Justia Consumer Law Opinion Summaries

The case involves a consumer class action against Premier Nutrition Corporation, which marketed Joint Juice, a dietary supplement drink, as effective for relieving joint pain. Mary Beth Montera, representing a class of New York consumers, alleged that Premier's advertising was deceptive and violated New York General Business Law (GBL) §§ 349 and 350. These laws require proof that the defendant engaged in consumer-oriented conduct that was materially misleading and caused injury to the plaintiff.The United States District Court for the Northern District of California certified the class and the case proceeded to trial. Montera presented evidence, including studies showing that Joint Juice's key ingredients, glucosamine and chondroitin, were ineffective for joint health. Premier countered with industry-funded studies supporting the product's efficacy. The jury found Premier's statements deceptive and awarded statutory damages based on the number of units sold in New York during the class period. Premier's post-trial motions to decertify the class and for judgment as a matter of law were denied.The United States Court of Appeals for the Ninth Circuit reviewed the case. The court affirmed the district court's rulings on class certification, liability under GBL §§ 349 and 350, and the initial calculation of statutory damages. The court rejected Premier's arguments that its statements were not materially misleading and that Montera's injury was not cognizable under New York law. The court also upheld the jury's finding that the class members' injuries were caused by Premier's misrepresentations.However, the Ninth Circuit vacated the district court's award of prejudgment interest, ruling that statutory damages under GBL §§ 349 and 350 are not compensatory and thus do not warrant prejudgment interest. The court also remanded the case for the district court to reconsider the statutory damages award in light of the factors identified in Wakefield v. ViSalus, Inc., which addresses the substantive due process limits on aggregate statutory damages. The court affirmed in part, reversed in part, and vacated and remanded in part. View "MONTERA V. PREMIER NUTRITION CORPORATION" on Justia Law

A joint state and federal criminal investigation, "Operation Back Cracker," uncovered a scheme where Minnesota healthcare providers, primarily chiropractors, recruited car accident victims and fraudulently billed auto insurers for their treatment. In related civil settlements, some providers agreed not to bill certain insurance companies, including Illinois Farmers Insurance Company, for any treatment provided to their insureds. Plaintiffs, representing a class of insured individuals, sued Farmers, alleging that these no-bill agreements violated the Minnesota No-Fault Automobile Insurance Act.The United States District Court for the District of Minnesota granted summary judgment to the plaintiffs' injunctive class, enjoining Farmers from entering into or enforcing the no-bill agreements. The court found that these agreements effectively provided managed care services and set preestablished limitations on medical expense benefits, both of which are prohibited under the No-Fault Act. Farmers appealed the decision.The United States Court of Appeals for the Eighth Circuit reviewed the case and vacated the injunction. The court held that the no-bill agreements did not constitute managed care services as defined by the No-Fault Act because they excluded, rather than used, the providers under contract with Farmers. Additionally, the court found that the agreements did not place preestablished limitations on medical expense benefits since they did not limit reimbursement for reasonable expenses incurred by insureds. The court concluded that an insurer does not violate the No-Fault Act by enforcing a no-bill agreement against a provider, as long as it does not refuse to reimburse an insured who has incurred a qualifying expense. The case was remanded for further proceedings consistent with this opinion. View "Taqueria El Primo LLC v. IL Farmers Insurance Co." on Justia Law

The case involves BioPoint, Inc., a life sciences consulting firm, which accused Catapult Staffing, LLC, and Andrew Dickhaut of misappropriating trade secrets, confidential business information, and engaging in unfair trade practices. BioPoint alleged that Catapult, with the help of Dickhaut and Leah Attis (a former BioPoint employee and Dickhaut's fiancée), used BioPoint's proprietary information to recruit candidates and secure business from BioPoint's clients, including Vedanta and Shire/Takeda.The U.S. District Court for the District of Massachusetts handled the initial proceedings. The jury found Catapult liable for misappropriating BioPoint's trade secrets concerning three candidates and two clients, and for tortious interference with BioPoint's business relationship with one candidate. The jury awarded BioPoint $312,000 in lost profits. The judge, in a subsequent bench trial, found Catapult liable for unjust enrichment and violations of the Massachusetts Consumer Protection Law (chapter 93A), awarding BioPoint $5,061,444 in damages, which included treble damages for willful and knowing conduct, as well as costs and attorneys' fees.The United States Court of Appeals for the First Circuit reviewed the case. The court largely affirmed the lower court's findings but reduced the judge's award by $157,068, as it found that BioPoint could not recover both lost profits and unjust enrichment for the same placement. The court also reversed the district court's imposition of joint-and-several liability on Andrew Dickhaut, ruling that he could not be held liable for profits he did not receive. The case was remanded for further proceedings to determine Dickhaut's individual liability. View "BioPoint, Inc. v. Dickhaut" on Justia Law

D'Pergo Custom Guitars, Inc. sued Sweetwater Sound, Inc. for using a photo of D'Pergo's guitar necks on Sweetwater's website. D'Pergo claimed copyright infringement under the Copyright Act, trademark infringement under the Lanham Act, and a violation of the New Hampshire Consumer Protection Act (CPA). The district court granted summary judgment to Sweetwater on the trademark claim and to D'Pergo on the copyright claim. A bench trial found in favor of Sweetwater on the CPA claim, and a jury awarded D'Pergo approximately $75,000 in compensatory damages for the copyright claim but did not award any of Sweetwater's profits.D'Pergo appealed the district court's summary judgment on the trademark claim and the bench trial ruling on the CPA claim. D'Pergo also argued that erroneous jury instructions warranted a reversal of the jury's finding that it was not entitled to recover any of Sweetwater's profits. Sweetwater cross-appealed, challenging the copyright damages based on what it claimed was inadmissible expert testimony.The United States Court of Appeals for the First Circuit affirmed the district court's ruling in favor of Sweetwater on the CPA claim, finding that Sweetwater did not act with the intent required for a CPA violation. However, the court reversed the district court's grant of summary judgment to Sweetwater on the trademark claim, concluding that D'Pergo's evidence created a genuine issue of fact regarding the trademark's secondary meaning and likelihood of confusion.The court also remanded for a new jury trial on the issue of infringing profits for the copyright claim, finding that the district court's jury instruction on the burden of proof for infringing profits overstated D'Pergo's burden. The court affirmed the district court's refusal to give D'Pergo's proposed "commingling" instruction and upheld the actual damages awarded to D'Pergo, rejecting Sweetwater's challenge to the admissibility of the expert testimony. View "D'Pergo Custom Guitars, Inc. v. Sweetwater Sound, Inc." on Justia Law

The Department of Transportation (DOT) issued a Rule on April 30, 2024, requiring airlines to disclose ancillary service fees, such as baggage and change fees, during the booking process. The Rule aims to protect consumers from surprise charges and is expected to provide significant societal and consumer benefits. The Rule took effect on July 1, 2024, with compliance deadlines for airlines and third-party ticket agents set for later dates. Various airlines and airline associations challenged the Rule, arguing it exceeds DOT’s authority, is arbitrary and capricious, and bypassed the required notice and comment process.The airlines and associations first sought a stay from the DOT, which was denied. They then petitioned the United States Court of Appeals for the Fifth Circuit for a stay pending review. The petitioners argued that the Rule exceeds DOT’s statutory authority under 49 U.S.C. § 41712(a), which allows the DOT Secretary to investigate and adjudicate unfair or deceptive practices but does not authorize the creation of detailed legislative rules. The petitioners also claimed that the Rule imposes significant compliance costs that would cause irreparable harm.The United States Court of Appeals for the Fifth Circuit granted the stay, finding that the petitioners made a strong showing that the Rule likely exceeds DOT’s authority. The court noted that the Rule mandates specific disclosure practices without the adjudicatory process required by the statute. The court also found that the petitioners would suffer irreparable harm due to the nonrecoverable compliance costs. The court concluded that there is no public interest in perpetuating unlawful agency action and expedited the petition for review to the next available oral argument panel. View "Airlines for America v. Department of Transportation" on Justia Law

Cybercriminals hacked into T-Mobile's computer systems, stealing personal information of approximately 76.6 million customers. Several customers filed class action lawsuits against T-Mobile, which were centralized in the U.S. District Court for the Western District of Missouri. The parties reached a settlement, with T-Mobile agreeing to create a $350 million fund for affected customers and to spend an additional $150 million on data security improvements. Class counsel requested $78.75 million in attorneys' fees, which two class members, Cassie Hampe and Connie Pentz, objected to as excessive.The district court struck Hampe's and Pentz's objections and overruled them on the merits. The court found Hampe's objection to be in bad faith, influenced by her attorneys' history as serial objectors, and struck it under Federal Rule of Civil Procedure 12(f). Pentz's objection was struck as a discovery sanction after she refused to cooperate with class counsel's discovery efforts. Both objectors appealed the district court's decisions.The United States Court of Appeals for the Eighth Circuit reviewed the case. The court held that the district court abused its discretion in striking Hampe's objection, as Rule 12(f) does not apply to objections and there was no evidence of bad faith in this case. The court also found that the district court erred in awarding attorneys' fees, determining that the fee award was unreasonable given the relatively short duration and limited discovery of the case. The court affirmed the decision to strike Pentz's objection but reversed the decision to strike Hampe's objection and the award of attorneys' fees, remanding for further proceedings. View "Daruwalla v. Hampe" on Justia Law

Jose Medina purchased a used car from St. George Auto Sales in December 2014, with financing from Alaska Federal Credit Union. Medina later discovered that the car had extensive engine repairs that were not disclosed to him at the time of purchase. He experienced multiple issues with the car, including the check engine light activating several times shortly after the purchase. Despite repeated repairs, the problems persisted. In December 2015, Medina learned from a different dealership that the car had significant pre-existing engine issues, which led him to believe that St. George had concealed this information.Medina filed a lawsuit in August 2018 against St. George and Alaska Federal, claiming a violation of the Consumer Legal Remedies Act (CLRA). The defendants argued that the claim was barred by the three-year statute of limitations. They contended that Medina should have been aware of the issues by March 2015 due to the repeated activation of the check engine light. The Superior Court of San Bernardino County overruled the defendants' demurrer and denied their motion for summary judgment, finding that there were factual questions about when Medina should have suspected the harm. The jury ultimately found in favor of Medina, concluding that he did not have sufficient notice of the claim until later.The California Court of Appeal, Fourth Appellate District, Division Three, reviewed the case. The court held that the discovery rule applies to the CLRA’s statute of limitations, meaning the limitations period begins when the plaintiff discovers or should have discovered the basis for the claim. The court found no error in the trial court’s rulings on the demurrer, summary judgment, or nonsuit motions, as there were factual questions about when Medina should have known about the engine issues and the defendants' potential wrongdoing. The judgment in favor of Medina was affirmed. View "Medina v. St. George Auto Sales, Inc." on Justia Law

Becky Anne Wilson was prosecuted for financial theft from her employer, Valley Hope Association. She pled guilty to three felonies: theft by deception, making a false information, and attempted theft by deception. The district court sentenced her to 24 months' probation for each conviction and ordered her to pay $65,864 in restitution with interest. Twenty-three months into her probation, the court revoked it and ordered her to serve consecutive prison sentences for each felony. Wilson appealed, arguing that the probation terms for the two lower-level felonies could not be revoked as she had completed their statutory terms and also challenged the interest order.The Kansas Court of Appeals agreed with Wilson, holding that the district court overstepped its authority by extending her probation until full restitution was paid and that the interest order was illegal. The State sought review from the Kansas Supreme Court.The Kansas Supreme Court reversed the Court of Appeals on the probation issue, holding that the district court properly extended Wilson's probation until she fully paid her restitution obligation, thus having jurisdiction to revoke her probation and impose the prison terms. However, on the interest issue, the Supreme Court affirmed the Court of Appeals but on different grounds. The Supreme Court held that while K.S.A. 21-6604(b)(1) permits monetary interest as part of restitution when evidence shows it is a damage or loss caused by the defendant's crime, the district court in this case did not make the necessary findings to support the causal connection for the interest award. Therefore, the interest portion of the restitution order was vacated. View "State v. Wilson" on Justia Law

Windward Bora LLC purchased a junior promissory note signed by Constance and Royston Browne, secured by a junior mortgage on real property. Windward's predecessor had already obtained a final judgment of foreclosure on the junior mortgage. Without seeking leave from the court that issued the foreclosure, Windward filed a diversity action to recover on the promissory note. Both parties moved for summary judgment.The United States District Court for the Southern District of New York granted the Brownes' motion for summary judgment and denied Windward's. The court found diversity jurisdiction by comparing the national citizenship of the Brownes with that of Windward’s sole member, a U.S. lawful permanent resident, and concluded that state domiciles were irrelevant. It also held that the suit was precluded by New York’s election-of-remedies statute because Windward did not seek leave before suing on the note after its predecessor had already sued on the mortgage. The court found no special circumstances to excuse Windward’s failure.The United States Court of Appeals for the Second Circuit reviewed the case. It agreed with the district court that diversity jurisdiction was present but clarified that the state domiciles of the parties were relevant. The court resolved a divide among district courts, stating that there is no diversity jurisdiction in a suit between U.S. citizens and unincorporated associations with lawful permanent resident members if such jurisdiction would not exist in a suit between the same U.S. citizens and those permanent resident members as individuals. The court also affirmed the district court’s decision to grant summary judgment for the Brownes under New York’s election-of-remedies statute, finding no special circumstances to excuse Windward’s failure to seek leave. The judgment of the district court was affirmed. View "Bora v. Browne" on Justia Law

J.M., an 11-year-old student, filed a class action lawsuit through his guardian ad litem against Illuminate Education, Inc., an education consulting business. J.M. alleged that Illuminate obtained his personal and medical information from his school to assist in evaluating his educational progress. Illuminate promised to keep this information confidential but negligently maintained its database, leading to a data breach where a hacker accessed the information. Illuminate delayed notifying J.M. and other victims about the breach for five months, during which J.M. began receiving unsolicited mail and phone calls.The trial court sustained Illuminate's demurrer, concluding that Illuminate did not fall within the scope of the Confidentiality of Medical Information Act (CMIA) or the Customer Records Act (CRA) and that J.M. failed to state a cause of action. J.M. filed a proposed second amended complaint with additional facts and a motion for reconsideration. The trial court reviewed the amended pleadings but maintained that J.M. had not stated a cause of action and could not amend to do so, thus sustaining the demurrer without leave to amend and entering judgment for Illuminate.The California Court of Appeal, Second Appellate District, reviewed the case and concluded that Illuminate falls within the scope of the CMIA and CRA. The court found that J.M. stated sufficient facts to support causes of action under both statutes. The court held that the trial court abused its discretion by sustaining the demurrer without leave to amend. The judgment of dismissal was reversed, and the case was remanded to the trial court, allowing J.M. to file an amended complaint with additional facts. View "J.M. v. Illuminate Education, Inc." on Justia Law