Justia Consumer Law Opinion Summaries

Several individuals who allegedly owed debts to Kentucky public institutions—either for medical services at the University of Kentucky or for educational services at the University of Kentucky, Morehead State University, or the Kentucky Community & Technical College System—challenged the referral of their debts to the Kentucky Department of Revenue for collection. The plaintiffs argued that the statutes used to justify these referrals did not apply to their debts and that the Department unlawfully collected the debts, sometimes without prior court judgments or adequate notice. The Department used its tax collection powers, including garnishments and liens, to recover these debts, and in some cases, added interest and collection fees.In the Franklin Circuit Court, the plaintiffs sought declaratory and monetary relief, including refunds of funds collected. The Circuit Court ruled that the Department was not authorized by statute to collect these debts and held that sovereign immunity did not protect the defendants from the plaintiffs’ claims. The court also certified the medical debt case as a class action. The Court of Appeals reviewed these interlocutory appeals and held that while sovereign immunity did not bar claims for purely declaratory relief, it did bar all claims for monetary relief, including those disguised as declaratory relief.The Supreme Court of Kentucky reviewed the consolidated appeals. It held that sovereign immunity does not bar claims for purely declaratory relief or for a refund of funds that were never due to the state, nor does it bar constitutional takings claims. However, the court held that sovereign immunity does bar claims for a refund of funds that were actually due to the state, even if those funds were unlawfully or improperly collected. The court affirmed in part, reversed in part, and remanded for further proceedings to determine which funds, if any, were never due to the state and thus subject to refund. The court also found that statutory changes rendered prospective declaratory relief in the medical debt case moot, but not retrospective relief. View "LONG V. COMMONWEALTH OF KENTUCKY" on Justia Law

A Missouri consumer incurred a medical debt that was later assigned to a debt collection agency. Several years after the initial collection letter, the consumer sent a fax to the agency disputing the debt and requesting no further contact. In response, the agency mailed a letter verifying the debt and indicating that collection efforts would resume. The consumer then filed suit, alleging that the agency violated the Fair Debt Collection Practices Act (FDCPA) by communicating after being asked not to.The United States District Court for the Western District of Missouri reviewed cross-motions for summary judgment based on stipulated facts. The court found that the consumer had suffered a concrete injury because the unwanted letter intruded upon her seclusion and privacy. It granted summary judgment for the consumer, awarded statutory damages and attorneys’ fees, and denied the agency’s motion for reconsideration.On appeal, the United States Court of Appeals for the Eighth Circuit reviewed the district court’s standing determination de novo. The appellate court held that the consumer lacked Article III standing because she did not suffer a concrete injury. The court reasoned that the agency’s letter was a required response under the Fair Credit Reporting Act (FCRA) after the consumer disputed the debt in connection with her credit report, and that a single, invited letter verifying a debt does not amount to an intrusion upon seclusion or a highly offensive act. The Eighth Circuit vacated the district court’s judgment and remanded the case with instructions to dismiss the complaint. View "Denmon v. Kansas Counselors, Inc." on Justia Law

After registering to receive an email newsletter from a news publication, the plaintiff visited the publication’s website and watched videos there. The website contained a tracking tool, the Meta Pixel, which transmitted information about the videos she viewed to Meta (Facebook’s owner) without her knowledge or consent. The plaintiff did not access the website or its videos through the newsletter, nor did she allege that the newsletter itself transmitted any information about her video viewing to Meta.The plaintiff filed suit in the United States District Court for the District of Columbia, alleging that the news publication’s owner violated the Video Privacy Protection Act (VPPA) by disclosing her personally identifiable information to Meta. The district court dismissed the complaint for failure to state a claim, holding that the plaintiff was not a “consumer” under the VPPA because she had not purchased, rented, or subscribed to the specific videos or similar audio-visual materials at issue. The court found that merely subscribing to the newsletter, which was unrelated to the videos she watched on the website, was insufficient to establish the necessary connection under the statute.On appeal, the United States Court of Appeals for the District of Columbia Circuit affirmed the district court’s dismissal. The appellate court held that to state a claim under the VPPA, a plaintiff must allege that she purchased, rented, or subscribed to the specific video or similar audio-visual good or service, and that the protected information disclosed must concern that same good or service. Because the plaintiff did not subscribe to or otherwise acquire the videos she watched on the website, she was not a “consumer” protected by the VPPA with respect to those videos. The judgment of dismissal was affirmed. View "Pileggi v. Washington Newspaper Publishing Company, LLC" on Justia Law

A website visitor in Pennsylvania interacted with a retail website that used session replay code provided by a third party to record her mouse movements, clicks, and keystrokes. The visitor did not enter any sensitive or personal information during her session. She later brought a putative class action against the website operator, alleging that the use of session replay code constituted intrusion upon seclusion and violated the Pennsylvania Wiretapping and Electronic Surveillance Control Act (WESCA).The United States District Court for the Western District of Pennsylvania dismissed the complaint with prejudice, finding that the plaintiff lacked Article III standing because she did not allege a concrete injury. The court reasoned that the mere recording of her website activity, which did not include any personal or sensitive information, was not analogous to harms traditionally recognized at common law, such as disclosure of private information or intrusion upon seclusion. The court also found that amendment would be futile.On appeal, the United States Court of Appeals for the Third Circuit reviewed the dismissal de novo and agreed that the plaintiff failed to allege a concrete injury sufficient for Article III standing. The Third Circuit held that the alleged harm was not closely related to the traditional privacy torts of disclosure of private information or intrusion upon seclusion, as the information recorded was neither sensitive nor publicly disclosed, and there was no intrusion into the plaintiff’s solitude or private affairs. The court also clarified that a statutory violation alone does not automatically confer standing without a concrete harm. However, the Third Circuit determined that the District Court erred in dismissing the complaint with prejudice and modified the order to a dismissal without prejudice, affirming the order as modified. View "Cook v. GameStop, Inc." on Justia Law

Several individuals from five different states purchased ovens with front-mounted burner knobs manufactured by a major appliance company. They allege that these ovens have a defect causing the stovetop burners to turn on unintentionally, sometimes resulting in gas leaks. The plaintiffs claim they were unaware of this defect at the time of purchase, but that the manufacturer had prior knowledge of the issue through consumer complaints sent to the U.S. Consumer Product Safety Commission (CPSC) and reviews posted on the company’s website. The plaintiffs assert that, had they known about the defect, they would have paid less for the ovens or not purchased them at all.The plaintiffs filed a class action in the United States District Court for the Western District of Michigan, alleging violations of federal warranty law, fraud by omission, breach of express and implied warranties, unjust enrichment, and violations of state consumer protection statutes. The district court found that the plaintiffs had Article III standing, as they alleged a concrete injury, but dismissed all claims for failure to state a plausible claim for relief. The plaintiffs appealed the dismissal of their state common law fraud and statutory consumer protection claims, while the manufacturer argued that the plaintiffs lacked standing.The United States Court of Appeals for the Sixth Circuit reviewed the case de novo. The court held that the plaintiffs had Article III standing because they plausibly alleged economic injury from overpaying for a defective product. The court further held that the plaintiffs plausibly alleged the manufacturer’s knowledge of the defect and its safety risks, particularly because the CPSC had sent incident reports directly to the manufacturer. The court reversed the district court’s dismissal of most state law fraud and consumer protection claims, except for the Illinois common law fraud claim, which failed for lack of a duty to disclose under Illinois law. The case was remanded for further proceedings consistent with these holdings. View "Tapply v. Whirlpool Corp." on Justia Law

An attorney in Connecticut discovered that his name and attorney registration number were being used by a criminal organization, believed to be based in Mexico, to defraud time-share owners in the United States and Canada. The organization created a sham website using the attorney’s identity to induce victims to transfer funds under false pretenses. The attorney learned of the scheme in 2019 and took steps to stop it, including contacting authorities and assisting in taking down the fraudulent website, though it repeatedly reappeared. The scam affected the attorney’s personal and professional life, causing significant emotional distress, and resulted in substantial losses to numerous victims.The attorney filed suit in the Superior Court, judicial district of Middlesex, seeking damages for identity theft under Connecticut law and for violations of the Connecticut Unfair Trade Practices Act (CUTPA). The defendants failed to appear, resulting in a default judgment. The trial court awarded the attorney $150,000 in compensatory damages for identity theft, $300,000 in punitive damages under CUTPA, as well as attorney’s fees and costs. The attorney moved for treble damages under the identity theft statute, but the trial court denied the motion without explanation.On appeal, the Connecticut Appellate Court determined that the attorney was entitled to treble damages under the identity theft statute, totaling $450,000, but held that he could not recover both treble damages and punitive damages under CUTPA for the same conduct, citing the rule against double recovery. The Appellate Court vacated the punitive damages award and directed the trial court to award only treble damages.The Connecticut Supreme Court reviewed the case and held that the attorney was entitled to both treble damages under the identity theft statute and punitive damages under CUTPA. The Court reasoned that the two remedies address different legal harms and are not duplicative. The Supreme Court reversed the Appellate Court’s judgment in part and directed reinstatement of the trial court’s punitive damages award under CUTPA. View "White v. FCW Law Offices" on Justia Law

A consumer lender, GreatPlains Finance, LLC, owned by the Fort Belknap Indian Community, a federally recognized tribe, was sued by Rashonna Ransom for allegedly violating New Jersey consumer-protection laws. Ransom had taken out two high-interest loans from GreatPlains and claimed the lender broke several laws. GreatPlains argued it was protected by tribal sovereign immunity, as it was created by the tribe to generate revenue and was managed by a tribally owned corporation, Island Mountain Development Group.The United States District Court for the District of New Jersey denied GreatPlains' motion to dismiss, ruling that the lender was not an arm of the tribe and thus not entitled to sovereign immunity. The court based its decision partly on the control exerted by a non-tribal private-equity fund, Newport Funding, which had significant influence over GreatPlains' operations due to a loan agreement. GreatPlains' subsequent motion to reconsider was also denied, leading to this appeal.The United States Court of Appeals for the Third Circuit reviewed the case and applied a multi-factor test to determine whether GreatPlains was an arm of the tribe. The court considered factors such as the method of incorporation, the entity's purpose, tribal control, the tribe's intent to confer immunity, and the financial relationship between the tribe and the entity. The court found that while GreatPlains was created under tribal law and intended to benefit the tribe, the financial relationship was crucial. GreatPlains had not shown that a judgment against it would impact the tribe's finances, as it had not returned profits to the tribe. Consequently, the Third Circuit held that GreatPlains was not an arm of the tribe and lacked sovereign immunity, affirming the District Court's decision and remanding for further proceedings. View "Ransom v. GreatPlains Finance, LLC" on Justia Law

Darrell J. Austin, Jr. filed a lawsuit against Experian Information Solutions, Inc., alleging violations of the Fair Credit Reporting Act (FCRA). Austin claimed that Experian reported inaccurate and derogatory information about his credit history, even after he had disputed the inaccuracies. He had enrolled in CreditWorks, a free online credit-monitoring service offered by an Experian affiliate, to understand why his credit applications were being denied despite the discharge of much of his debt through bankruptcy.The United States District Court for the Eastern District of Virginia denied Experian’s motion to compel arbitration and excluded the declaration of David Williams, an Experian affiliate employee, which was submitted to support the motion. The court found that Williams lacked personal knowledge and relied on hearsay documents. Additionally, the court concluded that the CreditWorks enrollment page was deceptive and did not provide sufficient notice to Austin that he was agreeing to arbitration.The United States Court of Appeals for the Fourth Circuit reviewed the case and reversed the district court’s decision. The appellate court found that the district court erred in excluding the Williams declaration, as Williams had adequately demonstrated personal knowledge of the enrollment process and the terms of use. The court also determined that the CreditWorks enrollment page provided clear and conspicuous notice of the terms of use, including the arbitration agreement, and that Austin had manifested assent to those terms by creating an account.The Fourth Circuit held that Experian had met its burden to establish the existence of a binding arbitration agreement and remanded the case for further proceedings consistent with its opinion. View "Austin v. Experian Information Solutions, Inc." on Justia Law

Andrew King, a customer of Navy Federal Credit Union (NFCU), was charged a $15 returned-check fee despite not being at fault for the check's failure to clear. King argued that this fee constituted an "unfair" and "unlawful" business practice under California's Unfair Competition Law (UCL) and violated the federal Consumer Financial Protection Act (CFPA). He filed a lawsuit in state court, which NFCU removed to federal court.The United States District Court for the Central District of California dismissed King's state law claims, ruling that they were preempted by federal law. Specifically, the court found that 12 C.F.R. § 701.35(c), which governs federal credit unions, expressly preempted King's UCL claim. The court concluded that state laws regulating account fees are not applicable to federal credit unions, and thus, King's claim was preempted.The United States Court of Appeals for the Ninth Circuit reviewed the case and affirmed the district court's dismissal. The Ninth Circuit held that the plain language of 12 C.F.R. § 701.35(c) expressly preempts state laws regulating account fees for federal credit unions. The court rejected King's arguments that the UCL transcends the preemption clause, stating that all state laws regulating account fees, whether general or specific, have no application to federal credit unions. The court emphasized that the regulation's preemption clause operates independently of whether a fee complies with federal law. Thus, the Ninth Circuit affirmed the district court's decision to dismiss King's UCL claim on preemption grounds. View "KING V. NAVY FEDERAL CREDIT UNION" on Justia Law

Two minor boys, referred to as John Doe 1 and John Doe 2, were coerced by a trafficker into producing pornographic content, which was later posted on Twitter. Despite reporting the content to Twitter, the platform did not immediately remove it, leading to significant views and retweets. The boys and their mother made multiple attempts to have the content removed, but Twitter only acted after being prompted by the Department of Homeland Security.The United States District Court for the Northern District of California dismissed the plaintiffs' complaint, primarily based on the immunity provided under § 230 of the Communications Decency Act of 1996. The court found that Twitter was immune from liability for most of the claims, including those under the Trafficking Victims Protection Reauthorization Act (TVPRA) and California product-defect claims, as these claims treated Twitter as a publisher of third-party content.The United States Court of Appeals for the Ninth Circuit reviewed the case. The court held that Twitter is immune from liability under § 230 for the TVPRA claim and the California product-defect claim related to the failure to remove posts and the creation of search features that amplify child-pornography posts. However, the court found that the plaintiffs' claims for negligence per se and their product-liability theory based on defective reporting-infrastructure design are not barred by § 230 immunity, as these claims do not arise from Twitter's role as a publisher. Consequently, the court affirmed the dismissal of the TVPRA and certain product-defect claims, reversed the dismissal of the negligence per se and defective reporting-infrastructure design claims, and remanded the case for further proceedings. View "DOE 1 V. TWITTER, INC." on Justia Law