Justia Consumer Law Opinion Summaries

Retired Hall of Fame football player, James "Jim" Brown, filed suit against EA, alleging that EA violated section 43(a) of the Lanham Act, 15 U.S.C. 1125(a), through the use of Brown's likeness in EA's "Madden NFL" series of football video games. The court rejected the "likelihood of confusion" test and the "alternative means" test, concluding that the only relevant legal framework for balancing the public's right to be free from consumer confusion about Brown's affiliation with "Madden NFL" and EA's First Amendment rights in the context of Brown's section 43(a) claim was the Rogers v. Grimaldi test. Applying the Rogers test, the court concluded that the use of Brown's likeness was artistically relevant to the "Madden NFL" games and that there were no alleged facts to support the claim that EA explicitly mislead consumers as to Brown's involvement with the games. In this case, the public interest in free expression outweighed the public interest in avoiding consumer confusion. Accordingly, the court affirmed the district court's grant of EA's motion to dismiss. View "Brown v. Electronic Arts, Inc." on Justia Law

Plaintiffs filed a putative consumer class action suit against DirecTV and Best Buy, alleging violations of California's consumer protection laws. The arbitration agreement at issue in this instance was a customer service agreement between DirecTV and individuals who believed they purchased DirecTV equipment from Best Buy stores. AT&T Mobility v. Concepcion held that Section 2 of the Federal Arbitration Act (FAA), 9 U.S.C. 2, preempted the State of California's rule rendering unenforceable arbitration provisions in consumer contracts that waive collective or class action proceedings. The court concluded that the arbitration agreement in this case was enforceable under Concepcion and, therefore, the district court did not err in compelling plaintiffs to arbitrate their claims against DirecTV. The court concluded, however, that plaintiffs were not required to arbitrate their claims with Best Buy. Accordingly, the court affirmed in part, reversed in part, and remanded for further proceedings. View "Murphy v. DirecTV, Inc." on Justia Law

Green sued under the Truth in Lending Act, 15 U.S.C. 1606, claiming that U.S. Cash Advance misstated her loan’s annual percentage rate. The lender requested arbitration under the loan agreement, which referred to “binding arbitration by one arbitrator by and under the Code of Procedure of the National Arbitration Forum.” The agreement was signed in 2012; the Forum has not accepted new consumer cases for arbitration since 2009, when it settled a suit alleging bias in merchants’ favor. The lender asked the court to appoint a substitute arbitrator under 9 U.S.C. 5. The judge declined, stating that identification of the Forum as arbitrator was “integral.” The Seventh Circuit reversed, reasoning that the agreement calls for use of the Forum’s Code of Procedure, not for the Forum itself to conduct proceedings. The court noted that the lender will have to “live with” the judge’s broad discretion in choosing an arbitrator, who might be familiar with practices in the payday loan industry or open to use of claimant classes in arbitrations, perhaps on a theory “that a consumer who would not voluntarily waive her rights under the Truth in Lending Act probably should not be deemed to have implicitly waived her right to the only procedure that could effectively enforce those rights.” View "Green v. U.S. Cash Advance IL, LLC" on Justia Law

The Thomas M. Cooley Law School, accredited by the ABA, enrolls more students than any other U.S. law school and plans to expand. Cooley charges full-time students tuition of $36,750 per year, exclusive of other costs, and, according to U.S. News & World Report, has the lowest admission standards of any accredited law school. The school has a very low retention rate. In a 66-page complaint, 12 graduates claimed that the school disseminated false employment statistics, upon which they relied as assurances that they would obtain full-time attorney jobs after graduating. The graduates did not obtain the kind of employment the statistics advertised; some found employment at all. They claimed that, had they known the truth, they would not have attended Cooley or would have paid less tuition, and sought, among other relief, partial tuition reimbursement, which they estimated for the class would be $300,000,000. The district court dismissed. The Sixth Circuit affirmed, reasoning that the Michigan Consumer Protection Act does not apply to the facts. The complaint shows that one of the statistics on which they relied was objectively true and reliance on the statistics, without further inquiry, was unreasonable. View "MacDonald v. Thomas M. Cooley Law School" on Justia Law

Plaintiffs filed suit against Chase under the Truth in Lending Act (TILA), 15 U.S.C. 1641(g), alleging that Chase did not comply with disclosure requirements when it did not inform them that it had been assigned an interest in their mortgage. The court concluded that the assignment was an "administrative convenience" within the meaning of section 1641(f) because the assignment allowed Chase to perform foreclosure, a requirement of servicing the loan. Accordingly, Chase was not subject to the disclosure requirements and the court affirmed the district court's grant of summary judgment in favor of Chase. View "Reed, Jr., et al. v. Chase Home Finance, LLC" on Justia Law

This case involved arbitration proceedings stemming from plaintiff's class action suit alleging, among other things, that SouthernLINC's termination fees were unlawful penalties under Georgia law. SouthernLINC, a wireless provider, appealed the district court's denial of its motion to vacate two arbitration awards. Under the standard set forth by the Supreme Court in Oxford Health Plans LLC v. Sutter, the court concluded that the arbitrator did not exceed his powers under section 10(a)(4) of the Federal Arbitration Act (FAA), 9 U.S.C. 1 et seq., either in construing the arbitration clause as he did or in certifying a class. Accordingly, the court affirmed the judgment of the district court. View "Southern Communications Serv. v. Thomas" on Justia Law

Plaintiffs in these consolidated appeals brought claims under the Truth in Lending Act (TILA), 15 U.S.C. 1601 et seq., related to their mortgage transactions. The court held that to accomplish rescission within the meaning of section 1635(f), the obligor must file a rescission action in court. Because neither plaintiffs accomplished rescission in this way within three years of their respective transactions, their right to rescind expired and the district court correctly entered summary judgment on these claims. Further, plaintiffs were not entitled, as a matter of law, to money damages for the banks' refusal to rescind, although their claim was cognizable, where the violation - that each set of plaintiffs were given one, rather than two TILA disclosures - was not facially apparent on the loan documents as set forth in section 1641. View "Keiran, et al. v. Home Capital, Inc., et al." on Justia Law

Appellant signed a loan agreement with Bank for a line of credit for his business (Business). Appellant later defaulted on the loan, and Bank brought a collection action against Appellant, his wife, their conjugal partnership, and Business. The FDIC subsequently took over the Bank as receiver and obtained summary judgment in its favor on the collection action. The district court also dismissed Appellants' counterclaim for lack of jurisdiction, finding that Appellants had not timely taken the steps necessary to maintain an action against the FDIC. The First Circuit Court of Appeals affirmed, holding (1) summary judgment was properly granted on the collection action because factual disputes did not remain concerning Bank's role in causing Appellants to breach their loan agreement and whether Appellants should be released from their obligations under that agreement; and (2) the district court correctly dismissed Appellants' counterclaims on jurisdictional grounds, as the Bank had insufficient assets to make any distribution on the claims of general unsecured creditors, including Appellants if they prevailed on their counterclaim, and therefore, the claim was not redressable. View "Fed. Deposit Ins. Corp., as receiver for R-G Premier Bank of P.R. v. Estrada-Rivera" on Justia Law

Plaintiffs filed suit against Wells Fargo under the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692-1692p, and the Equal Credit Opportunity Act (ECOA), 15 U.S.C. 1691-1691f. The court affirmed the district court's dismissal of plaintiffs' FDCPA claim because the complaint did not plausibly allege that Wells Fargo was a debt collector under section 1692a(6). The court reversed, however, the district court's dismissal of the ECOA claim where the complaint's allegations that Wells Fargo took an adverse action without complying with ECOA's notice requirements were enough for the ECOA claim to survive a motion to dismiss because the parties agreed that Wells Fargo did not send plaintiffs an adverse action notice. View "Schlegel v. Wells Fargo Bank" on Justia Law

Ferraro suffered serious burns after falling asleep next to the power adapter of her newly purchased laptop computer. She filed a product liability suit, alleging a design defect that allowed the power adapter to overheat, that HP failed to include adequate warnings about the power adapter’s propensity to overheat, and that HP breached an implied warranty of merchantability. The district court granted HP summary judgment, reasoning that Ferraro would be unable to show that the adapter was “unreasonably dangerous,” as required for her design defect claim. The Seventh Circuit affirmed. Illinois law provides two alternative methods of establishing unreasonable danger: the “consumer-expectations test” and the “risk-utility test.” Ferraro appealed with respect to the consumer expectations test, but, under Illinois law, the risk-utility test “trumps” in design defect cases if the two methods of establishing unreasonable dangerousness have conflicting results. The district court’s finding that Ferraro could not succeed under the risk-utility test furnished an independent, unchallenged ground for its decision. View "Ferraro v. Best Buy Stores, L.P." on Justia Law