Justia Consumer Law Opinion Summaries

In this case, the plaintiffs, a minor and her parents, sued their health insurer, Premera Blue Cross, for denying coverage for the minor’s stay in a wilderness therapy program, claiming that the denial violates mental health parity laws. The plaintiffs also alleged breach of contract, insurance bad faith, and violation of the Consumer Protection Act.The Supreme Court of the State of Washington held that the plaintiffs’ breach of contract claim based on alleged violation of federal parity laws does not form a viable common law action. The Court found that the plaintiffs failed to show that a violation of federal parity law would give rise to a viable common law action for breach of contract.Furthermore, the Court held that the breach of contract action based on Premera's alleged violation of state parity laws could not succeed based on the statutory language that was in place at the time.However, the Court did affirm the lower court’s finding that the plaintiffs were not required to produce evidence of objective symptomatology to support their insurance bad faith claim for emotional distress damages. Consequently, the case was remanded to the trial court for further proceedings on the bad faith and Consumer Protection Act claims. View "P.E.L. v. Premera Blue Cross" on Justia Law

In the state of California, an individual named Chad Grayot purchased a used vehicle from a car dealership with a contract that was later assigned to the Bank of Stockton. This contract included the Federal Trade Commission's 'Holder Rule' notice, which allows a consumer to assert against third party creditors all claims and defenses that could be asserted against the seller of a good or service. Grayot sought to hold the Bank responsible for refunding the money he paid under the contract based on the holder provision in the contract. The Bank argued that it could not be held responsible because it was no longer the holder of the contract as it had reassigned the contract back to the dealership. The trial court granted summary judgment in favor of the Bank, accepting its argument. Grayot appealed this decision.The Court of Appeal of the State of California Third Appellate District reversed the trial court's decision. The appellate court held that a creditor cannot avoid potential liability for claims that arose when it was the holder of the contract by later reassigning the contract. This interpretation of the Holder Rule is in line with the Federal Trade Commission's intent to reallocate any costs of seller misconduct to the creditor. The court sent the case back to the lower court for further proceedings consistent with its opinion. View "Grayot v. Bank of Stockton" on Justia Law

In this case, the District of Columbia sued Exxon Mobil Corporation and several other energy companies, alleging that these companies violated District law by making material misstatements about their products' effects on climate change. The energy companies removed the case to a federal district court, which determined it lacked jurisdiction and sent the case back to a local court. The energy companies then appealed that decision.The United States Court of Appeals for the District of Columbia Circuit affirmed the lower court's decision, holding that the case was properly remanded. The Court of Appeals held that the case did not fall under federal jurisdiction because the District of Columbia based its lawsuit on a local consumer protection statute, not a federal cause of action. The energy companies' arguments essentially amounted to federal defenses, which the court held were insufficient to establish federal jurisdiction over the District's claims.The court also rejected the companies' argument that the case could be moved to a federal court under the "artful pleading" doctrine, which allows federal courts to hear cases where the plaintiff has attempted to avoid federal jurisdiction by carefully crafting their complaint to avoid mentioning federal law. The court held that this doctrine didn't apply because the energy companies couldn't rely on federal common law governing air pollution since it had been displaced by the Clean Air Act.Finally, the court rejected the companies' arguments that the case could be removed to federal court under the federal officer removal statute and the Outer Continental Shelf Lands Act. The court found that the companies failed to demonstrate a sufficient connection between their actions under color of federal office and the District's suit, and that the District's claims did not arise out of or connect with operations conducted on the Outer Continental Shelf. View "DC v. Exxon Mobil Corporation" on Justia Law

In a dispute involving the foreclosure of a home, the Supreme Court of Alabama upheld the decisions of the lower court in favor of the purchasers of the foreclosed property and the mortgagee. The original homeowners, the Littlefields, defaulted on their mortgage payments and the property was subsequently foreclosed on by Planet Home Lending, LLC ("Planet"), and then sold to Terry Daniel Smith and Staci Herring Smith. The Littlefields refused to vacate the property, leading the Smiths to initiate an ejectment action against them. The Littlefields responded with counterclaims against the Smiths and Planet, arguing that the foreclosure was void because Planet had failed to comply with the mortgage's notice requirements. The Supreme Court of Alabama rejected the Littlefields' arguments, holding that any alleged noncompliance with the notice requirements would have rendered the foreclosure voidable, not void. The court concluded that because the Littlefields did not challenge the foreclosure before the property was sold to the Smiths, who were considered bona fide purchasers, the foreclosure could not be set aside. The court also noted that the Littlefields failed to challenge other rulings related to their counterclaims against Planet and their forfeiture of redemption rights, leading to these aspects of the lower court's judgment being affirmed as well. View "Littlefield v. Smith" on Justia Law

In this case heard before the United States Court of Appeals for the Eleventh Circuit, the appellant, Christopher Ounjian, claimed that his employer, Globoforce, Inc., retaliated against him and forced him to resign after he objected to their unlawful conduct. Ounjian filed a suit alleging constructive discharge and sought damages under the Florida Private Whistleblower Act and Florida Deceptive and Unfair Trade Practices Act. The district court dismissed the complaint, stating that Ounjian failed to allege facts constituting a constructive discharge under the Florida Private Whistleblower Act and failed to allege damages cognizable under the Florida Deceptive and Unfair Trade Practices Act.The Court of Appeals agreed with the district court's ruling, stating that the alleged instances of criticism, improper disclosure of personal information, and the withdrawn demotion threat did not meet the high bar for stating a constructive discharge claim. The court also stated that the company's actions were not compelling enough to force a reasonable employee to resign. The court further stated that the company's alleged improper sales practices were not a result of Ounjian's objections, thus negating any causal connection between the protected activity and the adverse employment action required by the Florida Private Whistleblower Act.Regarding the claim under the Florida Deceptive and Unfair Trade Practices Act, the court ruled that while Ounjian did allege deceptive or unfair actions in the conduct of trade or commerce, the damages he sought resulting from the loss of his employment were not cognizable under the Act. As such, the Court of Appeals affirmed the district court's dismissal of the complaint with prejudice. View "Ounjian v. Globoforce, Inc." on Justia Law

In this case, the plaintiff, Maria Del Rosario Hernandez, filed a lawsuit against MicroBilt Corporation alleging the company violated the Fair Credit Reporting Act after the lender denied her loan application based on inaccurate information provided by a MicroBilt product. MicroBilt moved to compel arbitration based on the terms and conditions that Hernandez agreed to while applying for the loan, which included an arbitration provision. However, Hernandez had already submitted her claims to the American Arbitration Association (AAA) for arbitration.The AAA notified MicroBilt that its agreement with Hernandez was a consumer agreement, which meant the AAA's Consumer Arbitration Rules applied. Applying these rules, the AAA notified MicroBilt that its arbitration provision included a material or substantial deviation from the Consumer Rules and/or Protocol. Specifically, the provision’s limitation on damages conflicted with the Consumer Due Process Protocol, which requires that an arbitrator should be empowered to grant whatever relief would be available in court under law or in equity. After MicroBilt did not waive the damages limitation, the AAA declined to administer the arbitration under Rule 1(d).MicroBilt asked Hernandez to submit her claims to a different arbitrator, but she refused, requesting a hearing before the District Court. She argued that she must now pursue her claims in court because the AAA dismissed the case under Rule 1(d). The District Court reinstated Hernandez’s complaint and granted MicroBilt leave to move to compel arbitration under 9 U.S.C. § 4. However, the District Court denied MicroBilt’s motion to compel, leading to this appeal.The United States Court of Appeals for the Third Circuit affirmed the lower court's decision, stating that Hernandez had fully complied with MicroBilt’s arbitration provision, which allowed her to pursue her claims in court. The court held that it lacked the authority to compel arbitration. The court rejected MicroBilt's arguments that the AAA administrator improperly resolved an arbitrability issue that should have been resolved by an arbitrator, that the provision’s Exclusive Resolution clause conflicted with Hernandez’s return to court, and that the AAA’s application of the Consumer Due Process Protocol was unreasonable. The court concluded that it lacked the authority to review the AAA’s decision or to sever the damages limitation from the arbitration provision. View "Hernandez v. MicroBilt Corp" on Justia Law

Plaintiff is a resident of California. While present in California, Plaintiff used his iPhone’s Safari browser to navigate to the website of California-based retailer IABMFG to purchase fitness apparel. Although Plaintiff claims he did not know it at the time, IABMFG’s website used software and code from Shopify, Inc. to process customer orders and payments. Shopify, Inc. is a Canadian corporation with its headquarters in Ottawa, Canada. Plaintiff filed a putative class action lawsuit in California alleging that Shopify violated various California privacy and unfair competition laws because it deliberately concealed its involvement in consumer transactions. The district court agreed, dismissing the second amended complaint without leave to amend. Plaintiff timely appealed.   The Ninth Circuit affirmed. For specific jurisdiction to exist over Shopify, Plaintiff’s claim must arise out of or relate to Shopify’s forum-related activities. The panel held that there was no causal relationship between Shopify’s broader business contacts in California and Plaintiff’s claims because these contacts did not cause Plaintiff’s harm. Nor did Plaintiff’s claims “relate to” Shopify’s broader business activities in California outside of its extraction and retention of plaintiff’s data. Because there was an insufficient relationship between plaintiff's claims and Shopify’s broader business contacts in California, the activities relevant to the specific jurisdiction analysis were those that caused Plaintiff’s injuries: Shopify’s collection, retention, and use of consumer data obtained from persons who made online purchases while in California. The panel held that Shopify, which provides nationwide web-based payment processing services to online merchants, did not expressly aim its conduct toward California. View "BRANDON BRISKIN V. SHOPIFY, INC., ET AL" on Justia Law

Plaintiff, a retail customer, brought a putative class action under the Class Action Fairness Act against clothing retailers The Gap, Inc. and its wholly-owned subsidiary, Old Navy, LLC (“Defendants”). Plaintiff alleged that she purchased numerous products at Old Navy stores and online at discount prices that were deceptively advertised because Defendants did not sell a substantial quantity of these products at the advertised “regular” prices prior to selling them at the advertised “sale” prices. She sought class-wide compensatory damages under the Missouri Merchandising Practices Act (“MMPA”). The district court granted Defendants’ motion to dismiss Plaintiff’s Amended Complaint with prejudice, Plaintiff appealed, arguing that she plausibly pleaded ascertainable loss under Missouri’s benefit-of-the-bargain rule.   The Eighth Circuit affirmed. The court agreed with the district court’s decision to “join a growing number of courts in finding that complaints based solely on a plaintiff’s disappointment over not receiving an advertised discount at the time of purchase have not suffered an ascertainable loss.” Further, the court wrote that Plaintiff’s Amended Complaint also alleged that the actual fair market value of some of the products she purchased “may have even been less than the discounted prices that she paid.” This theory of ascertainable loss does not depend on Defendants’ comparison pricing for the value represented component of the benefit-of-the-bargain rule. Plausible allegations of such immediate injury would satisfy an MMPA plaintiff’s burden to show an ascertainable loss. However, these allegations are based solely on information and belief, which are generally insufficient under Rule 9(b). View "Jill Hennessey v. The Gap, Inc." on Justia Law

Plaintiffs s filed a class action complaint and sought to represent a class of individuals whose Healthcare Revenue tradelines had been wrongly “re-aged” by Experian. They alleged that Experian “willfully” violated its obligation under the Fair Credit Reporting Act to “follow reasonable procedures” to ensure consumer credit reports were prepared with “maximum possible accuracy” when it allowed credit reports to reflect allegedly inaccurate status dates. The district court denied Experian’s summary judgment motion. After the close of discovery, Plaintiffs moved to certify a class of all consumers “whose Experian credit reports had an account or accounts reported by [Healthcare Revenue] with an inaccurately displayed Date of Status and were viewed by one or more third parties.” The district court adopted the magistrate judge’s recommendation and denied class certification. Plaintiffs petitioned for permission to appeal the district court’s class certification order under Rule 23(f).   The Eleventh Circuit vacated and remanded. The court held that the denial of Plaintiffs' motion for class certification was an abuse of discretion because the district court’s analysis of Rule 23(b)(3)’s predominance requirement was based on its contrary interpretation of the second option in section 1681n(a)(1)(A). The court wrote that a consumer alleging a willful violation of the Act doesn’t need to prove actual damages to recover “damages of not less than $100 and not more than $1,000.” While the parties raise other issues that may ultimately affect whether the class should be certified, the district court’s order denying class certification only relied on its interpretation of section 1681n(a)(1)(A) and didn’t address these other arguments. View "Omar Santos, et al v. Experian Information Solutions, Inc." on Justia Law

The Supreme Court affirmed the judgment of the district court granting summary judgment for Defendants and denying relief in this class action, holding that the district court did not err.In 2014, over two-thirds of the members of the Try County Telephone Association, Inc., a Wyoming cooperative utility providing telecommunication services on a non-profit basis, voted to sell the Cooperative, including its for-profit subsidiaries, to entities owned by Neil Schlenker. Schlenker converted the Cooperative into a for-profit corporation (TCT). After the sale, Class Representatives filed a class action lawsuit against TCT, Schlenker and his entities, and others, alleging fraud conversion and other claims and requesting that the sale be set aside. The district court granted summary judgment in favor of Defendants. The Supreme Court affirmed, holding that the district court did nor err in granting summary judgment on all claims. View "Campbell v. Davidson" on Justia Law