Justia Consumer Law Opinion Summaries

Ramona Milam, an Illinois homeowner, obtained a mortgage loan in 2005 and later fell behind on her payments. Selene Finance, acting as the loan servicer since 2021, sent Milam a letter warning of possible acceleration and foreclosure if she did not cure her default within 35 days. Milam argued that, due to federal regulations and Selene’s internal practices, Selene would not actually seek foreclosure or acceleration until at least 120 days of delinquency, making the letter’s threat misleading and intended to spur premature payment. After making a payment, Milam sued Selene, alleging violations of the Fair Debt Collection Practices Act and Illinois law, and claimed negligent misrepresentation.Selene moved to dismiss the complaint in the United States District Court for the Northern District of Illinois, Eastern Division, arguing that, as the lender’s assignee under the mortgage, it was entitled to notice and an opportunity to cure before being sued. The district court agreed, finding Selene to be an assignee and holding that Milam failed to comply with the mortgage’s notice and cure provision, thus barring her claims. The court also dismissed Milam’s state law claims for lack of pleaded pecuniary loss.On appeal, the United States Court of Appeals for the Seventh Circuit reviewed whether Milam had standing and whether Selene was properly considered an assignee under Illinois law. The court found Milam had standing based on supplemental allegations of monetary harm from accelerated payment. However, the Seventh Circuit held that the pleadings did not establish Selene as an assignee under Illinois law, distinguishing between assignment and delegation of duties. The Seventh Circuit reversed the district court’s dismissal and remanded the case for further proceedings to resolve the assignee issue and reconsider the state law claims. View "Milam v Selene Finance" on Justia Law

Ana Faiaipau, an elderly woman recovering from heart surgery, was transferred to a long-term acute care hospital operated by Kindred Healthcare. During her stay, Ana allegedly suffered neglect, including lack of dialysis, malnutrition, inadequate hygiene care, and failure to properly monitor her ventilator. The ventilator became disconnected, leading to a severe anoxic brain injury and Ana’s subsequent death. Ana’s daughters, Jennifer and Faamalieloto, acting both individually and as successors in interest, filed suit against Kindred for negligence, elder neglect, fraud, violation of the Unfair Competition Law (UCL), and wrongful death.The Alameda County Superior Court reviewed Kindred’s motion to compel arbitration based on agreements signed by Jennifer as Ana’s legal representative. The court granted arbitration for survivor claims brought on behalf of Ana, including negligence, elder neglect, fraud, and UCL claims, but denied arbitration for Jennifer and Faamalieloto’s individual claims for wrongful death, fraud, and violation of the UCL. The court also stayed litigation of the individual claims pending arbitration.The Court of Appeal of the State of California, First Appellate District, Division Four, reviewed the appeal. Citing the California Supreme Court’s decision in Holland v. Silverscreen Healthcare, Inc., the appellate court held that the wrongful death claim—premised on failure to monitor and reconnect Ana’s ventilator—constituted professional negligence and must be arbitrated under the arbitration agreement. However, the court affirmed the denial of arbitration for Jennifer and Faamalieloto’s individual fraud and UCL claims, finding Kindred had not shown that the agreement bound them in their individual capacities. The order was modified to compel arbitration of the wrongful death claim and affirmed as modified. View "Faiaipau v. THC-Orange County, LLC" on Justia Law

A veteran and his spouse obtained a VA-guaranteed loan to purchase a home. After the veteran’s employment was disrupted due to the U.S. withdrawal from Afghanistan, the couple experienced financial hardship and defaulted on their mortgage. The lender, a bank, initiated foreclosure proceedings. The couple attempted to reinstate their mortgage by tendering the full amount to bring the loan current, as provided by the mortgage contract, but allege that the bank and its foreclosure law firm failed to accept their payment or provide a means for payment. The property was sold to third-party purchasers at a foreclosure sale for more than the outstanding loan balance. The couple claims they did not receive adequate notice or an opportunity to exercise their statutory right of redemption.The third-party purchasers filed an ejectment action in Madison Circuit Court. The couple defended against the action and brought counterclaims against both the purchasers and the bank, alleging breach of good faith and fair dealing, breach of contract, wrongful foreclosure, unjust enrichment, and seeking declaratory relief. The trial court dismissed all claims against the bank and the third-party purchasers and granted summary judgment on the ejectment. The couple amended their pleadings, but the trial court again dismissed all claims. They appealed to the Supreme Court of Alabama. During the appeal, they settled with the third-party purchasers, leaving only their claims against the bank.The Supreme Court of Alabama held that Alabama law does not recognize an independent cause of action for breach of the duty of good faith and fair dealing and affirmed dismissal of that claim. However, the Court found that the couple adequately pleaded claims for breach of contract (due to the bank’s alleged refusal to allow reinstatement), wrongful foreclosure, and unjust enrichment. The Court reversed dismissal of those claims and remanded the case for further proceedings. View "Laborde v. Citizens Bank, N.A." on Justia Law

A nonprofit environmental organization sued a manufacturer of feminine hygiene products, alleging that the company marketed certain products as “organic” or “made with organic ingredients” in violation of California’s organic products law. The complaint claimed that these products, such as period underwear, pads, and panty liners, contained much less than the minimum required percentage of certified organic materials, and included several synthetic or non-organic components not permitted under state and federal organic standards. The organization sought to prevent the manufacturer from advertising and selling these products as organic within California.The Superior Court of Alameda County granted judgment on the pleadings in favor of the manufacturer. The court reasoned that California’s organic products law, known as the California Organic Food and Farming Act (COFFA), did not apply to personal care products like the ones at issue, but only to specifically enumerated items such as agricultural products, cosmetics, and pet food. Based on this interpretation, the trial court concluded that the plaintiff’s claims failed as a matter of law and entered judgment for the defendant.The California Court of Appeal, First Appellate District, Division Two, reviewed the case de novo. It concluded that the statutory text, legislative history, and public policy underlying COFFA support a broad interpretation. The Court held that COFFA applies to all products sold as “organic” or containing “organic” materials within California, including feminine hygiene and personal care products, unless specifically exempted. The Court rejected the argument that such products are categorically excluded and emphasized the statute’s intent to regulate consumer organic claims broadly. The judgment of the trial court was therefore reversed. View "Environmental Democracy Project v. Rael, Inc." on Justia Law

Two individuals brought a class action against Amazon, alleging that its Virtual Try-On (VTO) feature—used to preview makeup and eyewear products by rendering them on users’ faces via their mobile devices—violated the Illinois Biometric Information Privacy Act (BIPA). The VTO software, developed both in-house and by a third party, captured users’ facial geometry to overlay products for virtual preview. The plaintiffs claimed Amazon collected, stored, and used their facial data and that of many others in Illinois without proper notice, informed consent, or the creation of required data retention and destruction policies as mandated by BIPA.After removal from Illinois state court to the United States District Court for the Northern District of Illinois, the plaintiffs moved for class certification under Federal Rule of Civil Procedure 23(b)(3). The district court certified a class of all individuals who used Amazon’s VTO feature in Illinois after September 7, 2016. The district court found the class satisfied the requirements of numerosity, commonality, typicality, and adequacy, and that common questions—primarily concerning the VTO’s functionality and Amazon’s use of biometric data—predominated over individual questions such as location and damages. It also found a class action was superior due to the size and cost of potential individual litigation.On interlocutory appeal, the United States Court of Appeals for the Seventh Circuit reviewed only the class certification decision, focusing on predominance and superiority. The court affirmed the district court’s certification, holding that common questions about Amazon’s alleged statutory violations predominated and that individual questions regarding user location and damages were manageable. The court also agreed that a class action was superior to individual suits, given the complexity and cost of litigation, and affirmed the district court’s discretion. View "Svoboda v Amazon.com Inc." on Justia Law

A commercial landlord leased property in downtown Boston to a restaurant operator. As part of their lease agreement, the landlord sold the restaurant a liquor license for one dollar, with the understanding that the license would be transferred back to the landlord for one dollar at the end of the lease. The lease included a provision prohibiting the restaurant from pledging the liquor license as collateral for any loan without the landlord’s written consent. Despite this, before the lease ended, the restaurant pledged the license to its principal as collateral for a loan. When the landlord discovered this, it terminated the lease and demanded the return of the license.The landlord and its related entities filed suit in the Massachusetts Superior Court, alleging breach of contract, unfair or deceptive business practices under General Laws c. 93A, and conversion. The Superior Court granted partial summary judgment for the landlord on the contract claims, finding the anti-pledge provision enforceable and the pledge a default. After a bench trial, the court found for the landlord on the c. 93A and conversion claims, awarding treble damages, attorney's fees, and costs. The defendants appealed these decisions.The Supreme Judicial Court of Massachusetts reviewed the case after transferring it from the Appeals Court. The Supreme Judicial Court held that the anti-pledge provision did not violate public policy or state law and was therefore enforceable. The court affirmed that the principal’s conduct in falsely affirming to regulatory authorities that the pledge did not violate any agreements constituted willful and knowing unfair or deceptive conduct under c. 93A. However, while the court affirmed the breach of contract claim, it reversed the conversion judgment, finding that the landlord did not have actual or immediate right to possession of the license at the relevant time. The award of attorney's fees and costs was affirmed. View "Nicosia v. Burns, LLC" on Justia Law

A woman rented a car from a rental company in 2014 and, after a traffic camera recorded a violation during her rental, the company paid the fine and charged her both the fine amount and an administrative fee. She filed a putative class action in the United States District Court for the District of New Jersey on behalf of customers who were charged fines and fees in similar circumstances, alleging state-law claims such as violations of consumer fraud statutes and unjust enrichment. The rental company later updated its rental agreements in 2016 to include an arbitration clause and class-action waiver, but this provision applied only prospectively to rentals after its adoption. The named plaintiffs’ rentals predated this clause.The District Court, after years of litigation that included several amended complaints, discovery, mediation, and a motion to certify a class, ultimately certified a subclass that included some renters whose agreements contained the arbitration provision. The District Court found that the rental company had waived its right to enforce arbitration by participating in litigation for several years without moving to compel arbitration. The company then filed a motion to compel arbitration for the affected class members, which the District Court denied again on waiver grounds, emphasizing that the company had not sought to enforce arbitration until after class certification.On appeal, the United States Court of Appeals for the Third Circuit reviewed the waiver issue de novo. The Third Circuit held that waiver of the right to compel arbitration did not occur here, because the company’s conduct—such as raising arbitration as an affirmative defense and the futility of seeking to compel arbitration prior to class certification—did not evince an intentional relinquishment of that right. The Third Circuit vacated the District Court’s order denying the motion to compel arbitration and remanded for consideration of other unresolved questions about enforceability. View "Valli v. Avis Budget Group Inc" on Justia Law

During the COVID-19 pandemic, a university in Nebraska instituted a policy requiring all students to be vaccinated against COVID-19 by a specified deadline, with the only exemptions allowed for medical reasons or until a vaccine received full FDA approval. Religious exemptions were not permitted. Students who failed to comply were unenrolled and barred from campus, and some had holds placed on their accounts, preventing access to transcripts. One student complied with the mandate but suffered adverse effects and was medically exempted from further doses. Another student withdrew voluntarily before the deadline.After the university enforced the mandate, several students sought injunctive relief in the District Court for Douglas County to prevent their unenrollment, alleging breach of contract and unjust enrichment. The court denied relief, finding that any contract included the Emergency Use Authorization waiver agreements and that the students breached the contract by not being vaccinated after FDA approval. An initial appeal was dismissed by the Nebraska Supreme Court for lack of a final, appealable order. The students then consolidated their actions and filed an operative complaint alleging breach of implied contract, denial of due process, conversion, negligence, and violations of the Nebraska Consumer Protection Act (NCPA). The district court dismissed the complaint with prejudice and denied leave to amend.The Nebraska Supreme Court reviewed the district court’s dismissal de novo and found that the students plausibly alleged claims for breach of an implied contract and conversion, based on the university’s unilateral modification of conditions mid-semester and the withholding of transcripts. The court affirmed the dismissal of the negligence and NCPA claims, finding them preempted by the federal Public Readiness and Emergency Preparedness Act, and held that the due process claim was abandoned on appeal. The case was affirmed in part, reversed in part, and remanded for further proceedings on the breach of contract and conversion claims. View "Ramaekers v. Creighton University" on Justia Law

Epic Games, a developer and operator of the Epic Games Store, sued Apple over its App Store practices, alleging violations of federal and California competition law. The dispute centered on Apple’s rules requiring developers to use Apple’s in-app payment system, which imposed a 30% commission, and its prohibition of developers directing users to other purchasing options outside the App Store. After a bench trial, the district court found Apple’s anti-steering provisions violated California’s Unfair Competition Law by preventing informed consumer choice but upheld Apple’s in-app payment system requirement for digital goods. The court issued an injunction barring Apple from restricting developers from including in their apps buttons, links, or other calls to action that direct users to alternative purchasing mechanisms.Following the injunction, Apple implemented a compliance plan involving a 27% commission on linked-out purchases and a series of restrictions on how developers could present external payment options, including limitations on button design, link placement, and user flow. Epic contested Apple’s compliance, arguing these measures still effectively prohibited alternative purchases. After holding multiple evidentiary hearings, the United States District Court for the Northern District of California found Apple in civil contempt for failing to comply with the injunction, citing Apple’s bad faith and pretextual justifications. The district court imposed broad sanctions, including prohibiting any commission on linked-out purchases, restricting Apple’s ability to limit external links, and referring Apple for criminal investigation.On appeal, the United States Court of Appeals for the Ninth Circuit affirmed the district court’s contempt findings and most of the resulting sanctions but found portions of the sanctions—particularly the blanket ban on commissions—overbroad and more punitive than coercive. The Ninth Circuit reversed and remanded those parts for further tailoring, clarified the scope of permissible developer link prominence, and declined to vacate the injunction or reassign the case. The court otherwise affirmed the district court’s orders. View "EPIC GAMES, INC. V. APPLE INC." on Justia Law

Two individuals brought their dogs to a veterinary clinic for treatment. Dissatisfied with the care provided, both posted negative reviews on social media, detailing their experiences and criticizing the clinic’s practices. These posts were shared on multiple community Facebook pages and received significant engagement from the local community, including comments from others about the clinic. After the posters refused the clinic’s request to remove the reviews, the clinic filed a lawsuit for defamation per se against both individuals, alleging numerous defamatory statements.In the District Court for El Paso County, the defendants filed a special motion to dismiss under Colorado’s anti-SLAPP statute, arguing that their posts were protected as speech on a public issue. The district court denied the motion, finding that the statements concerned a private business dispute and did not address matters of public interest. The court also found that, even if the statute applied, the clinic had shown a reasonable likelihood of prevailing on its claims. On appeal, a division of the Colorado Court of Appeals agreed that the posts provided consumer information relevant to the public but concluded they did not contribute to a broader public discussion, largely because they were motivated by personal animosity and aimed to harm the clinic’s business.The Supreme Court of Colorado reviewed the case and determined that the lower courts had applied the wrong legal standard. The Supreme Court held that courts must use a two-step test to determine if speech is protected under the anti-SLAPP statute: first, whether an objective observer could reasonably understand the speech, in context, to be made in connection with a public issue or interest; and second, whether the speech contributed to public discussion of that issue. The court further held that the speaker’s motive is irrelevant to this analysis. The judgment of the court of appeals was reversed, and the matter was remanded for application of the correct standard. View "Lind-Barnett v. Tender Care Veterinary Ctr." on Justia Law