F:\29226 Ind Law Rev 48-3\48 masthead.wpd


Indiana Law Review
Volume 48 2015 Number 3

ARTICLES

INFORMATION FLOODING

KAREN BRADSHAW SCHULZ*

ABSTRACT
Consumers are under siege.  A flood of information is forcing consumers to

abandon rational decision-making.  The very laws designed to help consumers
navigate information—mandated disclosures—are causing them to become even
more overwhelmed.  Reducing mandated disclosures will lessen information
overload and empower consumer choice.  This is the dominant message from
politicians, agency officials, and academics.  Unfortunately, it is wrong.

Although consumers are faced with vast amounts of information, mandated
disclosures are not solely responsible for the sea of data.  Corporate strategy is
also a source of overload.  Some companies intentionally confuse consumers
through information flooding—submerging bad facts about their products or
services in volumes of irrelevant information.  Inexpensive, web-based data
sources have made information flooding worse than ever.  Yet, consumer
decision-making is also empowered like never before.  In the face of information
onslaught, the market has given rise to specialized intermediaries to curate data
for consumers, providing convenient access to salient information through apps
and handheld devices.

Understanding information flooding significantly shifts the conversation
about how to empower consumer choice.  Market solutions, rather than futile
attempts to reform mandated disclosures, are the key to keeping consumers
empowered and informed.  In the rare cases where information overload harms
consumer choice, government should promote the expansion of intermediaries
rather than trying in vain to outrun corporate innovation.

INTRODUCTION
Billions of consumers receive too much information as they move through

* Associate Professor of Law, Sandra Day O’Connor College of Law, Arizona State
University.  The author gratefully acknowledges comments provided by Oren Bar-Gill, Omri Ben-
Shahar, Ryan Bubb, Adam Chodorow, Laura Napoli Coordes, Richard Epstein, Aaron Fellmeth,
David Gartner, Bruce Huber, Rhett Larson, Florencia Marotta-Wurgler, Zachary Gubler, Zachary
Kramer, John C. Nagle, Troy Rule, Mary Sigler, Judy Stinson and the participants at the Arizona
State University Global Institute of Sustainability.  Lauren Ferrigni and Danielle Trogden provided
research assistance. Beth DiFelice provided library services.

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756 INDIANA LAW REVIEW [Vol. 48:755

daily life.1  Overwhelmed consumers give up on rational decision-making and
make arbitrary choices, diminishing consumer welfare and distorting market
signals.2  Fixing the harmful effects of information overload has become a
national obsession.3  But, politicians are luddites when it comes to improving
consumer decision-making.  Policymakers are focused on reforming or
eliminating mandatory disclosure regimes to fix overload.4

This Article joins a growing body of recent scholarly work in challenging the
received wisdom that reforming—or even eliminating—mandatory disclosures
will solve the problem of information overload.5  It argues that regulators have
failed to account for firms strategically dumping information on consumers to
hide bad facts about their products or practices, which it terms “information
flooding.”6  Firms overwhelm consumers to increase profitability by increasing

1. Information overload is pervasive.  “A weekday edition of The New York Times contains
more information than the average person was likely to come across in a lifetime in seventeenth-
century England.”  RICHARD WURMAN, INFORMATION ANXIETY 32 (1989).  Doctors have identified
“information fatigue syndrome” as occurring when patients are paralyzed by the need to analyze
information, leading to difficulty in finding the right solutions and making the best decisions. 
DAVID LEWIS, DYING FOR INFORMATION (1998).

2. Cass R. Sunstein, Empirically Informed Regulation, 78 U. CHI. L. REV. 1349, 1369
(2011) (noting that “even accurate disclosure of information may be ineffective if the information
is too . . . overwhelming to be useful”).

3. Too Much Information: How to Cope with Data Overload, ECONOMIST (June 30, 2011),
http://www.economist.com/node/18895468, archived at http://perma.cc/89J4-9DLA (noting that
“’[i]nformation overload’ is one of the biggest irritations in modern life”); Adam Davidson, Making
Choices in the Age of Information Overload, N.Y. TIMES (May 15, 2012), http://mobile.
nytimes.com/2012/05/20/magazine/making-choices-in-the-age-of-information-overload.html?_r=0,
archived at http://perma.cc/3WDX-W3CK (highlighting the annoyances of information overload
in modern times).

4. A non-exhaustive summary of recent works calling for reform of mandatory disclosure
regimes includes the following:  OMRI BEN-SHAHAR & CARL E. SCHNEIDER, MORE THAN YOU
WANTED TO KNOW:  THE FAILURE OF MANDATED DISCLOSURE (2013); RICHARD H. THALER & CASS
R. SUNSTEIN, NUDGE:  IMPROVING DECISIONS ABOUT HEALTH, WEALTH, AND HAPPINESS (Penguin
2009); Richard Craswell, Taking Information Seriously:  Misrepresentation and Nondisclosure in
Contract Law and Elsewhere, 92 VA. L. REV. 565 (2006); Omri Ben-Shahar & Carl E. Schneider,
The Failure of Mandated Disclosure, 159 U. PA. L. REV. 647 (2011).

5. Cass R. Sunstein, Information Regulation and Informational Standing Akins and Beyond,
147 U. PA. L. REV. 613, 624-25 (1999) (highlighting advantages of information regulation over
traditional command-and-control regulatory methods).

6. “Information flooding” is different from, but related to, the widely-discussed problem of
“information overload.”  Overload is the result of too much information, flooding is the cause.
Information overload describes consumers making cognitive mistakes because they are
overwhelmed and confused by the amount of information.  Overload is a well-established, widely-
discussed concept.  Information flooding describes why there is so much information that
consumers become overloaded.  It captures that companies intentionally overload consumers with
information to gain strategic advantages.  This Article is the first to introduce the concept of

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competitive advantage, attract customers, and forestall regulation. 
Information flooding changes the conversation about how to expand

consumer choice.  It shows that firms respond dynamically to information
regulation, drowning out legally-required disclosures.  Because laws ossify as
soon as they are passed and firms can innovate,7 mandatory disclosure regimes
will always be a step behind firms’ information flooding.  Simply put, mandatory
disclosure cannot be reformed to work well.  There are better ways to promote
consumer choice.

The supposedly devastating effects of information overload are usually not
so bad in practice.8  Markets have developed solutions to aid consumers. 
Companies including Mint, Amazon, and Google have earned billions of dollars
guiding consumers through information-flooded realms.9  These “information
intermediaries” process, analyze, and distill information for consumers.10

But, what to do with pockets of law—like “green claims” in environmental
markets—where overload remains a problem?  This Article proposes a new
model for government intervention to prevent information flooding.  It argues for
leveraging information intermediaries by incentivizing them to enter the isolated
areas where consumer decision-making fails.11 Encouraging intermediaries to
enter underserved, high-value areas will provide adaptive, effective solutions to
information overload. 

This Article also advances a larger normative claim:  information flooding
is pervasive not only in firm-consumer transactions but also throughout a variety
of legal arenas.  Groups including nongovernmental organizations, agency
officials, and political parties engage in flooding on a regular basis.12  This
Article ends by foreshadowing one example of this broad applicability:
information flooding in administrative law.  This is a small preview of the
widespread applicability of the concept of information flooding and the
possibilities it offers for regulatory reforms.13

information flooding. 
7. Richard J. Pierce, Jr., Rulemaking Ossification Is Real:  A Response to Testing the

Ossification Thesis, 80 GEO. WASH. L. REV. 1493, 1493 (2012) (noting that “[m]any scholars have
long maintained that the process of issuing rules . . . has become ‘ossified’”).

8. David M. Grether et al., The Irrelevance of Information Overload: An Analysis of Search
and Disclosure, 59 S. CAL. L. REV. 277, 285 (1986) (noting that “[n]o evidence supports th[e]
view” that too much information harms consumers).

9. See, e.g., How Mint Works, MINT, https://www.mint.com/how-mint-works (last visited
Dec. 26, 2014), archived at http://perma.cc/AR55-SPFV.

10. DOC SEARLS, THE INTENTION ECONOMY:  WHEN CONSUMERS TAKE CHARGE 178 (Harvard
Business Review 2012) (introducing the ideas of “fourth party” companies acting to aid consumers
in transactions).

11. Ryan Bubb, TMI? Why the Optimal Architecture of Disclosure Remains TBD, MICH. L.
REV. (forthcoming) (arguing for improved disclosures based on evidence of how they work, instead
of widespread “antidisclosurism”).

12. See infra notes 171-77. 
13. See Part IV.



758 INDIANA LAW REVIEW [Vol. 48:755

Part I14 introduces the concept of what this Article terms “information
flooding,” companies intentionally burying bad facts in junk information so
consumers cannot find them.  Part II illustrates that understanding information
flooding dramatically shifts the conversation surrounding the raging debate over
the potential to improve consumer choice.  The dominant regulatory fix—
improving or reducing mandated disclosures—cannot be reformed to address
information flooding.  Part III argues that market solutions have emerged to
counter information flooding.  Information intermediaries—companies that distill
information—promote better consumer decisions.  Because of these
intermediaries, information overload is likely not as big of as a problem as
widely believed.  Where it is a problem, leveraging intermediaries is the key to
effective reform.  Part IV shows that the concept of information flooding is much
broader than the firm-consumer model suggests.  Virtually every public and
private actor has the potential to engage in information flooding.  The wider
applicability of the idea is demonstrated by a brief sketch of information flooding
in Administrative Law.  Part V briefly concludes.

I.  INFORMATION FLOODING
Firms inundate consumers with junk information to hide bad facts, a practice

this Article terms “information flooding.”  Consumers’ brains shut down when
faced with vast amounts of data.15  Thus, information flooding causes consumers
to make arbitrary choices, which harm consumer welfare and distort market
signals.16  Decades of empirical study17 and dozens of cases18 indicate that firms

14. Structuring this Article requires a difficult choice: whether to first provide the new
theoretical foundation of information flooding, or to instead begin with an account of the received
wisdom of consumer choice.  Presenting the theoretical concept of information flooding first
requires readers to take on faith that this concept is a game-changing development in consumer
choice debates.  But, beginning with the current consumer choice debate requires readers to spend
time reading through a model that this Article later argues is hopelessly flawed.  This Article begins
with a brief introduction to information flooding, including examples of it in practice.  This forms
the basis for the remainder of the article, which discusses the background literature about consumer
choice and mandatory disclosure regimes.  The Article repeatedly returns to these early examples
and concepts to illustrate how the theoretical model of information flooding challenges the efficacy
of mandatory disclosures and provide new, more promising, regulatory solutions.

15. Information overload occurs when consumers receive more information than they can
reasonably process. Sunstein, supra note 2, at 1369.

16. See Jacob Jacoby, Information Load and Decision Quality: Some Contested Issues, 14
J. MARKETING RES. 569, 569 (1977) (“Information overload refers to the fact that there are finite
limits to the ability of human beings to assimilate and process information during any given unit
of time.  Once these limits are surpassed, the system is said to be ‘overloaded’ and human
performance (including decisionmaking) becomes confused, less accurate, and less effective.”).

17. Corporate social performance literature authored by interdisciplinary academics from
management, economics, and accounting demonstrates that firms with poor environmental
performance tend to report more about the quality of their environmental performance than firms

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2015] INFORMATION FLOODING 759

intentionally engage in information flooding, precisely to cause consumers to
make poor decisions.

A.  Information Flooding
Eighteen-year-old Veronica Gutierrez had a busy afternoon.19  It started when

she bought Subway sandwiches for $11.27.20  Then, she stopped by AutoZone to
purchase $80 worth of car parts.21  Finally, she wrote a $65 check.22  The total of
the day’s purchases was greater than the amount in Veronica’s Wells Fargo
checking account.23  She was $49 overdrawn.24

Prior to 2005, Veronica would have owed her bank a $22 overdraft fee.25 
But, in 2005, Wells Fargo implemented a “Balance Sheet Engineering” policy to
maximize its revenue, including reordering customer transactions to increase the
bank’s revenue.26  Wells Fargo reordered Veronica’s purchases from
chronological order, placing the highest-value transactions first and the lowest-
value transactions last.27  By ordering the car parts first, the grocery store second,
and the sandwiches last, the bank was able to charge Veronica three overdraft
fees of progressively higher amounts.28  Veronica was charged $111 in overdraft

with good financial performance.  This largely empirical literature has been growing for over thirty
years.  See Sulaiman A. Al-Tuwaijri, The Relations Among Environmental Disclosure,
Environmental Performance, and Economic Performance:  A Simultaneous Equations Approach,
29 ACCT. ORGS. & SOC’Y 447, 448 (2004) (listing a number of disciplines engaged in the
conversation regarding information loads linked to environmental performance); Manuel Castelo
Branco & Lucia Lima Rodrigues, Issues in Corporate Social and Environmental Reporting
Research: An Overview, 1 ISSUES SOC. ENVTL. ACCT. 27, 77 (2007) (noting that companies attempt
to avoid social and regulatory pressure by reporting on environmental metrics); Joanne Wiseman,
An Evaluation of Environmental Disclosures Made in Corporate Annual Reports, 7 ACCT. ORG.
& SOC’Y 53, 54 (1982) (noting that “the completeness, length and items of information included
in voluntary environmental disclosures is not a representative measure of actual environmental
performance, and may in fact misrepresent a firm’s performance compared to other firms in the
same industry”).

18. See infra Part II.C (discussing several lines of cases, including overshadowing and buried
fact doctrine cases, in which judges identify firms intentionally overwhelming consumers with too
much information).

19. Gutierrez v. Wells Fargo Bank, 730 F. Supp. 2d 1080 (N.D. Cal. 2010).
20. Id. at 1087.
21. Id.
22. Id.
23. Id.
24. Id.
25. Id. at 1088.
26. Id.
27. Id. (describing the order in which sums were posted for the collection of overdraft fees

per page twenty-four of Wells Fargo’s sixty-page Consumer Account Agreement).
28. Id.

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760 INDIANA LAW REVIEW [Vol. 48:755

fees for her afternoon of shopping.29  What happened to Veronica happened to
thousands of banking customers.30

Wells Fargo Bank assessed over $1.4 billion in overdraft fees between 2005
and 2007.31  Changing the post ordering to high-to-low increased its profitability
by approximately $500 million a year.32  Traditionally, the bank deducted the
lowest payments a customer made on a particular day before deducting higher
payment.33  Wells Fargo discovered that by simply reversing the order in which
the deductions were made—from posting charges from low-to-high to high-to-
low—accounts would accrue far more overdraft charges.34  A district court judge
found “the bank’s dominant, indeed sole, motive”35 for changing from high-to-
low posting was “exclusively to generate more overdraft fees and fee revenues
at the expense of depositors.”36

Why did Veronica not switch banks when Wells Fargo adopted the policy? 
She didn’t know about it.37  Wells Fargo claimed that it disclosed the change to
consumers, consistent with federal law requiring banks to inform customers of
changes in banking practices (a mandated disclosure).38  The required disclosure
was printed as a single bullet in a lengthy document.39  The judge found that “the
bank went to great lengths to bury the words deep in a lengthy fine-print
document.”40  Burying the disclosure in a sea of irrelevant information rendered
it meaningless.  The amount of information overwhelmed consumers.  Testimony
demonstrated that consumers did not read the document because it was so long.41 
By burying an important disclosure in a long document, Wells Fargo was
engaging in “information flooding.” 

Information flooding describes companies intentionally giving consumers so
much information that it triggers overload.42  Consumers give up on making
reasoned decisions or learning more.  Companies flood consumers to hide bad

29. Id. at 1089.
30. Id. at 1128.
31. Id. at 1082.
32. Id. at 1104.
33. Id. at 1084.
34. Id.
35. Id. at 1097.
36. Id. at 1104.
37. Id. at 1086.
38. Id.
39. Id.
40. Id. at 1124.
41. Id. at 1115.
42. Intentionality is a key component of information overload.  Firms’ strategic attempts to

exploit consumers have been recognized in withholding information, but not with regard to
information overload.  See Xavier Gabaix & David Laibson, Shrouded Attributes, Consumer
Myopia, and Information Suppression in Competitive Markets, 121 Q. J. ECON. 505, 505 (2006)
(arguing that “[w]hen consumers make mistakes, firms will try to exploit those mistakes”).

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2015] INFORMATION FLOODING 761

facts about their products or practices, like inadequate privacy policies43 or poor
environmental performance.44

If companies notified consumers of bad facts straightforwardly, they would
lose customers and the associated revenue.  Information flooding allows
companies to garner the public relation benefits of transparency.45  If sued,
companies can claim that they disclosed key facts.  But, really, companies
engaged in flooding are strategically hiding the important information, albeit in
plain sight.  Key facts are surrounded by so much vague, meaningless
information that consumers cannot functionally access them.46

Across industries, firms with facts to hide respond to mandated disclosures
by flooding markets with information.  Laws,47 norms,48 and markets49 alike
punish companies for providing too little information.  Companies are lauded for
transparency when they over-disclose.  There are few corresponding punishments

43. See generally Florencia Marotta-Wurgler, Does Increased Disclosure Help? Evaluating
the Recommendation of the ALI’s “Principles of the Law of Software Contracts”, 78 U. CHI. L.
REV. 165 (2011) (discussing whether mandated heightened contract disclosure will by itself
meaningfully alter contracting practices by encouraging increased readership and comparison
shopping). 

44. See generally David W. Case, The Role of Information in Environmental Justice, 81
MISS. L.J. 701 (2012) (discussing the correlation between the varying degrees of public access to
information and achieving environmental justice); Daniel C. Esty, Environmental Protection in the
Information Age, 79 N.Y.U. L. REV. 115 (2004) (identifying the harm that information gaps and
uncertainties cause in terms of exacerbating environmental problems); Samuel Pederson,
Regulation and Information Disclosure: Parallel Universes and Beyond, 25 HARV. ENVTL. L. REV.
151 (2001); Clifford Rechtschaffen, Enforcing the Clean Water Act in the Twenty-First Century:
Harnessing the Power of the Public Spotlight, 55 ALA. L. REV. 798 (2004) (noting that information
regulation has become an increasingly common technique for enforcing environmental regulation
in the past two decades); Katherine Renshaw, Sounding Alarms: Does Informational Regulation
Help or Hinder Environmentalism?, 14 N.Y.U. ENVTL. L.J. 654 (2006) (outlining the importance
of information regulation in managing environmental risks); Alexander Volokh, The Pitfalls of the
Environmental Right-To-Know, 2002 UTAH L. REV. 805, 815 (cautioning that environmental
information regulation is often misleading).

45. Kathryn Bewley & Yue Li, Disclosure of Environmental Information by Canadian
Manufacturing Companies:  A Voluntary Disclosure Perspective, 1 AD. ENVTL. ACCT. MGMT. 201,
216 (2000) (discussing the benefits companies believe accompany perceptions of transparency).

46. Craswell, supra note 4, at 584 (suggesting that a company may disclose a discrete fact
that is technically correct but misleading about the larger point).

47. Sunstein, supra note 5, at 624 (noting that information regulation is a response to firms
providing inadequate amounts of information).

48. Jacob Vos, Actions Speak Louder Than Words:  Greenwashing in Corporate America,
23 NOTRE DAME J.L. ETHICS & PUB. POL’Y 672, 680-81 (2009) (describing public companies as
operating under a strong norm that they will make public claims about environmental policy).

49. See generally MICHAEL KERR ET AL., CORPORATE SOCIAL RESPONSIBILITY:  A LEGAL
ANALYSIS (2011) (arguing that the pressure on companies to be socially responsible has become so
great that corporate adoption of responsible practices is no longer strictly voluntary).

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762 INDIANA LAW REVIEW [Vol. 48:755

for providing too much information.50  The problem is that too much information
produces information overload, which causes consumers to make poor choices.

B.  Information Overload
Consumers have a fickle relationship with information.  With too little

information, consumers make poor choices.51  But, too much information also
produces the same outcome.52  Consumers’ ability to make decisions that reflect
their best interests requires enough information to facilitate conscious decision-
making, but not so much as to overwhelm.53

Intuitively, we understand that consumers with too little information make
arbitrary choices.  Imagine a person shopping at a grocery store in which the
products were not labeled.  Selecting tomatoes from a sea of unlabeled canned
goods would be a frustrating endeavor.  The customer would take a long time to
make selection, incurring high search costs.  Or, he might pick several cans at
random, hoping that one contained tomatoes.  The customer would likely return
home only to discover that he had accidently selected a can of corn instead of
tomatoes.  Time and money are wasted in markets, like the grocery store, that do
not give consumers enough information to satisfy their preferences.  Consumer
welfare suffers. 

Marginal increases in the amount of information may also be insufficient. 
Imagine that the grocery store labels bore the names of the cans’ content, such
as “tomatoes” or “peaches” but nothing else.  The customer would be a little
better off.  He would no longer buy corn while hoping for tomatoes.  But, not all
consumers would be able to satisfy their preferences.  Nutrition-conscious
consumers could not be able to differentiate tomatoes with added sugar from pure
tomatoes.  To allow such consumers to satisfy their preferences, canned goods
include standardized nutrition labels, product weights, and clearly marked
pricing.  Each of these pieces of information enables grocery store shoppers to
make choices reflecting their preferences.  Supporting consumer choice by

50. Henkel v. Aschinger, 962 N.E.2d 395, 406 (Ohio Com. Pl. 2012) (finding that “too much
information can be as misleading as too little”); Davidson, supra note 3 (arguing that “[t]oo much
information, it turns out, is a lot like no information”).

51. Jacob Jacoby et al., Brand Choice Behavior as a Function of Information Load: Study
II, in ADVANCES IN CONSUMER RESEARCH 381-83 (Scott Ward & Peter Wright eds., 1974).

52. Jacoby, supra note 16, at 569 (defining information overload as “the fact that there are
finite limits to the ability of human beings to assimilate and process information during any given
unit of time”); Kenneth Einar Himma, The Concept of Information Overload: A Preliminary Step
in Understanding the Nature of a Harmful Information-Related Condition, 9 ETHICS & INFO. TECH.
259, 260 (2007) (providing a comprehensive overview of the cognitive mistakes created by
information overload and explaining various views on the value of information).

53. Katie Morgan & Michael J. Zudney Mannheimer, The Impact of Information Overload
on the Capital Jury’s Ability to Assess Aggravating and Mitigating Factors, 17 WM. & MARY BILL
RTS. J. 1089, 1108-18 (2009) (discussing legal and interdisciplinary literatures about the harms of
information overload).

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2015] INFORMATION FLOODING 763

providing this additional information increases consumer welfare. 
Crucially, though, there is a point when consumers are given so much

information that it is harmful.  When faced with overwhelming amounts of
information, consumers give up on making decisions reflecting their
preferences.54  They make arbitrary choices to save time and to avoid the
frustration caused by high search costs.55

Consider the grocery store customer seeking to satisfy “green” preferences. 
This consumer is willing to pay more for products with relatively less
environmental harm.  In the egg aisle, the green consumer faces too much
information.  Some eggs are labeled as “cage free,” others are “organic,” some
are “free range” and others are “ethically produced.” Because these terms do not
provide underlying information about environmental attributes, the consumer
cannot distinguish which eggs satisfy his preference.  He pays more for “ethically
produced” eggs without knowing whether they are environmentally sound. 

This is an example of too much information—the overwhelmed consumer
cannot sort out competing claims.  Decisions become arbitrary.  Just like the
consumer who intended to buy tomatoes but came home with corn because of too
little information, the consumer with too much information purchased “ethically
produced” eggs when “organic” eggs might have better satisfied her preferences. 
Too much information produces similar effects as too little information.  The
consumer’s welfare suffers. 

Thus information operates along a curve,56 on which both too little57 and too
much information harms consumers.58

54. Troy A. Paredes, Blinded by the Light: Information Overload and Its Consequences for
Securities Regulation, 81 WASH. U. L.Q. 417, 419 (2003).

55. See generally Howard Latin, “Good” Warnings, Bad Products, and Cognitive
Limitations, 41 UCLA L. REV. 1193, 1206-15 (1994) (discussing factors that influence consumer
choices and information overload).

56. This information curve is adapted from the work of information behavior scientist Jacob
Jacoby.  See Jacoby et al., supra note 51, at 381-83.

57. Douglas A. Kysar, Preferences for Processes: The Process/Product Distinction and the
Regulation of Consumer Choice, 118 HARV. L. REV. 525, 526 (2004).

58. Henkel v. Aschinger, 962 N.E.2d 395, 406 (Ohio Com. Pl. 2012) (“[T]oo much
information can be as misleading as too little.”); Davidson, supra note 3 (“Too much information,
it turns out, is a lot like no information.”).

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764 INDIANA LAW REVIEW [Vol. 48:755

Figure 1.  Consumer understanding is low when they are faced with both too
little and too much information.

As consumers receive more information, decision quality initially increases.59 
But, eventually, the information load becomes too great.  Then, each marginal
unit of information decreases the consumers’ decision quality.60  Information
flooding occurs when companies intentionally trigger consumers’ inability to
process information.61  It causes consumers to make arbitrary choices.62  As a
result, information flooding wreaks havoc on both individual consumers and
markets as a whole.

C.  Harming Consumers and Markets
Leonardo DiCaprio arrived at the Oscars in a Prius in 2003.63  Al Gore won

a Nobel Peace Prize for raising climate change awareness, as evidenced through
the Academy Award-winning documentary An Inconvenient Truth, in 2007.64 
American consumers were demanding environmentally-friendly products and
were willing to pay more for them throughout the new millennium.65  Eleven

59. Latin, supra note 55, at 1193-95; Paredes, supra note 54, at 441.
60. Paredes, supra note 54, at 441.
61. See Jacoby et al., supra note 51, at 569; Himma, supra note 52, at 260.
62. See Jacoby et al., supra note 51, at 569; Himma, supra note 52, at 260.
63. Kelly Carter, “Hybrid” Cars were Oscars’ Politically Correct Ride, USA TODAY (Mar.

30, 2003), http://usatoday30.usatoday.com/life/2003-03-30-hybrids_x.htm, archived at http://
perma.cc/7Q8P-Q68H.

64. Walter Gibbs & Sarah Lyall, Gore Shares Peace Prize for Climate Change Work, N.Y.
TIMES (Oct. 13, 2007), http://www.nytimes.com/2007/10/13/world/13nobel.html, archived at
http://perma.cc/C7XN-2VGP (noting that “Former Vice President Al Gore . . . was awarded the
2007 Nobel Peace Prize”); AN INCONVENIENT TRUTH (Davis Guggenheim Production 2006).

65. Glenn Israel, Taming the Green Marketing Monster: National Standards for



2015] INFORMATION FLOODING 765

percent of all assets in the United States screened out financial products that
failed to meet environmental and social performance objectives in 2011.66  It is
difficult to identify the exact moment when consumers began trending towards
environmentally-conscious products.  But, going green—from buying organic
foods to reducing carbon footprints—is a defining feature of modern American
life.67

Companies have responded to consumer demand for green products by
information flooding.  Some firms have sincere ideological commitments to
reducing the environmental footprint of their goods and services.68  Others simply
responded to consumer demand—and dollars—that flow towards green
products.69  Established firms worry about losing market share and profitability
to green firms.70  They could attract green customers by investing in
sustainability.71  Instead, they rely on information flooding to confuse customers
about competitors’ claims.72  Firms with poor environmental performance
“greenwash” by advertising their products as being environmentally-superior,
even when they have not made investments in sustainability measures.73

Environmental Marketing Claims, 20 B.C. ENVTL. AFF. L. REV. 303, 303-05 (1993) (noting that
American consumers demand environmentally-friendly products and are willing to pay a premium
for them).

66. Socially Responsible Investing Facts, SOC. INV. FORUM, http://www.ussif.org/
files/Publications/07_Trends_%20Report.pdf (last visited Jan. 2, 2014), archived at http://perma.
cc/5GTZ-ZJ3B (noting that eleven percent of assets in the United States operate under screens for
environmental and social performance).

67. See Israel, supra note 65, at 303-05.
68. 68See, e.g., Susan Adams, 11 Companies Considered Best for the Environment, FORBES

(April 22, 2014, 5:37 PM), www.forbes.com/sites./susanadams/2014/04/22/11-companies-
considered-best-for-the-environment/, archived at http://perma.cc/BPX5-8ZJ9.

69. Peter S. Menell, Structuring a Market-Oriented Federal Eco-Information Policy, 54 MD.
L. REV. 1435, 1445 (1995) (raising doubts about the efficacy of unregulated environmental labeling
in light of consumers’ lack of clear standards regarding the relationship between human activities
and the environment, and the difficulty of verifying many environmental claims).

70. KERR ET AL., supra note 49 (arguing that the pressure on companies to be socially
responsible has become so great that corporate adoption of responsible practices is no longer strictly
voluntary).

71. See Emma M. Lloyd, “Greening” the Supply Chain: Why Corporate Leaders Make It
Better, 27 J. LAND USE & ENVTL. L. 31, 55 (2011) (quoting Mike Duke, a Walmart executive, who
stated that “[customers] increasingly . . . want information about the entire lifecycle of a product
so they can feel good about buying it.  They want to know that the materials in the product are safe,
that it was made well[,] and that it was produced in a responsible way.”).

72. See generally John M. Church, A Market Solution to Green Marketing: Some Lessons
from the Economics of Information, 79 MINN. L. REV. 245 (1994) (discussing the role of
information flooding in green advertising).

73. See generally Elizabeth K. Coppolecchia, Note, The Greenwashing Deluge:  Who Will
Rise Above the Waters of Deceptive Advertising?, 64 U. MIAMI L. REV. 1353 (2010) (describing
greenwashing).



766 INDIANA LAW REVIEW [Vol. 48:755

“Greenwashing” is information flooding that involves materials related to the
sustainability of products and companies.74  Firms engaged in greenwashing are
intentionally overwhelming consumers with so much information that consumers
cannot determine whether a company or product meets their preferences for good
environmental performance.75  Companies make vague, meaningless claims
designed to confuse customers about which products and companies truly are
sustainable.76  There is an inverse relationship between the quality of
environmental performance and the quantity of disclosure.77  The worse a firm’s
environmental performance, the more information it releases, claiming good
performance.78

Information flooding is merely one of many outcomes of companies seeking
profit in a stiffly competitive marketplace.79  It is on par with companies’

74. See Jacob Vos, Actions Speak Louder Than Words:  Greenwashing in Corporate
America, 23 NOTRE DAME J.L. ETHICS & PUB. POL’Y 672, 680-81 (2009) (describing how public
companies must engage in public claims about environmental policy).  See generally Rob Gray et
al., Corporate Social and Environmental Reporting: A Review of the Literature and a Longitudinal
Study of UK Disclosure, 8 ACCT., AUDITING & ACCOUNTABILITY J. 47, 47-77 (1995) (arguing that
the listed social-political theories provide the strongest analysis of corporate social disclosure).

75. Corporations across industry, including those not traditionally viewed as being green,
engage in sustainability efforts.  See, e.g., CHARLES WOOLFSON & MATTHAIS BECK, CORPORATE
SOCIAL RESPONSIBILITY FAILURES IN THE OIL INDUSTRY (2005) (challenging the oil industry’s
claims of good corporate citizenship); Matthew T. Bodie, NASCAR Green: The Problem of
Sustainability in Corporations and Corporate Law, 46 WAKE FOREST L. REV. 491 (2011)
(discussing, with skepticism, NASCAR’s attempts to “go green”). 

76. See TERRACHOICE ENVIRONMENTAL MARKETING, INC., THE “SIX SINS OF
GREENWASHING”:  A STUDY OF ENVIRONMENTAL CLAIMS IN NORTH AMERICAN CONSUMER
MARKETS (2007), available at http://sinsofgreenwashing.org/index6b90.pdf, archived at
http://perma.cc/D97K-LTZU (finding, in an empirical study, that only one green claim among 1753
advanced was accurate); Adam J. Sulkowski, The Growing Trend of Voluntary Corporate
Responsibility Disclosure and Its Implication for Real Estate Attorneys, 38 REAL EST. L.J. 475, 480
(2010) (noting that corporate reporting “can obviously be a means to deliberately manipulate
perceptions as a means for attaining competitive advantage . . .”).

77. See William S. Laufer, Social Accountability and Corporate Greenwashing, 43 J. BUS.
ETHICS 253, 257 (2003) (noting that “[t]he very firms that wash their reputations through public
relations, complex front coalitions, sponsored ‘think tanks’ and who publically lead the fight against
global warming, nuclear waste, and water pollution, remain some of the worst corporate
offenders”).

78. Wiseman, supra note 17, at 61 (noting that “longer environmental disclosures do not
represent better environmental performance”); accord Robert W. Ingram & Katherine Beal Frazier,
Environmental Performance and Corporate Disclosure, 18 J. ACCT. RES. 614, 620 (1980) (finding
that there is, at best, a weak association between firms’ disclosure content in annual reports and
independent measures of social performance).  

79. See Aaron K. Chatterji et al., How Well do Social Ratings Actually Measure Corporate
Social Responsibility?, 18 J. ECON & MGMT. STRATEGY, 125, 126 (2009) (noting that “[m]any
companies attempt to enhance their environmental image by mitigating deleterious effects on the

http://dx.doi.org/10.1108/09513579510146996
http://dx.doi.org/10.2307/2490597
http://dx.doi.org/10.1111/j.1530-9134.2009.00210.x


2015] INFORMATION FLOODING 767

exploiting biological attraction to trick consumers into eating more potato
chips.80  We accept, and even grudgingly admire, corporate innovation in many
arenas.  Therefore, why shouldn’t information flooding be celebrated as another
example of corporate ingenuity?81

Information flooding has destroyed markets for environmentally-friendly
goods.82  More than a decade after DiCaprio showed up in a Prius, progress on
environmental objectives through better consumption has stalled.  Green goods
have become a market for lemons.83  Companies make egregiously confusing
assertions of being green.84  Consequently, consumers cannot distinguish honest
claims.85  The failure of green markets is a story of the destructiveness of
information flooding. 

Information flooding in green markets, and all other markets, imposes search
costs on consumers.86  Consumer confusion and frustration are easily identified
as costs of green information flooding.87  Even if consumers invest time in

environment and publicizing . . . their successes”).
80. See Michael Moss, The Extraordinary Science of Addictive Junk Food, N.Y. TIMES (Feb.

20, 2013), http://www.nytimes.com/2013/02/24/magazine/the-extraordinary-science-of-junk-
food.html?pagewanted=all&_r=0, archived at http://perma.cc/L48K-W4TU (describing food
manufacturers’ use of laboratory tests and marketing meetings to get people hooked on unhealthy
foods).

81. There are a multitude of regulatory efforts to regulate green claims.  See Thomas C.
Downs, “Environmentally Friendly” Product Advertising:  Its Future Requires a New Regulatory
Authority, 42 AM. U. L. REV. 155, 158-60 (1992); Robert B. White, Preemption in Green
Marketing:  The Case for Uniform Federal Marketing Definitions, 85 IND. L.J. 325, 354 (2010);
Roger D. Wynne, Defining Green: Toward Regulation of Environmental Marketing Claims, 24 U.
MICH. J.L. REFORM 785, 785-86 (1991).

82. Kysar, supra note 57, at 626 (explaining that rampant false “green” claims have distorted
the market for green goods).

83. Id. at 626 n.427 (noting that greenwashing has transformed the market for sustainably-
produced goods into a market for lemons in which misrepresentations, rather than legitimate,
accurate information, predominate).

84. One way in which companies trick consumers about their environmental practices is by
controlling the timing of information released, so that bad data is accompanied by good data.  Nola
Buhr & Marty Freedman, A Comparison of Mandated and Voluntary Environmental Disclosure:
The Case of Canada and the United States, 8 CRITICAL PERSPECTIVES ON ACCOUNTING
CONFERENCES 1, 8-9 (1996) (noting that because some companies produce their environmental
reports at a different time than their annual reports, there may have been environmental reports
missing from the empirical study).

85. David Hoch & Robert Franz, Eco-Porn Versus the Constitution: Commercial Speech and
the Regulation of Environmental Advertising, 58 ALB. L. REV. 441, 442 (1994) (noting that surveys
indicate that almost fifty percent of consumers dismiss green claims as “mere gimmickry”).

86. See generally Todd A. Rathe, Note, The Gray Area of the Green Market: Is it Really
Environmentally Friendly? Solutions to Confusion Caused by Environmental Advertising, 17 J.
CORP. L. 419 (1992) (describing the effects of greenwashing on consumers).

87. See id. at 425-28.



768 INDIANA LAW REVIEW [Vol. 48:755

searching for goods, they may not find what they want.88  Because consumer
purchases do not reflect their preferences, market signals are distorted. 

Consumers send mixed or incorrect messages to firms about the extent to
which they value green products.  This, in turn, undermines the competitive
advantage of sustainable firms.89  They lose market shares to misled customers
who want to “go green” but are confused about which products are truly
sustainable.90  The profit premium for sustainability efforts shrinks, causing
sustainable firms to cut back on investments in sustainable practices.91 
Innovation in sustainability will come slowly, if at all, without continued
infusions of investment.92  Without a profit motive, companies have little
incentive to invest in sustainability.93  This is doubly harmful in markets that
produce public goods, as green markets do.94  Information flooding can limit the
production of public goods.95  In turn, rewards for sustainability are minimal.96 
This becomes a downward spiral.

Green markets provide one of several examples of the harms of information
flooding.97  Unfortunately, the commonly-offered solution of mandated
disclosure actually exacerbates the harmful effects of information flooding.98

88. Cristi Lindblom, The Implications of Organizational Legitimacy for Corporate Social
Performance and Disclosure (1994) (transcript on file with author) (noting that corporations may
use disclosure to deflect attention from an issue of concern by highlighting other accomplishments).

89. See Kysar, supra note 57, at 626-27 (noting that, because of greenwashing, the market
for sustainably-produced goods is predominated by misrepresentations rather than legitimate,
accurate information).

90. See id. (describing the ease with which companies can develop marketing schemes
designed to confuse consumers and providing the example of unregulated organic labeling).

91. See Lloyd, supra note 71, at 34 (noting that corporate officers are forced to consider
“whether becoming sustainable contradicts the goal of continuing business operations in the current
market place”).

92. See id. at 55-62 (describing the extreme lengths to which Walmart and Nike went in order
to implement sustainability practices).

93. See id. at 34 (discussing how profitability is weighed in determining whether to invest
in sustainability practices).

94. See Kysar, supra note 57, at 533 (noting that consumers, acting on “process preferences,”
reveal “their true level of support for human safety, the environment, and a host of other public
goods”).

95. See id.
96. See id. at 626-27 (suggesting that companies that adopt sustainability practices may not

necessarily profit from them, due to the misleading marketing strategies used by other, less
environmentally-conscious companies).

97. Green markets are, however, a particularly poignant example of the harms of information
flooding, as information flooding in that context reduces the public good of environmental well-
being, as well as individual consumer welfare.

98. See Sunstein, supra note 2, at 1369 (explaining that consumers make poor choices when
they are overwhelmed with information).



2015] INFORMATION FLOODING 769

D.  How Have We Missed This?
If information flooding is so widespread, one must wonder how it was missed

for so long.  Scholars have empirically demonstrated the harmful effects of
information flooding in many fields.99  They have not, however, linked their
individual findings together to identify the broad and pervasive practice of
information flooding. 

Courts have also addressed the issue in a number of cases, but they are
scattered across disparate areas.100  Silos of research into “contracts” or “tax” or
“environmental law” alone may turn up a few examples, but fail to catch the
ubiquity of the practice.  This Article looks across pockets of law to identify the
broader trend.  Information flooding is a far more widespread phenomenon than
previously realized, suggesting that mandated disclosure alone, as a regulatory
strategy, simply cannot work.101

Identifying information flooding is difficult.  One is loath to mistakenly call
well-intentioned attempts information flooding.  Intent to deceive, a crucial facet
of information flooding, is hard to discern.  A company releasing information
may be genuinely trying to aid consumers, or de-bias competing claims.102 
Companies also aggressively attempt to shut down scholarship calling into
question their practices.103  This is because scholars identifying “good” and “bad”
corporate practices open up a can of worms.  Information flooding examples in
this article are drawn from judges identifying the practice or empirical literature

99. See id.
100. See Henkel v. Aschinger, 962 N.E.2d 395, 399, 406 (Ohio Com. Pl. 2012) (finding, in

a case brought by shareholders alleging that their company made material omissions and
misstatements on the proxy statement that it filed with the SEC, that “too much information can be
as misleading as too little”); Savino v. Computer Credit, Inc., 164 F.3d 81, 84-85 (2d Cir. 1998)
(finding in favor of the consumer plaintiff in a case alleging that the defendant debt collector’s
demand for payment overshadowed its required notice of rights and clarifying that “[a] debt
collection notice is overshadowing or contradictory if it fails to convey the validation information
clearly and effectively and thereby makes the least sophisticated consumer uncertain as to her
rights”); In re Martinez, 266 B.R. 523, 530, 536 (Bankr. S.D. Fla. 2001) (noting, in a bankruptcy
case, that the notice of rights provided to the plaintiff by the defendant law office was
inappropriately hidden on page eight of a sixteen-page letter).

101. See infra Part II.
102. See Michael R. Siebecker, Trust and Transparency: Promoting Efficient Corporate

Disclosure through Fiduciary-Based Discourse, 87 WASH. U. L. REV. 115, 132-133 (2009) (noting
that even corporations acting in good faith “might opt for excessive disclosure, because [they] . .
. ‘face a dilemma:  Too often they just don't know what they know.  And when they do, they don't
know what to share’”).

103. David Barstow, Vast Mexico Bribery Case Hushed Up by Wal-Mart After Top-Level
Struggle, N.Y. Times (April 21, 2012), www.nytimes.com/2012/04/22/business/at-wal-mart-in-
mexico-a-bribe-inquiry-silenced.html?pagewanted=all&=_r=0, archived at http://perma.cc/EP8D-
57EP.



770 INDIANA LAW REVIEW [Vol. 48:755

of particular industries, not independent assessments.104
Information flooding, although pervasive, is not always that harmful.  Left

unchecked, it can clearly harm consumers and distort markets.105  But, as
explained in Part III, there are checks on information flooding.106  Companies
have emerged to shield consumers from the harmful effects of information
overload.107  They usually do a relatively good job.  People generally are able to
function in the face of the information around them, rather than constantly
shutting down as a result of it.  For these reasons, it is easy to underestimate the
role of information flooding amidst the nearly hysterical discussion of the
harmful effects of information overload on consumer choice, which is discussed
below.108

II.  FLOODING AS A DYNAMIC RESPONSE TO MANDATED DISCLOSURES
A raging national debate focuses on empowering consumer choice through

reforming mandatory disclosures.109 Ironically, the dominant regulatory solution
to “save” consumers from information overload is implementing mandatory
disclosure regimes—laws requiring companies to disclose information to
consumers.110 But, information flooding illustrates that mandated disclosure
reforms will prove useless in promoting consumer choice.111

A.  Expanding Consumer Choice
“Consumer choice” is a popular phrase used by those on both sides of the

political aisle.  Mitt Romney, the 2012 presidential hopeful, promised to increase
consumer choice in healthcare.112  President Barack Obama announced that he

104. Supra note 100 (cases in which various judges highlight the problem of information
flooding).

105. See infra Part II.
106. See infra Part III.
107. See infra Part III.A-B.
108. See infra Part II.
109. See BEN-SHAHAR & SCHNEIDER, supra note 4, at 649-51 (introducing the underlying

rationale of mandatory disclosures and briefly discussing the debate surrounding their use).
110. See Paula J. Dalley, The Use and Misuse of Disclosure as a Regulatory System, 34 FLA.

ST. U. L. REV. 1089, 1115 (2007) (discussing the ways in which both the quantity and quality of
information available to consumers affect the quality of their decision-making skills); Patricia A.
McCoy, The Middle-Class Crunch:  Rethinking Disclosure in a World of Risk-Based Pricing, 44
HARV. J. ON LEGIS. 123, 133 (2007) (discussing the disclosure requirements of the Truth in Lending
Act); Lauren E. Willis, Decisionmaking and The Limits of Disclosure:  The Problem of Predatory
Lending:  Price, 65 MD. L. REV. 707, 766 (2006) (discussing lenders’ practice of deluging potential
borrowers with information).

111. See Dalley, supra note 110; McCoy, supra note 110; Willis, supra note 110.
112. Andy Serwer & David Whitford, Mitt Romney:  Rich Taxpayers Will Pay Their Share,

FORTUNE (Aug. 15, 2012, 9:00 AM), http://fortune.com/2012/08/15/mitt-romney-rich-taxpayers-
will-pay-their-share/, archived at http://perma.cc/4RYK-TVG6 (noting that Mitt Romney promised



2015] INFORMATION FLOODING 771

was committed to protecting consumer choice online.113  Yet, despite
campaigning on a platform of expanding consumer choice, politicians have done
a poor job of actually achieving it.  Like many goals that sound good in campaign
speeches, expanding consumer choice can prove difficult in practice.

The central debate about consumer choice is whether government regulation
of markets helps or hurts consumer decision-making.114  One side of the debate
argues that too little regulation is contributing to growing income inequality and
loss of the middle class.115  Unregulated market dynamics, they argue, benefit a
few elite but leave behind many more average Americans.116  Elizabeth Warren’s
senatorial campaign has shined a spotlight on this position.  Warren’s years of
research as a law professor have contributed to her view that the current cobbled-
together regulations and judicial interventions for consumer protection are
insufficient to protect the middle and lower classes.117  She argues that more
comprehensive consumer protection regulation is necessary.118

On the other side of the debate, adherents to free market ideals argue that
consumer interests are best served by market dynamics, in which sellers respond
to consumer demands.119 Optimism toward the markets’ ability to solve problems
is accompanied by the view that markets should be lightly regulated.120  Of
course, this presupposes that consumers can make choices reflective of their

a “consumer choice market-driven [healthcare] system”).
113. The White House, Technology, http://www.whitehouse.gov/issues/technology (last visited

Nov. 12, 2014), archived at http://perma.cc/4N3M-XJ3F(noting that “President Obama has pledged
to preserve the free and open nature of the Internet to encourage innovation, protect consumer
choice, and defend free speech”).

114. Compare Richard A. Epstein, Behavioral Economics:  Human Errors and Market
Corrections, 73 U. CHI. L. REV. 111 (2006) (suggesting that government regulation largely harms
consumer decision-making), with Oren Bar-Gill & Elizabeth Warren, Making Credit Safer, 157 U.
PA. L. REV. 1, 38 (2008) (arguing that comprehensive regulatory regimes are necessary to improve
consumer decision-making).

115. Bar-Gill & Warren, supra note 114, at 38 (noting that a substantial number of middle-
income families with low default risk sign up for subprime loans, despite the fact that they qualify
for prime-rate loans, which can prove to be “a very costly mistake”).

116. See id. at 21 (explaining that, although many consumers are uninformed, “in most
markets, relatively few informed, rational consumers can wield enough influence to ensure the
efficient operation of the market”).

117. See id. at 64.
118. Id. at 6 (arguing that consumer credit products should be governed by “the creation of a

single regulatory body that will be responsible for evaluating the safety of consumer credit products
and policing any features that are designed to trick, trap, or otherwise fool the consumers who use
them”). 

119. See Epstein, supra note 114, at 128 (arguing that “[v]irtuous legislators would be prey
to all sorts of error, even if they were immune to the cognitive and emotional errors that plague the
rest of us (which they’re not)”).

120. See id. at 115.



772 INDIANA LAW REVIEW [Vol. 48:755

preferences, a necessary condition for the market to work.121  Even staunch
libertarians seek judicial and legislative intervention for preservation of
consumer choice when sellers interfere with consumer decision-making, through
force or fraud.122  The basis for intervention is the need to protect the market
from failure caused by distortion or mistrust.

Surprisingly, the polarized sides agree that information overload is the
scourge of consumer decisions.123  Information overload research suggests that
consumers overwhelmed with too much information make poor decisions.124 
Politicians and academics alike almost universally agree that reducing
information overload will improve consumer decisions.125  The debate rests on
whether regulation or free markets can improve information flows.

The compromise position that has emerged involves the implementation of
mandatory disclosure regimes.126  Mandated disclosures require companies to
publically report key information.127  Examples include requirements that
publicly-traded companies report facts material to their stock performance and
that car manufacturers attach emission compliance standards to the windshields
of new cars.128  The idea behind these requirements is that consumers will be
empowered by the information contained in the disclosures to make choices
reflective of their preferences.129  This, supposedly, benefits both consumers and
markets.130  Consumers can more accurately reflect their preferences, lower
search costs, and more frequently get what they want.131  Markets are subject to
quasi-regulatory public pressure by consumers and consumer groups, who pursue

121. Murray N. Rothbard, Free Market, LIBRARY OF ECON. AND LIBERTY, http://www.
econlib.org/library/Enc/FreeMarket.html (last visited Jan. 12, 2015), archived at http://perma.cc/
9B9B-ERGJ.

122. RICHARD A. EPSTEIN, FORBIDDEN GROUNDS:  THE CASE AGAINST EMPLOYMENT
DISCRIMINATION LAWS 103-112 (1992) (arguing that government intervention is appropriate to
reduce force or fraud in peoples’ transactions).

123. See BEN-SHAHAR & SCHNEIDER, supra note 4, at 652-54.
124. Jacoby et al., supra note 51, at 381.
125. BEN-SHAHAR & SCHNEIDER, supra note 4, at 648.
126. David W. Case, Corporate Environmental Reporting as Informational Regulation: A Law

and Economics Perspective, 76 U. COLO. L. REV. 379, 383 (2005) (defining “informational
regulation” as “government mandated public disclosure of information on the environmental
performance of regulated entities”).

127. See id. at 383-85.
128. Kimberly C. Cavanagh, It's a Lorax Kind of Market! But is it a Sneetches Kind of

Solution?:  A Critical Review of Current Laissez-Faire Environmental Marketing Regulation, 9
VILL. ENVTL. L.J. 133, 164 (1998) (discussing Environmental Protection Agency emission standard
disclosures).

129. Case, supra note 126, at 433.
130. Id.
131. See Kysar supra note 57, at 607 (noting that “consumers [might] derive utility from

participating in a marketplace that is rich with information about the consequences of
consumption”).



2015] INFORMATION FLOODING 773

companies with negative disclosures.132  “Good” companies benefit, and “bad”
companies lose.  In pursuit of profit, the reasoning goes, all companies will
perform better in the areas on which they must disclose.133

Mandated disclosure has become a popular regulatory fix because it is cheap,
uncontroversial, and looks good.134  Politicians who implement mandated
disclosure regimes can assure constituents that they are taking action to protect
them.135  At the same time, companies generally accept mandated disclosure
because it is relatively low-cost and does not harm their bottom line.136  In fact,
companies even seek mandated disclosures to forestall other, more effective,
regulatory practices.137  Mandated disclosures are also relatively low-cost for the
government because monitoring and reporting costs fall on regulated companies
and enforcement costs are shifted to the public.138

Elected officials implementing mandated disclosure regimes see them as a
win-win solution: lots of credit, little cost.139  As a result, mandated disclosure
has become the dominant strategy for promoting consumer choice in fields
ranging from privacy to environmental practices, software agreements to banking
policies.140  The problem is that mandatory disclosure regimes actually harm both
consumers and the markets that they purport to protect, which means that they
have negative regulatory value.141

In sum, the central, largely uncontested premise of the consumer choice
debate is that consumers make bad choices because they are overwhelmed by
information.142  To solve this problem, politicians rely on mandated disclosures
that force companies to tell consumers what they want to know.  In other words,
consumers make bad choices because they are overwhelmed with more
information.143  The regulatory solution? More information! Absurdly, mandated
disclosures respond to overwhelmed consumers by requiring that they receive

132. Regulators increasingly impose mandatory disclosure regimes in the hope that investors,
regulators, interested stakeholders, and members of the media will process the disclosed information
and exert social pressure on firms with poor performance to improve their practices.  See Paul R.
Kleindorfer & Eric W. Orts, Information Regulation and Environmental Risks, 18 RISK ANALYSIS
155, 157 (1998) (noting that information regulation allows for indirect enforcement from market
economies or citizen stakeholders). 

133. Id. at 168.
134. BEN-SHAHAR & SCHNEIDER, supra note 4, at 652.
135. Id. 
136. Id.
137. Karen Bradshaw Schulz, New Governance and Industry Culture, 88 NOTRE DAME L.

REV. 2515, 2526 (2013).
138. BEN-SHAHAR & SCHNEIDER, supra note 4, at 682.
139. Id.
140. See id.
141. Id. at 735.
142. Information overload occurs when consumers receive more information than they can

reasonably process.  Sunstein, supra note 2, at 1369.
143. See Jacoby et al., supra note 51, at 381; Himma, supra note 52, at 260.

http://dx.doi.org/10.1111/j.1539-6924.1998.tb00927.x


774 INDIANA LAW REVIEW [Vol. 48:755

even more information.  Both the premise and the solution are flawed.

B.  The Flaws of Mandated Disclosure
A consumer encountering a software agreement for the first time would

likely read it with painstaking care.  They would wonder what, exactly, they were
signing up for.  But after several encounters with user agreements, the average
consumer would not bother reading the dense text before clicking “I agree.”144 
Consumers unable to sift through pages of legalese in privacy agreements or
software license agreements simply agree without reading the terms of the
agreement.145  If consumers want to use the product, they must accept the terms. 
Besides, agreements are dense and unwieldy.  They take a long time to read. 
Because of this, the disclosures fail to do what they are intended to do:  promote
consumer choice.146

Mandatory disclosure regimes are not working.  Study after study shows that
this strategy fails to accomplish its goal of helping consumers make better
decisions.147  The reason why mandated disclosures are failing is hotly contested. 
Red herrings are lining the path of the failure. 

One theory is that mandated disclosures are improperly calibrated; they tilt
too far toward consumer protection or free markets.148  Ironically, mandated
disclosures are criticized as being both too conservative and too liberal at the
same time.  Polarized back-and-forth debates about the “right” levels of market
regulation to protect consumers are woefully out-of-date.149  This is a false
dichotomy.  It may score points on a campaign trail but is doing little to actually
promote either consumer welfare or the market efficiencies reliant upon genuine
consumer choice.

144. Yannis Bakos et al., Does Anyone Read the Fine Print? Consumer Attention to Standard
Form Contracts (New York University Law and Economics Working Papers, Working Paper No.
195, 2014), available at http://lsr.nellco.org/nyu_lewp/195/, archived at http://perma.cc/YW5C-
2KHJ (finding that only one or two in one thousand, or 0.02%, of online shoppers spends at least
one second reading end user license agreements).

145. Frederic M. Bloom, Information Lost and Found, 100 CAL. L. REV. 635, 675 (2012)
(finding that “people prefer information ease to information quality—that they choose less useful
but more accessible information over higher value facts that are harder to find”).

146. Florencia Marotta-Wugler, Even More than You Wanted to Know About the Failures of
Disclosure 1 (New York University Law and Economics Working Papers, Working Paper No. 394,
2014), available at http://lsr.nellco.org/cgi/viewcontent.cgi?article=1398&context=nyu_lewp,
archived at http://perma.cc/6FJ2-K5S6.

147. See supra Part I.C.
148. Mary Jo White, Chair, National Association of Corporate Directors, Remarks at the

Leadership Conference 2013 in National Harbor, Md. (Oct. 15, 2013) (transcript available at
http://www.sec.gov/News/Speech/Detail/Speech/1370539878806#.VO0uJCvtmSo), archived at
http://perma.cc/8DNU-8GK5 (describing how disclosure can sometimes be “too much” and can
“stray[] away from its core purpose”).

149. See supra Part II.A.



2015] INFORMATION FLOODING 775

A more recent theory suggests that there are so many mandated disclosures
that consumers are suffering from information overload, making them worse off
than if no disclosure was required at all.150  Contracts are too long, this theory
suggests, because of all of the information Congress requires companies to tell
consumers.151  Consumers cannot process all of the required disclosures.152  So,
mandatory disclosure regimes harm the very consumers that they are designed to
protect.153

This theory reaches the correct conclusion, but for the wrong reasons. 
Mandatory disclosure can lead to information overload.  It is failing its
objectives.  However, mandatory disclosures are not the sole—or even the
primary—cause of the plethora of information that overwhelms consumers.154 
Instead, corporate strategy in the form of information flooding is a key driver of
overload.155  Scholars have confused the correlation between mandatory
disclosures and information overload as being causal. 

This Article argues that the failure of mandatory disclosure is caused by
corporations’ ability to innovate around disclosure laws as soon as they are
passed.156  Companies dynamically respond to mandatory disclosures by
deliberately overwhelming consumers with too much information.  Strategic
corporate behavior, not legislation, drives companies to dump information on
consumers.157  Firms with bad performance drown out competitors’ good
performance.158  When faced with so much information, consumers cannot

150. See BEN-SHAHAR & SCHNEIDER, supra note 4, at 666-79 (examining the harm that
mandated disclosures, and the information resulting therefrom, have inflicted on consumers across
a wide array of industries).

151. Id. at 661 (describing the significant amount of information that Congress requires
hospitals and healthcare facilities to provide to patients).

152. See Bloom, supra note 145, at 675.
153. See BEN-SHAHAR & SCHNEIDER, supra note 4, at 666-79.
154. See supra Part I.A.
155. See supra Part I.A.
156. The key role of corporate behavior in fostering information overload has been overlooked

because scholars are looking at the content of contracts rather than at the interplay between firms
within an industry.  Looking more broadly to how firms compete within a market shifts the blame
from regulators developing mandatory disclosures to firms seeking to “one-up” one another in a
quest for profitability.  Mandated disclosures may encourage companies to flood consumers even
more, but information overload can and does exist in contexts without mandated disclosures. 

Given this, solutions aimed at improving or reducing mandatory disclosures may be necessary,
but they are certainly not sufficient.  Effective solutions must incorporate an understanding of
corporate behavior as a key contributor to information overload. 

157. See Siebecker, supra note 102, at 131-32 n.60 (implying that firms act in bad faith to
dump information on consumers, undermining adequate understanding and increasing costly efforts
to wade through data dumps).

158. See id. at 132-33 (noting that even corporations acting in good faith “might opt for
excessive disclosure, because [they] . . . ‘face a dilemma:  Too often they just don't know what they
know.  And when they do, they don't know what to share’”).



776 INDIANA LAW REVIEW [Vol. 48:755

distinguish the good from the bad.  Purchasing decisions, therefore, do not reflect
the choices consumers would make if they understood their options.

C.  Flooding as a Dynamic Response to Mandated Disclosures
Ironically, the very laws designed to promote consumer choice actually

promote information flooding.  Laws requiring mandated disclosures ossify as
soon as they are made.159 Companies can respond dynamically, in real time. 
They quickly innovate around disclosure laws.  They undermine the salience of
disclosures by burying them in junk information.160  To demonstrate firms’
adeptness at employing flooding as a dynamic response to mandatory disclosures,
this Article explores two doctrines that have emerged in debt collection and
shareholder disclosures.  In each context, mandatory disclosures encouraged
firms seeking to hide bad facts to flood consumers with overwhelming amounts
of information.

1.  Overshadowing.—Debt collectors enslaved, imprisoned, and indentured
debtors for thousands of years.161  America eventually abolished debtors’ prisons
and servitude, but debt collection practices have remained harsh.162  People who
fell on hard times lost their homes and belongings to unscrupulous debt
collectors.163  In 1976, Congress sought to curb abusive debt collection practices
by passing the Fair Debt Collection Practices Act (“FDCPA”).164  The FDCPA
centered on mandatory disclosures designed to give debtors information that they
needed.165  Debt collectors were required to send delinquent debtors a letter
outlining key facts about the debt and debt collector.166

159. Pierce, supra note 7.
160. Donald C. Langevoort, Toward More Effective Risk Disclosure for Technology-Enhanced

Investing, 75 WASH. U. L. REV. 753, 759 (1997) (noting that “the more information there is[,] the
more each bit of it is diluted.  The immediate and salient crowds out the less attention-grabbing”).

161. For an engaging overview of debt collection practices, see Jake Halpern, Pay Up:  A Debt
Collector Struggles to Stay Out of Debt, NEW YORKER (Oct. 11, 2010), http://www.
newyorker.com/magazine/2010/10/11/pay-up, archived at http://perma.cc/353G-DRYL (tracing the
practices of a debt collector in Buffalo, New York).

162. Jill Lepore, I.O.U.:  How We Used to Treat Debtors, NEW YORKER (Apr. 13, 2009),
http://www.newyorker.com/magazine/2009/04/13/i-o-u, archived at http://perma.cc/HGG7-ABQL
(discussing historical debt collection practices in the United States).

163. The canonical contracts case, Williams v. Walker-Thomas Furniture Co., 350 F.2d 445
(D.C. Cir. 1965), involved a woman losing her household furnishings because of an unpaid debt. 

164. See Fair Debt Collection Practices Act, 15 U.S.C. § 1692g (2013).  
165. The FDCPA applies to third-party debt collectors attempting to collect consumer debts. 

See Manuel H. Newburger, Acceleration Notices and Demand Letters, 47 CONSUMER FIN. L. Q.
REP. 338, 344-45 (1993) (discussing the parties to whom the statute applies).

166. The plain language of the FDCPA required debt collectors to provide specific information
to a consumer when attempting to collect a debt:  (1) the amount of the debt; (2) the name of the
creditor; (3) that the debt will be assumed valid if not disputed after thirty days; (4) that the debt
collector must obtain verification of the debt within thirty days if it is disputed; and (5) that the



2015] INFORMATION FLOODING 777

Soon, debt collectors began “overshadowing” the disclosure by burying it in
long, meaningless boilerplate language (a form of information flooding).167  Debt
collectors were required to include the disclosure, or face legal penalty.168  But,
the mandated disclosures were actually harmful to debt collectors.  Collectors’
obscuring the disclosure about debtors’ legal rights made debtors more
vulnerable to abusive collection practices and more likely to pay fraudulent
debts.169

To minimize the effectiveness of the disclosure, collectors buried it in
irrelevant information.170  One debt collector buried the disclosure on page eight
of a sixteen-page letter.171  Another included the disclosure in small, light grey
font at the end of an information-rich document.172  Debt collectors guessed that
many debtors would not sift through junk information to find the disclosure.  The
junk information overshadowed, or overwhelmed, the salience of the
disclosure.173  Information flooding allowed debt collectors to satisfy the letter
of law for the Fair Debt Collection Act while destroying its intent.

Courts and Congress tried repeatedly to improve the disclosure.  Judge
Posner created a sample letter that debt collectors could use as a “safe harbor”
to protect against claims of overshadowing.174  Many debt collectors chose to risk
legal liability for overshadowing rather than to use the form letter.175  They
continued to overwhelm consumers with information.  Others used Posner’s

consumer is owed the name and address of the original creditor, upon written request.  15 U.S.C.
§ 1692g (2013).

167. Savino v. Computer Credit, Inc., 164 F.3d 81, 85 (2d Cir. 1998) (clarifying that “[a] debt
collection notice is overshadowing or contradictory if it fails to convey the validation information
clearly and effectively and thereby makes the least sophisticated consumer uncertain as to her
rights”).

168. 15 U.S.C. § 1692g (2013).
169. See Halpern, supra note 161 (discussing the potential for corruption that surrounds debt

collection practices).
170. See Savino, 164 F.3d at 85 (holding that “a debt collection notice is overshadowing or

contradictory if it fails to convey the validation information clearly and effectively and thereby
makes the least sophisticated consumer uncertain as to her rights”); Adams v. Law Offices of
Stuckert & Yates, 926 F. Supp. 521, 527 (E.D. Pa.1996) (noting that “extraneous language is
considered overshadowing or contradictory if it would cause the least sophisticated debtor to
become confused or uncertain as to his rights under the FDCPA”).

171. In re Martinez, 266 B.R. 523, 530 (Bankr. S.D. Fla. 2001).
172. Ost v. Collection Bur., Inc., 493 F. Supp. 701, 703 (D.N.D. 1980).
173. Russell v. Equifax A.R.S., 74 F.3d 30, 35 (2d Cir. 1996) (holding that “there are many

cunning ways to circumvent [section] 1692g under cover of technical compliance”).
174. Bartlett v. Heibl, 128 F.3d 497, 501-02 (7th Cir. 1997) (providing a sample letter that

debt collectors could use as a safe harbor from FDCPA claims).
175. Zemeckis v. Global Credit & Collection Corp., 679 F.3d 632, 635-37 n.1 (7th Cir. 2012)

(noting that the letter at issue did not follow the Bartlett form but was instead virtually
indistinguishable from a letter found not to display overshadowing, despite its having the mandated
notice on the back of the letter and extraneous words in red font on the front of the letter).



778 INDIANA LAW REVIEW [Vol. 48:755

letter, but stuffed the envelope containing the letter with extraneous
documents.176

Congress later amended the Act to prohibit overshadowing.177  The 2006
Financial Services Regulatory Relief Act explicitly prohibited the practice.178 
This did not work either.179  Debt collectors circumvented the problem by having
debtors sign pages of notices in collection offices.180  Information flooding
worsened in response to each reform of the original mandatory disclosure.181  In
the bigger picture, debt collection practices have become increasingly abusive
since the passage of the 1976 Act.182  De facto debtor prisons have even returned
to the United States for the first time since the Colonial Era.183  Mandated
disclosure designed to curb abusive debt collection failed miserably, despite
several reform attempts.184  Information flooding, the natural response to these
laws, is a leading cause of that failure.185

Judges and legislators argued that the reason information flooding harmed
debtors was because they were a particularly vulnerable group.186  Delinquent
debtors, they posited, were particularly susceptible to the harmful effects of
information overload.187 Courts employed a “least sophisticated debtor”188 or
“unsophisticated debtor” standard.189  Little did they know that judges were

176. Russell, 74 F.3d at 35 (noting that “[i]t is not enough for a debt collection agency simply
to include the proper debt validation notice in a mailing to a consumer—Congress intended that
such notice be clearly conveyed”).

177. See 15 U.S.C. § 1692g(b) (2013) (as amended by the Financial Services Regulatory Relief
Act of 2006, Pub. L. No. 109-351, § 802(c), 120 Stat. 1966, 2006-07 (2006)) (providing that “[a]ny
collection activities and communication during the 30-day period may not overshadow or be
inconsistent with the disclosure of the consumer’s right to dispute the debt or request the name and
address of the original creditor”).

178. Financial Services Regulatory Relief Act of 2006, Pub. L. No. 109-351, § 802(c), 120
Stat. 1966, 2006-07 (2006).

179. Halpern, supra note 161 (detailing the abusive practices of modern debt collection).
180. Id. 
181. Id. 
182. Id. 
183. Return of Debtors’ Prisons, N.Y. TIMES (July 13, 2012), http://mobile. nytimes.com/

2012/07/14/opinion/return-of-debtors-prisons.html, archived at http://perma.cc/VV2U-RUU3
(critiquing the emergence of modern-day equivalents to debtor prisons). 

184. Halpern, supra note 161 (detailing the abusive practices of modern debt collection).
185. Id.
186. Adams v. Law Offices of Stuckert & Yates, 926 F. Supp. 521, 527 (E.D. Pa. 1996)

(noting that “extraneous language is considered overshadowing or contradictory if it would cause
the least sophisticated debtor to become confused or uncertain as to his rights under the FDCPA”).

187. Id. 
188. Id. 
189. Marshall-Mosby v. Corporate Receivables, Inc., 205 F.3d 323, 326 (7th Cir.2000)

(applying an “unsophisticated consumer” standard); Adams, 926 F. Supp. at 527 (applying a “least
sophisticated debtor” standard).



2015] INFORMATION FLOODING 779

contemporaneously holding that sophisticated corporate shareholders were also
confused by information flooding.190

2.  Buried Facts Doctrine.—The Great Depression destroyed public
confidence in the stock market.191  By extension, the market itself was failing.192 
To rebuild exchanges, Congress began requiring publicly traded corporations to
publicly release material information to shareholders.193  This mandatory
disclosure regime was designed to restore public confidence in the failed stock
market.194  It was heralded as expanding shareholders’ access to information.195 
A series of acts provided a “floor” of information—companies could choose to
disclose more, but were required to disclose a minimum amount of information
to trade on public exchanges.196  Shareholders could rely on mandatory
disclosures to evaluate firm performance and decide whether to buy or sell
stock.197

Corporate executives were in a difficult position; if they disclosed bad
information about performance, shareholders would sell their stock, driving stock
prices down.198  If executives did not disclose poor performance, they were
subject to legal penalties for violating the Act.199

Like debt collectors, corporate executives responded to information-forcing
mandated disclosures by information flooding.200  They hid bad facts about

190. See generally Susanna Kim Ripken, The Dangers and Drawbacks of the Disclosure
Antidote: Toward a More Substantive Approach to Securities Regulation, 58 BAYLOR L. REV. 139,
180-82 (2006) (noting that “[s]ophisticated investors and professionals can suffer from the same
cognitive and behavioral biases that constrain individual, unsophisticated investors”). 

191. See David Monsma & Timothy Olson, Muddling Through Counterfactual Materiality and
Divergent Disclosure:  The Necessary Search for a Duty to Disclose Material Non-Financial
Information, 26 STAN. ENVTL. L.J. 137, 145 (2007).

192. Id.
193. Corporate disclosure requirements were created by the Securities Act of 1933 and the

Securities Exchange Act of 1934.  See Monsma & Olson, supra note 191, at 1454-46.
194. Id. 
195. Michael J. Viscuso, Note, Scrubbing the Books Green:  A Temporal Evaluation of

Corporate Disclosure Requirements, 32 DEL. J. CORP. L. 879, 879-80 (2007).
196. Sulkowski, supra note 76, at 479-80.
197. Id. 
198. Siebecker, supra note 102, at 131-32 n.60.
199. Monsma & Olson, supra note 191, at 196-98.
200. Werner v. Werner, 267 F.3d 288, 297 (3d Cir. 2001); Greenapple v. Detroit Edison Co.,

618 F.2d 198, 210 (2d Cir. 1980) (noting that a disclosure in a prospectus must not “submerg[e]
a material fact in a flood of collateral data”); Gould v. American-Hawaiian S.S. Co., 535 F.2d 761,
774 (3d Cir. 1976) (finding that proxy materials were deficient because they were scattered and
buried in a lengthy proxy statement); Ballan v. Wilifred Am. Educ. Corp., 720 F. Supp. 241, 250-51
(E.D.N.Y. 1989) (finding a cause of action where a shareholder claimed that a corporation “buried
negative information in obscure parts of the various reports so that potential purchasers would
overlook it”).



780 INDIANA LAW REVIEW [Vol. 48:755

corporate performance.201  One company placed a bolded statement on page two
of a 200-page document stating that a transaction was fair.202  Appendices near
the end of the document contradicted the statement, disclosing that the directors
had conflicts of interests and that the investment advisors were not
independent.203  Another company stated at the beginning of a report that a
proposed tender offer would give shareholders similar voting rights.204  The last
page of the document stated that acceptance of the tender offer would
significantly dilute those rights.205  Companies were information
flooding—burying bad facts in lots of distracting, irrelevant information.206

Courts began cracking down on the practice in the 1970s.207  Judge Friendly
admonished firms that, with regard to financial statements, “it is not sufficient
that overtones might have been picked up [only] by the sensitive antennae of
investment analysts.”208  The “buried facts doctrine” held that companies could
not hide important information in the middle of lengthy documents.209

In the wake of the most recent financial crises, Congress passed additional
mandated disclosures and reformed existing disclosure requirements.210 
Companies are now required to disclose more,211 but continue to bury
information.212  Yet, interestingly, financial markets continue to function
relatively well, unlike debt collection practices.  The reasons for this contrast are
explored in Part III, which credits the “sensitive antennae of investment” analysis
Judge Friendly mentioned as key to counteracting the harmful effects of
information flooding.213

These examples illustrate that mandated disclosures open the floodgates of

201. Id. 
202. Kohn v. American Metal Climax, Inc., 322 F. Supp. 1331, 1353-62 (E.D. Pa. 1971).
203. Id. at 1349 (noting that material facts “although disclosed, were not fully, fairly and

adequately disclosed in that they are insufficiently brought to the shareholder’s attention, especially
in light of the length, complexity and detail of the Explanatory Statement and Appendices”).

204. Blanchette v. Providence & Worcester Co., 428 F. Supp. 347, 353 (D. Del. 1977).
205. Id.
206. See Paredes, supra note 54, at 430.
207. Gerstle v. Gamble-Skogmo, Inc., 478 F.2d 1281, 1297 (2d Cir. 1973).
208. Id. 
209. See cases cited supra note 200; see also Kohn v. American Metal Climax, 322 F. Supp.

1331, 1349 (E.D. Pa. 1971) (noting that material facts “although disclosed, were not fully, fairly
and adequately disclosed in that they are insufficiently brought to the shareholder’s attention,
especially in light of the length, complexity and detail of the Explanatory Statement and
Appendices”).

210. The Sarbanes-Oxley Act of 2002 requires executives to certify disclosures and increased
SEC scrutiny of environmental liability disclosures.  See generally Robert C. Kirch & Tina Y. Wu,
Disclosure of Environmental Liabilities: SEC Obligations, Auditing Standards and the Effect of
Sarbanes-Oxley, A.L.I.-A.B.A. CONTINUING LEGAL EDUC. (2008).

211. Id.
212. Paredes, supra note 54, at 430. 
213. Gerstle v. Gamble-Skogmo, Inc., 478 F.2d 1281, 1297 (2d Cir. 1973).



2015] INFORMATION FLOODING 781

information, but has no mechanism for shutting them when “enough” information
is issued.214  Once laws requiring disclosure are passed, they instantly ossify.215 
Companies innovate around the disclosure laws, finding clever ways to
technically satisfy the disclosure requirement but undermine its intent.216  So,
why don’t we just fix mandated disclosures to account for firms’ dynamic
responses? 

D.  The Reform Myth
Speaking publicly about the shortcomings of mandatory disclosures

invariably prompts an audience member to raise her hand and ask, “But what
about nutrition labels?  Aren’t they working? I read them every day.  Let’s do
more regulation like that.” 

Nutrition labeling regulations, requiring food manufacturers to place labels
on packaged food, are the poster child of the mandated disclosure reform
movement.217  They reflect a reform of mandated disclosure, called “smart
disclosure.”218  Smart disclosure tells companies not only what to disclose, but
how to disclose it.219  It requires standardized reporting, designed to increase
consumer understanding and diminish corporate chicanery.220  Smart disclosure
is a regulatory response to the kinds of flaws in information flooding that courts
identified with debt collection practices221 and the buried fact doctrine222 in the
1970s.  Nutrition labels, Energy Star labels, and cigarette warnings are examples
of much-heralded reformed disclosures.223  Unfortunately, making mandated
disclosures smarter has largely failed.

In 1990, Congress began requiring nutrition labels on packaged foods.224 
Giving consumer information, advocates promised, would help them make
smarter choices.225  At that time, not a single state had an obesity rate greater than

214. Kohn v. Am. Metal Climax, 322 F. Supp. 1331, 1349 (E.D. Pa. 1971).
215. Pierce, supra note 7. 
216. Siebecker, supra note 102. 
217. C. Moorman, A Quasi Experiment to Assess the Consumer and Informational

Determinants of Nutrition Information Processing Activities:  The Case of the Nutrition Labeling
and Education Act, 15 J. PUB. POL’Y & MKTG. 28 (1996) (describing nutrition labeling regimes).

218. Sunstein, supra note 2, at 1383 (defining “smart disclosures” as “the timely release of
complex information and data in standardized, machine readable formats in ways that enable
consumers to make informed decisions”).

219. Id. 
220. Id.
221. Halpern, supra note 161 (detailing the abusive practices of modern debt collection).
222. See supra Part II.C.2. 
223. Rules for Using Energy Costs and Consumption Information Used in Labeling and

Advertising for Consumer Appliances Under the Energy Policy and Conservation Act, 16 C.F.R.
§ 305 (1992).

224. Nutrition Labeling and Education Act of 1990, Pub. L. No. 101-535, 104 Stat. 2353. 
225. JEBARAJ ASIRVATHAM ET AL., DID IMPLEMENTING NUTRITION LABELING AND EDUCATION



782 INDIANA LAW REVIEW [Vol. 48:755

fourteen percent.226  Twenty years later, nutrition labels are ubiquitous.227  Over
half of consumers claim to read them before purchasing a new food.228  Yet, the
problem that the labels were designed to solve—promoting healthy food selection
to reduce obesity—has worsened.229  In 2010, forty-eight states reported obesity
rates of thirty percent or higher.230  Obesity is a multifaceted challenge driven by
a dizzying array of factors.231  But, clearly, mandated disclosure in this area failed
to deliver what it promised to achieve.232

Companies responded to nutrition labels by plastering health claims on the
front of food packaging.233  Terms like “low-fat” and “multi-grain” were written
in big, bright letters on foods.234  The idea was that consumers would focus on the
bright claim rather than turning the box around to read the dull, black-and-white
nutrition label on the back of the box.235  Companies also innovated by creating
100-calorie snack packs of unhealthy foods.236  Refocusing calorie-conscious
consumers from nutrition labels to the calorie count of snack packs could prompt
even calorie counters to eat mini Oreos.237  Just like debt collectors and corporate
executives, food manufacturers flooded consumers with information to hide bad
facts in the required disclosure of a nutrition label.238

The failure of mandated disclosures and smart disclosures rests in the same

ACT (NLEA) OF 1990 IMPROVE DIET? 1 (2010), available at http://ageconsearch.umn.edu/
bitstream/61660/2/11974_Asirvatham_McNamara_Baylis_NLEA1990paper.pdf, archived at
http://perma.cc/U47R-C23D. 

226. Ali H. Mokdad et al., The Spread of the Obesity Epidemic in the United States, 1991-
1998, 282 J. AM. MED. ASSOC. 1519, 1520 (1999).

227. B. Roe et al., The Impact of Health Claims on Consumer Search and Product Evaluation
Outcomes: Results from FDA Experimental Data, 18 J. PUB. POL’Y & MKTG. 89 (1999).

228. Id. 
229. Ross A. Hammond & Ruth Levine, The Economic Impact of Obesity in the United States,

3 DIABETES METABOLISM SYNDROME & OBESITY 285 (2010).
230. Id. 
231. Youfa Wang & May A. Beydoun, The Obesity Epidemic in the United States—Gender,

Age, Socioeconomic, Racial/Ethic, and Geographic Characteristics:  A Systematic Review and
Meta-Regression Analysis, 29 EPIDEMIOLOGY REV. 6, 7 (2007) (discussing the multitude of factors
linked to obesity).

232. Pauline M. Ippolito & Alan D. Mathios, Information, Policy, and the Sources of Fat and
Cholesterol in the U.S. Diet, 13(2) J. PUB. POL’Y & MKTG (1994) (describing research which
considered numerous food categories and other information).

233. Timothy Muller, Structural Information Factors which Stimulate the Use of Nutrition
Information:  A Field Experiment, 22 J. MKTG. RES . 143 (1985).

234. Id.
235. Id. 
236. For an overview of the intentionally deceptive practices of food manufacturers, see FED

UP (Stephanie Soechtig Production 2014) (overviewing the role of the food industry in aggravating
America’s obesity epidemic).

237. Id. 
238. Id.

http://dx.doi.org/10.1001/jama.282.16.1519
http://dx.doi.org/10.2147/dmsott.s7384
http://dx.doi.org/10.1093/epirev/mxm007
http://dx.doi.org/10.2307/3151360


2015] INFORMATION FLOODING 783

explanation.239  Consumer understanding is limited.240  Hitting the sweet spot of
enough but not too much information is a difficult proposition.241  Even if
regulators get it right, companies with facts to hide will intentionally overwhelm
consumers.242

Revisiting the consumer understanding curve illustrates that regulators
establish a floor of information that companies cannot dip beneath.243  They must
provide some baseline level of understanding.244  What mandated disclosure does
not do is provide a maximum amount of information that companies can
provide.245

Companies understand information overloads.246  Those with good
performance will attempt to hit the sweet spot of consumer understanding, so
consumers can comprehend their positive message.247  Companies with bad facts
will seek to bury the disclosure in so much information that consumers cannot
discern the bad facts of the disclosure.248

1.  De-biasing.—Others have tried to make the salience of mandatory
disclosures more powerful by educating customers.249  Customers can be taught
to look for key metrics and dismiss other information.250  Theorists argue that
good corporations, nongovernmental organizations, and lead users will de-bias
consumers from misleading claims.251  Misinformation in the market will
naturally be corrected overtime.252  For example, customers can be taught that
CO2 emissions are the primary measure for evaluating shipping companies’
environmental performance.  Educated customers will locate and evaluate all
companies based on that measure and block out junk information.253  De-biasing
sounds good in theory, but it rarely works in practice.254  Even educated
consumers can only process so much; education shifts their processing abilities
up, but not infinitely.255

239. Ippolito & Mathios, supra note 232.
240. Roe et al., supra note 227. 
241. Ippolito & Mathios, supra note 232.
242. FED UP, supra note 236. 
243. Davidson, supra note 3.
244. Id. 
245. Id. 
246. Gutierrez v. Wells Fargo Bank, 730 F. Supp. 2d 1080, 1086 (N.D. Cal. 2010).
247. Ippolito & Mathios, supra note 232.
248. Gutierrez, 730 F. Supp. 2d. at 1086.
249. Liran Haim, Rethinking Consumer Protection Policy in Financial Markets, 32 J.L. &

COM. 23, 53 (2013).
250. Gabaix & Laibson, supra note 42. 
251. Schulz, supra note 137, at 2515-16. 
252. Id. 
253. Gabaix & Laibson, supra note 42.
254. Id. at 506 (arguing that firms do not engage in efforts to de-bias consumers because doing

so is expensive and rarely successful).
255. Id.  

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784 INDIANA LAW REVIEW [Vol. 48:755

Educating consumers is also extremely costly.256  Choosing the “right”
metrics for a specific space is subjective and difficult.  For example, convincing
consumers to care about CO2 emissions for shipping companies—as opposed to
other worthy social issues—requires issue trumping other demands on their time. 
Is CO2 the right measure of evaluation? Labor conditions or safety records may
be equally valid metrics. 

On the other hand, it is cheap and profitable for companies to send confusing
and overwhelming messages to consumers.257  This is likely why a growing body
of recent scholarship demonstrates that it is simply not worth it for “good”
companies to de-bias customers.258  Instead of fighting information flooding by
competing firms, they just give up.259  For these reasons, increasing consumer
cognition is a losing battle in information flooding reform.260

2.  Setting Information Ceilings.—Sometimes, mandatory disclosure
works.261  Anti-smoking campaigns are an attempt to encourage consumers to
make better-informed decisions about smoking.262  Mandated disclosures required
cigarette manufacturers to place prominent disclosures on their packages (an
example of smart disclosures).263  Advertising campaigns sponsored by the
American Heart Association educated customers about the harms of smoking.264 
In a virtually unprecedented step, cigarette companies were prevented from
adding countervailing information into the conversation.265  They could not
advertise, or flood consumers with positive messages.266  This three-part
campaign was largely successful in changing social norms of smoking.267

Limiting messages from cigarette companies to consumers carried
tremendous political costs.268  First Amendment concerns abounded when
Congress attempted to prohibit corporate speech.269  The reform was, however,

256. Id. at 508-09.
257. Joseph Farrell & Matthew Rabin, Cheap Talk, 10 J. ECON. PERSPECTIVES 103, 116

(1996).
258. Gabaix & Laibson, supra note 42.
259. Id. 
260. Id. 
261. Patricia A. Davidson, Cigar Warnings: Proceed with Caution, 33 J. MARSHALL L. REV.

521, 537 (2000). 
262. Jef I. Richards, Politicizing Cigarette Advertising, 45 CATH. U. L. REV. 1147, 1182

(1996). 
263. Davidson, supra note 261. 
264. Id. 
265. Cass R. Sunstein & Adrian Vermeule, Libertarian Administrative Law (Harvard Pub.

Law, Working Paper No. 14-29 2014), available at http://papers.ssrn.com/sol3/papers.
cfm?abstract_id=2460822, archived at http://perma.cc/GR94-52HY.

266. Id.
267. Id.
268. See Michael R. Siebecker, Building a “New Institutional” Approach to the First

Amendment, 59 ALA. L. REV. 247, 250-54 (2008).
269. Id. 

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2015] INFORMATION FLOODING 785

likely the game-changing step in changing consumer norms surrounding smoking. 
Compare anti-smoking and anti-obesity campaigns.270  Creating information
ceilings—which prevent cigarette companies from flooding consumers—was
likely a key difference in the wildly different outcomes of these campaigns.271 
Food manufacturers can continue to innovate around disclosures by adding noise
to the conversation.272  Cigarette manufacturers could not.273

This is not to suggest that limiting corporations’ ability to advertise is
necessary, or even desirable.274  Recent advances in First Amendment rights of
corporations may even render such efforts dead on arrival.275  But, it highlights
that as long as companies can respond to information disclosures and de-biasing,
they will quickly innovate around mandatory disclosure designed to protect
consumers.276

Regulators are caught in a bad relationship with mandated disclosure.  Legal
thinkers seem to reason if we just regulate better, we can solve information
overload.  Even people skeptical of mandated disclosures have focused on
making disclosures “smarter”277 instead of giving up on them all together. 
Paradoxically, the more we regulate, the greater information overload
becomes.278

However, there is a more effective solution.  Innovations on the demand side
of the market, combined with well-targeted policy goals, can expand consumer
choice and improve markets.  Understanding information flooding shapes the
conversation in this direction and empowers us to provide solutions based on a
new understanding of firm behavior in the marketplace.

III.  INFORMATION INTERMEDIARIES
Average people overcome information flooding every day.  Vast industries

have popped up to fight information flooding.279  Companies including Google,
Amazon, and Whole Foods have made billions by distilling areas affected by
information flooding into manageable amounts of information that consumers
care about.280  This Article terms such mediators of information as “information
intermediaries.”281  There is a market to protect consumer choice.282  Market

270. Sunstein, supra note 2, at 1378.
271. Id. 
272. Id. 
273. Sunstein & Vermeule, supra note 265. 
274. Siebecker, supra note 268, at 252-57. 
275. Id. 
276. Gabaix & Laibson, supra note 42.
277. Sunstein, supra note 2. 
278. See Ripken, supra note 190, at 185-90. 
279. SEARLS, supra note 10. 
280. Id. 
281. The role of intermediaries in creating transparency is the subject of discussion in

international law.  See David Gartner, Uncovering Bretton Woods:  Conditional Transparency, the



786 INDIANA LAW REVIEW [Vol. 48:755

solutions to information flooding abound.  Many work quite well.  But,
intermediaries can themselves overwhelm consumers with information, or even
be captured.283  Sometimes, politicians fail to recognize that intermediaries are
working and create duplicative mandated disclosures despite them.  Leveraging
these solutions in troubled areas provides a better alternative to mandatory
disclosure regimes. 

A.  Information Intermediaries
A secret to navigating information-rich fields is the assistance of

“information intermediaries.”284  Transactions occur between a buyer and seller. 
Information intermediaries facilitate transactions on behalf of the buyer.285 
Information flooding creates a mismatch between what a consumer wants to
know and what a firm communicates.286  Information intermediaries solve this
problem by sifting through seas of information provided by firms to identify the
characteristics that consumers care about.287  They save consumers the work and
frustration of sifting through irrelevant information.288

Real estate brokers are an example of an information intermediary.289 
Landlords may flood listings with flattering pictures and too-good-to-be-true
descriptions to lure renters into seeing their listings.  This is information
flooding.290  Brokers act as an information intermediary to guide renters through
the overwhelming sea of information of what is available on the market and to
connect them with the housing that they want.291  Brokers do not show clients
every listing available.292  Brokers sort through the sea of available listings to

World Bank, and the International Monetary Fund, 44 GEO. WASH. INT’L L. REV. 121 (2013).
282. SEARLS, supra note 10, at 178. 
283. Pierre Zarokian, Does Yelp Filter Reviews if a Business Refuses to Pay for Ads?, SEARCH

ENGINE J. (Apr. 10, 2014), http://www.searchenginejournal.com/yelp-filter-positive-reviews-
business-refuses-pay-advertising/98695/, archived at http://perma.cc/7U24-75W6.

284. Id. 
285. Id. 
286. Paredes, supra note 54. 
287. Id. at 432 (“Realistically, few people expect the ‘average’ individual investor to focus on

any detail of the information that companies disclose.  As a practical matter, a company's
disclosures are largely ‘filtered’ through experts—various securities professionals and financial
intermediaries—who research and process the information and whose trades and recommendations
ultimately set securities prices.”).

288. Id. 
289. Monte Mohr, What Does A Real Estate Buyer’s Agent Do?, FORBES (Oct. 29, 2013),

http://www.forbes.com/sites/zillow/2013/10/29/what-does-a-real-estate-buyers-agent-do/, archived
at http://perma.cc/VGQ3-8ZQB. 

290. Jacoby, supra note 16. 
291. Mohr, supra note 289. 
292. Id. 



2015] INFORMATION FLOODING 787

find the units that match the clients’ needs.293  Clients see the options that meet
their needs without having to filter through the vast body of every available
listing to find it.294

Just like a broker helps a client find a building, digital information
intermediaries also help consumers meet their needs without becoming
overwhelmed by options.  Information intermediaries satisfy a valuable social
function by providing comprehensible sets of information in areas where
consumers otherwise can be duped because they are overwhelmed.295  Apps,
certifications, and specialized stores are modern examples of information
intermediaries.  Companies profit by helping consumers navigate information-
flooded areas.  Information intermediaries filter information flooded realms and
deliver the relevant bits to consumers.296  Delivery of important information and
omission of informational junk help consumers make decisions.297  Information
intermediaries provide the best hope for counteracting information flooding. 
They can improve consumer choice and correct market distortion. 

B.  Information Intermediaries in Practice
Google, Amazon, and Whole Foods do not make money simply by returning

search results or selling groceries.  Many companies providing these services
have gone out of business.298  The value-added of successful consumer-driven
companies is sifting through vast amounts of information to give consumers what
they want with little effort.299  Each of these companies is an information
intermediary.300  They make money by promoting consumer choice by
counteracting information flooding.301

Modern companies are replicating age-old intermediary functions—like the
services that real estate brokers provide—to provide consumers with tools to
fight information overload.302  Information intermediaries are better at gathering

293. Id. 
294. Id. 
295. Paredes, supra note 54, at 432. 
296. Id.
297. Id.
298. See Josee Johnston, The Citizen-Consumer Hybrid:  Ideological Tensions and the Case

of Whole Foods Market, 37 THEORY & SOC’Y 229 (2007) (describing how Whole Foods Market
operates).

299. See id. (describing Whole Foods as appealing to consumers by providing environmentally
friendly products and practices so that customers do not have to do the research to find such
products); SEARLS, supra note 10, at 100-01, 178 (noting the rise of information providers through
the internet).

300. Johnston, supra note 298; SEARLS, supra note 10.
301. Johnston, supra note 298; SEARLS, supra note 10.
302. See ZILLOW.COM, http://www.zillow.com/corp/About.htm (last visited Jan. 15, 2015),

archived at http://perma.cc/KS4V-43RJ (stating that their “mission is to empower consumers with
information and tools to make smart decisions about homes, real estate and mortgages”).

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788 INDIANA LAW REVIEW [Vol. 48:755

information than most individual consumers.303  They have access to information
and can gather, organize, and analyze it quickly.304  They winnow the information
to present customized recommendations to a consumer, based on her
preferences.305  Intermediaries hand consumers easy-to-understand, relevant bits
of information in convenient formats.306

Lawyers are a classic example of information intermediaries.307  They
mediate the complex and information-rich landscape of law on behalf of
clients.308  Similarly, accountants navigate notoriously difficult tax codes, and
doctors mediate constantly evolving information about drug safety.309  Consumers
can outsource understanding of medicine, law, and the tax code to doctors,
lawyers, and accountants.  

Lead users are a modern example of lawyer-like intermediaries.310  They are
sophisticated technological consumers who translate privacy policies and
troubleshoot for other users.311  When one posts a question about a broken laptop
in an online forum, lead users are the people who will post helpful replies.312 
They are especially useful in technological realms, like software agreements and
privacy policies.313  Lead users recently caught unadvertised changes to
Facebook’s privacy policy.314  They brought the changes to the publics’ attention,
leading the company to change its policy.315

Stores can also serve as information intermediaries.316  Whole Foods has built
an empire selling premium products with green or ethical attributes at high
prices.317  A Whole Foods customer can buy any product in the store with the

303. See SEARLS, supra note 10, at 100-01, 178 (noting the growing industry of fourth party
information providers).

304. See, e.g., id. at 204 (describing how TripEase knows a consumer’s travel preferences and
uses them to help the consumer purchase accommodations).

305. Paredes, supra note 54, at 432.
306. Id.
307. John S. Dzienkowski, Lawyers as Intermediaries: The Representation of Multiple Clients

in the Modern Legal Profession, 1992 U. ILL. L. REV. 741, 773.
308. Id. 
309. Margaret Z. Johns, Informed Consent:  Requiring Doctors to Disclose Off-Label

Prescriptions and Conflicts of Interest, 58 HASTINGS L.J. 967, 981 (2007). 
310. See, e.g., Martin Schreier & Reinhard Prugl, Extending Lead-User Theory: Antecedents

and Consequences of Consumers’ Lead Userness, 25 J. PRODUCT INNOVATION MGMT. 331 (2008).
311. Id.
312. Id. at 332.
313. Id.
314. See Juliette Garside, Facebook Bows to Pressure on Privacy Settings for New Users,

GUARDIAN (May 22, 2014, 5:25 PM), http://www.theguardian.com/technology/2014/may/22/
facebook-privacy-settings-changes-users, archived at http://perma.cc/9J2Z-MAGW.

315. Id.
316. See Johnston, supra note 298.
317. Id. at 230-31 (describing Whole Foods as appealing to consumers by providing

environmentally friendly products and practices).

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2015] INFORMATION FLOODING 789

assurance that it has been screened according to ethical food standards.318  This
removes consumer search costs.319  A consumer who cares about buying “green”
eggs can lessen the confusion of competing claims by simply shopping at Whole
Foods.  In exchange for a price premium, she knows her preferences are satisfied.

Technology has exacerbated information flooding, but it has also provided
solutions to expand consumer choice.  Two decades ago, few consumers could
afford personal shoppers.  A personal shopper is an information intermediary—
considering many goods but returning those that meets a consumer’s
preferences.320 Personal shoppers may save consumers time and money.

Technology has translated the convenience of personal shoppers to the
masses.321  Shopittome.com allows consumers to enter their preferences of
clothing designers and sizes one time to receive daily emails offering discounted
options across an array of merchants.322  Shopittome.com is also an information
intermediary because it combs the information-overloaded sphere of shopping
websites to provide personalized summaries of goods on the consumers’
request.323  Some markets for relatively idiosyncratic goods, like that for used
books, have been utterly transformed.324  At one time, a person searching for a
book had to visit multiple bookstores to locate a hard-to-find title.325  Online used
booksellers like AbeBooks, eBay, and Amazon have transformed the market by
successfully pairing buyers and sellers.326

Other examples of intermediaries abound.  Financial websites Mint.com327
and Billshrink.com328 process consumer financial data compiled from multiple
savings, checking, and credit card accounts to inform consumer finance
decisions, such as which cellular telephone package best suits their calling data
at the most affordable price or how to reduce monthly spending.329  Travel
website Kayak.com culls hundreds of airlines, car rental companies, and hotels
to present consumers with options that meet their needs, sortable by price, brand,

318. Id. at 255.
319. Id. at 239. 
320. Id. at 255.
321. About Us, SHOP IT TO ME, https://www.shopittome.com/about (last visited Dec. 26,

2014), archived at http://perma.cc/T5CS-RLXU.
322. Id.
323. Id.
324. Company Information, ABE BOOKS, http://www.abebooks.com/books/Company

Information/?cm_sp=Ftr-_-Comm-_-D1 (last visited Dec. 26, 2014), archived at http://perma.cc/
T3PB-36SM.

325. History, ABE BOOKS, http://www.abebooks.com/books/CompanyInformation/Profile/
history.shtml (last visited Dec. 26, 2014), archived at http://perma.cc/D2D8-ZPBK.

326. I am indebted to John Nagle for this example.
327. How Mint Works, supra note 9.
328. Statement Rewards for Consumers, TRUAXIS, http://www.truaxis.com/statementrewards-

for-consumers/ (last visited Dec. 26, 2014), archived at http://perma.cc/V6SF-GNQM.
329. See, e.g., How Mint Works, supra note 9.



790 INDIANA LAW REVIEW [Vol. 48:755

and date.330  There are countless examples of information intermediary websites
and apps.

Of course, there is the risk that intermediaries will provide consumers with
false or bad information.331  Information intermediaries make money doing a
good job giving consumers what they want.332  Quality, objective guidance is
rewarded through future business.333  As a result, consumers feel relatively
confident that they will receive adequate service at a hotel that is rated well on
Trip Advisor, a restaurant with a five star rating on OpenTable, or the hair salon
with a four star review on Yelp.334  Disappointed consumers can leave feedback,
improving the ranking for the next user. 

Captured intermediaries are also a concern.335  If companies buy off trusted
intermediaries, consumers suffer.  Some businesses post signs offering $20
discounts to customers who write positive Yelp reviews.336  Yelp does not always
respond to reports or concerns about such abuse, and this raises the question of
whether companies that advertise with them get preferential treatment.337 
Suspicion abounds that search engines favor some businesses by placing them
higher in the search results.  Consumers will likely identify abuses and punish
captured intermediaries over time.  They will shift from less credible to more
credible websites.

C.  The Role of Law in Managing Information
Remember that the debate about how best to expand consumer choice centers

on the dichotomous divide between free markets and consumer protection
regulation.338  This debate is not resolved by information flooding and the
intermediaries that mitigate its effects.  This analysis opens the doors to new
solutions to promote consumer choice, focused on leveraging intermediaries. 

330. About, KAYAK, http://www.kayak.com/about (last visited Dec. 26, 2014), archived at
http://perma.cc/TE5N-6DNG.

331. This risk has been discussed at length in the context of certifiers acting as intermediaries
on behalf of consumers.  Schulz, supra note 137, at 2515; Jamie Grodsky, Certified Green:  The
Law and Future of Environmental Labeling, 10 YALE J. REG. 147, 151 (1993) (noting that
“proliferation of competing certification programs and product evaluation criteria could amplify
consumer confusion, the very problem these programs were designed to combat”).

332. Onnig H. Dombalagian, Regulating Informational Intermediation, 1 AM. U. BUS. L. REV.
59, 80-81 (2012). 

333. Id.
334. See, e.g., Trip Advisor, www.tripadvisor.com (last visited Feb. 20, 2015), archived at

http://perma.cc/YHY2-NJ8U; Open Table, www.opentable.com/start/home (last visited Feb. 20,
2015), archived at http://perma.cc/H74J-Q8EG; Yelp, www.yelp.com (last visited Feb. 20, 2015),
archived at http://perma.cc/28P2-YZNQ.

335. Zarokian, supra note 283.
336. Id. 
337. Id. 
338. Part II.A.



2015] INFORMATION FLOODING 791

The first question is when the government should intervene in stopping
information flooding, if at all.

Markets have popped up to protect consumers from information flooding. 
Information intermediaries are expanding consumer choice.  This begs the
question of whether there is any need for government involvement to “fix”
information flooding.

Revisiting the examples of information flooding presented in Part II provides
some principles for when intervention is necessary.  Where market solutions
work well, there is little need for intervention.  Markets likely fail, however, to
meet the needs of consumers who cannot pay for intermediaries.339  They may
also lead to underinvestment in products that provide secondary public goods,
like green products or food safety.  In these instances, public policy may
encourage intervention.

Corporate shareholders, for example, are more likely to be adequately
protected.340 Markets respond to money.341  Wealthy investors can and do pay for
sophisticated intermediaries to process information on their behalf.  Money
managers sift through corporate disclosures with great attention to detail.342  This
is likely why the buried facts doctrine has popped up a few times over the years,
but is not an ongoing source of litigation.  As a default assumption, market
solutions will pop up to protect consumer choice.

Sometimes, however, market solutions do not work.343  Debt collection
practices have become more draconian since the overshadowing cases.344 
Delinquent debtors can ill afford intermediaries to process information on their
behalf.345  Because there is little money to be made in servicing this group,
information intermediaries have been slow to enter the space.

Markets are slow to respond to socio-economically disadvantaged buyers,
like delinquent debtors or students considering college loans.346  Economically
disadvantaged buyers likely cannot pay for the service of information
intermediaries and are not attractive to advertising revenue on which some
information intermediaries rely.347  This may be a case in which the government
must counteract sellers’ use of information flooding. 

It is, of course, debatable whether interventions about consumer protection

339. Church, supra note 72, at 272-73.
340. Paredes, supra note 54, at 431.
341. Id.
342. Id. at 431-32 (“Realistically, few people expect the ‘average’ individual investor to focus

in any detail on the information thatcompanies disclose.  As a practical matter, a company's
disclosures are largely ‘filtered’ through experts—various securities professionals and financial
intermediaries—who research and process the information and whose trades and recommendations
ultimately set securities prices.”).

343. See supra Part II.C.
344. Id.
345. Id.
346. Id.
347. Id.



792 INDIANA LAW REVIEW [Vol. 48:755

for the socioeconomically disadvantaged are useful.348  This Article does not
resolve that debate.  But, to the extent that democratic will pushes towards
intervention, such efforts would not be duplicative of market abuses.

Another case for government intervention arises in the case of products that
produce public goods.  Green goods, for example, produce diffuse, widespread
social benefits, including reduced carbon emissions, ethical treatment of animals,
and fewer pesticides in crop production.349  There is a strong consumer demand
for green products.350  Yet, the market for green goods has become a market for
lemons because of information flooding.351  Untrusting consumers systemically
under-invest in green goods relative to their own preferences and also with regard
to public goods.352 Intervention may be necessary to promote public goods
associated with environmentally friendly products.  Mandatory disclosure has
failed to fix market distortion in green products.353  A public good, strong will for
change, and the ineffectiveness of mandatory disclosure make green markets a
prime candidate for intervention. 

Finally, intervention might be justified for extremely important, high-priority
preferences widely held by a majority of people.  The public expects the
government to provide safe markets for food and drug safety, for example.354  In
such high-stakes markets—where the cost of consumer mistakes can be
deadly—the government may be expected to distinguish safe and unsafe products
to guard against consumer mistakes.355  We trust government, rather than private
intermediaries, to be especially credible in certain high-stakes fields.356

This section has sketched out a few examples of when government
intervention makes sense for information flooding.  Now, we turn to how
government intervention can work.

348. Anne Fleming, The Rise and Fall of Unconscionability as the “Law of the Poor,” 102
GEO. L.J. 1383, 1422-24 (2014) (describing the debate surrounding whether the doctrine of
unconscionability helps or hurts the poor).

349. Church, supra note 72, at 273-77.
350. Id.  
351. See Kysar, supra note 57, at 626 n.427 (noting that greenwash has transformed the market

for sustainably-produced goods into a market for lemons in which misrepresentations rather than
legitimate, accurate information predominates).

352. See Menell, supra note 69, at 1445 (suggesting that market regulation of green goods is
likely insufficient).

353. Id.
354. Sarah Taylor Roller et al., FDA’s Expanding Postmarket Authority to Monitor and

Publicize Food and Consumer Health Product Risks:  The Need for Procedural Safeguards to
Reduce “Transparency” Policy Harms in the Post-9/11 Regulatory Environment, 64 FOOD & DRUG
L.J. 577, 577 (2009).

355. Id. 
356. Id.



2015] INFORMATION FLOODING 793

D.  The New Governance Approach to Expanding Consumer Choice
In 2009, a research branch of the Department of Defense conducted an

experiment designed as a prize competition.357  It released ten red weather
balloons in secret locations throughout the United States and offered $40,000 to
the first team that provided accurate geographical coordinates for all ten
balloons.358  The Department of Defense anticipated releasing the balloons in the
same locations every day for a week.359  But, within nine hours of the contest
starting, a team located all ten balloons using social media and sharing rewards
with participants around the country.360  The Department of Defense was shocked
by how quickly civilian crowd-sourcing located the balloons.361

Chasing weather balloons is hardly the only government incentive program
to spur private action.  Farm subsidies encourage production of certain crops.362 
Grants fund research in designated areas.363  Low-interest educational loans and
tax breaks encourage college attendance.364  The government knows how to
incentivize private action.

Incentivizing intermediaries provides a powerful alternative to mandated
disclosures to promote consumer choice in problem areas.  Government can
encourage market solutions to resolve information flooding.  Just like prize
money incentivized teams to locate weather balloons, financial incentives will
also encourage entrepreneurs and businesses to provide information intermediary
functions.  Public-private approaches are one way to resolve problematic areas
of information flooding.365  New governance is an emerging366 regulatory strategy

357. Monica Hesse, MIT Wins Defense Department Balloon Hunt, a Test of Social Networking
Savvy, WASH. POST (Dec. 7, 2009), http://www.washingtonpost.com/wp-dyn/content/ article/
2009/12/06/AR2009120602558.html, archived at http://perma.cc/RW9J-C3C6.

358. Id.
359. Id.
360. Id. (noting that all ten balloons were found within “8 hours and 56 minutes”).
361. Id.
362. See, e.g., David J. Lynch & Alan Bjerga, Taxpayers Turn U.S. Farmers into Fat Cats with

Subsidies, BLOOMBERG (Sept. 9, 2013, 2:11 PM), http://www.bloomberg.com/news/articles/ 2013-
09-09/farmers-boost-revenue-sowing-subsidies-for-crop-insurance, archived at http://perma.
cc/5XU5-NWH3.

363. See, e.g., Find Open Grant Opportunities, GRANTS.GOV, www.grants.gov/ (last visited
Feb. 20, 2015), archived at http://perma.cc/EJ3L-MYYH.

364. See, e.g., Federal Student Aid, U.S. DEP’T OF EDUC., https://studentaid.ed.gov (last visited
Feb. 20, 2015), archived at http://perma.cc/W3MK-KC4S.

365. The term “new governance” first appeared in a 1996 article.  See R.A.W. Rhodes, The
New Governance: Governing Without Government, 44 POL. STUD. 652 (1996).  In 2004, Orly Lobel
published the article that is credited with signaling that the movement was growing within legal
literature.  See Orly Lobel, The Renew Deal:  The Fall of Regulation and the Rise of Governance
in Contemporary Legal Thought, 89 MINN. L. REV. 342, 344 (2004).

366. For recent efforts to provide examples of new governance, see generally Lisa T.
Alexander, Stakeholder Participation in New Governance: Lessons from Chicago’s Public Housing

http://dx.doi.org/10.1111/j.1467-9248.1996.tb01747.x


794 INDIANA LAW REVIEW [Vol. 48:755

that emphasizes a blend of public and private solutions.367  It captures the
flexibility and adaptive nature of the markets while preserving the order provided
by traditional state governance.368  New governance approaches are particularly
well suited to issues, such as information flooding, in which corporate behavior
quickly adapts around laws that ossify as soon as they are made.369

Leveraging information intermediaries is the core of this approach.  Although
they generally work well, information intermediaries are failing to protect some
consumers and promote some public goods.370  Information flooding is winning
sometimes, to the detriment of consumers and society. 

Legislators and agencies can leverage information intermediaries to provide
services in high-value or underserved areas in three ways:  (1) subsidizing private
intermediaries; (2) providing free data to intermediaries in easily usable formats;
and (3) acting as an intermediary.

First, subsidies preserve the benefits of mandated disclosures—they too are
easily administrable, relatively low-cost, and politically feasible.371  Subsidies
could operate as a prize competition, a grant, venture capital, or a contract. 
Information intermediaries could include private technology companies or
nongovernmental organizations.

Agencies are relatively ill-suited to provide the support consumers need to
rely on information intermediaries.372  Answering customer complaints, providing
user guides, and creating updated versions of applications are a few examples of
the many ways in which technology companies may have a comparative
advantage relative to agencies in producing information intermediary services.

Second, if there is a piece of information that consumers need, but cannot
get, mandated disclosures can facilitate intermediaries’ job of giving consumers
what they want.373  This functions as a non-financial subsidy.  Agencies provide
a service free of charge by requiring and gathering data.374  Making this data

Reform Experiment 16 GEO. J. POVERTY L. & POL’Y, 117 (2009); Julia Black, Paradoxes and
Failures:  ‘New Governance’ Techniques and the Financial Crisis, 75 MOD. L. REV. 1037 (2012);
Eric Tucker, Old Lessons for New Governance: Safety or Profit and the New Conventional
Wisdom, Osgoode CLPE Research Paper No. 38/2012 (2012), archived at http://perma.cc/SB58-
67KU.

367. Bradley C. Karkkainen, “New Governance” in Legal Thought and in the World: Some
Splitting as an Antidote to Overzealous Lumping, 89 MINN. L. REV. 471, 478 (2004).

368. Id.  
369. Ronen Shamir, The Age of Responsibilization: On Market-Embedded Morality, 37 ECON.

& SOC’Y 1, 7-8 (2008).
370. See supra notes 344-46 and accompanying text.
371. Lobel, supra note 365, at 412-13.
372. See supra Part II.C.
373. Paredes, supra note 54, at 432.
374. Memorandum from Cass R. Sunstein, Administrator for the Office of Information and

Regulatory Affairs, Office of Management and Budget 5 (Sept. 8, 2011), available at
http://www.whitehouse.gov/sites/default/files/omb/inforeg/for-agencies/informing-consumers-
through-smart-disclosure.pdf, archived at http://perma.cc/J9T6-6DWG (describing a role for

http://dx.doi.org/10.1111/j.1468-2230.2012.00936.x
http://dx.doi.org/10.1080/03085140701760833


2015] INFORMATION FLOODING 795

freely available encourages companies to invest in processing and translating the
information for consumers, at a profit.

To promote consumer choice, disclosure data should not be targeted at the
consumer.  Individual consumers are a lost cause.  Agencies have tried to
disclose to the consumer for a long time with little impact.  Individuals are not
equipped to process enormous amounts of information.375  Well-intentioned
efforts to educate and engage consumers have fallen flat.376 Ironically, protecting
consumers requires giving up on them.

Instead of targeting data to consumers, agencies should target intermediaries. 
Intermediaries, in turn, will process and distill the information for the
consumer.377  The Office of Information Regulatory Affairs has anticipated that
agencies may use data sets to promote consumer decision-making.378  Using
intermediaries to guide consumer decisions, rather than trying to prop up the
consumer, will lead to better outcomes. 

Third, the government may choose to act as an information intermediary in
some realms.  Agencies already sometimes act as information intermediaries,
filtering complex information into easy-to-understand formats for public
consumption.379  The government has historically issued a food pyramid (now
plate guidelines) of what Americans should eat.380  It manages an energy star
rating system on consumer appliances.381  The government has a comparative
advantage of credibility and perceived neutrality.382  It can also force corporate
participation in a way that private intermediaries cannot.383  These factors make
it an effective intermediary in limited circumstances.  Agencies should be
careful, however, not to unnecessarily displace or duplicate private
intermediaries that are working well.  It would be nonsensical for the Department
of Transportation to attempt to create a better Google Maps.

Just because this proposal relies on leveraging market solutions does not
mean that law is unnecessary.  Law provides a vital backstop to market-based
solutions.384  Sellers will sometimes outpace information intermediaries’ ability

agencies providing individual consumers with “with direct access to relevant information and data
sets”).  

375. See supra note 10.
376. Id.
377. Paredes, supra note 54, at 431-32.
378. See Memorandum from Cass R. Sunstein, supra note 374, at 2. 
379. See generally, Sunstein supra note 2.
380. Id. at 1356 (discussing federally produced food guidelines).
381. Rules for Using Energy Costs and Consumption Information Used in Labeling and

Advertising for Consumer Appliances Under the Energy Policy and Conservation Act, 16 C.F.R.
§ 305 (1992) (outlining the Energy Star labeling requirements). 

382. See generally Memorandum from Cass R. Sunstein, supra note 374, at 24. 
383. Case, supra note 126, at 402-04.
384. Schulz, supra note 137, at 2550 (noting that in new governance regimes “private actors

regulate firm behavior against a backdrop of limited state involvement or enforcement but parallel
with existing governmental regulations on the industry”).



796 INDIANA LAW REVIEW [Vol. 48:755

to protect consumers.385  When a company acts in bad faith—as Wells Fargo did
by charging Veronica Gutierrez overdraft fees with no meaningful notice—courts
can and should step in.386  The threat of judicial action creates a buffer of
protection around consumers.387  It encourages better corporate behavior.  It also
protects against very costly consumer mistakes that result from information
flooding.388

This public-private approach captures the flexibility of private intermediaries
and comparative skill in serving customer needs.  Unlike mandatory disclosure
regimes, leveraging intermediaries will not ossify.  Companies cannot merely
adapt around the laws.  But, the threat of traditional state governance, that is
courts and legislatures threatening to intervene against the worst abuses, checks
corporate behavior against more blatant abuses.

IV.  GOVERNMENT INFORMATION FLOODING
Information flooding is a new concept.  Most of this article focuses

specifically on firms flooding consumers with information.  But, the idea is much
bigger than that.  It exists widely outside the firm-consumer model; stretching to
attorneys engaging in dump truck litigation—to politicians sticking to
information-dense talking points—to directing messaging to constituents away
from unpopular topics.389

Part IV considers information flooding in administrative law.  It expands the
discussion of information flooding to agencies, courts, and politicians.  The
players, incentives, and harms predictably vary from the firm-consumer context. 
But, the basic dynamic of using information to overwhelm the cognitive ability
of a target is universal.  This Article argues that the concepts of information
flooding and information intermediaries have broad applicability to a variety of
areas of law.

A.  Information Flooding in Administrative Law
Information flooding in the government context is intentionally

385. See Gutierrez v. Wells Fargo Bank, 730 F. Supp. 2d. 1080 (N.D. Cal. 2010). 
386. Id. 
387. See Karen Gullo, Wells Fargo Loses Appeal of $203 Million Court Award, BLOOMBERG

(Oct. 29, 2014, 1:24 PM), http://www.bloomberg.com/news/2014-10-29/wells-fargo-loses-appeal-
of-203-million-court-award.html, archived at http://perma.cc/ED56-3UG5.

388. See, e.g., id.
389. Law firms engage in information flooding to impose costs on adversaries by forcing them

to sift through seas of information, as with “dump truck litigation.”See Bemont Investments, LLC
v. United States, 679 F.3d 339, 345-46 (5th Cir. 2012) (noting that Deustche Bank responded to
an IRS summons with two million pages of information, three of which were relevant); Richard L.
Marcus, Reassessing the Magnetic Pull of Megacases on Procedure, 51 DEPAUL L. REV. 457, 471
(2001) (using the term “dump truck delivery” to describe intentional information flooding in
litigation).



2015] INFORMATION FLOODING 797

overwhelming a target with so much information that they cannot process it.390 
It is often done to hide bad facts.391  The following presents a brief case study of
agencies engaging in information flooding in environmental impact statements. 
This example of the practice provides a sense of the incentives, limitations, and
solutions that have developed over time in a narrow context.

The National Environmental Policy Act requires every agency to prepare an
Environmental Impact Statement (“EIS”) for major federal action that may harm
the environment.392  If, for example, the Department of Transportation wants to
build a major highway, it must prepare an EIS.  The EIS is designed to provide
a concise but comprehensive account of the possible harms likely to occur from
the action.393  It is designed so that the acting agency—along with the public,
other agencies, the executive, and the courts—go through the process of
evaluating the impacts, mitigation options, and alternatives to the proposed
action.394  The EIS can be thought of as being analogous to a mandatory
disclosure in that it is designed to publicize action and allow for public response.

Soon after the Act was passed, courts began invalidating EISs that were too
short on the basis that the agency failed to study an important point.395  Agencies
began flooding their EISs with so much information that they became
overwhelming.  Negative impacts were buried under a sea of vague, meaningless
analysis—similar to the junk information in overshadowing or buried fact
cases.396  Agencies were intentionally burying bad impacts in junk information.397 
They were information flooding.

Firms engage in information flooding to make money.398  Secondary reasons
may include gaining competitive advantages, forestalling regulation, and
diffusing negative attention.399  Incentives for government information flooding
are more complicated to understand.  Agencies flooding EISs were trying to
discourage careful scrutiny of the projects.400  Ample information served as a
signal of quality of analysis to courts and potential litigants, who might otherwise
bring suit against the statements as ill-considered.  Some agencies wanted to
make it harder for commentators to catch the worst impacts.  Over-disclosing
allowed them to claim that they were being transparent.

EISs are not only targeted to individual citizens.  Instead, the primary

390. Gabaix and Laibson, supra note 42, at 505-06.
391. Id.
392. National Environmental Policy Act, 40 C.F.R. § 1502.1 (2015).
393. Id. (“Agencies shall focus on significant environmental issues and alternatives and shall

reduce the paperwork and accumulation of extraneous background data.  Statements shall be
concise, clear, and to the point . . . .”).

394. Id.
395. See generally id.; see supra Part II.C.
396. See § 1502.1; see supra Part II.C.
397. See supra Part II.C.
398. See § 1502.1; see supra Part I.A.
399. See § 1502.1; see supra Part II.C.
400. See § 1502.1; see supra Part IV.



798 INDIANA LAW REVIEW [Vol. 48:755

audiences are regulators, agency officials, and nongovernmental organizations.401
These entities are also subject to information overload.402 Groups may be better
positioned to process information compared to consumers because of their skill
and manpower.  They can process more information, more quickly and with
greater accuracy.403  Government resources and skill are not infinite, however. 
They are subject to the same time and resource constraints as consumers, with
decision-to-information ratios operating along a curve.404

Figure 2:  Groups are better positioned to process information relative to
consumers, but do not have infinite capacity to process information. 

This curve is upward and to the left of the curve used for consumers, to
reflect superior, although not infinite, ability to process information.  Groups,
too, are subject to information overload, although it takes more information to
overload them because of both their superior resources and expertise.405

Congress put an information intermediary into place to respond to
information flooding in EISs.406  The Environmental Protection Agency (“EPA”)
became responsible for reading and processing each EIS, regardless of which
agency prepared it.407  The EPA functioned as an expert familiar with EISs.  If the
EPA found a particular EIS to be problematic, it could alert the Council on
Environmental Quality, who could bring the problematic EIS to the attention of

401. See supra note 399.
402. See generally Paredes, supra note 54.
403. Id.
404. Id. at 454-55 (“In terms of the classic inverted-U curve of information overload studies,

we could think of the curve turning down at a higher quantity of information for experts than non-
experts and with a less steep slope, but it still curves down at some point.”).

405. Id.
406. See generally supra note 399.
407. Id.



2015] INFORMATION FLOODING 799

the President.408
As information intermediaries, the Council on Environmental Quality and the

EPA promulgated guidelines to lessen information flooding by other agencies.409 
They required that EISs “shall be analytic rather than encyclopedic,” “no longer
than absolutely necessary to comply with NEPA,” and that “impacts shall be
discussed in proportion to their significance.”410  Environmental impact
statements are limited to 150 pages in length, or 300 pages for proposals of
unusual scope or complexity.411  Setting page limits, requiring prioritization, and
emphasizing simplicity were forms of setting information ceilings to protect the
usefulness of mandated disclosures.412

B.  Government Information Intermediaries
The role of the EPA is one of several examples of government relying on

information intermediaries to avoid overload.  Government has developed
information intermediaries in especially information-intensive areas of
governance.  Agencies, congressional committees, and special masters are
designed to protect the President, Congress, and Courts from information
flooding.413  Each of these entities processes information-dense realms, distills
findings, and makes customized recommendations based upon the expressed
preferences.414  They save higher-ups from the search costs associated with
sifting through the sea of information underlying each decision.415

Just as attorneys and doctors filter information to patients, so too do
government intermediaries sift through seas of information to facilitate better
government decision-making.416  As with intermediaries in the consumer
contexts, government agencies are also developing technological tools to develop
better decision-making.  The Executive uses the content of these opinions as “fire
alarms” to alert decision-makers up the chain of command of unusual actions.417 
Courts also use the opinions of expert agencies as a heuristic for gauging agency

408. Sarah Langberg, A “Full and Fair” Discussion of Environmental Impacts in NEPA EISs: 
The Case for Addressing the Impact of Substantive Regularity Regimes, 124 YALE L.J. 576, 728-30
(2014) (explaining how the Council on Environmental Quality handles EISs).

409. National Environmental Policy Act, 40 C.F.R. §1502.2 (2015).
410. Id.
411. Id. at §1502.7.
412. See Part II.C.2 (identifying information ceilings as one mechanism to offset information

overload).
413. See supra note 33.
414. Id.
415. Id.
416. University of Alaska Anchorage, Public Decision Making:  Government’s Changing

Role, http://www.uaa.alaska.edu/resourcesolutions/upload/Gov%20Changing%20Role.pdf (last
visited Feb. 20, 2015), archived at http://perma.cc/33CZ-KDLM.

417. Mathew D. McCubbins & Thomas Schwartz, Congressional Oversight Overlooked: 
Police Patrols Versus Fire Alarms, 28 AM. J. POL. SCI. 165, 165-79 (1984).

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action.418
The media also functions as an information intermediary that guards against

attempts by government entities to flood consumers with information to distract
them from key issues.419  The media processes information issued by the
government and passes along the most important bits to citizens in digestible
formats.420  Few citizens likely read United States Supreme Court opinions. 
Fewer still likely keep up with the Federal Register.  But most people have a
sense of emerging legal issues because of television news and newspapers.421 
Like other intermediaries, media counteracts information flooding by processing,
analyzing, distilling, and presenting information to consumers.

The harmfulness of information flooding becomes ambiguous outside of the
consumer context.  A few examples of information flooding in government
suggest that information flooding may even be a useful tool.  In Bush v. Gore, the
United States Supreme Court issued an unprecedented nine concurring and
dissenting opinions roundly declared as incomprehensible.422  The Court flooded
commentators with extraneous, confusing information to render the holding of
limited precedential value.423  Some leading constitutional law scholars suggest
the court did this to limit the prospective harm of the opinion.424

Information overload is sometimes viewed as providing a valuable social
function.  Recent debates over the National Security Agency’s access of
telephone databases center on the inability of the agency to process all of the
records available.425  Because the agency has limited resources and competing

418. Catherine M. Sharkey, State Farm ‘with Teeth’: Heighted Judicial Review in the Absence
of Executive Oversight, 89 NYU L. REV. 101 (2014) (describing courts deference to cost benefit
analysis that have survived OIRA review).

419. What Is the Purpose of Journalism, AM. PRESS INSTITUTE, www.americanpressinstitute.
org/journalism:journalism-essentials/what-is-journalism/purpose-journalism/ (last visited Feb. 20,
2015), archived at http://perma.cc/7B6F-B85R.

420. Id.
421. As media becomes more fragmented, however, it is difficult for consumers to understand

which sources to rely upon for various kinds of information.  Social media may be more suitable
for breaking news, whereas traditional newspapers may provide superior investigative reporting.

422. Peter Schrag, Dred Scott Echoes: Court’s “Self-Inflicted Wound,” SACRAMENTO BEE
(Dec. 15, 2000) (describing Bush v. Gore as relying upon “an inconsistent and nearly
incomprehensible set of arguments).

423. The Court also announced “[o]ur consideration is limited to the present circumstances.” 
Bush v. Gore, 531 U.S. 98, 109 (2000).  Similarly, in the death penalty case Furman v. Georgia,
the Supreme Court issued a five-to-four decision in a one-paragraph per curium opinion.  Each
justice produced a separate concurrence, with no controlling majority opinion.  Furman v. Georgia,
408 U.S. 238 (1972) (per curium).

424. See Samuel Issacharoff, Political Judgments, 68 U. CHI. L. REV. 637, 650 (2001)
(describing Bush v. Gore as “the classic ‘good for this train, and this train only’ offer”). 

425. RICHARD A. CLARKE ET AL., LIBERTY AND SECURITY IN A CHANGING WORLD: REPORT AND
RECOMMENDATIONS OF THE PRESIDENT’S REVIEW GROUP ON INTELLIGENCE AND COMMUNICATIONS
T E C H N O L O G I E S  1 0 8 - 1 2  ( 2 0 1 3 ) ,  a v a i l a b l e  a t  h t t p : / / w w w . w h i t e h o u s e .



2015] INFORMATION FLOODING 801

priorities, it cannot process all of the information.  In this way, as the argument
goes, we are all protected against arbitrary invasions into our phone
conversations.426 Interestingly, this argument is the exact opposite of those posed
against information flooding in the firm-consumer model, showing the need for
future scholarship of information flooding in a variety of contexts.

This brief sketch of information flooding in government demonstrates that
the concept has broader applicability outside the firm-consumer model.  It is one
small example of information flooding in another context.  Future scholarship
should look for information flooding wherever information overload has been
identified, including: patent litigation, election law, jury consideration, and
product warnings.427  Applications of the theoretical concept of information
flooding to other areas of law will likely challenge early assessments of the harm
of the practice and range of available solutions.  Importantly, though, information
flooding holds great promise to provide new legal solutions to problems—just
as it does with consumer choice.

CONCLUSION
This Article introduces the concept of information flooding, which happens

when companies intentionally bury key information so that consumers cannot
find it.  Consumers lacking the patience and cogitative ability to sift through junk
to uncover the nugget or two on which they would base a decision, if given the
chance, give up on making a reasoned decision.  Because they cannot locate the
information key to reaching decisions that best suit them, people are arbitrarily
reaching decisions not in their best interests.  Burying bad facts in a sea of
informational junk overwhelms consumers’ ability to find and process the bad
information. 

The very solution politicians have been using to stem information overload
in fact makes it worse.  Mandatory disclosures encourage firms to respond
dynamically, by piling more information on consumers.  The “fixes” to mandated
disclosures—smart disclosures, de-biasing consumers, and limiting corporate

gov/sites/default/files/docs/2013-12-12_rg_final_report.pdf, archived at http://perma.cc/X5PY-
5RBR (noting that its focus was on “genuinely mass collections of all undigested, non-public
personal information about individuals—those collections that involve not a selected or targeted
subset (such as airline passenger lists), but far broader collections”).

426. The Committee ultimately rejected this argument.  Id. at 110.
427. See Carnegie Mellon Univ. v. Hoffman-La Roche Inc., Nos. C95-3524 SI, C01-0415 SI,

2007 WL 902548, at *6 (N.D. Cal. March 22, 2007) (noting the “balancing act” between submitting
too much information and not enough information in patent and trademark litigation); Elizabeth
Garrett, The Law and Economics of “Informed Voter” Ballot Notations, 85 VA. L. REV. 1533,
1579-82 (1999) (discussing the informational effects of ballot notations on voters); Katie Morgan
& Michael J. Zydney Mannheimer, The Impact of Information Overload on the Capital Jury’s
Ability to Assess Aggravating and Mitigating Factors, 17 WM. & MARY BILL RTS. J. 1089 (2009);
W. Kip Viscusi, Individual Rationality, Hazard Warnings, and the Foundations of Tort Law, 48
RUTGERS L. REV. 625, 633 (1996).

http://dx.doi.org/10.2307/1073929


802 INDIANA LAW REVIEW [Vol. 48:755

speech—generally do not work.  Laws ossify.  Companies respond dynamically,
working around legislative fixes to gain profit, forestall future regulation, and
undermine competitors with superior practices.  But, all is not all doom and
gloom.

The very profit motive that fuels information flooding has also birthed its
antidote.  Intermediaries have popped up to profit from guiding consumers
through information-flooded spheres.  They usually work well.  When there are
not intermediaries in certain underserved or high-value areas, legislative response
should focus on encouraging intermediaries to enter the space.  Of course, this
solution must operate against a backdrop of traditional law—judicial
involvement and the threat of legislation—to guard against abuses that would
otherwise slip through the cracks.

Information flooding is a new idea.  To explain it, this Article surveyed
disparate areas—from greenwashing to credit card practices, grocery stores to
debt collection—to provide examples to form the firm-consumer model.  But,
information flooding is far more widespread than that.  The final section of this
piece foreshadows future research into other areas of law, in which parties other
than firms are information flooding to gain competitive advantage.  It highlights
an example from administrative law, in which agencies flood one another to
avoid potential scrutiny of new projects.  Information flooding likely extends
more broadly to other areas of jurisprudence and legislation.