Justia Consumer Law Opinion Summaries

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The Ninth Circuit filed an amended opinion affirming in part and vacating in part the dismissal of plaintiff's action for failure to state a claim, holding that the trustee of a California deed of trust is a "debt collector" under the Fair Debt Collection Practices Act (FDCPA). Actions taken to facilitate a non-judicial foreclosure, such as sending the notice of default and notice of sale, are not attempts to collect "debt" as that term is defined by the FDCPA; enforcement of a security interest will often involve communications between the forecloser and the consumer; and when these communications are limited to the foreclosure process, they do not transform foreclosure into debt collection. The panel explained that, because the money collected from a trustee's sale is not money owed by a consumer, it is not "debt" as defined by the FDCPA. In this case, the notices at issue did not request payment from plaintiff, but merely informed her that the foreclosure had begun, explained the timeline, and apprised her of her rights. Therefore, the panel held that ReconTrust's activities fell into the category of enforcement of a security interest, rather than general debt collection. View "Vien-Phuong Thi Ho v. ReconTrust" on Justia Law

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Family Security Credit Union ("FSCU") appealed the trial court's denial of its motions to compel arbitration in eight separate but closely related cases. Action Auto Sales ("Action Auto") was a car-financing group that financed the vehicle inventory of Pine City Auto ("Pine City"), a used-car dealership. Action Auto held titles to the vehicles in inventory, and released a title only when a vehicle was sold, and Pine City paid off a proportional amount of the inventory financing. Pine City eventually went out of business without paying off the inventory financing on some of the vehicles it had sold. Action Auto sued Pine City and the purchasers of eight vehicles who had purchased vehicles from Pine City and financed those purchases through FSCU. Action Auto sought possession of the vehicles and money damages. The purchasers each filed counterclaims and cross-claims against Action Auto and Pine City and third-party claims against FSCU, alleging negligence, wantonness, and conspiracy. The purchasers' third-party claims against FSCU were based on FSCU's alleged failure to perfect its security interest in the vehicles before financing the purchasers of the vehicles. FSCU moved for each of those third-party claims to be submitted to arbitration. The purchasers opposed the motions to compel arbitration, but they did not submit any evidence. After review, the Alabama Supreme Court concluded the trial court erred in denying FSCU's motions to compel arbitration in each of the eight cases, and remanded all for further proceedings. View "Family Security Credit Union v. Etheredge" on Justia Law

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The Supreme Court affirmed the circuit court’s ruling that Petitioner was not a “consumer” within the applicable definitions of the West Virginia Consumer Credit and Protection Act. The circuit court granted summary judgment to Respondent, a debt collector, concluding that Petitioner lacked standing to seek relief under the Act because Petitioner did not have any specific debt in connection with the calls that Respondent made to her land line phone. The Supreme Court affirmed, holding (1) Petitioner clearly did not come within the definition of “consumer” set forth in the Act, and (2) therefore, the circuit court correctly ruled that Petitioner lacked standing to pursue a claim under the Act. View "Young v. EOSCCA" on Justia Law

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In 2014, plaintiff filed suit against NCO for violations of the Telephone Consumer Protection Act (TCPA) because NCO attempted to collect medical debts from her (Vanover I). Plaintiff then filed suit against NCO in Florida state court alleging violations of the TCPA, the Fair Debt Collection Practices Act (FCPA), and the Florida Consumer Collection Practices Act (FCCPA) (Vanover II). The Eleventh Circuit held that the district court did not abuse its discretion in denying the permissive joinder of additional parties because plaintiff's failure to timely amend her complaint in Vanover I to include these parties did not justify subjecting NCO to duplicative litigation. Furthermore, NCO had no obligation to seek consolidation of Vanover I and Vanover II. Therefore, the district court properly acted within its discretion when it denied plaintiff's motion to permissively join additional parties. The Eleventh Circuit, as a matter of first impression, agreed with the test announced by the Tenth Circuit that claim-spitting is not whether there is finality of judgment, but whether the first suit, assuming it were final, would preclude the second suit. Consequently, the district court did not err by dismissing Vanover II for improper claim-splitting. The court affirmed the judgment. View "Vanover v. NCO Financial Services" on Justia Law

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Filing a bankruptcy proof of claim that is obviously time-barred is not a false, deceptive, misleading, unfair, or unconscionable practice under the Fair Debt Collection Practices Act (FDCPA). Midland filed a proof of claim in Johnson’s Chapter 13 bankruptcy case, asserting a credit-card debt and noting that the last time any charge appeared on Johnson’s account was more than 10 years ago. The Alabama limitations period is six years. The Bankruptcy Court disallowed the claim. Johnson filed suit under the FDCPA, 15 U.S.C. 1692. The Supreme Court reversed the Eleventh Circuit. The Bankruptcy Code defines “claim” as a “right to payment,” 11 U.S.C. 101(5)(A); state law usually determines whether a person has such a right. Alabama law provides that a creditor has the right to payment of a debt even after the limitations period has expired. The word “enforceable” does not appear in the Code’s definition. The law treats unenforceability of a claim due to the expiration of the limitations period as an affirmative defense. There is nothing misleading or deceptive in filing a proof of claim that follows the Code’s similar system. Concerns that a consumer might unwittingly repay a time-barred debt have diminished force in a Chapter 13 bankruptcy, where: the consumer initiates the proceeding; a knowledgeable trustee is available; procedural rules guide evaluation of claims; and the claims resolution process is “less unnerving” than facing a collection lawsuit. View "Midland Funding, LLC v. Johnson" on Justia Law

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In 2004, George and Thelma Nickola, were injured in a car accident. The driver of the other car was insured with a no-fault insurance policy provided the minimum liability coverage allowed by law: $20,000 per person, up to $40,000 per accident. The Nickolas’ (acting through their attorney) wrote to their insurer, defendant MIC General Insurance Company, explaining that the no-fault liability insurance policy was insufficient to cover the Nickolas' injuries. The letter also advised MIC that the Nickolas were claiming UIM benefits under their automobile policy. The Nickolas’ policy provided for UIM limits of $100,000 per person, up to $300,000 per accident, and they sought payment of UIM benefits in the amount of $160,000; $80,000 for each insured. An adjuster for defendant MIC denied the claim, asserting that the Nickolas could not establish a threshold injury for noneconomic tort recovery. The matter was ultimately ordered to arbitration, the outcome of which resulted in an award of $80,000 for George’s injuries and $33,000 for Thelma’s. The award specified that the amounts were “inclusive of interest, if any, as an element of damage from the date of injury to the date of suit, but not inclusive of other interest, fees or costs that may otherwise be allowable.” The trial court affirmed the arbitration awards but declined to award penalty interest under the UTPA, finding that penalty interest did not apply because the UIM claim was “reasonably in dispute” for purposes of MCL 500.2006(4). The Court of Appeals affirmed the trial court, holding that the “reasonably in dispute” language applied to plaintiff’s UIM claim because a UIM claim “essentially” places the insured in the shoes of a third-party claimant. The Michigan Supreme Court held that an insured making a claim under his or her own insurance policy for UIM benefits cannot be considered a “third party tort claimant” under MCL 500.2006(4). The Court reversed the Court of Appeals denying plaintiff penalty interest under the UTPA, and remanded this case back to the trial court for further proceedings. View "Estate of Nickola v MIC General Ins. Co." on Justia Law

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Where an individual fails to allege a concrete injury stemming from allegedly incomplete or incorrect information listed on a credit report, he or she cannot satisfy the threshold requirements of constitutional standing. At issue in this case was whether the decision of Experian to list a defunct credit card company, rather than the name of its servicer, as a source of information on an individual's credit report -- without more -- created sufficient injury in fact under the Fair Credit Reporting Act (FCRA), 15 U.S.C. 1681g(a)(2), for purposes of Article III standing. The Fourth Circuit found no concrete injury on behalf of plaintiff because he was not adversely affected by the alleged error on his credit report. Therefore, the Fifth Circuit vacated the district court's denial of Experian's motion for summary judgment and remanded with instructions that the case be dismissed. View "Dreher v. Experian Information Solutions" on Justia Law

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The Second Circuit reversed and remanded the district court's dismissal of plaintiff's lemon law suit based on lack of subject matter jurisdiction. Plaintiff filed suit under the Magnuson‐Moss Warranty—Federal Trade Commission Act (MMWA), 15 U.S.C. 2301 et seq., and New York State law, contending that the "certified pre-owned" BMW she purchased from defendant was incurably defective. The Second Circuit held that the value of plaintiff's MMWA claims, as pled, exceeded the $50,000 minimum amount in controversy requirement. In this case, although plaintiff could neither add punitive damages under the MMWA nor rely on the value of her state law claims to meet the jurisdictional threshold, plaintiff's rescission claim supplied a sufficient basis for subject matter jurisdiction. View "Pyskaty v. Wide World of Cars, LLC" on Justia Law

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Under the Telephone Consumer Protection Act (TCPA), an effective consent to automated calls is one that relates to the same subject matter covered by the challenged messages. Akira, a retailer, engaged Opt for text-message marketing services. Akira gathered 20,000 customers’ cell phone numbers for Opt’s messaging platform. Akira customers could join its “Text Club” by providing their cell phone numbers to Akira representatives inside stores, by texting to an opt-in number, or by completing an “Opt In Card,” stating that, “Information provided to Akira is used solely for providing you with exclusive information or special offers. Akira will never sell your information or use it for any other purpose.” In 2009-2011, Akira sent about 60 text messages advertising store promotions, events, contests, and sales to those customers, including Blow. In a purported class action, seeking $1.8 billion in damages, Blow alleged that Akira violated the TCPA, 47 U.S.C. 227, and the Illinois Consumer Fraud Act by using an automatic telephone dialing system to make calls without the recipient’s express consent. The Seventh Circuit affirmed summary judgment for Akira. Blow’s attempt to parse her consent to accept some promotional information from Akira while rejecting “mass marketing” texts construed “consent” too narrowly. The court declined to award sanctions for frivolous filings. View "Blow v. Bijora, Inc." on Justia Law

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The district court erred in affirming the magistrate’s decision that Medical Recovery Services, LLC (MRS) was estopped from requesting attorney fees under Idaho Code section 12-120(5). MRS attempted a garnishment of Penny Siler’s wages, which was returned unsatisfied because Siler, a school bus driver who cared for her disabled husband and made an average of $499.00 a month, did not earn enough to garnish. MRS agreed to accept $10.00 per month for payment on a default judgment entered after Siler failed to pay a medical bill. Siler went to MRS’s counsel’s office and was told the payoff amount was $1,224.88. She paid that amount in cash. Six days later, counsel for MRS filed an application for supplemental attorney fees under Idaho Code section 12-120(5). Following the hearing, the magistrate court issued an order denying MRS’s application for supplemental attorney fees. In its order, the magistrate court, sua sponte, found that MRS was barred by quasi and equitable estoppel from asking for attorney fees because MRS had told Siler the “payoff amount” was $1,224.88, and MRS did not inform Siler it planned to pursue additional postjudgment fees. MRS appealed the magistrate’s decision to the district court. The district court affirmed, finding “the Magistrate Court retains discretion as to whether, or what amount of, attorney fees will be awarded,” and therefore was free to consider any factor it deemed appropriate, including quasi or equitable estoppel, in determining the amount of attorney fees. View "Medical Recovery Svcs v. Siler" on Justia Law