Justia Consumer Law Opinion Summaries

Articles Posted in US Court of Appeals for the Ninth Circuit
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The case at hand involves a putative class action brought against RAC Acceptance East, LLC, by Shannon McBurnie and April Spruell. The plaintiffs argue that two fees imposed by RAC, operators of retail stores that lease household and electronic items through rent-to-own contracts, violated California consumer protection laws. RAC sought to compel arbitration, citing an arbitration agreement with the plaintiffs. The district court denied RAC's motion, and RAC appealed the decision.RAC argued that a recent Supreme Court decision, Viking River Cruises, Inc. v. Moriana, implicitly abrogated a prior Ninth Circuit decision, Blair v. Rent-A-Center, Inc., which held that RAC's arbitration agreement was unenforceable under California law. The Ninth Circuit disagreed, stating that Viking River was not irreconcilable with Blair, and that Viking River dealt with different claims from those at issue in this case. Therefore, Blair remained binding.RAC also argued that the plaintiffs' claim for public injunctive relief was mooted by a Consent Decree it entered into with the California Attorney General. The court disagreed, stating that the Consent Decree did not address whether the $45 processing fee in this case violates the law, and therefore, the challenge to the fee was not moot.However, RAC contended that the plaintiffs lacked standing to challenge a $1.99 expedited payment fee because Spruell did not actually pay the fee. The court remanded this issue to the district court for further consideration. As a result, the Ninth Circuit affirmed the district court's denial of RAC's motion to compel arbitration in part and remanded the case for further proceedings on the issue of the standing of the plaintiffs to challenge the $1.99 expedited payment fee. View "McBurnie v. RAC Acceptance East, LLC" on Justia Law

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The United States Court of Appeals for the Ninth Circuit affirmed the lower court's order to compel arbitration and dismiss without prejudice a series of lawsuits against several sports goods e-commerce companies (the defendants). The lawsuits were brought by several plaintiffs, who were consumers that purchased goods online from the defendants and had their personal information stolen during a data breach on the defendants' websites. The defendants moved to compel arbitration based on the arbitration provision in their terms of use. The appellate court held that the plaintiffs had sufficient notice of the arbitration provision and that the arbitration clause was not invalid under California law, was not unconscionable, and did not prohibit public injunctive relief. Furthermore, the parties agreed to delegate the question of arbitrability to an arbitrator according to the commercial rules and procedures of JAMS, a private alternative dispute resolution provider. View "PATRICK V. RUNNING WAREHOUSE, LLC" on Justia Law

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In a class action lawsuit, plaintiffs accused Eden Creamery, LLC of underfilling its pints of Halo Top ice cream. After the discovery period, the plaintiffs attempted to amend their complaint to include a new theory of liability (fraud by omission) and a new defendant (Wells Enterprises). The district court denied this motion, stating that plaintiffs failed to show good cause for amending their complaint. The plaintiffs then moved to voluntarily dismiss their claims without prejudice, which the district court also denied, instead dismissing the individual claims with prejudice and the class claims without prejudice.On appeal, the United States Court of Appeals for the Ninth Circuit found that the district court did not abuse its discretion in denying the motion to amend the complaint, as the plaintiffs failed to show good cause for amending after the deadline to do so had passed. However, the court found that the district court had abused its discretion by denying the plaintiffs' motion for voluntary dismissal without prejudice, as the defendants did not demonstrate that they would suffer legal prejudice if the case were dismissed without prejudice. The court held that a defendant must show legal prejudice to prevent a dismissal without prejudice. Uncertainty from unresolved disputes or inconvenience of defending another lawsuit does not constitute legal prejudice. The case was remanded with instructions to dismiss the action without prejudice, and the district court was instructed to consider whether any conditions should be imposed on the dismissal, such as an appropriate amount of costs and fees. View "KAMAL V. EDEN CREAMERY, LLC" on Justia Law

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Plaintiff is a resident of California. While present in California, Plaintiff used his iPhone’s Safari browser to navigate to the website of California-based retailer IABMFG to purchase fitness apparel. Although Plaintiff claims he did not know it at the time, IABMFG’s website used software and code from Shopify, Inc. to process customer orders and payments. Shopify, Inc. is a Canadian corporation with its headquarters in Ottawa, Canada. Plaintiff filed a putative class action lawsuit in California alleging that Shopify violated various California privacy and unfair competition laws because it deliberately concealed its involvement in consumer transactions. The district court agreed, dismissing the second amended complaint without leave to amend. Plaintiff timely appealed.   The Ninth Circuit affirmed. For specific jurisdiction to exist over Shopify, Plaintiff’s claim must arise out of or relate to Shopify’s forum-related activities. The panel held that there was no causal relationship between Shopify’s broader business contacts in California and Plaintiff’s claims because these contacts did not cause Plaintiff’s harm. Nor did Plaintiff’s claims “relate to” Shopify’s broader business activities in California outside of its extraction and retention of plaintiff’s data. Because there was an insufficient relationship between plaintiff's claims and Shopify’s broader business contacts in California, the activities relevant to the specific jurisdiction analysis were those that caused Plaintiff’s injuries: Shopify’s collection, retention, and use of consumer data obtained from persons who made online purchases while in California. The panel held that Shopify, which provides nationwide web-based payment processing services to online merchants, did not expressly aim its conduct toward California. View "BRANDON BRISKIN V. SHOPIFY, INC., ET AL" on Justia Law

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Plaintiff asserted that ZoomInfo did not obtain her permission or compensate her when it used her name and likeness in its online directory to promote its product, in violation of California’s Right of Publicity statute and her common-law privacy and intellectual property rights. ZoomInfo moved to strike the complaint under the California anti-SLAPP statute. In the district court, ZoomInfo moved to dismiss the complaint and to cut off the claims at the pleading stage. The district court denied the motion to dismiss and rejected ZoomInfo’s special motion to strike the complaint under California anti-SLAPP statute.   The Ninth Circuit affirmed. The panel held that it had appellate jurisdiction under the collateral order doctrine to review the denial of ZoomInfo’s anti-SLAPP motion. The panel also held that, at this stage, Martinez has plausibly pleaded that she suffered sufficient injury to establish constitutional standing to sue. The panel wrote that although the district court did not address the exemptions, Plaintiff’s case fell within the public interest exemption to the anti-SLAPP law. Plaintiff met the three conditions for the public interest exemption: Plaintiff requests all relief on behalf of the alleged class of which she is a member and does not seek any additional relief for herself; Plaintiff’s lawsuit seeks to enforce the public interest of the right to control one’s name and likeness; and private enforcement is necessary and disproportionately burdensome. View "KIM MARTINEZ V. ZOOMINFO TECHNOLOGIES, INC." on Justia Law

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AB 2571, as later amended by AB 160, is codified at Section 22949.80 of the California Business and Professions Code. The statute mandates that “[a] firearm industry member shall not advertise, market, or arrange for placement of an advertising or marketing communication offering or promoting any firearm-related product in a manner that is designed, intended, or reasonably appears to be attractive to minors.” Junior Sports Magazines Inc. publishes Junior Shooters, a youth-oriented magazine focused on firearm-related activities and products. According to Junior Sports Magazines, its ability to publish Junior Shooters depends on advertising revenue. Junior Sports Magazines ceased distributing the magazine in California and has placed warnings on its website deterring California minors from accessing its content. Shortly after California enacted AB 2571, Junior Sports Magazines challenged its constitutionality under the First and Fourteenth Amendments. Junior Sports Magazines also moved to preliminarily enjoin the enforcement of Section 22949.80. The district court denied the injunction.   The Ninth Circuit reversed the district court’s denial. The panel first concluded that because California permits minors under supervision to possess and use firearms for hunting and other lawful activities, Section 22949.80 facially regulates speech that concerns lawful activity and is not misleading. Next, the panel held that section 22949.80 does not directly and materially advance California’s substantial interests in reducing gun violence and the unlawful use of firearms by minors. Finally, the panel held that section 22949.80 was more extensive than necessary because it swept in truthful ads about lawful use of firearms for adults and minors alike. View "JUNIOR SPORTS MAGAZINES INC., ET AL V. ROB BONTA, ET AL" on Justia Law

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Two putative class actions are at issue in these appeals: Nacarino v. Kashi Co., No. 22-15377, and Brown v. Kellogg Co., No. 22-15658. The complaints were filed in the Northern District of California, and they asserted materially identical state-law consumer protection claims for unfair business practices, unjust enrichment, and fraud. Both complaints alleged that the front labels on several of Defendants’ products are “false and misleading” under state and federal law. At issue is whether food product labels that advertise the amount of protein in the products are false or misleading.   The Ninth Circuit affirmed on different grounds the district court’s dismissal of the two complaints. The panel rejected Plaintiffs’ arguments that the protein claims on Defendants’ labels were false because the nitrogen method for calculating protein content overstated the actual amount of protein the products contained. The panel held that FDA regulations specifically allow manufacturers to measure protein quantity using the nitrogen method.   The panel rejected Plaintiffs’ arguments that the protein claims on Defendants’ labels were misleading because the “amount of digestible or usable protein the Products actually deliver to the human body is even lower” than the actual amount of protein the products contain. The panel held that Defendants’ protein claims could be misleading under FDA regulations if they did not accurately state the quantity of protein or if the products did not display the quality-adjusted percent daily value in the Nutritional Facts Panel. However, Plaintiffs’ complaints did not allege that the challenged protein claims were misleading within the meaning of the federal regulations. View "ELENA NACARINO, ET AL V. KASHI COMPANY" on Justia Law

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Plaintiff appealed from the district court’s partial judgment granting a motion to dismiss in favor of Defendant, Reward Zone USA, LLC (Reward Zone), in a putative class action lawsuit brought under the Telephone Consumer Protection Act (TCPA). In Plaintiff’s second cause of action, which is the subject of this opinion, Plaintiff alleged a violation of the TCPA because she received at least three mass marketing text messages from Reward Zone which utilized “prerecorded voices.”   The Ninth Circuit affirmed the district court’s dismissal. The court held the text messages did not use prerecorded voices under the Act because they did not include audible components. The panel relied on the statutory context of the Act and the ordinary meaning of voice, which showed that Congress used the word voice to include only an audible sound, and not a more symbolic definition such as an instrument or medium of expression. The panel addressed Plaintiff’s appeal of the district court’s dismissal of another cause of action under the Telephone Consumer Protection Act in a simultaneously-filed memorandum disposition. View "LUCINE TRIM V. REWARD ZONE USA LLC, ET AL" on Justia Law

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Plaintiff alleged that Valeant fraudulently obtained two sets of patents related to a drug and asserted these patents to stifle competition from generic drugmakers. Plaintiff further alleged that Defendants defrauded the federal government by charging an artificially inflated price for the drug while falsely certifying that its price was fair and reasonable. Dismissing Plaintiff’s action under the False Claims Act’s public disclosure bar, the district court concluded that his allegations had already been publicly disclosed, including in inter partes patent review (“IPR”) before the Patent and Trademark Office.   The Ninth Circuit reversed the district court’s dismissal. The panel held that an IPR proceeding in which the Patent and Trademark Office invalidated Valeant’s “‘688” patent was not a channel (i) disclosure because the government was not a party to that proceeding, and it was not a channel (ii) disclosure because its primary function was not investigative. The panel held that, under United States ex rel. Silbersher v. Allergan, 46 F.4th 991 (9th Cir. 2022), the patent prosecution histories of Valeant’s patents were qualifying public disclosures under channel (ii). The panel assumed without deciding that a Law360 article and two published medical studies were channel (iii) disclosures. The panel held that the “substantially the same” prong of the public disclosure bar applies when the publicly disclosed facts are substantially similar to the relator’s allegations or transactions. None of the qualifying public disclosures made a direct claim that Valeant committed fraud, nor did they disclose a combination of facts sufficient to permit a reasonable inference of fraud. View "ZACHARY SILBERSHER, ET AL V. VALEANT PHARMACEUTICALS INT'L, ET AL" on Justia Law

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From 2003 to 2007, Plaintiff took out ten student loans to attend college in Washington state. Defendants National Collegiate Student Loan Trusts (collectively, “the Trusts”) ultimately purchased Plaintiff’s loans. The Trusts appointed Defendant U.S. Bank as their special servicer. The Trusts also hired Defendant Transworld Systems, Inc. (“Transworld”), to collect the defaulted loans, and hired Defendant Patenaude & Felix (“Patenaude”), a law firm specializing in debt collection, to represent them in debt collection actions. Several years after taking out the loans, Plaintiff filed for Chapter 13 bankruptcy relief.   The Ninth Circuit affirmed in part and reversed in part the district court’s dismissal for failure to state a claim, Plaintiff’s action alleging that Defendants’ attempts to collect debts that were discharged in bankruptcy violated the Fair Debt Collection Practices Act and the Bankruptcy Code. Affirming the dismissal of Plaintiff’s claims that were based on a violation of his bankruptcy discharge order, the panel reiterated that Walls v. Wells Fargo Bank, 276 F.3d 502 (9th Cir. 2002), precludes FDCPA claims and other claims based on violations of Bankruptcy Code Section 524. The panel reversed the district court’s dismissal, as barred by the one-year statute of limitations, of Plaintiff’s remaining FDCPA claim based on the theory that Defendants knowingly brought a meritless post-discharge debt collection lawsuit because they knew they could not prove ownership of Plaintiff’s debts. The panel concluded that Plaintiff sufficiently alleged one post-filing FDCPA violation in the filing of an affidavit that presented a new basis, not contained in the complaint, to show that Defendants owned the debts. View "OSURE BROWN V. TRANSWORLD SYSTEMS, INC., ET AL" on Justia Law