Justia Consumer Law Opinion Summaries

Cothron works at an Illinois White Castle restaurant where she must scan her fingerprint to access the computer system. With each scan, her fingerprint is collected and transmitted to a third-party vendor for authentication. Cothron alleges that White Castle did not obtain her written consent before implementing the fingerprint-scanning system, violating the Illinois Biometric Information Privacy Act, 740 ILCS 14/1, arguing that every unauthorized fingerprint scan amounted to a separate violation of the statute, so a new claim accrued with each scan. On interlocutory appeal, the Seventh Circuit certified a question to the Illinois Supreme Court, which responded that claims accrue each time a private entity scans a person’s biometric identifier and each time a private entity transmits such a scan to a third party, respectively, not only upon the first scan and first transmission.The Seventh Circuit then lifted a stay and affirmed the denial of White Castle’s motion for judgment on the pleadings. The court rejected White Castle’s request to expand the interlocutory appeal to include new questions concerning the scope of a possible damages award and Due Process and Excessive Fines Clause claims. The order before the court concerned only the timeliness of Cothron’s suit. View "Latrina Cothron v. White Castle System, Inc." on Justia Law

Mark Kielar challenged a superior court’s decision to grant Hyundai Motor America’s (Hyundai) motion to compel arbitration of his causes of action for violation of the Song-Beverly Consumer Warranty Act, and fraudulent inducement arising from alleged mechanical defects in the condition of his 2012 Hyundai Tucson. The superior court’s ruling followed Court of Appeal's earlier decision in Felisilda v. FCA US LLC, 53 Cal.App.5th 486 (2020) and concluded Hyundai, a nonsignatory manufacturer, could enforce the arbitration provision in the sales contract between Kielar and his local car dealership under the doctrine of equitable estoppel. The Court of Appeal joined recent decisions that have disagreed with Felisilda and concluded the court erred in ordering arbitration. Therefore, it issued a preemptory writ of mandate compelling the superior court to vacate its June 16, 2022 order and enter a new order denying Hyundai’s motion. View "Kielar v. Super. Ct." on Justia Law

The United States and the Commonwealth of Virginia (together, the “governments”) appealed the district court’s dismissal of their complaint under the False Claims Act and Virginia state law. The governments alleged that Walgreen Co. (“Walgreens”) misrepresented that certain patients met Virginia’s Medicaid-eligibility requirements for expensive Hepatitis C drugs. The district court dismissed the complaint, holding that Virginia’s eligibility requirements violated the Medicaid Act, and therefore Walgreens’s misrepresentations were immaterial as a matter of law.   The Fourth Circuit vacated and remanded. The court held that the governments plausibly allege facts that establish materiality. The court wrote that the alleged misrepresentation (that Patient 12 couldn’t use the cheaper drug alternative) has nothing to do with the eligibility requirements Walgreens now challenges. The district court didn’t explain how the supposed illegality of Virginia’s eligibility requirements rendered this misrepresentation immaterial or how it otherwise failed to state a claim. Further, the court explained it is also persuaded that Walgreens can’t avoid liability by collaterally challenging the eligibility requirements’ legality under a line of cases beginning with United States v. Kapp. Moreover, the court explained that Walgreens offers no good reason why a contract law (and even more specifically, a collective-bargaining-contract-law) rule should displace the liability created by the False Claims Act, a federal statute. View "US v. Walgreen Co." on Justia Law

Chaitoff sued under the Fair Credit Reporting Act, 15 U.S.C. 1681, alleging that Experian made a mistake when it omitted a fact from his credit report, then failed to correct its error. Chaitoff had signed an agreement with his mortgage lender that allowed him to make lower payments and avoid foreclosure. Rather than report the agreement, Chaitoff’s credit report said that he was delinquent. The district court granted Experian summary judgment.The Seventh Circuit reversed in part, holding that the omission of material information is actionable under the FCRA; reporting the existence of the agreement did not involve the application of law to facts. Experian’s initial reporting efforts were reasonable but, concerning Experian’s investigations after Chaitoff alerted it to the discrepancy, a reasonable jury could find that there was a cost-effective step Experian could have taken that would have discovered the agreement’s existence. Experian failed to note Chaitoff’s dispute in later reports, as the FCRA requires. View "Chaitoff v. Experian Information Solutions, Inc." on Justia Law

Two putative class actions are at issue in these appeals: Nacarino v. Kashi Co., No. 22-15377, and Brown v. Kellogg Co., No. 22-15658. The complaints were filed in the Northern District of California, and they asserted materially identical state-law consumer protection claims for unfair business practices, unjust enrichment, and fraud. Both complaints alleged that the front labels on several of Defendants’ products are “false and misleading” under state and federal law. At issue is whether food product labels that advertise the amount of protein in the products are false or misleading.   The Ninth Circuit affirmed on different grounds the district court’s dismissal of the two complaints. The panel rejected Plaintiffs’ arguments that the protein claims on Defendants’ labels were false because the nitrogen method for calculating protein content overstated the actual amount of protein the products contained. The panel held that FDA regulations specifically allow manufacturers to measure protein quantity using the nitrogen method.   The panel rejected Plaintiffs’ arguments that the protein claims on Defendants’ labels were misleading because the “amount of digestible or usable protein the Products actually deliver to the human body is even lower” than the actual amount of protein the products contain. The panel held that Defendants’ protein claims could be misleading under FDA regulations if they did not accurately state the quantity of protein or if the products did not display the quality-adjusted percent daily value in the Nutritional Facts Panel. However, Plaintiffs’ complaints did not allege that the challenged protein claims were misleading within the meaning of the federal regulations. View "ELENA NACARINO, ET AL V. KASHI COMPANY" on Justia Law

Lee’s contract with Cardiff segregated the $231,500 price between the construction of a pool and spa ($88,400) and the construction of a pavilion, an outdoor kitchen, an outdoor fireplace, pavers, and other landscaping items ($143,000). Disputes arose and Cardiff left the project. Lee sued. The court largely rejected Lee’s claims pertaining to the pool construction, agreed with some of her claims pertaining to the pavilion and other landscaping items, and agreed that Cardiff had violated state contracting laws by hiring workers who were not licensed contractors and treating them as independent contractors for purposes of worker’s compensation. Based on that claim, the court ordered disgorgement plus interest ($238,470). It awarded contract and tort damages of $236,634, allocating $35,000 to deficiencies with the pool.The contract did not have an attorney fees clause. The court declined to award discretionary fees under Code of Civil Procedure 1029.8, ruling Cardiff had not knowingly violated the state contractor licensing law and disgorgement was a sufficient penalty for that violation. The court ruled that because Lee was “unsuccessful on the vast majority of [her] swimming pool claims,” there was no prevailing party under Business and Professions Code 7168, which pertains to swimming pool construction contracts.The court of appeal affirmed with respect to section 7168. None of the non-swimming pool projects can reasonably be categorized as part of “a contract for swimming pool construction.” View "Lee v. Cardiff" on Justia Law

Genentech manufactures and sells Rituxan, a drug used to treat leukemia and lymphoma. Rituxan is sold in single-use vials. Williamson was diagnosed with follicular lymphoma and was treated with Rituxan. Williamson later sued Genentech, on behalf of himself and a putative class of similarly situated individuals. He claims that Genentech violates the unfair competition law by selling Rituxan (and three other medications) in excessively large single-use vials; because the appropriate dosage varies based on a patient’s body size, Genentech’s vial sizes are too large for most patients. He argues Genentech should be required to offer smaller vials to reduce the waste of expensive medicine. In addition to injunctive relief, Williamson seeks to recover the amount the class spent on wasted Rituxan (and three other medications). Williamson took only Rituxan, not the other three medications, and paid a $231.15 deductible– the rest of the payments were made by his health insurer.The court of appeal affirmed the dismissal of the case for lack of standing under California’s unfair competition law (Bus. & Prof. Code 17200). Williamson suffered no economic injury caused by the alleged unfair practices and cannot establish standing by borrowing an economic injury from his insurer. The collateral source rule, under which a tortfeasor must fully compensate a victim and cannot subtract compensation the victim may have received from their insurer or another collateral source, does not apply. View "Williamson v. Genentech, Inc." on Justia Law

Unifund purchased Choice's defaulted consumer debt and hired the Kohn Law Firm, which sued Choice in state court on behalf of Unifund, seeking judgment in the amount of the debt plus “statutory attorney fees.” An attached affidavit by Unifund’s agent indicated that the company was not seeking additional amounts after the charge-off date, including attorney’s fees. Choice believed that because the affidavit contradicted the complaint's request for judgment, one of the statements was false; he claimed that no applicable statute permitted the recovery of such attorney’s fees.Choice sued under the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692, alleging injury from the receipt of false, misleading, and deceptive communications. Choice alleged “he hired an attorney to help him ascertain the amount of the alleged debt owed, whether attorney fees could be imposed, and in what amount” and paid an appearance fee to a lawyer in the state court action. Despite his allegation that, but for the statements, he would have paid or settled the debt, during discovery Choice denied owing any debt. He later said he lost sleep due to concern over the extent of his liability.The Seventh Circuit affirmed the dismissal of the complaint. Choice did not establish Article III standing; neither confusion, lost sleep, nor hiring a lawyer are concrete harms. Choice admitted in discovery that he did not suffer any actual damages. View "Choice v. Kohn Law Firm, S.C." on Justia Law

FSSolutions faxed Dr. Thalman several times to ask him to join its network of preferred medical providers and administer various employment screening and testing services to its clients. Thalman declined the invitation and instead invoked the Telephone Consumer Protection Act, 7 U.S.C. 227(b)(1)(C), to sue FSSolutions for sending him unsolicited advertisements. The district court dismissed the complaint after finding that the faxes were not “unsolicited advertisements” within the meaning of the TCPA because they merely asked to purchase Thalman’s own services rather than inviting him to buy something from FSSolutions.The Seventh Circuit reversed. While a fax must directly or indirectly encourage recipients to buy goods, services, or property to qualify as an unsolicited advertisement, Thalman plausibly alleged that FSSolutions’s faxes did just that by promoting the company’s network of preferred medical providers, a network that would bring Thalman new business in exchange for a portion of the underlying client fees. “[M]indful that many plaintiffs’ attorneys view the TCPA opportunistically, the court cautioned against overreading its opinion, which applies to unsolicited faxes that an objective recipient would construe as urging the purchase of a good, service, or property by emphasizing its availability or desirability. View "Smith v. First Hospital Laboratories, Inc." on Justia Law

Plaintiff appealed from the district court’s partial judgment granting a motion to dismiss in favor of Defendant, Reward Zone USA, LLC (Reward Zone), in a putative class action lawsuit brought under the Telephone Consumer Protection Act (TCPA). In Plaintiff’s second cause of action, which is the subject of this opinion, Plaintiff alleged a violation of the TCPA because she received at least three mass marketing text messages from Reward Zone which utilized “prerecorded voices.”   The Ninth Circuit affirmed the district court’s dismissal. The court held the text messages did not use prerecorded voices under the Act because they did not include audible components. The panel relied on the statutory context of the Act and the ordinary meaning of voice, which showed that Congress used the word voice to include only an audible sound, and not a more symbolic definition such as an instrument or medium of expression. The panel addressed Plaintiff’s appeal of the district court’s dismissal of another cause of action under the Telephone Consumer Protection Act in a simultaneously-filed memorandum disposition. View "LUCINE TRIM V. REWARD ZONE USA LLC, ET AL" on Justia Law