Justia Consumer Law Opinion Summaries

A group of Illinois residents called John Hancock to discuss their retirement accounts. John Hancock routed these calls through Amazon Connect, a service provided by Amazon Web Services. During these calls, Pindrop Security, using its cloud-based biometric technology, authenticated the callers by analyzing their voiceprints. The plaintiffs alleged that Amazon and Pindrop collected their biometric information without the required consent, in violation of the Illinois Biometric Information Privacy Act (BIPA).The plaintiffs first brought their claims against Amazon in Illinois state court, but after Amazon removed the case to the United States District Court for the Southern District of Illinois, that court dismissed the case for lack of personal jurisdiction. The plaintiffs then filed a similar complaint in the United States District Court for the District of Delaware, adding Pindrop as a defendant. The District of Delaware initially dismissed the case on extraterritoriality grounds, but after amended complaints, dismissed all claims against Pindrop based on BIPA’s financial-institution exemption and most claims against Amazon, except the claim under Section 15(b) for collecting biometric data without written consent. The court later granted Amazon judgment on the pleadings as to a Section 15(d) claim and ultimately granted summary judgment in favor of Amazon, closing the case. The court also denied the plaintiffs’ motions related to discovery extensions and voluntary dismissal of certain plaintiffs.On appeal, the United States Court of Appeals for the Third Circuit affirmed the District Court in all respects. The Third Circuit held that Pindrop was exempt from BIPA under the financial-institution exemption, that the District Court did not abuse its discretion in denying discovery extensions or the voluntary dismissal motion, and that the extraterritoriality doctrine barred the plaintiffs’ BIPA claims against Amazon because the relevant conduct did not occur primarily and substantially in Illinois. The court also affirmed the judgment on the pleadings for the Section 15(d) claim. View "McGoveran v. Amazon Web Services Inc" on Justia Law

Several individuals sued two outdoor retailers, alleging that the retailers used third-party “Session Replay Code” on their websites to record users’ activities, including keystrokes, clicks, and text entries, without user consent. This code operated invisibly to typical users and transmitted the recorded data to outside providers, which could aggregate and store the information, including potentially sensitive details. Among the plaintiffs, two made purchases on the websites and entered personal information such as names, addresses, and complete credit or debit card numbers; the other six only browsed and did not provide identifying data.The lawsuits were consolidated and transferred to the U.S. District Court for the Eastern District of Pennsylvania. That court dismissed the complaint, ruling that none of the plaintiffs sufficiently alleged an “injury in fact” necessary for Article III standing. The District Court reasoned that only the sharing of highly sensitive information, like medical or financial data, would establish standing, and it dismissed with prejudice the claims of the six plaintiffs who did not make purchases (and thus did not provide sensitive data). As for the two plaintiffs who did make purchases, the court dismissed their claims without prejudice, allowing them to amend if they could allege sharing of highly sensitive information.On appeal, the United States Court of Appeals for the Third Circuit held that the two purchasing plaintiffs (Cornell and Montecalvo) alleged an injury analogous to the common-law tort of intrusion upon seclusion, since their complete credit or debit card numbers were surreptitiously recorded and transmitted. Thus, the Third Circuit reversed the dismissal as to those two plaintiffs and remanded for further proceedings. However, the court affirmed (as modified to be without prejudice) the dismissal of the claims brought by the other six plaintiffs, holding that their allegations did not establish a concrete injury sufficient for standing. View "In Re: BPS Direct, LLC" on Justia Law

A woman rented a car from a rental company in 2014 and, after a traffic camera recorded a violation during her rental, the company paid the fine and charged her both the fine amount and an administrative fee. She filed a putative class action in the United States District Court for the District of New Jersey on behalf of customers who were charged fines and fees in similar circumstances, alleging state-law claims such as violations of consumer fraud statutes and unjust enrichment. The rental company later updated its rental agreements in 2016 to include an arbitration clause and class-action waiver, but this provision applied only prospectively to rentals after its adoption. The named plaintiffs’ rentals predated this clause.The District Court, after years of litigation that included several amended complaints, discovery, mediation, and a motion to certify a class, ultimately certified a subclass that included some renters whose agreements contained the arbitration provision. The District Court found that the rental company had waived its right to enforce arbitration by participating in litigation for several years without moving to compel arbitration. The company then filed a motion to compel arbitration for the affected class members, which the District Court denied again on waiver grounds, emphasizing that the company had not sought to enforce arbitration until after class certification.On appeal, the United States Court of Appeals for the Third Circuit reviewed the waiver issue de novo. The Third Circuit held that waiver of the right to compel arbitration did not occur here, because the company’s conduct—such as raising arbitration as an affirmative defense and the futility of seeking to compel arbitration prior to class certification—did not evince an intentional relinquishment of that right. The Third Circuit vacated the District Court’s order denying the motion to compel arbitration and remanded for consideration of other unresolved questions about enforceability. View "Valli v. Avis Budget Group Inc" on Justia Law

An elderly homeowner in New Jersey was approached by a door-to-door salesman who offered her “free” rooftop solar panels. She accepted the offer after some hesitation, but was never shown or asked to sign any paperwork. Later, her son discovered that she had been signed up for a 25-year loan of nearly $100,000, with documents digitally signed in her name and sent to a fake email address created by the salesman. The solar panels were installed but were unusable due to the home’s condition. When the homeowner tried to cancel, the companies involved refused. She then sued the solar company, its CEO, and the lenders who financed the panels, alleging fraud and violations of both state and federal law.The United States District Court for the District of New Jersey dismissed her claims against the lenders, Sunlight Financial LLC and Cross River Bank, finding that she had not plausibly alleged that the salesman was acting as their agent. The court allowed some claims against the solar company and its CEO to proceed, but the plaintiff later voluntarily dismissed those remaining claims. She then appealed the dismissal of her claims against the lenders.The United States Court of Appeals for the Third Circuit reviewed the case de novo. It held that the plaintiff failed to plausibly allege an agency relationship between the salesman and the lenders, as required for vicarious liability under the New Jersey Consumer Fraud Act. The court also found that the plaintiff did not plead direct liability with the particularity required by Rule 9(b), and that the lenders’ actions in obtaining her credit report were permissible under the Fair Credit Reporting Act. The Third Circuit affirmed the District Court’s dismissal of all claims against the lenders. View "Migliore v. Vision Solar LLC" on Justia Law

Scranton Products sued Bobrick Washroom Equipment in 2014, alleging false advertising regarding the fire compliance of Scranton’s toilet partitions. Bobrick counterclaimed, asserting Scranton’s advertising was itself false. Scranton voluntarily dismissed its claims, and the parties entered into a settlement agreement that included a provision waiving their rights to appeal any court orders arising from the agreement or enforcement motions. The District Court approved the agreement, dismissed the case, and retained jurisdiction to enforce the settlement. Subsequently, both parties filed enforcement motions related to compliance with the agreement, leading to a public evidentiary hearing. During post-hearing proceedings, Scranton moved to seal certain documents, and the District Court issued two sealing orders: one temporarily sealing documents during the pendency of enforcement motions, and another indefinitely sealing them after the motions were resolved.The United States District Court for the Middle District of Pennsylvania denied all enforcement motions and issued the second sealing order, directing the parties to confer about sealing and stating that, absent agreement, the status quo of sealing would remain. Bobrick appealed both sealing orders, arguing that the indefinite sealing was overbroad and contrary to the public’s right of access to judicial records.The United States Court of Appeals for the Third Circuit reviewed the case. It held that it lacked jurisdiction to review the first, temporary sealing order because it was no longer in effect, rendering the appeal moot. The court found it had jurisdiction to review the second, indefinite sealing order under the collateral order doctrine, as it was final and appealable. However, the Third Circuit enforced the appellate waiver in the settlement agreement, declining to exercise jurisdiction over the appeal and affirming the District Court’s indefinite sealing order. The court also denied Bobrick’s alternative request for a writ of mandamus. View "Bobrick Washroom Equipment Inc v. Scranton Products Inc" on Justia Law

A website visitor in Pennsylvania interacted with a retail website that used session replay code provided by a third party to record her mouse movements, clicks, and keystrokes. The visitor did not enter any sensitive or personal information during her session. She later brought a putative class action against the website operator, alleging that the use of session replay code constituted intrusion upon seclusion and violated the Pennsylvania Wiretapping and Electronic Surveillance Control Act (WESCA).The United States District Court for the Western District of Pennsylvania dismissed the complaint with prejudice, finding that the plaintiff lacked Article III standing because she did not allege a concrete injury. The court reasoned that the mere recording of her website activity, which did not include any personal or sensitive information, was not analogous to harms traditionally recognized at common law, such as disclosure of private information or intrusion upon seclusion. The court also found that amendment would be futile.On appeal, the United States Court of Appeals for the Third Circuit reviewed the dismissal de novo and agreed that the plaintiff failed to allege a concrete injury sufficient for Article III standing. The Third Circuit held that the alleged harm was not closely related to the traditional privacy torts of disclosure of private information or intrusion upon seclusion, as the information recorded was neither sensitive nor publicly disclosed, and there was no intrusion into the plaintiff’s solitude or private affairs. The court also clarified that a statutory violation alone does not automatically confer standing without a concrete harm. However, the Third Circuit determined that the District Court erred in dismissing the complaint with prejudice and modified the order to a dismissal without prejudice, affirming the order as modified. View "Cook v. GameStop, Inc." on Justia Law

A consumer lender, GreatPlains Finance, LLC, owned by the Fort Belknap Indian Community, a federally recognized tribe, was sued by Rashonna Ransom for allegedly violating New Jersey consumer-protection laws. Ransom had taken out two high-interest loans from GreatPlains and claimed the lender broke several laws. GreatPlains argued it was protected by tribal sovereign immunity, as it was created by the tribe to generate revenue and was managed by a tribally owned corporation, Island Mountain Development Group.The United States District Court for the District of New Jersey denied GreatPlains' motion to dismiss, ruling that the lender was not an arm of the tribe and thus not entitled to sovereign immunity. The court based its decision partly on the control exerted by a non-tribal private-equity fund, Newport Funding, which had significant influence over GreatPlains' operations due to a loan agreement. GreatPlains' subsequent motion to reconsider was also denied, leading to this appeal.The United States Court of Appeals for the Third Circuit reviewed the case and applied a multi-factor test to determine whether GreatPlains was an arm of the tribe. The court considered factors such as the method of incorporation, the entity's purpose, tribal control, the tribe's intent to confer immunity, and the financial relationship between the tribe and the entity. The court found that while GreatPlains was created under tribal law and intended to benefit the tribe, the financial relationship was crucial. GreatPlains had not shown that a judgment against it would impact the tribe's finances, as it had not returned profits to the tribe. Consequently, the Third Circuit held that GreatPlains was not an arm of the tribe and lacked sovereign immunity, affirming the District Court's decision and remanding for further proceedings. View "Ransom v. GreatPlains Finance, LLC" on Justia Law

A data breach occurred at Wawa convenience stores, affecting customers' payment information. Wawa discovered the breach in December 2019 and contained it within days. The breach led to a class action lawsuit filed in the U.S. District Court for the Eastern District of Pennsylvania, consolidating 15 actions into three tracks: financial institution, employee, and consumer. The consumer track, which is the focus of this case, alleged negligence, breach of implied contract, and violations of state consumer protection laws, seeking both damages and injunctive relief.The District Court preliminarily approved a settlement that included compensation through Wawa gift cards and cash for out-of-pocket losses, as well as injunctive relief to improve Wawa's data security. Class member Theodore Frank objected, arguing that the settlement's attorney's fees were excessive and that the settlement included a clear sailing agreement and a fee reversion clause. The District Court approved the settlement and the attorney's fees, but Frank appealed.The United States Court of Appeals for the Third Circuit vacated the fee award and remanded the case, instructing the District Court to scrutinize the reasonableness of the attorney's fees and the presence of any side agreements. On remand, the District Court found no clear sailing agreement or collusion and determined that the fee reversion was unintentional. The court reaffirmed the attorney's fee award based on the funds made available to the class, considering the benefits provided, including the injunctive relief.The Third Circuit reviewed the District Court's findings and affirmed the judgment, holding that the attorney's fee award was reasonable and that the settlement process was free of collusion or improper side agreements. The court emphasized the meaningful benefits provided to the class members and the appropriateness of the fee award based on the amount made available rather than the amount claimed. View "In re: Wawa, Inc. Data Security Litigation" on Justia Law

In New Jersey, GTL is the sole provider of telecommunications services that enable inmates to call approved persons outside the prisons. Users can open an account through GTL’s website or through an automated telephone service with an interactive voice-response system. Website users see GTL’s terms of use and must click “Accept” to complete the process. Telephone users receive an audio notice: Please note that your account, and any transactions you complete . . . are governed by the terms of use and the privacy statement posted at www.offenderconnect.com.” Telephone users are not required to indicate their assent to those terms, which contain an arbitration agreement and a class-action waiver. Users have 30 days to opt out of those provisions. The terms state that using the telephone service or clicking “Accept” constitutes acceptance of the terms; users have 30 days to cancel their accounts if they do not agree to the terms. Plaintiffs filed a putative class action alleging that GTL’s charges were unconscionable and violated the state Consumer Fraud Act, the Federal Communications Act, and the Takings Clause. GTL argued that the FCC had primary jurisdiction. Plaintiffs withdrew their FCA claims. GTL moved to compel arbitration. The district court denied GTL’s motion with respect to plaintiffs who opened accounts by telephone, finding “neither the knowledge nor intent necessary to provide ‘unqualified acceptance.’” The Third Circuit affirmed. The telephone plaintiffs did not agree to arbitration. View "James v. Global TelLink Corp." on Justia Law

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