Justia Consumer Law Opinion Summaries

The Supreme Court reversed the order of the district court dismissing Plaintiff's complaint against Defendant, his student loan servicer, as expressly preempted by the Higher Education Act (HEA), 20 U.S.C. 1098g, holding that Plaintiff's state law claims were not expressly or implicitly preempted by the HEA.Plaintiff raised claims that Defendant violated the Consumer Protection Act, was negligent in its accounting of his payments, breached the implied covenant of good faith and fair dealing, and engaged in deceit, negligent misrepresentation, or constructive fraud. The district court dismissed the complaint, determining that the HEA expressly preempted Plaintiff's claims. The Supreme Court reversed, holding that Plaintiff's state law claims as pleaded were neither expressly preempted by 20 U.S.C. 1098g, nor were they preempted under conflict preemption, and thus the claims survived dismissal. View "Reavis v. Pennsylvania Higher Education Assistance Agency" on Justia Law

The plaintiffs obtained payday loans from AWL, an online entity owned by the Otoe-Missouria Tribe of Indians. The loan agreement stated that the loan was governed by tribal law and that the borrowers consented to the application of tribal law. The plaintiffs filed a purported class action, asserting that AWL charged unlawfully high interest rates, in violation of federal and Pennsylvania law, including the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1961-1968. The defendants moved to compel arbitration. The district court denied their motion, holding that the loan agreements, which provided that only tribal law would apply in arbitration, stripped the plaintiffs of their right to assert statutory claims and were therefore unenforceable. The Third Circuit affirmed. Because AWL permits borrowers to raise disputes in arbitration only under tribal law, and such a limitation constitutes a prospective waiver of statutory rights, its arbitration agreement violates public policy and is therefore unenforceable. View "Williams v. Medley Opportunity Fund II, LP" on Justia Law

Plaintiff Regina Little asserted claims on her own behalf and on behalf of other New Jersey owners and lessees of 1997, 1998, 1999, and 2000 Kia Sephia vehicles distributed by defendant Kia Motors America, Inc., alleging that those vehicles had a defective brake system. The central question in this appeal was whether the trial court properly permitted plaintiff’s theory of damages based on the cost of brake repairs to be asserted classwide, supported only by aggregate proofs. The jury determined that defendant had breached its express and implied warranties and that the class had sustained damages. The jury found that the class members had suffered $0 in damages due to diminution in value but that each class member had sustained $750 in damages “[f]or repair expenses reasonably incurred as a result of the defendant’s breach of warranty.” The trial court granted defendant’s motion to decertify the class as to the quantum of damages each individual owner suffered. The parties cross-appealed. The Appellate Division reversed the trial court’s post-trial determinations, reinstated the jury’s award for out-of-pocket repair costs based on plaintiff’s aggregate proofs, and remanded for an award of attorneys’ fees. The appellate court held that, notwithstanding the jury’s rejection of plaintiff’s diminution-in-value theory, the trial court should have ordered a new trial on both theories of damages, which it found were not “fairly separable from each another.” Although aggregate proof of damages can be appropriate in some settings, the New Jersey Supreme Court considered such proof improper as presented in this case. The trial court erred when it initially allowed plaintiff to prove class-members’ out-of-pocket costs for brake repairs based on an estimate untethered to the experience of plaintiff’s class. The trial court properly ordered individualized proof of damages on plaintiff’s brake-repair claim based on the actual costs incurred by the class members. Thus, the trial court’s grant of defendant’s motions for a new trial and for partial decertification of the class were a proper exercise of its discretion. View "Little v. Kia Motors America, Inc." on Justia Law

Defendant Javier Torres signed a promissory note (Note) secured by a residential mortgage (Mortgage). Torres defaulted on the Note. CitiMortgage, Inc., discovered that it had lost the original Note but had retained a digital copy setting forth its terms. CitiMortgage assigned the Mortgage and its interest in the Note to plaintiff Investors Bank (Investors). In this appeal, the issue presented for the New Jersey Supreme Court's review was whether Investors could enforce the Note. The Supreme Court affirmed the trial court: Investors Bank could enforce the note. Relying on two statutes addressing assignments, N.J.S.A. 2A:25-1 and N.J.S.A. 46:9-9, as well as common-law assignment principles, the Court held Investors had the right as an assignee of the Mortgage and transferee of the Note to enforce the Note. The Court construed N.J.S.A. 12A:3-309 to address the rights of CitiMortgage as the possessor of a note or other instrument at the time that the instrument was lost, but not to supplant New Jersey assignment statutes and common law in the setting of this appeal or to preclude an assignee in Investors’ position from asserting its rights according to the Note’s terms. Read together, "N.J.S.A. 12A:3-309, N.J.S.A. 2A:25-1, and N.J.S.A. 46:9-9 clearly authorized the assignment and entitled Investors to enforce its assigned Mortgage and transferred Note." View "Investors Bank v. Torres" on Justia Law

The Eleventh Circuit held that plaintiffs lacked Article III standing to pursue their claims under the Fair Debt Collection Practices Act (FDCPA). Plaintiffs alleged that collection letters were misleading and unfair in falsely suggesting that they could be sued or that the debt could be reported to credit-rating agencies. The court wrote that plaintiffs seek to recover for representations that they contend were misleading or unfair, but without proving even that they relied on the representations, much less that the reliance caused them any damages. View "Trichell v. Midland Credit Management, Inc." on Justia Law

The Fourth Circuit vacated the district court's dismissal of plaintiff's complaint alleging claims under the Fair Debt Collection Practices Act (FDCPA). The district court concluded that the entire complaint was time-barred because the more recent violations that plaintiffs alleged were of the "same type" as other violations that occurred outside the one-year limitations period.The court disagreed with the district court's analysis and held that each violation of the FDCPA gives rise to a separate claim governed by its own limitations period. In this case, plaintiffs have alleged at least two potential violations of the FDCPA that are not barred by the one-year limitations period provided by the Act. Therefore, the court remanded for further proceedings. View "Bender v. Elmore & Throop, P.C." on Justia Law

The Supreme Court affirmed Defendant's convictions and sentences for second degree murder and use of a weapon to commit a felony, holding that there was no abuse in the trial proceedings.Specifically, the Court held (1) any error in the admission of statements Defendant made during two interviews was harmless, and the district court did not err when it overruled Defendant's motion to suppress a letter to his sister; (2) the district court did not err when it overruled Defendant's motion to suppress evidence from the search of his cell phone; (3) the district court did not abuse its discretion when it prohibited Defendant from presenting evidence regarding the victim’s mental health and use of alcohol and prescription drugs; (4) the district court did not err when it denied Defendant the right to cross-examine a witness on issues the court determined to lack probative value; and (5) the district court did not err when it allowed evidence that results of certain DNA tests were uninterpretable. View "State v. Said" on Justia Law

The Supreme Court made permanent its preliminary writ of mandamus compelling the circuit court to transfer the underlying lawsuit to St. Charles County, holding that the circuit court had no authority to change venue and transfer the case from St. Charles County to St. Louis County.Universal Credit Acceptance, Inc. (UCA) filed the underlying lawsuit in St. Charles County seeking to recover a judgment arising from Renwick Ware's alleged default on a retail sales installment contract. After the associate circuit division sustained Ware's application for change of judge, Ware filed a motion to change the venue to St. Louis County. The circuit court sustained the motion and transferred the case to St. Louis County. UCA filed a petition for a writ of mandamus, arguing that, pursuant to Rule 51.06(a), Ware waived the right to file a motion to change venue because the motion was not consolidated with his application for change of judge. The Supreme Court issued a preliminary writ that it made permanent, holding that Ware's motion to change venue was improper under Rule 51.06(a), and therefore, UCA demonstrated a clear and unequivocal right to have the case retransferred to St. Charles County. View "State ex rel. Universal Credit Acceptance, Inc. v. Honorable Reno" on Justia Law

A judicial foreclosure proceeding is not a form of debt collection when the proceeding does not include a request for a deficiency judgment or some other effort to recover the remaining debt. If a foreclosure plaintiff seeks not only to foreclose on the property but also to recover the remainder of the debt through a deficiency judgment, then the plaintiff is attempting to collect a debt within the meaning of the Fair Debt Collection Practices Act (FDCPA). But if the plaintiff is simply enforcing a security interest by retaking or forcing a sale of the property, without regard to any additional debt that may be owed, then the FDCPA does not apply.The Ninth Circuit affirmed the district court's dismissal of plaintiff's action under the Fair Debt Collection Practices Act over a judicial foreclosure proceeding in Oregon. The panel held that plaintiff pleaded no conduct by the defendants beyond the filing of a foreclosure complaint and actions to effectuate that proceeding. View "Barnes v. Routh Crabtree Olsen PC" on Justia Law

Following the 2008 financial crisis, the Consumer Financial Protection Bureau (CFPB), was established by the Dodd-Frank Act as an independent regulatory agency tasked with ensuring that consumer debt products are safe and transparent. The administration of 18 existing federal statutes was transferred to CFPB. A new prohibition on unfair and deceptive practices in the consumer-finance sector, 12 U.S.C. 5536(a)(1)(B), gave CFPB extensive rulemaking, enforcement, and adjudicatory powers, including the authority to conduct investigations, issue subpoenas and civil investigative demands, initiate administrative adjudications, prosecute civil actions in federal court, and issue binding decisions in administrative proceedings. CFPB is led by a single Director, appointed by the President with the advice and consent of the Senate, for a five-year term, during which the President may remove the Director only for “inefficiency, neglect of duty, or malfeasance,” 12 U.S.C. 5491(c)(1),(3).CFPB issued a civil investigative demand to Seila, a law firm that provides debt-related legal services. The Ninth Circuit affirmed an order requiring that Seila comply.The Supreme Court vacated. CFPB’s leadership by a single individual removable only for inefficiency, neglect, or malfeasance violates the separation of powers. Precedent has established two exceptions to the President’s unrestricted removal power: for a multi-member body of experts who were balanced along partisan lines, appointed to staggered terms, performed only “quasi-legislative” and “quasi-judicial functions,” and were not to exercise executive power, and for an inferior officer—an independent counsel—who had limited duties and no policymaking or administrative authority. Neither of those exceptions applies to CFPB.The Court declined to extend the precedents to an independent agency led by a single Director and vested with significant executive power. CFPB’s structure has no foothold in history or tradition and is incompatible with the Constitution, which—with the sole exception of the Presidency—avoids concentrating power in the hands of any single individual. The Director’s five-year term and receipt of funds outside the appropriations process heighten the concern that the agency will slip from the Executive’s control and from that of the people. The Court found the Director’s removal protection severable from the other provisions of Dodd-Frank that establish CFPB. View "Seila Law LLC v. Consumer Financial Protection Bureau" on Justia Law