Justia Consumer Law Opinion Summaries

Plaintiff filed a putative class action against DCI, alleging that DCI violated the Telephone Communications Practice Act, 47 U.S.C. 227, by sending plaintiff two text messages. The court concluded that plaintiff gave his prior express consent to be contacted by voluntarily providing his cell phone number to DCI. Accordingly, the court affirmed the district court's dismissal of plaintiff's claims because plaintiff’s complaint alleges, on its face, facts that demonstrate prior express consent. View "Murphy v. DCI Biologicals Orlando, LLC" on Justia Law

Rocio Trujillo's home loan was secured by a deed of trust encumbering the home. She defaulted, and Northwest Trustee Services Inc. (NWTS), the successor trustee, sent a notice of default and scheduled a trustee's sale of her property. NWTS had a beneficiary declaration from Wells Fargo Bank. RCW 61.24.030(7)(a) (part of the Deeds of Trust Act) required that a trustee not initiate such a nonjudicial foreclosure without "proof that the beneficiary [of the deed of trust] is the owner of any promissory note ... secured by the deed of trust," and must include "[a] declaration by the beneficiary made under the penalty of perjury stating that the beneficiary is the actual holder of the promissory note or other obligation secured by the deed of trust shall be sufficient proof as required under this subsection." NTWS' declaration did not contain that specific statutory language. Instead, it stated under penalty of perjury, "Wells Fargo Bank, NA is the actual holder of the promissory note . . . or has requisite authority under RCW 62A.3-301 to enforce said [note]" (This declaration language differed from the language of RCW 61.24.030(7)(a), by adding the "or" alternative). Following the Washington Supreme Court's decision in "Lyons v. U.S. Bank National Ass 'n," (336 P.3d 1142 (2014)), the Court held in this case that a trustee could not rely on a beneficiary declaration containing such ambiguous alternative language. The Court found that Trujillo alleged facts sufficient to show that NWTS breached the DTA and also to show that that breach could support the elements of a Consumer Protection Act (CPA) claim. However, her allegations did not support a claim for intentional infliction of emotional distress or criminal profiteering. The Court therefore reversed in part and remanded for trial. View "Trujillo v. Nw. Tr. Servs., Inc." on Justia Law

The named plaintiffs purchased Align, Procter & Gamble’s probiotic nutritional supplement, and found that the product did not work as advertised—that it did not promote their digestive health. Plaintiffs filed suit, alleging violations of state unfair or deceptive practices statutes because it has not been proven scientifically that Align promotes digestive health for anyone. The district court certified five single-state classes from California, Illinois, Florida, New Hampshire, and North Carolina under FRCP 23(b)(3) comprised of “[a]ll consumers who purchased Align . . . from March 1, 2009, until the date notice is first provided to the Class.” The Sixth Circuit affirmed class certification. The district court did not abuse its discretion in finding the proposed class to be sufficiently ascertainable; there is significant evidence that Plaintiffs could use traditional models and methods to identify class members. View "Rikos v. Procter & Gamble Co." on Justia Law

Bible defaulted on a loan under the Federal Family Education Loan Program, but entered into a rehabilitation agreement. She remains current on her reduced payments, but a guaranty agency assessed $4,500 in collection costs. Bible’s loan terms were governed by a Stafford Loan Master Promissory Note (MPN), approved by the Department of Education, incorporating the Higher Education Act, and providing for “reasonable collection fees and costs” in default, as defined by regulations promulgated under the Act. Bible sued, alleging breach of contract and violation of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1961, arguing that federal regulations prohibit assessment of collection costs and that the guaranty agency committed mail fraud and wire fraud in assessing collection costs despite its representations that her “current collection cost balance” and “current other charges” were zero. The court dismissed, finding both claims “preempted” by the Higher Education Act, which permits collection costs and that Bible had not shown “a scheme to defraud; commission of an act with intent to defraud; or the use of mails or interstate wires in furtherance of a fraudulent scheme.” The Seventh Circuit reversed. The contract claim does not conflict with federal law. The Secretary of Education interprets the regulations to provide that a guaranty agency may not impose collection costs on a borrower who is in default for the first time and has complied with an alternative repayment agreement. Bible’s RICO claim is not preempted. View "Bible v. United Student Aid Funds, Inc." on Justia Law

The Investigative Consumer Reporting Agencies Act (ICRAA), Civ. Code,1 1786 et seq., and the Consumer Credit Reporting Agencies Act (CCRAA), Civ. Code 1785.1 et seq., regulate agencies that gather information on consumers to provide to employers, landlords, and others for use by those persons in making employment, rental, and other decisions. This appeal involves investigative consumer reports – background checks – made on employees of First by HireRight. Plaintiff filed suit against First alleging violations of the ICRAA and the trial court dismissed the suit after granting First's motion for summary judgment based on the holding of Ortiz v. Lyon Management Group, Inc. In Ortiz, the appellate court held that the ICRAA was unconstitutionally vague as applied to tenant screening reports containing unlawful detainer information because unlawful detainer information relates to both creditworthiness and character. The court disagreed with the analysis in Ortiz, concluding that there is nothing in either the ICRAA or the CCRAA that precludes application of both acts to information that relates to both character and creditworthiness. Therefore, the court concluded that the ICRAA is not unconstitutionally vague as applied to such information and reversed the summary judgment. View "Connor v. First Student, Inc." on Justia Law

Plaintiff filed suit under the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692 et seq., against FCI, his mortgage loan servicer and a debt collector, alleging that FCI violated the FDCPA by sending him two written communications that failed to comply with FDCPA requirements that debt collectors timely provide certain notices to debtors. The district court granted FCI's motion to dismiss for failure to state a claim, ruling principally that the letter, which the district court viewed as primarily a transfer‐of‐servicing informational notice sent pursuant to the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. 2605, was not also a communication sent “in connection with the collection of any debt” under the FDCPA. The district court also ruled that plaintiff failed to allege that FCI violated the FDCPA by mailing the payment statement and the district court denied plaintiff leave to filed a second amended complaint. The court applied an objective standard to resolve the question and concluded that plaintiff adequately alleged that the Letter was an “initial communication . . . in connection with the collection of [a] debt,” so as to obligate FCI to provide plaintiff a section 1692g notice. Therefore, the district court erred in granting the motion, and the court vacated and remanded. View "Hart v. FCI Lender Serv." on Justia Law

Plaintiff filed suit against Landmark, seeking statutory damages for alleged violations of the Electronic Funds Transfer Act (EFTA), 15 U.S.C.1693, et seq., after he was charged $2.95 for an ATM withdrawal but was not given notice or informed of the fee. The district court granted Landmark's second motion to dismiss for lack of subject matter jurisdiction. At issue was whether Landmark’s Federal Rule of Civil Procedure 68 offer, assuming it were complete, mooted plaintiff’s individual claim and the class action claims. Finding the reasoning of the Ninth and Eleventh Circuits persuasive, the court held that an unaccepted offer of judgment to a named plaintiff in a class action “is a legal nullity, with no operative effect.” Nothing in Rule 68 alters that basic principle. Accordingly, given that plaintiff's individual claim was not mooted by the unaccepted offer in this case, neither were the class claims. The court reversed and remanded. View "Hooks v. Landmark Indus." on Justia Law

Burglars stole four desktop computers from Advocate Health and Hospitals Corporation’s Illinois administrative offices. The computers contained unencrypted private data relating to approximately four million Advocate patients. Six of those patients brought a putative class action alleging that Advocate did too little to safeguard their information, asserting claims for willful and negligent violations of the Fair Credit Reporting Act, 15 U.S.C. 1681. The district court dismissed the FCRA claims for failure to state a claim. It also found that four of the plaintiffs lacked standing to sue because their injuries were too speculative; the thieves had stolen their information but had not yet misused it. The Seventh Circuit affirmed. Using information internally does not count as “furnishing … to third parties,” so the Act’s reasonable‐procedures provision did not apply, and the FCRA claims were properly dismissed. View "Tierney v. Advocate Health & Hosp. Corp." on Justia Law

Plaintiffs filed separate class action complaints against GMAC, alleging violations of Maryland's Credit Grantor Closed End Credit Provisions (CLEC), Md. Code Ann., Com. Law 12-1001 et seq.; breach of contract; declaratory and injunctive relief; restitution/unjust enrichment; and violation of Maryland's Consumer Protect Act, Md. Code Ann., Com. Law 13-101 et seq. At issue was whether borrowers may seek a remedy after their creditors violate the repossession notice requirements in the CLEC. The court concluded that the CLEC requires borrowers to have repaid more than the original principal amount of their loans before they are entitled to relief. Accordingly, the court affirmed the district court's grant of summary judgment to GMAC. View "Gardner v. GMAC, Inc." on Justia Law

Latoya Brown purchased a Mazda 6 from Dick Smith Nissan, Inc. through the dealer's salesman, Robert Hiller. The purchase was contingent on acquiring third-party financing. Due to continuing and unresolved issues with financing, Brown returned the vehicle to Dick Smith. The car was later repossessed and sold by Sovereign Bank with a deficiency against Brown. Brown filed a complaint against Dick Smith and Old Republic Surety Company, the surety on Dick Smith's licensing bond, alleging violations of the South Carolina Dealers Act. The trial judge, in a bench trial, found in favor of Brown and awarded damages plus interest as well as attorney's fees and costs. Dick Smith and Old Republic appealed and the Court of Appeals reversed, concluding that any misconceptions that Brown had about her financing were caused by Sovereign Bank, not Dick Smith. Despite evidence in the record to support the trial judge's findings of fact, the Court of Appeals ignored those findings and substituted its own. By doing so, the Court of Appeals exceeded its standard of review. Accordingly, the Supreme Court reversed the Court of Appeals and reinstated the trial judge's decision. View "Brown v. Dick Smith Nissan" on Justia Law