Justia Consumer Law Opinion Summaries

Plaintiffs appealed the district court’s dismissal of their claims against Rio Properties, LLC (“Rio”), which owns and operates the Rio All-Suite Hotel and Casino in Las Vegas, Nevada. During this time, Plaintiffs claim Defendant knew that its water system was infected with Legionella bacteria, which causes Legionnaires’ Disease. After learning of the contamination, Plaintiffs brought a putative class action against Defendant. They sought the return of the resort fee on the theory that they would not have gone to the hotel, and would not have paid the resort fee if Defendant had told them about the presence of the Legionella.   In a prior decision, the Ninth Circuit affirmed the dismissal of Plaintiffs’ claims for negligence, “declaratory relief,” violation of Nevada Revised Statutes (“NRS”) Section 205.377(1), and consumer fraud, and reversed the dismissal of Plaintiffs’ unjust enrichment claim. However, the court reserved judgment on Plaintiffs’ claims for fraudulent concealment and statutory consumer fraud, based on NRS Section 598.0923(2), because a controlling question of state law existed.   In response to a certified question, the Nevada State Supreme Court answered “that a plaintiff who receives the true value of the goods or services purchased has not suffered damages under theories of common-law fraudulent concealment or N.R.S. 41.600.”  Thus, the Ninth Circuit affirmed, finding that applying Nevada state law as declared by the Nevada State Supreme Court, Plaintiffs failed to allege recoverable damages as to their fraudulent concealment and consumer fraud claims. View "AARON LEIGH-PINK V. RIO PROPERTIES, LLC" on Justia Law

While working for a company that makes skin grafts, Plaintiff caught wind of a kickback scheme operating in a Veterans Administration hospital. The scheme involved the sale of skin grafts to the VA by commission-based salespeople who were paid based on how much they sold. If true, that would likely violate the Anti-Kickback Statute, 42 U.S.C. Section 1320a-7b, which would then make each commission-induced sale a violation of the False Claims Act, 31 U.S.C. Section 3729 et seq. So Plaintiff brought a qui tam suit as a False Claims Act relator on behalf of the United States government and an analogous state-law claim under North Carolina law.   After the United States declined to intervene in the suit, Plaintiff prosecuted it. Because he used conclusory language in his original Complaint, the district court dismissed the Complaint with prejudice for failure to state a fraud claim with particularity under Federal Rule of Civil Procedure 9(b).   The Fourth Circuit agreed with the district court’s dismissal of the original Complaint for a lack of particularity. Given that it is largely made up of conclusory allegations, the original Complaint may even have failed Rule 8’s lower standard of plausibility. The court also found that the district court did not abuse its discretion in denying leave to amend for bad faith. Although the court affirmed the district court’s decision, because the district court did not take jurisdiction over the state-law claim, the court modified the decision to clarify that the state-law claim should be dismissed without prejudice. View "US ex rel. Haile Nicholson v. Medcom Carolinas, Inc." on Justia Law

Adam saw advertisements for free samples of beauty products, which implied that she need only pay for shipping and handling. Adam ordered two free samples and purchased another item. She was charged $9.94 for shipping and $14.99 for the purchased item. Soon thereafter, Adam was unexpectedly charged $92.94, which resulted in an overdraft of her checking account. A company representative told Adam that “she had agreed" to pay the full amount if she kept the "free samples" and that Adam would need to return the items before refunds could be issued. Adam, not trusting the company, refused to return the items, then called her bank, which temporarily reversed the charge but ultimately reinstated it. Adam contends that her bank was misled by the “false-front scheme” and that the charge would have been reversed but for the defendants’ misrepresentations.Adam filed a putative class-action suit, alleging violations of (or conspiracy to violate or aiding and abetting violation of): multiple California laws; the Electronic Fund Transfer Act, 15 U.S.C. 1693–1693r; the RICO Act, 18 U.S.C. 1961–1968; and consumer laws. The Third Circuit reversed the dismissal of the suit. Adam has standing; she was not made whole by the refund offer; she has neither received a refund nor accepted any alternative. Defendants’ conduct could provide but-for causation for Adam’s financial harm and a restitution order would redress that harm. View "Adam v. Barone" on Justia Law

In the district court, Appellants brought suit against the Internal Revenue Service for its responses to the Appellants’ twelve Freedom of Information Act (“FOIA”) requests. The district court ultimately granted summary judgment to the IRS on all issues. Appellants appealed the district court’s order awarding summary judgment to the IRS, as well as seven opinions and orders supporting the order.   Appellants set forth three procedural arguments averring that the IRS is barred from asserting a Glomar Response to Requests 1–5: (1) collateral estoppel; (2) judicial estoppel; and (3) the official acknowledgment doctrine.  Appellants argued that the IRS benefitted from its argument to the Fifth Circuit that no informant existed, resulting in favorable evidentiary and statute of limitations rulings, and thus the IRS cannot now change its position that no informant exists.   The DC Circuit affirmed the district court’s ruling. The court explained that the IRS’s Glomar Response to the existence of whistleblower documents, as requested by the Appellants in FOIA Requests 1–5, does not bear on its prior position in the Fifth Circuit cases regarding the existence of a whistleblower. Since the IRS’s positions are not inconsistent, the IRS is not judicially estopped from its Glomar Response.  Further, the court held that the official acknowledgment doctrine does not apply to Appellants’ argument because the IRS did not officially acknowledge in any prior proceeding that it did, or did not, possess records pertaining to potential informants, the subject of Requests 1–5. View "Thomas Montgomery v. IRS" on Justia Law

Petitioners Wages and White Lion Investments, LLC, d/b/a Triton Distribution (“Triton”) and Vapetasia, LLC (“Vapetasia”) sought to market flavored nicotine-containing e-liquids for use in open-system e-cigarette devices. Petitioners needed to submit premarket tobacco product applications as required by 21 U.S.C. Section 387j—which the Food and Drug Administration (“FDA”) deemed applicable to e-cigarette tobacco products. FDA denied the requested marketing authorizations, finding that Petitioners failed to offer reliable and robust evidence (such as randomized controlled trials or longitudinal studies) to overcome the risks of youth addiction and show a benefit to adult smokers. Petitioners sought review of those marketing denial orders (“MDOs”), and prior to the consolidation of the two cases. Petitioners argued that the FDA lacks the authority to impose a comparative efficacy requirement and that FDA acted arbitrarily and capriciously by “requiring” scientific studies.   The Eleventh Circuit denied the petitions for review. The court explained that Congress passed the Family Smoking Prevention and Tobacco Control Act (“TCA”) in an active effort to protect public health. Relevant here, the Deeming Rule subjected e-cigarette manufacturers to the TCA’s prior authorization requirement—manufacturers of “new tobacco product[s]” must submit premarket tobacco product applications (“PMTAs”). The court held that the FDA’s consideration of the lack of cessation as a risk and comparing that risk between new tobacco products and old tobacco products “fall[s] squarely within the ambit of the FDA’s expertise and merit[s] deference.”  As such, the court cannot say that FDA acted arbitrarily and capriciously by disagreeing with Petitioners as to the significance of the evidence they presented. View "Wages and White Lion Investmen v. FDA" on Justia Law

Appellant made a series of Freedom of Information Act request seeking records related to the animal rights movement. During five years of litigation, the Federal Bureau of Investigation (“FBI”) produced tens of thousands of pages of responsive documents. The district court found that the FBI had adequately searched for responsive records and granted summary judgment in its favor. The FOIA requester now challenges the adequacy of the search for electronic surveillance records, as well as several of the district court’s interlocutory rulings.   The DC Circuit explained that because it agrees with the district court that the FBI’s search was largely adequate, it affirmed in most respects. It remanded, however, for the Bureau to provide a more detailed explanation of its search for electronic surveillance records related to individuals mentioned in but not party to monitored conversations.   The court explained that despite the FBI’s good-faith effort to process the voluminous requests, it agrees with Appellant that its declarations inadequately address one class of records: those related to individuals mentioned in monitored communications but not directly targeted for surveillance. According to its declarations, the FBI’s electronic surveillance indices include “the names of all individuals whose voices have been monitored,” but for many years field offices have not been “required to forward to [FBI headquarters] the names of all individuals mentioned during monitored conversations.” Thus, a limited remand is appropriate for the FBI to fill this gap in its declarations. View "Ryan Shapiro v. DOJ" on Justia Law

Plaintiff entered into a reverse mortgage agreement with Reverse Mortgage Solutions, Inc. (“RMS”). In violation of the Truth in Lending Act (“TILA”), RMS failed to disclose certain information at closing. Section 1635(b) of TILA imposes certain obligations on a creditor, like RMS, after it receives a notice of rescission, but RMS did not comply with those obligations either. Plaintiff sued RMS for, among other things, rescission and failing to honor her rescission rights under TILA.   A jury returned a verdict for RMS, finding that RMS did not fail to honor Plaintiff’s attempt to rescind the loan. However, the district court issued judgment as a matter of law for Plaintiff holding that RMS violated Section 1635(b)’s requirements. It also held that Plaintiff was not required to tender or return, the loan proceeds to RMS.   The Fourth Circuit vacated the district court’s judgment as a matter of law and remanded. The court explained that the district court erred in granting judgment as a matter of law to Plaintiff on the Rescission Count. In response to RMS’s failure to voluntarily unwind the loan or otherwise respond to that notice as required by Section 1635(b), Plaintiff had a right to sue RMS to obtain rescission relief under TILA. But neither Section 1635(b) nor any other provision of TILA provides that the failure of a lender to voluntarily unwind a loan or respond to a notice of intent to rescind allows a borrower to avoid tendering the loan proceeds as part of rescission. View "Teresa Lavis v. Reverse Mortgage Solutions Inc" on Justia Law

The Supreme Court reversed the order of the circuit court denying Meemic Insurance Company's motion to dismiss this action for lack of personal jurisdiction, holding that the minimum contacts necessary to support the exercise of personal jurisdiction in accordance with due process requirements were not satisfied.Catherine Davis was riding as a passenger on William Laeder's motorcycle when Richard Otten, who was also driving a motorcycle, collided with them. All three people sustained incapacitating injuries. Meemic had issued an insurance policy in Michigan to Davis, which was in effect at the time of the accident. Davis ultimately filed a complaint against Otten and Meemic alleging that Meemic breached its insurance contract with Davis by failing to compensate her under the underinsured motorist coverage and no-fault insurance terms of her policy. After the circuit court denied Meemic's motion to dismiss, Meemic filed a petition for intermediate appeal. The Supreme Court granted the petition and reversed, holding that the minimum contacts required to warrant a finding of jurisdiction were not met in this case. View "Davis v. Otten" on Justia Law

The Supreme Court reversed the rulings of the circuit court denying Bridgecrest Acceptance Corporation's motions to dismiss or stay the counterclaims against it and to compel the matters to arbitration pursuant to an arbitration agreement, holding that the arbitration agreement was legally valid, conscionable, and not precluded by collateral estoppel.In two separate cases, Bridgecrest sought a deficiency judgment against consumers who had defaulted on car payments. The consumers brought counterclaims, raising putative class claims for unlawful and deceptive business practices. Bridgecrest moved to stay or dismiss the consumers' counterclaims and compel arbitration pursuant to the arbitration agreements signed by the consumers when buying their vehicles. The circuit court overruled the motions in both cases. The Supreme Court reversed, holding that the circuit court erred in refusing to compel arbitration. View "Bridgecrest Acceptance Corp. v. Donaldson" on Justia Law

The Supreme Court affirmed the order of the district court granting summary judgment to ERA Advantage Realty, Inc. and dismissing Jodie Young's complaint alleging that Advantage's brokers were negligent in failing to disclose certain issues when she was buying her home, holding that the district court did not abuse its discretion.In her complaint, Young alleged negligence because Advantage's brokers failed to disclose that local zoning ordinances preluded her from enclosing her yard with a fence and constructive fraud for failure to disclose a mold problem in her basement. The district court granted summary judgment to Advantage, holding that Young could not sustain her claims because she failed to submit notice of a real estate expert who could establish the standard of care applicable to real estate agents. The Supreme Court affirmed, holding that Young's duty-based claims failed as a matter of law and that this conclusion was dispositive. View "Young v. Era Advantage Realty" on Justia Law