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At issue in this consolidated appeal was whether the Maryland Collection Agency Licensing Act (MCALA), as revised by a 2007 departmental bill, was constrained to the original scope of collection agencies seeking consumer claims or whether the revised statutory language required principal actors of Maryland’s mortgage market to obtain a collection agency license. In 2007, the Department of Labor, Licensing, and Regulation requested a department bill to revise the definition of collection agencies required to obtain the MCALA license. The enacted departmental bill changed MCALA’s definition of “collection agencies” to include a person who engages in the business of “collecting a consumer claim the person owns if the claim was in default when the person acquired it[.]” The circuit courts below dismissed the foreclosure actions at issue in this appeal, concluding that foreign statutory trusts acting as a repository for defaulted mortgage debts were required to obtain a MCALA license before its substitute trustees filed the foreclosure actions. The Supreme Judicial Court reversed, holding that the foreign statutory trusts did not fall under the definition of “collection agencies” that are licensed and regulated by MCALA, and therefore, the foreign statutory trusts were not required to obtain a license under MCALA before the substitute trustees instituted foreclosure proceedings on their behalf. View "Blackstone v. Sharma" on Justia Law

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Plaintiff filed suit against electronic retailer Newegg.com, alleging claims of false advertising under the (UCL), false advertising law (FAL), and Consumers Legal Remedies Act (CLRA). Plaintiff contended that Newegg.com used fictitious former price information in its advertisements that mislead customers to believe they were receiving merchandise at a discounted price. The Court of Appeal reversed the trial court's judgment sustaining Newegg's demurrer without leave to amend, holding that plaintiff had standing to pursue his claims. In this case, plaintiff satisfied the UCL and FAL's standing requirements by alleging that Newegg advertised that its products were being offered at a discount from their former or original price; these representations were false or misleading; plaintiff saw and relied on the former price representations when purchasing the products; and he would not have purchased the products but for the false former price representations. Because the court concluded that plaintiff adequately alleged an economic injury for purposes of UCL standing, he likewise had standing to pursue his CLRA claim. View "Hansen v. Newegg.com Americas, Inc." on Justia Law

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Plaintiffs each received a letter from GC, a debt collector, notifying them that their credit-card accounts had been referred for collection. The letters contained the name and address of the original creditor and stated: [I]f you do dispute all or any portion of this debt within 30 days of receiving this letter, we will obtain verification of the debt from our client and send it to you. Or, if within 30 days of receiving this letter you request the name and address of the original creditor, we will provide it to you in the event it differs from our client, Synchrony Bank. Plaintiffs assert that the letters were deficient under the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692, in failing to inform Plaintiffs that GC was obligated to provide the additional debt and creditor information only if Plaintiffs disputed their debts in writing. Plaintiffs filed a purported class action. The court determined that GC’s letters created a “substantial” risk that consumers would waive important FDCPA protections by following GC’s deficient instructions, and certified a class of Kentucky and Nevada consumers, rejecting GC’s argument that Federal Rule of Civil Procedure 23 was not satisfied because Plaintiffs had not shown that each class member had standing. The Sixth Circuit affirmed, rejecting arguments that that the alleged FDCPA violations did not constitute harm sufficiently concrete to satisfy the injury-in-fact requirement of standing. Plaintiffs have Article III standing. View "Macy v. GC Services Limited Partnership" on Justia Law

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When a debt collector misreports a debt obligation to a consumer that she no longer owes, and requests payment on that debt, the consumer plausibly alleges violations of 15 U.S.C. 1692e and 1692f, notwithstanding the fact that the debt collector advised the consumer of her right to dispute the debt as required by section 1692g, and that the consumer did not exercise that right.      The Second Circuit vacated the district court's dismissal of plaintiff's complaint, alleging violations of the Fair Debt Collection Practices Act when defendant used false representations and unfair practices in seeking payment on an already settled debt. The court held that plaintiff alleged plausible FDCPA claims. In this case, the inclusion of section 1692g notice did not prevent plaintiff from plausibly pleading that, on a least sophisticated consumer standard, defendant's debt communication was misleading and unfair. The court explained that the FDCPA was a strict liability statute, and a consumer was not required to plead mens rea to state plausible FDCPA claims. Instead, a debt collector's intent was relevant as an element of the affirmative defense afforded by section 1692k(c). View "Vangorden v. Second Round, LP" on Justia Law

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Johnson & Johnson appealed the district court's certification of a class of consumers who purchased baby products in an action alleging that the company violated the Connecticut Unfair Trade Practices Act (CUTPA), as well as other state consumer protection laws, when it labeled its baby products as "natural" when they were not. The Second Circuit held that, although plaintiff had Article III standing, it was not clear on the record whether the district court undertook the requisite analysis of the material differences in the state laws at issue before concluding that their similarities predominated over their differences. Therefore, the court vacated the district court's grant of certification and remanded for further proceedings. View "Langan v. Johnson & Johnson Consumer Cos." on Justia Law

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The Second Circuit affirmed the district court's judgment in favor of defendants in an action alleging that defendants violated the Fair Debt Collection Practices Act, 15 U.S.C. 1692 et seq., in connection with their attempt to initiate foreclosure proceedings on his home. The court held that, although the district court erred in dismissing plaintiff's claims on the ground that the enforcement of a security interest through foreclosure proceedings was not debt collection for purposes of the Act, defendant failed to plausibly allege that defendants violated the FDCPA. The court held that the mortgage foreclosure, at least under the circumstances here, constituted debt collection under the Act. However, the court also held that defendantsʹ identification of Green Tree as the creditor was not deceptive as to the nature or legal status of plaintiffʹs debt, nor would it have prevented the least sophisticated consumer from responding to or disputing the action. Finally, plaintiff's 15 U.S.C. 1692g claim was properly dismissed because the Certificate of Merit fell within section 1692g(d)ʹs pleading exclusion, and was therefore not an initial communication, because defendants were legally obligated to file this document with the foreclosure complaint. View "Cohen v. Rosicki, Rosicki & Assocs., P.C." on Justia Law

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Defendants service student loans. Parchman, individually and on behalf of others similarly situated, filed suit, alleging violations of the Telephone Consumer Protection Act (TCPA), 47 U.S.C. 227, which prohibits a party from making a call “using any automatic telephone dialing system or an artificial or prerecorded voice,” absent an emergency or consent. Plaintiffs alleged that Defendants “negligently, knowingly and/or willfully contact[ed] Plaintiffs on Plaintiffs’ cellular telephones without their prior express consent and repeatedly contacted plaintiff Parchman, even though he never gave them his cell phone number, never owed any debt to any Defendant, and told them to stop calling. Plaintiffs alleged that, although plaintiff Carlin took out a student loan in 2012, Defendants repeatedly contacted her, even after she demanded in writing that they stop calling her, in October 2014. Defendant NSI successfully moved to sever and dismiss Carlin’s claims because the calls involved different companies and their respective calling practices. Plaintiffs unsuccessfully moved to amend the complaint after Parchman died to substitute Parchman’s daughter. Defendants argued that the requisite elements of adequacy of class counsel and adequacy of class representatives were not met. The Sixth Circuit reversed in part, holding that a TCPA claim does survive death, but affirmed with respect to Carlin’s claims. View "Parchman v. SLM Corp." on Justia Law

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This is the third appeal that comes to us in this case, which arises out of Patrick and Mary Lafferty’s purchase of a defective motor home from Geweke Auto & RV Group (Geweke) with an installment loan funded by Wells Fargo Bank, N.A. In Lafferty v. Wells Fargo Bank, 213 Cal.App.4th 545 (2013: "Lafferty I"), the Court of Appeal affirmed in part and reversed in part the action brought by the Laffertys against Wells Fargo. Lafferty I awarded costs on appeal to the Laffertys. On remand, the Laffertys moved for costs and attorney fees. The trial court granted costs in part but denied the Laffertys’ request for attorney fees as premature because some causes of action remained to be tried. The Laffertys appealed. In "Lafferty II," the Court of Appeal held the award of costs on appeal did not include an award of attorney fees. Lafferty II also held the Laffertys’ request for attorney fees was prematurely filed. After issuance of the remittitur in Lafferty II, the parties stipulated to a judgment that contained two key components: (1) their agreement the Laffertys had paid $68,000 to Wells Fargo under the loan for the motor home; and (2) Wells Fargo repaid $68,000 to the Laffertys. After entry of the stipulated judgment, the trial court awarded the Laffertys $40,596.93 in prejudgment interest and $8,384.33 in costs. The trial court denied the Laffertys’ motion for $1,980,070 in post-trial attorney fees, $464,220 in post-appeal attorney fees, and $16,816.15 in non-statutory costs. Wells Fargo appealed the award of prejudgment interest and costs, and the Laffertys cross-appealed the denial of their requests for attorney fees and nonstatutory costs. The Court of Appeal concluded resolution of this appeal and cross-appeal turned on the meaning of title 16, section 433.2 of the Code of Federal Regulations, or the "Holder Rule." The Court found the Laffertys were limited under the plain meaning of the Holder Rule to recovering no more than the $68,000 they paid under terms of the loan with Wells Fargo. Consequently, the trial court properly denied the Laffertys’ request for attorney fees and nonstatutory costs in excess of their recovery of the amount they actually paid under the loan to Wells Fargo. In holding the Laffertys were limited in their recovery against Wells Fargo, the Court of Appeal rejected the Laffertys’ claims the Holder Rule violated the First Amendment, due process, or equal protection guarantees of the federal Constitution. However, the Court concluded the trial court did not err in awarding costs of suit and prejudgment interest to the Laffertys. View "Lafferty v. Wells Fargo Bank, N.A." on Justia Law

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The Kohn collection law firm sent Dunbar a letter seeking to collect a debt originally owed to a bank. The letter stated that the full balance due was $4,049.08 and offered to settle the debt for $2,631.90, but warned: “NOTICE: This settlement may have tax consequences.” Dunbar was insolvent and filed for bankruptcy six months later. The Weltman collection law firm sent Smith a collection letter seeking to collect a consumer credit-card debt. The letter stated that the balance due was $4,319.69 and invited Smith to contact the law firm to discuss satisfying her debt obligation for a reduced amount but warned: “This settlement may have tax consequences.” Smith too was insolvent and filed for bankruptcy two months later. The debtors filed actions under the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692e, alleging that the letters were misleading because they were insolvent and would not have had to pay taxes on any discharged debt. A magistrate and district judge each dismissed the cases, reasoning that alerting debtors that a settlement “may” have tax consequences is neither false nor misleading. The Seventh Circuit affirmed, reasoning that “may” does not mean “will” and insolvent debtors might become solvent before settling their debt, triggering the possibility of tax consequences. View "Smith v. Weltman, Weinberg & Reis Co." on Justia Law

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The Second Circuit affirmed the district court's judgment in an action brought by plaintiff against Midland, alleging that they violated the Fair Debt Collection Practices Act (FDCPA). The court held that the district court did not err by granting summary judgment in favor of Midland, because there were no genuine questions of fact as to whether a Midland employee purposefully overwhelmed him with harassing questions or misled him with her questions in violation of section 1692e of the FDCPA. Summary judgment was also properly granted as to plaintiff's claim that Midland violated section 1692e(8), which required debt collectors to communicate that a disputed debt was disputed. The court also held that the district court did not abuse its discretion by sanctioning plaintiff's attorney for misleading the court during the initial status conference, plaintiff for disregarding a protective order, and both plaintiff and the law firm for needlessly multiplying proceedings. View "Huebner v. Midland Credit Management" on Justia Law