Articles Posted in Consumer Law

The district court denied class certification to a class of plaintiffs who allegedly received unsolicited faxed advertisements from McKesson between September 2009 and May 2010, in violation of the Telephone Consumer Protection Act of 1991. The Ninth Circuit affirmed the district court's denial of class certification with respect to a possible subclass of the putative class members with the fifty-five unique fax numbers in Exhibit C; reversed the district court's holding that the other possible subclasses cannot satisfy the predominance requirement of Rule 23(b)(3); held that the subclass of putative class members with 9,223 unique fax numbers that would be created by taking out of Exhibit A the putative class members listed in Exhibits B and C would satisfy the predominance requirement of Federal Rule of Civil Procedure 23(b)(3); remanded for a determination by the district court whether the claims and defenses applicable to some or all of the class of putative class members with 2,701 unique fax numbers listed in Exhibit B would satisfy the predominance requirement of Rule 23(b)(3); and remanded to allow the district court to address the requirements of Rule 23(a). View "True Health Chiropractic, Inc. v. McKesson Corp." on Justia Law

The Ninth Circuit affirmed the district court's grant of summary judgment in favor of State Farm in an action alleging violations of procedural requirements under the Fair Credit Reporting Act (FCRA). Specifically, plaintiff alleged that State Farm was required to provide a job applicant with a copy of his consumer credit report, notice of his FCRA rights, and an opportunity to challenge inaccuracies in the report. The panel held that plaintiff waived any challenge to the admissibility of a declaration, which was the only source of admissible proof as to why plaintiff's credit report would have disqualified him from acceptance in the Agency Career Track program. The panel also held that plaintiff lacked Article III standing because he failed to show how the specific violation of 15 U.S.C. 1681b(b)(3)(A) alleged in the complaint actually harmed or presented a material risk of harm to him. View "Dutta v. State Farm Mutual Automobile Insurance Co." on Justia Law

Plaintiff bought a Gilbert, Arizona home in 2004. She was required to pay the Community Association an annual assessment in monthly installments. Defendants notified Plaintiff in 2009 of her failure to pay a debt arising out of the assessment. Defendants represented the Association in suing Plaintiff. After Plaintiff defaulted on a payment agreement, Defendants revived the lawsuit and obtained a default judgment. The parties agreed to a new payment plan and to execute a stipulated judgment against Plaintiff that recognized the Association’s right to collect the debt by selling Plaintiff’s home. Plaintiff failed to make the required payments. The Maricopa Superior Court granted a writ of special execution for foreclosure on Plaintiff’s house. The property was sold for $75,000 at a foreclosure sale, and Defendants received $11,600.13 in satisfaction of the debt, including attorneys’ fees and costs. The district court rejected Plaintiff’s claim that Defendants violated the Fair Debt Collection Practices Act by misrepresenting the amount of Plaintiff’s debt and seeking attorneys’ fees to which they were not entitled. The Ninth Circuit reversed. Defendants’ effort to collect homeowner association fees through judicial foreclosure constitutes “debt collection” under the Act, 15 U.S.C. 1692a(5). In Arizona, requests for post-judgment attorneys’ fees must be made in a motion to the court. No court had yet approved the quantification of the “accruing” attorneys’ fees claimed by Defendants; Defendants falsely represented the legal status of this debt. View "McNair v. Maxwell & Morgan PC" on Justia Law

California consumer protection laws do not obligate Mars, Inc. to label their goods as possibly being produced by child or slave labor. In the absence of any affirmative misrepresentations by the manufacturer, the manufacturer did not have a duty to disclose the labor practices in question, even though they were reprehensible, because they were not physical defects that affected the central function of the chocolate products. The Ninth Circuit affirmed the dismissal of a putative class action alleging that Mars had a duty to disclose on its labels the labor practices that may have tainted its supply chain. In this pure omissions case concerning no physical product defect relating to the central function of the chocolate and no safety defect, the panel held that plaintiff has not sufficiently pleaded that Mars had a duty to disclose on its labels the labor issues in its supply chain. Absent such a duty, plaintiff's claims under the Consumers Legal Remedies Act, Unfair Competition Law, and False Advertising Law claims were foreclosed. View "Hodsdon v. Mars, Inc." on Justia Law

The Ninth Circuit affirmed the district court's dismissal of an action under the Fair Credit Reporting Act, 15 U.S.C. 1681c(g), against the National Park Service. Plaintiff alleged that the Service violated the Act by failing to redact plaintiff's debit card expiration date from her park entrance purchase receipt. The panel held that plaintiff lacked standing where her complaint made only conclusory allegations that her stolen identity was traceable to the Park Service's alleged violation of the Act. The panel also held that leave to amend the complaint would be futile where the Act did not waive the federal government's sovereign immunity from suit. View "Daniel v. National Park Service" on Justia Law

The Ninth Circuit affirmed the district court's grant of summary judgment to Experian in an action alleging violation of the Fair Credit Reporting Act. The panel held that plaintiffs' reasonable procedures and reasonable reinvestigation claims failed because Experian's credit reports were accurate. The panel also held that plaintiffs' failure to disclose claim failed because Experian clearly and accurately disclosed to plaintiffs all information that Experian recorded and retained that might be reflected in a consumer report. Finally, plaintiffs' request for statutory damages under 15 U.S.C. 1681n failed because they have not shown a willful violation by Experian. View "Shaw v. Experian Information Solutions, Inc." on Justia Law

Echlin received treatment at PeaceHealth but ignored multiple requests for payment. PeaceHealth referred her accounts to CCI, a purported collection agency. Under a 2004 agreement, for a fixed fee, CCI performed services related to debt-collection and PeaceHealth would suspend its in-house collection efforts. CCI independently screened each account for potential collection problems. Although PeaceHealth was generally aware of the standard format of CCI’s letters, CCI alone controlled their content without PeaceHealth’s approval. The letters were written on CCI letterhead, mailed from CCI’s in-house mailing center, and listed CCI’s contact information (PeaceHealth’s information was labeled “Creditor Detail”). The letters directed debtors to a CCI website. CCI handled correspondence from PeaceHealth debtors.CCI had no ability to process or negotiate payments but forwarded to PeaceHealth any payments it received. After two letters, accounts were returned to PeaceHealth. CCI did not participate in subsequent collection steps. Echlin filed a putative class action under the Fair Debt Collection Practices Act, 15 U.S.C. 1692e, 1692j. The Ninth Circuit affirmed summary judgment in favor of the defendants. CCI did not engage in “flat-rating,” in which a third party sends a delinquency letter to a debtor, portraying itself as a debt collector, when it actually has no real involvement in the debt collection effort. CCI meaningfully participated in PeaceHealth’s debt-collection efforts, screening the accounts, independently composing and mailing letters, responding to customer questions, and maintaining a website that allowed customers to access individualized information. View "Echlin v. PeaceHealth" on Justia Law

Heryford, Trinity County, California's District Attorney, sued American Bankers and others, on behalf of the people under California’s Unfair Competition Law (UCL), alleging they had “engaged in deceptive marketing and sales practices.” Private parties may seek injunctive relief and restitution under the UCL; only a public prosecutor may pursue civil penalties. The complaint listed private law firms as “Special Assistant District Attorneys.” An agreement required the Firms to “provide all legal services that are reasonably necessary,” and to “conduct negotiations and provide representations at all hearings, depositions, trials, appeals, and other appearances” with authority to control the performance of their work “under the direction of the District Attorney,” stating that Heryford’s office did “not relinquish its constitutional or statutory authority or responsibility” and retained “sole and final authority to initiate and settle.” Heryford retained the Firms on a contingency-fee basis. American Bankers challenged the contingency-fee agreement as a violation of its federal due process rights that gave the Firms “a direct and substantial financial stake in the imposition of civil penalties and restitution,” which “compromise[d] the integrity and fairness of the prosecutorial motive and the public’s faith in the judicial process.” The Ninth Circuit affirmed the dismissal of the suit. Heryford’s retention of private counsel to pursue civil penalties cannot be meaningfully distinguished from a private relator’s pursuit of civil penalties under the qui tam provisions of the False Claim Act, an arrangement that does not violate due process. View "American Bankers Management Co. v. Heryford" on Justia Law

The Ninth Circuit reversed the district court's dismissal of plaintiff's claims based on lack of Article III standing. Plaintiffs filed suit against online retailer Zappos.com, alleging that they were harmed by hacking of their accounts. The panel held that plaintiffs sufficiently alleged standing based on the risk of identity theft under Krottner v. Starbucks Corp., 628 F.3d 1139 (9th Cir. 2010). Plaintiffs also alleged an injury in fact under Krottner, based on a substantial risk that the Zappos hackers will commit identity fraud or identity theft. The panel explained that it assessed standing at the time the complaints were filed, not as of the present. Finally, the panel held that plaintiffs sufficiently alleged that the risk of future harm was fairly traceable to the conduct being challenged and that their identity theft injury was redressable. The panel addressed an issue raised by sealed briefing in a concurrently filed memorandum disposition. View "Stevens v. Zappos.com, Inc." on Justia Law

The Ninth Circuit reversed the district court's dismissal of plaintiff's claims based on lack of Article III standing. Plaintiffs filed suit against online retailer Zappos.com, alleging that they were harmed by hacking of their accounts. The panel held that plaintiffs sufficiently alleged standing based on the risk of identity theft under Krottner v. Starbucks Corp., 628 F.3d 1139 (9th Cir. 2010). Plaintiffs also alleged an injury in fact under Krottner, based on a substantial risk that the Zappos hackers will commit identity fraud or identity theft. The panel explained that it assessed standing at the time the complaints were filed, not as of the present. Finally, the panel held that plaintiffs sufficiently alleged that the risk of future harm was fairly traceable to the conduct being challenged and that their identity theft injury was redressable. The panel addressed an issue raised by sealed briefing in a concurrently filed memorandum disposition. View "Stevens v. Zappos.com, Inc." on Justia Law