Justia U.S. 6th Circuit Court of Appeals Opinion Summaries

Defendants bought consumer debts. Collection proceedings in Michigan state court suit resulted in a judgment against each plaintiff. The defendants employed Michigan’s simplified post-judgment garnishment procedure. None of the debtors timely objected. The rate of post-judgment interest “is calculated on the entire amount of the money judgment, including attorney fees and other costs,” using a complex formula. The Michigan Department of Treasury’s website lists every judgment interest rate calculated using this method. During the 11-year period at issue, it reached a peak of 4.033% and a valley of 0.687%. The plaintiffs’ debts were, instead, subjected to a rate of 13%, the maximum interest rate allowed for a judgment “rendered on a written instrument evidencing indebtedness with a specified [or variable] interest rate” although the underlying default judgments specify that they are “not based on a note or other written evidence of indebtedness,” and none of the judgments include any supporting written instrument.The plaintiffs alleged that using the 13% rate was improper and filed a federal suit under the Fair Debt Collection Practices Act, 15 U.S.C. 1692, and the Michigan Collection Practices Act. The Sixth Circuit reversed the dismissal of the debtors’ suit. The suit “is not the rare one" subject to the Rooker-Feldman doctrine, under which federal courts are prohibited from reviewing appeals of state-court decisions. The plaintiffs' injuries stemmed from the defendant’s conduct, not the state-court judgment. View "VanderKodde v. Mary Jane M. Elliott, P.C." on Justia Law

Van Hoven, a Michigan attorney, defaulted on a credit card debt. The Buckles law firm, collecting the debt, won a state court lawsuit. Van Hoven did not pay. Buckles filed four requests for writs of garnishment. Van Hoven says those requests violated the Michigan Court Rules by including the costs of the request ($15 filing fee) in the amount due and, in later requests, adding the costs of prior failed garnishments. Van Hoven filed a class-action lawsuit under the Fair Debt Collection Practices Act, which prohibits debt collectors from making false statements in their dunning demands, 15 U.S.C. 1692e. Years later, after “Stalingrad litigation” tactics, discovery sanctions, and professional misconduct allegations, Van Hoven won. The court awarded 168 class members $3,662 in damages. Van Hoven’s attorneys won $186,680 in attorney’s fees.The Sixth Circuit vacated. When Buckles asked for all total costs, including those of any garnishment request to date, it did not make a “false, deceptive, or misleading representation.” It was a reasonable request at the time and likely reflected the best interpretation of the Michigan Rules. The court remanded for determinations of whether Buckles made “bona fide” mistakes of fact in including certain costs of prior failed garnishments and whether its procedure for preventing such mistakes suffices. In some instances, Buckles included the costs of garnishments that failed because the garnishee did not hold any property subject to garnishment or was not the debtor’s employer. View "Van Hoven v. Buckles & Buckles, P.L.C." on Justia Law

Buchholz received two letters about overdue payments he owed on credit accounts. The letters came from MNT law firm, on MNT’s letterhead. Each referred to a specific account but the content is identical except for information regarding that specific account. MNT attorney Harms signed both letters; Buchholz alleges that MNT must have inserted “some sort of pre-populated or stock signature.” The letters do not threaten legal action but purport to be communications from a debt collector and explain that MNT has been retained to collect the above-referenced debts. Buchholz alleges that he felt anxiety that he would be subjected to legal action if prompt payment was not made and sued under the Fair Debt Collection Practices Act, 15 U.S.C. 1692e, e(3), and e(10), asserting that MNT processes such a high volume of debt-collection letters that MNT attorneys cannot engage in meaningful review of the underlying accounts. The Sixth Circuit affirmed the dismissal of the complaint for lack of standing. Buchholz has shown no injury-in-fact that is traceable to MNT’s challenged conduct. Buchholz’s allegation of anxiety falls short of the injury-in-fact requirement; it amounts to an allegation of fear of something that may or may not occur in the future. Buchholz is anxious about the consequences of his decision to not pay the debts that he does not dispute he owes; if the plaintiff caused his own injury, he cannot draw a connection between that injury and the defendant’s conduct. View "Buchholz v. Meyer Njus Tanick, PA" on Justia Law

In 2018, Mosley visited the Kohl’s stores in Northville and Novi, Michigan and encountered architectural barriers to access by wheelchair users in their restrooms. He sought declaratory and injunctive relief under the Americans with Disabilities Act (ADA) provisions governing public accommodations, claiming that Kohl’s denied him “full and equal access and enjoyment of the services, goods and amenities due to barriers ... and a failure . . . to make reasonable accommodations,” 42 U.S.C. 12182. According to the district court, Mosley has filed similar lawsuits throughout the country. A resident of Arizona, Mosley “has family and friends that reside in the Detroit area whom he tries to visit at least annually.” Mosley, a musician, had scheduled visits to “southeast Michigan” in September and October 2018. He is planning to visit his family in Detroit in November 2018. He stated that he would return to the stores if they were modified to be ADA-compliant. The district court dismissed the suit for lack of standing. The Sixth Circuit reversed and remanded. Mosley has sufficiently alleged a concrete and particularized past injury and has sufficiently alleged a real and immediate threat of future injury. Plaintiffs are not required to provide a definitive plan for returning to the accommodation itself to establish a threat of future injury, nor need they have visited the accommodation more than once. View "Mosley v. Kohl's Department Stores, Inc." on Justia Law

Plaintiffs sued, claiming that certain Tristar pressure cookers had defective lids that could come open while the cookers were in use, exposing the user to possible injury. The district court certified three separate state classes for trial: Ohio, Pennsylvania, and Colorado. During a trial recess, the parties agreed to a settlement with a nationwide class. The parties agreed to the principal amount but, with Tristar’s agreement not to dispute an award at or below $2.5 million, deferred determination of attorneys’ fees. Class members would receive a coupon to purchase a different Tristar product and a warranty extension. The court calculated the value of the coupons and warranty extensions as $1,020,985 and approved attorneys’ fees of $1,980,382.59. At a fairness hearing, Arizona made its first appearance, arguing as amicus, along with the U.S. Department of Justice, that the settlement was unfair because of the division between the principal settlement and attorneys’ fees. None of the class joined in objections to the settlement. The court indicated that it would approve the settlement. Before the court issued its order, Arizona sought to officially intervene under either Rule 24(a) Rule 24(b). The court rejected each of Arizona’s requests for lack of Article III standing. The Sixth Circuit dismissed an appeal, rejecting the state’s arguments that it had standing under the parens patriae doctrine, under the Class Action Fairness Act, 28 U.S.C. 1715, and because it has a participatory interest as a “repeat player.” View "Kenneth Chapman v. Tristar Products, Inc." on Justia Law

Plaintiffs own two dental practices, several properties that generate rental income, a sports bar, and an indoor basketball gymnasium that they rent out as an event center. Around 2009, they began “buying property” and obtained a $300,000 commercial line of credit from First Southern. In 2013, Plaintiffs sought a loan from Southern to convert a vacant former hotel into apartment units and commercial spaces. Southern approved a “maximum total principal balance” that “will not exceed $1,013,519.00.” Plaintiffs later sought additional funds to complete the renovation. A revised total estimated cost was $1,654,648.65, approximately $712,000 above the total cost for the project represented in Plaintiffs’ loan application. Southern then learned about Plaintiffs’ additional debt burden, refused to loan additional funds, and declined to extend the maturity date on the line of credit. After Scott paid off his debts with Southern, Southern’s automated computer system continued to report Scott’s entire prior payment history, including that he had previously been delinquent on his loans. Southern represented to Plaintiffs that it had contacted a consumer credit agency about the error. The Sixth Circuit affirmed summary judgment in favor of the defendants in a suit under the Fair Credit Reporting Act, 15 U.S.C. 1681. Plaintiffs never notified a consumer reporting agency about their dispute, a prerequisite for prevailing under the Act, which preempts state common law claims involving reporting to consumer reporting agencies. View "Scott v. First Southern National Bank" on Justia Law

The Sparkses own property subject to a homeowners’ association. When they fell behind on their assessments, the Association engaged Equity Experts to collect that debt. Equity Experts also sought to collect from the Sparkses the $270 fee it charges the Association for its collection services; the Sparkses contend that those attempts violated the Fair Debt Collection Practices Act (FDCPA). That Act prohibits debt collectors from attempting to collect debts not “expressly authorized by the agreement creating the debt or permitted by law,” 15 U.S.C. 1692f(1). The Sixth Circuit affirmed summary judgment in favor of Equity Experts. The agreement at issue expressly authorizes the Association to collect its “costs.” The Declaration’s use of “costs” is best read in its ordinary sense to mean all “costs of collection,” and not just taxable “legal costs.” The Sparkses did not argue that Equity Experts’ fees were unreasonably high, nor did they provide substantial evidence of an understanding between Equity Experts and the Association that the Association would never actually have to pay the collection fees. View "Melvin Sparks v. EquityExperts.org, LLC" on Justia Law

Louisiana-Pacific produces “engineered-wood” building siding—wood treated with zinc borate, a preservative that poisons termites; Hardie sells fiber-cement siding. To demonstrate the superiority of its fiber cement, Hardie initiated an advertising campaign called “No Wood Is Good,” proclaiming that customers ought to realize that all wood siding—however “engineered”—is vulnerable to damage by pests. Its marketing materials included digitally-altered images and video of a woodpecker perched in a hole in Louisiana-Pacific’s siding with nearby text boasting both that “Pests Love It,” and that engineered wood is “[s]ubject to damage caused by woodpeckers, termites, and other pests.” Louisiana-Pacific sued Hardie, alleging false advertising, and moved for a preliminary injunction. The Sixth Circuit affirmed the denial of the motion. Louisiana-Pacific failed to show that it would likely succeed in proving the advertisement unambiguously false under the Lanham Act and the Tennessee Consumer Protection Act. View "Louisiana-Pacific Corp. v. James Hardie Building Products, Inc." on Justia Law

Fifth Third Bank’s “Early Access” program is a short-term lending option for certain customers who hold eligible checking accounts. Fifth Third deposited Early Access loans straight into borrowers’ accounts, then paid itself back automatically, with a 10% “transaction fee,” after a direct deposit posted or 35 days elapsed, whichever came first. The contract governing the program disclosed the annual percentage rate (APR) as 120% in all cases. Plaintiffs obtained Early Access loans, which were paid back fewer than 30 days later. They contend that the 120% figure is false and misleading. Calculated using a more conventional method, in which the APR is tied to the length of the loan, plaintiffs assert that the APR was actually as high as 3650%. The district court rejected an Ohio law breach-of-contract claim, holding that the contract unambiguously disclosed the method for calculating APR despite admitting that the result “may be misleading.” The Sixth Circuit reversed. The contract was ambiguous because it provided different descriptions of “APR” that cannot be reconciled. The first was a definition, lifted verbatim from a federal regulation, that describes the APR as being “expressed as a yearly rate”; the second was the method used to calculate it, which is not based on any time period. The ambiguity raises a question of fact that should be resolved on remand. View "Laskaris v. Fifth Third Bank" on Justia Law

A consumer paying by check usually provides identification such as a driver’s license. The merchant often takes the bank account number and the driver’s license number and sends them to companies like TeleCheck. TeleCheck runs these identifiers through its system and may recommend that the merchant refuse the check. When a customer presents two identifiers, TeleCheck records a link between them in its system. If, in a later transaction, a customer uses only one of those identifiers, TeleCheck recommends a decline if there is a debt associated with the presented identifier or the linked identifier. Huff requested a copy of his TeleCheck file (Fair Credit Reporting Act. 15 U.S.C. 1681g(a)(1)), providing only his driver’s license. The report contained only the 23 transactions in which he presented his license during the past year but stated that: “Your record is linked to information not included in this report, subject to identity verification prior to disclosure. Please contact TeleCheck.” Huff did not call. Huff’s driver’s license actually links to six different bank accounts. In addition to omitting the linked accounts, the report did not reveal checks from those accounts that were not presented with Huff’s license. TeleCheck has never told a merchant to decline one of Huff’s checks. Huff filed suit and moved for class certification. The Sixth Circuit affirmed the dismissal of the case because Huff lacked standing for failure to show that the incomplete report injured him in any way. View "Huff v. TeleCheck Services., Inc." on Justia Law