commission and other agencies.

Bank stocks rebounded last year under the prospect of rising interest rates, faster growth, and deregulation. Last year, Wall Street bankers raked in a total of $31.7 billion in bonuses.

Five times higher than private sector

The latest figures highlight just how much more Wall Street executives earn compared to the rest of the private sector.

The comptroller's annual report said the average salary, including bonuses, in New York City’s securities industry was $375,200 in 2016. That's five times as high as the rest of the private sector, with an average of $74,800.

“The large increase in profitability over the past two years demonstrates that the industry can prosper with the regulations and consumer protections adopted after the financial crisis,” said Thomas P. DiNapoli, the New York comptroller.

About 25 percent of the industry’s employees earned more than $250,000 compared with 2 percent in the rest of the city’s workforce, the report said. The median U.S. household income reached $59,039 in 2016, according to data from the Census Bureau.

Tax changes pay dividends

Tax law changes likely helped drive bigger bonuses in 2017, the annual report noted. Changes to the tax code passed last year encouraged some banks to move up payments to December 2017. Lowering the corporate tax rate to 21 percent is expected to pay off biggest for banks.

“The massive size of the Wall Street bonuses is disturbing not just because of how it contributes to economic inequality in this country,” Sarah Anderson, the global economy project director at the Institute for Policy Studies, told the Washington Post. “It’s also a sign that the reckless Wall Street bonus culture, which contributed to the 2008 financial crisis, continues to flourish.”