Justia Consumer Law Opinion Summaries

Plaintiffs, whose vehicles had been “totaled,” sued Liberty, an auto insurer, and CCC, alleging that Liberty breached its contracts with its insureds and that both companies violated Washington’s unfair trade practices law and committed civil conspiracy. Liberty’s valuation method uses a report about the value of “comparable vehicles,” provided by CCC. To account for the difference between the average car owned by a private person and the cars for sale at dealerships, CCC reduces a totaled car’s valuation.The district court declined to certify a proposed class because individual questions predominated over common questions and individualized trials were superior to a class action. The Ninth Circuit affirmed. Whether Liberty and CCC’s condition adjustment violates the Washington state regulations is a common question but to show liability for breach of contract or unfair trade practices, the plaintiffs must show an injury. Establishing an injury will require an individualized determination for each plaintiff; those individualized determinations predominate over the common questions. A class action here would involve adjudicating issues specific to each class member’s claim, and that would be unmanageable. Individual trials would be a better way to adjudicate those issues. View "Lara v. First National Insurance Co." on Justia Law

The First Circuit vacated and reversed the judgment of the district court holding that two laws passed by Maine's Legislature in 2019 that amended the Maine Fair Credit Reporting Act, Me. Rev. Stat. Ann. tit. 10, 1306 et seq. (Maine Act) were preempted under section 1681t(b)(1)(E) of the Fair Credit Reporting Act, 15 U.S.C. 1681 et seq., holding that remand was required.The amendments to the Maine Act were passed in order to regulate the reporting of overdue medical debt and debt resulting from economic abuse. Plaintiff, an industry group representing the "Big Three" credit reporting agencies, brought a facial preemption challenge to the laws. The district court concluded that the amendments were preempted by section 1681t(b)(1)(E). The First Circuit remanded the matter for further proceedings, holding (1) section 1681t(b)(1)(E) narrowly preempts state laws that impose requirements or prohibitions with respect to the specific subject matters regulated under section 1681c; and (2) the amendments were not preempted in their entirety. View "Consumer Data Industry Ass'n v. Frey" on Justia Law

A class action claimed Nationstar violated consumer protection laws in servicing class members’ mortgage loans. Years later, the parties filed a notice of settlement. A magistrate granted preliminary approval. In order of priority, the parties proposed that the $3,000,000 settlement fund pay for administrative expenses up to $300,000, attorneys’ fees, a class representative award, and class claims. The settlement proposed notice by Email, Postcard, and Longform. The Email and Postcard Notice informed class members of the amount of the settlement, how to submit a claim, how to opt-out of the class, and where to find the Longform Notice. The Longform Notice explained the attorneys’ fee arrangement. The notices did not estimate each class member's recovery. Nationstar agreed not to oppose class counsel’s fee request up to $1,300,000. Class counsel submitted records that supported $1,261,547.50 in fees and $217,657.26 in unreimbursed expenses but requested only $1,300,000. The value of a class member’s claim is determined by a points system based on Nationstar’s treatment of their account and the class member’s expenses.An absent class member, having sued Nationstar in California state court, objected to the settlement, arguing that the notice was insufficient; the settlement was unfair and inadequate; the release was unconstitutionally overbroad; and the attorneys’ fee award was improper. The magistrate overruled those objections. The Fourth Circuit affirmed, noting that over 97% of the nearly 350,000 class members received notice and the low opt-out rate. View "McAdams v. Nationstar Mortgage, LLC" on Justia Law

In October 2004, plaintiff Shelby Anderson (individually, plaintiff) and his wife, plaintiff Tammy Anderson (Tammy), bought a Ford Super Duty F-250 6.0 liter diesel pickup truck containing an engine sourced from nonparty ITEC, also known as Navistar (Navistar). Plaintiff chose the Ford for its power, towing capacity, and other qualities as represented by defendant Ford Motor Company (Ford) in brochures and advertisements and by Ford dealership sales agents. Plaintiff began experiencing issues with the truck during his second year of ownership. After numerous attempts to have the vehicle repaired so it could perform the functions for which they purchased it, plaintiffs effectively gave up, rendering the truck a “driveway ornament.” After opting out as putative members of a class action involving the 6.0 liter diesel engine, plaintiffs sued Ford. The jury found in favor of plaintiffs on their causes of action pursuant to the Song-Beverly Consumer Warranty Act (popularly known as the “lemon law”), the Consumers Legal Remedies Act (CLRA), and their fraud in the inducement–concealment cause of action. The jury awarded plaintiffs $47,715.60 in actual damages, which was the original purchase price of the truck, $30,000 in statutory civil penalties under the Song-Beverly Act, and $150,000 in punitive damages. The trial court granted plaintiffs’ motion for attorney fees in the amount of $643,615. Ford appealed, but finding no reversible error in the judgment and damages awards, the Court of Appeal affirmed. View "Anderson v. Ford Motor Co." on Justia Law

The Fair Credit Reporting Act (FCRA) prohibits credit reporting agencies from disclosing in a credit report “[a]ny . . . adverse item of information . . . which antedates the report by more than seven years,” 15 U.S.C. 1681c(a)(5). The Ninth Circuit previously held that Screening Pros, a credit reporting agency, violated FCRA when, in 2010, it issued a tenant screening report that disclosed a criminal charge that was filed against Moran in 2000 (beyond the seven-year window) but dismissed in 2004 (within the seven-year window).On remand, the district court granted Screening Pros summary judgment, holding that Moran failed to present evidence that Screening Pros violated the FCRA willfully or negligently, as required for liability. The Ninth Circuit affirmed. To prove a negligent violation of the FCRA, a plaintiff must show that the defendant acted pursuant to an objectively unreasonable interpretation of the statute. A plaintiff can prove a willful violation by showing a knowing or a reckless violation of a standard. Screening Pros’ interpretation of the FCRA was not objectively unreasonable. Screening Pros presented evidence that its interpretation was consistent with industry norms; the FTC’s only guidance at the time appeared to permit reporting the criminal charge. View "Moran v. The Screening Pros, LLC" on Justia Law

Ewing and Webster disputed debts they allegedly owed to debt‐collection companies. Under the Fair Debt Collection Practices Act, debt‐collection companies must report such disputes to credit reporting agencies, 15 U.S.C. 1692e(8), but the companies failed to do so. The plaintiffs sued separately, seeking damages. The companies prevailed at summary judgment. Both district courts determined that the companies’ mistakes were bona fide errors.In consolidated appeals, the Seventh Circuit first held that the plaintiffs suffered intangible, reputational injuries, sufficiently concrete for purposes of Article III standing; they have shown that their injury is related closely to the harm caused by defamation. The court affirmed as to Ewing and reversed as to Webster. In Ewing’s case, a receptionist accidentally forwarded Ewing’s faxed dispute letter to the wrong department. The company had reasonably adapted procedures; if its step‐by‐step fax procedures had been followed, the error would have been avoided. Unlike the one‐time misstep in Ewing, a lack of procedures invited the Webster error. Until debtors and their attorneys knew that the collection company no longer accepted disputes by fax, it was entirely foreseeable that it would continue receiving faxed disputes. There were no procedures to avoid the error that occurred. View "Webster v. Receivables Performance Management, LLC" on Justia Law

Melendez purchased a used 2015 Toyota from Southgate under a retail installment sales contract. Southgate assigned the contract to Westlake. Weeks later, Melendez sent a notice alleging Southgate violated the Consumer Legal Remedies Act (CLRA) and demanded rescission, restitution, and an injunction. Melendez later sued Southgate and Westlake, alleging violations of the CLRA, the Song-Beverly Consumer Warranty Act, Civil Code 1632 (requiring translation of contracts negotiated primarily in Spanish), the unfair competition law, fraud, and negligent misrepresentation. Westlake assigned the contract back to Southgate. Default was entered against Southgate. Westlake agreed to pay $6,204.68 ($2,500 down payment and $3,704.68 Melendez paid in monthly payments). Melendez would have no further obligations under the contract.The parties agreed Melendez could seek attorney fees, costs, expenses, and prejudgment interest. Westlake was entitled to assert all available defenses, “including the defense that no fees at all should be awarded against it as a Holder” The FTC’s “holder rule” makes the holder of a consumer credit contract subject to all claims the debtor could assert against the seller of the goods or services but caps the debtor’s recovery from the holder to the amount paid by the debtor under the contract. The trial court awarded attorney fees ($115,987.50), prejudgment interest ($2,956.62), and costs ($14,295.63) jointly and severally against Westlake, Southgate, and other defendants. The court of appeal affirmed. The limitation does not preclude the recovery of attorney fees, costs, nonstatutory costs, or prejudgment interest. View "Melendez v. Westlake Services, Inc." on Justia Law

Plaintiff-respondent Ken Duff prevailed at a bench trial on one claim under the Song-Beverly Consumer Warranty Act, but was only awarded $1 in nominal damages. The trial court awarded Duff $684,250 in attorney fees. Defendant-appellant Jaguar Land Rover North America, LLC (Jaguar) appealed the order awarding Duff attorney fees, arguing (among other things) Jaguar contended the trial court applied the incorrect legal standard in finding that Duff was the prevailing buyer under California Civil Code section 1794(d). The Court of Appeal agreed and thus, reversed the order and remanded the matter to the superior court to reconsider the issue. View "Duff v. Jaguar Land Rover North America, LLC" on Justia Law

The Supreme Judicial Court affirmed the judgments of the superior court in this dispute over a commercial lease, holding that contractual provisions limiting liability for violations of Mass. Gen. Laws ch. 93A, 11 will not be enforced to protect defendants who willfully or knowingly engage in the unfair or deceptive conduct prohibited by the statute.The statute at issue makes unfair or deceptive acts or practices between businesses unlawful. When Defendants attempted to terminate a lease agreement between the parties, Plaintiff alleged a violation of Mass. Gen. Laws ch. 93A, 11. The judge found for Plaintiff on its claim and granted specific performance. After finding that Defendants' violations of the statute were willful or knowing the judge doubled the damages awarded. After reopening the trial, the judge awarded Plaintiff additional damages for willful or knowing violations. The Supreme Judicial Court affirmed, holding (1) Defendants' conduct met the standard for unfair or deceptive acts or practices under chapter 93A, 11; (2) the double damages award was warranted; and (3) a limitation of liability provision provides no protection in a chapter 93A, 11 action where the violation of the statute was done willfully or knowingly, as in this case. View "H1 Lincoln, Inc. v. South Washington Street, LLC" on Justia Law

TitleMax provides vehicle loans at interest rates as high as 180%. The entire process occurs at a TitleMax brick-and-mortar location. The borrower receives “a check drawn on a bank outside of Pennsylvania,” The borrower grants TitleMax a security interest in the vehicle. TitleMax records its lien with the appropriate state authority. Borrowers can make payments from their home states. TitleMax does not have any offices, employees, agents, or brick-and-mortar stores and is not licensed as a lender in Pennsylvania. TitleMax claims that it never solicited Pennsylvania business and does not run television ads within Pennsylvania.Pursuant to the Consumer Discount Company Act and the Loan Interest and Protection Law, Pennsylvania’s Department of Banking and Securities issued a subpoena requesting documents regarding TitleMax’s interactions with Pennsylvania residents. TitleMax then stopped making loans to Pennsylvania residents and asserts that it has lost revenue.The district court held that Younger abstention did not apply and that the Department’s subpoena’s effect was to apply Pennsylvania’s usury laws extraterritorially in violation of the Commerce Clause.The Third Circuit reversed. Applying the Pennsylvania statutes to TitleMax does not violate the extraterritoriality principle. TitleMax receives payments from within Pennsylvania and maintains an actionable security interest in vehicles located in Pennsylvania; its conduct is not “wholly outside” of Pennsylvania. The laws do not discriminate between in-staters and out-of-staters. Pennsylvania has a strong interest in prohibiting usury. Applying Pennsylvania’s usury laws to TitleMax’s loans furthers that interest and any resulting burden on interstate commerce is, at most, incidental. View "TitleMax of Delaware Inc v. Weissmann" on Justia Law