Justia Consumer Law Opinion Summaries

Kenneth Tilley sought financing from Malvern National Bank (MNB) for a real estate development project in 2009 and 2010, totaling $350,000. Tilley claimed MNB engaged in unfair dealings and sued for breach of contract, promissory estoppel, violations of the Arkansas Deceptive Trade Practices Act (ADTPA), tortious interference, negligence, and fraud. The case has been appealed multiple times, with the Arkansas Supreme Court previously reversing decisions related to Tilley's right to a jury trial.Initially, the Garland County Circuit Court struck Tilley's jury demand, which was reversed by the Arkansas Supreme Court. After remand, the circuit court reinstated a bench trial verdict, citing Act 13 of 2018, which was again reversed by the Supreme Court. On the third remand, MNB moved for summary judgment on all claims. The circuit court granted summary judgment, citing Tilley's reduction of collateral as a material alteration of the agreement, a rationale not argued by MNB. Tilley appealed this decision.The Arkansas Supreme Court reviewed the case and held that the circuit court did not violate the mandate by considering summary judgment. However, it was reversible error for the circuit court to grant summary judgment based on an unargued rationale. The Supreme Court affirmed summary judgment on Tilley's ADTPA, tortious interference, and negligence claims, finding no genuine issues of material fact. However, it reversed and remanded the summary judgment on Tilley's breach of contract, promissory estoppel, and fraud claims, determining that there were disputed material facts that required a jury trial. The case was remanded for further proceedings consistent with this opinion. View "Tilley v. Malvern National Bank" on Justia Law

A national consumer advocate law firm (C Co.) and its affiliate (S Co.) providing administrative support services sought injunctive and declaratory relief against the Department of Banking. The Department had initiated an administrative enforcement action against S Co. for allegedly engaging in unlicensed debt negotiation activities. The plaintiffs argued that S Co. was exempt from licensing requirements under a presumption established in a prior case (Persels & Associates, LLC v. Banking Commissioner), which holds that attorneys providing debt negotiation services as part of their legal practice fall under the exclusive regulation of the Judicial Branch.The trial court denied the Department's motion to dismiss the plaintiffs' action, concluding that the plaintiffs were not required to exhaust administrative remedies before seeking judicial intervention on whether the Persels presumption applied to S Co. The Department appealed, arguing that the Commissioner of Banking should first determine whether the presumption applied.The Supreme Court of Connecticut affirmed the trial court's decision, holding that the plaintiffs were not required to exhaust administrative remedies before seeking judicial intervention. The court reasoned that the Commissioner of Banking lacks the expertise to determine whether the Persels presumption applies, as this involves assessing whether the activities in question constitute the practice of law, which falls under the exclusive authority of the Judicial Branch. The court emphasized that allowing the commissioner to make this determination would violate the constitutional separation of powers. Therefore, the plaintiffs could seek declaratory and injunctive relief in the trial court without waiting for the commissioner to resolve the issue. View "Commonwealth Servicing Group, LLC v. Dept. of Banking" on Justia Law

Sara Watts, an African American woman, sued her former homeowners’ association, Joggers Run Property Owners Association (HOA), alleging racial discrimination under the Fair Housing Act (FHA) and the Civil Rights Act. Watts claimed the HOA interfered with her property enjoyment through unwarranted citations, restricted access to amenities, and discriminatory treatment as a former HOA board member. She cited provisions from the FHA (42 U.S.C. §§ 3604(b), 3617) and the Civil Rights Act (42 U.S.C. §§ 1981, 1982).The United States District Court for the Southern District of Florida dismissed Watts' claims, ruling that the FHA did not cover discriminatory conduct occurring after the purchase of her home and that Watts failed to specify the contractual terms the HOA allegedly violated. The court found her allegations insufficient to support claims under the FHA and the Civil Rights Act.The United States Court of Appeals for the Eleventh Circuit reviewed the case. The court held that Watts presented plausible claims under the FHA and the Civil Rights Act. It found that the FHA's language is broad and inclusive, prohibiting a wide range of discriminatory conduct related to housing. The court concluded that the HOA's actions, including restricted access to amenities and selective enforcement of rules, fell within the scope of the FHA. The court also determined that Watts sufficiently alleged intentional racial discrimination causing contractual injury under Section 1981 and that the HOA's actions violated her right to use property on an equal basis with White citizens under Section 1982.The Eleventh Circuit reversed the district court's dismissal and remanded the case for further proceedings. View "Watts v. Joggers Run Property Owners Association, Inc." on Justia Law

John Koontz received two letters from SN Servicing Corporation (SNSC) regarding his residential mortgage loan. Koontz had previously filed for Chapter 7 bankruptcy, and his debts were discharged. The letters from SNSC stated that they were attempting to collect a debt and mentioned late fees assessed to Koontz's loan account. Koontz filed a lawsuit claiming that SNSC's actions violated the Fair Debt Collection Practices Act (FDCPA) and a similar West Virginia law.The United States District Court for the Northern District of West Virginia dismissed Koontz's complaint. The court concluded that Koontz was no longer a "consumer" with a "debt" under the FDCPA due to his Chapter 7 bankruptcy discharge. The court also found that the letters did not constitute attempts to collect a consumer debt and that Koontz failed to adequately plead a "false, deceptive, or misleading representation" under the FDCPA. Consequently, the court dismissed both the federal and state claims.The United States Court of Appeals for the Fourth Circuit reviewed the case and reversed the district court's decision in part. The appellate court held that Koontz remained a "consumer" with a "debt" under the FDCPA despite his Chapter 7 discharge, as the mortgage lien remained an enforceable obligation. The court also determined that the letters from SNSC constituted attempts to collect a debt. However, the court agreed with the district court that Koontz failed to state a claim under 15 U.S.C. § 1692e but found that he adequately stated a claim under 15 U.S.C. § 1692f. The appellate court reversed the dismissal of the state-law claim for the same reasons. The case was remanded for further proceedings. View "Koontz v. SN Servicing Corporation" on Justia Law

Michael Salazar filed a class action lawsuit against Paramount Global, alleging a violation of the Video Privacy Protection Act (VPPA). Salazar claimed that he subscribed to a 247Sports e-newsletter and watched videos on 247Sports.com while logged into his Facebook account. He alleged that Paramount had installed Facebook’s tracking Pixel on 247Sports.com, which enabled Paramount to track and disclose his video viewing history to Facebook without his consent.The United States District Court for the Middle District of Tennessee dismissed Salazar’s complaint. The court found that Salazar had standing because the alleged disclosure of his video viewing history to Facebook constituted a concrete injury. However, the court dismissed the complaint for failure to state a claim under the VPPA, concluding that Salazar was not a “consumer” under the Act. The court reasoned that Salazar’s subscription to the 247Sports e-newsletter did not qualify him as a “consumer” because the newsletter was not “audio visual materials.”The United States Court of Appeals for the Sixth Circuit reviewed the case and affirmed the district court’s decision. The Sixth Circuit agreed that Salazar had standing but held that he did not plausibly allege that he was a “consumer” under the VPPA. The court interpreted the term “goods or services” in the context of the VPPA to mean audio-visual materials, and since Salazar’s newsletter subscription did not involve audio-visual materials, he was not a “consumer” under the Act. The court also found that the district court did not abuse its discretion in dismissing the complaint with prejudice, as Salazar had not filed a formal motion to amend his complaint. View "Salazar v. Paramount Global" on Justia Law

Plaintiffs in this case are four Oregon residents who filed a putative class action against Tillamook County Creamery Association (Tillamook) under Oregon’s Unlawful Trade Practices Act (UTPA). They allege that Tillamook falsely represented the nature and origin of its dairy products, claiming they were sourced from small, family-owned farms in Tillamook County, while most of the milk actually came from a large factory farm in eastern Oregon. Plaintiffs argue that these misrepresentations led consumers to suffer economic harm by purchasing products they otherwise would not have bought or by paying inflated prices.The Multnomah County Circuit Court partially granted Tillamook’s motion to dismiss, ruling that plaintiffs must plead that Tillamook’s false representations were observed and relied upon by anyone seeking recovery. The court dismissed the claims based on a price-inflation theory and a prohibited-transaction theory, reasoning that the class must be limited to consumers who purchased Tillamook products in reliance on the marketing representations.The Oregon Court of Appeals affirmed the trial court’s decision, concluding that plaintiffs’ UTPA claim required them to plead reliance on Tillamook’s representations. The court rejected the price-inflation theory, likening it to the fraud-on-the-market theory used in securities fraud cases, and found it inapplicable to consumer goods. The court also determined that the prohibited-transaction theory required proof of reliance, as the claimed loss was the purchase price resulting from misrepresentations.The Oregon Supreme Court reversed the Court of Appeals’ decision, holding that plaintiffs’ premium-price theory and prohibited-transaction theory do not require pleading reliance. The court explained that the premium-price theory alleges that Tillamook’s deceptive marketing inflated the market value of its products, causing all purchasers to pay higher prices, regardless of individual reliance. Similarly, the prohibited-transaction theory claims that plaintiffs suffered loss by purchasing misbranded or falsely advertised products, which does not depend on consumers’ awareness of the misrepresentations. The case was remanded to the Court of Appeals for further proceedings. View "Bohr v. Tillamook County Creamery Assn." on Justia Law

Douglas Horn, a commercial truck driver, purchased and consumed a CBD tincture called "Dixie X," marketed as THC-free by Medical Marijuana, Inc. After a random drug test by his employer detected THC in his system, Horn was fired for refusing to participate in a substance abuse program. Horn subsequently sued Medical Marijuana under the Racketeer Influenced and Corrupt Organizations Act (RICO), claiming that the company's false advertising led to his job loss.The District Court granted summary judgment in favor of Medical Marijuana, reasoning that Horn's job loss was a consequence of a personal injury (ingesting THC), and thus not recoverable under RICO, which only allows recovery for business or property injuries. The Second Circuit Court of Appeals reversed this decision, holding that Horn's job loss constituted an injury to his business under RICO, rejecting the "antecedent-personal-injury bar" that precludes recovery for business or property losses derived from personal injuries.The Supreme Court of the United States reviewed the case to determine whether civil RICO categorically bars recovery for business or property losses that derive from a personal injury. The Court held that under civil RICO, a plaintiff may seek treble damages for business or property loss even if the loss resulted from a personal injury. The Court emphasized that the statute's language allows recovery for business or property harms without excluding those that result from personal injuries. The judgment of the Second Circuit was affirmed, and the case was remanded for further proceedings consistent with this opinion. View "Medical Marijuana, Inc. v. Horn" on Justia Law

Plaintiffs David Vance Gardner and Gary Merchant filed a lawsuit against MeTV National Limited Partnership, alleging that MeTV violated the Video Privacy Protection Act (VPPA) by disclosing their personally identifiable information without consent. MeTV operates a website where users can watch classic TV shows. Users can sign up with their email addresses and zip codes to personalize their experience, which includes receiving reminders and using a channel finder feature. Plaintiffs claimed that MeTV embedded a "Meta pixel" in its videos, allowing Facebook to link users' viewing habits to their Facebook accounts for targeted advertising.The United States District Court for the Northern District of Illinois dismissed the plaintiffs' complaint, ruling that they were not "consumers" under the VPPA because they did not pay for MeTV's services. The court allowed the plaintiffs to file an amended complaint, which was also dismissed on the same grounds.The United States Court of Appeals for the Seventh Circuit reviewed the case and reversed the district court's decision. The appellate court held that the term "consumer" under the VPPA includes anyone who subscribes to services from a video tape service provider, regardless of whether they pay money. The court found that providing personal information, such as an email address and zip code, in exchange for personalized services constitutes a subscription. Therefore, the plaintiffs are considered "consumers" under the VPPA, and their complaint should not have been dismissed.The Seventh Circuit remanded the case for further proceedings consistent with its opinion, allowing the plaintiffs' claims to proceed. View "Gardner v MeTV" on Justia Law

Paul Osheske, a Facebook user, purchased a movie ticket on Landmark Theatres' website. Landmark Theatres, operated by Silver Cinemas Acquisition Co., shared the name of the film, the location of the showing, and Osheske’s unique Facebook identification number with Facebook without his consent. Osheske filed a class action lawsuit against Landmark, alleging that this disclosure violated the Video Privacy Protection Act (VPPA).The United States District Court for the Central District of California dismissed Osheske’s complaint, concluding that Landmark Theatres did not qualify as a “video tape service provider” under the VPPA. The court reasoned that the activities of selling tickets and providing an in-theater movie experience did not fall under the VPPA’s definition of “rental, sale, or delivery of prerecorded video cassette tapes or similar audio visual materials.”The United States Court of Appeals for the Ninth Circuit reviewed the case and affirmed the district court’s dismissal. The Ninth Circuit held that the VPPA does not apply to businesses providing a classic in-theater moviegoing experience. The court determined that the statutory text and historical context of the VPPA indicate that the Act was intended to cover the rental, sale, or delivery of video products, not the provision of shared access to film screenings in a theater. Consequently, Landmark Theatres' conduct did not make it a “video tape service provider” under the VPPA. The court also noted that the district court’s dismissal without leave to amend was proper, as the complaint could not be saved by any amendment. View "OSHESKE V. SILVER CINEMAS ACQUISITION COMPANY" on Justia Law

The case involves a dispute between several plaintiffs, who are independent distributors for Nu Skin Enterprises Inc., and the defendants, which include Nu Skin and its affiliates. The plaintiffs allege that Nu Skin operates an unlawful pyramid scheme, making it difficult for distributors to profit from product sales alone, and instead requiring them to recruit new distributors to earn money. The plaintiffs filed a lawsuit in Spokane County Superior Court, asserting claims under various state and federal laws.In the lower courts, Nu Skin filed a motion to dismiss the case for improper venue based on a forum-selection clause in the parties' contract, which designated Utah as the exclusive forum for dispute resolution. The Spokane County Superior Court denied Nu Skin's motion, ruling that the case did not fall within the contractual definition of a "Dispute" and that Spokane County was a proper venue. Nu Skin sought reconsideration, which was also denied, and then moved for discretionary review.The Washington Supreme Court reviewed the case and addressed whether CR 12(b)(3) is the correct procedural mechanism to enforce a contractual forum-selection clause designating a non-Washington forum. The court held that CR 12(b)(3) is not the appropriate procedure for such enforcement. The court reasoned that the plain language of CR 12(b)(3) authorizes dismissal only when venue is "improper" according to Washington's venue statutes and court rules, which do not account for contractual forum-selection clauses. Therefore, a forum-selection clause cannot render a statutorily authorized venue "improper" under CR 12(b)(3). The court affirmed the denial of Nu Skin's motion to dismiss and remanded the case to the superior court for further proceedings consistent with its opinion. View "Raab v. Nu Skin Enters., Inc." on Justia Law