Justia Consumer Law Opinion SummariesArticles Posted in US Court of Appeals for the Sixth Circuit
Lloyd v. Ford Motor Co.
Consumers alleged that Ford cheated on its fuel economy and emissions testing for certain truck models, including the F-150 and Ranger. The Energy Policy and Conservation Act, 42 U.S.C. 6201, and its regulations control such testing, the results of which are sent to the EPA. The EPA uses the information to provide fuel economy estimates for labels affixed to new vehicles. The FTC regulates advertising to consumers; Its “Guide Concerning Fuel Economy Advertising for New Vehicles” advises vehicle manufacturers and dealers about disclosing the established fuel economy of a vehicle, as determined by the EPA. The EPA and Department of Justice investigated Ford’s testing and resultsThe Sixth Circuit affirmed the dismissal of the purported class action, which included claims of breach of contract, negligent misrepresentation, breach of express warranty, fraud, and unjust enrichment under the laws of every state. The claims are preempted by federal law as they inevitably conflict with the EPA’s regime. The EPA accepted Ford’s testing information and published its own estimate based on that information. The EPA has the authority to approve or reject Ford's figures. The tort claims essentially challenge the EPA’s figures. The EPA must balance several objectives in reaching those figures, and these claims would skew this balance. View "Lloyd v. Ford Motor Co." on Justia Law
Lewis v. Acuity Real Estate Services, LLC
Acuity operates a website that connects people looking to buy or sell homes with a local real estate agent. Acuity’s services are free to home buyers and sellers but realtors pay a fee for referrals. The real-estate broker that employed Lewis, a real estate agent, signed up to receive Acuity’s referrals. The broker required its agents (including Lewis) to pay Acuity’s fee out of their commissions from home sales. Lewis sued, alleging that Acuity makes false claims to home buyers and sellers on its website and that this false advertising violates the Lanham Act, 15 U.S.C. 1125(a)(1)(B).The Sixth Circuit affirmed the dismissal of the suit. The Lanham Act provides a cause of action only for businesses that suffer commercial injuries (such as lost product sales) from the challenged false advertising. The Act does not provide a cause of action for customers who suffer consumer injuries (such as the cost of a defective product) from false advertising. Lewis alleges that type of consumer harm as his injury from Acuity’s allegedly false advertising: He seeks to recover the referral fee (that is, the price) he paid for Acuity’s services. View "Lewis v. Acuity Real Estate Services, LLC" on Justia Law
sWard v. NPAS, Inc.
Ward twice received medical treatment at Stonecrest after signing agreements, stating that Ward was responsible for charges not covered by insurance and that Stonecrest may “utilize the services of a third party" as an extended business office (EBO) for billing and account servicing, and that while the account is being serviced by the EBO it is not considered delinquent, past due or in default. Stonecrest would “determine the account to be delinquent, past due, and in default” after its return from the EBO and the account could be referred to a collection agency. After Ward did not pay bills from Stonecrest, Ward’s accounts were referred to a third party, NPAS, which mailed Ward statements and left him messages. NPAS identified itself as “a company that is managing your account." Ward contacted a law firm, which erroneously sent a cease-and-desist letter to the wrong company.Ward sued under the Fair Debt Collection Practices Act (FDCPA), alleging NPAS had not disclosed its identity as a debt collector, 15 U.S.C. 1692d(6); used a name other than its “true name” (NPAS instead of NPAS, Inc.); and called him after he attempted to send a cease-and-desist letter. The court held that NPAS did not qualify as a “debt collector” under the FDCPA. The Third Circuit found that Ward did not have Article III standing but remanded. On remand, Ward amended his complaint and submitted documents to show he had suffered concrete harm. The Third Circuit affirmed that those changes were sufficient to demonstrate Ward’s standing but that NPAS is not a debt collector. View "sWard v. NPAS, Inc." on Justia Law
Bouye v. Bruce
Bouye financed a furniture purchase with Winner through a retail installment contract (RIC). Winner supposedly sold the debt to Mariner. Bouye defaulted. Mariner, through its attorney (Bruce), sued in state court to recover the debt and attorney’s fees “of one-third of the amount" collected; the RIC limited fees to 15% of the unpaid balance. The attached RIC did not establish a transfer to Mariner. The court ordered Mariner to file proof of assignment. Mariner filed an updated RIC that listed Winner’s store manager as assigning the debt to Mariner. The court granted Mariner summary judgment. The Kentucky appellate court found that Mariner had not sufficiently demonstrated a valid transfer. Mariner dismissed the case.Bouye sued Bruce in federal court under the Fair Debt Collection Practices Act, 15 U.S.C. 1692(e), 380 days after Mariner sued in state court. The district court dismissed the complaint as untimely under FDCPA’s one-year limitations period. Bruce sought attorney’s fees. Meanwhile, Bouye and Mariner entered into a settlement that released Mariner, later clarifying that Bruce was not released.Three months before the court denied motions for reconsideration and attorney’s fees, Bruce learned of the settlement. The Sixth Circuit first held the settlement did not moot the appeal, then reversed, The statute of limitations did not bar an allegation Bruce filed an updated RIC and moved for summary judgment on that basis, affirmatively misrepresenting that the assignment occurred before Mariner filed suit. View "Bouye v. Bruce" on Justia Law
Hammoud v. Equifax Information Services, LLC
Mohamad and Ahmed Hammoud, father and son, each filed a Chapter 7 bankruptcy petition, just over a year apart using the same attorney. The petitions contained their similar names, identical addresses, and—mistakenly—Ahmed’s social security number. Although the attorney corrected the social security number on Mohamad’s bankruptcy petition the day after it was filed, Experian failed to catch the amendment and erroneously reported Mohamad’s bankruptcy on Ahmed’s credit report for nine years. Ahmed learned of the uncorrected mistake while attempting to refinance his mortgage. He sued Experian and Equifax, alleging that each had violated the Fair Credit Reporting Act by failing to “follow reasonable procedures to assure maximum possible accuracy” of his reported information, 15 U.S.C. 1681e(b). Equifax and Ahmed settled.The district court granted Experian summary judgment. The Sixth Circuit affirmed. Ahmed had standing to sue but cannot establish that Experian’s procedures were unreasonable as a matter of law. Viewing the facts in the light most favorable to Ahmed, his cognizable injury was fairly traceable to Experian’s actions. A credit reporting agency’s reliance on information gathered by outside entities is reasonable if the information is not “obtained from a source that was known to be unreliable” and is “not inaccurate on its face” or otherwise inconsistent with information already had on file. Experian was not required to implement additional procedures for collecting and verifying corrected information from bankruptcy proceedings. View "Hammoud v. Equifax Information Services, LLC" on Justia Law
Hurst v. Caliber Home Loans, Inc.
Hurst sought a loan modification in 2018. Caliber notified Hurst that her application was complete as of April 5, 2018, that it would evaluate her eligibility within 30 days, that it would not commence foreclosure during that period, and that it might need additional documents for second-stage review. On May 1, Caliber requested additional documents within 30 days. Although Hurst responded, she did not meet all of Caliber’s requirements. On May 31, Caliber informed Hurst that it could not review her application. Hurst sent some outstanding documents on June 7, but her application remained incomplete. Caliber filed a foreclosure action on June 18. Hurst spent $13,922 in litigating the foreclosure but continued working with Caliber. Caliber again denied the application as incomplete on August 31 but eventually approved her loan modification and dismissed the foreclosure action.Hurst filed suit under the Real Estate Settlement Procedures Act (RESPA), alleging that Caliber violated Regulation X’s prohibition on “dual tracking,” which prevents a servicer from initiating foreclosure while a facially complete loan-modification application is pending, 12 C.F.R. 1024.41(f)(2); failed to exercise reasonable diligence in obtaining documents and information necessary to complete her application, section 1024.41(b)(1); and failed to provide adequate notice of the information needed to complete its review (1024.41(b)(2)). The district court granted Caliber summary judgment. The Sixth Circuit reversed with respect to the “reasonable diligence” claim. Hurst identified communications where Caliber employees provided conflicting information and had trouble identifying deficiencies. View "Hurst v. Caliber Home Loans, Inc." on Justia Law
Snyder v. Finley & Co., L.P.A.
Ohio’s Necessaries Statute permits creditors to collect certain debts from one spouse incurred by the other.. Seeking to recover outstanding legal defense bills owed by Snyder’s husband, who had been convicted of embezzlement, Finley filed a debt-collection lawsuit against Finley and her husband, asserting joint liability. Snyder contends that the lawsuit was “objectively baseless” and violated the Fair Debt Collection Practices Act, 15 U.S.C. 1692e.The Sixth Circuit reversed the entry of summary judgment in favor of Finley. The Ohio Supreme Court has clearly held that the Necessaries Statute does not impose joint liability on a married person for the debts of a spouse. A creditor must first seek satisfaction of its claim from the assets of the spouse who incurred the debt and must show that the debtor-spouse is “unable to pay” for a non-debtor spouse to be liable under the Necessaries Statute. Finley’s claims against the husband remain pending in the Ohio state trial court. View "Snyder v. Finley & Co., L.P.A." on Justia Law
Lindenbaum v. Realgy, LLC
In 1991, Congress prohibited almost all robocalls to cell phones and landlines, 47 U.S.C. 227(b)(1)(B). A 2015 amendment attempted to allow robocalls if they were made “solely to collect a debt owed to or guaranteed by the United States.” The Supreme Court, in AAPC, held the amendment was unconstitutional content discrimination but that the exception was severable from the rest of the restriction, leaving the general prohibition intact. In 2019-2020, Lindenbaum received two robocalls from Realgy advertising its electricity services. She sued, alleging violations of the robocall restriction. After the Supreme Court decided AAPC, the district court dismissed the case for lack of subject matter jurisdiction reasoning that severability is a remedy that operates only prospectively, so the robocall restriction was unconstitutional and therefore “void” for the period the exception was on the books. Because it was “void,” the district court believed, it could not provide a basis for federal-question jurisdiction.The Sixth Circuit reversed. Because severance is not a remedy, it would have to be a legislative act in order to operate prospectively only. The Court recognized only that the Constitution had “automatically displace[d]” the government-debt-collector exception from the start, then interpreted what the statute has always meant in its absence. View "Lindenbaum v. Realgy, LLC" on Justia Law
Ward v. National Patient Account Services Solutions, Inc.
Ward received twice medical treatment at Stonecrest. Stonecrest hired NPAS, Inc. to collect Ward’s outstanding balances. NPAS first sent Ward a billing statement on October 3 related to his July hospital visit. The statement provided NPAS's full name and address at the top of the first page; the reverse side explained who it was. NPAS called Ward on October 24 and left a voice message: We are calling from NPAS on behalf of Stonecrest … Please return our call. On November 17, NPAS, sent a second billing statement. On December 27, NPAS left a second, identical, voice message. NPAS then returned his account to Stonecrest. Ward’s second account regarding his October hospital visit followed a similar process. On December 28, after retaining counsel, Ward sent a cease-and-desist letter to “NPAS Solutions, LLC,” an entity unrelated to NPAS, Inc. Ward stated at his deposition that NPAS, Inc.’s voice messages caused him to become confused as to which entity had called him.Ward filed suit under the Federal Debt Collection Practices Act, 15 U.S.C. 1692e(11) alleging NPAS failed, in its voice messages, to identify itself as a debt collector and failed to identify the “true name” of its business. The Sixth Circuit held that the case should be dismissed because Ward lacks Article III standing. Ward does not automatically have standing simply because Congress authorizes a plaintiff to sue for failing to comply with the Act. The procedural injuries Ward asserts do not bear a close relationship to traditional harms. View "Ward v. National Patient Account Services Solutions, Inc." on Justia Law
Garland v. Orlans, PC
The Orlans law firm, sent a letter on law-firm letterhead, stating that Wells Fargo had referred the Garland loan to Orlans for foreclosure but that “[w]hile the foreclosure process ha[d] begun,” “foreclosure prevention alternatives” might still be available if Garland contacted Wells Fargo. The letter explained how to contact Wells Fargo “to attempt to be reviewed for possible alternatives,” the signature was typed and said, “Orlans PC.”Garland says that the letter confused him because he was unsure if it was from an attorney and “raised [his] anxiety” by suggesting “that an attorney may have conducted an independent investigation and substantive legal review ... such that his prospects for avoiding foreclosure were diminished.” Garland alleges that Orlans sent a form of this letter to thousands of homeowners, without a meaningful review of the homeowners’ foreclosure files, so the communications deceptively implied they were from an attorney. The Fair Debt Collection Practices Act (FDCPA) prohibits misleading debt-collection communications that falsely imply they are from an attorney.The Sixth Circuit affirmed the dismissal of the purported class action for lack of jurisdiction. Garland lacks standing. That a statute purports to create a cause of action does not alone create standing. A plaintiff asserting a procedural claim must have suffered a concrete injury; bare allegations of confusion and anxiety do not qualify. Whether from an attorney or not, the letter said nothing implying Garland’s chance of avoiding foreclosure was “diminished.” View "Garland v. Orlans, PC" on Justia Law