Justia Consumer Law Opinion Summaries

Plaintiffs filed suit against RAC after entering into a rental agreement with RAC for a wooden trundle bed and mattress infested with bedbugs. On appeal, plaintiffs challenged the district court's order compelling arbitration of their breach of warranty claim under the Magnuson-Moss Warranty Act, 15 U.S.C. 2301 et seq. Relying on regulation promulgated by the FTC under its authority to interpret the Act, plaintiffs argued that RAC could not require binding arbitration as part of a consumer warranty. The court concluded that the district court erred in holding that the FTC regulations contained no ban on binding arbitration. However, the FTC arbitration ban simply did not apply to plaintiffs' rental agreement with RAC. Because plaintiffs have not linked RAC's warranty to any sale, they failed to establish the existence of a written warranty under FTC regulations. Accordingly, the binding arbitration clause was enforceable and the court affirmed the judgment of the district court. View "Seney v. Rent-a-Center, Inc." on Justia Law

Appellant filed two amended qui tam actions against her employer, a pharmaceutical company and its subsidiary (collectively, Appellees), under the federal False Claims Act (FCA), alleging that Appellees failed adequately to disclose the risks associated with some of their drugs and that this failure resulted in the submission of false claims by third-party patients and physicians for government payment. The district court dismissed both of Appellant's actions under Fed. R. Civ. P. 9(b) for failure to plead fraud with particularity and under Fed. R. Civ. P. 12(b)(6) for failure to state a claim. Appellant subsequently sought to amend the second amended complaint, asserting more theories of FCA liability, but the district court refused to allow further amendment. The First Circuit Court of Appeals affirmed the district court's rulings regarding the dismissal of Appellant's claim under Rule 9(b) and the denial of Appellant's proposed amendments, holding (1) Appellant's claims on all theories which were presented failed under Rule 9(b); and (2) the district court did not err in denying Appellant's motion to amend. View "United States ex rel. Ge v. Takeda Pharm. Co. Ltd." on Justia Law

Plaintiff was sued by Asset Acceptance, a debt collector, for a debt arising from her purchase of natural gas for household use. She sued, claiming that Asset Acceptance sued after the statute of limitations on the creditor’s claim had run, in violation of the Fair Debt Collection Practices Act, 15 U.S.C. 1692. Plaintiff moved to certify a class of debtors sued, after the limitations period, by Asset Acceptance for debts from sale of natural gas to consumers. The district judge waited 25 months and denied the motion. The class would have 793 members, of whom 343 reside in Illinois; 290 were sued four to five years after the claims accrued and 45 were sued more than five years after accrual. The judge shrank the class to 45, then to 23, ruling that suing to collect a debt but failing to serve the defendant did not violate the Act even if the suit was untimely, and concluded that 23 was too small a number to justify a class action. The Seventh Circuit reversed, finding that all 343 Illinois residents were proper class members because the applicable statute of limitations is four years. Certification need not be limited to Illinois residents or to claims under the federal Act. View "Phillips v. Asset Acceptance, LLC" on Justia Law

In 2006, Plaintiff financed a purchase of residential property. Residential Finance was the lender; Chase serviced the loan. In 2011 Plaintiff sent Chase a “Qualified Written Request” under the Real Estate Settlement Procedures Act, 12 U.S.C. 2605(e), requesting information about the amount owed on the loan, the identity of the “current holder,” the date Chase began servicing the loan, and a breakdown of accrued charges. Plaintiff disputed late fees and other charges and stated that Chase had refused a loan modification for which she qualified and had failed to provide a copy of the Note as requested. Chase sent some material, but stated that any requested information not included was either unavailable or considered proprietary; the letter did not provide the identity of the loan’s owner or information on the correctness of Plaintiff’s account, and did not provide contact information for obtaining assistance. Plaintiff sued, alleging that she made excess payments that Chase failed to credit, violations of the Truth in Lending Act, 15 U.S.C. 1641(f)(2), RESPA, the Ohio Consumer Sales Practices Act, and conversion. Chase finally identified the owner of the loan: Fannie Mae. The district court dismissed. The Sixth Circuit affirmed with respect to TILA, but reversed dismissal of the RESPA claim, finding that Plaintiff adequately alleged causation of damages. View "Marais v. Chase Home Fin., LLC" on Justia Law

Plaintiff filed suit against defendant, an attorney, for an alleged violation of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692. At issue on appeal was whether a defendant remained liable for plaintiff's attorney's fees accrued after defendant offered a settlement that included the maximum available damages and, as mandated by statute, plaintiff's fees and costs, but that did not include an offer of judgment. The court concluded that because defendant's initial offer to settle did not include an offer of judgment, it did not fully resolve the dispute between the parties, and thus further litigation by plaintiff was not per se unreasonable; the district court did not abuse its discretion in awarding full attorney's fees to plaintiff; and, therefore, the court affirmed the judgment. View "Cabala v. Crowley" on Justia Law

Plaintiffs appealed from the district court's grant of defendants' motion for summary judgment on plaintiffs' Truth in Lending Act (TILA), 15 U.S.C. 1601 et seq., claims and denial of plaintiffs' motion for reconsideration of an earlier dismissal of their Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692 et seq., claims against The Money Store. The court held that the district court erred in concluding that The Money Store was not a "debt collector" under the false name exception to FDCPA liability. Where a creditor, in the process of collecting its own debts, hires a third party for the express purpose of representing to its debtors that the third party is collecting the creditor's debts, and the third party engages in no bona fide efforts to collect those debts, the false name exception exposes the creditor to FDCPA liability. In regards to the TILA claims, the court concluded that the district court correctly determined that, because plaintiffs' mortgage documents did not name The Money Store as the person to whom the debt was initially payable, The Money Store was not a "creditor" under TILA and was therefore not subject to liability. Accordingly, the court affirmed in part, vacated in part, and remanded for further proceedings. View "Vincent v. The Money Store" on Justia Law

Med‐1 buys delinquent debts and purchased Suesz’s debt from Community Hospital. In 2012 it filed a collection suit in small claims court and received a judgment against Suesz for $1,280. Suesz lives one county over from Marion. Though he incurred the debt in Marion County, he did so in Lawrence Township, where Community is located, and not in Pike Township, the location of the small claims court. Suesz says that it is Med‐1’s practice to file claims in Pike Township regardless of the origins of the dispute and filed a purported class action under the Fair Debt Collection Practices Act venue provision requiring debt collectors to bring suit in the “judicial district” where the contract was signed or where the consumer resides, 15 U.S.C. 1692i(a)(2). The district court dismissed after finding Marion County Small Claims Courts were not judicial districts for the purposes of the FDCPA. The Seventh Circuit affirmed.View "Suesz v. Med-1 Solutions, LLC" on Justia Law

Mead Johnson, purchased a primary Commercial General Liability policy from National Union, with a limit of $2 million for liability for “personal and advertising injury” and an excess liability policy from Lexington, with a limit of $25 million. Mead’s main product, Enfamil infant formula, is sold worldwide. Mead’s competitor, PBM, sued Mead for false advertising and consumer fraud and Mead sued PBM for trade dress infringement. PBM claimed that Mead had falsely asserted that PBM’s generic formula lacked key fats that promote brain and eye development. The suit sought $500 million in damages for product disparagement, a tort that the policies cover as a form of “advertising injury.” Mead did not notify the insurers of the suit until December 2009, after the suit ended in the $13.5 million verdict against Mead. Mead wanted its insurers to pay that judgment, plus a $15 million settlement that it made to resolve the class action suit. The insurers obtained declaratory judgments that they were not required to pay. The Seventh Circuit reversed the summary judgment in favor of the insurers in the suit relating to the PBM litigation, but affirmed the judgment in favor of National Union in the suit arising from the class action against Mead. View "Nat'l Union Fire Ins. Co. v. Mead Johnson & Co., LLC" on Justia Law

137 named plaintiffs filed suit against 25 financial institutions alleging, among other things, that the institutions' deceptive mortgage lending and securitization practices decreased the value of their homes, impaired their credit scores, and compromised their privacy. The court concluded that the action was properly removed from state court to federal court because more than 100 named plaintiffs proposed a joint trial and because the other prerequisites of the Class Action Fairness Act of 2005 (CAFA), Pub. L. No. 109-2, 119 Stat. 4, were satisfied. However, the court reversed and remanded to the district court to dismiss without prejudice the claims of all plaintiffs but the first named plaintiff because, under Federal Rule of Civil Procedure 20(a), the First Amended Complaint did not present common questions of law. View "Visendi v. Bank of America" on Justia Law

Plaintiffs, minors who were born with permanent brachial plexus injuries, sued through their mothers and next friends, alleging separately that their injuries were caused by the application of excessive traction during delivery. At both trials, the defense introduced into evidence a case report that purported to document an instance of brachial plexus injury occurring in a delivery. Plaintiffs lost their medical malpractice cases and subsequently sued the authors of the report, the journal in which it was published, and the publisher, contending that the report was false and that Defendants engaged in fraudulent conduct in publishing the report. The district court dismissed the complaint for failure to state a claim upon which relief could be granted. The First Circuit Court of Appeals affirmed, holding that, because the causation allegation was wholly speculative, Plaintiffs' claim did not reach the plateau of plausibility that is the "new normal in federal civil procedure." View "A.G. v. Elsevier, Inc." on Justia Law