Justia Consumer Law Opinion Summaries

In November 2013, Washington voters rejected Initiative 522 (I-522), which would have required labels on packaged foods containing genetically modified organisms (GMOs). The Grocery Manufacturers Association (GMA) opposed state-level GMO labeling laws, including I-522. Over the course of the 2013 election cycle, GMA solicited over $14 million in optional contributions from its member companies, $11 million of which went to support the “No on 522” political committee. The payments to No on 522 were attributed solely to GMA itself, with no indication of which companies had provided the funds. Prior to the initiation of this lawsuit, GMA was not registered as a political committee and did not make any reports to the Public Disclosure Commission (PDC). The State filed a complaint alleging that GMA intentionally violated the Fair Campaign Practices Act (FCPA)'s registration and disclosure requirements and the FCPA’s prohibition on concealing the sources of election-related spending. GMA countered that it cannot be subject to the FCPA’s registration and disclosure requirements because those requirements violate the First Amendment as applied. U.S. CONST. amend. I. The trial court agreed with the State, imposed a $6 million base penalty on GMA, and trebled the penalty to $18 million after determining GMA;s violations were intentional. The Court of Appeals largely affirmed, but revered the treble penalty, holding that one had to "subjectively intend to violate the law in order to be subject to treble damages." After review, the Washington Supreme Court affirmed the conclusion that the FCPA, and that the FCPA was constitutional as applied. The Court reversed the appellate court on the treble penalty, holding that the trial court applied the proper legal standard to determine GMA intentionally violated the FCPA. The matter was remanded to the Court of Appeals for consideration of GMA's claim that the penalty imposed violated the excessive fines clauses of the federal and Washington constitutions. View "Washington v. Grocery Mfrs. Ass'n" on Justia Law

The Supreme Court affirmed the district court's order granting summary judgment in favor of Sisters of Charity of Leavenworth Health System, Inc. (SCL) on Cheryl Bratton's claims, holding that the district court did not err by granting summary judgment to SCL.This case stemmed from SCL's practice of issuing refunds to its patients, for such reasons as overpayment on an account, in the form of prepaid MasterCard debit cards issued through Bank of America. Plaintiff brought this suit alleging, among other claims, constructive trust based on unjust enrichment, unfair trade practices under the Montana Consumer Protection Act (MCPA), money had and received, and declaratory judgment. During discovery, SCL asked Bank of America to issue checks to Bratton for her refunds, which Bank of America did. The district court granted summary judgment for SCL. The Supreme Court affirmed, holding that the district court did not err by granting summary judgment to SCL on Bratton's claims and by denying Bratton's cross motions for summary judgment. View "Bratton v. Sisters of Charity of Leavenworth Health System, Inc." on Justia Law

Borrower filed suit under federal and state regulations for consumer credit transactions against the lenders, alleging that the lender's loan disclosures were materially inconsistent with the terms of the loan. At issue in this appeal was whether the loan the borrower obtained to make repairs to a personal residence occupied by her niece should be considered a consumer credit transaction. The district court held that, because the borrower did not intend to live in the house, this was not a consumer credit transaction.The Ninth Circuit held that, under applicable statutes and regulations, a trust created by an individual for tax and estate planning purposes, like the one in this case, does not lose all state and federal consumer disclosure protections when it seeks to finance repairs to a personal residence for the trust beneficiary, rather than for the trustee herself. Therefore, the transaction remains a consumer credit transaction. Because the district court erred in construing the statutes in this case too narrowly, the panel reversed the district court's dismissal and remanded for further proceedings. View "Gilliam v. Levine" on Justia Law

Borrowers filed suit alleging that Great Lakes made affirmative misrepresentations to them and other borrowers that they were on track to have their student loans forgiven based on their public-service employment when, in fact, their loans were ineligible for the forgiveness program. Borrowers alleged a variety of claims under Florida law, including the Florida Consumer Collection Practices Act (FCCPA). The district court ruled that Borrowers' claims were preempted by a provision of the Higher Education Act of 1965 (HEA), which prohibits the application of state law disclosure requirements to loans made under federal student loan programs.The Eleventh Circuit held that the HEA, which expressly preempts state law disclosure requirements, does not preempt Borrowers' claims in this case. The court also held that Borrowers' claims are not otherwise preempted. Accordingly, the court vacated the district court's dismissal of the claims and remanded for further proceedings. View "Lawson-Ross v. Great Lakes Higher Education Corp." on Justia Law

The Supreme Court affirmed the order of the circuit court denying Petitioners' motion to compel arbitration of Respondents' claims against them, holding that a merger clause in the retail sales installment contract (RISC) between the parties served to supplant the arbitration agreement contained in the previously-executed credit application.Respondents purchased a new truck from Petitioners. Respondents first executed a credit application that contained an arbitration provision. Thereafter, the parties executed the RSIC, which did not contain an arbitration clause. After Respondents defaulted on their loan Petitioners began collection efforts. Respondents filed this complaint asserting that Petitioners harassed them by phone even after being advised they were represented by counsel. Petitioners moved to compel arbitration based on the arbitration provision contained in the credit application. The circuit court denied the motion. The Supreme Court affirmed, holding that the arbitration provisions in the credit application did not survive the merger clause of the RISC, thereby nullifying Respondents' obligation to arbitrate their claims against Petitioners. View "TD Auto Finance LLC v. Reynolds" on Justia Law

Southwest Mississippi Electric Power Association (Southwest) was a nonprofit, member-owned electric cooperative corporation created by statute to provide electricity to rural Mississippians. Plaintiffs Ray Virgil, Barbara Lloyd, and Cassandra Johnson were are members of Southwest who filed a lawsuit alleging Southwest failed to return excess revenues and receipts to its members. Southwest moved to compel arbitration. The trial court granted Southwest’s motion to compel arbitration. Plaintiffs appealed. Finding no reversible error in that judgment, the Mississippi Supreme Court affirmed. View "Virgil v. Southwest Mississippi Electric Power Association" on Justia Law

Plaintiff filed suit alleging that LBD used Automatic Telephone Dialing Systems (ATDSs) in violation of the Telephone Consumer Protection Act of 1991 (TCPA). In this case, plaintiff received hundreds of unsolicited text messages from LBD over the course of more than a year and a half.The Second Circuit vacated the district court's grant of summary judgment to LBD, holding that LBD's systems qualified as ATDSs. The court held that LBD's systems met both statutory requirements by having both the capacity to store or produce telephone numbers to be called, using a random or sequential number generator, and the capacity to dial such numbers. Accordingly, the court remanded for further proceedings. View "Duran v. La Boom Disco, Inc." on Justia Law

Plaintiff, individually and on behalf of a class, filed suit under the Fair Debt Collection Practices Act, alleging that Credit Control, in an effort to collect the outstanding debt on plaintiff's Kohl's private label credit card account, sent him a letter that did not list the "creditor to whom the debt is owed," in violation of 15 U.S.C. 1692g. Plaintiff also alleged that Credit Control's letter constituted a false or misleading representation, in violation of 15 U.S.C. 1692e. The district court granted summary judgment on the pleadings to Credit Control.The Second Circuit held that the district court erred in finding that Credit Control disclosed the "name of the creditor to whom the debt is owed" by listing Kohl's, the servicer of the account, as the "client." Because the district court then relied on this erroneous finding in further holding that the letter did not constitute a false or misleading representation, the court did not reach the question of whether the letter violated Section 1692e. Accordingly, the court reversed as the Section 1692g claim and vacated as to the Section 1692e claim, remanding for further proceedings. View "Bryan v. Credit Control, LLC" on Justia Law

Twumasi-Ankrah is an Uber driver. Uber requested a background check on Twumasi-Ankrah from, Checkr, a consumer reporting agency under the Fair Credit Reporting Act (FCRA), 15 U.S.C. 1681a(f). Checkr learned from the Ohio Bureau of Motor Vehicles that Twumasi-Ankrah had been involved in “accidents,” dated October 23, 2015; December 19, 2015; and February 10, 2017. Checkr gave this information to Uber, without further investigation, knowing that the Bureau reports all accidents that a driver is involved in, regardless of fault. Uber fired Twumasi-Ankrah, allegedly because it assumed Twumasi-Ankrah was responsible for the accidents. Twumasi-Ankrah sent Checkr a legal document adjudging him “not guilty” of the December 19, 2015 minor traffic offense and a police report treating him as the victim of the hit-and-run allegedly at issue on February 10, 2017. Twumasi-Ankrah’s requests for reconsideration went unheeded. Twumasi-Ankrah claimed that Checkr violated FCRA by failing to “follow reasonable procedures to assure [the] maximum possible accuracy” of its reporting. The district court dismissed, finding that Twumasi-Ankrah failed plausibly to allege that Checkr reported information that was literally “factually inaccurate.” The Sixth Circuit reversed and remanded. FCRA requires that credit reports be both accurate and not misleading. Taken as true, the complaint plausibly suggests that Checkr reported “misleading” information about Twumasi-Ankrah that could have been “expected to have an adverse effect.” View "Twumasi-Ankrah v. Checkr, Inc." on Justia Law

The Second Circuit affirmed the district court's dismissal of plaintiffs' second amended complaint alleging that Dunkin Donuts deceptively marketed two of its trademarked products -- the Angus Steak & Egg Breakfast Sandwich and the Angus Steak & Egg Wake-Up Wrap. Plaintiffs alleged that through representations made in labeling and television advertisements, Dunkin Donuts deceived consumers into believing that the Products contained an "intact" piece of meat when the Products actually contained a ground beef patty with multiple additives. The district court dismissed claims based on lack of general personal jurisdiction in New York and failure to state a claim.The court held that, under New York law, the act of registering to do business under section 1301 of the New York Business Corporation Law does not constitute consent to general personal jurisdiction in New York. The court rejected plaintiffs' arguments that Dunkin Donuts' contacts with New York were sufficient to subject it to general personal jurisdiction in the state, and agreed with the district court that plaintiff failed to allege a plausible violation of sections 349 and 350. View "Chen v. Dunkin' Brands, Inc." on Justia Law