Justia Consumer Law Opinion Summaries

Jeannie K. May filed suit seeking to recover damages under state and federal law arising from the debt-collection practices of Nationstar. After a jury found in favor of May on her invasion-of-privacy claim and her claim that Nationstar negligently violated the Fair Credit Reporting Act (FCRA), 15 U.S.C. 1681, the jury awarded May compensatory damages on both claims and punitive damages on her invasion-of-privacy claim. The court concluded that there was ample evidence to support the jury's award of punitive damages and Nationstar's renewed assertions that it acted in good faith provided no legal basis to vacate the jury's verdict. In this case, the record reflected that May contacted Nationstar repeatedly in order to resolve the issue with her account; rather than suspend its efforts based on its erroneous assessment of her debt, Nationstar aggressively pursued collection, posted May's home for foreclosure and conducted inspections of her residence; Nationstar employees spoke to May in a mocking and sarcastic manner; and May suffered physical ailments from the stress caused by Nationstar's conduct. The court concluded that the $400,000 punitive damages award was not unconstitutionally excessive because of the reprehensible nature of Nationstar's conduct; the 8-to-1 ratio of the award was not unconstitutionally excessive; and the award did not violate due process. The court also concluded that the district court did not err by excluding the testimony of another borrower; and the jury instruction regarding the Real Estate Settlement Procedures Act (RESPA), 26 U.S.C. 2601, was not plainly erroneous. Accordingly, the court affirmed the judgment. View "May v. Nationstar Mortgage, LLC" on Justia Law

In New Jersey, GTL is the sole provider of telecommunications services that enable inmates to call approved persons outside the prisons. Users can open an account through GTL’s website or through an automated telephone service with an interactive voice-response system. Website users see GTL’s terms of use and must click “Accept” to complete the process. Telephone users receive an audio notice: Please note that your account, and any transactions you complete . . . are governed by the terms of use and the privacy statement posted at www.offenderconnect.com.” Telephone users are not required to indicate their assent to those terms, which contain an arbitration agreement and a class-action waiver. Users have 30 days to opt out of those provisions. The terms state that using the telephone service or clicking “Accept” constitutes acceptance of the terms; users have 30 days to cancel their accounts if they do not agree to the terms. Plaintiffs filed a putative class action alleging that GTL’s charges were unconscionable and violated the state Consumer Fraud Act, the Federal Communications Act, and the Takings Clause. GTL argued that the FCC had primary jurisdiction. Plaintiffs withdrew their FCA claims. GTL moved to compel arbitration. The district court denied GTL’s motion with respect to plaintiffs who opened accounts by telephone, finding “neither the knowledge nor intent necessary to provide ‘unqualified acceptance.’” The Third Circuit affirmed. The telephone plaintiffs did not agree to arbitration. View "James v. Global TelLink Corp." on Justia Law

Mains executed a mortgage on his home with WAMU in 2006 and made timely payments for about two years. WAMU failed in 2008; the FDIC became its receiver. Chase purchased Mains’s mortgage. Mains fell behind on his payments. He requested loan modifications from Chase three times and discontinued making payments in March 2009. Chase sent Mains a default and acceleration notice in June. In April 2010, Citibank (Chase’s successor) filed for foreclosure in Clark County, Indiana. That court granted Citibank summary judgment in 2013. Mains unsuccessfully appealed, contending that Citibank had committed fraud because it was not the real party in interest but instructed its employees fraudulently to sign documents. In 2015, Mains filed a “rambling, 90‐page” federal court complaint, alleging that he had discovered new evidence that he could not have presented to the state court—undisclosed consent judgments, parties in interest, and evidence of robo‐signing. He claimed to have rescinded his mortgage. He alleged state law claims and violations of: the Real Estate Settlement Procedures Act, 12 U.S.C. 2601; the Truth in Lending Act, 15 U.S.C. 1631; the Fair Debt Collection Practices Act, 15 U.S.C. 1692; and the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1961. The district court found that a decision for Mains would effectively nullify the state‐court judgment and dismissed for lack of subject matter jurisdiction under the Rooker‐Feldman doctrine. The Seventh Circuit agreed, but modified so that the dismissal was without prejudice. View "Mains v. Citibank, N.A." on Justia Law

Portfolio alleges that in 1993, Pantoja incurred a debt for annual fees, an activation fee, and late fees for a Capital One credit card that he applied for but never actually used. In 2013, long after the statute of limitations had run, Portfolio, having purchased bought Capital One’s rights to this old debt, sent Pantoja a dunning letter trying to collect. The letter claimed that Patoja owed $1903 and offered several “settlement options.” The Fair Debt Collection Practices Act, 15 U.S.C. 1692e, prohibits collectors of consumer debts from using “any false, deceptive, or misleading representation or means in connection with the collection of any debt.” The district court granted summary judgment in favor of Pantoja on his claim under section 1692e. The Seventh Circuit affirmed, agreeing that the dunning letter was deceptive or misleading because it did not tell the consumer that Portfolio could not sue on the time‐barred debt and it did not tell the consumer that if he made, or even just agreed to make, a partial payment on the debt, he could restart the clock on the long‐expired statute of limitations, bringing a long‐dead debt back to life. View "Pantoja v. Portfolio Recovery Associates, LLC" on Justia Law

Businesses challenged New York General Business Law section 518, which provides that “[n]o seller in any sales transaction may impose a surcharge on a holder who elects to use a credit card in lieu of payment by cash, check, or similar means,” as violating the First Amendment by regulating how they communicate their prices, and as unconstitutionally vague. The Second Circuit vacated a judgment in favor of the businesses, reasoning that in the context of singlesticker pricing—where merchants post one price and would like to charge more to customers who pay by credit card—the law required that the sticker price be the same as the price charged to credit card users. In that context, the law regulated a relationship between two prices: conduct, not speech. The Supreme Court vacated, limiting its review to single-sticker pricing. Section 518 regulates speech. It is not a typical price regulation, which simply regulates the amount a store can collect. The law tells merchants nothing about the amount they may collect from a cash or credit card payer, but regulates how sellers may communicate their prices. Section 518 is not vague as applied to the businesses; it bans the single-sticker pricing they wish to employ, and “a plaintiff whose speech is clearly proscribed cannot raise a successful vagueness claim.” View "Expressions Hair Design v. Schneiderman" on Justia Law

Lender’s assignee (Assignee), while operating as an unlicensed debt collector, obtained a judgment against a credit card debtor (Debtor) in district court. Debtor’s contract with Lender included an arbitration provision. Debtor then filed a class action suit collaterally attacking the judgment based on violations of Maryland consumer protection laws. Assignee filed a motion to arbitrate the class action suit pursuant to an arbitration clause between Lender and Debtor. Assignee moved to compel arbitration. The circuit court granted the motion to compel, thus rejecting Debtor’s argument that Assignee waived its right to arbitrate when it brought its collection action against Debtor. The Court of Special Appeals affirmed. The Court of Appeals reversed, holding that because Assignee’s collection action was related to Debtor’s claims, Assignee waived its contractual right to arbitrate Debtor’s claims when it chose to litigate the collection action. View "Cain v. Midland Funding, LLC" on Justia Law

Plaintiffs, twenty individuals who purchased first generation four stroke outboard motors (the Class Motors), filed suit against defendants, alleging that the Class Motors contained an inherent design defect that caused severe, premature corrosion in the motors’ dry exhaust system. Plaintiffs alleged that defendants knew of the defect prior to the sales of the Class Motors to plaintiffs, and that the defect posed an unreasonable safety hazard. On appeal, plaintiffs challenged the district court's grant of YMC's motion to dismiss for lack of personal jurisdiction and its grant of YMUS's fifth motion to dismiss plaintiffs' consumer fraud claims. The court concluded that the district court lacked general jurisdiction over YMC because YMC does not have sufficient contacts with California; plaintiffs failed to plead facts sufficient to make out a prima facie case that YMC and YMUS were alter egos; and even assuming that YMUS's contacts could be imputed to YMC, this does not, on its own, suffice to establish general jurisdiction. The court also concluded that the district court lacked specific jurisdiction over YMC because plaintiffs do not allege any actions that YMC "purposefully directed" at California. Even assuming that some standard of agency continued to be relevant to the existence of specific jurisdiction pursuant to Daimler AG v. Bauman, plaintiffs failed to make out a prima facie case for any such agency relationship. Finally, the court concluded that plaintiffs failed to plead a prima facie case of consumer fraud where, although plaintiffs adequately pleaded defendants' presale knowledge of the defect, plaintiffs failed to plead the existence of an unreasonable safety hazard. Accordingly, the court affirmed the judgment. View "Williams v. Yamaha Motor Corp." on Justia Law

Plaintiffs, municipal corporations operate the local “emergency communications” or “911” programs in their respective counties, alleged that the telephone company, to reduce costs, offer lower prices, and obtain more customers, engaged in a covert practice of omitting fees mandated by Tennessee’s Emergency Communications District Law (Code 7-86-101), and sought compensation under that statute. They also alleged that, while concealing this practice, the telephone company violated the Tennessee False Claims Act. The district court dismissed the first claim, finding that the statute contained no implied private right of action, and rejecting the second claim on summary judgment on the second claim, finding that the statements at issue were not knowingly false. In consolidated appeals, the Sixth Circuit reversed. Plaintiffs provided evidence of a “massive quantity of unexplained unbilled lines,” establishing a disputed question of material fact. The Law does not require the plaintiffs to prove that the defendant acted in some form of bad faith, given that the statute imposes liability for “deliberate ignorance” View "Knox County Emergency Communications District v. BellSouth Telecommunications LLC" on Justia Law

The State brought this civil action against Consumer Attorney Services, P.A., The McCann Law Group, LLP, and Brenda McCann (collectively, Defendants), alleging that Defendants’ conduct violated four Indiana consumer protection statutes: the Credit Services Organizations Act (CSOA), the Mortgage Rescue Protection Fraud Act (MRPFA), the Home Loan Practices Act (HLPA), and the Deceptive Consumer Sales Act (DCSA). Defendants filed a motion for summary judgment, asserting that they were statutorily exempted from liability. The trial court denied the motion. The Supreme Court affirmed, holding that neither the CSOA, the MRPFA, the HLPA, nor the DCSA provides an exemption for law firms. View "Consumer Attorney Services, P.A. v. State" on Justia Law

ECM BioFilms manufactures an additive that it claims accelerates the rate at which plastic biodegrades. In 2013, the Federal Trade Commission filed an administrative complaint, claiming that several of ECM’s biodegradability claims were deceptive. The full Commission ultimately found that three of ECM’s claims were false and misleading under 15 U.S.C. 45. The Commission’s order prohibits ECM from representing that ECM plastic is biodegradable “unless such representation is true, not misleading, and, at the time it is made, respondent possesses and relies upon competent and reliable scientific evidence that substantiates the representation,” The Sixth Circuit denied a petition for review, rejecting claims that part of the Commission’s decision was unsupported by substantial evidence and that the Commission violated ECM’s rights under the First Amendment, the Administrative Procedures Act, and the Due Process Clause. ECM had adequate notice and the order is not a prohibition on claims of biodegradability. View "ECM BioFilms, Inc. v. Federal Trade Commission" on Justia Law