Justia Consumer Law Opinion Summaries

Plaintiff, on behalf of himself and similarly situated individuals, brought an action against Chase, alleging that it increased his interest rates retroactively to the beginning of this payment cycle after his account was closed to new transactions as a result of a late payment to Chase or another creditor. The court had previously issued an opinion reversing the district court's dismissal of most of plaintiff's federal and state claims. However, Chase sought Supreme Court review of the court's decision and the Supreme Court reversed with respect to the federal claim and remanded for further proceedings. Consequently, the court withdrew its prior opinion and, consistent with the Supreme Court's ruling, affirmed the district court's dismissal of plaintiff's first cause of action under the Truth in Lending Act (TILA), 15 U.S.C. 1601-1615, for failure to notify of rate increase, as well as plaintiff's sixth cause of action for breach of contract for failure to notify him "of any change if required by applicable law." Although the Supreme Court's decision did not specifically address the court's ruling on plaintiff's state law claims, the court held: as Delaware law permitted the actions taken by Chase, the district court correctly concluded that plaintiff's second, third, and fourth state law causes of action were foreclosed; plaintiff's fifth cause of action failed to state a claim for consumer fraud under 6 Del. C. 2513(a); and plaintiff's seventh cause of action failed to state a claim for breach of an implied duty of good faith. Therefore, the court affirmed the judgment of the district court.

This case arose when the FTC alleged deceptive advertising claims against defendants based on two purported weight loss products, a Chinese Diet Tea and a Bio-Slim Patch. On appeal, defendants challenged both the power of the district court to award monetary relief and the means by which the district court calculated the award. The court held that the district court had the power to award restitution pursuant to Section 13(b) of the Federal Trade Commission Act, 15 U.S.C. 53(b). The court also held that the district court did not err in ordering defendants to disgorge the full proceeds from its sale of the products in question. Accordingly, the court affirmed the judgment of the district court.

The FTC sued Lundbeck, Inc., alleging that its acquisition of the drug NeoProfen violated the Federal Trade Commission Act, 15 U.S.C. 41 et seq., the Sherman Act, 15 U.S.C. 1-7, the Clayton Act, 15 U.S.C. 12-27, the Minnesota Antitrust Law of 1971, and unjustly enriched Lundbeck. At issue was whether the district court properly determined that the FTC failed to identify a relevant market where the FTC did not meet its burden of proving that the drugs Indocin IV and Neoprofen were in the same product market. The court held that the district court's finding was not clearly erroneous and affirmed the judgment.

Plaintiff, the personal representative of the Estate of Dorothy Brown, appealed from summary judgment certified as final pursuant to Federal Rule of Civil Procedure 54(b) in favor of Noxubee General Hospital (Noxubee) and Baptist Memorial Hospital-Golden Triangle (Baptist) and from a summary judgment in favor of Eli Lilly and Company (Eli Lilly). The action that gave rise to this appeal, removed from state court in Mississippi to a federal district court in Mississippi, and thereafter transferred to the Eastern District of New York, was brought to recover for the wrongful death of Ms. Brown allegedly due to her treatment with the drug Zyprexa, which was manufactured by Eli Lilly. An earlier appeal from the certified judgment in favor of Noxubee was withdrawn by stipulation. A motion to remand, predicated on the lack of diversity on the parts of Noxubee and Baptist were denied following the issuance of all the orders granting summary judgment. The court held that the appeals from the judgments entered in favor of Noxubee and Baptist were dismissed and the judgment dismissing the action against Eli Lilly were affirmed.

Liberty Mutual sued Pella in the district court for declaratory judgment where the suit was sought to determine the scope of Liberty Mutual's obligation, under general commercial liability (GCL) policies issued to Pella, to reimburse Pella's defense costs in two underlying lawsuits. Both parties appealed the judgment of the district court. The court held that the district court did not err in concluding that Liberty Mutual's duty to reimburse Pella's defense costs should be determined by looking at the allegations in the complaint to determine if they stated a covered claim where Liberty Mutual would still have no duty to defend even if it had to reimburse defense costs in a suit where an "occurrence" was alleged but not yet an established fact. The court also held that because the underlying suits did not allege an "occurrence," Liberty Mutual did not owe Pella a duty to reimburse its costs in defending either action. Therefore, the court need not address Liberty Mutual's alternative argument. The court further held that the district court did not commit reversible error in granting summary judgment to Liberty Mutual. The court finally held that, in light of its conclusion that Liberty Mutual had no duty to reimburse Pella's defense costs in the underlying suits, the court need not address the issue of defense costs. Accordingly, the court affirmed the district court's grant of summary judgment to Liberty Mutual on Pella's bad-faith counterclaim. The court reversed the district court's order granting summary judgment to Pella on Liberty Mutual's claim for declaratory judgment and remanded with instructions to enter declaratory judgment in favor of Liberty Mutual.

Five hunters commenced this purported class action against A.L.S. Enterprises, and three of its licensees (collectively, defendants), who sell odor absorbing clothing under various brand names in retail stores and mail order catalogs, alleging that defendants violated the Minnesota Consumer Fraud Act (MCFA), Minn. Stat. 325F.69, subd. 1; the Minnesota Unlawful Trade Practices Act (MUTPA), Minn. Stat. 325D.13; and the Minnesota Uniform Deceptive Trade Practices Act (MDTPA), Minn. Stat. 325D.44, subd. 1. Defendants appealed the grant of a permanent injunction, arguing that the district court erred in its literal falsity determinations and in granting an injunction based solely on those determinations. The court held that plaintiffs failed to prove both the requisite irreparable injury and their core allegations that defendants' use of the terms "odor eliminating" and "reactivation" were literally false. Accordingly, the court directed the district court to enter an order dismissing with prejudice all claims for equitable relief. The court held, however, that plaintiffs' individual claims for damages could not be resolved on this summary judgment record. Accordingly, the court remanded for a determination of those claims applying the standards prescribed in Wiegand v. Walser Auto. Groups, Inc.

Victor Tacke failed to pay real property taxes on his property in Lake County from 2005 to 2008. In 2006, the County conducted a tax sale for the year 2005, at which the County purchased the tax lien. In 2009, the County assigned its interest in the tax lien to Montana Lakeshore Properties (Lakeshore) in exchange for payment of the past due taxes and issued a tax sale certificate to Lakeshore. The County subsequently issued a tax deed to Lakeshore. In 2010, Tacke filed an action to quiet title in the property, seeking a judicial declaration that the tax deed was void. The district court granted summary judgment in favor of Lakeshore. At issue on appeal was whether Lakeshore violated Mont. Code Ann. 15-17-212(3) by paying the back taxes two hours and forty-five minutes short of two weeks after giving notice to Tacke. The Supreme Court affirmed, holding that the district court did not err by granting summary judgment upholding the tax deed obtained by Lakeshore because this case fit within the general principle that "the law regards the day as an indivisible unit" and discards fractional days in most time computations.

LCI Equipments, Inc. (LLC) was a Texas corporation that imported and sold the tractor that killed Rudy Slater in a roll-over accident. Wanda Slater, an Arkansas resident and Rudy's wife, commenced a wrongful death action in state court, asserting negligence and strict product liability claims against LCI, and others, focusing primarily on the tractor's lack of a roll-over protection system (ROPS). LCI's insurer, also a Texas corporation, denied coverage and refused to defend LCI under its Commercial General Liability policy. With the wrongful death suit pending, LCI assigned its rights in the policy to Slater who then commenced this action against the insurer in Arkansas state court. On appeal, Slater asserted for the first time the absence of diversity jurisdiction and further argued that the district court erred in construing the policy exclusion. The court held that, as here, where Slater structured the case, naming LCI as a nominal plaintiff, the district court had, and properly exercised, diversity jurisdiction. The court also noted that the partial assignment of the $100 interest retained by LCI did not defeat jurisdiction. The court held that Slater's argument that the insurer had a duty to defend because of LCI's failure to install ROPS safety equipment was not properly preserved in the district court and therefore, the court declined to consider it further. The court also agreed with the district court's conclusion that LaBatt Co. v. Hartford Lloyd's Ins. Co., reflected Texas law. Moreover, the definition of "Your product" in the insurer's policy expressly excluded the "providing of or failure to provide warnings or instructions," unlike the exclusion at issue in LaBatt. Therefore, the insurer's contention was more consistent with the plain language of the policy and Slater had failed to show plain error. Accordingly, the judgment of the district court was affirmed.

The company made and sold a toy that, when swallowed, made children seriously ill. The product was recalled and removed from store shelves. Plaintiffs, purchasers whose children were not harmed and who did not ask for a refund, challenged the adequacy of the recall and alleged violations of the Consumer Products Safety Act, 15 U.S.C. 2051–89, express and implied warranties, and state consumer-protection statutes. The district court denied class certification. The Seventh Circuit affirmed, first holding that plaintiffs' had standing, based on financial harm. There would be serious problems of class action management, apart from differences in state law. Individual notice would be impossible, making it hard for class members to opt out. No one knows who bought the kits or who used them without problems. It would be difficult to determine who would be entitled to a remedy. The per-buyer costs of identifying class members and giving notice would exceed the price of the toys. The principal effect of class certification would be to induce defendants to pay class lawyers enough to make them go away; effectual relief for consumers is unlikely.

FICO brought suit against three credit bureaus: Experian, Equifax, and Trans Union, as well as against VantageScore, the credit bureaus' joint venture. The suit alleged antitrust, trademark infringement, false-advertising, and other claims. FICO, Experian, and VantageScore appealed from the district court's judgment. The court held that FICO failed to demonstrate that it had suffered any antitrust injury that would entitle it to seek damages under section 4 of the Clayton Act, 15 U.S.C. 12-27, and FICO failed to demonstrate the threat of an immediate injury that might support injunctive relief under section 16. The court also held that there was no genuine issue of material fact that consumers in this market immediately understood "300-850" to describe the qualities and characteristics of FICO's credit score and therefore, the district court did not err in finding the mark to be merely descriptive. The court further held that there was sufficient evidence for a reasonable jury to determine that the U.S. Patent and Trademark Office (PTO) relied on FICO's false representation in deciding whether to issue the "300-850" trademark registration. The court agreed with the district court that VantageScore was not a licensee and therefore was not estopped from challenging the mark under either theory of agency or equity. The court finally held that FICO's false advertising claims were properly dismissed and the district court did not abuse its discretion in denying the motion for attorneys' fees.