Articles Posted in Consumer Law

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A debt collection letter that informs the consumer of the total, present quantity of his or her debt satisfies 15 U.S.C. 1692g notwithstanding its failure to inform the consumer of the debt's constituent components or the precise rates by which it might later increase. Such a letter does not violate section 1692e for failure to inform the consumer that his or her balance might increase due to interest or fees when the letter contains the "safe harbor" language previously ratified in Avila v. Riexinger & Associates, LLC, 817 F.3d 72 (2d Cir. 2016). In this case, after plaintiff received a debt collection letter from CMS, he filed suit against the company under the Fair Debt Collection Practices Act. The Second Circuit affirmed the district court's dismissal of plaintiff's claims, holding that CMS's letter complied with sections 1692g and 1692e. View "Kolbasyuk v. Capital Management Services, LP" on Justia Law

Posted in: Consumer Law

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The Second Circuit affirmed the district court's judgment in an action against Direct Energy, alleging breach of contract, deceptive and unfair trade practices, and unjust enrichment. Plaintiff had entered into a consumer electricity contract with Direct Energy which initially guaranteed a fixed electricity rate. Consistent with the terms of the contract, the fixed‐rate plan was converted into a variable rate plan after the first twelve months. The court affirmed the district court's grant of summary judgment in favor of Direct Energy and held that, by the contract's plain terms, Direct Energy promised that the variable rate would be set in its discretion and that it would reflect "business and market conditions," a phrase which encompasses more than just procurement costs. Because plaintiff's claims under the Connecticut Unfair Trade Practices Act were entirely duplicative of his contract claim, they also failed. Finally, the court affirmed the district court's dismissal of plaintiff's unjust enrichment and Massachusetts unfair trade practices claims. View "Richards v. Direct Energy Servs., LLC" on Justia Law

Posted in: Consumer Law, Contracts

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The FTC filed suit alleging that defendants' debt collection practices violated several provisions of the Federal Trade Commission Act (FTCA) and the federal Fair Debt Collection Practices Act (FDCPA). The Second Circuit affirmed the district court's grant of summary judgment for the FTC. Because Defendant Moses submitted no brief prior to the deadline submission set by the court, the court dismissed the appeal under Local Rule 31.2(d). The court also held that the disgorgement assessed jointly and severally against all defendants, including Briandi and Moses, was in an appropriate amount because it was a reasonable approximation of the total amounts received by the defendant companies from consumers as a result of their unlawful acts. View "Federal Trade Commission v. Federal Check Processing, Inc." on Justia Law

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Consumers who purchased Cheez‐It crackers labeled "whole grain" or "made with whole grain," filed a class action complaint against Kellogg, alleging that the whole grain labels were false and misleading in violation of New York and California consumer protection laws. The district court dismissed the complaint for failure to state a claim. The Second Circuit vacated, holding that the district court erred in dismissing plaintiffs' complaint because, under the proper standards for reviewing a motion to dismiss under Rule 12(b)(6), plaintiffs plausibly alleged that the whole grain labels would lead a reasonable consumer to believe, incorrectly, that the grain in whole grain Cheez‐Its was wholly or predominantly whole grain. In this case, the whole grain claims failed to communicate that the quantity of enriched white flour exceeded the quantity of whole grain. Accordingly, the court remanded for further proceedings. View "Mantikas v. Kellogg Company" on Justia Law

Posted in: Consumer Law

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When a debt collector misreports a debt obligation to a consumer that she no longer owes, and requests payment on that debt, the consumer plausibly alleges violations of 15 U.S.C. 1692e and 1692f, notwithstanding the fact that the debt collector advised the consumer of her right to dispute the debt as required by section 1692g, and that the consumer did not exercise that right.      The Second Circuit vacated the district court's dismissal of plaintiff's complaint, alleging violations of the Fair Debt Collection Practices Act when defendant used false representations and unfair practices in seeking payment on an already settled debt. The court held that plaintiff alleged plausible FDCPA claims. In this case, the inclusion of section 1692g notice did not prevent plaintiff from plausibly pleading that, on a least sophisticated consumer standard, defendant's debt communication was misleading and unfair. The court explained that the FDCPA was a strict liability statute, and a consumer was not required to plead mens rea to state plausible FDCPA claims. Instead, a debt collector's intent was relevant as an element of the affirmative defense afforded by section 1692k(c). View "Vangorden v. Second Round, LP" on Justia Law

Posted in: Consumer Law

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Johnson & Johnson appealed the district court's certification of a class of consumers who purchased baby products in an action alleging that the company violated the Connecticut Unfair Trade Practices Act (CUTPA), as well as other state consumer protection laws, when it labeled its baby products as "natural" when they were not. The Second Circuit held that, although plaintiff had Article III standing, it was not clear on the record whether the district court undertook the requisite analysis of the material differences in the state laws at issue before concluding that their similarities predominated over their differences. Therefore, the court vacated the district court's grant of certification and remanded for further proceedings. View "Langan v. Johnson & Johnson Consumer Cos." on Justia Law

Posted in: Consumer Law

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The Second Circuit affirmed the district court's judgment in favor of defendants in an action alleging that defendants violated the Fair Debt Collection Practices Act, 15 U.S.C. 1692 et seq., in connection with their attempt to initiate foreclosure proceedings on his home. The court held that, although the district court erred in dismissing plaintiff's claims on the ground that the enforcement of a security interest through foreclosure proceedings was not debt collection for purposes of the Act, defendant failed to plausibly allege that defendants violated the FDCPA. The court held that the mortgage foreclosure, at least under the circumstances here, constituted debt collection under the Act. However, the court also held that defendantsʹ identification of Green Tree as the creditor was not deceptive as to the nature or legal status of plaintiffʹs debt, nor would it have prevented the least sophisticated consumer from responding to or disputing the action. Finally, plaintiff's 15 U.S.C. 1692g claim was properly dismissed because the Certificate of Merit fell within section 1692g(d)ʹs pleading exclusion, and was therefore not an initial communication, because defendants were legally obligated to file this document with the foreclosure complaint. View "Cohen v. Rosicki, Rosicki & Assocs., P.C." on Justia Law

Posted in: Consumer Law

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The Second Circuit affirmed the district court's judgment in an action brought by plaintiff against Midland, alleging that they violated the Fair Debt Collection Practices Act (FDCPA). The court held that the district court did not err by granting summary judgment in favor of Midland, because there were no genuine questions of fact as to whether a Midland employee purposefully overwhelmed him with harassing questions or misled him with her questions in violation of section 1692e of the FDCPA. Summary judgment was also properly granted as to plaintiff's claim that Midland violated section 1692e(8), which required debt collectors to communicate that a disputed debt was disputed. The court also held that the district court did not abuse its discretion by sanctioning plaintiff's attorney for misleading the court during the initial status conference, plaintiff for disregarding a protective order, and both plaintiff and the law firm for needlessly multiplying proceedings. View "Huebner v. Midland Credit Management" on Justia Law

Posted in: Consumer Law

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The Second Circuit reversed the district court's grant of partial summary judgment for plaintiff on her claim that Time Warner knowingly or willfully violated the Telephone Consumer Protection Act of 1991, 47 U.S.C. 227, by using an "automatic telephone dialing system" to call her cell phone 153 times without her consent. The court held that the district court's analysis was based on an incorrect interpretation of the statutory text where the district court relied primarily on a Declaratory Ruling and Order issued by the FCC in 2015 that has since been invalidated by the D.C. Circuit. When the court considered the statute independently, without an administrative interpretation to defer to, the best interpretation of the statutory language was the one suggested by the D.C. Circuit's discussion in ACA Int'l v. FCC, 885 F.3d 687, 699 (D.C. Cir. 2018): in the TCPA's definition of an autodialer, a device's "capacity" referred to its current functions absent additional modifications, regardless of whether those functions were in use during the offending call. Accordingly, the court remanded for the district court to develop the factual record and to apply the appropriate standard. View "King v. Time Warner Cable Inc." on Justia Law

Posted in: Consumer Law

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The Second Circuit affirmed the district court's judgment in an action filed by seven former participants in online discount membership programs, alleging that Trilegiant conspired with e‐merchant retailers such as Buy.com, Orbitz, and Priceline to enroll the retailers' customers in the membership programs via deceptive post‐transaction marketing and datapass techniques. The court held that prohibitions on the Electronic Communications Privacy Act did not apply in this case because plaintiffs failed to raise a material issue of fact as to whether they consented to enrollment in the membership programs. Therefore, the court affirmed the grant of summary judgment as to that claim. The court affirmed the dismissal of the racketeering claim, holding that plaintiffs could not proceed on a theory of racketeering because they did not identify an actionable fraud. Finally, the court affirmed the grant of summary judgment on the Connecticut Unfair Trade Practices Act and unjust enrichment claims, holding that plaintiffs have not shown that they were entitled to a refund of membership fees and Trilegiant was not unjustly enriched by not issuing the refunds. View "Williams v. Affinion Group, LLC" on Justia Law