Justia Consumer Law Opinion Summaries

The Supreme Court vacated the permanent injunction against Defendants for cybersquatting, holding that Charter West Bank failed to produce evidence showing it was entitled to protection under the Anticybersquatting Consumer Protection Act (ACPA).Charter West brought this lawsuit against pursuant to the ACPA in state district court seeking an injunction enjoining Defendants from using the domain name "www.charterwestbank.com" and using the website to post information that would reflect negatively on Charter West. The district court concluded that Defendants violated the ACPA by threatening to use the website to disseminate adverse information unless the bank purchased it for $1 million. The district court granted Charter West's request for a permanent injunction and enjoined Defendants from using any domain name containing the words "charter west." The Supreme Court reversed and vacated the injunction, holding that Charter West failed to prove it owned a mark that was "distinctive" or "famous" and therefore did not meet the requirements of the ACPA. View "Charter West Bank v. Riddle" on Justia Law

Defendant spearheaded a get-rich-quick scam—which promised to make consumers rich but ultimately defrauded them of hundreds of millions of dollars. In response, the Federal Trade Commission (“FTC”) brought suit against Defendant and other scam participants under Sections 13(b) and 19 of the Federal Trade Commission Act (“FTCA”) and under the Telemarketing and Consumer Fraud and Abuse Prevention Act, alleging that the scam violated Section 5 of the FTCA and the FTC’s Telemarketing Sales Rule. In 2012, the district court granted summary judgment to the FTC, holding that Defendant’s scam indeed violated Section 5 of the FTCA and the Telemarketing Sales Rule. To remedy the established violations, the district court granted both injunctive and monetary relief. Defendant never challenged the statutory validity of the equitable monetary relief, nor appealed from the 2012 judgment—which has remained on the books all this time.   The Ninth Circuit affirmed the district court’s denial of Defendant’s Fed. R. Civ. P. 60(b) motion for relief from an equitable money judgment. The panel held that Defendant failed to establish a certain type of jurisdictional error. Defendant failed to show that the equitable monetary judgment here—which was consistent with then-prevailing precedent—rested on a total want of jurisdiction or lacked even a colorable basis. Second, Defendant argued that the district court abused its discretion in concluding that the equitable monetary portion of the judgment lacked prospective application under Rule 60(b)(5). The panel held that the first relevant set of considerations—the nature and relationship of the intervening change in the law—did not establish that the district court abused its discretion in denying relief. View "FTC V. GARY HEWITT, ET AL" on Justia Law

The Federal Food, Drug, and Cosmetic Act (“FDCA”) prohibits the misbranding of any food. A food is deemed to be misbranded if it meets any of the definitions in 21 U.S.C. Section 343. To implement this subsection, the Food and Drug Administration (“FDA”) promulgated regulations governing the nutrition labeling of dietary supplements. Plaintiff alleged that she and other consumers were damaged because “they paid for a product that they would not have purchased had it truthfully disclosed that it did not contain Glucosamine Sulfate.” The second amended complaint claimed violations of the California Consumers Legal Remedies Act, the California Unfair Competition Law, the California False Advertising Law, unjust enrichment, restitution, and breach of warranty. The district court concluded that Walmart had carried its burden of showing Plaintiff’s state-law claims were preempted by federal law.   The Ninth Circuit affirmed the district court’s order granting summary judgment for Walmart Inc. The panel held that Defendant’s proposed rule to the contrary was preempted. The holding in Durnford v. MusclePharm Corp., 907 F.3d 595 (9th Cir. 2018), did not provide otherwise. Nothing in Durnford suggested its analysis applied only to the nutrition panel. The panel concluded that Defendant’s claims were preempted, and Walmart was entitled to judgment as a matter of law. View "DARLENE HOLLINS, ET AL V. WALMART INC., ET AL" on Justia Law

In this "highly unusual" personal jurisdiction dispute the Supreme Court held that Texas courts have specific jurisdiction over German automobile manufacturers based on their intentional post-sale tampering with affected vehicles that were owned, operated, and serviced in Texas.The State and several local governments brought civil actions to enforce state environmental laws against Defendants - German automobile manufacturers that intentionally evaded federal emissions standards by embedding illegal emissions-defeating technology in graded vehicles. At issue was whether the manufacturers' contacts with Texas satisfied the constitutional requisites to exercising specific personal jurisdiction. The trial court ruled that the manufacturers were amenable to specific personal jurisdiction in Texas, but the court of appeals reversed. The Supreme Court reversed, holding that where the manufacturers developed the product, controlled the distribution stream that brought the product to Texas, and "called all the shots," the trial court did not err in exercising specific personal jurisdiction over the German manufacturers. View "State v. Volkswagen Aktiengesellschaft" on Justia Law

Young alleged that Midland improperly pursued a debt collection lawsuit and obtained a default judgment against her for a delinquent credit account of $8,529.93. She sought vacatur of the default judgment and damages under the Rosenthal Fair Debt Collection Practices Act. She claimed that Midland falsely and deceptively represented in the debt collection lawsuit that they effected substituted service of process on her, and then relied on this false representation to obtain the default judgment and attempt to collect on it. The complaint also cited the Fair Debt Collection Practices Act (15 U.S.C. 1692). Midland responded with a motion to strike all of Young’s causes of action under Code of Civil Procedure section 425.16 (anti-SLAPP statute), The trial court granted the anti-SLAPP motion, finding thatYoung did not show she would probably prevail on the merits of her claims.The court of appeal reversed. Young showed she would probably prevail on the merits of her Rosenthal Act cause of action; she produced prima facie evidence that Midland falsely represented substituted service on her was effected in the debt collection lawsuit. She was not required under the Rosenthal Act section 1788.17 to show that Midland knowingly made this false representation. View "Young v. Midland Funding LLC" on Justia Law

The National Advertising Division (“NAD”), a self-regulatory organization, concluded that Defendant Young Living Essential Oils, LC’s (“Young Living”) claims that its oils are “therapeutic-grade” and impart physical and/or mental health benefits are “unsupported,” and recommended that Young Living stop making these claims. Plaintiff had already spent money on Young Living’s products, including lavender oil advertised to “promote [a] feeling of calm and fight occasional nervous tension” and peppermint oil that allegedly “helps to  maintain energy levels.” Feeling misled by claims that the products would have effects like “promoting feelings of relaxation & tranquility,” Plaintiff sued, on behalf of herself and other similarly situated individuals, asserting claims under common law and various state statutes that she believes protect consumers like her against companies like Young Living. The district court dismissed Plaintiff’s suit, finding that Young Living’s claims that its products would do things like “help to maintain energy levels” was run-of-the-mill puffery that companies use when trying to persuade potential customers to part with their dollars.   The Second Circuit vacated in part and affirmed in part. The court vacated the district court’s ruling insofar as it dismissed the New York General Business Law claims for being based on statements of non-actionable puffery and the unjust enrichment claim for not satisfying the Rule 9(b) requirement. The court affirmed the ruling as to the dismissal of the breach of warranty claims. The court found that Plaintiff’s stated the circumstances constituting fraud with sufficient particularity to satisfy Rule 9(b) and certainly with enough particularity to give fair notice of her claim and enable the preparation of a defense. View "MacNaughton v. Young Living Essential Oils, LC" on Justia Law

Plaintiff filed a class action lawsuit against Medical Center seeking declaratory and injunctive relief and alleging violations of the unfair competition law (UCL) and the Consumer Legal Remedies Act (CLRA) in connection with Medical Center’s emergency room billing practices. Briefly summarized, Plaintiff alleged Medical Center’s practice of charging him (and other similarly situated patients) an undisclosed “Evaluation and Management Services Fee” (EMS Fee) was an “unfair, deceptive, and unlawful practice.” The trial entered judgment in favor of Defendants.   The Fifth Appellate District reversed. The court held that Plaintiff sought a declaration of the parties' rights and duties under the COA and their legal rights in connection with EMS Fee disclosures. An actual controversy is alleged and appears to exist. Plaintiff is entitled to seek declaratory relief in regard to each controversy stated. The court concluded he has adequately stated a cause of action for declaratory relief. The court wrote that on remand, the trial court will have the discretion to consider a motion by Plaintiff to amend the FAC to state a cause of action for breach of contract should Plaintiff choose to file one. View "Naranjo v. Doctors Medical Center of Modesto, Inc." on Justia Law

Pucillo, an Indiana resident who formerly used the last name Lock, had previously leased an apartment from Main Street. He filed for Chapter 7 bankruptcy in May 201, and listed as a debt past‐due rent he allegedly owed Main. The bankruptcy court granted him a discharge in September 2017, including any debt to Main. That bankruptcy discharge is listed on Pucillo’s credit reports but Main was not notified of Pucillo’s bankruptcy. In July 2017, 10 weeks before the discharge, Main had placed Pucillo’s account with National Credit for collection. Over the next 18 months, National sent Pucillo two collection letters, stating that if payment was made, National “will update credit data it may have previously submitted regarding this debt.”The week before Pucillo received the second letter, he filed suit under the Fair Debt Collection Practices Act, 15 U.S.C. 1692e (demanding payment of a debt not owed) and section 1692c(c) (failure to cease communications and cease collections). He alleged that National’s continued communications “confused and alarmed” him. National did not actually give information to a credit reporting agency—before or after his bankruptcy discharge. The Seventh Circuit affirmed the dismissal of the suit. Pucillo lacked Article III standing to sue. Pucillo’s allegations of ʺconfusion,” “stress,” “concern,” and “fear” are not sufficiently concrete to result in an injury in fact that would give him standing to sue. View "Pucillo v. National Credit Systems, Inc." on Justia Law

Consumers alleged that Ford cheated on its fuel economy and emissions testing for certain truck models, including the F-150 and Ranger. The Energy Policy and Conservation Act, 42 U.S.C. 6201, and its regulations control such testing, the results of which are sent to the EPA. The EPA uses the information to provide fuel economy estimates for labels affixed to new vehicles. The FTC regulates advertising to consumers; Its “Guide Concerning Fuel Economy Advertising for New Vehicles” advises vehicle manufacturers and dealers about disclosing the established fuel economy of a vehicle, as determined by the EPA. The EPA and Department of Justice investigated Ford’s testing and resultsThe Sixth Circuit affirmed the dismissal of the purported class action, which included claims of breach of contract, negligent misrepresentation, breach of express warranty, fraud, and unjust enrichment under the laws of every state. The claims are preempted by federal law as they inevitably conflict with the EPA’s regime. The EPA accepted Ford’s testing information and published its own estimate based on that information. The EPA has the authority to approve or reject Ford's figures. The tort claims essentially challenge the EPA’s figures. The EPA must balance several objectives in reaching those figures, and these claims would skew this balance. View "Lloyd v. Ford Motor Co." on Justia Law

The First Circuit reversed the judgment of the district court granting Defendant's motion to dismiss this lawsuit alleging unfair and deceptive business practices under Massachusetts law by intentionally obfuscating information regarding the sales of Plaintiff's published books, holding that this action was not barred.Plaintiff filed a putative class action complaint against Defendant on behalf of himself and other authors alleging a single count for violation of Mass. Gen. Laws ch. 93A, seeking declaratory and injunctive relief requiring Defendant to disclose its royalty calculation methods and provide reasonable disclosures of royalty-related information. The district court granted Defendant's motion to dismiss, concluding that the choice of law in Plaintiff's publishing agreement mandating that all disputes be resolved according to New York law barred the assertion of a claim arising only under Massachusetts law. The First Circuit reversed, holding that Plaintiff's Chapter 93A claim was not precluded by the choice of law clause before the Court. View "Kleiner v. Cengage Learning Holdings II, Inc." on Justia Law