Justia Consumer Law Opinion Summaries

These original proceedings involve efforts by the Public Utilities Commission (PUC or the Commission) to discover whether the political activities of Southern California Gas Company (SCG) are funded by SCG’s shareholders, which is permissible, or ratepayers, which is not. The Commission propounded several discovery requests (called “Data Requests”) on SCG, and when SCG failed fully to comply, moved to compel further responses that ultimately resulted in an order to comply or face substantial penalties. SCG seeks a writ of mandate directing the Commission to rescind its order on the ground that the discovery requests infringe on SCG’s First Amendment rights.   The Second Appellate District granted the petition and held that SCG has shown that disclosure of the requested information will impact its First Amendment rights, and the Commission failed to show that its interest in determining whether SCG’s political efforts are impermissibly funded outweighs that impact. The court reasoned that because SCG demonstrated that a threat to its constitutional rights exists, the burden shifted to the Commission to demonstrate that the data requests serve and are narrowly tailored to a compelling governmental interest. However, the PAO’s discovery inquiries into all sources of funding for SCG’s lobbying activities go beyond ratepayer expenditures. Insofar as the requests seek information about shareholder expenditures, they exceed the PAO’s mandate to obtain the lowest possible costs for ratepayers and its authority to compel disclosure of information necessary for that task. The requests, therefore, are not carefully tailored to avoid unnecessary interference with SCG’s protected activities. View "So. Cal. Gas Co. v. P.U.C." on Justia Law

The Bureau of Consumer Financial Protection (“the CFPB”) promulgated the Prepaid Rule, which regulates digital wallets and other prepaid accounts. As relevant here, the Rule requires financial institutions to make certain disclosures by using model language or other “substantially similar” wording. Challenging the Rule on statutory, administrative, and constitutional grounds, PayPal sued the CFPB. The district court reached only PayPal’s statutory claims, vacating part of the Rule because it mandated a “model clause” in violation of the Electronic Fund Transfer Act (“EFTA”). In this case, PayPal and the CFPB proceed on the assumption that EFTA prohibits mandatory model clauses, and so the DC Circuit considered only whether the Prepaid Rule mandates such a clause.   The DC Circuit reversed. The court concluded the CFPB’s Prepaid Rule does not mandate a “model clause” in contravention of EFTA. That the Rule’s content and formatting requirements do not fall within the meaning of “model clause” does not necessarily mean the CFPB can impose whatever content and formatting requirements it chooses. The court directed that on remand, the district court may consider PayPal’s other challenges to the Rule, including the APA and constitutional claims, which remain to be addressed. View "PayPal, Inc. v. CFPB" on Justia Law

Plaintiffs-buyers Melissa and Geoffrey Williams sued defendant FCA US LLC (manufacturer) for violation of the Song-Beverly Consumer Warranty Act (popularly known as the lemon law), seeking restitution for a defective truck that was manufactured and warranted by manufacturer. Buyers sought restitution from manufacturer after trading in the defective truck for another vehicle at an unrelated dealership. The parties disputed whether manufacturer was entitled to a credit for the trade-in value of the truck in calculating “the actual price paid or payable by the buyer” under the restitution provision. Instead of resolving the question of statutory interpretation presented, the trial court transmitted the question to the jury and told the parties the jury would decide, based on the parties’ closing arguments, what should be included in “the actual price paid.” The jury found manufacturer breached its express written warranty to buyers when it (or its authorized repair facility) failed to repair the defects in buyers’ truck “to match the written warranty after a reasonable number of opportunities to do so.” The jury further found manufacturer willfully failed to promptly replace or repurchase the defective truck and awarded buyers damages and a civil penalty. The trial court subsequently denied buyers’ motion for a new trial, in which buyers argued the damages were inadequate as a matter of law because the jury’s calculation of “the actual price paid or payable” impermissibly deducted the $29,500 credit buyers previously received when they traded in the defective truck for a new vehicle. Buyers appealed, raising the issue of whether the jury impermissibly deducted the trade-in credit when it calculated “the actual price paid or payable by the buyer,” as provided in the restitution provision. The Court of Appeal reversed, finding the jury inappropriately and prejudicially deducted the $29,500 trade-in value of the defective vehicle from the buyers’ statutory restitution award, and thus the damages awarded were inadequate as a matter of law. View "Williams v. FCA US LLC" on Justia Law

Fleming filed a class action complaint, alleging Oliphant violated the California Rosenthal Fair Debt Collection Practices Act. Oliphant filed a petition to dismiss Fleming’s class action claims and compel binding arbitration of his individual claims under the Federal Arbitration Act (9 U.S.C. 2). According to Oliphant’s records custodian, Fleming electronically applied for a credit card in December 2013. The electronic application included no reference to an arbitration agreement. Fleming received the card, used his card for purchases, made payments on his account, and received account statements, which did not include any reference to arbitration. There is no evidence of any signed agreement. Oliphant provided no evidence that it even sent such an agreement to Fleming. Oliphant proffered three Cardmember Agreements—or exemplars—that were in effect when Fleming opened his account, when he made his last payment to the account in March 2018, and when the account was charged off in May 2018, which included arbitration agreements. Fleming denied receiving any of the exemplars.The court of appeal affirmed the denial of the petition to compel arbitration. Oliphant did not meet its burden in proving the existence of a valid arbitration agreement with Fleming. Nothing in the record suggests that Fleming might have consented to an arbitration provision. View "Fleming v. Oliphant Financial, LLC" on Justia Law

In 2019, the Department of Justice announced that it would resume federal executions using a new lethal agent: the drug pentobarbital. Shortly thereafter, Citizens for Responsibility and Ethics in Washington submitted a Freedom of Information Act (FOIA) request for the Bureau of Prisons’ records related to its procurement of pentobarbital. The Bureau of Prisons supplied some records but withheld any information that could identify companies in the government’s pentobarbital supply chain. The Bureau invoked FOIA Exemption 4, which protects, among other things, trade secrets and confidential commercial information. The district court sustained those withholdings and entered judgment for the Bureau.   The DC Circuit reversed. The court concluded that on de novo review that the Bureau of Prisons has not met its burden to justify the challenged nondisclosures. In particular, the Bureau has not provided the detailed and specific explanation required to justify withholding the information as “commercial” and “confidential” under Exemption 4. The court remanded to the district court to determine in the first instance whether and to what extent any information in the public domain is the basis on which the government seeks to withhold any records or reasonably segregable portions thereof under Exemption 4. View "CREW v. DOJ" on Justia Law

DirecTV and Dish Network (“Defendants”) provide video services in part through the Internet. The City of Creve Coeur filed this class action in Missouri state court on behalf of local government authorities, seeking a declaratory judgment that Defendants are liable under the Video Services Providers Act (“VSPA”) and implementing local ordinances, plus injunctive relief, an accounting of unpaid fees, and damages. Defendants removed the action based on diversity jurisdiction and the Class Action Fairness Act (CAFA). After the state court entered an interlocutory order declaring that VSPA payments are fees, rather than taxes, DirecTV filed a second notice of removal, arguing this order established the required federal jurisdiction. The district court granted Creve Coeur’s motion to remand.   The Eleventh Circuit affirmed on different grounds. The court explained that the district court’s remand order plainly stated that the remand was based on comity principles as articulated in Levin, not on “state-tax based comity concerns.” Comity as a basis to remand was raised and fully argued in the first remand proceeding. Federal courts have long precluded two bites at this apple. Second, the Supreme Court in Levin emphatically stated that the century-old comity doctrine is not limited to the state-tax-interference concerns that later led Congress to enact the TIA. Third, the state court’s December 2020 Order addressed, preliminarily, only the VSPA fee-or-tax issue under state law. It did not address the broader considerations comity addresses. The state court order in no way overruled or undermined the basis for the district court’s first remand order. Therefore, DirecTV failed to establish the essential basis for a second removal. View "City of Creve Coeur v. DirecTV LLC" on Justia Law

Chen sued BMW for breach of warranty and for violating the Song-Beverly Consumer Warranty Act (Civ. Code 1790) and the Consumers Legal Remedies Act (section 1750). After the suit was pending for about a year, the defendants communicated an offer under Code of Civil Procedure Section 998, to have a $160,000 judgment entered against them; the defendants would pay Chen’s reasonable attorney’s fees and costs, as determined by the court. Chen would return the vehicle. Chen rejected the offer as “fatally vague and uncertain. The litigation continued for another two years. The parties settled on the day of the trial. The terms of the settlement were essentially identical to the section 998 offer.Chen moved as a prevailing party for attorney fees and costs of $436,071.82. The trial court awarded only $53,509.51, including only fees and costs accrued through July 2017, 45 days after the section 998 offer was made. The court of appeal affirmed. BMW’s offer complied with the statutory requirements and Chen did not achieve a result more favorable than its terms. The statute, therefore, disallowed recovery of attorney fees and costs accrued after the offer was made. View "Chen v. BMW of North America" on Justia Law

The First Circuit affirmed in part and reversed in part the judgment of the district court dismissing Plaintiff's amended complaint bringing claims for product disparagement and related torts, holding that some of Plaintiff's claims were sufficiently plausible to warrant further proceedings.Plaintiff, a medical device company that designed and manufactured customized hip and knee replacements, brought this complaint against Aetna, Inc. and its wholly owned subsidiary (collectively, Aetna) alleging state common-law claims for product disparagement, tortious interference with both contractual and advantageous relations, and unfair trade practices, in violation of Mass. Gen. Laws chapter 93A. The district court granted Aetna's motion to dismiss for failure to state a claim. The First Circuit reversed in part, holding that the district court correctly dismissed Plaintiff's claim for tortious interference with contractual relations but erred in dismissing Plaintiff's claim for tortious interference with advantageous relations. View "Conformis, Inc. v. Aetna, Inc." on Justia Law

Plaintiff appealed the district court’s post-trial dismissal of his case for lack of subject-matter jurisdiction. A jury found that AXA Equitable Life Insurance Company negligently reported false medical information about Plaintiff to an information clearinghouse used by insurance companies, causing him to become uninsurable. Despite the fact that the parties satisfied the requirements for federal diversity jurisdiction, and the fact that both parties litigated the entire case through trial under North Carolina law, the district court decided that Connecticut law applied and found itself deprived of subject-matter jurisdiction by virtue of a Connecticut statute.   The Fourth Circuit found that the district court erred and concluded that choice of law is waivable and was waived here. And even if Connecticut’s law applied, it would not have ousted federal jurisdiction. Further, the court held that the district court also erred by concluding that Connecticut’s CIIPPA divested it of subject-matter jurisdiction despite that statute affecting only choice of law rather than choice of forum. AXA’s alternative argument for affirmance based on the nature of Plaintiff’s s injury and its causation was thoroughly briefed and argued before the court, and the court found it to be without merit. But because AXA’s argument for post-trial relief challenging the number of damages was neither raised nor briefed before this court, the court remanded to the district court to consider that issue in the first instance. View "Malcolm Wiener v. AXA Equitable Life Insurance Company" on Justia Law

The Public Utilities Commission (the Commission or PUC) oversees the California High-Cost Fund A program (CHCF-A), which provides subsidies to small, rural, independent telephone companies that provide local telephone service in rural and remote areas of California. The subsidies defray the high cost of providing service in such areas. Ten small rural telephone companies that participate in CHCF-A subsidies filed this writ proceeding to nullify the Commission’s broadband imputation order. They contend broadband imputation (1) is not authorized by section 275.6, (2) exceeds the authority granted to the Commission by other statutes and the California Constitution, (3) is preempted by federal law, and (4) is an unconstitutional taking of private property.   The Fifth Appellate District denied the telephone companies’ petition for a writ. The court reasoned that to implement broadband imputation in a general rate case, the Commission will be required to conduct several reasonableness inquiries before reaching a decision about a telephone company’s rates. At this point, the “total effect” of broadband imputation on the telephone companies’ rates cannot be determined because the Commission has not made the foregoing reasonableness determinations and established a telephone company’s rate design and CHCF-A subsidy. Consequently, the court wrote it cannot determine that the rates will be so unreasonably low as to be confiscatory in violation of the telephone companies’ constitutional rights. View "Calaveras Telephone Co. v. Public Utilities Commission" on Justia Law