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

Articles Posted in Consumer Law

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Chance Gordon, a licensed California attorney, appealed the district court's order of summary judgment for the CFPB on its enforcement action for violations of the Consumer Financial Protection Act, 12 U.S.C. 5531, 5536, and Regulation O, 12 C.F.R. 1015.1-11. On January 4, 2012, President Obama, relying on his recess-appointment power, named Richard Cordray as the CFPB’s initial Director. President Obama renominated Cordray as Director on January 24, 2013. The parties agree that while Cordray’s initial January 2012 recess appointment was invalid, his July 2013 confirmation was valid. The court concluded that, while the failure to have a properly confirmed director may raise Article II Appointments Clause issues, it does not implicate the court's Article III jurisdiction to hear this case. That its director was improperly appointed does not alter the Executive Branch’s interest or power in having federal law enforced. The subsequent valid appointment, coupled with Cordray’s August 30, 2013 ratification, cures any initial Article II deficiencies. Because the CFPB had the authority to bring the action at the time Gordon was charged, Cordray’s August 2013 ratification, done after he was properly appointed as Director, resolves any Appointments Clause deficiencies. On the merits, the court concluded that CFPB is entitled to summary judgment on all counts because there is no dispute as to material fact regarding Gordon's liability. Because the district court conscientiously tailored the injunction at issue, it did not abuse its discretion in granting equitable judgment. However, because the district court may have impermissibly entered a monetary judgment against Gordon for a time period prior to the enactment or effective date of the relevant provisions of the CFPA and Regulation O, the court vacated and remanded for further consideration. View "Consumer Fin. Prot. Bureau v. Gordon" on Justia Law

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Florencio Pacleb filed a class action complaint against Allstate, alleging that he received unsolicited automated calls to his cell phone in violation of the Telephone Consumer Protection Act (TCPA), 47 U.S.C. 227. Allstate deposited $20,000 in full settlement of Pacleb’s individual monetary claims in an escrow account “pending entry of a final District Court order or judgment directing the escrow agent to pay the tendered funds to Pacleb, requiring Allstate to stop sending non-emergency telephone calls and short message service messages to Pacleb in the future and dismissing this action as moot.” The court affirmed the district court's order denying Allstate’s motion to dismiss for lack of subject matter jurisdiction. The court concluded that, even if the district court entered judgment affording Pacleb complete relief on his individual claims for damages and injunctive relief, mooting those claims, Pacleb would still be able to seek class certification under Pitts v. Terrible Herbst, Inc., which remains good law under Gomez v. Campbell-Ewald Co. The court also concluded that, even if Pitts were not binding, and Allstate could moot the entire action by mooting Pacleb’s individual claims for damages and injunctive relief, those individual claims are not now moot, and the court will not direct the district court to moot them by entering judgment on them before Pacleb has had a fair opportunity to move for class certification. View "Chen v. Allstate Ins. Co." on Justia Law

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Plaintiff filed a putative consumer class action against Fresh, alleging that Fresh’s label, tube design, and packaging are deceptive and misleading. Plaintiff alleged that the tube design for Fresh's Sugar Lip Treatment product line uses a screw mechanism that allows only 75% of the product to advance up the tube. Each Sugar tube contains a weighted metallic bottom and is wrapped in oversized packaging. The district court granted Fresh's Rule 12(b)(6) motion to dismiss. Although the court concluded that neither the safe harbor doctrine nor the Food, Drug, and Cosmetic Act (FDCA), 21 U.S.C. 301 et seq., preemption bars plaintiff’s supplemental statement claim, this label claim ultimately fails on the merits because plaintiff cannot plausibly allege that the omission of supplemental disclosures about product weight rendered Sugar’s label “false or misleading” to the reasonable consumer. The court also concluded that the district court did not err in dismissing plaintiff's package-based claims under various California consumer laws because plaintiff cannot plausibly allege that Sugar’s design and packaging is deceptive. When viewed in the proper context of the high-end cosmetics market, Sugar’s elaborate packaging and the weighty feel of the tube is commonplace and even expected by a significant portion of Fresh’s “targeted consumers.” Finally, the district court correctly concluded that the First Amended Complaint fails to allege a violation of California Fair Packaging and Labeling Act, Cal. Bus. & Prof. Code 12606(b). Any further amendment to the complaint would be futile. The court affirmed the judgment. View "Ebner v. Frech, Inc." on Justia Law
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Plaintiffs filed a putative class action against Wells Fargo and U.S. Bank, alleging federal and state law claims arising out of the modification of the deed of trust for plaintiffs' home. At issue is the retroactivity of 15 U.S.C.1641(g), a 2009 amendment to the 1968 Truth in Lending Act (TILA). Section 1641(g) requires a creditor who obtains a mortgage loan by sale or transfer to notify the borrower of the transfer in writing. The court held that section 1641(g) does not apply retroactively because Congress did not express a clear intent to do so. The court noted that its holding is consistent with numerous district court decisions. Accordingly, the court affirmed the judgment. View "Talaie v. Wells Fargo Bank" on Justia Law
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Plaintiff filed suit against defendant, a debt collector, alleging that by sending a collection letter that sought ten percent interest on a debt, defendant violated the federal Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692(f)(1) and thereby violated California's Fair Debt Collection Practices Act (the Rosenthal Act), Cal. Civ. Code 1788-1788.33. The district court granted summary judgment in favor of plaintiff. The court reversed and remanded, concluding that defendant's debt collection letter did not violate the FDCPA or the Rosenthal Act where the district court's grant of summary judgment was based on an incorrect reading of California Civil Code section 3287. The court concluded that section 3287(a) can entitle a creditor to prejudgment interest on a debt that is certain or capable of being made certain even without a prior judgment. View "Diaz v. Kubler Corp." on Justia Law
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In this putative nationwide class action Plaintiffs claimed that they were deceived into purchasing Defendants’ “natural” cosmetics, which contained allegedly synthetic and artificial ingredients. Plaintiffs sought injunctive relief and damages under the federal Magnuson-Moss Warranty Act, California’s unfair competition and false advertising laws, and common law theories of fraud and quasi-contract. The district court dismissed the quasi-contract cause of action for failure to state a claim and dismissed the state law claims under the primary jurisdiction doctrine so that the parties could seek expert guidance from the Food and Drug Administration (FDA). A panel of the Ninth Circuit reversed, holding (1) the Food, Drug, and Cosmetic Act does not expressly preempt California’s state law causes of action that create consumer remedies for false or misleading cosmetics labels; (2) although the district court properly invoked the primary jurisdiction doctrine, it erred by dismissing the case rather than staying proceedings while the parties sought guidance from the FDA; and (3) the district court erred in dismissing the quasi-contract cause of action as duplicative of or superfluous to Plaintiffs’ other claims. View "Astiana v. Hain Celestial Group, Inc." on Justia Law

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Plaintiff filed a false advertising lawsuit against Johnson & Johnson and McNeil Nutritionals, LLC (collectively, McNeil) challenging several of McNeil’s assertions about its product, Benecol, a vegetable oil-based spread. Specifically, Plaintiff alleged that McNeil’s claims about its product were not authorized under the FDA’s regulations and were false. Plaintiff asserted claims for relief on behalf of a putative class of Benecol purchasers under California’s Unfair Competition Law, False Advertising Law, and Consumer Legal Remedies Act. The district court granted McNeil’s motion to dismiss, concluding that Plaintiff lacked standing because he failed to plead reasonable reliance on any misrepresentations and that Plaintiff’s claims for relief were preempted under federal law. The Ninth Circuit reversed, holding (1) Plaintiff had standing to challenge McNeil’s statements; (2) Plaintiff’s claims for relief were not preempted to the extent they were predicated on McNeil’s statements about trans fat, and a certain FDA letter was not entitled to preemptive effect; and (3) Plaintiff’s action was not barred by the primary jurisdiction doctrine. Remanded. View "Reid v. Johnson & Johnson" on Justia Law

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IntelliGender sold and advertised the IntelliGender Prediction Test as an accurate predictor of a fetus's gender using the mother's urine sample. The district court approved a Class Action Fairness Act (CAFA), 28 U.S.C. 1332(d), settlement between a nationwide certified class of purchasers of the Test and IntelliGender. The State subsequently filed an enforcement action against IntelliGender under the State's Unfair Competition and False Advertising Laws, largely based on the same claims as the class action. The court concluded that the district court correctly denied IntelliGender's motion to enjoin the State's enforcement action in its entirety where IntelliGender had not met its burden of showing that the CAFA class action settlement could bind the State in its sovereign capacity, where it asserted both public and private interests. The court agreed that a CAFA class action settlement, though approved by the district court, does not act as res judicata against the State in its sovereign capacity, even though many of the same claims are included in both actions. Because the State action is brought on behalf of the people, it implicates the public's interests as well as private interests, and therefore the remedial provisions sweep much more broadly. The court concluded, however, that the State is precluded from seeking the same relief sought in the CAFA class action where IntelliGender provided notice to the appropriate parties of the class action and the State chose not to participate. Therefore, the district court erred in denying IntelliGender's motion to enjoin the State's claims for restitution. Accordingly, the court affirmed in part and reversed in part. View "State of California v. IntelliGender" on Justia Law

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Plaintiff filed suit on behalf of himself and a putative class, alleging claims under the Telephone Consumer Protection Act (TCPA), 42 U.S.C. 227(b)(1)(A)(iii), that Campbell-Ewald instructed or allowed a third-party vendor to send unsolicited text messages on behalf of the Navy, with whom Campbell-Ewald had a marketing contract. The district court granted summary judgment to Campbell-Ewald under the doctrine of derivative sovereign immunity. The court rejected Campbell-Ewald's claim that the personal and putative class claims were mooted by petitioner's refusal to accept the settlement offer; Campbell-Ewald's constitutional claims were unavailing where the company relied upon a flawed application of First Amendment principles; the TCPA imposes vicarious liability where an agency relationship, as defined by federal common law, is established between the defendant and a third-party caller; and the application of the doctrine of derivative sovereign immunity is inapplicable in this case. Because Campbell-Ewald failed to demonstrate that it was entitled to judgment as a matter of law, the court vacated and remanded for further proceedings.View "Gomez v. Campbell-Ewald Co." on Justia Law

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Plaintiff filed suit on behalf of himself and a putative class of consumers whose Touchpad orders had been cancelled, alleging that Barnes & Noble had engaged in deceptive business practices and false advertising. On appeal, Barnes & Noble challenged the district court's denial of its motion to compel arbitration against plaintiff under the arbitration agreement contained in its website's Terms of Use. The court held that there was no evidence that the website user had actual knowledge of the agreement. The court also held that where a website makes its terms of use available via a conspicuous hyperlink on every page of the website but otherwise provides no notice to users nor prompts them to take any affirmative action to demonstrate assent, even close proximity of the hyperlink to relevant buttons users must click on - without more - is insufficient to give rise to constructive notice. Therefore, the court concluded that there is nothing in the record to suggest that those browsewrap terms at issue are enforceable by or against plaintiff, much less why they should give rise to constructive notice of Barnes & Noble's browsewrap terms. In light of the distinguishing facts, the district court did not abuse its discretion in rejecting Barnes & Noble's estoppel argument. Accordingly, the court held that plaintiff had insufficient notice of Barnes & Noble's Terms of Use, and thus did not enter into an arbitration agreement. The court affirmed the judgment of the district court.View "Nguyen v. Barnes & Noble Inc." on Justia Law