Justia Consumer Law Opinion Summaries

Articles Posted in US Court of Appeals for the Ninth Circuit
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Plaintiffs filed a putative class action against pet food manufacturers and others, challenging the marketing of so-called prescription pet food under California's consumer protection laws and federal antitrust law. Plaintiffs alleged that the prescription requirement and advertising lead reasonable consumers falsely to believe that such food has been subject to government inspection and oversight, and has medicinal and drug properties, causing consumers to pay more or purchase the product when they otherwise would not have.The Ninth Circuit reversed the district court's dismissal of plaintiffs' claims under California's Unfair Competition Law, False Advertising Law, and Consumer Legal Remedies Act for failure to state a claim. The panel held that the district court erred in dismissing the California state law consumer protection claims, because plaintiffs have sufficiently alleged a deceptive practice under the reasonable consumer test. The panel also held that plaintiffs' complaint satisfies the Federal Rule of Civil Procedure 9(b) heightened pleading standard in alleging fraud. In this case, plaintiffs alleged sufficient facts to show that prescription pet food and other pet food were not materially different. Finally, the panel held that plaintiffs alleged sufficient reliance based on the word "prescription" and the "Rx" symbol. View "Moore v. Mars Petcare US, Inc." on Justia Law

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Plaintiffs filed a putative class action raising warranty claims arising out of crashes or injuries caused by the alleged "rollaway effect" of certain Honda Civic vehicles. The district court dismissed plaintiffs' claims under the Magnuson-Moss Warranty Act (MMWA) and state law for express and implied warranty against Honda.The Ninth Circuit held that the Class Action Fairness Act (CAFA) may not be used to evade or override the MMWA's specific numerosity requirement. In this case, plaintiffs name only three individuals, but argue that, by satisfying CAFA requirements, they are relieved of the MMWA's obligation to name at least one hundred plaintiffs. The panel rejected plaintiffs' argument and affirmed the district court's dismissal of the MMWA claim. The panel vacated the district court's dismissal of the state law claims, holding that the district court erred in not considering whether plaintiffs' state law claims met the diversity requirements of CAFA even if the MMWA claim failed. Therefore, the district court improperly dismissed the state law claims based only on lack of supplemental jurisdiction. View "Floyd v. American Honda Motor, Co." on Justia Law

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The Ninth Circuit affirmed the district court's grant of summary judgment in favor of defendants in an action brought by plaintiff, alleging that defendants' garnishment of his wages violated the Fair Debt Collection Practices Act and California law.The panel held that the Hatch Act Reform Amendments of 1993, the federal statute permitting garnishment of federal employees' wages, 5 U.S.C. 5520a, waived the federal government's sovereign immunity and subjected a federal employee's pay to legal process in the same manner and to the same extent as if the agency were a private person. Therefore, under the statute, federal employees' wages are subject to garnishment to the extent allowed by state law. In this case, plaintiff's federal wages were properly garnished under California law where the garnishment order was properly served on the federal government and plaintiff remained a government employee. The panel held that plaintiff's remaining arguments are unpersuasive. View "Farrell v. Boeing Employees Credit Union" on Justia Law

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A judicial foreclosure proceeding is not a form of debt collection when the proceeding does not include a request for a deficiency judgment or some other effort to recover the remaining debt. If a foreclosure plaintiff seeks not only to foreclose on the property but also to recover the remainder of the debt through a deficiency judgment, then the plaintiff is attempting to collect a debt within the meaning of the Fair Debt Collection Practices Act (FDCPA). But if the plaintiff is simply enforcing a security interest by retaking or forcing a sale of the property, without regard to any additional debt that may be owed, then the FDCPA does not apply.The Ninth Circuit affirmed the district court's dismissal of plaintiff's action under the Fair Debt Collection Practices Act over a judicial foreclosure proceeding in Oregon. The panel held that plaintiff pleaded no conduct by the defendants beyond the filing of a foreclosure complaint and actions to effectuate that proceeding. View "Barnes v. Routh Crabtree Olsen PC" on Justia Law

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The Ninth Circuit affirmed the district court's judgment in favor of an eleven year old boy in an action alleging that Credit One violated the Telephone Consumer Protection Act by making 189 automated calls to his cell phone. In this case, Credit One was trying to collect past-due payments from a customer, but, unbeknownst to the bank, the customer's cell phone number had been reassigned to Sandra Lemos, who in turn had let her son, N.L., use the phone as his own.The panel joined every circuit to have addressed this issue and held that the consent of the person it intended to call did not exempt Credit One from liability under the TCPA. Therefore, Credit One cannot escape liability under the TCPA and upheld the district court's determination that Credit One was liable for the calls made to N.L. The panel also held that, in light of Marks v. Crunch San Diego, LLC, 904 F.3d 1041 (9th Cir. 2018), the district court properly instructed the jury on the definition of an "automatic telephone dialing system." Because the jury instruction on this definition is consistent with Marks, the panel held that Credit One's challenge to it failed. View "N. L. v. Credit One Bank, N.A." on Justia Law

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Luna is a former employee of Hansen, which employs over 1,100 big rig truckers, mechanics, dispatchers, and other support staff. Hansen’s hiring process involved a Commercial Driver Employment Application, which included notices and authorizations permitting Hansen to retrieve safety history and driving records, and conduct drug and background checks. Job applicants signed “the disclosure,” which appeared on a separate sheet of paper, and informed applicants “that reports verifying your previous employment, previous drug and alcohol test results, and your driving record may be obtained on you for employment purposes,” and “the authorization,” at the end of the Application, which indicated that an applicant’s signature authorized Hansen “to investigate my previous record of employment” and included other notices, waivers, and agreements unrelated to acquiring the consumer report.Luna filed a putative class action alleging Hansen ’s hiring process violated the Fair Credit Reporting Act (FCRA). The Ninth Circuit affirmed summary judgement in favor of Hansen. FCRA forbids procurement of a consumer report for employment purposes unless “a clear and conspicuous disclosure has been made in writing ... in a document that consists solely of the disclosure.” 15 U.S.C. 1681b(b)(2)(A)(i). Hansen’s disclosure may have been provided alongside other application materials, but it appeared in a standalone document, as FCRA requires. View "Luna v. Hansen & Adkins Auto Transport, Inc." on Justia Law

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Borrower filed suit under federal and state regulations for consumer credit transactions against the lenders, alleging that the lender's loan disclosures were materially inconsistent with the terms of the loan. At issue in this appeal was whether the loan the borrower obtained to make repairs to a personal residence occupied by her niece should be considered a consumer credit transaction. The district court held that, because the borrower did not intend to live in the house, this was not a consumer credit transaction.The Ninth Circuit held that, under applicable statutes and regulations, a trust created by an individual for tax and estate planning purposes, like the one in this case, does not lose all state and federal consumer disclosure protections when it seeks to finance repairs to a personal residence for the trust beneficiary, rather than for the trustee herself. Therefore, the transaction remains a consumer credit transaction. Because the district court erred in construing the statutes in this case too narrowly, the panel reversed the district court's dismissal and remanded for further proceedings. View "Gilliam v. Levine" on Justia Law

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Beyond a plain statement disclosing "that a consumer report may be obtained for employment purposes," some concise explanation of what that phrase means may be included as part of the "disclosure" required by the Fair Credit Reporting Act (FCRA), 15 U.S.C. 1681b(b)(2)(A)(i). The right provided by the FCRA to dispute inaccurate information in a consumer report does not require employers to provide job applicants or employees with an opportunity to discuss their consumer reports directly with the employer. Instead, the FCRA requires that an employer provide, in a pre-adverse action notice to the consumer, a description of the consumer's right to dispute with a consumer reporting agency the completeness or accuracy of any item of information contained in the consumer’s file at the consumer reporting agency.The Ninth Circuit affirmed in part and reversed in part in this putative class action against Fred Meyer, alleging that Fred Meyer willfully violated the FCRA by providing an unclear disclosure form encumbered by extraneous information and failing to notify plaintiff in the pre-adverse action notice that he could discuss the consumer report obtained about him directly with Fred Meyer. In this case, the fourth and fifth paragraphs of the disclosure violated the FCRA's standalone disclosure requirement. The panel remanded for the district court to decide in the first instance whether the remaining language of the disclosure satisfied the separate "clear and conspicuous" requirement. View "Walker v. Fred Meyer, Inc." on Justia Law

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Plaintiff filed suit against Numi, and its partner CNB, alleging that they violated the Electronic Fund Transfers Act (EFTA), violated the Fifth Amendment Takings Clause, and were liable for conversion and unjust enrichment under Oregon state law. Numi is a for-profit, private company that returns released inmates' money via a prepaid debit card loaded with the balance of their funds. Numi earns revenue by charging fees to the cardholders, rather than the government.The Ninth Circuit held that plaintiff plausibly alleged a claim under section 1693l-1 of the EFTA and the district court erred in dismissing the case for failure to state a claim. The court explained that, because defendants marketed their cards to the general public, section 1693l-1 was applicable. In this case, defendants marketed the card program to municipalities and correctional facilities, and Multnomah County does not give released inmates a choice of whether to accept the cards. Therefore, when defendants marketed the cards to Multnomah County, they indirectly marketed them to these released inmates, and then the inmates reenter the general public.The panel also held that the district court abused its discretion when it denied plaintiff leave to file a third amended complaint; summary judgment was not proper on plaintiff's takings claim; and summary judgment was not proper on plaintiff's state law claims. View "Brown v. Stored Value Cards, Inc." on Justia Law

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The Ninth Circuit reversed the district court's dismissal of a Fair Debt Collection Practices Act case, holding that a business that buys and profits from consumer debts, but outsources direct collection activities, qualifies as a "debt collector" subject to the requirements of the Act. The panel joined the Third Circuit in concluding that an entity that otherwise meets the "principal purpose" definition of debt collector cannot avoid liability under the FDCPA merely by hiring a third party to perform its debt collection activities.In this case, the panel held that the complaint sufficiently alleged that DNF was a debt collector under the FDCPA, regardless of whether DNF outsourced debt collection activities to a third party. The panel remanded for further proceedings. View "McAdory v. M.N.S. & Associates, LLC" on Justia Law