Justia Consumer Law Opinion Summaries

Plaintiff filed suit against defendants, debt-collection attorneys for non-party Publix, under the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692-1692p. On appeal, plaintiff challenged the district court's dismissal of the complaint for failure to state a claim. At issue was whether representations made by an attorney in court filings during the course of debt-collection litigation are actionable under the FDCPA. The court found that the plain language of the FDCPA, other persuasive decisions interpreting that language, and the purpose underlying the Act mandate a finding that the FDCPA applies to attorneys, like defendants, who regularly engage in debt collection activity, even when that activity includes litigation and even when the attorneys’ conduct is directed at someone other than the consumer. The court further concluded that absent a statutory exception, documents filed in court in the course of judicial proceedings to collect on a debt, like defendants' sworn reply, are subject to the FDCPA. However, because the court agreed with the district court’s finding that plaintiff failed to state a claim under the FDCPA, the court affirmed the dismissal of his complaint. View "Miljkovic v. Shafritz and Dinkin, P.A." on Justia Law

Petitioners purchased and financed an automobile from Respondent. Petitioners averred that Respondent failed properly to disclose the vehicle’s history. At issue in this case was the extent to which multiple documents executed on the same day during the course of the purchase and financing could be read together as constituting the entire agreement between the parties. The issue arose in the context of whether Petitioners’ claims against Respondent were subject to a mandatory arbitration provision in the Buyer’s Order, which set forth the purchase price. A Retail Installment Sales Contract (RISC), which contained the financing terms of the purchase, did not include an agreement to arbitrate. The circuit court granted Respondent’s motion to compel arbitration, thus disagreeing with Petitioners that the language of the Buyer’s Order was superseded by the RISC. The Court of Appeals affirmed, holding that, for the purposes of the instant case, the Buyer’s Order may be construed together with the RISC as evincing the entire agreement between the parties. View "Ford v. Antwerpen Motorcars Ltd." on Justia Law

Messerli law firm obtained a default judgment for its client, Capital One against Scheffler, a former debt collector. Having learned of Scheffler’s reputation as “the most litigious debtor” in Minnesota, Messerli instructed its employees not to contact Scheffler. Scheffler claims he nonetheless sent a cease-and-desist letter to Messerli, which says it received no letter. Messerli attempted to enforce the judgment by serving Scheffler with a garnishment summons. Scheffler returned an exemption Form, claiming that all of the money the bank had frozen was protected, but giving no reason why it was protected. He asserted that the source of the money was “[his] butt,” that he was entitled to death benefits, and “I told you that you were wasting your time.” Scheffler’s attorney sent a letter asking Messerli to honor the claimed cease-and-desist request and asserting that Scheffler was “judgment proof.” Scheffler, acting pro se, sued Messerli under the Fair Debt Collection Practices and Fair Credit Reporting Acts and state laws. The Eighth Circuit affirmed dismissal. Even if there were a cease letter, Messerli’s communications did not violate it. A creditor may communicate with a debtor after receiving a cease letter “to notify the consumer that the debt collector or creditor may invoke specified remedies,” 15 U.S.C. 1692c(c)(2), which is what the garnishment letter was. Messerli was also permitted to request Scheffler’s credit report, 15 U.S.C. 1681b(a)(3). View "Scheffler v. Messerli & Kramer P.A." on Justia Law

Gladys Tellis, Sherry Bronson, Gwendolyn Moody, Nadine Ivy, and Uneeda Trammell (collectively, "the policyholders") initiated separate actions against American Bankers Insurance Company of Florida, asserting generally that American Bankers had sold them homeowner's insurance policies providing a level of coverage they could never receive, even in the event of a total loss involving the covered property. American Bankers moved the trial court hearing each action to compel arbitration pursuant to arbitration provisions it alleged were part of the subject policies; however, the trial courts denied those motions, and American Bankers appealed. The Supreme Court consolidated the five appeals for the purpose of writing one opinion, and reversed those orders denying the motions to compel arbitration. The Court based its decision on its holdings that the policyholders manifested their assent to the arbitration provision in their policies by continuing to renew the policies, that the sale of the policies affected interstate commerce, and that the arbitration provision in the policies was not unconscionable. View "American Bankers Ins. Co. of Florida v. Tellis" on Justia Law

Plaintiff filed a class action against HCP, alleging causes of action for violation of the unfair competition law (UCL), Bus. & Prof. Code, 7200 et seq.; common law fraudulent concealment; and violation of the false advertising law (FAL), Bus. & Prof. Code, 17500. Plaintiff argued that, although HCP does not fall within the literal definition of a “health care service plan” as defined in Health and Safety Code section 1345, subdivision (f)(1), due to the level of risk it assumed, HCP operated as a health care service plan without obtaining the license required by the Knox-Keene Health Care Service Plan Act of 1975, Health and Safety Code section 1340 et seq., and without meeting the regulatory mandates required of health care service plans. The trial court sustained without leave to amend the demurrers filed by HCP and entered a judgment of dismissal. The court concluded that the trial court acted within its discretion in invoking the abstention doctrine as to the statutory causes of action but not as to the common law cause of action for fraudulent concealment. However, the court found that plaintiff failed to plead a claim for fraudulent concealment, and that she has failed to demonstrate how she could amend the operative complaint to cure the defect. Accordingly, the court affirmed the judgment. View "Hambrick v. Healthcare Partners Med. Grp." on Justia Law

In earlier litigation, Teva challenged the validity and enforceability of GSK’s patents on lamotrigine, Lamictal’s active ingredient. Teva was first to file an FDA application, alleging invalidity or nonenforceability, and seeking approval to produce generic lamotrigine tablets and chewable tablets for markets alleged to be annually worth $2 billion and $50 million,. If the patent suit resulted in a determination of invalidity or nonenforceability—or a settlement incorporating such terms—Teva would be statutorily entitled to a 180- day period of market exclusivity, during which time only it and GSK could produce generic lamotrigine tablets. After the judge ruled the patent’s main claim invalid, the companies settled; Teva would end its patent challenge in exchange for early entry into the chewables market and GSK’s commitment not to produce its own, “authorized generic” Lamictal tablets. Plaintiffs, direct purchasers of Lamictal, sued under the Sherman Act, 15 U.S.C. 1 & 2, claiming that the agreement was a “reverse payment” intended to induce Teva to abandon the patent fight and eliminate the risk of competition in the lamotrigine tablet market for longer than the patent would otherwise permit. The district court dismissed. The Third Circuit vacated, citing Supreme Court precedent, holding that unexplained large payments from the holder of a drug patent to an alleged infringer to settle litigation of the patent’s validity or infringement (reverse payment) can violate antitrust laws. View "King Drug Co of Florence Inc, v. Smithkline Beecham Corp." on Justia Law

Respondents, three married couples, obtained home equity lines of credit from Petitioners, a bank and its loan officer. Approximately four years later, Petitioners filed a putative class action alleging that these transactions were part of an elaborate “buy-first-sell-later” mortgage fraud arrangement carried out by Petitioners and other defendants. Petitioners alleged numerous causes of action, including fraud, conspiracy, and violations of Maryland consumer protection statutes. The circuit court granted summary judgment for Petitioners, concluding that the statute of limitations barred several of Respondents’ claims and that no Petitioner violated the Maryland Secondary Mortgage Loan Law as a matter of law. The Court of Special Appeals reversed. The Court of Appeals reversed, holding that the Court of Special Appeals (1) erred in concluding that Respondents stated a claim upon which relief could be granted under the Maryland Secondary Mortgage Loan Law; and (2) erred in concluding that it was a question of fact to be decided by the jury as to whether Respondents’ claims against Petitioners were barred by the relevant statute of limitations. View "Windesheim v. Larocca" on Justia Law

Plaintiffs, consumers who purchased joint health supplements produced and sold by GNC and Rite Aid, filed suit alleging that GNC and Rite Aid violated the consumer protection laws of various states by marketing these supplements as promoting joint health, even though many scientific studies have shown that the ingredients they contain, glucosamine and chondroitin, are no more effective than a placebo in treating the symptoms of osteoarthritis. The district court granted GNC and Rite Aid's motion to dismiss the complaint for failure to state a claim. The court affirmed, concluding that marketing statements, like the ones at issue here, that accurately describe the findings of duly qualified and reasonable scientific experts are not literally false. View "Brown v. GNC" on Justia Law

In 2011, the IRS required tax preparers who were neither attorneys nor CPAs to pass a certification exam and obtain an identification number. H&R, a nation-wide tax service, passed anticipated costs to its customers by charging a “Compliance Fee.” H&R explained at its offices and on its website that the fee would cover only the costs to comply with the new laws. In 2011, the fee was $2; in 2012, the fee was $4. Perras sued on behalf of himself and a putative class. Perras alleged that the amount collected exceeded actual compliance costs. Perras sued under the Missouri Merchandising Practices Act. The district court compelled arbitration of the 2011 claims. Later, the court declined to certify the class, agreeing that the proposed class met the requirements under Federal Rule of Civil Procedure 23(a) of “numerosity, commonality, typicality, and fair and adequate representation,” but Rule 23(b)(3), requires that “the questions of law or fact common to class members predominate over any questions affecting only individual members.” The Eighth Circuit affirmed, reasoning that the Supreme Court of Missouri would likely conclude that the MMPA does not cover the out-of-state transactions. The law applicable to each class member would be the consumer-protection statute of that member’s state; questions of law common to the class members do not predominate over individual questions. View "Perras v. H&R Block" on Justia Law

In 2004, CashCall, a licensed lender, issued Montgomery a consumer credit account. In 2011, CashCall sold that debt to GCFS for collection. In 2012, GCFS sold the debt to Mountain Lion. Neither GCFS nor Mountain Lion is a licensed finance lender under the Finance Lenders Law. These entities are also not institutional investors within the meaning of section 22340. Mountain Lion subsequently sued Montgomery for payment on the debt. Montgomery filed a cross-complaint challenging the validity of her debt under Financial Code section 22340(a), which provides that “A licensee may sell promissory notes evidencing the obligation to repay loans made by the licensee pursuant to this division or evidencing the obligation to repay loans purchased from and made by another licensee pursuant to this division to institutional investors, and may make agreements with institutional investors for the collection of payments or the performance of services with respect to those notes.” The court of appeal affirmed dismissal of her cross-complaint. The legislative history indicates no intent to prohibit the sale of debt to noninstitutional investors. View "Montgomery v. GCFS, Inc." on Justia Law