Justia Consumer Law Opinion Summaries

Todd alleges that in 2012 he received a recorded telephone message from Collecto asking him to call and help the company locate his mother, Terry. He called; a Collecto representative told him that Terry owed AT&T money for cell phone service. Todd stated that he is not Terry, but the representative continued to discuss the alleged debt without asking how to reach Terry or asking Todd to pay the bill. Todd claimed that this interaction harmed him emotionally and violated the Fair Debt Collection Practices Act, 15 U.S.C. 1692b, which permits a debt collector to call a third party for help in locating a “consumer” but prohibits revealing the existence of the consumer’s debt to the third party. Section 1692f prohibits “unfair or unconscionable means to collect or attempt to collect any debt.” The district court concluded that Todd lacked standing under the Act. The Seventh Circuit affirmed, finding that Todd lacked standing under 1692b and failed to state a claim under 1692f. View "Todd v. Collecto, Inc." on Justia Law

Plaintiff filed suit against debt management businesses and individual employees of those businesses on behalf of herself and a statewide class of about 10,000 consumers. The parties agreed to allow a magistrate judge to enter a final judgment in the class action. The parties then reached a settlement agreement. Five class members and the Attorneys General of Connecticut, Florida, Maine, New York, and West Virginia objected to the settlement agreement. The court concluded that the magistrate judge had subject-matter jurisdiction to enter a final judgment because absent class members were not parties whose consent was required for a magistrate judge to enter a final judgment under 28 U.S.C. 636(c). However, the court vacated the judgment because the magistrate judge abused his discretion when he found, without adequate evidentiary support, that defendants could not satisfy a significant judgment. Accordingly, the court remanded for further proceedings. View "Day v. Persels & Assoc., LLC, et al." on Justia Law

Mortgagors appealed the district court's grant of judgment on the pleadings to their lenders in a dispute regarding a home loan. At issue on appeal was whether mailing a notice of rescission within three years of consummating a loan was sufficient to "exercise" the right to rescind a loan transaction under 15 U.S.C. 1635(a) or, alternatively, whether a party seeking to rescind the transaction was required to file a lawsuit within the three-year statutory period. The court held that a party seeking to rescind a loan transaction must file suit within three years of consummating the loan. Accordingly, the court affirmed the district court's judgment on the pleadings in favor of the lenders. View "Jesinoski, et al. v. Countrywide Home Loans, Inc., et al." on Justia Law

The defendants, affiliated companies, owned ATMs in Indianapolis bars that were popular with college students. Plaintiffs filed a purported class action, based on violation of the Electronic Funds Transfer Act, 15 U.S.C. 1693b(d)(3). At the time, the Act required a sticker notice on the ATM and an onscreen notification during transactions. Defendants provided onscreen notice but not, according to the complaint, a sticker. The Act has been amended to remove the sticker notice requirement. The district court decertified the class. The Seventh Circuit reversed, finding that the district judge did not provide adequate explanation. While the compensatory function of the class action has no significance in this case, the damages sought by the class, and, more importantly, the attorney’s fee that the court will award if the class prevails, will likely make the suit a wake‐up call and have a deterrent effect on future violations of the Electronic Funds Transfer Act. View "Hughes v. Kore of IN Enters., Inc." on Justia Law

Plaintiffs filed a putative class action suit against CMH Homes, Vanderbilt and others in state court. The companies subsequently filed a petition in the district court alleging that plaintiffs' claims were subject to mandatory arbitration. The district court dismissed the petition. The companies argued that the district court erred by concluding that it lacked diversity jurisdiction. The court concluded that the district court correctly reasoned that Vaden undermined Advance America and required the court's departure from that precedent. Following the Vaden approach, the district court properly looked through the arbitration petition to the state court complaint to determine the amount in controversy. Nonetheless, the court remanded for the district court to calculate an amount in controversy and to determine on that basis whether it had jurisdiction over the putative class action under 28 U.S.C. 1332(d)(2). View "CMH Homes, Inc., et al. v. Goodner, et al." on Justia Law

In 2007, Gager applied for a line of credit to purchase computer equipment. The application required that she provide her home phone number. Gager listed her cellular phone number without stating that the number was for a cellular phone, or indicating that Dell should not use an automated telephone dialing system to call her at that number. Gager defaulted on the loan Dell granted. Dell began using an automated telephone dialing system to call Gager’s cell phone, leaving pre-recorded messages concerning the debt. In 2010, Gager sent a letter, listing her phone number and asking Dell to stop calling it regarding her account. The letter did not indicate that the number was for a cellular phone. Dell continued to call, using an automated telephone dialing system. Gager filed suit, alleging that Dell violated the Telephone Consumer Protection Act of 1991, 47 U.S.C. 227(b)(1)(A)(iii). The district court dismissed on the theory that she could not revoke her consent once it was given. The Third Circuit reversed. The fact that Gager entered into a contract with Dell does not exempt Dell from the TCPA. Dell will still be able to call Gager about her delinquent account, but not using an automated dialing system. View "Gager v. Dell Fin. Servs. LLC" on Justia Law

Carrera sued Bayer, claiming that Bayer falsely advertised its product One-A-Day WeightSmart as a multivitamin and dietary supplement that had metabolism-enhancing effects due to its ingredient, epigallocatechin gallate, a green tea extract. The daily dose was one tablet and the price was about $8.99 for 50 tablets. Bayer sold WeightSmart through retail stores until 2007 and did not sell directly to consumers. Carrera initially sought to certify a nationwide class under Fed. R. Civ. P. 23(b)(3), bringing a claim under the New Jersey Consumer Fraud Act. The court denied certification because New Jersey law did not apply to out-of-state customers. Carrera then moved to certify a Rule 23(b)(3) class of Florida consumers under the Florida Deceptive and Unfair Trade Practices Act. Bayer challenged certification, reasoning that class members are unlikely to have documentary proof of purchase and Bayer has no list of purchasers. The Third Circuit vacated class certification. If class members are impossible to identify without extensive and individualized fact-finding or mini-trials, a class action is inappropriate. If class members cannot be ascertained from a defendant’s records, there must be “a reliable, administratively feasible alternative,” not a method that would amount to no more than ascertaining by potential class members‟ say so.”View "Carrera v. Bayer Corp." on Justia Law

Plaintiffs filed suit against defendants alleging claims under, inter alia, the Truth in Lending Act (TILA), as amended by the Home Ownership Equity Protection Act, 15 U.S.C. 1602 et seq. Defendants are persons and entities involved in the transactions related to the financing of an addition to a house on plaintiffs' property. The court recently joined the Ninth and Tenth Circuits in holding that notice was not sufficient to exercise the right of rescission. In this instance, the court concluded that the district court erred in finding that plaintiffs' notice was sufficient to exercise the right of rescission under section 1635 of TILA. Therefore, plaintiffs' right of rescission expired upon the sale of the property. Accordingly, the court reversed the district court's finding that plaintiffs' notice was sufficient to exercise the TILA statutory right of rescission. The court affirmed, however, the district court's grant of summary judgment, the dismissal of plaintiffs' claims, and the dismissal of the Hartmans as parties to the case. View "Hartman, et al. v. Smith, et al." on Justia Law

In 2004, Plaintiffs refinanced their home by means of a loan from Downey Savings and Loan Association (Downey), a federal insured financial institution. In 2008, Plaintiffs' monthly loan payment doubled. Later that year, Downey was closed and the FDIC was appointed as its receiver. U.S. Bank subsequently assumed all of Downey's loans and mortgages. After Plaintiffs defaulted on their mortgage loan, U.S. Bank conducted a foreclosure sale and recorded a foreclosure deed. Plaintiffs, in turn, sued U.S. Bank, claiming that the loan made by Downey violated various state consumer protection laws and that the foreclosure was unlawful. U.S. Bank removed the case to federal district court, which granted summary judgment to U.S. Bank. The First Circuit Court of Appeals affirmed, holding (1) the Financial Institutions Reform, Recovery, and Enforcement Act's exhaustion requirement applied to Plaintiffs' consumer protection claims, and therefore, Plaintiffs' failure to file those claims with the FDIC divested the district court of subject-matter jurisdiction; and (2) the transfer of a mortgage, authorized by federal law, obviates the need for a specific written assignment of the mortgage that state law would otherwise require, and thus, the foreclosure sale in this case was lawful. View "Demelo v. U.S. Bank Nat'l Ass'n" on Justia Law

The issue before the Tenth Circuit in this case centered on a written consumer contract for the sale of goods and whether it incorporated by reference a separate document entitled "Terms of Sale" which was available on the seller's website, but that the contract stated that it was "subject to" the seller's "Terms of Sale" but does not specifically reference the website? Finding no controlling precedent, the Tenth Circuit decided to certify the question to the Oklahoma Supreme Court. View "Walker, et al v. BuildDirect.com Technologie" on Justia Law