Justia Consumer Law Opinion Summaries

Plaintiffs created accounts on justanswer.com and paid to ask questions. According to JustAnswer's Terms of Service, paying for answers automatically enrolled plaintiffs in a recurring monthly subscription. Plaintiffs alleged that JustAnswer violated the Electronic Funds Transfer Act and various state consumer protection laws by enrolling them in the subscription service without their consent and making cancellation difficult. JustAnswer sought to compel arbitration based on a provision in its Terms of Service, asserting that plaintiffs were put on inquiry notice of those terms and agreed to arbitrate any claims arising from their use of the site.The United States District Court for the Northern District of California denied JustAnswer's motion to compel arbitration. The court held that plaintiffs did not receive sufficient notice of JustAnswer's Terms of Service containing the arbitration clause, and thus no contract was formed. The court found that the payment pages and other advisals presented to plaintiffs were not sufficiently conspicuous to put them on inquiry notice of the terms, and the advisals did not explicitly inform users that clicking a button would constitute assent to the terms.The United States Court of Appeals for the Ninth Circuit affirmed the district court's order. The Ninth Circuit concluded that no contracts were formed between plaintiffs and JustAnswer under an inquiry theory of notice. The court held that the website did not provide reasonably conspicuous notice of the terms, and the advisals did not unambiguously manifest the plaintiffs' assent to those terms. Therefore, plaintiffs were not bound by the arbitration provision in JustAnswer's Terms of Service, and the motion to compel arbitration was denied. View "GODUN V. JUSTANSWER LLC" on Justia Law

Plaintiff AirDoctor, LLC, sells air purifiers and replacement air filters, while Defendant Xiamen Qichuang Trade Co., Ltd., sells replacement air filters primarily through Amazon.com. Plaintiff alleged that Defendant falsely advertised its air filters as compatible with Plaintiff’s air purifiers and offering equivalent filtration, which diverted sales from Plaintiff and harmed its reputation. Plaintiff filed a Complaint alleging violations of the Lanham Act, California’s Unfair Competition Law, and California’s False Advertising Law, seeking various forms of relief, including actual damages to be determined at trial, attorney’s fees, and an injunction.The United States District Court for the Central District of California entered default judgment in favor of Plaintiff after Defendant failed to appear or respond. However, the district court denied Plaintiff’s request for actual damages, reasoning that awarding damages would exceed what was demanded in the pleadings under Rule 54(c) of the Federal Rules of Civil Procedure, as the Complaint did not specify an amount of damages sought. The district court also denied attorney’s fees based on its local rules, which tied fees to the amount of damages awarded.The United States Court of Appeals for the Ninth Circuit reviewed the case and held that Rule 54(c) does not prohibit awarding actual damages in a default judgment when the pleadings sought such damages in an amount to be determined at trial. The court referenced its decision in Henry v. Sneiders, which allowed for damages to be awarded even if the exact amount was not specified in the complaint. The Ninth Circuit reversed the district court’s denial of damages and remanded the case for further proceedings consistent with its opinion. View "AirDoctor, LLC v. Xiamen Qichuang Trade Co., Ltd" on Justia Law

Paul Osheske, a Facebook user, purchased a movie ticket on Landmark Theatres' website. Landmark Theatres, operated by Silver Cinemas Acquisition Co., shared the name of the film, the location of the showing, and Osheske’s unique Facebook identification number with Facebook without his consent. Osheske filed a class action lawsuit against Landmark, alleging that this disclosure violated the Video Privacy Protection Act (VPPA).The United States District Court for the Central District of California dismissed Osheske’s complaint, concluding that Landmark Theatres did not qualify as a “video tape service provider” under the VPPA. The court reasoned that the activities of selling tickets and providing an in-theater movie experience did not fall under the VPPA’s definition of “rental, sale, or delivery of prerecorded video cassette tapes or similar audio visual materials.”The United States Court of Appeals for the Ninth Circuit reviewed the case and affirmed the district court’s dismissal. The Ninth Circuit held that the VPPA does not apply to businesses providing a classic in-theater moviegoing experience. The court determined that the statutory text and historical context of the VPPA indicate that the Act was intended to cover the rental, sale, or delivery of video products, not the provision of shared access to film screenings in a theater. Consequently, Landmark Theatres' conduct did not make it a “video tape service provider” under the VPPA. The court also noted that the district court’s dismissal without leave to amend was proper, as the complaint could not be saved by any amendment. View "OSHESKE V. SILVER CINEMAS ACQUISITION COMPANY" on Justia Law

The plaintiff, Katherine Chabolla, purchased a one-month subscription from ClassPass, a company offering access to gyms and fitness classes, in January 2020. Due to the COVID-19 pandemic, ClassPass paused charges but resumed them when gyms reopened. Chabolla filed a lawsuit alleging that ClassPass violated California’s Automatic Renewal Law, Unfair Competition Law, and Consumers Legal Remedies Act by resuming charges without proper notice.The United States District Court for the Northern District of California denied ClassPass’s motion to compel arbitration, which argued that Chabolla had agreed to arbitrate any claims by using their website. The district court found that the website did not provide reasonably conspicuous notice of the Terms of Use, which included the arbitration clause, and that Chabolla did not unambiguously manifest assent to those terms.The United States Court of Appeals for the Ninth Circuit reviewed the case and affirmed the district court’s decision. The court held that ClassPass’s website, which resembled a sign-in wrap agreement, did not provide reasonably conspicuous notice of the Terms of Use on the landing page or the first screen. Even if the second and third screens provided such notice, Chabolla did not unambiguously manifest her assent to the Terms of Use on those screens. The court concluded that Chabolla’s use of the website did not amount to an unambiguous manifestation of assent to the Terms of Use, and therefore, she was not bound by the arbitration clause within those terms. The court affirmed the district court’s order denying ClassPass’s motion to compel arbitration. View "CHABOLLA V. CLASSPASS, INC." on Justia Law

Ryan Six filed a lawsuit against IQ Data International, Inc. under the Fair Debt Collection Practices Act (FDCPA), alleging that IQ sent him a debt verification letter after he had informed the company that all communications should be directed to his attorney. Six claimed that this action violated 15 U.S.C. § 1692c(a)(2), which prohibits debt collectors from directly communicating with a consumer known to be represented by an attorney.The United States District Court for the District of Arizona dismissed Six's action for lack of subject matter jurisdiction, ruling that he lacked Article III standing because he did not suffer an injury in fact. The district court reasoned that receiving one unwanted letter did not constitute a concrete harm akin to those traditionally recognized by American courts, nor was it the type of abusive debt collection practice the FDCPA was intended to prevent.The United States Court of Appeals for the Ninth Circuit reviewed the case and reversed the district court's dismissal. The Ninth Circuit held that Six had Article III standing to bring his claim under § 1692c(a)(2). The court concluded that receiving a letter in violation of this provision constituted a concrete injury because it infringed on Six's privacy interests, a harm that Congress intended to prevent with the FDCPA. The court also found that this harm was analogous to the common law tort of intrusion upon seclusion, which protects against unwanted intrusions into one's private affairs. The court determined that Six's injury was particularized and actual, and that the remaining elements of standing were met, as there was a causal connection between the injury and IQ's conduct, and the relief sought would redress the intrusion.The Ninth Circuit reversed the district court's dismissal and remanded the case for further proceedings consistent with its opinion. View "SIX V. IQ DATA INTERNATIONAL, INC." on Justia Law

A cyberattack on California Pizza Kitchen, Inc. (CPK) in September 2021 compromised the personal information of over 100,000 former and current employees. This led to multiple class action lawsuits against CPK, alleging negligence and other claims. The consolidated plaintiffs reached a settlement with CPK, offering cash payments and credit monitoring services to class members, with CPK required to make payments only to those who submitted valid claims. The settlement's monetary value was estimated at around $950,000, while the attorneys sought $800,000 in fees.The United States District Court for the Central District of California approved the settlement but reserved judgment on the attorneys' fees until after the claims process concluded. The consolidated plaintiffs reported a final claims rate of 1.8%, with the maximum monetary value of the claims being around $950,000. Despite expressing concerns about the scope of attorneys' fees, the district court ultimately awarded the full $800,000 in fees and costs.The United States Court of Appeals for the Ninth Circuit reviewed the case and affirmed the district court's approval of the class settlement, finding that the district court had properly applied the heightened standard to review the settlement for collusion and had not abused its discretion in finding the settlement fair, reasonable, and adequate. However, the Ninth Circuit reversed the fee award, noting that the district court had not adequately assessed the actual value of the settlement and compared it to the fees requested. The case was remanded for the district court to determine the settlement's actual value to class members and award reasonable and proportionate attorneys' fees. View "IN RE: CALIFORNIA PIZZA KITCHEN DATA BREACH LITIGATION" on Justia Law

The Ninth Circuit filed an amended opinion affirming in part and vacating in part the dismissal of plaintiff's action for failure to state a claim, holding that the trustee of a California deed of trust is a "debt collector" under the Fair Debt Collection Practices Act (FDCPA).Actions taken to facilitate a non-judicial foreclosure, such as sending the notice of default and notice of sale, are not attempts to collect "debt" as that term is defined by the FDCPA; enforcement of a security interest will often involve communications between the forecloser and the consumer; and when these communications are limited to the foreclosure process, they do not transform foreclosure into debt collection. The panel explained that, because the money collected from a trustee's sale is not money owed by a consumer, it is not "debt" as defined by the FDCPA. In this case, the notices at issue did not request payment from plaintiff, but merely informed her that the foreclosure had begun, explained the timeline, and apprised her of her rights. Therefore, the panel held that ReconTrust's activities fell into the category of enforcement of a security interest, rather than general debt collection. View "Vien-Phuong Thi Ho v. ReconTrust" on Justia Law

Serena Kwan appealed the dismissal of her second amended complaint for failing to state a claim upon which relief can be granted. In 2014, Kwan, On Behalf of Herself and All Others Similarly Situated, filed a class action against Defendants-Appellees, SanMedica International, LLC (“SanMedica”), and Sierra Research Group, LLC (“Sierra”), alleging violations of California’s Unfair Competition Law (“UCL”) and California’s Consumers Legal Remedies Act (“CLRA”). The complaint was based on an allegation that the defendants falsely represented that their product, SeroVital, provided a 682% mean increase in Human Growth Hormone (“HGH”) levels, that it was clinically tested, and that “peak growth hormone levels” were associated with “youthful skin integrity, lean musculature, elevated energy production, [and] adipose tissue distribution." The Ninth Circuit concluded the district court correctly concluded that California law did not provide for a private cause of action to enforce the substantiation requirements of California’s unfair competition and consumer protection laws. Further, the district court did not err in concluding that Kwan’s second amended complaint failed to allege facts that would support a finding that SanMedica International’s claims regarding its product, SeroVital, were actually false. Accordingly, the Court affirmed dismissal. View "Kwan v. Sanmedica Int'l" on Justia Law

Plaintiffs filed suit against Nationstar and others, asserting claims relating to defendants' servicing of plaintiffs' home loan. Plaintiffs alleged violations of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692-1692p; intentional infliction of emotional distress (IIED); and a violation of the Nevada Deceptive Trade Practices Act (DTPA), Nev. Rev. Stat. 598.0915–598.0925, 598.0934. The district court dismissed the complaint. The court concluded that the district court properly dismissed plaintiffs' claims of violations of sections 1692c(a)(2), 1692d, and 1692e pursuant to Ho v. ReconTrust Co. The court reasoned that Nationstar was not engaged in "debt collection" and thus defendants were not "debt collectors" when interacting with plaintiffs. The court concluded, however, that the district court erred in dismissing plaintiffs' claim under section 1692f(6) on the ground that Nationstar was not collecting a debt. The court explained that, unlike sections 1692c(a)(2), 1692d, and 1692e, the definition of debt collector under section 1692f(6) includes a person enforcing a security interest. In this case, plaintiffs alleged that Nationstar threatened to take non-judicial action to dispossess plaintiffs of their home without a legal ability to do so. The court noted that such conduct is exactly what section 1692f(6) protects borrowers against. Finally, the court concluded that the district court correctly dismissed plaintiffs' claims of IIED and of violation of the DTPA. Accordingly, the court affirmed in part, reversed in part, and remanded. View "Dowers v. Nationstar Mortgage" on Justia Law

Plaintiffs, twenty individuals who purchased first generation four stroke outboard motors (the Class Motors), filed suit against defendants, alleging that the Class Motors contained an inherent design defect that caused severe, premature corrosion in the motors’ dry exhaust system. Plaintiffs alleged that defendants knew of the defect prior to the sales of the Class Motors to plaintiffs, and that the defect posed an unreasonable safety hazard. On appeal, plaintiffs challenged the district court's grant of YMC's motion to dismiss for lack of personal jurisdiction and its grant of YMUS's fifth motion to dismiss plaintiffs' consumer fraud claims. The court concluded that the district court lacked general jurisdiction over YMC because YMC does not have sufficient contacts with California; plaintiffs failed to plead facts sufficient to make out a prima facie case that YMC and YMUS were alter egos; and even assuming that YMUS's contacts could be imputed to YMC, this does not, on its own, suffice to establish general jurisdiction. The court also concluded that the district court lacked specific jurisdiction over YMC because plaintiffs do not allege any actions that YMC "purposefully directed" at California. Even assuming that some standard of agency continued to be relevant to the existence of specific jurisdiction pursuant to Daimler AG v. Bauman, plaintiffs failed to make out a prima facie case for any such agency relationship. Finally, the court concluded that plaintiffs failed to plead a prima facie case of consumer fraud where, although plaintiffs adequately pleaded defendants' presale knowledge of the defect, plaintiffs failed to plead the existence of an unreasonable safety hazard. Accordingly, the court affirmed the judgment. View "Williams v. Yamaha Motor Corp." on Justia Law