Justia Consumer Law Opinion Summaries

The case involves an Arizona resident who received an unsolicited text message on his cell phone during the 2020 presidential election campaign. The message, sent by the Republican National Committee, included written text and an automatically downloaded video file featuring a still image of Ivanka Trump with a play button overlay. The plaintiff alleged the video contained an artificial or prerecorded voice and stated he never gave prior express consent to receive such messages. He claimed the message was part of a broader campaign targeting Arizona residents.In the United States District Court for the District of Arizona, the plaintiff filed a putative class action, alleging violations of two provisions of the Telephone Consumer Protection Act (TCPA): 47 U.S.C. § 227(b)(1)(A)(iii) and § 227(b)(1)(B), both prohibiting calls using an artificial or prerecorded voice without prior consent. The district court dismissed the complaint with prejudice under Rule 12(b)(6), holding that the statute did not apply because the recipient had to actively press play to hear the video’s audio, and, for the § 227(b)(1)(B) claim, because the message was exempted under FCC regulations for certain nonprofit organizations.On appeal, the United States Court of Appeals for the Ninth Circuit affirmed the district court’s dismissal. The Ninth Circuit held that the TCPA’s prohibitions apply only to the use of artificial or prerecorded voices in the manner in which a call is begun. Because the text message was made and initiated without the automatic playing of a prerecorded voice—the recipient had to affirmatively choose to play the video—the conduct did not violate the statutory provisions. The court concluded that sending a text message containing a video file that requires recipient interaction to play does not constitute “making” or “initiating” a call “using” a prerecorded voice under the TCPA. View "HOWARD V. REPUBLICAN NATIONAL COMMITTEE" on Justia Law

Milliman, Inc. operates a service that compiles consumer medical and prescription reports, which are then sold to insurers for underwriting decisions. The named plaintiff, James Healy, applied for life insurance, but Milliman provided a report to the insurer containing another person's medical records and social security number. This erroneous report flagged Healy as high risk for several serious medical conditions he did not actually have, resulting in the denial of his insurance application. Healy attempted to correct the report, but Milliman did not timely investigate or remedy the errors.Healy filed a class action in the United States District Court for the Western District of Washington, alleging that Milliman’s procedures violated the Fair Credit Reporting Act by failing to ensure maximum possible accuracy. The district court certified an “inaccuracy class” for those whose reports included mismatched social security numbers and risk flags. Milliman moved for partial summary judgment, arguing that Healy needed to show class-wide standing at this stage. The district court agreed, finding under TransUnion LLC v. Ramirez, 594 U.S. 413 (2021), that Healy had failed to present direct evidence of concrete injury on a class-wide basis, and dismissed the inaccuracy class.On interlocutory appeal, the United States Court of Appeals for the Ninth Circuit held that, following class certification in damages actions, both named and unnamed class members must present evidence of standing at summary judgment. However, the court clarified that plaintiffs may rely on either direct or circumstantial evidence, and need only show that a rational trier of fact could infer standing, not that standing is conclusively established. The panel reversed the district court’s partial summary judgment and remanded for reconsideration under the correct summary judgment standard. View "HEALY V. MILLIMAN, INC." on Justia Law

Joneca Company, LLC, and InSinkErator, LLC, are direct competitors in the garbage disposal market. InSinkErator alleged that Joneca marketed its disposals using horsepower designations that misrepresented the actual output power of the motors, thereby misleading consumers. InSinkErator claimed that industry and consumer standards understood horsepower to refer to the motor’s mechanical output, not merely the electrical input, and that Joneca’s advertising was causing it to lose sales and goodwill. InSinkErator tested Joneca’s products and found the output horsepower to be substantially less than advertised, prompting it to seek injunctive relief.The United States District Court for the Central District of California reviewed these allegations in the context of a motion for a preliminary injunction. After considering expert declarations and industry standards, the district court found that Joneca’s horsepower claims were literally false by necessary implication, as consumers would interpret horsepower designations as referring to output. The court also found that these claims were material to consumer purchasing decisions and that InSinkErator was likely to suffer irreparable harm absent an injunction. As a result, the court ordered Joneca to place disclaimers on its packaging and sales materials and required InSinkErator to post a $500,000 bond. Joneca appealed, challenging the district court’s findings on falsity, materiality, irreparable harm, balancing of hardships, and public interest.The United States Court of Appeals for the Ninth Circuit affirmed the district court’s preliminary injunction. The court held that the district court did not err in finding that InSinkErator was likely to succeed on the merits of its Lanham Act false advertising claim, that Joneca’s horsepower claims were materially misleading, and that InSinkErator faced irreparable harm. The Ninth Circuit found no abuse of discretion in the district court’s balancing of equities, bond requirement, or determination that the injunction served the public interest. View "INSINKERATOR, LLC V. JONECA COMPANY, LLC" on Justia Law

The plaintiff held a variable-rate credit card issued by a bank, with an agreement specifying that the interest rate for each billing cycle would be determined by adding a constant margin to the U.S. Prime Rate as published in The Wall Street Journal on the last day of each month. When the Federal Reserve increased the Federal Funds Rate multiple times from March 2022 to July 2023, the Prime Rate—and consequently, the plaintiff’s credit card interest rate—increased significantly. The new, higher rate was applied to the cardholder’s outstanding balances for the entire billing cycle, including balances incurred before the Prime Rate increased. The plaintiff, dissatisfied with paying higher interest on previous balances, filed a class action alleging that the bank’s method of calculating and applying the interest rate violated the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act) and California’s Unfair Competition Law.The United States District Court for the Northern District of California dismissed the case under Rule 12(b)(6), concluding that the bank’s method fell within a statutory exception in the CARD Act. The court found that the credit card agreement’s use of the Prime Rate, which is publicly available and not controlled by the bank, satisfied the CARD Act’s exception for variable rates tied to an external index.On appeal, the United States Court of Appeals for the Ninth Circuit reviewed the dismissal de novo. The appellate court held that the agreement complied with 15 U.S.C. § 1666i-1(b)(2), as the only variable affecting the rate was the Prime Rate, which was not under the bank’s control. The court found no violation of the CARD Act and affirmed the district court’s dismissal, holding that the bank’s method of setting variable rates according to the Prime Rate was lawful under the statute’s exception. View "MILLIKEN V. BANK OF AMERICA, N.A." on Justia Law

Epic Games, a developer and operator of the Epic Games Store, sued Apple over its App Store practices, alleging violations of federal and California competition law. The dispute centered on Apple’s rules requiring developers to use Apple’s in-app payment system, which imposed a 30% commission, and its prohibition of developers directing users to other purchasing options outside the App Store. After a bench trial, the district court found Apple’s anti-steering provisions violated California’s Unfair Competition Law by preventing informed consumer choice but upheld Apple’s in-app payment system requirement for digital goods. The court issued an injunction barring Apple from restricting developers from including in their apps buttons, links, or other calls to action that direct users to alternative purchasing mechanisms.Following the injunction, Apple implemented a compliance plan involving a 27% commission on linked-out purchases and a series of restrictions on how developers could present external payment options, including limitations on button design, link placement, and user flow. Epic contested Apple’s compliance, arguing these measures still effectively prohibited alternative purchases. After holding multiple evidentiary hearings, the United States District Court for the Northern District of California found Apple in civil contempt for failing to comply with the injunction, citing Apple’s bad faith and pretextual justifications. The district court imposed broad sanctions, including prohibiting any commission on linked-out purchases, restricting Apple’s ability to limit external links, and referring Apple for criminal investigation.On appeal, the United States Court of Appeals for the Ninth Circuit affirmed the district court’s contempt findings and most of the resulting sanctions but found portions of the sanctions—particularly the blanket ban on commissions—overbroad and more punitive than coercive. The Ninth Circuit reversed and remanded those parts for further tailoring, clarified the scope of permissible developer link prominence, and declined to vacate the injunction or reassign the case. The court otherwise affirmed the district court’s orders. View "EPIC GAMES, INC. V. APPLE INC." on Justia Law

Several individuals operated two multi-level marketing businesses, Success by Health and VOZ Travel. Success by Health sold coffee, tea, and nutraceuticals, promising affiliates “financial freedom” through a compensation structure that incentivized recruitment over product sales. VOZ Travel, launched in 2019 to offset losses, purported to sell travel services, but never produced the promised products. Both businesses generated substantial revenues, largely through affiliate recruitment. One of the individuals, James Noland, was already subject to a 2002 permanent injunction prohibiting him and those acting with him from running unlawful multi-level marketing schemes.The Federal Trade Commission (FTC) filed suit in the United States District Court for the District of Arizona, alleging violations of the Federal Trade Commission Act and related consumer protection rules. The district court granted an ex parte temporary restraining order, followed by a preliminary injunction that froze assets and installed a receiver. Summary judgment was entered for the FTC on some claims, and after an 11-day bench trial, the district court found the defendants liable for operating a pyramid scheme, making material misrepresentations, and violating two consumer protection rules. The court imposed monetary damages, a permanent injunction barring participation in multi-level marketing, and, for some defendants, a civil compensatory sanction for contempt of the 2002 injunction. The defendants appealed only the scope and nature of the relief.The United States Court of Appeals for the Ninth Circuit reviewed the case and affirmed in all respects. The court held that challenges to the preliminary injunction were moot. It found no abuse of discretion in the district court’s calculation and imposition of a civil compensatory sanction based on net revenues, nor in the award of monetary relief under Section 19 of the FTC Act without the need for prior administrative proceedings. The court also upheld the permanent injunction prohibiting future participation in multi-level marketing, finding it appropriately tailored to the defendants’ conduct. View "FEDERAL TRADE COMMISSION V. NOLAND" on Justia Law

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