Justia U.S. 2nd Circuit Court of Appeals Opinion Summaries

Plaintiff appealed the district court's dismissal of his claim under the Fair Debt Collections Practices Act (FDCPA), 15 U.S.C. 1692k, as untimely. The court concluded that the district court erred in finding that the FDCPA violation “occurred” when defendant sent the restraining notice. The court held instead that where a debt collector sends an allegedly unlawful restraining notice to a bank, the FDCPA violation does not “occur” for purposes of Section 1692k(d) until the bank freezes the debtor’s account. Because the record is unclear as to when the freeze actually took place, the court vacated the judgment and remanded to the district court for further proceedings. View "Benzemann v. Citibank" on Justia Law

Plaintiff filed suit alleging that she was the victim of an identity theft scheme perpetrated by employees of Chase, and seeks to hold Chase liable for this identity theft under the New York Fair Credit Reporting Act, N.Y. Gen. Bus. L. 380-1, 380-s. At issue was whether plaintiff's suit is preempted by the federal Fair Credit Reporting Act (FCRA), 15 U.S.C. 1681 et seq. The court held that 15 U.S.C. 1681t(b)(1)(F) preempts only those claims that concern a defendant’s responsibilities as a furnisher of information under the FCRA. The court concluded that, viewed in the light most favorable to plaintiff, the complaint advances claims against Chase for identity theft under N.Y. Gen. Bus. L. 380‐l and 380‐s based on acts of identity theft perpetrated by Chase employees, as distinct from any erroneous or otherwise wrongful actions by Chase in furnishing information to consumer reporting agencies. These identity theft claims are not preempted because they do not concern Chase’s responsibilities as a furnisher. The court further concluded that, to the extent that plaintiff’s complaint seeks relief based on Chase’s erroneous or otherwise improper furnishing of information to consumer reporting agencies, those claims are preempted. Accordingly, the court vacated and remanded. View "Galper v. JP Morgan Chase Bank, N.A." on Justia Law

Plaintiff appealed the district court's dismissal of his claims against Staples for breach of contract and for violations of New York General Business Law (N.Y. G.B.L.) Sections 349 and 350 for failure to state a claim. Sections 349 and 350 prohibit deception of consumers and false advertising. Plaintiff alleged, among other things, that the district court erred in finding that the language of the Protection Plan Brochure (the Contract) that plaintiff purchased for his computer was unambiguous. The court concluded that plaintiff has adequately alleged both a materially misleading practice and an actual injury under N.Y. GBL Sections 349 and 350; with respect to the breach of contract claim, the district court erred in finding the Contract to be unambiguous, in requiring plaintiff to allege a “material” breach, and in finding that plaintiff had failed to adequately allege damages; construing the contract’s ambiguities in plaintiff’s favor, he has alleged Staples’s failure to perform in the first year of the contract and damages in the amount of his restitution interest; and should plaintiff seek damages beyond his restitution interest, he should amend his complaint. Accordingly, the court vacated and remanded with instructions. View "Orlander v. Staples, Inc." on Justia Law

Plaintiff filed suit under the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692 et seq., against FCI, his mortgage loan servicer and a debt collector, alleging that FCI violated the FDCPA by sending him two written communications that failed to comply with FDCPA requirements that debt collectors timely provide certain notices to debtors. The district court granted FCI's motion to dismiss for failure to state a claim, ruling principally that the letter, which the district court viewed as primarily a transfer‐of‐servicing informational notice sent pursuant to the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. 2605, was not also a communication sent “in connection with the collection of any debt” under the FDCPA. The district court also ruled that plaintiff failed to allege that FCI violated the FDCPA by mailing the payment statement and the district court denied plaintiff leave to filed a second amended complaint. The court applied an objective standard to resolve the question and concluded that plaintiff adequately alleged that the Letter was an “initial communication . . . in connection with the collection of [a] debt,” so as to obligate FCI to provide plaintiff a section 1692g notice. Therefore, the district court erred in granting the motion, and the court vacated and remanded. View "Hart v. FCI Lender Serv." on Justia Law

Plaintiffs filed a putative class action suit against defendant, an attorney representing National Grid, a company providing natural gas to plaintiffs' home. Plaintiffs alleged that defendant's debt collection practices concerning an alleged theft of natural gas violated the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692–1692p. On appeal, plaintiffs challenged the district court's grant of defendant's motion to dismiss. The court held that money owed as a result of theft is not an “obligation or alleged obligation of a consumer to pay money arising out of a transaction” and, therefore, does not constitute a “debt” for purposes of the FDCPA. Accordingly, the court affirmed the judgment of the district court. View "Beauvoir v. Israel" on Justia Law

Plaintiffs filed suit against Kennedy, alleging that Kennedy’s attempts to collect a debt from plaintiffs violated the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692 et seq. The district court dismissed the amended complaint. The court concluded that the district court had personal jurisdiction over Kennedy where Kennedy's three purposeful contacts with New York meet the minimum contacts test; Kennedy can easily defend itself in New York; New York has a manifest interest in the suit; and plaintiffs have an interest in adjudicating their case in the state where they reside. In regards to the FDCPA claim, the court concluded that plaintiffs’ alleged obligation to pay the $8,000 balance exists only because of the exchange of nursing home services for money and accordingly constitutes a debt under the FDCPA. However, plaintiffs have failed to allege that Kennedy's debt collection activities are actionable under the FDCPA. Accordingly, the court affirmed in part and vacated in part, remanding for further proceedings. View "Eades v. Kennedy, PC Law Offices" on Justia Law

Plaintiff filed a putative class action alleging that defendants violated the Fair Debt Practices Act (FDCPA), 15 U.S.C. 1692e, 1692f, by charging and attempting to collect interest at a rate higher than permitted under the law of her home state and that defendants violated New York's usury law, N.Y. Gen. Bus. Law 349; N.Y. Gen. Oblig. Law 5-501; N.Y. Penal Law 190.40. The district court entered judgment in favor of defendants. The court reversed the district court's holding that the National Bank Act (NBA), 12 U.S.C. 85, preempts plaintiff's claims because neither defendant is a national bank nor a subsidiary or agent of a national bank, or is otherwise acting on behalf of a national bank, and because application of the state law on which plaintiff's claim relies would not significantly interfere with any national bank’s ability to exercise its powers under the NBA. Accordingly, the court vacated the judgment and remanded to the court to address in the first instance whether the Delaware choice-of-law precludes plaintiff's claims. Finally, the court also vacated the district court's denial of class certification. View "Madden v. Midland Funding, LLC" on Justia Law

Plaintiff filed a putative class action suit against J.C. Christensen, alleging that J.C. Christensen violated the Fair Debt Collections Practices Act (FDCPA), 15 U.S.C. 1692, by offering to settle his debt for less than the full amount without warning him that his total savings might be reduced by an increase in his tax liability. The district court dismissed the suit. The court held that a debt collector need not warn of possible tax consequences when making a settlement offer for less than the full amount owed to comply with the FDCPA. Accordingly, the court affirmed the judgment of the district court. View "Altman v. J.C. Christensen & Assoc." on Justia Law

The FTC appealed the damages portion of a district court order granting in part the FTC's motion for contempt relating to defendants' violation of a Consent Order. The FTC argued that it was entitled to a presumption that consumers relied, when deciding to purchase defendants' products, on defendants' omissions and misrepresentations. Therefore, the FTC sought over $14 million in contempt damages, an amount equal to defendants' gross receipts. As a preliminary matter, the court concluded that the FTC may pursue recovery for contempt damages based on alleged violations of a Consent Order. The court agreed with the FTC and joined its sister circuits in holding that the FTC is entitled to a presumption of consumer reliance. Here, in the context of a contempt action arising out of violations of a promise to refrain from misrepresentations concerning material terms or omissions of material terms, the court held that the calculation of the appropriate measure of loss begins with defendants' gross receipts derived from such contumacious conduct. After the court uses defendants' gross receipts as a baseline for calculating damages, the court must permit defendants to put forth evidence showing that certain amounts should offset the sanctions assessed against them. The court vacated that portion of the district court's contempt order that has calculated damages and remanded for further proceedings.View "FTC v. BlueHippo, et al." on Justia Law

Gnosis appealed the district court's entry of judgment in favor of Merck on its Lanham Act, 15 U.S.C. 1125(a), false advertising and contributory false advertising claims; award to Merck of damages, attorneys' fees and costs, and prejudgment interest; and order that Gnosis engage in a corrective advertising campaign. Merck had filed suit against Gnosis, claiming misleading advertising in connection with its use of the pure Isomer Product chemical name and properties in its marketing materials for Extrafolate. At issue on appeal was the court's false advertising jurisprudence. The court concluded that where, as here, the parties operate in the context of a two-player market and literal falsity and deliberate deception have been proved, it is appropriate to utilize legal presumptions of consumer confusion and injury for the purposes of finding liability in a false advertising case brought under the Lanham Act; in a case where willful deception is proved, a presumption of injury may be used to award a plaintiff damages in the form of defendant's profits, and may, in circumstances such as those presented here, warrant enhanced damages; and, therefore, the court affirmed the judgment of the district court. View "Merck Eprova AG v. Gnosis S.P.A." on Justia Law