Justia Consumer Law Opinion Summaries

Articles Posted in US Court of Appeals for the Fifth Circuit
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Petitioners Wages and White Lion Investments, LLC, d/b/a Triton Distribution (“Triton”) and Vapetasia, LLC (“Vapetasia”) sought to market flavored nicotine-containing e-liquids for use in open-system e-cigarette devices. Petitioners needed to submit premarket tobacco product applications as required by 21 U.S.C. Section 387j—which the Food and Drug Administration (“FDA”) deemed applicable to e-cigarette tobacco products. FDA denied the requested marketing authorizations, finding that Petitioners failed to offer reliable and robust evidence (such as randomized controlled trials or longitudinal studies) to overcome the risks of youth addiction and show a benefit to adult smokers. Petitioners sought review of those marketing denial orders (“MDOs”), and prior to the consolidation of the two cases. Petitioners argued that the FDA lacks the authority to impose a comparative efficacy requirement and that FDA acted arbitrarily and capriciously by “requiring” scientific studies.   The Eleventh Circuit denied the petitions for review. The court explained that Congress passed the Family Smoking Prevention and Tobacco Control Act (“TCA”) in an active effort to protect public health. Relevant here, the Deeming Rule subjected e-cigarette manufacturers to the TCA’s prior authorization requirement—manufacturers of “new tobacco product[s]” must submit premarket tobacco product applications (“PMTAs”). The court held that the FDA’s consideration of the lack of cessation as a risk and comparing that risk between new tobacco products and old tobacco products “fall[s] squarely within the ambit of the FDA’s expertise and merit[s] deference.”  As such, the court cannot say that FDA acted arbitrarily and capriciously by disagreeing with Petitioners as to the significance of the evidence they presented. View "Wages and White Lion Investmen v. FDA" on Justia Law

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American Express National Bank (“AmEx”) filed suit for breach of contract in Mississippi state court to recover $2,855.74 of unpaid credit card debt incurred on Plaintiff's account. Plaintiff contended an unknown person incurred this debt fraudulently. Plaintiff then filed Fair Credit Reporting Act (“FCRA”) claims against AmEx and other defendants in Mississippi state court. The district court denied AmEx’s motion to compel arbitration.   The Fifth Circuit vacated the decision of the district court and remanded for reconsideration in the first instance in light of Forby v. One Techs., L.P and Morgan v. Sundance, Inc. The court held that these cases were decided on the same day and after the district court’s ruling. Forby clarified the test for waiver by a party of the right to compel arbitration and reiterated that waiver analysis occurs on a claim-by-claim basis. In addition, Morgan addressed this and other sister circuits’ tests for waiver by a party of the right to compel arbitration. The court explained that although it can apply subsequent precedent to cases before it, “[a]s a court for review of errors, we are not to decide facts or make legal conclusions in the first instance." Thus, the court’s task is to review the actions of a trial court for claimed errors. View "Barnett v. American Express National" on Justia Law

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On the panel's initial hearing of the case, Judge Higginson concluded that the restrictions on the President's removal authority under the Consumer Financial Protection Act are valid and constitutional. Judge Higginson found that neither the text of the United States Constitution nor the Supreme Court's previous decisions support appellants' arguments that the Consumer Financial Protection Bureau is unconstitutionally structured, and thus he affirmed the district court's judgment.More than two years later, and after conducting a vote among the circuit judges, the Fifth Circuit vacated its previous opinion and elected to hear the case en banc. View "CFPB v. All American Check Cashing, et al" on Justia Law

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The Fifth Circuit vacated the district court's award of fees to class counsel in a class action settlement involving consumers who purchased defective toilet tanks against defendants. The court agreed with Porcelana that the district court erred in calculating the lodestar and refusing to decrease it. In this case, the district court abused its discretion by failing to make any factual findings regarding the nature of the class's unsuccessful claims and an unsupported assertion is insufficient to permit the district court to bypass the proper lodestar calculation and only consider the unsuccessful claims under the eighth Johnson factor. Nor is this a case where the record supports such a conclusion in the absence of an explicit finding by the district court. Even assuming the district court had adequately supported its conclusion that unsuccessful claims were intertwined with those that proved successful, the court stated that the district court still failed to properly analyze the award in relation to the results obtained. Accordingly, the court remanded for further proceedings. View "Fessler v. Porcelana Corona de Mexico, S.A. de C.V." on Justia Law

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The 2009 Family Smoking Prevention and Tobacco Control Act, implemented through the FDA, 21 U.S.C. 387a(b), 393(d)(2), prohibits manufacturers from selling any “new tobacco product” without authorization. The FDA’s 2016, “Deeming Rule” classified electronic nicotine delivery systems (e-cigarettes) as a “new tobacco product.” To avoid an overnight shutdown of the e-cigarette industry, the FDA delayed enforcement of the Deeming Rule then required e-cigarette makers to submit premarket tobacco applications (PMTAs). Originally, the FDA required that all PMTAs be filed by 2018. The FDA later extended the PMTA deadline to 2022 but then moved the deadline to 2020. Initially, the FDA’s guidance stated that “in general, FDA does not expect that applicants will need to conduct long-term studies to support an application” but later changed course and required long-term studies of e-cigarettes.Triton had e-cigarette products on the market before the Deeming Rule. Triton (and others) submitted PMTAs for flavored e-cigarettes. In August 2021, the FDA announced that it would deny the PMTAs for 55,000 flavored e-cigarettes, stating it “likely” needed evidence from long-term studies." Less than a week later, Triton submitted a letter stating that it intended to conduct long-term studies of its products. About two weeks later, the FDA issued Triton a marketing denial order. The Fifth Circuit granted a temporary administrative stay and, later, a full stay, “to prevent the FDA from shutting down Triton’s business” pending disposition of Triton’s petition. View "Wages and White Lion Investments, L.L.C. v. United States Food and Drug Administration" on Justia Law

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Plaintiff filed a class action complaint alleging that 5 Star negligently, willfully, and/or knowingly sent text messages to his cell phone number using an automatic telephone dialing system without prior express consent in violation of the Telephone Consumer Protection Act (TCPA). The district court dismissed the complaint for lack of standing.The Fifth Circuit reversed, concluding that plaintiff has alleged a cognizable injury in fact: nuisance arising out of an unsolicited text advertisement. The court concluded that the TCPA cannot be read to regulate unsolicited telemarketing only when it affects the home. The court also concluded that plaintiff's injury has a close relationship to common law public nuisance and, moreover, plaintiff alleges a special harm not suffered by the public at large. The court rejected the Eleventh Circuit's holding in Salcedo v. Hanna, 936 F.3d 1162, 1168 n.6 (11th Cir. 2019), and remanded for further proceedings. View "Cranor v. 5 Star Nutrition, LLC" on Justia Law

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The Fifth Circuit held that a private settlement does not constitute a "successful action to enforce . . . liability" under the fee-shifting provision of the Fair Debt Collection Practices Act (FDCPA). The court affirmed the district court's denial of attorney's fees in this case, concluding that the district court did not commit reversible error in refusing plaintiff's fee application under the FDCPA. The court explained that a "successful action to enforce the foregoing liability" means a lawsuit that generates a favorable end result compelling accountability and legal compliance with a formal command or decree under the FDCPA. In this case, plaintiff settled before his lawsuit reached any end result, let alone a favorable one. Furthermore, by settling, Portfolio Recovery avoided a formal legal command or decree from plaintiff's lawsuit. The court stated that plaintiff's alternative interpretation requires rewriting the FDCPA's fee-shifting provision.The court also concluded that, at most, plaintiff's FDCPA suit was the catalyst that spurred Portfolio Recovery to settle. Therefore, the catalyst theory does not make plaintiff's action a successful one under 15 U.S.C. 1692k(a)(3) and thus plaintiff is not entitled to fees. View "Tejero v. Portfolio Recovery Associates, LLC" on Justia Law

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Plaintiffs filed suit against Lexington Law and its vendor, Progrexion, for purportedly perpetrating a fraud in which the firm failed to disclose that it was sending letters to the companies in its clients' names and on their behalves. After a jury agreed that defendants violated Texas law in committing fraud and fraud by non-disclosure, the district court set aside the verdict and issued judgment in favor of defendants as a matter of law.The Fifth Circuit affirmed, concluding that plaintiffs have not shown that defendants committed fraud. In this case, the district court concluded that defendants did not make any false representations (material or otherwise) when signing and sending the dispute letters because Lexington Law had the legal right to sign its clients' names on the correspondence it sent on their behalf to data furnishers who reported inaccurate information about the clients' credit. Furthermore, Progrexion cannot be liable for fraud since it, like Lexington Law, did not make any material misrepresentations. The court also concluded that plaintiffs' fraud by non-disclosure claim must be dismissed because they did not justifiably rely on any failure of defendants to disclose material facts, and plaintiffs have not shown that defendants had a duty to disclose that they were the ones actually sending the dispute letters. Additionally, plaintiffs have not shown that Progrexion disclosed any facts—material or otherwise—and so cannot be liable for fraud by nondisclosure. The court explained that the fact that Lexington Law had the legal right to send dispute letters on their clients behalves and in their names suggests that the firm did not make any false representations, and thus the firm did not create any false impressions requiring disclosure. Finally, plaintiffs waived their conspiracy claim by failing to move for judgment as a matter of law on the claim before and after the case was submitted to the jury or for a new trial. View "The CBE Group, Inc. v. Lexington Law Firm" on Justia Law

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Petitioners sought review of the Commission's final rule prohibiting the manufacture and sale of any children's toy or child care article that contains concentrations of more than 0.1 percent of any one of five phthalates.The Fifth Circuit held that EMCC has standing to bring its challenge to the Final Rule and the court has jurisdiction to review the Final Rule. The court also held that the Commission procedurally erred by not providing an adequate opportunity to comment on the rule and by failing to consider the costs of a portion of the rule. Having reviewed the record and the Final Rule, the court can discern the Commission's path for each of the six decisions at issue and held that its explanations are not "so implausible that it could not be ascribed to a difference in view or the product of agency expertise." Because there is a serious possibility that CSPC will be able to remedy its failures, the court concluded that remand, rather than vacatur, was appropriate in this case. View "Texas Association of Manufacturers v. United States Consumer Product Safety Commission" on Justia Law

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The Fifth Circuit affirmed the district court's dismissal of plaintiff's claim under the Fair Debt Practices Act. Plaintiff filed suit after a debt collector spoke with plaintiff's sister over the phone, alleging that the debt collector violated the Act's prohibition on communicating with third parties about a consumer's debt. However, the court concluded that the conversation between plaintiff's sister and the debt collector was not a "communication" as defined by the statute. In this case, even taking the pleaded facts in the light most favorable to plaintiff, the conversation between the debt collector's representative and plaintiff's sister did not convey any information regarding a debt, either directly or indirectly. Rather, the representative mentioned "an important personal business matter," which does not even suggest the existence of a debt, much less provide information about it. View "Fontana v. HOVG LLC" on Justia Law