Justia Consumer Law Opinion Summaries

Appellant brought a products liability lawsuit against appellee after appellant's left arm was amputated below his elbow as the result of a farming accident on a 1998 New Holland Model 648 hay baler. A jury found in favor of appellee and appellant appealed challenging six of the district court's evidentiary rulings. The court affirmed the judgment and held that the district court did not abuse it's discretion by admitting two jury verdicts favorable to appellee in other cases involving accidents substantially similar to appellant's where appellant's opening statements and theme increased the probative value of the verdicts; by excluding other accidents involving appellee's hay balers where admitting similar-incident evidence threatened to raise extraneous controversial issues, confuse the issues, be more prejudicial than probative, and create a trial within a trial for each previous incident; by excluding expert testimony of the pinch point and the baler tire where the evidence was minimally probative, cumulative, and would have unnecessarily confused the issue; and by admitting the total number of Series 6 balers manufactured where admitting the total number provided context for the jury to consider the substantially similar incidents. The court also held that the district court did not abuse its discretion by excluding photographs and exhibits that had limited probative value and would unduly confuse the jury. The court further held that the district court did not err in excluding expert witness testimony regarding the Engineering Code of Ethics where such testimony was irrelevant because there was no legal force or effect to those rules and no foundation.

Plaintiffs sued DAP, Inc. ("DAP") on behalf of herself and the decedent's minor children when decedent suffered second and third-degree burns on 80% of his body and ultimately died from an accident that occurred when he dropped a can of DAP Weldwood Gel Formula Contact Cement ("DAP cement") on the floor of his home and attempted to clean the spill which caused the DAP cement to ignite and caused a flash fire. At issue was whether the label on the DAP cement complied with the Federal Hazardous Substances Act ("FHSA"), 15 U.S.C. 1261, for failure to warn and whether the DAP cement label failed to exhibit adequate precautionary measures describing the action to be followed or avoided under section 1261(p)(1)(F). The court affirmed summary judgment and held that the risk of fire from an accident spill of DAP cement was not a principal hazard that the FHSA required the label to affirmatively make. The court also held that the FHSA did not require the DAP cement label to warn consumers against spreading the product after a spill as a precautionary measure.

Respondents filed a complaint against AT&T Mobility LLC ("AT&T"), which was later consolidated with a putative class action, alleging that AT&T had engaged in false advertising and fraud by charging sales tax on phones it advertised as free. AT&T moved to compel arbitration under the terms of its contract with respondents and respondents opposed the motion contending that the arbitration agreement was unconscionable and unlawfully exculpatory under California law because it disallowed classwide procedures. The district court denied AT&T's motion in light of Discover Bank v. Superior Court and the Ninth Circuit affirmed. At issue was whether the Federal Arbitration Act ("FAA"), 9 U.S.C. 2, prohibited states from conditioning the enforceability of certain arbitration agreements on the availability of classwide arbitration procedures. The Court held that, because it "stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress," quoting Hines v. Davidowitz, California's Discover Bank rule was preempted by the FAA. Therefore, the Court reversed the Ninth Circuit's ruling and remanded for further proceedings consistent with the opinion.

From March 2005 to November 2007, Appellee Wilma Ruby entered into a total of 33 payday loan agreements with Appellant Cashnet, Inc. The amount of each loan increased over time. Appellee failed to pay her last loan. In 2008, Appellee brought suit against Cashnet alleging that with each loan she made, she was refinancing, renewing or extending the previous loan, in violation of state law. She further alleged that the annual percentage rate for each loan exceeded the finance fee allowed under state law. Appellee sought the return of interest paid or statutory damages and attorney's fees. A bench trial was held on Appellee's claims; the circuit court ruled in Cashnet's favor, holding that the loans did not constitute a refinance, renewal or extension, and were not in violation of the law. On appeal, the Supreme Court gave ordinary meaning to the terms at issue in the lower court's ruling: "refinance" and "renew." The Court found that "refinancing" is the exchange of an old debt for a new one; "renewal" is the recreation of a legal relationship or the replacement of an old contract with a new one. By looking at the substance of the transactions between Cashnet and Appellee, the Court deduced that the proceeds from each new loan were being used to repay the previous loan, therefore each transaction was refinanced. The Court held that Cashnet's practice of making loans to Appellee immediately after she repaid a previous loan was a refinancing in violation of state law. It reversed the circuit court's decision and remanded the case for further proceedings.

Appellees filed a suit challenging the Federal Trade Commission's ("Commission") Extended Enforcement Policy claiming that the Commission had intruded upon an area of traditional regulation when it authorized the Fair Trade Reporting Act ("FACT"), 15 U.S.C. 1681, and that the policy was unlawful absent a clear statement from Congress authorizing federal regulation over the practice of law. Shortly after oral arguments, Congress passed the Red Flag Program Clarification Act of 2010 which expressly amended the FACT Act by changing the definition of "creditor." Therefore, the court vacated the district court's opinion holding that legislation had clearly altered the posture of the case such that there was no longer a live "case or controversy" before the court.

Plaintiff filed an action against defendants claiming that they violated the D.C. Consumer Protection Procedures Act ("CPPA"), DC Code 28-3904, by inducing her to sell her house to one of the defendants and then failing to pay her the full amount promised. At issue was whether the district court erred in granting summary judgment under Federal Rule of Civil Procedure 56 and sanctions under Federal Rule of Civil Procedure 11. The court affirmed summary judgment where the district court correctly concluded on the record before it that one of the defendants was not a merchant subject to the CPPA. The court vacated the sanction award against one defendant where the defendant's conduct did not involve representations to the court that was sanctionable under Rule 11.

Homeowners fell behind on their mortgage and the bank initiated foreclosure. The homeowners filed a Chapter 13 bankruptcy. The judge denied their motion for rescission of the mortgage and for damages, based on noncompliance with state laws. The district court and First Circuit affirmed. The homeowners signed right-to-cancel forms required under the Massachusetts Consumer Credit Cost Disclosure Act, modeled after the federal Truth in Lending Act (15 U.S.C. 1635); technical flaws in the form cannot serve as a basis for invalidating a transaction five years later. Similarly, a slight delay in receipt of a required high-cost loan disclosure did not justify rescission five years later.

PBM Products, LLC ("PBM") sued Mead Johnson & Company, LLC ("Mead Johnson") under the Lanham Act, 15 U.S.C. 1125(a), alleging that Mead Johnson distributed direct-to-consumer mailers that falsely claimed PBM's baby formula products were inferior to Mead Johnson's baby formula products. At issue was whether the district court erred in its dismissal of Mead Johnson's counterclaims; whether the district court abused its discretion in its admission of expert opinion testimony and evidence of prior litigation between the parties; and whether the district court erred or abused its discretion in issuing an injunction prohibiting Mead Johnson from making similar claims. The court held that the district court properly dismissed Mead Johnson's counterclaims based on statute of limitations, laches, and deficiencies in the merits. The court also held that the district court did not abuse its discretion in admitting PBM's consumer experts' testimony regarding surveys conducted when they were sufficiently close in approximation of the recipient pool to be admissible. The court further held that the district court did not abuse its discretion in admitting evidence of prior litigation where the evidence was relevant to the instant case and its probative value outweighed any danger of unfair prejudice. The court finally held that the district court did not abuse its discretion in issuing the injunction where the misleading information pertained to public health and infant well-being and that the injunction was not overbroad in scope where it only reached the specific claims that were found to be literally false.

Plaintiffs appealed the dismissal of their putative class action asserting antitrust claims against defendants where plaintiffs alleged that the fares they paid for airline tickets were unlawfully excessive and in violation of both state and federal antitrust and consumer protection laws. At issue was whether plaintiffs' state law claims were properly dismissed; whether the court erred in denying plaintiffs' leave to amend to add federal claims; and whether the court had jurisdiction to review the interlocutory case management order governing the pretrial coordination of pending cases in the same multidistrict litigation. The court affirmed the district court's dismissal of plaintiffs' state law claims and held that the Airline Deregulation Act of 1978, 49 U.S.C. 41713, preempted state regulations of foreign air carriers. The court also held that the district court erred in denying plaintiffs' leave to amend to add federal antitrust claims where the district court applied an incorrect legal standard to plaintiffs' motion by denying leave to amend on the basis of the court's prior case management order. The court further held that it lacked jurisdiction to review the interlocutory case management order where these decisions did not represent final judgments.

Plaintiffs, various tenants of Norton Community Apartments, L.P. ("Norton"), sued Norton over rent disputes and other claims. At issue was whether International Realty & Investments, Inc. ("International Realty"), the agent appointed by a receiver to manage and collect rents on the Norton property, was a debt collector under the Fair Debt Collection Practices Act ("Act"). Also at issue was whether the district court's sanctions against plaintiffs' counsel for filing multiple identical actions and the district court's award of attorneys' fees to defendant for opposing plaintiffs' disqualification motions was an abuse of discretion. The court held that International Realty, as the residential property manager in this case, was not a debt collector because it acquired the debt before default and thus exempted it, as the manager, from the Act. The court also held that the district court did not abuse its discretion in sanctioning plaintiffs' counsel where plaintiffs' counsel filed nine separate but identical actions for alleged violations of the Act and the district court did not abuse its discretion in awarding sanctions where there was no legal basis for the motion to disqualify defense counsel.