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

The plaintiff, Katherine Chabolla, purchased a one-month subscription from ClassPass, a company offering access to gyms and fitness classes, in January 2020. Due to the COVID-19 pandemic, ClassPass paused charges but resumed them when gyms reopened. Chabolla filed a lawsuit alleging that ClassPass violated California’s Automatic Renewal Law, Unfair Competition Law, and Consumers Legal Remedies Act by resuming charges without proper notice.The United States District Court for the Northern District of California denied ClassPass’s motion to compel arbitration, which argued that Chabolla had agreed to arbitrate any claims by using their website. The district court found that the website did not provide reasonably conspicuous notice of the Terms of Use, which included the arbitration clause, and that Chabolla did not unambiguously manifest assent to those terms.The United States Court of Appeals for the Ninth Circuit reviewed the case and affirmed the district court’s decision. The court held that ClassPass’s website, which resembled a sign-in wrap agreement, did not provide reasonably conspicuous notice of the Terms of Use on the landing page or the first screen. Even if the second and third screens provided such notice, Chabolla did not unambiguously manifest her assent to the Terms of Use on those screens. The court concluded that Chabolla’s use of the website did not amount to an unambiguous manifestation of assent to the Terms of Use, and therefore, she was not bound by the arbitration clause within those terms. The court affirmed the district court’s order denying ClassPass’s motion to compel arbitration. View "CHABOLLA V. CLASSPASS, INC." on Justia Law

Ryan Six filed a lawsuit against IQ Data International, Inc. under the Fair Debt Collection Practices Act (FDCPA), alleging that IQ sent him a debt verification letter after he had informed the company that all communications should be directed to his attorney. Six claimed that this action violated 15 U.S.C. § 1692c(a)(2), which prohibits debt collectors from directly communicating with a consumer known to be represented by an attorney.The United States District Court for the District of Arizona dismissed Six's action for lack of subject matter jurisdiction, ruling that he lacked Article III standing because he did not suffer an injury in fact. The district court reasoned that receiving one unwanted letter did not constitute a concrete harm akin to those traditionally recognized by American courts, nor was it the type of abusive debt collection practice the FDCPA was intended to prevent.The United States Court of Appeals for the Ninth Circuit reviewed the case and reversed the district court's dismissal. The Ninth Circuit held that Six had Article III standing to bring his claim under § 1692c(a)(2). The court concluded that receiving a letter in violation of this provision constituted a concrete injury because it infringed on Six's privacy interests, a harm that Congress intended to prevent with the FDCPA. The court also found that this harm was analogous to the common law tort of intrusion upon seclusion, which protects against unwanted intrusions into one's private affairs. The court determined that Six's injury was particularized and actual, and that the remaining elements of standing were met, as there was a causal connection between the injury and IQ's conduct, and the relief sought would redress the intrusion.The Ninth Circuit reversed the district court's dismissal and remanded the case for further proceedings consistent with its opinion. View "SIX V. IQ DATA INTERNATIONAL, INC." on Justia Law

A cyberattack on California Pizza Kitchen, Inc. (CPK) in September 2021 compromised the personal information of over 100,000 former and current employees. This led to multiple class action lawsuits against CPK, alleging negligence and other claims. The consolidated plaintiffs reached a settlement with CPK, offering cash payments and credit monitoring services to class members, with CPK required to make payments only to those who submitted valid claims. The settlement's monetary value was estimated at around $950,000, while the attorneys sought $800,000 in fees.The United States District Court for the Central District of California approved the settlement but reserved judgment on the attorneys' fees until after the claims process concluded. The consolidated plaintiffs reported a final claims rate of 1.8%, with the maximum monetary value of the claims being around $950,000. Despite expressing concerns about the scope of attorneys' fees, the district court ultimately awarded the full $800,000 in fees and costs.The United States Court of Appeals for the Ninth Circuit reviewed the case and affirmed the district court's approval of the class settlement, finding that the district court had properly applied the heightened standard to review the settlement for collusion and had not abused its discretion in finding the settlement fair, reasonable, and adequate. However, the Ninth Circuit reversed the fee award, noting that the district court had not adequately assessed the actual value of the settlement and compared it to the fees requested. The case was remanded for the district court to determine the settlement's actual value to class members and award reasonable and proportionate attorneys' fees. View "IN RE: CALIFORNIA PIZZA KITCHEN DATA BREACH LITIGATION" on Justia Law

The Consumer Financial Protection Bureau (CFPB) brought an action against CashCall, Inc., alleging that CashCall engaged in unfair, deceptive, or abusive practices by attempting to collect interest and fees it was not legally entitled to. The CFPB sought legal restitution for the affected consumers. CashCall argued that the restitution order triggered its Seventh Amendment right to a jury trial.The United States District Court for the Central District of California initially granted partial summary judgment to the CFPB on liability and conducted a bench trial to determine the appropriate remedy. The court imposed a civil penalty but declined to order restitution. Both parties appealed, and the Ninth Circuit Court of Appeals affirmed the finding of liability but vacated the civil penalty and remanded for further proceedings regarding restitution.On remand, the district court ordered CashCall to pay over $134 million in legal restitution. CashCall appealed again, contending that the restitution order violated its Seventh Amendment right to a jury trial. The United States Court of Appeals for the Ninth Circuit assumed, without deciding, that CashCall had a right to a jury trial but concluded that CashCall had waived that right by voluntarily participating in the initial bench trial and not objecting to the second bench trial. The court also held that the district court did not abuse its discretion in concluding that the doctrines of judicial estoppel and waiver did not preclude the CFPB from seeking legal restitution. Additionally, the court found that the district court did not overstate CashCall’s unjust gains and properly used CashCall’s net revenues as a basis for measuring unjust gains. Finally, the court rejected CashCall’s argument that the CFPB’s funding mechanism violated the Appropriations Clause.The Ninth Circuit affirmed the district court’s judgment. View "CONSUMER FINANCIAL PROTECTION BUREAU V. CASHCALL, INC." on Justia Law

Plaintiffs brought a putative class action against Live Nation Entertainment, Inc., and Ticketmaster LLC, alleging anticompetitive practices in violation of the Sherman Act. The plaintiffs had purchased tickets through Ticketmaster’s website, which required them to agree to Ticketmaster’s Terms of Use. These terms included an arbitration agreement mandating that disputes be resolved by an arbitrator from New Era ADR, using expedited/mass arbitration procedures.The United States District Court for the Central District of California denied the defendants' motion to compel arbitration. The court found that the clause delegating the authority to determine the validity of the arbitration agreement to the arbitrator was unconscionable under California law, both procedurally and substantively. The court also held that the entire arbitration agreement was unconscionable and unenforceable. The defendants appealed this decision.The United States Court of Appeals for the Ninth Circuit affirmed the district court’s decision. The appellate court held that the delegation clause and the arbitration agreement as a whole were unconscionable under California law. The court found that the delegation clause was part of a contract of adhesion and that the terms on Ticketmaster’s website exhibited extreme procedural unconscionability. Additionally, the court identified several features of New Era’s arbitration rules that contributed to substantive unconscionability, including the mass arbitration protocol, lack of discovery, limited right of appeal, and arbitrator selection provisions.The Ninth Circuit also held that the application of California’s unconscionability law to the arbitration agreement was not preempted by the Federal Arbitration Act (FAA). As an alternate and independent ground, the court held that the FAA does not preempt California’s prohibition of class action waivers in contracts of adhesion in large-scale small-stakes consumer cases, as established in Discover Bank v. Superior Court. The court concluded that Ticketmaster’s Terms and New Era’s Rules were independently unconscionable under Discover Bank. The decision of the district court was affirmed. View "HECKMAN V. LIVE NATION ENTERTAINMENT, INC." on Justia Law

A Californian plaintiff purchased several bottles of Banana Boat sunscreen between 2017 and 2020, including Ultra Sport SPF 100, SPF 50, and SPF 30. She later discovered that the SPF 50 bottle contained 0.29 parts per million (ppm) of benzene, a known carcinogen. She alleged that the products were falsely advertised as safe and that the presence of benzene was not disclosed on the labels. The plaintiff claimed she would not have purchased the products, or would have paid less for them, had she known about the benzene contamination.The United States District Court for the Central District of California dismissed the plaintiff’s suit for lack of Article III standing, concluding that she did not demonstrate a non-speculative increased health risk or actual economic harm. The court relied on FDA guidelines permitting up to 2 ppm of benzene in sunscreen, determining that the plaintiff’s allegations did not establish that 0.29 ppm of benzene posed a credible risk of harm or economic injury.The United States Court of Appeals for the Ninth Circuit reviewed the case and reversed the district court’s dismissal. The appellate court held that the district court erred by resolving disputed facts in favor of the defendants and prematurely addressing merits issues intertwined with the jurisdictional question of standing. The Ninth Circuit found that the plaintiff adequately established an injury in fact for purposes of Article III standing, as she alleged economic harm from purchasing a product she would not have bought, or would have paid less for, absent the defendants’ misrepresentations. The court also determined that the plaintiff met the causation and redressability elements of standing, as her injury was likely caused by the defendants' alleged misrepresentations and could be redressed by judicial relief. The case was remanded for further proceedings. View "BOWEN V. ENERGIZER HOLDINGS, INC." on Justia Law

Michael Terpin, a cryptocurrency investor, sued AT&T Mobility, LLC after hackers gained control over his phone number through a fraudulent "SIM swap," received password reset messages for his online accounts, and stole $24,000,000 of his cryptocurrency. Terpin alleged that AT&T failed to adequately secure his account, leading to the theft.The United States District Court for the Central District of California dismissed some of Terpin's claims for failure to state a claim and later granted summary judgment against him on his remaining claims. The court dismissed Terpin's fraud claims and punitive damages claim, holding that he failed to allege that AT&T had a duty to disclose or made a promise with no intent to perform. The court also held that Terpin failed to allege facts sufficient to support punitive damages. On summary judgment, the court ruled that Terpin's negligence claims were barred by the economic loss rule, his breach of contract claim was barred by the limitation of liability clause in the parties' agreement, and his claim under Section 222 of the Federal Communications Act (FCA) failed because the SIM swap did not disclose any information protected under the Act.The United States Court of Appeals for the Ninth Circuit affirmed the district court's dismissal of Terpin's fraud claims and punitive damages claim, agreeing that Terpin failed to allege a duty to disclose or an intent not to perform. The court also affirmed the summary judgment on Terpin's breach of contract claim, holding that consequential damages were barred by the limitation of liability clause. The court affirmed the summary judgment on Terpin's negligence claims, finding them foreclosed by the economic loss rule. However, the Ninth Circuit reversed the summary judgment on Terpin's claim under Section 222 of the FCA, holding that Terpin created a triable issue over whether the fraudulent SIM swap gave hackers access to information protected under the Act. The case was remanded for further proceedings on this claim. View "TERPIN V. AT&T MOBILITY LLC" on Justia Law

Plaintiffs, dog owners, alleged that Nutramax Laboratories falsely marketed their product, Cosequin, as promoting healthy joints in dogs, despite evidence suggesting it provided no such benefits. They claimed this violated the California Consumers Legal Remedies Act (CLRA). The district court certified a class of California purchasers who were exposed to the allegedly misleading statements on Cosequin’s packaging.The United States District Court for the Central District of California certified the class, relying on the proposed damages model of Plaintiffs’ expert, Dr. Jean-Pierre Dubé, who had not yet executed his model. Nutramax challenged this, arguing that the model needed to be applied to the class to demonstrate that damages were susceptible to common proof. The district court found Dr. Dubé’s model sufficiently reliable for class certification purposes and concluded that common questions predominated regarding injury. Nutramax also contended that the element of reliance was not susceptible to common proof, but the district court found that classwide reliance could be established through proof of material misrepresentation.The United States Court of Appeals for the Ninth Circuit affirmed the district court’s decision. The court held that there is no general requirement for an expert to apply a reliable damages model to the proposed class to demonstrate that damages are susceptible to common proof at the class certification stage. The court concluded that the district court did not abuse its discretion in finding Dr. Dubé’s proposed model sufficiently sound. Additionally, the court rejected Nutramax’s argument regarding reliance, affirming that classwide reliance could be established under the CLRA through proof of material misrepresentation. The Ninth Circuit affirmed the district court’s grant of class certification. View "LYTLE V. NUTRAMAX LABORATORIES, INC." on Justia Law

The case involves the plaintiffs, including the estate of Carson Bride and three minors, who suffered severe harassment and bullying through the YOLO app, leading to emotional distress and, in Carson Bride's case, suicide. YOLO Technologies developed an anonymous messaging app that promised to unmask and ban users who engaged in bullying or harassment but allegedly failed to do so. The plaintiffs filed a class action lawsuit against YOLO, claiming violations of state tort and product liability laws.The United States District Court for the Central District of California dismissed the plaintiffs' complaint, holding that Section 230 of the Communications Decency Act (CDA) immunized YOLO from liability. The court found that the claims sought to hold YOLO responsible for third-party content posted on its app, which is protected under the CDA.The United States Court of Appeals for the Ninth Circuit reviewed the case. The court reversed the district court's dismissal of the plaintiffs' misrepresentation claims, holding that these claims were based on YOLO's promise to unmask and ban abusive users, not on a failure to moderate content. The court found that the misrepresentation claims were analogous to a breach of promise, which is not protected by Section 230. However, the court affirmed the dismissal of the plaintiffs' product liability claims, holding that Section 230 precludes liability because these claims attempted to hold YOLO responsible as a publisher of third-party content. The court concluded that the product liability claims were essentially about the failure to moderate content, which is protected under the CDA. View "Estate of Bride v. Yolo Technologies, Inc." 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