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

The Ticket Law, N.J. Stat. 56:8-35.1, part of New Jersey’s Consumer Fraud Act, says: It shall be an unlawful practice for a person, who has access to tickets to an event prior to the tickets’ release for sale to the general public, to withhold those tickets from sale to the general public in an amount exceeding 5% of all available seating for the event. The Consumer Fraud Act permits private plaintiffs to sue any person who violates the Act and causes them to suffer ascertainable damages. Plaintiffs wanted to attend Super Bowl XLVIII, which was held in New Jersey in 2014. One plaintiff bought two tickets on the resale market, allegedly for much more than face price. They assert that the NFL’s method of selling tickets to Super Bowl XLVIII violated the Ticket Law and resulted in unjust enrichment. The Third Circuit affirmed dismissal. Neither plaintiff has constitutional standing to bring this case. Otherwise, anyone who purchased a Super Bowl ticket on the resale market would have standing to sue in federal court based on nothing more than conjectural assertions of causation and injury. Article III requires more. The court declined to interpret the Ticket Law’s meaning. View "Finkelman v. Nat'l Football League" on Justia Law

Plaintiffs filed a class action alleging that defendants, who run internet advertising businesses, placed tracking cookies on the plaintiffs’ web browsers in contravention of their browsers’ cookie blockers and defendant Google’s own public statements. Essentially they claimed that the defendants acquired the plaintiffs’ internet history information when, in the course of requesting webpage advertising content at the direction of the visited website, the plaintiffs’ browsers sent that information directly to the defendants’ servers. They cited the Wiretap Act, 18 U.S.C. 2510; the Stored Communications Act, 18 U.S.C 2701; the Computer Fraud and Abuse Act, 18 U.S.C. 1030; and, against Google, violation of the privacy right conferred by the California Constitution, intrusion upon seclusion, the state Unfair Competition Law, the California Comprehensive Computer Data Access and Fraud Act, the California Invasion of Privacy Act, and the California Consumers Legal Remedies Act. The district court dismissed. The Third Circuit affirmed as to the federal claims, stating that fraud or deceit does not amount to wiretapping; the alleged conduct implicated no protected “facility” under the Stored Communications Act; and the plaintiffs alleged no damages under the Fraud Act. The court vacated dismissal of the state law claims against Google. View "In Re: Google Inc Cookie Placement Consumer Privacy Litig." on Justia Law

Leyse filed suit under the Telephone Consumer Protection Act, 47 U.S.C. 227, after receiving a prerecorded telemarketing call on the landline he shares with his roommate. Leyse was not the intended recipient of the call— his roommate was. The district court dismissed for lack of statutory standing. The Third Circuit reversed, concluding that Leyse has statutory standing. His status as a regular user of the phone line and occupant of the residence that was called brings him within the language of the Act and the zone of interests it protects. View "Leyse v. Bank of America NA" on Justia Law

The district court denied a motion to certify a class to sue Zions Bank and its payment-processor subsidiaries for alleged civil violations of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1962(c), (d). The complaint that the defendants conspired to conduct a fraudulent telemarketing scheme that caused unauthorized debits from bank accounts owned by Reyes and members of the proposed class. The court concluded that there were no issues common to the class and Reyes could therefore satisfy neither the commonality requirement of Federal Rule of Civil Procedure 23(a), nor the predominance requirement of Rule 23(b)(3). The court recognized Reyes’ theory of a sham enterprise, but focused on the fact that different sales pitches were used and different products were pitched. The Third Circuit vacated, reasoning that the district court did not adequately consider evidence of the structure of each of the alleged fraudulent schemes and related FTC investigations. If absolute conformity of conduct and harm were required for class certification, unscrupulous businesses could victimize consumers with impunity merely by tweaking the language in a telemarketing script to get access to personal information such as account numbers. View "Reyes v. Netdeposit, LLC" on Justia Law

Wyndham has licensed its brand name to approximately 90 independently owned hotels, each having a system that processes consumer information, including names, addresses, email addresses, telephone numbers, payment card account numbers, expiration dates, and security codes. Wyndham manages the systems and requires the hotels to configure them to its specifications to connect to Wyndham’s network. The FTC filed suit under 15 U.S.C. 45(a), alleging that Wyndham engaged in unfair cybersecurity practices that, unreasonably and unnecessarily exposed consumers’ personal data to unauthorized access and theft. The company: allowed Wyndham-branded hotels to store payment card information in clear readable text and allowed use of easily guessed passwords; failed to use “readily available security measures,” such as firewalls; allowed hotel systems to connect to its network without taking appropriate cybersecurity precautions; and did not follow “proper incident response procedures,” so that hackers used similar methods in three attacks, but has published a privacy policy on its website that overstates its cybersecurity. Hackers stole information for hundreds of thousands of consumers leading to $10.6 million in fraudulent charges. The district court denied Wyndham’s motion to dismiss. On interlocutory appeal, the Third Circuit agreed that the FTC has authority to regulate cybersecurity under the unfairness prong of section 45(a); and, that Wyndham had fair notice its specific practices could fall short of that provision. View "Fed. Trade Comm'n v. Wyndham Worldwide Corp" on Justia Law

Evankavitch executed a mortgage against her property and fell behind on her payments. The mortgagee’s rights were assigned to Green Tree. Green Tree and Evankavitch talked about the loan several times. Evankavitch initiated one discussion by calling Green Tree from her daughter’s (Cheryl) cell phone. Green Tree recorded Cheryl’s number and called Evankavitch at both Evankavitch’s and Cheryl’s numbers. Evankavitch instructed Green Tree to stop using her daughter’s number. Green Tree continued to call both numbers, left messages on Cheryl’s voicemail, and began calling Evankavitch’s neighbors. After learning of these communications, Evankavitch brought suit. Under the Fair Debt Collection Practices Act, 15 U.S.C. 1692, a debt collector is liable to a consumer for contacting third parties unless the communication falls under a statutory exception. One exception covers communication “for the purpose of acquiring location information about the consumer.” That exception prohibits more than one such contact “unless the debt collector reasonably believes that the earlier response of such person is erroneous or incomplete and that such person now has correct or complete location information.” The Third Circuit affirmed judgment in favor of Evankavitch, finding that the debt collector has the burden to prove that the challenged communications fit within the exception. View "Evankavitch v. Green Tree Servicing LLC" on Justia Law

In earlier litigation, Teva challenged the validity and enforceability of GSK’s patents on lamotrigine, Lamictal’s active ingredient. Teva was first to file an FDA application, alleging invalidity or nonenforceability, and seeking approval to produce generic lamotrigine tablets and chewable tablets for markets alleged to be annually worth $2 billion and $50 million,. If the patent suit resulted in a determination of invalidity or nonenforceability—or a settlement incorporating such terms—Teva would be statutorily entitled to a 180- day period of market exclusivity, during which time only it and GSK could produce generic lamotrigine tablets. After the judge ruled the patent’s main claim invalid, the companies settled; Teva would end its patent challenge in exchange for early entry into the chewables market and GSK’s commitment not to produce its own, “authorized generic” Lamictal tablets. Plaintiffs, direct purchasers of Lamictal, sued under the Sherman Act, 15 U.S.C. 1 & 2, claiming that the agreement was a “reverse payment” intended to induce Teva to abandon the patent fight and eliminate the risk of competition in the lamotrigine tablet market for longer than the patent would otherwise permit. The district court dismissed. The Third Circuit vacated, citing Supreme Court precedent, holding that unexplained large payments from the holder of a drug patent to an alleged infringer to settle litigation of the patent’s validity or infringement (reverse payment) can violate antitrust laws. View "King Drug Co of Florence Inc, v. Smithkline Beecham Corp." on Justia Law

Plaintiffs purchased Restaurant.com gift certificates, substantially all of which display restaurant-specific conditions and Restaurant.com’s standard conditions, including expiration one year from date of issue, “except in California and where otherwise provided by law,” and that the certificate is “[v]oid to the extent prohibited by law.” Plaintiffs filed a purported class action, alleging violations of the New Jersey Gift Certificate Statute, prohibiting gift certificates from expiring within 24 months of the date of sale; Consumer Fraud Act, creating a cause of action for violations of the Statute; and Truth-in-Consumer Contract, Warranty, and Notice Act, prohibiting notice to a consumer or offering any written consumer contract that violates any clearly established consumer right or seller responsibility; any notice or consumer contract that states that any of its provisions may be void in some jurisdictions must also specify “which provisions are or are not void, unenforceable or inapplicable within the State of New Jersey.” After the Third Circuit certified questions to the Supreme Court of New Jersey, it vacated dismissal of the TCCWNA count. On remand, the district court dismissed, reasoning that retroactive application was inappropriate because the state court decision established a new rule of law and because the plaintiffs did not have “non-theoretical damages.” The Eighth Circuit reversed and remanded for entry of judgment solely in favor of the named plaintiffs, noting that their efforts brought about the new rule. View "Bohus v. Restaurant.Com Inc" on Justia Law

Aaron’s stores sell and lease residential and office furniture, consumer electronics, and appliances. Byrd leased a laptop computer from Aspen, an Aaron’s franchisee. Although Byrd asserts that she made full payments, an Aspen agent came to repossess the laptop, claiming that the payments had not been made. The agent allegedly presented a screenshot of a poker website Byrd had visited as well as a picture of Byrd taken by the laptop’s camera. Aspen obtained the picture and screenshot through spyware named “PC Rental Agent” that can collect screenshots, keystrokes, and webcam images from the computer and its users. Between November 16, 2010 and December 20, 2010, the Byrds alleged that this spyware secretly accessed their laptop 347 times on 11 different days. According their putative class action, alleging violation of the Electronic Communications Privacy Act, 18 U.S.C. 2511, 895 customers had surveillance conducted through PC Rental Agent. Concluding that the proposed classes were not ascertainable, the district court denied class certification. The Third Circuit reversed. The court erred by: misstating the rule governing ascertainability; engrafting an “underinclusive” requirement; finding that an “overly broad” class was not ascertainable; and improperly applying precedent to the issue of whether “household members” could be ascertainable. View "Byrd v. Aaron's Inc" on Justia Law

Kaymark defaulted on a mortgage held by Bank of America (BOA). On behalf of BOA, Udren Law Offices initiated foreclosure proceedings. The body of the Foreclosure Complaint listed not-yet-incurred fees as due and owing, which, Kaymark alleged, violated state and federal fair debt collection laws and breached the mortgage contract. The Third Circuit reversed dismissal of claims that the disputed fees constituted actionable misrepresentation under the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692, but affirmed dismissal of all other claims. By attempting to collect fees for legal services not yet performed in the mortgage foreclosure, Udren violated FDCPA section 1692e(2)(A), (5), and (10), which imposes strict liability on debt collectors who “use any false, deceptive, or misleading representation or means in connection with the collection of any debt,” and section 1692f(1) by attempting to collect “an[] amount (including any interest, fee, charge, or expense incidental to the principal obligation) unless such amount is expressly authorized by the agreement creating the debt or permitted by law.” The court analogized to similar claims in a debt collection demand letter. View "Kaymark v. Bank of America NA" on Justia Law