Justia Consumer Law Opinion Summaries

Ridgeline Medical, LLC provided medical services to David Lyon and sought to recover $777 in unpaid charges. Ridgeline sent a final billing statement to Lyon at his provided address, but Lyon did not receive it and did not pay. Ridgeline retained a law firm to collect the debt, which sent demand letters to the same address, also not received by Lyon. Subsequently, Ridgeline initiated a lawsuit for breach of an implied-in-fact contract and reported Lyon’s debt to a consumer reporting agency. Lyon responded by alleging Ridgeline’s actions violated the Idaho Patient Act (IPA) and counterclaimed for statutory penalties under the Act, asserting noncompliance with its procedural requirements.The Magistrate Court for Bonneville County initially found some IPA provisions unconstitutional, severed them, and dismissed Ridgeline’s complaint for noncompliance with the remaining requirements. It denied Lyon’s claim for statutory penalties, finding that provision violated the Eighth Amendment as applied. The Idaho Attorney General intervened to defend the Act’s constitutionality. After further briefing and argument, the magistrate court vacated its prior decision, held the IPA constitutional in full, dismissed Ridgeline’s complaint again, and awarded statutory penalties to Lyon. On intermediate appeal, the District Court of the Seventh Judicial District affirmed the magistrate court’s amended decision.On further appeal, the Supreme Court of the State of Idaho reviewed the magistrate court’s decision independently, with due regard for the district court’s ruling. The Supreme Court held that the challenged IPA provisions regulate commercial speech and are subject to intermediate scrutiny, which they satisfy. The court found no violation of the First Amendment (speech or petition), Fourteenth Amendment (equal protection or due process), or Eighth Amendment. The Supreme Court affirmed the district court’s decision, upholding the IPA against Ridgeline’s constitutional challenges. Neither party was awarded attorney fees on appeal. View "Ridgeline Medical, LLC v. Lyon" on Justia Law

Milliman, Inc. operates a service that compiles consumer medical and prescription reports, which are then sold to insurers for underwriting decisions. The named plaintiff, James Healy, applied for life insurance, but Milliman provided a report to the insurer containing another person's medical records and social security number. This erroneous report flagged Healy as high risk for several serious medical conditions he did not actually have, resulting in the denial of his insurance application. Healy attempted to correct the report, but Milliman did not timely investigate or remedy the errors.Healy filed a class action in the United States District Court for the Western District of Washington, alleging that Milliman’s procedures violated the Fair Credit Reporting Act by failing to ensure maximum possible accuracy. The district court certified an “inaccuracy class” for those whose reports included mismatched social security numbers and risk flags. Milliman moved for partial summary judgment, arguing that Healy needed to show class-wide standing at this stage. The district court agreed, finding under TransUnion LLC v. Ramirez, 594 U.S. 413 (2021), that Healy had failed to present direct evidence of concrete injury on a class-wide basis, and dismissed the inaccuracy class.On interlocutory appeal, the United States Court of Appeals for the Ninth Circuit held that, following class certification in damages actions, both named and unnamed class members must present evidence of standing at summary judgment. However, the court clarified that plaintiffs may rely on either direct or circumstantial evidence, and need only show that a rational trier of fact could infer standing, not that standing is conclusively established. The panel reversed the district court’s partial summary judgment and remanded for reconsideration under the correct summary judgment standard. View "HEALY V. MILLIMAN, INC." on Justia Law

Corpay, Inc., a publicly traded company based in Atlanta, Georgia, markets fuel credit cards to businesses, primarily small and medium-sized enterprises. The cards were advertised to offer per-gallon fuel savings, “fuel only” purchase restrictions, and no transaction fees. However, the Federal Trade Commission (FTC) brought suit alleging that Corpay’s advertisements were misleading and its billing practices unfair. The FTC presented evidence that customers received significantly lower discounts than advertised, that “fuel only” cards were frequently used for non-fuel purchases, and that transaction fees were charged despite claims to the contrary. Additionally, Corpay was found to have automatically enrolled customers in various add-on programs and fees, often without clear disclosure or express consent, and assessed late fees even when customers paid on time.The United States District Court for the Northern District of Georgia reviewed these claims. It granted summary judgment for the FTC on all five counts, holding that Corpay’s advertisements and fee practices were deceptive and unfair under Section 5 of the FTC Act. The court also found Corpay’s CEO, Ronald Clarke, personally liable due to his authority and knowledge of the company’s practices. To address ongoing and potential future violations, the district court issued a permanent injunction, requiring clear and unavoidable fee disclosures and separate customer assent for each fee charged.On appeal, the United States Court of Appeals for the Eleventh Circuit affirmed the grant of summary judgment and permanent injunction against Corpay on all counts. It also affirmed summary judgment against Clarke on four counts but vacated the judgment on the “fuel only” advertising count, remanding for further proceedings on that issue. The appellate court held that the injunction’s requirements for express informed consent and prominent disclosure were within the district court’s equitable authority. The disposition was affirmed in part, vacated in part, and remanded. View "Federal Trade Commission v. FleetCor Technologies, Inc." on Justia Law

Blue Beach Bungalows DE, LLC sought to purchase Pine Haven, a manufactured home and RV community in Delaware, from its longtime owner. After entering a purchase agreement in March 2022, Blue Beach sent numerous letters to residents, informing them of changing tenancy statuses, threatening eviction, police action, and property destruction, and imposing shifting deadlines to vacate. These aggressive tactics prompted complaints to the Delaware Department of Justice (DOJ), which initiated an administrative enforcement action against Blue Beach for violations including the Consumer Fraud Act (CFA), alleging false or misleading statements regarding the nature of residents’ living arrangements and improper rent solicitations.After a four-day hearing, the administrative Hearing Officer largely ruled in favor of the DOJ, penalizing Blue Beach over $700,000 for statutory violations. Blue Beach appealed to the Superior Court of the State of Delaware, which affirmed some violations and vacated others. The Superior Court held the CFA applied to communications made after the underlying transaction and found the CFA constitutional, rejecting Blue Beach’s arguments about the right to a jury trial. The DOJ cross-appealed the vacation of certain penalties.The Supreme Court of Delaware reviewed the case. It held that the plain language of the CFA does not apply to post-transaction communications, reversing the Superior Court on that issue. The Court affirmed the Superior Court’s finding that the CFA is constitutional and does not violate Delaware’s jury trial right, because the statutory cause of action is not sufficiently analogous to common law fraud. The Court declined to address the DOJ’s cross-appeal, finding those issues moot in light of its holding on the CFA’s scope. The case was affirmed in part, reversed in part, and remanded for further proceedings consistent with the Supreme Court’s opinion. View "Blue Beach Bungalows DE, LLC v. Department of Justice Consumer Protection Unit" on Justia Law

Joneca Company, LLC, and InSinkErator, LLC, are direct competitors in the garbage disposal market. InSinkErator alleged that Joneca marketed its disposals using horsepower designations that misrepresented the actual output power of the motors, thereby misleading consumers. InSinkErator claimed that industry and consumer standards understood horsepower to refer to the motor’s mechanical output, not merely the electrical input, and that Joneca’s advertising was causing it to lose sales and goodwill. InSinkErator tested Joneca’s products and found the output horsepower to be substantially less than advertised, prompting it to seek injunctive relief.The United States District Court for the Central District of California reviewed these allegations in the context of a motion for a preliminary injunction. After considering expert declarations and industry standards, the district court found that Joneca’s horsepower claims were literally false by necessary implication, as consumers would interpret horsepower designations as referring to output. The court also found that these claims were material to consumer purchasing decisions and that InSinkErator was likely to suffer irreparable harm absent an injunction. As a result, the court ordered Joneca to place disclaimers on its packaging and sales materials and required InSinkErator to post a $500,000 bond. Joneca appealed, challenging the district court’s findings on falsity, materiality, irreparable harm, balancing of hardships, and public interest.The United States Court of Appeals for the Ninth Circuit affirmed the district court’s preliminary injunction. The court held that the district court did not err in finding that InSinkErator was likely to succeed on the merits of its Lanham Act false advertising claim, that Joneca’s horsepower claims were materially misleading, and that InSinkErator faced irreparable harm. The Ninth Circuit found no abuse of discretion in the district court’s balancing of equities, bond requirement, or determination that the injunction served the public interest. View "INSINKERATOR, LLC V. JONECA COMPANY, LLC" on Justia Law

The plaintiff held a variable-rate credit card issued by a bank, with an agreement specifying that the interest rate for each billing cycle would be determined by adding a constant margin to the U.S. Prime Rate as published in The Wall Street Journal on the last day of each month. When the Federal Reserve increased the Federal Funds Rate multiple times from March 2022 to July 2023, the Prime Rate—and consequently, the plaintiff’s credit card interest rate—increased significantly. The new, higher rate was applied to the cardholder’s outstanding balances for the entire billing cycle, including balances incurred before the Prime Rate increased. The plaintiff, dissatisfied with paying higher interest on previous balances, filed a class action alleging that the bank’s method of calculating and applying the interest rate violated the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act) and California’s Unfair Competition Law.The United States District Court for the Northern District of California dismissed the case under Rule 12(b)(6), concluding that the bank’s method fell within a statutory exception in the CARD Act. The court found that the credit card agreement’s use of the Prime Rate, which is publicly available and not controlled by the bank, satisfied the CARD Act’s exception for variable rates tied to an external index.On appeal, the United States Court of Appeals for the Ninth Circuit reviewed the dismissal de novo. The appellate court held that the agreement complied with 15 U.S.C. § 1666i-1(b)(2), as the only variable affecting the rate was the Prime Rate, which was not under the bank’s control. The court found no violation of the CARD Act and affirmed the district court’s dismissal, holding that the bank’s method of setting variable rates according to the Prime Rate was lawful under the statute’s exception. View "MILLIKEN V. BANK OF AMERICA, N.A." on Justia Law

Ramona Milam, an Illinois homeowner, obtained a mortgage loan in 2005 and later fell behind on her payments. Selene Finance, acting as the loan servicer since 2021, sent Milam a letter warning of possible acceleration and foreclosure if she did not cure her default within 35 days. Milam argued that, due to federal regulations and Selene’s internal practices, Selene would not actually seek foreclosure or acceleration until at least 120 days of delinquency, making the letter’s threat misleading and intended to spur premature payment. After making a payment, Milam sued Selene, alleging violations of the Fair Debt Collection Practices Act and Illinois law, and claimed negligent misrepresentation.Selene moved to dismiss the complaint in the United States District Court for the Northern District of Illinois, Eastern Division, arguing that, as the lender’s assignee under the mortgage, it was entitled to notice and an opportunity to cure before being sued. The district court agreed, finding Selene to be an assignee and holding that Milam failed to comply with the mortgage’s notice and cure provision, thus barring her claims. The court also dismissed Milam’s state law claims for lack of pleaded pecuniary loss.On appeal, the United States Court of Appeals for the Seventh Circuit reviewed whether Milam had standing and whether Selene was properly considered an assignee under Illinois law. The court found Milam had standing based on supplemental allegations of monetary harm from accelerated payment. However, the Seventh Circuit held that the pleadings did not establish Selene as an assignee under Illinois law, distinguishing between assignment and delegation of duties. The Seventh Circuit reversed the district court’s dismissal and remanded the case for further proceedings to resolve the assignee issue and reconsider the state law claims. View "Milam v Selene Finance" on Justia Law

Ana Faiaipau, an elderly woman recovering from heart surgery, was transferred to a long-term acute care hospital operated by Kindred Healthcare. During her stay, Ana allegedly suffered neglect, including lack of dialysis, malnutrition, inadequate hygiene care, and failure to properly monitor her ventilator. The ventilator became disconnected, leading to a severe anoxic brain injury and Ana’s subsequent death. Ana’s daughters, Jennifer and Faamalieloto, acting both individually and as successors in interest, filed suit against Kindred for negligence, elder neglect, fraud, violation of the Unfair Competition Law (UCL), and wrongful death.The Alameda County Superior Court reviewed Kindred’s motion to compel arbitration based on agreements signed by Jennifer as Ana’s legal representative. The court granted arbitration for survivor claims brought on behalf of Ana, including negligence, elder neglect, fraud, and UCL claims, but denied arbitration for Jennifer and Faamalieloto’s individual claims for wrongful death, fraud, and violation of the UCL. The court also stayed litigation of the individual claims pending arbitration.The Court of Appeal of the State of California, First Appellate District, Division Four, reviewed the appeal. Citing the California Supreme Court’s decision in Holland v. Silverscreen Healthcare, Inc., the appellate court held that the wrongful death claim—premised on failure to monitor and reconnect Ana’s ventilator—constituted professional negligence and must be arbitrated under the arbitration agreement. However, the court affirmed the denial of arbitration for Jennifer and Faamalieloto’s individual fraud and UCL claims, finding Kindred had not shown that the agreement bound them in their individual capacities. The order was modified to compel arbitration of the wrongful death claim and affirmed as modified. View "Faiaipau v. THC-Orange County, LLC" on Justia Law

A veteran and his spouse obtained a VA-guaranteed loan to purchase a home. After the veteran’s employment was disrupted due to the U.S. withdrawal from Afghanistan, the couple experienced financial hardship and defaulted on their mortgage. The lender, a bank, initiated foreclosure proceedings. The couple attempted to reinstate their mortgage by tendering the full amount to bring the loan current, as provided by the mortgage contract, but allege that the bank and its foreclosure law firm failed to accept their payment or provide a means for payment. The property was sold to third-party purchasers at a foreclosure sale for more than the outstanding loan balance. The couple claims they did not receive adequate notice or an opportunity to exercise their statutory right of redemption.The third-party purchasers filed an ejectment action in Madison Circuit Court. The couple defended against the action and brought counterclaims against both the purchasers and the bank, alleging breach of good faith and fair dealing, breach of contract, wrongful foreclosure, unjust enrichment, and seeking declaratory relief. The trial court dismissed all claims against the bank and the third-party purchasers and granted summary judgment on the ejectment. The couple amended their pleadings, but the trial court again dismissed all claims. They appealed to the Supreme Court of Alabama. During the appeal, they settled with the third-party purchasers, leaving only their claims against the bank.The Supreme Court of Alabama held that Alabama law does not recognize an independent cause of action for breach of the duty of good faith and fair dealing and affirmed dismissal of that claim. However, the Court found that the couple adequately pleaded claims for breach of contract (due to the bank’s alleged refusal to allow reinstatement), wrongful foreclosure, and unjust enrichment. The Court reversed dismissal of those claims and remanded the case for further proceedings. View "Laborde v. Citizens Bank, N.A." on Justia Law

A nonprofit environmental organization sued a manufacturer of feminine hygiene products, alleging that the company marketed certain products as “organic” or “made with organic ingredients” in violation of California’s organic products law. The complaint claimed that these products, such as period underwear, pads, and panty liners, contained much less than the minimum required percentage of certified organic materials, and included several synthetic or non-organic components not permitted under state and federal organic standards. The organization sought to prevent the manufacturer from advertising and selling these products as organic within California.The Superior Court of Alameda County granted judgment on the pleadings in favor of the manufacturer. The court reasoned that California’s organic products law, known as the California Organic Food and Farming Act (COFFA), did not apply to personal care products like the ones at issue, but only to specifically enumerated items such as agricultural products, cosmetics, and pet food. Based on this interpretation, the trial court concluded that the plaintiff’s claims failed as a matter of law and entered judgment for the defendant.The California Court of Appeal, First Appellate District, Division Two, reviewed the case de novo. It concluded that the statutory text, legislative history, and public policy underlying COFFA support a broad interpretation. The Court held that COFFA applies to all products sold as “organic” or containing “organic” materials within California, including feminine hygiene and personal care products, unless specifically exempted. The Court rejected the argument that such products are categorically excluded and emphasized the statute’s intent to regulate consumer organic claims broadly. The judgment of the trial court was therefore reversed. View "Environmental Democracy Project v. Rael, Inc." on Justia Law