Justia Consumer Law Opinion Summaries

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Sterling Senechal submitted a claim to Allstate Vehicle and Property Insurance Company for water damage caused by a broken water heater. Allstate issued three payments totaling $12,410.48. After a dispute over the loss amount, an appraisal determined the actual cash value to be $58,396.58, which Allstate paid minus the deductible and prior payments. Senechal then filed a lawsuit alleging breach of contract, violations of the Texas Prompt Payment of Claims Act (TPPCA), bad faith claims under Chapter 541 of the Texas Insurance Code, and breach of the common law duty of good faith and fair dealing. Allstate removed the case to federal court and paid what it calculated as the maximum potential interest owed.The United States District Court for the Southern District of Texas granted summary judgment in favor of Allstate on all claims. Senechal conceded the breach of contract claim but opposed summary judgment on the other claims. The district court ruled that Allstate's payment of the appraisal award and interest defeated Senechal's claims.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court affirmed the summary judgment on Senechal's bad faith claims under Chapter 541 and common law, citing the Texas Supreme Court's decision in Ortiz v. State Farm Lloyds, which held that payment of an appraisal award and interest precludes recovery for bad faith claims unless there is an independent injury. However, the court vacated the summary judgment on Senechal's TPPCA claims, noting that payment of an appraisal award and interest does not automatically absolve an insurer of TPPCA liability. The case was remanded for further proceedings to determine whether Allstate's initial payment "roughly corresponds" with the appraisal award and whether Allstate is liable under the TPPCA. View "Senechal v. Allstate" on Justia Law

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The City of Martinsville, Virginia, sued Express Scripts and OptumRx in state court, alleging public nuisance and harm related to the opioid epidemic. The defendants removed the case to federal court under the Class Action Fairness Act, but the district court remanded it back to state court. In 2024, the defendants again removed the case to federal court under the federal-officer-removal statute. The district court granted Martinsville's motion to remand the case to state court.The defendants appealed the remand order before it was mailed to the state court and requested a stay of the remand order pending appeal, citing the Supreme Court's decision in Coinbase, Inc. v. Bielski. The district court denied the stay, interpreting Coinbase narrowly to apply only to orders compelling arbitration. The defendants then sought a stay from the United States Court of Appeals for the Fourth Circuit.The Fourth Circuit granted the stay, holding that the district court was automatically stayed from mailing the remand order once the defendants filed their notice of appeal. The court applied the "Griggs principle," which divests the district court of control over aspects of the case involved in the appeal. The court found that the district court's interpretation of Coinbase was too narrow and that the automatic stay applied to the remand order. The court concluded that the district court lacked the authority to mail the remand order while the appeal was pending. View "City of Martinsville v. Express Scripts, Inc." on Justia Law

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Richard Martinez, a licensed plumber, contracted with Gayle Jelley to construct a pool in her backyard for $26,900. Jelley made several payments totaling $9,000, but Martinez abandoned the project after partially completing the excavation and rebar installation. It was later discovered that Martinez's contractor's license had expired before the project began. The Department of Consumer Affairs, Contractors State Licensing Board (CSLB) confirmed that Martinez had never held a valid contractor's license and had previously received three administrative citations for unlicensed contracting.The People charged Martinez with grand theft, acting as a contractor without a license, requiring an excessive downpayment, and unlawfully receiving payments exceeding the work performed. Martinez was arraigned on December 9, 2021, and later filed a motion to dismiss based on a violation of his speedy trial rights, citing a four-and-a-half-year delay in prosecution. He argued that the delay resulted in the loss of key witnesses and evidence, causing actual prejudice to his defense.The Superior Court of Riverside County granted Martinez's motion to dismiss, citing the prosecution's lack of effort to arrest Martinez after the complaint was filed. The People appealed the decision, arguing that the trial court applied an incorrect legal standard by not requiring Martinez to demonstrate actual prejudice.The California Court of Appeal, Fourth Appellate District, Division Two, reviewed the case. The court held that Martinez failed to affirmatively demonstrate actual prejudice resulting from the delay, as required under state constitutional law. The court also noted that the trial court did not conduct the necessary analysis of the four factors required to determine a federal speedy trial violation for the misdemeanor charges. The appellate court reversed the trial court's decision in part and remanded the case with directions to conduct the proper analysis for the federal speedy trial claim on the misdemeanor charges and to deny the motion to dismiss on the felony charge. View "People v. Martinez" on Justia Law

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The case involves Eastern Maine Medical Center and eight other Maine hospitals (the Hospitals) who filed a 509-page complaint against various businesses and individuals (the Opioid Sellers) involved in the marketing and distribution of prescription opioids. The Hospitals alleged that the Opioid Sellers created illegitimate demand for opioids and unlawfully increased supply, leading to an opioid epidemic that caused the Hospitals to incur high costs for treating patients with opioid misuse, addiction, and dependency, with only partial reimbursement from insurance.The Business and Consumer Docket (Duddy, J.) dismissed the Hospitals' complaint. The court found that the complaint did not comply with the requirement for a "short and plain statement" of the claim but chose to dismiss it based on the legal insufficiency of the claims. The court concluded that the Hospitals could not recover under any of their legal theories, including negligence, public nuisance, unjust enrichment, fraud and negligent misrepresentation, fraudulent concealment, and civil conspiracy. The court also denied the Hospitals' request for leave to amend their complaint.The Maine Supreme Judicial Court reviewed the case and affirmed the lower court's dismissal. The court held that the Hospitals' claims were legally insufficient. Specifically, the court found that the Hospitals did not have a direct negligence claim, as they did not suffer harm directly caused by the Opioid Sellers. The fraud and misrepresentation claims failed due to lack of reliance by the Hospitals on the Opioid Sellers' misrepresentations. The unjust enrichment claim was dismissed because the Hospitals did not confer a benefit on the Opioid Sellers. The public nuisance claim failed as the Hospitals did not suffer a special injury different in kind from the public. Lastly, the civil conspiracy claim was dismissed as it required an underlying tort, which was not present. The court concluded that the deficiencies in the complaint could not be remedied by amendment. View "Eastern Maine Medical Center v. Walgreen Co." on Justia Law

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Sheryl Glover and Cathy Booze, plaintiffs, argued that Ocwen Loan Servicing, LLC, violated the Fair Debt Collection Practices Act (FDCPA) by charging optional fees for expedited mortgage payments online or by phone. Ocwen offered borrowers the option to make expedited payments for an additional fee, while mailed payments incurred no fee. Glover and Booze paid these fees multiple times, but their mortgage agreements did not mention such fees.The Southern District of Florida held that Ocwen was acting as a debt collector when it charged the fees, that the fees were incidental to the principal obligation, and that they were not permitted by law nor authorized by the debt agreements. The district court awarded actual damages to Glover and Booze. Ocwen appealed the decision.The United States Court of Appeals for the Eleventh Circuit reviewed the case. The court held that Ocwen, as a debt collector, violated the FDCPA by charging an amount not expressly authorized by the agreement creating the debt or permitted by law. The court emphasized that the FDCPA prohibits debt collectors from collecting any amount unless it is expressly authorized by the debt agreement or permitted by law. The court found that the convenience fees were not permitted by law, as neither the Truth in Lending Act (TILA) nor the Electronic Funds Transfer Act (EFTA) substantively authorized such fees. The court affirmed the district court’s judgment in favor of Glover and Booze. View "Glover v. Ocwen Loan Servicing, LLC" on Justia Law

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A California consumer entered into an agreement with an RV manufacturer that stipulated all legal disputes would be resolved in Indiana under Indiana law. The consumer later filed a lawsuit in California under the Song-Beverly Consumer Warranty Act, alleging the RV manufacturer failed to repair or replace a defective motorhome. The manufacturer moved to stay or dismiss the action based on forum non conveniens, arguing that the case should be heard in Indiana. To address concerns about the consumer's rights under the Song-Beverly Act, the manufacturer offered to stipulate that California law would apply to the warranty claims in Indiana.The Superior Court of Los Angeles County granted the manufacturer's motion, stating that the forum selection clause was not unconscionable and that the consumer's rights could be preserved by staying the California action while the Indiana case was pending. The court concluded that if the Indiana court declined to apply the Song-Beverly Act, the consumer could move to lift the stay in California.The California Court of Appeal, Second Appellate District, Division Two, reviewed the case and found that the lower court erred in its application of the legal standard. The appellate court held that the stipulation to apply California law in Indiana did not cure the unconscionability of the forum selection clause. The court emphasized that the agreement, as written, was void and against public policy because it attempted to waive unwaivable rights under the Song-Beverly Act. The appellate court concluded that severing the unconscionable terms would condone an illegal practice and that the lower court's solution violated California public policy.The Court of Appeal reversed and remanded the case, ordering the trial court to deny the motion to dismiss or stay. The appellate court's decision underscores the importance of protecting California consumers' unwaivable statutory rights and ensuring that forum selection clauses do not undermine those rights. View "Hardy v. Forest River, Inc." on Justia Law

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The Coachella Valley Water District (Water District) appealed a judgment finding that the rates it charged for Coachella Canal water violated Article XIII C of the California Constitution. The Water District argued that the rates were lawful and that no refund remedy was authorized. The court rejected both arguments, finding the rates unlawful and that a refund remedy was constitutionally mandated.In the lower court, the Superior Court of Riverside County ruled that the Water District's Canal Water rates and the Irrigation Water Availability Assessment (IWAA) violated Proposition 218. The court found that the Water District's historical priority argument was not persuasive and that the Water District had made no attempt to show that the rates complied with the California Constitution. The court deferred ruling on remedies and later awarded Class 2 customers approximately $17.5 million in refunds and interest for invalid charges from March 2018 through June 2022.The California Court of Appeal, Fourth Appellate District, Division Two, reviewed the case. The court held that Howard Jarvis Taxpayers Association (Howard Jarvis) had standing to challenge the Class 2 rates because domestic customers paid the rates indirectly. The court found that the Class 2 rates were taxes under Article XIII C and did not fall under any exceptions. The court rejected the Water District's arguments that the rates were justified based on historical priority and that they were expenditures of funds. The court also found that the IWAA was an assessment under Proposition 218 and that the Water District failed to show it was proportional to the benefits conferred on the properties.The court affirmed the lower court's ruling on liability and the amount of refund relief awarded. However, the court found that the injunction in the judgment was overbroad and modified the judgment to strike the paragraph enjoining the Water District from imposing any future Canal Water rates and charges that did not comply with Proposition 218. As modified, the judgment was affirmed, and Howard Jarvis was awarded its costs on appeal. View "Howard Jarvis Taxpayers Assn. v. Coachella Valley Water Dist." on Justia Law

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Chesapeake Exploration, LLC (Chesapeake) and Morton Production Company, LLC (Morton) entered into a joint operating agreement for oil and gas development in Converse County, Wyoming. Morton sued Chesapeake for breach of contract, violation of the Wyoming Royalty Payment Act (WRPA), and conversion after Chesapeake adjusted Morton’s ownership interest and withheld production proceeds. Chesapeake counterclaimed for breach of contract, unjust enrichment, and breach of the implied covenant of good faith and fair dealing. The district court granted summary judgment in favor of Morton.Chesapeake appealed, challenging the district court’s summary judgment on Morton’s breach of contract claim, the supplemental decision on Chesapeake’s counterclaims and affirmative defenses, and the determination that Chesapeake violated the WRPA. The Wyoming Supreme Court reviewed the case.The Wyoming Supreme Court affirmed the district court’s decision. It held that Chesapeake breached the contract by adjusting Morton’s ownership interest and billing for costs beyond the twenty-four-month limitation period specified in the 1985 COPAS Form, which was incorporated into the joint operating agreement. The court found the language in the COPAS Form unambiguous and declined to consider extrinsic evidence. The court also upheld the district court’s use of Rule 60(a) to correct a clerical error in its original order and found that Chesapeake’s counterclaims were properly dismissed as they were rendered moot by the summary judgment on Morton’s claims. Additionally, the court ruled that Chesapeake violated the WRPA by withholding production proceeds without placing the disputed funds in escrow, as required by the statute. View "Chesapeake Exploration, LLC, v. Morton Production Company, LLC" on Justia Law

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Former Spokane police officer Jeffery Thurman was the subject of a June 13, 2019 article in the Spokesman-Review, owned by Cowles Co., which alleged he was fired for racial slurs, sexual harassment, and talk of killing black people. On June 14, 2021, Thurman filed a defamation lawsuit against Cowles Co. Shortly after, on July 25, 2021, the Uniform Public Expression Protection Act (UPEPA) took effect. Thurman amended his complaint on December 3, 2021, adding new factual allegations and a claim under the Consumer Protection Act (CPA).The trial court partially granted Cowles' special motion for expedited relief under the UPEPA, dismissing Thurman’s CPA claim but denying the motion to dismiss the defamation claim, reasoning that the defamation claim was part of the original complaint. Cowles appealed the denial of expedited relief for the defamation claim, and Thurman cross-appealed the dismissal of his CPA claim.The Washington Court of Appeals affirmed in part and reversed in part, holding that the UPEPA applied to both Thurman’s defamation and CPA claims. The majority reasoned that the defamation claim was "asserted" on a continuing basis on the UPEPA’s effective date. The dissent argued that the defamation claim was not "asserted" on or after July 25, 2021, and thus the UPEPA did not apply.The Washington Supreme Court held that Thurman’s amended defamation claim relates back to the original complaint filed on June 14, 2021, and is not subject to the UPEPA. The court reversed the Court of Appeals and remanded for further proceedings, deciding the case on statutory grounds and declining to address the constitutional arguments. View "Thurman v. Cowles Co." on Justia Law

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Michael Wood incurred credit card debt with Pentagon Federal Credit Union (PenFed) and defaulted. PenFed reported the debt to credit reporting agencies, but Wood disputed the debt in writing. PenFed investigated and concluded the debt was valid. Later, Security Credit Services, LLC (SCS) purchased Wood's debt from PenFed and reported it as delinquent to a credit reporting agency without noting Wood's dispute. Wood alleged that SCS violated the Fair Debt Collection Practices Act (FDCPA) by failing to communicate that he disputed the debt.The United States District Court for the Northern District of Illinois granted summary judgment in favor of SCS. The court found that Wood had standing to sue but concluded that PenFed reasonably interpreted Wood's lack of response to its letter as an indication that he no longer disputed the debt. Therefore, the court determined that SCS did not know and should not have known that Wood still disputed the debt.The United States Court of Appeals for the Seventh Circuit reviewed the case. The court held that Wood had standing because the harm he alleged was analogous to defamation, a recognized common law injury. The court also found that there was a genuine issue of material fact regarding whether SCS should have known about Wood's dispute. Specifically, the court noted conflicting evidence about SCS's understanding of what constitutes a disputed account and whether SCS shared PenFed's interpretation that Wood's silence meant he no longer disputed the debt. The court concluded that SCS's failure to communicate Wood's dispute could be considered negligent under the FDCPA. Consequently, the Seventh Circuit reversed the district court's summary judgment and remanded the case for further proceedings. View "Wood v. Security Credit Services, LLC" on Justia Law