Justia Consumer Law Opinion Summaries

The Ninth Circuit reversed the district court's dismissal of plaintiff's claims based on lack of Article III standing. Plaintiffs filed suit against online retailer Zappos.com, alleging that they were harmed by hacking of their accounts. The panel held that plaintiffs sufficiently alleged standing based on the risk of identity theft under Krottner v. Starbucks Corp., 628 F.3d 1139 (9th Cir. 2010). Plaintiffs also alleged an injury in fact under Krottner, based on a substantial risk that the Zappos hackers will commit identity fraud or identity theft. The panel explained that it assessed standing at the time the complaints were filed, not as of the present. Finally, the panel held that plaintiffs sufficiently alleged that the risk of future harm was fairly traceable to the conduct being challenged and that their identity theft injury was redressable. The panel addressed an issue raised by sealed briefing in a concurrently filed memorandum disposition. View "Stevens v. Zappos.com, Inc." on Justia Law

A wine dealer sold millions of dollars’ worth of counterfeit wine to an unsuspecting wine collector. When the collector discovered the fraud, he filed an insurance claim based on his “Valuable Possessions” property insurance policy. The insurance company denied the claim. The collector sued for breach of contract. The trial court ruled in favor of the insurance company, sustaining its demurrer. The Court of Appeal concurred with the trial court: the collector suffered a financial loss, but there was no loss to property that was covered by the property insurance policy. View "Doyle v. Fireman's Fund Insurance Co." on Justia Law

Enacted in 2005, in response to the "debt treadmill," NRS Chapter 604A regulates the payday loan industry, including deferred deposit loans and loans with an annual interest rate greater than 40 percent. If a borrower cannot repay such a loan within 35 days, NRS 604A.480 subsection 1 allows for an extension but a licensee cannot extend the period beyond 60 days and cannot "add any unpaid interest or other charges accrued ... to the principal amount of the new deferred deposit loan or high-interest loan." However, under subsection 2, certain new deferred deposit or high-interest loans are exempt from those restrictions: A licensee may offer a new loan to satisfy an outstanding loan for a period of not less than 150 days and at an interest rate of less than 200 percent. The licensee must follow all of subsection 2's requirements for the new loan to be exempted. Subsection (2)(f) permits a loan under subsection 2 if the licensee does “not commence any civil action or process of alternative dispute resolution on a defaulted loan or any extension or repayment plan thereof." Reversing the district court, the Nevada Supreme Court held that NRS 604A.480(2)(f) bars a licensee from bringing any type of enforcement action on a refinancing loan made under NRS 604A.480(2) and is not merely a condition precedent to making a refinancing loan under the subsection. View "State of Nevada Department of Business and Industry, Financial Institutions Division v. Dollar Loan Center., LLC" on Justia Law

The Eighth Circuit affirmed the district court's grant of summary judgment on remand in favor of defendants in an action filed by mortgage loan borrowers alleging violation of the Truth in Lending Act (TILA). Specifically, borrowers alleged that the lender did not provide the required number of copies of the required notice and material disclosures, and thus borrowers could rescind their loan on a date just shy of the three-year anniversary of loan execution. The court held that the district court did not err in determining that the signed acknowledgement borrowers had executed created a rebuttable presumption that they received the required number of copies and that borrowers' evidence was insufficient to overcome that rebuttable presumption. View "Jesinoski v. Countrywide Home Loans, Inc." on Justia Law

The Supreme Court took the opportunity of this case to follow the overwhelming majority of courts, holding that claims under section 1692e of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692-1692p, are subject to a strict liability standard.The Supreme Court here abrogated a Utah Court of Appeals decision, Midland Funding LLC v. Sotolongo, 325 P.3d 871 (Utah Ct. App. 2014), holding that the court of appeals misstated the Ninth Circuit Court of Appeals’ standard for section 1692e claims and that the standard set forth in Midland Funding clearly contradicts the language of the FDCPA. Further, a strict liability interpretation of section 1692e is consistent with section 1692k(c) of the FDCPA. The Supreme Court thus reversed the decision of the district court dismissing Plaintiff’s section 1692e claims based solely on Midland Funding and remanded the case for further proceedings in light of this opinion. View "Gonzalez v. Cullimore" on Justia Law

After paying a total of $15,493.00 on his $5,000 loan, MacDonald filed a putative class action concerning the loan agreement. He cited RICO and New Jersey state usury and consumer laws, arguing that the agreement is usurious and unconscionable for containing a provision requiring that all disputes be resolved through arbitration conducted by a representative of the Cheyenne River Sioux Tribe (CRST) and a clause that delegates questions about the arbitration provision’s enforceability to the arbitrator. No CRST arbitral forum exists. The agreement also purported to waive all of the borrower’s state and federal statutory rights. The district court denied a motion to compel arbitration. The Third Circuit affirmed, concluding that the agreement directs arbitration to an illusory forum without a provision for an alternative forum, and the forum selection clause is not severable, so that the entire agreement to arbitrate, including the delegation clause, is unenforceable. View "MacDonald v. Cashcall Inc." on Justia Law

In this case involving an arbitration provision in short-term loan contracts the Supreme Court affirmed the judgment of the court of appeals ruling (1) the borrowers’ claims against the lender came within the arbitration provision, and (2) the lender did not waive its right to arbitrate by providing information to the district attorney that checks written to the lender by the borrowers had been returned for insufficient funds.The borrowers sued the lender, claiming that the lender wrongfully used the criminal justice system to collect unpaid loans by filing false charges against them. The lender responded by filing a motion to compel arbitration. The trial court denied the motion, concluding that the arbitration clause was inapplicable because the borrowers' claims related solely to the lender’s illegal use of the criminal justice system and that the lender waived its right to arbitration by substantially invoking the judicial process. The court of appeals reversed. The Supreme Court affirmed, holding (1) the borrowers’ claims were within the scope of the arbitration provision; and (2) the lender did not substantially invoke the judicial process, and therefore, there was no evidence to support the trial court’s finding the the lender waived its right to arbitrate. View "Henry v. Cash Biz, LP" on Justia Law

Receiving an overly revealing credit card receipt -- unseen by others and unused by identity thieves-- was not a sufficient injury to confer Article III standing. The Ninth Circuit affirmed the district court's dismissal of a putative class action alleging a violation of the Fair Credit Reporting Act. In this case, plaintiff filed suit alleging that ABM violated the Act's requirement that businesses redact certain credit card information on printed receipts. 15 U.S.C. 1681c(g). The panel joined the Second and Seventh Circuits in affirming dismissal under identical circumstances and held that plaintiff failed to allege a concrete injury sufficient to give him standing. View "Bassett v. ABM Parking Services, Inc." on Justia Law

The Third Circuit Court of Appeals certified a question of Pennsylvania law to the Pennsylvania Supreme Court. Appellant Jobe Danganan’s contracted with Appellee Guardian Protection Services (“Guardian”), a Pennsylvania-headquartered business, for home security equipment and services at his then-home in Washington, D.C. The contract signed by Appellant, a standardized form agreement employed by Guardian, contained, inter alia, a choice-of-law provision, stating that the “Agreement shall be governed by the laws of Pennsylvania.” Another clause required that any suit or legal proceeding pertaining to the Agreement be brought in the other party’s district or county of residence and mandated that the parties consent to jurisdiction in such venue. Prior to the expiration of the Agreement’s purported three-year initial term, Appellant moved to California and sold his Washington, D.C. house, notifying Guardian of his intent to cancel the contract and related home protection services. However, Guardian continued to bill Appellant, citing provisions of the Agreement that it claimed authorized ongoing charges through the contract’s term, regardless of cancellation attempts. Appellant filed a complaint in the Court of Common Pleas of Philadelphia County on behalf of himself and a putative class of nationwide plaintiffs who were subject to the same form contract. His claims for relief were predicated exclusively on Pennsylvania statutory grounds, namely, the Pennsylvania Unfair Trade Practices and Consumer Protection Law ("UTPCPL") and Pennsylvania’s Fair Credit Extension Uniformity Act. The matter was removed to federal district court, and Guardian moved to dismiss, arguing that Appellant had not, pursuant to the UTPCPL, demonstrated a "sufficient nexus" between the Commonwealth and the improper conduct alleged in the complaint. In response to the first certified question, the Pennsylvania Supreme Court held that a non- Pennsylvania resident may bring suit under the UTPCPL against a Commonwealth-headquartered business based on transactions that occurred out-of-state. Furthermore, the Court concluded that its answer to the first issue eliminated the predicate to the second question certified for review. The matter was thus returned to the Third Circuit Court of Appeals. View "Danganan v. Guardian Protection Svc." on Justia Law

The Supreme Court affirmed Defendant’s conviction for operating a noncommercial vehicle with alcohol concentration of 0.08 or more (DUI per se) but reversed the district court’s order imposing the cost of legal counsel on Defendant. The court held (1) Defendant’s right to due process was not violated by a jury instruction that instructed the jurors, when choosing between two competing interpretations of circumstances evidence, to choose whichever interpretation was the “most reasonable”; but (2) the district court erred in imposing costs of legal counsel on Defendant given Defendant’s limited fixed income and disability status. View "State v. Iverson" on Justia Law