Justia U.S. 9th Circuit Court of Appeals Opinion Summaries

Articles Posted in Consumer Law

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Serena Kwan appealed the dismissal of her second amended complaint for failing to state a claim upon which relief can be granted. In 2014, Kwan, On Behalf of Herself and All Others Similarly Situated, filed a class action against Defendants-Appellees, SanMedica International, LLC (“SanMedica”), and Sierra Research Group, LLC (“Sierra”), alleging violations of California’s Unfair Competition Law (“UCL”) and California’s Consumers Legal Remedies Act (“CLRA”). The complaint was based on an allegation that the defendants falsely represented that their product, SeroVital, provided a 682% mean increase in Human Growth Hormone (“HGH”) levels, that it was clinically tested, and that “peak growth hormone levels” were associated with “youthful skin integrity, lean musculature, elevated energy production, [and] adipose tissue distribution." The Ninth Circuit concluded the district court correctly concluded that California law did not provide for a private cause of action to enforce the substantiation requirements of California’s unfair competition and consumer protection laws. Further, the district court did not err in concluding that Kwan’s second amended complaint failed to allege facts that would support a finding that SanMedica International’s claims regarding its product, SeroVital, were actually false. Accordingly, the Court affirmed dismissal. View "Kwan v. Sanmedica Int'l" on Justia Law

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Plaintiffs filed suit against Nationstar and others, asserting claims relating to defendants' servicing of plaintiffs' home loan. Plaintiffs alleged violations of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692-1692p; intentional infliction of emotional distress (IIED); and a violation of the Nevada Deceptive Trade Practices Act (DTPA), Nev. Rev. Stat. 598.0915–598.0925, 598.0934. The district court dismissed the complaint. The court concluded that the district court properly dismissed plaintiffs' claims of violations of sections 1692c(a)(2), 1692d, and 1692e pursuant to Ho v. ReconTrust Co. The court reasoned that Nationstar was not engaged in "debt collection" and thus defendants were not "debt collectors" when interacting with plaintiffs. The court concluded, however, that the district court erred in dismissing plaintiffs' claim under section 1692f(6) on the ground that Nationstar was not collecting a debt. The court explained that, unlike sections 1692c(a)(2), 1692d, and 1692e, the definition of debt collector under section 1692f(6) includes a person enforcing a security interest. In this case, plaintiffs alleged that Nationstar threatened to take non-judicial action to dispossess plaintiffs of their home without a legal ability to do so. The court noted that such conduct is exactly what section 1692f(6) protects borrowers against. Finally, the court concluded that the district court correctly dismissed plaintiffs' claims of IIED and of violation of the DTPA. Accordingly, the court affirmed in part, reversed in part, and remanded. View "Dowers v. Nationstar Mortgage" on Justia Law

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Plaintiffs, twenty individuals who purchased first generation four stroke outboard motors (the Class Motors), filed suit against defendants, alleging that the Class Motors contained an inherent design defect that caused severe, premature corrosion in the motors’ dry exhaust system. Plaintiffs alleged that defendants knew of the defect prior to the sales of the Class Motors to plaintiffs, and that the defect posed an unreasonable safety hazard. On appeal, plaintiffs challenged the district court's grant of YMC's motion to dismiss for lack of personal jurisdiction and its grant of YMUS's fifth motion to dismiss plaintiffs' consumer fraud claims. The court concluded that the district court lacked general jurisdiction over YMC because YMC does not have sufficient contacts with California; plaintiffs failed to plead facts sufficient to make out a prima facie case that YMC and YMUS were alter egos; and even assuming that YMUS's contacts could be imputed to YMC, this does not, on its own, suffice to establish general jurisdiction. The court also concluded that the district court lacked specific jurisdiction over YMC because plaintiffs do not allege any actions that YMC "purposefully directed" at California. Even assuming that some standard of agency continued to be relevant to the existence of specific jurisdiction pursuant to Daimler AG v. Bauman, plaintiffs failed to make out a prima facie case for any such agency relationship. Finally, the court concluded that plaintiffs failed to plead a prima facie case of consumer fraud where, although plaintiffs adequately pleaded defendants' presale knowledge of the defect, plaintiffs failed to plead the existence of an unreasonable safety hazard. Accordingly, the court affirmed the judgment. View "Williams v. Yamaha Motor Corp." on Justia Law

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Plaintiff, pro se, filed suit against Chase, alleging claims for, inter alia, breach of contract, breach of implied covenant of good faith and fair dealings, and a violation of California's Unfair Competition Law (UCL), Cal. Bus. & Prof. Code 17200, as well as violation of the Truth in Lending Act (TILA), 15 U.S.C. 1601. Plaintiff's claims stemmed from damages allegedly suffered when she unsuccessfully attempted over a two-year period to modify the loan on her home. The district court granted summary judgment for Chase. The court concluded that the facts plainly demonstrated a viable UCL claim based on the ground that plaintiff was the victim of an unconscionable process. In this case, Chase knew that plaintiff was a 68 year old nurse in serious economic and personal distress, yet it strung her along for two years, kept moving the finish line, accepted her money, and then brushed her aside. During this process, plaintiff made numerous frustrating attempts in person and by other means to seek guidance from Chase, only to be turned away. The court also concluded that the district court erred in failing to acknowledge plaintiff's claim for breach of contract and remanded with instructions to permit plaintiff to amend if necessary and to proceed with her complaint. The court also remanded with instructions to permit plaintiff to amend her complaint to allege a right to rescind under Jesinoski v. Countrywide Home Loans, Inc. View "Oskoui v. J.P. Morgan" on Justia Law
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Plaintiff filed a putative class action alleging that defendants sent unauthorized text messages in violation of the Telephone Consumer Protection Act of 1991 (TCPA), 47 U.S.C. 227; California Business and Professions Code 17538.41; and California Business and Professions Code 17200. The district court granted summary judgment to defendants. As a preliminary matter, the court concluded that plaintiff has Article III standing under Spokeo, Inc. v. Robins because plaintiff established a concrete injury-in-fact. On the merits, the court concluded that the FCC has established no rule that a consumer who gives a phone number to a company has consented to be contacted for any reason. Instead, FCC orders and rulings show that the transactional context matters in determining the scope of a consumer’s consent to contact. In this case, the court held that as a matter of law plaintiff gave prior express consent to receive defendants’ text messages where he gave his cell phone number for the purpose of a gym membership contract. Revocation of consent must be clearly made and express a desire not to be called or texted. The court joined its sister circuits and agreed that the TCPA permits consumers to revoke their prior express consent to be contacted by telephone autodialing systems. Here, the court held that, although consumers may revoke their prior express consent, plaintiff's gym cancellation was not effective in doing so here. Finally, the court concluded that plaintiff lacked standing to bring his claim under the California Business and Professions Code. Accordingly, the court affirmed the judgment. View "Van Patten v. Vertical Fitness Group" on Justia Law

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The Tribal Lending Entities challenged the district court's decision compelling them to comply with the Bureau's civil investigative demands. The court rejected the Tribal Lending Entities' argument that because the Consumer Financial Protection Act of 2010, Title X, Pub. L. No. 111-203, 124 Stat 1376, defines the term "State" as including Native American tribes, the Tribal Lending Entities, as arms of sovereign tribes, are not required to comply with the investigative demands. The court concluded that, in the Act, which is a generally applicable law, Congress did not expressly exclude tribes from the Bureau’s enforcement authority. The court explained that, although the Act defines “State” to include Native American tribes, with States occupying limited co-regulatory roles, this wording falls far short of demonstrating that the Bureau plainly lacks jurisdiction to issue the investigative demands challenged in this case, or that Congress intended to exclude Native American tribes from the Act’s enforcement provisions. Neither have the Tribes offered any legislative history compelling a contrary conclusion regarding congressional intent. Accordingly, the court affirmed the judgment. View "CFPB v. Great Plains Lending, LLC" on Justia Law

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Plaintiff filed a putative class action against M-I, alleging violation of the Fair Credit Reporting Act (FCRA), 15 U.S.C. 1681b(b)(2)(A). Addressing an issue of first impression, the court held that a prospective employer violates Section 1681b(b)(2)(A) when it procures a job applicant’s consumer report after including a liability waiver in the same document as the statutorily mandated disclosure. The court also held that, in light of the clear statutory language that the disclosure document must consist “solely” of the disclosure, a prospective employer’s violation of the FCRA is “willful” when the employer includes terms in addition to the disclosure, such as the liability waiver in this case, before procuring a consumer report or causing one to be procured. Accordingly, the court reversed the district court's dismissal of the complaint. View "Syed v. M-I, LLC" on Justia Law
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Plaintiff filed suit alleging that the law firm of Epsten Grinnell & Howell and attorney Debora M. Sumwalt (collectively, "Epsten") committed unlawful debt collection practices in violation of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692 et seq., the Rosenthal Fair Debt Collection Practices Act (Rosenthal Act), Cal. Civ. Code 1788 et seq., and the California Unfair Competition Law, Cal. Bus. & Prof. Code 17200, et seq. The district court dismissed the FDCPA claims and the state law claims. The court held, however, that plaintiff has alleged a plausible claim for relief because the collection letter contains language that overshadows and conflicts with her FDCPA debt validation rights when reviewed under the “least sophisticated debtor” standard; rejected Epsten's argument, raised for the first time on appeal, that in sending the collection letter, it merely sought to perfect a security interest and is therefore subject only to the limitations in section 1692f(6); and held that Epsten is subject to the full scope of the FDCPA. Accordingly, the court reversed and remanded. View "Mashiri v. Epsten Grinnell & Howell" on Justia Law
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Plaintiff filed suit against CarMax, alleging violations of four California consumer protection laws: (1) the Consumer Legal Remedies Act (CLRA); (2) the Song-Beverly Consumer Warranty Act (Song-Beverly); (3) common law fraud and deceit; and (4) the Unfair Competition Law (UCL). Plaintiff's claims under the CLRA and UCL were both based on CarMax’s alleged violation of California Vehicle Code section 11713.18(a)(6), which requires a car dealer to provide consumers with a “completed inspection report” prior to the sale of any “certified” vehicle. The district court dismissed the fraud and Song-Beverly claims and granted CarMax summary judgment on his CLRA and UCL claims. The court concluded that the district court did not err in exercising diversity-based subject matter jurisdiction over his case. The court concluded that when the potential cost of complying with injunctive relief is considered along with plaintiff's claims for compensatory damages and punitive damages, the district court did not err in finding that the jurisdictional amount-in-controversy requirement was satisfied. The court held that a report, like the ones in this case, that fails to indicate the results of an inspection in a manner that conveys the condition of individual car components to a buyer is not a "completed inspection report" under California law. The court noted that if CarMax’s generic, and ultimately uninformative, list of components inspected were considered a “completed inspection report,” section 11713.18(a)(6)’s effectiveness in promoting transparency in the sale of certified cars would be substantially diminished. Therefore, the court reversed and remanded the district court's grant of summary judgment to CarMax on the CLRA and UCL claims. View "Gonzales v. CarMax Auto Superstores LLC" on Justia Law
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After plaintiff began missing loan payments on a house she bought in Long Beach, ReconTrust initiated a non-judicial foreclosure. In this case, the lender was Countrywide, the borrower was plaintiff and the trustee was ReconTrust. Plaintiff subsequently filed suit alleging that ReconTrust violated the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692e(2)(A), by sending her notices that misrepresented the amount of debt she owed. Plaintiff also sought to rescind her mortgage transaction under the Truth in Lending Act (TILA), 15 U.S.C. 1635(a), on the ground that defendants had perpetrated fraud against her. The district court twice dismissed plaintiff's rescission claim without prejudice and then granted ReconTrust's motion to dismiss the FDCPA claims. The court held that actions taken to facilitate a non-judicial foreclosure, such as sending the notice of default and notice of sale, are not attempts to collect “debt” as that term is defined by the FDCPA; the court's holding affirms Hulse v. Ocwen Federal Bank; the court acknowledged that the Fourth and Sixth Circuit declined to follow Hulse; and the notices at issue in this case didn’t request payment from plaintiff, they merely informed plaintiff that the foreclosure process had begun and explained the foreclosure timeline. Therefore, the court affirmed the dismissal of the FDCPA claim. The court also concluded where, as here, the district court dismisses a claim and instructs the plaintiff not to refile the claim unless he includes certain additional allegations that the plaintiff is unable or unwilling to make, the dismissed claim is preserved for appeal even if not repleaded. Therefore, the court remanded to the district court to consider plaintiff's TILA rescission claim in light of Merritt v. Countrywide Fin. Corp. View "Vien-Phoung Thi Ho v. ReconTrust Co." on Justia Law
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