Justia Consumer Law Opinion Summaries

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

Three public interest organizations brought suit against a utility company that provides natural gas services in the District of Columbia, alleging that the company violated the Consumer Protection Procedures Act (CPPA) by making false and misleading statements about the environmental effects of its natural gas. The organizations claimed these statements appeared in customer bills, on the company’s website, and in other public documents. They sought declaratory and injunctive relief to address the alleged unfair and deceptive trade practices.The utility company responded by filing a special motion to dismiss under the District’s Anti-SLAPP Act, followed by a motion to dismiss under Superior Court Civil Rules 12(b)(1) and 12(b)(6). The company argued that the CPPA does not create a right of action against entities regulated by the Public Service Commission (PSC), citing D.C. Code § 28-3903(c)(2)(B) and the District of Columbia Court of Appeals’ decision in Gomez v. Independence Management of Delaware, Inc., 967 A.2d 1276 (D.C. 2009). The public interest organizations countered that the statutory limitation only applied to the Department of Licensing and Consumer Protection, not to private actors like themselves, and that subsequent amendments to the CPPA had rendered Gomez obsolete. The Superior Court granted the utility’s motion to dismiss, finding that Gomez remained controlling and that the CPPA’s exemptions for PSC-regulated entities had not been altered by later amendments.On appeal, the District of Columbia Court of Appeals affirmed the Superior Court’s dismissal. The court held that, although the plain text of the CPPA does not expressly bar private suits against PSC-regulated entities, binding precedent from Gomez requires that the limitations in D.C. Code § 28-3903(c)(2) apply to private actions as well. Therefore, public interest organizations may not sue entities regulated by the PSC under the CPPA. View "Client Earth v. Washington Gas Light Company" on Justia Law

An elderly plaintiff with significant disabilities inherited her home and, facing a tax sale due to unpaid property taxes, responded to a flyer offering help. She met with the defendant, who had her sign documents that transferred ownership of her home to him, allegedly under the pretense of providing a loan. The documents did not provide for any payment to the plaintiff, only that the defendant would pay the back taxes. The plaintiff later attempted to cancel the transaction, believing it had been voided when the defendant returned her documents and she received no loan. Several years later, the defendant served her with an eviction notice, prompting her to file suit alleging fraud, undue influence, financial elder abuse, and other claims, seeking cancellation of the transfer and damages.The case was heard in the Superior Court of Los Angeles County. The defendant, representing himself, filed an answer and a cross-complaint, asserting that he had purchased the property and that the plaintiff had lived rent-free for years. The litigation was marked by extensive discovery disputes, with the plaintiff filing nine motions to compel and for sanctions due to the defendant’s repeated failures to provide timely and adequate discovery responses, appear for depositions, and pay court-ordered sanctions. The court issued incremental sanctions, including monetary and issue sanctions, before ultimately imposing terminating sanctions by striking the defendant’s answer and cross-complaint, leading to a default judgment in favor of the plaintiff.The California Court of Appeal, Second Appellate District, Division Eight, reviewed the case. It held that the trial court did not abuse its discretion in imposing terminating sanctions after the defendant’s persistent and willful noncompliance with discovery orders. The court also found that the plaintiff’s complaint provided sufficient notice of damages, and that the award of damages and attorney fees was supported by substantial evidence. The judgment of the trial court was affirmed in all respects. View "Atlas v. Davidyan" on Justia Law

The State of Vermont brought a lawsuit against Meta Platforms, Inc. and its subsidiary Instagram, LLC, alleging violations of the Vermont Consumer Protection Act (VCPA). The State claimed that Meta intentionally designed Instagram to be addictive to teenagers, prioritized increased user engagement for advertising revenue despite known negative effects on teens, and misled consumers about the platform’s safety by downplaying or withholding internal research. Meta, a Delaware corporation with its principal place of business in California, operates Instagram nationwide, including in Vermont, where tens of thousands of teens and young adults use the platform daily. Meta collects user data in exchange for access to Instagram and sells targeted advertising to Vermont businesses, specifically aiming at Vermont teens.Meta moved to dismiss the complaint in the Vermont Superior Court, Chittenden Unit, Civil Division, arguing that Vermont lacked personal jurisdiction over it. The court denied the motion, finding that Meta’s contracts with Vermont users, targeted advertising sales to Vermont businesses, and research on Vermont teen engagement established sufficient contacts with the state. The court concluded these activities were sufficiently related to the State’s claims and that exercising jurisdiction would not be unfair. Meta sought and was granted interlocutory appeal on the jurisdictional issue.The Vermont Supreme Court reviewed the case de novo and affirmed the lower court’s decision. The Court held that Meta’s continuous and deliberate exploitation of the Vermont market—through user agreements, targeted advertising, and research on Vermont users—constituted purposeful availment sufficient for specific personal jurisdiction. The Court further held that the State’s claims arose out of or related to these contacts, as the alleged harm occurred in Vermont and was connected to Meta’s business activities there. The Court concluded that exercising jurisdiction over Meta in this case comports with due process and affirmed the denial of Meta’s motion to dismiss. View "State v. Meta Platforms, Inc." on Justia Law

After purchasing a collectible from an online retailer, the plaintiff was charged multiple times through his PayPal account for additional items he alleges he did not knowingly subscribe to. He filed a putative class action in California state court against the retailer, asserting claims under California’s False Advertising Law and Unfair Competition Law. Importantly, he sought only equitable restitution and did not pursue damages, even though he conceded that damages were available under California’s Consumer Legal Remedies Act.The defendant removed the case to the United States District Court for the Southern District of California under the Class Action Fairness Act, which was not disputed as a proper basis for federal jurisdiction. The plaintiff then moved to remand, arguing that the federal court lacked “equitable jurisdiction” because he had an adequate remedy at law available, even though he chose not to pursue it. The district court agreed, holding that it could remand for lack of equitable jurisdiction and that the defendant could not waive the defense that an adequate legal remedy was available.On appeal, the United States Court of Appeals for the Ninth Circuit held that district courts do have the authority to remand a removed case to state court for lack of equitable jurisdiction. However, the Ninth Circuit further held that a defendant may waive the adequate-remedy-at-law defense in order to keep the case in federal court. The court vacated the district court’s remand order and sent the case back to allow the defendant the opportunity to perfect its waiver. If the defendant waives the defense, the case may proceed in federal court. View "RUIZ V. THE BRADFORD EXCHANGE, LTD." on Justia Law

The dispute arose when a homeowner contracted with a tree nursery company to purchase and install six trees on her property in Washington, D.C. The homeowner sought to restore privacy lost when a neighbor removed existing trees, and she wanted the new trees to provide “evergreen screening.” After installation, she was dissatisfied with the results, noting that the trees did not achieve the desired screening effect and that two of the trees died within a year. She refused to pay the remaining contract balance, prompting the nursery to sue for breach of contract. The homeowner counterclaimed, alleging breach of contract, breach of the duty of good faith and fair dealing, breach of the implied warranty of merchantability, and violations of the D.C. Consumer Protection Procedures Act (CPPA).The Superior Court of the District of Columbia held a bench trial. The court found that the contract required the nursery only to select, install, and monitor six trees for six weeks, not to guarantee any particular screening effect. The court ruled in favor of the nursery on its contract claim and on most of the homeowner’s counterclaims, except for a finding that the nursery breached the implied warranty of merchantability as to one tree (the dogwood) that died soon after installation. The court rejected the homeowner’s claims regarding the CPPA and the duty of good faith and fair dealing, and denied her motion for reconsideration.On appeal, the District of Columbia Court of Appeals affirmed the trial court’s judgment on all grounds. The appellate court held that the contract did not obligate the nursery to provide evergreen screening, that the nursery fulfilled its contractual duties, and that the homeowner breached the contract by withholding payment. The court also affirmed the trial court’s application of the clear-and-convincing-evidence standard to the intentional CPPA claims and agreed that the implied warranty of merchantability was breached only as to the one tree that died. View "Galvin v. Ruppert Nurseries, Inc." on Justia Law

In this case, the appellant purchased a car through an installment sales contract, which was later assigned to a finance company. After the appellant defaulted on payments, the finance company repossessed the vehicle and, through its attorneys, filed a claim in Small Claims Court to recover a deficiency balance. The appellant, representing herself, entered into a settlement agreement to pay the claimed amount in installments. After defaulting on the settlement, a judgment was entered against her, which was satisfied through wage garnishment. Subsequently, the appellant, now represented by counsel, filed a putative class action against the law firm that represented the finance company, alleging violations of various consumer protection laws and abuse of process, based on the assertion that the deficiency debt was not lawfully recoverable due to procedural defects in the repossession process.Previously, the District of Columbia Superior Court dismissed the appellant’s complaint, finding that the law firm was in privity with the finance company for res judicata purposes, and that the complaint failed to state claims under the Uniform Commercial Code (UCC), the District’s Automobile Financing and Repossession Act (AFRA), the Consumer Protection Procedures Act (CPPA), the Debt Collection Law (DCL), and for abuse of process. On an earlier appeal, the District of Columbia Court of Appeals held that the attorney-client relationship alone did not establish privity for res judicata and remanded for further analysis of the mutuality of legal interests.On review, the District of Columbia Court of Appeals held that the appellant’s DCL claim against the law firm could proceed, as the complaint plausibly alleged that the law firm willfully used deceptive means to collect a debt that was not lawfully owed, including seeking to recover an excessive retaking fee and pursuing a deficiency despite procedural defects. The court found that the law firm and finance company did not have the same legal interest in the subject matter of the prior Small Claims action, so res judicata did not bar the DCL claim. However, the court affirmed dismissal of the claims under AFRA, the UCC, the CPPA, and for abuse of process, finding the complaint insufficient as to those causes of action. The case was remanded for further proceedings on the DCL claim only. View "Bell v. Weinstock, Friedman & Friedman, PA" on Justia Law

Leslie Cruz made two purchases from the website operated by subsidiaries of Tapestry, Inc. in early 2024. She later filed a lawsuit in the Superior Court of Los Angeles County, alleging that the companies engaged in unfair competition and false advertising by promoting misleading sales discounts. Cruz claimed that the advertised sale reductions were deceptive because the merchandise was rarely, if ever, sold at the full price listed, and sought restitution and disgorgement of unjust enrichment resulting from these practices.The defendants moved to compel arbitration, relying on an arbitration clause in their website’s Terms of Use. The checkout pages on the website included a line of gray, small-font text below the order submission button stating that by clicking, the user agreed to the Terms of Use and Privacy Policy, with hyperlinks to those documents. The trial court, after reviewing screenshots of the checkout pages, found that the notice of the arbitration agreement was not sufficiently conspicuous. The court emphasized that the notice was less prominent than other visual elements on the page and that the transaction did not create an expectation of an ongoing contractual relationship governed by extensive terms. The court concluded that Cruz had not assented to the arbitration agreement and denied the motion to compel arbitration.The California Court of Appeal, Second Appellate District, Division One, reviewed the trial court’s decision de novo. It held that the defendants failed to provide reasonably sufficient notice to Cruz that clicking the order button would bind her to the Terms of Use, including the arbitration provision. The court found that the design of the checkout pages did not adequately call attention to the notice text, and affirmed the trial court’s order denying the motion to compel arbitration. View "Cruz v. Tapestry" on Justia Law