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

SEB distributes household products under several brand names, including electric steam irons sold under the Rowenta brand name. Euro-Pro distributes household appliances under the Shark brand name. The Shark packaging states: “MORE POWERFUL STEAM vs. Rowenta®†† at half the price.” The “††”refers to a fine-print footnote on the package’s bottom, stating that the claim is “††[b]ased on independent comparative steam burst testing to Rowenta DW5080 (grams/shot).” The packaging also asserts “#1 MOST POWERFUL STEAM*” with a fine-print reference on the bottom stating it “*[o]ffers more grams per minute (maximum steam setting while bursting before water spots appear) when compared to leading competition in the same price range, at time of printing.” SEB directed its internal laboratory to conduct tests, which showed that the Rowenta performed the same as the Shark. SEB commissioned an independent laboratory to conduct tests, which showed that the Rowenta outperformed the Shark. SEB claimed false advertising under the Lanham Act, 15 U.S.C. 1125(a), and unfair competition under Pennsylvania common law. The Third Circuit affirmed entry of an injunction, agreeing that the packaging’s definition of a claim term applies to the claim’s explicit message and that the court properly disregarded consumer survey evidence offering alternative meanings. View "Groupe SEB USA Inc v. Euro Pro Operating, LLC" on Justia Law

McLaughlin had a mortgage. As a result of an error, the mortgage company believed that he was in default and referred the matter to a law firm, PHS, which sent McLaughlin a letter about the debt that he claims violated the Fair Debt Collection Practices Act, 15 U.S.C. 1692 by referring to attorneys’ fees and costs that McLauglin claims had not yet been incurred. The district court dismissed certain claims because McLaughlin did not ask PHS to validate the debt before he filed suit. The Third Circuit reversed, concluding that he was not required to request validation. The court affirmed imposition of sanctions against PHS for its failure to produce certain documents during discovery. View "McLaughlin v. Phelan Hallinan & Schmieg, LLP" on Justia Law

Quest provides diagnostic and clinical testing. In general, it tests a patient’s specimens upon the request of a referring physician. Once Quest bills a patient’s insurance provider, the provider reviews the claim and sends Quest an Explanation of Benefits (EOB) or an Electronic Remittance Advice (ERA), which informs Quest of the amount, if any, that the patient is responsible for paying. Quest then sends the patient a bill, and, if no response is received, it may turn the bill over to a collection agency. Plaintiffs in a putative class action claimed that Quest billed patients in excess of the amount stated on the EOB or ERA. The district court denied certification as to all four proposed classes and granted summary judgment against an individual plaintiff, as to her state law claims of consumer fraud and unjust enrichment. The Third Circuit affirmed. The court properly found that individual inquiries would be required to determine whether an alleged overbilling constituted unjust enrichment for each class member. View "Grandalski v. Quest Diagnostics Inc." on Justia Law

Douglass received a letter from Convergent regarding a debt that Douglass allegedly owed T-Mobile. Convergent used an envelope with a glassine window, through which were visible: Douglass’s name and address; a sequence of numbers representing Douglass’s account number with Convergent that does not refer or relate to her T-Mobile account; a Postal Service bar code; a QR code, which, when scanned by a smart phone, revealed the same information as displayed through the glassine window; and a monetary amount corresponding to Douglass’s alleged debt. A putative class action on behalf of recipients of similar letters alleged that disclosure of the account number on the envelope and embedded in the QR code, violated the Fair Debt Collection Practices Act, 15 U.S.C. 1692f(8), which prohibits “using any language or symbol” other than a debt collector’s name and address on an envelope. Convergent argued that the account number qualified as “benign language.” The district court granted summary judgment to Convergent, reasoning that a strict interpretation of section1692f(8) would contradict Congress’s true intent: barring markings that would reveal the letter to pertain to debt collection or harass or humiliate a consumer. The Third Circuit vacated, stating that the account number could identify Douglass as a debtor and its disclosure was not benign.View "Douglass v. Convergent Outsourcing" on Justia Law

In 1989, Seamans received a Federal Perkins Loan of $1,180.00 from Temple University. The first payment was due in 1992. The loan was declared delinquent the following month. Nonths later, Temple notified Seamans that the account had been placed for collection. In 2010, Seamans enrolled at Drexel University. He sought a Pell Grant, but Drexel refused to provide with financial assistance until Seamans repaid the Temple Loan. In 2011, Seamans repaid that loan in full. Seamans then noticed a “trade line” on his credit report. The trade line may or may not have appeared on his credit report when the account was in default. Seamans formally disputed some of the information by contacting the credit reporting agency. Temple, had its loan servicer investigate, but resubmitted information virtually unchanged. Seamans again contacted Temple and credit agencies, to dispute the trade line. After a second investigation, Temple modified certain elements, but still did not report various details. There was evidence that Temple treated other disputes in a similar manner. Seamans sued, alleging that Temple negligently or willfully violated the Fair Credit Reporting Act, 15 U.S.C. 1681–1681x. The district court granted Temple summary judgment, finding that the Higher Education Act, 20 U.S.C. 1001–1155, exempted Temple from FCRA compliance because the credit instrument was a Perkins Loan. The Third Circuit vacated, stating that Seamans’s dispute appears to have merit and that failure to report the dispute may constitute a material inaccuracy on his credit report. View "Seamans v. Temple University" on Justia Law

Plaintiffs involved in, or wishing to be involved in the “death care industry” challenged Pennsylvania’s Funeral Director Law, 63 Pa. Stat. 479.1 provisions that: permit warrantless inspections of funeral establishments by the state Board of Funeral Directors; limit the number of establishments in which a funeral director may have an ownership interest or practice the provision; restrict the capacity of unlicensed individuals and certain entities to hold ownership interests in a funeral establishment; require every funeral establishment to have a licensed full-time supervisor; require funeral establishments to have a “preparation room”; prohibit service of food in a funeral establishment; prohibit use of trade names by funeral homes; govern the trusting of monies advanced under pre-need contracts for merchandise; and prohibit payment of commissions. The district court found several provisions unconstitutional. The Third Circuit reversed: invalidation of the warrantless inspection scheme; holdings on dormant Commerce Clause challenges to certain provisions; conclusions that disputed provisions violate substantive due process; a ruling that the Board’s actions unconstitutionally impair private contractual relations with third parties; and invalidation of the ban on payment of commissions to unlicensed salespeople. The court affirmed that the ban on the use of trade names in the funeral industry violates First Amendment protections. The court noted that antiquated provisions are not necessarily unconstitutional. View "Heffner v. Murphy" on Justia Law

The Simons filed for Chapter 7 bankruptcy protection, identifying a nonpriority credit-card debt to FIA. FIA retained Weinstein, which sent the Simons a letter and notice through their bankruptcy counsel, stating that FIA was an adversary proceeding under 11 U.S.C. 523 to challenge dischargeability, but offering to forego the proceeding if the Simons stipulated that the debt was nondischargeable or agreed to a reduced amount. The letter stated that a Rule 2004 examination had been scheduled, but that Weinstein was open to settlement; it mentioned the possibility of rescheduling and set out information about challenging the debt. The subpoena certificate, signed by a Weinstein attorney, stated that a copy was mailed to the Simons’ home and their attorney’s office. The Simons allege that Weinstein did not actually send it to their home. Their counsel received copies. The Simons moved to quash, alleging violations of Bankruptcy Rule 9016 and Civil Rule 45 subpoena requirements, and filed an adversary proceeding asserting Fair Debt Collection Practices Act claims based on the letter. The Bankruptcy Court quashed the notices, but ruled that it lacked jurisdiction over the FDCPA claims. The Simons then sued FIA and Weinstein in the district court, which dismissed. The Third Circuit affirmed dismissal of 15 U.S.C 1692e(5) and (13) claims for allegedly failing to identify the recording method in the Rule 2004 examination and by issuing the subpoenas from a district other than where the examinations were to be held. The court also affirmed dismissal of a 1692e(11) claim because its mini-Miranda requirement conflicts with the Bankruptcy Code automatic stay. The court reversed dismissal of claims based failing to serve the subpoenas directly on the individuals and failing to include the text of Civil Rule 45(c)–(d) in the subpoenas. View "Simon v. FIA Card Servs., NA" on Justia Law

In 2007, Gager applied for a line of credit to purchase computer equipment. The application required that she provide her home phone number. Gager listed her cellular phone number without stating that the number was for a cellular phone, or indicating that Dell should not use an automated telephone dialing system to call her at that number. Gager defaulted on the loan Dell granted. Dell began using an automated telephone dialing system to call Gager’s cell phone, leaving pre-recorded messages concerning the debt. In 2010, Gager sent a letter, listing her phone number and asking Dell to stop calling it regarding her account. The letter did not indicate that the number was for a cellular phone. Dell continued to call, using an automated telephone dialing system. Gager filed suit, alleging that Dell violated the Telephone Consumer Protection Act of 1991, 47 U.S.C. 227(b)(1)(A)(iii). The district court dismissed on the theory that she could not revoke her consent once it was given. The Third Circuit reversed. The fact that Gager entered into a contract with Dell does not exempt Dell from the TCPA. Dell will still be able to call Gager about her delinquent account, but not using an automated dialing system. View "Gager v. Dell Fin. Servs. LLC" on Justia Law

Carrera sued Bayer, claiming that Bayer falsely advertised its product One-A-Day WeightSmart as a multivitamin and dietary supplement that had metabolism-enhancing effects due to its ingredient, epigallocatechin gallate, a green tea extract. The daily dose was one tablet and the price was about $8.99 for 50 tablets. Bayer sold WeightSmart through retail stores until 2007 and did not sell directly to consumers. Carrera initially sought to certify a nationwide class under Fed. R. Civ. P. 23(b)(3), bringing a claim under the New Jersey Consumer Fraud Act. The court denied certification because New Jersey law did not apply to out-of-state customers. Carrera then moved to certify a Rule 23(b)(3) class of Florida consumers under the Florida Deceptive and Unfair Trade Practices Act. Bayer challenged certification, reasoning that class members are unlikely to have documentary proof of purchase and Bayer has no list of purchasers. The Third Circuit vacated class certification. If class members are impossible to identify without extensive and individualized fact-finding or mini-trials, a class action is inappropriate. If class members cannot be ascertained from a defendant’s records, there must be “a reliable, administratively feasible alternative,” not a method that would amount to no more than ascertaining by potential class members‟ say so.”View "Carrera v. Bayer Corp." on Justia Law

Sam’s Club is a members-only retail warehouse that features a section for clearance items, called “as-is” items. Items may be designated “as-is” for various reasons and may be damaged or undamaged. Every as-is item is marked with an orange sticker; when a cashier scans the item, the original price appears and the cashier must perform a manual override. The software records the fact that a price override was performed, but does not include the reason. Overrides can occur for reasons other than “as-is” designation. Sam’s contracted with NEW to sell extended warranties for items sold in the store. NEW will not cover some “as is” products, including some purchased by Hayes. On each occasion, Sam’s employees offered and Hayes purchased a NEW warranty. The store provided Hayes with a manual and remote missing from a television he purchased and offered to refund the warranty price. Hayes declined. Hayes sued, on behalf of himself and all other persons who purchased a warranty for an as-is product from Clubs in New Jersey since 2004, asserting violation of the state Consumer Fraud Act, breach of contract, and unjust enrichment. The trial court certified a Rule 23(b)(3) class. The Third Circuit vacated and remanded for consideration of Rule 23’s class definition, ascertainability, and numerosity requirements in light of a recent decision. View "Hayes v. WalMart Stores Inc" on Justia Law