Justia U.S. 9th Circuit Court of Appeals Opinion SummariesArticles Posted in Consumer Law
N. L. v. Credit One Bank, N.A.
The Ninth Circuit affirmed the district court's judgment in favor of an eleven year old boy in an action alleging that Credit One violated the Telephone Consumer Protection Act by making 189 automated calls to his cell phone. In this case, Credit One was trying to collect past-due payments from a customer, but, unbeknownst to the bank, the customer's cell phone number had been reassigned to Sandra Lemos, who in turn had let her son, N.L., use the phone as his own. The panel joined every circuit to have addressed this issue and held that the consent of the person it intended to call did not exempt Credit One from liability under the TCPA. Therefore, Credit One cannot escape liability under the TCPA and upheld the district court's determination that Credit One was liable for the calls made to N.L. The panel also held that, in light of Marks v. Crunch San Diego, LLC, 904 F.3d 1041 (9th Cir. 2018), the district court properly instructed the jury on the definition of an "automatic telephone dialing system." Because the jury instruction on this definition is consistent with Marks, the panel held that Credit One's challenge to it failed. View "N. L. v. Credit One Bank, N.A." on Justia Law
Luna v. Hansen & Adkins Auto Transport, Inc.
Luna is a former employee of Hansen, which employs over 1,100 big rig truckers, mechanics, dispatchers, and other support staff. Hansen’s hiring process involved a Commercial Driver Employment Application, which included notices and authorizations permitting Hansen to retrieve safety history and driving records, and conduct drug and background checks. Job applicants signed “the disclosure,” which appeared on a separate sheet of paper, and informed applicants “that reports verifying your previous employment, previous drug and alcohol test results, and your driving record may be obtained on you for employment purposes,” and “the authorization,” at the end of the Application, which indicated that an applicant’s signature authorized Hansen “to investigate my previous record of employment” and included other notices, waivers, and agreements unrelated to acquiring the consumer report. Luna filed a putative class action alleging Hansen ’s hiring process violated the Fair Credit Reporting Act (FCRA). The Ninth Circuit affirmed summary judgement in favor of Hansen. FCRA forbids procurement of a consumer report for employment purposes unless “a clear and conspicuous disclosure has been made in writing ... in a document that consists solely of the disclosure.” 15 U.S.C. 1681b(b)(2)(A)(i). Hansen’s disclosure may have been provided alongside other application materials, but it appeared in a standalone document, as FCRA requires. View "Luna v. Hansen & Adkins Auto Transport, Inc." on Justia Law
Gilliam v. Levine
Borrower filed suit under federal and state regulations for consumer credit transactions against the lenders, alleging that the lender's loan disclosures were materially inconsistent with the terms of the loan. At issue in this appeal was whether the loan the borrower obtained to make repairs to a personal residence occupied by her niece should be considered a consumer credit transaction. The district court held that, because the borrower did not intend to live in the house, this was not a consumer credit transaction. The Ninth Circuit held that, under applicable statutes and regulations, a trust created by an individual for tax and estate planning purposes, like the one in this case, does not lose all state and federal consumer disclosure protections when it seeks to finance repairs to a personal residence for the trust beneficiary, rather than for the trustee herself. Therefore, the transaction remains a consumer credit transaction. Because the district court erred in construing the statutes in this case too narrowly, the panel reversed the district court's dismissal and remanded for further proceedings. View "Gilliam v. Levine" on Justia Law
Walker v. Fred Meyer, Inc.
Beyond a plain statement disclosing "that a consumer report may be obtained for employment purposes," some concise explanation of what that phrase means may be included as part of the "disclosure" required by the Fair Credit Reporting Act (FCRA), 15 U.S.C. 1681b(b)(2)(A)(i). The right provided by the FCRA to dispute inaccurate information in a consumer report does not require employers to provide job applicants or employees with an opportunity to discuss their consumer reports directly with the employer. Instead, the FCRA requires that an employer provide, in a pre-adverse action notice to the consumer, a description of the consumer's right to dispute with a consumer reporting agency the completeness or accuracy of any item of information contained in the consumer’s file at the consumer reporting agency. The Ninth Circuit affirmed in part and reversed in part in this putative class action against Fred Meyer, alleging that Fred Meyer willfully violated the FCRA by providing an unclear disclosure form encumbered by extraneous information and failing to notify plaintiff in the pre-adverse action notice that he could discuss the consumer report obtained about him directly with Fred Meyer. In this case, the fourth and fifth paragraphs of the disclosure violated the FCRA's standalone disclosure requirement. The panel remanded for the district court to decide in the first instance whether the remaining language of the disclosure satisfied the separate "clear and conspicuous" requirement. View "Walker v. Fred Meyer, Inc." on Justia Law
Brown v. Stored Value Cards, Inc.
Plaintiff filed suit against Numi, and its partner CNB, alleging that they violated the Electronic Fund Transfers Act (EFTA), violated the Fifth Amendment Takings Clause, and were liable for conversion and unjust enrichment under Oregon state law. Numi is a for-profit, private company that returns released inmates' money via a prepaid debit card loaded with the balance of their funds. Numi earns revenue by charging fees to the cardholders, rather than the government. The Ninth Circuit held that plaintiff plausibly alleged a claim under section 1693l-1 of the EFTA and the district court erred in dismissing the case for failure to state a claim. The court explained that, because defendants marketed their cards to the general public, section 1693l-1 was applicable. In this case, defendants marketed the card program to municipalities and correctional facilities, and Multnomah County does not give released inmates a choice of whether to accept the cards. Therefore, when defendants marketed the cards to Multnomah County, they indirectly marketed them to these released inmates, and then the inmates reenter the general public. The panel also held that the district court abused its discretion when it denied plaintiff leave to file a third amended complaint; summary judgment was not proper on plaintiff's takings claim; and summary judgment was not proper on plaintiff's state law claims. View "Brown v. Stored Value Cards, Inc." on Justia Law
McAdory v. M.N.S. & Associates, LLC
The Ninth Circuit reversed the district court's dismissal of a Fair Debt Collection Practices Act case, holding that a business that buys and profits from consumer debts, but outsources direct collection activities, qualifies as a "debt collector" subject to the requirements of the Act. The panel joined the Third Circuit in concluding that an entity that otherwise meets the "principal purpose" definition of debt collector cannot avoid liability under the FDCPA merely by hiring a third party to perform its debt collection activities. In this case, the panel held that the complaint sufficiently alleged that DNF was a debt collector under the FDCPA, regardless of whether DNF outsourced debt collection activities to a third party. The panel remanded for further proceedings. View "McAdory v. M.N.S. & Associates, LLC" on Justia Law
Ramirez v. TransUnion LLC
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
Becerra v. Dr Pepper/Seven Up, Inc.
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
Shaw v. Bank of America Corp.
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
Lima v. Educational Credit Management Corp.
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