Justia Consumer Law Opinion Summaries

The Fair Debt Collection Practices Act prohibits debt collectors from threatening to take an action that they do not intend to take in the course of collecting a debt, 15 U.S.C. 1692e(5). The defendants, debt collectors, filed suit in Illinois state court to recover on the plaintiffs’ delinquent credit card accounts, but later moved to voluntarily dismiss the actions without prejudice. The actions were dismissed before trial. The plaintiffs then sued the debt collectors for allegedly engaging in various deceptive practices under the FDCPA during the state court litigation. The Seventh Circuit affirmed dismissal. Section 1692e(5) of the FDCPA does not require debt collectors to intend to proceed to trial when filing a lawsuit to recover a debt. View "Owusumensah v. Cavalry Portfolio Servs., LLC" on Justia Law

General Motors challenged the district court's order granting in part a motion for class certification in an action brought by plaintiffs under the Florida Deceptive and Unfair Trade Practices Act (FDUTPA), Fla. Stat. 501.201 et seq. The district court certified a class consisting of all Florida purchasers and lessees of 2014 Cadillac CTS sedans. In this case, the district court found the predominance requirement to be satisfied by an essential question common to each class member: whether the inaccurate Monroney sticker provided by General Motors constituted a misrepresentation prohibited by FDUTPA. The court concluded that, by inaccurately communicating that the 2014 Cadillac CTS had attained three perfect safety ratings, General Motors plainly obtained enhanced negotiating leverage that allowed it to command a price premium. The size of that premium represents the damages attributable to that theory of liability. Because that theory is consistent for all class members, the predominance requirement under Federal Rule of Civil Procedure 23(b)(3) is satisfied. This consistency is also sufficient to establish the commonality requirement under Rule 23(a)(2). Because common questions of law and fact predominate, class-wide adjudication appropriately conserves judicial resources and advances society’s interests in judicial efficiency. Finally, the court rejected General Motor's contention that plaintiff failed to prove that she can fairly and adequately protect the interests of the class. Because the district court did not abuse its discretion in certifying the class, the court affirmed the judgment. View "Carriuolo v. General Motors Co." on Justia Law

Between 2002-2006, Lucht purchased treated lumber for a deck on his vacation home in the Virgin Islands. The lumber allegedly decayed prematurely and he began replacing boards in 2010; he claims he did not discover the severity of the problem until the fall of 2011. Lucht sued the retailer, wholesaler, and treatment company of the lumber in February 2013, alleging a Uniform Commercial Code contract claim; a common law contract claim; a breach of warranty claim; a negligence claim; a strict liability claim; and a deceptive trade practices claim under the Virgin Islands Deceptive Trade Practices Act. The district court rejected the claims as time-barred. The Third Circuit affirmed, citing the “‘gist of the action doctrine,” which bars plaintiffs from bringing a tort claim that merely replicates a claim for breach of an underlying contract. View "MRL Dev. I, LLC v. Whitecap Inv. Corp" on Justia Law

Montgomery bought a Tassimo, a single-cup coffee brewer manufactured by Kraft Foods, expecting it to brew Starbucks coffee. After the purchase she struggled to find Starbucks T-Discs—single-cup coffee pods compatible with the brewer. The Starbucks T-Disc supply eventually disappeared as Kraft’s business relationship with Starbucks soured. Montgomery sued Kraft and Starbucks on behalf of a class for violations of various Michigan laws. After dismissing several claims and denying class certification on the rest, the district court entered judgment in Montgomery’s favor when she accepted defendants’ joint offer of judgment under FRCP 68. Montgomery appealed the dismissal of her breach of express and implied warranty claims, the denial of class certification on her consumer-protection claims, and the attorney’s fees awarded as part of the Rule 68 settlement (about 3% of what she had requested). The Sixth Circuit affirmed, noting that Montgomery did not purchase the item directly from defendants, for purposes of express warranty, and did not allege that the coffee maker was unfit for its ordinary purpose. View "Montgomery v. Kraft Foods Global, Inc." on Justia Law

The Fair Debt Collection Practices Act prohibits “abusive debt collection practices,” 15 U.S.C. 1692(a)–(d), barring “false, deceptive, or misleading representation[s].” The definition of “debt collectors,” excludes “any officer . . . of . . . any State to the extent that collecting . . . any debt is in the performance of his official duties.” Under Ohio law, overdue debts owed to state-owned agencies and instrumentalities are certified to the State’s Attorney General, who may appoint, as independent contractors, private attorneys, as “special counsel” to act on the Attorney General’s behalf. Special counsel must use the Attorney General’s letterhead in communicating with debtors. Attorneys appointed as special counsel, sent debt collection letters on the Attorney General’s letterhead to debtors, with signature blocks containing the name and address of the signatory as well as the designation “special” or “outside” counsel to the Attorney General. Each letter identified the sender as a debt collector seeking payment for debts to a state institution. Debtors filed a putative class action, alleging violation of FDCPA. The district court granted defendants summary judgment. The Sixth Circuit vacated, concluding that special counsel, as independent contractors, are not entitled to the FDCPA’s state-officer exemption. The Supreme Court reversed. Even if special counsel are not “state officers” under the Act, their use of the Attorney General’s letterhead does not violate Section 1692e. The letterhead identifies the principal—Ohio’s Attorney General—and the signature block names the agent—a private lawyer. A debtor’s impression that a letter from special counsel is a letter from the Attorney General’s Office is “scarcely inaccurate.” View "Sheriff v. Gillie" on Justia Law

Spokeo operates a “people search engine,” which searches a wide spectrum of databases to gather and provide personal information about individuals to various users, including prospective employers. After Robins discovered that his Spokeo-generated profile contained inaccurate information, he filed a class-action complaint alleging that the company willfully failed to comply with the Fair Credit Reporting Act of 1970, 15 U.S.C. 1681e(b). The district court dismissed. The Ninth Circuit reversed, reasoning that Robins’ “personal interests in the handling of his credit information are individualized.” The Supreme Court vacated. A plaintiff invoking federal jurisdiction bears the burden of establishing the “irreducible constitutional minimum” of standing by demonstrating an injury in fact, fairly traceable to the defendant’s challenged conduct, likely to be redressed by a favorable judicial decision. A plaintiff must show that he suffered “an invasion of a legally protected interest” that is “concrete and particularized” and “actual or imminent, not conjectural or hypothetical.” The Ninth Circuit’ focused on particularization: the requirement that an injury “affect the plaintiff in a personal and individual way,” but an injury in fact must be both concrete and particularized. Concreteness requires an injury to actually exist; a plaintiff does not automatically satisfy the injury-in-fact requirement whenever a statute grants a right and purports to authorize a suit to vindicate it. The violation of a statutory procedural right granted can be sufficient in some circumstances to constitute injury in fact, so that a plaintiff need not allege additional harm beyond the one identified by Congress. The Court did not rule on the correctness of the Ninth Circuit’s ultimate conclusion, but stated that Robins cannot satisfy Article III by alleging a bare procedural violation. View "Spokeo, Inc. v. Robins" on Justia Law

Consumer class actions against Global, on behalf of individuals who purchased gym memberships, alleged improper fees, unfair sales practices, lack of disclosures, improper bank account deductions, and improper handling of contract cancellations. The cases claimed breach of contract, unjust enrichment, fraud, and violation of state consumer protection laws. Objectors challenged a settlement, claiming it was unfair under FRCP 23(e); that class counsel’s fees were disproportionate to claims paid; that the settlement unnecessarily required a claims process; and that the settlement contained a “clear-sailing” agreement from Global not to oppose any application for $2.39 million for costs and fees or less and a “kicker” clause, providing that if the court awarded less than $2.39 million, that amount would constitute full satisfaction of Global’s obligation for costs and fees. Some further argued that the settlement failed to provide adequate compensation for Kentucky state-law claims and for plaintiffs who had signed an early, more favorable version of the contract. The district court approved the settlement based on a magistrate judge’s 80-page Report and Recommendation, which addressed each objection. The Sixth Circuit affirmed. Though some courts disfavor clear sailing agreements and kicker clauses, their inclusion alone does not show that the court abused its discretion in approving the settlement. View "Gascho v. Global Fitness Holdings, LLC" on Justia Law

Plaintiff, a retired bank manager, filed suit against Nationstar under the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. 2601 et seq., a consumer-protection statute geared toward mortgagors. Plaintiff claimed that her mortgage payment incorrectly increased after Nationstar began servicing the loan. The district court granted Nationstar's motion to dismiss. The court concluded that plaintiff has plausibly alleged that Nationstar did not offer a written explanation stating the reason or reasons for its determination, in violation of section 2605(e)(2)(B) and 12 C.F.R. 1024.35(e)(1)(i)(B); that this failure indicated Nationstar's investigation was unreasonable; and that Nationstar’s unreasonable investigation prevented it from discovering and appropriately correcting the account error. The court concluded that the district court improperly elevated Nationstar's allegations over those of plaintiff at the motion-to-dismiss stage, and that plaintiff adequately pleaded damages. Accordingly, the court reversed and remanded. View "Renfroe v. Nationstar Mortg., LLC" on Justia Law

Sometime after loan servicing duties on Robin and Kathleen Jacobsens’ loan was transferred to Bayview Loan Servicing, LLC, Bayview initiated foreclosure proceedings. The Jacobsens filed this action to enjoin the sale of their house at a trustee’s sale. The district court canceled the trustee’s sale, and the Jacobsens amended their complaint to add Fair Debt Collections Practices Act (FDCPA) and Montana Consumer Protection Act (MCPA) claims against Bayview. The trial court awarded money damages to the Jacobsens under the FDCPA and the MCPA. After the trial, the court imposed an additional amount in damages, finding that Bayview was in violation of the FDCPA, the MCPA, and the district court’s order in the case prohibiting debt collection by bay view during the pendency of the action. Thereafter, the district court concluded that Bayview committed a second violation of the order. The Supreme Court affirmed, holding (1) the district court did not err when it determined that Bayview violated the FDCPA and the MCPA; (2) the district court properly determined damages incurred by the Jacobsens as a result of Bayview’s actions and supported those conclusions with substantial evidence; and (3) the Jacobsens were entitled to attorney fees and costs on appeal. View "Jacobson v. Bayview Loan Servicing, LLC" on Justia Law

H. Peter Doble II appealed a district court’s order awarding Interstate Amusements, Inc. (Interstate) attorney fees. Interstate owned and operated a number of movie theaters throughout Magic Valley. As part of its business, Interstate marketed and sold vouchers known as “Cinema Cash:” vouchers purchased in $1.00 increments and could be redeemed for movie tickets and concessions sold at Interstate’s various theater locations. Each voucher was clearly marked with an expiration date after which the voucher was no longer redeemable. Doble attempted to redeem an expired Cinema Cash voucher at one of Interstate’s movie theaters in Twin Falls. Doble filed a Complaint against Interstate in which he alleged that the issuance of Cinema Cash violated Idaho’s Consumer Protection Act (ICPA). The district court granted summary judgment in favor of Interstate. With regard to fees, the court found that Doble brought his action “frivolously, unreasonably, and without foundation” and awarded Interstate attorney fees under Idaho Code section 12-121. The district court then entered an amended judgment stating: “The defendant, Interstate Amusement, Inc., shall recover from the plaintiff costs in the amount of $320.44 and attorney’s fees in the amount of $7,972.50, for a total of $8,292.94.” Finding no reversible error in the district court's fee award, the Supreme Court affirmed. View "Doble v. Interstate Amusements, Inc." on Justia Law