Justia Consumer Law Opinion Summaries

Douglass received a letter from Convergent regarding a debt that Douglass allegedly owed T-Mobile. Convergent used an envelope with a glassine window, through which were visible: Douglass’s name and address; a sequence of numbers representing Douglass’s account number with Convergent that does not refer or relate to her T-Mobile account; a Postal Service bar code; a QR code, which, when scanned by a smart phone, revealed the same information as displayed through the glassine window; and a monetary amount corresponding to Douglass’s alleged debt. A putative class action on behalf of recipients of similar letters alleged that disclosure of the account number on the envelope and embedded in the QR code, violated the Fair Debt Collection Practices Act, 15 U.S.C. 1692f(8), which prohibits “using any language or symbol” other than a debt collector’s name and address on an envelope. Convergent argued that the account number qualified as “benign language.” The district court granted summary judgment to Convergent, reasoning that a strict interpretation of section1692f(8) would contradict Congress’s true intent: barring markings that would reveal the letter to pertain to debt collection or harass or humiliate a consumer. The Third Circuit vacated, stating that the account number could identify Douglass as a debtor and its disclosure was not benign.View "Douglass v. Convergent Outsourcing" on Justia Law

Plaintiffs filed a putative class action against defendants alleging that defendants violated the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692 et seq., and New York statutory and common law. Plaintiffs alleged that defendants obtained unauthorized attorneys' fees and costs in connection with actions to foreclose liens on plaintiffs' properties arising out of unpaid municipal property taxes and water and sewer charges. The court held that liens for mandatory water and sewer charges imposed by New York City as an incident to property ownership, which are treated as akin to property tax liens, are not subject to the FDCPA because they do not involve a "debt" as that term is defined in the statute. The court also held that the district court properly declined to exercise supplemental jurisdiction over the state law claims. Accordingly, the court affirmed the judgment of the district court. View "Boyd v. J.E. Robert Co., Inc." on Justia Law

Before the patents expired (2012) for the individual coffee pods used in Keurig coffeemakers, defendants wanted to enter the market for Keurig‐compatible pods. In 2010 they introduced a product that used the external K‐Cup design, but did not contain a filter so that use of fresh coffee grounds was impossible. They used small chunks of freeze‐dried brewed coffee that dissolve and are reconstituted when hot water is added. The packaging stated in small font that it contained “naturally roasted soluble and microground Arabica coffee”; it never explained that soluble coffee is instant coffee or that the pods contained 95% instant coffee. The package included a warning: “DO NOT REMOVE the foil seal as the cup will not work properly in the coffee maker and could result in hot water burns.” Except to ensure that the user did not view the contents of the pod, this made no sense. Customers began to complain and were told that the pods were “not instant coffee” but “a high quality coffee bean pulverized into a powder so fine that [it] will dissolve,” which was largely false. Consumer protection lawsuits were consolidated. The district court refused to certify a class and granted summary judgment. The Seventh Circuit reversed. Plaintiffs’ claims and those of the class they propose all derive from a single course of conduct. The court overlooked genuine issues of fact when it granted summary judgment. View "Suchanek v. Sturm Foods, Inc." on Justia Law

The Plaintiffs sued Payday Financial, Webb, an enrolled member of the Cheyenne River Sioux Tribe, and other entities associated with Webb, alleging violations of civil and criminal statutes related to loans that they had received from the defendants. The businesses maintain several websites that offer small, high-interest loans to customers. The entire transaction is completed online; a potential customer applies for, and agrees to, the loan terms from his computer. The district court dismissed for improper venue, finding that the loan agreements required that all disputes be resolved through arbitration conducted by the Cheyenne River Sioux Tribe on their Reservation in South Dakota. Following a limited remand, the district court concluded that, although the tribal law could be ascertained, the arbitral mechanism detailed in the agreement did not exist. The Seventh Circuit held that the action should not have been dismissed because the arbitral mechanism specified in the agreement is illusory. Rejecting an alternative argument that the loan documents require that any litigation be conducted by a tribal court on the Cheyenne River Sioux Tribe Reservation, the court stated that tribal courts have a unique, limited jurisdiction that does not extend generally to the regulation of nontribal members whose actions do not implicate the sovereignty of the tribe or the regulation of tribal lands. View "Jackson v. Payday Fin., LLC" on Justia Law

Paul Kennamer and Dorothy Kennamer appeal an order entered by the Marshall Circuit Court compelling them to arbitrate their claims against Ford Motor Credit Company LLC and Ray Pearman Lincoln, Inc. (the dealership). The Kennamers had problems with the used car they purchased and stopped making payments on the loan they obtained through Ford Credit and the dealership. After review of the retail-installment contract at the center of this controversy, the Supreme Court affirmed the circuit court's decision insofar as it granted the dealership's motion to compel arbitration and reversed insofar as it granted Ford Credit's motion to compel arbitration. View "Kennamer v. Ford Motor Credit Company LLC" on Justia Law

Appellant filed a claim against Wells Fargo Home Mortgage, Inc. under the Missouri Merchandising Practices Act (MMPA), alleging that Wells Fargo engaged in bad faith negotiations of a loan modification and wrongfully foreclosed on a deed of trust. The trial court entered judgment for Wells Fargo, concluding that because Wells Fargo’s actions were not taken before or at time of the extension of credit in the original loan, and because Wells Fargo was not a party to the transaction when Appellant first obtained the loan, Wells Fargo’s actions were not “in connection with” the sale of the original loan. The Supreme Court affirmed in part and reversed in part, holding (1) to the extent Appellant’s allegations related to the wrongful foreclosure, summary judgment was not appropriate pursuant to Conway v. CitiMortgage, Inc., also decided today; and (2) because Wells Fargo was not enforcing the terms of the original loan when it negotiated the loan modification, its actions were not “in connection with” the sale of the original loan and thus did not violate the MMPA. Remanded. View "Watson v. Wells Fargo Home Mortgage, Inc." on Justia Law

Homeowners filed a claim against Fannie Mae and CitiMortgage (collectively, Defendants) under the Missouri Merchandising Practices Act (MMPA), alleging wrongful foreclosure of a deed of trust. Defendants filed a motion to dismiss on the basis that the alleged wrongful foreclosure of the deed of trust was not “in connection with” the mortgage loan. The trial court dismissed the complaint, concluding that the MMPA did not apply because Defendants were not parties to the original loan transaction and that the MMPA does not apply to post-sale activities that are unrelated to claims or representations made before or at the time of the transaction. At issue before the Supreme Court was whether Homeowners sufficiently pleaded that Defendants’ alleged wrongful foreclosure of the deed of trust was “in connection with” the loan so as to state a claim under the MMPA. The Supreme Court reversed, holding that because the sale of a loan lasts as long as the agreed upon services are being performed, Homeowners’ allegations of fraud and deception must have occurred “in connection with” the “sale” of their loan. Remanded. View "Conway v. CitiMortgage, Inc." on Justia Law

Plaintiff filed suit on behalf of himself and a putative class of consumers whose Touchpad orders had been cancelled, alleging that Barnes & Noble had engaged in deceptive business practices and false advertising. On appeal, Barnes & Noble challenged the district court's denial of its motion to compel arbitration against plaintiff under the arbitration agreement contained in its website's Terms of Use. The court held that there was no evidence that the website user had actual knowledge of the agreement. The court also held that where a website makes its terms of use available via a conspicuous hyperlink on every page of the website but otherwise provides no notice to users nor prompts them to take any affirmative action to demonstrate assent, even close proximity of the hyperlink to relevant buttons users must click on - without more - is insufficient to give rise to constructive notice. Therefore, the court concluded that there is nothing in the record to suggest that those browsewrap terms at issue are enforceable by or against plaintiff, much less why they should give rise to constructive notice of Barnes & Noble's browsewrap terms. In light of the distinguishing facts, the district court did not abuse its discretion in rejecting Barnes & Noble's estoppel argument. Accordingly, the court held that plaintiff had insufficient notice of Barnes & Noble's Terms of Use, and thus did not enter into an arbitration agreement. The court affirmed the judgment of the district court. View "Nguyen v. Barnes & Noble Inc." on Justia Law

Appellant financed the purchase of a car over time pursuant to a loan contract. The car dealer assigned the contract to Appellee, a financial services company. Because Appellant stopped making payments before the loan was paid off, Appellee repossessed and sold the car. Appellant sued Appellee, alleging that the repossession and sale of the car did not comply with the Credit Grantor Closed End Credit Law (CLEC). The circuit court dismissed the complaint, concluding (1) Appellant’s statutory claims were untimely under the Maryland Equal Credit Opportunity Act’s one-year statute of limitations, and (2) Appellant’s complaint did not state a cause of action for breach of contract because the requirements of CLEC were not incorporated into the contract as to Appellee. The Court of Appeals reversed, holding (1) an action alleging a violation of CLEC must be brought no later than six months after the loan is satisfied pursuant to the CLEC’s statute of limitations, and therefore, Appellant’s claims under CLEC on limitations grounds were improperly dismissed; and (2) Appellant may assert a contract claim against Appellee because the loan contract adequately incorporated CLEC as part of the contractual obligations, and Appellee voluntarily accepted that provision in taking the assignment. View "Patton v. Wells Fargo Fin. Md., Inc." on Justia Law

Plaintiff filed suit against Absolute Collection, alleging that the collection agency's conduct violated the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692-1692p, and the North Carolina Collection Agency Act, N.C. Gen. Stat. 58-70-1 et seq. Plaintiff alleged that Absolute Collection falsely reported the status of a 2008 debt to credit bureaus as "past due." The district court granted plaintiff's motion for judgment as a matter of law with respect to certain claims under the FDCPA and allowed the state claims to go to the jury, which found in favor of plaintiff. Absolute Collection appealed. The court concluded that the district court did not err in denying Absolute Collection's motion for judgment as a matter of law and held that a debtor is not required to dispute his or her debt under section 1692g as a condition to filing suit under section 1692e. The court rejected Absolute Collection's remaining arguments and affirmed the judgment of the district court. View "Russell v. Absolute Collection Services" on Justia Law