Justia Civil Procedure Opinion Summaries

Under the Rosenthal Fair Debt Collection Practices Act (the Rosenthal Act or the Act), a debt collector may not “collect or attempt to collect a consumer debt by means of judicial proceedings when the debt collector knows that service of process, where essential to jurisdiction over the debtor or his property, has not been legally effected.” The trial court found that Defendant (Collect Access) violated this law in its efforts to collect a default judgment against Plaintiff. The court set aside the underlying judgment on equitable grounds, awarded Plaintiff statutory damages and attorney fees, and ordered Collect Access to repay the amount it had collected from Plaintiff as restitution. Collect Access appealed from both the trial court’s judgment (case No. B318325) and its order awarding attorney fees (case No. B321996).   The Second Appellate District affirmed. The court held that substantial evidence supports the trial court’s finding that Collect Access is a debt collector under the Act. Further, the litigation privilege does not apply to Collect Access’s conduct. Moreover, Section 1788.15 does not require actual knowledge of no effective service of process. it is irrelevant that no court had declared the judgment against Plaintiff void. Additionally, the trial court did not err by finding collect access liable under the unfair competition law. Finally, the court found that the attorney fees award was not an abuse of discretion. View "Minser v. Collect Access, LLC" on Justia Law

Nevada enacted Senate Bill 248 (“S.B. 248”), Act of June 2, 2021, ch. 291, 2021 Nev. Stat. 1668, in response to the COVID-19 pandemic. S.B. 248 requires debt collectors to provide written notification to debtors 60 days before taking any action to collect a medical debt. Plaintiffs are entities engaged in consumer debt collection. They filed suit in district court against Defendant, Commissioner of the Financial Institutions Division of Nevada’s Department of Business and Industry, bringing a facial challenge to the law. They moved for a temporary restraining order and a preliminary injunction, contending that S.B. 248 is unconstitutionally vague, violates the First Amendment and is preempted by both the federal Fair Credit Reporting Act (“FCRA”) and the Fair Debt Collection Practices Act (“FDCPA”). The district court denied Plaintiffs’ motion for a temporary restraining order and a preliminary injunction. Plaintiffs timely appealed the denial of the preliminary injunction.   The Ninth Circuit affirmed on the grounds that Plaintiffs failed to show a likelihood of success on the merits of their claims. The panel first rejected Plaintiffs’ claim that the term “action to collect a medical debt” in S.B. 248 was unconstitutionally vague, noting that the implementing regulations set forth examples of actions that do, and do not, constitute actions to collect a medical debt. The panel held that: S.B. 248 regulates commercial speech and therefore is not subject to strict scrutiny; communications to collect a medical debt “concerned lawful activity” and were not “inherently misleading.” The panel next rejected Plaintiffs’ argument that the FCRA expressly preempts S.B. 248 under 15 U.S.C. Section 1681t(b)(1)(F). View "AARGON AGENCY, INC., ET AL V. SANDY O'LAUGHLIN" on Justia Law

Plaintiffs are the legal representatives and family members of two individuals killed using guns that had been listed on armslist.com, an online firearms marketplace. Plaintiffs each sued Armslist LLC and its member manager, Jonathan Gibbon, in separate diversity actions, alleging negligence and other Wisconsin state law claims. Plaintiffs asserted that Defendants designed the website to encourage and assist individuals in circumventing federal and state law regulating firearms. Defendants argued that Plaintiffs have failed to state a claim upon which relief can be granted because publishing third-party offers to sell firearms does not establish tort or other liability under Wisconsin law. The district court dismissed the negligence claim in both cases, concluding that Plaintiffs failed to plausibly allege the website’s design caused the deaths. The remaining claims were also dismissed, and Gibbon was dismissed from the lawsuit for lack of personal jurisdiction.   The Seventh Circuit reversed the decision in Webber that personal jurisdiction exists over Gibbon. Further, the court wrote that because Plaintiffs have failed to state a claim upon which relief can be granted, it affirmed the dismissal in each case. The court explained that Plaintiffs have not alleged an act or omission occurring within the state or solicitation or service activities outside of the state by Gibbon that would bring him within the grasp of Wisconsin’s long-arm statute. Moreover, the court wrote that Plaintiffs have failed to plausibly plead that the deaths would not have occurred but for Armslist LLC’s failure to permit users to flag illegal conduct. View "Richard Webber v. Armslist, LLC" on Justia Law

The Consumer Financial Protection Bureau (“CFPB”) is not exempt from the rules of discovery. Nonetheless, the CFPB tried to bring a wide-ranging civil lawsuit against 18 defendants without ever being deposed. When the district court ordered the CFPB to sit for Rule 30(b)(6) depositions, the CFPB doubled down by engaging in dramatic abuse of the discovery process. The district court imposed sanctions for this misconduct. On appeal, the CFPB maintains that it behaved properly.   The Eleventh Circuit affirmed, concluding that violating the district court’s clear orders and derailing multiple depositions is nowhere near proper conduct. The court explained that the CFPB was determined to avoid 30(b)(6) depositions. To realize its goal, the CFPB employed tactics that the district court repeatedly forbade. As such, the CFPB clearly violated Rule 37(b), and severe sanctions were warranted. The court, therefore, held that the district court’s sanctions order dismissing the CFPB’s claims against the five appellees was not an abuse of discretion. View "Consumer Financial Protection Bureau v. Check & Credit Recovery, LLC, et al" on Justia Law

Plaintiff contended that P&G’s packaging “represents that the Products are natural, when, in fact, they contain nonnatural and synthetic ingredients, harsh and potentially harmful ingredients, and are substantially unnatural.” Plaintiff stated that if he had known when he purchased them that the products were not “from nature or otherwise natural,” he would not have purchased the products or paid a price premium for the products. Plaintiff asserted claims under California’s Unfair Competition Law (“UCL”), California’s False Advertising Law (“FAL”), and California’s Consumers Legal Remedies Act (“CLRA”).   The Ninth Circuit affirmed the district court’s Fed. R. Civ. P. 12(b)(6) dismissal of Plaintiff’s action alleging that P&G violated California consumer protection laws by labeling some of its products with the words “Nature Fusion” in bold, capitalized text, with an image of an avocado on a green leaf. The panel held that there was some ambiguity as to what “Nature Fusion” means in the context of its packaging, and it must consider what additional information other than the front label was available to consumers of the P&G products. Here, the front label containing the words “Nature Fusion” was not misleading— rather, it was ambiguous. Upon seeing the back label, it would be clear to a reasonable consumer that avocado oil is the natural ingredient emphasized in P&G’s labeling and marketing. With the entire product in hand, the panel concluded that no reasonable consumer would think that the products were either completely or substantially natural. The survey results did not make plausible the allegation that the phrase “Nature Fusion” was misleading. View "SEAN MCGINITY V. THE PROCTER & GAMBLE COMPANY" on Justia Law

Plaintiff’s employee opened, in Plaintiff’s name, a credit card with Chase and ran up tens of thousands of dollars in debt. The employee also illegally accessed Plaintiff’s bank accounts and used them to partially pay off the monthly statements. When she discovered the scheme, Plaintiff reported the fraud to Chase, but Chase refused to characterize the charges as illegitimate. Plaintiff sued Chase under the Fair Credit Reporting Act for not conducting a reasonable investigation into her dispute. The district court granted summary judgment for Chase because it concluded that Chase’s investigation into Plaintiff’s dispute was “reasonable,” as the Act requires.   The Eleventh Circuit affirmed, holding that Plaintiff hasn’t shown a genuine dispute of fact whether Chase’s conclusion was unreasonable as a matter of law. The court explained that Chase didn’t need to keep investigating. Nor has Plaintiff explained what Chase should have done differently: whom it should have talked to or what documents it should have considered that might have affected its apparent-authority analysis. That omission dooms Plaintiff’s claim because “a plaintiff cannot demonstrate that a reasonable investigation would have resulted in the furnisher concluding that the information was inaccurate or incomplete without identifying some facts the furnisher could have uncovered that establish that the reported information was, in fact, inaccurate or incomplete.” View "Shelly Milgram v. Chase Bank USA, N.A., et al" on Justia Law

In March 2020, The Vail Corporation and Vail Resorts, Inc. (collectively, “Vail”) closed its ski resorts and did not reopen them until the start of the 2020–2021 ski season. Plaintiffs-Appellants (“Passholders”) were a group of skiers and snowboarders who purchased season passes from Vail to access its resorts during the 2019–2020 ski season. Passholders, on behalf of themselves and a class of similarly situated individuals, brought contractual, quasi-contractual, and state consumer protection law claims based on Vail’s decision to close due to the COVID-19 pandemic without issuing refunds to Passholders. The district court granted Vail’s Federal Rule of Civil Procedure 12(b)(6) motion to dismiss all of Passholders’ claims for failure to state a claim. Passholders appealed, arguing the district court erred in its interpretation of their contracts with Vail. Although it did not agree with the district court’s interpretation of “2019–2020 ski season,” the Tenth Circuit concurred with the ultimate conclusion that Passholders failed to state a contractual claim. Passholders sought only one form of relief in their complaint, but they purchased passes under the condition that the passes were not eligible for refunds of any kind. Recognizing that Passholders might amend their breach of contract and breach of warranty claims to seek other forms of relief, the Tenth Circuit vacated the dismissal of these two claims with prejudice and remanded for the district court to modify its judgment to a dismissal without prejudice. As with Passholders’ breach of contract and breach of warranty claims, the Court concluded the district court correctly dismissed Passholders’ consumer protection claims. Recognizing Passholders could refile these claims to seek an alternative remedy, the Tenth Circuit vacated the district court’s dismissal of Passholders’ state consumer protection law claims with prejudice so the district court could modify its dismissal of these six claims to be without prejudice. View "McAuliffe, et al. v. Vail Corporation" on Justia Law

The Supreme Court affirmed the judgment of the district court denying Exile Brewing Company's attempt to intervene in the underlying probate matter and striking Exile's motion to vacate, dismiss, and close two estates seeking to pursue certain claims, holding that the probate court did not err in denying the request to intervene and close the estates.During the 1950s and '60s, Ruth Bisignano owned and operated a popular bar in Des Moines. In 2012, Exile named one of its craft beers "Ruthie" and used Ruth's image. Ruthie died in 1993, and her estate was closed that year. Her husband Frank Bisignano died three years later, and his estate was closed in 1999. In 2020, Plaintiff successfully filed petitions to reopen both estates. Subsequently, as administrator of Frank's estate, Plaintiff sued Exile alleging common law appropriation and other claims. Exile filed a motion to vacate, dismiss, and close both estates, arguing that the probate court lacked statutory jurisdiction to reopen the estates. The probate court denied the motion, concluding that Exile had no right to intervene in the probate proceedings. The Supreme Court affirmed, holding that the probate court correctly determined that Exile was an interloper with no ability to challenge the estates' reopening. View "In re Estate of Bisignano" on Justia Law

Ring manufactures and sells home security and smart home devices including video doorbells, security cameras, and alarms. The plaintiffs purchased video doorbell and security camera products from Ring and subsequently filed a class action complaint against Ring asserting claims under the Consumer Legal Remedies Act, false advertising law, and Unfair Competition Law. They sought injunctive relief requiring Ring to prominently disclose to consumers certain information about its products and services.Ring moved to compel arbitration based on an arbitration provision in its terms of service. The plaintiffs did not dispute that they agreed to Ring’s terms of service but argued the arbitration provision violates the California Supreme Court’s 2017 “McGill” holding that a pre-dispute arbitration agreement is invalid and unenforceable under state law insofar as it purports to waive a party’s statutory right to seek public injunctive relief.The court of appeal affirmed the denial of Ring's motion to compel arbitration. The parties did not “clearly and unmistakably" delegate to the arbitrator exclusive authority to decide whether the arbitration provision is valid under McGill. The contract language at issue is commonly understood to preclude public injunctive relief in arbitration. The Federal Arbitration Act, 9 U.S.C. 1, does not preempt McGill’s holding. The contract’s severability clause means the plaintiffs’ claims cannot be arbitrated and may be brought in court. View "Jack v. Ring LLC" on Justia Law

Plaintiff Kamiya Perry appealed a judgment entered in favor of defendant Kia Motors America, Inc. (Kia) after a jury found in favor of Kia in her automobile defect trial. On appeal, she argued: (1) the trial court abused its discretion by refusing to instruct the jury that Kia had concealed evidence (certain engineering documents) during discovery; (2) the trial court erred by excluding the testimony of Kia’s paralegal who verified discovery requests relevant to the engineering documents; and (3) she was not given a fair trial because the jurors were required to deliberate in a small room, which, in the midst of the coronavirus disease 2019 (COVID-19) pandemic, incentivized the jury to complete their deliberations quickly. Finding no reversible error, the Court of Appeal affirmed the trial court's judgment. View "Perry v. Kia Motors America, Inc." on Justia Law