Justia Consumer Law Opinion Summaries

Plaintiff alleged that private educational loan was discharged in bankruptcy. He sued Experian under the Fair Credit Reporting Act (FCRA) for reporting the loan was due and owing. The district court concluded the loan was not discharged in bankruptcy and later declined to set aside summary judgment when Plaintiff proffered newly discovered evidence.   The Second Circuit held that the kind of legal inaccuracy alleged by Plaintiff is not cognizable as an “inaccuracy” under the FCRA, thus the court affirmed, on an alternative ground, the district court’s order granting summary judgment in favor of Experian. Accordingly, the court dismissed as moot Plaintiff’s appeal of the denial of his motion for an indicative judgment. The court explained that Plaintiff has failed to allege an inaccuracy within the plain meaning of section 1681e(b) of the FCRA. The unresolved legal question regarding the application of section 523(a)(8)(A)(i) to Plaintiff’s educational loan renders his claim non-cognizable under the FCRA. The court noted that the holding does not mean that credit reporting agencies are never required by the FCRA to accurately report information derived from the readily verifiable and straightforward application of law to facts. However, the inaccuracy that Plaintiff alleged does not meet this statutory test because it evades objective verification. There is no bankruptcy order explicitly discharging this debt. View "Mader v. Experian" on Justia Law

Plaintiffs in two putative class actions took out home mortgage loans from Bank of America, N.A. (“BOA”), one before and the other after the effective date of certain provisions of the DoddFrank Wall Street Reform and Consumer Protection Act (“DoddFrank”). The loan agreements, which were governed by the laws of New York, required Plaintiffs to deposit money in escrow accounts for property taxes and insurance payments for each mortgaged property. When BOA paid no interest on the escrowed amounts, Plaintiffs sued for breach of contract, claiming that they were entitled to interest under New York General Obligations Law Section 5-601, which sets a minimum 2% interest rate on mortgage escrow accounts. BOA moved to dismiss on the ground that GOL Section 5-601 does not apply to mortgage loans made by federally chartered banks because, as applied to such banks, it is preempted by the National Bank Act of 1864 (“NBA”). The district court disagreed and denied the motion.   The Second Circuit reversed and remanded. The court held that (1) New York’s interest-on-escrow law is preempted by the NBA under the “ordinary legal principles of pre-emption,” Barnett Bank of Marion Cnty., N.A. v. Nelson, 517 U.S. 25, 37 (1996), and (2) the Dodd-Frank Act does not change this analysis. GOL Section 5-601 thus did not require BOA to pay a minimum rate of interest, and Plaintiffs have alleged no facts supporting a claim that interest is due. View "Cantero v. Bank of Am., N.A." on Justia Law

A group of public servants who had contacted Navient for help repaying their loans (collectively, “Plaintiffs”) filed a putative class action lawsuit, alleging that Navient had not “lived up to its obligation to help vulnerable borrowers get on the best possible repayment plan and qualify for PSLF.”   Navient moved to dismiss the amended complaint under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim, which the district court granted in part, dismissing all claims except “the claim brought under New York’s General Business Law Section 349”. The district court certified a class for settlement purposes under Federal Rule of Civil Procedure 23(b)(2) and approved the settlement as “fair, reasonable, adequate,” and “in the best interest of the Settlement Class as a whole.”   Two objectors now appeal that judgment, arguing that the district court erred in certifying the class, approving the settlement, and approving service awards of $15,000 to the named Plaintiffs. The Second Circuit affirmed concluding that the district court did not abuse its discretion in making any of these determinations. The court explained that here, the amended complaint plausibly alleged that the named Plaintiffs were likely to suffer future harm because they continued to rely on Navient for information about repaying their student loans. At least six of the named Plaintiffs continue to have a relationship with Navient. That is enough to confer standing on the entire class. Further, the court explained individual class members [in fact] retain their right to bring individual lawsuits,” and the settlement does not prevent absent class members from pursuing monetary claims. View "Hyland v. Navient Corporation" on Justia Law

After the district court granted summary judgment in favor of two government agencies and a pharmaceutical company in this Freedom of Information Act ("FOIA") case. Plaintiff, a science writer and journalism professor, sought records from the government agencies relating to the pharmaceutical company's successful application for accelerated approval of a drug for the treatment of a neuromuscular disease. The agencies produced over 45,000 pages of documents, some of which were redacted under Exemption 4 of FOIA. The district court granted summary judgment for the agencies and the pharmaceutical company on the basis that the redacted information fell within Exemption 4 and publication would either cause foreseeable harm to the interests protected by Exemption 4 or was prohibited by law.Plaintiff appealed and the Second Circuit affirmed the district court’s ruling. The court held that the interests protected by Exemption 4 are the submitter's commercial or financial interests in the information that is of a type held in confidence and not disclosed to any member of the public by the person to whom it belongs. Defendants' declarations show that the release of the information Plaintiff seeks would foreseeably harm the pharmaceutical company’s interests and Plaintiff does not raise a genuine dispute as to that showing. View "Seife v. FDA, et al." on Justia Law

Defendant-Appellant U.S. Department of Homeland Security (“DHS”) appealed the judgment of the district court ordering the U.S. Secret Service, a component of DHS, to release certain records that Plaintiff-Appellee requested under the Freedom of Information Act (“FOIA”), 5 U.S.C. Section 552.   The Second Circuit reversed the judgment of the district court on two grounds. First, the records are not “agency records” subject to the FOIA. Second, even if the records were eligible for disclosure under the FOIA, Exemption 7(C), 5 U.S.C. Sec. 552(b)(7)(C), would shield the records from disclosure. The court explained that the Secret Service obtained records from the campaign and transition subject to an understanding of confidentiality in order to provide security services to the presidential candidate and President-elect. Under these circumstances, the agency did not exercise control sufficient to convert the records into agency records subject to disclosure under the FOIA. View "Behar v. Dep't of Homeland Sec." on Justia Law

Plaintiffs, a putative class of fantasy sports players, filed suit alleging claims for fraudulent misrepresentations and omissions, negligent misrepresentations, violations of various state consumer protection laws, and unjust enrichment. Plaintiffs alleged that defendants fraudulently concealed that player statistics were purportedly unreliable because of rule violations in the form of electronic sign-stealing by certain MLB teams during the 2017–2019 baseball seasons. Plaintiffs further alleged that MLB intentionally took no action to address these rule violations in order to protect its financial interest and investment in DraftKings.The Second Circuit affirmed the district court's dismissal of the First Amended Complaint and its denial of plaintiffs' motion for reconsideration, holding that alleged misrepresentations or omissions by organizers and participants in major league sports about the competition itself—such as statements about performance, team strategy, or rules violations—do not give rise to plausible claims sounding in fraud or related legal theories brought by consumers of a fantasy sports competition who are utilizing a league's player statistics.The court also affirmed the district court's order, which concluded that a September 14, 2017 letter from the MLB Commissioner to the New York Yankees General Manager should be unsealed. The court concluded that the district court did not abuse its discretion in unsealing the letter in light of plaintiffs' attempted use of the letter in their proposed Second Amended Complaint and the district court's discussion of the letter in explaining its decision to deny plaintiffs' request for leave to amend in their reconsideration motion, and because MLB disclosed a substantial portion of the substance of the letter in its press release about the investigation. View "Olson v. Major League Baseball" on Justia Law

The Second Circuit reversed the district court's dismissal of plaintiff's claims under the Real Estate Settlement Procedures Act (RESPA), alleging that Ocwen's failure to record her mortgage instruments and its actions in losing key mortgage documents constituted covered errors under the catch-all provision of Regulation X (RESPA's implementing regulation). In this case, plaintiff alleged that the errors committed by Ocwen in handling her loan modification documents were errors relating to servicing of a mortgage loan, and, consequently, were subject to the provisions of RESPA and Regulation X. The court concluded that plaintiffs' asserted errors are covered by the catch-all provision of Regulation X, which includes the terms "any other errors" and "relating to." Accordingly, the court remanded for further proceedings. View "Naimoli v. Ocwen Loan Servicing, LLC" on Justia Law

Soliman entered a California Subway sandwich shop. An employee showed her an in-store, hard-copy advertisement, on which Subway offered to send special offers if she texted a keyword. Soliman sent a text message to Subway. Subway began sending her, via text message, hyperlinks to electronic coupons. Soliman alleges that she later requested by text that Subway stop sending her messages, but her request was ignored. She filed suit under the Telephone Consumer Protection Act. Subway moved to compel arbitration, arguing that a contract was formed because the in-store advertisement, from which Soliman got the keyword and shortcode, included a reference to terms and conditions, including an arbitration requirement, located on Subway’s website and provided the URL.The Second Circuit affirmed the denial of the motion to compel arbitration. Under California law, Soliman was not bound by the arbitration provision because Subway did not provide reasonably conspicuous notice that she was agreeing to the terms on the website. Because of barriers relating to the design and content of the print advertisement, and the accessibility and language of the website itself, the terms and conditions were not reasonably conspicuous under the totality of the circumstances; a reasonable consumer would not realize she was being bound to such terms by sending a text message to Subway in order to receive promotional offers. View "Soliman v. Subway Franchisee Advert. Fund Trust, Ltd." on Justia Law

In Avila v. Riexinger & Associates, LLC, 817 F.3d 72, 76 (2d Cir. 2016), the Second Circuit held that the Fair Debt Collection Practices Act, 15 U.S.C. 1692e, requires "debt collectors, when they notify consumers of their account balance, to disclose that the balance may increase due to interest and fees."In this case, the Second Circuit held that Avila's disclosure requirement does not apply to collection notices that extend offers to settle outstanding debt. The court explained that such collection notices do not present the risk that a debtor might pay the listed balance only to find herself still owing more. Furthermore, payment of an amount that the collector indicates will fully satisfy a debt excludes the possibility of further debt to pay. Therefore, the court concluded that a settlement offer need not enumerate the consequences of failing to meet its deadline or rejecting it outright so long as it clearly and accurately informs a debtor that payment of a specified sum by a specified date will satisfy the debt. Applying these principles here, the court held that Forster & Garbus's notice to plaintiff did not violate section 1692e because it extended a settlement offer that, if accepted through payment of the specified amount(s) by the specified date(s), would have cleared plaintiff's account. Accordingly, the court reversed and remanded. View "Cortez v. Forster & Garbus, LLP" on Justia Law

The Second Circuit affirmed the district court's grant of summary judgment in favor of Lands' End in a putative class action brought by Gorss Motels under the Telephone Consumer Protection Act (TCPA), seeking compensation for faxes it received advertising the products of Lands' End.As a preliminary matter, although the parties do not raise the issue on appeal, the court concluded that Gorss has standing to proceed under the TCPA. The court concluded that Gorss gave prior express permission to receive the faxes at issue through its franchise agreements with Wyndham, and rejected plaintiff's contention that any permission to send fax advertisements was given to Wyndham and not to Lands' End. Therefore, the court concluded that Gorss agreed to the process that occurred here, in which Wyndham sent Gorss fax advertisements on behalf of a Wyndham approved supplier, Lands' End, advertising products that could be used in franchised motels. View "Gorss Motels, Inc. v. Lands' End, Inc." on Justia Law