Justia Consumer Law Opinion Summaries

Edward and Linda Diaz purchased a motorhome from a California dealer, receiving warranties from the manufacturer that included a clause requiring any legal disputes related to the warranties to be litigated exclusively in Indiana, where the motorhome was manufactured. The warranties also contained a choice-of-law provision favoring Indiana law and a waiver of jury trial. After experiencing issues with the vehicle that were not remedied under warranty, the Diazes sued the manufacturer, dealer, and lender in California under the Song-Beverly Consumer Warranty Act, alleging failure to repair defects and refusal to replace or refund the vehicle.The Superior Court of Los Angeles County granted the defendants’ motion to stay the California action, enforcing the forum selection clause. The manufacturer had offered to stipulate that it would not oppose application of California’s Song-Beverly Act or a jury trial if the Diazes pursued their claims in Indiana. The court ordered the manufacturer to sign such a stipulation, holding that the Diazes could seek to lift the stay if Indiana courts declined to apply California law.On appeal, the California Court of Appeal, Second Appellate District, Division Eight, concluded that the forum selection clause was unenforceable. The court held that the warranty’s terms, including the forum selection and choice-of-law provisions, violated California public policy by purporting to waive unwaivable statutory rights under the Song-Beverly Act. The court determined that the manufacturer’s post hoc offer to stipulate to California law did not cure the unconscionability present at contract formation and that severance of the unlawful terms would not further the interests of justice. As a result, the Court of Appeal reversed the trial court’s order staying the California action and directed entry of a new order denying the stay. View "Diaz v. Thor Motor Coach, Inc." on Justia Law

Two students enrolled at a private university in California during early 2020, when the COVID-19 pandemic prompted widespread campus closures. In accordance with local lockdown orders, the university transitioned from in-person to online instruction in March 2020. Prior to the Fall 2020 semester, the university communicated with students about its intention to return to in-person education but made clear that such plans depended on approval from local authorities. Ultimately, the university continued remote instruction. The students remained enrolled and later graduated.The students filed suit in the Superior Court of Orange County, alleging breach of contract, unjust enrichment, and unfair business practices. They argued that the university had made an enforceable promise to provide in-person education, citing various university publications, course listings, policies, and statements about on-campus experiences. They sought a partial tuition refund and raised alternative claims regarding unfair or unlawful representations. The university moved for summary judgment, asserting that it had not made any specific promise to provide in-person instruction and that its statements reflected only general expectations. The Superior Court granted summary judgment for the university, relying on Berlanga v. University of San Francisco and finding no triable issue of material fact regarding any misrepresentation.The California Court of Appeal, Fourth Appellate District, Division Three, reviewed the case and affirmed the judgment. The court held that the university’s statements and practices did not constitute sufficiently specific enforceable promises of in-person education under California law. The court found that only specific, explicit promises are enforceable in the student-university relationship, and none were present here. The court also rejected the students’ unjust enrichment and unfair business practices claims. The judgment in favor of the university was affirmed, and the university was awarded costs on appeal. View "Grant v. Chapman University" on Justia Law

The case concerns a job applicant who, after accepting an offer of employment as a sales associate at a large retailer, received an investigative consumer report as part of the onboarding process. The applicant was presented with a lengthy disclosure form that identified multiple consumer reporting agencies rather than only the one that provided her report. She alleged that the employer failed to comply with specific requirements under California’s Investigative Consumer Reporting Agencies Act (ICRAA), including not identifying the agency actually conducting the investigation in a standalone document, and including extraneous information. She also claimed other technical violations related to the handling of her report.The Superior Court of San Diego County reviewed the matter after the employee brought suit for ICRAA violations. The employer moved for summary judgment, arguing the plaintiff lacked standing because she did not suffer any concrete injury or adverse employment action resulting from the alleged violations—she was hired and received the report. The trial court agreed, finding that the applicant had not shown injury, and entered judgment for the employer.The California Court of Appeal, Fourth Appellate District, Division One, reviewed the case. It held that under the plain language of ICRAA, a consumer need only show that a statutory violation occurred to have standing and to recover the statutory sum of $10,000; no further showing of injury or harm is required. The court distinguished California law from federal standards, emphasized relevant legislative history, and declined to follow interpretations requiring proof of concrete injury. The appellate court reversed the trial court’s judgment and directed that summary judgment be vacated. View "Parsonage v. Wal-Mart Associates" on Justia Law

The plaintiff leased and later purchased a 2013 vehicle from the defendant, which subsequently developed engine problems. After experiencing issues like rattling and crunching noises and receiving a safety recall notice, the plaintiff sought repairs and eventually requested that the defendant repurchase the car due to unresolved defects. The defendant did not respond to these repurchase requests.The plaintiff sued for violations under the Song-Beverly Consumer Warranty Act, breach of warranties, fraud by omission, and the Consumer Legal Remedies Act (CLRA). The Superior Court of San Diego County sustained the defendant’s demurrer to the CLRA claim without leave to amend, citing the plaintiff’s failure to file a required venue affidavit with the complaint. During discovery, the defendant repeatedly objected to producing documents related to engine defects and verified, under penalty of perjury, that no responsive documents existed. The plaintiff challenged the adequacy of the defendant’s document search and later discovered evidence indicating the defendant had produced such documents to a government agency in another matter. The trial court denied the plaintiff’s motions to compel and for terminating sanctions, accepted the defendant’s responses, and excluded key evidence at trial, which left the plaintiff unable to prove fraud.At trial, the jury found that a defect existed but concluded the defendant remedied it, resulting in a defense verdict. The trial court denied the plaintiff’s motions for a new trial and judgment notwithstanding the verdict, focusing on the plaintiff’s delay in discovering withheld documents and awarding costs to the defendant.On appeal, the California Court of Appeal, Fourth Appellate District, Division One, reversed and remanded. The court held that the defendant’s discovery misuse denied the plaintiff a fair trial, requiring a new trial and monetary sanctions to compensate for costs and attorney fees. It also directed that the plaintiff be given leave to amend the CLRA claim and vacated the award of prevailing-party costs to the defendant. View "Higginson v. Kia Motors America" on Justia Law

More than one hundred individuals who became tenants at three apartment complexes in Los Angeles applied to rent from the property owners by filling out standard applications and paying $41.50 screening fees. The landlords used these fees to obtain credit and background reports. The plaintiffs alleged that the landlords violated California’s Investigative Consumer Reporting Agencies Act (ICRAA) by failing to disclose the scope of the investigations, the identity of the reporting agencies, the right to inspect information, and by not providing copies of the consumer reports. Three plaintiffs also asserted a claim under California’s Unfair Competition Law (UCL) based on the same alleged violations.After consolidating the cases, the Superior Court of Los Angeles County granted summary judgment for the defendants, reasoning that none of the plaintiffs had shown actual damages or concrete injury resulting from the alleged ICRAA violations, and thus lacked standing. The court also found that the plaintiffs’ UCL claims failed for similar reasons, as they did not lose money or property due to the alleged conduct.On appeal, the Court of Appeal of the State of California, Second Appellate District, Division Three, held that the plaintiffs have standing to pursue their ICRAA claims because the statute provides a $10,000 minimum recovery for violations without requiring proof of actual damages or concrete injury. The court found that the statutory remedy is punitive and serves to deter violations, granting standing based on the violation itself. However, the court affirmed the dismissal of the UCL claims, concluding that plaintiffs did not suffer an “injury in fact” or lose money or property as required for UCL standing. The judgment was therefore reversed as to the ICRAA claims, affirmed as to the UCL claims, and remanded for further proceedings. View "Yeh v. Barrington Pacific" on Justia Law

In this case, the plaintiff purchased a new Hyundai vehicle that experienced repeated mechanical issues, leading to seven repair attempts over 19 months. After the buyer or his wife requested Hyundai repurchase the vehicle, it was involved in a collision and declared a total loss. The wife’s insurer paid her for the vehicle’s loss. The plaintiffs—comprised of the buyer and his wife—then sued Hyundai under the Song-Beverly Consumer Warranty Act, alleging breach of express warranty, among other claims. After some claims were dismissed, only the express warranty claim proceeded to trial.The Superior Court of Los Angeles County allowed the wife to join as a plaintiff, even after finding she was not the buyer, based on the belief that prior precedent allowed her to proceed. The jury returned a verdict for both plaintiffs, awarding damages and prejudgment interest, but the court reduced the damages by the amount of the insurance payment and adjusted the interest calculation. Both sides filed post-trial motions regarding prejudgment interest and costs, and both appealed aspects of the judgment and cost rulings.The California Court of Appeal, Second Appellate District, held that only a “buyer” as defined by the Act has standing to pursue claims under it; since the wife was not a buyer, she lacked standing and should not have been a party. The court also ruled that insurance payouts received after a vehicle is totaled cannot reduce the statutory restitution owed by the manufacturer under the Act. Additionally, the court found that prejudgment interest is available under Civil Code section 3288. The judgment was affirmed in part, reversed in part, and remanded for recalculation of prejudgment interest and reconsideration of costs. View "Towns v. Hyundai Motor America" on Justia Law

Daevieon Towns purchased a new Hyundai Elantra in 2016, and over the next 19 months, the car required multiple repairs for alleged electrical and engine defects. In March 2018, either Towns or his wife, Lashona Johnson, requested that Hyundai buy back the defective vehicle. Before Hyundai acted, the car was involved in a collision, declared a total loss, and Johnson’s insurance paid her $14,710.91.Towns initially sued Hyundai Motor America in the Superior Court of Los Angeles County for breach of express warranty under the Song-Beverly Consumer Warranty Act. As trial approached, Towns amended his complaint to add Johnson as a plaintiff, arguing she was the primary driver and responsible for the vehicle. The trial court allowed the amendment, finding Johnson was not a buyer but permitted her to proceed based on its interpretation of Patel v. Mercedes-Benz USA, LLC. At trial, the jury found for Towns and Johnson, awarding damages and civil penalties. However, the court reduced the damages by the insurance payout and adjusted the prejudgment interest accordingly. Both parties challenged the judgment and costs in post-trial motions.The California Court of Appeal, Second Appellate District, Division Four, reviewed the case. It held that only a buyer has standing under the Act, so Johnson could not be a plaintiff. The court also held that third-party insurance payments do not reduce statutory damages under the Act, following the Supreme Court’s reasoning in Niedermeier v. FCA US LLC. Furthermore, prejudgment interest is available under Civil Code section 3288 because Hyundai’s statutory obligations do not arise from contract. The court affirmed in part, reversed in part, and remanded for the trial court to enter a modified judgment and reconsider costs. View "Towns v. Hyundai Motor America" on Justia Law

Ana Faiaipau, an elderly woman recovering from heart surgery, was transferred to a long-term acute care hospital operated by Kindred Healthcare. During her stay, Ana allegedly suffered neglect, including lack of dialysis, malnutrition, inadequate hygiene care, and failure to properly monitor her ventilator. The ventilator became disconnected, leading to a severe anoxic brain injury and Ana’s subsequent death. Ana’s daughters, Jennifer and Faamalieloto, acting both individually and as successors in interest, filed suit against Kindred for negligence, elder neglect, fraud, violation of the Unfair Competition Law (UCL), and wrongful death.The Alameda County Superior Court reviewed Kindred’s motion to compel arbitration based on agreements signed by Jennifer as Ana’s legal representative. The court granted arbitration for survivor claims brought on behalf of Ana, including negligence, elder neglect, fraud, and UCL claims, but denied arbitration for Jennifer and Faamalieloto’s individual claims for wrongful death, fraud, and violation of the UCL. The court also stayed litigation of the individual claims pending arbitration.The Court of Appeal of the State of California, First Appellate District, Division Four, reviewed the appeal. Citing the California Supreme Court’s decision in Holland v. Silverscreen Healthcare, Inc., the appellate court held that the wrongful death claim—premised on failure to monitor and reconnect Ana’s ventilator—constituted professional negligence and must be arbitrated under the arbitration agreement. However, the court affirmed the denial of arbitration for Jennifer and Faamalieloto’s individual fraud and UCL claims, finding Kindred had not shown that the agreement bound them in their individual capacities. The order was modified to compel arbitration of the wrongful death claim and affirmed as modified. View "Faiaipau v. THC-Orange County, LLC" on Justia Law

A nonprofit environmental organization sued a manufacturer of feminine hygiene products, alleging that the company marketed certain products as “organic” or “made with organic ingredients” in violation of California’s organic products law. The complaint claimed that these products, such as period underwear, pads, and panty liners, contained much less than the minimum required percentage of certified organic materials, and included several synthetic or non-organic components not permitted under state and federal organic standards. The organization sought to prevent the manufacturer from advertising and selling these products as organic within California.The Superior Court of Alameda County granted judgment on the pleadings in favor of the manufacturer. The court reasoned that California’s organic products law, known as the California Organic Food and Farming Act (COFFA), did not apply to personal care products like the ones at issue, but only to specifically enumerated items such as agricultural products, cosmetics, and pet food. Based on this interpretation, the trial court concluded that the plaintiff’s claims failed as a matter of law and entered judgment for the defendant.The California Court of Appeal, First Appellate District, Division Two, reviewed the case de novo. It concluded that the statutory text, legislative history, and public policy underlying COFFA support a broad interpretation. The Court held that COFFA applies to all products sold as “organic” or containing “organic” materials within California, including feminine hygiene and personal care products, unless specifically exempted. The Court rejected the argument that such products are categorically excluded and emphasized the statute’s intent to regulate consumer organic claims broadly. The judgment of the trial court was therefore reversed. View "Environmental Democracy Project v. Rael, Inc." on Justia Law

A teacher employed by the Los Angeles Unified School District purchased a variable annuity with an optional Guaranteed Minimum Income Benefit (GMIB) rider from an insurance company in 2010. The GMIB rider, which provided a guaranteed minimum level of payments, was subject to an annual fee that was disclosed both to the purchaser and on a state-maintained website as required by the California Education Code at the time of purchase. In 2018, the insurer ceased offering the GMIB rider to new customers, but permitted existing holders, including the plaintiff, to maintain the rider and continue paying the associated fee. After January 2019, the fee for the GMIB rider was no longer listed on the state-administered website, although the underlying annuity product remained available to new purchasers.The plaintiff filed a lawsuit in the Superior Court of Los Angeles County, alleging that the insurer’s collection of the GMIB rider fee after it was no longer disclosed on the state website constituted an unlawful business practice under California’s Unfair Competition Law (UCL). The plaintiff did not claim to have relied on the website or to have been misled about the fee, but asserted that the insurer was statutorily barred from collecting undisclosed fees. The trial court sustained the insurer’s demurrer, finding that the plaintiff failed to allege reliance necessary for standing under the UCL, and dismissed the action with prejudice when the plaintiff declined to amend the complaint.The California Court of Appeal, Second Appellate District, Division One, affirmed the dismissal, albeit on different grounds. The court held that the Education Code does not require continued disclosure of fees for optional product features, such as the GMIB rider, after those features are no longer offered to prospective purchasers. As a result, the insurer was not prohibited from collecting the fee from existing holders, and the plaintiff’s UCL claim failed as a matter of law. The court awarded the insurer its costs on appeal. View "Jacobson v. Metropolitan Life Insurance Co." on Justia Law