Justia U.S. 3rd Circuit Court of Appeals Opinion Summaries

The consumers had rental applications denied based on inaccurate consumer reports generated by a consumer reporting agency, RealPage, which would not correct the reports unless the consumers obtained proof of the error from its sources. The identity of RealPage’s sources was not included in the disclosures to the consumers, despite their requests for their files. The consumers sued under the Fair Credit Reporting Act, 15 U.S.C. 1681, to disclose on request “[a]ll information in the consumer’s file at the time of the request” and “[t]he sources of th[at] information,” seeking damages and attorneys’ fees for themselves and on behalf of a purported class and subclass.The district court denied their Rule 23(b)(3) motion for class certification, citing the Rule’s predominance and superiority requirements and finding that their proposed class and subclass were not ascertainable. The Third Circuit vacated. The district court based its predominance analysis on a misinterpretation of Section 1681g(a), erroneously concluding that individualized proof would be needed to distinguish requests for “reports” from those for “files.” The court also misapplied ascertainability precedents. The consumers have standing, having made the requisite showing of the omission of information to which they claim entitlement, “adverse effects” that flow from the omission, and the requisite nexus to the protected “concrete interest.” View "Kelly v. RealPage Inc" on Justia Law

Kirtz obtained loans from the Pennsylvania Higher Education Assistance Agency (AES), a “public corporation” that makes, guarantees, and services student loans, and the USDA through the Rural Housing Service, which issues loans to promote the development of affordable housing in rural communities. Kirtz alleges that, as of June 2018, both of his loan accounts were closed with a balance of zero. AES and the USDA continued to report the status of Kirtz’s accounts as “120 Days Past Due Date” on his Trans Union credit file, resulting in damage to his credit score. Kirtz sent Trans Union a letter disputing the inaccurate statements. Trans Union gave AES and USDA notice of the dispute, as required by the Fair Credit Reporting Act (FCRA), 15 U.S.C. 1681. According to Kirtz, neither AES nor the USDA took any action to investigate or correct the disputed information.The district court dismissed Kirtz’s lawsuit, concluding that FCRA did not clearly waive the United States’ sovereign immunity. Courts of Appeals that have considered this issue are split. The Third Circuit reversed. FCRA’s plain text clearly and unambiguously authorizes suits for civil damages against the federal government. In reaching a contrary conclusion, the district court relied on its determination that applying the FCRA’s literal text would produce results that seem implausible. Implausibility is not ambiguity, and where Congress has clearly expressed its intent, courts may neither second-guess its choices nor decline to apply the law as written. View "Kirtz v. Trans Union LLC" on Justia Law

Popa browsed the website of Harriet Carter Gifts, added an item to her cart, but left the website without making a purchase. She later discovered that, unbeknownst to her, Harriet Carter’s third-party marketing service, NaviStone, tracked her activities across the site. Popa sued both entities under Pennsylvania’s Wiretapping and Electronic Surveillance Control Act (WESCA), 18 Pa. C.S. 5701, which prohibits the interception of wire, electronic, or oral communications. The district court granted the defendants summary judgment, reasoning that NaviStone could not have “intercepted” Popa’s communications because it was a “party” to the electronic conversation. Alternatively, it ruled that if any interception occurred, it happened outside Pennsylvania, so the Act did not apply.The Third Circuit vacated. Under Pennsylvania law, there is no direct-party exception to WESCA liability, except for law enforcement under specific conditions. The defendants cannot avoid liability merely by showing that Popa directly communicated with NaviStone’s servers. NaviStone intercepted Popa’s communications at the point where it routed those communications to its own servers; that was at Popa’s browser, not where the signals were received at NaviStone’s servers. The court noted that the district court never addressed whether Harriet Carter posted a privacy policy and, if so, whether that policy sufficiently alerted Popa that her communications were being sent to a third-party company to support a consent defense. View "Popa v. Harriet Carter Gifts Inc." on Justia Law

The Third Circuit consolidated district court cases claiming violations of the Fair Credit Reporting Act, 15 U.S.C. 1681. Borrowers had student loans from various lenders and made payments on those loans until they were unable to do so. Their respective lenders closed their accounts and transferred their loans. After the transfers, the borrowers viewed their credit reports published by Trans Union, each of which contained a negative “Pay Status” notation stating “Account 120 Days Past Due.” The entries also stated that the loans were closed, transferred, and had account balances of zero. The borrowers claimed that the pay status notations were inaccurate because the borrowers did not have any financial obligations to their previous lenders.The Third Circuit affirmed the dismissal of the suits. Applying the “reasonable reader standard,” the credit reports containing the Pay Status notations were not misleading or inaccurate. The reports contain multiple conspicuous statements reflecting that the accounts are closed and the borrowers have no financial obligations to their previous creditors; a reasonable interpretation of the reports in their entirety is that the Pay Status of a closed account is historical information. The court also rejected claims that Trans Union failed to conduct a good faith investigation and to permanently delete or modify inaccurate information. View "Bibbs v. Trans Union LLC" on Justia Law

Adam saw advertisements for free samples of beauty products, which implied that she need only pay for shipping and handling. Adam ordered two free samples and purchased another item. She was charged $9.94 for shipping and $14.99 for the purchased item. Soon thereafter, Adam was unexpectedly charged $92.94, which resulted in an overdraft of her checking account. A company representative told Adam that “she had agreed" to pay the full amount if she kept the "free samples" and that Adam would need to return the items before refunds could be issued. Adam, not trusting the company, refused to return the items, then called her bank, which temporarily reversed the charge but ultimately reinstated it. Adam contends that her bank was misled by the “false-front scheme” and that the charge would have been reversed but for the defendants’ misrepresentations.Adam filed a putative class-action suit, alleging violations of (or conspiracy to violate or aiding and abetting violation of): multiple California laws; the Electronic Fund Transfer Act, 15 U.S.C. 1693–1693r; the RICO Act, 18 U.S.C. 1961–1968; and consumer laws. The Third Circuit reversed the dismissal of the suit. Adam has standing; she was not made whole by the refund offer; she has neither received a refund nor accepted any alternative. Defendants’ conduct could provide but-for causation for Adam’s financial harm and a restitution order would redress that harm. View "Adam v. Barone" on Justia Law

TitleMax provides vehicle loans at interest rates as high as 180%. The entire process occurs at a TitleMax brick-and-mortar location. The borrower receives “a check drawn on a bank outside of Pennsylvania,” The borrower grants TitleMax a security interest in the vehicle. TitleMax records its lien with the appropriate state authority. Borrowers can make payments from their home states. TitleMax does not have any offices, employees, agents, or brick-and-mortar stores and is not licensed as a lender in Pennsylvania. TitleMax claims that it never solicited Pennsylvania business and does not run television ads within Pennsylvania.Pursuant to the Consumer Discount Company Act and the Loan Interest and Protection Law, Pennsylvania’s Department of Banking and Securities issued a subpoena requesting documents regarding TitleMax’s interactions with Pennsylvania residents. TitleMax then stopped making loans to Pennsylvania residents and asserts that it has lost revenue.The district court held that Younger abstention did not apply and that the Department’s subpoena’s effect was to apply Pennsylvania’s usury laws extraterritorially in violation of the Commerce Clause.The Third Circuit reversed. Applying the Pennsylvania statutes to TitleMax does not violate the extraterritoriality principle. TitleMax receives payments from within Pennsylvania and maintains an actionable security interest in vehicles located in Pennsylvania; its conduct is not “wholly outside” of Pennsylvania. The laws do not discriminate between in-staters and out-of-staters. Pennsylvania has a strong interest in prohibiting usury. Applying Pennsylvania’s usury laws to TitleMax’s loans furthers that interest and any resulting burden on interstate commerce is, at most, incidental. View "TitleMax of Delaware Inc v. Weissmann" on Justia Law

Collecto sent a letter to collect on a debt that Hopkins initially owed to Verizon. The letter itemized Hopkins’s debt in a table, concluded that Hopkins owed $1,088.34, and offered to “resolve this debt in full” if he paid $761.84. Hopkins filed a putative class action, alleging that Collecto’s letter violated the Fair Debt Collection Practices Act, 15 U.S.C. 1692 (FDCPA). Hopkins claimed that the debt could not or was not intended to accrue interest or collection fees and that by assigning a “$0.00” value to table columns for interest and collection fees, the letter falsely implied that interest and fees could accrue and increase the amount of his debt over time. Hopkins argued consumers prioritize what debts to pay and, by suggesting that the debt might accrue interest and fees, the Collecto letter gave him the false impression that the debt needed to be prioritized.The Third Circuit affirmed the dismissal of Hopkins’s complaint with prejudice, declining to require assurances by debt collectors that itemized amounts will not change in the future. Doing so would lead to “complex and verbose debt collection letters” that would confuse consumers. Even a hypothetical “least sophisticated consumer” reads a debt collection letter without speculating about what could happen in the future based on true statements concerning the past; “he is not a litigious claim-seeker who hunts, Lagotto-like, for truffles in dunning letters.” View "Hopkins v. Collecto Inc" on Justia Law

Klotz’s now-deceased husband received medical services from the Hospital and incurred a $1,580 debt; he left no estate. The Hospital retained CSW to collect the debt. CSW mailed collection letters to Klotz. Klotz claims she is not liable for the debt, arguing that the Equal Credit Opportunity Act (ECOA), 15 U.S.C. 1691, preempts New Jersey’s common-law doctrine of necessaries (where a spouse is jointly liable for necessary expenses incurred by the other spouse) and sued CSW for violating the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692e and 1692f. Preemption of the doctrine would allow Klotz to pursue her FDCPA case. The Third Circuit affirmed the dismissal of the case. The ECOA does not preempt New Jersey’s doctrine of necessaries. One ECOA regulation provides that “a creditor shall not require the signature of an applicant’s spouse . . . on any credit instrument if the applicant qualifies under the creditor’s standards of creditworthiness for the amount and terms of the credit requested.” Rejecting an argument that the doctrine effectively treats her as a spousal co-signer in violation of the spousal-signature prohibition, the court reasoned that Klotz’s medical debt falls within an exemption for incidental credit and rejected an argument that CSW failed to follow the procedural requirements of the doctrine of necessaries. View "Klotz v. Celentano Stadtmauer and Wale LLP" on Justia Law

Moyer failed to pay her credit-card debt. The card issuer hired Patenaude to collect it. Patenaude sent Moyer a one-page, single-sided collection letter that stated: If you wish to eliminate further collection action, please contact us at …. This is an attempt to collect a debt and any information obtained will be used for that purpose. Moyer sued Patenaude under the Fair Debt Collection Practices Act (FDCPA), arguing the letter’s second sentence, “to eliminate further collection action, please contact us," would deceive a debtor and lead a debtor to believe that a phone call is a “legally effective way to stop such collection action” when, in reality, only written communication can legally stop collection activity. Moyer claimed that the Contact Sentence would make a debtor uncertain about her right to dispute the debt in writing.The Third Circuit affirmed summary judgment in favor of Patenaude. The letter included statements that inform the consumer how to obtain verification of the debt and that she had 30 days in which to do so. Patenaude invited Moyer to call to “eliminate” collection action, but never asserted, explicitly or implicitly, that the phone call would, by law, force Patenaude to cease its collection efforts. View "Moyer v. Patenaude & Felix A.P.C." on Justia Law

In 2012, Earl contracted for the purchase of a house in Allegheny County from NVR, the seller and builder of the house. NVR's agents made representations about the house’s construction, condition, and amenities, including that the house would be constructed in a good and workmanlike manner; that NVR would remedy any deficiencies; and that the house would be constructed in accordance with relevant building codes and standards. Construction was completed around March 2013. Upon moving in, Earl encountered several material defects. NVR’s attempts to repair the defects were inadequate and exacerbated some of the issues, despite NVR’s assurances that the problems were remedied. Several promised conditions and amenities that Earl had relied upon had not been provided.Earl, claiming that NVR’s failure to provide the promised conditions and amenities of the agreement were knowing and willful, sued for violation of the Unfair Trade Practices and Consumer Protection Law (UTPCPL) and breach of implied warranty of habitability. The Third Circuit reversed the dismissal of her UTPCPL claim. Rulings by Pennsylvania appellate courts subsequent to an earlier Third Circuit holding have cast substantial doubt upon the continuing validity of prior interpretations of the UTPCPL. The economic loss and “gist of the action” doctrines no longer bar UTPCPL claims. View "Earl v. NVR Inc" on Justia Law