Justia Consumer Law Opinion Summaries

During the COVID-19 pandemic, Kentucky’s Attorney General opened civil price-gouging investigations into Kentucky-based merchants, including at least one member of the Guild that was selling goods to Kentuckians through Amazon’s online marketplace. The Guild challenged the constitutionality of Kentucky’s price-gouging laws as applied to sellers on Amazon, invoking the extraterritoriality doctrine of the dormant commerce clause. Accepting that the Attorney General sought only to enforce the Commonwealth’s price-gouging laws against Kentucky-based sellers in connection with sales to Kentucky consumers through Amazon’s platform, the district court nevertheless granted the Guild a preliminary injunction, concluding that enforcing the laws in connection with Amazon sales would have impermissible extraterritorial effects.The Sixth Circuit vacated, first holding that the Guild is likely to establish direct organizational standing and standing on behalf of its members. This enforcement of Kentucky’s price-gouging laws is unlikely to run afoul of the dormant commerce clause’s extraterritoriality doctrine, which invalidates state laws as per se unconstitutional in the narrow instances where a state expressly or inevitably exceeds its authority and seeks to control wholly out-of-state commerce. The effect on out-of-state commerce of Kentucky’s price-gouging laws depends entirely upon Amazon’s independent decision-making with regard to the structure of its online marketplace, so the application of those laws to Kentucky-based third-party sellers on Amazon in connection with sales to Kentucky consumers is unlikely to offend the extraterritoriality doctrine. View "Online Merchants Guild v. Cameron" on Justia Law

Plaintiff filed suit against Experian, alleging that the credit reporting agency violated the Fair Credit Reporting Act's (FCRA) requirements. The district court concluded that Experian did not violate the FCRA and granted summary judgment in favor of the agency.After determining that plaintiff had Article III standing, the Eleventh Circuit concluded that plaintiff's claims that Experian negligently violated 15 U.S.C. 1681e and 1681i by failing to undertake reasonable procedures to ensure maximal accuracy in its credit reports, and to conduct a reasonable reinvestigation of disputed information, survive summary judgment. However, the court concluded that plaintiff failed to establish that Experian acted willfully where the agency's interpretation could reasonably have found support in the courts. Accordingly, the court vacated in part, affirmed in part, and remanded for further proceedings. View "Losch v. Experian Information Solutions, Inc." on Justia Law

Plaintiff filed suit against defendant, alleging violations of the Song-Beverly Consumer Warranty Act, Civ. Code, 1790 et seq, after the new vehicle he leased developed unrepairable defects. The trial court entered a judgment awarding plaintiff restitution and civil penalties under the Act, as well as an order awarding him attorney fees.In the published portion of the opinion, the court held that, under section 1793.2, subdivision (b)(2), if a manufacturer is unable to repair a vehicle after a reasonable number of attempts, then it must either replace the vehicle in accordance with subparagraph (A) or make restitution in accordance with subparagraph (B). In this case, awarding plaintiff the residual value of the vehicle—an amount he admits he did not pay and was not obligated to pay under the terms of the lease—would leave him in a better position than he was in at the time he leased the vehicle. Therefore, it would be contrary to the Legislature's intent in using the term restitution to describe a lessee's damages remedy under the Act. The court was unpersuaded by plaintiff's assertion that excluding the residual value from the restitution award would result in unequal treatment of lease transactions, as compared to purchase transactions, in violation of the Act. Therefore, the restitution award did not violate the equal treatment mandate of the Act. The court rejected plaintiff's contention that he was obligated to terminate the lease and purchase the vehicle when he sought restitution under the Act. Rather, the court read the Act as expressly imposing reacquisition, branding, and disclosure requirements solely on manufacturers who cannot repair a vehicle after a reasonable number of attempts. View "Crayton v. FCA US LLC" on Justia Law

After a debt collector electronically transmitted data concerning a consumer's debt to a third-party vendor, the third-party vendor then used the data to create, print, and mail a "dunning" letter to the consumer. The consumer then filed suit alleging that, in sending his personal information to the vendor, the debt collector had violated the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692c(b), which, with certain exceptions, prohibits debt collectors from communicating consumers' personal information to third parties "in connection with the collection of any debt." The district court dismissed the action.The Eleventh Circuit held that a violation of section 1692c(b) gives rise to a concrete injury in fact under Article III. The court also concluded that the debt collector's transmittal of the consumer's personal information to its dunning vendor constituted a communication "in connection with the collection of any debt" within the meaning of section 1692c(b). Accordingly, the court reversed and remanded for further proceedings. View "Hunstein v. Preferred Collection and Management Services, Inc." on Justia Law

Mesa sent faxes promoting its services. Some recipients had not consented to receive such faxes, and the faxed materials did not include an opt‐out notice as required by the Telephone Consumer Protection Act (TCPA), 47 U.S.C. 227(b)(1)(C). Orrington filed a class‐action lawsuit under the TCPA and the Illinois Consumer Fraud and Deceptive Business Practices Act and alleged that Mesa’s conduct constituted common‐law conversion, nuisance, and trespass to chattels for Mesa’s appropriation of the recipients’ fax equipment, paper, ink, and toner. Mesa notified its insurer, Federal, of the Orrington action. Federal declined to provide a defense. After Mesa and Orrington reached a settlement, Mesa sued Federal, alleging breach of contract, bad faith, and improper delay and denial of claims under Colorado statutes.The Seventh Circuit affirmed summary judgment in favor of Federal. The policy’s “Information Laws Exclusion” provides that the policy “does not apply to any damages, loss, cost or expense arising out of any actual or alleged or threatened violation of “ TCPA “or any similar regulatory or statutory law in any other jurisdiction.” The exclusion barred all of the claims because the common-law claims arose out of the same conduct underlying the statutory claims. View "Mesa Laboratories, Inc. v. Federal Insurance Co." on Justia Law

Plaintiff filed suit against two debt collectors, TAG and CMLP, alleging that they violated the Fair Debt Collection Practices Act (FDCPA) in attempting to collect debt related to her treatment at North Memorial Health Care.The Eighth Circuit affirmed the district court's grant of summary judgment to the debt collectors, concluding that the assignment of a contract is enough to put the assignee into privity with an original party to that contract under Minnesota law. In this case, the record before the district court established that there was a written agreement between North Memorial and CMLP due to TAG's assignment. Therefore, there is no dispute over a material fact and summary judgment on this issue was proper. The court also concluded that the district court did not err when it granted summary judgment under 15 U.S.C. 1692(e) where CMLP was the valid assignee of the contract between North Memorial and TAG; CMLP could legally take action to collect that debt on behalf of North Memorial, and CMLP did not violate section 1692e by saying as much; and even viewing all of this from the perspective of the unsophisticated consumer, no reasonable jury would believe that there was any deception. Finally, the court concluded that the district court properly interpreted section 1692e(5) and 1692f(1) and that, because TAG and CMLP are not hospital organizations and do not operate hospital facilities, the Treasury Department regulations governing North Memorial do not apply. View "Klein v. The Affiliated Group, Inc." on Justia Law

Collecto sent a letter to collect on a debt that Hopkins initially owed to Verizon. The letter itemized Hopkins’s debt in a table, concluded that Hopkins owed $1,088.34, and offered to “resolve this debt in full” if he paid $761.84. Hopkins filed a putative class action, alleging that Collecto’s letter violated the Fair Debt Collection Practices Act, 15 U.S.C. 1692 (FDCPA). Hopkins claimed that the debt could not or was not intended to accrue interest or collection fees and that by assigning a “$0.00” value to table columns for interest and collection fees, the letter falsely implied that interest and fees could accrue and increase the amount of his debt over time. Hopkins argued consumers prioritize what debts to pay and, by suggesting that the debt might accrue interest and fees, the Collecto letter gave him the false impression that the debt needed to be prioritized.The Third Circuit affirmed the dismissal of Hopkins’s complaint with prejudice, declining to require assurances by debt collectors that itemized amounts will not change in the future. Doing so would lead to “complex and verbose debt collection letters” that would confuse consumers. Even a hypothetical “least sophisticated consumer” reads a debt collection letter without speculating about what could happen in the future based on true statements concerning the past; “he is not a litigious claim-seeker who hunts, Lagotto-like, for truffles in dunning letters.” View "Hopkins v. Collecto Inc" on Justia Law

After Asset Acceptance received a default judgment against plaintiff in a debt collection action, Asset Acceptance began garnishing plaintiff's wages. Plaintiff then appeared in the action, eventually entering into a stipulation of settlement. When plaintiff learned that Equifax was including the 2013 default judgment on his credit report, he filed suit alleging that, in reporting the judgment as "satisfied" and in its subsequent dealings with plaintiff, Equifax willfully and negligently violated the source-disclosure, accurate reporting, and reinvestigation provisions of the Fair Credit Reporting Act (FRCPA).The Second Circuit affirmed the district court's judgment in favor of Equifax, concluding that the district court correctly determined that Equifax's credit report was accurate; plaintiff could not establish damages arising from Equifax's allegedly negligent conduct; and that Equifax need not prove it actually interpreted the FCRA in line with its claimed reasonable interpretation to rely on the reasonable-interpretation defense established by Safeco Insurance Company of America v. Burr, 551 U.S. 47, 57 (2007). The court considered plaintiff's remaining arguments on appeal and found no basis for reversal. View "Shimon v. Equifax Information Services LLC" on Justia Law

The Fifth Circuit held that a private settlement does not constitute a "successful action to enforce . . . liability" under the fee-shifting provision of the Fair Debt Collection Practices Act (FDCPA). The court affirmed the district court's denial of attorney's fees in this case, concluding that the district court did not commit reversible error in refusing plaintiff's fee application under the FDCPA. The court explained that a "successful action to enforce the foregoing liability" means a lawsuit that generates a favorable end result compelling accountability and legal compliance with a formal command or decree under the FDCPA. In this case, plaintiff settled before his lawsuit reached any end result, let alone a favorable one. Furthermore, by settling, Portfolio Recovery avoided a formal legal command or decree from plaintiff's lawsuit. The court stated that plaintiff's alternative interpretation requires rewriting the FDCPA's fee-shifting provision.The court also concluded that, at most, plaintiff's FDCPA suit was the catalyst that spurred Portfolio Recovery to settle. Therefore, the catalyst theory does not make plaintiff's action a successful one under 15 U.S.C. 1692k(a)(3) and thus plaintiff is not entitled to fees. View "Tejero v. Portfolio Recovery Associates, LLC" on Justia Law

In a fifth amended class action complaint, plaintiffs Kelly Peviani, Judy Rudolph, and Zachary Rudolph, on behalf of themselves and others similarly situated, sued defendants Arbors at California Oaks Property Owner, LLC and JRK Residential Group, Inc. Plaintiffs alleged “Defendants advertise with colorful brochures and promising language that the Property is a safe, habitable, and luxurious place to live, with numerous amenities including a playground, cabanas and lounges, tennis and basketball courts, a rock climbing wall, gym, and pools and heated spas. But the Property is nothing of the kind. Instead, the Property is littered with used condoms, drug use, broken security gates, violence, is devoid of security patrols, and police are called to the complex on a regular basis. The pools are dirty, and the fitness equipment is broken. The complex is unsafe for tenants, especially children, and does not deliver on its material promises.” The complaint included eight causes of action: (1) false advertising; (2) breach of the implied warranty of habitability; (3) nuisance; (4) breach of the implied covenant of good faith and fair dealing; (5) bad faith retention of security deposits; and (6) three causes of action for unfair competition. Plaintiffs moved for certification of two classes, but the trial court denied the motion. Plaintiffs contended on appeal the trial court erred by denying their class certification motion. In regard to the false advertising claim, the trial court denied class certification due to a lack of commonality that would, in turn, cause the class to be unmanageable. After review of the trial court record, the Court of Appeal determined the trial court's commonality finding was flawed, making its related conclusion pertaining to manageability unreliable. Judgment was reversed and the matter remanded for further proceedings. View "Peviani v. Arbors at California Oaks Property Owner" on Justia Law