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

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

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

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

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

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

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

The Ninth Circuit filed: (1) an order granting a request for publication, withdrawing the mandate, withdrawing a memorandum disposition, and replacing the memorandum disposition with an opinion; and (2) an opinion reversing the district court's grant of summary judgment in favor of the defendant debt collector in an action under the Fair Debt Collection Practices Act (FDCPA) and remanding for further proceedings.The panel agreed with the Eleventh Circuit and held that the FDCPA's bona fide error defense does not allow debt collectors to avoid liability by contractually obligating creditor-clients to provide accurate information, nor by requesting that creditor-clients provide notice of any errors in the accounts assigned for collection without waiting to receive a response before instituting collection efforts. Accordingly, the panel reversed the district court's grant of summary judgment for NBF concluding that NBF was entitled to the defense because it employed a procedure reasonably adapted to avoid errors of the type that occurred in plaintiff's case. Rather, the panel concluded that the two procedures NBF relied upon did little more than evidence an attempt to outsource the duties the FDCPA imposes upon debt collectors. View "Urbina v. National Business Factors Inc." on Justia Law

The Ninth Circuit affirmed the district court's grant of summary judgment for Ocwen in an action brought by plaintiffs, alleging violation of the Fair Credit Reporting Act's prohibition against obtaining a consumer credit report without a permissible purpose. Specifically, plaintiffs alleged that Ocwen willfully violated the FCRA when it obtained credit reports about consumers whose mortgage loans had been discharged in bankruptcy.The panel encouraged courts in this circuit to determine whether the defendant committed a violation of the FCRA before turning to questions of negligence and willfulness. In this case, Ocwen was permitted under 15 U.S.C. 1681b(a)(3)(A) to review plaintiffs' accounts and credit reports to determine whether it could offer them alternatives to foreclosure, and it thus did not violate the Act. Therefore, the issue of willfulness is essentially moot. However, for the sake of completeness, and at the risk of stating the obvious, the panel noted its agreement with the district court that Ocwen did not willfully violate the FCRA. View "Marino v. Ocwen Loan Servicing LLC" on Justia Law

The Ninth Circuit issued (a) an order amending its opinion filed on June 17, 2020, denying the petition for rehearing, and denying on behalf of the court the petition for rehearing en banc; and (b) an amended opinion affirming on different grounds the district court's dismissal of plaintiff's claims for restitution.In this case, plaintiff voluntarily dismissed her sole state law damages claim and chose to proceed with only state law equitable claims for restitution and injunctive relief. Plaintiff did so in an attempt to try the class action as a bench trial rather than to a jury.Pursuant to Erie Railroad Co. v. Tompkins, 304 U.S. 64 (1938), and Guaranty Trust Co. of New York v. York, 326 U.S. 99 (1945), the panel held that federal courts must apply equitable principles derived from federal common law to claims for equitable restitution under California's Unfair Competition Law (UCL) and Consumers Legal Remedies Act (CLRA). The panel explained that state law cannot circumscribe a federal court's equitable powers even when state law affords the rule of decision. The panel held that the district court did not abuse its discretion in denying plaintiff leave to amend her complaint for a third time to reallege the CLRA damages claim. In this case, plaintiff failed to demonstrate that she lacked an adequate legal remedy. View "Sonner v. Premier Nutrition Corp." on Justia Law

Plaintiffs filed a putative class action against pet food manufacturers and others, challenging the marketing of so-called prescription pet food under California's consumer protection laws and federal antitrust law. Plaintiffs alleged that the prescription requirement and advertising lead reasonable consumers falsely to believe that such food has been subject to government inspection and oversight, and has medicinal and drug properties, causing consumers to pay more or purchase the product when they otherwise would not have.The Ninth Circuit reversed the district court's dismissal of plaintiffs' claims under California's Unfair Competition Law, False Advertising Law, and Consumer Legal Remedies Act for failure to state a claim. The panel held that the district court erred in dismissing the California state law consumer protection claims, because plaintiffs have sufficiently alleged a deceptive practice under the reasonable consumer test. The panel also held that plaintiffs' complaint satisfies the Federal Rule of Civil Procedure 9(b) heightened pleading standard in alleging fraud. In this case, plaintiffs alleged sufficient facts to show that prescription pet food and other pet food were not materially different. Finally, the panel held that plaintiffs alleged sufficient reliance based on the word "prescription" and the "Rx" symbol. View "Moore v. Mars Petcare US, Inc." on Justia Law