Justia Consumer Law Opinion Summaries

In this consolidated appeal regarding collection actions by a debt buyer, the Supreme Judicial Court vacated the judgments that the district court entered in favor of Portfolio Recovery Associates, LLC, holding that the court's factual findings underlying the admission of certain challenged records were erroneous.When the trial court decided these credit card debt collection matters Supreme Judicial Court jurisprudence contained conflicting interpretations of Me. R. Evid. 803(6) with regard to the admission of integrated business records. The trial court admitted the records in accordance with the predominant evidentiary standards at the time. In Bank of New York Mellon v. Shone, 239 A.3d 671 (Me. 2020), however, the Supreme Court clarified the proper approach for evaluating the sufficiency of the foundation laid for the admission of integrated business records. In the instant case, the Supreme Judicial Court held that because the parties developed their records with a different evidentiary standard in mind, fairness required that the matters be remanded for further proceedings, including potentially reopening the record to allow further evidence or to take new evidence. View "Portfolio Recovery Associates, LLC v. Casey Clougherty Portfolio Recovery Associates, LLC" on Justia Law

Cadence Bank, N.A. ("Cadence"), sued Steven Dodd Robertson and Mary Garling-Robertson, seeking to recover a debt the Robertsons allegedly owed Cadence. The circuit court ruled that Cadence's claim was barred by the statute of limitations and, thus, granted the Robertsons' motion for a summary judgment. The Alabama Supreme Court reversed, finding the Robertsons' summary-judgment motion did not establish that Cadence sought to recover only pursuant to an open-account theory subject to a three-year limitations period. The Robertsons did not assert any basis in support of their summary-judgment motion other than the statute of limitations. The matter was remanded for further proceedings. View "Cadence Bank, N.A. v. Robertson" on Justia Law

Plaintiffs filed suit against Lexington Law and its vendor, Progrexion, for purportedly perpetrating a fraud in which the firm failed to disclose that it was sending letters to the companies in its clients' names and on their behalves. After a jury agreed that defendants violated Texas law in committing fraud and fraud by non-disclosure, the district court set aside the verdict and issued judgment in favor of defendants as a matter of law.The Fifth Circuit affirmed, concluding that plaintiffs have not shown that defendants committed fraud. In this case, the district court concluded that defendants did not make any false representations (material or otherwise) when signing and sending the dispute letters because Lexington Law had the legal right to sign its clients' names on the correspondence it sent on their behalf to data furnishers who reported inaccurate information about the clients' credit. Furthermore, Progrexion cannot be liable for fraud since it, like Lexington Law, did not make any material misrepresentations. The court also concluded that plaintiffs' fraud by non-disclosure claim must be dismissed because they did not justifiably rely on any failure of defendants to disclose material facts, and plaintiffs have not shown that defendants had a duty to disclose that they were the ones actually sending the dispute letters. Additionally, plaintiffs have not shown that Progrexion disclosed any facts—material or otherwise—and so cannot be liable for fraud by nondisclosure. The court explained that the fact that Lexington Law had the legal right to send dispute letters on their clients behalves and in their names suggests that the firm did not make any false representations, and thus the firm did not create any false impressions requiring disclosure. Finally, plaintiffs waived their conspiracy claim by failing to move for judgment as a matter of law on the claim before and after the case was submitted to the jury or for a new trial. View "The CBE Group, Inc. v. Lexington Law Firm" on Justia Law

Two cases consolidated for the Mississippi Supreme Court's review presented common questions of the validity of a cause of action brought by the Mississippi Attorney General under the Mississippi Consumer Protection Act, Mississippi Code Section 75-24-5. The first was whether the Act covered the State’s claim, and the second was whether that claim was preempted by federal law. In 2014, the State commenced an action against Johnson & Johnson for what it alleged to have been unlawful, unfair, and deceptive business practices related to its cosmetic talcum powder products. Specifically, the State alleged that Johnson & Johnson failed to warn of the risk of ovarian cancer in women who used talc. The Chancery Court denied the summary judgment motion made by Johnson & Johnson and Johnson & Johnson Consumer, Inc. Johnson & Johnson then filed an interlocutory appeal of the chancellor’s decision, which the Supreme Court granted. The Court concluded the Act did not exclude the State's talc labeling claim. Further, because of the lack of any specific requirement by the Food and Drug Administration, the State’s claim was not barred by the principles of express or implied preemption. Therefore, the judgment of the Chancery Court was affirmed, and the case was remanded for further proceedings. View "Johnson & Johnson Consumer Companies, Inc. v. Fitch" on Justia Law

Plaintiff filed suit against defendant, the manufacturer of a new vehicle he leased, alleging violations of the Song-Beverly Consumer Warranty Act. The trial court entered a judgment awarding plaintiff restitution and civil penalties under the Act, as well as awarding him attorney fees.In the published portion of the opinion, the Court of Appeal affirmed in part, reversed in part, and remanded. The court concluded that the trial court did not err by refusing to include in its restitution award the residual value of the vehicle under the lease. The court explained that 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, this 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. Rather, the court concluded that the restitution award did not violate the equal treatment mandate under the Act. Furthermore, 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. Absent an agreement on appeal as to the causation issue and the amount of premiums and registration renewal fees to which plaintiff is entitled, the court reversed and remanded for further proceedings under Kirzhner v. Mercedes-Benz USA, LLC (2020) 9 Cal.5th 966, 969. View "Crayton v. FCA US LLC" on Justia Law

In 2018, the State of Mississippi filed a complaint against Navient Corporation and Navient Solutions, LLC (together, “Navient”), alleging that Navient’s origination of high-cost, subprime loans and predatory practices while servicing student-loan borrowers in Mississippi violated the Mississippi Consumer Protections Act. Navient moved to dismiss on two grounds: failure to state a claim and lack of venue. In 2019, the chancery court denied Navient’s motion; Navient timely petitioned the Mississippi Supreme Court for an interlocutory appeal, arguing that federal law preempted the State’s servicing claims and that injunctive relief under the Act did not apply because the alleged loan-origination misconduct ceased and could not recur. To this the Supreme Court disagreed and affirmed the trial court. View "Navient Corporation v. Mississippi ex rel. Fitch, Attorney General" on Justia Law

Klotz’s now-deceased husband received medical services from the Hospital and incurred a $1,580 debt; he left no estate. The Hospital retained CSW to collect the debt. CSW mailed collection letters to Klotz. Klotz claims she is not liable for the debt, arguing that the Equal Credit Opportunity Act (ECOA), 15 U.S.C. 1691, preempts New Jersey’s common-law doctrine of necessaries (where a spouse is jointly liable for necessary expenses incurred by the other spouse) and sued CSW for violating the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692e and 1692f. Preemption of the doctrine would allow Klotz to pursue her FDCPA case. The Third Circuit affirmed the dismissal of the case. The ECOA does not preempt New Jersey’s doctrine of necessaries. One ECOA regulation provides that “a creditor shall not require the signature of an applicant’s spouse . . . on any credit instrument if the applicant qualifies under the creditor’s standards of creditworthiness for the amount and terms of the credit requested.” Rejecting an argument that the doctrine effectively treats her as a spousal co-signer in violation of the spousal-signature prohibition, the court reasoned that Klotz’s medical debt falls within an exemption for incidental credit and rejected an argument that CSW failed to follow the procedural requirements of the doctrine of necessaries. View "Klotz v. Celentano Stadtmauer and Wale LLP" on Justia Law

Moyer failed to pay her credit-card debt. The card issuer hired Patenaude to collect it. Patenaude sent Moyer a one-page, single-sided collection letter that stated: If you wish to eliminate further collection action, please contact us at …. This is an attempt to collect a debt and any information obtained will be used for that purpose. Moyer sued Patenaude under the Fair Debt Collection Practices Act (FDCPA), arguing the letter’s second sentence, “to eliminate further collection action, please contact us," would deceive a debtor and lead a debtor to believe that a phone call is a “legally effective way to stop such collection action” when, in reality, only written communication can legally stop collection activity. Moyer claimed that the Contact Sentence would make a debtor uncertain about her right to dispute the debt in writing.The Third Circuit affirmed summary judgment in favor of Patenaude. The letter included statements that inform the consumer how to obtain verification of the debt and that she had 30 days in which to do so. Patenaude invited Moyer to call to “eliminate” collection action, but never asserted, explicitly or implicitly, that the phone call would, by law, force Patenaude to cease its collection efforts. View "Moyer v. Patenaude & Felix A.P.C." on Justia Law

The Seventh Circuit affirmed the district court's judgment declaring that Zurich had no duty to defend Ocwen in the underlying litigation brought by a consumer. In the underlying case, the consumer's complaint relied on the Fair Debt Collection Practices Act (FDCPA) and the Telephone Consumer Protection Act (TCPA), as well as common law claims of defamation and invasion of privacy. Zurich insured Ocwen under a series of commercial general liability policies, but two provisions in the policies expressly excluded injuries resulting from conduct that violates certain laws.Setting aside the live-operator calls to the consumer's home and the manually dialed calls to her cell phone, and assuming that neither violated the TCPA, the court concluded that it remains true that if Ocwen caused "a telephone to ring … repeatedly or continuously with the intent to annoy, abuse, or harass any person at that called number," which the district court concluded Ocwen did, then it violated the FDCPA. Because the policy exclusion's catch-all clause swept in the FDCPA as an "other statute" that regulates the communication of information, Zurich had not duty to defend based on the factual allegations of the consumer's complaint. View "Zurich American Insurance Co. v. Ocwen Financial Corp." on Justia Law

Pennell defaulted on a loan, then sent MobiLoans a letter refusing to pay her debt and requesting that all future debt communications cease. MobiLoans sold Pennell’s debt to Global, which had no knowledge that Pennell refused to pay and that she was represented by counsel. Pennell received a dunning letter from Global. Through counsel, Pennell notified Global that she refused to pay the debt and requested all debt communications stop. Global complied. Pennell sued under 15 U.S.C. 1692c(a)(2), the Fair Debt Collection Practices Act, which prohibits a debt collector from directly communicating with a consumer who is represented by counsel with respect to the debt and proscribes a debt collector from directly communicating with a consumer who notifies a debt collector in writing that she refuses to pay or that she wishes the collector to stop communicating with her. Pennell claimed “stress and confusion” as her injuries. The district court granted Global summary judgment on the merits. The Seventh Circuit vacated and ordered dismissal for lack of Article III standing. A party invoking federal jurisdiction must demonstrate that he has suffered an injury in fact that is fairly traceable to the defendant’s conduct and redressable by a favorable judicial decision. The state of confusion is not itself a “concrete and particularized” injury. Nor does stress, without physical manifestations or a medical diagnosis, amount to concrete harm. Pennell failed to show that receiving the dunning letter led her to change her course of action or put her in harm’s way. View "Pennell v. Global Trust Management, LLC" on Justia Law