Justia Consumer Law Opinion Summaries

Electric Reliability Council of Texas, Inc. (“ERCOT”) determines market-clearing prices unless otherwise directed by the Public Utility Commission of Texas (“PUCT”). ERCOT is the sole buyer and seller of all energy in Texas. According to the operative complaint, during winter storm Uri ERCOT and the PUCT allegedly “intervened in the market for wholesale electricity by setting prices [that were] orders of magnitude higher than what market forces would ordinarily produce.”   Just Energy, a retail energy provider, purports that after the storm, ERCOT “floored” it with invoices totaling approximately $335 million. Just Energy commenced bankruptcy proceedings in Canada and filed this Chapter 15 case in the United States Bankruptcy Court for the Southern District of Texas, Houston Division. Just Energy challenges its invoice obligations. At the hearing on ERCOT’s motion to dismiss, the bankruptcy court stated that it would strike various language like, “subject to reduction only after a finding by the Court concerning a legally appropriate energy price per megawatt hour as proven by expert testimony, if appropriate, but in no event greater than the price per megawatt hour in effect after market forces took effect.” By striking this and similar language sprinkled throughout the complaint, the court concluded that “this change solves the abstention problem.”    The Fifth Circuit disagreed and vacated the bankruptcy court’s order and remanded with instructions to determine the appropriate trajectory of this case after abstention. The court explained that abstention under Burford6\ is proper because: (1) the doctrine applies in the bankruptcy context; and (2) four of the five Burford factors counsel in favor of abstention. View "Electric Reliability v. Just Energy" on Justia Law

Plaintiff alleged that private educational loan was discharged in bankruptcy. He sued Experian under the Fair Credit Reporting Act (FCRA) for reporting the loan was due and owing. The district court concluded the loan was not discharged in bankruptcy and later declined to set aside summary judgment when Plaintiff proffered newly discovered evidence.   The Second Circuit held that the kind of legal inaccuracy alleged by Plaintiff is not cognizable as an “inaccuracy” under the FCRA, thus the court affirmed, on an alternative ground, the district court’s order granting summary judgment in favor of Experian. Accordingly, the court dismissed as moot Plaintiff’s appeal of the denial of his motion for an indicative judgment. The court explained that Plaintiff has failed to allege an inaccuracy within the plain meaning of section 1681e(b) of the FCRA. The unresolved legal question regarding the application of section 523(a)(8)(A)(i) to Plaintiff’s educational loan renders his claim non-cognizable under the FCRA. The court noted that the holding does not mean that credit reporting agencies are never required by the FCRA to accurately report information derived from the readily verifiable and straightforward application of law to facts. However, the inaccuracy that Plaintiff alleged does not meet this statutory test because it evades objective verification. There is no bankruptcy order explicitly discharging this debt. View "Mader v. Experian" on Justia Law

Doe alleges that she was sexually assaulted by a massage therapist during a massage at a San Rafael Massage Envy retail location. She filed suit against the Arizona-based franchisor that licenses the “Massage Envy” brand name (MEF), and the independently owned San Rafael franchise where the assault allegedly occurred. MEF moved to compel arbitration on the basis of a “Terms of Use Agreement” presented to Doe when she checked in for a massage she had booked at the franchise location. The trial court concluded that there was no agreement to arbitrate between Doe and MEF.The court of appeal affirmed, rejecting MEF’s argument that the “Terms of Use Agreement,” which was available to Doe via a hyperlink on the electronic tablet she was given at the franchise, was a valid and enforceable “clickwrap” agreement of the sort that courts routinely enforce. Doe did not have reasonable notice that she was entering into any agreement with MEF, much less notice of the terms of the agreement. The transaction was nothing like the typical transactions in which clickwrap agreements are used; Doe went to a physical location, where she was already a member, and was handed a tablet to check in for a massage. View "Doe v. Massage Envy Franchising, LLC" on Justia Law

Plaintiffs, a class of children, appearing through their guardians ad litem, filed a lawsuit against Google LLC and others, alleging that Google used persistent identifiers to collect data and track their online behavior surreptitiously and without their consent in violation of the Children’s Online Privacy Protection Act (“COPPA”). They pled only state law claims arising under the constitutional, statutory, and common law of California, Colorado, Indiana, Massachusetts, New Jersey, and Tennessee, but also allege Google’s activities violate COPPA. The district court held that the “core allegations” in the third amended complaint were squarely covered, and preempted, by COPPA.   The Ninth Circuit reversed the district court’s dismissal on preemption grounds. The panel considered the question of whether COPPA preempts state law claims based on underlying conduct that also violates COPPA’s regulations. The Supreme Court has identified three different types of preemption—express, conflict, and field. First, express preemption is a question of statutory construction. The panel concluded that COPPA’s preemption clause does not bar state-law causes of action that are parallel to, or proscribe, the same conduct forbidden by, COPPA. Accordingly, express preemption does not apply to the plaintiff class’s claims. Second, even if express preemption is not applicable, preemptive intent may be inferred through conflict preemption principles. The panel held that although express and conflict preemption are analytically distinct inquiries, they effectively collapse into one when the preemption clause uses the term “inconsistent.” For the same reasons that the panel concluded there was no express preemption, the panel concluded that conflict preemption did not bar Plaintiffs’ claims. View "CARA JONES, ET AL V. GOOGLE LLC, ET AL" on Justia Law

The Supreme Court interpreted, for the first time, Wisconsin's product liability statute, Wis. Stat. 895.047, created in 2011, when the claim is for defective design, holding that the statute's plain language is clear in showing that the legislature codified the common-law consumer-contemplation standard in section 895.047(1)(b).Specifically, the Supreme Court held (1) in interpreting Wisconsin's product liability statute when the claim is for a defective design, the statute requires proof of three elements; (2) the legislature codified the common-law consumer-contemplation standard in the statute and discarded the consumer-contemplation test by incorporating the risk-utility balancing test; and (3) this Court declines to adopt comment f of Restatement (Third) of Torts section 2, upon which the court of appeals relied. View "Murphy v. Columbus McKinnon Corp." on Justia Law

The case arose from the district court’s dismissal with prejudice of Plaintiff’s class-action claim under the Telephone Consumer Protection Act (TCPA), against Meta Platforms, Inc. (Meta), formerly known as Facebook, Inc. Enacted in 1991, the TCPA generally bans calls made to a telephone if the call is generated by an “automatic telephone dialing system” (commonly referred to as an “autodialer”). Plaintiff argued that Meta violated the TCPA by sending unsolicited “Birthday Announcement” text messages to consumers’ cell phones. He alleged that these Birthday Announcements were sent by Meta through an autodialer that used an RSNG to store and dial the telephone numbers of the consumers being texted. The question on appeal was whether a TCPA-defined autodialer must use an RSNG to generate the telephone numbers that are dialed.   The Ninth Circuit affirmed the district court’s dismissal with prejudice. The panel held that Meta did not violate the TCPA because it did not use a TCPA-defined autodialer that randomly or sequentially generated the telephone numbers in question. View "COLIN BRICKMAN V. META PLATFORMS, INC." on Justia Law

Plaintiffs, husband and wife, have appealed an order of the district court granting summary judgment for J&M Securities, LLC, in an action arising from disputes over debt collection. The district court concluded that Plaintiffs lacked Article III standing to bring claims under federal law, and dismissed their claims under Missouri law on the merits. The husband died while the appeal was pending. The wife moved under Federal Rule of Appellate Procedure 43(a)(1) to substitute herself for her husband.   Plaintiffs appealed the district court’s reinstated order and judgment. As part of the appeal, the wife contends that once the district court concluded that Plaintiffs lacked standing to pursue their federal claims, the court should have remanded the case to state court. The district court agreed with this contention in its amended judgment but then vacated that judgment on the view that it lacked jurisdiction to enter it.   The Eighth Circuit concluded that the district court erred by vacating the amended judgment and that the case should be remanded to state court. The court explained that here, the district court reconsidered its own remand order before any appeal. Under the statute, however, the remand order is “not reviewable on appeal or otherwise.” And This language has been universally construed to preclude not only appellate review but also reconsideration by the district court. The court remanded to the district court with instructions to reinstate the amended judgment of January 26, 2022, as to the claims of the wife, and to return the case to Missouri state court. View "Felicia Stone v. J & M Securities, LLC" on Justia Law

The First Circuit vacated the approval of a class action settlement under Fed. R. Civ. P. 23(e), holding that the absence of separate settlement counsel for distinct groups of class members made too difficult a determination whether the settlement treated class members equitably.Plaintiffs sued HelloFresh, a subscription service, alleging that its so-called "win back" marketing campaign violated the Telephone Consumer Protection Act. The parties eventually arrived at a proposed settlement conditioned on court approval. The district court adopted the settlement agreement. An objector to the settlement appealed, arguing that the settlement process was unfair and led to an inequitable result. The First Circuit agreed and vacated the district court's approval, holding (1) the district court lacked the requisite basis for certifying the settlement class and approving an allocation among class members as fair, reasonable, and adequate; and (2) incentive payments to named class representatives are not prohibited so long as they fit within the bounds of Rule 23(e). View "Murray v. McDonald" on Justia Law

Professional Bureau of Collections of Maryland, Inc. sent three collection letters to Elizabeth Shields over outstanding student loan debt. It used an outside mailer to send the letters. The letters did not indicate the debt balance could increase due to interest and fees from the date of the letters. Shields sued, alleging the disclosure of her debt and the misleading letters violated the Fair Debt Collection Practices Act (FDCPA). The district court dismissed because it found Shields lacked a concrete injury necessary for standing. To this the Tenth Circuit affirmed: Shields did not allege that Professional Bureau’s use of a mailer and the content of its letters sufficiently harmed her. View "Shields v. Professional Bureau of Collections of Maryland" on Justia Law

The North Dakota Retail Association and the North Dakota Petroleum Marketers Association sued the Board of Governors of the Federal Reserve System, alleging that fees for merchants in debit card transactions violated the Durbin Amendment. The district court dismissed the case, ruling that the claims were barred by the statute of limitations. The Merchants alleged that their facial challenge to Regulation II first accrued when Corner Post opened in 2018, rather than when Regulation II was published in 2011.   The Eighth Circuit affirmed. The court concluded that, when plaintiffs bring a facial challenge to a final agency action, the right of action accrues, and the limitations period begins to run, upon publication of the regulation. In this case, the Merchants challenge the collection of interchange fees by third parties authorized to collect interchange fees by Regulation II. Here, The Merchants’ equitable tolling argument failed on its merits. This court reviews “a denial of equitable tolling de novo” and “underlying fact findings for clear error.” Thus, the court wrote that the Merchants failed to show that they have been pursuing their rights diligently. Because the Board published Regulation II in 2011 and the Merchants are not eligible for equitable tolling, the Merchants’ facial challenge to Regulation II remains time-barred by the six-year statute of limitations under 28 U.S.C. Section 2401(a). View "North Dakota Retail Assoc. v. Board of Governors" on Justia Law