Justia Consumer Law Opinion Summaries

A borrower in Rhode Island financed a home purchase with a mortgage from a national bank. The mortgage required the borrower to make advance payments for property taxes and insurance into an escrow account managed by the bank. The bank did not pay interest on these escrowed funds, despite a Rhode Island statute mandating that banks pay interest on such accounts. Years later, the borrower filed a class action lawsuit against the bank, alleging breach of contract and unjust enrichment for failing to pay the required interest under state law.The United States District Court for the District of Rhode Island dismissed the complaint, agreeing with the bank that the National Bank Act preempted the Rhode Island statute. The court reasoned that the state law imposed limits on the bank’s federal powers, specifically the power to establish escrow accounts, and thus significantly interfered with the bank’s incidental powers under federal law. The court did not address class certification or the merits of the unjust enrichment claim, focusing solely on preemption.On appeal, the United States Court of Appeals for the First Circuit reviewed the case after the Supreme Court’s decision in Cantero v. Bank of America, N.A., which clarified the standard for preemption under the National Bank Act. The First Circuit held that the district court erred by not applying the nuanced, comparative analysis required by Cantero. The appellate court found that the bank failed to show that the Rhode Island statute significantly interfered with its federal banking powers or conflicted with the federal regulatory scheme. The First Circuit vacated the district court’s judgment and remanded the case for further proceedings, allowing the borrower’s claims to proceed. View "Conti v. Citizens Bank, N.A." on Justia Law

A resident of a memory-care facility in Massachusetts alleged that the facility’s court-appointed receiver, KCP Advisory Group, LLC, conspired with others to unlawfully evict residents, including herself, by falsely claiming that the local fire department had ordered an emergency evacuation. The resident, after being transferred to another facility, filed suit in the United States District Court for the District of Massachusetts, asserting several state-law claims against KCP and other defendants. The complaint alleged that KCP’s actions violated statutory and contractual notice requirements and were carried out in bad faith.KCP moved to dismiss the claims against it, arguing that as a court-appointed receiver, it was entitled to absolute quasi-judicial immunity. The district court granted the motion in part and denied it in part, holding that while quasi-judicial immunity barred claims based on negligent performance of receivership duties, it did not bar claims alleging that KCP acted without jurisdiction, contrary to law and contract, or in bad faith. The court thus denied KCP’s motion to dismiss several counts, including those for violation of the Massachusetts Consumer Protection Act, intentional infliction of emotional distress, civil conspiracy, fraud, and breach of fiduciary duty. KCP appealed the denial of immunity as to these counts.The United States Court of Appeals for the First Circuit reviewed the district court’s denial of absolute quasi-judicial immunity de novo. The appellate court held that KCP’s alleged acts—removing residents from the facility—were judicial in nature and within the scope of its authority as receiver. Because KCP did not act in the absence of all jurisdiction, the court concluded that quasi-judicial immunity barred all of the resident’s claims against KCP. The First Circuit therefore reversed the district court’s denial of KCP’s motion to dismiss the specified counts. View "Suny v. KCP Advisory Group, LLC" on Justia Law

The case involves a dispute between several plaintiffs, who are foreign nationals participating in an au pair program, and Cultural Care, Inc., a Massachusetts company that places au pairs with host families in the U.S. The plaintiffs allege that Cultural Care violated their rights under the Fair Labor Standards Act (FLSA) and various state wage and hour laws by failing to pay them legal wages. They also claim violations of state deceptive trade practices laws.The United States District Court for the District of Massachusetts denied Cultural Care's motion to dismiss the complaint, including its defense of derivative sovereign immunity under Yearsley v. W.A. Ross Construction Company. Cultural Care appealed, but the United States Court of Appeals for the First Circuit affirmed the District Court's decision, concluding that Cultural Care had not established entitlement to protection under Yearsley. After the case returned to the District Court, Cultural Care filed a motion to compel arbitration based on agreements in contracts signed by the au pairs with International Care Ltd. (ICL), a Swiss company. The District Court denied this motion, ruling that Cultural Care had waived its right to compel arbitration and that it could not enforce the arbitration agreement as a nonsignatory.The United States Court of Appeals for the First Circuit reviewed the case and affirmed the District Court's denial of the motion to compel arbitration. The court held that Cultural Care, as a nonsignatory to the ICL Contract, could not enforce the arbitration agreement under either third-party beneficiary theory or equitable estoppel. The court emphasized that the arbitration agreement did not demonstrate with "special clarity" that the signatories intended to confer arbitration rights on Cultural Care. Additionally, the plaintiffs' statutory claims did not depend on the ICL Contract, making equitable estoppel inapplicable. View "Posada v. Cultural Care, Inc." on Justia Law

In 1982, Lesley Phillips purchased an apartment in Cambridge, Massachusetts, assuming a preexisting mortgage. Phillips' spouse, Linda Pinti, was added to the deed in 2005. In 2008, Pinti and Phillips refinanced with a $160,000 promissory note and mortgage from Emigrant Mortgage Company (EMC). They defaulted on the note in 2009, and EMC initiated foreclosure proceedings. In 2012, EMC mistakenly issued a discharge of the mortgage, which Pinti recorded in 2015 after a Massachusetts Supreme Judicial Court decision voided the foreclosure sale.EMC filed a federal action in 2016 to strike the discharge, but the court dismissed it, ruling EMC was not the mortgagee. Emigrant Residential, LLC (Emigrant) then filed a new action in 2019. The district court granted summary judgment for Emigrant, striking the discharge and rejecting Pinti's counterclaims. Pinti appealed, contesting the district court's rulings on standing, the discharge, unclean hands, restoration to the status quo, and her Chapter 93A claim.The United States Court of Appeals for the First Circuit affirmed the district court's decision. The court held that Emigrant had standing as the holder of the note, which was sufficient under Article III. The court found no genuine dispute that the discharge was a mistake, supported by EMC's policies and the fact that the note was never returned to Pinti. The court also ruled that Emigrant was entitled to equitable relief, rejecting Pinti's arguments of unclean hands and the inability to restore the status quo. Finally, the court upheld the dismissal of Pinti's Chapter 93A claim as time-barred. View "Emigrant Residential LLC v. Pinti" on Justia Law

Plaintiffs Jodi Bourgeois and Pamela Smith filed separate lawsuits against The TJX Companies, Inc., Home Depot U.S.A., Inc., and The Gap, Inc., alleging violations of the New Hampshire Driver Privacy Act (NH DPA). The plaintiffs claimed that the retailers required them to present their driver's licenses for non-receipted returns and subsequently disclosed their driver's license information to a third party, The Retail Equation (TRE), without their consent. The plaintiffs argued that this disclosure violated sections IX(a) and IX(b) of the NH DPA.The United States District Court for the District of New Hampshire dismissed the complaints in all three cases. The court held that the plaintiffs failed to state a claim under the NH DPA because a driver's license in the possession of the person to whom it pertains is not considered a "motor vehicle record" under the statute. The court also found that the information disclosed to TRE was not from a "department record" as defined by the NH DPA.The United States Court of Appeals for the First Circuit reviewed the consolidated appeals. The court affirmed the district court's dismissals, agreeing that the plaintiffs' driver's licenses, in their own possession, are not "motor vehicle records" under the NH DPA. The court also held that the term "department record" refers to authentic copies of documents deposited and kept with the New Hampshire Department of Safety, and the information disclosed to TRE did not fall within this definition. Therefore, the plaintiffs' claims under sections IX(a) and IX(b) of the NH DPA were not supported by the facts alleged. View "Bourgeois v. The TJX Companies, Inc." on Justia Law

Gerardo Salvati died from injuries he sustained while doing maintenance work. Gerardo’s wife, Lucia (hereinafter referred to as Salvati) filed a lawsuit seeking damages for wrongful death and loss of consortium. The underlying defendants had a primary policy through Western World Insurance Company in the amount of $1 million and an excess policy through the American Insurance Company (AIC) in the amount of $9 million. AIC refused to provide coverage to the underlying defendants. Salvati and the underlying defendants eventually reached a $6 million settlement agreement. In exchange for tendering the full $1 million of the Western World primary insurance policy, the agreement released Western World and the underlying defendants from any further liability and assigned all rights held by the underlying defendants against AIC to Salvati. Thereafter, Salvati filed a complaint against AIC, alleging, inter alia, breach of contract and seeking a declaratory judgment that she was entitled to collect $5 million from AIC under the excess policy. The district court dismissed the complaint for failure to state a claim. The Supreme Court affirmed, holding (1) Salvati failed to show that the settlement agreement triggered AIC’s duty to indemnify; and (2) Salvati may not bring a claim under Mass. Gen. Laws ch. 176D, and therefore, none of her causes of action survived. View "Salvati v. American Insurance Co." on Justia Law

Hubbard Systems, Inc. (HSI) was in the business of developing, marketing, and selling a debt collection software program titled “Collection Partner.” In 1992, Gregory Turner entered into a rent-to-own agreement with HSI in which he was granted a temporary rental license for the use of Collection Partner. Turner made the final installment payment in 1996, after which Turner owned a permanent license to the software. In April 2011, HSI sent Turner a new license key to reflect an update in the software. The license expired on May 31, 2011. On June 1, 2011, HSI sent Turner a new license key that permitted him uninterrupted access to the software. In 2012, Appellant brought suit, alleging that HSI violated the Computer Fraud and Abuse Act when it issued a license key that expired on May 31, 2011, despite the fact that he owned a permanent license to the Collection Partner software. The district court accepted and adopted the magistrate judge’s report and recommendation, denied Turner’s motion to strike, and granted summary judgment in favor of HSI. The First Circuit affirmed, holding that the district court did not err in granting HSI’s motion for summary judgment and denying Turner’s motion to strike. View "Turner v. Hubbard Systems, Inc." on Justia Law

Plaintiff purchased CVS-brand Vitamin E 400 International Units Softgels at a CVS in Plainview, New York. The bottle containing the product bore a label that advertised the product as supporting “heart health.” Plaintiff filed a putative class action complaint, claiming that there were no scientifically valid studies supporting the “heart health” statements. In her complaint, Plaintiff asserted a violation of the New York Consumer Protection Act (NYCPA) and a piggy-back common law claim of unjust enrichment. The district court dismissed Plaintiff’s complaint for failure to state a claim, concluding that federal law preempted Plaintiff’s effort to maintain this action under New York’s consumer protection law. The First Circuit reversed, holding (1) neither federal nor state law posed any bar to recovery under NYCPA to the extent that recovery was predicated on a failure by CVS to comply with the requirements of Federal Food Drug and Cosmetic Act section 343(r); and (2) the complaint adequately alleged that the label’s statements were misleading in a manner that violated the requirements of section 343(r), and therefore, the unjust enrichment count was also not preempted. View "Kaufman v. CVS Caremark Corp." on Justia Law

After seeking a mortgage modification under the Home Affordable Modification Program Plaintiff filed a complaint against Wells Fargo Bank, N.A. and Homeward Residential Inc., claiming breach of contract, unfair debt collection under Mass. Gen. Laws ch. 93A, and derivative equitable relief. A federal district court dismissed Plaintiff’s action in its entirety. The First Circuit vacated and remanded, holding that Plaintiff’s complaint sufficiently alleged that Defendants failed to offer her a mortgage modification in a timely manner and that Plaintiff had sufficiently pled damages for her Chapter 93A claim. On remand, the district court granted summary judgment in favor of Defendants. The First Circuit affirmed, holding that Plaintiff’s breach of contract and Chapter 93A claims failed, and therefore, her derivative claim for equitable relief failed as well. View "Young v. Wells Fargo Bank, N.A." on Justia Law

TelTech Systems, Inc.’s SpoofCard service, a prepaid minutes-based calling service, enables customers to disguise the phone number from which they place calls. In 2009, a customer placed several phone calls to Appellant using SpoofCard and, posing as someone else, made a series of sexually harassing comments to Appellant. Appellant sued TelTech under Massachusetts’s consumer protection statute. The district court granted summary judgment for TelTech, concluding that no reasonable jury could find that TelTech’s actions caused Appellant’s injuries. The First Circuit affirmed, holding that the district court did not err in ruling that, on this record, TelTech was entitled to summary judgment on Appellant’s state law claim. View "Walsh v. Teltech Systems, Inc." on Justia Law