Justia Consumer Law Opinion Summaries

A trade organization representing companies involved in a type of home-improvement loan, in which local governments finance property improvements for homeowners and collect repayment through property tax bills, challenged a new federal rule. For years, these loans were generally exempt from federal consumer credit regulations, as they were treated as tax assessments rather than credit. However, after Congress amended the Truth in Lending Act and directed the Consumer Financial Protection Bureau (CFPB) to regulate these loans and consider their unique features, the CFPB promulgated a rule classifying them as consumer credit transactions subject to federal disclosure, underwriting, and liability requirements.The case was first heard by the United States District Court for the Middle District of Florida. The district court denied the organization’s motion for a preliminary injunction to halt enforcement of the rule, and later granted summary judgment in favor of the CFPB, concluding that the Bureau acted within its statutory authority, did not act arbitrarily or capriciously, and did not violate the Tenth Amendment.On appeal, the United States Court of Appeals for the Eleventh Circuit reviewed the district court’s summary judgment de novo. The appellate court held that the CFPB properly exercised its rulemaking authority, as the loans in question meet the statutory definition of consumer credit transactions. The court found the Bureau’s reliance on available data reasonable and determined that the rule did not interfere with states’ sovereign taxing powers or unlawfully commandeer state officials. The Eleventh Circuit affirmed the summary judgment in favor of the CFPB and dismissed the appeal of the preliminary injunction denial as moot. View "Building Resilient Infrastructure & Developing Greater Equity, Inc. v. Consumer Financial Protection Bureau" on Justia Law

HYC Logistics, a Tennessee-based logistics provider, entered into a contract with OJCommerce (OJC), a Florida-based importer, to transport consumer goods from the Port of Los Angeles to OJC’s California warehouse. While the contract included provisions regarding liens, attorney’s fees, and Tennessee law, payment terms were negotiated separately by email. HYC Logistics billed OJC for various services, but OJC contested the charges, claiming they were inflated, and left a substantial balance unpaid despite making a partial payment. When OJC attempted to cancel a shipment, HYC Logistics exercised its lien rights over nine shipping containers and withheld delivery pending payment.The United States District Court for the Western District of Tennessee presided over the case, which involved both parties asserting multiple claims. A jury found OJC liable for breach of contract and validated HYC Logistics’ exercise of its lien, awarding damages to HYC Logistics. The jury also found HYC Logistics liable for violating the Tennessee Consumer Protection Act (TCPA) and for intentional or reckless misrepresentation, awarding damages to OJC on these claims. Post-trial motions resulted in the district court vacating the TCPA verdict against HYC Logistics but upholding the misrepresentation verdict. The court granted HYC Logistics attorney’s fees and denied OJC’s request for fees, and it rejected a motion for Rule 11 sanctions brought by Weiss, OJC’s owner.The United States Court of Appeals for the Sixth Circuit reviewed the consolidated appeal. It affirmed the district court’s rulings, upholding the jury’s verdicts on breach of contract and lien rights, finding no error in the jury instructions or damages awards, and agreeing with the district court’s grant of attorney’s fees to HYC Logistics. The Sixth Circuit also affirmed the denial of prejudgment interest and Rule 11 sanctions, concluding there was no abuse of discretion or objective unreasonableness in the district court’s decisions. View "HYC Logistics, Inc. v. OJCommerce, LLC" on Justia Law

After being rear-ended in 2018, the plaintiff claimed various injuries including concussion, neck pain, cognitive deficits, psychological issues, and TMJ dysfunction. She settled with the at-fault driver’s insurer for $45,000 but believed her damages exceeded that amount. She sought $25,000—the full underinsured motorist (UIM) policy—from her own insurer, Safeco. Safeco evaluated her claim, excluded certain medical expenses such as TMJ treatment, and initially offered $4,000, inviting further negotiation. The plaintiff rejected this and filed suit for breach of contract, enhanced damages (Hayseeds), and violations of the West Virginia Unfair Trade Practices Act (WVUTPA).The case originated in West Virginia state court but was removed by Safeco to the United States District Court for the Northern District of West Virginia. During discovery, the plaintiff produced new expert reports estimating much higher damages. Safeco then offered the full UIM policy limit of $25,000, which was memorialized in a joint motion signed by both parties, explicitly resolving the claim for policy proceeds and leaving only extracontractual and bad faith claims. The district court found the contractual claim settled, denied the plaintiff’s attempt to later seek reformation for higher policy limits, and granted summary judgment to Safeco on all claims. It found Safeco’s conduct reasonable and no evidence of a pattern of unfair trade practices.Reviewing the appeal, the United States Court of Appeals for the Fourth Circuit affirmed the district court’s summary judgment. The court held the breach of contract claim was resolved for $25,000 based on undisputed settlement evidence, rejected the plaintiff’s reformation argument, found Safeco’s conduct did not necessitate litigation for Hayseeds damages, and concluded there was no evidence of a general business practice violating WVUTPA. The judgment and orders of the district court were affirmed. View "Kreitzer v. Safeco Insurance Company of America" on Justia Law

The case arises from a series of contractual and property disputes among three parties in Vermont. In 2015, one party sold land to another, then was hired to construct a pond on a separate property owned by the buyer. The pond builder subcontracted a third party to clear-cut land for the pond and also hired this subcontractor to cut timber on his own property. Disagreements ensued regarding payment, completion of work, and use of equipment, resulting in a lawsuit in 2017. The plaintiff alleged breach of contract and violations under Vermont’s Prompt Pay Act against the buyer, as well as conversion and intentional infliction of emotional distress. Claims against the subcontractor included breach of contract and conversion. Both defendants counterclaimed, including allegations of consumer protection violations, assault, and extortion.The Vermont Superior Court, Windsor Unit, Civil Division, conducted a jury trial on most claims. The plaintiff was awarded $7,500 for breach of contract against the buyer, plus interest. The buyer received $5,000 for assault, and the subcontractor was awarded $15,100 on his civil extortion claim. Both the plaintiff and buyer requested attorney’s fees under the Prompt Pay Act, each arguing they were the substantially prevailing party. The court denied both motions, finding neither party substantially prevailed in the construction dispute. The court also allowed the subcontractor’s civil extortion claim to proceed.On appeal, the Vermont Supreme Court affirmed the trial court’s decisions. It held that the determination of a substantially prevailing party under the Prompt Pay Act is within the trial court’s discretion and confirmed that neither party substantially prevailed. The Supreme Court also upheld the recognition of a civil claim for restitution based on economic duress, consistent with Vermont precedent, and affirmed the damages awarded for extortion. The judgment was affirmed in all respects. View "Lamson v. Goode" on Justia Law

A couple entered into an agreement with a construction company to build a home on their property. The contract was signed at a time when the construction company’s registration as a contractor had lapsed, which violated the Idaho Contractor Registration Act (ICRA). During construction, numerous problems arose, including water leaks, mold, improper grading, and unfinished work. The couple paid substantial sums and alleged that the company issued fraudulent invoices for work not performed. After failed attempts to resolve the issues, the couple sued for breach of contract, breach of implied warranty of merchantability, and fraudulent billing. The construction company counterclaimed, arguing it was prevented from completing the work and that its registration lapse was inadvertent.The District Court of the Second Judicial District, Clearwater County, initially dismissed the construction company’s counterclaims due to its failure to register under ICRA. Later, the court granted summary judgment to the construction company, dismissing the couple’s claims and finding the contract void and unenforceable because of the registration violation. The court reasoned that neither party could enforce the contract and denied all claims arising from it, including those for breach of contract and fraudulent billing.On appeal, the Supreme Court of the State of Idaho reviewed the summary judgment de novo. The Court held that while ICRA prohibits an unregistered contractor from enforcing a contract, it does not bar the innocent project owner from doing so. Contracts entered in violation of ICRA are voidable, not void, and remain enforceable at the option of the project owner. The Supreme Court reversed the district court’s dismissal of the couple’s breach of contract claim and remanded for further proceedings, clarifying that the project owner may pursue claims under such a contract. Attorney fees were denied, but costs were awarded to the prevailing party. View "Kumm v. Work Shops & Sons " on Justia Law

After the foreclosure sale of a residential property in Charles Town, West Virginia, the purchasers sought to evict the previous owners, who had defaulted on their mortgage. The former owners responded by filing counterclaims and third-party claims against the mortgage servicing company and others, alleging breach of contract, tortious conduct, and violations of West Virginia’s consumer protection laws. The litigation centered on whether the mortgage servicer had properly handled a payment intended to cure the default: the former owners claimed they mailed a cashier’s check that was delivered before the sale, but were repeatedly told by customer service representatives that the check had not been received. The dispute focused on what actually happened to the payment and what representations were made by the servicer’s employees.The Circuit Court of Jefferson County initially denied the mortgage servicer’s request for a protective order and granted the former owners’ motion to compel depositions of two customer service employees located outside the United States. The circuit court determined these individuals were “managing agents” because they made decisions regarding the disputed payment and its investigation, thus subject to deposition upon notice alone. PHH Mortgage Corporation argued that international procedures, such as those in the Hague Convention, were required and that the depositions would be unduly burdensome and duplicative.The Supreme Court of Appeals of West Virginia reviewed the petition for a writ of prohibition. The court held that, under West Virginia’s procedural rules, a corporate party’s managing agents located outside the United States may be deposed upon notice alone, without resort to international procedures. It clarified the factors courts should consider in determining “managing agent” status. Finding no clear legal error or abuse of discretion by the circuit court, the Supreme Court of Appeals denied the requested writ of prohibition and upheld the circuit court’s discovery order. View "State ex rel. PHH Mortgage Corp. v. Hammer" on Justia Law

The State of Alaska sued several major retail pharmacies, alleging their practices contributed significantly to the opioid epidemic in Alaska. The State claimed these pharmacies failed to monitor, investigate, and report illegitimate opioid prescriptions, as required by federal and state controlled substances laws. The complaint alleged that such failures led to widespread opioid diversion, increased availability of prescription opioids, and a marked rise in addiction, overdose deaths, strain on healthcare and law enforcement systems, and harm to families and children. The State further asserted these actions constituted a public nuisance and violated the Alaska Unfair Trade Practices and Consumer Protection Act (UTPA).The State brought suit in the Superior Court of the State of Alaska, Third Judicial District, Anchorage, seeking injunctive relief and penalties under the UTPA, as well as abatement of the public nuisance. The pharmacies jointly moved to dismiss, arguing their conduct was exempt from the UTPA due to ongoing regulation and did not amount to public nuisance because the sale of lawful products cannot constitute such a claim and their actions were not the proximate cause of harm. The superior court granted the motion, holding that the alleged conduct was exempt from the UTPA and that the State failed to allege unreasonable interference with a public right, referencing City of Chicago v. Beretta U.S.A. Corp.On appeal, the Supreme Court of the State of Alaska reviewed the superior court’s dismissal de novo. The court affirmed the dismissal of most UTPA claims, holding the pharmacies’ conduct was regulated and thus exempt, except for one claim regarding deceptive promotion of compliance efforts, which was not specifically prohibited and thus survived. The court reversed the dismissal of the public nuisance claim, holding the State sufficiently alleged the pharmacies’ failures unreasonably interfered with public health and safety and declined to categorically bar public nuisance claims involving product sales. The case was remanded for further proceedings. View "State v. Albertsons Companies, Inc." on Justia Law

Two individuals who use a rideshare company’s smartphone application alleged that the company engaged in a deceptive pricing scheme. They claimed the company publicly advertises that the price displayed to consumers before a ride is “the price [the consumer will] pay at the end of the ride.” However, plaintiffs asserted that this displayed price is only an estimate and that the company frequently charges more than the advertised price. Plaintiffs sought an injunction to prevent the company from advertising prices lower than what consumers actually pay and requested restitution or disgorgement of any excess amounts paid.The Superior Court of California, City and County of San Francisco, reviewed the company’s motion to compel arbitration under its user agreement. That agreement required arbitration of individual claims and included a class action waiver, but also stated that if the waiver was unenforceable, claims subject to the waiver would proceed in court. Plaintiffs argued that the waiver violated California law (as interpreted in McGill v. Citibank, N.A.), since it barred them from seeking public injunctive relief. The trial court agreed, finding that the relief sought was public in nature and that the agreement did not require severance of plaintiffs’ requests for individual relief into arbitration.The California Court of Appeal, First Appellate District, Division Five, affirmed the trial court’s order. The appellate court held that plaintiffs sought public injunctive relief because their requested injunction would benefit all potential users of the platform, not simply themselves or a discrete group. The court further held that the arbitration agreement was ambiguous regarding whether only the injunctive request should proceed in court or whether all relief should. Applying the contra proferentem rule, the court construed the ambiguity against the company and concluded the entire action must remain in court. The order denying arbitration was affirmed. View "Bogguess v. Uber Technologies" on Justia Law

A consumer used an online platform to book short-term accommodations, paying through the platform’s payment processor. The payment processor, a subsidiary of the platform, collected, held, and later disbursed guest payments to hosts after the guest’s check-in. The platform’s terms specified that the payment processor acted as a collection agent for the host and retained any interest earned on guest funds held before disbursement. The platform did not claim to act as an escrow agent or company and explicitly disclaimed any broader agency relationship with users.The consumer sued in the Superior Court of San Francisco City and County, alleging that the defendants unlawfully operated as escrow agents without complying with California’s Escrow Law and engaged in unfair business practices, in violation of the state’s unfair competition law (UCL). The complaint also included claims under the Consumers Legal Remedies Act and for unjust enrichment. The trial court sustained the defendants’ demurrer to the operative complaint without leave to amend, finding that the plaintiff failed to allege facts sufficient to establish that the defendants acted as escrow holders or conducted escrow transactions as defined by law. Judgment was entered for the defendants.On appeal, the Court of Appeal of the State of California, First Appellate District, Division Three, reviewed the trial court’s order de novo. The appellate court held that the plaintiff’s complaint did not allege facts showing that the defendants acted as escrow agents under California law, as there was no indication that any party expected or intended an escrow relationship, or that the transactions had the irrevocability and fiduciary duties characteristic of escrow arrangements. The court affirmed the trial court’s judgment, holding that the complaint failed to state a cause of action under the UCL for unlawful or unfair business practices, and that amendment would not cure the defects. View "Edson v. Airbnb Payments, Inc." on Justia Law

The plaintiff, a borrower, sent a qualified written request (QWR) for information concerning the servicing of her mortgage to the loan servicer and master servicer. After she received no response, her attorney prepared and sent a second QWR, for which she incurred a legal fee and postage costs. She alleged that the defendants’ failure to respond prevented her from correcting errors on her account, resulting in over $70,000 in improper fees and interest being added to her loan balance due to a subsequent mortgage modification.The United States District Court for the Eastern District of New York previously reviewed the case. The District Court dismissed the plaintiff’s first amended complaint for failure to allege damages, but allowed her to amend the complaint. In her second amended complaint, the plaintiff sought to recover the increased interest and fees resulting from the mortgage modification, the attorney’s fee for preparing the second QWR, and the postage cost for mailing it. The District Court denied all relief and dismissed the second amended complaint.On appeal, the United States Court of Appeals for the Second Circuit affirmed the District Court’s judgment. The Second Circuit held that the increased interest and fees resulting from the mortgage modification were not recoverable under the Real Estate Settlement Procedures Act (RESPA) because they were not caused by the defendants’ servicing of the mortgage. The court further ruled that legal fees for preparing the second QWR did not constitute “actual damages” under RESPA, since the statute separately provides for attorney’s fees only in successful actions, which did not apply here. Finally, the court held that the $3.20 postage cost was too trivial to warrant recovery under the de minimis doctrine. The judgment of the District Court was affirmed. View "Murray v. Newrez LLC" on Justia Law