Justia Consumer Law Opinion Summaries

A group of grocery retailers and public interest organizations challenged federal regulations that established a national uniform disclosure standard for foods containing genetically modified ingredients. Congress had directed the Secretary of Agriculture to create this standard, which was delegated to the Agricultural Marketing Service (AMS). The AMS’s regulations, effective January 1, 2022, required certain foods to disclose if they were “bioengineered” or contained “bioengineered” ingredients, but generally excluded highly refined foods where genetically modified material was undetectable. Plaintiffs argued that this exclusion, the mandated use of the term “bioengineered” instead of more familiar terms like “GMO,” and the allowance of QR code and text-message disclosure options were unlawful or arbitrary under the Administrative Procedure Act (APA).The United States District Court for the Northern District of California granted summary judgment to the plaintiffs only on their challenge to the QR code and text-message disclosure options, remanding those provisions to the AMS without vacating them. The court denied summary judgment on all other claims, which the Ninth Circuit construed as a final judgment granting summary judgment to the AMS and intervenor-defendants on the remaining claims. Plaintiffs appealed.The United States Court of Appeals for the Ninth Circuit held that the plaintiffs had standing and that the AMS committed legal error by generally excluding highly refined foods from the definition of “bioengineered foods.” The court reversed the district court’s grant of summary judgment to the defendants on this issue, remanded with instructions to grant summary judgment to the plaintiffs, and directed the district court to determine whether any regulatory provisions should be vacated. The Ninth Circuit affirmed the district court’s rejection of the claim that the use of “bioengineered” was arbitrary and capricious, finding the agency’s choice reasonable. The court also held that the district court abused its discretion by not vacating the two disclosure-format regulations and directed prospective vacatur after further input from the parties. The judgment was otherwise affirmed. View "NATURAL GROCERS V. ROLLINS" on Justia Law

Ajay Thakore, a resident of La Jolla, California, and owner of Gopher Media LLC, a digital marketing agency, became involved in a dispute with Andrew Melone and American Pizza Manufacturing (APM), a local “take-n-bake” restaurant. The conflict began after the City of San Diego converted parking spaces outside APM to 15-minute zones. Thakore, who frequented nearby businesses and allegedly had a financial stake in a competitor, was accused of parking for extended periods and initiating contentious exchanges. Thakore and Gopher Media sued Melone and APM in the United States District Court for the Southern District of California, alleging harassment, discrimination, and unfair competition. Melone and APM counterclaimed, alleging defamation, trade libel, and unfair business practices, including claims that Thakore and Gopher Media orchestrated negative online reviews and made false statements on social media.In response to the countercomplaint, Thakore and Gopher Media filed a motion to strike under California’s anti-SLAPP statute (Cal. Civ. Proc. Code § 425.16), arguing that the alleged conduct constituted protected speech on a public issue. The United States District Court for the Southern District of California denied the anti-SLAPP motion. Thakore and Gopher Media then sought an interlocutory appeal to the United States Court of Appeals for the Ninth Circuit, challenging the denial.The United States Court of Appeals for the Ninth Circuit, sitting en banc, reviewed whether it had jurisdiction to hear an interlocutory appeal from the denial of an anti-SLAPP motion under the collateral order doctrine. The court held that such denials do not resolve issues completely separate from the merits and are not effectively unreviewable after final judgment. Accordingly, the Ninth Circuit overruled its prior decision in Batzel v. Smith, dismissed the appeal for lack of jurisdiction, and remanded the case. View "GOPHER MEDIA LLC V. MELONE" on Justia Law

A group of borrowers in California brought a class action against Flagstar Bank, alleging that the bank failed to pay interest on their mortgage escrow accounts as required by California Civil Code § 2954.8(a). Flagstar did not pay interest on these accounts, arguing that the National Bank Act (NBA) preempted the California law, and therefore, it was not obligated to comply. The plaintiffs sought restitution for the unpaid interest.The United States District Court for the Northern District of California, relying on the Ninth Circuit’s prior decision in Lusnak v. Bank of America, N.A., granted summary judgment for the plaintiffs. The court ordered Flagstar to pay restitution and prejudgment interest to the class. Flagstar appealed to the United States Court of Appeals for the Ninth Circuit, which affirmed the district court’s decision, holding that Lusnak foreclosed Flagstar’s preemption argument. However, the Ninth Circuit remanded the case to the district court to correct the class definition date and the judgment amount due to errors in the statute of limitations tolling and calculation of damages.On remand from the United States Supreme Court, following its decision in Cantero v. Bank of America, N.A., the Ninth Circuit reviewed whether it could overrule Lusnak in light of Cantero. The court held that Cantero did not render Lusnak “clearly irreconcilable” with Supreme Court precedent, and therefore, the panel lacked authority to overrule Lusnak. The Ninth Circuit affirmed the district court’s holding that the NBA does not preempt California’s interest-on-escrow law, but vacated and remanded the judgment and class certification order for modification of the class definition date and judgment amount. View "KIVETT V. FLAGSTAR BANK, FSB" on Justia Law

The defendant, a former U.S. Coast Guard employee, was convicted by a jury of murdering two co-workers in Alaska. At the time of the government’s collection action, he held approximately $450,000 in a Thrift Savings Plan (TSP) account, a federal retirement savings plan. His wife had a statutory right to a joint and survivor annuity from the account, and federal law generally requires spousal consent for lump-sum withdrawals. Following his conviction, the government sought to collect the entire balance of his TSP account as restitution for the victims’ families.The United States District Court for the District of Alaska initially ordered restitution from the defendant’s retirement and disability income, including his TSP funds, but limited lump-sum withdrawals from the TSP without spousal consent, instead permitting monthly payments. On appeal, the United States Court of Appeals for the Ninth Circuit vacated the restitution order, holding that the district court could not use the All Writs Act to bypass statutory garnishment limits and remanded for a determination of whether the defendant’s benefit streams constituted “earnings” subject to a 25% garnishment cap under the Consumer Credit Protection Act.On remand, the district court issued amended restitution orders authorizing the government to collect the entire TSP account balance as a lump sum. The defendant appealed, arguing that statutory spousal protections limited the government to periodic garnishments. The United States Court of Appeals for the Ninth Circuit held that the government may only cash out a defendant’s TSP account to satisfy a restitution order under the Mandatory Victims Restitution Act if the plan’s terms would allow the defendant to do so at the time of the order. Because spousal consent was required and not obtained, the court vacated the restitution orders and remanded for further proceedings. View "United States v. Wells" on Justia Law

Plaintiffs, representing themselves and a putative class, purchased Kleenex Germ Removal Wet Wipes manufactured by Kimberly-Clark Corporation. They alleged that the product’s labeling misled consumers into believing the wipes contained germicides and would kill germs, rather than merely wiping them away with soap. Plaintiffs claimed that this misrepresentation violated several California consumer protection statutes. The wipes were sold nationwide, and the plaintiffs included both California and non-California residents.The United States District Court for the Northern District of California first dismissed the non-California plaintiffs’ claims for lack of personal jurisdiction and dismissed the remaining claims under Rule 12(b)(6), finding that the labels would not plausibly deceive a reasonable consumer. The court dismissed the Second Amended Complaint (SAC) without leave to amend, and plaintiffs appealed.On appeal, the United States Court of Appeals for the Ninth Circuit reviewed whether subject-matter jurisdiction existed under diversity jurisdiction statutes, 28 U.S.C. §§ 1332(a) and 1332(d)(2). The court found that the SAC failed to allege Kimberly-Clark’s citizenship and did not state the amount in controversy. The panel held that diversity of citizenship cannot be established by judicial notice alone and that the complaint must affirmatively allege the amount in controversy. Plaintiffs were permitted to submit a proposed Third Amended Complaint (TAC), which successfully alleged diversity of citizenship but failed to plausibly allege the required amount in controversy for either statutory basis. The court concluded that neither it nor the district court had subject-matter jurisdiction and vacated the district court’s judgment, remanding with instructions to dismiss the case without prejudice. The panel denied further leave to amend, finding that additional amendment would be futile. View "ROSENWALD V. KIMBERLY-CLARK CORPORATION" on Justia Law

After purchasing a collectible from an online retailer, the plaintiff was charged multiple times through his PayPal account for additional items he alleges he did not knowingly subscribe to. He filed a putative class action in California state court against the retailer, asserting claims under California’s False Advertising Law and Unfair Competition Law. Importantly, he sought only equitable restitution and did not pursue damages, even though he conceded that damages were available under California’s Consumer Legal Remedies Act.The defendant removed the case to the United States District Court for the Southern District of California under the Class Action Fairness Act, which was not disputed as a proper basis for federal jurisdiction. The plaintiff then moved to remand, arguing that the federal court lacked “equitable jurisdiction” because he had an adequate remedy at law available, even though he chose not to pursue it. The district court agreed, holding that it could remand for lack of equitable jurisdiction and that the defendant could not waive the defense that an adequate legal remedy was available.On appeal, the United States Court of Appeals for the Ninth Circuit held that district courts do have the authority to remand a removed case to state court for lack of equitable jurisdiction. However, the Ninth Circuit further held that a defendant may waive the adequate-remedy-at-law defense in order to keep the case in federal court. The court vacated the district court’s remand order and sent the case back to allow the defendant the opportunity to perfect its waiver. If the defendant waives the defense, the case may proceed in federal court. View "RUIZ V. THE BRADFORD EXCHANGE, LTD." on Justia Law

Ashley Popa visited a website operated by PSP Group LLC, which used a session-replay technology called “Clarity,” owned by Microsoft Corporation. This technology recorded users’ interactions with the website, including mouse movements, clicks, and some text inputs. Popa alleged that Clarity collected information such as her browsing activity and partial address details, and that this data was used to recreate her visit for analysis by PSP. She filed a putative class action, claiming violations of Pennsylvania’s Wiretapping and Electronic Surveillance Control Act (WESCA) and intrusion upon seclusion.Popa initially filed her complaint in the United States District Court for the Western District of Pennsylvania, later amending it. The case was transferred to the United States District Court for the Western District of Washington. Both defendants moved to dismiss; PSP argued lack of subject matter jurisdiction and failure to state a claim, while Microsoft moved to dismiss for failure to state a claim. The district court found that Popa failed to establish Article III standing, concluding that the information collected did not constitute the type of private information historically protected by law. The court dismissed the action without prejudice and denied Microsoft’s motion as moot.On appeal, the United States Court of Appeals for the Ninth Circuit reviewed the district court’s dismissal de novo. The Ninth Circuit held that Popa did not allege a “concrete” injury sufficient for Article III standing, as required by TransUnion LLC v. Ramirez. The court found that the alleged harm was not analogous to common-law privacy torts such as intrusion upon seclusion or public disclosure of private facts, as Popa did not identify any highly offensive or private information collected. The Ninth Circuit affirmed the district court’s dismissal. View "Popa v. Microsoft Corp." on Justia Law

An individual whose nursing license was revoked in 2011 was subsequently excluded from participating in federally funded health care programs, a status that remains ongoing. When she later applied for a job involving health care consulting, the prospective employer requested a background check from a consumer reporting agency. The agency’s report disclosed both her current exclusion from federal health care programs and the fact that her license had been revoked in 2011. As a result, her job offer was rescinded. She disputed the report but was unsuccessful.She then filed a class action lawsuit in the United States District Court for the District of Arizona, alleging that the agency violated the Fair Credit Reporting Act (FCRA) by including adverse information more than seven years old in its report. The district court granted summary judgment for the agency, holding that reporting the ongoing exclusion was permissible because it was a continuing event, and that reporting the reason for the exclusion (the license revocation) was also allowed. The court further found that, even if there was a violation, the agency’s interpretation of the FCRA was not objectively unreasonable, so there was no negligent or willful violation.On appeal, the United States Court of Appeals for the Ninth Circuit held that the agency did not violate the FCRA by reporting the ongoing exclusion, as such exclusions may be reported for their duration and for seven years after they end. However, the court found that reporting the underlying license revocation, which occurred more than seven years before the report, did violate the FCRA. Despite this, the Ninth Circuit affirmed the district court’s judgment because the agency’s interpretation of the statute was not objectively unreasonable, and thus its violation was neither negligent nor willful. View "Grijalva v. ADP Screening and Selection Services, Inc." on Justia Law

Andrew King, a customer of Navy Federal Credit Union (NFCU), was charged a $15 returned-check fee despite not being at fault for the check's failure to clear. King argued that this fee constituted an "unfair" and "unlawful" business practice under California's Unfair Competition Law (UCL) and violated the federal Consumer Financial Protection Act (CFPA). He filed a lawsuit in state court, which NFCU removed to federal court.The United States District Court for the Central District of California dismissed King's state law claims, ruling that they were preempted by federal law. Specifically, the court found that 12 C.F.R. § 701.35(c), which governs federal credit unions, expressly preempted King's UCL claim. The court concluded that state laws regulating account fees are not applicable to federal credit unions, and thus, King's claim was preempted.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 plain language of 12 C.F.R. § 701.35(c) expressly preempts state laws regulating account fees for federal credit unions. The court rejected King's arguments that the UCL transcends the preemption clause, stating that all state laws regulating account fees, whether general or specific, have no application to federal credit unions. The court emphasized that the regulation's preemption clause operates independently of whether a fee complies with federal law. Thus, the Ninth Circuit affirmed the district court's decision to dismiss King's UCL claim on preemption grounds. View "KING V. NAVY FEDERAL CREDIT UNION" on Justia Law

Two minor boys, referred to as John Doe 1 and John Doe 2, were coerced by a trafficker into producing pornographic content, which was later posted on Twitter. Despite reporting the content to Twitter, the platform did not immediately remove it, leading to significant views and retweets. The boys and their mother made multiple attempts to have the content removed, but Twitter only acted after being prompted by the Department of Homeland Security.The United States District Court for the Northern District of California dismissed the plaintiffs' complaint, primarily based on the immunity provided under § 230 of the Communications Decency Act of 1996. The court found that Twitter was immune from liability for most of the claims, including those under the Trafficking Victims Protection Reauthorization Act (TVPRA) and California product-defect claims, as these claims treated Twitter as a publisher of third-party content.The United States Court of Appeals for the Ninth Circuit reviewed the case. The court held that Twitter is immune from liability under § 230 for the TVPRA claim and the California product-defect claim related to the failure to remove posts and the creation of search features that amplify child-pornography posts. However, the court found that the plaintiffs' claims for negligence per se and their product-liability theory based on defective reporting-infrastructure design are not barred by § 230 immunity, as these claims do not arise from Twitter's role as a publisher. Consequently, the court affirmed the dismissal of the TVPRA and certain product-defect claims, reversed the dismissal of the negligence per se and defective reporting-infrastructure design claims, and remanded the case for further proceedings. View "DOE 1 V. TWITTER, INC." on Justia Law