The failure of mandated disclosure

University of Pennsylvania Law Review

Volumn 159, Issue 3, 2011, Pages 647-749

  Ben Shahar, Omri ^a   Schneidern, Carl E ^b,c  

^a UNIVERSITY OF CHICAGO   (United States)

^b UNIVERSITY OF MICHIGAN   (United States)

^c GEORGETOWN UNIVERSITY   (United States)

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[No Author keywords available]

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EID: 79952175130     PISSN: 00419907     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (555)

1. See Citizens United v. FEC, 130 S. Ct. 876, 913-17 (2010) (striking campaign finance laws that ban corporate expenditures but upholding disclosure requirements).
2. 15 U.S.C. §§ 1601-1667 (2006); accord 12 C.F.R pt. 226 (2010); cf. Truth in Savings Act § 263, 12 U.S.C. § 4302 (requiring banks to disclose interest rates and terms of demand on interest bearing accounts). The most important disclosure in TILA is the annual percentage rate (APR), a uniform measure of the cost of credit.
3. See 15 U.S.C. §§ 1606, 1631-1649.
4. See, e.g., MICH. COMP. LAWS ANN. § 390.1222 (West 1997) (mandating disclosure of payment terms, penalties, and options for educational loans).
5. 205 ILL. COMP. STAT. ANN. 670/16(m) (West 2007).
6. Edward L. Rubin, Legislative Methodology: Some Lessons from the Truth-in-Lending Act, 80 GEO. L.J. 233, 234 (1991).
7. Consumer Leasing Regulation M, 12 C.F.R § 213.3 (2010); see
8. also Press Release, Federal Reserve (Sept. 27, 1996), available at http://www.federalreserve.gov/boarddocs/press/boardacts/1996/19960927/default. htm (announcing revisions to Regulation M that would "simplify and clarify required disclosures for car leasing and other types of consumer lease transactions").
9. See, e.g., CAL. CIV. CODE §§ 1748.11(a), 1748.13(a) (West 2009) (requiring creditors to disclose the terms of a credit card account during enrollment and to disclose in each billing statement the effects of making less than full payment).
10. E.g., 205 ILL. COMP. STAT. ANN. 510/2 (West 2007).
11. E.g., 815 ILL COMP. STAT. ANN. 122/2-20 (West 2008).
12. E.g., CAL. CIV. CODE § 1812.623(a) (West 2009);
13. MICH. COMP. LAWS. ANN. §445.953 (West 2002).
14. See, e.g., MICH. COMP. LAWS ANN. § 445.853 (West 2002) (requiring disclosure of overall price, the feeds, insurance, remaining balance, time-price differentials, and more in retail installment sale);
15. ILL. ADMIN. CODE tit. 14, § 475.610 (2009) (detailing disclosure requirements for credit sales advertising of motor vehicles);
16. 815 ILL. COMP. STAT. ANN. 375/2.9 (West 2007) (defining "finance charges" for purposes of disclosures for installment sales of cars).
17. See, e.g., 815 ILL. COMP. STAT. ANN. 137/95 (West 2008)
18. (requiring mortagees to inform borrowers "YOU MIGHT BE ABLE TO OBTAIN A LOAN AT A LOWER COST.. .. CLOSING COSTS AND FEES VARY BASED ON MANY FACTORS ... YOU COULD LOSE YOUR HOME AND ANY MONEY YOU PUT INTO IT IF YOU DO NOT MEET YOUR PAYMENT OBLIGATIONS UNDER THE LOAN. ..." (capitalization in original)).
19. 12 U.S.C. §§ 2601-2617 (2006).
20. Pub. L. No. 103-325, 108 Stat. 2190 (codified in scattered sections of 15 U.S.C).
21. 12 C.F.R. § 226.32 (2010).
22. Kg, 765 ILL. COMP. STAT. ANN. 930/15 (West 2001).
23. Kg, 205 ILL. COMP. STAT. ANN. 635/5-7(a)(3) (West 2009).
24. See, e.g., 765 ILL. COMP. STAT. ANN. 940/10 (West 2009) (requiring "distressed property consultants" to disclose the client's rights to cancel the consultation contract).
25. See, e.g., 205 ILL. COMP. STAT. ANN. 635/5-9 (West 2009) (ordering the licensee to disclose any material change in loan terms).
26. See, e.g., CAL. CIV. CODE § 2971 (West 1993) (directing lenders to disclose that a home equity loan is secured by the home and "failure to repay the loan for any reason could cause you to lose your home");
27. MICH. COMP. LAWS ANN. § 445.1637 (West 2009) (requiring lenders to provide a premortgage educational notice that instructs potential borrowers to "shop around and compare loan rates and fees" and recommends credit counseling).
28. For two classic cases involving informed consent, see Canterbury v. Spence, 464 F.2d 772 (D.C. Cir. 1972),
29. and Cobbs v. Crant, 502 P.2d 1 (Cal. 1972).
30. For a legislative example, see GA. CODE ANN. § 31-9-6.1 (2006).
31. Tracy E. Miller & William M. Sage, Disclosing Physician Financial Incentives, 281 JAMA 1424, 1426 (1999).
32. For example, one "court ruled that payments received from a pharmaceutical manufacturer to prescribe a particular medication were within a physician's informed consent obligation." Id.
33. (citing D.A.B. v. Brown, 570 N.W.2d 168 (Minn. Ct. App. 1997)).
34. Moore v. Regents of the Univ. of Cal., 793 P.2d 479, 485 (Cal. 1990).
35. Johnson v. Kokemoor, 545 N.W.2d 495, 510 (Wis. 1996).
36. William M. Sage, Regulating Through Information: Disclosure Laws and American Health Care, 99 COLUM. L. REV. 1701, 1779 (1999).
37. Joan H. Krause, Reconceptualizing Informed Consent in an Era of Health Care Cost Containment, 85 IOWAL. REV. 261, 379-81 (1999).
38. 505 U.S. 833, 881 (1992)
39. (quoting 18 PA. CONS. STAT. § 3205 (2008 & Supp. 2009)).
40. See generally 45 C.F.R. pt. 46 (2009) (requiring such procedures to protect human research subjects).
41. For an illuminating discussion of the general contract law disclosure doctrine, see Richard Craswell, Taking Information Seriously: Misrepresentation and Nondisclosure in Contract Latu and Elsewhere, 92 VA. L. REV. 565 (2006).
42. See, e.g., Hill v. Gateway 2000, Inc., 105 F.3d 1147, 1150-51 (7th Cir 1997) (enforcing an arbitration clause included in terms found in a computer's shipping box);
43. ProCD, Inc. v. Zeidenberg, 86 F.3d 1447, 1452-53 (7th Cir. 1996) (holding that licenses included in product packaging are enforceable if consumers do not explicitly reject them).
44. See PRINCIPLES OF THE LAW OF SOFTWARE CONTRACTS, §2.02(c)(2) (2010) (requiring "reasonable notice of and access to the standard form before payment or . .. before completion of the transfer").
45. Id. ch. 2, topic 2, at 118.
46. PRINCIPLES, DEFINITIONS AND MODEL RULES OF EUROPEAN PRIVATE LAW §§ 11.-3:103, -3:105 (Study Grp. on a Eur. Civil Code & Research Grp. on EC Private Law, Draft Common Frame of Reference, interim outline ed. 2008).
47. 15 U.S.C. § 2302 (2006).
48. U.C.C. § 2-316(2) (2009).
49. See, e.g., CAL. HEALTH & SAFETY CODE § 1363.1 (West 2008) (requiring that the disclosure of mandatory arbitration in health plan contracts be "prominently displayed on the enrollment form").
50. See, e.g., CAL. CIV. CODE § 1723 (West 2009) (instructing retail sellers with return policies to "conspicuously display that policy" in various locations);
51. N.Y. GEN. Bus. LAW § 218-a (McKinney 2004) (detailing where retail mercantile establishments must "conspicuously post" their return policy).
52. See, e.g., 205 ILL COMP. STAT. ANN. 635/5-9 (West Supp. 2009) (requiring disclosure of any material change in the terms of a residential mortgage loan).
53. See Richard Craswell, Property Rules and Liability Rules in Unconscionalňlity and Related Doctrines, 60 U. CHI. L. REV. 1, 57-58 (1993).
54. Edward L. Rubin, Toward a General Theory of Waiver, 28 UCLA L. REV. 478, 523 (1981).
55. Banks must disclose information to depositors when they open accounts or request some transactions. See, e.g., CAL. FIN. CODE § 23035(d) (West Supp. 2009) (outlining disclosure requirements accompanying deferred deposit transactions);
56. 205 ILL. COMP. STAT. ANN. 605/3 (West 2007) (requiring financial institutions to disclose consumer-deposit-account terms).
57. The Truth in Savings Act, 12 U.S.C. §§ 4301-4413 (2006) - as implemented by Regulation DD, 12 C.F.R pt. 230 (2010) - tells depository institutions what costs and terms they must reveal and how they must do so. SEC regulations require the disclosure of mutual fund fees.
58. See Shareholder Reports and Quarterly Portfolio Disclosure of Registered Management Investment Companies, Securities Act Release No. 8393, Exchange Act Release No. 49,333, Investment Company Act Release No. 26,372, 69 Fed. Reg. 11,244, 11,245 (Mar. 9, 2004) (codified in scattered parts of 17 C.F.R).
59. 24 C.F.R. pt. 3500 app. C.
60. 12 C.F.R. § 205.17.
61. E.g., MICH. COMP. LAWS ANN. §§ 500.519, .529, .543 (West 2002).
62. 815 ILL. COMP. STAT. ANN. 175/15-30 (West 2008) (capitalization in original).
63. E.g, ILL. ADMIN. CODE, tit. 14, § 130.847 (2009).
64. 15 U.S.C. §§ 1681b(b), 1681g(c) (2) (2006).
65. E.g., CAL. INS. CODE § 1758.97 (West 2005).
66. E.g, 205 ILL. COMP. STAT. ANN. 695/15 (West 2007).
67. 215 ILL. COMP. STAT. ANN. 5/500-80(e) (West 2008).
68. See, e.g., CAL. INS. CODE § 778.4(a) (West 2005) (mandating disclosures by fire and casualty insurance broker-agents prior to arranging premium financing for a new or renewed policy);
69. 215 ILL. COMP. STAT. ANN. 5/513a9 (providing the required disclosures in premium financing agreements).
70. E.g., CAL. INS. CODE § 762 ;
71. 215 ILL. COMP. STAT. ANN. 5/1409.
72. Kg, CAL. INS. CODE §§ 10101, 10102(a).
73. Id. § 10103.5.
74. E.g, id. § 1758.86;
75. 215 ILL. COMP. STAT. ANN. 5/500-105(b)(3);
76. 625 ILL. COMP. STAT. ANN. 27/20.
77. E.g, 215 ILL. COMP. STAT. ANN. 5/500-107(b)(2)(B).
78. See, e.g., MICH. COMP. LAWS ANN. § 500.2080(6) (d) (West 2008) (giving the insured a right to revoke assignment of life insurance proceeds to cemetery or funeral services).
79. E.g., 215 ILL. COMP. STAT. ANN. 158/35.
80. In a viatical settlement, terminally ill insureds sell their death benefits in exchange for annuities or other immediate support payments. Id. 159/5.
81. 42 U.S.C. §1395cc(f)(1)(A) (2006).
82. 45 C.F.R. § 164.520 (2009).
83. E.g., CAL. HEALTH & SAFETY CODE § 1367.10 (West 2008).
84. For an extended treatment, see Carl E. Schneider & Mark A. Hall, The Patient Life: Can Consumers Direct Health Carel 35 AM. J.L. & MED. 7, 62-65 (2009).
85. Robert Pear, Bush Proposes Linking the Medicare Drug Premium to Beneficiaries' Income, N.Y. TIMES, Feb. 16, 2008, at A15 (quoting Secretary Michael Leavitt).
86. Miranda v. Arizona, 384 U.S. 436, 478-79 (1966).
87. See Berghuis v. Thompkins, 130 S. Ct. 2250, 2259-60 (2010) (holding that a suspect remaining silent is insufficient to imply that the suspect invoked his rights);
88. see also Sherry F. Colb, The Supreme Court Holds that Responding to Police Interrogation Waives the Right to Remain Silent, FINDLAW (June 7, 2010), http://writ.news.findlaw.com/colb/20100607.html (arguing that Berghuis "leaves [Miranda] to stand as an arbitrary disclosure requirement, rather than the protection against coercive interrogation").
89. E.g., N.Y. AGRIO. & MKTS. LAW § 214-i (McKinney 2004).
90. 21 C.F.R. § 101.9(2010)
91. See, e.g., Federal Trade Commission Act § 15, 15 U.S.C § 55(a)(1) (2006) (defining when an advertisement is misleading);
92. see also Howard Beales et al., The Efficient Regulation of Consumer Information, 24 J.L. & ECON. 491, 495-501 (1981) (considering how to define deceptive advertisements).
93. The classic exposé is JESSICA MITFORD, THE AMERICAN WAY OF DEATH (Vintage 2000) (1963).
94. 16 C.F.R. § 453.2 (2010);
95. see also FED. TRADE COMM'N, COMPLYING WITH THE FUNERAL RULE 6 (2004), available at http://www.ftc.gov/bcp/edu/pubs/business/adv/bus05.pdf (explaining the "General Price List," which mandates six disclosures).
96. CAL. BUS. & PROF. CODE § 17530.7(c) (West 2008) (capitalization in original).
97. For pre-need cemetery sales, see, for example, 815 ILL. COMP. STAT. ANN. 390/14(a) (West 2008);
98. for pre-need burial, see 225 ILL. COMP. STAT. ANN. 45/1a-1(a)(3)(A) (West 2007).
99. See also Illinois Consumers' Guide to Pre-Need Funeral and Burial Purchases, ILL. ADMIN. CODE tit. 38, § 610 exh. A (2009) (notifying consumers about terms, descriptions, payment method, and cancellation policy).
100. See, e.g., CAL. CIV. CODE § 1793.23 (West 2009) (requiring "Lemon Law Buyback" disclosure if a car was repurchased due to defect);
101. 625 ILL. COMP. STAT. ANN. 5/5-104.2 (West 2008) (requiring disclosure if a car was repurchased due to failure of warranty).
102. E.g., MICH. COMP. LAWS ANN. § 257.233a (West 2007).
103. E.g., 625 ILL. COMP. STAT. ANN. 5/18d-120, 5/18d-130 (requiring disclosure to vehicle owner before towing a damaged or disabled vehicle).
104. See, e.g., 815 ILL. COMP. STAT. ANN. 306/15(a), 306/20, 306/50 (prohibiting work exceeding one hundred dollars until consumer authorization after disclosures);
105. id. 308/15 (b), 308/20, 308/50 (requiring disclosure of estimated and itemized repair costs);
106. see also CAL. Bus. & PROF. CODE § 9875.1 (West 2008) (mandating disclosure if repair parts are derived from secondary sources).
107. E.g., CHI., ILL., MUN. CODE 4-228-120 (2010).
108. E.g., CAL. CIV. CODE § 1936(g)(1) (West Supp. 2009).
109. E.g, CAL. INS. CODE § 12150(1) (West 2005).
110. E.g., MICH. COMP. LAWS ANN. § 339.2517 (West 2004).
111. See STATE OF CAL. DEP'T OF REAL ESTATE, DISCLOSURES IN REAL PROPERTY TRANSACTIONS (6th ed. 2005), available at http://www.dre.ca.gov/pub-disclosures. html.
112. E.g., CHI., ILL., MUN. CODE § 5-12-100 (2010).
113. E.g., CAL. BUS. & PROF. CODE §§ 11211, 11216 (West 2008).
114. E.g., CAL. CIV. CODE § 1812.302 (West 2009).
115. E.g., 765 ILL. COMP. STAT. ANN. 745/6.5 (West Supp. 2009).
116. E.g., CAL. BUS. & PROF. CODE § 7159 (West Supp. 2009);
117. see also id. § 7159.10 (listing disclosures in service contracts between $500 and $750).
118. E.g., CAL. Bus. & PROF. CODE § 7599.54 (West 2008).
119. E.g., 105 ILL. COMP. STAT. ANN. 425/15.1 (West 2006).
120. See, e.g., 225 ILL. COMP. STAT. ANN. 410/3B-12(a) (West 2007).
121. See, e.g., CAL. VEH. CODE § 11200(b)(1) (West Supp. 2009) (traffic-violator schools);
122. N.J. ADMIN. CODE § 13:23-5.16 (Supp. 2010) (driving schools).
123. Se 20 U.S.C. § 1092(f) (2006).
124. E.g., 220 ILL. COMP. STAT. ANN. 5/16-115C(e)(1) (West Supp. 2009).
125. E.g., 815 ILL. COMP. STAT. ANN. 505/2AA(e) (West 2008).
126. E.g., CAL. HEALTH & SAFETY CODE §§ 122100, 122190 (West 2006).
127. E.g., CAL. BUS. & PROF. CODE § 17550.13 (West 2008).
128. E.g., CAL. CIV. CODE §§ 1742, 1744 (West 2009).
129. E.g., MICH. COMP. LAWS ANN. § 289.6149 (West 2003).
130. CHI., ILL., MUN. CODE 7-38-012 (2010).
131. 815 ILL. COMP. STAT. ANN. 505/2LL(b) (West 2008).
132. See Rubin, supra note 5, at 242-63 (describing the "epic battle" of the debate and drafting process).
133. See, e.g., Yu-Chun Regina Chang & Sherman Hanna, Consumer Credit Search Behavior, 16 J. CONSUMER STUD. & HOME EGON. 207, 222 (1992) ("[M]ost consumers (80%) did not consider searching for information before purchasing credit.");
134. James H. McAlexander & Debra L. Scammon, Are Disclosures Sufficient? A Micro Analysis of Impact in the Financial Services Market, 7 J. PUB. POL*Y & MARKETING 185, 186 (1988) (finding "important differences between high- and low-knowledge consumers in how they learned about and evaluate financial advisers").
135. Rubin, supra note 5, at 236
136. (citing William K. Brandt & George S. Day, Information Disclosure and Consumer Behavior: An Empirical Evaluation of Truth-in-Lending, 7 U. MICH. J.L. REF. 297, 302-03 (1974)).
137. For a survey, see Lauren E. Willis, Decisionmaking and the Limits of Disclosure: The Problem of Predatory Lending: Price, 65 MD. L. REV. 707, 789-98 (2006).
138. Jinkook Lee & Jeanne M. Hogarth, The Price of Money: Consumers' Understanding of APRs and Contract Interest Rates, 18 J. PUB. POL'Y & MARKETING 66, 70 (1999).
139. See Jean Kinsey & Ray McAlister, Consumer Knowledge of the Costs of Open-End Credit, 15 J. CONSUMER AFF. 249, 257-59 (1981) (finding wealth and education effects in a 1977 survey of Minnesota households).
140. Pub. L. No. 100-483, 102 Stat. 2960 (codified as amended in scattered sections of 15 U.S.C.).
141. Sherrill Shaffer, The Competitive Impact of Disclosure Requirements in the Credit Card Industry, 15 J. REG. EGON. 183,195-96 (1999).
142. See, e.g., Lauren E. Willis, Against Financial-Literacy Education, 94 IOWA L. REV. 197, 208-09 (2008) (surveying studies finding that financial education programs have no effect or small paradoxical results).
143. See id. at 207-09;
144. cf. Forum to Explore the Causes of the Financial Crisis: Hearing Before the Financial Crisis Inquiry Commission (2010) (testimony of Annamaria Lusardi, Professor, Dartmouth Coll.; Research Associate, Nat'l Bur. of Econ. Research), available at http://www.fcic.gov/hearings/pdfs/2010-0226-Lusardi.pdf (analyzing the "troubling" picture painted by surveys that examine the financial capabilities of Americans).
145. Jessica Hölzer, Geithner: New Bureau To Focus On Improved Disclosures, FoxBusiNESS, Sept. 21, 2010, http://www.foxbusiness.com/markets/ 2010/09/21/geithner-new-bureau-focus-improved-disclosures (quoting Secretary Timothy Geitner).
146. For a brief exposition, see Carl E. Schneider, After Autonomy, 41 WAKE FOREST L. REV. 411, 417-25 (2006).
147. For a detailed assessment, see CARL E. SCHNEIDER, THE PRACTICE OF AUTONOMY: PATIENTS, DOCTORS, AND MEDICAL DECISIONS 92-99 (1998).
148. For an extended comparison of the law and the reality of informed consent, see the first chapter of MARSHA GARRISON & CARL E. SCHNEIDER, THE LAW OF BIOETHICS: INDIVIDUAL AUTONOMY AND SOCIAL REGULATION (2d ed. 2009).
149. Clarence H. Braddock ILL et al., Informed Decision Making in Outpatient Practice: Time to Get Back to Basics, 282 JAMA 2313, 2315 (1999).
150. See Michael K. Paasche-Orlow et al., Readability Standards for Informed-Consent Forms as Compared with Actual Readability, 348 NEW ENGL. J. MED. 721, 724 (2003) ("Among... 61 [medical] schools with specific grade-level standards [for informed consent text], only 8 percent.. . met their own standard; the mean readability exceeded the stated standard by 2.8 grade levels . ...").
151. Margaret L. Schwarze et al., Exploring Patient Preferences for Infrainguinal Bypass Operation, 202J. AM. C SURGEONS 445, 450 (2006) (footnotes omitted).
152. David A. Herzetal., Informed Consent: Is It a Myth?, 30 NEUROSURGERY 453, 455 (1992).
153. Schwarze, supra note 113, at 449.
154. Angela Fagerlin et ai., An Informed Decision? Breast Cancer Patients and Their Knowledge About Treatment, 64 PATIENT EDUC. & COUNSELING 303, 309 (2006).
155. See PAUL S. APPELBAUM ET AL., INFORMED CONSENT: LEGAL THEORY AND CLINICAL PRACTICE 202 (1987) ("[T] he empirical and anecdotal studies of patients who refuse treatment almost never portray the process of obtaining informed consent as playing a causative role.");
156. Ruth R Faden et al., Disclosure of Information to Patients in Medical Care, 19 MED. CARE 718, 732 (1981) ("[R]efusals attributable to disclosures are rarely, if ever, seen.").
157. See SCHNEIDER et al., supra note 110, at 92-99 (discussing the reluctance of patients to make decisions and the ways in which they do so).
158. Mark A. Hall et al., How Disclosing HMO Physician Incentives Affects Trust, HEALTH AFF., Mar-Apr. 2002, at 197, 203.
159. Id. at 205.
160. See Joan H. Krause, Reconceptualizing Informed Consent in an Era of Health Care Cost Containment, 85 IOWAL. REV. 261, 379-83 (1999) (discussing the unique requirements of disclosure to breast cancer patients).
161. Ann Butler Nattinger et al, The Effect of Legislative Requirements on the Use of Breast-Conserving Surgery, 335 NEW ENGL. J. MED. 1035, 1039 (1996).
162. Steven Joffe et al., Quality of Infiyrmed Consent in Cancer Clinical Trials: A Cross-Sectional Survey, 358 LANCET 1772, 1775 (2001) (assessing the effectiveness of informed consent in clinical trials and proposing interventions that could enhance patients' understandings of the risks involved in participating in such trials).
163. Id. at 1774-75.
164. Gail Geller et al., "Decoding" Informed Consent: Insights from Women Regarding Breast Cancer Susceptibility Testing, HASTINGS CENTER REP., Mar-Apr. 1997, at 28, 30-31.
165. Larry Magid, It Pays to Read License Agreements, P.C. PlTSTOP, http://pcpitstop.com/spycheck/eula.asp (last visited Nov. 15, 2010).
166. Yannis Bakos et al., Does Anyone Read the Fine Print? Testing a Law and Economics Approach to Standard Form Contracts 3 (N.Y. Univ. Sch. of Law Law & Econ. Working Paper Grp., Paper No. 195, 2009), available at http://lsr.nellco.org/nyu-lewp/195/.
167. See id. (reporting an average number of words of 2271 and an average reading rate of 250 to 300 words-per-minute). Less rigorously, Robert Hillman surveyed contracts students at Cornell on their readership of boilerplate and found that only a minority of somewhere between 4% to 13% read the online contracts.
168. Robert A. Hillman, Online Consumer Standard Form Contracting Practices: A Survey and Discussion of Legal Implications, in CONSUMER PROTECTION IN THE AGE OF THE 'INFORMATION ECONOMY' 283, 289 tbls.11.3A-B (Jane K. Winn ed., 2006).
169. We suspect this study significantly overstates readership ratios. It is not clear that reports by the survey subjects-first-year law students-regarding contract readership are credible or representative. Students did not have to actually read a contract, but merely state their readership habits. Id. at 286.
170. None of their answers had any payoff implication. Indeed, some of the students' answers were puzzling, for example, by reporting a greater propensity to read free-subscription contracts than purchase contracts. Id. at 288-89.
171. Florencia Marrota-Wurgler, Will Increased Disclosure Help? Evaluating the Recommendations of the All's Principles of the Law of Software Contrads, 78 U. CHI. L. REV. (forthcoming 2011) (manuscript at 13), available at http://www.law.uchicago.edu/files/file/Wurgler paper.pdf.
172. Id. (manuscript at 16).
173. 42 U.S.C. § 1395cc(f) (2006).
174. For an extended explanation, see Angela Fagerlin & Carl E. Schneider, Enough: The Failure of the Living Will, HASTINGS CENTER REP., Mar-Apr. 2004, at 30.
175. Thaddeus Mason Pope, The Maladaptation of Miranda to Advance Directives: A Critique of the Implementation of the Patient Self-Determination Act, 9 HEALTH MATRDC 139, 167 (1999)
176. (footnote omitted) (quoting Rebecca Dresser, Confronting the Near Irrelevance'of Advance Directives, 5 J. CLINICAL ETHICS 55 ,56 (1994)).
177. See, e.g., Martin N. Marshall et al., The Public Release of Performance Data: What Do We Expect to Gain? A Review of Evidence, 283 JAMA 1866, 1873 (2000) (reviewing studies that explore the impact of publicly disclosed health care performance and determining that patients fail to "use the currently available information to any significant extent");
178. Eric C Schneider & Arnold M. Epstein, Use of Public Performance Reports: A Survey of Patients Undergoing Cardiac Surgery, 279 JAMA 1638, 1641 (1998) (assessing patient awareness of publicly released report card on cardiac surgery mortality and finding that only a small percentage of patients knew about the data before undergoing cardiac surgery).
179. See Arnold M. Epstein, Rolling Down the Runway: The Challenges Ahead for Quality Report Cards, 279 JAMA 1691, 1695 (1998) (exploring recent developments in health care report cards and identifying the greatest challenges to using these report cards more effectively).
180. Judith H. Hibbard et al., Can Medicare Beneficiaries Make Informed Choices?, HEALTH AFF., Nov.-Dec. 1998, at 181, 186.
181. James S. Lubalin & Lauren D. Harris-Kojetin, What Do Consumers Want and Need to Know in Making Health Care Choices?, 56 MED. CARE RES. & REV. 67, 70 (Supp. 1 1999).
182. Id. at 91 fig.1
183. (citing Judith H. Hibbard et al., Choosing a Health Plan: Do Large Employers Use theData?, HEALTH AFF., Nov.-Dec. 1997, at 172).
184. Id. at 91-92.
185. See, e.g., Edward L. Hannan et al., Improving the Outcomes of Coronary Artery Bypass Surgery in New York State, 271 JAMA 761, 765-66 (1994) (contending that the decline in mortality rate from coronary-bypass graft surgery in New York was largely due to "quality improvement" measures undertaken in hospitals after the State began collecting and analyzing health outcome data on the operation);
186. Dana B. Mukamel & Alvin I. Mushlin, Quality of Care Information Makes a Difference: An Analysis of Market Share and Price Changes After Publication of the New York State Cardiac Surgery Mortality Reports, 36 MED. CARE 945, 950-53 (1998) (finding that "quality report cards" assessing health outcomes of cardiac surgery in New York State hospitals resulted in, among other things, greater market share for those hospitals with more favorable outcomes);
187. Eric D. Peterson et al., The Effects of New York's Bypass Surgery Provider Profiling on Access to Care and Patient Outcomes in the Elderly, 32 J. AM. C. CARDIOLOGY 993, 999 (1998) (concluding that bypass-surgery-provider profiling is a "potential means of improving patient outcomes while maintaining access to care").
188. For a statistical critique of these studies, see Jesse Green & Neil Wintfeld, Report Cards on Cardiac Surgeons: Assessing New York State's Approach, 332 NEW ENG. J. MED. 1229, 1230 (1995), which describes controversy surrounding the publicly available data on cardiac surgery mortality rates and cautions that the data might not properly account for the degree of patients' illnesses.
189. See also Timothy P. Hofer et al., The Unreliability of Individual Physician "Report Cards" for Assessing the Costs and Quality of Care of a Chronic Disease, 281 JAMA 2098, 2098 (1999) (examining the effects of "physician performance measures for diabetes care" and concluding that these measures could incentivize doctors to avoid "patients with high prior cost, poor adherence, or response to treatments").
190. See Susan Feng Lu, Multitasking Information Disclosure and Product Quality: Evidence from Nursing Homes 1-3 (Simon Sch. Working Paper No. FR 09-03, 2009), available at http://ssrn.com/abstract-1340578 (determining that nursing homes have not improved in overall quality of care despite publicly available "report cards" because existing resources were simply reallocated to achieve better scores on those aspects of care being measured).
191. See David Dranove et al., Is More Information Better? The Effects of "Report Cards" on Health Care Providers, 111 J. POL. ECON. 555, 555-56 (2003) (finding that cardiac surgery "report cards" in New York and Pennsylvania resulted in medical providers being less willing to take on sicker patients, and therefore caused "worse health outcomes" and "decreased patient and social welfare").
192. Id. at 581-84.
193. See Leemore Dafny & David Dranove, Do Report Cards Tell Consumers Anything They Don't Already Know? The Case of Medicare HMOs, 39 RAND J. ECON. 790, 817 (2008) (finding patient response to the Medicare report cards even after controlling for independent market factors).
194. See, e.g., Steven Walfish & Keely M. Watkins, Readability Level of Health Insurance Portability and Accountability Ad Notices of Privacy Practices Utilized fry Academic Medical Centers, 28 EVALUATION & HEALTH PROFS. 479 (2005);
195. Mark Hochhauser, Readability of HIPAA Privacy Notices, BENEFITSLINK.COM HTTP (Mar. 12, 2003), articles/hipaareadability.pdf.
196. Carl E. Schneider, HIPAA-cracy, HASTINGS CENTERREP., Jan.-Feb. 2006, at 10, 11.
197. B.J. Fogg et al., How Do People Evaluate a Web Site's Credibility? Results from a Large Study, CONSUMER REPORTS WEBWATCH, 86 (Nov. 11, 2002), http://www.consumerwebwatch.org/pdfs/stanfordPTL.pdf.
198. Alan D. Mathios, The Impact of Mandatory Disclosure Laws on Product Choices: An Analysis of the Salad Dressing Market, 43 J.L. & ECON. 651, 673-75 (2000).
199. Gary Jones & Miles Richardson, An Otyective Examination of Consumer Perception of Nutrition Information Based on Healthiness Ratings and Eye Movements, 10 PUB. HEALTH NUTRITION 238 (2007).
200. Id.
201. Gill Cowburn & Lynn Stockley, Consumer Understanding and Use of Nutrition Labelling: A Systematic Review, 8 PUB. HEALTH NUTRITION 21, 23 (2005).
202. Id. at 24;
203. see also Russell L. Rothman et al., Patient Understanding of Food Labels: The Role of Literacy and Numeracy, 31 AM. J. PREVENTIVE MED. 391, 391 (2006) (concluding that many patients struggle to understand nutrition labels and that there is a strong correlation between poor label comprehension and low-level literacy and numeracy skills).
204. Mary Margaret Huizinga et al., Literacy, Numeracy, and Portion-Size Estimation Skills, 36 AM. J. PREVENTIVE MED. 324, 326 (2009).
205. Rothman et al., supra note 152, at 394.
206. Id. at 396.
207. Id. at 393.
208. Pub. L. No. 101-535, § 1(a), 104 Stat. 2353 (1990) (codified in scattered sections of 21 U.S.C).
209. PAULINE M. IPPOLITO &JANIS K. PAPPALARDO, BUREAU OF ECON. STAFF, FTC, ADVERTISING NUTRITION AND HEALTH: EVIDENCIE FROM FOOD ADVERTISING 1977-1997 E-30 (2002);
210. see also Pauline M. Ippolito & Alan D. Mathios, Information, Advertising and Health Choices: A Study of the Cereal Market, 21 RAND J. ECON. 459 (1990) (examining the effects of information on consumer and producer behavior in the ready-to-eat cereal market);
211. Pauline M. Ippolito & Alan D. Mathios, Information and Advertising: The Case of Fat Consumption in the United States, 85 AM. ECON. REV. 91 (1995) (examining how the introduction of producer advertising affected fat consumption).
212. See Brenda M. Derby & Alan S. Levy, Do Food Labels Work? (noting studies that show reduced-fat options do not necessarily lead to less fat intake), in HANDBOOK OF MARKETING AND SOCIETY 372, 389 (Paul N. Bloom & Gregory T. Gundlach eds., 2001);
213. Daniel S. Putler & Elizabeth Frazão, Assessing the Effeds of Diet/Health Awareness on the Consumption and Composition of Fat Intake (finding "widespread 'balloon' effects, where women trade one source of dietary fat for another"), in ECONOMICAS OF FOOD SAFETY 247, 267 (Julie A. Caswell ed., 1991).
214. Richard Rogers, A Little Knowledge is a Dangerous Thing... Emerging Miranda Research and Professional Roles For Psychologists, 63 AM. PSYCHOLOGIST 776, 779 (2008).
215. Id. at 781.
216. Richard A. Leo, Questioning the Relevance of Miranda in the Twenty-First Century, 99 MICH. L REV 1000, 1012-13 (second alteration in original)
217. (quoting Patrick Malone, "You Have the Right to Remain Silent": Miranda After Twenty Years, 55 AM. SCHOLAR 367, 368 (1986)).
218. John Griffiths & Richard E. Ayres, Faculty Note, A Postscript to the Miranda Project: Interrogation of Draft Protestors, 77 YALE L.J. 300, 318 (1967).
219. Id. at 310.
220. See Kenneth McNeil et al., Market Discrimination Against the Poor and the Impad of Consumer Disclosure Laws: The Used Car Industry, 13 LAW & SOC'YREV. 695, 717 (1979) ("Wisconsin's disclosure law.. . did not increase or decrease the relative disadvantage of the poor.").
221. See ARCHON FUNG ET AL., FULL DISCLOSURE: THE PERILS AND PROMISE OF TRANSPARENCY (2007) (analyzing the success of simple disclosures).
222. But see Clifford Winston, The Efficacy of Information Policy: A Review of Archon Fung Mary Graham, and David Weil's Full Disclosure: The Perils and Promise of Transparency, 46 J. ECON. LIT. 704 (2008) (arguing that evidence of the alleged success of transparency regimes is inconclusive).
223. EUGENE BARDACH & ROBERTA. KAGAN, GOING BY THE BOOK: THE PROBLEM OF REGULATORY UNREASONABLENESS 23 (Transaction Publishers 2d prtg. 2003) (1982).
224. Id. at 67.
225. Id. at 14.
226. Id. at xiv.
227. Id. at 22.
228. Robin Fretwell Wilson, Estate of Gelsinger v. Trustees of University of Pennsylvania: Money, Prestige, and Conflicts of Interest in Human Subjects Research, in HEALTH LAW AND BIOETHICS 229, 230 (Sandra H. Johnson et al. eds., 2009).
229. Kevin P. Weinfurt et al., Disclosing Conflicts of Interest in Clinical Research: Views of Institutional Review Boards, Conflict of Interest Committees, and Investigators, 34 J.L. MED. & ETHICS 581, 583 (2006).
230. For excellent discussions, see Beales et al., supra note 68, at 513-14,
231. Colin Camerer et al., Regulation for Conservatives: Behavioral Economics and the Case for "Asymmetric Paternalism, "151 U. PA. L. REV. 1211 (2003),
232. and Cass R Sunstein & Richard H. Thaler, Libertarian Paternalism Is Not an Oxymoron, 70 U. CHI. L. REV. 1159 (2003).
233. Proprietary Vocational and Home Study Schools, 43 Fed. Reg. 60,796, 60,805 (Dec. 28, 1978).
234. Rubin, supra note 5, at 254-55.
235. See Elizabeth Leibold McCloskey, The Patient Self-Determination Act, 1 KENNEDY INST. ETHICS J. 163, 168 (1991).
236. McCloskey, the sponsor's aide, thinks "Reinhold Niebuhr would have enjoyed watching the legislative process," for translating "a good idea into a good law is ... a Niebuhrian dream." Id. at 164.
237. Truman v. Thomas, 155 Cal. Rptr. 752, 762 (Cal. Ct. App. 1979) (Karlton, J. concurring and dissenting), vacated, 611 P.2d 902 (Cal. 1980).
238. For a detailed examination of that case and the assumption that Ms. Truman would have behaved differently had Dr. Thomas told her the risks of not having a Pap smear, see Mark A. Hall & Carl E. Schneider, When Patients Say No (to Save Money): An Essay on the Tectonics of Health Law, 41 CONN. L. REV. 743, 764-67 (2009).
239. See, e.g., Kathleen C Engel & Patricia A. McCoy, A Tale of Three Markets: The Law and Economics of Predatory Lending, 80 TEX. L. REV. 1255, 1317-66 (2002) (proposing that the government stop predatory lending by establishing a suitability standard);
240. John A. E. Pottow, Private Liability for Reckless Consumer Lending, 2007 U. ILL. L. REV. 405, 407 (suggesting "creditor-focused reform");
241. see also HUD-TREASURY TASK FORCE ON PREDATORY LENDING, CURBING PREDATORY HOME MORTGAGE LENDING 17-18 (2000), available at http://www.huduser.org/ publications/pdf/treasrpt.pdf (explaining the relationship between predatory lending and subprime markets).
242. See HUD-TREASURY TASK FORCE ON PREDATORY LENDING, supra note 179, at 67 (proposing that originators be required to provide an accurate "Good Faith Estimate" of, among other things, the APR);
243. see also U.S. DEP'T OF THE TREASURY, FINANCIAL REGULATORY REFORM: A NEW FOUNDATION 63-65 (2009), available at http://www.financialstability.gov/docs/ regs/FinalReport-web.pdf (proposing new formats for financial disclosures that would be less technical and tested for their readability) ;
244. Oren Bar-Gill, The Law, Economics and Psychology of Sulrprime Mortgage Contracts, 94 CORNELL L. REV. 1073, 1140-49 (2009) (providing one of the more nuanced and careful views of disclosure reform);
245. Elizabeth Renuart & Diane E. Thompson, The Truth, the Whole Truth, and Nothing but the Truth: Fulfilling the Promise of Truth in Lending, 25 YALE J. ON RECi. 181, 230-31 (2008) (proposing a comprehensive APR measure).
246. 15 U.S.C. §1638(b)(2) (2006 & Supp. ILL 2009).
247. Jody Freeman, The Good Driller Award, Op-Ed., N.Y. TIMES, July 1, 2010, at A31.
248. Jeremy Sugarman et al., The Cost of Ethics Legislation: A Look at the Patient Self-Determination Act, 3 KENNEDY INST. ETHICS J. 387, 389 (1993).
249. See, e.g., Canterbury v. Spence, 464 F.2d 772, 786 (D.C Cir. 1972) ("[T]he patient's right of self-decision .. . can be effectively exercised only if the patient possesses enough information to enable an intelligent choice.").
250. For some early skepticism, see Robert L. Jordan & William D. Warren, Disclosure of Finance Charges: A Rationale, 64 MICH. L. REV. 1285 (1966),
251. Homer Kripke, Gesture and Reality in Consumer Credit Reform, 44 N.Y.U. L. REV. 1 (1969)
252. , and Note, Consumer Legislation and the Poor, 76 YALE L.J. 745 (1967). Some economists who expect businesses to volunteer information if consumers want it have criticized mandated disclosure, if faintly.
253. See, e.g., Michael J. Fishman & Kathleen M. Hagerty, Mandatory Disclosure (exploring various consequences of disclosure through economic analysis), in 2 THE NEW PALGRAVE DICTIONARY OF EGONOMIGS AND THE LAW 605 (Peter Newman ed., 1998);
254. Sanford J. Grossman, The Informational Role of Warranties and Private Disclosure About Product Quality, 24 J.L. & ECON. 461, 479-80 (1981) (arguing that it is in a company's economic interest to disclose information, even in the absence of positive disclosure law);
255. A. Mitchell Polinsky & Steven Shavell, Mandatory Versus Voluntary Disclosure ofProdud Risks 2-4 (Stanford Law and Econ. Olin Working Paper No. 327, Harvard Law and Economics Discussion Paper No. 564, 2006), available at http://ssrn.com/abstract=939546 (noting that disclosure regimes present potential unintended risks, such as chilling information gathering from firms).
256. See, e.g., William N. Eskridge, Jr., One Hundred Years of Ineptitude: The Need for Mortgage Rules Consonant with the Economic and Psychological Dynamics of the Home Sale and Loan Transaction, 70 VA. L. REV. 1083, 1096-102 (1984) (describing the shift from usury laws to disclosure regulation).
257. Richard S. Saver, Medical Research Oversight from the Corporate Governance Perspective: Comparing Institutional Review Boards and Corporate Boards, 46 WM. & MARY L. REV. 619, 716 (2004).
258. Id. at 717.
259. Debra Pogrund Stark & Jessica M. Choplin, A Cognitive and Social Psychological Analysis of Disclosure Laws and Call for Mortgage Counseling to Prevent Predatory Lending, 16 PSYCHOL. PUB. POL'Y& L. 85, 90-91 (2010).
260. Lubalin & Harris-Kojetin, supra note 137, at 72.
261. Dewey K. Ziegler et al., How Much Information About Adverse Effects of Medication Do Patients Want from Physicians?, 161 ARCHIVES INTERNAL MED. 706, 708 (2001) (emphasis added).
262. Judith H. Hibbard et al., Informing Consumer Decisions in Health Care: Implications from Decision-Making Research, 75MILBANK Q. 395, 395 (1997).
263. Id. at 398.
264. R Lemaire, Informed Consent - A Contemporary Myth?, 88-B J. BONE & JOINT SURGERY 2, 4 (2006).
265. Christine Grady et al., The Limits of Disclosure: What Research Sutyects Want to Know Ahmt Investigator Financial Interests, 34 J.L.MED. & ETHICS 592, 598 (2006).
266. See, e.g., Eskridge, supra note 186, at 1165 (arguing that the correct approach to reform is to increase accuracy rather than to simply increase or decrease the number of disclosures).
267. See Howard Latin, "Good" Warnings, Bad Products, and Cognitive Limitations, 41 UCLAL. REV. 1193, 1211-15 (1994) (examining the social science literature on information overload).
268. George A. Miller, The Magical Number Seven, Plus or Minus Two: Some Limits on Our Capacity for Processing Information, 63 PSYCHOL. REV. 81, 90 (1956).
269. Rogers, supra note 160, at 778.
270. Id. at 778-79.
271. Elisabeth H. Sandberg et al., Clinicians Consistently Exceed a Typical Person's Short-Term Memory During Preoperative Teaching, 53 SURV. ANESTHESIOLOGY 131, 131 (2009).
272. See Carl E. Schneider, The Hydra, HASTINGS CENTER REP., July-Aug. 2010, at 9.
273. Ilene Albala et al., The Evolution of Consent Forms for Research: A Quarter Century of Changes, IRB: ETHICS & HUMAN RES., May-June 2010, at 7, 9 (citation omitted).
274. "More recently, Beardsley and colleagues in Australia found that the median length of consent forms increased from seven to 11 pages between 2000 and 2005." Id. at 7
275. (citing Emma Beardsley et al., Longer Consent Forms for Clinical Trials Compromise Patient Understanding: So Why Are They Lengthening?, 25 J. CLINICAL ONCOLOGY, e13, e13-e14 (2007), http://jco.ascopubs.org/content/25/9/e13.full. pdf).
276. Id. at 7.
277. William Burman et al., The Effects of Local Review on Informed Consent Documents From a Multicenter Clinical Trials Consortium, 24 CONTROLLED CLINICAL TRIALS 245 (2003).
278. Id. at 252.
279. The range of changes was between 3 and 160.
280. Id. at 249.
281. Id.
282. Furthermore, 11.2% of the changes actually introduced errors into the forms. Two-thirds of the forms "had an error of protocol presentation or a required consent form element." Id. Many errors were minor, but over a quarter were more substantive: deletions of significant side effects (e.g., the possibility of hepatotoxicity from rifampin and/or pyrazinamide), major errors in the description of study procedures (e.g., incorrect information on study duration), or the complete removal of a required section of the consentform (e.g., the right to withdraw from the study).
283. Id. at 249-51.
284. See, e.g., Int'l Harvester Co., 104 F.T.C 949, 1060 (1984).
285. Wyeth v. Levine, 129 S. Ct. 1187 (2009) (discussing a case arising under state law in which the jury found that a drugmaker did not provide adequate warning on its labels of risks related to using the drug intravenously).
286. John D. Sutter, San Francisco to Warn Consumers About Cell Radiation Levels, CNN (June 16, 2010), http://www.cnn.com/2010/TECH/mobile/06/16/san. francisco.cell. radiation/index.html?hpt=T2.
287. Id.
288. Weinfurt et al., supra note 173, at 590.
289. RESTATEMENT (SEGOND) OF CONTRACTS § 161(b) (1981).
290. See, e.g., 15 U.S.C. §§ 45, 52 (2006).
291. Canterbury v. Spence, 464 F.2d 772, 787 (D.C Cir. 1972)
292. (quotingJon R Waltz & Thomas W. Scheuneman, Informed Consent for Therapy, 64 NW. U. L. REV. 628, 640 (1970)).
293. Common and Rare Side Effects for Aspirin Oral, WEBMD, http://www.webmd.com/drugs/drug-1082-aspirin.aspx?drugid=1082&drugname= aspirin& source=1&pagenumber=6 (last visited Nov. 15, 2010).
294. See Byron Cryer, NSAID-Associated Deaths: The Rise and Fall of NSAID-Associated GI Mortality, 100 AM. J. GASTROENTEROLOGY 1694, 1694 (2005) (citing estimates of between 3200 and more than 16,500 NSAID-associated deaths per year in the United States).
295. Norman F. Boyd et al., Whose Utilities for Decision Analysis?, 10 MED. DECISION MAKING 58, 66(1990).
296. Peter A. Ubel et al., Whose Quality of Life? A Commentary Exploring Discrepancies Between Health State Evaluations of Patients and the General Public, 12 QUALITY OF LIFE RES., 599, 601 (2003).
297. Id.
298. 45 C.F.R. § 164.520 (2009).
299. The University of Michigan Health Services Privacy notices includes the following disclosure: University Providers, Employee Plans and Affiliated Health Plans all use and disclose [private health information] in connection with their standard business operations, including quality assessment and improvement activities. Examples of these activities include obtaining accreditation from independent organizations like the Joint Commission for the Accreditation of Healthcare Organizations, the National Committee for Quality Assurance and others, outcomes evaluation and development of clinical guidelines, operation of preventive health, early detection and disease management programs, case management and care coordination, contacting of health care providers and patients with information about treatment alternatives, and related functions; evaluations of health care providers (credentialing and peer review activities) and health plans; operation of educational programs; underwriting, premium rating and other activities relating to the creation, renewal or replacement of health benefits contracts; obtaining reinsurance, stop-loss and excess loss insurance; conducting or arranging for medical review, legal services, and auditing functions, including fraud and abuse detection and compliance programs; business planning and development; and business management and general administrative activities, including data and information systems management, customer service, resolution of internal grievances, and sales, mergers, transfers, or consolidations with other providers or health plans or prospective providers or health plans. University of Michigan Quality and Safety, UNIVERSITY OF MlCHICiAN HEALTH SYSTEMS, http://www.med.umich.edu/quality/ toolkit/npp.htm (last visited Nov. 15, 2010).
300. Rubin, supra note 5, at 236-37.
301. Lawrence D. Brown, Management by Objection? Public Policies to Protect Choice in Health Plans, 56 MED. CARE RES. & REV. 145, 161 (Supp. 1 1999).
302. Id. (quoting Paul Lengerin, President, NJ. HMO Ass'n).
303. See, e.g., Lee A. Green et al., Impact of Institutional Review Board Practice Variation on Observational Health Services Research, 41 HEALTH SERVICIES RES. 214, 221 (2006) (finding wide variations in consent requirements and the "standards [IRBs] applied to determine the level of review required");
304. Keith Humphreys et al., Letter, The Cost of Institutional Review Board Procedures in Multicenter Observational Research, 139 ANNALS INTERNAL MED. 77, 77 (2003) (determining that disagreement among home IRBs and local sites contributes to the high cost of IRBs).
305. 225 ILL. COMP. STAT. ANN. 410/3B-12(a) (West 2007).
306. Dave Wendler & Jonathan Rackoff, Consent for Continuing Research Participation: What Is It and When Should It be Obtained?, IRB: ETHIGS & HUMAN RES., May-June 2002, at 1, 1.
307. Rogers, supra note 160, at 778 (citations omitted).
308. Id.
309. Id. at 779.
310. Kimberley Koons Woloshin et al., Patients' Interpretation of Qualitative Probability Statements, 3 ARCHIVES FAM. MED. 961, 965 (1994).
311. Dianne C Berry et al., Patients' Understanding of Risk Associated with Medication Use: Impact of European Commission Guidelines and Other Risk Scales, 26 DRUG SAFETY 1, 2 (2003)
312. (citing Geoffrey D. Bryant & Geoffrey R. Norman, Correspondence, Expressions of Probability: Words and Numbers, 302 NEW ENG. J. MED. 411 (1980)).
313. Id.
314. (citing Danielle Timmermans, The Roles of Experience and Domain of Expertise in Using Numerical and Verbal probability Terms in Medical Decisions, 14 MED. DECISION MAKING 146 (1994)).
315. Tim Smits & Vera Hoorens, How Probable is Probably ? It Depends on Whom You 're Talking About, 18 J. BEHAV. DECISION MAKING 83, 84 (2005) (citations omitted).
316. David A. Grimes & Gillian R. Snively, Patients ' Understanding of Medical Risks: Implications for Genetic Counseling, 93 OBSTETRICS & GYNECOLOGY 910, 912-13 (1999).
317. Id.
318. Peter Knapp et al., Communicating the Risk of Side Effects to Patients: An Evaluation of UK Regulatory Recommendations, 32 DRUG SAFETY 837, 838-39 (2009) (footnotes omitted).
319. Id. at 839.
320. For entry to a large literature, see Annette Moxey et al., Describing Treatment Effeds to Patients: How They Are Expressed Makes a Difference, 18 J. GEN. INTERNAL MED. 948 (2003).
321. Florencia Marotta-Wurgler, Are "Pay Now, Terms Later" Contracts Worse for Buyers? Evidence from Software License Agreements, 38 J. LEGAL STUD. 309, 312 (2009) (showing that undisclosed terms in software licenses are no worse than disclosed ones).
322. See Kenneth J. Arrow, Uncertainty and the Welfare Economics of Medical Care, 53 AM. ECON. REV. 941, 951 (1963) ("Because medical knowledge is so complicated, the information possessed by the physician as to the consequences and possibilities of treatment is necessarily very much greater than that of the patient.... Further, both parties are aware of this information inequality, and their relation is colored by this knowledge.").
323. See Kimberly S.H. Yarnall et al., Primary Care: Is There Enough Time for Prevention?, 93 AM. J. PUB. HEALTH 635, 637 (2003) (concluding that doctors do not have enough time to provide patients with all of the screening and counseling that the U.S. Prevention Services Task Force recommends).
324. Truls Østbye et al., Is There Time for Management of Patients With Chronic Diseases in Primary Care?, 3 ANNALS FAM. MED. 209, 212 (2005).
325. See Berry et al., supra note 235, at 5-6 (showing through four experiments that disclosure requirements affect treatment decisions by causing patients to overestimate "adverse effects").
326. On noncompliance, see L. Stockwell Morris & R M. Schulz, Patient Compliance - An Overview, 17 J. CLINICAL PHARMACY & THERAPEUTICS 283 (1992).
327. The extent of noncompliance is commonly thought to be vast, so that " [noncompliance may be the most significant problem facing medical practice today." Stephen A Eraker et al., Understanding and Improving Patient Compliance, 100 ANNALS INTERNAL MED. 258, 258 (1984).
328. Morris and Schulz estimate that half the patients in long-term therapy are noncompliant. Morris & Schulz, supra at 285.
329. Jean-Marie Berthelot et al., Informing Patients Ahmt Serious Side Effects of Drugs. A 2001 Survey of 341 French Rheumatologists, 70 JOINT BONE SPINE 52, 55 (2003).
330. Id. at 54-55.
331. Mildly but unrealistically positive beliefs can improve outcomes in patients with chronic or terminal diseases.... Moreover, unrealistically optimistic views have been shown to improve quality of life." Peter A. Ubel, Editorial, Truth in the Mast Optimistic Way, 134 ANNALS INTERNAL MED. 1142, 1143 (2001) (citations omitted).
332. Tracy M. Robinson et al., Patient-Oncologist Communication in Advanced Cancer: Predictors of Patient Perception of Prognosis, 16 SUPPORTIVE CARE GANGER 1049, 1050 (2008).
333. Neil Carrigan et al., Adequacy of Patient Information on Adverse Effects: An Assessment of Patient Information Leaflets in the UK, 31 DRUG SAFETY 305, 306 (2008).
334. Id. at 307.
335. Mark A. Hall, The Theory and Practice of Disclosing HMO Physician Incentives, LAW & CONTEMP. PROBS., Autumn 2002, at 207, 227.
336. Id.
337. Willis, supra note 102, at 790.
338. See generally JAMES C. SCOTT, SEEING LIKE A STATE (1998) (describing the shortcomings of well-intentioned social projects over time).
339. Leo, supra note 162 at 1009 & n.53, 1010 & n.56.
340. Susan Block-Lieb & Edward J. Janger, The Myth of the Rational Borrower: Rationality, Behavioralism, and the Misguided "Reform" of Bankruptcy Law, 84 TEX. L. REV. 1481, 1560 (2006).
341. Daylian M. Cain et al., The Dirt on Coming Clean: Perverse Effects of Disclosing Conflicts of Interest, 34 J. LEGAL STUD. 1, 7 (2005).
342. Id. at 22.
343. See, e.g., Rev. Proc. 2008, 2008-5 I.R.B. 368.
344. See 21 C.F.R. § 101.9 (2010) (defining serving size as an amount of food customarily consumed per eating occasion by persons 4 years of age or older which is expressed in a common household measure that is appropriate for food").
345. See James P. Nehf, Effective Regulation of Rent-to-Own Contracts, 52 OHIO ST. LJ. 751, 841-43 (1991)
346. (identifying seventeen items of disclosure in Ohio's rent-to-own statute, OHIO REV. CODE ANN. § 1351.02 (LexisNexis 2006)).
347. McNeil, supra note 165, at 701 n.5 (describing Wisconsin's used-car disclosure regulations).
348. 20 U.S.C. § 1092(f) (2006).
349. Sara Lipka, Do Crime Statistics Keep Students Safe?, CHRON. HIGHER EDUG., Jan. 30, 2009, at A1.
350. OFFICE OF POSTSEGONDARY EDUG, U.S. DEP'T OF EDUC, THE HANDBOOK FOR CAMPUS CRIME REPORTING 3 (2005).
351. See id. at 1 ("Compliance with the Clery Act is not simply a matter of entering statistics into a Web site or publishing a brochure once a year. Compliance is a whole system of developing policy statements, gathering information from all the required sources and translating it into the appropriate categories, disseminating information, and, finally, keeping records. Many people at your institution - from the president on down - should be involved.").
352. Lipka, supra note 268.
353. Id.
354. Id. (quoting Dolores A. Stafford, Chief of Police, George Washington Univ.).
355. OFFICE OF POSTSEGONDARY EDUC., supra note 269.
356. See, e.g., UNIV. OF MICH., ANNUAL SECURITY REPORT & ANNUAL FIRE SAFETY REPORT (2010), available at http://www.umich.edu/~safety/pdf/annual- report-2010.pdf (providing thirty-six pages of information for the relatively safe town of Ann Arbor).
357. Lipka, supra note 268.
358. Nor do disclosees even read Clery Act data. "[W] hen the law required colleges to print and distribute their annual crime statistics, [George Washington University's police chief] would make a point to visit freshman dormitories on the day of delivery. 'There were trash cans full of them,' she says. 'It was a colossal waste of money.'" Id.
359. Id.
360. HA T. TU & JOHANNA R LAUER, CTR. FOR STUDYING HEALTH SYS. CHANGE, RESEARCH BRIEF NO. 9, WORD OF MOUTH AND PHYSICIAN REFERRALS STILL DRIVE HEALTH CARE PROVIDER CHOIGE 5 (2008), available at http://www.hschange.org/CONTENT/ 1028/1028.pdf.
361. Ha T. Tu & Jessica H. May, Self-Pay Markets in Health Care: Consumer Nirvana or Caveat Emptor?, 26 HEALTH AFF. w217, w222 (2007), http://content.healthaffairs.org/cgi/content/reprint/26/2/w217.
362. LASIK may be "relatively simple surgery with low complication rates, but for patients whose eyes have certain 'problem' characteristics (for example, abnormal topography, large pupils, thin corneas), quality differences can be critical." Id.
363. Stephen J. Choi & AC. Pritchard, Behavioral Economics and the SEC, 56 STAN. L. REV. 1, 12 (2003).
364. Gary S. Fischer et al., Patient Knowledge and Physician Predidions of Treatment Preferences After Discussion of Advance Directives, 13J. GEN. INTERNAL MED. 447, 452 (1998).
365. When our hypothetical Chris Consumer was prescribed Prozac, Googling turned up a website that told him how to read a package insert (2443 words). How to Read a Package Insert, EPILEPSY.COM, http://www.epilepsy.com/epilepsy/ medicine-inserts (last visited Nov. 15, 2010).
366. It said inserts have eleven sections: "Description," "Clinical Pharmacology," "Indications and Usage," "Contraindications," "Warnings," "Precautions," "Adverse Reactions," "Overdosage," "Dosage and Administration," "How Supplied," and for some drugs, "Drug Abuse and Dependence." Id.
367. Chris balked but read on: "It's a good idea to review the package insert for any new medicine and to look at it again if anything about your health changes." Id.
368. Chris sighed and reached for his Stedman's medical dictionary. And then for the insert, which bade him "read the Medication Guide before starting therapy with PROZAC" and "reread it each time the prescription is renewed." ELI LILLY AND Co., PROZAC; MEDICATION INSERT 24 (2009), available at http://pi.lilly.com/us/prozac.pdf. Chris embarked dutifully on 1993 words.
369. Epstein, supra note 135, at 1694.
370. See NAT'L READING PANEL, TEACHING CHILDREN TO READ 7-15 (2000) (describing the stages of literacy development).
371. Ad Hoc Comm. on Health Literacy for the Council on Scientific Affairs, Am. Med. Ass'n, Health Literacy: Report of the Council on Scientific Affairs, 281 JAMA 552, 552 (1999).
372. IRWIN S. KIRSCH, ET AL., NAT'L CTR. FOR EDUC. STATISTICS, ADULT LITERACY IN AMERICA: A FIRST LOOK AT THE RESULTS OF THE NATIONAL ADULT LITERACY SURVEY 82-83 (1993).
373. Ad Hoc Comm. on Health Literacy for the Council on Scientific Affairs, supra note 286, at 552
374. (citing Mark v. Williams et al., Inadequate Functional Health Literacy Among Patients at Two Public Hospitals, 274 JAMA 1677 (1995)).
375. Michele Heisler, Helping Your Patients With Chronic Disease: Effective Physician Approaches to Support Self-Management, 8 SEMINARS MED. PRAG 43, 49 (2005).
376. Lisa M. Schwartz et al., The Role of Numeracy in Understanding the Benefit of Screening Mammography, 127 ANNALS INTERNAL MED. 966,969 (1997).
377. Isaac M. Lipkus et al., General Performance on a Numeracy Scale Among Highly Educated Samples, 21 MED. DECISION MAKING 37, 39 (2001).
378. Schwartz et al., supra note 290, at 969. Accuracy ranged from 7% to 33%.
379. See Mark Hochhauser, Lost in the Fine Print: Readability of Financial Privacy Notices, PRIVACY RIGHTS CLEARINGHOUSE (July 1, 2001), http://www.privacyrights.org/ar/GLB-Reading.htm (examining a sample of sixty privacy policies).
380. Walfish & Watkins, supra note 145, at 484.
381. See Judith Hibbard & Jacquelyn Jewett, Will Quality Report Cards Help Consumers?, HEALTH AFF., May-June 1997, at 218, 225 (finding that consumers did not understand many of the report's indicators and, in turn, gave those indicators low salience).
382. Peter Breese et al., Letter, The Health Insurance Portability and Accountability Act and the Informed Consent Process, 141 ANNALS INTERNAL MED. 897, 897 (2004). Similarly, HIPAA forms in "major health-care institutions" were (on average) six pages long in ten-point font.
383. Peter Breese, Readability of Notice of Privacy Forms Used fry Major Health Care Institutions, 293 JAMA 1593, 1593 (2005).
384. A "median of 80.0% of persons in the surrounding area would have difficulty understanding the privacy notices." Id.
385. Alan M. White & Cathy Lesser Mansfield, Literacy and Contract, 13 STAN. L. & POL'Y REV. 233, 234, 237-38 (2002)
386. (citing KIRSCH ET AL., supra note 287, at 17 fig. 1.1, 19);
387. see also Melvin A. Eisenberg, Commentary, Text Anxiety, 59 S. CAL. L. REV. 305, 309 (1986) (explaining why it is reasonable for consumers to ignore the dense textual content of contracts).
388. 225 A2d 328 (N.J. 1966).
389. Eisenberg, supra note 297, at 309.
390. Elizabeth Warren Defends The Consumer Financial Protection Agency, BUSINESS INSIDER, http://www.businessinsider.com/elizabeth-warren-defends-the- consumer-financial-protection-agency-2009-7/#ixzzl137xyXGQL (view video).
391. David Lat, Do Lawyers Actually Read Boilerplate Contrads?, ABOVE THE LAW (June 22, 2010, 2:42 PM), http://abovethelaw.com/2010/06/do-lawyers-actaully- read-boilerplate-contracts-judge-richard-posner-doesnt-do-you/.
392. Margaret Holmes-Rovner et al., Evidence-Based Patient Choice: A Prostate Cancer Decision Aid in Plain Language, BMC MED. INFORMATICS & DECISION MAKING, June 20, 2005, http://www.biomedcentral.eom/1472-6947/5/16.
393. See John Beshears et al., How Does Simplified Disclosure Affect Individuals' Mutual Fund Choices? 3 (Nat'l Bureau of Econ. Research, Working Paper No. 14,859, 2009), available at http://www.nber.org/papers/w14859 (finding that providing a white-collar test subject with a "Summary Prospectus" did not alter the subject's investment choice, although the subject made the decision more quickly).
394. Even a father of the IRB system thinks it "necessary to use polysyllabic words in consent forms; it is in the nature of the language. If the prospective subject has systemic mastocytosis and we want to invite him or her to participate in a controlled clinical trial of cimetidine versus disodium cromoglycate, we must say so." Robert J. Levine, Letter, IRB: ETHICS & HUMAN RES., Jan. 1982, at 8.
395. Rogers, supra note 160, at 779
396. (citing A. Bruce Ferguson & Alan Charles Douglas, A Study of Juvenile Waiver, 7 SAN DIEGO L. REV. 34 (1970)).
397. Your User Agreement, EBAY, http://pages.ebay.com/help/policies/user- agreement. html?-trksid=m40 (last visited Nov. 15, 2010).
398. Id.
399. ROSALIND MACPHEE, PICASSO'S WOMAN 41 (Kodashu Int'l 1996) (1994).
400. Griffiths & Ayres, supra note 163, at 314-15.
401. USLIFE Credit Corp., 91 F.T.C 984,1027 (1978),
402. modified, 92 F.T.C 353 (1978).
403. Jaya Virmani et al., Relationship of Advance Directives to Physician-Patient Communication, 154 ARCHIVES INTERNAL MED. 909, 913 (1994).
404. James A. Tulsky et al., Opening the Black Box: How Do Physicians Communicate About Advance Diredives?, 129 ANNALS INTERNAL MED. 441, 444 (1998).
405. Id.
406. Gary S. Fischer et al., Patient Knowledge and Physician Predidions of Treatment Preferences After Discussion of Advance Directives, 13J. GEN. INTERNAL MED. 447, 451 (1998).
407. Hill v. Gateway 2000, Inc., 105 F.3d 1147, 1149 (7th Cir. 1997).
408. See, e.g., L. Jaime Fitten & Martha S. Waite, Impact of Medical Hospitalization on Treatment Decision-Making Capacity in the Elderly, 150 ARCHIVES INTERNAL MED. 1717, 1720 (1990) ("[S]ignificant numbers of medically ill patients failed to substantially understand key issues in treatment despite language and form simplification of consent documents.").
409. Linda S. Gottfredson & Ian J. Deary, Intelligence Predicts Health and Longevity, but Why?, 13 CURRENT DIRECTIONS PSYCHOL. SGL 1, 2 (2004) (citations omitted).
410. We cite numerous examples of this failure in our material on the effectiveness of mandated disclosure in Part II, especially the material on the failure of informed consent. See supra subsection II.A.2.
411. RICHARD NISBETT & LEE ROSS, HUMAN INFERENCE: STRATEGIES AND SHORTCOMINGS OF SOCIAL JUDGMENT 28 (1980).
412. Ben Watt was literate enough to have written a memoir of his illness, but had "always thought 'bowel' was just a colloquial term like 'guts' and meant somewhere near your arse." BEN WATT, PATIENT 32 (Grove Press 1997) (1996).
413. See Susan J. Diem et al., Cardiopulmonary Resuscitation on Television: Miracles and Misinformation, 334 NEW ENG. J. MED. 1578, 1581 (1996) (observing that on television "only 28 percent of the patients had primary cardiac arrests," while in real life "75 to 95 percent of arrests result from underlying cardiac disease");
414. cf. Rebecca Dresser, The Ubiquity and Utility of the Therapeutic Misconception, 19 SOC. PHIL. & POL;Y, 271, 271 (2002) (arguing that research subjects "confuse research with therapy" not just because of inadequate consent forms, but also because "[p]atients are inundated with messages equating study participation with medical treatment").
415. James M. Lacko & Janis K. Pappalardo, The Failure and Promise of Mandated Consumer Mortgage Disclosures: Evidence from Qualitative Interviews and a Controlled Experiment with Mortgage Borrowers, 100 AM. ECON. REV. (PAPERS & PROG.) 516, 518-19 (2010).
416. For example, 30% of those surveyed in one study knew almost nothing about HMOs. Of the remaining patients, "only 16 percent had adequate knowledge (scores of 76 percent or higher) to choose between traditional Medicare and an HMO." Hibbard et al., supra note 136, at 185-86.
417. William M. Sage, Accountability Through Information: What the Health Care Industry Can Learn from Securities Regulation, MlLBANK MEMORIAL FUND (Nov. 2000), http://www.milbank.org/reports/0012sage.html (citations omitted).
418. Sage, supra note 25, at 1729
419. (citing Barbara S. Cooper, From Bill-Payer to Purchaser: Medicare in Transition, HEALTH SYS. REV., July-Aug. 1997, at 16, 17).
420. Griffiths & Ayres, supra note 163, at 311.
421. Daniel Schwarcz, Beyond Disclosure: The Case for Banning Contingent Commissions, 25 YALE L. & POLV REV. 289, 314-15 (2007).
422. See, e.g., Herz et al., supra note 114, at 454 tbl.1.
423. See Phoebe C Ellsworth, Are Twelve Heads Better Than One?, 52 L. & CONTEMP. PROBS., Autumn 1989, at 205, 206 (discussing evidence that jurors assimilate incoming information into a story framework they construct and often forget information that does not fit well into that framework).
424. See id. at 218 (reporting that, when tested on the elements of the judge's instructions, jurors on average performed about as well as they would have if they had randomly guessed).
425. Lemaire, supra note 194, at 4.
426. See Robinson et al., supra note 252, at 1050 (discussing various cases of patient over-optimism, including those connected to patient communication behaviors).
427. See supra subsection ILL.A.4.
428. Hibbard et al., supra note 192, at 397.
429. Id. at 398.
430. Id. (emphasis added).
431. See Willis, supra note 107, at 219-23 (arguing that most American adults lack the skills necessary to make "independent, welfare-enhancing decisions in today's personalfinance product market").
432. Lubalin & Harris-Kojetin, supra note 137, at 88 (citations omitted).
433. See Yaniv Hanoch & Thomas Rice, Can Limiting Choice Increase Social Welfare? The Elderly and Health Insurance, 84 MILBANK Q. 37, 41 (2006) (arguing that elders use decisionmaking shortcuts and "heuristic-based strategies" when faced with complex decisions).
434. JAMES M. LACKO & JANS K. PAPPALARDO, FED. TRADE COMM N, THE EFFECT OF MORTGAGE BROKER COMPENSATION DISCLOSURES ON CONSUMERS AND COMPETITION: A CONTROLLED EXPERIMENT 28-29 (2004).
435. See Willis, supra note 102, at 780-84 (explaining how consumers simplify financial decisionmaking by focusing on one dimension of a product).
436. Penny F. Pierce, Deciding on Breast Cancer Treatment: A Description of Decision Behavior, 42 NURSING RES. 22, 23 (1993).
437. Id. A study of prospective dialysis patients observed "similarly truncated courses of decision."
438. SCHNEIDER, supra note 110, at 94-95.
439. The patients listened until they heard some arresting fact and then based their decision on it: "as soon as some patients hear that hemodialysis requires someone to insert two large needles into their arm three times a week, they opt for whatever the alternative is." Id.
440. For an extended development of these points, see id. at 92-99.
441. See Angela Fagerlin et al., An Informed Decision? Breast Cancer Patients and Their Knowledge Ahmt Treatment, 64 PATIENT EDUC;. & COUNSELING 303, 309 (2006) (noting that "a considerable number of studies have reached similar conclusions" with regard to the low level of knowledge patients used in making health care decisions).
442. Hibbard et al., supra note 138, at 177.
443. Id.
444. See, e.g., DANIEL GILBERT, STUMBLING ON HAPPINESS (2006) (providing a psychological explanation of the limitations of human imagination in the area of forecasting the future);
445. NISBETT & Ross, supra note 319 (arguing that human error often arises when people use simplistic inferential decisionmaking strategies, rather than normative and inferential tools);
446. TIMOTHY D. WILSON, STRANGERS TC) OURSELVES: DISCOVERING THE ADAPTIVE UNCONSCIOUS (2002) (arguing that the adaptive unconscious is a powerful force, controlling many motivations, judgments, and actions).
447. Stark & Choplin, supra note 189, at 89.
448. Id.
449. See Oren Bar-Gill, Informing Consumers About Themselves (N.Y. Univ. Sch. of Law Ctr. for Law and Econ., Working Paper No. 07-44, 2007), available at abstract-1056381 (providing numerous examples in which consumers fail to maximize their preferences in product choice and product use).
450. See generally Daniel T. Gilbert & Timothy D. Wilson, Miswanting: Some Problems in the Forecasting of Future Affective States (describing how people incorrectly evaluate their desires over time), in FEELING AND THINKING: THE ROLE OF AFFECT IN SOCIAL COGNITION 178, 182-83 (Joseph P. Forgas ed., 2000).
451. Lawrence M. Ausubel, The Failure of Competition in the Credit Card Market, 81 AM. ECON. REV. 50, 71 (1991) (discussing "indirect empirical confirmation of the presence of consumers who act as though they do not intend to borrow but who continuously do so").
452. Stefano Della Vigna & Ulrike Malmendier, Paying Not to Go to the Gym, 96 AM. ECON. REV. 694, 706(2006).
453. See GILBERT, supra note 347, 175-92.
454. See, e.g., Joel Tsevat et al., The Will to Live Among HIV-infected Patients, 131 ANNALS INTERNAL MED. 194, 195 (1999) (reporting that half of AIDS patients interviewed said "their life was better currently than it was before they were aware that they had HIV," while only 29% said life was worse).
455. See Ubel et al., supra note 221, at 601-04 (highlighting the discrepancy between quality-of-life estimates from patients and the general public).
456. See Tsevat et al., supra note 355, at 196 (reporting HIV patients' "mean timetradeoff score was 0.95 ± 0.1" over a five-year period, "indicating that, on average, patients did not have a clear preference between living 5 years in their current state of health and 4.75 years ... in excellent health").
457. DONALD A SCHÖN, THE REFLECTIVE PRACTITIONER 60 (1983).
458. GARY KLEIN, SOURGES OF POWER 24 (1998).
459. See Stephen A. Marglin, Towards the Decolonization of the Mind ("The sources of techne range from intuition to authority; ... it is often implicit rather than articulate;... it is practical rather than theoretical, and geared to discovery rather than verification ...."), in DOMINATING KNOWLEDGE 1, 24 (Frédérique Apffel Marglin & Stephen A. Marglin eds., 1990).
460. SCHÖN, supra note 358, at viii.
461. See text accompanying supra note 1.
462. See SCHÖN, supra note 358, at 60-64 (describing a practioner's "reflection-inaction").
463. See, e.g., 11 U.S.C. § 727(a) (11) (2006) (prohibiting a debtor from discharging a debt in a bankruptcy proceeding if the debtor has not completed a personal-finance management course).
464. See Stark & Choplin, supra note 189, at 87 & n.12 (listing statutes in Arkansas, Georgia, Indiana, New Mexico, and North Carolina).
465. Real Estate Settlement Procedures Act (RESPA): Rule to Simplify and Improve the Process of Obtaining Mortgages and Reduce Consumer Settlement Costs, 73 Fed. Reg. 68,204, 68,205 (Nov. 17, 2008).
466. Ironically, in contrast with the rule's title, HUD projected the closing script would take forty-five minutes to read and would cost approximately $98.48 per loan. See Stark & Choplin, supra note 189, at 108
467. (citing Real Estate Settlement Procedures Act Proposed Rule to Simplify and Improve the Process of Obtaining Mortgages and Reduce Consumer Settlement Costs, 73 Fed. Reg. 14,030, 14,102
468. (proposed Mar. 14, 2008) (to be codified at 24 C.F.R. pts. 203, 3500)).
469. Cathy Charles et al., What Do We Mean fry Partnership in Making Decisions Ahmt Treatment?, 319 BMJ 780, 781 (1999).
470. See SCHNEIDER, supra note 110, at 41 (surveying direct empirical studies on patient preferences about autonomy).
471. Jack Ende et al., Measuring Patients' Desire for Autonomy: Decision Making and Information-Seeking Preferences Among Medical Patients, 4 J. GEN. INTERNAL MED. 23, 25-26 (1989).
472. See NATIONAL INSTITUTE ON AGING, GROWING OLDER IN AMERICA: THE HEALTH & RETIREMENT STUDY 57, 60 (2007) (reporting studies finding low savings rates for retirement, including one study finding that one third of survey respondents had saved nothing for retirement);
473. see also James J. Choi et al., For Better or For Worse: Default Effeds and 401(k) Savings Behavior (reporting 401 (k) participation rates not exceeding 70% at two large companies without automatic-enrollment plans), in PERSPECTIVES ON THE ECONOMICS OF AGING 81, 98 tbl.2.2 (David A. Wise ed., 2004);
474. James J. Choi et al., Optimal Defaults, 93 AM. ECON. REV. (PAPERS & PROC.) 180, 180 (2003) (discussing the potential effects of an optimal default-savings rule given people's tendency to procrastinate in making retirement choices).
475. RUTH HELMAN ET AL., EMP. BENEFIT RESEARCH INST., ENCOURAGING WORKERS TO SAVE: THE 2005 RETIREMENT CONFIDENCIE SURVEY 6 (2005) (emphasis added).
476. See James J. Choi et al., Defined Contribution Pensions: Plan Rules, Participant Choices, and the Path of Least Resistance (discussing studies on "passive decisionmaking in asset allocation choices"), in 16 TAX POLICY AND THE ECONOMY 67, 97-99 (James M. Poterba ed., 2002).
477. See James J. Choi et al., Are Empowerment and Education Enough? Undiversification in 401(k) Plans, BROOKINGs PAPERS ON ECON. ACTIVITY, no. 2, 2005, at 151, 156-57 (surveying research finding that 401 (k) plans have high percentages of employer stock).
478. Cf. SCHNEIDER, supra note 110, at 38-39 (describing a study finding that patients wish to defer to doctors who presumably have more expertise).
479. ALFRED NORTH WHITEHEAD, AN INTRODUCTION TO MATHEMATICS 41-42 (Galaxy Book, 3d prtg. 1961) (1911).
480. See Alan Schwartz & Louis L. Wilde, Intervening in Markets on the Basis of Imperfect Information: A Legal and Economic Analysis, 127 U. PA. L. REV. 630, 638-39 (1979) (arguing that these effects arise because disclosers often cannot distinguish between sophisticated and unsophisticated readers) ;
481. see also George L. Priest, A Theory of the Consumer Product Warranty, 90 YALE LJ. 1297, 134647 (1981) (arguing that manufacturers focus warranty content to attract marginal consumers and repeat business).
482. But see Clayton P. Gillette, Rolling Contracts as an Agency Problem, 2004 Wis. L. REV. 679, 692-97 (questioning the conditions under which readers would indeed serve as "agents" for nonreaders).
483. For example, the Comcast arbitration clause discussed below, infra note 413 and accompanying text, is a "Right to Opt Out," which requires the reader to notify Comcast. Only sophisticated readers that so notify get the benefit; naifs enjoy no spillover effect. See generally David Gilo & Ariel Porat, The Unconventional Uses of Transactions Costs, in BOILERPLATE: THE FOUNDATION OF MARKET CONTRACTS 66 (Omri BenShahared., 2007).
484. Marshall B. Kapp, Patient Autonomy in the Age of Consumer-Driven Health Care: Informed Consent and Informed Choice, 2 J. HEALTH & BIOMEDICAL L. 1, 13 (2006).
485. Id. at 13-14 (footnotes omitted).
486. See, e.g., Willis, supra note 107, at 199
487. (citing Remarks by the President in Roundtable Interview with Business Reporters, WASH. POST (Aug. 9, 2007, 1:00 PM), http://www.washingtonpost.com/wp- dyn/Content/article/2007/08/09/AR2007080900780.html).
488. A. BARTLETT GIAMATTI, A FREE AND ORDERED SPACE: THE REAL WORLD OF THE UNIVERSITY 33 (1988) (quoting Tocqueville).
489. Choi et al., supra note 372, at 102-03.
490. See Willis, supra note 107, at 208 (highlighting that this result held true even for students with their own credit cards or who helped pay for car insurance).
491. Peter J, Cunningham et al,, Do Consumers Know How Their Health Plan Works?, HEALTH AFF., Mar.-Apr. 2001, at 159, 165.
492. Lubalin & Harris-Kojetin, supra note 137, at 73.
493. A chastening perspective on education comes from the world of continuing medical education (CME), Despite many reasons to expect CME to work, its record is discouraging, and it delivers "messages in ways that are most often ineffective," Karen Tu & Dave Davis, Can We Alter Physician Behavior by Educational Methods ? Lessons Learned from Studies of the Management and Follow-up of Hypertension, 22 J. CONTINUING EDUC. HEALTH PROFS. 11, 20 (2002).
494. Despite the ineffectiveness of didactic CME, "[t]here is clear evidence that CME offerings today in North America consist mostly of the less effective change strategies such as conferences," Dave Davis, Does CME Work? An Analysis of the Effect of Educational Activities on Physician Performance or Health Care Outcomes, 28 INT'L J. PSYCHIATRY MED. 21, 31 (1998).
495. See GARY A. GIOVINO ET AL., ROBERT WOOD JOHNSON FOUND., CIGARETTE SMOKING PREVALENCE AND POLICIES IN THE 50 STATES: AN ERA OF CHANGE 11 fig.3 (2009) (illustrating a decrease in the percentage of smokers among those over eighteen).
496. See id. at 21 (listing fifteen states that have enacted legislation banning smoking in "private workplaces, restaurants and bars" and forty-four states that "increased their cigarette excise tax rate at least once" since January 2002).
497. Florencia Marotta-Wurgler, Will Increased Disclosure Help? Evaluating the Recommendations of the ALI's Principles of the Law of Software Contracts, 78 U. CHI. L. REV. (forthcoming 2011) (manuscript at 9), available at http://www.law.uchicago.edu/files/file/Wurgler%20paper.pdf;
498. see also Robert A. Hillman & Maureen A. O'Rourke, Defending Disclosure in Software Contracts, 78 U. CHI L. REV. 1, 12 (forthcoming 2011) (manuscript at 23), available at http://ssrn.com/abstract=1596685 (arguing that disclosure can promote "economic efficiency, due process, and corrective justice").
499. See, e.g., Alan Meisel, A "Dignitary Tort" as a Bridge Between the Idea of Informed Consent and the Law of Informed Consent, 16 L. MED. & HEALTH CARE 210, 210 (1988) ("[I]nformed consent should promote not merely those [values]-autonomy, individualism, self-determination-that are honored in the dicta of case law ... but the value of mutual trust and education between doctor and patient.").
500. See, e.g., ROBERT AMDUR & ELIZABETH A. BANKERT, THE INSTITUTIONAL REVIEW BOARD MEMBER HANDBOOK 96 (3d ed. 2011) ("Disclosure via the informed consent process is . .. the most direct and ethically intuitive route of disclosure.").
501. See generally NAACP, NAACP FINANCIAL EMPOWERMENT GUIDE 4-5 (2003), available at http://backup.naacp.org/pdfs/finance-fei.pdf (stating the importance of financial literacy in achieving economic success and social justice).
502. Jeremy Sugarman et al., The Cost of Ethics Legislation: A Look at the Patient SelfDetermination Act, 3 KENNEDY INST. ETHICS J. 387, 393 (1993).
503. See Todd J. Zywicki, Institutional Review Boards as Academic Bureaucracies: An Economic and Experiential Analysis, 101 NW. U. L. REV. 861, 882 (2007) (" [A] t Northwestern the Office for the Protection of Research subjects grew from two full-time professionals in the late 1990s to 25 professionals and an administrative staff of 20 [in 2006].").
504. John H. Mueller, Ignorance Is Neither Bliss Nor Ethical, 101 Nw. U. L. REV. 809, 822 (2007).
505. Humphreys et al., supra note 228, at 77.
506. Craswell, supra note 29, at 584.
507. Id. ("[A] recent FTC study found that a proposed disclosure of brokerage fees paid to mortgage brokers caused many consumers to overestimate the total cost of loans .. ..").
508. See Todd M. Ruppar et al., Medication Adherence Interventions far Older Adults: Literature Review, 22 RES. & THEORY NURSING PRAG. 114, 115 (2008) ("Adherence to prescribed medications in older adults has been reported to range from 26% to 59% .. ..").
509. See id. at 140-43 (reviewing the literature analyzing how to increase medication adherence among older adults).
510. This argument was made in the context of securities regulation by Frank H. Easterbrook & Daniel R. Fischel, Mandatory Disclosure and the Protection of Investors, 70 VA. L. REV. 669, 671 (1984).
511. See, e.g., CAL. VEH. CODE § 11200(b)(1) (West Supp. 2009) (mandating disclosure by schools for traffic violators);
512. III. COMP. STAT. ANN. 425/15.1 (West 2006) (mandating detailed information in vocational school enrollment agreements);
513. III. COMP. STAT. 410/3B-12(a) (2007) (requiring numerous disclosures in cosmetology, esthetics, and nail technology school enrollment agreements);
514. NJ. ADMIN. CODE § 13:23-5.16 (Supp. 2010) (mandating disclosure by driving schools).
515. Patient Protection and Affordable Care Act, Pub. L. No. 111-148, § 4205, 124 Stat. 119, 573 (2010) (to be codified at 21 U.S.C. § 343(q) (5));
516. see also N.Y., N.Y., NEW YORK CITY HEALTH CODE tit. IV, pt. A, art. 81, § 81.50 (2008).
517. See, e.g., Williams v. First Gov't Mortg. & Investors Corp., 225 F.3d 738, 748 (D.C. Cir. 2000) (stating that common law unconscionability requires both a lack of "meaningful choice" and "unreasonably favorable" contract terms).
518. See, e.g., id. at 749-51 (finding no violation of TILA when plaintiff signed a disclosure statement the Act required).
519. HUD-TREASURY TASK FORCE ON PREDATORY LENDING, supra note 179, at 67.
520. See Robert A. Hillman, Online Boilerplate: Would Mandatory Web Site Disclosure of eStandard Terms Backfire? (warning that "[m]andating Web site disclosure would narrow consumer rights rather than expand them"),
521. in BOILERPLATE, supra note 377, at 83, 89-94;
522. see also Riensche v. Cingular Wireless LLC, No. 06-1325, 2006 WL 3827477, at *7-8 (W.D. Wash. Dec. 27, 2006) (rejecting an unconscionability claim because the consumer had unlimited time to review the arbitration clause and thus a reasonable opportunity to understand the terms).
523. See Cain et al., supra note 261, at 22 (concluding that conflict-of-interest disclosure "can fail because it (1) gives advisors strategic reason and moral license to further exaggerate their advice and (2) it may not lead to sufficient discounting to counteract this effect").
524. RESTATEMENT (SECOND) OF TORTS § 402A cmt. J (1965). Recognizing that a warning "may either not be seen or will be disregarded," the Restatement (Third) of Torts repudiates this language. RESTATEMENT (THIRD) OF TORTS: PRODUCTS LIABILITY § 2 cmt. 1, reporter's note on cmt. 1 (2008). The Third Restatement, however, recognizes that "when an alternative design to avoid risk cannot reasonably be implemented, adequate instructions and warning will normally be sufficient to render the product reasonably safe."
525. Id. § 2 cmt. 1.
526. See Willis, supra note 102, at 794-95
527. ("Disclosures give the veneer of legality and authority to the loan process, both to the borrowers at the time they take the loan and to regulatory agencies and courts who may review the transaction down the line.").
528. Consumers' understanding of credit and mandated disclosures is positively associated with their income and education. See Kinsey & McAlister, supra note 104, at 266 (finding that accurate consumer knowledge about APRs correlated with income);
529. Lewis Mandell, Consumer Knowledge and Understanding of Consumer Credit, 7 J. CONSUMER AFF. 23, 34 (1973) ("Knowledge of credit is strongly and directly related to the income and education of the family.").
530. McNeil et al., supra note 165, at 717.
531. COMCAST AGREEMENT FOR RESIDENTIAL SERVICES, COMCAST, ¶ 13.c (2010).
532. See Ronald J. Mann, "Contracting"for Credit (describing methods card issuers use to exploit unsophisticated consumers, such as teaser rates and backloading less attractive terms),
533. in BOILERPLATE, .supra note 377, at 106, 110-11.
534. Lemaire, supra note 194, at 4 (footnotes omitted).
535. David Mechanic, Disadvantage, Inequality, and Social Policy: Major Initiatives Intended to Improve Population Health May Also Increase Health Disparities, HEALTH AFF., Mar./Apr. 2002, at 48, 49.
536. See, e.g., Ad Hoc Comm. on Health Literacy for the Council on Scientific Affairs, supra note 286, at 553 (reporting that patients' health literacy correlates with knowledge of their illness);
537. Schneider & Hall, supra note 62, at 62-65 (examining the inequitable effects of disclosure statements, which the poor-who tend to have the highest prevalence of chronic disease-tend to be able to read and comprehend least).
538. See generally Gilo & Porat, supra note 377, at 70-71 (explaining that suppliers hide terms favorable to some consumers in boilerplate language "to avoid frustrating the consumers who do not receive them").
539. See supra notes 140-44 and accompanying text (discussing the effects of hospital report cards).
540. See Ginger Zhe Jin & Phillip Leslie, The Effect of Information on Product Quality: Evidence from Restaurant Hygiene Grade Cards, 118 Q.J. ECON. 409, 449 (2003) (finding evidence that "the grade cards cause a significant decrease in the number of people admitted to hospitals with food-borne illness, and that this effect is not fully explained by consumers switching from bad to good hygiene restaurants").
541. See Dafny & Dranove, supra note 144, at 817 (identifying a "report-card effect.. . entirely due to beneficiaries' responses to consumer satisfaction scores; other reported quality measures .. . did not affect enrollment").
542. See Lacko & Pappalardo, supra note 322, at 518-19 (observing that study participants who received a prototype disclosure, developed for the study, "answered on average 80 percent of the loan term questions correctly, compared to an average 61 percent for participants viewing the mandated disclosure").
543. See 19 U.S.C. § 1304 (2006) (mandating marking of any imported articles and containers with the country of origin);
544. 7 C.F.R. §§ 60.200-300 (2010) (detailing country-of-origin labeling requirements for agricultural products).
545. See, e.g., SCHNEIDER, supra note 110, at 188-90 (noting that bureaucratization of medical care and the shift of doctors' focus from individuals towards "the organizations which employ doctors" has an effect of "weaken [ing] the doctor's ties with, and sense of obligation to, the patient").
546. Compare the medical principle of informed consent with the very different principles that govern the relationships between lawyers and clients.
547. See, e.g., MODEL RULES OF PROF'L CONDUCT R. 1.2 cmt. (2009) ("Clients normally defer to the special knowledge and skill of their lawyer with respect to the means to be used to accomplish their objectives ... .").
548. See supra note 420 and accompanying text.
549. See, e.g., Omri Ben-Shahar, One-Way Contracts: Consumer Protection Without Law, 7 EUR. REV. CONTRACT L. 221 (2010).
550. See, e.g., Scott D. Halpern et al., Harnessing the Power of Default Options to Improve Health Care, 357 NEW ENG. J. MED. 1340, 1343 (2007) (declaring that policymakers should set default options to "achieve legitimate and important health care goals");
551. Carl E. Schneider, The Channelling Function in Family Law, 20 HOFSTRA L. REV. 495, 496-97 (1992) (introducing the concept that, in family law, the law has a channeling function, which "recruits, builds, shapes, sustains, and promotes social institutions").
552. See RICHARD R. THALER & CASS H. SUNSTEIN, NUDGE (2008).
553. The Obama administration recently advanced a proposal in this spirit. See U.S. DEP'T OF TREASURY, supra note 180, at 66-67 (proposing that a "plain vanilla" type mortgage, or one "easy for consumers to understand" should be offered as a simple option alongside other mortgages).
554. 12 C.F.R. §§ 226.31-.34 (2010).
555. See, e.g., Credit Card Accountability Responsibility and Disclosure Act of 2009 § 105, 15 U.S.C. 1637(n) (2006 & Supp. III 2009).