Consumer Financial Services Litigation

On June 12, 2017, the United States Supreme Court held that a buyer of defaulted consumer debt was not subject to the Fair Debt Collection Practices Act (“FDCPA”). The question of whether such debt buyers fit within the FDCPA’s definition of “debt collector” has long been a subject of contention. While this result will not shield debt buyers entirely from the FDCPA’s purview, it does provide additional defenses against FDCPA liability and has broad potential implications for other consumer protection actions.

In Henson v. Santander Consumer USA, the petitioner had defaulted on a car loan owed to CitiFinancial Auto, which then sold the debt to Santander, which attempted to collect on the debt. The petitioner alleged that Santander’s collection methods violated the FDCPA. Continue Reading Debt Buyers Get Some FDCPA Relief from Supreme Court: Case Offers Insights But Leaves Some Questions Unanswered

On May 24, the U.S. Court of Appeals for the D.C. Circuit heard oral arguments in the case of PHH vs. CFPB. The case, arising out of a CFPB enforcement action under the Real Estate Settlement Procedures Act (RESPA), also addresses the fundamental issue of whether the CFPB’s leadership structure is permissible under the Constitution.   

The en banc consideration of the case followed the opinion of a three-judge panel of the D.C. Circuit that found the Bureau’s structure unconstitutional because it features a single director who is not removable at will by the President. While other federal agencies are led by a single person—including a fellow financial regulator, the Office of the Comptroller of the Currency (OCC)—the court dismissed the similarity in a footnote, distinguishing the OCC structure in noting that the authorizing statutory language is not identical.  Continue Reading En Banc Oral Argument in PHH vs. CFPB Case Continues the CFPB Saga, Pits Federal Government Against Itself

In Johnston v. Midland Credit Mgmt., No. 16-437, 2017 U.S. Dist. LEXIS 10610 (W.D. Mich. Jan. 26, 2017), the court recently dismissed a class action complaint alleging a violation of the Fair Debt Collection Practices Act (“FDCPA”) for lack of Article III standing. Johnston is notable as the first FDCPA claim dismissed for lack of Article III standing in the Sixth Circuit. In addition, Johnston provides an interesting case study regarding some of the issues that may need to be considered prior to filing a motion premised on lack of Article III standing. Continue Reading A Case Study – Some Things to Consider When Challenging a Putative Consumer Class Action in Federal Court for Lack of Article III Standing

As has been reported in the news recently, there is increasing litigation asserting that the websites of some commercial enterprises, including financial institutions, are not accessible to consumers with disabilities. The Americans with Disabilities Act was adopted before widespread adoption of the internet, but the Department of Justice and many courts have taken the position that the ADA’s prohibition of discrimination against anyone on the basis of disability in the use of “accommodations of any place of public accommodation” applies to websites as well as physical establishments. Continue Reading Watch for Litigation Concerning Website Accessibility to the Disabled to Rise

In Bravo v. Midland Credit Management, Inc., the plaintiff urged the U.S. Court of Appeals for the Seventh Circuit to take a liberal view of the Fair Debt Collection Practices Act’s (FDCPA) prohibition against contacting a consumer once he is represented by counsel, or after he has refused to pay a debt. The court dismissed all of plaintiff’s claims, shutting the door on an aggressive attempt to broaden the FDCPA’s reach.

Continue Reading Seventh Circuit Rejects Attempt to Expand Liability Under FDCPA

On February 12, 2016, the United States Court of Appeals for the Sixth Circuit issued its opinion in Baisden v. Credit Adjustments, Inc., 15-3411 (CA 6) (for publication), affirming dismissal of a purported class action under the Telephone Consumer Protection Act (“TCPA”). In Baisden, plaintiffs were the recipients of medical services from Mount Caramel Hospital in Ohio. As part of the care provided, plaintiffs received anesthesiology services from Consultant Anesthesiologists, an anesthesiologist group working within the hospital. When plaintiffs failed to pay for the services rendered, Consultant Anesthesiologists sent their accounts to debt collector, Credit Adjustments. Credit Adjustments used an automatic telephone dialing system and prerecorded messages to contact plaintiffs on their cell phones to request payment.

Continue Reading Sixth Circuit Issues Important TCPA Ruling on “Prior Express Consent”

On January 20, 2016, the Supreme Court ruled that companies cannot defeat class action suits by making settlement offers to named plaintiffs. In a 6-3 decision, the Justices held in Campbell-Ewald Co. v. Gomez that an offer of compensation, equal to or greater than the maximum potential individual damages to a defendant, does not erase a defendant’s interest in a case. The ruling could significantly hinder companies’ ability to overcome pending class action suits.

Continue Reading Supreme Court Says Companies Cannot Use Settlement Offers to Overcome Class Actions