Justia Consumer Law Opinion SummariesArticles Posted in U.S. Court of Appeals for the Third Circuit
James v. Global TelLink Corp.
Fried v. JP Morgan Chase & Co
Fried bought a home in 2007 for $553,330; an appraisal estimated the home’s value at $570,000. Fried borrowed $497,950 at a fixed interest rate. Because the loan-to-purchase-price ratio was more than 80%, Chase, the servicer for Fried’s mortgage required her to obtain private mortgage insurance. Fried had to pay monthly premiums for that insurance until the ratio reached 78%; projected to happen around March 2016. After the housing market crashed in 2008, Fried had trouble making mortgage payments. Chase modified Fried’s mortgage under the Home Affordable Mortgage Program, part of the Emergency Economic Stabilization Act of 2008, by reducing the principal balance to $463,737. By reassessing the value of Fried’s home at the time of the modification, Chase extended Fried’s mortgage insurance premiums to 2026. The district court declined to dismiss Fried’s purported class action under the Homeowners Protection Act, 12 U.S.C. 4901. The Third Circuit affirmed, finding that the Act does not permit a servicer to rely on an updated property value, estimated by a broker, to recalculate the length of a homeowner’s mortgage insurance obligation following a modification; the Act requires that the ending of that obligation remain tied to the initial purchase price of the home. View "Fried v. JP Morgan Chase & Co" on Justia Law
In re: Horizon Healthcare Inc. Data Breach Litigation
Horizon Blue Cross Blue Shield provides health insurance products and services to approximately 3.7 million members. Two laptop computers, containing sensitive personal information about members, were stolen from Horizon. Four plaintiffs filed suit on behalf of themselves and other Horizon customers whose personal information was stored on those laptops, alleging willful and negligent violations of the Fair Credit Reporting Act (FCRA), 15 U.S.C. 1681, and numerous violations of state law. The district court dismissed the suit for lack of Article III standing. According to the court, none of the plaintiffs had claimed a cognizable injury because, although their personal information had been stolen, none of them had adequately alleged that the information was actually used to their detriment. The Third Circuit vacated. In light of the congressional decision to create a remedy for the unauthorized transfer of personal information, a violation of FCRA gives rise to an injury sufficient for Article III standing purposes. Even without evidence that the plaintiffs’ information was in fact used improperly, the alleged disclosure of their personal information created a de facto injury. View "In re: Horizon Healthcare Inc. Data Breach Litigation" on Justia Law
Hoffman v. Nordic Naturals, Inc.
Hoffman, “a serial pro se class action litigant,” frequently sues under the New Jersey Consumer Fraud Act, serving as both the sole class representative and sole class counsel. Hoffman has sued nearly 100 defendants in New Jersey state court in less than four years. Hoffman sued Nordic for its allegedly false and misleading advertisements for fish oil supplements. The suit was removed to federal court pursuant to the Class Action Fairness Act. The district court dismissed the lawsuit for failure to state a claim. Hoffman filed a second suit, alleging the same facts and legal theories, but with a smaller class, to reduce the amount recoverable and defeat federal jurisdiction. Nordic again removed the suit. The district court declined to remand the case and dismissed, finding the action procedurally barred under New Jersey’s entire controversy doctrine and, in the alternative, that Hoffman’s claims under the Consumer Fraud Act failed for substantially the same reasons they failed in the earlier suit. The Third Circuit affirmed. The district court was permitted to “bypass” the jurisdictional inquiry in favor of a non-merits dismissal on claim preclusion grounds. View "Hoffman v. Nordic Naturals, Inc." on Justia Law
Harnish v. Widener Univ. Sch. of Law
Named plaintiffs, 2008-2011 graduates of the Widener School of Law, claim that Widener violated the New Jersey and Delaware Consumer Fraud Acts by intentionally publishing misleading statistics, reporting that in 2005-2011, 90-97% of graduates were employed. In reality, only 50-70% of Widener graduates secured full-time legal positions. The school included non-legal and part-time positions without reporting the breakdown. In 2011, Widener improved its reporting, but allegedly continued to gather unreliable information by crediting secondhand accounts of employment and avoiding responses from unemployed graduates. The plaintiffs claim that publishing misleading statistics enabled Widener to inflate tuition. The plaintiffs moved to certify a class of “persons who enrolled in Widener University School of Law and were charged full or part-time tuition within the statutory period.” The district court denied class certification, finding that the plaintiffs could not meet FRCP 23(b)(3)’s requirement that common questions “predominate” over individual questions because they had not shown that they could prove damages by common evidence. The court noted differences in class members’ employment outcomes and that New Jersey has rejected a “fraud-on-the-market” theory outside the securities fraud context. Plaintiffs could not meet Rule 23(a)(3)’s requirement that the named plaintiffs’ claims be “typical” of the claims of the proposed class; students who enrolled in 2012 and later, after Widener improved its reporting, might prefer not to have Widener’s reputation tarnished by the lawsuit. The Third Circuit affirmed. The plaintiffs’ theory was insufficiently supported by class-wide evidence. View "Harnish v. Widener Univ. Sch. of Law" on Justia Law
MRL Dev. I, LLC v. Whitecap Inv. Corp
Between 2002-2006, Lucht purchased treated lumber for a deck on his vacation home in the Virgin Islands. The lumber allegedly decayed prematurely and he began replacing boards in 2010; he claims he did not discover the severity of the problem until the fall of 2011. Lucht sued the retailer, wholesaler, and treatment company of the lumber in February 2013, alleging a Uniform Commercial Code contract claim; a common law contract claim; a breach of warranty claim; a negligence claim; a strict liability claim; and a deceptive trade practices claim under the Virgin Islands Deceptive Trade Practices Act. The district court rejected the claims as time-barred. The Third Circuit affirmed, citing the “‘gist of the action doctrine,” which bars plaintiffs from bringing a tort claim that merely replicates a claim for breach of an underlying contract. View "MRL Dev. I, LLC v. Whitecap Inv. Corp" on Justia Law
Goldenstein v. Repossessors Inc.
Goldenstein, obtained a $1,000 online loan from a company owned by Chippewa Indians, incorporated under Chippewa tribal law, and authorized to issue loans secured by vehicles at interest rates greater than permitted under Pennsylvania law. Goldenstein pledged his car and was charged 250 percent interest. The company, after deducting a $50 transfer fee and wiring $950 to Goldenstein, withdrew installments of $207.90 from Goldenstein’s bank account in June and July. Goldenstein removed funds from the account because he did not recognize the activity on his bank statements. When the company attempted to collect the August installment, it was rejected for insufficient funds. Repossessors took Goldenstein’s car. Goldenstein was told that his payment would not be accepted, nor his car returned unless he signed releases. Goldenstein paid $2,393 ($2,143 for the loan and $250 in repossession fees), signed the releases, then filed suit, claiming violations of the Fair Debt Collection Practices Act, 15 U.S.C. 1692–1692p; Pennsylvania’s Fair Credit Extension Uniformity Act and Uniform Commercial Code; and the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1962(c). The Third Circuit vacated summary judgment in favor of the defendants on the RICO and state law claims, but affirmed as to the FDCPA claim. Forfeiture of collateral can amount to “collection of unlawful debt” under RICO, but defendants had a right to possession and did not violate the FDCPA by repossessing the car. View "Goldenstein v. Repossessors Inc." on Justia Law
Finkelman v. Nat’l Football League
The Ticket Law, N.J. Stat. 56:8-35.1, part of New Jersey’s Consumer Fraud Act, says: It shall be an unlawful practice for a person, who has access to tickets to an event prior to the tickets’ release for sale to the general public, to withhold those tickets from sale to the general public in an amount exceeding 5% of all available seating for the event. The Consumer Fraud Act permits private plaintiffs to sue any person who violates the Act and causes them to suffer ascertainable damages. Plaintiffs wanted to attend Super Bowl XLVIII, which was held in New Jersey in 2014. One plaintiff bought two tickets on the resale market, allegedly for much more than face price. They assert that the NFL’s method of selling tickets to Super Bowl XLVIII violated the Ticket Law and resulted in unjust enrichment. The Third Circuit affirmed dismissal. Neither plaintiff has constitutional standing to bring this case. Otherwise, anyone who purchased a Super Bowl ticket on the resale market would have standing to sue in federal court based on nothing more than conjectural assertions of causation and injury. Article III requires more. The court declined to interpret the Ticket Law’s meaning. View "Finkelman v. Nat'l Football League" on Justia Law
In Re: Google Inc Cookie Placement Consumer Privacy Litig.
Plaintiffs filed a class action alleging that defendants, who run internet advertising businesses, placed tracking cookies on the plaintiffs’ web browsers in contravention of their browsers’ cookie blockers and defendant Google’s own public statements. Essentially they claimed that the defendants acquired the plaintiffs’ internet history information when, in the course of requesting webpage advertising content at the direction of the visited website, the plaintiffs’ browsers sent that information directly to the defendants’ servers. They cited the Wiretap Act, 18 U.S.C. 2510; the Stored Communications Act, 18 U.S.C 2701; the Computer Fraud and Abuse Act, 18 U.S.C. 1030; and, against Google, violation of the privacy right conferred by the California Constitution, intrusion upon seclusion, the state Unfair Competition Law, the California Comprehensive Computer Data Access and Fraud Act, the California Invasion of Privacy Act, and the California Consumers Legal Remedies Act. The district court dismissed. The Third Circuit affirmed as to the federal claims, stating that fraud or deceit does not amount to wiretapping; the alleged conduct implicated no protected “facility” under the Stored Communications Act; and the plaintiffs alleged no damages under the Fraud Act. The court vacated dismissal of the state law claims against Google. View "In Re: Google Inc Cookie Placement Consumer Privacy Litig." on Justia Law
Leyse v. Bank of America NA
Leyse filed suit under the Telephone Consumer Protection Act, 47 U.S.C. 227, after receiving a prerecorded telemarketing call on the landline he shares with his roommate. Leyse was not the intended recipient of the call— his roommate was. The district court dismissed for lack of statutory standing. The Third Circuit reversed, concluding that Leyse has statutory standing. His status as a regular user of the phone line and occupant of the residence that was called brings him within the language of the Act and the zone of interests it protects. View "Leyse v. Bank of America NA" on Justia Law