Justia Consumer Law Opinion Summaries

A fatal car accident involving an eighteen-year-old driving a 2013 Toyota Scion led to a lawsuit by the driver’s estate against Toyota and Subaru, who had jointly developed the vehicle. The plaintiff alleged negligence, product liability, and violations of North Carolina’s Unfair and Deceptive Trade Practices Act, claiming that design defects caused the occupant compartment to collapse and a fire to spread, ultimately resulting in the driver’s death. During discovery, the plaintiff requested extensive documents and depositions, including English translations of Japanese-language materials. Toyota and Subaru objected to several document requests and deposition topics, and disputes arose regarding the timing and sufficiency of their responses.The Superior Court of Robeson County granted the plaintiff’s motions to compel, ordered the production of additional documents (including English translations), and mandated that Toyota and Subaru’s corporate representatives testify to all noticed deposition topics without further objection. When the defendants failed to comply as ordered, the trial court imposed sanctions, deeming certain facts established against them—including elements of duty and breach in the plaintiff’s product liability claim—and struck their regulatory compliance defense. Toyota and Subaru appealed, challenging the discovery and sanctions orders.The North Carolina Court of Appeals vacated the sanctions order and reversed the requirement to translate documents but otherwise affirmed the discovery order, holding that most of the trial court’s actions were not an abuse of discretion. The Supreme Court of North Carolina reviewed only the remaining issues in the discovery order. It held that the trial court erred by enforcing a fourteen-day deadline for objections to document requests in deposition notices (rather than the seven days required by the rules), and by waiving defendants’ objections to deposition topics for not seeking a protective order. Accordingly, the Supreme Court reversed the relevant portions of the Court of Appeals’ decision, instructed it to vacate the discovery order, and remanded for further proceedings. View "Sessoms v. Toyota Motor Sales, U.S.A., Inc" on Justia Law

A married couple enrolled their children at a private school that, until the 2020–2021 academic year, offered a traditional curriculum. Following the events of summer 2020, the school shifted its curriculum to emphasize issues of race and gender identity. The parents became concerned after learning their sixth-grade child was exposed to controversial teachings and age-inappropriate materials. They joined a group of parents to express their concerns to the school’s leadership. After the parents met with school officials, the school abruptly expelled their children and accused the parents of making racist remarks, which the parents deny.The parents filed suit in Superior Court, Mecklenburg County, alleging breach of contract, fraud, unfair and deceptive trade practices, defamation, and other claims. The trial court, Judge Lisa C. Bell presiding, dismissed all claims except for breach of the implied covenant of good faith and fair dealing. The parents voluntarily dismissed that remaining claim to appeal. The North Carolina Court of Appeals affirmed the trial court’s dismissal of all other claims.The Supreme Court of North Carolina reviewed the case to determine whether the parents’ complaint satisfied the state’s “notice pleading” standard for surviving a motion to dismiss under Rule 12(b)(6). The court held that the parents adequately alleged claims for breach of contract, fraud, unfair and deceptive trade practices based on their fraud allegations, and defamation. The court found that their breach of contract claim was viable because they alleged the school expelled their children under a false pretext, in violation of the contract. The fraud and defamation claims also survived due to sufficient factual allegations. The Court reversed the Court of Appeals in part and remanded for further proceedings on these claims, but affirmed or declined to review the dismissal of other claims. View "Turpin v. Charlotte Latin Schools, Inc" on Justia Law

A group of plaintiffs, including a data privacy company serving public officials and several individually named police and correctional officers, alleged that a broad range of defendants, such as data brokers and marketing companies, continued to disclose the home addresses and phone numbers of individuals protected under Daniel’s Law after receiving formal requests to cease disclosure. The data privacy company, acting as an assignee for thousands of covered persons, facilitated these take-down requests. Plaintiffs claimed that, despite notice, defendants failed to comply within the statutory period, exposing individuals to risks such as stalking and threats.After the plaintiffs filed numerous civil actions in New Jersey state court, defendants removed the cases to federal court, where the United States District Court for the District of New Jersey, with a judge from the Eastern District of Pennsylvania presiding, consolidated and considered the cases. Defendants moved to dismiss, arguing Daniel’s Law was facially unconstitutional, particularly objecting to the apparent lack of a mental state requirement for liability. The district court denied the motions, reasoning that the statute could be interpreted to require at least negligence, not strict liability, for actual damages, to avoid constitutional concerns.On appeal, the United States Court of Appeals for the Third Circuit certified to the Supreme Court of New Jersey the question of whether Daniel’s Law requires a mental state for liability. The Supreme Court of New Jersey held that Daniel’s Law, as currently written, does not require any mental state—such as negligence, knowledge, or recklessness—to impose liability for actual damages under its civil cause of action. The Court based its decision on the statute’s text, legislative history, and the legislature’s omission of a mental state requirement where such language was used elsewhere in the statute. View "Atlas Data Privacy Corp. v. We Inform, LLC" on Justia Law

A software company operated an online payment portal used by residents, including the plaintiff, to pay rent for Maryland apartments. Each time the plaintiff paid rent through the portal, she was charged a convenience fee. To complete a transaction, users were required to check a box agreeing to the portal’s hyperlinked terms and conditions, which included an arbitration provision, a clause allowing unilateral changes to the agreement, and a notice provision stating that notices would be posted on the portal. The plaintiff, on behalf of herself and similarly situated individuals, filed a class action, alleging that the company unlawfully acted as an unlicensed collection agency by collecting these fees.After the action was removed to the U.S. District Court for the District of Maryland, the company moved to compel arbitration based on the terms and conditions. The plaintiff opposed, arguing that the arbitration agreement was unenforceable under Maryland law because the company’s ability to unilaterally change the terms without advance notice rendered its promise to arbitrate illusory. The district court agreed, finding that the contract was a browsewrap agreement and that the modification and notice clauses allowed the company to change terms at will without meaningful notice or an opportunity for users to opt out before changes became binding.On appeal, the United States Court of Appeals for the Fourth Circuit reviewed the district court’s denial of the motion to compel arbitration de novo. The Fourth Circuit held that, under Maryland law, the arbitration agreement was unenforceable for lack of consideration because the company’s promise to arbitrate was illusory. The court reasoned that the change-in-terms clause gave the company unfettered discretion to modify the agreement at any time, without advance notice, thus failing to bind the company meaningfully. The court affirmed the district court’s judgment. View "Trimble v. Entrata, Inc." on Justia Law

Several individuals who purchased and used Samsung smartphones and tablets alleged that the preinstalled Samsung Gallery app created and stored face templates by scanning photographs for facial geometry, thereby capturing biometric data. They claimed that Samsung’s proprietary algorithm measured unique facial features, and the resulting face templates were stored locally on their devices. Plaintiffs argued that Samsung controlled the biometric data, since users had no way to disable the facial recognition features, and Samsung’s privacy policy indicated it “may collect” such information. They further contended that Samsung lacked a written policy for retention and destruction of biometric data and failed to provide required disclosures or obtain releases, in violation of the Illinois Biometric Privacy Information Act (“BIPA”).The plaintiffs initially filed their suit in Illinois state court, seeking class certification for all Illinois residents whose biometric data was collected or stored by Samsung. Samsung removed the case to the United States District Court for the Northern District of Illinois under the Class Action Fairness Act. After several amended complaints and motions to dismiss, the district court ultimately granted Samsung’s third motion to dismiss with prejudice, finding that the plaintiffs failed to plausibly allege that Samsung possessed or exerted control over the biometric data stored on users’ devices.The United States Court of Appeals for the Seventh Circuit reviewed the district court’s dismissal de novo. The court held that under both Illinois law and BIPA, “possession,” “collection,” and “capture” require a degree of control by the company over the biometric data. Because the plaintiffs’ allegations did not plausibly show that Samsung itself controlled the facial geometry data generated by the app, the Court affirmed the district court’s judgment dismissing the complaint. View "G.T. v Samsung Electronics America, Inc." on Justia Law

The plaintiff leased a new vehicle from the defendant, but soon experienced persistent defects that could not be repaired despite multiple attempts. After the defendant failed to promptly replace the vehicle or provide restitution under the Song-Beverly Consumer Warranty Act, the plaintiff filed suit for breach of warranty, seeking damages and attorney fees. During litigation, the defendant made a statutory settlement offer pursuant to Code of Civil Procedure section 998, presenting two alternative sets of terms: a lump-sum payment or a reimbursement option requiring proof of damages, both accompanied by provisions for attorney fees and costs.In the Los Angeles County Superior Court, the jury awarded the plaintiff damages totaling $76,155.27, less than the lump-sum alternative in the defendant’s 998 offer. The trial court found the offer valid, imposed section 998’s cost-shifting penalty, limited plaintiff’s postoffer costs and attorney fees, and awarded defendant its postoffer costs. The plaintiff appealed, contesting the validity of the alternative-choice offer. The California Court of Appeal upheld the trial court’s awards, finding the lump-sum alternative sufficiently certain but deemed alternative-choice offers categorically invalid for cost-shifting purposes.The Supreme Court of California reviewed whether an offer under section 998 that presents two independent, alternative sets of terms for acceptance is categorically invalid due to uncertainty. The Court held that such an alternative-choice offer can be valid if it clearly presents the alternatives and at least one alternative is sufficiently certain to permit accurate valuation at the time the offer is made. If the judgment or award does not exceed the highest valued, valid alternative, cost-shifting under section 998 is permitted. The Court affirmed the trial court’s award, but rejected the Court of Appeal’s categorical prohibition of alternative-choice offers under section 998. View "Gorobets v. Jaguar Land Rover North America, LLC" on Justia Law

Three individuals, all cast members of a reality television show, became embroiled in a public scandal when one, Rachel Leviss, had a secret sexual affair with another cast member, Tom Sandoval, who was in a relationship with fellow cast member Ariana Madix. The affair came to light when Sandoval’s phone fell into Madix’s possession during a public event. Upon accessing his phone—using a passcode known to her from their longstanding relationship—Madix discovered and recorded sexually explicit videos of Leviss that Sandoval had secretly made. Madix then sent these videos to Leviss and informed the show’s production team, after which the affair became widely publicized.Leviss filed a civil suit in the Superior Court of Los Angeles County against Sandoval and Madix, asserting causes of action for violation of privacy and “revenge porn,” among others. She alleged that Madix had obtained and disseminated the explicit videos without consent, causing Leviss emotional and reputational harm. Madix responded with a special motion to strike under California’s anti-SLAPP statute (Code of Civil Procedure § 425.16), arguing that her conduct was protected as activity in connection with a public issue involving public figures. The Superior Court denied Madix’s motion, finding that the conduct did not constitute protected activity under the anti-SLAPP statute, and that the gravamen of Leviss’s claims was private conduct, not public commentary.The California Court of Appeal, Second Appellate District, Division Eight, reviewed the case. The appellate court affirmed the Superior Court’s ruling, holding that Madix failed to meet her burden to show that Leviss’s claims arose from constitutionally protected activity under the anti-SLAPP statute. The court determined that the unauthorized acquisition and dissemination of private sexual videos did not qualify as conduct in connection with a public issue or a matter of public interest as required by the statute. View "Leviss v. Madix" on Justia Law

Benjamin Hoskins and his wife, Leanne Rodgers, participated in a telemarketing operation that defrauded consumers of more than $130 million by selling worthless “business coaching” services. The Federal Trade Commission (FTC) obtained a judgment against Hoskins for over $130 million and against Rodgers for approximately $1.5 million, reflecting the proceeds they received from the scam. Hoskins and Rodgers took steps to hinder collection by transferring assets through trusts and shell entities, including a residence in Las Vegas held via a trust in which they were both trustees and beneficiaries.The United States District Court for the District of Nevada initially blocked the FTC’s attempts to enforce the judgment, concluding that Nevada’s six-year statute of limitations for enforcement of judgments barred the FTC’s action against Rodgers. The court also quashed a writ of execution the FTC obtained under the Federal Debt Collection Procedure Act (FDCPA), reasoning that Nevada law required a separate action to prove the trust holding the property was Rodgers’s alter ego before the property could be levied.On appeal, the United States Court of Appeals for the Ninth Circuit reversed both of the district court’s rulings. The Ninth Circuit held that the FDCPA preempts inconsistent state statutes of limitations and has no time limit for collecting debts owed to the federal government by writ of execution. The court also determined that the judgment against Rodgers, which is payable to the FTC, qualifies as a “debt” under the FDCPA, regardless of whether the proceeds are ultimately distributed to victims. Additionally, the Ninth Circuit held that the FTC was not required to file a separate alter ego action under state law to levy property held in trust; under the FDCPA, the FTC may levy any property in which the judgment debtors have a substantial nonexempt interest. The case was remanded for further proceedings consistent with these holdings. View "FEDERAL TRADE COMMISSION V. HOSKINS" on Justia Law

The plaintiff purchased a portable speaker from a Wisconsin-based retailer, believing she was receiving a $30 discount off a regular price of $129.99. However, she later discovered that the retailer almost always sold the speaker at the “sale” price of $99.99 and rarely at the higher “regular” price. She claimed she would not have bought the speaker if she had known this, and brought suit on behalf of a proposed nationwide class, alleging the retailer had violated Wisconsin’s Unfair Trade Practices Act by using misleading price comparison advertising. The suit was filed in federal court, invoking the Class Action Fairness Act as the basis for subject matter jurisdiction.The United States District Court for the Western District of Wisconsin dismissed the complaint for lack of subject matter jurisdiction, finding that the plaintiff had not adequately alleged pecuniary loss under Wisconsin law. The court reasoned that, for damages under Wisconsin’s Unfair Trade Practices Act, the plaintiff must plead that the product was defective or worth less than the price paid, or otherwise did not receive the benefit of the bargain. Because the plaintiff did not make such allegations, the court concluded it was legally impossible for her to meet the required amount-in-controversy for class action jurisdiction.The United States Court of Appeals for the Seventh Circuit reviewed the dismissal de novo. It found Wisconsin law unclear on whether a consumer who was misled by false price comparison advertising, but received a product worth the purchase price, suffers a pecuniary loss. Noting a split in authority and uncertainty in Wisconsin precedent, the appellate court certified this question to the Wisconsin Supreme Court and stayed further proceedings pending an answer. View "Cortez Gomez v Kohl's Corporation" on Justia Law

The Michigan Attorney General initiated an investigation into Eli Lilly and Company's insulin pricing practices, alleging potential violations of the Michigan Consumer Protection Act (MCPA). Specifically, the Attorney General asserted there was probable cause to believe Eli Lilly's pricing strategies for insulin, including disparities between branded and generic products and differences between U.S. and international prices, constituted violations of specific MCPA provisions. The Attorney General sought authorization from the Ingham Circuit Court to issue investigative subpoenas and also filed a complaint for declaratory relief, asking the court to rule that the investigation and any future enforcement action were not barred by a statutory exemption for conduct "specifically authorized" by law.The Ingham Circuit Court found probable cause for the investigation and authorized subpoenas. However, Eli Lilly argued that, based on prior Michigan Supreme Court decisions—Smith v Globe Life Ins Co and Liss v Lewiston-Richards, Inc.—the MCPA exemption for regulated conduct applied, as the sale of pharmaceuticals is regulated by law. The parties agreed to pause the subpoenas pending resolution of the declaratory relief action. The circuit court granted summary disposition for Eli Lilly, concluding the exemption applied, and the Michigan Court of Appeals affirmed this decision.On review, the Michigan Supreme Court overruled its previous broad interpretation of the MCPA exemption in Smith and Liss, holding instead that courts must consider whether the specific transaction or conduct at issue, rather than the general activity, is "specifically authorized" by law. The Court found that Smith and Liss had improperly expanded the exemption, undermining the MCPA's purpose. The Supreme Court reversed the Court of Appeals, vacated the circuit court's order, and remanded for further proceedings to determine if Eli Lilly's specific conduct was exempt under the new, narrower standard. View "Attorney General v. Eli Lilly And Company" on Justia Law