Justia Consumer Law Opinion Summaries

This case arose from an ongoing investigation by the district attorneys’ offices of several California counties into the debt collection practices of Alorica Inc. (Alorica), specifically the Rosenthal Fair Debt Collection Practices Act, and the federal Telephone Consumer Protection Act. In November 2019, the district attorneys' offices (collectively referred to as the State) served Alorica with an investigative subpoena. The subpoena contained 11 separate document requests and covered the time period from February 2015 through the date the subpoena was served. The State directed Alorica to respond by December 13, 2019, and to specify whether any of the requested records were no longer in Alorica’s “possession, custody or control.” Alorica served its objections and responses to the subpoena. Alorica objected to most of the requests, and argued that the requests violated Alorica’s right to privacy and right against unreasonable searches and seizures. Alorica claimed that it did not have any debt collection clients, so it denied having any of the requested agreements with clients related to debt collection, policies and procedures relating to the collection of consumer debt, or call records of debt collection calls as to the defined top five clients. One year later, in November 2020, the People petitioned for an order compelling full compliance with the subpoena. Alorica opposed and argued that it was not a debt collector subject to the Rosenthal Act, so the subpoena was invalid as it was not reasonably relevant to an investigation concerning debt collection. Alorica ultimately lost its argument and was ordered to produce files in accordance with the administrative subpoena. View "California v. Alorica, Inc." on Justia Law

Plaintiff commenced a class-action lawsuit alleging that SC Data Center, Inc. (“SC Data”) committed three violations of the Fair Credit Reporting Act (“FCRA”). The parties reached a settlement agreement. Following the Supreme Court’s decision in Spokeo, Inc. v. Robins, 578 U.S. 330 (2016), SC Data moved to dismiss the action. The plaintiff first alleged that SC Data took an adverse employment action based on her consumer report without first showing her the report. The court reasoned that the right to pre-action explanation to the employer is not unambiguously stated in the statute’s text. Next, the plaintiff asserts that SC Data obtained her consumer report without first obtaining an FCRA compliant disclosure form. The court found that plaintiff has not established that she suffered a concrete injury due to the improper disclosure. Finally, the plaintiff’s last claim asserts that she did not authorize SC Data to obtain a consumer report. She did authorize a company to conduct a criminal background search. The court found that plaintiff has not pleaded any facts demonstrating concrete harm—a prerequisite for Article III standing. As such, she lacks standing to pursue her failure-to-authorize claim. The court vacated the district court's orders. View "Ria Schumacher v. SC Data Center, Inc." on Justia Law

In 2006 Pierre opened a credit card account. She accumulated consumer debt and defaulted. Midland Funding bought the debt and sued Pierre in Illinois state court in 2010 but voluntarily dismissed the lawsuit. In 2015. Midland Credit sent Pierre a letter seeking payment, listing multiple payment plans, stating that the offer would expire in 30 days. The letter stated that because of the age of the debt, Midland would neither sue nor report to a credit agency and that her credit score would be unaffected by either payment or nonpayment. The statute of limitations had run. Pierre sued Midland under the Fair Debt Collection Practices Act, 15 U.S.C. 1692e(2). Asking for payment of a time-barred debt is not unlawful, but Pierre contended that the letter was a deceptive, unfair, and unconscionable method of debt collection. She sought to represent a class of Illinois residents who had received similar letters from Midland.The district court certified the class and granted it summary judgment on the merits. A jury awarded statutory damages totaling $350,000. The Seventh Circuit vacated and remanded with instructions to dismiss the suit. The letter might have created a risk that Pierre would suffer harm, such as paying the time-barred debt; that risk alone is not enough to establish an Article III injury in a suit for money damages, as the Supreme Court held in “TransUnion" (2021). View "Pierre v. Midland Credit Management, Inc." on Justia Law

The First Circuit affirmed the judgment of the district court granting summary judgment to IKO Industries, Inc. (IKO) on the Massachusetts state law contractual and consumer protection claims that Armand Bessette asserted with respect to roofing shingles that IKO manufactured and that he purchased in 1999, holding that there was no error or abuse of discretion.In 2018, after having replaced the singles on the roof his home, Bessette brought suit against IKO in Massachusetts state court alleging claims under Massachusetts law in connection with the alleged premature deterioration of the shingles. IKO removed the case to the federal district court, which granted summary judgment in favor of IKO. Bessette appealed, challenging the summary judgment on his express warranty and implied warranty of merchantability claims and claims alleging a violation of Chapter 93A, the Massachusetts consumer protection law. The First Circuit affirmed, holding that the district court properly granted summary judgment to IKO on the three claims at issue on appeal. View "Bessette v. IKO Industries, Inc." on Justia Law

The Eighth Circuit agreed with the district court that an automated marketing system that sends promotional text messages to phone numbers randomly selected from a database of customers' information is not an automated telephone system (an Autodialer) under the Telephone Consumer Protection Act (TCPA). Plaintiffs, persons who received promotional text messages from defendants through their marketing software called Txt Live, allege that these messages violated the TCPA because they were sent using an Autodialer without plaintiffs' consent. The court affirmed the district court's grant of summary judgment in favor of defendants, holding that Txt Live did not meet the statutory definition of an Autodialer. View "Beal v. Outfield Brew House, LLC" on Justia Law

The Supreme Court affirmed the order of the circuit court denying Petitioner's motion to compel arbitration, holding that the circuit court did not err.Respondents Louise McGraw and Charlotte Rodgers, by and through their daughters, Nancy Reuschel and Loretta Holcomb, filed a complaint against Petitioner, Chancellor Senior Management, Ltd., arguing that Petitioner defrauded their mothers by making misrepresentations and misleading statements and concealing material facts, in violation of the West Virginia Consumer Credit and Protection Act (WVCCPA). See W. Va. Code 46A-1-101 to -8-102. Petitioner filed a motion to compel arbitration based on an arbitration provision set forth in the residency agreement Reuschel and Holcomb signed on behalf of their motions. The circuit court denied the motion, concluding that the agreement could not be enforced as written. The Supreme Court affirmed, holding that the circuit court did not err in determining that the arbitration agreement could not be enforced as written because it did not "comply with its own stated standards." View "Chancellor Senior Management, Ltd. v. McGraw" on Justia Law

Plaintiffs, a putative class of fantasy sports players, filed suit alleging claims for fraudulent misrepresentations and omissions, negligent misrepresentations, violations of various state consumer protection laws, and unjust enrichment. Plaintiffs alleged that defendants fraudulently concealed that player statistics were purportedly unreliable because of rule violations in the form of electronic sign-stealing by certain MLB teams during the 2017–2019 baseball seasons. Plaintiffs further alleged that MLB intentionally took no action to address these rule violations in order to protect its financial interest and investment in DraftKings.The Second Circuit affirmed the district court's dismissal of the First Amended Complaint and its denial of plaintiffs' motion for reconsideration, holding that alleged misrepresentations or omissions by organizers and participants in major league sports about the competition itself—such as statements about performance, team strategy, or rules violations—do not give rise to plausible claims sounding in fraud or related legal theories brought by consumers of a fantasy sports competition who are utilizing a league's player statistics.The court also affirmed the district court's order, which concluded that a September 14, 2017 letter from the MLB Commissioner to the New York Yankees General Manager should be unsealed. The court concluded that the district court did not abuse its discretion in unsealing the letter in light of plaintiffs' attempted use of the letter in their proposed Second Amended Complaint and the district court's discussion of the letter in explaining its decision to deny plaintiffs' request for leave to amend in their reconsideration motion, and because MLB disclosed a substantial portion of the substance of the letter in its press release about the investigation. View "Olson v. Major League Baseball" on Justia Law

CalChamber filed suit, 42 U.S.C. 1983, to “vindicate its members’ First Amendment rights to not be compelled to place false and misleading acrylamide warnings on their food products.” The district court entered a preliminary injunction, prohibiting the Attorney General and related entities, including private enforcers from pursuing new lawsuits to enforce Proposition 65's requirement that “[n]o person in the course of doing business shall knowingly and intentionally expose any individual to a chemical known to the state to cause cancer . . . without first giving clear and reasonable warning.”The Ninth Circuit affirmed. CalChamber was likely to succeed on the merits of its compelled speech claim. Given the robust disagreement by reputable scientific sources over whether acrylamide in food causes cancer in humans, the warning was controversial and misleading. Proposition 65’s enforcement regime created a heavy litigation burden on manufacturers who use alternative warnings rather than the regulatory safe harbor warning. The serious constitutional issue provided sufficient reason to enjoin Proposition 65 acrylamide litigation until the case was finally decided; the injunction was not an impermissible prior restraint. CalChambers established irreparable harm, and the scope of the injunction was not impermissible; and the balance of hardships weighed in CalChamber’s favor. The injunction was in the public interest. View "California Chamber of Commerce v. Council for Education and Research on Toxics" on Justia Law

Food manufacturer B&G sued, 42 U.S.C. 1983, alleging that Embry and her attorney violated B&G’s constitutional rights by suing B&G to enforce California’s Safe Drinking Water and Toxic Enforcement Act of 1986, Proposition 65. Proposition 65 requires businesses to notify customers if their products contain chemicals known to the state to cause cancer. Acrylamide, the chemical allegedly found in B&G’s Cookie Cakes, is on a state list of such chemicals based solely on laboratory studies in which pure acrylamide was given to rats or mice.The district court dismissed B&G’s complaint based on the Noerr-Pennington doctrine, which provides that those who petition any department of the government for redress are generally immune from statutory liability for their petitioning conduct. The Ninth Circuit affirmed. B&G’s section 1983 suit burdened Embry's petition activities; Embry's prelitigation communications and suit to enforce Proposition 65 were protected by the Petition Clause. B&G failed to show that any of the Noerr-Pennington sham exceptions applied. Even if Embry and her attorney were state actors, the suit was barred. The court remanded to allow B&G to amend its complaint. B&G proposed additional allegations concerning a sham exception that examines the objective reasonableness of a defendant’s suit and the defendant’s subjective motivation. View "B&G Foods North America, Inc. v. Embry" on Justia Law

In 2014, DeNike purchased a 2014 hardtop Jeep Wrangler from SCJ. DeNike subsequently discovered that, contrary to a salesman’s representation, the vehicle was originally manufactured as a soft top. The hardtop was improperly installed after it left the factory. DeNike filed suit. A jury found in favor of DeNike on his claims under the Consumers Legal Remedies Act (CLRA) (Civ. Code 1750 ), the Song-Beverly Consumer Warranty Act (section 1790), and for intentional misrepresentation. The trial court issued a permanent injunction against SCJ and, in a post-judgment order, awarded DeNike attorney fees.The court of appeal reversed with respect to restitution under the CLRA. Having found that SCJ’s response to DeNike’s CLRA demand letter was “reasonable and appropriate,” the trial court erred in allowing DeNike’s claim for restitution under the CLRA to proceed to the jury. The court rejected arguments that there was insufficient evidence of reasonable reliance to support the verdict on the intentional misrepresentation cause of action and that the trial court misinstructed the jury on the Song-Beverly Act cause of action and erred in granting DeNike’s request for injunctive relief under the CLRA. View "DeNike v. Mathew Enterprise, Inc." on Justia Law