Justia U.S. 8th Circuit Court of Appeals Opinion SummariesArticles Posted in Consumer Law
Jill Hennessey v. The Gap, Inc.
Plaintiff, a retail customer, brought a putative class action under the Class Action Fairness Act against clothing retailers The Gap, Inc. and its wholly-owned subsidiary, Old Navy, LLC (“Defendants”). Plaintiff alleged that she purchased numerous products at Old Navy stores and online at discount prices that were deceptively advertised because Defendants did not sell a substantial quantity of these products at the advertised “regular” prices prior to selling them at the advertised “sale” prices. She sought class-wide compensatory damages under the Missouri Merchandising Practices Act (“MMPA”). The district court granted Defendants’ motion to dismiss Plaintiff’s Amended Complaint with prejudice, Plaintiff appealed, arguing that she plausibly pleaded ascertainable loss under Missouri’s benefit-of-the-bargain rule. The Eighth Circuit affirmed. The court agreed with the district court’s decision to “join a growing number of courts in finding that complaints based solely on a plaintiff’s disappointment over not receiving an advertised discount at the time of purchase have not suffered an ascertainable loss.” Further, the court wrote that Plaintiff’s Amended Complaint also alleged that the actual fair market value of some of the products she purchased “may have even been less than the discounted prices that she paid.” This theory of ascertainable loss does not depend on Defendants’ comparison pricing for the value represented component of the benefit-of-the-bargain rule. Plausible allegations of such immediate injury would satisfy an MMPA plaintiff’s burden to show an ascertainable loss. However, these allegations are based solely on information and belief, which are generally insufficient under Rule 9(b). View "Jill Hennessey v. The Gap, Inc." on Justia Law
Adrianna Beckler v. Rent Recovery Solutions, LLC
Debt collector Rent Recovery Solutions (“RRS”) called Plaintiff to collect an alleged $900 debt to her former landlord. In June, without sending the relevant documents to Plaintiff, RRS reported her debt to TransUnion, a credit reporting agency, failing to tell TransUnion that the debt was disputed. Plaintiff commenced this action against RRS, alleging that it violated the Fair Debt Collection Practices Act (“FDCPA”). Plaintiff requested an award of $18,810 in attorneys’ fees for work by two attorneys and a paralegal. RRS challenged the fees requested by both attorneys, who submitted sworn declarations and detailed billing records. The district court, applying the lodestar method of calculating an attorney fee award, found that the attorneys’ claimed hourly rates were reasonable, but the hours expended on the case were excessive. The court reduced the claimed attorney hours by fifty percent, exclusive of paralegal work, and awarded Plaintiff $9,480 in attorneys’ fees. Plaintiff’s attorneys accused the district court of departing from the lodestar calculation by imposing a “cap” that violates FDCPA policies and deprives counsel of full compensation for bringing consumer enforcement actions under this complex federal statute. The Eighth Circuit affirmed. The court explained that the district court followed the lodestar method, reducing the award based on its determination of the number of attorney hours reasonably expended on litigation. There is a “strong presumption” that the lodestar method represents a reasonable fee. The court wrote that the district court did not abuse its substantial discretion in finding that fifty hours was unreasonable for such a claim. View "Adrianna Beckler v. Rent Recovery Solutions, LLC" on Justia Law
Anastasia Wullschleger v. Royal Canin U.S.A., Inc.
Plaintiff’s dog, Clinton, suffered from health problems. The solution, at least according to a veterinarian, was to feed him specialized dog food available only by prescription. It has different ingredients than regular dog food but includes no special medication. Prescription dog food is expensive. The crux of Plaintiff’s complaint is that the “prescription” requirement is misleading because the Food and Drug Administration never actually evaluates the product. And the damages came from its higher sales price. The original complaint, which included only state-law claims, reflected these theories. Brought on behalf of all similarly situated Missouri consumers, it alleged a violation of Missouri’s antitrust laws, claims under Missouri’s Merchandising Practices Act, and unjust enrichment. Plaintiff initially filed her complaint in state court, but Royal Canin and Nestle Purina quickly removed it to federal court. The district court then remanded it. The Eighth Circuit vacated the district court’s judgment and send this case back to the district court with directions to remanded it to Missouri state court. The court explained that just on the face of the amended complaint, the answer is clear. Only the carryover claims and their civil-conspiracy counterpart remain, and neither one presents a federal question. It is no longer possible to say that “dependence on federal law permeates the allegations” of Plaintiff’s complaint. Further, the court wrote that the manufacturers hope to keep the case in federal court through supplemental jurisdiction. It is too late, however, to turn back the clock. View "Anastasia Wullschleger v. Royal Canin U.S.A., Inc." on Justia Law
Venture Comm. Co-Op, Inc. v. James Valley Co-Op Telephone Co.
The Federal Communications Commission (FCC) provides subsidies to encourage telecommunication companies to expand high-speed broadband internet services in rural areas where customer revenues would otherwise be insufficient to justify the cost of doing business. Venture Communications Cooperative (“Venture”) provides broadband services to rural South Dakota customers. James Valley Cooperative Telephone Company and its wholly owned subsidiary, Northern Valley Communications (collectively, “Northern Valley”), is a competing provider. Venture filed this lawsuit against Northern Valley. The primary claim is that Northern Valley violated 47 U.S.C. Section 220(e) by filing a Form 477 that “intentionally, deliberately, fraudulently, and maliciously misrepresented” information “for the sole unlawful purpose of harming [Venture]” by depriving Venture of FCC subsidies in census blocks where Northern Valley was deemed to be an unsubsidized competitor. The district court granted Northern Valley summary judgment, concluding “there is no evidence that Northern Valley willfully overreported its broadband capabilities.” The Eighth Circuit affirmed. The court explained that Venture’s claim of intent to injure is belied by Northern Valley helping Venture by filing a letter with the FCC clarifying that Northern Valley did not offer voice service in the Overlap Area. The court likewise affirmed the dismissal of Venture’s tortious interference and civil conspiracy claims under South Dakota law. The court agreed with the district court that Venture proffered no evidence of an “intentional and unjustified act of interference” because Northern Valley complied with all FCC reporting requirements. As Northern Valley complied with the Telecommunications Act in filing Form 477 at issue, there is no plausible underlying tort alleged. Summary judgment is warranted on this claim. View "Venture Comm. Co-Op, Inc. v. James Valley Co-Op Telephone Co." on Justia Law
Farm Credit Services v. Steven L. Swackhammer
After the bankruptcy court allowed Chapter 12 debtors – several years in a row – to modify their confirmed plan over the objection of their primary secured creditor, that creditor appealed. The issues are whether the bankruptcy court abused its discretion by confirming the debtors’ fourth modified plan under 11 U.S.C. Section 1229 without requiring the debtors to show an “unanticipated and substantial change in circumstances” and whether, under whatever standard applicable to plan modifications, the court’s factual findings were clearly erroneous. The Eighth Circuit affirmed. The court held that, at a minimum, a substantial change in circumstances is required to justify modification of a plan under Section 1229. The bankruptcy court’s alternate ruling that the debtors met their burden of showing an unanticipated, substantial change in circumstances is not clearly erroneous, nor is the bankruptcy court’s finding that the fourth modified plan was feasible and confirmable. View "Farm Credit Services v. Steven L. Swackhammer" on Justia Law
State of Minnesota v. American Petroleum Institute
Minnesota sued a litany of fossil fuel producers1 (together, the Energy Companies) in state court for common law fraud and violations of Minnesota’s consumer protection statutes. In doing so, it joined the growing list of states and municipalities trying to hold fossil fuel producers responsible for alleged misrepresentations about the effects fossil fuels have had on the environment. The Energy Companies removed to federal court. The district court granted Minnesota’s motion to remand, and the Energy Companies appealed. The Eighth Circuit affirmed. The court held that Congress has not acted to displace the state-law claims, and federal common law does not supply a substitute cause of action, the state-law claims are not completely preempted. The court reasoned that because the “necessarily raised” element is not satisfied, the Grable exception to the well-pleaded complaint rule does not apply to Minnesota’s claims. Further, the court wrote that the connection between the Energy Companies’ marketing activities and their OCS operations is even more attenuated. Thus, neither requirement is met, there is no federal jurisdiction under Section 1349. View "State of Minnesota v. American Petroleum Institute" on Justia Law
Kelly Bassett v. Credit Bureau Services, Inc.
Plaintiff sued Credit Bureau Services, Inc. and C.J. Tighe (collectively, the “collectors”) for unfair debt-collection practices. The district court granted judgment as a matter of law to Plaintiff and the plaintiff class. The collectors appealed, alleging amongst various issues, (i) Plaintiff does not have Article III standing, (ii) the district court erred in allowing her to introduce an issue at trial without notice, (iii) the district court erred in determining that the NCPA requires a judgment before collecting prejudgment interest, (iv) the district court abused its discretion in finding Plaintiff an adequate class representative, and (v) the district court abused its discretion in certifying the FDCPA class. The Eighth Circuit vacated the district court’s judgment. The court held that Plaintiff did not suffer a concrete injury in fact as a result of the alleged statutory violations, thus, she lacks Article III standing. The court explained that Plaintiff contends that she suffered an injury in fact when the collectors demanded interest on her debts without a judgment. However, the court reasoned that Plaintiff only received the letter and never paid any part of the interest or principal. Without suffering a tangible harm, Plaintiff must point to an injury that “has a ‘close relationship’ to a harm ‘traditionally’ recognized as providing a basis for a lawsuit in American courts.” Here, Plaintiff has not shown any harm that bears a “close relationship” to the type of injury that results from reliance on a misrepresentation or wrongful interference with property rights. View "Kelly Bassett v. Credit Bureau Services, Inc." on Justia Law
Kamisha Stanton v. Cash Advance Centers, Inc
Plaintiff brought a putative class action against Cash Advance Centers, Inc., alleging a violation of the Telephone Consumer Protection Act, 47 U.S.C. Section 227. Counsel purporting to represent Cash Advance Centers, Inc., moved to compel arbitration based on arbitration provisions contained in loan agreements between Plaintiff and non-party Advance America, Cash Advance Centers of Missouri, Inc. The district court denied the motion to compel. Counsel also moved to substitute Advance America, Cash Advance Centers of Missouri, Inc., for Cash Advance Centers, Inc., as the party defendant, but the district court denied that motion as well. The Eighth Circuit affirmed. The court explained only parties to a lawsuit may appeal an adverse judgment. Because Advance America, Cash Advance Centers of Missouri, Inc., is not a party to the lawsuit, its notice of appeal is insufficient to confer jurisdiction on the Court. The non-party Advance America, Cash Advance Centers of Missouri, Inc., made no appearance in connection with the motion, and the court’s order addressed only a motion advanced by the party Defendant. The notice of appeal also names Cash Advance Centers, Inc., the party Defendant, as an appellant. But while attorneys purporting to represent Cash Advance Centers, Inc., filed a notice of appeal, counsel acknowledged at oral argument that she represented only non-party Advance America, Cash Advance Centers of Missouri, Inc., and not Cash Advance Centers, Inc. View "Kamisha Stanton v. Cash Advance Centers, Inc" on Justia Law
City of Creve Coeur v. DirecTV LLC
DirecTV and Dish Network (“Defendants”) provide video services in part through the Internet. The City of Creve Coeur filed this class action in Missouri state court on behalf of local government authorities, seeking a declaratory judgment that Defendants are liable under the Video Services Providers Act (“VSPA”) and implementing local ordinances, plus injunctive relief, an accounting of unpaid fees, and damages. Defendants removed the action based on diversity jurisdiction and the Class Action Fairness Act (CAFA). After the state court entered an interlocutory order declaring that VSPA payments are fees, rather than taxes, DirecTV filed a second notice of removal, arguing this order established the required federal jurisdiction. The district court granted Creve Coeur’s motion to remand. The Eleventh Circuit affirmed on different grounds. The court explained that the district court’s remand order plainly stated that the remand was based on comity principles as articulated in Levin, not on “state-tax based comity concerns.” Comity as a basis to remand was raised and fully argued in the first remand proceeding. Federal courts have long precluded two bites at this apple. Second, the Supreme Court in Levin emphatically stated that the century-old comity doctrine is not limited to the state-tax-interference concerns that later led Congress to enact the TIA. Third, the state court’s December 2020 Order addressed, preliminarily, only the VSPA fee-or-tax issue under state law. It did not address the broader considerations comity addresses. The state court order in no way overruled or undermined the basis for the district court’s first remand order. Therefore, DirecTV failed to establish the essential basis for a second removal. View "City of Creve Coeur v. DirecTV LLC" on Justia Law
Michael Tucker v. General Motors LLC
General Motors (“GM”) installed Generation IV 5.3 Liter V8 Vortec 5300 LC9 engines (“Gen IV engine”) in seven different GMC and Chevrolet trucks and SUVs in model years 2010 to 2014 (the “affected vehicles”). In 2016, representatives from various States filed a putative class action alleging that the affected vehicles contain a defect that causes excess oil consumption and other engine damage (the “oil consumption defect”). Plaintiffs appealed only the dismissal of their Missouri Merchandising Practice Act (MMPA) claim, stating that “the sole issue presented on appeal is whether the district court improperly applied the concept of puffery to their deceptive omissions claims under the MMPA.” The Eighth Circuit reversed the dismissal of the MMPA claims. The court concluded that advertising “puffery” does not affect an MMPA claim based on omission of a material fact, at least in this case, and the court agreed that Plaintiffs’ Class Action Complaint alleges sufficient factual matter, accepted as true, to state an omissions claim to relief that is plausible on its face. View "Michael Tucker v. General Motors LLC" on Justia Law