Justia U.S. 9th Circuit Court of Appeals Opinion SummariesArticles Posted in Consumer Law
NEXUS PHARMACEUTICALS, INC. V. CAPS, ET AL
Nexus Pharmaceuticals, Inc. (Nexus) developed the trademarked and FDA-approved drug Emerphed, ready-to-use ephedrine sulfate in a vial. Drug compounding by “outsourcing facilities” is permitted without FDA approval, but 21 U.S.C. Section 353b, a part of the Food, Drug, and Cosmetic Act, excludes from this exception compounded drugs that are “essentially a copy of one or more approved drugs.” To avoid the Act’s bar on private enforcement, Nexus alleged violation of state laws that prohibit the sale of drugs not approved by the FDA. The Ninth Circuit affirmed the district court’s dismissal, for failure to state a claim, of state law claims brought by Nexus against Central Admixture Pharmacy Services, Inc., operator of a network of compounding pharmacies that sold the drug ephedrine sulfate pre-loaded into ready-to-use syringes without FDA approval. The panel affirmed the district court’s conclusion that, under the implied preemption doctrine, Nexus’s state law claims were barred because they were contrary to the Food, Drug, and Cosmetic Act’s exclusive enforcement provision, which states that proceedings to enforce or restrain violations of the Act, including the compounding statute, must be by and in the name of the United States, not a private party. The panel held that all of Nexus’s claims depended on a determination of whether Central Admixture’s ephedrine sulphate was “essentially a copy” of Nexus’s Emerphed, and the plain text of the Food, Drug, and Cosmetic Act left that determination in the first instance to the FDA and its enforcement process. View "NEXUS PHARMACEUTICALS, INC. V. CAPS, ET AL" on Justia Law
ANDREW COHEN V. APPLE INC.
A regulatory scheme established by a Federal Communications Commission 1996 RF Order set exposure limits that included cell phones, and it remains largely intact today. Plaintiffs alleged that RF radiation emitted by iPhones regularly exceeded the federal exposure limit, and they brought eight claims against Apple under state tort and consumer-fraud laws. The district court held that plaintiffs’ state-law claims were preempted by federal law.The Ninth Circuit affirmed the district court’s summary judgment for Apple Inc. The court explained that a federal statute need not specify its preemptive force in order for the statute to have such a force, and Congress did not need to expressly delegate preemptive authority to the FCC for its regulations to preempt state law. View "ANDREW COHEN V. APPLE INC." on Justia Law
Posted in: Consumer Law
G AND G CLOSED CIRCUIT EVENTS V. ZIHAO LIU
The district court ruled that Sections 553 and 605 do not apply when a pirated program is transmitted via Internet streaming. The Ninth Circuit, however, concluded that Plaintiff, a middleman distributor of entertainment display rights, failed to meet its burden on summary judgment to provide evidence sufficient to demonstrate a genuine issue of material fact regarding the method of transmission of the program at issue. Accordingly, the panel declined to reach the merits and affirmed on that alternative ground. View "G AND G CLOSED CIRCUIT EVENTS V. ZIHAO LIU" on Justia Law
AARON LEIGH-PINK V. RIO PROPERTIES, LLC
Plaintiffs appealed the district court’s dismissal of their claims against Rio Properties, LLC (“Rio”), which owns and operates the Rio All-Suite Hotel and Casino in Las Vegas, Nevada. During this time, Plaintiffs claim Defendant knew that its water system was infected with Legionella bacteria, which causes Legionnaires’ Disease. After learning of the contamination, Plaintiffs brought a putative class action against Defendant. They sought the return of the resort fee on the theory that they would not have gone to the hotel, and would not have paid the resort fee if Defendant had told them about the presence of the Legionella. In a prior decision, the Ninth Circuit affirmed the dismissal of Plaintiffs’ claims for negligence, “declaratory relief,” violation of Nevada Revised Statutes (“NRS”) Section 205.377(1), and consumer fraud, and reversed the dismissal of Plaintiffs’ unjust enrichment claim. However, the court reserved judgment on Plaintiffs’ claims for fraudulent concealment and statutory consumer fraud, based on NRS Section 598.0923(2), because a controlling question of state law existed. In response to a certified question, the Nevada State Supreme Court answered “that a plaintiff who receives the true value of the goods or services purchased has not suffered damages under theories of common-law fraudulent concealment or N.R.S. 41.600.” Thus, the Ninth Circuit affirmed, finding that applying Nevada state law as declared by the Nevada State Supreme Court, Plaintiffs failed to allege recoverable damages as to their fraudulent concealment and consumer fraud claims. View "AARON LEIGH-PINK V. RIO PROPERTIES, LLC" on Justia Law
CRAIG MOSKOWITZ V. AMERICAN SAVINGS BANK
Plaintiff American Savings Bank, F.S.B (“ASB”) sent text messages to his mobile phone without the consent required by the Telephone Consumer Protection Act (“TCPA”). Affirming the district court’s summary judgment, the Ninth Circuit held that under Van Patten v. Vertical Fitness Grp., LLC, 847 F.3d 1037 (9th Cir. 2017), messages sent by Plaintiff’s phone to ASB’s “short code” number provided the required prior express consent for ASB’s responsive messages. The district court granted ASB’s motion for an award of costs under Rule 41(d) for costs, including attorney’s fees, that ASB incurred in defending identical litigation commenced and later voluntarily dismissed by Plaintiff in the District of Connecticut. Joining other circuits, and reversing in part, the court held that Rule 41(d) “costs” do not include attorney’s fees as a matter of right. Accordingly, the district court abused its discretion in including attorney’s fees in its award of costs under Rule 41(d). The court explained that it did not decide if bad faith is sufficient to allow a party to recover attorney’s fees as “costs” under Rule 41(b), as bad faith was not alleged, much less proven, by ASB in the district court. The court did not address whether attorney’s fees are available under Rule 41(b) if the underlying statute so provides because, here, it was undisputed that the TCPA does not provide for the award of attorney’s fees to the prevailing party. View "CRAIG MOSKOWITZ V. AMERICAN SAVINGS BANK" on Justia Law
INTER-COOPERATIVE EXCHANGE V. USDOC
The Ninth Circuit reversed the district court’s grant of summary judgment to federal defendants in a Freedom of Information Act (“FOIA”) action brought by Inter-Cooperative Exchange (“ICE”), a cooperative of fishers who harvest and deliver crab off the coast of Alaska, seeking the government’s communications concerning the government’s decision not to factor Alaska’s minimum wage increase into the arbitration system that sets the price of crab. The North Pacific Fishery Management Council manages fisheries off the coast of Alaska. In 2005, the National Marine Fisheries Service (“NMFS”) implemented a program recommended by the Council to allocate crab resources among harvesters, processors, and coastal communities. Alaska increased the minimum wage, which raised the question of whether costs should be considered under the arbitration system. The Council reviewed the matter at a 2017 meeting where an Assistant Regional Administrator of NMFS and a voting member of the Council, introduced an unsuccessful motion to include costs for consideration in the arbitration system. The court held that on the facts here, the three search terms were not reasonably calculated to uncover all documents relevant to ICE’s request. ICE contended that the government’s choice of search terms was unduly narrow and not reasonably calculated to uncover all documents relevant to its FOIA request. The court held that the government’s choice of search terms was overly narrow. View "INTER-COOPERATIVE EXCHANGE V. USDOC" on Justia Law
CFPB V. CASHCALL, INC.
CashCall made unsecured, high-interest loans to consumers throughout the country, and sought to avoid state usury and licensing laws by using an entity operating on an Indian reservation. The entity issued loan agreements that contained a choice-of-law provision calling for the application of tribal law. The Consumer Financial Protection Bureau brought an action alleging that the scheme was an “unfair, deceptive, or abusive act or abusive practice.” 12 U.S.C. Section 5536(a)(1)(B). The district court held that CashCall violated the Consumer Financial Protection Act (“CFPA”). The court first considered whether the Bureau lacked authority to bring this action because it was unconstitutionally structured. The court found despite the unconstitutional limitation on the President’s authority to remove the Bureau’s Director, the Director’s actions were valid when they were taken. Both the complaint and the notice of appeal were filed while the Bureau was headed by a lawfully appointed Director. The court declined to consider CashCall’s new theory that the Bureau’s structure violated the Appropriations Clause of the Constitution. Next, the court held that the Tribe had no substantial relationship to the transactions, and because there was no other reasonable basis for the parties’ choice of tribal law, the district court correctly declined to give effect to the choice-of-law provision in the loan agreements. The court concluded that from September 2013, the danger that CashCall’s conduct violated the CFPA was so obvious that CashCall must have been aware of it. The court vacated the civil penalty and remanded with instructions that the district court reassess it. View "CFPB V. CASHCALL, INC." on Justia Law
MARSHALL GROSS V. CITIMORTGAGE, INC.
CitiMortgage, Inc. (“CitiMortgage”) erroneously reported that Plaintiff owed a debt that had been “abolished” under Arizona law. After Plaintiff disputed the entry, CitiMortgage continued to report late payments on the debt and mounting interest and late fees. The Ninth Circuit reversed the district court’s summary judgment in favor of CitiMortgage in Plaintiff’s action alleging that CitiMortgage violated the Fair Credit Reporting Act (FCRA), 15 U.S.C. Sections 1681, et seq., by failing to reasonably investigate Plaintiff's dispute concerning a debt that CitiMortgage reported to national credit reporting agencies and by providing inaccurate information to those agencies. The court held that Plaintiff has more than satisfied his burden to make a prima facie showing of inaccurate reporting by establishing as a matter of law that CitiMortgage’s reports were “patently incorrect.” The court further explained that the question is not whether the junior mortgage was entirely “extinguished” by Arizona law, or whether the debt continued to exist; the point is that vis-à-vis Plaintiff, no outstanding balance existed, because the statute abolished his personal liability.The court held that there is a genuine factual dispute about the reasonableness of CitiMortgage’s investigation, and thus left it to the jury to determine the reasonableness. The court wrote that the issue of causation is quintessentially one for the jury and not for this court to decide on appeal. View "MARSHALL GROSS V. CITIMORTGAGE, INC." on Justia Law
Posted in: Consumer Law
SUSAN CLARK V. EDDIE BAUER LLC
Plaintiff bought garments from Eddie Bauer Outlet Stores advertising sales of 40–70% off. The price tags of the garments included two numbers: a higher price, which the parties call a “reference” or “list price,” and a lower “sale” price. Plaintiff paid the “sale” price for the clothes. She alleges that she relied on the representation that she was getting the clothes on sale, but later discovered that the “list prices” were misleading because Eddie Bauer never sold the garments for the “list price” and that the Eddie Bauer Outlet Stores have perpetual sales of 40–70% off.The court concluded that the disposition of this appeal turns on a question of Oregon law: whether a consumer suffers an “ascertainable loss” under Or. Rev. Stat. Sec. 646.638(1) when the consumer purchased a product that the consumer would not have purchased at the price that the consumer paid but for a violation of Or. Rev. Stat. Secs. 646.608(1)(e), (i), (j), (ee), or (u), if the violation arises from a representation regarding the product’s price, comparative price, or price history, but not about the character or quality of the product itself. View "SUSAN CLARK V. EDDIE BAUER LLC" on Justia Law
NICHOLAS SHONER V. CARRIER CORPORATION
Plaintiff filed a class action against air conditioner manufacturer Carrier Corporation alleging that his air conditioner was defective, asserting state law claims and a federal Magnuson-Moss Warranty Act ("MMWA") claim. The court reasoned that although the MMWA is a federal statute, federal courts do not have jurisdiction over an MMWA claim if the amount in controversy is less than $50,000. At issue is whether attorneys’ fees count toward the MMWA’s amount in controversy requirement.The panel held that attorneys’ fees are not “costs” within the meaning of MMWA, and therefore they may be included in the amount in controversy if they are available to prevail plaintiffs pursuant to state fee-shifting statutes.The panel next considered whether Plaintiff could include attorneys’ fees toward the MMWA’s $50,000 jurisdictional threshold. Plaintiff’s MMWA claim was premised on Carrier’s alleged breach of express and implied warranties pursuant to Michigan law. Neither of these statutes grants a prevailing plaintiff attorneys’ fees. The court found that even if this claim was included in his lawsuit, the Act makes clear that attorneys’ fees are not available in a class action. Thus, because Plaintiff brought this claim as part of a putative class action, he is not entitled to attorneys’ fees under state law. View "NICHOLAS SHONER V. CARRIER CORPORATION" on Justia Law