Justia Consumer Law Opinion Summaries

The National Automobile Dealers Association and the Texas Automobile Dealers Association challenged the Federal Trade Commission's (FTC) Combating Auto Retail Scams Trade Regulation Rule (CARS Rule). They argued that the FTC violated its own regulations by not issuing an advance notice of proposed rulemaking (ANPRM), failed to provide a reasoned basis for the rule, and conducted an arbitrary and capricious cost-benefit analysis. Alternatively, they requested a remand for additional evidence consideration.The FTC published the CARS Rule without an ANPRM, which led to the petitioners seeking judicial review. The rule aimed to address deceptive practices in the auto sales industry, including misrepresentations, mandatory disclosures, prohibitions on valueless add-ons, and requirements for consumer consent. The FTC received over 27,000 comments during the rulemaking process.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court found that the FTC violated its own regulations by not issuing an ANPRM, which is required under subpart B procedures for rules promulgated under section 18(a)(1)(B) of the FTC Act. The court determined that the Dodd-Frank Act did not grant the FTC independent substantive authority to bypass the ANPRM requirement. The court also rejected the FTC's argument for deference under Auer v. Robbins and Kisor v. Wilkie, finding no relevant ambiguity in the regulations.The court concluded that the FTC's failure to issue an ANPRM was not harmless error, as it deprived the petitioners of a procedural benefit that could have influenced the final rule. Consequently, the court granted the petition for review and vacated the CARS Rule, without addressing the petitioners' remaining substantive challenges. View "National Automobile Assoc v. Federal Trade Commission" on Justia Law

The executor of Bonnie Pereida's estate filed suit and obtained a judgment on claims brought under the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1961. Pereida had spent hundreds of thousands of dollars on rare coins that she thought would be a good hedge against inflation. In this case, the majority owner of the company that sold her the coins also owned the company that acted as a purportedly independent grader of the coins, and the grades it had assigned did not reflect the coins’ value. The court concluded that Pereida's RICO claims survived her death, but that the evidence did not prove a pattern of racketeering activity at trial. The court found that there is no evidence from which to conclude that the fraud Pereida fell victim to would have continued indefinitely but for this lawsuit. Accordingly, the court reversed and remanded for further proceedings as to state law claims. View "Malvino v. Delluniversita" on Justia Law

Plaintiff filed suit against defendant debt collectors, alleging violations of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692-1692p. The district court dismissed the complaint. At issue is whether a collection letter for a time-barred debt containing a discounted “settlement” offer—but silent as to the time bar and without any mention of litigation—could mislead an unsophisticated consumer to believe that the debt is enforceable in court, and therefore violate the FDCPA. The court concluded that while it is not automatically unlawful for a debt collector to seek payment of a time-barred debt, a collection letter violates the FDCPA when its statements could mislead an unsophisticated consumer to believe that her time-barred debt is legally enforceable, regardless of whether litigation is threatened. In this case, accepting as true the well-pleaded facts alleged by plaintiff, and viewing these facts in the light most favorable to her, the court concluded that her claim is facially plausible. Accordingly, the court reversed and remanded for further proceedings. View "Daugherty v. Convergent Outsourcing, Inc." on Justia Law

Plaintiff filed suit against SunTrust under the Fair Credit Reporting Act (FCRA), 15 U.S.C. 1681, alleging that she suffered actual damages and emotional distress due to erroneous information from her credit reports. The district court granted summary judgment to SunTrust. The court concluded that the district court did not err in categorizing these real estate investment losses as related to a failed “commercial business transaction[ ]” that falls outside the scope of the FCRA. The court also concluded that plaintiff points to no evidence that the denial of home loan repairs was actually caused by SunTrust’s conduct. Finally, the court concluded that plaintiff is not entitled to emotional distress damages where the only evidence of emotional distress that plaintiff points to is her own vague and conclusory deposition testimony. Accordingly, the court affirmed the judgment. View "Bacharach v. Suntrust Mortgage, Inc." on Justia Law

Plaintiffs are individuals who obtained property tax loans from defendant property tax lenders in exchange for the transfer of their tax liens pursuant to Sections 32.06 and 32.065 of the Texas Tax Code. In these four consolidated appeals, at issue is whether the Truth in Lending Act's (TILA), 15 U.S.C. 1602(f), (g), (i), disclosure and consumer protection requirements apply to transfers of property tax liens carried out under Section 32.06 of the Texas Tax Code. The court concluded that the transfer of a tax lien does not constitute an extension of “credit” that is subject to TILA. Accordingly, the court denied the district court's dismissal of No. 14-51326, and reversed the district court's denial of defendants' motion to dismiss in No. 15-50199, 15-50340, and 15-50437. View "Billings v. Propel Fin. Servs." on Justia Law

Plaintiff filed suit for breach of contract, negligence, wrongful foreclosure, and violations of the Texas Deceptive Trade Practices Act (DTPA), Tex. Bus. & Com. Code 17.50(a)(1)). On appeal, plaintiff challenged the district court's dismissal of her claims, as well as her motion to join a non-diverse defendant. The court concluded that the district court's dismissal of plaintiff's breach-of-contract claim was proper because she failed to allege any facts showing her own performance and did not refute the facts in documents referred to in her complaint, central to her claims, and attached to the motion to dismiss; the dismissal of the negligence claim was proper where any damages stemming from an alleged violation of those solely contractual duties are not redressable in tort; the wrongful-foreclosure claim was properly dismissed where plaintiff never alleged that Wells Fargo disposed of the house at a “grossly inadequate selling price,” nor does she allege that Wells Fargo fraudulently chilled the bidding at the foreclosure sale; and, where plaintiff bases her DTPA claims on Wells Fargo’s failure to make automatic withdrawals to pay the loan, such services cannot form the basis of a DTPA claim because they are incidental to the loan and would serve no purpose apart from facilitating the mortgage loan. Finally, in regard to the motion to join a non-diverse defendant, the district court applied the correct legal standard and its finding of fact were not clearly erroneous. Accordingly, the court affirmed the judgment. View "Villarreal v. Wells Fargo Bank, N.A." on Justia Law

Plaintiffs appealed the district court's grant of summary judgment for Wells Fargo in a suit stemming from plaintiffs' default on a home mortgage. Plaintiff asserted claims for common-law fraud and fraudulent inducement. The court concluded that plaintiffs' claimed damages are either categorically not damages, too speculative, or unsubstantiated assertions. Because plaintiffs failed to give proof to support an element of their fraud claims, the district court committed no error in granting summary judgment. The district court did not commit error, let alone plain error, in denying a continuance where plaintiffs filed only a one-line request for a continuance without any supporting evidence regarding the need for additional discovery or why existing discovery had been incomplete. Accordingly, the court affirmed the judgment. View "Lawrence v. FHLMC" on Justia Law

Plaintiff filed suit against BOA and Wells Fargo alleging, among other claims, that BOA had violated Section 51.002(d) of the Texas Property Code and the Texas Debt Collection Act (TDCA), Tex. Fin. Code Ann. 392.301(a)(8), 392.303(a)(2), and 392.304(a)(8). On appeal, plaintiff challenged the district court's grant of summary judgment for BOA. The court concluded that, even if section 51.002(d) authorizes a private cause of action, plaintiff fails to state a claim because she did not allege that BOA attempted to send her a timely notice of sale or to initiate foreclosure. Further, the court concluded that, irrespective of any statutory notice requirements, BOA did not violate section 392.301(a)(8) of the TDCA by threatening to foreclose; plaintiff failed to allege a violation of section 392.303(a)(2); and plaintiff failed to establish any of the elements required by section 392.304(a)(8). Accordingly, the court affirmed the judgment. View "Rucker v. Bank of America" on Justia Law