Justia Consumer Law Opinion Summaries

Plaintiffs filed a putative class action against AEO, alleging that unsolicited spam text messages they received were in violation of the Telephone Consumer Protection Act. After the parties agreed to settle, third party defendant Experian objected to certification, arguing that plaintiffs lacked standing under Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016). Class member Bowes objected to the settlement as unfair. The district court approved both the settlement and certified the settlement class.The Second Circuit held that plaintiffs' receipt of the unsolicited text messages, without any other injury, was sufficient to demonstrate injury-in-fact. The court held that plaintiffs were not required to demonstrate any additional harm because the nuisance and privacy invasion attendant on spam texts were the very harms with which Congress was concerned when enacting the Act. Furthermore, history confirms that causes of action to remedy such injuries were traditionally regarded as providing bases for lawsuits in English or American courts. Therefore, the court dismissed Experian's appeal. The court affirmed with respect to Bowes' appeal, because the district court acted within its discretion in approving the class settlement. View "Melito v. Experian Marketing Solutions, Inc." on Justia Law

Abdollahzadeh opened an MBNA credit-card account in 1998. He defaulted on the debt, making his last payment in August 2010. In June 2011 he attempted another payment that never cleared. In April 2013 MBNA sold his account to CACH, which referred Abdollahzadeh’s debt to Mandarich, a debt-collection law firm. CACH identified the later, unsuccessful payment attempt as the last payment on the account. Relying on this date, Mandarich sent Abdollahzadeh a collection letter in December 2015. Mandarich sued when it received no response. The state court dismissed the suit because the last payment to clear occurred outside of Illinois’s five-year statute of limitations. Abdollahzadeh sued Mandarich for attempting to collect a time-barred debt (Fair Debt Collection Practices Act, 15 U.S.C. 1692). The court granted Mandarich summary judgment, concluding that the violations were unintentional and occurred despite reasonable procedures aimed at avoiding untimely collection attempts. The Seventh Circuit affirmed, rejecting Abdollahzadeh’s arguments that Mandarich’s continuation of the collection action after it learned the true last-payment date created a factual dispute on the issue of intent; that the firm’s reliance on CACH’s representations about the last-payment date was an abdication of its duty to engage in meaningful review; and that the firm’s procedures for weeding out time-barred debts were insufficient to support the affirmative defense. The bona fide error defense doesn’t require independent verification and procedural perfection. Mandarich had procedures in place that were reasonably adapted to avoid late collection efforts. View "Abdollahzadeh v. Mandarich Law Group, LLP" on Justia Law

Plaintiffs brought a putative class action alleging that between 2009 and 2014 certain lenders participated in "kickback schemes" prohibited by the Real Estate Settlement Procedures Act (RESPA). The district court dismissed the claims because the first of the five class actions was filed after the expiration of the one year statute of limitations.The Fourth Circuit reversed and held that, under the allegations set forth in their complaints, plaintiffs were entitled to relief from the limitations period under the fraudulent concealment tolling doctrine. In this case, plaintiffs sufficiently pleaded that the lenders engaged in affirmative acts of concealment and the court could not conclude as a matter of law that these plaintiffs unreasonably failed to discover or investigate the basis of their claims within the limitations period. Accordingly, the court remanded for further proceedings. View "Edmondson v. Eagle National Bank" on Justia Law

Plaintiffs filed suit alleging violations of Vermont and federal law when the terms of their loan agreements provided for interest rates well in excess of caps imposed by Vermont law. Plaintiffs sought an injunction against tribal officers in charge of Plain Green and an award of money damages against other defendants.The Second Circuit affirmed the district court's denial of defendants' motion to dismiss and motion to compel arbitration. The court held that tribal sovereign immunity did not bar this suit because plaintiffs may sue tribal officers under a theory analogous to Ex parte Young for prospective, injunctive relief based on violations of state and substantive federal law occurring off of tribal lands. The court also held that the arbitration clauses of the loan agreements were unenforceable and unconscionable. View "Gingras v. Think Finance, Inc." on Justia Law

The Eleventh Circuit sua sponte vacated its previous opinion and publish this opinion in its place.This appeal involved the approval of a class action settlement against Godiva for violating the Fair and Accurate Credit Transactions Act (FACTA) by printing more digits of his credit card number than the Act allowed. Objectors challenged the class settlement reached by plaintiff and Godiva, but the district court approved the settlement, class counsel's request for attorney's fees, and an incentive award for plaintiff. The court affirmed.The court held that Congress judged the risk of identity theft plaintiff suffered to be sufficiently concrete to confer standing, and the risk of identity theft bears a close enough relationship to the common law tort of breach of confidence to make plaintiff's injury concrete. In this case, plaintiff alleged he suffered a heightened risk of identity theft as a result of a FACTA violation and his allegation was sufficient under Spokeo, Inc. v. Robins, 578 U.S. ___, 136 S. Ct. 1540 (2016). The court declined to follow the Third Circuit's rule that actual identity theft was required to bring a FACTA claim. Rather, the court held that Congress conferred the procedural right in FACTA to reduce the risk of identity theft. View "Muransky v. Godiva Chocolatier, Inc." on Justia Law

The Eighth Circuit affirmed the district court's grant of Credico's motion to dismiss a complaint alleging that the content of a debt collection letter violated the Fair Debt Collection Practices Act (FDCPA). The court held that plaintiff failed to sufficiently plead that Credico violated the Act by using "PROFESSIONAL DEBT COLLECTORS" and the acronym "CCB" because they were organization names other than Credico's true name. Furthermore, Credico did not violate the Act by having a non-licensed signatory on the letter, because there were two other licensed signatories in the letter. Finally, under Minnesota law, Credico was permitted to seek prejudgment interest. View "Klein v. Credico Inc." on Justia Law

The Supreme Court affirmed the decision of the court of appeals affirming the circuit court's order granting Security Finance's (Security) motion to dismiss Brian Kirsch's (Kirsch) counterclaims against Security under Wis. Stat. Chapters 425 and 427, holding that Kirsch's counterclaims were properly dismissed.Security and Kirsch entered into a loan agreement. Kirsch later defaulted on the payment obligation. Security subsequently filed a small claims lawsuit against Kirsch to enforce the agreement and collect the alleged debt. Kirsch counterclaimed for damages under chapter 427, the Wisconsin Consumer Act, on the grounds that Security filed this action before serving Kirsch with a notice of right to cure default satisfying the requirements set forth in chapter 425. The circuit court dismissed the counterclaim relating to the notice of right to cure default. The court of appeals affirmed. The Supreme Court affirmed, holding that a creditor's failure to provide a notice of right to cure default does not constitute a sufficient basis for relief under chapter 427. View "Security Finance v. Kirsch" on Justia Law

In 1996 Aldaco pleaded guilty to battery and received a sentence of six months’ supervision, a diversionary disposition under Illinois law. The court entered a finding of guilt and deferred proceedings. After Aldaco complied with the conditions of her supervision, the court dismissed the charge. Aldaco could have had the battery record expunged, but did not ask the court to do so. Nineteen years later Aldaco wished to rent an apartment. As part of one application process, she consented to a criminal background check, which the landlord outsourced to Yardi. Its report flagged her battery sentence and the landlord refused to rent to Aldaco. She protested to Yardi, falsely asserting that the battery record did not pertain to her. She did not inform Yardi that the reported length of her sentence was incorrect. Yardi reexamined its work and confirmed that the record pertained to Aldaco. Aldaco filed suit, contending that Yardi—as a consumer reporting agency—violated the Fair Credit Reporting Act when it disclosed her criminal history. The Act prohibits reporting agencies from disclosing any arrest record or other adverse items more than seven years old but permits them to report “records of convictions” no matter how old, 15 U.S.C. 1681c(a). The Act does not define the word “conviction.” The Seventh Circuit affirmed summary judgment for Yardi. Federal law controls; the word “convictions” encompasses pleas of guilt. View "Aldaco v. Rentgrow, Inc." on Justia Law

In the underlying actions, the People asserted claims under Business and Professions Code section 17501 against real parties in interest and alleged that real parties sold products online by means of misleading, deceptive or untrue statements regarding the former prices of those products. The trial court sustained real parties' demurrer without leave to amend on the ground that the statute was void for vagueness as applied to real parties.The Court of Appeal granted the petition for writ of mandate seeking relief from the ruling regarding the section 17501 claims, and held that real parties failed to demonstrate any constitutional defect on demurrer. Regarding real parties' challenge to section 17501 as an unconstitutional regulation of free speech, as a preliminary matter, the court rejected petitioner's contention that the statute targets only false, misleading or deceptive commercial speech; the plain language of the statute restricts protected commercial speech and thus, the statute was subject to the test for constitutional validity set forth in Central Hudson Gas & Elec. v. Public Serv. Comm'n (1980) 447 U.S. 557, 566; and, because the undeveloped record was inadequate to apply the test, real parties' "free speech" challenge necessarily failed on demurrer. The court also rejected real parties' contention that section 17501 was void for vagueness, and rejected the facial and as-applied challenges. View "People v. Superior Court" on Justia Law

Plaintiff appealed the district court's dismissal of his claim under the Fair Debt Collection Practices Act (FDCPA) and the Florida Consumer Collection Practices Act, arising from an attempt by defendants to collect on plaintiff's time-barred consumer debt. The Eleventh Circuit reversed the district court's dismissal of the FDCPA claim and held that the collection letter plaintiff received plausibly could be misleading or deceptive to the "least sophisticated consumer" in violation of 15 U.S.C. 1692e. Although the court found that plaintiff stated a plausible claim, the court held that attempting to collect on time-barred debt was not a per se unfair or unconscionable practice that automatically violates section 1692f of the FDCPA. Finally, the court reinstated plaintiff's state claim and remanded for further proceedings. View "Holzman v. Malcolm S. Gerald & Associates, Inc." on Justia Law