Justia Consumer Law Opinion Summaries

Since 1992, the Energy Star Program has set energy efficiency standards for categories of products and permitted approved products to bear the Energy Star logo. Three models of Whirlpool top-loading clothes washers were approved to display that logo and did so from 2009-2010. Under one method of measurement, those machines did not meet the Program’s energy- and water-efficiency standards; the washers did satisfy the Program’s standards under another measurement technique, which the Program previously endorsed. Program guidance from July 2010 disapproved of that method.Consumers in several states who had purchased those models commenced a putative class action against Whirlpool and retailers that sold those machines, alleging breach of express warranty and violations of state consumer protection statutes based on the allegedly wrongful display of the Energy Star logo. The district court certified a class action against Whirlpool but declined to certify a class against the retailers. At summary judgment, the court rejected all remaining claims.The Third Circuit affirmed, finding no genuine dispute of material fact. The plaintiffs did not demonstrate that the models were unfit for their intended purpose. A reasonable jury could not find that the retailer defendants were unjustly enriched from selling the washers. Without evidence of a false or misleading statement attributable to Whirlpool or the retailers, the state consumer protection claims failed. View "Dzielak v. Whirlpool Corp" on Justia Law

Three men joined in a shootout, but only Rogers was convicted of murdering a bystander caught in their crossfire. At his trial, Rogers’s attorney did not object while the trial judge admonished a trial witness (Singleton) about perjury after that witness gave testimony favorable to Rogers. The attorney offered no arguments when Singleton changed his testimony and did not cross-examine Singleton about the change. The Third Circuit reversed the denial of habeas relief. Counsel’s failure to object to the trial judge’s admonishment, conduct he “did not think” was problematic, fell below an objective standard of reasonableness under “Strickland” as did counsel’s later failure to cross-examine Singleton regarding his changed testimony. Counsel characterized Singleton as “a liar, trying to help his buddy out,” whose testimony would not be “determinative of the outcome of this case,” but Singleton was the only witness to ever claim Rogers shot first—the ultimate issue in the case. Had Rogers’s counsel objected to the trial judge’s admonishment of Singleton and cross-examined Singleton about his changed testimony, “a reasonable probability” exists that “the result of the proceeding would have been different.” Without Singleton’s testimony against Rogers, the prosecution’s remaining evidence was negligible. View "Rogers v. Superintendent Greene SCI" on Justia Law

Weichsel's Chase credit card member agreement discloses an “Annual Membership Fee” to be added to his billing statement and that Weichsel may request an additional card for an authorized user. A “Rates and Fees Table” discloses the annual membership fee as $450 plus $75 for each additional card. Weichsel included one additional user. Weichsel alleges that his December 2019 billing statement included a renewal notice, stating that Weichsel’s annual $525.00 membership fee would be billed on 02/01/2020, how the fee would be charged, and how Weichsel could avoid it. The notice did not specify the breakdown: $450 for the primary cardholder and $75 for the additional user. The fee appeared as separate items on Weichsel’s February 2020 billing statement: a $450 charge and another for $75. Weichsel paid $525 but claims that “[h]ad [he] been aware” he could retain his credit card for $450, he would have paid only that amount. Weichsel filed a putative class action, alleging that Chase’s failure to itemize each component of the renewal fee in the December 2019 renewal notice violated the Truth in Lending Act (TILA), 15 U.S.C. 1601, and Regulation Z.The Third Circuit affirmed the dismissal of the suit. Weichsel had standing; he suffered an economic injury based on his assertion that he would not have paid the full $525 if he had known it included the additional card fee. However, neither TILA nor Regulation Z expressly mandates disclosure of each individual component of the total annual fee in a renewal notice. Regulation Z requires itemization of fees on other disclosures but lacks such a requirement for renewal notices. View "Weichsel v. JP Morgan Chase Bank NA" on Justia Law

Lutz received a Capital One credit card, made purchases, and obtained cash advances with the card. Under the credit card agreement, Lutz could make minimum installment payments with interest at an annual rate of up to 22.90% on any unpaid monthly balance. His account balance rose to $2,343.76, including at least $341.67 in interest that had accrued at an annual rate of 22.90%. When Lutz failed to pay, Capital One sold the charged-off account to PRA, which is not a bank and cannot issue credit cards. PRA holds a license from the Pennsylvania Department of Banking and Securities to make motor vehicle loans and to charge interest at 18-21% on those loans but PRA’s sole business involves purchasing defaulted consumer debt at a discount and then attempting to collect the debt. PRA obtained a default judgment against Lutz.Lutz filed a putative class action against PRA under the Fair Debt Collection Practices Act, 15 U.S.C. 1692e, 1692f, alleging that PRA made false statements about debt and attempted to collect a debt not permitted by law, citing alleged violations of Pennsylvania’s Consumer Discount Company Act. The Third Circuit affirmed the dismissal of the suit. Lutz did not plausibly allege that Pennsylvania law prohibited PRA from collecting interest that had previously accrued at greater than 6% annually. PRA is not in the business of negotiating loans or advances and is not subject to the CDCA and its limitations on collecting interest. View "Lutz v. Portfolio Recovery Associates LLC" on Justia Law

OneMain, a non-bank finance company, loaned Zirpoli $6,200.08, to be repaid at a rate of 26.91% (total $11,364.35). The loan was issued under the Consumer Discount Company Act (CDCA), a consumer protection statute, which creates an exception to Pennsylvania’s usury law. The loan is governed by a disclosure statement, a security agreement, and an arbitration agreement. Later, OneMain sold delinquent accounts to Midland, including Zirpoli’s loan. Midland sued Zirpoli but later dismissed the suit and undertook collection efforts.Zirpoli filed a class action, alleging that Midland’s collection activities constituted an unlawful attempt to collect the loan because Midland does not have a CDCA license and never obtained nor requested approval from the Department of Banking. Midland was, therefore, not lawfully permitted to purchase the loan. Midland moved to compel arbitration. The court denied the motion, focusing on the validity of the assignment from OneMain and Midland. The Third Circuit vacated. The ultimate illegality of a contract does not automatically negate the parties’ agreement that an arbitrator should resolve disputes arising from the contract. The parties to the loan clearly agreed to arbitrate the issue of arbitrability. The arbitration agreement provides that an arbitrator shall resolve the arbitrability of defenses to enforcement, including alleged violations of state usury laws. View "Zirpoli v. Midland Funding LLC" on Justia Law

The consumers had rental applications denied based on inaccurate consumer reports generated by a consumer reporting agency, RealPage, which would not correct the reports unless the consumers obtained proof of the error from its sources. The identity of RealPage’s sources was not included in the disclosures to the consumers, despite their requests for their files. The consumers sued under the Fair Credit Reporting Act, 15 U.S.C. 1681, to disclose on request “[a]ll information in the consumer’s file at the time of the request” and “[t]he sources of th[at] information,” seeking damages and attorneys’ fees for themselves and on behalf of a purported class and subclass.The district court denied their Rule 23(b)(3) motion for class certification, citing the Rule’s predominance and superiority requirements and finding that their proposed class and subclass were not ascertainable. The Third Circuit vacated. The district court based its predominance analysis on a misinterpretation of Section 1681g(a), erroneously concluding that individualized proof would be needed to distinguish requests for “reports” from those for “files.” The court also misapplied ascertainability precedents. The consumers have standing, having made the requisite showing of the omission of information to which they claim entitlement, “adverse effects” that flow from the omission, and the requisite nexus to the protected “concrete interest.” View "Kelly v. RealPage Inc" on Justia Law

Kirtz obtained loans from the Pennsylvania Higher Education Assistance Agency (AES), a “public corporation” that makes, guarantees, and services student loans, and the USDA through the Rural Housing Service, which issues loans to promote the development of affordable housing in rural communities. Kirtz alleges that, as of June 2018, both of his loan accounts were closed with a balance of zero. AES and the USDA continued to report the status of Kirtz’s accounts as “120 Days Past Due Date” on his Trans Union credit file, resulting in damage to his credit score. Kirtz sent Trans Union a letter disputing the inaccurate statements. Trans Union gave AES and USDA notice of the dispute, as required by the Fair Credit Reporting Act (FCRA), 15 U.S.C. 1681. According to Kirtz, neither AES nor the USDA took any action to investigate or correct the disputed information.The district court dismissed Kirtz’s lawsuit, concluding that FCRA did not clearly waive the United States’ sovereign immunity. Courts of Appeals that have considered this issue are split. The Third Circuit reversed. FCRA’s plain text clearly and unambiguously authorizes suits for civil damages against the federal government. In reaching a contrary conclusion, the district court relied on its determination that applying the FCRA’s literal text would produce results that seem implausible. Implausibility is not ambiguity, and where Congress has clearly expressed its intent, courts may neither second-guess its choices nor decline to apply the law as written. View "Kirtz v. Trans Union LLC" on Justia Law

Popa browsed the website of Harriet Carter Gifts, added an item to her cart, but left the website without making a purchase. She later discovered that, unbeknownst to her, Harriet Carter’s third-party marketing service, NaviStone, tracked her activities across the site. Popa sued both entities under Pennsylvania’s Wiretapping and Electronic Surveillance Control Act (WESCA), 18 Pa. C.S. 5701, which prohibits the interception of wire, electronic, or oral communications. The district court granted the defendants summary judgment, reasoning that NaviStone could not have “intercepted” Popa’s communications because it was a “party” to the electronic conversation. Alternatively, it ruled that if any interception occurred, it happened outside Pennsylvania, so the Act did not apply.The Third Circuit vacated. Under Pennsylvania law, there is no direct-party exception to WESCA liability, except for law enforcement under specific conditions. The defendants cannot avoid liability merely by showing that Popa directly communicated with NaviStone’s servers. NaviStone intercepted Popa’s communications at the point where it routed those communications to its own servers; that was at Popa’s browser, not where the signals were received at NaviStone’s servers. The court noted that the district court never addressed whether Harriet Carter posted a privacy policy and, if so, whether that policy sufficiently alerted Popa that her communications were being sent to a third-party company to support a consent defense. View "Popa v. Harriet Carter Gifts Inc." on Justia Law

The Third Circuit consolidated district court cases claiming violations of the Fair Credit Reporting Act, 15 U.S.C. 1681. Borrowers had student loans from various lenders and made payments on those loans until they were unable to do so. Their respective lenders closed their accounts and transferred their loans. After the transfers, the borrowers viewed their credit reports published by Trans Union, each of which contained a negative “Pay Status” notation stating “Account 120 Days Past Due.” The entries also stated that the loans were closed, transferred, and had account balances of zero. The borrowers claimed that the pay status notations were inaccurate because the borrowers did not have any financial obligations to their previous lenders.The Third Circuit affirmed the dismissal of the suits. Applying the “reasonable reader standard,” the credit reports containing the Pay Status notations were not misleading or inaccurate. The reports contain multiple conspicuous statements reflecting that the accounts are closed and the borrowers have no financial obligations to their previous creditors; a reasonable interpretation of the reports in their entirety is that the Pay Status of a closed account is historical information. The court also rejected claims that Trans Union failed to conduct a good faith investigation and to permanently delete or modify inaccurate information. View "Bibbs v. Trans Union LLC" on Justia Law

Adam saw advertisements for free samples of beauty products, which implied that she need only pay for shipping and handling. Adam ordered two free samples and purchased another item. She was charged $9.94 for shipping and $14.99 for the purchased item. Soon thereafter, Adam was unexpectedly charged $92.94, which resulted in an overdraft of her checking account. A company representative told Adam that “she had agreed" to pay the full amount if she kept the "free samples" and that Adam would need to return the items before refunds could be issued. Adam, not trusting the company, refused to return the items, then called her bank, which temporarily reversed the charge but ultimately reinstated it. Adam contends that her bank was misled by the “false-front scheme” and that the charge would have been reversed but for the defendants’ misrepresentations.Adam filed a putative class-action suit, alleging violations of (or conspiracy to violate or aiding and abetting violation of): multiple California laws; the Electronic Fund Transfer Act, 15 U.S.C. 1693–1693r; the RICO Act, 18 U.S.C. 1961–1968; and consumer laws. The Third Circuit reversed the dismissal of the suit. Adam has standing; she was not made whole by the refund offer; she has neither received a refund nor accepted any alternative. Defendants’ conduct could provide but-for causation for Adam’s financial harm and a restitution order would redress that harm. View "Adam v. Barone" on Justia Law