The latest published decisions relevant to consumer protection from the California Supreme Court and Courts of Appeal.
Apr. 26, 2022 — Fourth App. Dist. — The City of San Diego sued Experian Data Corp. for violating the Unfair Competition Law (Bus. & Prof. Code, § 17200 et seq.). The City hired three private law firms to represent it on a contingency fee basis. Experian filed a motion to disqualify the private law firms for violating the prosecutor's duty of neutrality. The trial court denied Experian’s motion, and the Court of Appeal affirmed. The Court further held that the "agreements to pay the private law firms from any penalties recovered from Experian do not violate Business and Professions Code section 17206’s requirement that all funds recovered in a UCL action be paid to the City’s treasurer."
Apr. 21, 2022 — Supreme Court — In a 6-3 decision authored by Justice Sotomayor, the Supreme Court ruled that a city ordinance treating signs differently depending on whether they have a connection to the site where they are located is content-neutral and therefore not subject to strict scrutiny, the most stringent constitutional test. Austin's ordinance was challenged as a content-based restriction of First Amendment free speech rights, but the court concluded that the ordinance does not “single out any topic or subject matter for differential treatment.” The case will be sent back to the lower courts to consider whether the sign code can survive under intermediate scrutiny.
Mar. 28, 2022 — First District, Div. 4 — In this legal malpractice action, the defendants filed to compel arbitration. The Court of Appeal held that the trial court that granted a defendant’s petition to compel arbitration has jurisdiction to lift the stay of trial court proceedings where a plaintiff demonstrates financial inability to pay the anticipated arbitration costs. Further, the court may require defendant either to pay plaintiff’s share of arbitration costs or to waive the right to arbitration.
Mar. 7, 2022 — California Supreme Court — Plaintiff asked Wells Fargo to modify two junior loans that used his home as collateral. Wells Fargo did not respond to that request, but informed the plaintiff of actions it might take against him for nonpayment. Eventually the loans were sold to a third party, which foreclosed on the house. Plaintiff sued Wells Fargo for negligence, but the Supreme Court held that Wells Fargo had no tort duty to respond to plaintiff's request to modify his loans.
Mar. 3, 2022 — Third App. Dist. — Plaintiff sued National Western Life Insurance Company (NWL) for negligence and elder abuse arising from an NWL annuity sold to plaintiff. After a remand from the Supreme Court, the Court of Appeal affirmed the judgment finding NWL liable for negligence and financial elder abuse. However, punitive damages assessed against NWL were reversed.
Feb. 8, 2022 — Third App. Dist. — The plaintiffs sued Ford after experiencing unfixable engine issues with their Ford pickup truck. The jury found in favor of the plaintiffs on their claims under the Song-Beverly Consumer Warranty Act (California's "lemon law"), the Consumer Legal Remedies Act, and their cause of action for fraud in the inducement-concealment. The jury awarded damages, civil penalties, punitive damages, and attorneys' fees. The Court of Appeal affirmed the judgment and the damages awards.
Jan. 28, 2022 — Second App. Dist. — Plaintiff sued his auto dealer, Southgate Auto, and the assignee of his credit contract, Westlake Services, after buying a used Toyota. After default was entered against the dealer, the plaintiff settled with Westlake. He then requested attorneys' fees, which the court awarded. Westlake appealed, claiming that pursuant to the FTC Holder Rule, the plaintiff could not recover attorneys' fees against the assignee above what he paid on the contract. The Court of Appeal, however, followed the reasoning of Pulliam v. HNL Automotive (2021) 60 Cal.App.5th 396, review granted April 28, 2021, S267576, holding that the FTC Holder Rule does allow defrauded plaintiffs to recover attorneys' fees as well as costs from assignees of credit contracts.
Jan. 27, 2022 — Fourth App. Dist — After a bench trial, plaintiff prevailed on one claim under the Song-Beverly Consumer Warranty Act and received $1 in nominal damages. The court awarded him $684,250 in attorney fees. The Court of Appeal held that the trial court used the incorrect legal standard in finding that the plaintiff was the prevailing party, and remanded for the superior court to apply the correct standard. The Court also rejected Jaguar's argument that the plaintiff had rejected its 998 offer to compromise and did not receive a more favorable judgment, finding that its offer was not sufficiently specific.
Dec. 30, 2021 — Fourth App. Dist. — Plaintiffs filed a class action lawsuit against JustAnswer, alleging it routinely enrolled online consumers like them in automatic renewal membership programs without providing “clear and conspicuous” disclosures and obtaining their “affirmative consent” as mandated by the Automatic Renewal Law. JustAnswer filed a motion to compel arbitration, and the trial court denied it. The court of appeal affirmed, holding that the company's arbitration agreement was not sufficiently conspicuous and therefore plaintiffs should not be held to it.
Dec. 29, 2021 — First App. Dist. — The court of appeal held that the requirement under Civil Code section 1799.91 that notice be afforded to cosigners of consumer credit contracts about the risks of guaranteeing such an agreement applies to bail bond premium financing agreements. As such, a person who cosigns a bail bond financing agreement on behalf of an arrestee must be provided with this statutory notice.
Nov. 15, 2021 — Second App. Dist. — Plaintiff Lana Sieu Ngu sued bail agents Mylinh Kha and Ethan Kha, doing business as City Bail Bonds, for restitution under California’s unfair competition law (UCL) (Bus. & Prof. Code, §§ 17200, et seq.) based on defendants’ unlawful solicitation of bail in violation of California Code of Regulations, title 10, section 2079. After a bench trial, the trial court ruled in plaintiff’s favor, awarding her $38,666 in restitution. On appeal, defendants argued that the trial court erred in finding defendants unlawfully solicited bail from plaintiff and in finding that their conduct caused plaintiff economic injury. The Court of Appeal affirmed.
Sept. 27, 2021 — Second App. Dist. — The Department of Fair Employment and Housing (the Department) filed a complaint against M&N Financing Corporation (M&N) and Mahmood Nasiry, who operated a business that purchased retail installment sales contracts from used car dealerships. In deciding how much to pay for the contracts, defendants used a formula that considered the gender of the car purchaser and would pay more for a contract with a male purchaser than for a contract with a female purchaser. The trial court entered judgment in favor of the Department on the first and second causes of action, but dismissed other causes of action. The Court of Appeal held that the trial court erred in dismissing the fifth cause of action but otherwise affirmed.
Sept. 21, 2021 — First. App. Dist. — In this products liability action for mesothelioma due allegedly caused by asbestos in Johnson & Johnson baby powder, the court of appeal reversed summary judgment to Johnson & Johnson and held that the not all of the plaintiff's experts should have been excluded.
Sept. 10, 2021 — Los Angeles Appellate Div. — The court held that a tenant may assert the defense to being evicted based upon domestic violence causing a nuisance on rented property even if non-domestic violence grounds are also asserted.
Aug. 30, 2021 — CA Supreme Court — In 2012, the Legislature created certain protections to shield consumers from losing life insurance coverage because of a missed premium payment, which went into effect on January 1, 2013. Soon thereafter, the defendant terminated one of the life insurance policies at issue in this case because the policy owner had failed to make a payment. The Supreme Court concluded that those protections apply to all life insurance policies in force when the two sections went into effect, regardless of when the policies were originally issued.
May 21, 2021 — 4th App. Dist, Div. 2 — In this case, plaintiff homeowners alleged that defendants attempted to collect a debt secured by their home, despite having no legal right to do so. They further alleged that, in the process, the Bank engaged in unlawful, unfair, and fraudulent debt collection practices. Based on these allegations, they asserted six causes of action, including one under the Rosenthal Fair Debt Collection Practices Act (Rosenthal Act) (Civ. Code, § 1788 et seq.). In the trial court, the Bank demurred in part on the ground that the Rosenthal Act does not apply to conduct in connection with a nonjudicial foreclosure. The Court of Appeal reversed in part, holding that the Rosenthal Act can apply to a nonjudicial foreclosure.
Apr. 1, 2021 — CA Supreme Court — Holding that Cal Penal Code 632.7 prohibiting recordings of phone conversations without both parties consent applies to parties as well as third party eavesdroppers. LoanMe recorded plaintiff's conversation with them without informing him or getting consent.