Justia Consumer Law Opinion Summaries

Appellants brought this action against BAC Home Loans Servicing, LP, asserting fraud and consumer fraud. The district court granted BAC’s motion to dismiss but allowed Appellants leave to file an amended complaint. Thereafter, Appellants filed a first amended complaint, again asserting fraud and consumer fraud. The district court dismissed the amended complaint, allowing Appellants leave to amend. Instead of filing a second amended complaint, however, Appellants appealed. The Supreme Court dismissed the appeal for lack of jurisdiction, holding that the district court’s order granting BAC’s second motion to dismiss was not final and appealable because it allowed Appellants leave to amend. View "Bergenfield v. BAC Home Loans Servicing, LP" on Justia Law

A few decades ago, an oil spill occurred on property in Salem, Massachusetts that was owned by Peabody Essex Museum. The pollution from the spill migrated to the land of a down gradient neighbor, Heritage Plaza. In 2003, Heritage Plaza discovered the subsurface contamination and notified the Museum. The Museum, in turn, gave prompt notice to state environmental authorities and to its insurer, United States Fire Insurance Company (U.S. Fire). The Museum filed a coverage suit against U.S. Fire and, in 2013, secured a judgment requiring U.S. Fire to pay the Museum over $1.5 million, including punitive damages under Mass. Gen. Laws ch. 93A. In this appeal, the parties challenged multiple district court rulings. The First Circuit affirmed the challenged rulings related to insurance coverage but reversed the finding of Chapter 93A liability and vacated the district court’s associated award of punitive damages, holding that U.S. Fire’s conduct under these circumstances was not the kind that the Massachusetts Supreme Judicial Court has condemned as egregious settlement misconduct that is actionable under Chapter 93A. View "Peabody Essex Museum, Inc. v. U.S. Fire Ins. Co." on Justia Law

The district court denied a motion to certify a class to sue Zions Bank and its payment-processor subsidiaries for alleged civil violations of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1962(c), (d). The complaint that the defendants conspired to conduct a fraudulent telemarketing scheme that caused unauthorized debits from bank accounts owned by Reyes and members of the proposed class. The court concluded that there were no issues common to the class and Reyes could therefore satisfy neither the commonality requirement of Federal Rule of Civil Procedure 23(a), nor the predominance requirement of Rule 23(b)(3). The court recognized Reyes’ theory of a sham enterprise, but focused on the fact that different sales pitches were used and different products were pitched. The Third Circuit vacated, reasoning that the district court did not adequately consider evidence of the structure of each of the alleged fraudulent schemes and related FTC investigations. If absolute conformity of conduct and harm were required for class certification, unscrupulous businesses could victimize consumers with impunity merely by tweaking the language in a telemarketing script to get access to personal information such as account numbers. View "Reyes v. Netdeposit, LLC" on Justia Law

Robert Benson appealed the denial of his motion for attorney fees and costs from respondent Southern California Auto Sales, Inc. (SCAS), after he obtained a favorable judgment based on the Consumer Legal Remedies Act (CLRA). The court found that SCAS had offered Benson an appropriate correction upon receiving the statutorily required notice of problems with its used car. Benson contended the trial court erred in deciding SCAS had offered him an appropriate correction under the CLRA, and further that he was entitled to attorney fees as the prevailing party. After review, the Court of Appeal chose to defer to the trial court's determination of whether a correction offer was appropriate in this case. "Whether a plaintiff can recover attorney fees and costs incurred in an action for damages after being offered an appropriate correction is a matter of statutory interpretation, and we conclude CLRA fees and costs are not available under these circumstances." View "Benson v. Southern Cal. Auto Sales" on Justia Law

This appeal arose from two related class-action lawsuits that were first brought by Appellees almost fifteen years ago. Appellees sought damages from Appellants, Ganley Chevrolet and Ganley Management Company, as well as declaratory and injunctive relief, alleging violations of the Ohio Consumer Sales Practices Act (OCSPA). The trial court eventually certified a class of plaintiffs and ruled that all class members could recover damages. The trial court then ruled that Appellants violated the OCSPA and awarded damages to each class member. The appellate court affirmed the trial court’s order certifying the class without squarely addressing Appellants’ claim that there was no showing that all class members had suffered damages. The Supreme Court reversed the judgment of the court of appeals and vacated the trial court’s order certifying the class, holding (1) all members of a plaintiff class must have suffered injuries as a result of the conduct challenged in the suit; and (2) because the class certified in this case included plaintiffs whose damages were inchoate, the class as certified was inconsistent with the law. View "Felix v. Ganley Chevrolet, Inc." on Justia Law

In April 2014, two consumers filed a class action against BF Labs, asserting “deceptive and unconscionable business practices” in marketing and selling Bitcoin mining machines. Five months later, the Federal Trade Commission sued BF for unfair and deceptive acts, 15 U.S.C. 45(a). The court stayed pending suits and imposed a receivership. The stay was subsequently lifted. The two consumers were denied leave to intervene in the FTC action. The Eighth Circuit affirmed, agreeing that the interests of the consumers’ proposed class are subsumed within the public interest because the FTC, on behalf of consumers, sought relief for the same “deceptive and unconscionable business practices” alleged by the consumers. The consumers have not made the necessary “strong showing of inadequate representation.” View "Alexander v. Fed. Trade Comm'n" on Justia Law

Wyndham has licensed its brand name to approximately 90 independently owned hotels, each having a system that processes consumer information, including names, addresses, email addresses, telephone numbers, payment card account numbers, expiration dates, and security codes. Wyndham manages the systems and requires the hotels to configure them to its specifications to connect to Wyndham’s network. The FTC filed suit under 15 U.S.C. 45(a), alleging that Wyndham engaged in unfair cybersecurity practices that, unreasonably and unnecessarily exposed consumers’ personal data to unauthorized access and theft. The company: allowed Wyndham-branded hotels to store payment card information in clear readable text and allowed use of easily guessed passwords; failed to use “readily available security measures,” such as firewalls; allowed hotel systems to connect to its network without taking appropriate cybersecurity precautions; and did not follow “proper incident response procedures,” so that hackers used similar methods in three attacks, but has published a privacy policy on its website that overstates its cybersecurity. Hackers stole information for hundreds of thousands of consumers leading to $10.6 million in fraudulent charges. The district court denied Wyndham’s motion to dismiss. On interlocutory appeal, the Third Circuit agreed that the FTC has authority to regulate cybersecurity under the unfairness prong of section 45(a); and, that Wyndham had fair notice its specific practices could fall short of that provision. View "Fed. Trade Comm'n v. Wyndham Worldwide Corp" on Justia Law

Plaintiff filed suit on behalf of himself and a class of similarly situated individuals, alleging that Capital One violated certain provisions of the Federal Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692–1692p, by attempting to collect on defaulted or delinquent credit card accounts that Capital One had acquired from HSBC. The district court dismissed plaintiff's amended complaint. The court concluded that it need look no further than the statutory text to conclude that, under the plain language of the FDCPA, a bank (or any person or entity) does not qualify as a “debt collector” where the bank does not regularly collect or attempt to collect on debts “owed or due another” and where “the collection of any debts” is not “the principal purpose” of the bank’s business, even where the consumer’s debt was in default at the time the bank acquired it. In this case, the amended complaint’s factual matter establishes that Capital One’s collection efforts in this case related only to debts owed to it and that debt collection is only some part of, and not the principal purpose of, Capital One’s business. Therefore, Capital One's activity, as alleged by plaintiff, is not the activity of a “debt collector” under the FDCPA, and plaintiff cannot state a claim under the Act. Accordingly, the court affirmed the judgment. View "Davidson v. Capital One Bank (USA), N.A." on Justia Law

Plaintiff filed claims individually and on behalf of three putative classes against Defendant seeking damages and injunctive relief under the Telephone Consumer Protection Act. Prior to the parties’ agreed-upon deadline for the class certification motion that Plaintiff announced it would pursue, Defendant tendered to Plaintiff an offer for judgment under Fed. R. Civ. P. 68. Four days after receiving the offer, Plaintiff moved for class certification. The unaccepted offer was subsequently withdrawn due to Plaintiff’s failure to respond to the offer. Thereafter, Defendant moved to dismiss for lack of matter jurisdiction, arguing that its unaccepted and withdrawn Rule 68 offer resolved any case or controversy between the parties, thereby mooting Plaintiff’s claims. The district court denied the motion to dismiss. The First Circuit affirmed, holding that a rejected and withdrawn offer of settlement of the named plaintiff’s individual claims in a putative class action made before the named plaintiff moves to certify a class does not moot the named plaintiff’s claims and divest the court of subject matter jurisdiction. View "Bais Yaakov of Spring Valley v. ACT, Inc." on Justia Law

The Telephone Consumer Protection Act prohibits companies from making automated calls to a person’s cellphone without that person’s prior express consent, 47 U.S.C. 227(b)(1)(A)(iii). Hill claims he received more than 100 prohibited phone calls from his creditor, Homeward, in connection to a debt he owed. Hill had given the company his cell number and knew that this number would be used if Homeward needed to reach him about his mortgage. He also listed the number on a loan modification document. While behind on his payments, Hill told Homeward not to call him at work anymore, instructing Homeward to call his cellphone instead. He also provided express written consent for Homeward to call his cellphone. The district court rejected Hills’s claims under the Act. The Sixth Circuit affirmed. A person gives his “prior express consent” when he gives his creditor his cellphone number in connection with a debt he owes. View "Hill v. Homeward Residential, Inc." on Justia Law