Justia Consumer Law Opinion Summaries

Roger Tejon subscribed to a video streaming service operated by Zeus Networks, LLC, through its online platform using an Apple device. To register, Tejon chose between an annual or monthly plan by clicking one of two large, red buttons on a “Choose your plan” page. Below these buttons, in small, gray text was a hyperlinked “Terms of Service,” which included a mandatory arbitration clause, but there was no requirement that Tejon click on this link to complete his subscription. Tejon later alleged that Zeus shared his viewing history and personally identifiable information with a social media company without his consent and sued Zeus for violating the Video Privacy Protection Act.Zeus moved to compel arbitration, arguing that Tejon had consented to the arbitration clause by signing up for an account. The United States District Court for the Southern District of Florida denied this motion. The district court found that the terms of service hyperlink was not conspicuous enough to put a reasonably prudent user on inquiry notice of the arbitration provision.The United States Court of Appeals for the Eleventh Circuit reviewed the district court’s denial de novo. The Eleventh Circuit held that the design of Zeus’s subscription page did not provide sufficient inquiry notice of the arbitration agreement to bind Tejon. The court explained that the hyperlink to the terms was small, in gray font, and located beneath prominent action buttons, making it easy to overlook. The court further noted that the page did not explicitly state that clicking the subscription button would bind the user to arbitration. The Eleventh Circuit affirmed the district court’s order denying the motion to compel arbitration. View "Tejon v. Zeus Networks, LLC" on Justia Law

A group of consumers residing in California purchased products online from a national retailer’s website between 2020 and 2022. To complete their purchases, they were required to agree to the retailer’s Terms and Conditions, which included an arbitration clause mandating that any disputes be resolved through arbitration before the American Arbitration Association (AAA) and that certain pre-arbitration steps be followed. When the consumers later believed that the retailer had engaged in false and deceptive marketing, they followed the pre-arbitration process as outlined, served notices of dispute, attempted mediation, and, after those efforts failed, filed demands for arbitration with the AAA and paid all required fees.After the consumers initiated arbitration, the AAA notified the parties that the retailer had not filed its arbitration agreement with the AAA as required by AAA rules. The AAA requested compliance, but the retailer refused to register its agreement. As a result, the AAA, following its Consumer Arbitration Rules, terminated the arbitration proceedings and closed the consumers’ cases. The consumers then filed a petition in the United States District Court for the Eastern District of Wisconsin seeking to compel arbitration, arguing that the retailer’s refusal to register the agreement and pay related fees constituted a refusal to arbitrate under the Federal Arbitration Act.The district court denied the petition, relying on precedent which holds that, when arbitration proceeds and ends in accordance with the agreed rules—even if terminated by the arbitral forum for procedural reasons—a court may not intervene to compel further arbitration. The United States Court of Appeals for the Seventh Circuit affirmed, holding that because the parties’ agreement delegated procedural questions to the AAA and the AAA exercised its discretion under its rules in terminating the proceedings, there was no refusal to arbitrate that would justify judicial intervention under the Act. View "Bernal v Kohl's Corporation" on Justia Law

A patient received medical care at a hospital and was billed for those services. At the time, the patient’s income allegedly qualified her for financial assistance known as charity care under Washington law, which is designed to help low-income patients pay hospital bills. The hospital did not determine the patient’s eligibility for charity care before billing her and subsequently assigned the debt to a collection agency. The agency sued to collect the debt, obtained a judgment, and did not provide any information about the availability of charity care in its communications. The patient only learned about the program after judgment and was later granted a partial reduction by the hospital, but the collection agency refused to honor it, citing its policy against reductions after court judgment.The patient filed a class action against the collection agency in Skagit County Superior Court, alleging violations of the Washington Consumer Protection Act (CPA), the Collection Agency Act (CAA), and the federal Fair Debt Collection Practices Act (FDCPA). The case was removed to the United States District Court for the Western District of Washington. The district court dismissed some claims, including those under the CAA, and divided the remaining claims into “failure-to-screen” and “failure-to-notify” theories. The court dismissed the “failure-to-screen” theory, retained the “failure-to-notify” theory, and certified a question of state law to the Washington Supreme Court regarding whether the charity care notice requirements apply to collection agencies.The Supreme Court of the State of Washington held that the statutory requirement to give notice of charity care under RCW 70.170.060(8)(a) applies to collection agencies collecting hospital debt. The court explained that the policy and plain language of the statute require patients to be notified by all entities engaged in billing or collection, including collection agencies, and that the duty to provide notice passes to assignees of hospital debt. View "Preston v. SB&C, Ltd." on Justia Law

The Pennsylvania Office of Attorney General brought a civil enforcement action against a home improvement contractor and related parties, alleging violations of consumer protection laws. The case centered on three incidents in which customers entered into home improvement contracts with the contractor, then sought to cancel within three business days—sometimes verbally and sometimes in writing. In each instance, the contractor either rejected or failed to honor attempts to cancel unless the customer provided written notice, even when actual notice to the contractor was given verbally or by phone.The Court of Common Pleas of Allegheny County reviewed the matter after the Office of Attorney General filed for partial summary judgment. The trial court found the contractor’s policy—requiring only written notice to effect cancellation—violated Section 7(b) of the Home Improvement Consumer Protection Act (HICPA). The court granted a permanent injunction compelling the contractor to allow cancellations within three business days, regardless of the form of notice, and to refrain from misrepresenting the cancellation rights of consumers. On appeal, the Commonwealth Court affirmed the trial court’s decision, adopting its reasoning and conclusions.The Supreme Court of Pennsylvania reviewed whether, when a home improvement contract is governed by both the Unfair Trade Practices and Consumer Protection Law (UTPCPL) and HICPA, a consumer must provide written notice to cancel the contract, or if any actual notice suffices. The Court held that HICPA, as the more specific and later-enacted statute, governs home improvement contracts and permits consumers to rescind within three business days by providing actual notice of cancellation in any form, not limited to written notice. The judgment of the Commonwealth Court was affirmed. View "OAG v. Gillece" on Justia Law

A nonprofit organization that operates under the name Healthy Living Foundation, Inc. (HLF) served a 60-day notice of intent to sue on several grocery companies, including The Kroger Company and its affiliates. The notice alleged that the companies sold a brand of farm-raised mussels containing cadmium and lead, chemicals listed under California’s Proposition 65 as causing cancer and reproductive harm, without providing the required consumer warnings. The notice, signed by HLF’s outside counsel, included the law firm’s contact information but did not provide contact details for an individual within HLF itself.After HLF filed suit in the Superior Court of Los Angeles County, the defendants moved for judgment on the pleadings, arguing that HLF’s notice did not strictly or substantially comply with Proposition 65’s regulatory requirements. Specifically, they contended that the notice failed to include the name, address, and telephone number of a responsible individual within HLF, instead listing only outside counsel’s contact information. The Superior Court granted the motion and entered judgment for the defendants.On appeal, the California Court of Appeal, Second Appellate District, Division Three, reviewed the trial court’s ruling de novo. The appellate court considered whether the regulation requiring contact information for a “responsible individual within the noticing entity” was mandatory or directory in nature. Relying on its own analysis and the reasoning adopted in Environmental Health Advocates, Inc. v. Pancho Villa’s, Inc., the court concluded that the regulation is directory and that substantial compliance is sufficient. The court held that providing outside counsel’s contact information satisfied the regulation’s objectives and that HLF’s notice was adequate. The appellate court reversed the judgment and remanded the case for further proceedings. View "Chemical Toxin Working Grp. v. Kroger Co." on Justia Law

William and Traci Butcher purchased a recreational vehicle for approximately $80,000, which was found to have various defects. After unsuccessful negotiations with the dealer and manufacturer, Keystone, to repurchase the vehicle, the Butchers filed suit in the Circuit Court of Hanover County, alleging violations of the Virginia Consumer Protection Act and the federal Magnuson-Moss Warranty Act. The parties eventually settled the substantive claims, with Keystone agreeing to repurchase the RV and stipulating that the Butchers were prevailing parties for purposes of attorney fees under the Magnuson-Moss Warranty Act. However, the parties did not agree on the amount of attorney fees owed.After settlement, the Butchers sought over $40,000 in attorney fees, including fees incurred litigating the fee request itself. The trial court awarded them $24,885 in attorney fees, covering time spent on the underlying claims but excluding fees related to the post-settlement litigation over the fee amount. The trial court found the excluded fees were not reasonable based on the facts and circumstances, including Keystone’s willingness to negotiate and billing practices such as block billing and lack of contemporaneous records. The trial court’s cost award was not challenged.The Court of Appeals of Virginia affirmed the trial court’s decision, concluding that the lower court did not abuse its discretion in declining to award fees for the time spent litigating the fee petition. Upon further appeal, the Supreme Court of Virginia also affirmed. It held that while attorney fees incurred litigating a fee petition (“fees on fees”) may be recoverable, they must still be reasonable and necessary under the circumstances. In this case, the court found the trial court acted within its discretion in finding the requested additional fees unreasonable. The judgment of the Court of Appeals was affirmed. View "Butcher v. General R.V. Center" on Justia Law

A Massachusetts resident, Barbara, began smoking Marlboro and Parliament cigarettes manufactured by Philip Morris as a teenager and continued for decades, becoming addicted and unable to quit despite many attempts. In 2015, after finally quitting, she was diagnosed with inoperable lung cancer and died two years later. Her husband and two children, individually and on behalf of her estate, sued Philip Morris for wrongful death, alleging breach of the implied warranty of merchantability, negligent design and marketing, fraud, civil conspiracy, and deceptive trade practices.The Superior Court (trial court) dismissed claims against other defendants and tried the remaining claims against Philip Morris before a jury. The jury found for the plaintiffs on most claims, awarding $8.014 million in compensatory damages and $1 billion in punitive damages. The judge, after post-trial motions, reduced (remitted) the punitive damages to about $56 million—seven times the compensatory damages—finding the original award excessive. The judge also denied Philip Morris’s motions for a new trial and for judgment notwithstanding the verdict, concluding that the jury was not swayed by passion or prejudice and that the compensatory and punitive damages were supported by the evidence.The Supreme Judicial Court of Massachusetts reviewed the case after transferring it from the Appeals Court. The court held that the trial judge did not abuse her discretion in denying a new trial or further remittitur, and that the remitted punitive damages were constitutionally permissible in light of the egregious conduct by Philip Morris. The court also rejected Philip Morris’s arguments that the trial should have been bifurcated, that a higher burden of proof was required for punitive damages, that federal preemption barred certain claims, and that evidentiary rulings were improper. The judgment and denial of post-trial motions were affirmed. View "Fontaine v. Philip Morris USA Inc." on Justia Law

After purchasing a used car in Oklahoma with his then-wife, Alexander Ross divorced and relocated to Michigan, while his ex-wife kept the car in Oklahoma. The couple fell behind on payments, leading their creditor to repossess and sell the vehicle. The creditor retained an Oklahoma law firm, Robinson, Hoover & Fudge, PLLC (“RHF”), to sue both parties for the outstanding balance in Oklahoma state court. After unsuccessful attempts to serve Ross personally, including publishing notice in an Oklahoma newspaper, the court entered a default judgment against him. RHF later learned that Ross was residing and working in Michigan and proceeded to use the Oklahoma judgment to garnish Ross’s wages from his Michigan-based employer, Detroit Diesel.Ross filed suit against RHF in the United States District Court for the Eastern District of Michigan, alleging violations of the Fair Debt Collection Practices Act (FDCPA) and Michigan’s Regulation of Collection Practices Act (MRCPA). He claimed that RHF unlawfully garnished his Michigan wages without first domesticating the Oklahoma judgment as required by Michigan law. RHF moved to dismiss the case for lack of personal jurisdiction. The district court granted the motion, holding that RHF did not have sufficient contacts with Michigan to justify the exercise of personal jurisdiction.The United States Court of Appeals for the Sixth Circuit reversed the district court’s dismissal. The appellate court held that RHF had purposefully directed its actions at Ross in Michigan with knowledge of his residence and employment there, and that its actions caused harm in Michigan. The court found that both Michigan’s long-arm statute and the Due Process Clause permitted the exercise of personal jurisdiction over RHF. Accordingly, the Sixth Circuit remanded the case for further proceedings. View "Ross v. Robinson, Hoover & Fudge, PLLC" on Justia Law

A Wisconsin statute enacted in 2023 required that electronic nicotine delivery systems (such as vapes and e-cigarettes) could only be sold in the state if they had received premarket authorization from the Food and Drug Administration (FDA), were pending FDA review as of specified dates, or did not contain nicotine. The law also imposed financial penalties and authorized private lawsuits against violators. Several businesses and consumers involved in the manufacture, distribution, retail, and use of these products challenged the statute, arguing that federal law granting the FDA authority over tobacco products preempted the Wisconsin statute. They also asserted that the law violated the Equal Protection Clause, and sought preliminary and permanent injunctions to prevent enforcement.The United States District Court for the Western District of Wisconsin denied the motion for a preliminary injunction. The district court found that the Wisconsin law was not preempted by federal statutes, specifically the Federal Food, Drug, and Cosmetic Act (FDCA) and the Family Smoking Prevention and Tobacco Control Act (TCA). The court concluded that Congress had not intended to preempt states from imposing additional or more stringent requirements on the sale of tobacco products, and that the plaintiffs had not shown a likelihood of success on the merits or that the balance of equities favored an injunction.On appeal, the United States Court of Appeals for the Seventh Circuit reviewed the district court’s decision. The Seventh Circuit held that the text and structure of the relevant federal statutes, including the TCA’s preservation and savings clauses, demonstrated that Congress did not preempt state authority to regulate, or even prohibit, the sale of tobacco products. The court affirmed the district court’s denial of a preliminary injunction, holding that the plaintiffs had failed to show a reasonable likelihood of success on the merits of their preemption claim. View "Wisconsinites for Alternatives to Smoking v. Casey" on Justia Law

Several individuals alleged that Google collected and misused the private browsing data of Chrome users who utilized Incognito mode, despite Google’s representations about the privacy of this feature. In June 2020, five plaintiffs brought a putative class action on behalf of these users, seeking both injunctive relief and damages. After extensive discovery, the United States District Court for the Northern District of California certified a class for injunctive relief but denied certification for a damages class, finding the plaintiffs had not shown that common issues predominated over individual ones.Following the denial of damages class certification, the named plaintiffs sought review in the United States Court of Appeals for the Ninth Circuit under Rule 23(f), but the petition was denied. The case proceeded, and as trial approached, the parties settled: Google agreed to change its policies, the named plaintiffs would arbitrate their individual damages claims, and they waived their rights to appeal the denial of damages class certification. The settlement explicitly stated that absent class members were not releasing damages claims or appellate rights. Several months after the settlement, a group of 185 Chrome users, referred to as the Salcido plaintiffs, moved to intervene to preserve absent class members’ appellate rights regarding damages.The United States Court of Appeals for the Ninth Circuit reviewed the district court’s denial of the intervention motion. The Ninth Circuit held that the district court did not abuse its discretion in finding the intervention motion untimely. Applying the circuit’s traditional three-part test for intervention—considering the stage of the proceedings, prejudice to other parties, and the reason for and length of delay—the court found that intervention at this late stage would prejudice the existing parties, that the delay was unjustified, and that the timing weighed against intervention. The denial of the motion to intervene was therefore affirmed. View "BROWN V. SALCIDO" on Justia Law