Consumer Financial Services Law Blog
Dykema Gossett PLLC
Dykema Gossett PLLC

Consumer Financial Services Law Blog

Consumer Financial Services Law Blog

News and analysis regarding Consumer Financial Services litigation and regulation, and activities of the Consumer Financial Protection Bureau

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Showing 15 posts in Class Actions.

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

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. Read More ›

Is Your Putative Consumer Class Ascertainable? The 7th Circuit Suggests It Doesn’t Really Matter at the Certification Stage

Class action plaintiffs have a new reason to file suit in the Seventh Circuit. In Mullins v. Direct Digital, LLC, 795 F.3d 654 (7th Cir. 2015), the Seventh Circuit refused to follow the Third Circuit’s imposition of a heightened “ascertainability” requirement at the class certification stage. The Seventh Circuit affirmed the district court’s certification of the consumer class and held that the plaintiffs did not have to prove at the class certification stage that there was a “reliable and administratively feasible” way to identify class members.The Seventh Circuit’s ruling contributes to a growing divide among the circuits over how to ascertain a class under Rule 23’s implicit requirement that a class must be defined clearly and that class membership must be defined by objective criteria. Read More ›

Bank Insurer Challenges Insurability of Restitution in Settled Class Action

Posted on September 16, 2015 by Kevin Connor

Indian Harbor Insurance Company, relying on the established legal principle that insurance contracts exist to avert loss and not to permit gain, is appealing a federal court’s ruling that it must indemnify U.S. Bancorp’s losses in a settled class action. Indian Harbor’s appeal is pending before the United States Court of Appeals for the Eighth Circuit, whose ruling on the issue may dramatically affect the tenor of future settlement negotiations in suits alleging negligent or willful misconduct by banks.  Read More ›

Reverse Mortgage Rule re. Surviving Spouses Remanded to HUD

In Bennett v. Donovan, three plaintiffs brought suit against the Secretary of the Department of Housing and Urban Development (HUD) alleging that regulations implementing the Home Equity Conversion Mortgage (HECM) program violated the Administrative Procedure Act (APA).  Read More ›

Offers of Judgment: New Sixth Circuit Ruling Guides Litigants

Some good news in an otherwise adverse ruling on Rule 68 offers of judgment in the context of putative class actions: On June 11, 2013, the Sixth Circuit issued its  opinion in Hrivnak v. NCO Portfolio Management, a decision that clears up some confusion on the rule and provides a roadmap for litigants seeking to employ or defend against them. Read More ›

Federal Court Dismisses $8 Billion Recording Fee Class Action Against MERS

In yet another blow to local municipalities seeking to recover damages against Mortgage Electronic Registration Systems, Inc. (MERS) for failing to record mortgage assignments and pay the accompanying fees, the U.S. District Court for the Western District of Missouri dismissed an $8 billion putative class action suit filed by Jackson County, Missouri. U.S. District Senior Judge Ortrie D. Smith of the U.S. District Court for the Western District of Missouri, Western Division, ruled that Jackson County's complaint failed to state a claim because “there is no duty to record assignments under Missouri law.” Read More ›

Sixth Circuit Denies Class Certification Against Countrywide On Commonality Grounds

On January 15, 2013, the Sixth Circuit Court of Appeals affirmed a district court’s denial of class certification holding that the plaintiff did not satisfy the commonality requirements established by the United States Supreme Court in Wal-Mart Stores, Inc. v. Dukes, ___ U.S. ____; 131 S.Ct. 2541 (2011). In Miller v. Countrywide Bank, N.A., No. 12-5250, 2013 WL 149853 (6th Cir. Jan. 15, 2013), the Sixth Circuit, explained that Dukes requires plaintiffs to “unite the acts of discretion under a single policy or practice, or through a single mode of exercising discretion” to demonstrate that class certification is appropriate.  The Miller Court held that this common “glue” was absent from in the Miller case. Read More ›

Nation’s Governors Resist CFPB’s Call, Prepare Lawsuit Challenging CFPB’s Authority

Last March, CFPB Director, Richard Cordray, called on all 50 states to sign a memorandum of understanding (MOU) to assuage industry concerns regarding the protection of confidential information shared among states and the bureau. To date, only 12 states have answered the call. Oklahoma Attorney General Scott Pruitt explains that some attorney generals are declining to sign the MOU over legal objections to Dodd-Frank and the recess appointment of Cordray. “There are misgivings I have about the authority and scope and power of the CFPB and the power granted to the director. Frankly, until some of those issues are fleshed out, it is very premature for a state to enter into an MoU.”  Indeed, it has been reported that some states, including Oklahoma, South Carolina, Kansas and Michigan, are preparing a lawsuit to challenge the constitutionality of Dodd-Frank and the powers it grants to the bureau and its director. South Carolina Attorney General Alan Wilson warned that the lawsuit would be filled later this month.   Read More ›

Banks Challenge Missouri Foreclosure Mediation Law

Yesterday (September 19, 2012), the Business Bank of St. Louis filed a putative class action lawsuit on behalf of 272 commercial banks challenging a new foreclosure mediation requirement ordinance in St. Louis County. The new ordinance, passed last month by the St. Louis County Council, requires lenders to participate in and pay for a mediation session upon request of a borrower before initiating a foreclosure. The ordinance further requires lenders to provide borrowers with a notice of meditation and pay a $100 fee to a mediation coordinator. If the borrower requests a mediation, then the lender is required not only to participate in the meditation, but also to pay $350 for the mediation. The lawsuit contends that the ordinance "bears a price tag of an annual direct cost to lenders of more than $1 million - which will be paid to a private contractor on a no-bid contract - and indirect costs of millions more in compliance."  The borrowers, who defaulted on the loan, are not required to pay anything for the mediation. The ordinance also imposes a $1,000 fine on the lender, but not the borrower, for violating the ordinance, e.g., by failing to participate in the mediation process.  Read More ›

Consumer Financial Protection Bureau Files Amicus Brief in Truth in Lending Act Case

On March 26, 2012, the CFPB filed an amicus, or “friend of the court,” brief in Rosenfield v. HSBC Bank, USA, a case pending in the United States Court of Appeals for the Tenth Circuit in Denver, Colorado.  The Bureau’s brief backs the homeowner in the case, who claims that an automatic right of rescission exists when a loan fails to provide borrowers with disclosures required by the Truth in Lending Act (“TILA”), and that the right of rescission is triggered by timely notification to the lender. Read More ›