Justia Consumer Law Opinion Summaries

A group of business associations, including the Fort Worth Chamber of Commerce, challenged a new Final Rule issued by the Consumer Financial Protection Bureau (CFPB) regarding credit card late fees. The plaintiffs argued that the district court had abused its discretion by transferring their challenge to the United States District Court for the District of Columbia. The case had a complex procedural history, with the district court transferring venue twice under 28 U.S.C. § 1404(a). The first transfer was reversed by a different panel because the district court lacked jurisdiction to transfer the case while the plaintiffs' appeal of the denial of its preliminary-injunction motion was pending.The district court in the Northern District of Texas had initially transferred the case to the District of Columbia, but this decision was challenged by the plaintiffs. The Fifth Circuit Court of Appeals had previously issued a writ of mandamus because the district court lacked jurisdiction to transfer the case while the plaintiffs' appeal of the denial of its preliminary-injunction motion was pending. The district court then transferred the case again, this time under § 1404(a), which allows for transfer for the convenience of parties and witnesses and in the interest of justice.The United States Court of Appeals for the Fifth Circuit ruled that the district court had misapplied the controlling § 1404(a) standard for transferring cases and that the transfer order was a clear abuse of discretion. The court granted the plaintiffs' petition for a writ of mandamus and directed the district court to vacate its transfer order. The court found that the district court had erred in considering the convenience of counsel and in finding that D.C. residents had a localized interest in the case. The court also noted that the district court's familiarity with the case due to a preliminary injunction did not lessen the weight of the court congestion factor in favor of transfer. View "In Re: Chamber of Commerce" on Justia Law

The case revolves around a fire that caused significant damage to Jamie Norris's mobile home. Norris had called A&O Sheet Metal, a business owned by Rick L. Olsen, to fix a malfunctioning water heater and furnace in his mobile home. After the A&O employees left, Norris's home caught fire. Norris filed a lawsuit against A&O alleging two counts: a claim under the Montana Consumer Protection Act (MCPA) and a claim of negligence. He argued that A&O acted deceptively in its advertising and representations and that their negligence in performing work below industry standards was a direct and proximate cause of the fire.The District Court of the Fifth Judicial District, Beaverhead County, granted summary judgment in favor of A&O. The court denied A&O’s motion to exclude Norris’s expert witnesses but concluded that Norris could not prove causation, as the reasoning was speculative, and the expert report did not sufficiently establish that the fire was caused by any of A&O’s actions or inactions.Upon appeal, the Supreme Court of the State of Montana affirmed in part, reversed in part, and remanded for further proceedings. The court found that genuine issues of material fact exist regarding whether A&O was the cause-in-fact of the fire that destroyed Norris’s home. Therefore, the District Court erred by granting summary judgment in favor of A&O. Regarding A&O’s motion to exclude Norris’s experts, the Supreme Court found that the District Court did not abuse its discretion in determining that exclusion of Norris’s retained experts would be an inequitably harsh sanction. View "Norris v. Olson" on Justia Law

The case involves RSD Leasing, Inc., a Vermont-based corporation that leases trucks to commercial operators. Between 2008 and 2014, RSD purchased forty trucks manufactured by Navistar International Corp. and Navistar, Inc. from a nonparty dealer. These trucks were equipped with an emission-control system known as an exhaust gas recirculation system. RSD alleged that the system caused the trucks to lose power, break down, and damage other engine components. RSD leased the trucks to other entities for four-to-six-year terms and intended to sell them at the end of the lease term. RSD filed a complaint against Navistar alleging violation of the Vermont Consumer Protection Act (VCPA), among other claims.In the U.S. District Court for the District of Vermont, Navistar moved for summary judgment on the VCPA claim, arguing that RSD is not a “consumer” under the VCPA and is therefore barred from recovery. The district court granted summary judgment on the VCPA claim, reasoning that RSD did not qualify as a consumer under the VCPA because it purchased the trucks for resale in the ordinary course of its business. RSD appealed to the Second Circuit, which certified the question of whether RSD qualified as a consumer under the VCPA to the Vermont Supreme Court.The Vermont Supreme Court concluded that RSD is not a consumer under the VCPA. The court found that RSD's intent at the time it purchased the trucks was to lease them out and, after each lease term expired, sell them. The court held that the trucks were purchased for resale in the ordinary course of RSD’s business. Therefore, RSD did not qualify as a consumer under the VCPA. The court answered the certified question from the Second Circuit in the negative. View "RSD Leasing, Inc. v. Navistar International Corporation and Navistar, Inc." on Justia Law

The case involves Leah Lorch, who filed a lawsuit against Kia Motors America, Inc. The case was initially assigned to Judge Robert C. Longstreth for all purposes. However, due to Judge Longstreth's unavailability, the case was reassigned to Judge Timothy B. Taylor. Upon learning of this reassignment, Lorch's counsel filed a peremptory challenge against Judge Taylor under section 170.6 of the Code of Civil Procedure, asserting that Judge Taylor was prejudiced against Lorch. However, Judge Taylor denied the challenge, ruling it was untimely under the master calendar rule. The trial proceeded, resulting in a defense verdict in favor of Kia Motors.The Superior Court of San Diego County denied Lorch's peremptory challenge, ruling it was untimely under the master calendar rule. The court also refused to stay the trial, and Judge Taylor immediately began a two-day jury trial, which resulted in a defense verdict and judgment in favor of Kia Motors. Lorch then filed a petition within the statutory 10-day period, contending that her peremptory challenge was timely because it was filed before the trial started. She sought to vacate Judge Taylor’s orders denying her section 170.6 challenge and contended that all of Judge Taylor’s subsequent orders, as well as the judgment, were void for lack of jurisdiction.The Court of Appeal, Fourth Appellate District Division One State of California, held that Lorch’s section 170.6 challenge was timely filed before the commencement of the trial and rejected Kia’s laches argument. The court also concluded that the Superior Court of San Diego County's local rule, which purports to provide any superior court judge with the power to act as a master calendar department for purposes of assigning cases for trial, is inconsistent with section 170.6 and case law interpreting the statute. The court granted the petition with directions to vacate the void orders and judgment entered by Judge Taylor after denying the peremptory challenge. View "Lorch v. Super. Ct." on Justia Law

In this case, plaintiffs Brandi Stiles and Abel Gorgita purchased a 2011 Kia Optima in April 2013. The car, manufactured and distributed by Kia Motors America, Inc., was sold with express warranties still in effect from the original sale. However, the car had serious defects, including issues with the transmission, electrical system, brakes, engine, suspension, and steering. Despite multiple attempts, Kia was unable to repair these defects. The plaintiffs argued that Kia failed to replace the car or make restitution as required under the Song-Beverly Consumer Warranty Act.The trial court sustained Kia's demurrer, arguing that the remedies sought by the plaintiffs under the Song-Beverly Act only apply to new motor vehicles. The court relied on a previous case, Rodriguez v. FCA US, LLC, which held that a used motor vehicle with an unexpired warranty is not a "new motor vehicle" under the Song-Beverly Act. The court rejected another case, Jensen v. BMW of North America, Inc., which held that a previously owned motor vehicle with an unexpired warranty qualifies as a "new motor vehicle" under the Song-Beverly Act.The Court of Appeal of the State of California Second Appellate District Division Six reversed the trial court's decision. The court held that a previously owned motor vehicle purchased with the manufacturer’s new car warranty still in effect is a “new motor vehicle” as defined by section 1793.22, subdivision (e)(2) of the Song-Beverly Act. Thus, the replace or refund remedy of section 1793.2, subdivision (d)(2) applies. The court rejected Kia's arguments and affirmed the interpretation of the Song-Beverly Act in Jensen v. BMW of North America, Inc. The court also modified the opinion to clarify the interpretation of the implied warranty provisions. View "Stiles v. Kia Motors America, Inc." on Justia Law

Tri-Plex Technical Services, Ltd., an Illinois corporation that develops, manufactures, distributes, and sells commercial-grade carpet cleaning products, filed a complaint against its competitors, including Jon-Don, LLC, alleging violations of the Illinois Uniform Deceptive Trade Practices Act and the Illinois Consumer Fraud and Deceptive Business Practices Act. The plaintiff claimed that the defendants failed to disclose that their cleaning products contained excessive amounts of phosphorous and volatile organic material, in violation of Illinois environmental laws. The plaintiff argued that this harmed its business because its products complied with Illinois law and the carpet cleaning companies preferred and purchased the defendants’ products because they contained phosphorus and cleaned better, albeit illegally.The circuit court dismissed the plaintiff’s complaint on several grounds, including that the plaintiff failed to allege sufficient facts to state a claim and that the plaintiff lacked standing. The appellate court reversed the judgment of the circuit court and remanded the case for further proceedings.The Supreme Court of the State of Illinois reversed the judgment of the appellate court and affirmed the judgment of the circuit court dismissing the plaintiff’s complaint. The court found that the plaintiff failed to exhaust administrative remedies before bringing its claims under the Deceptive Trade Practices Act. The court also found that the plaintiff failed to plead all the elements of a Consumer Fraud Act claim, as it did not plead that it was the intended recipient of the defendants’ alleged deceptions. The court further held that the plaintiff’s civil conspiracy claim, which rested upon the validity of the Deceptive Trade Practices Act and the Consumer Fraud Act claims, also failed. View "Tri-Plex Technical Services, Ltd. v. Jon-Don, LLC" on Justia Law

A Lyft driver, Abdu Lkader Al Shikha, was attacked by a passenger who had a criminal record. Al Shikha sued Lyft for negligence, arguing that the company should conduct criminal background checks on all passengers, not just drivers. The trial court granted Lyft's motion for judgment on the pleadings, concluding that Lyft had no legal duty to conduct background checks on passengers.Al Shikha appealed, but the Court of Appeal of the State of California Second Appellate District Division Three affirmed the trial court's decision. The court found that Al Shikha failed to establish that Lyft's legal duty to its drivers extends to conducting criminal background checks on all riders. The court reasoned that such a duty would be highly burdensome and would not necessarily prevent violent attacks on drivers. The court also noted that the foreseeability of a passenger attacking a driver was not sufficiently high to warrant imposing this duty on Lyft.The court further noted that imposing a duty on Lyft to conduct criminal background checks on all passengers would raise significant concerns about consumer privacy and the potential for discrimination. The court concluded that Al Shikha's complaint failed to allege facts demonstrating that the type of harm he suffered was highly foreseeable, or that the failure to conduct criminal background checks on all passengers is sufficiently likely to result in a violent, unprovoked attack on a driver. View "Shikha v. Lyft, Inc." on Justia Law

The case revolves around a data privacy dispute involving Pebbles Martin and LCMC Health Holdings and Louisiana Children’s Medical Center (collectively, “LCMC”). Martin filed a class action suit alleging that LCMC violated Louisiana law by embedding tracking pixels onto its website that shared her private health information with third-party websites. The question before the court was not to determine the merits of Martin’s claims, but instead to determine which forum—state or federal—is proper to hear this dispute. LCMC argued that the suit should proceed in federal court because it acted under the direction of a federal officer when it allegedly violated Louisiana law. Martin, however, argued that the suit should remain in state court because LCMC fails to show a basis for federal jurisdiction.LCMC had removed the case to federal court, invoking the federal officer removal statute as the basis for jurisdiction. Martin moved to remand to state court, and the district court granted Martin’s motion, holding that LCMC did not act under the direction of a federal officer when it disclosed private health information to third-party websites. LCMC appealed the remand order.The United States Court of Appeals for the Fifth Circuit affirmed the district court's decision. The court concluded that LCMC did not act under the direction of a federal officer when it embedded tracking pixels onto its website. The court noted that a hospital does not act under the direction of the federal government when it maintains an online patient portal that utilizes tracking pixels. Therefore, the federal officer removal statute does not provide jurisdiction for this case to be heard in federal court. The court affirmed the district court’s order remanding this case to state court. View "Martin v. LCMC Health Holdings" on Justia Law

In April 2013, Brandi Stiles and Abel Gorgita purchased a 2011 Kia Optima, which was manufactured and distributed by Kia Motors America, Inc. At the time of purchase, some of Kia's original warranties were still in effect, including the basic and drivetrain warranties. The car developed serious defects covered by the warranties, including issues with the transmission, electrical system, brakes, engine, suspension, and steering. Despite multiple attempts, Kia was unable to repair the defects. Stiles and Gorgita alleged that Kia failed to replace the car or make restitution as required under the Song-Beverly Consumer Warranty Act.Kia demurred to the first amended complaint, arguing that the remedies sought under the Song-Beverly Act apply only to new motor vehicles, and the car purchased by Stiles and Gorgita was not a "new motor vehicle" as defined in the Act. The trial court sustained Kia's demurrer, relying on a previous case, Rodriguez v. FCA US, LLC, which held that a used motor vehicle with an unexpired warranty is not a "new motor vehicle" under the Song-Beverly Act.The Court of Appeal of the State of California Second Appellate District Division Six reversed the trial court's decision. The court held that a previously owned motor vehicle purchased with the manufacturer’s new car warranty still in effect is a “new motor vehicle” as defined by the Song-Beverly Act. Therefore, the replace or refund remedy of the Act applies. The court rejected Kia's argument that the Act's definition of a "new motor vehicle" should be limited to vehicles that have never been previously sold to a consumer and come with full express warranties. The court also rejected Kia's argument that Stiles and Gorgita's interpretation of the Act conflicts with its implied warranty provisions. View "Stiles v. Kia Motors America, Inc." on Justia Law

The case involves a group of bettors who sued Churchill Downs, Inc., and trainers Robert Baffert and Bob Baffert Racing, Inc., after the horse they bet on, Medina Spirit, was disqualified from the 2021 Kentucky Derby due to a failed post-race drug test. The bettors claimed that they would have won their bets under the new order of finish after Medina Spirit's disqualification. However, under Kentucky law, only the first order of finish marked "official" counts for wagering purposes. The plaintiffs brought claims for negligence, breach of contract, violation of the Kentucky Consumer Protection Act, and unjust enrichment.The case was initially heard in the United States District Court for the Western District of Kentucky, which granted the defendants' motions to dismiss and denied the plaintiffs leave to amend the complaint. The court found that the plaintiffs' claims were based on the theory that they had "unpaid winning wagers," but under Kentucky law, the first official order of finish is final. Therefore, the plaintiffs' wagers were lost, and the complaint failed to state a claim upon which relief could be granted.The case was then appealed to the United States Court of Appeals for the Sixth Circuit. The appellate court affirmed the lower court's decision, agreeing that the plaintiffs' claims were based on the theory that they had "unpaid winning wagers." However, under Kentucky law, the first official order of finish is final for wagering purposes. Therefore, the plaintiffs' wagers were lost, and the complaint failed to state a claim upon which relief could be granted. The court also found that the proposed amendment to the complaint did not cure this flaw, so the lower court properly denied leave to amend. View "Mattera v. Baffert" on Justia Law