Justia Consumer Law Opinion Summaries

Plaintiffs’ Indianapolis home had a mortgage serviced by J.P. Morgan Chase. In 2011 plaintiffs accused Chase of paying the wrong homeowner’s insurer using $1,422 from their escrow account. They had switched insurers without telling Chase. When Chase learned of the change, it promptly paid the new insurer and informed plaintiffs that their old insurer would send a refund. Chase told them to forward the refund to replenish the depleted escrow. When the refund came, plaintiffs kept the money. Chase adjusted their mortgage payment to make up the shortfall. When plaintiffs refused to pay the higher amount, the mortgage went into default. Instead of curing, they requested information under the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. 2601–2617, which requires the bank to correct account errors and disclose account information. They demanded that Chase reimburse their escrow. Chase sent a complete account history. Plaintiffs divorced, ending their 25-year marriage. They sued Chase, claiming that its response was inadequate under RESPA and caused more than $300,000 in damages—including the loss of their marriage— and claiming breach of the implied covenant of good faith and fair dealing. The Seventh Circuit affirmed summary judgment for Chase. Chase’s response complied with its RESPA duties. To the extent that any requested information was missing, plaintiffs suffered no actual damages. Nor did Chase breach the duty of good faith and fair dealing, assuming that Indiana would recognize the implied covenant in this context. View "Perron v. J.P. Morgan Chase Bank, N.A." on Justia Law

Plaintiffs filed suit against Bank of America, alleging that Bank of America failed to provide necessary disclosures in violation of the Truth in Lending Act (TILA), 15 U.S.C. 1601 et seq. The district court agreed with defendants that the loan at issue was a residential mortgage transaction to which section 1635(a) did not apply. Therefore, the notice of rescission plaintiffs sent to Bank of America in February 2011 could not cancel the loan or provide a basis for wrongful foreclosure and quiet title actions. The district court determined that even if defendants had been required to provide disclosures under the TILA, any claim for damages would have been barred by its one-year statute of limitations. The court concluded that, based on the plain language of the statute, a residential mortgage transaction is not entitled to the right of rescission under section 1635(a). The court rejected plaintiffs' remaining claims and affirmed the judgment. View "Dunn v. Bank of America N.A." on Justia Law

A veterans’ group challenged an anti‑robocall statute, Ind. Code 24‑5‑14‑5, under the First Amendment. The law prohibits automated calls with recorded messages unless the recipient has previously consented or the message is immediately preceded by a live operator who obtains consent. The Seventh Circuit upheld the law, noting that the Telephone Consumer Protection Act, 47 U.S.C. 227, which contains similar restrictions, has been sustained by the Ninth and Eighth Circuits. The court rejected a claim of content-based discrimination. While the law exempts messages from school districts to students, parents, or employees; messages to recipients with whom the caller has a current business or personal relationship; messages advising employees of work schedules, nothing in the law, including those exceptions, disfavors political speech. The exceptions primarily concern who may be called, not what may be said. The court noted the legitimate purposes of the law. View "Patriotic Veterans, Inc. v. State of Indiana" on Justia Law

This case involved the practice of short-term deferred deposit lending, often referred to as “payday” or “cash advance” lending. After the Legislature enacted the California Deferred Deposit Transaction Law (the Law), which limits the size of each loan and the fees that lenders may charge, some deferred deposit lenders sought affiliation with federal recognized Indian tribes, which are generally immune from suit on the basis of tribal sovereign immunity. In this case, a pair of federally recognized tribes created affiliated business entities, which provide deferred deposit loans through the internet to borrowers in California under terms that allegedly violated the Law. At issue in this case was whether these tribally affiliated entities were immune from suit as “arms of the tribe.” The Supreme Court clarified the legal standard and burden of proof for establishing arm-of-the-tribe immunity and held that the entities in this case failed to show by a preponderance of the evidence that they were entitled to tribal immunity as an arm of its affiliated tribe. Remanded for the trial court to address the issue of whether the parties had the opportunity to fully litigate their claims under that standard. View "People ex rel. Owen v. Miami Nation Enterprises" on Justia Law

Plaintiff brought this action against Nationstar Mortgage, LLC and Fremont Investment and Loan (collectively, Defendants) alleging that Defendants violated his rights under Mass. Gen. Laws ch. 93A. The Appeals Court reversed, concluding that there was a genuine issue of material fact as to Plaintiff’s chapter 93A claim. Nationstar appealed, arguing that Plaintiff’s claim was barred because he failed to serve a demand letter. The Supreme Judicial Court agreed with the Appeals Court, holding that, if a defendant keeps assets in the Commonwealth but does not maintain a place of business in the Commonwealth, the plaintiff need not serve a demand letter. View "Moronta v. Nationstar Mortgage, LLC" on Justia Law

Smith’s husband obtained a Capital One credit card that he used for family consumer debts. Smith subsequently filed for bankruptcy. Smith’s husband did not join Smith’s petition and was not listed as a co‐debtor. The bankruptcy court confirmed Smith’s Chapter 13 plan. During Smith’s repayment period, Capital One, through attorney Kohn, sued Smith’s husband and obtained a Wisconsin state court judgment for amounts owed on his credit card; it has not attempted to enforce the judgment. Smith initiated a successful bankruptcy court adversary proceeding, arguing that Smith’s husband’s credit card debt was covered by the co‐debtor stay due under Wisconsin marital law and alleging violations of the co‐debtor stay, 11 U.S.C. 1301(a); the Wisconsin Consumer Act; and the Fair Debt Collection Practices Act, 15 U.S.C. 1692(d)(e). The district court reversed, holding that “consumer debt of the debtor” does not include a debt for which the debtor is not personally liable but that may be satisfied from the debtor’s interest in marital property. The Seventh Circuit affirmed. Smith’s suggested expansion of the co‐debtor stay is contrary to its plain meaning and purpose, which is to prevent undue pressure that creditors could otherwise exert by threatening action against third-parties who have co‐signed the debtor’s debts. View "Smith v. Capital One Bank (USA), N.A." on Justia Law

Plaintiff-appellee Elizabeth Hammond sought to pursue a class action in New Mexico state court on behalf of everyone in the country who, like her, called to cancel their Stamps.com subscriptions after “discovering” that Stamps.com “was taking money from them” every month. Hammond alleged that this class included “hundreds or thousands of persons.” And while she didn't allege a total damages amount, she contended that she was entitled to $300 in statutory damages and that other members of the proposed class should “likely” receive damages of $31.98, representing two monthly subscription charges ($15.99 x 2), based on her estimate of how long customers could have reasonably failed to notice the monthly charges before calling to cancel. Hammond also sought punitive damages for herself and other class members. Stamps.com sought to remove the case to federal court, presenting uncontested declarations showing that in the last four years, at least 312,680 customers called to cancel their subscriptions. The company observed that, if each of these persons were to win the same $300 in damages Hammond sought for herself, the value of this case would exceed $93 million. And even if other class members could secure only $31.98 in damages, the company noted, the case’s potential value would still lie at almost $10 million. The district court found lack of jurisdiction, holding that Stamps.com failed to meet its burden of showing that over $5 million was "in controversy" because the company failed to disaggregate from the total number of customer cancellations those customers who “felt duped” by Stamps.com’s website disclosures. Disagreeing with the district court's decision it lacked jurisdiction, the Tenth Circuit reversed and remanded for further proceedings. View "Hammond v. Stamps.com" on Justia Law

Two credit card holders defaulted on their accounts, and the issuing bank elected to litigate debt-collection actions. After courts entered default judgments against both card holders, the card holders filed new and separate suits alleging that the bank violated the Uniform Trade Practices and Consumer Protection Act (UTPA) during the earlier debt collection actions. The bank moved in each case to arbitrate the UTPA claims, and the superior court stayed the UTPA litigation and ordered arbitration. The issue presented for the Supreme Court's review was whether the bank waived its right to demand arbitration of the subsequent UTPA claims by litigating the debt-collection claims. Because the Court concluded that the two claims were not sufficiently closely related, it held that the bank did not waive its right to demand arbitration of the separate UTPA claims. But The Court also concluded that it was error for the superior court to interpret the arbitration agreement on the question of the availability of statewide injunctive relief: the interpretation of an arbitration agreement is in the first instance a matter for the arbitrator. View "Hudson v. Citibank (South Dakota) NA" on Justia Law

The Automobile Sales Finance Act (ASFA) is a consumer protection law that governs the sale of vehicles in which the buyer finances all or part of the car’s purchase. Plaintiffs were consumers who purchased vehicles from Raceway Ford, Inc., an automobile dealership. Plaintiffs alleged that Raceway violated ASFA when (1) after agreeing to an initial finance contract, Raceway would enter into a subsequent finance contract with a buyer and backdate the second contract to the date of the first contract, and (2) a computer error caused Raceway to incorrectly include smog-related fees in buyers’ purchase contracts. The trial court found in favor of Raceway on all claims relevant to this appeal. The court of appeal affirmed with respect to Plaintiffs’ smog fee claims but reversed with respect to Plaintiffs’ backdating claims. The Supreme Court affirmed in part and reversed in part, holding (1) Raceway’s practice of backdating contracts did not violate the ASFA; and (2) Raceway did violate the ASFA when its disclosed inaccurate smog fees, but Plaintiffs were not entitled to a remedy under ASFA because the violation was due to an accidental or bona fide error in computation. View "Raceway Ford Cases" on Justia Law

Plaintiffs filed a class action against Banana Republic, a clothing retailer, alleging that signs in its store windows advertising a 40 percent off sale were false or misleading because they did not disclose that the discount applied only to certain items. Plaintiffs cited the Unfair Competition Law (Bus. & Prof. Code, 17200), the False Advertising Law (Bus. & Prof. Code, 17500), and the Consumers Legal Remedies Act (Civ. Code, 1750) and produced evidence that, in reliance on the advertising, they were lured to shop at certain stores and selected items for purchase. As the items were being rung up, plaintiffs were told for the first time that the discount did not apply to their chosen merchandise. Having waited in line and out of embarrassment, they bought some (but not all) of the items, without the discount. The trial court granted Banana Republic summary judgment, concluding that plaintiffs failed to raise a triable issue that they suffered injury in fact. The court of appeal reversed. Plaintiffs raised a triable issue whether they lost “money or property sufficient to qualify as injury in fact, i.e., economic injury,” and whether “that economic injury was the result of, i.e., caused by, the unfair business practice or false advertising.” View "Veera v. Banana Republic, LLC" on Justia Law