Justia Class Action Opinion Summaries

Articles Posted in Consumer Law
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The New Jersey Supreme Court evaluated a class-action lawsuit brought by shoppers at the retail clothing store Aéropostale against the store's owner and operator, SPARC Group LLC. The plaintiffs alleged that the store used "illusory discounts," offering items at a discounted rate from an original price that was never actually charged. They claimed this practice violated the Consumer Fraud Act (CFA), the Truth in Consumer-Contract, Warranty and Notice Act (TCCWNA), and various common law contract rights.The trial court dismissed the lawsuit, finding that the plaintiffs had not demonstrated an "ascertainable loss," which is a prerequisite for a private cause of action under the CFA. The Appellate Division reversed this decision, contending that the plaintiffs had suffered an ascertainable loss because they received no value for the offered discount.The Supreme Court disagreed with the Appellate Division, ruling that the plaintiffs had not demonstrated an ascertainable loss because they purchased non-defective, conforming goods with no measurable disparity between the product they thought they were buying and what they received. Even though the court found that the store's pricing practices were deceptive and violated the CFA, it held that the plaintiffs' CFA claim failed because they had not demonstrated either a benefit-of-the-bargain loss or an out-of-pocket loss.Since the plaintiffs did not meet the "ascertainable loss" requirement of the CFA, they were also not considered to be "aggrieved consumers" under the TCCWNA, and their common law claims failed. The court reversed the Appellate Division's decision and reinstated the trial court's order dismissing the lawsuit. View "Robey v. SPARC Group, LLC" on Justia Law

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This case revolves around a promotional flyer from a car dealership that led plaintiffs to believe they had won a major prize. Instead, they received a minor prize, leading them to file a class action lawsuit alleging deception. The trial court certified the case as a class action, but the defendants appealed. The Supreme Court of North Carolina found the trial court's certification order internally inconsistent as it used one class definition in its analysis and another when certifying the class.The plaintiffs had brought their claim on behalf of all individuals who received a contest flyer and went to the dealership to claim their prize. However, the trial court's analysis of the certification criteria was based on a narrower definition of the class, specifically those who both called the dealership's hotline and visited the dealership. This inconsistency led the Supreme Court to vacate the order and remand for further proceedings.The Supreme Court further directed the trial court to examine potential conflicts of interest within the class and assess the potential for inefficiencies that could render class certification inappropriate. It emphasized that the class members' potential recovery must exceed the costs of administering a class action for certification to be warranted. View "Surgeon v. TKO Shelby, LLC" on Justia Law

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The case at hand involves a putative class action brought against RAC Acceptance East, LLC, by Shannon McBurnie and April Spruell. The plaintiffs argue that two fees imposed by RAC, operators of retail stores that lease household and electronic items through rent-to-own contracts, violated California consumer protection laws. RAC sought to compel arbitration, citing an arbitration agreement with the plaintiffs. The district court denied RAC's motion, and RAC appealed the decision.RAC argued that a recent Supreme Court decision, Viking River Cruises, Inc. v. Moriana, implicitly abrogated a prior Ninth Circuit decision, Blair v. Rent-A-Center, Inc., which held that RAC's arbitration agreement was unenforceable under California law. The Ninth Circuit disagreed, stating that Viking River was not irreconcilable with Blair, and that Viking River dealt with different claims from those at issue in this case. Therefore, Blair remained binding.RAC also argued that the plaintiffs' claim for public injunctive relief was mooted by a Consent Decree it entered into with the California Attorney General. The court disagreed, stating that the Consent Decree did not address whether the $45 processing fee in this case violates the law, and therefore, the challenge to the fee was not moot.However, RAC contended that the plaintiffs lacked standing to challenge a $1.99 expedited payment fee because Spruell did not actually pay the fee. The court remanded this issue to the district court for further consideration. As a result, the Ninth Circuit affirmed the district court's denial of RAC's motion to compel arbitration in part and remanded the case for further proceedings on the issue of the standing of the plaintiffs to challenge the $1.99 expedited payment fee. View "McBurnie v. RAC Acceptance East, LLC" on Justia Law

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In this case, there were three separate class action lawsuits filed against Costa Del Mar, Inc., a sunglasses manufacturer, for allegedly deceptive warranty and repair policies. Each of the named plaintiffs purchased Costa sunglasses and were charged up to $105.18 to repair their sunglasses, despite the company's lifetime warranties that they claimed required the company to repair their sunglasses either free-of-charge or for a nominal fee. The plaintiffs sought both monetary damages and injunctive relief. The district court approved a settlement agreement that provided over $32 million in monetary relief and injunctive relief. However, the United States Court of Appeals for the Eleventh Circuit vacated this decision, reasoning that the named plaintiffs lacked Article III standing to pursue injunctive relief because none of them alleged any threat of future injury. The court remanded the case back to the district court to reconsider its approval of the settlement agreement, taking into account that it could not consider the injunctive relief's value in its determination that the settlement was fair, reasonable, and adequate. View "Smith v. Miorelli" on Justia Law

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In this case before the United States Court of Appeals for the Third Circuit, the appellant, Paulette Barclift, sued Keystone Credit Services, LLC ("Keystone") for allegedly violating the Fair Debt Collection Practices Act ("FDCPA"). Barclift claimed that Keystone unlawfully communicated her personal information to a third-party mailing vendor, RevSpring, without her consent. She sought to represent a class of similarly situated plaintiffs. The District Court dismissed her suit on the grounds that she did not allege an injury sufficient to establish standing under Article III of the United States Constitution.Upon appeal, the Third Circuit agreed with the lower court that Barclift lacked standing, but modified the District Court's order so that the dismissal would be without prejudice. The court found that Barclift's alleged harm—embarrassment and distress caused by the disclosure of her personal information to a single intermediary (RevSpring)—did not bear a close relationship to a harm traditionally recognized by American courts, such as the public disclosure of private facts. Therefore, the court concluded that Barclift did not suffer a concrete injury and could not establish Article III standing. The court further held that the possibility of future harm was too speculative to establish a concrete injury. The case was dismissed without prejudice, allowing Barclift the opportunity to amend her complaint if she can allege a concrete injury. View "Barclift v. Keystone Credit Services LLC" on Justia Law

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In this case, a group of patients initiated a class action lawsuit against various hospitals and vendors who provide medical record production services to the hospitals. The plaintiffs alleged that the hospitals and vendors were involved in an illegal kickback scheme, where the vendors charged patients excessive prices for their medical records and used the profits to offer free and discounted pages to the hospitals for other types of medical records. The plaintiffs alleged violations of New York Public Health Law (PHL) § 18(2)(e) (which restricts the price that can be charged for medical records), New York General Business Law (GBL) § 349 (which prohibits deceptive business practices), and unjust enrichment. However, the New York Court of Appeals had previously ruled in Ortiz v. Ciox Health LLC that PHL § 18(2)(e) does not provide a private right of action.The United States Court of Appeals for the Second Circuit affirmed the district court's dismissal of all the plaintiffs' claims. It found that the patients' GBL § 349 and unjust enrichment claims were essentially repackaging their PHL § 18(2)(e) claims, and therefore not cognizable as they attempted to circumvent the Ortiz ruling. The court also held that the plaintiffs failed to allege any actionable wrongs independent of the requirements of PHL § 18(2)(e). The court concluded that the plaintiffs failed to state a claim, and as such, the district court did not err in granting the defendants' motions for judgment on the pleadings, in denying the plaintiffs' cross-motion for summary judgment as moot, and in denying the plaintiffs' leave to file a second amended complaint. View "McCracken v. Verisma Systems, Inc." on Justia Law

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The United States Court of Appeals for the Eleventh Circuit considered whether consumers can recover statutory damages under the Fair Credit Reporting Act (FCRA) without proving actual damages caused by a consumer reporting agency's willful violation of the Act. The case was brought by plaintiffs Omar Santos and Amanda Clements on behalf of a class of individuals, against Experian Information Solutions, Inc. The plaintiffs alleged that Experian willfully violated its obligation under the FCRA to ensure consumer credit reports were prepared with maximum possible accuracy, allowing credit reports to reflect inaccurately updated status dates. The district court denied class certification, holding that the FCRA required proof of actual damages.The Eleventh Circuit vacated and remanded the district court's decision, holding that consumers do not need to prove actual damages to recover statutory damages under the FCRA. The court found that the FCRA allows consumers to recover damages of not less than $100 and not more than $1,000 for a willful violation of the Act, regardless of whether they can prove actual damages. The court cited the plain language of the Act, the structure of the statute, and the Act's legislative history in reaching its decision. The court also noted that its interpretation was consistent with the holdings of other circuit courts that have addressed this issue. The case was remanded for further proceedings consistent with this interpretation. View "Santos v. Experian Information Solutions, Inc." on Justia Law

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In a class action lawsuit, plaintiffs accused Eden Creamery, LLC of underfilling its pints of Halo Top ice cream. After the discovery period, the plaintiffs attempted to amend their complaint to include a new theory of liability (fraud by omission) and a new defendant (Wells Enterprises). The district court denied this motion, stating that plaintiffs failed to show good cause for amending their complaint. The plaintiffs then moved to voluntarily dismiss their claims without prejudice, which the district court also denied, instead dismissing the individual claims with prejudice and the class claims without prejudice.On appeal, the United States Court of Appeals for the Ninth Circuit found that the district court did not abuse its discretion in denying the motion to amend the complaint, as the plaintiffs failed to show good cause for amending after the deadline to do so had passed. However, the court found that the district court had abused its discretion by denying the plaintiffs' motion for voluntary dismissal without prejudice, as the defendants did not demonstrate that they would suffer legal prejudice if the case were dismissed without prejudice. The court held that a defendant must show legal prejudice to prevent a dismissal without prejudice. Uncertainty from unresolved disputes or inconvenience of defending another lawsuit does not constitute legal prejudice. The case was remanded with instructions to dismiss the action without prejudice, and the district court was instructed to consider whether any conditions should be imposed on the dismissal, such as an appropriate amount of costs and fees. View "KAMAL V. EDEN CREAMERY, LLC" on Justia Law

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Plaintiff is a resident of California. While present in California, Plaintiff used his iPhone’s Safari browser to navigate to the website of California-based retailer IABMFG to purchase fitness apparel. Although Plaintiff claims he did not know it at the time, IABMFG’s website used software and code from Shopify, Inc. to process customer orders and payments. Shopify, Inc. is a Canadian corporation with its headquarters in Ottawa, Canada. Plaintiff filed a putative class action lawsuit in California alleging that Shopify violated various California privacy and unfair competition laws because it deliberately concealed its involvement in consumer transactions. The district court agreed, dismissing the second amended complaint without leave to amend. Plaintiff timely appealed.   The Ninth Circuit affirmed. For specific jurisdiction to exist over Shopify, Plaintiff’s claim must arise out of or relate to Shopify’s forum-related activities. The panel held that there was no causal relationship between Shopify’s broader business contacts in California and Plaintiff’s claims because these contacts did not cause Plaintiff’s harm. Nor did Plaintiff’s claims “relate to” Shopify’s broader business activities in California outside of its extraction and retention of plaintiff’s data. Because there was an insufficient relationship between plaintiff's claims and Shopify’s broader business contacts in California, the activities relevant to the specific jurisdiction analysis were those that caused Plaintiff’s injuries: Shopify’s collection, retention, and use of consumer data obtained from persons who made online purchases while in California. The panel held that Shopify, which provides nationwide web-based payment processing services to online merchants, did not expressly aim its conduct toward California. View "BRANDON BRISKIN V. SHOPIFY, INC., ET AL" on Justia Law

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Plaintiff, a retail customer, brought a putative class action under the Class Action Fairness Act against clothing retailers The Gap, Inc. and its wholly-owned subsidiary, Old Navy, LLC (“Defendants”). Plaintiff alleged that she purchased numerous products at Old Navy stores and online at discount prices that were deceptively advertised because Defendants did not sell a substantial quantity of these products at the advertised “regular” prices prior to selling them at the advertised “sale” prices. She sought class-wide compensatory damages under the Missouri Merchandising Practices Act (“MMPA”). The district court granted Defendants’ motion to dismiss Plaintiff’s Amended Complaint with prejudice, Plaintiff appealed, arguing that she plausibly pleaded ascertainable loss under Missouri’s benefit-of-the-bargain rule.   The Eighth Circuit affirmed. The court agreed with the district court’s decision to “join a growing number of courts in finding that complaints based solely on a plaintiff’s disappointment over not receiving an advertised discount at the time of purchase have not suffered an ascertainable loss.” Further, the court wrote that Plaintiff’s Amended Complaint also alleged that the actual fair market value of some of the products she purchased “may have even been less than the discounted prices that she paid.” This theory of ascertainable loss does not depend on Defendants’ comparison pricing for the value represented component of the benefit-of-the-bargain rule. Plausible allegations of such immediate injury would satisfy an MMPA plaintiff’s burden to show an ascertainable loss. However, these allegations are based solely on information and belief, which are generally insufficient under Rule 9(b). View "Jill Hennessey v. The Gap, Inc." on Justia Law