Justia Consumer Law Opinion Summaries

Articles Posted in US Court of Appeals for the Ninth Circuit
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After Plaintiff provided his phone number to an insurance company on a website, he began receiving marketing texts from eFinancial. Plaintiff sued under the TCPA, claiming that eFinancial uses a “sequential number generator” to pick the order in which to call customers who had provided their phone numbers. He says that this type of number generator qualifies as an “automatic telephone dialing system” (often colloquially called an “autodialer”) under the TCPA. But eFinancial responds that it does not use an autodialer. eFinancial argues that the TCPA defines an autodialer as one that must generate telephone numbers to dial, not just any number to decide which pre-selected phone numbers to call.   The Ninth Circuit affirmed the district court’s dismissal. The panel held that an “automatic telephone dialing system” must generate and dial random or sequential telephone numbers under the TCPA’s plain text. eFinancial thus did not use an autodialer, and its texts to Plaintiff did not implicate the TCPA. View "DAVID BORDEN V. EFINANCIAL, LLC" on Justia Law

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Apple entered into a $310 million settlement with a class of individuals based on claims that Apple secretly throttled the system performance of certain model iPhones to mask battery defects. Five class objectors sought to vacate the settlement on various grounds, including 1.) that the district court provided inadequate notice of the settlement to nonnatural persons; 2.) the settlement extinguished the claims of “all former or current U.S. owners” of certain devices who downloaded iOS software before Apple disclosed potential defect, but the settlement limited recovery to the subset of owners who can attest that “they experienced” the alleged defects; and 3.) that the district court cited the wrong legal standard in examining the settlement’s fairness by improperly applying a presumption of reasonableness to the settlement rather than applying a heightened scrutiny.The Ninth Circuit held that the district court applied the wrong legal standard when reviewing the settlement’s fairness. View "IN RE: NAMED PLAINTIFFS, ET AL V. APPLE INC." on Justia Law

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Polaris sells off-road vehicles that have roll cages, or rollover protective structures (“ROPS”). The labels on the Polaris vehicles stated that the ROPS complied with Occupational Safety and Health Administration standards. Plaintiffs filed a class action against Polaris, claiming that the statements made on these labels were misleading, and that they relied on the statements when purchasing the vehicles.The district court granted summary judgment to Polaris. The Ninth Circuit reversed. The court agreed with the district court that Plaintiff could not bring his equitable UCL claim in federal court because he had an adequate legal remedy in his time-barred CLRA claim. However, the court held that it must still reverse the entry of summary judgment against Plaintiff because no decision was reached on the merits of the claim. Because the district court lacked equitable jurisdiction, which it recognized, it should have denied Polaris’ motion for summary judgment and dismissed Plaintiff's UCL claim without prejudice for lack of equitable jurisdiction. View "PAUL GUZMAN, ET AL V. POLARIS INDUSTRIES, INC., ET AL" on Justia Law

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In Sonner v. Premier Nutrition Corp. (Sonner I), 971 F.3d 834 (9th Cir. 2020), the court affirmed the district court’s dismissal without leave to amend of Plaintiff's class action complaint. This court held that federal courts sitting in diversity must apply federal equitable principles to claims for equitable restitution brought under California law and that, under such principles, dismissal was appropriate because Plaintiff could not show that she lacked an adequate remedy at law. After Sonner I was issued, Plaintiff filed a virtually identical complaint in California state court. Premier Nutrition responded by returning to the district court and seeking a permanent injunction against the state court action. The district court denied the injunction.The panel held that the district court did not abuse its discretion in denying the permanent injunction regardless of Sonner I’s preclusive effect. The panel did not determine the preclusive effect of Sonner I.The Ninth Circuit held that there was a strong presumption against enjoining a state court proceeding under the relitigation exception. Premier did not point to any clearly erroneous factual findings in the district court’s order, and the panel detected none. Res judicata principles are of high importance, but they can be addressed by the state court, and do not compel resorting to the heavy artillery of a permanent injunction. View "KATHLEEN SONNER V. PREMIER NUTRITION CORPORATION" on Justia Law

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Defendants are GoSmith, Inc., Porch.com, Inc. (which acquired GoSmith), and three individual corporate officers. The Telephone Consumer Protection Act (TCPA) prohibits calls using automatic telephone dialing systems (“ATDS”) to cell phones, see 47 U.S.C. Section 227(b), and telephone solicitations sent to residential telephone subscribers who have registered their phone numbers on the national donot-call registry, see 47 U.S.C. Section 227(c). Both provisions provide private causes of action for damages and injunctive relief. The complaint alleges that Defendants’ use of ATDS to plaintiffs’ cell phones violated (and continues to violate) Section 227(b); and that Defendants’ text messages to Plaintiffs’ cell phones that were (and are) registered on the national do-not-call registry violated (and continue to violate) Section 227(c). The district court assumed that plaintiffs have Article III standing but held they lack statutory standing.   The Ninth Circuit reversed the district court’s judgment dismissing the complaint. The panel held that Plaintiffs have statutory standing under Section 227(b) and (c) of the TCPA. Defendants argued that the TCPA protects only individuals from unwanted calls, and that plaintiffs, as home improvement contractors, fall outside of TCPA’s zone of interest. The panel concluded that all of the Plaintiffs have standing to sue under Section 227(b) of the TCPA. The panel, therefore, concluded that these Plaintiffs have standing to sue under Section 227(c). The panel wrote that after discovery, Defendants may seek to argue that they have rebutted the presumption by showing that Plaintiffs’ cell phones are used to such an extent and in such a manner as to be properly regarded as business rather than “residential” lines. View "NATHAN CHENNETTE, ET AL V. PORCH.COM, INC., ET AL" on Justia Law

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Plaintiffs alleged that ViSalus, Inc., sent them automated telephone calls featuring an artificial or prerecorded voice message without prior express consent. The jury returned a verdict against ViSalus, finding that it sent 1,850,440 prerecorded calls in violation of the TCPA. Because the TCPA sets the minimum statutory damages at$500 per call, the total damages award against ViSalus was $925,220,000. Nearly two months later, the FCC granted ViSalus a retroactive waiver of the heightened written consent and disclosure requirements. ViSalus then filed post-trial motions to decertify the class, grant judgment as a matter of law, or grant a new trial on the ground that the FCC’s waiver necessarily meant ViSalus had consent for the calls made. Alternatively, ViSalus filed a post-trial motion challenging the statutory damages award as being unconstitutionally excessive. The district court denied these motions.Affirming in part, the panel held that members of the plaintiff class had Article III standing to sue because the receipt of unsolicited telemarketing phone calls in alleged violation of the TCPA is a concrete injury.The panel held that, when ruling on ViSalus’s motions to decertify the class, grant judgment as a matter of law, or grant a new trial, the district court properly refused to consider the FCC’s retroactive waiver. The panel explained that ViSalus waived a consent defense, and no intervening change in law excused this waiver of an affirmative defense.The panel vacated the district court’s denial of ViSalus’s post-trial motion challenging the constitutionality of the statutory damages award under the Due Process Clause of the Fifth Amendment. View "LORI WAKEFIELD V. VISALUS, INC." on Justia Law

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Users of Reddit, a social media platform, posted and circulated sexually explicit images and videos of minors online. The victims, or their parents, sued Reddit pursuant to Section 1595, the Trafficking Victims Protection Reauthorization Act.   The Ninth Circuit affirmed the district court’s dismissal. Rhe panel held that Section 230 of the Communications Decency Act, 47 U.S.C. Section 230(c)(1), shielded defendant Reddit, Inc., from liability. The panel held that Reddit, an “interactive computer services” provider, generally enjoys immunity from liability for user-posted content under Section 230(c)(1). However, pursuant to the Allow States and Victims to Fight Online Sex Trafficking Act of 2018 (“FOSTA”), Section 230 immunity does not apply to child sex trafficking claims if the conduct underlying the claim also violates 18 U.S.C. Section 1591, the criminal child sex trafficking statute.   The panel held that the plain text of FOSTA, as well as precedent interpreting a similar immunity exception under the Foreign Sovereign Immunities Act, established that the availability of FOSTA’s immunity exception is contingent upon a plaintiff proving that a defendant-website’s own conduct—rather than its users’ conduct—resulted in a violation of 18 U.S.C. Section 1591. The panel held that FOSTA’s wider statutory context confirmed its reading. In Section II.C, the panel held that its reading was also supported by the legislative history of FOSTA. View "JANE DOES, ET AL V. REDDIT, INC." on Justia Law

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City of Reno’s complaint and declaratory relief under Nevada’s Video Service Law (“VSL”) and the federal Declaratory Judgment Act, respectively. The Ninth Circuit affirmed the district court’s dismissal for failure to state a claim of Reno’s complaint alleging that Netflix, Inc. and Hulu, LLC failed to pay franchise fees for the video streaming services they provide.   Specifically, the panel first addressed the VSL. The VSL does not expressly create a private right of action for cities to sue for unpaid franchise fees. The test under Nevada law for whether a statute creates an implied right of action is set forth in Baldonado v. Wynn Las Vegas, LLC, 194 P.3d 96 (Nev. 2008). The panel held that all three Baldonado factors weigh against recognition of an implied right of action here. Concerning the federal Declaratory Judgment Act, the panel held that it does not provide a cause of action when a party, such as Reno, lacks a cause of action under a separate statute and seeks to use the Act to obtain affirmative relief. Here, Reno’s suit was offensive, not defensive, and Reno lacked an independent cause of action, so the Declaratory Judgment Act provided no basis for relief. View "CITY OF RENO V. NETFLIX, INC., ET AL" on Justia Law

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Nexus Pharmaceuticals, Inc. (Nexus) developed the trademarked and FDA-approved drug Emerphed, ready-to-use ephedrine sulfate in a vial. Drug compounding by “outsourcing facilities” is permitted without FDA approval, but 21 U.S.C. Section  353b, a part of the Food, Drug, and Cosmetic Act, excludes from this exception compounded drugs that are “essentially a copy of one or more approved drugs.” To avoid the Act’s bar on private enforcement, Nexus alleged violation of state laws that prohibit the sale of drugs not approved by the FDA.   The Ninth Circuit affirmed the district court’s dismissal, for failure to state a claim, of state law claims brought by Nexus against Central Admixture Pharmacy Services, Inc., operator of a network of compounding pharmacies that sold the drug ephedrine sulfate pre-loaded into ready-to-use syringes without FDA approval.   The panel affirmed the district court’s conclusion that, under the implied preemption doctrine, Nexus’s state law claims were barred because they were contrary to the Food, Drug, and Cosmetic Act’s exclusive enforcement provision, which states that proceedings to enforce or restrain violations of the Act, including the compounding statute, must be by and in the name of the United States, not a private party. The panel held that all of Nexus’s claims depended on a determination of whether Central Admixture’s ephedrine sulphate was “essentially a copy” of Nexus’s Emerphed, and the plain text of the Food, Drug, and Cosmetic Act left that determination in the first instance to the FDA and its enforcement process. View "NEXUS PHARMACEUTICALS, INC. V. CAPS, ET AL" on Justia Law

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A regulatory scheme established by a Federal Communications Commission 1996 RF Order set exposure limits that included cell phones, and it remains largely intact today. Plaintiffs alleged that RF radiation emitted by iPhones regularly exceeded the federal exposure limit, and they brought eight claims against Apple under state tort and consumer-fraud laws. The district court held that plaintiffs’ state-law claims were preempted by federal law.The Ninth Circuit affirmed the district court’s summary judgment for Apple Inc. The court explained that a federal statute need not specify its preemptive force in order for the statute to have such a force, and Congress did not need to expressly delegate preemptive authority to the FCC for its regulations to preempt state law. View "ANDREW COHEN V. APPLE INC." on Justia Law