Justia Consumer Law Opinion Summaries
Kenneth Chapman v. Tristar Products, Inc.
Plaintiffs sued, claiming that certain Tristar pressure cookers had defective lids that could come open while the cookers were in use, exposing the user to possible injury. The district court certified three separate state classes for trial: Ohio, Pennsylvania, and Colorado. During a trial recess, the parties agreed to a settlement with a nationwide class. The parties agreed to the principal amount but, with Tristar’s agreement not to dispute an award at or below $2.5 million, deferred determination of attorneys’ fees. Class members would receive a coupon to purchase a different Tristar product and a warranty extension. The court calculated the value of the coupons and warranty extensions as $1,020,985 and approved attorneys’ fees of $1,980,382.59. At a fairness hearing, Arizona made its first appearance, arguing as amicus, along with the U.S. Department of Justice, that the settlement was unfair because of the division between the principal settlement and attorneys’ fees. None of the class joined in objections to the settlement. The court indicated that it would approve the settlement. Before the court issued its order, Arizona sought to officially intervene under either Rule 24(a) Rule 24(b). The court rejected each of Arizona’s requests for lack of Article III standing. The Sixth Circuit dismissed an appeal, rejecting the state’s arguments that it had standing under the parens patriae doctrine, under the Class Action Fairness Act, 28 U.S.C. 1715, and because it has a participatory interest as a “repeat player.” View "Kenneth Chapman v. Tristar Products, Inc." on Justia Law
Zabriskie v. Federal National Mortgage Association
The Ninth Circuit filed an order amending its prior opinion, denying panel rehearing, and denying, on behalf of the court, rehearing en banc; and an amended opinion and dissent. The panel reversed the district court's judgment for plaintiffs in an action brought under the Fair Credit Reporting Act (FCRA), alleging that Fannie Mae falsely communicated to potential mortgage lenders, via its proprietary software, called Desktop Underwriter, that plaintiffs had a prior foreclosure on a mortgage account. The panel held that Fannie Mae is not a consumer reporting agency because, even if it assembles or evaluates consumer information through Desktop Underwriter, it does not do so for the purpose of furnishing consumer reports to third parties. Therefore, the panel held that the district court erred by granting plaintiffs' motion for summary judgment and denying Fannie Mae's cross-motion on this issue. The court also vacated the award of attorney's fees and costs to plaintiffs. View "Zabriskie v. Federal National Mortgage Association" on Justia Law
Keodalah v. Allstate Ins. Co.
While driving his truck, Moun Keodalah and an uninsured motorcyclist collided. After Keodalah stopped at a stop sign and began to cross the street, the motorcyclist struck Keodalah's truck. The collision killed the motorcyclist and injured Keodalah. Keodalah's insurance policy with Allstate Insurance Company included underinsured motorist (UIM) coverage. Keodalah requested Allstate pay him his UIM policy limit of $25,000. Allstate refused, offering $1,600 based on its assessment Keodalah was 70% at fault for the accident. After Keodalah asked Allstate to explain its evaluation, Allstate increased its offer to $5,000. Keodalah sued Allstate asserting a UIM claim. The ultimate issue before the Washington Supreme Court in this case was whether RCW 48.01.030 provided a basis for an insured's bad faith and Consumer Protection Act claims against an insurance company's claims adjuster. The Supreme Court held that such claims were not available, and reversed the Court of Appeals. View "Keodalah v. Allstate Ins. Co." on Justia Law
Williams-Sonoma Song-Beverly Act Cases
The Song-Beverly Credit Card Act (Civ. Code 1747) makes it unlawful for merchants to request or require customers to provide “personal identification information” as a condition to accepting a credit card for payment. In 2015, the court of appeal held (Harrold) the Act does not prohibit merchants from requesting such information unless the request is made under circumstances that would lead a reasonable person to believe the information is required to complete the transaction. The trial court decertified a class of plaintiffs who alleged that retailer Williams-Sonoma violated the Act by requesting their zip codes or email addresses because any violation would depend on the circumstances of the specific transaction. Zip codes and emails were requested regardless of the form of payment. If the customer declined, the sales clerk bypassed the request. Employees had discretion not to solicit the information at all and could explain that the information was not required and was only being collected for marketing purposes. Williams-Sonoma neither rewards its employees for collecting the information nor disciplines them if they do not. Williams-Sonoma required each of its California stores to post signs at the cash registers stating that zip codes and email addresses were requested solely for marketing purposes and were not required. The court of appeal affirmed, finding that the court correctly applied the Harrold legal standard and its ruling is supported by substantial evidence. View "Williams-Sonoma Song-Beverly Act Cases" on Justia Law
State, Department of Business & Industry, Financial Institutions Division v. TitleMax of Nevada, Inc.
The Supreme Court affirmed in part and reversed in part an order of the district court granting a petition for judicial review of a decision of the administrative law judge (ALJ) and vacated the ALJ's order finding that the Grace Period Payment Deferment Agreement (GPPDA) marketed by TitleMax of Nevada, Inc. violated Nev. Rev. Stat. 604A.445 and Nev. Rev. Stat. 604A.210, holding that the GPPDA impermissibly extended the duration of the loan. In 2014, TitleMax began offering the GPPDA, marketed as an amendment and modification to its 210-day loan and under which TitleMax collected seven months of interest-only payments calculated based on a static principal balance and then collected seven months of payments amortizing principal. The Nevada Department of Business and Industry, Financial Institutions Division brought the underlying administrative disciplinary action alleging that TitleMax violated sections 604A.445(3) and 604A.210. The ALJ ordered TitleMax to cease and desist offering the GPPDA and sanctioned TitleMax for willfully violating the statutes. The district court vacated the ALJ's order. The Supreme Court reversed in part, holding (1) because the GPPDA required borrowers to make unamortized payments and consequently charged "additional interest" it violated the pertinent statutes; and (2) TitleMax's statutory violation was not "willful" and thus did not warrant statutory sanctions. View "State, Department of Business & Industry, Financial Institutions Division v. TitleMax of Nevada, Inc." on Justia Law
Taffe v. First National Bank of Alaska
Borrowers brought suit alleging that their lending bank had engaged in fraudulent real estate lending practices. The bank responded that statutes of limitations barred the borrowers’ fraud claims. Following an evidentiary hearing to establish relevant dates for the statutes of limitations inquiry, the superior court entered judgment and awarded attorney’s fees in the bank’s favor. The borrowers appealed, arguing that the superior court erred in its factual and legal determinations and otherwise violated their due process rights. Finding no reversible error, the Alaska Supreme Court affirmed the superior court’s rulings. View "Taffe v. First National Bank of Alaska" on Justia Law
Koehn v. Delta Outsource Group, Inc/
Delta, a collection agency, sent Koehn a letter stating that the “current balance” of Koehn’s debt was $2,034.03. Koehn claimed the letter was misleading under the Fair Debt Collection Practices Act, 15 U.S.C. 1692 because the phrase “current balance” implied that her balance could grow, even though her account was “static.” Additional interest and fees could no longer be added to the balance. The statute requires a debt collector to state “the amount of the debt,” and section 1692e prohibits more generally “any false, deceptive, or misleading representation or means.” The Seventh Circuit affirmed dismissal. To state a legally viable claim, Koehn needed to allege plausibly that Delta’s use of the “current balance” phrase “would materially mislead or confuse an unsophisticated consumer.” An unsophisticated consumer is “uninformed, naïve, or trusting,” but nonetheless possesses “reasonable intelligence,” basic knowledge about the financial world, and “is wise enough to read collection notices with added care.” There is nothing inherently misleading in the phrase “current balance.” Delta’s letter contained no directive to call for a “current balance,” nor does it include any language implying that “current balance” means anything other than the balance owed. “The Act is not violated by a dunning letter that is susceptible of an ingenious misreading.” View "Koehn v. Delta Outsource Group, Inc/" on Justia Law
Accettura v. Vacationland, Inc.
Plaintiffs purchased a recreational vehicle (RV) from Vacationland for $26,000.25. When it leaked during a rainstorm, they brought it in for repair. When it leaked again, causing extensive damage, they brought it back. A little more than two weeks after they dropped it off the second time and without a timetable for when the vehicle would be repaired, they told the seller that they no longer wanted the RV and asked for their money back. Plaintiffs sued, citing revocation of acceptance under the Magnuson-Moss Warranty-Federal Trade Commission Improvement Act, 15 U.S.C. 2310(d); breach of implied warranty of merchantability under the Magnuson-Moss Act; revocation of acceptance and cancellation of contract under Illinois’s adoption of the Uniform Commercial Code; and return of purchase price under the UCC. Defendant argued that plaintiffs’ failure to give it a reasonable opportunity to cure was fatal to their claims. The circuit court granted the defendant summary judgment. The appellate court affirmed. Plaintiffs sought review of the revocation of acceptance claim under the UCC (810 ILCS 5/2- 608(1)(b)). The Illinois Supreme Court reversed. The plain language of subsection 2-608(1)(b) does not require that the buyer give the seller an opportunity to cure a substantial nonconformity before revoking acceptance. View "Accettura v. Vacationland, Inc." on Justia Law
Blanks et al. v. TDS Telecommunications LLC
Jason Blanks, Peggy Manley, Kimberly Lee, Nancy Watkins, Randall Smith, Trenton Norton, Earl Kelly, Jennifer Scott, and Alyshia Kilgore (referred to collectively as "the customers") appealed the denial of a motion to compel arbitration and a declaratory judgment entered in an action brought by TDS Telecommunications LLC, and its two affiliates, Peoples Telephone Company, Inc., and Butler Telephone Company, Inc. (referred to collectively as "the Internet providers"). The customers subscribed to Internet service furnished by the Internet providers; their relationship was governed by a written "Terms of Service." The customers alleged that the Internet service they have received was slower than the Internet providers promised them. At the time the customers learned that their Internet service was allegedly deficient, the Terms of Service contained an arbitration clause providing that "any controversy or claim arising out of or relating to [the Terms of Service] shall be resolved by binding arbitration at the request of either party." In the declaratory-judgment action, the trial court ruled that the Internet providers were not required to arbitrate disputes with the customers. The Alabama Supreme Court determined the arbitration clause in the applicable version of the Terms of Service included an agreement between the Internet providers and the customers that an arbitrator was to decide issues of arbitrability, which included the issue whether an updated Terms of Service effectively excluded the customers' disputes from arbitration. Accordingly, the Supreme Court reversed the trial court's denial of the customers' motion to compel arbitration and its judgment declaring the updated Terms of Service "valid and enforceable," and remanded the case for further proceedings. View "Blanks et al. v. TDS Telecommunications LLC" on Justia Law
Posted in: Arbitration & Mediation, Communications Law, Consumer Law, Contracts, Supreme Court of Alabama
Hamann v. Carpenter
The First Circuit reversed in part and affirmed in part the decision of the district court dismissing with prejudice Plaintiff's claims of alleging that he was denied the fruits of a profitable exclusive-seller agreement for the sale of a Ferrari when Defendant caused the breach of that agreement by threatening economic harm to the other party to the contract, holding that Plaintiff plausibly pleaded his claim of tortious interference with an existing contract. Plaintiff brought suit against Defendant alleging claims of tortious interference with an advantageous business relationship, tortious interference with an existing contract, and violations of Massachusetts's Consumer Protection Law, Mass. Gen. Laws ch. 93A, 11. The district court dismissed the suit, concluding that Plaintiff had failed plausibly to allege any impermissible motive or means of interference with Plaintiff's business relationships or existing contracts. The First Circuit reversed in part, holding (1) Plaintiff plausibly pleaded that Defendant harmed Plaintiff by tortiously interfering with the contract; and (2) the district court correctly dismissed Plaintiff's remaining claims. View "Hamann v. Carpenter" on Justia Law