Justia U.S. 9th Circuit Court of Appeals Opinion SummariesArticles Posted in Consumer Law
Cohen v. ConAgra Brands, Inc.
The district court dismissed a putative class action challenge to ConAgra’s poultry labels and its website advertising, alleging that ConAgra falsely advertised its frozen chicken products as natural and preservative-free, when in fact they contain synthetic ingredients. The court found the claims preempted by the federal Poultry Products Inspection Act (PPIA), 21 U.S.C. 467e, under which the U.S. Department of Agriculture’s Food Safety and Inspection Service’s (FSIS) had approved ConAgra’s poultry labels.The Ninth Circuit reversed in part; the mere existence of the label was insufficient to establish that it was reviewed and approved by FSIS. Preemption is an affirmative defense, and when the parties dispute whether review occurred at all, the defendant must produce evidence that the label was reviewed and approved by FSIS. If the evidence on remand shows that ConAgra’s label was approved by FSIS, then the claims are preempted. The plaintiff may not assert that FSIS’s approval decision was wrong. ConAgra’s website representations were not reviewed by FSIS. The label and the website were not materially identical. A challenge to that part of the website’s representation that was materially different from the representations on the label is not preempted. The court rejected an argument under the primary jurisdiction doctrine, a prudential doctrine under which courts may determine that the initial decision-making responsibility should be performed by the relevant agency rather than the courts. View "Cohen v. ConAgra Brands, Inc." on Justia Law
Loyhayem v. Fraser Financial & Insurance Services, Inc.
Loyhayem filed suit under the Telephone Consumer Protection Act (TCPA), 47 U.S.C. 227(b)(1)(A)–(B), which prohibits robocalls to cellphones except for emergency purposes or with the prior express consent of the called party. Loyhayem received a call to his cell phone that left a pre-recorded voicemail message: Hi, this is Don with Fraser Financial... I recently saw your industry experience and I wanted to let you know that we’re looking to partner with select advisors ... I thought you might be a fit.” Loyhayem characterized this call as a “job recruitment call,” and alleged that it was made using an automated telephone dialing system and an artificial or pre-recorded voice and that he did not expressly consent to calls from Fraser.The district court dismissed Loyhayem’s suit, holding that the TCPA and the implementing regulation do not prohibit job-recruitment robocalls. The court read the Act as prohibiting robocalls to cell phones only when the calls include an “advertisement” or constitute “telemarketing,” as those terms have been defined by the FCC. The Ninth Circuit reversed. The statute prohibits in plain terms “any call,” regardless of content, that is made to a cell phone using an automatic telephone dialing system or an artificial or pre-recorded voice. Loyhayem adequately alleged that the call he received was not made for emergency purposes and that he did not expressly consent to it. View "Loyhayem v. Fraser Financial & Insurance Services, Inc." on Justia Law
Moore v. Trader Joe’s Co.
The Ninth Circuit affirmed the district court's Federal Rule of Civil Procedure 12(b)(6) dismissal of a putative consumer class action alleging that Trader Joe's misleadingly labeled its store brand honey as "100% New Zealand Manuka Honey." The district court agreed with Trader Joe's that its product is 100% honey whose chief floral source is Manuka, and that no reasonable consumer would believe that it was marketing a product that is impossible to create.The panel concluded that the district court did not err in determining that Trader Joe's Manuka Honey labeling would not mislead a reasonable consumer as a matter of law. In this case, the district court based much of its decision on the FDA's Honey Guidelines, which set the standards for the proper labeling of honey and honey products. The panel stated that Trader Joe's meets this standard. The panel also concluded that the district court properly held that Trader Joe's representation of "Manuka Honey" as the sole ingredient on its ingredient statement was not misleading as a matter of law. Therefore, plaintiffs have not alleged, and cannot allege, facts to state a plausible claim that Trader Joe's Manuka Honey is false, deceptive, or misleading. View "Moore v. Trader Joe's Co." on Justia Law
Stafford v. Rite Aid Corp.
Stafford used his third-party insurance coverage to purchase prescription drugs from Rite Aid’s pharmacies. Rite Aid submits a claim for a prescription drug to an insurance company through a “pharmacy benefits manager” (PBM). The claim form that Rite Aid submits includes the “usual and customary” price of the relevant prescription drug.Stafford brought a class action, alleging that Rite Aid fraudulently inflated the reported prices of prescription drugs, which resulted in class members paying Rite Aid a higher co-payment for the drugs than they would have paid if Rite Aid had reported the correct price. After litigating several motions to dismiss, Rite Aid moved to compel arbitration. Although Rite Aid and Stafford had no contract between them containing an arbitration clause, Rite Aid did have such contracts with the PBMs who coordinated insurance reimbursements and co-payment calculations.The Ninth Circuit affirmed the denial of the motion to compel arbitration. Under California law, Stafford’s claims did not depend on Rite Aid’s contractual obligations to the PBMs. Consequently, equitable estoppel did not apply to bind Stafford to the arbitration agreements in those contracts. View "Stafford v. Rite Aid Corp." on Justia Law
Consumer Financial Protection Bureau v. Seila Law LLC
The Ninth Circuit filed an order (1) amending its December 29, 2020, opinion issued on remand from the United States Supreme Court; and (2) denying on behalf of the court a sua sponte request for rehearing en banc. The panel reaffirmed the district court's order granting the CFPB's petition to enforce Seila Law LLC's compliance with the Bureau's civil investigative demand (CID) requiring the firm to produce documents and answer interrogatories. The amendments reflected that two of the panel's citations were to the plurality portion of the Supreme Court opinion.The panel held that the CID was validly ratified, but that there was no need to decide whether the ratification occurred through the actions of Acting Director Mulvaney. After the Supreme Court's ruling, the CFPB's current Director, Kathleen Kraninger, expressly ratified the agency's earlier decisions. Furthermore, at the time that she ratified these decisions, Director Kraninger knew that the President could remove her with or without cause. Therefore, the ratification remedied any constitutional injury that Seila Law may have suffered due to the manner in which the CFPB was originally structured. Seila Law advances two arguments challenging the validity of Director Kraninger's ratification, neither of which the panel found persuasive. For the reasons given in its earlier decision, the panel rejected Seila Law's arguments challenging the CFPB's statutory authority to issue the CID. View "Consumer Financial Protection Bureau v. Seila Law LLC" on Justia Law
Kaiser v. Cascade Capital, LLC
The Ninth Circuit reversed the district court's dismissal, based on failure to state claim, of an action brought by plaintiff, alleging that defendant violated the Fair Debt Collection Practices Act (FDCPA) by sending a collection letter threatening litigation over time-barred debt and filing a lawsuit seeking to collect time-barred debt.The panel held that the FDCPA prohibits filing or threatening to file a lawsuit to collect debts that were defaulted on so long ago that a suit would be outside the applicable statute of limitations. The panel explained that the FDCPA's prohibitions regarding such "time-barred debts" apply even if it was unclear at the time a debt collector sued or threatened suit whether a lawsuit was time barred under state law. In this case, plaintiff's debt was time barred under Oregon's four-year statute of limitations for sale-of-goods contracts, and thus plaintiff stated a claim for relief under the FDCPA.However, Cascade may nonetheless be able to avoid liability through the FDCPA's affirmative defense for bona fide errors. The panel held that a mistake about the time-barred status of a debt under state law could qualify as a bona fide error within the meaning of the FDCPA. The panel left it to the district court to consider in the first instance whether a bona fide error defense, if raised on remand, could succeed in this case. View "Kaiser v. Cascade Capital, LLC" on Justia Law
Leigh-Pink v. Rio Properties, LLC
The Ninth Circuit certified the following question to the Supreme Court of Nevada: For purposes of a fraudulent concealment claim, and for purposes of a consumer fraud claim under NRS 41.600, has a plaintiff suffered damages if the defendant’s fraudulent actions caused the plaintiff to purchase a product or service that the plaintiff would not otherwise have purchased, even if the product or service was not worth less than what the plaintiff paid? View "Leigh-Pink v. Rio Properties, LLC" on Justia Law
Greenberg v. Target Corp.
To fight his hair loss, Greenberg bought an $8 bottle of biotin. The product label states that biotin “helps support healthy hair and skin” and has an asterisk that points to a disclaimer: “This statement has not been evaluated by the Food and Drug Administration. This product is not intended to diagnose, treat, cure, or prevent any disease.” A Supplement Facts panel on the bottle states that the biotin amount in the product far exceeds the recommended daily dosage. Greenberg filed a putative class action under California’s Unfair Competition Law, alleging that the labels are deceptive because most people do not benefit from biotin supplementation.The panel affirmed summary judgment in favor of the manufacturer and distributors. The plaintiff’s state law claims were preempted by the federal Food, Drug, and Cosmetic Act (FDCA), under which the FDA requires that dietary supplement labels be truthful and not misleading; 21 U.S.C. 343(r)(6)(B) authorizes several categories of statements, including disease claims and structure/function claims. The FDCA includes a preemption provision to establish a national, uniform standard for labeling. The challenged statement was a permissible structure/function claim. There was substantiation that biotin “helps support healthy hair and skin”; that statement was truthful and not misleading. The label had the appropriate disclosures and did not claim to treat diseases. The state law claims amounted to imposition of different standards from the FDCA. View "Greenberg v. Target Corp." on Justia Law
McGee v. S-L Snacks National
The Ninth Circuit affirmed the district court's dismissal for lack of constitutional Article III standing of a putative class action brought by a plaintiff, a consumer of Pop Secret popcorn. Plaintiff contends that Diamond engaged in unfair practices, created a nuisance, and breached the warranty of merchantability by including partially hydrogenated oils (PHOs) as an ingredient in Pop Secret. Plaintiff also alleges that PHOs, the primary dietary source of industrially produced trans fatty acids (also known as artificial trans fat), are an unsafe food additive that causes heart disease, diabetes, cancer, and other ailments. The panel held that plaintiff has not plausibly alleged that, as a result of her purchase and consumption of Pop Secret, she suffered economic or immediate physical injury, or that she was placed at substantial risk of adverse health consequences. Therefore, the district court properly dismissed the action based on lack of standing. View "McGee v. S-L Snacks National" on Justia Law
Manikan v. Peters & Freedman, LLP
The Ninth Circuit reversed the district court's grant of summary judgment for defendants in an action brought by plaintiff under the Fair Debt Collection Practices Act (FDCPA). Plaintiff alleged that P&F violated the FDCPA by attempting to collect a debt that was no longer owed and that P&F's agent, AAS, violated the FDCPA in attempting to collect the debt.Walls v. Wells Fargo Bank, N.A., 276 F.3d 502 (9th Cir. 2002), precludes claims under the FDCPA. The panel held that Walls does not extend to this circumstance because plaintiff's FDCPA claims are based on the wholly independent ground of full payment, rather than being premised on a violation of the discharge order. View "Manikan v. Peters & Freedman, LLP" on Justia Law