Public Citizen Litigation Group's Consumer Justice Project litigates individual and class action cases that offer a chance to establish important precedents on behalf of consumers. Working with private consumer attorneys and other non-profit organizations, our role may include representation on appeal, amicus support, briefing on important motions, or co-counseling from the inception of a case.
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Current and Recent Cases
Dickerson v. Heritage Care, Inc. (Md.)
Carter Bradley died from bedsores that became infected while he was a resident at Heritage Care's nursing home. After his death, his estate brought a medical malpractice claim against Heritage Care in Maryland state court, and the nursing home filed a petition to compel arbitration based on an arbitration agreement contained in the nursing home's admission packet. The arbitration agreement was not signed by Mr. Bradley, nor did he execute a power of attorney or advance directive in favor of the person whose signature is on the agreement. Nevertheless, the trial court held that Mr. Bradley's estate was bound by the arbitration agreement.
Mr. Bradley's estate appealed to the Maryland Court of Special Appeals. Prior to that court rendering a decision, the Maryland Court of Appeals granted certiorari on the following questions:
- Absent a power of attorney or other advance directive, does a friend or relative have authority to bind a nursing-home resident to an arbitration agreement included in nursing-home-admissions documents?
- Is an arbitration agreement providing that one party will unilaterally select the sole arbitrator from a list created by that party so one-sided as to be unenforceable?
Grimes v. Rave Motion Pictures and Harris v. LaPaz
In this appeal in the U.S. Court of Appeals for the Eleventh Circuit, we are appealing from a federal district court decision that struck down as unconstitutional a provision of the Fair Credit Reporting Act that permits consumers to recover statutory damages of not less than $100 and not more than $1,000 for willful violations of the Act. The district court held that the provision is unconstitutionally vague and would result in minimum statutory damages that are unconstitutionally excessive. The district court’s ruling, and the void-for-vagueness and excessiveness rationales on which it is based, are without precedent. We argue that the Eleventh Circuit should reverse the district court and uphold the constitutionality of the statute.
Pepper v. Routh Crabtree
In this case in the Supreme Court of Alaska, we are appealing from a decision holding that the First Amendment's Petition Clause, which guarantees the right of access to the courts, immunizes a debt collector from liability under the state's Unfair Trade Practices Act for otherwise actionable debt collection practices that occur in the context of litigation. The court below is the first and only court to reach that conclusion. In this particular case, the debt collector was accused of having failed to provide notice to the debtor of a collection lawsuit filed against her. We argue that the debt collector's alleged conduct was not constitutionally protected because there is no First Amendment right to withhold notice and because the debt collector's conduct threatened to deprive the debtor of *her* access to the courts.
Picard v. Credit Solutions, Inc.
Facing over $100,000 in credit card debt, Elizabeth Picard sought debt settlement help from Credit Solutions, Inc. Credit Solutions advised Picard to stop paying her creditors and promised to pay down her debts if she gave them authorization to make direct withdrawals from her bank account. Over four months, Credit Solutions withdrew over $5,500 from her account and failed to pay any creditors. Picard’s creditors declared her in default and demanded immediate payment, forcing her into bankruptcy. Picard sued, among other things, for violations of the Credit Repair Organizations Act (CROA). Credit Solutions argued that CROA did not apply to it and moved to compel arbitration pursuant to the agreement Picard had signed with them.
In an amicus brief to the Eleventh Circuit on behalf of itself, the National Consumer Law Center, National Association of Consumer Advocates, and U.S. Public Interest Research Group, Public Citizen argues that CROA applied to Credit Solutions and that CROA precludes mandatory pre-dispute binding arbitration of claims under the Act.
EMT-Mobile USA, Inc. v. Laster
T-Mobile's petition to the Supreme Court in this case asks the Court to decide whether courts can refuse to enforce class-action bans found in fine-print arbitration clauses in many consumer and employment contracts. Class-action bans are contract provisions that purport to strip consumers and employees of the right to bring any claims through classwide proceedings, whether through class-action litigation or a classwide arbitration. Many companies, such as cell-phone and cable companies and big employers, place these provisions in their form arbitration agreements in an effort to free themselves from any liability for small claims shared by large classes of customers or employees. Under the general contract law of some states, these class-action bans may be considered unconscionable and therefore unenforceable. The question is whether the Federal Arbitration Act preempts any state-law determination that a class action ban is unconscionable if the ban is embedded in an arbitration agreement. T-Mobile argues that any such state-law determination is preempted.
We filed a brief opposing T-Mobile's petition, on behalf of the plaintiffs in a California consumer class-action. Our brief explains to the Court that no state or federal courts have adopted T-Mobile's sweeping preemption theory and that nothing in the Court's jurisprudence requires such a sweeping displacement of general state contract law.
Sidun v. Wayne County Treasurer (Supreme Court of Michigan)
Stella Sidun is a 75-year old woman who depended on a rental property for her retirement income. She lost that property in a tax sale because the Wayne County Treasurer did not provide her with adequate notice of the foreclosure proceeding until it was too late to redeem the property. The County identified Ms. Sidun's ownership interest by consulting the deed to the property, but never sent notice of the proceeding to Ms. Sidun's address, even though her address was listed on the deed. Instead, the County sent notices to the former address of Ms. Sidun's mother, who had been a co-owner of the property until her death, but those notices were returned to the County unclaimed. Even after receiving the unclaimed notices, the County failed to follow up by sending notice to Ms. Sidun's address. Although the County also published notice, tried unsuccessfully to contact the occupants, and posted notice on the property, those steps cannot excuse the County's failure to attempt to contact Ms. Sidun at her address, when that address was readily at hand.
Griffin v. Bierman, et al. (Maryland Court of Special Appeals)
Griffin's mortgage company, the now-defunct Ameriquest, tricked her into refinancing the home she owned, when, after her fiancé died, she'd simply wanted to have his name taken off the mortgage. When the single mother could no longer make the increased mortgage payments, a "foreclosure mill" law firm representing Ameriquest quickly began foreclosure proceedings. After they made a bare-bones and unsuccessful effort to notify her of any pending action, Griffin lost her home when it was literally auctioned off on the courthouse steps. She never learned that her home had been sold until the new owner tacked a note on her door.
Maryland resident Joyce Griffin lost her house in a foreclosure sale because she never received notice until it was too late for her to save her home. Her case is a stunning example of how predatory subprime lenders, high-volume foreclosure mills, and a hands-off legal system can combine to wreak havoc on people's lives.
Griffin immediately hired a lawyer to block the sale, arguing that the notice procedures violated her constitutional right to due process, but the court upheld the lender's actions. Public Citizen and Baltimore-based Civil Justice Inc. are appealing that decision. We argue that the 2006 decision in Jones v. Flowers — a case that Public Citizen argued in the U.S. Supreme Court — means that additional reasonable steps must be taken to notify a property owner if a foreclosure notice is returned as unclaimed by the post office. But the lawyers who conducted the foreclosure of Ms. Griffin's house say they can ignore undelivered letters and do not have to make any effort to follow-up before selling someone's house.
If Griffin had been a defendant in a small-claims case, a property tax foreclosure, a federal tax foreclosure, or even a tenant in an eviction proceeding, the law would have required that the documents be served in person, sent via restricted certified mail (complete only upon delivery) or be posted by mail-and-nail notification in which the mailed documents are also posted directly on a dwelling's door. Even in a routine debt collection action, Ameriquest's mishandling of Griffin's case would have violated her constitutional rights. The Constitution demands more when someone's home is at stake.
Video Professor v. John Does 1-100 (D. Colo.)
Video Professor, which markets elementary computer learning products through pervasive infomercials, sued former customers who posted anonymous complaints about the "Professor"'s marketing and billing practices on consumer commentary sites. Public Citizen has objected to a broad subpoena to identify the critics who have posted on one such site, www.infomercialscams.com. Representing the site's host, objection letters explain the basis for the objections and request proof that the consumer posts are false and have caused actual damage to Video Professor.
State Sovereign Immunity for Private Debt Collectors: Rosario, et al. v. ACCS, et al. (11th Circuit)
In this appeal, we're asking a federal appeals court to reverse an extraordinary ruling that extended state sovereign immunity (also known as Eleventh Amendment immunity) to a private, for-profit California debt collector that does business in partnership with local Florida prosecutors, but is otherwise completely independent of the State of Florida, maintains no offices in the State of Florida, and would bear sole responsibility for any judgments against it. We argue that a decision affirming the lower court's ruling would run contrary to Supreme Court precedent and create a sweeping new immunity defense for private government contractors of every stripe. The ruling arose out of a consumer class action against a debt collector that operates "bad check restitution programs" for prosecutors.
Appeals from Class Action Certification Denials: Palmer, et al. v. Friendly Ice Cream Corporation (Connecticut Supreme Court)
In this case, we're asking the Connecticut Supreme Court to decide whether an order denying certification of a class may be immediately appealed — a question of first impression in the Connecticut courts. We argue that all of the relevant considerations — the efficiency rationales of class action litigation, the separate and distinct nature of the class action proceeding, the risk that denials of certification will constitute the "death knell" of the litigation, and the need to protect the rights of absent plaintiffs — all favor allowing immediate appeals from orders denying class certification.
Vacatur of Arbitration Awards: John Hancock Life Ins. Co. v. Patten (U.S. Supreme Court)
In this case, the U.S. Court of Appeals for the Fourth Circuit held that an arbitrator had "manifestly disregarded the law" when he dismissed a plaintiff's claim of wrongful termination and employment discrimination because he thought that the arbitration contained a time limit for bringing such claims when it clearly did not. The defendants (John Hancock Life Insurance Co. and some of its subsidiaries) asked the Supreme Court to take the case, arguing that arbitration awards should not be overturned when an arbitrator deliberately ignores the law, even though the courts of appeals have allowed such review of arbitration awards for half a century. We successfully opposed John Hancock's request that the Supreme Court hear the case.
OCC Preemption of Predatory Lending Laws - Watters v. Wachovia Bank (U.S. Supreme Court)
This is an important Supreme Court case about the extent to which a federal agency -- the Office of the Comptroller of the Currency (OCC) -- can promulgate rules that expand its own authority to preempt the reach of state consumer protection laws. Over the past few years, the OCC has sought to immunize state-chartered operating subsidiaries of national banks from the reach of numerous state laws and law enforcement relating to predatory lending and other abuses. Public Citizen, together with a coalition of twelve non-profit public interest organizations and seventeen law professors led by the Center for Responsible Lending, joined this amicus brief. The brief argues that courts shouldn't defer to the agency's own self-aggrandizing interpretation of its powers, an interpretation that is not supported by statutory text or congressional policy.
Fair Credit Reporting Act and "Willfulness": Hartford Life Insurance v. Reynolds (U.S. Supreme Court)
In this case, the U.S. Court of Appeals for the Ninth Circuit held that consumers who were quoted higher insurance premiums after insurance companies reviewed their credit scores could pursue lawsuits against the companies for "willful" violation of the Fair Credit Reporting Act. The court held that the companies could be found to have acted willfully if they recklessly disregarded the requirements of the law, and sent the case back to a lower court to determine whether the violations were in fact willful. The companies have now sought review by the Supreme Court of the Ninth Circuit's definition of willfulness as well as an assortment of other issues. PCLG is assisting attorneys for the plaintiff in attempting to persuade the Supreme Court not to take the case.
Sua Sponte Dismissal of Fair Debt Collections Case: Danow v. Borack (11th Cir.)
In this Fair Debt Collection Practices Act (FDCPA) case, a consumer had written a letter to a debt collector, asking the debt collector to stop telephoning him because the phone calls made him a "nervous wreck." Despite the letter, the debt collector continued to call the consumer. The district court, without explanation and without being asked to do so, dismissed the consumer's lawsuit -- even though the debt collector's conduct was precisely the kind of behavior the FDCPA was designed to prevent. Assisting Florida consumer lawyer Don Yarbrough, we successfully obtained a decision from the Eleventh Circuit reversing the district court.
Constitutional Challenges to District Attorneys' "Check Diversion" Programs
- Del Campo v. American Corrective Counseling Services, Inc. (N.D. Cal.)
- Schwarm v. District Attorney Technical Services, Ltd. (E.D. Cal.)
- Hamilton v. American Corrective Counseling Services (N.D. Ind.)
These class actions challenge arrangements under which local prosecutors rent their name and authority to private debt collectors, who use false threats of prosecution to coerce people who have written bad checks to pay various fees, which are then split between the debt collectors and the prosecutors. The cases raise several claims, including allegations of Fair Debt Collection Practices Act violations. We are serving as co-counsel in these cases for the purpose of litigating constitutional challenges to the programs."
We allege that the programs violate the most basic command of the Due Process Clause—that the state or entities cloaked in its authority may not take property without providing some process. The programs also violate due process by impermissibly injecting a private financial interest into the enforcement process and violate both equal protection and due process requirements because they extract fees from people, under the threat of prosecution, without regard for their ability to pay. Finally, we allege that the defendants are engaging in a pattern of making baseless threats of prosecution—threats that in themselves constitute an affront to plaintiffs' liberty interests—solely to extract the payment of fees, knowing that the fees are unlawful, that no probable cause determination has been made, and that there is a negligible chance of prosecution.
Our co-counsel in these cases include Paul Arons of Friday Harbor, WA; Randall Bragg of Chicago; Judy Fox of the Notre Dame Law School; and Ron Wilcox of San Jose, CA.
Click here for more information on "Check Diversion" Programs.
Strict Liability under the Fair Debt Collection Practices Act (9th Circuit)
A debt collector that attempts to collect an amount that a consumer doesn't owe is held strictly liable under the Fair Debt Collection Practices Act, unless the debt collector has in place procedures designed to prevent unintentional errors. The question in these two related Ninth Circuit appeals is whether a debt collector that admittedly has no such procedures can avoid liability anyway on the basis that it merely relied on its creditor-client.
In our briefs, we argue that this proposed reliance-on-the-creditor defense would upset decades of settled interpretation of the Act, frustrate the intent of Congress, place scrupulous debt collectors at a competitive disadvantage, and have negative consequences for many consumers.
- Beuter v. Canyon State Professional Services
- Reichert v. National Credit Systems, Inc.
Predatory Mortgage Lending Class Action Settlement: Lopez v. Delta Funding Corporation (2nd Circuit)
This case is a stunning illustration of class action abuse. A magistrate judge allowed class counsel and defendants to settle valuable home-ownership claims for a pittance, leaving over 66,000 poor and unsophisticated victims of predatory lending practices worse off than if this lawsuit had never been filed. Together with South Brooklyn Legal Services' Foreclosure Prevention Project, we filed objections to the settlement in the district court. We then joined forces with AARP, Community Legal Services of Philadelphia, Legal Services for the Elderly in Queens, and the Legal Aid Society of New York, to appeal the case to the Second Circuit.
We argued that the settlement was both substantively unfair and was improperly certified. We also argued that, by refusing to allow the objectors to elect a hearing before a life-tenured federal judge, the magistrate judge denied the objectors rights guaranteed by Article III of the Constitution. The Second Circuit agreed with us that a magistrate judge does not have the authority to decide an objecting absent class member's motion to intervene unless that class member expressly consents to be bound by the magistrate judge's decision on the motion. In addition, the Court held that if a class member intervenes and insists on an Article III judge, the magistrate judge may not issue a final appealable decision in the class action, including a decision approving a class action settlement.
The Court also suggested that the district judge, on remand, give the settlement careful scrutiny, noting that objectors had argued "with some persuasive force" that "the settlement delivers greatest relief to a limited number of class members who may not present the strongest claims" and that "the class representatives receive a disproportionate share of the settlement benefits as compared to absent class members."
Federal Remedies for Auto Fraud: Garry Ioffe v. Skokie Motor Sales, Inc. (U.S. Supreme Court)
The federal Odometer Act allows an injured consumer to bring a civil action for damages against a person who violates the Act or its implementing regulations "with intent to defraud." When petitioner Gary Ioffe bought a used Toyota, the dealership--in clear violation of Odometer Act regulations--didn't show him the vehicle's title. Instead, the dealership signed Mr. Ioffe's name to the title without his knowledge or permission. As a result, at the time that he made his purchase, Mr. Ioffe did not know what the title would have revealed—that the vehicle was a worthless rebuilt wreck.
The U.S. Court of Appeals for the Seventh Circuit held that Mr. Ioffe could not state a claim under the Odometer Act, inventing a requirement that is not in the text of the statute: that the plaintiff prove intent to defraud with respect to the vehicle's mileage. The Eleventh Circuit, in a decision issued just two months later, rejected that approach, concluding that "the Seventh Circuit failed to apply the statute's plain language." Because the Seventh Circuit's erroneous interpretation has sown confusion among the state and federal courts, upset the uniformity of an important federal regulatory scheme, and created incentives for increased fraud, we asked the Supreme Court to resolve the split and and restore certainty to the interstate auto market. Our co-counsel in this case were private consumer attorneys Lance Raphael, Stacy M. Bardo, and Allison Krumhorn of Consumer Advocacy Center, P.C, in Chicago.
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