Consumer Finance

United States District Court Judge David Carter recently approved a sweeping class action settlement under which the three credit reporting agencies have agreed to scrub historical data regarding bankrupt debtors.  White v. Experian, et. al. Case No. SACV 05-1070 DOC (MLGx) (C.D.Cal. 2008) Essentially, the CRAs typically would remove pre-bankruptcy debts from consumers' credit files only if the furnishers updated… Read More

Reminder:  FACTA Red Flag Rules become mandatory November 1, 2008.    From the FTC's website: The Federal Trade Commission (FTC), the federal bank regulatory agencies, and the National Credit Union Administration (NCUA) have issued regulations (the Red Flags Rules) requiring financial institutions and creditors to develop and implement written identity theft prevention programs, as part of the Fair and Accurate Credit… Read More

When an out-of-state car dealer successfully demonstrates that California had no jurisdiction over it, does the trial court retain jurisdiction to award attorneys fees to that defendant?  Yes it does, said a California Court of Appeal in Shisler v. Sanfer Sports Cars, Inc. (2008) __ Cal.Rptr. 3d __ 2008 WL 4347761.    Moreover, in determining whether the car dealer was… Read More

Does damage to a new automobile in a dealer's inventory, however minor and regardless of repair, necessarily strip the vehicle of its status as “new” under the Consumers Legal Remedies Act (CLRA; Civ. Code § 1750 et. seq.?   In Bourgi v. West Covina Motors, Inc. -- Cal.Rptr.3d --, 2008 WL 4335593 (2008), the Court of Appeal said that it did… Read More

      Numerous California state and federal decisions discuss arbitration clauses.  But recently only a few federal court decisions had addressed the specific situation of whether FDCPA claims fall within or outside an arbitration agreement.  (E.g. Gerber v. Citigroup, Inc. 2008 WL 596112 (E.D.Cal.2008) (FDCPA claim not arbitratable because valid arbitration agreement between parties not found);  Tickanen v. Harris & Harris, Ltd., 461 F.3d… Read More

AB 2116 seeks to amend Civil Code § 2983.2(a)(2) regarding reinstatement of a motor vehicle conditional sales contract after repossession for non-payment. Civil Code § 2983.2(a)(2) sets forth post-repossession obligations a finance company must follow when consumers seek to reinstate their contracts.     ab_2116_bill_20080220_introduced ab_2116_bill_20080507_amended_asm_v97 ab_2116_bill_20080403_amended_asm_v98 ab-2116-assembly-bill-bill-analysis-judicial ab-2116-assembly-bill-bill-analysis   BILL STATUS as of 9/22/08 MEASURE :  A.B. No. 2116 AUTHOR(S)… Read More

Prior to the enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), the ability of a debtor to "cramdown" the secured amount of a motor vehicle claim was commonplace.   BAPCPA seemingly precluding the cramdown of claims secured by a purchase money security interest in certain vehicles obtained within 910 days of the bankruptcy filing. But the 2005 BAPCPA… Read More

In Miller v. Midland Funding, LLC, 2008 WL 4093004 (C.D.Cal. 2008), Judge Otis Wright clarified the type of penalties and damages recoverable under the FDCPA.  As to the $1,000 penalty, Judge Wright explained: Defendants are correct that statutory damages are limited to $1,000 per action, not $1,000 per defendant.  Clark v. Capital Credit & Collection Services, Inc. 460 F.3d 1162, 1178 (9th… Read More

In Catalfamo v. Countrywide Home Loans, 2008 WL 4158432 (E.D.Cal. 2008), Judge O'Neal held that the FDCPA does not afford a right to punitive damages, since the FDCPA already affords a right to a penalty.  Mr. Catalfamo may not recover punitive damages for his RESPA, FDCPA, and breach of contract claims.  RESPA and FDCPA provide for compensatory relief, reasonable attorneys'… Read More

After favorable treatment of the Noerr-Pennington Doctrine by the Court of Appeals for the Ninth Circuit in Sosa v. DirectTV, 437 F.3d 923, 929 (9th Cir. 2006), many saw analogy to FDCPA claims.  In Sial v. Unifund CCR Partners, 2008 WL 4079281 (S.D.Cal. 2008), Judge Miller refused to apply the defense to litigation-related debt collection conduct.  The Noerr-Pennington doctrine derives… Read More

The Motion, scheduled for hearing on October 31, can be reviewed here: leckler-v-cashcall-motion-to-dismiss-under-hobbs. Read More

In Kelly v. Wolpoff & Abramson, LLP, 2008 WL 2397689 (D.Colo. 2008), District Judge Nottingham rejected a consumer's claim that a debt collector violated the FDCPA by collecing on a "charged off" account.  Judge Nottingham rejected the misperception some consumers have that "charging off" an account equates to debt extinguishment. According to generally accepted accounting principles codified into federal regulations and… Read More

In Reed v. Global Acceptance Credit Company, 2008 WL 3330165 (N.D.Cal. 2008), Judge Whyte rejected plaintiff's claim under Foti v. NCO Fin. Systems, Inc. 424 F.Supp.2d 643 (S.D.N.Y. 2006) and Hosseinzadeh v. M.R.S. Assocs, Inc. 337 F.Supp.2d 1104 (C.D.Cal. 2005) that a debt collector's failure to identify itself as a "debt collector" under 15 U.S.C. 1692e(11) violated that provision.  Here,… Read More

In Yasin v. Equifax Information Services, Inc. 2008 WL 2782704 (N.D.Cal. 2008), Judge Chesney conducted an analysis of FCRA and held that "equitable relief is not available as a remedy" under FCRA, citing Howard v. Blue Ridge Bank 371 F.Supp.2d 1139, 1145 (N.D.Cal.2005).  Judge Chesney also used an analogy to the FDCPA, finding in dicta that the FDCPA does not either. Read More

On July 3, 2008, Judge Conti ruled in Cruz v. MRC Receivables, Inc. -- F.Supp.2d -- 2008 WL 2627143 (N.D.Cal. 2008) on a debt collector's summary judgment motion in an FDCPA claim alleging that inclusion of the Notice of potentially adverse credit reporting required by California Civil Code § 1785.26 and 15 U.S.C. 1681s-2(a)(7)(A)(i) constituted an unfair collection tactic because… Read More

On July 7, 2008, the Court of Appeals for the Ninth Circuit in Reichert v. National Credit Systems, Inc. held that, in an action by a debtor against a debt collector under the FDCPA arising out of a debt that the debtor owed a former landlord, the debt collector bore the burden of proving the bona fide error defense.  The… Read More

In Witt v. Experian Information Solutions, Inc. 2008 WL 2489132 (E.D.Cal. 2008), Witt sued a Real-Time Resolutions, Inc., a furnisher of credit information under FCRA.  On June 16, Judge O'Neal of the USDC for the Eastern District dismissed Real-Time's collection action, which Real-Time filed as a counter-claim to the FCRA claim.  Judge O'Neal, following Sparrow v. Mazda American Credit 385… Read More

In Murphy v. Triad Financial, Judge Benitez of USDC for the Southern District dismissed a Rosenthal Act claim as lacking federal question jurisdiction.  Judge Benitez rejected the argument that since Civil Code § 1788.17 incorporates the federal FDCPA, claims filed under that section trigger federal question jurisdiction under the "substantial federal question" doctrine.  The parties "argue that Murphy's Rosenthal Act… Read More

On June 2, 2008, Judge Jeremy Vogel held in an unpublished decision that although an act to enforce the FDCPA must be filed within one year from the date of the violation, "conduct occurring outside the statute of limitations is actionable under a continuing violation theory".  (Cruz v. International Collection Corp. 2008 WL 2263800 (N.D.Cal. 2008). Judge Vogel explained that… Read More

On May 22, 2008, Judge Fogel of the United States District Court for the Northern District of California held that the TCPA's requirement that TCPA claims be filed in state court did not deprive federal courts of diversity jurisdiction to hear such claims.  The TCPA dictates that an individual may bring a private right of action in state court.  (47 U.S.C.  § 227(b)(3),… Read More