Justia U.S. 8th Circuit Court of Appeals Opinion Summaries

Plaintiff saw Cognium, a “nutraceutical” manufactured by Natrol, on sale. Cognium, according to Natrol’s advertising, improves memory and concentration. Its packaging stated that Cognium is “powered by Cera-Q, a natural protein from silkworm cocoons,” and can improve “Memory Recall Efficiency” by 90% when taken twice daily for four weeks. The box claimed that “nine clinical studies in adults, seniors and children showed statistically significant improvements in memory and cognition in 4 weeks or less when taken as directed.”   Plaintiff filed a putative class action complaint against Natrol, seeking damages for herself and establishment of a National Class and Missouri Consumer Subclass. Plaintiff alleged that, prior to her purchases of Cognium, two of the nine clinical studies noted on its packaging had been retracted, including one for “data fabrication and falsification.”   With Plaintiff’s individual claims dismissed, the court determined the sole named plaintiff could not represent the purported class and dismissed the entire action. On appeal, Plaintiff argued the district court erred in granting summary judgment dismissing her MMPA and unjust enrichment claims.   The Eighth Circuit affirmed. The court explained that here Plaintiff purchased a product that expressly stated on the label it was “not intended to” do what she stated she purchased it for, serve as a substitute treatment for her prescription medication. Thus, for Plaintiff the actual value of the Cognium she purchased, and the value of Cognium without Natrol’s alleged marketing misrepresentations was “zero.” The benefit of the bargain rule does not apply in this situation, so Plaintiff cannot prove that she suffered ascertainable loss “as a result of” Natrol’s unlawful practice. View "Christine Vitello v. Natrol, LLC" on Justia Law

Plaintiff sued I.C. System, Inc. (ICS) under the Fair Debt Collection Practices Act (FDCPA) for violating 15 U.S.C. Section 1692c(b), which prohibits a debt collector from contacting a third party about the collection of a debt without the prior consent of the consumer. The district court granted ICS’s motion for judgment on the pleadings, finding that Plaintiff, a non-consumer, lacked standing to bring a cause of action under Section 1692c(b).   The Eighth Circuit affirmed. The court explained that it joined the other circuits that have considered this issue in concluding that non-consumers cannot bring a claim under Section 1692c(b). The court further concluded that there was no abuse of discretion because Plaintiff failed to follow the applicable rules, including Eastern District of Missouri Local Rule 4.01(A). Further, the court wrote that Plaintiff confuses Article III standing, which implicates subject matter jurisdiction and is undisputed here, and statutory standing. Thus, because Plaintiff only alleged a violation of Section 1692c(b) and the district court correctly determined that Section 1692c(b) does not provide Plaintiff standing to sue, judgment as a matter of law was appropriate. View "Andrew Magdy v. I.C. System, Inc." on Justia Law

Plaintiff initiated action against Experian Information Solutions (“Experian”), alleging a violation of the Fair Credit Reporting Act, 15 U.S.C. Section 1681 (“FCRA”). The district court found that Plaintiff failed to produce sufficient evidence to create a jury question on damages.   Plaintiff contends that a genuine dispute of material fact exists on damages because she provided evidence of financial and emotional harm. The court explained that to maintain a claim for negligent violation of the FCRA, a plaintiff must offer proof of “actual damages sustained by the consumer as a result of the failure. Further, Plaintiff argues that she sustained financial injury based on the denial of her application for a Chase Bank credit card after a hard inquiry on her Experian report. However, her deposition testimony refutes this claim. The record bolsters the conclusion that the bankruptcy drove Chase’s decision to deny Plaintiff’s credit card application. Thus, Plaintiff’s assertion of financial harm is insufficient to create a jury question on damages. Finally, the court wrote that like in other decisions where the court has denied damages for emotional distress, the record reveals that Plaintiff “suffered no physical injury, she was not medically treated for any psychological or emotional injury, and no other witness corroborated any outward manifestation of emotional distress. View "Christa Peterson v. Experian Information Solutions" on Justia Law

Plaintiff commenced an action n against two credit reporting agencies (“CRAs”), Experian Information Solutions, Inc. (“Experian”) and Trans Union, LLC (“Trans Union”), for alleged violations of the Fair Credit Reporting Act. The district court dismissed the complaint for failure to state plausible claims.   The Eighth Circuit affirmed. The court explained that Plaintiff’s complaint is too thin to raise a plausible entitlement to relief. The FCRA is not a strict liability statute. Here, Plaintiff’s complaint presents a bare legal conclusion that Experian and Trans Union employed unreasonable reporting procedures. There are no allegations that the CRAs knew or should have known about systemic problems. The court explained that the FCRA requires reasonable—not perfect—procedures. That Plaintiff’s credit reports may have contained inaccurate information is not in itself sufficient for the imposition of liability. View "Anders Rydholm v. Experian Information Solutions" on Justia Law

Defendant, a neurosurgeon, chose to use implants distributed by DS Medical, a company wholly owned by his fiancée. Physicians in other practices grew suspicious and filed various claims under the False Claims Act. The jury returned a verdict for the government on two of the three claims. The district court then awarded treble damages and statutory penalties in the amount of $5,495,931.22. Following the verdict, the government moved to dismiss its two remaining claims without prejudice, see Fed. R. Civ. P. 41(a)(2), on the ground that any recovery would be “smaller and duplicative of what the [c]ourt ha[d] already awarded.”   The Eighth Circuit reversed and remanded for a new trial. The court explained that are several ways to prove that a claim is “false or fraudulent” under the False Claims Act. One of them is to show that it “includes items or services resulting from a violation” of the anti-kickback statute. This case required the court to determine what the words “resulting from” mean. The court concluded that it creates a but-for causal requirement between an anti-kickback violation and the “items or services” included in the claim. Thus, the court reversed and remanded because district court did not instruct the jury along these lines. View "United States v. Midwest Neurosurgeons, LLC, et al" on Justia Law

In June 2019, Plaintiffs submitted a FOIA request to the IRS seeking disclosure of the terms of a third-party authentication process set forth within IRM Sec. 21.1.3.3, pertaining to the tax professional authentication process. in August 2019, the IRS denied Plaintiffs' request citing the material was properly withheld pursuant to 5 U.S.C. Sec. 552(b)(7)(E), and then plaintiffs filed an action in federal court.The district court granted the IRS’s motion for summary judgment, rejecting Plaintiffs' request for an in-camera review of the documents.The Eighth Circuit reversed, remanding for the district court to conduct an in-camera inspection of the documents. To meet its burden under 5 U.S.C. Sec. 552(b)(7)(E), the IRS must prove the withheld material was “compiled for law enforcement purposes." Here, to effectively determine whether the IRS meets the requirements of 5 U.S.C. Sec. 552(b)(7)(E), an in-camera review is necessary. Thus, the district court erred in failing to hold an in-camera review. View "T. Keith Fogg v. Internal Revenue Service" on Justia Law

Plaintiff commenced a class action, alleging SC Data Center, Inc. (“SC Data”) committed three violations of the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. Sections 1681-1681x. In May 2016, the parties reached a tentative settlement agreement. Four days later, the Supreme Court decided Spokeo, Inc. v. Robins, 578 U.S. 330 (2016), which led SC Data to move to dismiss this action for lack of standing. On remand, the district court determined that Plaintiff had standing as to all three claims.   The Eighth Circuit vacated the district court’s orders and held that Plaintiff lacked Article III standing and remanded the matter to the district court with directions to remand the case to state court. The court held that the text of the FCRA nor the legislative history provide support for Plaintiff’s claim that she has a right under the FCRA to not only receive a copy of her consumer report but also discuss directly with the employer accurate but negative information within the report prior to the employer taking adverse action. Further, the court concluded that Plaintiff has not established that she suffered a concrete injury due to the improper disclosure, thus she lacks standing to pursue her improper disclosure or failure to authorize claims. View "Ria Schumacher v. SC Data Center, Inc." on Justia Law

Plaintiff commenced a class-action lawsuit alleging that SC Data Center, Inc. (“SC Data”) committed three violations of the Fair Credit Reporting Act (“FCRA”). The parties reached a settlement agreement. Following the Supreme Court’s decision in Spokeo, Inc. v. Robins, 578 U.S. 330 (2016), SC Data moved to dismiss the action. The plaintiff first alleged that SC Data took an adverse employment action based on her consumer report without first showing her the report. The court reasoned that the right to pre-action explanation to the employer is not unambiguously stated in the statute’s text. Next, the plaintiff asserts that SC Data obtained her consumer report without first obtaining an FCRA compliant disclosure form. The court found that plaintiff has not established that she suffered a concrete injury due to the improper disclosure. Finally, the plaintiff’s last claim asserts that she did not authorize SC Data to obtain a consumer report. She did authorize a company to conduct a criminal background search. The court found that plaintiff has not pleaded any facts demonstrating concrete harm—a prerequisite for Article III standing. As such, she lacks standing to pursue her failure-to-authorize claim. The court vacated the district court's orders. View "Ria Schumacher v. SC Data Center, Inc." on Justia Law

The Eighth Circuit agreed with the district court that an automated marketing system that sends promotional text messages to phone numbers randomly selected from a database of customers' information is not an automated telephone system (an Autodialer) under the Telephone Consumer Protection Act (TCPA). Plaintiffs, persons who received promotional text messages from defendants through their marketing software called Txt Live, allege that these messages violated the TCPA because they were sent using an Autodialer without plaintiffs' consent. The court affirmed the district court's grant of summary judgment in favor of defendants, holding that Txt Live did not meet the statutory definition of an Autodialer. View "Beal v. Outfield Brew House, LLC" on Justia Law

The Eighth Circuit affirmed the district court's dismissal of plaintiffs' putative class action, alleging that they were misled by claims made on packages of dog food manufactured and distributed by Champion. Because plaintiffs have not challenged the district court's determinations that they lacked standing to claim that Champion misrepresented that the dog food is BPA-free, the court did not reach the merits of their related arguments.In this case, plaintiffs were required to plausibly allege that because of defendant's affirmative misrepresentations or material omissions, their dog food packaging could deceive a reasonable consumer. The court concluded that the district court properly dismissed plaintiffs' omission-based claims because none of Champion's packaging statements are deceptive or misleading, and thus none require corrective disclosures. The court rejected plaintiffs' argument that Champion was required to disclose further information because of its special knowledge of material facts to which plaintiffs did not have access. The court stated that this duty to disclose based on special knowledge arises only in limited circumstances, which are not present in this case. Finally, the court concluded that plaintiffs' breach of warranty and unjust enrichment claims are premised on the same allegations of deception that are insufficient to support the fraud claims, and thus they fail for the same reasons. View "Song v. Champion Petfoods USA, Inc." on Justia Law