Justia Consumer Law Opinion Summaries

Wilson, with the help of co-signer Allan, took out a student loan serviced by PHEAA. The two submitted a written request for forbearance on the loan and, in doing so, consented to calls to their cell phones. In October 2013, however, both requested that PHEAA stop calling about the loan. Despite their requests, PHEAA called Allan 219 times and Wilson 134 times, after they revoked consent. They claim that those calls violated the Telephone Consumer Protection Act, 47 U.S.C. 227 (TCPA), which generally makes it a finable offense to use an automatic telephone dialing system (ATDS) to make unconsented-to calls or texts. The Sixth Circuit affirmed summary judgment in favor of the plaintiffs. Section 227(a) provides that a device that generates and dials random or sequential numbers qualifies as an ATDS. The Avaya system used by PHEAA dials from a stored list of numbers only. The court concluded that the plain text of section 227, read in its entirety, makes clear that devices that dial from a stored list of numbers are subject to the autodialer ban. View "Allan v. Pennsylvania Higher Education Assistance Agency" on Justia Law

The Supreme Judicial Court affirmed the judgment of the superior court denying Defendant's motion to compel arbitration of Plaintiff's claims that Defendant had engaged in improper debt collection practices and debt collection regulations, holding that there was no error in the denial of Defendant's motion to compel arbitration. Plaintiff allegedly owed debt to Enterprise Rent-A-Car Company of Boston, LLC for damage to a rental vehicle. Enterprise assigned the debt to Defendant for collection. Plaintiff filed a class action complaint against Defendant, alleging that Defendant made too frequent phone contact with him and other debtors. Defendant sought to compel arbitration of Plaintiff's claims pursuant to the rental contract between Plaintiff and Enterprise. The superior court denied the motion to compel. The Supreme Court affirmed, holding that reasonable minds could differ as to whether the arbitration provision in the contract was applicable to claims brought against Defendant, and therefore, Defendant did not put forth the clear and definite evidence of intent that it must to be entitled to enforce the arbitration provision as a third-party beneficiary. View "Landry v. Transworld Systems Inc." on Justia Law

In 2013, Zablocki had x-rays administered by Medical-Midwest. Zablocki’s insurance provider covered some of the costs, Eventually, Medical-Midwest turned to Merchants for debt collection. After about two years without success collecting the debts, Merchants reported to a consumer reporting agency, TransUnion, that Zablocki owes four debts of $50, $62, $70, and $210, corresponding to each x-ray charge. Zablocki filed suit under the Fair Debt Collection Practices Act, 15 U.S.C. 1692f, arguing that by reporting the obligations separately, rather than aggregated together, Merchants falsely represented the “character" of the debt, in violation of section 1692e(2)(A), and used an “unfair or unconscionable means” to collect or attempt to collect a debt, in violation of section 1692f. 15 U.S.C. §§ 1692e(2)(A), 1692f. The Seventh Circuit subsequently held that reporting debts separately, rather than aggregated together, does not misrepresent the “character” of a debt. Zablocki accordingly abandoned his section 1692e challenge. The Seventh Circuit affirmed the dismissal of the section 1692f claim. From the perspective of an unsophisticated but reasonable consumer, the alleged conduct is reasonable. It is not deceptive or outrageous for a collector to report individually debts that correspond to different charges, thereby communicating truthfully how much is owed on each debt. View "Zablocki v. Merchants Credit Guide Co." on Justia Law

Plaintiffs filed a putative class action against pet food manufacturers and others, challenging the marketing of so-called prescription pet food under California's consumer protection laws and federal antitrust law. Plaintiffs alleged that the prescription requirement and advertising lead reasonable consumers falsely to believe that such food has been subject to government inspection and oversight, and has medicinal and drug properties, causing consumers to pay more or purchase the product when they otherwise would not have. The Ninth Circuit reversed the district court's dismissal of plaintiffs' claims under California's Unfair Competition Law, False Advertising Law, and Consumer Legal Remedies Act for failure to state a claim. The panel held that the district court erred in dismissing the California state law consumer protection claims, because plaintiffs have sufficiently alleged a deceptive practice under the reasonable consumer test. The panel also held that plaintiffs' complaint satisfies the Federal Rule of Civil Procedure 9(b) heightened pleading standard in alleging fraud. In this case, plaintiffs alleged sufficient facts to show that prescription pet food and other pet food were not materially different. Finally, the panel held that plaintiffs alleged sufficient reliance based on the word "prescription" and the "Rx" symbol. View "Moore v. Mars Petcare US, Inc." on Justia Law

Plaintiffs filed a putative class action raising warranty claims arising out of crashes or injuries caused by the alleged "rollaway effect" of certain Honda Civic vehicles. The district court dismissed plaintiffs' claims under the Magnuson-Moss Warranty Act (MMWA) and state law for express and implied warranty against Honda. The Ninth Circuit held that the Class Action Fairness Act (CAFA) may not be used to evade or override the MMWA's specific numerosity requirement. In this case, plaintiffs name only three individuals, but argue that, by satisfying CAFA requirements, they are relieved of the MMWA's obligation to name at least one hundred plaintiffs. The panel rejected plaintiffs' argument and affirmed the district court's dismissal of the MMWA claim. The panel vacated the district court's dismissal of the state law claims, holding that the district court erred in not considering whether plaintiffs' state law claims met the diversity requirements of CAFA even if the MMWA claim failed. Therefore, the district court improperly dismissed the state law claims based only on lack of supplemental jurisdiction. View "Floyd v. American Honda Motor, Co." on Justia Law

In this case where Plaintiff selected the remedy of restitution under the Song-Beverly Consumer Warranty Act, Cal. Civ. Code 1790 et seq. after Mercedes-Benz USA LLC (Mercedes) was unable to repair defects in the vehicle Plaintiff leased from Mercedes the Supreme Court held that Mercedes was required to reimburse vehicle registration renewal and nonoperation fees Plaintiff paid if the fees were incurred as a result of Mercedes' breach of its duty to promptly provide a replacement vehicle or restitution. At issue was whether the Act required Mercedes to reimburse the vehicle registration renewal and nonoperation fees Plaintiff paid after the initial lease of his vehicle either as collateral charges or as incidental damages. The trial court excluded the vehicle registration renewal fees and the nonoperation fee from the restitution award. The court of appeals affirmed. The Supreme Court reversed and remanded the case for further proceedings, holding (1) the fees at issue were not recoverable as collateral charges because they were not auxiliary to and did not supplement the price paid for the vehicle; but (2) the fees were recoverable as incidental damages if they were incurred as a result of the manufacturer's breach of its duty to promptly provide a replacement vehicle or restitution under the Act. View "Kirzhner v. Mercedes-Benz USA, LLC" on Justia Law

Navient sells student loans to borrowers and services and collects on student loans. Its “subprime loans,” which had high variable interest rates and origination fees, benefited schools by maximizing enrollment. Student borrowers were not informed that the loans had a high likelihood of default. In 2000-2007, 68-87% of Navient’s high-risk loans defaulted. Navient allegedly steered borrowers into consecutive forbearances after they had demonstrated a long-term inability to repay their loans. Navient would sometimes place borrowers in forbearance even though they would have qualified for $0 per month payments in an Income-Driven Repayment (IDR) plan. In 2011-2015, more than 60% of Navient’s borrowers who enrolled in IDR plans failed timely to renew their enrollment, allegedly because of deficient notifications. Navient also allegedly made misrepresentations concerning releases for cosigners and misapplied payments, resulting in borrowers and cosigners being improperly charged late fees and increased interest. Pennsylvania sued Navient under the Consumer Financial Protection Act, 12 U.S.C. 5552, and the state’s Unfair Trade Practices and Consumer Protection Law. Nine months earlier, the Consumer Financial Protection Bureau and the states of Illinois and Washington had filed similar lawsuits. The Third Circuit affirmed the denial of a motion to dismiss. The federal Act permits concurrent action. The Higher Education Act, 20 U.S.C. 1001, preempts state law claims based on failures to disclose required information but does not preempt claims based on affirmative misrepresentations. View "Commonwealth of Pennsylvania v. Navient Corp" on Justia Law

The Ninth Circuit affirmed the district court's grant of summary judgment in favor of defendants in an action brought by plaintiff, alleging that defendants' garnishment of his wages violated the Fair Debt Collection Practices Act and California law. The panel held that the Hatch Act Reform Amendments of 1993, the federal statute permitting garnishment of federal employees' wages, 5 U.S.C. 5520a, waived the federal government's sovereign immunity and subjected a federal employee's pay to legal process in the same manner and to the same extent as if the agency were a private person. Therefore, under the statute, federal employees' wages are subject to garnishment to the extent allowed by state law. In this case, plaintiff's federal wages were properly garnished under California law where the garnishment order was properly served on the federal government and plaintiff remained a government employee. The panel held that plaintiff's remaining arguments are unpersuasive. View "Farrell v. Boeing Employees Credit Union" on Justia Law

The Supreme Court reversed the order of the district court dismissing Plaintiff's complaint against Defendant, his student loan servicer, as expressly preempted by the Higher Education Act (HEA), 20 U.S.C. 1098g, holding that Plaintiff's state law claims were not expressly or implicitly preempted by the HEA. Plaintiff raised claims that Defendant violated the Consumer Protection Act, was negligent in its accounting of his payments, breached the implied covenant of good faith and fair dealing, and engaged in deceit, negligent misrepresentation, or constructive fraud. The district court dismissed the complaint, determining that the HEA expressly preempted Plaintiff's claims. The Supreme Court reversed, holding that Plaintiff's state law claims as pleaded were neither expressly preempted by 20 U.S.C. 1098g, nor were they preempted under conflict preemption, and thus the claims survived dismissal. View "Reavis v. Pennsylvania Higher Education Assistance Agency" on Justia Law

The plaintiffs obtained payday loans from AWL, an online entity owned by the Otoe-Missouria Tribe of Indians. The loan agreement stated that the loan was governed by tribal law and that the borrowers consented to the application of tribal law. The plaintiffs filed a purported class action, asserting that AWL charged unlawfully high interest rates, in violation of federal and Pennsylvania law, including the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1961-1968. The defendants moved to compel arbitration. The district court denied their motion, holding that the loan agreements, which provided that only tribal law would apply in arbitration, stripped the plaintiffs of their right to assert statutory claims and were therefore unenforceable. The Third Circuit affirmed. Because AWL permits borrowers to raise disputes in arbitration only under tribal law, and such a limitation constitutes a prospective waiver of statutory rights, its arbitration agreement violates public policy and is therefore unenforceable. View "Williams v. Medley Opportunity Fund II, LP" on Justia Law