Justia Consumer Law Opinion Summaries

A patient with a long history of severe depression and multiple suicide attempts underwent 95 electroconvulsive therapy (ECT) treatments at a Nebraska hospital between 2014 and 2016. The ECT was administered using a device manufactured by Somatics, LLC. After the treatments, the patient experienced significant memory loss and was diagnosed with a neurocognitive disorder. In 2020, he filed suit against Somatics in the United States District Court for the Middle District of Florida, alleging negligence, strict product liability, breach of warranties, violation of Nebraska’s Consumer Protection Act, and fraudulent misrepresentation, primarily claiming that Somatics failed to adequately warn of the risks associated with ECT.The district court dismissed the claims under Nebraska’s Consumer Protection Act and for fraudulent misrepresentation, merged the strict liability and breach of implied warranty claims, and granted summary judgment to Somatics on the design defect, manufacturing defect, and breach of express warranty claims. The remaining claims for negligence and strict liability, both based on failure to warn, were merged for trial. The jury found that while Somatics failed to provide adequate warnings, this failure was not the proximate cause of the plaintiff’s injuries, and awarded no damages. The district court denied the plaintiff’s post-trial motions, including for a new trial.On appeal, the United States Court of Appeals for the Eleventh Circuit reviewed the district court’s decisions de novo for summary judgment and for abuse of discretion on evidentiary and procedural rulings. The Eleventh Circuit held that the district court properly granted summary judgment on the design defect claim, correctly merged the negligence and strict liability claims, gave an appropriate jury instruction on proximate cause, and did not abuse its discretion in excluding certain evidence and expert testimony. The judgment of the district court was affirmed. View "Thelen v. Somatics, LLC" on Justia Law

Scranton Products sued Bobrick Washroom Equipment in 2014, alleging false advertising regarding the fire compliance of Scranton’s toilet partitions. Bobrick counterclaimed, asserting Scranton’s advertising was itself false. Scranton voluntarily dismissed its claims, and the parties entered into a settlement agreement that included a provision waiving their rights to appeal any court orders arising from the agreement or enforcement motions. The District Court approved the agreement, dismissed the case, and retained jurisdiction to enforce the settlement. Subsequently, both parties filed enforcement motions related to compliance with the agreement, leading to a public evidentiary hearing. During post-hearing proceedings, Scranton moved to seal certain documents, and the District Court issued two sealing orders: one temporarily sealing documents during the pendency of enforcement motions, and another indefinitely sealing them after the motions were resolved.The United States District Court for the Middle District of Pennsylvania denied all enforcement motions and issued the second sealing order, directing the parties to confer about sealing and stating that, absent agreement, the status quo of sealing would remain. Bobrick appealed both sealing orders, arguing that the indefinite sealing was overbroad and contrary to the public’s right of access to judicial records.The United States Court of Appeals for the Third Circuit reviewed the case. It held that it lacked jurisdiction to review the first, temporary sealing order because it was no longer in effect, rendering the appeal moot. The court found it had jurisdiction to review the second, indefinite sealing order under the collateral order doctrine, as it was final and appealable. However, the Third Circuit enforced the appellate waiver in the settlement agreement, declining to exercise jurisdiction over the appeal and affirming the District Court’s indefinite sealing order. The court also denied Bobrick’s alternative request for a writ of mandamus. View "Bobrick Washroom Equipment Inc v. Scranton Products Inc" on Justia Law

The defendant, a former U.S. Coast Guard employee, was convicted by a jury of murdering two co-workers in Alaska. At the time of the government’s collection action, he held approximately $450,000 in a Thrift Savings Plan (TSP) account, a federal retirement savings plan. His wife had a statutory right to a joint and survivor annuity from the account, and federal law generally requires spousal consent for lump-sum withdrawals. Following his conviction, the government sought to collect the entire balance of his TSP account as restitution for the victims’ families.The United States District Court for the District of Alaska initially ordered restitution from the defendant’s retirement and disability income, including his TSP funds, but limited lump-sum withdrawals from the TSP without spousal consent, instead permitting monthly payments. On appeal, the United States Court of Appeals for the Ninth Circuit vacated the restitution order, holding that the district court could not use the All Writs Act to bypass statutory garnishment limits and remanded for a determination of whether the defendant’s benefit streams constituted “earnings” subject to a 25% garnishment cap under the Consumer Credit Protection Act.On remand, the district court issued amended restitution orders authorizing the government to collect the entire TSP account balance as a lump sum. The defendant appealed, arguing that statutory spousal protections limited the government to periodic garnishments. The United States Court of Appeals for the Ninth Circuit held that the government may only cash out a defendant’s TSP account to satisfy a restitution order under the Mandatory Victims Restitution Act if the plan’s terms would allow the defendant to do so at the time of the order. Because spousal consent was required and not obtained, the court vacated the restitution orders and remanded for further proceedings. View "United States v. Wells" on Justia Law

Plaintiffs, representing themselves and a putative class, purchased Kleenex Germ Removal Wet Wipes manufactured by Kimberly-Clark Corporation. They alleged that the product’s labeling misled consumers into believing the wipes contained germicides and would kill germs, rather than merely wiping them away with soap. Plaintiffs claimed that this misrepresentation violated several California consumer protection statutes. The wipes were sold nationwide, and the plaintiffs included both California and non-California residents.The United States District Court for the Northern District of California first dismissed the non-California plaintiffs’ claims for lack of personal jurisdiction and dismissed the remaining claims under Rule 12(b)(6), finding that the labels would not plausibly deceive a reasonable consumer. The court dismissed the Second Amended Complaint (SAC) without leave to amend, and plaintiffs appealed.On appeal, the United States Court of Appeals for the Ninth Circuit reviewed whether subject-matter jurisdiction existed under diversity jurisdiction statutes, 28 U.S.C. §§ 1332(a) and 1332(d)(2). The court found that the SAC failed to allege Kimberly-Clark’s citizenship and did not state the amount in controversy. The panel held that diversity of citizenship cannot be established by judicial notice alone and that the complaint must affirmatively allege the amount in controversy. Plaintiffs were permitted to submit a proposed Third Amended Complaint (TAC), which successfully alleged diversity of citizenship but failed to plausibly allege the required amount in controversy for either statutory basis. The court concluded that neither it nor the district court had subject-matter jurisdiction and vacated the district court’s judgment, remanding with instructions to dismiss the case without prejudice. The panel denied further leave to amend, finding that additional amendment would be futile. View "ROSENWALD V. KIMBERLY-CLARK CORPORATION" on Justia Law

A borrower in Rhode Island financed a home purchase with a mortgage from a national bank. The mortgage required the borrower to make advance payments for property taxes and insurance into an escrow account managed by the bank. The bank did not pay interest on these escrowed funds, despite a Rhode Island statute mandating that banks pay interest on such accounts. Years later, the borrower filed a class action lawsuit against the bank, alleging breach of contract and unjust enrichment for failing to pay the required interest under state law.The United States District Court for the District of Rhode Island dismissed the complaint, agreeing with the bank that the National Bank Act preempted the Rhode Island statute. The court reasoned that the state law imposed limits on the bank’s federal powers, specifically the power to establish escrow accounts, and thus significantly interfered with the bank’s incidental powers under federal law. The court did not address class certification or the merits of the unjust enrichment claim, focusing solely on preemption.On appeal, the United States Court of Appeals for the First Circuit reviewed the case after the Supreme Court’s decision in Cantero v. Bank of America, N.A., which clarified the standard for preemption under the National Bank Act. The First Circuit held that the district court erred by not applying the nuanced, comparative analysis required by Cantero. The appellate court found that the bank failed to show that the Rhode Island statute significantly interfered with its federal banking powers or conflicted with the federal regulatory scheme. The First Circuit vacated the district court’s judgment and remanded the case for further proceedings, allowing the borrower’s claims to proceed. View "Conti v. Citizens Bank, N.A." on Justia Law

Several borrowers executed mortgage agreements with a lender, granting the lender a lien on their respective properties in Hawai‘i. Between 2008 and 2009, the borrowers defaulted on their mortgage loans, and the lender foreclosed on the properties through nonjudicial foreclosure sales. The lender was the winning bidder at each sale and subsequently conveyed the properties to third parties. In 2019, the borrowers filed suit, alleging wrongful foreclosure, unfair or deceptive acts and practices (UDAP), and sought quiet title and ejectment against the current titleholders. They requested both monetary damages and the return of title and possession of the properties.The Circuit Court of the Third Circuit granted summary judgment in favor of the lender and the titleholders. The court found that the borrowers could not establish compensatory damages because their outstanding mortgage debts at the time of foreclosure exceeded any damages they claimed, even when accounting for loss of use and other asserted losses. The court also determined that the borrowers’ quiet title and ejectment claims were barred by the statute of limitations and that the titleholders were bona fide purchasers. The borrowers appealed, and the Supreme Court of Hawai‘i accepted transfer of the case.The Supreme Court of Hawai‘i affirmed the circuit court’s summary judgment. The court held that, under its precedents, borrowers must establish compensatory damages after accounting for their mortgage debts to survive summary judgment on wrongful foreclosure and UDAP claims. Here, the borrowers’ debts exceeded their claimed damages. The court further held that claims for return of title and possession are subject to a six-year statute of limitations for wrongful foreclosure actions, which barred the borrowers’ claims. Additionally, the court concluded that the titleholders were bona fide purchasers, as the foreclosure affidavits did not provide constructive notice of any defects. View "McCullough v. Bank of America, N.A." on Justia Law

A property management company operating several apartment buildings in Missoula County contracted with a waste management provider for “three-yard” dumpster service. After the expiration of their initial service agreement, the provider continued to supply waste removal services on an invoice-by-invoice basis. The property management company later discovered that many of the dumpsters labeled as “three-yard” actually had a capacity of less than three cubic yards, with one model measuring approximately 2.52 cubic yards. The waste management provider rotated these containers among customers and did not maintain records of which customers received which models. The property management company alleged that it was charged overage fees for exceeding the stated capacity of these undersized containers.The property management company filed suit in the Fourth Judicial District Court, Missoula County, asserting claims for breach of contract and negligent misrepresentation, and sought to represent a class of similarly situated customers. The District Court bifurcated discovery and, after briefing and oral argument, certified two classes: one for breach of contract and one for negligent misrepresentation, both defined as customers who paid for “three-yard” service but received dumpsters of 2.6 cubic yards or less. The District Court found that common questions predominated over individual issues and that class litigation was superior to individual actions.On appeal, the Supreme Court of the State of Montana reviewed whether the District Court abused its discretion in finding predominance of common questions and whether it erred by not considering the ascertainability of class members. The Supreme Court held that the District Court did not abuse its discretion in certifying the classes, as common questions regarding the provider’s contractual and legal obligations predominated, and individualized damages did not preclude certification. The Court also held that ascertainability is not a mandatory requirement under Montana’s class action rule. The District Court’s order granting class certification was affirmed. View "Allied Waste v. LH Residential" on Justia Law

Adir International, LLC operates a chain of retail stores, Curacao, which primarily serves low-income, Spanish-speaking immigrants in California, Nevada, and Arizona. Curacao offers store credit to customers, with over 90 percent of sales made on store credit. Since at least 2012, Curacao has offered optional “account protection” services (AGP Basic and AGP Plus) to credit customers, with AGP Plus including a credit property insurance component. Curacao was licensed as a credit insurance agent, but its sales associates, who were not licensed or endorsed, received bonuses for selling these insurance products. The AGP program allowed customers to defer payments under certain circumstances, but the fees for AGP often exceeded finance charges, and the program was highly profitable for Curacao.The People of the State of California filed a civil enforcement action in the Superior Court of Los Angeles County, alleging that Adir and its owner, Ron Azarkman, violated the Unfair Competition Law (UCL) through predicate violations of the Insurance Code and the Unruh Retail Installment Sales Act (Unruh Act). After a bench trial, the Superior Court found that Adir and Azarkman violated the Insurance Code by selling insurance through unlicensed employees, failing to use approved training materials, and providing required disclosures only after enrollment. The court held Azarkman personally liable due to his control and knowledge of the practices. However, the court ruled that the sale of account protection services did not violate the Unruh Act.On appeal, the California Court of Appeal, Second Appellate District, Division Eight, affirmed the trial court’s findings regarding the Insurance Code violations and Azarkman’s personal liability, rejecting arguments about primary jurisdiction, statutory interpretation, and statute of limitations. The appellate court reversed the trial court’s ruling on the Unruh Act, holding that the Act limits all permissible fees to those specifically authorized, and remanded for further proceedings on that claim. In all other respects, the judgment was affirmed. View "P. v. Adir Internat., LLC" on Justia Law

During the COVID-19 pandemic, two individuals who held automobile insurance policies with a major insurer in California alleged that the insurer’s rates became excessive due to a significant reduction in driving and traffic accidents. They claimed that the insurer was required by statute to refund a portion of the premiums collected during this period, even though the rates had previously been approved by the state’s insurance commissioner. The insurer did provide partial refunds in response to directives from the insurance commissioner, but the plaintiffs argued these refunds were insufficient and sought further restitution on behalf of a class of similarly situated policyholders.The Superior Court of Alameda County initially allowed the plaintiffs to amend their complaint after sustaining a demurrer. In their amended complaint, the plaintiffs continued to assert claims under California’s Unfair Competition Law and for unjust enrichment, maintaining that the insurer’s failure to provide full refunds violated Insurance Code section 1861.05(a). The trial court, however, sustained the insurer’s subsequent demurrer without leave to amend, holding that the statutory scheme did not require insurers to retroactively refund premiums collected under previously approved rates, even if those rates later became excessive due to changed circumstances.The California Court of Appeal, First Appellate District, Division One, reviewed the case on appeal. The court held that Insurance Code section 1861.05(a) does not impose an independent obligation on insurers to retroactively refund premiums collected under rates approved by the insurance commissioner, even if those rates later become excessive. The court reasoned that the statutory scheme provides for prospective rate adjustments through the commissioner’s review process, not retroactive modifications. The court also found that the insurer’s conduct was affirmatively permitted under the statutory “prior approval” system, and thus not actionable under the Unfair Competition Law. The judgment in favor of the insurer was affirmed. View "Davis v. CSAA Insurance Exchange" on Justia Law

A business was investigated by the Consumer Protection Unit (CPU) of the Alaska Attorney General’s Office after the CPU received an anonymous letter alleging that the business, a local car dealership, was charging documentation fees on top of advertised prices, potentially violating Alaska law. The letter included an email exchange confirming the practice. Following approval from the Department of Law, the CPU monitored the business’s website and conducted an undercover visit, during which employees confirmed the additional fees. In December, the CPU issued a subpoena requesting documents related to vehicle sales, including contracts and advertisements, to further its investigation.After the business missed the deadline to produce documents, it petitioned the Superior Court for the State of Alaska, Third Judicial District, Anchorage, to quash the subpoena. The business argued that the CPU lacked “cause to believe” a violation had occurred, as required by statute, and challenged the reliability of the anonymous complaint and the legitimacy of the undercover investigation. The CPU responded that the subpoena was an administrative subpoena, subject to a low threshold for issuance, and that the letter and email provided a sufficient basis for investigation.The Superior Court denied the petition to quash, finding that the subpoena was authorized under AS 45.50.495(b), was part of a good-faith investigation, and adequately specified the documents to be produced. The court held that the “cause to believe” standard did not apply to the subpoena power in subsection (b), but that even if it did, the evidence met the low bar required. The business appealed.The Supreme Court of the State of Alaska affirmed the superior court’s order, holding that the CPU had sufficient basis to issue the subpoena under AS 45.50.495(b), regardless of whether the “cause to believe” standard applied. The court found no abuse of discretion in the superior court’s decision. View "Business Doe, LLC v. State of Alaska" on Justia Law