Consumer Protection

First Amendment protects right to federal registration of offensive trademarks that disparage a person or group

/ Antidiscrimination Law, Consumer Protection, Fair Housing Act, Free Speech, Intellectual Property, Religious Freedom, Sexual Orientation, Trademarks

The Supreme Court held that the First Amendment prohibits enforcement of a provision of the Lanham Act that purports to deny the benefits of trademark registration to names or marks that “disparage” a person or “bring [them] into contempt or disrepute.” Matal v. Tam,2017 WL 2621315 (U.S. 2017); 15 U.S.C. §1502(a) (Lanham Act). The Court held that “this provision violates the Free Speech Clause of the First Amendment. It offends a bedrock First Amendment principle: Speech may not be banned on the ground that it expresses ideas that offend.” The case involved a band called “The Slants” who sought to reclaim an offensive term for persons of Asian descent. Because the Court’s analysis focused on the idea that speech cannot be regulated because of its offensive content, it would appear that this ruling would equally apply to those who use a term about themselves (the members of the Slants are Asian-Americans) …

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Time-barred claim in bankruptcy held not to violate Fair Debt Collection Practices Act

/ Consumer Protection, Mortgages, Real Estate Transactions

The Fair Debt Collection Practices Act, 15 U.S.C. §§1692e, 1692f, probibits debt collectors from using “any false, deceptive, or misleading representation or means in connection with the collection of any debt. §1692e, as well as prohibiting any “unfair or unconscionable menas to collect or attempt to collect any debt,” §1692f. In Midland Funding, LLC v. Johnson, 197 L.Ed.2d 790 (2017), the Supreme Court, in an opinion by Justice Breyer, held that it was not unfair, deceptive, misleading, or unconscionable to make a claim in a bankruptcy proceeding based on a debt when the statute of limitations has run on the claim. The majority argued that the Bankruptcy Code allowed presentation of any “claim” and did not qualify that by saying “enforceable claim.” The Court noted that such a claim might be unfair in an ordinary civil suit but distinguished the bankruptcy process partly because it treats untimeliness as an affirmative defense and because …

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Supreme Court rules that a city has a claim against a bank for the consequences of discriminatory subprime mortgages

/ Antidiscrimination Law, Consumer Protection, Mortgages, Real Estate Transactions

In Bank of America Corp. v. City of Miami, 137 S.Ct. 1296, 197 L. Ed. 2d 678 (2017), the Supreme Court held that the City of Miami was an “aggrieved person” within the meaning of the Fair Housing Act, 42 U.S.C. §3602(i), and that it could sue the Bank of America (and other banks) for lost tax revenue and other municipal expenses resulting from alleged discriminatory grants of subprime mortgages to Miami residents that resulted in mass foreclosures and vacancies. While it violates the FHA to deny mortgages on the basis of race, it also violates the FHA to target a racial group for disfavored terms. The Court noted that it had been previously held that white persons have a claim under the FHA when they are deprived of the benefits of interracial associations when discriminatory rental practices kept African Americans out of a rental complex (citing Trafficante v. Metropolitan Life Ins. Co., 409 …

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Sexual orientation discrimination as a form of sex discrimination

/ Antidiscrimination Law, Consumer Protection, Fair Housing Act, Sexual Orientation

While the West Virginia Supreme Court adopted the traditional view that discrimination because of sexual orientation is not a form of sex discrimination, State v. Butler, 2017 W. Va. LEXIS 333 (W.Va. 2017) (hate crime against two gay men did not constitute criminal civil rights violation willfully injuring a person “because of such other person’s … sex”), the Seventh Circuit came to the opposite view in Hively v. Ivy Tech Cmty. College of Ind., 853 F.3d 339 (7th Cir. 2017). See also Christiansen v. Omnicom Group, Inc., 2017 U.S. App. LEXIS 5278 (2d Cir. 2017) (although bound by precedent to hold the opposite, the court argued that sexual orientation discrimination is a form of sex discrimination); Smith v. Avanti, 2017 U.S. Dist. LEXIS 54777 (D.Colo. 2017) (refusal to rent to same-sex couple when one of the two was a transgender woman is a form of sex discrimination because it is based on gender stereotyping). The West Virginia Supreme …

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Sex offender cannot be evicted from state-subsidized housing because of regulatory limitation imposed after the lease began

/ Antidiscrimination Law, Consumer Protection, Due Process, Homelessness

The Connecticut Supreme Court has held that a registered sex offender cannot be evicted from housing subisidized by the state when he obtained the subsidy and the housing before passage of the state law banning such assistance. Shannon v. Comm’r of Housing, 140 A.3d 903 (Conn. 2016) (see dissenting opinion here). The court applied a state law that provides that any law that imposes “any new obligation on any person or corporation shall [not] be construed to have a retroactive effect.” Conn. Gen. Stat. §55-3. Under that law a new regulation that denies housing assistance to registered sex offenders could not be applied retroactively. The Court noted, however, that “although there is a property interest in the receipt of a public benefit so long as it is available, without statutory terms restricting its authority to do so, the legislature remains free to change or eliminate benefit entitlements by amending or repealing the …

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Estoppel by deed does not require reliance

/ Consumer Protection, Estates and Future Interests, Leaseholds, Real Estate Transactions, Statute of Frauds, Title Issues

The Pennsylvania Supreme Court has reaffirmed and applied the doctrine of estoppel by deed in the case of Shedden v. Anadarko E. & P. Co., L.P, 136 A.3d 485 (Pa. 2016) and distinguished it from the doctrine of equitable estoppel. Equitable estoppel “recognizes that an informal promise implied by one’s words, deeds or representations which leads another to rely justifiably thereon to his own injury or detriment, may be enforced in equity” while “[i]n contrast, the doctrine of estoppel by deed precludes one who conveys an interest in land that he does not own, but subsequently acquires the title thereto, from denying the validity of the first conveyance.” In this case, an owner leased oil and gas rights to a 62-acre parcel while actually owning only 50% of them. When the owner later acquired the other 50% of the oil and gas rights, the doctrine of estoppel by deed folded those …

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Banks that foreclose without legal authority to do so commit the tort of wrongful foreclosure

/ Consumer Protection, Estates and Future Interests, Mortgages, Real Estate Transactions, Title Issues

The California Supreme Court held in Yvanova v.  New Century Mortgage Corp.,, 365 P.3d 845 (Cal. 2016), that a borrower has standing to prove that a nonjudicial foreclosure was wrongful because an assignment by which the foreclosing entity purportedly took a beneficial interest was void, thereby depriving the foreclosing party of any authority to foreclose through a trustee’s sale.  In a follow up case, Sciarratta v. U.S. Bank Nat’l Ass’n, 2016 Cal. App. LEXIS 399 (2016), the Court of Appeals held that foreclosure by an entity with no power to foreclose is, by itself, the tort of wrongful foreclosure. Even if the borrower is in default, and someone has the right to foreclose, that does not mean that any person with a claim can bring the foreclosure. Only a party with a better claim to title — someone with the legal authority to foreclose — can oust a peaceable possessor from their home. …

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Retroactive restraint on short term leasing by homeowners association upheld by Idaho Supreme Court

/ Condominiums and Homeowners Associations, Consumer Protection, Leaseholds, Real Estate Transactions, Restraints on Alienation, Servitudes

When a homeowner’s association voted to amend the declaration of covenants, conditions, and restrictions to prohibit short term leasing of units (rentals for less than six months), one of the townhouse owners sued to declare the retroactive restraint on alienation invalid. However, the Idaho Supreme Court found the retroactive restraint to be valid; it neither constituted an unreasonable restraint on alienation or exceeded the scope of the powers of the association to amend the declaration retroactively. Adams v. Kimberley One Townhouse Owner’s Ass’n, 352 P.3d 492 (Idaho 2015). The court held that the amendment to the declaration was merely an interpretation of what it meant to devote the property to single-family residential purposes and thus could not be unduly surprising to the owner. Moreover, the association had the power to amend the covenants and that amendment power subjected the individual owner to retroactive changes in ownership rights. While some courts would …

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Buyer may sue seller for fraudulent failure to mention flooding problem despite “as is” clause in real estate sales contract

/ Consumer Protection, Real Estate Transactions, Statute of Frauds, Title Issues

When real estate contracts contain an “as is” clause or state that the buyer is not relying on any oral statements made by the seller, some courts hold that the buyer cannot sue the seller for fraud even if the seller lied about the condition of the premises or failed to reveal material facts any reasonable buyer would want to know. But other courts allow claims for fraud on the ground that sellers cannot be allowed to immunize themselves from liability for fraud by contract language. In McNulty v. Chip, 116 A.3d 173 (R.I. 2015), buyers of a home experienced serious flooding within weeks of buying the place. Rather than an all-or-nothing solution, the Court held that the sales contract had not been worded specifically enough to protect the seller from a fraud claim. While the contract said that the property was being sold “as is,” nothing specific was stated about …

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Tenants protected from retaliatory eviction need not prove landlord’s subjective intent, only that the tenants protected actions were the “but for” cause of the eviction

/ Consumer Protection, Leaseholds

Tenants who complained about the electrical system and were then evicted could prove retaliatory eviction and stave off eviction merely by showing that their protected action was the “but for” cause of the eviction. They need not prove the landlord’s subjective intent and the eviction following their complaint placed the burden on the landlord to show that the eviction was not retaliatory. Elk Creek Mgmt. Co. v. Gilbert, 303 P.3d 929 (Or. 2013).

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