Justia Consumer Law Opinion Summaries

After Asset Acceptance received a default judgment against plaintiff in a debt collection action, Asset Acceptance began garnishing plaintiff's wages. Plaintiff then appeared in the action, eventually entering into a stipulation of settlement. When plaintiff learned that Equifax was including the 2013 default judgment on his credit report, he filed suit alleging that, in reporting the judgment as "satisfied" and in its subsequent dealings with plaintiff, Equifax willfully and negligently violated the source-disclosure, accurate reporting, and reinvestigation provisions of the Fair Credit Reporting Act (FRCPA).The Second Circuit affirmed the district court's judgment in favor of Equifax, concluding that the district court correctly determined that Equifax's credit report was accurate; plaintiff could not establish damages arising from Equifax's allegedly negligent conduct; and that Equifax need not prove it actually interpreted the FCRA in line with its claimed reasonable interpretation to rely on the reasonable-interpretation defense established by Safeco Insurance Company of America v. Burr, 551 U.S. 47, 57 (2007). The court considered plaintiff's remaining arguments on appeal and found no basis for reversal. View "Shimon v. Equifax Information Services LLC" on Justia Law

The Fifth Circuit held that a private settlement does not constitute a "successful action to enforce . . . liability" under the fee-shifting provision of the Fair Debt Collection Practices Act (FDCPA). The court affirmed the district court's denial of attorney's fees in this case, concluding that the district court did not commit reversible error in refusing plaintiff's fee application under the FDCPA. The court explained that a "successful action to enforce the foregoing liability" means a lawsuit that generates a favorable end result compelling accountability and legal compliance with a formal command or decree under the FDCPA. In this case, plaintiff settled before his lawsuit reached any end result, let alone a favorable one. Furthermore, by settling, Portfolio Recovery avoided a formal legal command or decree from plaintiff's lawsuit. The court stated that plaintiff's alternative interpretation requires rewriting the FDCPA's fee-shifting provision.The court also concluded that, at most, plaintiff's FDCPA suit was the catalyst that spurred Portfolio Recovery to settle. Therefore, the catalyst theory does not make plaintiff's action a successful one under 15 U.S.C. 1692k(a)(3) and thus plaintiff is not entitled to fees. View "Tejero v. Portfolio Recovery Associates, LLC" on Justia Law

In a fifth amended class action complaint, plaintiffs Kelly Peviani, Judy Rudolph, and Zachary Rudolph, on behalf of themselves and others similarly situated, sued defendants Arbors at California Oaks Property Owner, LLC and JRK Residential Group, Inc. Plaintiffs alleged “Defendants advertise with colorful brochures and promising language that the Property is a safe, habitable, and luxurious place to live, with numerous amenities including a playground, cabanas and lounges, tennis and basketball courts, a rock climbing wall, gym, and pools and heated spas. But the Property is nothing of the kind. Instead, the Property is littered with used condoms, drug use, broken security gates, violence, is devoid of security patrols, and police are called to the complex on a regular basis. The pools are dirty, and the fitness equipment is broken. The complex is unsafe for tenants, especially children, and does not deliver on its material promises.” The complaint included eight causes of action: (1) false advertising; (2) breach of the implied warranty of habitability; (3) nuisance; (4) breach of the implied covenant of good faith and fair dealing; (5) bad faith retention of security deposits; and (6) three causes of action for unfair competition. Plaintiffs moved for certification of two classes, but the trial court denied the motion. Plaintiffs contended on appeal the trial court erred by denying their class certification motion. In regard to the false advertising claim, the trial court denied class certification due to a lack of commonality that would, in turn, cause the class to be unmanageable. After review of the trial court record, the Court of Appeal determined the trial court's commonality finding was flawed, making its related conclusion pertaining to manageability unreliable. Judgment was reversed and the matter remanded for further proceedings. View "Peviani v. Arbors at California Oaks Property Owner" on Justia Law

In this consolidated appeal regarding collection actions by a debt buyer, the Supreme Judicial Court vacated the judgments that the district court entered in favor of Portfolio Recovery Associates, LLC, holding that the court's factual findings underlying the admission of certain challenged records were erroneous.When the trial court decided these credit card debt collection matters Supreme Judicial Court jurisprudence contained conflicting interpretations of Me. R. Evid. 803(6) with regard to the admission of integrated business records. The trial court admitted the records in accordance with the predominant evidentiary standards at the time. In Bank of New York Mellon v. Shone, 239 A.3d 671 (Me. 2020), however, the Supreme Court clarified the proper approach for evaluating the sufficiency of the foundation laid for the admission of integrated business records. In the instant case, the Supreme Judicial Court held that because the parties developed their records with a different evidentiary standard in mind, fairness required that the matters be remanded for further proceedings, including potentially reopening the record to allow further evidence or to take new evidence. View "Portfolio Recovery Associates, LLC v. Casey Clougherty Portfolio Recovery Associates, LLC" on Justia Law

Cadence Bank, N.A. ("Cadence"), sued Steven Dodd Robertson and Mary Garling-Robertson, seeking to recover a debt the Robertsons allegedly owed Cadence. The circuit court ruled that Cadence's claim was barred by the statute of limitations and, thus, granted the Robertsons' motion for a summary judgment. The Alabama Supreme Court reversed, finding the Robertsons' summary-judgment motion did not establish that Cadence sought to recover only pursuant to an open-account theory subject to a three-year limitations period. The Robertsons did not assert any basis in support of their summary-judgment motion other than the statute of limitations. The matter was remanded for further proceedings. View "Cadence Bank, N.A. v. Robertson" on Justia Law

Plaintiffs filed suit against Lexington Law and its vendor, Progrexion, for purportedly perpetrating a fraud in which the firm failed to disclose that it was sending letters to the companies in its clients' names and on their behalves. After a jury agreed that defendants violated Texas law in committing fraud and fraud by non-disclosure, the district court set aside the verdict and issued judgment in favor of defendants as a matter of law.The Fifth Circuit affirmed, concluding that plaintiffs have not shown that defendants committed fraud. In this case, the district court concluded that defendants did not make any false representations (material or otherwise) when signing and sending the dispute letters because Lexington Law had the legal right to sign its clients' names on the correspondence it sent on their behalf to data furnishers who reported inaccurate information about the clients' credit. Furthermore, Progrexion cannot be liable for fraud since it, like Lexington Law, did not make any material misrepresentations. The court also concluded that plaintiffs' fraud by non-disclosure claim must be dismissed because they did not justifiably rely on any failure of defendants to disclose material facts, and plaintiffs have not shown that defendants had a duty to disclose that they were the ones actually sending the dispute letters. Additionally, plaintiffs have not shown that Progrexion disclosed any facts—material or otherwise—and so cannot be liable for fraud by nondisclosure. The court explained that the fact that Lexington Law had the legal right to send dispute letters on their clients behalves and in their names suggests that the firm did not make any false representations, and thus the firm did not create any false impressions requiring disclosure. Finally, plaintiffs waived their conspiracy claim by failing to move for judgment as a matter of law on the claim before and after the case was submitted to the jury or for a new trial. View "The CBE Group, Inc. v. Lexington Law Firm" on Justia Law

Two cases consolidated for the Mississippi Supreme Court's review presented common questions of the validity of a cause of action brought by the Mississippi Attorney General under the Mississippi Consumer Protection Act, Mississippi Code Section 75-24-5. The first was whether the Act covered the State’s claim, and the second was whether that claim was preempted by federal law. In 2014, the State commenced an action against Johnson & Johnson for what it alleged to have been unlawful, unfair, and deceptive business practices related to its cosmetic talcum powder products. Specifically, the State alleged that Johnson & Johnson failed to warn of the risk of ovarian cancer in women who used talc. The Chancery Court denied the summary judgment motion made by Johnson & Johnson and Johnson & Johnson Consumer, Inc. Johnson & Johnson then filed an interlocutory appeal of the chancellor’s decision, which the Supreme Court granted. The Court concluded the Act did not exclude the State's talc labeling claim. Further, because of the lack of any specific requirement by the Food and Drug Administration, the State’s claim was not barred by the principles of express or implied preemption. Therefore, the judgment of the Chancery Court was affirmed, and the case was remanded for further proceedings. View "Johnson & Johnson Consumer Companies, Inc. v. Fitch" on Justia Law

Plaintiff filed suit against defendant, the manufacturer of a new vehicle he leased, alleging violations of the Song-Beverly Consumer Warranty Act. The trial court entered a judgment awarding plaintiff restitution and civil penalties under the Act, as well as awarding him attorney fees.In the published portion of the opinion, the Court of Appeal affirmed in part, reversed in part, and remanded. The court concluded that the trial court did not err by refusing to include in its restitution award the residual value of the vehicle under the lease. The court explained that awarding plaintiff the residual value of the vehicle—an amount he admits he did not pay and was not obligated to pay under the terms of the lease—would leave him in a better position than he was in at the time he leased the vehicle. Therefore, this would be contrary to the Legislature's intent in using the term restitution to describe a lessee’s damages remedy under the Act. The court was unpersuaded by plaintiff's assertion that excluding the residual value from the restitution award would result in unequal treatment of lease transactions, as compared to purchase transactions, in violation of the Act. Rather, the court concluded that the restitution award did not violate the equal treatment mandate under the Act. Furthermore, the court read the Act as expressly imposing reacquisition, branding, and disclosure requirements solely on manufacturers who cannot repair a vehicle after a reasonable number of attempts. Absent an agreement on appeal as to the causation issue and the amount of premiums and registration renewal fees to which plaintiff is entitled, the court reversed and remanded for further proceedings under Kirzhner v. Mercedes-Benz USA, LLC (2020) 9 Cal.5th 966, 969. View "Crayton v. FCA US LLC" on Justia Law

In 2018, the State of Mississippi filed a complaint against Navient Corporation and Navient Solutions, LLC (together, “Navient”), alleging that Navient’s origination of high-cost, subprime loans and predatory practices while servicing student-loan borrowers in Mississippi violated the Mississippi Consumer Protections Act. Navient moved to dismiss on two grounds: failure to state a claim and lack of venue. In 2019, the chancery court denied Navient’s motion; Navient timely petitioned the Mississippi Supreme Court for an interlocutory appeal, arguing that federal law preempted the State’s servicing claims and that injunctive relief under the Act did not apply because the alleged loan-origination misconduct ceased and could not recur. To this the Supreme Court disagreed and affirmed the trial court. View "Navient Corporation v. Mississippi ex rel. Fitch, Attorney General" on Justia Law

Klotz’s now-deceased husband received medical services from the Hospital and incurred a $1,580 debt; he left no estate. The Hospital retained CSW to collect the debt. CSW mailed collection letters to Klotz. Klotz claims she is not liable for the debt, arguing that the Equal Credit Opportunity Act (ECOA), 15 U.S.C. 1691, preempts New Jersey’s common-law doctrine of necessaries (where a spouse is jointly liable for necessary expenses incurred by the other spouse) and sued CSW for violating the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692e and 1692f. Preemption of the doctrine would allow Klotz to pursue her FDCPA case. The Third Circuit affirmed the dismissal of the case. The ECOA does not preempt New Jersey’s doctrine of necessaries. One ECOA regulation provides that “a creditor shall not require the signature of an applicant’s spouse . . . on any credit instrument if the applicant qualifies under the creditor’s standards of creditworthiness for the amount and terms of the credit requested.” Rejecting an argument that the doctrine effectively treats her as a spousal co-signer in violation of the spousal-signature prohibition, the court reasoned that Klotz’s medical debt falls within an exemption for incidental credit and rejected an argument that CSW failed to follow the procedural requirements of the doctrine of necessaries. View "Klotz v. Celentano Stadtmauer and Wale LLP" on Justia Law