Justia Government & Administrative Law Opinion Summaries

The case involves a dispute between several plaintiffs, who are foreign nationals participating in an au pair program, and Cultural Care, Inc., a Massachusetts company that places au pairs with host families in the U.S. The plaintiffs allege that Cultural Care violated their rights under the Fair Labor Standards Act (FLSA) and various state wage and hour laws by failing to pay them legal wages. They also claim violations of state deceptive trade practices laws.The United States District Court for the District of Massachusetts denied Cultural Care's motion to dismiss the complaint, including its defense of derivative sovereign immunity under Yearsley v. W.A. Ross Construction Company. Cultural Care appealed, but the United States Court of Appeals for the First Circuit affirmed the District Court's decision, concluding that Cultural Care had not established entitlement to protection under Yearsley. After the case returned to the District Court, Cultural Care filed a motion to compel arbitration based on agreements in contracts signed by the au pairs with International Care Ltd. (ICL), a Swiss company. The District Court denied this motion, ruling that Cultural Care had waived its right to compel arbitration and that it could not enforce the arbitration agreement as a nonsignatory.The United States Court of Appeals for the First Circuit reviewed the case and affirmed the District Court's denial of the motion to compel arbitration. The court held that Cultural Care, as a nonsignatory to the ICL Contract, could not enforce the arbitration agreement under either third-party beneficiary theory or equitable estoppel. The court emphasized that the arbitration agreement did not demonstrate with "special clarity" that the signatories intended to confer arbitration rights on Cultural Care. Additionally, the plaintiffs' statutory claims did not depend on the ICL Contract, making equitable estoppel inapplicable. View "Posada v. Cultural Care, Inc." on Justia Law

The plaintiffs, a group of consumers, filed a lawsuit against General Motors (GM) and Robert Bosch LLC, alleging that the companies misled consumers about the emissions produced by certain Chevrolet Cruze vehicles. They claimed that the vehicles emitted higher levels of nitrogen oxides (NOx) than advertised and that the emissions control systems were manipulated to pass regulatory tests. The plaintiffs sought damages under various state fraud laws and the Racketeer Influenced and Corrupt Organizations (RICO) Act.The United States District Court for the Eastern District of Michigan initially dismissed some of the plaintiffs' claims, ruling that those based on the Environmental Protection Agency (EPA) standards were preempted by the Clean Air Act. The court allowed other claims to proceed, particularly those alleging that GM's advertising misled consumers about the vehicles' emissions. However, after the Sixth Circuit's decision in a similar case (In re Ford Motor Company F-150 and Ranger Truck Fuel Economy Marketing and Sales Practices Litigation), the district court revisited its decision and dismissed the remaining fraud claims, concluding they were preempted by federal law. The court also granted summary judgment to the defendants on the RICO claims.The United States Court of Appeals for the Sixth Circuit reviewed the case. The court held that the district court should determine whether the plaintiffs' remaining claims could proceed without relying on a disagreement with the EPA's determinations. The court remanded the case for the district court to decide if the claims were preempted under the analysis described. The court affirmed the dismissal of the RICO claims and the denial of the plaintiffs' post-judgment motion to vacate the judgment in part and approve a preliminary settlement agreement. The case was remanded for further proceedings consistent with the opinion. View "Counts v. General Motors, LLC" on Justia Law

Roxann Brown and Michelle Smith filed a lawsuit against Old Navy, alleging that the retailer sent them e-mails with subject lines containing false or misleading information about the duration of promotions, in violation of the "Commercial Electronic Mail Act" (CEMA). The plaintiffs claimed that Old Navy's e-mails falsely suggested that promotions were ending or were limited-time offers, which were extended beyond the specified time limits.The United States District Court for the Western District of Washington reviewed the case and certified a question to the Washington Supreme Court regarding the interpretation of RCW 19.190.020(1)(b). The federal court sought clarification on whether the statute prohibits any false or misleading information in the subject lines of commercial e-mails or only false or misleading information about the commercial nature of the message.The Washington Supreme Court reviewed the certified question de novo and concluded that RCW 19.190.020(1)(b) prohibits the use of any false or misleading information in the subject line of a commercial e-mail, not just information about the commercial nature of the message. The court emphasized that the statute's plain language is clear and unambiguous, and it does not require judicial construction. The court also noted that the statute's focus on subject lines is appropriate and does not lead to absurd results. The court held that mere puffery, which includes subjective statements, opinions, and hyperbole, is not prohibited by the statute. The court's decision clarifies that commercial e-mails sent to Washington residents must have truthful and non-misleading subject lines. View "Brown v. Old Navy, LLC" on Justia Law

A national consumer advocate law firm (C Co.) and its affiliate (S Co.) providing administrative support services sought injunctive and declaratory relief against the Department of Banking. The Department had initiated an administrative enforcement action against S Co. for allegedly engaging in unlicensed debt negotiation activities. The plaintiffs argued that S Co. was exempt from licensing requirements under a presumption established in a prior case (Persels & Associates, LLC v. Banking Commissioner), which holds that attorneys providing debt negotiation services as part of their legal practice fall under the exclusive regulation of the Judicial Branch.The trial court denied the Department's motion to dismiss the plaintiffs' action, concluding that the plaintiffs were not required to exhaust administrative remedies before seeking judicial intervention on whether the Persels presumption applied to S Co. The Department appealed, arguing that the Commissioner of Banking should first determine whether the presumption applied.The Supreme Court of Connecticut affirmed the trial court's decision, holding that the plaintiffs were not required to exhaust administrative remedies before seeking judicial intervention. The court reasoned that the Commissioner of Banking lacks the expertise to determine whether the Persels presumption applies, as this involves assessing whether the activities in question constitute the practice of law, which falls under the exclusive authority of the Judicial Branch. The court emphasized that allowing the commissioner to make this determination would violate the constitutional separation of powers. Therefore, the plaintiffs could seek declaratory and injunctive relief in the trial court without waiting for the commissioner to resolve the issue. View "Commonwealth Servicing Group, LLC v. Dept. of Banking" on Justia Law

The case involves the Consumer Product Safety Commission's (CPSC) second attempt to regulate small, high-powered magnets that pose serious health risks to children when ingested. These magnets, used in various consumer products like jewelry and puzzles, can cause severe internal injuries or death if swallowed. The CPSC's first attempt to regulate these magnets was struck down by the Tenth Circuit in 2016 due to inadequate data supporting the rule. The CPSC then revised its approach and issued a new rule, which is now being challenged by industry groups.The industry groups petitioned for review of the CPSC's new rule, arguing that the CPSC's cost-benefit analysis was flawed and that the rule was promulgated by an unconstitutionally structured agency. They contended that the CPSC's data on magnet ingestions was unreliable, that the CPSC failed to consider the impact of its own enforcement efforts, and that the rule was underinclusive and arbitrary. They also argued that existing voluntary standards were sufficient to address the risks posed by the magnets.The United States Court of Appeals for the Tenth Circuit reviewed the case. The court found that the CPSC's rule was supported by substantial evidence, noting that the CPSC had adequately addressed the shortcomings identified in the previous case and had conducted a thorough cost-benefit analysis. The court also held that the CPSC's structure, which includes removal protections for its commissioners, was constitutional, reaffirming its previous decision in Leachco, Inc. v. Consumer Product Safety Commission.The Tenth Circuit denied the petition for review, upholding the CPSC's rule regulating small, high-powered magnets. The court concluded that the rule was necessary to address the significant health risks posed by these magnets and that the CPSC had acted within its authority in promulgating the rule. View "Magnetsafety.org v. Consumer Product Safety Commission" on Justia Law

The National Automobile Dealers Association and the Texas Automobile Dealers Association challenged the Federal Trade Commission's (FTC) Combating Auto Retail Scams Trade Regulation Rule (CARS Rule). They argued that the FTC violated its own regulations by not issuing an advance notice of proposed rulemaking (ANPRM), failed to provide a reasoned basis for the rule, and conducted an arbitrary and capricious cost-benefit analysis. Alternatively, they requested a remand for additional evidence consideration.The FTC published the CARS Rule without an ANPRM, which led to the petitioners seeking judicial review. The rule aimed to address deceptive practices in the auto sales industry, including misrepresentations, mandatory disclosures, prohibitions on valueless add-ons, and requirements for consumer consent. The FTC received over 27,000 comments during the rulemaking process.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court found that the FTC violated its own regulations by not issuing an ANPRM, which is required under subpart B procedures for rules promulgated under section 18(a)(1)(B) of the FTC Act. The court determined that the Dodd-Frank Act did not grant the FTC independent substantive authority to bypass the ANPRM requirement. The court also rejected the FTC's argument for deference under Auer v. Robbins and Kisor v. Wilkie, finding no relevant ambiguity in the regulations.The court concluded that the FTC's failure to issue an ANPRM was not harmless error, as it deprived the petitioners of a procedural benefit that could have influenced the final rule. Consequently, the court granted the petition for review and vacated the CARS Rule, without addressing the petitioners' remaining substantive challenges. View "National Automobile Assoc v. Federal Trade Commission" on Justia Law

The case involves the Cigar Association of America and other plaintiffs challenging a regulation by the FDA that applied to premium cigars. The FDA had issued a rule under the Family Smoking Prevention and Tobacco Control Act, which brought all tobacco products, including premium cigars, under its regulatory authority. The plaintiffs argued that the regulation was arbitrary and capricious as applied to premium cigars, citing studies that suggested premium cigars posed fewer health risks due to less frequent use.The United States District Court for the District of Columbia, presided over by Judge Mehta, found in favor of the plaintiffs. The court determined that the FDA had failed to consider relevant evidence, specifically the Corey study and Monograph No. 9, which indicated that premium cigars were used less frequently and posed fewer health risks. The district court vacated the FDA's rule as it applied to premium cigars, finding the agency's action arbitrary and capricious.The United States Court of Appeals for the District of Columbia Circuit reviewed the case. The court agreed with the district court's finding that the FDA's rule was arbitrary and capricious because the agency ignored relevant data and falsely claimed that no such evidence existed. The appellate court upheld the vacatur of the rule as applied to premium cigars but remanded the case to the district court to invite further briefing on the appropriate definition of "premium cigars." The court emphasized that the vacatur should not allow for revisiting past user fee payments. The decision affirmed the district court's ruling in full, except for the need to refine the definition of premium cigars. View "Cigar Association of America v. FDA" on Justia Law

A Braintree tobacco compliance officer observed an open container of Jazz brand "Black & Mild" cigars on display behind the cash register of a convenience store. The Board of Health of Braintree found that the store violated state and local tobacco laws by offering a flavored tobacco product for sale and imposed a $1,000 fine. The store argued that it did not intend to sell the product and that its point-of-sale system would have prevented the sale. The store also contended that the board acted outside its authority in imposing the fine and that the proceedings were procedurally defective.The Superior Court reviewed the case and upheld the board's decision, finding substantial evidence to support the board's conclusion that the store offered the cigars for sale. The court also determined that the board had the authority to impose the fine administratively and that no procedural irregularities fatally marred the board's actions. The store appealed the decision.The Supreme Judicial Court of Massachusetts reviewed the case and affirmed the Superior Court's judgment. The court held that the store's placement and display of the cigars supported the board's finding that the product was being offered for sale. The court also concluded that the legislative and regulatory scheme governing the sale of tobacco products in Massachusetts permits local boards of health to enforce the regulations and impose mandatory penalties. The court found no procedural deficiencies that would invalidate the board's actions. View "Cumberland Farms, Inc. v. Board of Health of Braintree" on Justia Law

Day Pacer LLC and EduTrek L.L.C., along with their managing members, were responsible for millions of telemarketing calls to consumers on the National Do Not Call Registry. The Federal Trade Commission (FTC) brought a civil enforcement action against them, resulting in the district court finding the defendants liable on summary judgment and awarding over $28 million in civil penalties. The defendants appealed the court’s liability findings and damages award.The United States District Court for the Northern District of Illinois found the companies liable for violating the Telemarketing Sales Rule (TSR) by making calls to consumers on the registry without proper consent. The court also held the individual defendants liable, as they had control over the companies and knew or should have known about the illegal activities. The court substituted the estate of a deceased defendant, David Cumming, into the litigation, finding the penalties sought were remedial. The court awarded a $28.6 million penalty and issued a permanent injunction against the defendants.The United States Court of Appeals for the Seventh Circuit affirmed the district court’s finding of liability but reversed and remanded the decision to substitute Cumming’s estate and the damages award. The appellate court held that the penalties sought were penal, not remedial, and thus did not survive Cumming’s death. The court also found that the district court did not consider all mandatory statutory factors in calculating the damages award, constituting an abuse of discretion. The court affirmed the broad injunction against the defendants, prohibiting them from engaging in any telemarketing activities. View "FTC v. Day Pacer LLC" on Justia Law

The San Diego City Attorney filed a complaint against Experian Data Corp. on March 6, 2018, alleging a violation of the Unfair Competition Law (UCL) due to Experian's failure to promptly notify consumers of a data breach as required by Civil Code section 1798.82(a). The complaint sought civil penalties and injunctive relief. Experian demurred, arguing the claim was barred by the four-year statute of limitations. The trial court overruled the demurrer and denied summary judgment motions from both parties, finding the discovery rule could apply to delay the accrual of the claim.The trial court later granted Experian's motion in limine to exclude evidence of civil penalties, concluding the discovery rule did not apply to the UCL claim because it was a non-fraud claim and an enforcement action seeking civil penalties. The court also denied the City Attorney's motion for reconsideration and motion to file a Third Amended Complaint. The parties then stipulated to dismiss the entire complaint, and the City Attorney appealed.The California Court of Appeal, Fourth Appellate District, Division Three, reviewed the case and concluded that the discovery rule could apply to delay the accrual of the UCL claim. The court found that the nature of the claim, the enforcement action seeking civil penalties, and the involvement of a governmental entity did not preclude the application of the discovery rule. The court reversed the trial court's orders granting Experian's motion in limine and denying reconsideration, and remanded the case for further proceedings to determine when the UCL claim accrued based on the actual or constructive knowledge of the relevant actors. The court also vacated the order denying the City Attorney's request to file a Third Amended Complaint. View "P. v. Experian Data Corp." on Justia Law