Justia Consumer Law Opinion Summaries

A group of Facebook users who interacted with an optical retailer’s website alleged that the company installed a Meta Pixel tracking tool on its site, which collected and transmitted users’ sensitive health-related information—such as browsing for prescription eyewear, entering prescription details, and scheduling eye exams—to Meta Platforms, Inc. without their consent. The users claimed this information qualified as individually identifiable health information under federal law and should not have been shared without authorization. The plaintiffs divided themselves into two groups: those who browsed or scheduled appointments (“Search Plaintiffs”) and those who entered prescription information to purchase eyewear (“Prescription Plaintiffs”).The United States District Court for the Northern District of Texas initially found that the plaintiffs had standing but dismissed their first complaint for failure to state a claim, allowing them to amend. After the plaintiffs filed their amended complaint, the district court again dismissed the case with prejudice. It held that the Search Plaintiffs had not adequately alleged they shared any protected health information with the defendant, and that the Prescription Plaintiffs had failed to show any such information was actually disclosed to Meta through the Pixel.On appeal, the United States Court of Appeals for the Fifth Circuit reviewed the dismissal de novo. The Fifth Circuit concluded that the unauthorized disclosure of the plaintiffs’ health information to Meta constituted a concrete and particularized injury, affirming that the plaintiffs had standing. The court held that both groups of plaintiffs adequately alleged that their individually identifiable health information was transmitted to Meta without their consent. The Fifth Circuit therefore reversed the district court’s dismissal and remanded the case for further proceedings. View "Rand v. Eyemart Express" on Justia Law

After defaulting on his home mortgage, the plaintiff entered into a loan modification agreement with his mortgage servicer. The agreement allowed for a portion of the loan balance to be forgiven if the plaintiff made timely payments and remained in good standing. However, the plaintiff quickly fell behind on the modified payment schedule and remained delinquent for an extended period. During this time, the servicer issued an IRS Form 1099-C to the plaintiff, listing the amount eligible for forgiveness as a "cancellation of debt." The plaintiff subsequently argued that this form, along with certain communications from the servicer and its successor, meant the debt had been forgiven, even though he had not met the agreement’s conditions.The case was originally filed in Massachusetts state court and removed to the United States District Court for the District of Massachusetts on diversity grounds. The defendants moved for summary judgment after discovery. The plaintiff opposed the motion, arguing that further discovery was needed, particularly regarding the servicer’s tax filings, to support his claim that the debt had been forgiven. The district court denied the plaintiff’s request for additional discovery, finding the requested information irrelevant, and granted summary judgment to the defendants on all claims, including breach of contract, breach of the covenant of good faith and fair dealing, and violation of the Massachusetts consumer protection statute.On appeal, the United States Court of Appeals for the First Circuit affirmed the district court’s rulings. The appellate court held that the issuance of an IRS Form 1099-C does not, by itself, discharge a debt if the conditions for forgiveness were not met. The court also found no abuse of discretion in denying additional discovery and concluded there was no material factual dispute as to whether the debt had been forgiven. The grant of summary judgment to the defendants was affirmed. View "Dworman v. PHH Mortgage Services" on Justia Law

Several patients brought class action lawsuits against Indiana health care providers, alleging that their medical information was improperly shared with Facebook through the use of the Meta Pixel embedded in online patient portals. The plaintiffs asserted state law claims including breach of implied contract, unjust enrichment, and violations of the Indiana Deceptive Consumer Sales Act and Indiana Wiretapping Act. The health care providers had established these online portals to comply with federal regulations encouraging electronic health records, which offered incentive payments and imposed penalties for non-compliance.The health care providers removed the cases from Indiana state court to the United States District Court for the Southern District of Indiana, arguing that federal jurisdiction was proper under 28 U.S.C. § 1442(a)(1). They claimed they were “acting under” the Department of Health and Human Services when creating and maintaining their portals. District courts in multiple consolidated cases rejected this argument, finding that the providers did not meet the statutory requirements for removal under § 1442(a)(1). The courts concluded that while the providers were highly regulated and incentivized by federal policies, their actions did not amount to performing basic governmental tasks or operating under the direction of a federal officer.The United States Court of Appeals for the Seventh Circuit reviewed the consolidated appeals de novo. It held that compliance with federal regulations and incentives for patient portals did not constitute “acting under” a federal officer. The court found that the health care providers’ relationship to the federal government lacked the unusually close supervision and delegation required for federal officer removal. The court affirmed the district courts’ remand orders, holding that federal subject matter jurisdiction was not established under § 1442(a)(1). View "Chiaro v Methodist Hospitals, Inc." on Justia Law

A customer dined at a Mississippi restaurant specializing in local seafood, ordering premium snapper on three occasions between 2013 and 2018. The restaurant, along with its supplier and several managers, was later criminally charged for a long-running scheme to mislabel imported frozen fish as locally caught premium fish. All parties pled guilty, admitting to substituting and fraudulently selling over 29 tons of imported fish as local species during a multi-year period. The customer alleged that he paid high prices for what he believed to be premium Gulf snapper, but was instead served inferior imported fish, and he brought a class action seeking damages under federal and state law.The United States District Court for the Southern District of Mississippi dismissed the complaint under Rule 12(b)(1), finding no cognizable Article III injury. The court reasoned that since the plaintiff consumed his meals without complaint, paying for fish he would not have otherwise purchased was not a concrete injury. It also found the allegations insufficiently particularized, as the plaintiff did not specifically allege that imported fish was served on the dates he dined or that all snapper sold on those dates was misbranded. The court denied motions to amend the judgment and complaint, concluding any amendments would be futile.The United States Court of Appeals for the Fifth Circuit reviewed the case de novo and reversed the district court’s dismissal. The Fifth Circuit held that the plaintiff plausibly suffered a concrete and particularized injury in fact under Article III, either by being fraudulently induced to purchase inferior fish or by overpaying due to fraud. The court concluded that the allegations of widespread and routine fish substitution at the restaurant plausibly affected the plaintiff’s meals, particularly his August 21, 2018, visit. The denial of leave to amend was vacated, and the case was remanded for further proceedings. View "McCain v. Mary Mahoney's" on Justia Law

The appellant purchased and consumed a frozen “Oven Ready Breaded Cod Fillets” product sold by the appellee. While eating the fillet, a bone became lodged in her esophagus, causing her significant pain, medical treatment, and surgery. She claimed that the packaging’s “oven ready” and “breaded” descriptions led her to believe the product would be free of bones and thus safe to eat without risk of injury. As a result, she suffered physical and emotional harm, lost wages, ongoing impairment, and medical costs.After the incident, the appellant filed a complaint against the company in the Superior Court of the District of Columbia, alleging several causes of action including negligence for failure to warn, breach of warranty, strict products liability, and violation of consumer protection law. The company moved to dismiss all counts. The Superior Court initially dismissed all counts except negligence, finding enough factual allegations to suggest a failure to warn about bones. The company then filed a motion to reconsider, arguing that consumers should expect fish bones as a matter of law. The Superior Court agreed and dismissed the remaining negligence claim under Rule 12(b)(6), determining that the risk was obvious and no duty to warn existed.The District of Columbia Court of Appeals reviewed the dismissal de novo. The court held that whether fish bones are an obvious risk in a breaded, oven-ready fish fillet is a question of fact for a jury, not a legal determination appropriate for dismissal at this stage. The court also found that the harm caused by ingesting a fish bone—especially one requiring hospitalization and surgery—was not obviously foreseeable to all consumers. Therefore, the court reversed the Superior Court’s judgment and remanded for further proceedings. View "Bahrampour v. Trader Joe's Company, Inc." on Justia Law

A Mississippi-based furniture company and its principal operated an online “drop shipping” business, selling to customers nationwide. They fulfilled over a thousand orders for Michigan residents, accepting payments and arranging deliveries to Michigan addresses, but beginning in 2020, they kept payments for furniture they never delivered. After numerous complaints, the Michigan Attorney General sued them for violations of Michigan’s consumer protection laws and statutory conversion involving ten Michigan consumers. The defendants did not appear in the Michigan court, asserting that their website’s terms limited legal disputes to Mississippi and that Michigan lacked personal jurisdiction. Default judgments were entered against both defendants, awarding damages, civil fines, and attorneys’ fees.Following the Michigan judgment, the Attorney General enrolled it in the Lowndes County Circuit Court in Mississippi under the Uniform Enforcement of Foreign Judgments Act. The defendants objected, arguing that the Michigan court lacked jurisdiction due to their choice-of-law provision and that the forum-selection clause in their terms of service precluded jurisdiction. The circuit court held that the forum-selection clause was irrelevant to the statutory action and that Michigan law governed its validity, overruling the objections and directing enrollment of the judgment.The Supreme Court of Mississippi reviewed the appeal de novo. It held that the Michigan court had personal jurisdiction over the defendants because they knowingly and repeatedly contracted with Michigan residents, took their money, and arranged deliveries into Michigan, thus purposefully availing themselves of Michigan’s market. The choice-of-law provision in the website’s terms did not negate purposeful availment. The court found that Michigan’s long-arm statutes and due process requirements were satisfied. It also held that the size of the judgment was irrelevant to full faith and credit. The Supreme Court of Mississippi affirmed the circuit court’s order enrolling the Michigan judgment. View "AF, LLC v. Nessel" on Justia Law

Several individuals alleged that a hospital violated Washington’s privacy statute by using Meta Pixel technology on its public website. When these individuals searched for information or clicked links on the hospital’s website, Meta Pixel tracked their activity and sent the data to Meta Platforms, which then used the information for targeted advertising. The plaintiffs argued that this tracking amounted to intercepting or recording “private communications” under the Washington Privacy Act (WPA), and asserted their searches on the hospital’s website were protected communications.A putative class action was filed in the King County Superior Court. The hospital moved to dismiss the complaint, arguing that the plaintiffs' activities on its public website did not constitute “private communication[s]” under the WPA, and that Meta Pixel was not installed on the hospital’s patient portal. The trial court granted the hospital's motion to dismiss with prejudice. On appeal, the Washington Court of Appeals affirmed the dismissal, concluding that the plaintiffs’ website searches were unilateral actions and not “private communication[s]” between two or more individuals as required by the WPA.The Supreme Court of the State of Washington reviewed the case. The court held that the WPA provision at issue applies only to communications “between two or more individuals,” and excludes interactions between an individual and an automated system operated by a corporation. Because the plaintiffs’ activities involved only a single individual and an automated corporate server, the court concluded the WPA did not apply. The Supreme Court affirmed the trial court’s dismissal of the plaintiffs’ complaint. View "Baker v. Seattle Child.'s Hosp." on Justia Law

Two individuals received fines after failing to pay parking charges at garages operated by a company that uses automated technology, such as cameras and QR codes, to manage parking payments. When the plaintiffs did not pay the required parking fees, the company mailed them notices demanding the original fee plus a significantly larger fine. The plaintiffs alleged that the company’s business model intentionally made it difficult for drivers to pay, thereby increasing the likelihood of nonpayment and enabling the company to collect higher fines.The plaintiffs brought a putative class action in the United States District Court for the Northern District of Texas, asserting claims under the Fair Debt Collection Practices Act (FDCPA), as well as related Texas statutes. They argued that the company qualified as a “debt collector” under the FDCPA because it mailed notices demanding payment. The company moved to dismiss, and a magistrate judge recommended dismissal, finding that the company’s principal business was operating parking lots, not debt collection, and that it did not collect debts on behalf of others. The district court dismissed the FDCPA claim with prejudice, concluding the company was not a debt collector since it originated the debt and thus fell within a statutory exception. The court declined to exercise supplemental jurisdiction over the state law claims and denied leave to amend, finding any amendment would be futile.On appeal, the United States Court of Appeals for the Fifth Circuit held that the district court misapplied the statutory exception for debt originators. The Fifth Circuit clarified that to invoke this exception, a party must both collect debts on behalf of others and have originated the debt. However, the court affirmed the dismissal on alternative grounds, holding that the plaintiffs failed to state a plausible claim that the company was a debt collector under the FDCPA because they did not sufficiently allege either that debt collection was the company's principal purpose or that it regularly collected debts for others. The Fifth Circuit also affirmed the denial of leave to amend. View "Frankfort v. Metropolis Technologies" on Justia Law

Union Pacific Railroad operated intermodal facilities in Illinois where truck drivers were required to scan their fingerprints for identification between 2013 and 2021. Twelve truck drivers filed suit, alleging that this practice violated Illinois’s Biometric Information Privacy Act (BIPA). Union Pacific argued that it was exempt from BIPA due to its contracts with the State of Illinois and its subdivisions, including operating commuter trains for Metra and performing design work on overpasses and grade crossings. The plaintiffs countered that these contracts were unrelated to the intermodal freight operations where their biometric data was collected.The United States District Court for the Northern District of Illinois reviewed Union Pacific’s motion for summary judgment. The court found in favor of the plaintiffs, holding that the statutory exemption in BIPA only applied when a contractor was working in the course of fulfilling a state or local government contract, not merely because the contractor had any contract at the time. The district court denied summary judgment, and later certified its decision for interlocutory appeal under 28 U.S.C. §1292(b), prompting the Seventh Circuit to accept the appeal.The United States Court of Appeals for the Seventh Circuit considered whether the BIPA exemption for contractors of state agencies or local units applied broadly or only when the contractor is working in fulfillment of relevant contracts. The court looked to recent Illinois appellate decisions, which uniformly interpreted the exemption to mean “in the course of” working for the government. Concluding that the Illinois Supreme Court would likely adopt this interpretation, the Seventh Circuit affirmed the district court’s decision, holding that Union Pacific was not exempt from BIPA for its intermodal freight operations simply because it had unrelated contracts with government entities. View "Payton v Union Pacific Railroad Company" on Justia Law

Copper City Gaming, Inc. alleged that in July 2022, Eric Allen entered into a lease agreement with the corporation, resulting in four payments totaling $14,400. Copper City claimed these payments were fraudulent, part of a conspiracy between Eric and Russ Allen, and asserted causes of action for fraud, violation of the Montana Consumer Protection Act, breach of contract, unjust enrichment, and civil conspiracy. The complaint specifically alleged the lease used the wrong address and corporate name, Eric lacked authority to sublease or failed to provide usable space, and Copper City never stored property there.Previously, a related action (DV-22-206) involved disputes between shareholder groups over management and use of corporate funds. That action began in Copper City’s name but, by court order, Russ and Camy Allen were substituted as plaintiffs, and Copper City was no longer a named party. The parties reached a mediated settlement, which included a Mutual General Release and Settlement Agreement, and a Special Master’s Order waiving certain business dispute claims, including storage-unit fees. The Special Master dismissed the action with prejudice as fully settled.The Supreme Court of the State of Montana reviewed the District Court’s order granting Eric Allen’s motion to dismiss under M. R. Civ. P. 12(b)(6) on collateral estoppel grounds. The Supreme Court held that the complaint and materials properly considered at the pleading stage did not conclusively establish that the prior adjudication decided the identical issues now raised, that Copper City was adequately represented in the prior action, or that Copper City had a full and fair opportunity to litigate those issues. The Court also found the District Court erred by considering matters outside the pleadings without converting the motion to summary judgment under Rule 12(d). The Supreme Court reversed the dismissal and remanded for further proceedings. View "Copper City Gaming v. Allen" on Justia Law