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

Consumers filed suit against TransUnion under the Fair Credit Reporting Act (FCRA) after the agency—aware that its practice was unlawful—incorrectly placed terrorist alerts on the front page of the consumers' credit reports and subsequently sent the consumers confusing and incomplete information about the alerts and how to get them removed. The jury assessed $60 million in damages for three willful violations of the statute. The Ninth Circuit held that every member of a class certified under Federal Rule of Civil Procedure 23 must satisfy the basic requirements of Article III standing at the final stage of a money damages suit when class members are to be awarded individual monetary damages. In this case, the panel held that each of the 8,185 class members had standing on each of the class claims. The panel rejected TransUnion's arguments regarding the sufficiency of the evidence, Rule 23 certification, and statutory damages. However, the panel held that the punitive damages award is excessive in violation of constitutional due process. The panel reduced the punitive damages award, but otherwise affirmed the verdict and judgment. View "Ramirez v. TransUnion LLC" on Justia Law

The Ninth Circuit affirmed the district court's dismissal of plaintiff's third amended complaint alleging that defendant violated various California consumer-fraud laws by branding Diet Dr Pepper using the word "diet." The panel held that, taken all together, the allegations in the complaint failed to sufficiently allege that reasonable consumers read the word "diet" in a soft drink's brand name to promise weight loss, healthy weight management, or other health benefits. The panel stated that diet soft drinks are common in the marketplace and the prevalent understanding of the term in that context is that the "diet" version of a soft drink has fewer calories than its "regular" counterpart. The panel explained that just because some consumers may unreasonably interpret the term differently does not render the use of "diet" in a soda's brand name false or deceptive. Therefore, the panel held that plaintiff failed to sufficiently allege that Diet Dr. Pepper's labeling was false or misleading and the district court properly dismissed the claim. View "Becerra v. Dr Pepper/Seven Up, Inc." on Justia Law

The Ninth Circuit affirmed the district court's dismissal of a Truth in Lending Act (TILA) claim for lack of subject matter jurisdiction based on the jurisdiction-stripping provisions of the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA). In this case, plaintiff sought rescission of a mortgage loan under TILA, claiming that the lender provided him with defective notice of the right to cancel when the loan was signed. The panel held that FIRREA's administrative exhaustion requirement applied, and plaintiff had a claim under FIRREA because his cause of action gave right to an equitable remedy of rescission and was susceptible of resolution by FIRREA's claims process. The panel agreed with the Fourth Circuit and concluded that there was no requirement that the loan have passed through an FDIC receivership. The panel also held that plaintiff's claim related to an act or omission, the lender failed to comply with TILA, and the FDIC was appointed as receiver. However, the panel held that plaintiff failed to exhaust his administrative remedies with the FDIC because his complaint included no allegations that he presented his TILA claim to the FDIC before filing suit. Furthermore, because subject matter jurisdiction was lacking when this action was filed, plaintiff's later communications with the FDIC did not prevent dismissal of his TILA claim. Finally, the district court did not abuse its discretion in denying plaintiff’s request for further discovery. View "Shaw v. Bank of America Corp." on Justia Law

The Ninth Circuit affirmed the district court's grant of summary judgment for defendant, a nonprofit guaranty agency, on claims under the Fair Debt Collection Practices Act (FDCPA) and the Due Process Clause. In this case, defendant caused an offset against plaintiff's Social Security benefits, in order to recover on a judgment obtained after plaintiff defaulted on his student loans. The panel held that defendant fulfilled the criteria of the fiduciary exception for the definition of a debt collector under the FDCPA. The panel explained that, although defendant regularly collects or attempts to collect debts asserted to be owed or due another, defendant's collection activities were incidental to a bona fide fiduciary obligation. The panel also held that, assuming without deciding that defendant is a state actor, defendant did not violate plaintiff's due process rights because plaintiff was provided with notice of the debt, defendant's intention to seek an offset, and the means by which plaintiff could respond. View "Lima v. Educational Credit Management Corp." on Justia Law

A debt collector is entitled to collect a lawful, outstanding debt even if the statute of limitations has run, so long as the debt collector does not use means that are deceptive or misleading and otherwise complies with legal requirements. The Ninth Circuit affirmed the district court's grant of summary judgment for defendant in an action under the Fair Credit Reporting Act (FCRA), alleging that a debt collector's letter was deceptive or misleading under 15 U.S.C. 1692e because it attempted to persuade him to pay time-barred debt. The panel held that Midland's disclosure would not mislead or deceive the least sophisticated debtor into thinking that Midland could use legal means to collect the debt; Midland's letter was not deceptive or misleading for not warning about the potential for revival of the statute of limitations; the panel rejected plaintiff's argument that a letter is deceptive or misleading if a debt collector tries to persuade debtors to pay what they owe; and thus plaintiff has not identified anything false, deceptive, or misleading in Midland's letter. View "Stimpson v. Midland Credit Management, Inc." on Justia Law

A consumer suffers a concrete injury in fact when a third-party obtains her credit report for a purpose not authorized by the Fair Credit Reporting Act (FCRA); a consumer-plaintiff need allege only that her credit report was obtained for a purpose not authorized by the statute to survive a motion to dismiss; and the defendant has the burden of pleading it obtained the report for an authorized purpose. The Ninth Circuit reversed the district court's dismissal of plaintiff's claim under the FCRA for lack of standing and failure to state a claim. The panel held that plaintiff pleaded facts sufficient to give rise to a reasonable inference that the Bank obtained her credit report for an unauthorized purpose. In this case, she pleaded that she did not have a credit relationship with the Bank of the kind specified in 15 U.S.C. 1681b(a)(3)(A)–(F), the Bank submitted numerous credit report inquires to Experian, and plaintiff put forth factual assertions which negative each permissible purpose for which Capital One could have obtained her credit report and for which she could possibly have personal knowledge. View "Nayab v. Capital One Bank" on Justia Law

The Ninth Circuit filed an order amending its prior opinion, denying panel rehearing, and denying, on behalf of the court, rehearing en banc; and an amended opinion and dissent. The panel reversed the district court's judgment for plaintiffs in an action brought under the Fair Credit Reporting Act (FCRA), alleging that Fannie Mae falsely communicated to potential mortgage lenders, via its proprietary software, called Desktop Underwriter, that plaintiffs had a prior foreclosure on a mortgage account. The panel held that Fannie Mae is not a consumer reporting agency because, even if it assembles or evaluates consumer information through Desktop Underwriter, it does not do so for the purpose of furnishing consumer reports to third parties. Therefore, the panel held that the district court erred by granting plaintiffs' motion for summary judgment and denying Fannie Mae's cross-motion on this issue. The court also vacated the award of attorney's fees and costs to plaintiffs. View "Zabriskie v. Federal National Mortgage Association" on Justia Law

The Ninth Circuit affirmed the district court's grant of summary judgment for Chase in an action brought by plaintiff, alleging claims under the Truth in Lending Act (TILA). In a prior appeal, the panel held that plaintiff gave proper, timely notice of rescission and vacated the district court's judgment, remanding for further proceedings. On remand. the district court granted summary judgment on a different ground, holding that plaintiff had no right of rescission. The panel held that the district court properly considered defendants' new argument on remand and properly granted summary judgment, because plaintiff obtained the mortgage in order to reacquire a residential property in which his prior ownership interest had been extinguished. Therefore, the right of rescission did not apply. View "Barnes v. Chase Home Finance, LLC" on Justia Law

The Ninth Circuit reversed the district court's denial of class certification in an action brought by plaintiff against Nissan, under state and federal warranty laws, arising from an allegedly faulty hydraulic clutch system in plaintiff's 2012 Nissan vehicle. The panel held that, following Comcast Corp. v. Behrend, 569 U.S. 27 (2013), plaintiff's theory of liability—that Nissan's manufacture and concealment of a defective clutch system injured class members at the time of sale—is consistent with his proposed recovery based on the benefit of the bargain. Therefore, the district court abused its discretion when it denied class certification based on a misconception of plaintiff's legal theory. Accordingly, the panel remanded for further proceedings. View "Huu Nguyen v. Nissan North America, Inc." on Justia Law

The Ninth Circuit affirmed the district court's grant of summary judgment for Experian in an action brought by plaintiff under the Fair Credit Reporting Act, alleging claims that arose out of a series of letters a credit repair organization sent to Experian on plaintiff's behalf. The panel held that 15 U.S.C. 1681i requires consumer reporting agencies to reinvestigate disputed items in a consumer's credit file if the consumer notifies the agency of the dispute "directly." In this case, plaintiff played no part in drafting, finalizing, or sending the letters Go Clean Credit sent to Experian on his behalf, and thus those letters did not come directly from him. Therefore, Experian was not required to initiate a reinvestigation. View "Warner v. Experian Information Solutions, Inc." on Justia Law