Justia Consumer Law Opinion Summaries

Articles Posted in California Courts of Appeal
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In this case, Damien T. Davis and Johnetta H. Lane ("the plaintiffs") filed suit against Nissan North America, Inc. and Nissan of San Bernardino ("Nissan") after they allegedly bought a faulty Nissan vehicle with a defective transmission. Nissan attempted to compel arbitration as per the arbitration clause in the sale contract between plaintiffs and the dealership. However, the trial court denied the motion, ruling that Nissan, not being a party to the contract, could not invoke the clause based on the doctrine of equitable estoppel.Nissan appealed the decision, arguing that the trial court erred by refusing to compel arbitration based on equitable estoppel. However, the Court of Appeal, Fourth Appellate District Division One, State of California, agreed with the trial court's ruling reasoning that Nissan's reliance on the doctrine of equitable estoppel was misplaced. It explained that equitable estoppel applies when a party's claims against a non-signatory are dependent upon the underlying contractual obligations. Here, the plaintiffs' claims were not founded on the sale contract's terms, but rather on Nissan's statutory obligations under the Song-Beverly Act relating to manufacturer warranties. The court concluded that the plaintiffs are pursuing their statutory and tort claims in court, and there was no inequity in allowing them to do so.Therefore, Nissan's motion to compel arbitration was denied, and the trial court's order was affirmed. View "Davis v. Nissan North America, Inc." on Justia Law

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The Fourth Appellate District Division One of the California Court of Appeal affirmed, with a minor modification, a lower court's decision that Ashford University, LLC and Zovio, Inc. violated California's unfair competition law and false advertising law. Over a decade, the defendants made false and misleading statements to prospective students, committing 1,243,099 violations. The trial court imposed a penalty of $22,375,782, which the defendants challenged as excessive. The appeal court agreed with the defendants that the lower court inadvertently included violations outside the false advertising law's statute of limitations in the penalty calculation. The court reduced the penalty by $933,453. However, the court rejected the defendants' other arguments, including that the penalty should be further reduced because it did not bear a reasonable relationship to the harm proven at trial, violated extraterritoriality principles, and was excessive given the defendants' financial status. The court found the penalty was reasonably related to the harm caused, the defendants could pay the penalty, and the defendants' misconduct emanated from California, so principles of extraterritoriality were not violated. View "People v. Ashford University, LLC" on Justia Law

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In this case, the plaintiff Jacob Ayers purchased a new Jeep Grand Cherokee manufactured by the defendant, FCA US, LLC (FCA). After experiencing numerous problems with the vehicle, he asked FCA to repurchase it, but FCA refused. Ayers then sued FCA under the Song-Beverly Consumer Warranty Act, also known as the lemon law. During the course of litigation, FCA made multiple offers to settle the case. However, Ayers rejected these offers and continued to litigate. Later, Ayers traded in the Jeep for a new vehicle, receiving a credit of $13,000.In 2020, a court decision (Niedermeier v. FCA US LLC) held that the Song-Beverly restitution remedy does not include amounts a plaintiff has already recovered by trading in the vehicle at issue. This decision effectively reduced Ayers' maximum potential recovery by three times the amount of the trade-in. In January 2021, Ayers served FCA with a section 998 offer for $125,000 plus costs, expenses, and attorney fees, which FCA accepted.The dispute then centered on how much FCA should pay Ayers in attorney fees and costs. FCA argued that its earlier offer to settle the case (made under section 998 of the California Code of Civil Procedure) cut off Ayers' right to attorney fees incurred after the date of that offer. The trial court rejected this argument, and FCA appealed.The Court of Appeal of the State of California reversed the lower court's decision. The court held that section 998 does apply to a case that is resolved by a pretrial settlement. It also held that an intervening change in law that reduced the maximum amount a plaintiff could recover at trial does not exempt the plaintiff from the consequences of section 998. The court concluded that FCA's earlier settlement offer was valid and that it cut off Ayers' right to attorney fees incurred after the date of that offer.The court remanded the case to the trial court with instructions to enter a new judgment excluding any costs incurred by Ayers after the date of FCA's earlier offer. FCA was also awarded costs on appeal. View "Ayers v. FCA US, LLC" on Justia Law

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In the case of Maryann Jones v. Solgen Construction, LLC and GoodLeap, LLC, the Court of Appeal of the State of California Fifth Appellate District affirmed the trial court's decision not to compel arbitration. The case concerned a business relationship involving the installation of home solar panels. The appellants, Solgen Construction and GoodLeap, had appealed the trial court's denial of their separate motions to compel arbitration, arguing that the court had erred in several ways, including by concluding that no valid agreement to arbitrate existed.Jones, the respondent, had filed a lawsuit alleging fraudulent misrepresentation, fraudulent concealment, negligence, and violations of various consumer protection laws. She contended that she had been misled into believing she was signing up for a free government program to lower her energy costs, not entering into a 25-year loan agreement for solar panels. The appellants argued that Jones had signed contracts containing arbitration clauses, but the court found that the appellants had failed to meet their burden of demonstrating the existence of a valid arbitration agreement. The court also held that the contract was unenforceable due to being unconscionable.The appellate court affirmed the trial court's decision, rejecting the appellants' arguments that an evidentiary hearing should have been held and that the court had erred in its interpretation of the evidence and the law. It found that the trial court had not abused its discretion and that its finding that the appellants failed to meet their burden of proof was not erroneous as a matter of law. View "Jones v. Solgen Construction" on Justia Law

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The plaintiff, SanJuana Andrade, filed a lawsuit against the Western Riverside Council of Governments (Council) on the basis that she had been fraudulently enrolled in a Property Assessed Clean Energy (PACE) program. She claimed that her signature was forged on the PACE loan agreements, resulting in a lien on her home and increased property tax assessments that she had not agreed to. Following an investigation by the state Department of Financial Protection and Innovation, which confirmed the contractors’ fraud, the Council released its assessment and the lien on Andrade’s home. In January 2022, Andrade filed a motion for attorney’s fees and costs under Civil Code section 1717, which provides for attorney’s fees in any action on a contract where the contract specifically provides for such fees. The trial court denied Andrade’s motion, concluding that the contractual fee provisions were limited in scope and did not entitle Andrade to attorney’s fees because they concerned fees for “a judicial foreclosure action.”On appeal, the California Court of Appeal, Fourth Appellate District, Division One, reversed the trial court's decision. It held that under section 1717, a fee provision must be construed as applying to the entire contract unless each party was represented by counsel in the negotiation and execution of the contract, and the fact of that representation is specified in the contract. The Court found that limiting the fee provisions to foreclosure proceedings would be the precise kind of lopsided arrangement that section 1717 prohibits. The Court remanded the case back to the trial court to determine whether Andrade is “the party prevailing on the contract” and therefore entitled to attorney's fees. View "Andrade v. Western Riverside Council of Governments" on Justia Law

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This case pertains to the enforcement of the California Privacy Rights Act of 2020 (the Act), a voter-enacted statute that expanded and amended the California Consumer Privacy Act of 2018. The California Privacy Protection Agency (the Agency) failed to adopt final regulations by the July 1, 2022 deadline set out in the Act. The California Chamber of Commerce sought a court order to delay enforcement of the Act until one year after the agency adopted all required regulations. The trial court granted the petition in part, ruling that the Agency could not enforce any regulation until one year after that regulation became final. The Agency appealed, arguing that the Act did not mandate a one-year delay between the approval of a final regulation and its enforcement. The appellate court agreed with the Agency, finding that the Act's language did not unambiguously require a one-year delay between approval and enforcement. The court ordered a new trial court order denying the Chamber's petition and allowing the trial court to consider any remaining issues regarding the prompt development of regulations. View "California Privacy Protection Agency v. Superior Court" on Justia Law

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Charles Ramsey, a subscriber to Comcast Cable Communications, LLC’s Xfinity services, filed a lawsuit against Comcast for violations of California’s consumer protection statutes. He alleged that Comcast engaged in unfair, unlawful, and deceptive business practices under the Consumers Legal Remedies Act (CLRA) and the unfair competition law (UCL). Ramsey’s complaint sought injunctive relief, not monetary damages. Comcast filed a petition to compel arbitration pursuant to the arbitration provision in the parties’ subscriber agreement which required the parties to arbitrate all disputes and permitted the arbitrator to grant only individual relief. The trial court denied the petition based on the Supreme Court’s decision in McGill v. Citibank, which held that a predispute arbitration provision that waives a plaintiff’s right to seek public injunctive relief in any forum is unenforceable under California law. On appeal, Comcast argued that the trial court erred in concluding that Ramsey was seeking public injunctive relief. Comcast further argued that the Federal Arbitration Act (FAA) preempts McGill. The Court of Appeal of the State of California Sixth Appellate District held that Ramsey’s complaint seeks public injunctive relief, and that McGill is not preempted, thus affirming the trial court’s order. View "Ramsey v. Comcast Cable Communications, LLC" on Justia Law

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In a case concerning subsidized low-income housing, the Court of Appeal of the State of California, Second Appellate District, Division Seven, ruled that tenants in such housing developments have standing to sue a property management company under the unfair competition law (UCL) if their tenancies are terminated prematurely due to legally deficient notices. The plaintiffs, who lived in housing managed by FPI Management, Inc., claimed that their tenancies were terminated after FPI provided just three days’ notice, instead of the legally required 30 days’ notice. The trial court granted summary judgment to FPI, deciding that the plaintiffs did not suffer an injury that would confer standing under the UCL. The appellate court, however, held that the plaintiffs were prematurely deprived of property rights and subjected to imminent legal peril due to FPI's legally deficient termination notices. This amounted to an injury sufficient to confer standing under the UCL. The appellate court also noted a distinction between the plaintiffs who lived in housing subsidized by the HOME Investment Partnerships Program (HOME plaintiffs) and those living in housing subsidized by section 8 of the United States Housing Act of 1937 (Section 8 plaintiffs). The Section 8 plaintiffs failed to demonstrate their legal entitlement to 30 days’ notice, leading the court to affirm the trial court's summary judgment in favor of FPI regarding the Section 8 plaintiffs' UCL claim. The court also affirmed the trial court's denial of the plaintiffs' motion for summary adjudication, but reversed the judgment and post-judgment order on costs, rendering the cost order moot. View "Campbell v. FPI Management, Inc." on Justia Law

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In a case before the Court of Appeal of the State of California Fourth Appellate District Division Two, the plaintiff, a minor identified as J.R., filed a putative class action against Electronic Arts Inc. (EA), alleging causes of action for unlawful and unfair business practices, violation of the Consumer Legal Remedies Act, and unjust enrichment. J.R. claimed that EA deceptively induced players, particularly minors, to purchase in-game currency for its game, Apex Legends. EA sought to compel arbitration under the terms of its user agreement, which J.R. had accepted to play Apex Legends. The lower court denied EA's motion to compel on the grounds that J.R. had exercised his power under Family Code section 6710 to disaffirm all of his contracts with EA, including the arbitration agreement. EA appealed, arguing that an arbitrator, not the court, should decide issues of arbitrability due to a delegation provision within the agreement. The appellate court rejected EA's arguments, affirming the lower court's decision. The court held that J.R.'s disaffirmance of "any... contract or agreement" accepted through his EA account was sufficient to challenge the validity of the delegation provision specifically, thereby authorizing the court to assess the validity of J.R.'s disaffirmance. View "J.R. v. Electronic Arts" on Justia Law

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In this case, consumers brought tort claims against a mattress retailer and manufacturer, alleging injuries suffered while sleeping on a defective mattress. The plaintiffs settled with the retailer and later dismissed their claims against the manufacturer, Tempur-Pedic North America, LLC, before filing a new lawsuit. The manufacturer then moved for costs as the prevailing party in the dismissed lawsuit. The trial court awarded some costs to the manufacturer, including costs for depositions that were noticed but did not occur. The consumers appealed this decision, arguing it was improper to award costs for depositions that did not occur.The Court of Appeal of the State of California Fourth Appellate District Division Two disagreed with the consumers and affirmed the trial court's decision. The appellate court held that there is no blanket exception to awarding costs for depositions that were noticed but did not occur. The court explained that the proper analysis focuses on whether costs were reasonably necessary to litigating a case when incurred, not whether the costs could have been avoided in retrospect. The court found that the trial court did not abuse its discretion in finding the costs were reasonably necessary. View "Garcia v. Tempur-Pedic North America, LLC" on Justia Law