Justia Consumer Law Opinion Summaries

Plaintiffs, who are users of Coinbase's cryptocurrency platform, filed a complaint against Coinbase, Inc. alleging violations of the Consumer Legal Remedies Act (CLRA), the California False Advertising Law (FAL), and the California Unfair Competition Law (UCL). They sought public injunctive relief, claiming Coinbase misrepresented its security features to the public. Coinbase's user agreement, which plaintiffs accepted, included an arbitration clause. Coinbase moved to compel arbitration, arguing the plaintiffs sought private injunctive relief, which is subject to arbitration.The San Francisco Superior Court denied Coinbase’s motion to compel arbitration, finding that the plaintiffs sought public injunctive relief, which is not subject to arbitration under California law. The court noted that the complaint exclusively sought public injunctive relief and did not request any relief that would solely benefit the plaintiffs or existing Coinbase customers. The court also referenced a related federal case, Aggarwal I, where plaintiffs sought individual relief, supporting the conclusion that the current complaint sought public injunctive relief.The California Court of Appeal, First Appellate District, reviewed the case de novo. The court affirmed the trial court’s decision, holding that the plaintiffs’ complaint indeed sought public injunctive relief. The court explained that public injunctive relief under the CLRA, FAL, and UCL is intended to prohibit unlawful acts that threaten future injury to the public, rather than redress individual wrongs. The court found that the plaintiffs’ allegations and requests for relief were aimed at preventing Coinbase from continuing its allegedly deceptive practices, which primarily benefit the public. Consequently, the arbitration provision in Coinbase’s user agreement could not compel arbitration of the plaintiffs’ claims for public injunctive relief. View "Kramer v. Coinbase, Inc." on Justia Law

Santanu Das, a sales associate at Tata Consultancy Services, participated in a compensation incentive plan that promised a bonus exceeding $400,000 for achieving certain sales targets. Das met the target but was paid less than $100,000. He sued Tata under Illinois law, which requires employers to pay all agreed-upon compensation. Tata argued that disclaimers in the incentive plan negated any agreement to pay the bonus. The district court dismissed Das’s complaint, leading to this appeal.The United States District Court for the Northern District of Illinois initially dismissed Das’s claims without prejudice. Das amended his complaint, adding breach of contract and fraudulent misrepresentation claims. The district court dismissed the repleaded claims with prejudice but allowed Das to replead the new claims. Das chose to appeal only the Wage Act and fraudulent misrepresentation claims. The district court found that the disclaimers in the incentive plan prevented the formation of an agreement to pay wages and that Das’s fraudulent misrepresentation claim lacked the necessary particularity.The United States Court of Appeals for the Seventh Circuit reviewed the case de novo. The court found that Illinois law does not treat disclaimers as necessarily preventing the formation of mutual assent to terms. The court noted that past practices between Das and Tata could establish mutual assent. The court concluded that Das had plausibly alleged that Tata agreed to pay him the full bonus, reversing the district court’s dismissal of the Wage Act claim. However, the court affirmed the dismissal of the fraudulent misrepresentation claim, as Das failed to allege a scheme to defraud.The Seventh Circuit reversed the district court’s decision on the Wage Act claim and remanded the case for further proceedings. The dismissal of the fraudulent misrepresentation claim was affirmed. View "Das v. Tata Consultancy Services Limited" on Justia Law

Hannah Hekel received a letter from Hunter Warfield, Inc., a debt-collection agency hired by her landlord to collect past-due rent. The letter offered to forgive the debt in exchange for payment of about half of what she owed but included utility fees that may not have been collectible, failed to provide information on how to verify and dispute the debt on the front of the letter, and mentioned an interest rate that was allegedly too high. Hekel claimed these issues violated the Fair Debt Collection Practices Act and alleged harms including procedural injuries, emotional distress, and financial losses.The United States District Court for the District of Minnesota granted summary judgment in favor of Hunter Warfield on all claims. Although the agency mentioned standing as a defense, the district court did not address it.The United States Court of Appeals for the Eighth Circuit reviewed the case and focused on the issue of standing, which is a jurisdictional requirement. The court found that Hekel did not demonstrate a concrete injury. Allegations of statutory violations, informational injuries, risk of future harm, emotional distress, and financial losses were deemed insufficient or too conclusory to establish standing. The court emphasized that without a concrete injury, there is no standing, and without standing, the court lacks jurisdiction.The Eighth Circuit vacated the district court’s judgment and remanded the case with instructions to dismiss for lack of jurisdiction. View "Hekel v. Hunter Warfield, Inc." on Justia Law

The plaintiff landlord initiated a summary process action to evict the defendant tenant from an apartment. The trial court ruled in favor of the defendant, who then sought attorney’s fees under a statute that allows consumers to recover such fees when a contract includes a unilateral attorney’s fees provision favoring the commercial party. The lease agreement in question capped the plaintiff’s recoverable attorney’s fees at $750. The trial court awarded the defendant $3500 in attorney’s fees, reasoning that limiting the defendant’s recovery to $750 would not achieve true parity between the parties, as intended by the statute.The plaintiff appealed, arguing that the trial court could only award the defendant up to $750 in attorney’s fees, as specified in the lease agreement. The plaintiff contended that the statute required the court to base the defendant’s award on the same terms governing the plaintiff’s fees, as long as it was practicable to do so.The Connecticut Supreme Court reviewed the case and concluded that trial courts have discretion to award a prevailing consumer reasonable attorney’s fees in excess of the contractual cap when it is not practicable to base the award on the contractual terms. The court determined that the term "practicable" means feasible under the circumstances, which are circumstances that achieve equity or fairness. The court emphasized that the equitable purpose of the statute is to rectify the imbalance of power between consumers and commercial parties in contract disputes.The court vacated the trial court’s award of $3500 in attorney’s fees and remanded the case for a new hearing. The trial court was directed to determine whether it was practicable to base the defendant’s award on the lease agreement’s terms and, if not, to award reasonable attorney’s fees consistent with the statute’s equitable purpose. View "Centrix Management Co., LLC v. Fosberg" on Justia Law

A Californian plaintiff purchased several bottles of Banana Boat sunscreen between 2017 and 2020, including Ultra Sport SPF 100, SPF 50, and SPF 30. She later discovered that the SPF 50 bottle contained 0.29 parts per million (ppm) of benzene, a known carcinogen. She alleged that the products were falsely advertised as safe and that the presence of benzene was not disclosed on the labels. The plaintiff claimed she would not have purchased the products, or would have paid less for them, had she known about the benzene contamination.The United States District Court for the Central District of California dismissed the plaintiff’s suit for lack of Article III standing, concluding that she did not demonstrate a non-speculative increased health risk or actual economic harm. The court relied on FDA guidelines permitting up to 2 ppm of benzene in sunscreen, determining that the plaintiff’s allegations did not establish that 0.29 ppm of benzene posed a credible risk of harm or economic injury.The United States Court of Appeals for the Ninth Circuit reviewed the case and reversed the district court’s dismissal. The appellate court held that the district court erred by resolving disputed facts in favor of the defendants and prematurely addressing merits issues intertwined with the jurisdictional question of standing. The Ninth Circuit found that the plaintiff adequately established an injury in fact for purposes of Article III standing, as she alleged economic harm from purchasing a product she would not have bought, or would have paid less for, absent the defendants’ misrepresentations. The court also determined that the plaintiff met the causation and redressability elements of standing, as her injury was likely caused by the defendants' alleged misrepresentations and could be redressed by judicial relief. The case was remanded for further proceedings. View "BOWEN V. ENERGIZER HOLDINGS, INC." on Justia Law

A former professor at the University of California, Berkeley, sued the Regents of the University of California, alleging violations of the Fair Employment and Housing Act (FEHA) and the Information Practices Act (IPA). The professor claimed that the university failed to engage in the interactive process and provide reasonable accommodations for his bipolar II disorder, and that it invaded his privacy by leaking information about student complaints and his disability accommodations to the media.The Alameda County Superior Court granted summary adjudication in favor of the Regents on the claims of failure to engage in the interactive process, failure to provide reasonable accommodations, and invasion of privacy. The court also denied the professor’s motion to compel responses to certain discovery requests and his request for a retrial on the cause of action for which the jury left the verdict form blank. The jury found in favor of the Regents on all other claims except for the personnel file cause of action, which the jury did not address due to the instructions on the verdict form.The California Court of Appeal, First Appellate District, Division Four, affirmed the trial court’s rulings on the claims of failure to engage in the interactive process and failure to provide reasonable accommodations, finding no prejudicial error. The court also upheld the trial court’s denial of the motion to compel discovery, agreeing that the requests were overly broad and protected by the reporter’s privilege. However, the appellate court reversed the summary adjudication of the invasion of privacy cause of action, finding that there were triable issues of fact regarding whether the Regents violated the IPA by leaking information to the media. The court also reversed the trial court’s denial of attorney’s fees and costs, remanding for further proceedings consistent with its opinion. View "Wentworth v. UC Regents" on Justia Law

Michael Terpin, a cryptocurrency investor, sued AT&T Mobility, LLC after hackers gained control over his phone number through a fraudulent "SIM swap," received password reset messages for his online accounts, and stole $24,000,000 of his cryptocurrency. Terpin alleged that AT&T failed to adequately secure his account, leading to the theft.The United States District Court for the Central District of California dismissed some of Terpin's claims for failure to state a claim and later granted summary judgment against him on his remaining claims. The court dismissed Terpin's fraud claims and punitive damages claim, holding that he failed to allege that AT&T had a duty to disclose or made a promise with no intent to perform. The court also held that Terpin failed to allege facts sufficient to support punitive damages. On summary judgment, the court ruled that Terpin's negligence claims were barred by the economic loss rule, his breach of contract claim was barred by the limitation of liability clause in the parties' agreement, and his claim under Section 222 of the Federal Communications Act (FCA) failed because the SIM swap did not disclose any information protected under the Act.The United States Court of Appeals for the Ninth Circuit affirmed the district court's dismissal of Terpin's fraud claims and punitive damages claim, agreeing that Terpin failed to allege a duty to disclose or an intent not to perform. The court also affirmed the summary judgment on Terpin's breach of contract claim, holding that consequential damages were barred by the limitation of liability clause. The court affirmed the summary judgment on Terpin's negligence claims, finding them foreclosed by the economic loss rule. However, the Ninth Circuit reversed the summary judgment on Terpin's claim under Section 222 of the FCA, holding that Terpin created a triable issue over whether the fraudulent SIM swap gave hackers access to information protected under the Act. The case was remanded for further proceedings on this claim. View "TERPIN V. AT&T MOBILITY LLC" on Justia Law

Douglass Sloan provided a $60,000 short-term loan to Carlos Allen for property rehabilitation, with a 60-day term and a 20% fixed return rate. If unpaid within 60 days, the loan accrued an additional 2% every subsequent 60 days. The loan was subject to the maximum interest rate allowed by D.C. law if not repaid within 60 days. Sloan sought to collect the debt, leading to a dispute over whether the loan's interest rate was usurious, as D.C. law caps interest rates at 24% per annum.The Superior Court of the District of Columbia initially ruled that Allen had waived his usury defense by not raising it for nearly seven years. The court awarded Sloan $256,946.46 plus $97,450 in attorney’s fees and costs. On appeal, the District of Columbia Court of Appeals upheld the attorney’s fees but remanded the case for reconsideration of the usury defense waiver. The trial court then found no substantial prejudice to Sloan from Allen’s delay and ruled the loan usurious, reducing the award to $39,026.46, the remaining principal, plus the affirmed attorney’s fees.The District of Columbia Court of Appeals reviewed the case again. It upheld the trial court’s findings that Allen had not waived his usury defense and that the loan was usurious, as it effectively charged a 34.7% interest rate in its first year. The court rejected Sloan’s arguments against these findings but agreed that Sloan was entitled to post-judgment interest on the award from the date of the initial October 2020 judgment. The court also dismissed Allen’s cross-appeal, which challenged the validity of the loan and the attorney’s fees, as these issues had been resolved in a prior decision. The case was remanded for the imposition of post-judgment interest on the $39,026.46 award. View "Sloan v. Allen" on Justia Law

Karen Richardson obtained a loan in 2008, secured by a promissory note and a deed of trust on her home. After a series of transfers, Nationstar Mortgage, LLC became the holder and servicer of the note. Nationstar appointed members of McCabe, Weisberg & Conway, LLC (MWC) as substitute trustees. In 2015, Nationstar filed for judicial foreclosure, alleging Richardson defaulted on her mortgage. Richardson counterclaimed, challenging Nationstar's standing and alleging violations of lending laws. The Superior Court ruled in favor of Nationstar, and the property was sold in a foreclosure sale.Richardson opposed the ratification of the sale, arguing that Nationstar and MWC provided an incorrect payoff amount, constituting fraudulent misrepresentation and breach of fiduciary duty. The Superior Court ratified the sale, concluding that Richardson's right to cure the default had expired before the incorrect payoff amount was provided. Richardson's subsequent appeals were dismissed as moot.Richardson then filed a new suit against Nationstar, MWC, and the trustees, alleging wrongful foreclosure, fraud, and misrepresentation. The Superior Court dismissed her claims against Nationstar and others as barred by res judicata, but held her claims against MWC and the trustees in abeyance. Richardson amended her complaint, and the Superior Court dismissed it again on res judicata grounds, believing she had not disputed privity.The District of Columbia Court of Appeals reviewed the case and reversed the Superior Court's dismissal on the issue of privity. The court held that MWC and the trustees had not sufficiently demonstrated privity with Nationstar to invoke res judicata. The case was remanded for further proceedings to address the privity issue and any other unresolved claims. View "Richardson v. McCabe, Weisberg & Conway, LLC" on Justia Law

Joyce Toth purchased a Food Sensitivity Test from Target's website and followed the instructions to create an account on Everlywell's website, where she clicked a checkbox indicating that she had read and accepted the terms and conditions. These terms included an arbitration agreement. Toth later received test results that she found confusing and inaccurate, leading her to file a putative class action against Everlywell, alleging deceptive marketing and misuse of personal medical information.The United States District Court for the District of Massachusetts granted Everlywell's motion to compel arbitration, holding that Toth had formed a valid "clickwrap" contract by clicking the checkbox. The court found that Everlywell provided reasonable notice of the terms and secured Toth's assent. It also rejected Toth's arguments that the contract lacked consideration, that Everlywell did not provide reasonable notice, and that the contract was illusory or unconscionable.The United States Court of Appeals for the First Circuit affirmed the district court's decision. The appellate court held that Toth had received reasonable notice of the terms and had meaningfully assented to them by clicking the checkbox. The court also found that the arbitration agreement was valid and enforceable, noting that the User Agreement incorporated the AAA rules, which delegate issues of arbitrability to the arbitrator. Toth's arguments regarding the unilateral-modification clauses and the alleged unconscionability of the arbitration agreement were deemed insufficient to invalidate the delegation provision. Thus, the court concluded that the arbitration agreement was enforceable, and Toth's claims must be resolved through arbitration. View "Toth v. Everly Well, Inc." on Justia Law