Justia Civil Procedure Opinion Summaries

Anastasia Wullschleger sued Royal Canin U.S.A., Inc. in state court, alleging deceptive marketing practices. Her original complaint included both federal and state law claims. Royal Canin removed the case to federal court based on the federal claims, which allowed the federal court to exercise supplemental jurisdiction over the state claims. Wullschleger then amended her complaint to remove all federal claims and requested the case be remanded to state court.The District Court denied Wullschleger’s request to remand the case. However, the Eighth Circuit Court of Appeals reversed this decision, concluding that the amended complaint, which no longer contained any federal claims, eliminated the basis for federal-question jurisdiction. Consequently, the federal court also lost its supplemental jurisdiction over the state-law claims.The Supreme Court of the United States reviewed the case and held that when a plaintiff amends her complaint to delete the federal-law claims that enabled removal to federal court, the federal court loses supplemental jurisdiction over the remaining state-law claims. The case must then be remanded to state court. The Court affirmed the Eighth Circuit’s decision, emphasizing that the jurisdictional analysis must be based on the amended complaint, which in this case contained only state-law claims. View "Royal Canin U.S.A. v. Wullschleger" on Justia Law

Robert Gallagher borrowed money from Santander Consumer USA to purchase a car. After making the final payment via electronic funds transfer, Santander, following its standard practice, waited 15 days before sending the car title. Missouri law requires lienholders to release their lien within five business days after receiving full payment, including electronic funds transfers, or pay liquidated damages. Gallagher filed a lawsuit in Missouri state court on behalf of a potential class of borrowers affected by Santander's 15-day policy.The case was removed to the United States District Court for the Eastern District of Missouri, which granted summary judgment in favor of Santander. Gallagher appealed the decision, seeking to reverse the summary judgment.The United States Court of Appeals for the Eighth Circuit reviewed the case. The court focused on whether Gallagher had standing to bring the case in federal court, specifically whether he had suffered an injury-in-fact. The court determined that Gallagher had not identified a concrete harm resulting from the delay in receiving the car title. The court noted that a statutory violation alone is insufficient for standing; there must be a concrete harm related to the violation. Gallagher did not demonstrate any monetary harm, such as a failed sale or impaired credit rating, nor did he show any ongoing injury to his property rights.The Eighth Circuit concluded that Gallagher lacked standing because he did not suffer a concrete injury. As a result, the court vacated the district court's judgment and instructed the district court to remand the case to state court. View "Gallagher v. Santander Consumer USA, Inc." on Justia Law

Linda Thompson filed a putative class action against the Army and Air Force Exchange Service (the "Exchange") in Illinois state court, alleging that the Exchange printed her credit card’s expiration date on purchase receipts, violating the Fair and Accurate Credit Transactions Act (FACTA). The Exchange removed the case to federal court under 28 U.S.C. § 1442(a)(1), which allows federal agencies to remove cases to federal court. Thompson moved to remand the case to state court, arguing lack of Article III standing, while the Exchange moved to dismiss under Federal Rule of Civil Procedure 12(b)(1).The United States District Court for the Southern District of Illinois denied Thompson’s motion to remand and granted the Exchange’s motion to dismiss for lack of subject matter jurisdiction. The court held that the Exchange, as a federal entity, could remove the case without asserting a colorable federal defense and had an absolute right to litigate in federal court.The United States Court of Appeals for the Seventh Circuit reviewed the case. The court agreed that the Exchange did not need to present a federal defense to remove the case. However, it found that the district court erred in dismissing the suit. The Seventh Circuit held that under 28 U.S.C. § 1447(c), when a federal court lacks subject matter jurisdiction over a removed case, it must remand the case to state court. The court noted that Thompson’s lack of Article III standing did not preclude state court jurisdiction, as state courts are not bound by Article III constraints. Consequently, the Seventh Circuit vacated the district court’s judgment and remanded the case with instructions to remand it to state court. View "Thompson v Army and Air Force Exchange Service" on Justia Law

Plaintiffs filed two class action complaints against Experian Information Solutions, Inc. in Orange County Superior Court, alleging violations of the Fair Credit Reporting Act (FCRA). They claimed that Experian failed to include a required statement in the "Summary of Rights" portion of their consumer reports, which informs consumers of additional rights under state law. Plaintiffs sought actual, statutory, and punitive damages. Experian removed the cases to federal court, where Plaintiffs argued they lacked standing under Article III of the U.S. Constitution because they did not suffer concrete harm. The federal court agreed and remanded the cases back to state court.In state court, Experian moved for judgment on the pleadings, arguing that Plaintiffs lacked standing under Wisconsin law and that their FCRA claim did not fall within the "zone of interests" the FCRA is designed to protect. Plaintiffs contended that California law should apply and that they had standing under California law. The trial court granted Experian's motion, relying on the precedent set by Limon v. Circle K Stores Inc., which held that a plaintiff must allege a concrete injury to have standing in California state courts. Plaintiffs appealed the decision.The California Court of Appeal, Fourth Appellate District, reviewed the case and affirmed the trial court's judgment. The court found Limon persuasive and concluded that Plaintiffs lacked standing because they did not allege a concrete or particularized injury. The court held that an informational injury without adverse effects is insufficient to confer standing under California law. Therefore, the judgment in favor of Experian was affirmed. View "Muha v. Experian Information Solutions" on Justia Law

The San Diego City Attorney filed a complaint against Experian Data Corp. on March 6, 2018, alleging a violation of the Unfair Competition Law (UCL) due to Experian's failure to promptly notify consumers of a data breach as required by Civil Code section 1798.82(a). The complaint sought civil penalties and injunctive relief. Experian demurred, arguing the claim was barred by the four-year statute of limitations. The trial court overruled the demurrer and denied summary judgment motions from both parties, finding the discovery rule could apply to delay the accrual of the claim.The trial court later granted Experian's motion in limine to exclude evidence of civil penalties, concluding the discovery rule did not apply to the UCL claim because it was a non-fraud claim and an enforcement action seeking civil penalties. The court also denied the City Attorney's motion for reconsideration and motion to file a Third Amended Complaint. The parties then stipulated to dismiss the entire complaint, and the City Attorney appealed.The California Court of Appeal, Fourth Appellate District, Division Three, reviewed the case and concluded that the discovery rule could apply to delay the accrual of the UCL claim. The court found that the nature of the claim, the enforcement action seeking civil penalties, and the involvement of a governmental entity did not preclude the application of the discovery rule. The court reversed the trial court's orders granting Experian's motion in limine and denying reconsideration, and remanded the case for further proceedings to determine when the UCL claim accrued based on the actual or constructive knowledge of the relevant actors. The court also vacated the order denying the City Attorney's request to file a Third Amended Complaint. View "P. v. Experian Data Corp." on Justia Law

Donald Fleming filed a lawsuit against Caribou Creek Log Homes, Inc. and North Idaho Insulation, LLC, alleging that spray foam insulation installed by North Idaho Insulation caused significant structural damage to his residence in Montana. Fleming's claims included negligence, violations of residential construction defect statutes, the Montana Consumer Protection Act, and breach of warranties. North Idaho Insulation then filed a third-party complaint against Southwest Distributing Co. (Southwest), alleging that Southwest manufactured and sold the defective spray foam insulation and seeking indemnification and contribution.The Montana Nineteenth Judicial District Court denied Southwest's motion to dismiss for lack of personal jurisdiction, concluding that it had specific personal jurisdiction over Southwest under Montana Rule of Civil Procedure 4(b)(1). Southwest then petitioned the Montana Supreme Court for a writ of supervisory control, arguing that the District Court erred in its jurisdictional ruling.The Montana Supreme Court reviewed the case and determined that the District Court erred in concluding it had specific personal jurisdiction over Southwest. The Supreme Court found that Southwest did not transact business in Montana related to the claims and that the claims did not arise from Southwest's activities in Montana. Additionally, the Court held that the stream-of-commerce theory did not apply, as Southwest did not purposefully direct its activities toward Montana. Consequently, the Supreme Court granted the petition for a writ of supervisory control, reversed the District Court's order, and remanded the case for further proceedings consistent with its opinion. View "Southwest v. 19th Judicial Dist." on Justia Law

Plaintiff John Doe filed a class action lawsuit against Integris Health, Inc., alleging that Integris collected confidential health information from its website visitors and unlawfully shared it with third parties like Google and Facebook. Doe's complaint, filed in Oklahoma state court, asserted state law claims including negligence, invasion of privacy, and breach of fiduciary duty. Integris removed the case to federal court under the federal officer removal statute, claiming it was acting under the direction of a federal officer by helping the federal government achieve its objective of ensuring patient access to electronic health records (EHR).The United States District Court for the Western District of Oklahoma remanded the case to state court, concluding that Integris had not demonstrated it was "acting under" the direction of a federal officer. The court found that Integris was merely complying with federal regulations, which is insufficient to establish federal officer jurisdiction.The United States Court of Appeals for the Tenth Circuit reviewed the case and affirmed the district court's decision. The Tenth Circuit held that Integris was not "acting under" a federal officer because it was only complying with federal regulations and not fulfilling a basic government task. The court emphasized that compliance with federal law, even if highly detailed and supervised, does not equate to acting under a federal officer. The court also noted that Integris's use of tracking technology on its website was not required by the federal government and was not part of any federal directive. Therefore, the court concluded that removal under the federal officer removal statute was improper. View "Doe v. Integris Health" on Justia Law

Maritza Zavala filed a lawsuit against Hyundai Motor America (HMA) under the Song-Beverly Consumer Warranty Act, alleging that HMA failed to honor its warranty obligations for a vehicle she purchased in 2016. After prevailing at trial, Zavala was awarded $23,122.44 in damages. The trial court also granted Zavala’s motion for attorney fees and ruled on the parties’ competing motions to tax costs, resulting in a judgment in favor of Zavala for $276,104.61 in attorney fees and costs.The trial court concluded that HMA’s offer to compromise under Code of Civil Procedure section 998 was invalid for cost shifting because it contained two options: a $65,000 payment and a statutory option that was deemed too vague. The court found that the statutory option lacked specificity, making the entire offer invalid.The Court of Appeal, Fourth Appellate District, Division One, State of California, reviewed the case. It determined that the $65,000 option was sufficiently specific and certain to trigger cost shifting under section 998, even though the statutory option was not. The appellate court concluded that the trial court erred by not separately considering the validity of the two options. The appellate court reversed the trial court’s orders on Zavala’s motion for attorney fees and the parties’ motions to tax costs, as well as the judgment based on those orders. The case was remanded for further proceedings consistent with the appellate court’s opinion. The parties were ordered to bear their own costs on appeal. View "Zavala v. Hyundai Motor America" on Justia Law

Steven Fustolo purchased a rental investment unit in Boston, Massachusetts, in 2009, taking out a mortgage with Mortgage Electronic Registration Systems, Inc. (MERS) as nominee for Union Capital Mortgage Business Trust. The mortgage was reassigned six times, and Fustolo defaulted on the loan. He sought a declaratory judgment that the current holders, Federal Home Loan Mortgage Corporation as Trustee of SCRT 2019-2 (the Trust) and Select Portfolio Servicing, Inc. (SPS), had no right to foreclose because they did not validly hold the mortgage or the accompanying promissory note. Fustolo also claimed defamation, slander of title, unfair business practices, violation of Massachusetts's Debt Collection Act, and a violation of Regulation X of the Real Estate Settlement Procedures Act (RESPA) by SPS.The United States District Court for the District of Massachusetts dismissed Fustolo's claims, except for one count challenging the adequacy of a notice letter, which was later settled. The court found that the Trust validly held both the mortgage and the note, and that Fustolo's state law claims hinged on the incorrect assertion that the Trust did not have the right to foreclose. The court also dismissed the RESPA claim, stating that Fustolo failed to specify which provision of RESPA was violated and that SPS had responded to his notice of error.The United States Court of Appeals for the First Circuit affirmed the district court's dismissal. The appellate court held that the Trust validly held the mortgage and the note, as the note was indorsed in blank and in the Trust's possession. The court also found that MERS had the authority to assign the mortgage despite Union Capital's dissolution. Additionally, the court ruled that Fustolo's RESPA claim failed because challenges to the merits of a servicer's evaluation of a loss mitigation application do not relate to the servicing of the loan and are not covered errors under RESPA. View "Fustolo v. Select Portfolio Servicing, Inc." on Justia Law

The case involves Andris Pukke, Peter Baker, and John Usher, who were found liable for violations of the Federal Trade Commission Act, the Telemarketing Sales Rule, and a permanent injunction from a prior fraud case. They were involved in a real estate scam, selling lots in a development called "Sanctuary Belize" through deceptive practices. The district court issued an equitable monetary judgment of $120.2 million for consumer redress, imposed an asset freeze, and appointed a receiver.The United States District Court for the District of Maryland found the defendants liable after a bench trial and issued permanent injunctions against them. The court also held them in contempt for violating a prior judgment in a related case, ordering them to pay the same $120.2 million in consumer redress. The defendants appealed, and the United States Court of Appeals for the Fourth Circuit affirmed the district court's decision, except for vacating the monetary judgment to the extent it relied on FTC Act Section 13(b).The United States Court of Appeals for the Fourth Circuit reviewed the case and affirmed the district court's decision to maintain the receivership and asset freeze. The court held that the receivership and asset freeze were necessary to effectuate the injunctive relief and ensure that the defendants did not continue to profit from their deceptive practices. The court also found that the contempt judgment supported maintaining the receivership and asset freeze until the judgment was satisfied. The court emphasized the defendants' history of deceptive conduct and the need for a professional receiver to manage and distribute the assets to defrauded consumers. The judgment was affirmed. View "Federal Trade Commission v. Pukke" on Justia Law