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

First Resolution Investment Corp. filed a notice of judgment lien against Roslyn Currier's home and maintained it for approximately one month although the judgment it was based on never became final and was vacated. Upon review of the matter, the Sixth Circuit Court of Appeals held that filing and failing to release an invalid judgment lien against a debtor's home while the related state court collection action remained pending fell within the broad scope of practices prohibited by the Fair Debt Collection Practices Act (FDCPA). Because Currier stated a plausible claim under the FDCPA, the Court reversed the dismissal of her claims and remanded the case for further proceedings. View "Currier v. First Resolution Inv. Corp." on Justia Law

The Federal Trade Commission (FTC) filed a complaint alleging that Defendants fraudulently marketed and sold debt-related services, failed to provide those services, and retained money as upfront fees in violation of the FTC Act, 15 U.S.C. 45(a); the Telemarketing Sales Rule, 16 C.F.R. 310; and the Mortgage Assistance Relief Services Rule, 12 C.F.R. 1015. The FTC also sought a temporary restraining order and a preliminary injunction, and provided more than 1,000 pages of exhibits. Defendants sought to stay proceedings, asserting that a criminal investigation had been launched into their business activities, as evidenced by a raid conducted by the Royal Canadian Mounted Police that resulted in seizure of records they claim were necessary to defend against the FTC’s allegations. The district court denied the motion; the FTC and Defendants entered into a stipulated preliminary injunction. Defendants later renewed the motion for a stay, claiming that they were unable to access critical records. Without explanation, the district court denied the motion and later granted the FTC’s motion for summary judgment, ordering Defendants to jointly pay restitution in the amount of $5,706,135.48 to injured consumers. The Sixth circuit affirmed, finding clear evidence of the violations. View "Fed. Trade Comm'n v. E.M.A. Nationwide, Inc." on Justia Law

Haddad bought his condominium in 1991 and lived in the unit until 2005, when he began renting it out. In 2008, a law firm, representing the association, sent Haddad a notice of delinquency, stating that Haddad owed $803 in unpaid condominium assessments, $40 in late charges, and $55 in legal fees and costs. Haddad notified the firm that he disputed the amount demanded, that he had never missed a monthly dues payment, but that he had been “singled out and charged with various violations” by the management company. Correspondence continued for several months, with the amount owed increasing each month and Haddad contesting the charges. The law firm ultimately recorded a Notice of Lien, which was discharged about six months later. Haddad sued under the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692, and the Michigan Collection Practices Act, alleging use of a false, deceptive or misleading representation in the collection of a debt, and continuing collection of a disputed debt before verification of the debt. The district court rejected the claims on the ground that the debt was commercial because the unit was rented when collection began. The Sixth Circuit court reversed, holding that an obligation to pay assessments arose from the original purchase and constituted a “debt” under the FDCPA. On remand, the district court granted summary judgment, finding that the firm had properly verified the debt and that the collection efforts were not deceptive or misleading. The Sixth Circuit reversed and remanded, based on failure to properly verify the debt. View "Haddad v. Alexander, Zelmanski, Danner & Fioritto, PLLC" on Justia Law

The flea-and-tick “spot-on products” at issue claim that their active ingredient works by topical application to a pet’s skin rather than through the pet’s bloodstream. According to the manufacturers, after the product is applied to one area, it disperses over the rest of the pet’s body within one day because it collects in the oil glands and natural oils spread the product over the surface of the pet’s skin and “wick” the product over the hair. The plaintiffs alleged false advertising based on statements that the products are self-dispersing and cover the entire surface of the pet’s body when applied in a single spot; that they are effective for one month and require monthly applications to continue to work; that they do not enter the bloodstream; and that they are waterproof and effective after shampooing, swimming, and exposure to rain or sunlight. The district court repeatedly referred to a one-issue case: whether the product covers the pet’s entire body with a single application. The case management order stated that the manufacturers would bear the initial burden to produce studies that substantiated their claims; the plaintiffs would then have to refute the studies, “or these cases will be dismissed.” The manufacturers objected. The plaintiffs argued that the plan would save time, effort, and money. The manufacturers submitted studies. The plaintiffs’ response included information provided by one plaintiff and his adolescent son and an independent examination of whether translocation occurred that detected the product’s active ingredient in a dog’s bloodstream. The district court concluded that the manufacturers’ studies substantiated their claims and denied all of plaintiffs’ discovery requests, except a request for consumer complaints, then granted the manufacturers summary judgment. The Sixth Circuit affirmed. The doctrines of waiver and invited error precluded challenges to the case management plan. View "Simms v. Bayer Healthcare, LLC" on Justia Law

American Satellite, a third party retailer of Dish Network satellite television services, received a call from a potential customer. A woman, who identified herself as “Dickley,” provided what she claimed to be her social security number. In actuality, the number belonged to a man named Bickley. Dickley was an identity thief. The agent entered Dickley’s name and social security number into an interface that connects to credit reporting agencies. Unable to verify the information, American Satellite informed Dickley that her attempt to open an account was declined. Bickley later received a credit report indicating that Dish had made an inquiry on his name. Dish informed him that someone had attempted to open an account in his name, providing a recording of the conversation between the agent and the identity thief. A year later, despite knowing that the inquiry had prevented the theft of his identity, Bickley filed suit under the Fair Credit Reporting Act, 15 U.S.C. 1681b, alleging request and use of his credit report without a “permissible purpose” and sought emotional distress damages. The district court entered summary judgment for Dish, including a counterclaim for abuse of process. The Sixth Circuit affirmed, referring to the conspicuous underdevelopment of key factual detail in Bickley’s complaint and in briefs as “bordering on deceitful” and to the adage that no good deed goes unpunished. View "Bickley v. Dish Network LLC" on Justia Law

Under the Fair Debt Collection Practices Act, 15 U.S.C. 1692g(a)(3) a collector must notify the individual from whom it seeks payment that it will assume the validity of the debt unless he disputes it “within thirty days after receipt of the notice.” Diversified wrote to Wallace that it would assume the validity of a debt unless he disputed it “within 30 days of receiving this notice.” Based on the letter’s use of “of” rather than “after,” as in the Act, Wallace sued Diversified. The district court granted the debt collector judgment on the pleadings. The Sixth Circuit affirmed. A collector need not parrot the Act to comply with, but only must communicate with enough clarity to convey the required information to a reasonable but unsophisticated consumer. The Act and the letter mean the same thing. View "Wallace v. Diversified Consultants, Inc." on Justia Law

In 2006, Plaintiff financed a purchase of residential property. Residential Finance was the lender; Chase serviced the loan. In 2011 Plaintiff sent Chase a “Qualified Written Request” under the Real Estate Settlement Procedures Act, 12 U.S.C. 2605(e), requesting information about the amount owed on the loan, the identity of the “current holder,” the date Chase began servicing the loan, and a breakdown of accrued charges. Plaintiff disputed late fees and other charges and stated that Chase had refused a loan modification for which she qualified and had failed to provide a copy of the Note as requested. Chase sent some material, but stated that any requested information not included was either unavailable or considered proprietary; the letter did not provide the identity of the loan’s owner or information on the correctness of Plaintiff’s account, and did not provide contact information for obtaining assistance. Plaintiff sued, alleging that she made excess payments that Chase failed to credit, violations of the Truth in Lending Act, 15 U.S.C. 1641(f)(2), RESPA, the Ohio Consumer Sales Practices Act, and conversion. Chase finally identified the owner of the loan: Fannie Mae. The district court dismissed. The Sixth Circuit affirmed with respect to TILA, but reversed dismissal of the RESPA claim, finding that Plaintiff adequately alleged causation of damages. View "Marais v. Chase Home Fin., LLC" on Justia Law

The Thomas M. Cooley Law School, accredited by the ABA, enrolls more students than any other U.S. law school and plans to expand. Cooley charges full-time students tuition of $36,750 per year, exclusive of other costs, and, according to U.S. News & World Report, has the lowest admission standards of any accredited law school. The school has a very low retention rate. In a 66-page complaint, 12 graduates claimed that the school disseminated false employment statistics, upon which they relied as assurances that they would obtain full-time attorney jobs after graduating. The graduates did not obtain the kind of employment the statistics advertised; some found employment at all. They claimed that, had they known the truth, they would not have attended Cooley or would have paid less tuition, and sought, among other relief, partial tuition reimbursement, which they estimated for the class would be $300,000,000. The district court dismissed. The Sixth Circuit affirmed, reasoning that the Michigan Consumer Protection Act does not apply to the facts. The complaint shows that one of the statistics on which they relied was objectively true and reliance on the statistics, without further inquiry, was unreasonable. View "MacDonald v. Thomas M. Cooley Law School" on Justia Law

Hrivnak filed a purported class action under the Fair Debt Collection Practices Act, 15 U.S.C. 1692–1692p, and Ohio consumer-protection law, Ohio Rev. Code §§ 1345.01–.99, 4165.01–04, seeking statutory, compensatory, and punitive damages exceeding $25,000, and injunctive and declaratory relief. The suit was based on the conduct of debt management companies and a law firm in dunning hi on credit card debts. The defendants made an offer of judgment of $7,000 plus costs and attorney’s fees, under Civil Rule 68. Hrivnak rejected the offer. The district court rejected the defendants’ claim that the offer rendered the suit moot. The Sixth Circuit affirmed, characterizing defendants’ argument as asserting that claims with little to no chance of success should be dismissed as moot whenever they are mixed in with promising claims that a defendant offers to compensate in full. View "Hrivnak v. NCO Portfolio Mgmt., Inc." on Justia Law

Plaintiffs and defendants obtained class certification and settlement approval for a nationwide class action involving three related lawsuits, alleging violations of the Fair Debt Collection Practices Act, 15 U.S.C. 1692-1692p and state law, based on the practice of “robo-signing” affidavits in debt collections. Eight individuals objected. The Sixth Circuit reversed, holding that the disparity in the relief afforded under the settlement to the named plaintiffs (exoneration of debts, $2000, and prospective injunctive relief) and the unnamed class members ($17 and prospective injunctive relief) made the settlement unfair. The class notice was inadequate and, although the class satisfies four of the six certification requirements (numerosity, commonality, typicality and predominance), the representation is not adequate under Rule 23(a) nor is the class action vehicle superior. View "Vassalle v. Midland Funding LLC" on Justia Law