Justia Consumer Law Opinion Summaries

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

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

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

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

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

Google owns YouTube, an online video-sharing platform that is popular among children. Google’s targeted advertising is aided by technology that delivers curated, customized advertising based on information about specific users. Google’s technology depends partly on what Federal Trade Commission (“FTC”) regulations call “persistent identifiers,” information “that can be used to recognize a user over time and across different Web sites or online services.” In 2013, the FTC adopted regulations under COPPA that barred the collection of children’s “persistent identifiers” without parental consent. The plaintiff class alleged that Google used persistent identifiers to collect data and track their online behavior surreptitiously and without their consent. They pleaded only state law causes of action but also alleged that Google’s activities violated COPPA. The district court held that the “core allegations” in the third amended complaint were preempted by COPPA.   The Ninth Circuit reversed the district court’s dismissal of the third amended complaint on preemption grounds. The court remanded so that the district court can consider, in the first instance, the alternative arguments for dismissal to the extent those arguments were properly preserved. The panel held that state laws that supplement, or require the same thing as federal law, do not stand as an obstacle to Congress’s objectives, and are not “inconsistent.” The panel was not persuaded that the insertion of “treatment” in the preemption clause evinced clear congressional intent to create an exclusive remedial scheme for enforcement of COPPA requirements. The panel concluded that COPPA’s preemption clause does not bar state-law causes of action that are parallel to or proscribe the same conduct forbidden by COPPA. View "CARA JONES, ET AL V. GOOGLE LLC, ET AL" on Justia Law

Herbal Brands, Inc., which has its principal place of business in Arizona, brought suit in Arizona against New York residents that sell products via Amazon storefronts. Herbal Brands alleged that Defendants’ unauthorized sale of Herbal Brands products on Amazon to Arizona residents and others violated the Lanham Act and state law. The district court dismissed for lack of personal jurisdiction over Defendants.   The Ninth Circuit reversed. The panel held that if a defendant, in its regular course of business, sells a physical product via an interactive website and causes that product to be delivered to the forum, then the defendant has purposefully directed its conduct at the forum such that the exercise of personal jurisdiction may be appropriate. The panel applied the Arizona long-arm statute, which provides for personal jurisdiction co-extensive with the limits of federal due process. Due process requires that a nonresident defendant must have “certain minimum contacts” with the forum such that the exercise of personal jurisdiction does not offend traditional notions of fair play and substantial justice.   The panel held that Herbal Brands met its initial burden of showing that Defendants purposefully directed their activities at the forum because, under the Calder effects test, Defendants’ sale of products to Arizona residents was an intentional act, and Herbal Brands’ cease-and-desist letters informed defendants that their actions were causing harm in Arizona. The court held that Defendants had sufficient minimum contacts with Arizona, Herbal Brands’ harm arose out of those contacts, and the exercise of personal jurisdiction would be reasonable in the circumstances. View "HERBAL BRANDS, INC. V. PHOTOPLAZA, INC., ET AL" on Justia Law

Nevada enacted Senate Bill 248 (“S.B. 248”), Act of June 2, 2021, ch. 291, 2021 Nev. Stat. 1668, in response to the COVID-19 pandemic. S.B. 248 requires debt collectors to provide written notification to debtors 60 days before taking any action to collect a medical debt. Plaintiffs are entities engaged in consumer debt collection. They filed suit in district court against Defendant, Commissioner of the Financial Institutions Division of Nevada’s Department of Business and Industry, bringing a facial challenge to the law. They moved for a temporary restraining order and a preliminary injunction, contending that S.B. 248 is unconstitutionally vague, violates the First Amendment and is preempted by both the federal Fair Credit Reporting Act (“FCRA”) and the Fair Debt Collection Practices Act (“FDCPA”). The district court denied Plaintiffs’ motion for a temporary restraining order and a preliminary injunction. Plaintiffs timely appealed the denial of the preliminary injunction.   The Ninth Circuit affirmed on the grounds that Plaintiffs failed to show a likelihood of success on the merits of their claims. The panel first rejected Plaintiffs’ claim that the term “action to collect a medical debt” in S.B. 248 was unconstitutionally vague, noting that the implementing regulations set forth examples of actions that do, and do not, constitute actions to collect a medical debt. The panel held that: S.B. 248 regulates commercial speech and therefore is not subject to strict scrutiny; communications to collect a medical debt “concerned lawful activity” and were not “inherently misleading.” The panel next rejected Plaintiffs’ argument that the FCRA expressly preempts S.B. 248 under 15 U.S.C. Section 1681t(b)(1)(F). View "AARGON AGENCY, INC., ET AL V. SANDY O'LAUGHLIN" on Justia Law

Plaintiff contended that P&G’s packaging “represents that the Products are natural, when, in fact, they contain nonnatural and synthetic ingredients, harsh and potentially harmful ingredients, and are substantially unnatural.” Plaintiff stated that if he had known when he purchased them that the products were not “from nature or otherwise natural,” he would not have purchased the products or paid a price premium for the products. Plaintiff asserted claims under California’s Unfair Competition Law (“UCL”), California’s False Advertising Law (“FAL”), and California’s Consumers Legal Remedies Act (“CLRA”).   The Ninth Circuit affirmed the district court’s Fed. R. Civ. P. 12(b)(6) dismissal of Plaintiff’s action alleging that P&G violated California consumer protection laws by labeling some of its products with the words “Nature Fusion” in bold, capitalized text, with an image of an avocado on a green leaf. The panel held that there was some ambiguity as to what “Nature Fusion” means in the context of its packaging, and it must consider what additional information other than the front label was available to consumers of the P&G products. Here, the front label containing the words “Nature Fusion” was not misleading— rather, it was ambiguous. Upon seeing the back label, it would be clear to a reasonable consumer that avocado oil is the natural ingredient emphasized in P&G’s labeling and marketing. With the entire product in hand, the panel concluded that no reasonable consumer would think that the products were either completely or substantially natural. The survey results did not make plausible the allegation that the phrase “Nature Fusion” was misleading. View "SEAN MCGINITY V. THE PROCTER & GAMBLE COMPANY" on Justia Law

Defendant spearheaded a get-rich-quick scam—which promised to make consumers rich but ultimately defrauded them of hundreds of millions of dollars. In response, the Federal Trade Commission (“FTC”) brought suit against Defendant and other scam participants under Sections 13(b) and 19 of the Federal Trade Commission Act (“FTCA”) and under the Telemarketing and Consumer Fraud and Abuse Prevention Act, alleging that the scam violated Section 5 of the FTCA and the FTC’s Telemarketing Sales Rule. In 2012, the district court granted summary judgment to the FTC, holding that Defendant’s scam indeed violated Section 5 of the FTCA and the Telemarketing Sales Rule. To remedy the established violations, the district court granted both injunctive and monetary relief. Defendant never challenged the statutory validity of the equitable monetary relief, nor appealed from the 2012 judgment—which has remained on the books all this time.   The Ninth Circuit affirmed the district court’s denial of Defendant’s Fed. R. Civ. P. 60(b) motion for relief from an equitable money judgment. The panel held that Defendant failed to establish a certain type of jurisdictional error. Defendant failed to show that the equitable monetary judgment here—which was consistent with then-prevailing precedent—rested on a total want of jurisdiction or lacked even a colorable basis. Second, Defendant argued that the district court abused its discretion in concluding that the equitable monetary portion of the judgment lacked prospective application under Rule 60(b)(5). The panel held that the first relevant set of considerations—the nature and relationship of the intervening change in the law—did not establish that the district court abused its discretion in denying relief. View "FTC V. GARY HEWITT, ET AL" on Justia Law