Justia Consumer Law Opinion Summaries

The Ninth Circuit issued (a) an order amending its opinion filed on June 17, 2020, denying the petition for rehearing, and denying on behalf of the court the petition for rehearing en banc; and (b) an amended opinion affirming on different grounds the district court's dismissal of plaintiff's claims for restitution.In this case, plaintiff voluntarily dismissed her sole state law damages claim and chose to proceed with only state law equitable claims for restitution and injunctive relief. Plaintiff did so in an attempt to try the class action as a bench trial rather than to a jury.Pursuant to Erie Railroad Co. v. Tompkins, 304 U.S. 64 (1938), and Guaranty Trust Co. of New York v. York, 326 U.S. 99 (1945), the panel held that federal courts must apply equitable principles derived from federal common law to claims for equitable restitution under California's Unfair Competition Law (UCL) and Consumers Legal Remedies Act (CLRA). The panel explained that state law cannot circumscribe a federal court's equitable powers even when state law affords the rule of decision. The panel held that the district court did not abuse its discretion in denying plaintiff leave to amend her complaint for a third time to reallege the CLRA damages claim. In this case, plaintiff failed to demonstrate that she lacked an adequate legal remedy. View "Sonner v. Premier Nutrition Corp." on Justia Law

The Fifth Circuit reversed the district court's dismissal of plaintiff's Fair Debt Collection Practices Act (FDCPA) claim against SCW. In this case, SCW identified itself as a "debt collector" representing Louisiana and Road Home in connection with the hurricane relief grant plaintiff received, and sought an overpayment per a Road Home Program Agreement. Plaintiff alleged on behalf of herself and a proposed class that SCW violated the FDCPA for its purported use of misrepresentation, false or deceptive means, and unfair or unconscionable means to collect a debt that cannot be legally taken.The court held that the district court erred in concluding that plaintiff's obligation to pay the Road Home Program did not fall under the FDCPA. The court applied the St. Pierre inquiry and held that plaintiff's obligation of repayment for excess grant money arises from a "transaction," which encompasses consensual agreements and negotiations like the one at issue; plaintiff voluntarily elected to avail herself of disaster relief money in exchange for consent to Road Home's covenants and subrogation agreements; and what plaintiff received in exchange for compliance with Road Home's terms was for the private benefit of a "personal, family, or household" service or good. Accordingly, the court remanded for further proceedings. View "Calogero v. Shows, Cali & Walsh, LLP" on Justia Law

Rosas filed a representative action based on alleged participation in illegal internet payday loan practices. Defendant AMG is a wholly-owned tribal corporation of Miami Tribe, a federally recognized Indigenous American tribe. Rosas previously challenged a court order granting AMG's motion to quash service of summons for lack of jurisdiction based on tribal sovereign immunity. On remand, the court granted AMG’s motion to dismiss for lack of personal jurisdiction on the basis of tribal sovereign immunity. The court accepted AMG’s argument that the arm-of-the-tribe test should be applied to the current facts relating to its ownership and control rather than the facts that existed when the complaint was filed. The court credited AMG’s new, undisputed evidence concerning significant changes made to AMG’s structure and governance since the prior court ruling—changes that removed the nontribal actors from positions of authority and control and ended its involvement in the business of financial lending.The court of appeal affirmed. The court did not exceed the scope of the remand. When a court determines that a tribal entity is entitled to immunity from suit, the court lacks the authority, absent the tribe’s consent or federal authorization, to bring the tribal entity before the court for any purpose, including for the purpose of sanctioning misconduct. View "In re Internet Lending Cases" on Justia Law

After encountering problems with their used 2011 Dodge Grand Caravan, plaintiffs Dina C. and Pastor O. Felisilda brought an action against Elk Grove Auto Group, Inc., doing business as Elk Grove Dodge Chrysler Jeep (Elk Grove Dodge) and the manufacturer, FCA US LLC (FCA) for violation of the Song-Beverly Consumer Warranty Act. Relying on the retail installment sales contract signed by the Felisildas, Elk Grove Dodge moved to compel arbitration. FCA filed a notice of nonopposition to the motion to compel. The trial court ordered the Felisildas to arbitrate their claim against both Elk Grove Dodge and FCA. In response, the Felisildas dismissed Elk Grove Dodge. The matter was submitted to arbitration, and the arbitrator found in favor of FCA. The trial court confirmed the arbitrator’s decision. The Felisildas appealed, contending: (1) the trial court lacked jurisdiction to compel them to arbitrate their claim against FCA for lack of notice that the motion to compel included FCA; and (2) the trial court lacked discretion to order the Felisildas to arbitrate their claim against FCA because FCA was a nonsignatory to the sales contract. After review, the Court of Appeal concluded the Felisildas forfeited their claim regarding lack of notice by arguing against FCA’s participation in arbitration. Furthermore, the Court concluded the trial court correctly determined the Felisildas’ claim against FCA was encompassed by the arbitration provision in the sales contract. View "Felisilda v. FCA US LLC" on Justia Law

The Second Circuit affirmed the district court's dismissal of plaintiffs' amended complaint against Salisbury Bank for failure to state a claim. Plaintiffs alleged that the bank violated the Fair Credit Reporting Act and related state causes of action by failing to correct information contained in one of the plaintiff's credit reports after being notified that the information was not correct.The court agreed with the district court that plaintiffs' allegation that they notified Salisbury directly of their dispute, standing alone, is insufficient to state a claim under 15 U.S.C. 1681s–2(b). In this case, plaintiffs have not alleged facts indicating that Salisbury received notice from a consumer reporting agency regarding the inaccuracies in the credit report. Furthermore, the district court did not err in denying leave to amend and dismissing with prejudice where nothing in plaintiffs' proposed second amended complaint corrected the deficiency. View "Sprague v. Salisbury Bank & Trust Co." on Justia Law

The Fourth Circuit vacated the district court's order denying DIRECTV's motion to compel arbitration in an action brought by plaintiff, alleging violations of the Telephone Consumer Protection Act (TCPA). Plaintiff alleged that defendants called her cell phone to advertise DIRECTV products and services even though her telephone number is listed on the National Do Not Call Registry.Because plaintiff signed an acknowledgement expressly agreeing to the arbitration provision of the Wireless Customer Agreement with AT&T, which provision applies to her as an authorized user, the court rejected plaintiff's argument that she did not form an agreement to arbitrate. The court held that plaintiff formed an agreement to arbitrate with DIRECTV where the ordinary meaning of "affiliates" and the contractual context convinced the court that the term includes affiliates acquired after the agreement was signed. Furthermore, in light of the expansive text of the arbitration agreement, the categories of claims it specifically includes, and the parties' instruction to interpret its provisions broadly, the court must conclude that plaintiff's TCPA claims fall within the scope of the arbitration agreement. Therefore, the court remanded for further proceedings. View "Mey v. DIRECTV, LLC" on Justia Law

Wilson, with the help of co-signer Allan, took out a student loan serviced by PHEAA. The two submitted a written request for forbearance on the loan and, in doing so, consented to calls to their cell phones. In October 2013, however, both requested that PHEAA stop calling about the loan. Despite their requests, PHEAA called Allan 219 times and Wilson 134 times, after they revoked consent. They claim that those calls violated the Telephone Consumer Protection Act, 47 U.S.C. 227 (TCPA), which generally makes it a finable offense to use an automatic telephone dialing system (ATDS) to make unconsented-to calls or texts.The Sixth Circuit affirmed summary judgment in favor of the plaintiffs. Section 227(a) provides that a device that generates and dials random or sequential numbers qualifies as an ATDS. The Avaya system used by PHEAA dials from a stored list of numbers only. The court concluded that the plain text of section 227, read in its entirety, makes clear that devices that dial from a stored list of numbers are subject to the autodialer ban. View "Allan v. Pennsylvania Higher Education Assistance Agency" on Justia Law

The Supreme Judicial Court affirmed the judgment of the superior court denying Defendant's motion to compel arbitration of Plaintiff's claims that Defendant had engaged in improper debt collection practices and debt collection regulations, holding that there was no error in the denial of Defendant's motion to compel arbitration.Plaintiff allegedly owed debt to Enterprise Rent-A-Car Company of Boston, LLC for damage to a rental vehicle. Enterprise assigned the debt to Defendant for collection. Plaintiff filed a class action complaint against Defendant, alleging that Defendant made too frequent phone contact with him and other debtors. Defendant sought to compel arbitration of Plaintiff's claims pursuant to the rental contract between Plaintiff and Enterprise. The superior court denied the motion to compel. The Supreme Court affirmed, holding that reasonable minds could differ as to whether the arbitration provision in the contract was applicable to claims brought against Defendant, and therefore, Defendant did not put forth the clear and definite evidence of intent that it must to be entitled to enforce the arbitration provision as a third-party beneficiary. View "Landry v. Transworld Systems Inc." on Justia Law

In 2013, Zablocki had x-rays administered by Medical-Midwest. Zablocki’s insurance provider covered some of the costs, Eventually, Medical-Midwest turned to Merchants for debt collection. After about two years without success collecting the debts, Merchants reported to a consumer reporting agency, TransUnion, that Zablocki owes four debts of $50, $62, $70, and $210, corresponding to each x-ray charge. Zablocki filed suit under the Fair Debt Collection Practices Act, 15 U.S.C. 1692f, arguing that by reporting the obligations separately, rather than aggregated together, Merchants falsely represented the “character" of the debt, in violation of section 1692e(2)(A), and used an “unfair or unconscionable means” to collect or attempt to collect a debt, in violation of section 1692f. 15 U.S.C. §§ 1692e(2)(A), 1692f.The Seventh Circuit subsequently held that reporting debts separately, rather than aggregated together, does not misrepresent the “character” of a debt. Zablocki accordingly abandoned his section 1692e challenge. The Seventh Circuit affirmed the dismissal of the section 1692f claim. From the perspective of an unsophisticated but reasonable consumer, the alleged conduct is reasonable. It is not deceptive or outrageous for a collector to report individually debts that correspond to different charges, thereby communicating truthfully how much is owed on each debt. View "Zablocki v. Merchants Credit Guide Co." on Justia Law

Plaintiffs filed a putative class action against pet food manufacturers and others, challenging the marketing of so-called prescription pet food under California's consumer protection laws and federal antitrust law. Plaintiffs alleged that the prescription requirement and advertising lead reasonable consumers falsely to believe that such food has been subject to government inspection and oversight, and has medicinal and drug properties, causing consumers to pay more or purchase the product when they otherwise would not have.The Ninth Circuit reversed the district court's dismissal of plaintiffs' claims under California's Unfair Competition Law, False Advertising Law, and Consumer Legal Remedies Act for failure to state a claim. The panel held that the district court erred in dismissing the California state law consumer protection claims, because plaintiffs have sufficiently alleged a deceptive practice under the reasonable consumer test. The panel also held that plaintiffs' complaint satisfies the Federal Rule of Civil Procedure 9(b) heightened pleading standard in alleging fraud. In this case, plaintiffs alleged sufficient facts to show that prescription pet food and other pet food were not materially different. Finally, the panel held that plaintiffs alleged sufficient reliance based on the word "prescription" and the "Rx" symbol. View "Moore v. Mars Petcare US, Inc." on Justia Law