Justia Consumer Law Opinion Summaries

Honda appealed the district court's decision to certify a nationwide class of all consumers who purchased or leased Acura RLs equipped with a Collision Mitigation Braking System (CMBS) during a 3 year period under Rule 23(b)(3). Plaintiffs alleged that certain advertisements misrepresented the characteristics of the CMBS and omitted material information on its limitations. The court held that the district court erred because it erroneously concluded that California law could be applied to the entire nationwide class, and because it erroneously concluded that all consumers who purchased or leased the Acura RL could be presumed to have relied on defendant's advertisements, which allegedly were misleading and omitted material information. Accordingly, the court vacated the class certification order. View "Mazza, et al. v. American Honda Motor Co." on Justia Law

Plaintiff sued defendants, a law firm and its attorney, alleging that they violated the Fair Debt Collection Practices Act (FDCPA), 15 U.S.c. 1692 et seq. At issue was whether defendants' Rule 68 offer of judgment mooted plaintiff's case. Also at issue was whether the district court properly dismissed plaintiff's complaint pursuant to Rule 12(b)(6). The court held that defendants' first offer, a payment of $250 in actual damages, and defendants' second offer, conditioning the amount of actual damages on the district court's determination, did not moot plaintiff's case. The court also held that the district court erred in concluding that plaintiff's amended complaint failed to allege violations of 15 U.S.C. 1692c(a)(2), and 1692e(11). Therefore, the court reversed the judgment of the district court and remanded for further proceedings. View "Warren v. Sessoms & Rogers, P.A." on Justia Law

Plaintiff commenced this action against Burger King, raising claims under Oregon law for product liability, negligence, and vicarious liability after plaintiff discovered that a Burger King employee had spit into his Whopper. Plaintiff subsequently appealed from a final judgment on the pleadings dismissing his diversity action against defendants. This order certified to the Supreme Court of Washington the dispositive and unsettled question of Washington state law at issue in this appeal, namely, whether the Washington Products Liability Act (WPLA), Wash. Rev. Code 7.72.010, permitted relief for emotional distress damages, in the absence of physical injury to the plaintiff purchaser, caused by being served and touching, but not consuming a contaminated food product. View "Bylsma v. Burger King Corp., et al." on Justia Law

Plaintiff asserted a right to rescind a mortgage loan on the ground that the disclosures made at closing did not comply with the Massachusetts Consumer Credit Cost Disclosure Act, Mass. Gen. Laws ch. 140D, 10, the equivalent of the Truth in Lending Act, 15 U.S.C. 1601. The bankruptcy court dismissed for failure to state a claim, finding that the disclosures complied with the law, and waiver of the right to rescind the transaction. The district court affirmed the judgment for failure to state a claim, but did not reach the issue of waiver. The First Circuit affirmed, holding that plaintiff knowingly and voluntarily waived his rights in exchange for a reduction in the interest rate. The court also found that the disclosures at issue were not deficient. View "DiVittorio v. HSBC Bank USA, NA" on Justia Law

The issue before the Supreme Court concerned a dispute between Petitioners Donia Townsend and several other home purchasers and Defendant Quadrant Corporation and its parent companies over an arbitration clause in the home purchasers' individual purchase contracts. Several years after the home purchases, Townsend and the other purchasers jointly filed suit in superior court against Quadrant alleging outrage, fraud, unfair business practices, negligence, negligent misrepresentation, rescission and breach of warranty. In support of these allegations, they claimed that Quadrant knowingly engaged in shoddy workmanship in building the homes, and that this resulted in serious construction defects that caused personal injuries relating to mold, pests, and poisonous gases. They claimed that the arbitration clause in their purchase agreements was unenforceable. The superior court denied Quadrant's motion to compel arbitration. The Court of Appeals reversed. Upon review, the Supreme Court affirmed the appellate court's holding that the homeowners’ procedural unconscionability claim that pertained to the entire purchase contract, including the arbitration clause, was to be decided by an arbitrator. View "Townsend v. Quadrant Corp." on Justia Law

Merchants challenged 2010 N.J. Laws Chapter 25, amending the unclaimed property statute, N.J. Stat. 46:30B, to provide for escheat of stored value cards (gift cards). Chapter 25 presumes cards to be abandoned after two years of inactivity and requires issuers to transfer remaining value to the state. Issuers must obtain name and address of the purchaser or owner of each card. If the issuer's state exempts cards from its unclaimed property statute, unredeemed balances of cards previously-issued in New Jersey, where information was not recorded, must be reported to New Jersey. The address where the card issued or sold is presumed to be the owner's domicile. The district court enjoined retroactive application of Chapter 25 and prospective enforcement of the place-of-purchase presumption, but declined to enjoin data collection and two-year abandonment provisions. The Third Circuit affirmed. Chapter 25 substantially impaired contractual relationships by imposing unexpected obligations and did not reasonably accommodate the rights of the parties in light of the public purpose. The abandonment period is not preempted by the Credit CARD Act, 15 U.S.C. 1693l-1(c). The place-of-purchase presumption is preempted by federal common law, under which the first opportunity to escheat belongs to the state of the last known address of the creditor, shown by the debtor's records. If the primary rule does not apply, the right to escheat is with the state in which the debtor is incorporated. View "NJ Retail Merch. Assoc. v. Sidamon-Eristoff" on Justia Law

Plaintiffs filed a complaint alleging, among other things, a violation of the Truth in Lending Act (TILA), 15 U.S.C. 1601 et seq. The district court subsequently granted defendant's Rule 12(b)(6) motion and plaintiffs timely appealed. The court held that plaintiffs clearly alleged in their complaint that they were never given a Notice of Right to Cancel that complied with TILA. Consequently, the complaint was not subject to dismissal under Rule 12(b)(6) and therefore, the court reversed and remanded. View "Balderas, et al. v. Countrywide Bank, N.A., et al." on Justia Law

Petitioner Countrywide Home Loans, Inc. appealed an award by the Commissioner of the State Banking Department in favor of Respondent Rachel Nicholson based on claims under the Consumer Protection Act. The issue stemmed from Respondent contacting Countrywide in 2005 in order to purchase a house. She spoke with two Countrywide agents who promised that they would "investigate and present her with the best [financing] program." At the hearing before the Commissioner, Respondent testified the agents orally approved her for a 30-year fixed rate mortgage loan at 6% interest. Thereafter, Respondent spoke with agents on a weekly basis regarding the property purchase and loan. The agents did not raise any problems with the loan application until two days before the scheduled closing date. On that day, despite the fact that there were no changes in Respondent's employment status or credit since the application had been filed, the agents informed her that Countrywide would not be able to grant a fixed interest loan for the amount she needed. They informed her that to purchase the home, she would need to apply for two different loans. On the scheduled closing date, as instructed by the agents, Respondent applied for two new loans at higher rates of interest but for shorter durations. After multiple hearings, the Commissioner ultimately entered an order ruling that Countrywide had committed "an unfair or deceptive practice" under state law, and ordered that Countrywide reimburse Respondent for all monies paid prior to, at and after closing, as well as discharge the first mortgage and void the second. Furthermore, Countrywide was ordered to quitclaim the property to Respondent. Finding that the Commissioner should not have granted a hearing on the merits of Respondent's claims, the Supreme Court vacated the award entered in her favor. View "Appeal of Countrywide Home Loans, Inc. " on Justia Law

In this interlocutory appeal, the Supreme Court considered an order of the superior court which denied Defendant Empire Automotive Group, Inc.'s motion to dismiss two indictments charging with with felony violations of the state Consumer Protection Act (CPA). Defendant was indicted by the grand jury on two counts of violating the CPA by allegedly placing inspection stickers (indicative of having passed inspection) on two automobiles sold to consumers under installment sales contracts when Defendant knew the vehicles had not passed the on-board diagnostic emissions tests required by the New Hampshire Division of Motor Vehicles. Defendant moved to dismiss on the grounds that its conduct was exempt from the CPA and subject to the exclusive jurisdiction of the banking department, and that the department of justice which initiated the criminal proceedings, lacked authority to do so. Finding that the "trade or commerce" involved in this case involved the sale of motor vehicles and clearly brought Defendant's actions well within the scope of the CPA, the Supreme Court held that the trial record reflected substantial evidence to support Defendant's conviction. View "New Hampshire v. Empire Automotive Group, Inc." on Justia Law

Class actions charged defendant, a credit-reporting agency, with violating the Fair Credit Reporting Act, 15 U.S.C. 1681, by selling consumer credit information to advertisers. The actions were consolidated and settled for $75 million. Class counsel appealed approval of a settlement with members of the class who filed individual claims in state court, that allowed defendant, after paying the settlements, to be reimbursed out of the $75 million class settlement fund. The law firm (Watts) that represented the individual claimants, did nothing to create the fund out of which the settlements will be paid, but stands to receive from $10 to $15 million in attorneys’ fees out of the class settlement fund. Class counsel argued that it should receive a portion of Watts' fees on the ground that class counsel contributed to the creation of the fund. The Seventh Circuit deemed Watts' motion as one to add it as a party and granted the motion. Watts wants to be an appellee to defend its right to attorneys' fees from the fund that its clients (individual claimants) agreed to pay, according to the court, but doesn't want to be a party that could be ordered to disgorge some of the fees, should class counsel prevail. View "In re: Trans Union Corp. Privacy Litigation" on Justia Law