Justia Consumer Law Opinion Summaries

The plaintiff alleged consumer fraud by the seller of a dietary supplement, and the district court certified a plaintiff class of individuals “who purchased Instaflex within the applicable statute of limitations of the respective Class States for personal use until the date notice is disseminated,” under Rule 23(a) and (b)(3). The court rejected defendant’s argument that Rule 23(b)(3) implies a heightened ascertainability requirement. The Seventh Circuit affirmed, noting an implicit requirement under Rule 23 that a class must be defined clearly and that membership be defined by objective criteria rather than by, for example, a class member’s state of mind. In addressing this requirement, courts have sometimes used the term “ascertainability.” Class definitions fail this requirement when they were too vague or subjective, or when class membership was defined in terms of success on the merits (fail-safe classes). This class satisfied “ascertainability” View "Mullins v. Direct Digital, LLC" on Justia Law

Bowman law firm filed suit in Hendricks County Indiana, to recover Bentrud’s credit card debt owed to Capital One. Months later, Bowman moved for summary judgment. Bentrud responded by invoking the arbitration provision in his credit card agreement. The state court granted Bentrud’s election of arbitration and stayed the case, allowing Bentrud 30 days to initiate arbitration. The American Arbitration Association declined to do the arbitration because Capital One had previously failed to comply with its policy regarding consumer claims. Bentrud failed to meet the 30-day deadline, so that the stay automatically dissolved. Bowman filed a second summary judgment motion. Although the state court granted an extension, Bentrud characterized that motion, as an unfair or unconscionable means of attempting to collect a debt, under the Fair Debt Collection Practices Act, 15 U.S.C. 1692f. Bentrud also claimed that the Annual Percentage Rate on his credit card debt was 13.9%, but when Bowman filed its state court complaint, it averred the applicable interest rate to be 10.65%. The Seventh Circuit affirmed judgment in favor of Bowman, noting that when Bowman filed a second summary judgment motion, it acted consistently with the state court order and that any interest rate violation would be attributable to Capital One, which was not a party. View "Bentrud v. Bowman, Heintz, Boscia & Vicia, P.C." on Justia Law

The Bank and a group of States challenged the constitutionality of various provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203, 124 Stat. 1376. The district court concluded that plaintiffs lacked standing and that their claims were not ripe. The court concluded that the Bank has standing to challenge the constitutionality of the Consumer Financial Protection Bureau, and that claim is ripe. Therefore, the court reversed as to that claim and remanded for reconsideration in the first instance the Bank’s constitutional challenge to the Bureau. The court also concluded that the Bank has standing to challenge Director Cordray’s recess appointment, and that claim is ripe. Therefore, the court reversed as to that claim and remanded for reconsideration in the first instance the Bank’s constitutional challenge to the recess appointment. The court further concluded that the Bank lacks standing to challenge the constitutionality of the Financial Stability Oversight Council and affirmed the judgment as to that claim. Finally, the court concluded that the State plaintiffs lack standing to challenge the Government’s orderly liquidation authority, and that claim is not ripe. Therefore, the court affirmed as to that claim. View "State Nat'l Bank of Big Spring v. Lew" on Justia Law

Plaintiff filed suit against TMCC and Troy Campise, the Sales Manager of Lakeside Toyota, an automobile dealership, alleging that TMCC and Campise defrauded him by leading him to believe that a lease for a Toyota Corolla automobile would be tax exempt because the co-lessee, DELF, Inc., was a non-profit organization for which plaintiff is the registered agent and chief executive officer. On appeal, plaintiff challenged the district court's dismissal of his complaint for failure to state a claim. The court affirmed the judgment, concluding that the lease at issue was made to an organization as well as a natural person and therefore cannot be a consumer lease under the Consumer Leasing Act (CLA), 15 U.S.C. 1667-1667f. Because the CLA does not apply to a lease that is made to an organization, the court need not determine whether the complaint plausibly alleged that the lease was for personal use, rather than for agricultural, business, or commercial purposes. View "Dixon v. Toyota Motor Credit Corp." on Justia Law

Bank of America loaned Leipzig $960,000, secured by a deed of trust on a Brentwood, Tennessee residence. Leipzig assigned his rights in the residence to a trust, which leased it to Johannessen in 2010. The lease had a five-year term and an option to buy. Johannessen exercised that option in 2011, but otherwise did not act to obtain title. Leipzig stopped making payments. In 2013, Johannessen assigned his lease and option rights to Anarion; the residence was in foreclosure. Published foreclosure notices stated that Brock was a “substitute trustee” for purposes of the loan “by an instrument duly recorded.” Anarion alleges there was no such “instrument,” and, based on that putative “misrepresentation,” sued under the Fair Debt Collection Practices Act, 15 U.S.C. 1692. The court dismissed, holding that Anarion is not a “person” under the Act, which states that “any debt collector who fails to comply with any provision of this subchapter with respect to any person is liable.” The Sixth Circuit reversed, reasoning that section 1692a(3), defines “consumer” to mean “any natural person,” suggesting that, when Congress meant to refer only to natural persons, it did so expressly. The court noted that its decision does not mean that Anarion can bring suit under the FDCPA. View "Anarion Invs., LLC v. Carrington Mortg. Servs., LLC" on Justia Law

Purchasers of notebook computers, manufactured by HP, filed a class action, alleging that certain notebook computers manufactured by HP contained inverters that HP knew would likely fail and cause display screens to dim and darken at some point before the end of the notebook’s useful life. They claimed violation of the Unfair Competition Law (UCL), the Consumer Legal Remedies 2 Act (CLRA), unjust enrichment and breach of express warranty. After years of litigation, the trial court ultimately made a “no merits” determination as to the CLRA claim, and granted HP’s motion for summary judgment as to the remaining claims. The court of appeal affirmed class certification; reversed the summary adjudication of UCL claims and the no merits determination as to certain CLRA claims; and affirmed summary adjudication of some breach of express warranty claims, while reversing others. View "Rutledge v. Hewlett-Packard" on Justia Law

Plaintiffs filed a putative class action suit against defendant, an attorney representing National Grid, a company providing natural gas to plaintiffs' home. Plaintiffs alleged that defendant's debt collection practices concerning an alleged theft of natural gas violated the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692–1692p. On appeal, plaintiffs challenged the district court's grant of defendant's motion to dismiss. The court held that money owed as a result of theft is not an “obligation or alleged obligation of a consumer to pay money arising out of a transaction” and, therefore, does not constitute a “debt” for purposes of the FDCPA. Accordingly, the court affirmed the judgment of the district court. View "Beauvoir v. Israel" on Justia Law

From 2006-2011, NCO purchased consumers’ defaulted debt and referred collections to its sister corporation Financial, an Illinois-licensed debt collector, and to outside attorneys, who are exempt from the Illinois Collection Agency Act (ICAA), 225 ILCS 425/2.03(5). NCO avoided direct collection activities; did not communicate with debtors or credit-reporting agencies; and did not consider itself a ”collection agency” subject to the ICAA. Financial attempted to collect the debts and outside lawyers filed 2,749 lawsuits on NCO’s behalf. Illinois consumers whose debts NCO bought and referred to Financial or outside counsel, filed a class action, alleging that NCO engaged in unlicensed debt collection and that Financial violated the ICAA because it knew or should have known that NCO was an unlicensed debt collector. The district judge agreed that NCO was not a collection agency, relying in part on testimony from a lawyer in the Illinois Department of Financial and Professional Regulation, charged with enforcing the ICAA, that the Act did not apply to NCO until 2013, when it was amended to add a definition of “debt buyer.” The court entered judgment for the defendants. The Seventh Circuit reversed, noting a 2015 Illinois Supreme Court holding that a passive debt buyer “clearly qualifies as a ‘collection agency’ as defined in section 3 of the Act.” View "Hawthorne v. NCO Fin. Sys., Inc." on Justia Law

In 2013, hackers attacked Neiman Marcus and stole the credit card numbers of its customers. In December 2013, the company learned that some of its customers had found fraudulent charges on their cards. On January 10, 2014, it publicly announced that the cyberattack had occurred and that between July 16 and October 30, 2013, and approximately 350,000 cards had been exposed to the hackers’ malware. Customers filed suit under the Class Action Fairness Act, 28 U.S.C. 1332(d). The district court dismissed, ruling that the individual plaintiffs and the class lacked Article III standing. The Seventh Circuit reversed, finding that the plaintiffs identified some particularized, concrete, redress able injuries, as a result of the data breach. View "Remijas v. Neiman Marcus Group, LLC" on Justia Law

Plaintiff-appellant Greg Dagher sued defendant-respondent Ford Motor Company alleging violations of the Song-Beverly Consumer Warranty Act. In 2009, Plaintiff bought a used Ford 2006 vehicle in a private sale, then determined its engine needed substantial repairs. He obtained them by using Ford's transferable, unexpired express warranty that the private party sellers had originally been issued upon their purchase of the vehicle, new, from a Ford dealer. Plaintiff contends the warranty repairs attempted by the dealer were unsuccessful and he is entitled to the statutory remedies in the Act, the same as the original purchasers could have sought, including restitution, damages, and civil penalties. Ford sought summary judgment on the ground it had not failed to comply with any obligation owed to Plaintiff under the Act, because the available statutory remedies are restricted to aggrieved buyers of "consumer goods," chiefly new ones that are covered by express warranties. This was a used vehicle that was not sold to Plaintiff by a dealer, and even though the express warranty was transferable, Ford contended that Plaintiff lacked standing to sue for additional statutory remedies under the Act. The trial court granted summary judgment and denied leave to file an amended complaint. The Court of Appeal rejected Plaintiff's interpretations of the Act that would have allowed him standing to sue under it, and the Court affirmed the summary judgment order. Finding that the trial court did not properly exercise its discretion on the amendment issue, the Court reversed that order and the resulting judgment, with directions to the trial court to allow further proceedings on amendment of the complaint as proposed. View "Dagher v. Ford Motor Co." on Justia Law