Articles Posted in Consumer Law

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Malik Hasan ordered wine from Premier Cru Fine Wines (Premier Cru) and paid with credit cards issued by Chase Bank USA, N.A. (Chase) and American Express Centurion Bank (AmEx). Premier Cru declared bankruptcy while Hasan was still waiting for delivery of wine that he paid nearly $1 million for. Hasan claimed that under a provision of the Fair Credit Billing Act (FCBA), Chase and AmEx had to refund his accounts the amount he paid for wine that Premier Cru failed to deliver. But because the Tenth Circuit rejected Hasan’s interpretation of that FCBA provision, it affirmed the district court’s orders dismissing his complaints against Chase and AmEx. View "Hasan v. Chase Bank USA" on Justia Law

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The issue this case presented for the Tenth Circuit’s review centered on how, or even whether, an important-but-subtle and often confusing doctrine limiting federal-court jurisdiction should apply to a unique Colorado procedure for “nonjudicial” foreclosure of mortgages. Plaintiff Mary Mayotte was the debtor on a note held by U.S. Bank, NA. Wells Fargo serviced the loan for U.S. Bank. One allegation was that Plaintiff contacted Wells Fargo to modify her loan, that Wells Fargo told her she needed to miss three payments to secure a modification, and that she eventually took this advice. Rather than granting her a modification, however, Wells Fargo placed her in default. She further alleged the defendants fabricated documents, that their actions rendered her title unmarketable, that they had no ownership interest in her promissory note or property, that they have been unjustly enriched by accepting payments not due them, that they damaged her credit standing, and that they violated the Real Estate Settlement Procedures Act, and the Fair Debt Collection Practices Act. The jurisdictional doctrine raised by this appeal was the Rooker-Feldman doctrine, which forbade lower federal courts from reviewing state-court civil judgments. Colorado Rule of Civil Procedure 120 requires creditors pursuing nonjudicial foreclosure to first obtain a ruling by a Colorado trial court that there is a reasonable probability that a default exists. The Tenth Circuit determined it did not need to decide whether the Rooker-Feldman doctrine barred a federal court challenge to a Rule 120 proceeding or ruling: the federal-court suit here was not barred because none of the claims (at least none pursued on appeal) challenged the Rule 120 proceedings or sought to set aside the Rule 120 ruling. The Court left that issue for the district court on remand to consider what effect, if any, the Rule 120 ruling may have had on this case under state-law doctrines of claim and issue preclusion. View "Mayotte v. U.S. Bank National Association" on Justia Law

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The issue this case presented for the Tenth Circuit’s review centered on how, or even whether, an important-but-subtle and often confusing doctrine limiting federal-court jurisdiction should apply to a unique Colorado procedure for “nonjudicial” foreclosure of mortgages. Plaintiff Mary Mayotte was the debtor on a note held by U.S. Bank, NA. Wells Fargo serviced the loan for U.S. Bank. One allegation was that Plaintiff contacted Wells Fargo to modify her loan, that Wells Fargo told her she needed to miss three payments to secure a modification, and that she eventually took this advice. Rather than granting her a modification, however, Wells Fargo placed her in default. She further alleged the defendants fabricated documents, that their actions rendered her title unmarketable, that they had no ownership interest in her promissory note or property, that they have been unjustly enriched by accepting payments not due them, that they damaged her credit standing, and that they violated the Real Estate Settlement Procedures Act, and the Fair Debt Collection Practices Act. The jurisdictional doctrine raised by this appeal was the Rooker-Feldman doctrine, which forbade lower federal courts from reviewing state-court civil judgments. Colorado Rule of Civil Procedure 120 requires creditors pursuing nonjudicial foreclosure to first obtain a ruling by a Colorado trial court that there is a reasonable probability that a default exists. The Tenth Circuit determined it did not need to decide whether the Rooker-Feldman doctrine barred a federal court challenge to a Rule 120 proceeding or ruling: the federal-court suit here was not barred because none of the claims (at least none pursued on appeal) challenged the Rule 120 proceedings or sought to set aside the Rule 120 ruling. The Court left that issue for the district court on remand to consider what effect, if any, the Rule 120 ruling may have had on this case under state-law doctrines of claim and issue preclusion. View "Mayotte v. U.S. Bank National Association" on Justia Law

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Plaintiff-Appellant Dennis Obduskey appealed a district court’s order granting Defendants-Appellees Wells Fargo and McCarthy and Holthus, LLP’s motions to dismiss numerous claims, including whether either party was liable as a “debt collector” under the Fair Debt Collection Practices Act (FDCPA). In 2014, Wells Fargo hired McCarthy and Holthus, LLP, a law firm, to pursue a non-judicial foreclosure on Obduskey’s home. Obduskey responded to a letter McCarthy sent him; rather than responding further, McCarthy initiated a foreclosure action. Obduskey then filed this action claiming (1) a violation of the Fair Debt Collection Practices Act; (2) a violation of the Colorado Consumer Protection Act; (3) defamation; (4) extreme and outrageous conduct - emotional distress; and (5) commencement of an unlawful collections action. Wells Fargo and McCarthy filed motions to dismiss, which the district court granted on all claims. Regarding the FDCPA claim, the district court held that Wells Fargo was not liable because it began servicing the loan prior to default. It also held that McCarthy was not a “debt collector” because “foreclosure proceedings are not a collection of a debt,” but it noted that “not all courts have agreed” on whether foreclosure proceedings are covered under the FDCPA. After review, the Tenth Circuit found that the FDCPA does not apply to non-judicial foreclosure proceedings in Colorado, and affirmed the district court’s dismissal of Obduskey’s claims. View "Obduskey v. Wells Fargo" on Justia Law

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Cox Cable subscribers cannot access premium cable services unless they also rent a set-top box from Cox. A class of plaintiffs in Oklahoma City sued Cox under antitrust laws, alleging Cox had illegally tied cable services to set-top-box rentals in violation of section 1 of the Sherman Act, which prohibits illegal restraints of trade. Though a jury found that Plaintiffs had proved the necessary elements to establish a tying arrangement, the district court disagreed. In granting Cox’s Fed. R. Civ. P. 50(b) motion, the court determined that Plaintiffs had offered insufficient evidence for a jury to find that Cox’s tying arrangement "foreclosed a substantial volume of commerce in Oklahoma City to other sellers or potential sellers of set-top boxes in the market for set- top boxes." After careful consideration, the Tenth Circuit ultimately agreed with the district court and affirmed. View "Healy v. Cox Communications" on Justia Law

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Several individuals in multiple states (collectively, plaintiffs) brought class action lawsuits against various fuel retailers (collectively, defendants) based on defendants’ failure to control for, or at least disclose, the effects of temperature on gasoline. In 2007, the Judicial Panel on Multidistrict Litigation consolidated these cases and designated the District of Kansas as the transferee district. After years of legal wrangling, several of the parties entered into settlement agreements, which the district court ultimately approved. These appeals arose from: (1) the district court’s approval of those settlement agreements; and (2) its interpretation of one of them. The Tenth Circuit consolidated the appeals for procedural purposes. “The settlement agreements at issue here are unusual. But the decision to approve them rests with the sound discretion of the district court. Under the unique facts of this case, we can’t say the district court abused that discretion. Accordingly, we affirm the district court’s approval of the 10 settlement agreements.” View "In re: Motor Fuel Temperature" on Justia Law

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Plaintiff-appellee Elizabeth Hammond sought to pursue a class action in New Mexico state court on behalf of everyone in the country who, like her, called to cancel their Stamps.com subscriptions after “discovering” that Stamps.com “was taking money from them” every month. Hammond alleged that this class included “hundreds or thousands of persons.” And while she didn't allege a total damages amount, she contended that she was entitled to $300 in statutory damages and that other members of the proposed class should “likely” receive damages of $31.98, representing two monthly subscription charges ($15.99 x 2), based on her estimate of how long customers could have reasonably failed to notice the monthly charges before calling to cancel. Hammond also sought punitive damages for herself and other class members. Stamps.com sought to remove the case to federal court, presenting uncontested declarations showing that in the last four years, at least 312,680 customers called to cancel their subscriptions. The company observed that, if each of these persons were to win the same $300 in damages Hammond sought for herself, the value of this case would exceed $93 million. And even if other class members could secure only $31.98 in damages, the company noted, the case’s potential value would still lie at almost $10 million. The district court found lack of jurisdiction, holding that Stamps.com failed to meet its burden of showing that over $5 million was "in controversy" because the company failed to disaggregate from the total number of customer cancellations those customers who “felt duped” by Stamps.com’s website disclosures. Disagreeing with the district court's decision it lacked jurisdiction, the Tenth Circuit reversed and remanded for further proceedings. View "Hammond v. Stamps.com" on Justia Law

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Petitioner Zen Magnets, LLC (“Zen”) challenged a regulation promulgated by Respondent Consumer Product Safety Commission (“the Commission”) restricting the size and strength of the rare earth magnets that Zen sold. The sets consisted of small, high-powered magnets that users could arrange and rearrange in various geometric designs. The component magnets are unusually small (their diameters are approximately five millimeters) and unusually powerful. Magnets of this type have been marketed and sold to consumers (by Zen and other distributors) as desktop trinkets, stress-relief puzzles, and toys, and apparently also for educational and scientific purposes. Although the strength of these magnets was part of their appeal, it could also pose a grave danger when the magnets are misused, particularly if two or more magnets were ingested. During 2011, in response to reports of injured children, Commission staff began evaluating whether the magnet sets currently on the market complied with ASTM F963 (“the toy standard”). In May 2012, the Commission required the thirteen leading magnet set distributors to report any information of which they were aware reasonably supporting the conclusion that their magnets did not comply with an applicable safety standard, contained a defect, or created an unreasonable risk of serious injury. Four months after eliminating ten of the leading magnet set distributors, the Commission proposed a new safety standard aimed at regulating the size and strength of all magnet sets. Unlike the toy standard, the final rule was not limited to magnets designed or marketed as toys for children under fourteen years of age, but rather applied to all magnet sets. Zen was the only remaining importer and distributor of the magnet sets targeted by the final rule. Over the years, Zen made efforts to comply with the toy standard by implementing age restrictions and placing warnings on its website and packaging, as well as by imposing sales restrictions on its retail distributors. Its magnet sets, however, did not comply with the strength and size restrictions of the final rule. Zen sought judicial review of that safety standard. The Tenth Circuit Court of Appeals concluded that the Commission’s prerequisite factual findings, which were compulsory under the Consumer Product Safety Act, were incomplete and inadequately explained. Accordingly, the Court vacated and remanded this case back to the Commission for further proceedings. View "Zen Magnets v. Consumer Product Safety Comm'n" on Justia Law

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The Internal Revenue Service filed a notice of federal tax lien against "Attorneys Title Insurance Agency of Wright Gary A Member" with the Pitkin County Recorder. The Recorder, however, listed the lien on its indexing website as against "Gary A. Wright" in his personal capacity. Wright paid the underlying lien. Credit reporting agencies (“CRAs”) Experian Information Services, Inc. (“Experian”) and Trans Union LLC (“Trans Union”) received information about the lien from their contractor, LexisNexis, and included it in their reports of Wright’s credit history. Wright learned about the lien appearing in his credit reports. He sent letters to the CRAs disputing the lien, asserting: (1) the IRS had withdrawn the lien because the taxes had subsequently been paid; and (2) the notice of the lien inaccurately stated the lien was assessed against him when it should have been assessed only against Attorneys Title Insurance Agency of Aspen (“ATA”). In response to these letters, the CRAs checked the information, but did not remove the lien entirely from Wright’s credit report because the IRS treated the lien as "released" rather than withdrawn. Wright sued under the Fair Credit Reporting Act (“FCRA”) and Colorado Consumer Credit Reporting Act (“CCCRA”), claiming the credit reports were inaccurate, the CRAs acted unreasonably in reporting the lien and responding to his letters, and the foregoing caused him to suffer damages. The district court granted summary judgment to the CRAs, concluding they used reasonable procedures to prepare Wright’s credit report and to reinvestigate in response to Wright’s letters. Finding no reversible error, the Tenth Circuit affirmed. View "Wright v. Experian Information Solutions" on Justia Law

Posted in: Consumer Law

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Four Western Union customers whose wire transfers failed sued Western Union, alleging state-law claims for, among other things, conversion, unjust enrichment, and breach of fiduciary duty. The Named Plaintiffs initiated this litigation as a class action on behalf of all Western Union customers whose wire transfers failed. This class included three groups: 1) those customers who, like the named Plaintiffs, had already reclaimed their funds from Western Union; 2) those customers whose funds had already escheated to a state; and 3) those customers whose funds Western Union was currently holding. Two unnamed class members challenged the district court’s decision to certify the class and approve the settlement. They argued, among other things, that the class representatives could not adequately represent all of the class members; the settlement was unfair because it used primarily the money belonging to the class to fund the settlement; and the district court did not adequately notify absent class members of the class action and the settlement. After review, the Tenth Circuit concluded their objections lacked merit. View "Tennille v. Western Union" on Justia Law