Justia Consumer Law Opinion Summaries

The Fourth Circuit vacated the district court's dismissal of plaintiff's complaint alleging claims under the Fair Debt Collection Practices Act (FDCPA). The district court concluded that the entire complaint was time-barred because the more recent violations that plaintiffs alleged were of the "same type" as other violations that occurred outside the one-year limitations period. The court disagreed with the district court's analysis and held that each violation of the FDCPA gives rise to a separate claim governed by its own limitations period. In this case, plaintiffs have alleged at least two potential violations of the FDCPA that are not barred by the one-year limitations period provided by the Act. Therefore, the court remanded for further proceedings. View "Bender v. Elmore & Throop, P.C." on Justia Law

The Supreme Court affirmed Defendant's convictions and sentences for second degree murder and use of a weapon to commit a felony, holding that there was no abuse in the trial proceedings. Specifically, the Court held (1) any error in the admission of statements Defendant made during two interviews was harmless, and the district court did not err when it overruled Defendant's motion to suppress a letter to his sister; (2) the district court did not err when it overruled Defendant's motion to suppress evidence from the search of his cell phone; (3) the district court did not abuse its discretion when it prohibited Defendant from presenting evidence regarding the victim’s mental health and use of alcohol and prescription drugs; (4) the district court did not err when it denied Defendant the right to cross-examine a witness on issues the court determined to lack probative value; and (5) the district court did not err when it allowed evidence that results of certain DNA tests were uninterpretable. View "State v. Said" on Justia Law

The Supreme Court made permanent its preliminary writ of mandamus compelling the circuit court to transfer the underlying lawsuit to St. Charles County, holding that the circuit court had no authority to change venue and transfer the case from St. Charles County to St. Louis County. Universal Credit Acceptance, Inc. (UCA) filed the underlying lawsuit in St. Charles County seeking to recover a judgment arising from Renwick Ware's alleged default on a retail sales installment contract. After the associate circuit division sustained Ware's application for change of judge, Ware filed a motion to change the venue to St. Louis County. The circuit court sustained the motion and transferred the case to St. Louis County. UCA filed a petition for a writ of mandamus, arguing that, pursuant to Rule 51.06(a), Ware waived the right to file a motion to change venue because the motion was not consolidated with his application for change of judge. The Supreme Court issued a preliminary writ that it made permanent, holding that Ware's motion to change venue was improper under Rule 51.06(a), and therefore, UCA demonstrated a clear and unequivocal right to have the case retransferred to St. Charles County. View "State ex rel. Universal Credit Acceptance, Inc. v. Honorable Reno" on Justia Law

A judicial foreclosure proceeding is not a form of debt collection when the proceeding does not include a request for a deficiency judgment or some other effort to recover the remaining debt. If a foreclosure plaintiff seeks not only to foreclose on the property but also to recover the remainder of the debt through a deficiency judgment, then the plaintiff is attempting to collect a debt within the meaning of the Fair Debt Collection Practices Act (FDCPA). But if the plaintiff is simply enforcing a security interest by retaking or forcing a sale of the property, without regard to any additional debt that may be owed, then the FDCPA does not apply. The Ninth Circuit affirmed the district court's dismissal of plaintiff's action under the Fair Debt Collection Practices Act over a judicial foreclosure proceeding in Oregon. The panel held that plaintiff pleaded no conduct by the defendants beyond the filing of a foreclosure complaint and actions to effectuate that proceeding. View "Barnes v. Routh Crabtree Olsen PC" on Justia Law

Following the 2008 financial crisis, the Consumer Financial Protection Bureau (CFPB), was established by the Dodd-Frank Act as an independent regulatory agency tasked with ensuring that consumer debt products are safe and transparent. The administration of 18 existing federal statutes was transferred to CFPB. A new prohibition on unfair and deceptive practices in the consumer-finance sector, 12 U.S.C. 5536(a)(1)(B), gave CFPB extensive rulemaking, enforcement, and adjudicatory powers, including the authority to conduct investigations, issue subpoenas and civil investigative demands, initiate administrative adjudications, prosecute civil actions in federal court, and issue binding decisions in administrative proceedings. CFPB is led by a single Director, appointed by the President with the advice and consent of the Senate, for a five-year term, during which the President may remove the Director only for “inefficiency, neglect of duty, or malfeasance,” 12 U.S.C. 5491(c)(1),(3). CFPB issued a civil investigative demand to Seila, a law firm that provides debt-related legal services. The Ninth Circuit affirmed an order requiring that Seila comply. The Supreme Court vacated. CFPB’s leadership by a single individual removable only for inefficiency, neglect, or malfeasance violates the separation of powers. Precedent has established two exceptions to the President’s unrestricted removal power: for a multi-member body of experts who were balanced along partisan lines, appointed to staggered terms, performed only “quasi-legislative” and “quasi-judicial functions,” and were not to exercise executive power, and for an inferior officer—an independent counsel—who had limited duties and no policymaking or administrative authority. Neither of those exceptions applies to CFPB. The Court declined to extend the precedents to an independent agency led by a single Director and vested with significant executive power. CFPB’s structure has no foothold in history or tradition and is incompatible with the Constitution, which—with the sole exception of the Presidency—avoids concentrating power in the hands of any single individual. The Director’s five-year term and receipt of funds outside the appropriations process heighten the concern that the agency will slip from the Executive’s control and from that of the people. The Court found the Director’s removal protection severable from the other provisions of Dodd-Frank that establish CFPB. View "Seila Law LLC v. Consumer Financial Protection Bureau" on Justia Law

The Supreme Court held that the unfair competition law (UCL), Cal. Bus. & Prof. Code 17200 et seq., is not limited to the geographic boundaries of Orange County and therefore does not preclude a district attorney from including allegations of violations occurring outside as well as within the borders of her or his county. The Orange County District Attorney brought this action against several pharmaceutical companies, alleging that Defendants had intentionally delayed the sale of a generic version of a popular pharmaceutical drug to maximize their profits. The District Attorney sought statewide monetary relief. Defendants moved to strike references to "California" in their complaint, arguing that the district attorney's authority to enforce California's consumer protection laws is limited to Orange County's borders. The trial court denied the motion to strike. The court of appeals directed the trial court to vacate its order and granted the motion to strike. The Supreme Court reversed, holding that the trial court did not err in denying the motion to strike because the UCL did not preclude the District Attorney from including allegations of violations occurring outside the borders of Orange County. View "Abbott Laboratories v. Superior Court of Orange County" on Justia Law

In 2009 the Gomezes stopped paying on a Bank credit card. The Bank treated the account as a bad debt and stopped sending statements. In 2011 it sold the debt to Cavalry. In January 2013 Cavalry sent a letter seeking payment of $5,800, including $1,600 in interest for months after the Bank stopped sending bills. A March 2013 letter sought $6,200. Their lawyer asked Cavalry to verify the debt. A March 2014 reply indicated that the balance was $6,320.13 without explaining how much constituted interest. The court dismissed a suit under the Fair Debt Collection Practices Act, 15 U.S.C. 1692e, which prohibits “any false, deceptive, or misleading representation … in connection with the collection of any debt” including “the character, amount, or legal status of any debt.” The court cited the one-year limitations period after finding that the Bank had waived interest after the charge-off, despite a contractual non-waiver clause; 12 C.F.R. 1026.5(b)(2) requires banks to send periodic statements while interest is being charged. The Seventh Circuit affirmed. The third letter stood alone, within the limitations period, but was not false. A demand for payment is not “false” just because, years later, a judge disagrees with an argument supporting the calculation of the debt. The letter would not have misled a competent lawyer, who would not deem “false” a demand by a potential opponent just because counsel believes that his client may have a defense. View "Gomez v. Cavalry Portfolio Services, LLC" on Justia Law

The First Circuit affirmed the district court's dismissal of Appellant's claims in three putative class action lawsuits against Defendants - Nestle USA, Inc., Mars, Inc., and The Hersey Company - holding that Appellant did not plausibly state a claim for relief under Mass. Gen. Laws ch. 93A and that Appellant's unjust enrichment claim was foreclosed by the availability of a remedy at law. Appellant alleged that Defendant's failure to disclose on the packaging of their chocolate products that upstream labor abuses existing in their cocoa supply chains violated Chapter 93A and that Defendants had been unjustly enriched by this packaging omission. The district court dismissed the claims. The First Circuit affirmed, holding (1) Appellant did not plausibly state a Chapter 93A unfairness claim; and (2) Appellant's unjust enrichment claims must be dismissed because an adequate remedy at law was available to her through Chapter 93A. View "Tomasella v. Nestle USA, Inc." on Justia Law

Spikener purchased a car under a credit sales contract; the seller did not inform Spikener that the car had been in a major collision. Before Spikener learned about the collision, the contract was assigned to Ally. The Contract complied with the Holder Rule, 16 CFR 433.2, which requires consumer credit contracts to include a notice: “ANY HOLDER OF THIS CONSUMER CREDIT CONTRACT IS SUBJECT TO ALL CLAIMS AND DEFENSES WHICH THE DEBTOR COULD ASSERT AGAINST THE SELLER OF GOODS OR SERVICES OBTAINED PURSUANT HERETO OR WITH THE PROCEEDS HEREOF. RECOVERY HEREUNDER BY THE DEBTOR SHALL NOT EXCEED AMOUNTS PAID BY THE DEBTOR HEREUNDER.” Plaintiff sued Ally under the California Consumers Legal Remedies Act (CLRA). Ally agreed to rescind the contract and refund the amount Spikener had paid: $3,500. Spikener unsuccessfully sought $13,000 in attorney fees under CLRA’s fee-shifting provision. The court cited “Lafferty,” which held a debtor cannot recover damages and attorney fees for a Holder Rule claim that exceed the amount the debtor paid under the contract. The FTC construes the Holder Rule in the same manner. In response to Lafferty, Civil Code 1459.5, was enacted, providing that the Holder Rule’s limitation on recovery does not apply to attorney fees. The court of appeal affirmed. The FTC’s construction of the Rule is entitled to deference; to the extent section 1459.5 authorizes recovery of attorney fees on a Holder Rule claim even if that results in a total recovery greater than the amount the plaintiff paid under the contract, it conflicts with, and is preempted by, the Holder Rule. View "Spikener v. Ally Financial, Inc." on Justia Law

Johnson filed a putative class action against ERC, alleging that it sent her a misleading collection letter in violation of the Fair Debt Collection Practices Act, 15 U.S.C. 1692‐1692p. The district court certified a class composed of all individuals in Indiana who had received a collection letter like Johnson’s from ERC in 2016-2017. The court later entered summary judgment for ERC. The Seventh Circuit affirmed. Johnson failed to present any evidence beyond her own opinion that ERC’s letter was misleading, Johnson focused primarily on the sentence, “This letter serves as notification that your delinquent account may be reported to the national credit bureaus.” According to Johnson, “may be reported” implied future reporting, and by the time she received the letter her debt had already been reported. She also singled out a sentence stating, “Payment of the offered settlement amount will stop collection activity on this matter” as constituting a promise by ERC that if she took advantage of the first settlement offer and paid by May 26, then ERC would not report her debt to the national credit bureaus. Because Johnson chose instead to rely solely on her “speculation” to support her claim, summary judgment for ERC was appropriate. View "Johnson v. Enhanced Recovery Co., LLC" on Justia Law