Justia Consumer Law Opinion Summaries

The Federal Trade Commission (FTC) filed a complaint alleging that Defendants fraudulently marketed and sold debt-related services, failed to provide those services, and retained money as upfront fees in violation of the FTC Act, 15 U.S.C. 45(a); the Telemarketing Sales Rule, 16 C.F.R. 310; and the Mortgage Assistance Relief Services Rule, 12 C.F.R. 1015. The FTC also sought a temporary restraining order and a preliminary injunction, and provided more than 1,000 pages of exhibits. Defendants sought to stay proceedings, asserting that a criminal investigation had been launched into their business activities, as evidenced by a raid conducted by the Royal Canadian Mounted Police that resulted in seizure of records they claim were necessary to defend against the FTC’s allegations. The district court denied the motion; the FTC and Defendants entered into a stipulated preliminary injunction. Defendants later renewed the motion for a stay, claiming that they were unable to access critical records. Without explanation, the district court denied the motion and later granted the FTC’s motion for summary judgment, ordering Defendants to jointly pay restitution in the amount of $5,706,135.48 to injured consumers. The Sixth circuit affirmed, finding clear evidence of the violations. View "Fed. Trade Comm'n v. E.M.A. Nationwide, Inc." on Justia Law

Defendants–Appellants Abercrombie & Fitch Co., Abercrombie & Fitch Stores, Inc., and J.M. Hollister LLC, d/b/a Hollister Co. (collectively, Abercrombie) appealed several district court orders holding that Hollister clothing stores violated the Americans with Disabilities Act (ADA). Plaintiff–Appellee Colorado Cross-Disability Coalition (CCDC) is a disability advocacy organization in Colorado. In 2009, CCDC notified Abercrombie that Hollister stores at two malls in Colorado violated the ADA. Initial attempts to settle the matter were unsuccessful, and this litigation followed. Abercrombie took it upon itself to correct some barriers plaintiff complained of: it modified Hollister stores by lowering sales counters, rearranging merchandise to ensure an unimpeded path of travel for customers in wheelchairs, adding additional buttons to open the adjacent side doors, and ensuring that the side doors were not blocked or locked. However, one thing remained unchanged: a stepped, porch-like structure served as the center entrance at many Hollister stores which gave the stores the look and feel of a Southern California surf shack. The Tenth Circuit affirmed in part and reversed in part the district court's judgment: affirming the court's denial of Abercrombie's summary judgment motion and certification of a class. However, the Court reversed the district court's partial grant, and later full grant of summary judgment to plaintiffs, and vacated the court's permanent injunction: "each of the district court’s grounds for awarding the Plaintiffs summary judgment [were] unsupportable. It was error to impose liability on the design of Hollister stores based on 'overarching aims' of the ADA. It was also error to impose liability based on the holding that the porch as a 'space' must be accessible. Finally, it was error to hold that the porch must be accessible because it is the entrance used by a 'majority of people.'" View "CO Cross-Disability Coalition, et al v. Abercrombie & Fitch, et al" on Justia Law

In anticipation of the opening of the University of South Carolina's new basketball arena, the University of South Carolina and the University of South Carolina Gamecock Club distributed a brochure to high-level Gamecock Club members. The brochure offered the opportunity to purchase premium seating including a number of amenities for basketball games and other events held at the arena. The brochure offered members the opportunity to purchase these tickets over a "five year term." Members were to pay $5,000 per seat in the first year and $1,500 per seat each year in years two through five. Appellants claimed that Athletic Department employees promised Appellants that, after year five, they would only have to maintain their Gamecock Club membership and pay the face value of season tickets to retain these premium seats. Appellants accepted the University's offer and made the required payments for years one through five. After the fifth year, the University contacted Appellants and requested a $1,500 payment per seat for the sixth year of premium seating. Appellants brought an action against the University alleging breach of contract and seeking specific performance. After discovery, the parties filed cross motions for summary judgment. The trial judge denied Appellants' motion and granted the University's motion, finding that due to the absence of a written contract the statute of frauds barred Appellants' claims. The Supreme Court concluded the statute of frauds applied in the first instance, but that a question of fact existed concerning the question of equitable estoppel, rendering summary judgment inappropriate.View "Springob v. University of South Carolina " on Justia Law

When Frances O'Neill arranged for her mother, Elise Hopkins, to become a resident of Manahawkin Convalescent Center, she decided to pay Manahawkin's bills from Hopkins' Social Security benefits, rather than arranging for those benefits to be directly paid to the facility. When her mother was admitted to the nursing home, O'Neill signed a "Rehabilitation and Nursing Home Admission Agreement" which designated O'Neill as the "Responsible Party" for purposes of processing her mother's bills, and set forth remedies in case of a default of that obligation. Following Hopkins' death, Manahawkin demanded in writing that O'Neill pay a balance due on her mother's account. It ultimately filed a collection action against her. In a counterclaim, O'Neill asserted various causes of action, including claims based on the Nursing Home Act (NHA), the Consumer Fraud Act (CFA) and the Truth-in-Consumer Contract, Warranty, and Notice Act (TCCWNA). After the parties stipulated to the dismissal of the collection action, O'Neill reasserted her NHA, CFA and TCCWNA claims and sought class certification, which the trial court denied. The trial court granted summary judgment dismissing O'Neill's claims and construing the Admission Agreement to impose no obligation on O'Neill to devote her personal funds to her mother's care. The trial court therefore deemed the Admission Agreement to conform to the NHA, and dismissed O'Neill's remaining claims. The Appellate Division affirmed. Upon review, the Supreme Court held that the Admission Agreement met the requirements of the NHA, and that Manahawkin accordingly committed no unlawful act within the meaning of the CFA. Because Manahawkin's Admission Agreement imposed no requirements on O'Neill that contravened the NHA, and neither the Admission Agreement nor Manahawkin's collection complaint gave rise to a cause of action under the CFA or the TCCWNA, dismissal of O'Neill's claims was proper. "However, nursing homes and their counsel should ensure that each party's rights and remedies are clearly reflected in contracts and communications between facilities and individuals who arrange payment on a resident's behalf." View "Manahawkin Convalescent v. O’Neill" on Justia Law

The United States District Court for the Eastern District of Washington certified a question of Washington law to the Washington Supreme Court. This lawsuit involved two consolidated suits. Plaintiffs filed an amended complaint, alleging claims under Washington's Consumer Protection Act (WCPA), chapter 19.86 RCW, and the federal Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. sections 1692-1692p. These claims were based in part on plaintiffs' assertion that Midland Funding's business arrangements and debt collection processes violated the WCAA. The questions the federal court raised were: (1) Does the definition of "collection agency" in RCW 19.16.1 00(2) include a person who purchases claims that are owed or due or asserted to be owed or due another, undertakes no activity on said delinquent consumer account but rather contracts with an affiliated collection agency to collect the purchased claims, and is the named plaintiff in a subsequent collection lawsuit for said purchased claims?; and (2) Can a company file lawsuits in Washington on delinquent consumer accounts without being licensed as a collection agency as defined by RCW 19.16.1 00(2)? The Supreme Court responded that that debt buyers fall within the definition of "collection agency" under the Washington Collection Agency Act (WCAA), chapter 19.16 RCW, when they solicit claims for collection. Accordingly, if the court finds that a company (party in this suit) solicited claims, then the company was a collection agency and it could not file collection lawsuits without a license. View "Gray v. Suttell & Assocs." on Justia Law

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