Justia Consumer Law Opinion Summaries

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

A plaintiff purchased a product marketed by the defendant as "Neutrogena Oil-Free Face Moisturizer for Sensitive Skin." She alleged that the product contained oils and oil-based ingredients, contrary to its labeling. She filed a class action lawsuit against the defendant, claiming violations of California's deceptive marketing and consumer protection laws. The district court certified a class of California purchasers of the product.The defendant challenged the district court's reliance on the plaintiff's economic expert's proposed damages model, arguing it was too preliminary and did not match the plaintiff's theory of harm. The district court found the expert's model reliable for class certification purposes, noting that similar models had been approved in other cases. The defendant also argued that the elements of materiality and reliance were not susceptible to common proof, but the district court disagreed, finding that these elements could be established by reference to an objective, reasonable consumer standard.The United States Court of Appeals for the Ninth Circuit reviewed the case. The court held that the district court did not abuse its discretion in finding the expert's model could reliably measure damages on a classwide basis and matched the plaintiff's theory of harm. The court emphasized that the model need not be fully executed at the class certification stage, as long as it is reliable and capable of measuring damages in a manner common to the class. The court also held that materiality and reliance could be proven on a classwide basis using a reasonable consumer standard, and the defendant had not provided sufficient evidence to rebut the inference of reliance.The Ninth Circuit affirmed the district court's grant of class certification. View "Noohi v. Johnson & Johnson Consumer Inc." on Justia Law

Lisa Bodenburg, an Apple customer, purchased a 200 GB iCloud data storage plan, expecting it to add to the 5 GB of free storage she already had, resulting in a total of 205 GB. When she discovered that the plan only provided 200 GB in total, she filed a putative class action against Apple, alleging breach of contract and violations of California’s consumer protection laws due to Apple’s allegedly deceptive representations about its iCloud storage plans.The United States District Court for the Northern District of California dismissed Bodenburg’s action with prejudice. The court found that Bodenburg could not state a claim for breach of contract because Apple had fulfilled its contractual obligations by providing the additional storage as described in the iCloud Legal Agreement. The court also found that Bodenburg’s claims under California’s consumer protection laws did not satisfy the “reasonable consumer” test or the heightened pleading standard of Fed. R. Civ. P. 9(b).The United States Court of Appeals for the Ninth Circuit affirmed the district court’s dismissal. The panel held that Bodenburg could not state a claim for breach of contract because the iCloud Legal Agreement did not promise an additional 200 GB of storage but rather additional storage, which Apple provided. The court also held that Bodenburg’s claims under California’s consumer protection laws failed the reasonable consumer test, as Apple’s statements were not misleading when considered in context. Additionally, the claims did not meet Rule 9(b)’s heightened pleading requirements because Bodenburg could not demonstrate that Apple’s statements were false or deceptive. Thus, the dismissal of Bodenburg’s action was affirmed. View "Bodenburg v. Apple, Inc." on Justia Law

A plaintiff filed a putative class action against a dietary supplement company, alleging that the supplement Hydro BCAA was mislabeled. The plaintiff claimed that preliminary testing showed the supplement contained more carbohydrates and calories than listed on its FDA-prescribed label. The plaintiff tested the supplement using FDA methods but did not follow the FDA’s twelve-sample sampling process.The United States District Court for the Southern District of California dismissed the complaint, holding that the Food, Drug, and Cosmetic Act preempted the claims because the plaintiff did not plead that he tested the supplement according to the FDA’s sampling process. The district court noted a divide among district courts on whether plaintiffs must plead compliance with the FDA’s testing methods and sampling processes to avoid preemption.The United States Court of Appeals for the Ninth Circuit reviewed the case. The court held that the plaintiff’s complaint allowed a reasonable inference that the supplement was misbranded under the Act, even without allegations of compliance with the FDA’s sampling process. The court found that the plaintiff’s preliminary testing of one sample, which showed significant discrepancies in carbohydrate and calorie content, was sufficient to survive a motion to dismiss. The court emphasized that plaintiffs are not required to perform the FDA’s sampling process at the pleading stage to avoid preemption.The Ninth Circuit reversed the district court’s dismissal, allowing the plaintiff’s state-law claims to proceed. The court concluded that the plaintiff’s allegations were sufficient to avoid preemption and stated a plausible claim that the supplement was mislabeled under the Act. View "SCHEIBE V. PROSUPPS USA, LLC" on Justia Law

Yelp, a company that publishes consumer reviews, introduced a notification on its business pages for crisis pregnancy centers (CPCs) in 2022, stating that these centers typically offer limited medical services. After objections from several state Attorneys General, including Texas Attorney General Ken Paxton, Yelp replaced the notice with one stating that CPCs do not offer abortions or abortion referrals. Despite this change, Paxton initiated an investigation and sent Yelp a notice of intent to file suit, alleging that the original notice violated the Texas Deceptive Trade Practices – Consumer Protection Act (DTPA). Yelp then filed a lawsuit in federal court, claiming First Amendment retaliation, and sought to enjoin Paxton from further action. The next day, Paxton filed a state court action against Yelp.The United States District Court for the Northern District of California dismissed Yelp’s federal case based on the Younger abstention doctrine, which prevents federal courts from interfering with ongoing state judicial proceedings. The district court found that the requirements for Younger abstention were met and that the bad faith exception did not apply.The United States Court of Appeals for the Ninth Circuit affirmed the district court’s dismissal. The Ninth Circuit held that Younger’s bad faith exception did not apply because Yelp had not sufficiently established that the Texas civil enforcement action was brought without a reasonable expectation of obtaining a valid judgment or was facially meritless. The court also found that Yelp failed to show that Paxton’s enforcement action was motivated by a desire to harass or retaliate against Yelp for its support of abortion rights. The court concluded that the district court did not err in denying Yelp’s request for discovery and an evidentiary hearing. View "YELP INC. V. PAXTON" on Justia Law