Justia Consumer Law Opinion Summaries

In 2017, CNU of Alabama, LLC, and Shakeena Cox entered into a loan agreement allowing Cox to take cash advances. Cox took three advances totaling $1,250 but later defaulted. CNU assigned its rights to UHG I LLC, which then sued Cox in Mobile District Court. Cox argued the agreement, including an arbitration provision, was void under the Alabama Small Loan Act. The district court agreed and ruled in Cox's favor.UHG appealed to the Mobile Circuit Court, where Cox filed a counterclaim on behalf of herself and a class, adding CNU as a party and seeking injunctive relief and damages. Both companies moved to compel arbitration based on the agreement's arbitration provision. The circuit court denied the motions, holding that the agreement and arbitration provision were void under the Small Loan Act, the arbitration provision was unconscionable, and UHG had waived its right to arbitrate by appealing the district court's decision. UHG and CNU appealed.The Supreme Court of Alabama reversed the circuit court's decision denying the motions to compel arbitration for Cox's counterclaim, holding that the arbitration provision was valid and enforceable. The court determined that challenges to the agreement's validity, including claims of voidness and unconscionability, were for an arbitrator to decide. However, the court affirmed the circuit court's decision that UHG waived its right to arbitrate its initial collection claim by pursuing it in court. The case was remanded for further proceedings consistent with these findings. View "CNU of Alabama, LLC v. Cox" on Justia Law

In this case, Bayer U.S. LLC, a pharmaceutical company, recalled millions of dollars’ worth of Lotrimin and Tinactin spray products in October 2021 after discovering benzene contamination in products dating back to 2018. The plaintiffs, who purchased these products during the recall period, did not allege physical injuries but sought compensation for economic losses, claiming the contaminated products were worth less than uncontaminated ones.The United States District Court for the District of New Jersey dismissed the plaintiffs' complaint for lack of standing, concluding that the plaintiffs failed to sufficiently allege economic loss or harm from increased risk of future physical injury. The court found the plaintiffs' allegations too conclusory and lacking in specific facts to support their claims.On appeal, the United States Court of Appeals for the Third Circuit reviewed the case. The appellate court concluded that the District Court erred in applying a heightened standard for standing. The Third Circuit held that the plaintiffs plausibly alleged economic injury under the benefit-of-the-bargain theory, as the contaminated products were unusable and therefore worth less than the uncontaminated products they had bargained for. The court noted that the plaintiffs need not show that all products in the recall were contaminated but must plausibly allege that their specific products were contaminated.The Third Circuit reversed the District Court's dismissal of the complaint for lack of standing as to some plaintiffs and remanded the case for further proceedings consistent with its opinion. The appellate court emphasized that the plaintiffs' allegations, supported by the recall and additional testing data, were sufficient to establish standing at the motion-to-dismiss stage. View "Huertas v. Bayer US LLC" on Justia Law

Plaintiffs Everardo Rodriguez and Judith Arellano purchased a two-year-old car with over 55,000 miles on it, which still had an unexpired manufacturer’s powertrain warranty. Despite numerous repair attempts by the defendant, FCA US, LLC (FCA), the car continued to experience engine problems. Plaintiffs sued FCA under the Song-Beverly Consumer Warranty Act, seeking to enforce the refund-or-replace provision, arguing that their car qualified as a “new motor vehicle” because it was sold with a manufacturer’s new car warranty.The Riverside County Superior Court granted FCA’s motion for summary judgment, concluding that the plaintiffs’ car did not qualify as a “new motor vehicle” under the Act. The Fourth Appellate District, Division Two, affirmed the trial court’s decision, holding that the phrase “other motor vehicle sold with a manufacturer’s new car warranty” does not include previously owned vehicles with some balance remaining on the manufacturer’s express warranty.The Supreme Court of California reviewed the case and affirmed the judgment of the Court of Appeal. The Court held that a motor vehicle purchased with an unexpired manufacturer’s new car warranty does not qualify as a “motor vehicle sold with a manufacturer’s new car warranty” under section 1793.22, subdivision (e)(2) of the Song-Beverly Act unless the new car warranty was issued with the sale. The Court emphasized that the statutory language and the broader context of the Song-Beverly Act support this interpretation, maintaining the distinction between new and used vehicles and their respective warranty protections. View "Rodriguez v. FCA US, LLC" on Justia Law

Plaintiffs, residents of Wisconsin, filed two class action complaints against Experian Information Solutions, Inc. under the Fair Credit Reporting Act (FCRA). They alleged that Experian failed to include a required statement in the "Summary of Rights" portion of their consumer reports, violating 15 U.S.C. § 1681g(c)(2)(D). Plaintiffs sought actual, statutory, and punitive damages. Experian removed the cases to federal court, where Plaintiffs moved to remand, arguing they lacked standing under Article III of the U.S. Constitution because they did not suffer a concrete harm. The federal court agreed and remanded the cases to state court.In state court, Experian moved for judgment on the pleadings, arguing Plaintiffs lacked standing under Wisconsin law and that their FCRA claim did not fall within the statute's "zone of interests." Plaintiffs contended California law should apply and that they had standing under it. The trial court, referencing the recent Limon v. Circle K Stores Inc. decision, which required a concrete injury for standing in California state courts, granted Experian's motion. Plaintiffs appealed, arguing Limon was wrongly decided.The California Court of Appeal, Fourth Appellate District, Division Three, affirmed the trial court's decision. The appellate court found Limon persuasive, holding that Plaintiffs lacked standing because they did not allege a concrete or particularized injury. The court noted that under both California and federal law, an informational injury without adverse effects is insufficient to confer standing. Consequently, the judgment in favor of Experian was affirmed. View "Muha v. Experian Information Solutions" on Justia Law

Plaintiffs brought a putative class action against Live Nation Entertainment, Inc., and Ticketmaster LLC, alleging anticompetitive practices in violation of the Sherman Act. The plaintiffs had purchased tickets through Ticketmaster’s website, which required them to agree to Ticketmaster’s Terms of Use. These terms included an arbitration agreement mandating that disputes be resolved by an arbitrator from New Era ADR, using expedited/mass arbitration procedures.The United States District Court for the Central District of California denied the defendants' motion to compel arbitration. The court found that the clause delegating the authority to determine the validity of the arbitration agreement to the arbitrator was unconscionable under California law, both procedurally and substantively. The court also held that the entire arbitration agreement was unconscionable and unenforceable. The defendants appealed this decision.The United States Court of Appeals for the Ninth Circuit affirmed the district court’s decision. The appellate court held that the delegation clause and the arbitration agreement as a whole were unconscionable under California law. The court found that the delegation clause was part of a contract of adhesion and that the terms on Ticketmaster’s website exhibited extreme procedural unconscionability. Additionally, the court identified several features of New Era’s arbitration rules that contributed to substantive unconscionability, including the mass arbitration protocol, lack of discovery, limited right of appeal, and arbitrator selection provisions.The Ninth Circuit also held that the application of California’s unconscionability law to the arbitration agreement was not preempted by the Federal Arbitration Act (FAA). As an alternate and independent ground, the court held that the FAA does not preempt California’s prohibition of class action waivers in contracts of adhesion in large-scale small-stakes consumer cases, as established in Discover Bank v. Superior Court. The court concluded that Ticketmaster’s Terms and New Era’s Rules were independently unconscionable under Discover Bank. The decision of the district court was affirmed. View "HECKMAN V. LIVE NATION ENTERTAINMENT, INC." on Justia Law

The plaintiffs, Shane and Maura Pelissier, insured their automobile through GEICO General Insurance Company. They sought underinsured motorist benefits four and a half years after a motor vehicle accident with an underinsured driver. GEICO moved for summary judgment, citing a policy provision requiring lawsuits for underinsured motorist benefits to be filed within three years of the accident. The trial court denied the motion and transferred three interlocutory appeal questions to the Supreme Court of New Hampshire.The trial court found that the contractual limitations provision was unenforceable because it could require insureds to file suit before a justiciable cause of action exists. It also found that using the date of the accident as the triggering event for the limitations period was contrary to public policy and that there was a material factual dispute regarding the plaintiffs' ability to discover the tortfeasor’s policy limits before the limitations period expired. The trial court denied GEICO’s motion for reconsideration but granted an interlocutory appeal.The Supreme Court of New Hampshire reviewed whether the contractual limitations provision violated public policy. The court held that the provision was unenforceable because it could force insureds to file suit before their cause of action for underinsured motorist benefits had accrued, thus restricting their ability to recover damages. The court noted that the provision contravened the public policy underlying New Hampshire’s uninsured motorist statute, RSA 264:15, which aims to place insured persons in the same position as if the offending motorist had adequate liability insurance. The court affirmed the trial court’s decision in part, did not address the second interlocutory question, and remanded the case for further proceedings. View "Pelissier v. GEICO Gen. Ins. Co" on Justia Law

The case involves the People of the State of California, represented by the San Diego City Attorney, who filed a complaint against Kaiser Foundation Health Plan, Inc. The complaint alleged that Kaiser violated the unfair competition law (UCL) and false advertising law (FAL) by failing to maintain and update accurate health plan provider directories (PDs) as required by California Health and Safety Code section 1367.27. The People claimed that Kaiser’s inaccuracies in PDs misled consumers and harmed competitors.The Superior Court of San Diego County granted Kaiser’s motion for summary judgment, exercising its discretion to abstain from adjudicating the action. The court reasoned that the legislative framework did not impose an accuracy requirement but rather outlined procedural steps for maintaining PDs. The court concluded that adjudicating the People’s claims would require it to assume regulatory functions and interfere with policy judgments already made by the Legislature and the Department of Managed Health Care (DMHC).The Court of Appeal, Fourth Appellate District, Division One, State of California, reviewed the case and concluded that the trial court abused its discretion by applying the doctrine of judicial abstention. The appellate court found that section 1367.27 sets forth clear mandates for PD accuracy, which the trial court could enforce through its ordinary judicial functions. The appellate court held that the People’s enforcement of these statutory requirements would not interfere with the DMHC’s regulatory functions and that the trial court’s abstention was based on a mistaken view of the law. Consequently, the appellate court reversed the judgment and remanded the matter with directions to deny Kaiser’s motion for summary judgment. View "P. ex rel. Elliott v. Kaiser Foundation Health Plan" on Justia Law

In November 2014, the plaintiff purchased a recreational vehicle (RV) from a dealership, with the defendant bank financing the purchase. The sales contract inaccurately reflected the downpayment as $19,100 in cash instead of $1,000 in cash and $18,100 in trade-in value. The plaintiff later discovered issues with the RV and filed a lawsuit in February 2017, alleging violations of the Automobile Sales Finance Act (ASFA) due to the incorrect downpayment disclosure.The Superior Court of Fresno County reviewed the case and concluded that the four-year statute of limitations for written contracts applied, rather than the one-year statute for statutory penalties. The court granted summary adjudication in favor of the plaintiff against the dealership for violating the ASFA, and the dealership's liability was extended to the bank under the Federal Trade Commission’s holder rule. The court entered judgment requiring the bank to accept the return of the RV and pay the plaintiff $42,263.64.The California Court of Appeal, Fifth Appellate District, reviewed the case and determined that the rescission and restitution remedy under the ASFA is a penalty. The court concluded that the one-year statute of limitations for actions upon a statute for a penalty or forfeiture applied. The court noted that the ASFA imposes strict liability without regard to actual damages or fault, and the legislative history indicated the remedy was intended as a penalty. Consequently, the appellate court reversed the trial court's decision and remanded the case for further proceedings consistent with its opinion. View "Pompey v. Bank of Stockton" on Justia Law

Meghan Young was denied a mortgage loan due to an erroneous credit report prepared by Experian Information Solutions, Inc. The report falsely indicated that foreclosure proceedings had been initiated against her, despite her having paid off her mortgage in full. Following this, Young enrolled in a credit monitoring service called CreditWorks, which is affiliated with Experian. The terms of use for CreditWorks included an arbitration agreement covering disputes related to the service.Young sued Experian in the District of New Jersey for violations of the Fair Credit Reporting Act. Experian moved to compel arbitration based on the CreditWorks agreement. The District Court denied the motion without prejudice, allowing for limited discovery on the issue of arbitrability. The court applied the summary judgment standard from Guidotti v. Legal Helpers Debt Resolution, L.L.C., as the arbitration agreement was not apparent from the face of the complaint.The United States Court of Appeals for the Third Circuit reviewed the case. The court clarified that discovery is not necessary when there is no factual dispute about the existence or validity of the arbitration agreement. Since Young did not dispute the existence of the agreement but only its scope, and because the agreement delegated arbitrability issues to the arbitrator, the court held that the District Court should have granted the motion to compel arbitration without discovery. The Third Circuit vacated the District Court’s order and remanded the case for further proceedings consistent with its opinion. View "Young v. Experian Information Solutions Inc" on Justia Law

Michael Salazar filed a putative class action against the National Basketball Association (NBA) alleging violations of the Video Privacy Protection Act (VPPA). Salazar claimed that he signed up for the NBA’s free online newsletter, provided personal information, and watched videos on NBA.com. He alleged that the NBA disclosed his video-watching history and Facebook ID to Meta Platforms, Inc. without his consent, violating the VPPA.The United States District Court for the Southern District of New York dismissed Salazar’s complaint. The court concluded that while Salazar had standing to sue, he did not plausibly allege that he was a “consumer” under the VPPA. The court reasoned that the VPPA only applies to consumers of audiovisual goods or services, and the NBA’s online newsletter did not qualify as such. The court also found that signing up for the newsletter did not make Salazar a VPPA “subscriber.”The United States Court of Appeals for the Second Circuit reviewed the case. The court held that Salazar’s alleged injuries were sufficiently concrete to confer Article III standing. It also found that the district court erred in holding that Salazar was not a “subscriber of goods or services” under the VPPA. The appellate court concluded that the VPPA’s definition of “goods or services” is not limited to audiovisual materials and that Salazar’s exchange of personal information for the NBA’s online newsletter made him a “subscriber.” Consequently, the Second Circuit vacated the district court’s judgment and remanded the case for further proceedings. View "Salazar v. NBA" on Justia Law