Justia Consumer Law Opinion Summaries

A group of consumers who purchased or leased 2011-2016 GM Silverado or Sierra trucks with Duramax diesel engines sued General Motors LLC and Robert Bosch entities. They alleged that GM falsely advertised the trucks as having "clean diesel" technology with low emissions, while the vehicles actually emitted pollutants at levels much higher than advertised and above EPA standards. The plaintiffs claimed violations of state consumer protection laws, fraud, deceptive trade practices, and the Racketeer Influenced and Corrupt Organizations (RICO) Act.The United States District Court for the Eastern District of Michigan granted summary judgment in favor of the defendants. The court found that the plaintiffs' state-law claims were preempted by the Clean Air Act (CAA) and that the plaintiffs lacked standing to bring RICO claims because they were indirect purchasers.The United States Court of Appeals for the Sixth Circuit reviewed the case. The court held that the plaintiffs' state-law claims were not preempted by the CAA. The court distinguished this case from a previous decision, In re Ford Motor Co. F-150 and Ranger Truck Fuel Economy Marketing and Sales Practices Litigation, noting that the plaintiffs' claims did not challenge EPA determinations but rather focused on GM's misleading advertisements to consumers. The court emphasized that the state-law claims were based on traditional state tort law and did not depend on proving fraud against the EPA.However, the court affirmed the district court's decision regarding the RICO claims. The court held that the plaintiffs, as indirect purchasers, lacked standing to bring RICO claims under the indirect-purchaser rule, which bars suits by consumers who are two or more steps removed from the violator in a distribution chain.In conclusion, the Sixth Circuit reversed the district court's grant of summary judgment on the state-law claims, allowing those claims to proceed, but affirmed the summary judgment on the RICO claims, barring those claims. View "Fenner v. General Motors, LLC" on Justia Law

The case involves a dispute over the enforceability of a noncompetition provision in an operating agreement following the partial sale of a business interest. Robert and Stephen Samuelian co-founded Life Generations Healthcare, LLC, and later sold a portion of their interest in the company. The new operating agreement included a noncompetition clause that the Samuelians later challenged in arbitration. The arbitrator found the provision invalid per se under California Business and Professions Code section 16600, which generally voids contracts restraining lawful professions, trades, or businesses.The Superior Court of Orange County reviewed the arbitrator's decision de novo and confirmed the award, agreeing that the noncompetition provision was invalid per se. The court also found that the Samuelians did not owe fiduciary duties to the company as minority members in a manager-managed LLC. The company and individual defendants appealed, arguing that the arbitrator applied the wrong legal standard and that the reasonableness standard should apply instead.The California Court of Appeal, Fourth Appellate District, Division Three, reviewed the case and concluded that the arbitrator had indeed applied the wrong standard. The court held that noncompetition agreements arising from the partial sale of a business interest should be evaluated under the reasonableness standard, not the per se standard. The court reasoned that partial sales differ significantly from the sale of an entire business interest, as the seller remains an owner and may still have some control over the company. Therefore, such noncompetition provisions must be scrutinized for their procompetitive benefits.The Court of Appeal reversed the trial court's judgment confirming the arbitration award and directed the trial court to enter an order denying the Samuelians' petition to confirm the award and granting the company's motion to vacate the entire award, including the portion awarding attorney fees and costs. View "Samuelian v. Life Generations Healthcare, LLC" on Justia Law

Thomas Merck applied for an entry-level position at Walmart and was given a conditional job offer pending a background check. Merck failed to disclose an old misdemeanor conviction, which was discovered during the background check. Walmart, through a third-party vendor, provided Merck with an incomplete version of the report, which indicated he was "not competitive" for the job. Walmart then revoked the job offer. Merck claimed that Walmart violated the Fair Credit Reporting Act by not providing him with the full consumer report before taking adverse action.The United States District Court for the Southern District of Ohio initially denied Walmart's motion to dismiss, finding that Merck had standing based on a procedural violation of the Act. However, after the Supreme Court's decision in TransUnion LLC v. Ramirez, which clarified the requirements for standing under the Fair Credit Reporting Act, Walmart renewed its motion for summary judgment. The district court granted the motion, concluding that Merck had not demonstrated a concrete injury as required by TransUnion.The United States Court of Appeals for the Sixth Circuit reviewed the case and affirmed the district court's decision. The court held that Merck failed to show he suffered adverse effects from the denial of the full consumer report. Specifically, Merck did not provide evidence that he could have used the withheld information to his benefit, such as changing the outcome of his job application or affecting his subsequent job search. The court also rejected Merck's analogy to procedural due process claims and traditional common-law harms, finding that the statutory duty under the Fair Credit Reporting Act did not closely resemble these traditional harms. Therefore, Merck did not have constitutional standing to sue Walmart. View "Merck v. Walmart, Inc." on Justia Law

Jeremy Harris filed a lawsuit against City Cycle Sales, Inc. (CCS) in Kansas state court, alleging negligence and a violation of the Kansas Consumer Protection Act (KCPA) due to CCS's failure to repair the Anti-Lock Brake System (ABS) on his motorcycle. Harris was seriously injured when the ABS malfunctioned. He abandoned the KCPA claim before the case went to the jury, which resulted in a final judgment against him on all claims. Harris appealed the adverse judgment on the negligence claim but did not challenge the KCPA claim. After the appellate court reversed the negligence judgment and remanded for a new trial, Harris and CCS stipulated to dismiss the case without prejudice. Harris then filed a new lawsuit in federal district court, again alleging negligence and KCPA violations, and won on both claims.The United States District Court for the District of Kansas denied CCS's motion to dismiss the KCPA claims, reasoning that the law-of-the-case doctrine and preclusion principles did not apply because there was no final judgment on the merits of the KCPA claims. The jury awarded Harris damages, finding CCS liable for both negligence and KCPA violations. CCS appealed, arguing that Harris was barred from raising the KCPA claim in federal court and that there was insufficient evidence to support the negligence claim.The United States Court of Appeals for the Tenth Circuit reversed the judgment on the KCPA claim, holding that Harris was barred from raising the statutory claim in federal court due to his abandonment of the claim in the state trial and appellate courts. The court ruled that the federal district court was required to give full faith and credit to the Kansas proceedings, which had a preclusive effect on the KCPA claim. However, the Tenth Circuit affirmed the judgment on the negligence claim, finding that there was sufficient evidence for the jury to conclude that CCS's negligence caused Harris's injuries. View "Harris v. City Cycle Sales" on Justia Law

A group of Google Chrome users who chose not to sync their browsers with their Google accounts alleged that Google collected their personal data without consent. They believed that, based on Google's Chrome Privacy Notice, their data would not be collected if they did not enable sync. The users filed a class action lawsuit against Google, claiming violations of various state and federal laws.The United States District Court for the Northern District of California granted summary judgment in favor of Google. The court found that the data collection was "browser-agnostic," meaning it occurred regardless of the browser used. It concluded that Google's general privacy policies, which the users had consented to, governed the data collection. The court held that a reasonable person would understand from these policies that Google collected data when users interacted with Google services or third-party sites using Google services.The United States Court of Appeals for the Ninth Circuit reversed the district court's decision. The appellate court held that the district court should have determined whether a reasonable user would understand Google's various privacy disclosures as consenting to the data collection. The court found that the district court erred by focusing on the technical distinction of "browser agnosticism" rather than the reasonable person standard. The appellate court noted that Google's Chrome Privacy Notice could lead a reasonable user to believe that their data would not be collected without enabling sync. The case was remanded to the district court for further proceedings to determine whether the users consented to Google's data collection practices. View "CALHOUN V. GOOGLE LLC" on Justia Law

Adam N. Berry alleged that Experian Information Solutions, a consumer reporting agency, negligently or willfully published inaccurate information in his consumer report, indicating he owed spousal and child support. Berry provided Experian with court orders that purportedly showed he had no outstanding support obligations, but Experian continued to report a balance due as indicated by the Michigan Office of Child Support (OCS).The United States District Court for the Eastern District of Michigan granted Experian’s motion for judgment on the pleadings. The district court reasoned that the Fair Credit Reporting Act (FCRA) required Experian to report any information received from OCS about Berry’s failure to pay support. The court concluded that because Experian was required to report the unpaid balance and had verified the information’s accuracy with OCS, Berry’s claims were not actionable.The United States Court of Appeals for the Sixth Circuit reviewed the case and reversed the district court’s decision. The appellate court held that Berry sufficiently pleaded that Experian did not adopt reasonable procedures to ensure maximum possible accuracy and did not reasonably reinvestigate Berry’s consumer report after he challenged its accuracy. The court emphasized that the FCRA requires consumer reporting agencies to adopt reasonable procedures to assure maximum possible accuracy and to conduct a reasonable reinvestigation if a consumer disputes the report’s accuracy. The court found that Experian’s reliance on automated verification with OCS, without further investigation into the court orders provided by Berry, was insufficient. The case was remanded for further proceedings consistent with the appellate court’s opinion. View "Berry v. Experian Information Solutions" on Justia Law

A consumer of a glucosamine-based dietary supplement filed a putative class action lawsuit against the supplement’s manufacturer and retailer under New York law. The plaintiff alleged that the supplement was mislabeled because it contained a different formulation of glucosamine than what was displayed on the front of the label and disclosed as the main ingredient on the side. Specifically, the plaintiff claimed that the product contained blended glucosamine rather than single-crystal glucosamine, which she believed to be more effective for alleviating joint pain.The United States District Court for the Eastern District of New York granted summary judgment for the defendants on federal preemption grounds. The court concluded that the plaintiff’s state law mislabeling claims were preempted by the Food, Drug, and Cosmetic Act (FDCA), which establishes national standards for the labeling of dietary supplements. The district court found that the FDCA’s comprehensive regulatory scheme and its broad preemption clauses foreclosed the plaintiff’s state law claims.The United States Court of Appeals for the Second Circuit reviewed the case and affirmed the district court’s judgment. The appellate court held that the plaintiff’s state law mislabeling claims were expressly preempted by the FDCA. The court reasoned that the FDCA preempts any state law that imposes labeling requirements not identical to those set forth in the FDCA and its regulations. The court found that the product’s labeling complied with the FDCA’s requirements, as the dietary ingredient “glucosamine sulfate potassium chloride” was identified using methods endorsed by the FDA. Therefore, the plaintiff’s claims were preempted, and the judgment of the district court was affirmed. View "Jackson-Mau v. Walgreen Co." on Justia Law

Ryan Haygood, a dentist in Louisiana, faced an investigation by the Louisiana State Board of Dentistry, which led to the revocation of his dental license in 2010. Haygood alleged that competing dentists conspired with Board members to drive him out of business by fabricating complaints and manipulating the Board's proceedings. In 2012, a Louisiana appellate court vacated the Board's revocation of Haygood's license, citing due process violations. Haygood then entered a consent decree with the Board, allowing him to keep his license.Haygood filed a civil action in state court in 2011, alleging due process violations and unfair competition. In 2013, he filed a similar federal lawsuit, claiming violations under 42 U.S.C. § 1983 and the Louisiana Unfair Trade Practices Act (LUTPA). The federal district court dismissed the federal complaint, ruling that the § 1983 claim was time-barred and the LUTPA claim was not plausible. The court also awarded attorney’s fees to the defendants, deeming both claims frivolous.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court affirmed the district court's decision to award attorney’s fees for the frivolous § 1983 claim, agreeing that it was clearly time-barred. However, the appellate court found that the district court erred in calculating the fee amount. The district court had properly calculated $98,666.50 for the defendants' private attorneys but improperly awarded $11,594.66 for the Louisiana Attorney General’s office without using the lodestar method. Consequently, the Fifth Circuit remitted the fee award to $98,666.50 while affirming the decision to award fees. View "Haygood v. Morrison" on Justia Law

David Schaffner, Jr. and Theresa Sue Schaffner filed a lawsuit against Monsanto Corporation, alleging that Monsanto violated Pennsylvania law by failing to include a cancer warning on the label of its weed-killer, Roundup. The Schaffners claimed that this omission caused Mr. Schaffner to develop non-Hodgkin’s lymphoma due to his exposure to Roundup. The case was initially filed in the Court of Common Pleas of Allegheny County, Pennsylvania, and was later removed to the United States District Court for the Western District of Pennsylvania. The Judicial Panel on Multi-District Litigation (JPML) then transferred the case to the Northern District of California for consolidated pretrial proceedings.In the Northern District of California, the MDL Court had previously ruled in similar cases that the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) did not preempt state-law tort duties to include a cancer warning on Roundup’s label. Following this precedent, the MDL Court denied Monsanto’s motion for summary judgment on preemption grounds. The case was subsequently remanded to the Western District of Pennsylvania, where the parties stipulated to a judgment in favor of the Schaffners, reserving Monsanto’s right to appeal the preemption issue.The United States Court of Appeals for the Third Circuit reviewed the case and focused on whether FIFRA preempted the Pennsylvania duty to warn. The court held that FIFRA’s preemption provision, which prohibits states from imposing labeling requirements different from those required under federal law, did preempt the state-law duty to include a cancer warning. The court reasoned that the Environmental Protection Agency (EPA) had approved Roundup’s label without a cancer warning, and FIFRA regulations require pesticide labels to conform to the EPA-approved label. Therefore, the Pennsylvania duty to warn was not equivalent to the federal requirements and was preempted by FIFRA. The Third Circuit reversed the judgment of the District Court. View "Schaffner v. Monsanto Corporation" on Justia Law

William Lyons opened a Home Equity Line of Credit (HELOC) account with National City Bank in 2005, which was later acquired by PNC Bank. PNC withdrew funds from Lyons' deposit accounts to offset outstanding HELOC payments without prior notification. Lyons contested these withdrawals, claiming they were unauthorized. PNC responded, asserting their right to make the withdrawals. Lyons then sued for economic and statutory damages, as well as emotional distress.The case was initially heard in the United States District Court for the District of Maryland. PNC moved to compel arbitration on the Truth in Lending Act (TILA) claim, which the district court partially granted. Both parties appealed, and the United States Court of Appeals for the Fourth Circuit held that the Dodd-Frank Act prohibits arbitration of claims related to residential mortgage loans. The case was remanded to the district court, which ruled in favor of PNC on both the TILA and Real Estate Settlement Practices Act (RESPA) claims. The district court held that TILA’s offset provision does not apply to HELOCs and that the CFPB had the authority to exempt HELOCs from RESPA’s requirements.The United States Court of Appeals for the Fourth Circuit reviewed the case. The court held that TILA’s offset provision does apply to HELOCs, reversing the district court’s decision on the TILA claim. The court found that the term "credit card plan" includes HELOCs when accessed via a credit card. However, the court affirmed the district court’s decision on the RESPA claim, agreeing that the CFPB has the authority to exempt HELOCs from RESPA’s definition of “federally related mortgage loans.” The case was reversed and remanded in part and affirmed in part. View "Lyons v. PNC Bank, N.A." on Justia Law