Justia Consumer Law Opinion Summaries

Plaintiffs, business entities owning recovery rights assigned by health insurers and other third-party Medicare payors, alleged that Defendants, including a drug manufacturer, a specialty pharmacy, and healthcare nonprofits, colluded to inflate the price and quantity of the drug Xenazine. This alleged scheme purportedly violated the Racketeer Influenced and Corrupt Organizations Act (RICO) and various state laws, causing the Assignors to reimburse inflated Xenazine prescriptions at supra-competitive prices.The United States District Court for the Eastern District of Virginia dismissed the class-action complaint with prejudice, concluding that Plaintiffs failed to adequately allege that Defendants’ conduct proximately caused their injuries. The court emphasized that RICO’s proximate-causation requirement focuses on the directness of the harm, not its foreseeability. The court found the alleged causal chain too attenuated, involving numerous independent actors like physicians and pharmacists, and dismissed the state-law claims for similar reasons.The United States Court of Appeals for the Fourth Circuit affirmed the district court’s dismissal of the federal RICO claims, agreeing that Plaintiffs failed to establish proximate causation. The court noted that the alleged scheme had more direct victims, such as distributors and wholesalers, and that the volume of Xenazine prescriptions depended on the independent decisions of doctors. The court also affirmed the dismissal of the state-law consumer-protection and unjust-enrichment claims, finding them insufficiently pleaded.The Fourth Circuit reversed the district court’s conclusion that Plaintiffs had standing to bring claims on behalf of unidentified assignors, remanding those claims for dismissal without prejudice. The court upheld the district court’s denial of post-judgment relief and leave to amend the complaint, concluding that further amendment would be futile. View "MSP Recovery Claims, Series LLC v. Lundbeck LLC" on Justia Law

Charles R. Maples and Kathy S. Brown, owners of two condominium units, obtained a judgment against Compass Harbor Village Condominium Association and Compass Harbor Village, LLC for damages due to mismanagement. The judgment awarded Maples $134,900 and Brown $106,801, along with specific performance, declaratory relief, and attorney fees. The judgment prohibited the defendants from imposing special assessments to pay for the judgment. The judgment was affirmed in part by the Maine Supreme Judicial Court, but specific performance and the Unfair Trade Practices Act claim were vacated.Maples and Brown recorded writs of execution, obtaining liens against the LLC's and Association's properties. However, the LLC's units were foreclosed by The First, N.A., extinguishing the liens. Maples and Brown then filed a new action in the Superior Court, seeking to enforce the judgment against the remaining seven units not owned by them or foreclosed upon. The case was transferred to the Business and Consumer Docket, where the court dismissed their claims.The Maine Supreme Judicial Court reviewed the case and focused on whether the lower court erred in dismissing the claim to enforce the judgment lien against the seven units under the Maine Condominium Act, 33 M.R.S. § 1603-117. The court held that the proper procedure for enforcing such a lien requires a disclosure proceeding in the District Court, which has exclusive jurisdiction over such matters. The transfer to the Business and Consumer Docket did not cure the jurisdictional issue. Consequently, the court affirmed the dismissal of Maples and Brown’s claims, as the Superior Court and the Business and Consumer Docket lacked jurisdiction to issue the necessary turnover or sale orders under the disclosure statutes. View "Maples v. Compass Harbor Village Condominium Association" on Justia Law

Ryan Six filed a lawsuit against IQ Data International, Inc. under the Fair Debt Collection Practices Act (FDCPA), alleging that IQ sent him a debt verification letter after he had informed the company that all communications should be directed to his attorney. Six claimed that this action violated 15 U.S.C. § 1692c(a)(2), which prohibits debt collectors from directly communicating with a consumer known to be represented by an attorney.The United States District Court for the District of Arizona dismissed Six's action for lack of subject matter jurisdiction, ruling that he lacked Article III standing because he did not suffer an injury in fact. The district court reasoned that receiving one unwanted letter did not constitute a concrete harm akin to those traditionally recognized by American courts, nor was it the type of abusive debt collection practice the FDCPA was intended to prevent.The United States Court of Appeals for the Ninth Circuit reviewed the case and reversed the district court's dismissal. The Ninth Circuit held that Six had Article III standing to bring his claim under § 1692c(a)(2). The court concluded that receiving a letter in violation of this provision constituted a concrete injury because it infringed on Six's privacy interests, a harm that Congress intended to prevent with the FDCPA. The court also found that this harm was analogous to the common law tort of intrusion upon seclusion, which protects against unwanted intrusions into one's private affairs. The court determined that Six's injury was particularized and actual, and that the remaining elements of standing were met, as there was a causal connection between the injury and IQ's conduct, and the relief sought would redress the intrusion.The Ninth Circuit reversed the district court's dismissal and remanded the case for further proceedings consistent with its opinion. View "SIX V. IQ DATA INTERNATIONAL, INC." on Justia Law

A cyberattack on California Pizza Kitchen, Inc. (CPK) in September 2021 compromised the personal information of over 100,000 former and current employees. This led to multiple class action lawsuits against CPK, alleging negligence and other claims. The consolidated plaintiffs reached a settlement with CPK, offering cash payments and credit monitoring services to class members, with CPK required to make payments only to those who submitted valid claims. The settlement's monetary value was estimated at around $950,000, while the attorneys sought $800,000 in fees.The United States District Court for the Central District of California approved the settlement but reserved judgment on the attorneys' fees until after the claims process concluded. The consolidated plaintiffs reported a final claims rate of 1.8%, with the maximum monetary value of the claims being around $950,000. Despite expressing concerns about the scope of attorneys' fees, the district court ultimately awarded the full $800,000 in fees and costs.The United States Court of Appeals for the Ninth Circuit reviewed the case and affirmed the district court's approval of the class settlement, finding that the district court had properly applied the heightened standard to review the settlement for collusion and had not abused its discretion in finding the settlement fair, reasonable, and adequate. However, the Ninth Circuit reversed the fee award, noting that the district court had not adequately assessed the actual value of the settlement and compared it to the fees requested. The case was remanded for the district court to determine the settlement's actual value to class members and award reasonable and proportionate attorneys' fees. View "IN RE: CALIFORNIA PIZZA KITCHEN DATA BREACH LITIGATION" on Justia Law

Lillian Vogt purchased a used van from a dealer and later discovered that the dealer had bought the van from a representative of Progressive Casualty Insurance Company. The van had been classified as a total loss by Progressive but was sold with a clean title instead of a salvage title. Vogt believed that Progressive had mistitled the van and filed claims of fraud, negligent misrepresentation, negligence, and negligence per se against the company. She also sought to certify two classes of individuals who purchased and owned vehicles that Progressive allegedly mistitled in the same manner.The United States District Court for the Eastern District of Missouri denied class certification for both classes. The court concluded that issues common to the putative class members would not predominate over member-specific issues of reliance or causation. Vogt was granted leave to appeal this decision.The United States Court of Appeals for the Eighth Circuit reviewed the district court’s denial of class certification for abuse of discretion. The appellate court agreed with the district court, affirming its decision. The court held that the fraud and negligent misrepresentation claims required proof of reliance, which was a member-specific question unsuitable for class treatment. Similarly, the negligence and negligence per se claims required proof of causation, which also entailed proof of reliance. The court concluded that individualized inquiries into each putative class member’s reasons for purchasing their vehicles would be necessary, making class certification inappropriate. The decision of the district court was affirmed. View "Vogt v. Progressive Casualty Insurance Company" on Justia Law

Eido Hussam Al-Nahhas, an Illinois resident, took out four loans from Rosebud Lending LZO, operating as ZocaLoans, with interest rates up to nearly 700%, far exceeding Illinois law limits. Al-Nahhas alleged that ZocaLoans was a front for two private equity firms, 777 Partners, LLC, and Tactical Marketing Partners, LLC, to evade state usury laws by claiming tribal sovereign immunity through the Rosebud Sioux Tribe. He sued ZocaLoans and the firms for violating Illinois usury statutes and the federal Racketeer Influence and Corrupt Organizations Act.The defendants participated in litigation for fourteen months, including filing an answer, engaging in discovery, and attending status conferences. They later sought to compel arbitration based on an arbitration provision in the loan agreements. The United States District Court for the Northern District of Illinois denied the motion, finding that the defendants had waived their right to compel arbitration by participating in litigation.The United States Court of Appeals for the Seventh Circuit reviewed the case. The court affirmed the district court's decision, holding that the defendants waived their right to arbitrate through their litigation conduct. The court also found that the case was not moot despite the settlement between Al-Nahhas and ZocaLoans, as punitive damages were still at issue. The court granted the parties' motions to file documents under seal. View "Hussam Al-Nahhas v 777 Partners LLC" on Justia Law

Eight Black homeowners in New York City sued a lending institution and affiliated entities, alleging that the lender violated federal, state, and city antidiscrimination laws. They claimed the lender made mortgage refinancing loans with high default interest rates to Black and Latino individuals in poor neighborhoods who had no income, no assets, and low credit scores but high equity in their homes, and then foreclosed on the loans when the individuals defaulted. The United States District Court for the Eastern District of New York entered a final judgment awarding four homeowners $722,044 in compensatory damages and four others nominal damages.The lender appealed, arguing that the district court erred in three ways: by finding the homeowners' claims timely under the doctrine of equitable tolling and the discovery rule of accrual, in its instructions to the jury on disparate impact and disparate treatment theories of discrimination, and in holding that a release-of-claims provision in a loan modification agreement signed by two homeowners was unenforceable as a matter of law.The United States Court of Appeals for the Second Circuit reviewed the case. The court concluded that the district court did not abuse its discretion in holding that the homeowners' claims were timely under the doctrine of equitable tolling. The court also found no error in the district court's instructions to the jury on disparate impact and disparate treatment theories of discrimination. Finally, the court agreed that the release-of-claims provision in the loan modification agreement was unenforceable as a matter of law. Accordingly, the Second Circuit affirmed the judgment of the district court. View "Saint-Jean v. Emigrant Mortg. Co., Inc." on Justia Law

Daniel Garcia purchased cloth facemasks from several retail stores in late 2020. The retailers collected sales tax on these masks, which Garcia believed to be nontaxable. Garcia filed a class action complaint in the Court of Common Pleas of Allegheny County against the retailers, alleging that they collected sales tax on items they knew or should have known were nontaxable, violating the Unfair Trade Practices and Consumer Protection Law (UTPCPL).The Court of Common Pleas overruled the retailers' preliminary objections, which argued that the complaint was legally insufficient. The Superior Court granted the retailers permission to appeal and reversed the trial court's order. The Superior Court concluded that the collection of sales tax did not occur "in the conduct of any trade or commerce" as contemplated by the UTPCPL. The court reasoned that the collection of sales tax is a statutory obligation distinct from the conduct of trade or commerce and that merchants act as agents of the Commonwealth when collecting sales tax.The Supreme Court of Pennsylvania reviewed the case and affirmed the Superior Court's decision. The court held that a merchant’s collection of sales tax does not occur "in the conduct of any trade or commerce" under the UTPCPL. The court emphasized that the collection of sales tax is a statutory obligation imposed on merchants, who act as agents of the Commonwealth, and is distinct from their commercial activities. The court also noted that the Pennsylvania Code requires a clear separation between the advertising of a product’s price and the sales tax due, further supporting the conclusion that tax collection is not part of trade or commerce. View "Garcia v. Foot Locker" on Justia Law

Katelyn Hove was hospitalized in 2018 for pregnancy complications, and the Billings Clinic billed Blue Cross Blue Shield (BCBS) of Montana for her services. BCBS of Montana indicated that BCBS of Texas was her insurance provider. BCBS of Texas paid part of the bill, leaving a balance that Hove did not pay. The clinic assigned the unpaid debt to CB1, a debt-collection agency, which then sued the Hoves for breach of contract, breach of obligation, and unjust enrichment. The Hoves named BCBS of Montana as a third-party defendant. CB1 moved for summary judgment, supported by affidavits from the clinic. Hove responded with a written declaration disputing the charges, including an EOB from BCBS of Texas and an email from the Montana Commissioner of Securities and Insurance.The Thirteenth Judicial District Court, Yellowstone County, granted summary judgment in favor of CB1, reasoning that Hove's declaration and attached EOB were unverified and inadmissible. The court entered a final monetary judgment against the Hoves. The Hoves filed a motion to amend the judgment, attaching a sworn affidavit with the same information as the declaration. The District Court denied the motion, stating that the declaration and its attachments were inadmissible hearsay and that the declaration did not meet the statutory criteria under § 1-6-105, MCA.The Supreme Court of the State of Montana reviewed the case and found that a declaration under § 1-6-105, MCA, is equivalent to an affidavit. The court determined that Hove's declaration, which stated she never spent time in the ICU despite being billed for it, raised a genuine issue of material fact. The court reversed the District Court's summary judgment and remanded the case for trial on the merits. View "CB1 v. Hove" on Justia Law

Plaintiffs Jodi Bourgeois and Pamela Smith filed separate lawsuits against The TJX Companies, Inc., Home Depot U.S.A., Inc., and The Gap, Inc., alleging violations of the New Hampshire Driver Privacy Act (NH DPA). The plaintiffs claimed that the retailers required them to present their driver's licenses for non-receipted returns and subsequently disclosed their driver's license information to a third party, The Retail Equation (TRE), without their consent. The plaintiffs argued that this disclosure violated sections IX(a) and IX(b) of the NH DPA.The United States District Court for the District of New Hampshire dismissed the complaints in all three cases. The court held that the plaintiffs failed to state a claim under the NH DPA because a driver's license in the possession of the person to whom it pertains is not considered a "motor vehicle record" under the statute. The court also found that the information disclosed to TRE was not from a "department record" as defined by the NH DPA.The United States Court of Appeals for the First Circuit reviewed the consolidated appeals. The court affirmed the district court's dismissals, agreeing that the plaintiffs' driver's licenses, in their own possession, are not "motor vehicle records" under the NH DPA. The court also held that the term "department record" refers to authentic copies of documents deposited and kept with the New Hampshire Department of Safety, and the information disclosed to TRE did not fall within this definition. Therefore, the plaintiffs' claims under sections IX(a) and IX(b) of the NH DPA were not supported by the facts alleged. View "Bourgeois v. The TJX Companies, Inc." on Justia Law