Justia Consumer Law Opinion SummariesArticles Posted in US Court of Appeals for the Fifth Circuit
Tejero v. Portfolio Recovery Associates, LLC
The Fifth Circuit held that a private settlement does not constitute a "successful action to enforce . . . liability" under the fee-shifting provision of the Fair Debt Collection Practices Act (FDCPA). The court affirmed the district court's denial of attorney's fees in this case, concluding that the district court did not commit reversible error in refusing plaintiff's fee application under the FDCPA. The court explained that a "successful action to enforce the foregoing liability" means a lawsuit that generates a favorable end result compelling accountability and legal compliance with a formal command or decree under the FDCPA. In this case, plaintiff settled before his lawsuit reached any end result, let alone a favorable one. Furthermore, by settling, Portfolio Recovery avoided a formal legal command or decree from plaintiff's lawsuit. The court stated that plaintiff's alternative interpretation requires rewriting the FDCPA's fee-shifting provision.The court also concluded that, at most, plaintiff's FDCPA suit was the catalyst that spurred Portfolio Recovery to settle. Therefore, the catalyst theory does not make plaintiff's action a successful one under 15 U.S.C. 1692k(a)(3) and thus plaintiff is not entitled to fees. View "Tejero v. Portfolio Recovery Associates, LLC" on Justia Law
The CBE Group, Inc. v. Lexington Law Firm
Plaintiffs filed suit against Lexington Law and its vendor, Progrexion, for purportedly perpetrating a fraud in which the firm failed to disclose that it was sending letters to the companies in its clients' names and on their behalves. After a jury agreed that defendants violated Texas law in committing fraud and fraud by non-disclosure, the district court set aside the verdict and issued judgment in favor of defendants as a matter of law.The Fifth Circuit affirmed, concluding that plaintiffs have not shown that defendants committed fraud. In this case, the district court concluded that defendants did not make any false representations (material or otherwise) when signing and sending the dispute letters because Lexington Law had the legal right to sign its clients' names on the correspondence it sent on their behalf to data furnishers who reported inaccurate information about the clients' credit. Furthermore, Progrexion cannot be liable for fraud since it, like Lexington Law, did not make any material misrepresentations. The court also concluded that plaintiffs' fraud by non-disclosure claim must be dismissed because they did not justifiably rely on any failure of defendants to disclose material facts, and plaintiffs have not shown that defendants had a duty to disclose that they were the ones actually sending the dispute letters. Additionally, plaintiffs have not shown that Progrexion disclosed any facts—material or otherwise—and so cannot be liable for fraud by nondisclosure. The court explained that the fact that Lexington Law had the legal right to send dispute letters on their clients behalves and in their names suggests that the firm did not make any false representations, and thus the firm did not create any false impressions requiring disclosure. Finally, plaintiffs waived their conspiracy claim by failing to move for judgment as a matter of law on the claim before and after the case was submitted to the jury or for a new trial. View "The CBE Group, Inc. v. Lexington Law Firm" on Justia Law
Texas Association of Manufacturers v. United States Consumer Product Safety Commission
Petitioners sought review of the Commission's final rule prohibiting the manufacture and sale of any children's toy or child care article that contains concentrations of more than 0.1 percent of any one of five phthalates.The Fifth Circuit held that EMCC has standing to bring its challenge to the Final Rule and the court has jurisdiction to review the Final Rule. The court also held that the Commission procedurally erred by not providing an adequate opportunity to comment on the rule and by failing to consider the costs of a portion of the rule. Having reviewed the record and the Final Rule, the court can discern the Commission's path for each of the six decisions at issue and held that its explanations are not "so implausible that it could not be ascribed to a difference in view or the product of agency expertise." Because there is a serious possibility that CSPC will be able to remedy its failures, the court concluded that remand, rather than vacatur, was appropriate in this case. View "Texas Association of Manufacturers v. United States Consumer Product Safety Commission" on Justia Law
Fontana v. HOVG LLC
The Fifth Circuit affirmed the district court's dismissal of plaintiff's claim under the Fair Debt Practices Act. Plaintiff filed suit after a debt collector spoke with plaintiff's sister over the phone, alleging that the debt collector violated the Act's prohibition on communicating with third parties about a consumer's debt. However, the court concluded that the conversation between plaintiff's sister and the debt collector was not a "communication" as defined by the statute. In this case, even taking the pleaded facts in the light most favorable to plaintiff, the conversation between the debt collector's representative and plaintiff's sister did not convey any information regarding a debt, either directly or indirectly. Rather, the representative mentioned "an important personal business matter," which does not even suggest the existence of a debt, much less provide information about it. View "Fontana v. HOVG LLC" on Justia Law
Hammer v. Equifax Information Services, LLC
The Fifth Circuit affirmed the district court's dismissal of plaintiff's claims against Equifax and Experian under the Fair Credit Reporting Act after the consumer reporting agencies (CRAs) deleted a favorable credit item from his credit report and refused to restore it. The court held that plaintiff's 15 U.S.C. 1681e(b) claim fails where this provision does not hold a CRA strictly liable for all inaccuracies, Rather, the adequacy of a CRA's procedures is judged according to what a reasonably prudent person would do under the circumstances. In this case, the omission of a single credit item does not render a report inaccurate or misleading, and plaintiff has not alleged that the CRAs violated their stated disclosure policies or maintained an undisclosed policy of deleting certain favorable items.The court also held that plaintiff's section 1681i(a) claim fails because plaintiff disputed the completeness of his credit report, not of an item in that report. Therefore, plaintiff did not trigger the CRA's section 1681i(a) obligation to investigate. Finally, plaintiff's section 1681i(a)(5)(B)(ii) claim fails because Equifax had no duty to notify plaintiff where Equifax had not removed the credit item, and amending the pleading would be futile. View "Hammer v. Equifax Information Services, LLC" on Justia Law
Calogero v. Shows, Cali & Walsh, LLP
The Fifth Circuit reversed the district court's dismissal of plaintiff's Fair Debt Collection Practices Act (FDCPA) claim against SCW. In this case, SCW identified itself as a "debt collector" representing Louisiana and Road Home in connection with the hurricane relief grant plaintiff received, and sought an overpayment per a Road Home Program Agreement. Plaintiff alleged on behalf of herself and a proposed class that SCW violated the FDCPA for its purported use of misrepresentation, false or deceptive means, and unfair or unconscionable means to collect a debt that cannot be legally taken.The court held that the district court erred in concluding that plaintiff's obligation to pay the Road Home Program did not fall under the FDCPA. The court applied the St. Pierre inquiry and held that plaintiff's obligation of repayment for excess grant money arises from a "transaction," which encompasses consensual agreements and negotiations like the one at issue; plaintiff voluntarily elected to avail herself of disaster relief money in exchange for consent to Road Home's covenants and subrogation agreements; and what plaintiff received in exchange for compliance with Road Home's terms was for the private benefit of a "personal, family, or household" service or good. Accordingly, the court remanded for further proceedings. View "Calogero v. Shows, Cali & Walsh, LLP" on Justia Law
Manuel v. Merchants and Professional Bureau, Inc.
Plaintiff filed suit against Merchant's surety, Travelers, alleging claims under the Fair Debt Collection Practices Act (FDCPA), alleging that 2017 collection letters were false or misleading and unfair or unconscionable for failing to disclose the time-barred nature of the debt. Plaintiff also alleged a claim under the Texas Debt Collection Act based on the same conduct.The Fifth Circuit affirmed the district court's grant of summary judgment to Merchants, but on alternative grounds. The court held that the letters seeking collection of time-barred debt, filled with ambiguous offers and threats with no indication that the debt is old, much less that the limitations period has run, misrepresent the legal enforceability of the underlying debt in violation of 15 U.S.C. 1692e(2) and (10). View "Manuel v. Merchants and Professional Bureau, Inc." on Justia Law
Salinas v. R.A. Rogers, Inc.
Plaintiff filed suit against a debt collection agency, alleging a violation of the Fair Debt Collection Practices Act (FDCPA). The district court held that the collections letter that was mailed to plaintiff accurately conveyed what was possible under Texas law—that interest could accrue—and was therefore not false, deceptive, or misleading.The Fifth Circuit affirmed the district court's grant of summary judgment for the agency, holding that the agency's dunning letter was not false, misleading, or deceptive in violation of the FDCPA. The court held that the language at issue in this case expresses a common-sense truism about borrowing and lending, and does not imply that interest or other charges may actually accrue on the debtor's account. View "Salinas v. R.A. Rogers, Inc." on Justia Law
Casalicchio v. BOKF, N.A.
Plaintiff requested that the court set aside a foreclosure sale of his residence because his lender mailed him a preforeclosure notice with the wrong deadline for curing default. In this case, the letter contained a deadline thirty days from the day the notice was printed, even though the deed of trust called for a deadline thirty days from the day the letter was mailed.The Fifth Circuit held that the district court correctly applied Texas precedents and denied plaintiff relief, because the lender's "minor" non-compliance with the terms of the deed of trust did not justify unwinding the foreclosure sale. The court held that the error in the foreclosure notice did not clearly harm or prejudice plaintiff, where he does not dispute that, even if the notice had stated the correct deadline, he would not have had the funds to pay the past-due balance on his account. View "Casalicchio v. BOKF, N.A." on Justia Law
Germain v. US Bank National Association
Plaintiff appealed the district court's grant of summary judgment in favor of defendants in an action alleging claims under the Real Estate Settlement Procedure Act (RESPA); the Texas Debt Collection Act (TDCJ); promissory estoppel; and the Declaratory Judgment Act. The Fifth Circuit held that plaintiff failed to raise a genuine issue of material fact regarding defendants' compliance with 12 C.F.R. 1024.41 and properly dismissed his RESPA claims. The court also held that the district court did not err in dismissing plaintiff's TDCA claims and, because plaintiff's remaining claims were based on the underlying RESPA and TDCA claims, they were moot. Accordingly, the court affirmed the dismissal of plaintiff's action with prejudice. View "Germain v. US Bank National Association" on Justia Law