[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 2044 Reported in Senate (RS)]

<DOC>





                                                       Calendar No. 316
114th CONGRESS
  1st Session
                                S. 2044

                          [Report No. 114-175]

To prohibit the use of certain clauses in form contracts that restrict 
    the ability of a consumer to communicate regarding the goods or 
 services offered in interstate commerce that were the subject of the 
                   contract, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 16, 2015

  Mr. Thune (for himself, Mr. Schatz, Mr. Moran, Mr. Blumenthal, Mrs. 
   McCaskill, Mr. Nelson, Mr. Daines, and Mr. Booker) introduced the 
 following bill; which was read twice and referred to the Committee on 
                 Commerce, Science, and Transportation

                            December 8, 2015

                Reported by Mr. Thune, with an amendment
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]

_______________________________________________________________________

                                 A BILL


 
To prohibit the use of certain clauses in form contracts that restrict 
    the ability of a consumer to communicate regarding the goods or 
 services offered in interstate commerce that were the subject of the 
                   contract, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

<DELETED>SECTION 1. SHORT TITLE.</DELETED>

<DELETED>    This Act may be cited as the ``Consumer Review Freedom Act 
of 2015''.</DELETED>

<DELETED>SEC. 2. CONSUMER REVIEW PROTECTION.</DELETED>

<DELETED>    (a) Definitions.--In this section:</DELETED>
        <DELETED>    (1) Commission.--The term ``Commission'' means the 
        Federal Trade Commission.</DELETED>
        <DELETED>    (2) Covered communication.--The term ``covered 
        communication'' means a written, verbal, or pictorial review, 
        performance assessment of, or other similar analysis of, the 
        products, services, or conduct of a person by an individual who 
        is party to a form contract with respect to which such person 
        is also a party.</DELETED>
        <DELETED>    (3) Form contract.--The term ``form contract'' 
        means a standardized contract used by a person and imposed on 
        an individual without a meaningful opportunity for such 
        individual to negotiate the standardized terms, but does not 
        include a contract establishing an employer-employee or 
        independent contractor relationship.</DELETED>
        <DELETED>    (4) Pictorial.--The term ``pictorial'' includes 
        pictures, photographs, and video provided by electronic 
        means.</DELETED>
        <DELETED>    (5) Verbal.--The term ``verbal'' includes speech 
        provided by electronic means.</DELETED>
        <DELETED>    (6) Written.--The term ``written'' includes words 
        provided by electronic means.</DELETED>
<DELETED>    (b) Invalidity of Contracts That Impede Consumer 
Reviews.--</DELETED>
        <DELETED>    (1) In general.--Except as provided in paragraphs 
        (2) and (3), a provision of a form contract is void from the 
        inception of such contract if such provision--</DELETED>
                <DELETED>    (A) prohibits or restricts the ability of 
                an individual who is a party to the form contract to 
                engage in a covered communication;</DELETED>
                <DELETED>    (B) imposes a penalty or fee against an 
                individual who is a party to the form contract for 
                engaging in a covered communication; or</DELETED>
                <DELETED>    (C) transfers or requires an individual 
                who is a party to the form contract to transfer to any 
                person any intellectual property rights that the 
                individual may have in any otherwise lawful covered 
                communication about such person or the goods or 
                services provided by such person.</DELETED>
        <DELETED>    (2) Rule of construction.--Nothing in paragraph 
        (1) shall be construed to affect--</DELETED>
                <DELETED>    (A) any duty of confidentiality imposed by 
                law (including agency guidance); or</DELETED>
                <DELETED>    (B) any civil action for defamation, 
                libel, or slander, or any similar cause of 
                action.</DELETED>
        <DELETED>    (3) Exceptions.--Paragraph (1) shall not apply to 
        the extent that a provision of a form contract prohibits 
        disclosure of the following:</DELETED>
                <DELETED>    (A) Trade secrets or commercial or 
                financial information obtained from a person and 
                considered privileged or confidential.</DELETED>
                <DELETED>    (B) Personnel and medical files and 
                similar information the disclosure of which would 
                constitute a clearly unwarranted invasion of personal 
                privacy.</DELETED>
                <DELETED>    (C) Records or information compiled for 
                law enforcement purposes, the disclosure of which would 
                constitute a clearly unwarranted invasion of personal 
                privacy.</DELETED>
<DELETED>    (c) Prohibition.--It shall be unlawful for a person to 
offer or enter into a form contract containing a provision described as 
void in subsection (b).</DELETED>
<DELETED>    (d) Enforcement by Commission.--</DELETED>
        <DELETED>    (1) Unfair or deceptive acts or practices.--A 
        violation of subsection (c) by a person with respect to which 
        the Commission is empowered under section 5(a)(2) of the 
        Federal Trade Commission Act (15 U.S.C. 45(a)(2)) shall be 
        treated as a violation of a rule defining an unfair or 
        deceptive act or practice prescribed under section 18(a)(1)(B) 
        of the Federal Trade Commission Act (15 U.S.C. 
        57a(a)(1)(B)).</DELETED>
        <DELETED>    (2) Powers of commission.--</DELETED>
                <DELETED>    (A) In general.--The Commission shall 
                enforce this section in the same manner, by the same 
                means, and with the same jurisdiction, powers, and 
                duties as though all applicable terms and provisions of 
                the Federal Trade Commission Act (15 U.S.C. 41 et seq.) 
                were incorporated into and made a part of this 
                Act.</DELETED>
                <DELETED>    (B) Privileges and immunities.--Any person 
                who violates this section shall be subject to the 
                penalties and entitled to the privileges and immunities 
                provided in the Federal Trade Commission Act (15 U.S.C. 
                41 et seq.).</DELETED>
<DELETED>    (e) Enforcement by States.--</DELETED>
        <DELETED>    (1) In general.--In any case in which the attorney 
        general of a State has reason to believe that an interest of 
        the residents of the State has been or is threatened or 
        adversely affected by the engagement of any person subject to 
        subsection (c) in a practice that violates such subsection, the 
        attorney general of the State may, as parens patriae, bring a 
        civil action on behalf of the residents of the State in an 
        appropriate district court of the United States to obtain 
        appropriate relief.</DELETED>
        <DELETED>    (2) Rights of federal trade commission.--
        </DELETED>
                <DELETED>    (A) Notice to federal trade commission.--
                </DELETED>
                        <DELETED>    (i) In general.--Except as 
                        provided in clause (iii), the attorney general 
                        of a State shall notify the Commission in 
                        writing that the attorney general intends to 
                        bring a civil action under paragraph (1) before 
                        initiating the civil action against a person 
                        described in subsection (d)(1).</DELETED>
                        <DELETED>    (ii) Contents.--The notification 
                        required by clause (i) with respect to a civil 
                        action shall include a copy of the complaint to 
                        be filed to initiate the civil 
                        action.</DELETED>
                        <DELETED>    (iii) Exception.--If it is not 
                        feasible for the attorney general of a State to 
                        provide the notification required by clause (i) 
                        before initiating a civil action under 
                        paragraph (1), the attorney general shall 
                        notify the Commission immediately upon 
                        instituting the civil action.</DELETED>
                <DELETED>    (B) Intervention by federal trade 
                commission.--The Commission may--</DELETED>
                        <DELETED>    (i) intervene in any civil action 
                        brought by the attorney general of a State 
                        under paragraph (1) against a person described 
                        in subsection (d)(1); and</DELETED>
                        <DELETED>    (ii) upon intervening--</DELETED>
                                <DELETED>    (I) be heard on all 
                                matters arising in the civil action; 
                                and</DELETED>
                                <DELETED>    (II) file petitions for 
                                appeal of a decision in the civil 
                                action.</DELETED>
        <DELETED>    (3) Investigatory powers.--Nothing in this 
        subsection may be construed to prevent the attorney general of 
        a State from exercising the powers conferred on the attorney 
        general by the laws of the State to conduct investigations, to 
        administer oaths or affirmations, or to compel the attendance 
        of witnesses or the production of documentary or other 
        evidence.</DELETED>
        <DELETED>    (4) Preemptive action by federal trade 
        commission.--If the Federal Trade Commission institutes a civil 
        action or an administrative action with respect to a violation 
        of subsection (c), the attorney general of a State may not, 
        during the pendency of such action, bring a civil action under 
        paragraph (1) against any defendant named in the complaint of 
        the Commission for the violation with respect to which the 
        Commission instituted such action.</DELETED>
        <DELETED>    (5) Venue; service of process.--</DELETED>
                <DELETED>    (A) Venue.--Any action brought under 
                paragraph (1) may be brought in--</DELETED>
                        <DELETED>    (i) the district court of the 
                        United States that meets applicable 
                        requirements relating to venue under section 
                        1391 of title 28, United States Code; 
                        or</DELETED>
                        <DELETED>    (ii) another court of competent 
                        jurisdiction.</DELETED>
                <DELETED>    (B) Service of process.--In an action 
                brought under paragraph (1), process may be served in 
                any district in which the defendant--</DELETED>
                        <DELETED>    (i) is an inhabitant; or</DELETED>
                        <DELETED>    (ii) may be found.</DELETED>
        <DELETED>    (6) Actions by other state officials.--</DELETED>
                <DELETED>    (A) In general.--In addition to civil 
                actions brought by attorneys general under paragraph 
                (1), any other officer of a State who is authorized by 
                the State to do so may bring a civil action under 
                paragraph (1), subject to the same requirements and 
                limitations that apply under this subsection to civil 
                actions brought by attorneys general.</DELETED>
                <DELETED>    (B) Savings provision.--Nothing in this 
                subsection may be construed to prohibit an authorized 
                official of a State from initiating or continuing any 
                proceeding in a court of the State for a violation of 
                any civil or criminal law of the State.</DELETED>
        <DELETED>    (7) Prohibition on entering into contingency fee 
        agreement with outside counsel for state enforcement.--
        </DELETED>
                <DELETED>    (A) Contingency fee agreement defined.--
                For purposes of this paragraph, the term ``contingency 
                fee agreement'' means a contract or other agreement to 
                provide services under which the amount or the payment 
                of the fee for services is contingent in whole or in 
                part on the outcome of the matter for which the 
                services were obtained.</DELETED>
                <DELETED>    (B) Prohibition.--An attorney general of a 
                State, or any State or local law enforcement agency, 
                may not enter into a contingency fee agreement for 
                legal or expert witness services relating to an action 
                commenced under paragraph (1).</DELETED>
<DELETED>    (f)  Education and Outreach for Businesses.--Not later 
than 60 days after the date of the enactment of this Act, the 
Commission shall commence conducting education and outreach that 
provides businesses with non-binding best practices for compliance with 
this Act.</DELETED>
<DELETED>    (g) Relation to State Causes of Action.--Nothing in this 
section shall be construed to affect any cause of action brought by a 
person that exists or may exist under State law.</DELETED>
<DELETED>    (h) Effective Dates.--This section shall take effect on 
the date of the enactment of this Act, except that--</DELETED>
        <DELETED>    (1) subsections (b) and (c) shall apply with 
        respect to contracts in effect on or after the date of the 
        enactment of this Act; and</DELETED>
        <DELETED>    (2) subsections (d) and (e) shall apply with 
        respect to contracts in effect on or after the date that is 1 
        year after the date of the enactment of this Act.</DELETED>

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Consumer Review Freedom Act of 
2015''.

SEC. 2. CONSUMER REVIEW PROTECTION.

    (a) Definitions.--In this section:
            (1) Commission.--The term ``Commission'' means the Federal 
        Trade Commission.
            (2) Covered communication.--The term ``covered 
        communication'' means a written, oral, or pictorial review, 
        performance assessment of, or other similar analysis of, 
        including by electronic means, the goods, services, or conduct 
        of a person by an individual who is party to a form contract 
        with respect to which such person is also a party.
            (3) Form contract.--
                    (A) In general.--Except as provided in subparagraph 
                (B), the term ``form contract'' means a contract with 
                standardized terms--
                            (i) used by a person in the course of 
                        selling or leasing the person's goods or 
                        services; and
                            (ii) imposed on an individual without a 
                        meaningful opportunity for such individual to 
                        negotiate the standardized terms.
                    (B) Exception.--The term ``form contract'' does not 
                include an employer-employee or independent contractor 
                contract.
            (4) Pictorial.--The term ``pictorial'' includes pictures, 
        photographs, video, illustrations, and symbols.
    (b) Invalidity of Contracts That Impede Consumer Reviews.--
            (1) In general.--Except as provided in paragraphs (2) and 
        (3), a provision of a form contract is void from the inception 
        of such contract if such provision--
                    (A) prohibits or restricts the ability of an 
                individual who is a party to the form contract to 
                engage in a covered communication;
                    (B) imposes a penalty or fee against an individual 
                who is a party to the form contract for engaging in a 
                covered communication; or
                    (C) transfers or requires an individual who is a 
                party to the form contract to transfer to any person 
                any intellectual property rights in review or feedback 
                content, with the exception of a non-exclusive license 
                to use the content, that the individual may have in any 
                otherwise lawful covered communication about such 
                person or the goods or services provided by such 
                person.
            (2) Rule of construction.--Nothing in paragraph (1) shall 
        be construed to affect--
                    (A) any duty of confidentiality imposed by law 
                (including agency guidance);
                    (B) any civil action for defamation, libel, or 
                slander, or any similar cause of action;
                    (C) any party's right to remove or refuse to 
                publish any statement on an Internet website owned or 
                operated by such party that contains the personal 
                information or likeness of another person or is 
                libelous, harassing, abusive, obscene, vulgar, sexually 
                explicit, inappropriate with respect to race, gender, 
                sexuality, ethnicity, or other intrinsic 
                characteristic, or that is unrelated to the goods or 
                services offered by such party; or
                    (D) a party's right to establish terms and 
                conditions with respect to the creation of photographs 
                or video of such party's property when those 
                photographs or video are created by an employee or 
                independent contractor of a commercial entity and 
                solely intended for commercial purposes by that entity.
            (3) Exceptions.--Paragraph (1) shall not apply to the 
        extent that a provision of a form contract prohibits disclosure 
        of the following:
                    (A) Trade secrets or commercial or financial 
                information obtained from a person and considered 
                privileged or confidential.
                    (B) Personnel and medical files and similar 
                information the disclosure of which would constitute a 
                clearly unwarranted invasion of personal privacy.
                    (C) Records or information compiled for law 
                enforcement purposes, the disclosure of which would 
                constitute a clearly unwarranted invasion of personal 
                privacy.
    (c) Prohibition.--It shall be unlawful for a person to offer or 
enter into a form contract containing a provision described as void in 
subsection (b).
    (d) Enforcement by Commission.--
            (1) Unfair or deceptive acts or practices.--A violation of 
        subsection (c) by a person with respect to which the Commission 
        is empowered under section 5(a)(2) of the Federal Trade 
        Commission Act (15 U.S.C. 45(a)(2)) shall be treated as a 
        violation of a rule defining an unfair or deceptive act or 
        practice prescribed under section 18(a)(1)(B) of the Federal 
        Trade Commission Act (15 U.S.C. 57a(a)(1)(B)).
            (2) Powers of commission.--
                    (A) In general.--The Commission shall enforce this 
                section in the same manner, by the same means, and with 
                the same jurisdiction, powers, and duties as though all 
                applicable terms and provisions of the Federal Trade 
                Commission Act (15 U.S.C. 41 et seq.) were incorporated 
                into and made a part of this Act.
                    (B) Privileges and immunities.--Any person who 
                violates this section shall be subject to the penalties 
                and entitled to the privileges and immunities provided 
                in the Federal Trade Commission Act (15 U.S.C. 41 et 
                seq.).
    (e) Enforcement by States.--
            (1) Authorization.--Subject to subparagraph (B), in any 
        case in which the attorney general of a State has reason to 
        believe that an interest of the residents of the State has been 
        or is threatened or adversely affected by the engagement of any 
        person subject to subsection (c) in a practice that violates 
        such subsection, the attorney general of the State may, as 
        parens patriae, bring a civil action on behalf of the residents 
        of the State in an appropriate district court of the United 
        States to obtain appropriate relief.
            (2) Rights of federal trade commission.--
                    (A) Notice to federal trade commission.--
                            (i) In general.--Except as provided in 
                        clause (iii), the attorney general of a State 
                        shall notify the Commission in writing that the 
                        attorney general intends to bring a civil 
                        action under paragraph (1) before initiating 
                        the civil action against a person described in 
                        subsection (d)(1).
                            (ii) Contents.--The notification required 
                        by clause (i) with respect to a civil action 
                        shall include a copy of the complaint to be 
                        filed to initiate the civil action.
                            (iii) Exception.--If it is not feasible for 
                        the attorney general of a State to provide the 
                        notification required by clause (i) before 
                        initiating a civil action under paragraph (1), 
                        the attorney general shall notify the 
                        Commission immediately upon instituting the 
                        civil action.
                    (B) Intervention by federal trade commission.--The 
                Commission may--
                            (i) intervene in any civil action brought 
                        by the attorney general of a State under 
                        paragraph (1) against a person described in 
                        subsection (d)(1); and
                            (ii) upon intervening--
                                    (I) be heard on all matters arising 
                                in the civil action; and
                                    (II) file petitions for appeal of a 
                                decision in the civil action.
            (3) Investigatory powers.--Nothing in this subsection may 
        be construed to prevent the attorney general of a State from 
        exercising the powers conferred on the attorney general by the 
        laws of the State to conduct investigations, to administer 
        oaths or affirmations, or to compel the attendance of witnesses 
        or the production of documentary or other evidence.
            (4) Preemptive action by federal trade commission.--If the 
        Federal Trade Commission institutes a civil action or an 
        administrative action with respect to a violation of subsection 
        (c), the attorney general of a State may not, during the 
        pendency of such action, bring a civil action under paragraph 
        (1) against any defendant named in the complaint of the 
        Commission for the violation with respect to which the 
        Commission instituted such action.
            (5) Venue; service of process.--
                    (A) Venue.--Any action brought under paragraph (1) 
                may be brought in--
                            (i) the district court of the United States 
                        that meets applicable requirements relating to 
                        venue under section 1391 of title 28, United 
                        States Code; or
                            (ii) another court of competent 
                        jurisdiction.
                    (B) Service of process.--In an action brought under 
                paragraph (1), process may be served in any district in 
                which the defendant--
                            (i) is an inhabitant; or
                            (ii) may be found.
            (6) Actions by other state officials.--
                    (A) In general.--In addition to civil actions 
                brought by attorneys general under paragraph (1), any 
                other officer of a State who is authorized by the State 
                to do so may bring a civil action under paragraph (1), 
                subject to the same requirements and limitations that 
                apply under this subsection to civil actions brought by 
                attorneys general.
                    (B) Savings provision.--Nothing in this subsection 
                may be construed to prohibit an authorized official of 
                a State from initiating or continuing any proceeding in 
                a court of the State for a violation of any civil or 
                criminal law of the State.
    (f)  Education and Outreach for Businesses.--Not later than 60 days 
after the date of the enactment of this Act, the Commission shall 
commence conducting education and outreach that provides businesses 
with non-binding best practices for compliance with this Act.
    (g) Relation to State Causes of Action.--Nothing in this section 
shall be construed to affect any cause of action brought by a person 
that exists or may exist under State law.
    (h) Effective Dates.--This section shall take effect on the date of 
the enactment of this Act, except that--
            (1) subsections (b) and (c) shall apply with respect to 
        contracts in effect on or after the date that is 90 days after 
        the date of the enactment of this Act; and
            (2) subsections (d) and (e) shall apply with respect to 
        contracts in effect on or after the date that is 1 year after 
        the date of the enactment of this Act.
                                                       Calendar No. 316

114th CONGRESS

  1st Session

                                S. 2044

                          [Report No. 114-175]

_______________________________________________________________________

                                 A BILL

To prohibit the use of certain clauses in form contracts that restrict 
    the ability of a consumer to communicate regarding the goods or 
 services offered in interstate commerce that were the subject of the 
                   contract, and for other purposes.

_______________________________________________________________________

                            December 8, 2015

                       Reported with an amendment