Justia Consumer Law Opinion Summaries

California’s 1986 Safe Drinking Water and Toxic Enforcement Act, Health & Saf. Code 25249.5, Proposition 65, provides that no business shall "knowingly and intentionally expose any individual to a chemical known to the state to cause cancer or reproductive toxicity without first giving clear and reasonable warning.” Mercury compounds are listed as Proposition 65 reproductive toxins. Cosmetics containing 0.0001 percent or more of mercury are prohibited under federal law, 21 U.S.C. 331(a)–(c). Lee alleged skin-lightening creams offered for sale on Amazon’s Web site sold by third parties, contain mercury.The trial court concluded that Amazon is immune from liability under the federal Communications Decency Act (CDA), 47 U.S.C. 230, and that Lee failed to establish elements required by Proposition 65. The court of appeal reversed. The stated reasons for concluding that a laboratory test finding a high level of mercury in one unit of a skin-lightening cream is an insufficient basis for inferring other units of the same product contain mercury do not withstand scrutiny. The trial court erred in ruling that Lee was required to prove Amazon had actual knowledge the products contained mercury and in excluding evidence of constructive knowledge. The negligent failure to warn claim did not seek to hold a website owner liable as the “publisher or speaker of any information provided by another information content provider,” so CDA did not bar the claim. View "Lee v. Amazon.com, Inc." on Justia Law

Plaintiffs Robin Thornton and Michael Lucero alleged defendants Tyson Foods, Inc., Cargill Meat Solutions, Corp., JBS USA Food Company, and National Beef Packing Company, LLC, used deceptive and misleading labels on their beef products. In particular, plaintiffs contended the “Product of the U.S.A.” label on defendants’ beef products was misleading and deceptive in violation of New Mexico law because the beef products did not originate from cattle born and raised in the United States. The Tenth Circuit Court of Appeals determined the federal agency tasked with ensuring the labels were not misleading or deceptive preapproved the labels at issue here. In seeking to establish that defendants’ federally approved labels were nevertheless misleading and deceptive under state law, plaintiffs sought to impose labeling requirements that were different than or in addition to the federal requirements. The Tenth Circuit concluded plaintiffs’ deceptive-labeling claims were expressly preempted by federal law. Further, the Court agreed with the district court that plaintiffs failed to state a claim for false advertising. View "Thornton, et al. v. Tyson Foods, et al." on Justia Law

The Eighth Circuit affirmed the district court's dismissal of plaintiffs' putative class action, alleging that they were misled by claims made on packages of dog food manufactured and distributed by Champion. Because plaintiffs have not challenged the district court's determinations that they lacked standing to claim that Champion misrepresented that the dog food is BPA-free, the court did not reach the merits of their related arguments.In this case, plaintiffs were required to plausibly allege that because of defendant's affirmative misrepresentations or material omissions, their dog food packaging could deceive a reasonable consumer. The court concluded that the district court properly dismissed plaintiffs' omission-based claims because none of Champion's packaging statements are deceptive or misleading, and thus none require corrective disclosures. The court rejected plaintiffs' argument that Champion was required to disclose further information because of its special knowledge of material facts to which plaintiffs did not have access. The court stated that this duty to disclose based on special knowledge arises only in limited circumstances, which are not present in this case. Finally, the court concluded that plaintiffs' breach of warranty and unjust enrichment claims are premised on the same allegations of deception that are insufficient to support the fraud claims, and thus they fail for the same reasons. View "Song v. Champion Petfoods USA, Inc." on Justia Law

The Supreme Court affirmed the judgment of the circuit court concluding that Plaintiff lacked standing to enforce the "midnight deadline" rule set forth in section 4-302 of the Uniform Commercial Code (UCC), as adopted by Va. Code 8.4-302 and W. Va. Code 46-4-302, holding that there was no error.In her second amended complaint, Plaintiff alleged that MCNB Bank and Trust Company (MCNB) violated the midnight deadline rule adopted from the UCC and, therefore, MCNB was strictly liable for the payment of a check in the amount of $245,271.25. The circuit court granted summary judgment for MCNB, concluding that Plaintiff lacked standing to pursue her claim because she did not have any right to rely on the prompt payment of the check at issue. The Supreme Court affirmed, holding that the circuit court did not err when it granted MCNB’s motion for summary judgment based on Plaintiff's alleged lack of standing to enforce the midnight deadline rule. View "Stahl v. Stitt" on Justia Law

The Ninth Circuit affirmed the district court's denial of plaintiffs' motion for a remand to state court and the district court's dismissal of plaintiffs' class action suit alleging violations of the Fair Credit Reporting Act (FCRA) by Experian. Plaintiffs alleged that the FCRA required Experian to disclose behavioral data from its "ConsumerView" marketing database, "soft inquiries" from third parties and affiliates, the identity of certain parties who procured consumer reports, and the date on which employment data was reported.The panel concluded that the allegations of injury to plaintiffs' informational and privacy interests as recited in the first amended complaint are sufficiently concrete to support Article III standing at this pleading stage. The panel also concluded that none of the information plaintiffs contend Experian failed to include in its section 1681g of the FCRA disclosures is subject to disclosure under section 1681g(a)(1), (3) or (5), considered individually or in combination. View "Tailford v. Experian Information Solutions, Inc." on Justia Law

Woods claims an identity thief opened a credit card in his name, leading debt collectors to pursue him for the card’s unpaid balance, $723.55. The debt collector, Resurgent, initially rejected his claims that the debt was not his. After months of phone calls and letter writing, Woods succeeded in having the debt removed from his credit report. Woods filed suit under the Fair Debt Collection Practices Act and the Fair Credit Reporting Act. He alleged that the companies violated the FDCPA by using “false representation[s] or deceptive means to collect or attempt to collect any debt,” 15 U.S.C. 1692e(10). In Woods’s view, Resurgent’s collection letters were literally false, since they stated that he owed a debt that American Airlines had since determined was not his. Woods claimed that Resurgent violated FCRA by failing to conduct a reasonable investigation into his fraud claims, 15 U.S.C. 1681s-2(b)(1)(A).The Seventh Circuit affirmed the dismissal of his suit. Literal falsity is not the standard under section 1692; a statement “isn’t ‘false’ unless it would confuse the unsophisticated consumer.” Resurgent’s investigation was reasonable, in light of Woods’s failure to respond to requests for information. View "Woods v. LVNV Funding, LLC" on Justia Law

Morgan’s credit reports reflected purported overdue home loan payments. Morgan wrote to his loan servicer: Please find a report ... stating as of 10/13/15 I owe Caliber $16,806[.] [A]lso on 9/20/16 I called Caliber and talked to Thomas ID#27662[.] [H]e stated I owe $30,656.89 and the $630.00 on my record is late charges. Can you please correct your records[?] Your office reporting the wrong amount to the credit agency is effecting [sic] my employment. Morgan included a copy of a credit report. Morgan alleges the defendant continued to report adverse loan information.When Johnson fell behind on her mortgage payments, the defendant reported to credit reporting agencies. While seeking a loan modification, Johnson sent a letter, challenging the existence of “title issues” and requesting “a reasonable investigation,” correction of the “errors,” and “an accounting of all sums you have imposed." The parties ultimately finalized a loan modification but in the interim, the defendant continued reporting adverse information.Johnson and Morgan filed a putative class action. Qualified written requests (QWRs) under the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. 2601 or Consumer Financial Protection Bureau Regulation X, trigger an obligation to cease providing adverse information to credit reporting agencies. The Fourth Circuit reversed the dismissal of Morgan’s claim but affirmed the dismissal of Johnson’s claim. Where a written correspondence to a loan servicer provides sufficient information to identify the account and an alleged servicing error, such correspondence is a QWR; if it merely challenges a contractual issue, it does not implicate a servicing issue and is not a QWR. Johnson’s correspondence did not concern the servicing of her account. View "Morgan v. Caliber Home Loans, Inc." on Justia Law

Darilyn Baker, individually and on behalf of a certified class, appealed an order denying her motion for a new trial after a jury returned a verdict in favor of RW Enterprises, Inc. and Randy Westby. This case has been before the North Dakota Supreme Court three times. Prior to the Baker III decision, the district court dismissed Baker’s claims after finding the defendants did not violate disclosure requirements of the North Dakota Retail Installment Sales Act (“RISA”). Baker appealed. In Baker III, the Supreme Court concluded the retail installment contracts did not comply with RISA’s disclosure requirements. The Supreme Court reversed the district court’s judgment and remanded for consideration of a willful violation of RISA and the remedies available for noncompliance with the disclosure requirements. On remand, Baker filed a motion requesting the district court to approve a settlement with Autos, Inc., Robert Opperude, and James Hendershot, dismiss all claims under RISA, and grant summary judgment on the usury claim against RW Enterprises and Westby. The court approved the settlement but denied the motions to dismiss and for summary judgment. At trial, Baker requested the jury be instructed on a partnership between the defendants. The district court declined to provide the partnership instruction, but provided an instruction on “acting in concert” in order for Baker to establish the defendants worked together. The jury found RW Enterprises and Westby did not violate RISA. By answering “no” to the RISA violation, the verdict form instructed the jury to stop answering other questions and return the form to the court. Had the jury found RW Enterprises and Westby in violation, the next question was whether the contract charged usurious interest and if so, what damages were suffered by the plaintiffs. Baker moved for a new trial arguing the district court provided an improper verdict form and jury instructions. The district court denied Baker’s motion. Finding no reversible error in that judgment, the North Dakota Supreme Court affirmed the district court. View "Baker v. Autos, Inc., et al." on Justia Law

Pincus’s vehicle was photographed running a red light in North Miami Beach. His notice of violation stated that he owed a statutory penalty of $158 and that if Pincus paid online or by phone, he would be charged an additional convenience fee. Pincus paid online with a credit card and was required to pay both the statutory penalty and the convenience fee. Pincus brought a putative class action against ATS, the vendor that operated the city’s red-light enforcement program. He alleged that several Florida statutes barred ATS from charging the convenience fee and that ATS was unjustly enriched by retaining the fee. The district court dismissed Pincus’s complaint,The Eleventh Circuit certified questions to the Supreme Court of Florida, which explained that a claim for unjust enrichment under Florida law required Pincus to allege that “it was inequitable for ATS to retain” the convenience fee. Even assuming Florida law barred ATS from charging the fee, the court concluded, it was “not inequitable” for ATS to retain the fee because Pincus received “value in exchange,” including not having to procure postage and a check or money order; being able to pay the balance over time; avoiding the risk of payment being delayed, stolen, or lost; being afforded more time because his payment would be received instantaneously; and receiving immediate confirmation of payment. The Eleventh Circuit, in response, affirmed the dismissal. View "Pincus v. American Traffic Solutions, Inc." on Justia Law

In 2005, Lyons opened a Home Equity Line of Credit (HELOC) with PNC’s predecessor, signing an agreement with no arbitration provision. In 2010, Lyons opened deposit accounts at PNC and signed a document that stated he was bound by the terms of PNC’s Account Agreement, including a provision authorizing PNC to set off funds from the account to pay any indebtedness owed by the account holder to PNC. PNC could amend the Account Agreement. In 2013, PNC added an arbitration clause to the Account Agreement. Customers had 45 days to opt out. Lyons opened another deposit account with PNC in 2014 and agreed to be bound by the 2014 Account Agreement, including the arbitration clause. Lyons again did not opt out. Lyons’s HELOC ended in February 2015. PNC began applying setoffs from Lyons’s 2010 and 2014 Accounts.Lyons sued under the Truth in Lending Act (TILA). PNC moved to compel arbitration. The court found that the Dodd-Frank Act amendments to TILA barred arbitration of Lyons’s claims related to the 2014 Account but did not apply retroactively to bar arbitration of his claims related to the 2010 account. The Fourth Circuit reversed in part. The Dodd-Frank Act 15 U.S.C. 1639c(e) precludes pre-dispute agreements requiring the arbitration of claims related to residential mortgage loans; the relevant arbitration agreement was not formed until after the amendment's effective date. PNC may not compel arbitration of Lyons’s claims as to either account. View "Lyons v. PNC Bank" on Justia Law