Justia Consumer Law Opinion Summaries

A woman rented a car from a rental company in 2014 and, after a traffic camera recorded a violation during her rental, the company paid the fine and charged her both the fine amount and an administrative fee. She filed a putative class action in the United States District Court for the District of New Jersey on behalf of customers who were charged fines and fees in similar circumstances, alleging state-law claims such as violations of consumer fraud statutes and unjust enrichment. The rental company later updated its rental agreements in 2016 to include an arbitration clause and class-action waiver, but this provision applied only prospectively to rentals after its adoption. The named plaintiffs’ rentals predated this clause.The District Court, after years of litigation that included several amended complaints, discovery, mediation, and a motion to certify a class, ultimately certified a subclass that included some renters whose agreements contained the arbitration provision. The District Court found that the rental company had waived its right to enforce arbitration by participating in litigation for several years without moving to compel arbitration. The company then filed a motion to compel arbitration for the affected class members, which the District Court denied again on waiver grounds, emphasizing that the company had not sought to enforce arbitration until after class certification.On appeal, the United States Court of Appeals for the Third Circuit reviewed the waiver issue de novo. The Third Circuit held that waiver of the right to compel arbitration did not occur here, because the company’s conduct—such as raising arbitration as an affirmative defense and the futility of seeking to compel arbitration prior to class certification—did not evince an intentional relinquishment of that right. The Third Circuit vacated the District Court’s order denying the motion to compel arbitration and remanded for consideration of other unresolved questions about enforceability. View "Valli v. Avis Budget Group Inc" on Justia Law

During the COVID-19 pandemic, a university in Nebraska instituted a policy requiring all students to be vaccinated against COVID-19 by a specified deadline, with the only exemptions allowed for medical reasons or until a vaccine received full FDA approval. Religious exemptions were not permitted. Students who failed to comply were unenrolled and barred from campus, and some had holds placed on their accounts, preventing access to transcripts. One student complied with the mandate but suffered adverse effects and was medically exempted from further doses. Another student withdrew voluntarily before the deadline.After the university enforced the mandate, several students sought injunctive relief in the District Court for Douglas County to prevent their unenrollment, alleging breach of contract and unjust enrichment. The court denied relief, finding that any contract included the Emergency Use Authorization waiver agreements and that the students breached the contract by not being vaccinated after FDA approval. An initial appeal was dismissed by the Nebraska Supreme Court for lack of a final, appealable order. The students then consolidated their actions and filed an operative complaint alleging breach of implied contract, denial of due process, conversion, negligence, and violations of the Nebraska Consumer Protection Act (NCPA). The district court dismissed the complaint with prejudice and denied leave to amend.The Nebraska Supreme Court reviewed the district court’s dismissal de novo and found that the students plausibly alleged claims for breach of an implied contract and conversion, based on the university’s unilateral modification of conditions mid-semester and the withholding of transcripts. The court affirmed the dismissal of the negligence and NCPA claims, finding them preempted by the federal Public Readiness and Emergency Preparedness Act, and held that the due process claim was abandoned on appeal. The case was affirmed in part, reversed in part, and remanded for further proceedings on the breach of contract and conversion claims. View "Ramaekers v. Creighton University" on Justia Law

Epic Games, a developer and operator of the Epic Games Store, sued Apple over its App Store practices, alleging violations of federal and California competition law. The dispute centered on Apple’s rules requiring developers to use Apple’s in-app payment system, which imposed a 30% commission, and its prohibition of developers directing users to other purchasing options outside the App Store. After a bench trial, the district court found Apple’s anti-steering provisions violated California’s Unfair Competition Law by preventing informed consumer choice but upheld Apple’s in-app payment system requirement for digital goods. The court issued an injunction barring Apple from restricting developers from including in their apps buttons, links, or other calls to action that direct users to alternative purchasing mechanisms.Following the injunction, Apple implemented a compliance plan involving a 27% commission on linked-out purchases and a series of restrictions on how developers could present external payment options, including limitations on button design, link placement, and user flow. Epic contested Apple’s compliance, arguing these measures still effectively prohibited alternative purchases. After holding multiple evidentiary hearings, the United States District Court for the Northern District of California found Apple in civil contempt for failing to comply with the injunction, citing Apple’s bad faith and pretextual justifications. The district court imposed broad sanctions, including prohibiting any commission on linked-out purchases, restricting Apple’s ability to limit external links, and referring Apple for criminal investigation.On appeal, the United States Court of Appeals for the Ninth Circuit affirmed the district court’s contempt findings and most of the resulting sanctions but found portions of the sanctions—particularly the blanket ban on commissions—overbroad and more punitive than coercive. The Ninth Circuit reversed and remanded those parts for further tailoring, clarified the scope of permissible developer link prominence, and declined to vacate the injunction or reassign the case. The court otherwise affirmed the district court’s orders. View "EPIC GAMES, INC. V. APPLE INC." on Justia Law

Two individuals brought their dogs to a veterinary clinic for treatment. Dissatisfied with the care provided, both posted negative reviews on social media, detailing their experiences and criticizing the clinic’s practices. These posts were shared on multiple community Facebook pages and received significant engagement from the local community, including comments from others about the clinic. After the posters refused the clinic’s request to remove the reviews, the clinic filed a lawsuit for defamation per se against both individuals, alleging numerous defamatory statements.In the District Court for El Paso County, the defendants filed a special motion to dismiss under Colorado’s anti-SLAPP statute, arguing that their posts were protected as speech on a public issue. The district court denied the motion, finding that the statements concerned a private business dispute and did not address matters of public interest. The court also found that, even if the statute applied, the clinic had shown a reasonable likelihood of prevailing on its claims. On appeal, a division of the Colorado Court of Appeals agreed that the posts provided consumer information relevant to the public but concluded they did not contribute to a broader public discussion, largely because they were motivated by personal animosity and aimed to harm the clinic’s business.The Supreme Court of Colorado reviewed the case and determined that the lower courts had applied the wrong legal standard. The Supreme Court held that courts must use a two-step test to determine if speech is protected under the anti-SLAPP statute: first, whether an objective observer could reasonably understand the speech, in context, to be made in connection with a public issue or interest; and second, whether the speech contributed to public discussion of that issue. The court further held that the speaker’s motive is irrelevant to this analysis. The judgment of the court of appeals was reversed, and the matter was remanded for application of the correct standard. View "Lind-Barnett v. Tender Care Veterinary Ctr." on Justia Law

A company operating movie theaters in several Midwestern states offered free movie trailers on its website to attract customers. After a website visitor viewed these trailers, she began to receive targeted advertisements on her Facebook page. She alleged that the company had installed a program, Meta Pixel, which tracked her activity and shared her personal information with Meta (Facebook’s parent company). She claimed that the company, as a “video tape service provider,” had a duty under the Video Privacy Protection Act not to disclose her personally identifiable information without consent.The United States District Court for the District of Minnesota dismissed the complaint. The district court found that the company was not a “video tape service provider” as defined by the statute, because it was not engaged in the business of renting, selling, or delivering prerecorded video cassette tapes or similar audio visual materials. As a result, the court concluded that the company had no statutory obligation to withhold the plaintiff’s personal information under the Act.On appeal, the United States Court of Appeals for the Eighth Circuit reviewed the district court’s dismissal de novo. The appellate court agreed with the district court, holding that movie theaters are not “engaged in the business” of renting, selling, or delivering prerecorded video cassette tapes or similar audio visual materials. The court reasoned that the statutory definition requires a physical medium similar to video cassette tapes, which does not include theatrical screenings or free online trailers. The court further determined that offering trailers online did not constitute a separate business of delivering audio visual materials for livelihood or gain. Accordingly, the Eighth Circuit affirmed the judgment of the district court. View "Christopherson v. Cinema Entertainment Corp." on Justia Law

A teacher employed by the Los Angeles Unified School District purchased a variable annuity with an optional Guaranteed Minimum Income Benefit (GMIB) rider from an insurance company in 2010. The GMIB rider, which provided a guaranteed minimum level of payments, was subject to an annual fee that was disclosed both to the purchaser and on a state-maintained website as required by the California Education Code at the time of purchase. In 2018, the insurer ceased offering the GMIB rider to new customers, but permitted existing holders, including the plaintiff, to maintain the rider and continue paying the associated fee. After January 2019, the fee for the GMIB rider was no longer listed on the state-administered website, although the underlying annuity product remained available to new purchasers.The plaintiff filed a lawsuit in the Superior Court of Los Angeles County, alleging that the insurer’s collection of the GMIB rider fee after it was no longer disclosed on the state website constituted an unlawful business practice under California’s Unfair Competition Law (UCL). The plaintiff did not claim to have relied on the website or to have been misled about the fee, but asserted that the insurer was statutorily barred from collecting undisclosed fees. The trial court sustained the insurer’s demurrer, finding that the plaintiff failed to allege reliance necessary for standing under the UCL, and dismissed the action with prejudice when the plaintiff declined to amend the complaint.The California Court of Appeal, Second Appellate District, Division One, affirmed the dismissal, albeit on different grounds. The court held that the Education Code does not require continued disclosure of fees for optional product features, such as the GMIB rider, after those features are no longer offered to prospective purchasers. As a result, the insurer was not prohibited from collecting the fee from existing holders, and the plaintiff’s UCL claim failed as a matter of law. The court awarded the insurer its costs on appeal. View "Jacobson v. Metropolitan Life Insurance Co." on Justia Law

A group of homeowners, all over the age of 65, entered into contracts for energy efficiency improvements to their homes under California's Property Assessed Clean Energy (PACE) program. This program allows local governments to offer financing for such improvements, with repayment made through voluntary special assessments added to the homeowners’ property tax bills. Most local governments contracted private companies to administer these PACE loans. The homeowners alleged that these private administrators failed to comply with consumer protection and lending laws applicable to consumer lenders, such as providing required warnings and avoiding prohibited security interests. They filed suit under the Unfair Competition Law, seeking injunctive relief and restitution, including the return of assessment monies paid and prohibitions on future collection of delinquent assessments unless the assessments were removed from their properties.The San Diego County Superior Court sustained the defendants’ demurrers, concluding that the plaintiffs were required to exhaust administrative tax remedies before pursuing their claims in court. The California Court of Appeal affirmed, reasoning that because PACE assessments are collected as part of property taxes and the relief sought would invalidate those assessments, plaintiffs first needed to pay the assessments and seek administrative relief through the established tax refund procedures.The Supreme Court of California reviewed the case to determine whether plaintiffs were required to follow statutory procedures for challenging taxes. The court held that when plaintiffs’ claims effectively seek to invalidate PACE assessments or prevent their future collection, they must first pay the assessments and pursue administrative tax remedies. However, the court also held that plaintiffs are not required to use tax challenge procedures for claims that do not directly or indirectly challenge a tax, such as those solely addressing the administration of the PACE program. The judgment was affirmed in part, reversed in part, and the case remanded to consider whether plaintiffs should be allowed to amend their complaints to state only non-tax-related claims. View "Morgan v. Ygrene Energy Fund, Inc." on Justia Law

A teacher employed by the Los Angeles Unified School District purchased a variable annuity from Metropolitan Life Insurance Company in 2010, selecting an optional rider that guaranteed a minimum income benefit for an annual fee. At the time of purchase, the fee for this rider was disclosed both directly to her and on a state-maintained website, as required by California Education Code provisions governing vendors of certain retirement investment products to public education employees. In 2018, Met Life stopped offering the optional rider to new customers but continued to charge the annual fee to those, like the plaintiff, who had previously selected it. After January 2019, information about the rider fee was no longer displayed on the state website. The plaintiff continued making investments subject to the rider and paying the associated fee.The Superior Court of Los Angeles County reviewed the plaintiff’s claim under the unfair competition law (UCL), which alleged Met Life unlawfully charged the fee without required public disclosure, regardless of whether the plaintiff had relied on the website or was misled. The court sustained Met Life’s demurrer and dismissed the case with prejudice, reasoning that the plaintiff failed to allege reliance on the lack of disclosure.On appeal, the California Court of Appeal, Second Appellate District, Division One, affirmed the judgment but for a different reason. The appellate court held that the Education Code does not require vendors to continue disclosing fees for optional product features that are no longer offered to new customers, even if existing customers still pay those fees. Therefore, Met Life was not prohibited from charging the fee after discontinuing the rider for new enrollees, and the plaintiff’s UCL claim was properly dismissed. View "Jacobson v. Metropolitan Life Ins. Co." on Justia Law

The case concerns a dispute that arose after a company, Motiva Performance Engineering, failed to deliver on an agreement to upgrade a vehicle for the plaintiff, resulting in a jury verdict against Motiva for breach of contract, fraudulent misrepresentation, and violation of the Unfair Practices Act. The company’s managing member, who was also its attorney, transferred Motiva’s Ferrari to another company he controlled shortly after the verdict and subsequently used the car as collateral for a loan without disclosing this to the court. Additional questionable conduct included failing to disclose or potentially backdating a promissory note and depositing insurance proceeds into his personal account. These acts occurred while the court was overseeing asset proceedings to satisfy the judgment against Motiva.Following these actions, the district court held a hearing and issued a sanctions order against the managing member and his associated entities for what it termed remedial contempt, requiring payment of the underlying judgment and a $50,000 donation to charity. The sanctions order also referenced Rule 1-011 NMRA (Rule 11) violations due to misstatements in court filings. The managing member moved for reconsideration, arguing the evidence did not support remedial contempt, but appealed the order before the motion was decided. The New Mexico Court of Appeals affirmed the sanctions on both inherent powers and Rule 11 grounds, though a dissent questioned the breadth of conduct relied upon under Rule 11.The Supreme Court of the State of New Mexico held that the district court erred by imposing punitive contempt sanctions without affording criminal-level due process protections and that such sanctions could not be justified under the court’s inherent powers without those protections. However, the court upheld the sanctions under Rule 11, as the due process requirements for Rule 11 are not equivalent to those for contempt. The holding was limited to willful misstatements made in documents filed with the court. The court affirmed the Court of Appeals in part, reversed in part, and remanded for further proceedings. View "Butler v. Motiva Performance Engineering, LLC" on Justia Law

Robert Sullivan entered into a contract with Nomad Capitalist USA, LLC for consulting services related to international relocation and financial planning, paying approximately $52,500. The contract was governed by Arizona law and included a forum selection clause requiring disputes to be litigated exclusively in Hong Kong. Andrew Henderson, founder and manager of Nomad, signed the contract on Nomad’s behalf but not in his individual capacity. After the business relationship deteriorated, Sullivan sued both Nomad and Henderson in Arizona, alleging breach of contract, unjust enrichment, and consumer fraud under Arizona’s Consumer Fraud Act. Both Nomad and Henderson sought dismissal based on the forum selection clause.The Superior Court in Maricopa County granted Nomad’s motion to dismiss, finding the forum selection clause applicable to Sullivan’s claims against Nomad. However, it denied Henderson’s motion to dismiss, holding that the clause did not apply to Sullivan’s consumer fraud claim against Henderson as Henderson was not a signatory to the contract. The court dismissed all contract claims against Henderson, leaving only the statutory consumer fraud claim. Henderson petitioned the Arizona Court of Appeals for special action relief, which declined jurisdiction. He then sought review by the Supreme Court of Arizona.The Supreme Court of Arizona considered whether to adopt the “closely related party doctrine” or “alternative estoppel theory” to permit a non-signatory like Henderson to enforce the forum selection clause. The Court declined to adopt either doctrine, emphasizing that contract provisions control and that established doctrines for non-signatories—such as third-party beneficiary or alter ego—are sufficient. It held that, under Arizona law, a non-signatory cannot enforce a forum selection clause unless explicitly included in the contract. The Court affirmed the Superior Court’s ruling and remanded the case for further proceedings. View "HENDERSON v HON. MOSKOWITZ/SULLIVAN" on Justia Law