Articles Posted in Consumer Fraud/Consumer Protection

A student loan debtor sued her loan servicer, arguing that the servicer had violated Illinois consumer fraud law by asserting that its customer representatives were experts in repayment options and acted in a borrower’s best interest when they were in fact instructed to steer borrowers into payment options that benefited the servicer more than the borrower. The district court dismissed the suit, finding that federal disclosure law preempted the suit, but the appellate court reversed, holding that penalizing loan servicers for making affirmative misrepresentations did not impose additional disclosure requirements on servicers, and thus was not preempted.

Nicole Nelson financed her education with federal student loans. Great Lakes, Nelson’s loan servicer, manages borrowers’ accounts, processes payments, assists borrowers with alternative repayment plans, and communicates with borrowers about the repayment of their loans. Nelson began repaying her loans in December 2009. In September 2013, she changed jobs and her income dropped. She contacted Great Lakes, and its representative led Nelson to believe that “forbearance” was the best option for her personal financial situation. A few months later, Nelson lost her new job. She contacted Great Lakes again in March 2014. This time, the representative again did not inform her of income-based repayment options, and instead steered her into deferment.

Forbearance is the temporary cessation of payments, allowing an extension of the term of the loan, or temporarily accepting smaller payments than were previously scheduled. Under forbearance, unpaid interest is capitalized, which can substantially increase monthly payments after the forbearance period ends. Federal law requires lenders and loan servicers to offer income-driven repayment plans, which Nelson argues are more appropriate in situations of longer-term financial hardship. Enrolling callers in these plans is, however, time-consuming for customer service representatives. Nelson eventually sued Great Lakes on behalf of a putative class, arguing that Great Lakes breach Illinois consumer protection law when it held itself out as an expert on student loan plans and caused her to rely on their assertions that they would operate on her behalf. The district court dismissed Nelson’s complaint, finding that her claims were preempted by federal law that stated that federal student loans were not subject to state-law disclosure requirements. Nelson then appealed. Continue reading ›

An Illinois Federal District court recently handed Telephone Consumer Protection Act (“TCPA”) claim defendants a win of sorts by slashing the size of a putative class, striking all out-of-state residents from the putative class on personal jurisdiction grounds. The case, Garvey v. American Bankers Insurance Co. of Florida, is just one of an increasing number of cases limiting the scope of potential class actions filed in states other than the defendant’s home state.

On May 10, District Judge Sharon Johnson Coleman of the District Court for the Northern District of Illinois struck all non-Illinois residents from a putative class in a TCPA class action filed against two Florida corporations. The ruling relied heavily upon the Supreme Court’s 2017 decision in Bristol Myers Squibb v. Superior Court of California, San Francisco Cty., 137 S. Ct. 1773 (2017), which limited California courts’ jurisdiction over an out-of-state defendant in a mass tort action.

Although not a mass tort case, Garvey concerns alleged telemarketing calls using an automated telephone dialing system to individuals without their prior express consent in violation of the TCPA. The plaintiff, who is an Illinois resident, sought to certify a class consisting of “[a]ll persons in the United States and its Territories” who had received similar calls from the defendants. The two defendants, both incorporated in and having their principal places of business in Florida, moved to strike all non-Illinois plaintiffs from the putative class on grounds that the court lacked general or specific personal jurisdiction over the defendants with regard to the claims of those plaintiffs. The defendants, however, did not challenge the court’s jurisdiction to adjudicate the claims brought by Illinois residents. The Garvey court relying on the Supreme Court’s decision in Bristol Myers agreed with the defendants, finding that it lacked personal jurisdiction over the companies to decide claims brought by nonresidents of Illinois.

The Supreme Court’s decision in Bristol Myers, while not a class action, dealt with a concept ultimately fundamental to every case: personal jurisdiction. Courts may hear a case and decide a claim only if it has personal jurisdiction over the defendant or defendants. Personal jurisdiction can be either general or specific. General jurisdiction exists in the defendant’s “home state,” which for a corporation is the state in which the corporation is incorporated or where is headquarters. As its name implies, general jurisdiction provides the broadest basis for a court to decide claims filed against a defendant. When a court has general personal jurisdiction, it can decide any claims against that defendant, assuming the court has subject matter jurisdiction to decide such a claim. Specific jurisdiction, on the other hand, arises out a defendant’s particular actions in a state. Where a court only has specific jurisdiction over a defendant, it may only decide claims that arise out of or relate to that defendant’s particular actions in the state. Continue reading ›

What if you paid hundreds of thousands of dollars for new, original paintings by a famous artist, only to be told that the artist hasn’t painted in years and the paintings were created by someone you’ve never heard of? According to a series of lawsuits, Adam Max, son of the famous painter, Peter Max, has allegedly been taking advantage of his father’s declining mental health in order to make a profit for himself and a few of his business partners by selling new paintings with his dad’s name on them. The problem is that Max is allegedly no longer painting.

Widely considered to be a countercultural icon in the ‘60s and ‘70s, Max was one of the few painters to become a household name and have his work displayed on the White House lawn, the cover of Time Magazine, and even postage stamps. Now he’s 81 years old and suffering from dementia, but new paintings with his name on them continue to sell for tens of thousands, if not hundreds of thousands of dollars. Whether he’s really painting them is up for debate.

According to one of the many lawsuits between Max’s friends and family members, his son, Adam, together with three business associates, allegedly took over Max’s studio in order to profit off what is already one of the most lucrative art franchises of the 20th century. They have allegedly filled the studio with 18 painters they recruited (many of them off the street) and are paying minimum wage in order to produce paintings in Max’s famous style. Max is then allegedly instructed to hold out his hand and sign his name to each painting so his son can sell them at auction. Continue reading ›

Most people know better than to just throw their electronics in the trash. Instead, they should be responsibly recycled, which is where companies like Intercon come in. As technology evolves faster than ever and objects become obsolete almost as soon as they’re introduced to the market, Brian Brundage saw an opportunity to make some major profits for his company, Intercon.

Most people just don’t want to deal with the hassle of trying to figure out how to properly dispose of their electronics. They’d much rather hand their electronics off to a third party and trust they’ll recycle the old electronics responsibly. But what if the company they trust to recycle their used electronics isn’t as trustworthy as it seems?

Brundage’s company, Intercon, was supposed to be the company that would take used electronics off the hands of people and the corporations they ran. Intercon claimed their operations were eco-friendly and that none of the electronics they took went into a landfill when, in fact, much of the e-waste they took from their clients either went into a landfill, to third parties in China, or to other places that were equally unfriendly to the environment. Continue reading ›

Our longtime co-counsel and colleague Dmitry Feofanov argued an important case this week before the Illinois Supreme Court concerning a consumer’s ability to revoke acceptance of a brand new RV with a hidden defect — a leaky roof.  The consumers revoked acceptance after the RV dealer couldn’t provide an estimated completion date for the repairs. An RV is a summer product and the consumers feared (correctly) that they would lose the use of the RV which is a summer product for the entire summer if they did not revoke acceptance.  The trial and appellate courts ruled that the consumers should have given the dealer the opportunity to repair the RV. We filed an amicus brief in the Supreme Court on behalf of the National Association of Consumer Advocates supporting the position that a consumer or buyer of goods does not have to provide an opportunity to cure for a material defect as material defect undercuts the value of the product to the buyer and can revoke acceptance.

You can also listen to the oral argument below.

Continue reading ›

Our Chicago automobile fraud and Lemon law attorneys near Wheaton and Oak Brook have experience representing victims of odometer rollbacks, title washing, fake or improper certifications of rebuilt wrecks and other used car scams. We bring individual and class actions suits for defective cars with common design defects and auto dealer fraud and other car dealer scams such as selling rebuilt wrecks as certified used cars or misrepresenting a car as being in good condition when it is rebuilt wreck or had the odometer rolled back. We also see cases where new car dealers conceal that the car has been in an accident while in their possession and even certified it as a certified used car warranted by the manufacturer as having passed a multi-point inspection or used car dealers who put duck tape in the back of the check engine light to conceal serious engine or emission problems. Super Lawyers has selected our DuPage, Kane, Kendall, Lake, Will and Cook County Illinois auto-fraud, car dealer fraud, and lemon law lawyers as among the top 5% in Illinois. We only collect our fee if we win or settle your case. We handle cases near Schaumburg and Lake Forest and throughout the Chicago area. For a free consultation call our Chicago class action lawyers at our toll-free number (833) 306-4933 or contact us on the web by clicking here.

IMG_6355_3-300x189Rialmo and Former Drew Peterson Attorney Joel Brodsky seeks to overturn 7th Circuit Order Affirming $50,000 sanction with pro se brief claiming ineffective assistance of counsel.

You can read the pro se petition for rehearing here where Brodsky claims his sanctions hearing and appellate attorney allegedly caused him to incur the sanction award that may lead to his claimed financial ruin.

The 7th Circuit Opinion affirming the $50,000 sanction of attorney Joel Brodsky issued.  In upholding the $50,000 sanction against attorney Joel Brodsky, the 7th Circuit concluded:

“Brodsky’s egregious behavior, obvious on the face of the record and emphasized at length by the court, more than justified the court’s choice of sanction. Brodsky’s rhetoric was inappropriate and outlandish, and his attempt to implicate the court in his fraud—and to use legal process as a tool to intimidate a witness—was beyond the pale.”

You can read the full opinion here.

As consumers become increasingly aware of the potentially harmful side effects of certain chemicals used to extend the shelf life of prepared foods, the demand for packaged foods that are free of preservatives has gone up and continues to go up. Many consumers are prepared to pay a higher price for foods bearing labels such as “organic” and “all natural,” while others simply refuse to buy any foods they cannot be certain are free from artificial preservatives.

The more scrupulous buyers check the ingredients of everything they buy before taking it to the checkout counter, and over the years, people have come up with a few different rules regarding what to look for in the ingredients label. For example, some say you shouldn’t buy anything containing any ingredients you can’t pronounce, while others claim you simply shouldn’t buy anything with more than five ingredients.

Still others just rely on the product’s label. If the company claims their product is free of artificial preservatives, most customers will take that claim at face value and grab the product without bothering to check the ingredients label. Others rely on labels with terms like “all natural,” even though products don’t need to meet any legal qualifications in order to put that label on their products (as opposed to the term “organic,” which does require the product to be certified organic by the U.S. Department of Agriculture). Continue reading ›