Justia Consumer Law Opinion Summaries
Articles Posted in US Court of Appeals for the Second Circuit
Salazar v. NBA
Michael Salazar filed a putative class action against the National Basketball Association (NBA) alleging violations of the Video Privacy Protection Act (VPPA). Salazar claimed that he signed up for the NBA’s free online newsletter, provided personal information, and watched videos on NBA.com. He alleged that the NBA disclosed his video-watching history and Facebook ID to Meta Platforms, Inc. without his consent, violating the VPPA.The United States District Court for the Southern District of New York dismissed Salazar’s complaint. The court concluded that while Salazar had standing to sue, he did not plausibly allege that he was a “consumer” under the VPPA. The court reasoned that the VPPA only applies to consumers of audiovisual goods or services, and the NBA’s online newsletter did not qualify as such. The court also found that signing up for the newsletter did not make Salazar a VPPA “subscriber.”The United States Court of Appeals for the Second Circuit reviewed the case. The court held that Salazar’s alleged injuries were sufficiently concrete to confer Article III standing. It also found that the district court erred in holding that Salazar was not a “subscriber of goods or services” under the VPPA. The appellate court concluded that the VPPA’s definition of “goods or services” is not limited to audiovisual materials and that Salazar’s exchange of personal information for the NBA’s online newsletter made him a “subscriber.” Consequently, the Second Circuit vacated the district court’s judgment and remanded the case for further proceedings. View "Salazar v. NBA" on Justia Law
Malek v. Feigenbaum
The case involves Plaintiff-Appellant Joel J. Malek, who filed a complaint alleging that Defendants-Appellees, including Leonard Feigenbaum and AXA Equitable Life Insurance Co., engaged in a deceptive marketing scheme to trick him and others into replacing their existing life insurance policies with more expensive and less valuable ones. Malek claimed violations of New York law and the Racketeer Influenced and Corrupt Organizations Act (RICO).The United States District Court for the Eastern District of New York dismissed Malek’s complaint and denied him leave to amend. The court found that Malek’s New York claims were time-barred and that he failed to plead the existence of a RICO enterprise. Malek served a motion for reconsideration on the Defendants but did not file it with the court until after the deadline. The district court subsequently denied the motion for reconsideration.The United States Court of Appeals for the Second Circuit reviewed the case. The Defendants moved to dismiss the appeal, arguing that Malek’s notice of appeal was untimely because he did not file his motion for reconsideration within the required timeframe, thus failing to toll the deadline for filing a notice of appeal. The Second Circuit reiterated its holding in Weitzner v. Cynosure, Inc. that Appellate Rule 4(a)(4)(A) requires timely filing, not just service, of a post-judgment motion to toll the appeal deadline. The court also concluded that under Nutraceutical Corp. v. Lambert, Appellate Rule 4(a)(4)(A) is a mandatory claim-processing rule not subject to equitable tolling.The Second Circuit found that Malek’s notice of appeal was untimely and dismissed the appeal for lack of appellate jurisdiction. The court also determined that Malek’s notice of appeal could not be construed to include the order denying reconsideration. View "Malek v. Feigenbaum" on Justia Law
Jackson-Mau v. Walgreen Co.
A consumer of a glucosamine-based dietary supplement filed a putative class action lawsuit against the supplement’s manufacturer and retailer under New York law. The plaintiff alleged that the supplement was mislabeled because it contained a different formulation of glucosamine than what was displayed on the front of the label and disclosed as the main ingredient on the side. Specifically, the plaintiff claimed that the product contained blended glucosamine rather than single-crystal glucosamine, which she believed to be more effective for alleviating joint pain.The United States District Court for the Eastern District of New York granted summary judgment for the defendants on federal preemption grounds. The court concluded that the plaintiff’s state law mislabeling claims were preempted by the Food, Drug, and Cosmetic Act (FDCA), which establishes national standards for the labeling of dietary supplements. The district court found that the FDCA’s comprehensive regulatory scheme and its broad preemption clauses foreclosed the plaintiff’s state law claims.The United States Court of Appeals for the Second Circuit reviewed the case and affirmed the district court’s judgment. The appellate court held that the plaintiff’s state law mislabeling claims were expressly preempted by the FDCA. The court reasoned that the FDCA preempts any state law that imposes labeling requirements not identical to those set forth in the FDCA and its regulations. The court found that the product’s labeling complied with the FDCA’s requirements, as the dietary ingredient “glucosamine sulfate potassium chloride” was identified using methods endorsed by the FDA. Therefore, the plaintiff’s claims were preempted, and the judgment of the district court was affirmed. View "Jackson-Mau v. Walgreen Co." on Justia Law
Michel v. Yale University
Jonathan Michel, a sophomore at Yale University during the Spring 2020 semester, filed a putative class action against Yale after the university transitioned to online-only classes due to the COVID-19 pandemic. Michel sought tuition refunds, claiming promissory estoppel and unjust enrichment under Connecticut law, arguing that Yale's refusal to refund tuition was inequitable since the online education provided was of lower value than the in-person education promised.The United States District Court for the District of Connecticut granted Yale's motion for summary judgment, concluding that Michel did not present evidence of financial detriment caused by the transition to online classes, a necessary element for both promissory estoppel and unjust enrichment claims. The court dismissed Michel's suit on January 31, 2023.The United States Court of Appeals for the Second Circuit reviewed the case and affirmed the district court's judgment. The appellate court held that Michel's quasi-contract claims were barred by a "Temporary Suspension Provision" in Yale's Undergraduate Regulations. This provision, which acted as a force majeure clause, allowed Yale to transition to online-only classes during the pandemic without issuing tuition refunds. The court concluded that Michel and Yale had a contractual relationship governed by this provision, which precluded Michel's quasi-contract claims. Therefore, Yale was entitled to summary judgment. View "Michel v. Yale University" on Justia Law
Bora v. Browne
Windward Bora LLC purchased a junior promissory note signed by Constance and Royston Browne, secured by a junior mortgage on real property. Windward's predecessor had already obtained a final judgment of foreclosure on the junior mortgage. Without seeking leave from the court that issued the foreclosure, Windward filed a diversity action to recover on the promissory note. Both parties moved for summary judgment.The United States District Court for the Southern District of New York granted the Brownes' motion for summary judgment and denied Windward's. The court found diversity jurisdiction by comparing the national citizenship of the Brownes with that of Windward’s sole member, a U.S. lawful permanent resident, and concluded that state domiciles were irrelevant. It also held that the suit was precluded by New York’s election-of-remedies statute because Windward did not seek leave before suing on the note after its predecessor had already sued on the mortgage. The court found no special circumstances to excuse Windward’s failure.The United States Court of Appeals for the Second Circuit reviewed the case. It agreed with the district court that diversity jurisdiction was present but clarified that the state domiciles of the parties were relevant. The court resolved a divide among district courts, stating that there is no diversity jurisdiction in a suit between U.S. citizens and unincorporated associations with lawful permanent resident members if such jurisdiction would not exist in a suit between the same U.S. citizens and those permanent resident members as individuals. The court also affirmed the district court’s decision to grant summary judgment for the Brownes under New York’s election-of-remedies statute, finding no special circumstances to excuse Windward’s failure to seek leave. The judgment of the district court was affirmed. View "Bora v. Browne" on Justia Law
In re: Kind LLC "Healthy and All Natural" Litigation
The case involves a group of plaintiffs who filed a class-action lawsuit against KIND, LLC, a snack food company. The plaintiffs alleged that the phrase "All Natural" on the labels of KIND's products was deceptive and misleading. They sought damages on behalf of themselves and three classes, based on common law fraud, as well as consumer protection and false advertising laws in New York, California, and Florida.The District Court for the Southern District of New York granted KIND's motion for summary judgment, concluding that the plaintiffs had failed to establish how a reasonable consumer would understand the term "All Natural." The court held that this was fatal to the plaintiffs' claims because without showing how a reasonable consumer understood the term, the plaintiffs could not explain how or why they were materially deceived. The court also granted KIND's motion to preclude two of the plaintiffs' expert opinions from the summary judgment record and to decertify the classes.On appeal, the United States Court of Appeals for the Second Circuit affirmed the District Court's decision. The appellate court held that the District Court did not abuse its discretion in precluding the opinions of the plaintiffs' experts. The court also held that because the plaintiffs failed to present admissible evidence of what a reasonable consumer would expect of KIND products labeled "All Natural," the District Court did not err in concluding that there was no triable issue of fact as to whether reasonable consumers would be misled by the "All Natural" labeling. The court further held that the plaintiffs' arguments regarding class decertification were moot because the District Court's grant of summary judgment was affirmed. View "In re: Kind LLC "Healthy and All Natural" Litigation" on Justia Law
McCracken v. Verisma Systems, Inc.
In this case, a group of patients initiated a class action lawsuit against various hospitals and vendors who provide medical record production services to the hospitals. The plaintiffs alleged that the hospitals and vendors were involved in an illegal kickback scheme, where the vendors charged patients excessive prices for their medical records and used the profits to offer free and discounted pages to the hospitals for other types of medical records. The plaintiffs alleged violations of New York Public Health Law (PHL) § 18(2)(e) (which restricts the price that can be charged for medical records), New York General Business Law (GBL) § 349 (which prohibits deceptive business practices), and unjust enrichment. However, the New York Court of Appeals had previously ruled in Ortiz v. Ciox Health LLC that PHL § 18(2)(e) does not provide a private right of action.The United States Court of Appeals for the Second Circuit affirmed the district court's dismissal of all the plaintiffs' claims. It found that the patients' GBL § 349 and unjust enrichment claims were essentially repackaging their PHL § 18(2)(e) claims, and therefore not cognizable as they attempted to circumvent the Ortiz ruling. The court also held that the plaintiffs failed to allege any actionable wrongs independent of the requirements of PHL § 18(2)(e). The court concluded that the plaintiffs failed to state a claim, and as such, the district court did not err in granting the defendants' motions for judgment on the pleadings, in denying the plaintiffs' cross-motion for summary judgment as moot, and in denying the plaintiffs' leave to file a second amended complaint.
View "McCracken v. Verisma Systems, Inc." on Justia Law
Connecticut ex rel. Tong v. Exxon Mobil Corp.
il”) in Connecticut state court, alleging that Exxon Mobil had engaged in a decades-long campaign of deception to knowingly mislead and deceive Connecticut consumers about the negative climatological effects of the fossil fuels that Exxon Mobil was marketing to those consumers. Based on these allegations, Connecticut asserted eight claims against Exxon Mobil, all under the Connecticut Unfair Trade Practices Act (“CUTPA”). Exxon Mobil removed the case to federal district court, invoking subject-matter jurisdiction under the federal-question statute, the federal-officer removal statute, and the Outer Continental Shelf Lands Act (the “OCSLA”), as well as on other bases no longer pressed in this appeal. The district court rejected each of Exxon Mobil’s theories of federal subject-matter jurisdiction and thus remanded the case to state court. Exxon Mobil appealed.
The Second Appellate affirmed the district court’s order. The court explained that there are only three exceptions to the “general rule” that “absent diversity jurisdiction, a case will not be removable if the complaint does not affirmatively allege a federal claim.” The court reasoned that Exxon Mobil cannot establish Grable jurisdiction simply by gesturing toward ways in which “this case” loosely “implicates” the same subject matter as “the federal common law of transboundary pollution.” The court wrote that because no federal issue is necessarily raised by any of Connecticut’s CUTPA claims, the Grable/Gunn exception from the well-pleaded complaint rule is inapplicable here. View "Connecticut ex rel. Tong v. Exxon Mobil Corp." on Justia Law
RSD Leasing, Inc. v. Navistar Int’l Corp.
Plaintiff RSD Leasing Inc., a company that leases and, eventually, resells trucks to other commercial entities, appealed from a district court decision, granting in relevant part summary judgment to Defendants Navistar International Corp. and Navistar, Inc., the manufacturer of several allegedly substandard trucks in RSD’s fleet. The sole question on appeal is whether, for purposes of its purchase of those trucks, RSD qualifies as a “consumer” under the Vermont Consumer Protection Act and therefore is eligible to invoke the Act’s protections. In the absence of any on-point Vermont caselaw signaling whether the statute extends “consumer” protections to a business that purchases a good intending exclusively to lease that good to a third party and then to resell it at the end of the lease term, the district court relied in substantial part on two brief passages from the Act’s legislative history, holding that RSD was not acting as a “consumer” when it purchased the trucks at issue.
The Second Circuit wrote that it is unable to confidently predict how the Vermont Supreme Court would decide the matter. Therefore, the court certified to the Vermont Supreme Court the following question: Does a business that purchases goods intending first to lease those goods to end users and then to resell them at the termination of the lease term qualify as a ‘consumer’ under the VCPA? View "RSD Leasing, Inc. v. Navistar Int'l Corp." on Justia Law
Sessa v. Trans Union, LLC
Plaintiff leased a Subaru Forester in November 2018. Defendant Trans Union, LLC received certain information about the lease and reported that information on Sessa’s credit report. In particular, Trans Union reported that Plaintiff owed a “balloon payment” at the end of the lease term -- a payment that the terms of the lease did not, in fact, require. Plaintiff sued Trans Union under section 1681e(b) of the FCRA, which requires credit reporting agencies (“CRAs”), like Trans Union, to “follow reasonable procedures to assure maximum possible accuracy of the information” in a consumer’s credit report. 15 U.S.C. Section 681e(b). The district court granted Trans Union summary judgment, reasoning that Plaintiff's credit report could not be considered “inaccurate” under section 1681e(b) because the question of whether Plaintiff owed a balloon payment amounted to a legal, rather than factual, dispute.The Second Circuit vacated the district court’s order and remanded. The court concluded that section 1681e(b) does not incorporate a threshold inquiry as to whether an alleged inaccuracy is “legal” or “factual” in nature. The court, therefore, determined that the district court erred by ending its analysis after it found that the accuracy of the reported balloon payment amounted to a legal dispute and was, therefore, not actionable under section 1681e(b). View "Sessa v. Trans Union, LLC" on Justia Law