Justia Consumer Law Opinion Summaries

The Ninth Circuit affirmed the district court's dismissal of plaintiff's third amended complaint alleging that defendant violated various California consumer-fraud laws by branding Diet Dr Pepper using the word "diet."The panel held that, taken all together, the allegations in the complaint failed to sufficiently allege that reasonable consumers read the word "diet" in a soft drink's brand name to promise weight loss, healthy weight management, or other health benefits. The panel stated that diet soft drinks are common in the marketplace and the prevalent understanding of the term in that context is that the "diet" version of a soft drink has fewer calories than its "regular" counterpart. The panel explained that just because some consumers may unreasonably interpret the term differently does not render the use of "diet" in a soda's brand name false or deceptive. Therefore, the panel held that plaintiff failed to sufficiently allege that Diet Dr. Pepper's labeling was false or misleading and the district court properly dismissed the claim. View "Becerra v. Dr Pepper/Seven Up, Inc." on Justia Law

Dennis fell behind on his debt to Washington Mutual Bank. LVNV bought the debt and Niagara Credit sent a form collection letter on LVNV’s behalf, stating: “Your account was placed with our collection agency” and that Niagara’s “client” had authorized it to offer a payment plan or a settlement of the debt in full. The letter identifies Washington Mutual as the “original creditor” and LVNV as the “current creditor.” It lists the principal and interest balances of the debt and the last four digits of the account number. Dennis filed a putative class action complaint, claiming violation of the Fair Debt Collection Practices Act by “fail[ing] to identify clearly and effectively the name of the creditor to whom the debt was owed,” 15 U.S.C. 1692g(a)(2). The Seventh Circuit affirmed the rejection of the suit on the pleadings, rejecting an argument that listing two entities as “creditor” then stating that Niagara was authorized to make settlement offers on behalf of an unknown client could likely confuse consumers. The defendants’ letter expressly identifies LVNV as the current creditor and meets the Act’s requirement of a written notice containing “the name of the creditor to whom the debt is owed.” An unsophisticated consumer will understand that his debt has been purchased by the current creditor; the letter is not abusive or unfair. Section 1692(g)(a)(2) does not require a detailed explanation of the transactions leading to the debt collector’s notice. View "Dennis v. Niagara Credit Solutions, Inc." on Justia Law

The Ninth Circuit affirmed the district court's dismissal of a Truth in Lending Act (TILA) claim for lack of subject matter jurisdiction based on the jurisdiction-stripping provisions of the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA). In this case, plaintiff sought rescission of a mortgage loan under TILA, claiming that the lender provided him with defective notice of the right to cancel when the loan was signed.The panel held that FIRREA's administrative exhaustion requirement applied, and plaintiff had a claim under FIRREA because his cause of action gave right to an equitable remedy of rescission and was susceptible of resolution by FIRREA's claims process. The panel agreed with the Fourth Circuit and concluded that there was no requirement that the loan have passed through an FDIC receivership. The panel also held that plaintiff's claim related to an act or omission, the lender failed to comply with TILA, and the FDIC was appointed as receiver.However, the panel held that plaintiff failed to exhaust his administrative remedies with the FDIC because his complaint included no allegations that he presented his TILA claim to the FDIC before filing suit. Furthermore, because subject matter jurisdiction was lacking when this action was filed, plaintiff's later communications with the FDIC did not prevent dismissal of his TILA claim. Finally, the district court did not abuse its discretion in denying plaintiff’s request for further discovery. View "Shaw v. Bank of America Corp." on Justia Law

Plaintiffs alleged in 2016, an anonymous hacker stole the personally identifiable information, including Social Security numbers, addresses, birth dates, and health insurance details, of at least 200,000 current and former patients of Athens Orthopedic Clinic (“the Clinic”) from the Clinic’s computer databases. The hacker demanded a ransom, but the Clinic refused to pay. The hacker offered at least some of the stolen personal data for sale on the so-called “dark web,” and some of the information was made available, at least temporarily, on Pastebin, a data-storage website. The Clinic notified plaintiffs of the breach in August 2016. Each named plaintiff alleges that she has “spent time calling a credit reporting agency and placing a fraud or credit alert on her credit report to try to contain the impact of the data breach and anticipates having to spend more time and money in the future on similar activities.” Plaintiffs sought class certification and asserted claims for negligence, breach of implied contract, and unjust enrichment, seeking damages based on costs related to credit monitoring and identity theft protection, as well as attorneys’ fees. They also sought injunctive relief under the Georgia Uniform Deceptive Trade Practices Act (“UDTPA”), and a declaratory judgment to the effect that the Clinic must take certain actions to ensure the security of class members’ personal data in the future. The Clinic filed a motion to dismiss based on both OCGA 9-11-12 (b) (1) and OCGA 9-11-12 (b)(6), which the trial court granted summarily. The Georgia Supreme Court concluded the injury plaintiffs alleged they suffered was legally cognizable. Because the Court of Appeals held otherwise in affirming dismissal of plaintiffs’ negligence claims, the Supreme Court reversed that holding. Because that error may have affected the Court of Appeals’s other holdings, the Court vacated those other holdings and remanded the case. View "Collins et al. v. Athens Orthopedic Clinic, P.A." on Justia Law

Jeremiah Smith filed a class action complaint against LoanMe, Inc., alleging that LoanMe violated the California Invasion of Privacy Act. Smith alleged that LoanMe violated Penal Code section 632.7 by recording a phone call with Smith without his consent while he was using a cordless telephone, and he claimed that a “beep tone” at the beginning of the call did not constitute sufficient notice that LoanMe was recording the call. In a bifurcated trial about the beep tone issue, the trial court concluded that: (1) the beep tone provided sufficient notice to Smith that the call was being recorded; and (2) Smith implicitly consented to being recorded by remaining on the call. The Court of Appeal concluded section 632.7 prohibited only third party eavesdroppers from intentionally recording telephonic communications involving at least one cellular or cordless telephone. Conversely, section 632.7 did not prohibit the participants in a phone call from intentionally recording it. Consequently, Smith failed to state a claim against LoanMe under section 632.7. The Court therefore affirmed dismissal of Smith’s lawsuit. View "Smith v. LoanMe, Inc." on Justia Law

Nationwide Credit sent Horia a letter seeking to collect a debt owed to Gottlieb Hospital. By return mail, Horia disputed the claim. The Fair Debt Collection Practices Act requires a debt collector that notifies a credit agency about the debt to reveal whether the claim is disputed, 15 U.S.C. 1692e(8). Horia claims that Nationwide notified Experian about the debt but not about the dispute, injuring his credit rating and causing him mental distress. Horia previously complained about the same type of violation, based on a different letter that Nationwide sent, attempting to collect a different debt to a different creditor. The suit was settled. Days later Horia filed this second suit. Nationwide cited claim preclusion. The district court dismissed, ruling that Horia has split his claims impermissibly. The Seventh Circuit reversed. The doctrine of bar forecloses repeated suits on the same claim, even if a plaintiff advances a new legal theory or a different kind of injury but applies only to “the same claim.” Federal law defines a “claim” by looking for a single transaction, which usually means all losses arising from the same essential factual allegations. Horia has alleged two transactions. The two claimed debts are owed to different creditors. The wrongs differ—Nationwide could have given proper notice for one debt but not the other—and the injury differs. Each failure to notify could have caused additional harm to credit score or peace of mind. View "Horia v. Nationwide Credit & Collection, Inc." on Justia Law

The Ninth Circuit affirmed the district court's grant of summary judgment for defendant, a nonprofit guaranty agency, on claims under the Fair Debt Collection Practices Act (FDCPA) and the Due Process Clause. In this case, defendant caused an offset against plaintiff's Social Security benefits, in order to recover on a judgment obtained after plaintiff defaulted on his student loans.The panel held that defendant fulfilled the criteria of the fiduciary exception for the definition of a debt collector under the FDCPA. The panel explained that, although defendant regularly collects or attempts to collect debts asserted to be owed or due another, defendant's collection activities were incidental to a bona fide fiduciary obligation. The panel also held that, assuming without deciding that defendant is a state actor, defendant did not violate plaintiff's due process rights because plaintiff was provided with notice of the debt, defendant's intention to seek an offset, and the means by which plaintiff could respond. View "Lima v. Educational Credit Management Corp." on Justia Law

A debt collector is entitled to collect a lawful, outstanding debt even if the statute of limitations has run, so long as the debt collector does not use means that are deceptive or misleading and otherwise complies with legal requirements. The Ninth Circuit affirmed the district court's grant of summary judgment for defendant in an action under the Fair Credit Reporting Act (FCRA), alleging that a debt collector's letter was deceptive or misleading under 15 U.S.C. 1692e because it attempted to persuade him to pay time-barred debt.The panel held that Midland's disclosure would not mislead or deceive the least sophisticated debtor into thinking that Midland could use legal means to collect the debt; Midland's letter was not deceptive or misleading for not warning about the potential for revival of the statute of limitations; the panel rejected plaintiff's argument that a letter is deceptive or misleading if a debt collector tries to persuade debtors to pay what they owe; and thus plaintiff has not identified anything false, deceptive, or misleading in Midland's letter. View "Stimpson v. Midland Credit Management, Inc." on Justia Law

Health benefit plans sued GSK, the manufacturer of the prescription drug Avandia, under state consumer-protection laws and the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. ch. 96 (RICO), based on GSK’s marketing of Avandia as having benefits to justify its price, which was higher than the price of other drugs used to treat type-2 diabetes. The district court granted GSK summary judgment, finding that the state-law consumer-protection claims were preempted by the Federal Food, Drug, and Cosmetic Act (FDCA), 21 U.S.C. ch. 9; the Plans had failed to identify a sufficient “enterprise” for purposes of RICO; and the Plans’ arguments related to GSK’s alleged attempts to market Avandia as providing cardiovascular “benefits” were “belated.” The Third Circuit reversed, applying the Supreme Court’s 2019 "Merck" decision. The state-law consumer-protection claims are not preempted by the FDCA. The Plans should have been given the opportunity to seek discovery before summary judgment on the RICO claims. Further, from the inception of this litigation, the Plans’ claims have centered on GSK’s marketing of Avandia as providing cardiovascular benefits as compared to other forms of treatment, so the district court’s refusal to consider the Plans’ “benefits” arguments was in error because those arguments were timely raised. View "In re: Avandia Marketing, Sales and Products Liability Litigation" on Justia Law

The Supreme Court affirmed the judgments of the superior court granting summary judgment in favor of Plaintiff, Midland Funding, LLC, in these consolidated credit card debt collection appeals, holding that Defendant failed to set forth facts that established a genuine issue of material fact as to whether the credit card accounts were in fact her accounts.The complaints in this case sought to recover the unpaid balance due on two credit card accounts. The district court granted summary judgment for Plaintiff in both cases. On appeal, Defendant argued that there existed an issue of fact as to the ownership of the accounts. The Supreme Court affirmed, holding that the evidence was insufficient to give rise to a genuine issue of material fact. View "Midland Funding LLC v. Raposo" on Justia Law