Justia Consumer Law Opinion Summaries

In two separate class actions, Kenneth Hasson and Jordan Schnur alleged that FullStory, Inc. and Papa John’s International, Inc. unlawfully wiretapped their online communications using FullStory’s Session Replay Code. This code intercepts detailed user interactions on websites without user consent. Hasson, a Pennsylvania resident, claimed FullStory wiretapped him while he browsed Mattress Firm’s website. Schnur, also from Pennsylvania, alleged similar wiretapping by Papa John’s website.The United States District Court for the Western District of Pennsylvania dismissed both cases for lack of personal jurisdiction. In Hasson’s case, the court found that FullStory, a Delaware corporation with its principal place of business in Georgia, did not have sufficient contacts with Pennsylvania. The court denied Hasson’s request for jurisdictional discovery. In Schnur’s case, the court ruled that Papa John’s, also a Delaware corporation with its principal place of business in Georgia, did not expressly aim its conduct at Pennsylvania, despite operating numerous restaurants in the state.The United States Court of Appeals for the Third Circuit reviewed these dismissals. The court affirmed the dismissal in Schnur’s case, agreeing that Schnur failed to show that Papa John’s expressly aimed its conduct at Pennsylvania under the Calder “effects” test. The court noted that merely operating a website accessible in Pennsylvania does not establish personal jurisdiction.However, the court vacated the dismissal in Hasson’s case and remanded it for further consideration. The court held that the District Court should have also considered whether personal jurisdiction was proper under the traditional test as articulated in Ford Motor Co. v. Montana Eighth Judicial District Court. This test examines whether the defendant purposefully availed itself of the forum and whether the plaintiff’s claims arise out of or relate to the defendant’s contacts with the forum. The court instructed the District Court to reassess FullStory’s contacts with Pennsylvania under this framework. View "Hasson v. Fullstory Inc" on Justia Law

A ten-year-old girl named Nylah Anderson died after attempting the "Blackout Challenge," a dangerous activity promoted in a video recommended to her by TikTok's algorithm. Her mother, Tawainna Anderson, sued TikTok and ByteDance, Inc., alleging that the companies were aware of the challenge, allowed such videos to be posted, and promoted them to minors, including Nylah, through their algorithm.The United States District Court for the Eastern District of Pennsylvania dismissed the complaint, ruling that TikTok was immune under Section 230 of the Communications Decency Act (CDA), which protects interactive computer services from liability for content posted by third parties. The court found that TikTok's role in recommending the video fell under this immunity.The United States Court of Appeals for the Third Circuit reviewed the case and reversed the District Court's decision in part, vacated it in part, and remanded the case. The Third Circuit held that TikTok's algorithm, which curates and recommends videos, constitutes TikTok's own expressive activity, or first-party speech. Since Section 230 of the CDA only provides immunity for third-party content, it does not protect TikTok from liability for its own recommendations. Therefore, the court concluded that Anderson's claims were not barred by Section 230, allowing the lawsuit to proceed. View "Anderson v. TikTok Inc" on Justia Law

David Schaffner, Jr. and Theresa Sue Schaffner filed a lawsuit against Monsanto Corporation, alleging that Monsanto violated Pennsylvania law by failing to include a cancer warning on the label of its weed-killer, Roundup. The Schaffners claimed that this omission caused Mr. Schaffner to develop non-Hodgkin’s lymphoma due to his exposure to Roundup. The case was initially filed in the Court of Common Pleas of Allegheny County, Pennsylvania, and was later removed to the United States District Court for the Western District of Pennsylvania. The Judicial Panel on Multi-District Litigation (JPML) then transferred the case to the Northern District of California for consolidated pretrial proceedings.In the Northern District of California, the MDL Court had previously ruled in similar cases that the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) did not preempt state-law tort duties to include a cancer warning on Roundup’s label. Following this precedent, the MDL Court denied Monsanto’s motion for summary judgment on preemption grounds. The case was subsequently remanded to the Western District of Pennsylvania, where the parties stipulated to a judgment in favor of the Schaffners, reserving Monsanto’s right to appeal the preemption issue.The United States Court of Appeals for the Third Circuit reviewed the case and focused on whether FIFRA preempted the Pennsylvania duty to warn. The court held that FIFRA’s preemption provision, which prohibits states from imposing labeling requirements different from those required under federal law, did preempt the state-law duty to include a cancer warning. The court reasoned that the Environmental Protection Agency (EPA) had approved Roundup’s label without a cancer warning, and FIFRA regulations require pesticide labels to conform to the EPA-approved label. Therefore, the Pennsylvania duty to warn was not equivalent to the federal requirements and was preempted by FIFRA. The Third Circuit reversed the judgment of the District Court. View "Schaffner v. Monsanto Corporation" on Justia Law

Alison George sought to represent a class and obtain damages from Rushmore Service Center, LLC, based on a letter that identified Premier Bankcard, LLC as the “current/original creditor” instead of the actual credit card company. George alleged that this violated the Fair Debt Collection Practices Act (FDCPA) by failing to identify the creditor to whom the debt was owed and providing misleading information. She claimed that this would confuse the least sophisticated consumer about the legitimacy of the debt.The United States District Court for the District of New Jersey granted Rushmore’s motion to stay proceedings and compel individual arbitration. George lost in arbitration, where the arbitrator ruled in favor of Rushmore, finding that George was not misled because she admitted she did not read the letter. The District Court then declined to vacate the arbitration award, rejecting George’s arguments that the arbitrator disregarded evidence and law.The United States Court of Appeals for the Third Circuit reviewed the case and focused on whether George had standing to sue. The court concluded that George lacked standing from the outset because her complaint did not allege any specific adverse effects or confusion she personally experienced due to the letter. The court held that confusion alone is insufficient to establish a concrete injury under Article III. Consequently, the Third Circuit vacated the District Court’s orders and remanded with instructions to dismiss the case for lack of standing. The court declined to vacate the arbitration award itself, leaving its enforceability to be determined in a jurisdictionally correct proceeding. View "George v. Rushmore Service Center LLC" on Justia Law

The case involves Smith & Wesson Brands, Inc., Smith & Wesson Sales Company, and Smith & Wesson Inc. (collectively, “Smith & Wesson”) and the Attorney General of the State of New Jersey and the New Jersey Division of Consumer Affairs. The New Jersey Attorney General issued a subpoena to Smith & Wesson under the New Jersey Consumer Fraud Act, seeking documents related to the company's advertising practices. Smith & Wesson filed a federal lawsuit to enjoin enforcement of the subpoena, alleging it violated various constitutional provisions. The New Jersey Attorney General then filed a subpoena enforcement action in state court. The state court rejected Smith & Wesson’s objections and ordered the company to comply with the subpoena.The state court proceedings concluded before the federal case, with the state court ordering Smith & Wesson to comply with the subpoena. The federal court then dismissed Smith & Wesson’s civil rights action on claim preclusion grounds, giving preclusive effect to the state court’s order. The state appellate court later affirmed the state court judgment. Smith & Wesson appealed to the United States Court of Appeals for the Third Circuit, arguing that the District Court should not have given preclusive effect to the state court order.The United States Court of Appeals for the Third Circuit affirmed the District Court’s order. The court found that all elements of New Jersey’s claim preclusion test were satisfied. The court also rejected Smith & Wesson’s argument that it had reserved its right to litigate in federal court, finding that such reservation was unavailable in this case. The court emphasized that litigants get one opportunity to make their arguments, not two, and they cannot file a federal lawsuit to hedge against a potentially unfavorable state ruling. View "Smith & Wesson Brands Inc. v. Attorney General of the State of New Jersey" on Justia Law

The U.S. Court of Appeals for the Third Circuit ruled on a case involving the Consumer Financial Protection Bureau (CFPB) and a group of trusts associated with the National Collegiate Student Loan Trust. The central questions in the case were whether the trusts were "covered persons" under the Consumer Financial Protection Act (CFPA), and whether the CFPB was required to ratify the underlying action.The CFPB had initiated enforcement proceedings against the trusts for alleged violations related to servicing and collecting student loans, which the trusts had contracted out to third parties. The trusts argued that they were not "covered persons" under the CFPA and that the CFPB's action was untimely because it was initiated when the CFPB director was unconstitutionally insulated from presidential removal and ratified after the statute of limitations had expired.The Third Circuit held that the trusts were indeed "covered persons" under the CFPA because they were engaged in offering or providing a consumer financial product or service. The court also held that the CFPB was not required to ratify the action before the statute of limitations had run, following the Supreme Court's decision in Collins v. Yellen. The court concluded that there was no indication that the unconstitutional limitation on the President's authority to remove the CFPB Director harmed the Trusts, and thus no need for ratification. Therefore, the case was affirmed and remanded to the lower court for further proceedings with these determinations in mind. View "Consumer Financial Protection Bureau v. National Collegiate Master Student Loan Trust" on Justia Law

In this case before the United States Court of Appeals for the Third Circuit, the appellant, Paulette Barclift, sued Keystone Credit Services, LLC ("Keystone") for allegedly violating the Fair Debt Collection Practices Act ("FDCPA"). Barclift claimed that Keystone unlawfully communicated her personal information to a third-party mailing vendor, RevSpring, without her consent. She sought to represent a class of similarly situated plaintiffs. The District Court dismissed her suit on the grounds that she did not allege an injury sufficient to establish standing under Article III of the United States Constitution.Upon appeal, the Third Circuit agreed with the lower court that Barclift lacked standing, but modified the District Court's order so that the dismissal would be without prejudice. The court found that Barclift's alleged harm—embarrassment and distress caused by the disclosure of her personal information to a single intermediary (RevSpring)—did not bear a close relationship to a harm traditionally recognized by American courts, such as the public disclosure of private facts. Therefore, the court concluded that Barclift did not suffer a concrete injury and could not establish Article III standing. The court further held that the possibility of future harm was too speculative to establish a concrete injury. The case was dismissed without prejudice, allowing Barclift the opportunity to amend her complaint if she can allege a concrete injury. View "Barclift v. Keystone Credit Services LLC" on Justia Law

In this case, the plaintiff, Maria Del Rosario Hernandez, filed a lawsuit against MicroBilt Corporation alleging the company violated the Fair Credit Reporting Act after the lender denied her loan application based on inaccurate information provided by a MicroBilt product. MicroBilt moved to compel arbitration based on the terms and conditions that Hernandez agreed to while applying for the loan, which included an arbitration provision. However, Hernandez had already submitted her claims to the American Arbitration Association (AAA) for arbitration.The AAA notified MicroBilt that its agreement with Hernandez was a consumer agreement, which meant the AAA's Consumer Arbitration Rules applied. Applying these rules, the AAA notified MicroBilt that its arbitration provision included a material or substantial deviation from the Consumer Rules and/or Protocol. Specifically, the provision’s limitation on damages conflicted with the Consumer Due Process Protocol, which requires that an arbitrator should be empowered to grant whatever relief would be available in court under law or in equity. After MicroBilt did not waive the damages limitation, the AAA declined to administer the arbitration under Rule 1(d).MicroBilt asked Hernandez to submit her claims to a different arbitrator, but she refused, requesting a hearing before the District Court. She argued that she must now pursue her claims in court because the AAA dismissed the case under Rule 1(d). The District Court reinstated Hernandez’s complaint and granted MicroBilt leave to move to compel arbitration under 9 U.S.C. § 4. However, the District Court denied MicroBilt’s motion to compel, leading to this appeal.The United States Court of Appeals for the Third Circuit affirmed the lower court's decision, stating that Hernandez had fully complied with MicroBilt’s arbitration provision, which allowed her to pursue her claims in court. The court held that it lacked the authority to compel arbitration. The court rejected MicroBilt's arguments that the AAA administrator improperly resolved an arbitrability issue that should have been resolved by an arbitrator, that the provision’s Exclusive Resolution clause conflicted with Hernandez’s return to court, and that the AAA’s application of the Consumer Due Process Protocol was unreasonable. The court concluded that it lacked the authority to review the AAA’s decision or to sever the damages limitation from the arbitration provision. View "Hernandez v. MicroBilt Corp" on Justia Law

Huber visited Crozer doctors on four separate occasions, incurring debts to Crozer of $178, $78, $83.50, and $178. Crozer's debt collection agency, SAI, sent a form collection letter, with an “Account Summary” that provided two figures: the specific debt SAI sought to collect, entitled “Amount,” and a second figure, entitled “Various Other Acc[oun]ts Total Balance.” The fourth such letter to Huber informed Huber that she owed an “Amount” of $178, while her “Various Other Accounts Total Balance” was $517.50. Huber testified that she was confused as to how much she owed in total: Was it $695.50 or $517.50. She consulted a financial advisor.Huber filed this putative class action, asserting a “false, deceptive, or misleading” means of collecting a debt and failure to disclose the “amount of the debt” under the Fair Debt Collection Practices Act, 15 U.S.C. 1692. The district court held, on summary judgment, that there was no actionable failure to disclose but found the letters “misleading and deceptive,” and certified the class.The Third Circuit affirmed. Huber has standing, but not under the “informational injury doctrine.” Huber did not identify omitted information to which she has entitlement but the financial harm she suffered in reliance on the letter bears a “close relationship” to the harm associated with the tort of fraudulent misrepresentation. The court remanded for determination of whether any of the class members suffered any consequences beyond confusion. View "Huber v. Simons Agency Inc" on Justia Law

Ingram discovered a fraudulent Comcast account in his name for an address where he never lived. Ingram filed a direct dispute with Comcast, which requested several documents, including a notarized FTC fraud and identity theft affidavit. Ingram did not provide that affidavit. Comcast did not decide whether the account was opened fraudulently but referred it to Waypoint for collection. Waypoint then reported the delinquent account to the consumer reporting agency Experian. After the Waypoint account appeared on Ingram’s consumer report, Ingram challenged it in an indirect dispute with Experian, which forwarded notice of the dispute to Waypoint. Waypoint’s employee updated Ingram’s address and confirmed the account name and social security number, but did not further investigate. Waypoint continued to erroneously report that the Comcast account with a balance of $769. Ingram alleges that as a result, his credit score deteriorated and he was denied an apartment rental and loan application. Ingram filed suit under the Fair Credit Reporting and the Fair Debt Collection Practices Acts.The Third Circuit remanded for evaluation of whether Waypoint’s investigation into Ingram’s indirect dispute was reasonable. Furnishers may find that a direct dispute submitted by a consumer is frivolous, and consumer reporting agencies may find that an indirect dispute submitted by a consumer is frivolous but FCRA provides no such discretion to furnishers that receive an indirect dispute second-hand from a consumer reporting agency. View "Ingram v. Experian Information Solutions, Inc." on Justia Law