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Consumer Finance Law Blog

Developments and Analysis of Consumer Financial Services Laws, Rules, and Regulations

Category Archives: Class Action

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Does Cappuccitti Mark The End Of Federal Jurisdiction Over Consumer Class Actions In The Eleventh Circuit?

Posted in Class Action
In a decision that could render the Class Action Fairness Act (“CAFA”) virtually meaningless, the Eleventh Circuit recently held sua sponte that CAFA does not allow for federal court jurisdiction over class actions unless the amount in controversy for at least one plaintiff (or class member) exceeds $75,000. Should this decision hold up, courts in … Continue Reading

California’s Song-Beverly Credit Card Act: The Past, Present, and Future

Posted in Class Action, Credit Cards, Privacy, Song-Beverly Credit Card Act
Last week the BNA Privacy & Security Law Report published an article discussing in detail California’s Song-Beverly Credit Card Act (the “Act”). The aim of the article is to provide those persons and businesses that regularly engage in credit card transactions in California, most notably retail merchants, with a meaningful primer on some critical current and … Continue Reading

Identify Theft Litigation Update: Ninth Circuit Upholds Dismissal Of Speculative Claims

Posted in Class Action, Data Security, Privacy
Updating a prior post, the Ninth Circuit, in Ruiz v. Gap, Inc., recently upheld a dismissal on summary judgment on the grounds that the mere risk of identity theft is too speculative of an injury to substantiate a cause of action based on negligence. See Ruiz v. Gap, Inc., No. 09-15971, 2010 WL 2170993 (9th … Continue Reading

Third Circuit Affirms Dismissal of Consumer Class Action Arising Out of NFL “Spygate” Scandal

Posted in Class Action
The Third Circuit in Mayer v. Belichick recently affirmed dismissal of a consumer class action filed by disappointed football fans and season ticket-holders in response to the now infamous “spygate” scandal. As you may recall, this scandal arose when it was discovered that the New England Patriots were surreptitiously videotaping the defensive signals of the New … Continue Reading

Appellant Attempts to Re-litigate Issue of Whether Retailers that Collect Customer Zip Codes During Credit Card Transactions Violate California’s Song Beverly Credit Card Act

Posted in Class Action, Credit Cards, Privacy, Song-Beverly Credit Card Act
In a previous post, we noted that the California Supreme Court in Pineda v. Williams-Sonoma Stores, Inc., granted a petition to review the issue of whether a retailer violates California’s Song-Beverly Credit Card Act if, in connection with a credit card transaction, it records a customer’s zip code for the purpose of later using it … Continue Reading

Supreme Court to Decide Whether Agreements Barring Class-Wide Arbitration can be Invalidated Under State Law

Posted in Class Action, Consumer Financial Protection
This week, the Supreme Court granted the certiorari petition of AT&T Mobility LLC (“ATTM”) in AT&T Mobility LLC v. Concepcion, No. 09-893. ATTM’s petition asked the Court to determine whether the Federal Arbitration Act (“FAA”) preempts states from conditioning the enforcement of an arbitration agreement on the availability of particular procedures – here, class-wide arbitration – … Continue Reading

CAFA Update: Denial of Class Certification does not Divest Federal Court of Jurisdiction Over Case Removed Under CAFA

Posted in Class Action
Earlier this year, the Seventh Circuit in Cunningham Charter Corp. v. Learjet, Inc. held that denial of class certification does not eliminate subject matter jurisdiction in a case removed from state court under the Class Action Fairness Act (“CAFA”). You may remember that CAFA creates federal diversity jurisdiction over certain class actions in which at … Continue Reading

U.S. Supreme Court Holds that State Law Does Not Bar Federal Courts from Using Class Action Device for State Law Claims

Posted in Class Action
In a significant class action decision, Shady Grove Orthopedic Associates, P.A. v. Allstate Insurance Co., No. 08-1008, 559 U.S. – (Mar. 31, 2010), the U.S. Supreme Court recently held that federal rules on class actions preempt state laws restricting a case from proceeding as a class action. In the complaint, Shady Grove Orthopedic Associates, P.A. alleged … Continue Reading

Recently Commenced California Class Action May Impact Exposure Faced By Financial Institutions Involved With Federal Student Loans

Posted in Class Action, Fair Lending
If your company is one of the many companies that participates in originating, guaranteeing or servicing student loans made under the Federal Family Education Loan Program (“FFELP”) you should be aware of a recent putative class action filed in the United States District Court for the Northern District of California. In Sharon Cheslow v. Wells Fargo … Continue Reading

Class Certification Denied in RESPA Kickback Action

Posted in Class Action
The recent decision in Carter v. Welles-Bowen Realty, Inc., No. 3:09-cv-400 (N.D. Ohio Mar. 11, 2010), two consolidated cases involving alleged kickbacks to “sham” title insurance companies, in violation of the Real Estate Settlement Procedures Act (“RESPA”), is consistent with numerous other decisions of federal courts nationwide that have denied class certification of RESPA kickback claims … Continue Reading

Federal Court Rejects Coupon Settlement Under CAFA

Posted in Class Action
A federal court in California recently sided with twenty-six state attorneys general and several objectors in rejecting a proposed class action settlement that called for Honda to provide over 175,000 Honda Civic Hybrid owners a coupon worth no more than $1,000 toward purchasing a new Honda vehicle. In True v. American Honda Motor Co., No. … Continue Reading

Supreme Court Clarifies Diversity Jurisdiction Standard

Posted in Class Action
In a unanimous decision Tuesday in Hertz v. Friend, – U.S. –, No. 08-1107, 2010 WL 605601 (Feb. 23, 2010), the Supreme Court clarified the test federal courts should apply to determine a corporation’s citizenship for purposes of diversity jurisdiction, holding that corporations are citizens of the state of their “nerve center” – usually their corporate … Continue Reading

Recent Decisions Find In Favor of Insurance Coverage for “Blast Faxes”

Posted in Class Action, Insurance Coverage & Recovery, Privacy
Numerous class action suits have been brought over the past several years under the Telephone Consumer Protection Act (“TCPA”) against entities that fax unsolicited advertisements (so-called “blast faxes”) to individuals and businesses.  Companies facing such suits in turn have sought insurance coverage under their comprehensive general liability (“CGL”) policies for costs incurred defending TCPA suits, … Continue Reading

Wave of Class Actions for Data Security Breaches

Posted in Class Action, Data Security
If your company collects customers’ personal data in the course of its business, be aware of the wave of class actions that have recently been filed arising out of data security breaches. Finkelstein Thompson, a DC-based law firm, over the past year has filed a series of class actions against businesses that have fallen victim … Continue Reading

Plaintiffs File Suits Alleging Gift Cards With Expiration Dates In Less Than 10-Point Font Violate California Law

Posted in Class Action, Gift Cards
A number of class action lawsuits recently have been filed in California state court in San Diego County against a wide range of merchants as well as gift card issuers alleging, among other things, that the defendants have violated the California Civil Code by issuing gift cards that bear either an obscured expiration date, or … Continue Reading

Identity Theft Litigation Update: Recent Cases Show Trend Toward Dismissal of Speculative Claims

Posted in Class Action, Data Security, Privacy
Several weeks ago, we discussed how most courts were rejecting lawsuits where the plaintiffs claimed “damages” in the form of an increased risk of identity theft, generally stemming from allegations of an accidental loss or theft of personal confidential information. Since we last blogged on this issue, two recent decisions highlight how that trend is … Continue Reading

The End of the Arbitration Clause?

Posted in Class Action, Credit Cards, Legislative Developments
In order to avoid the substantial risks of class action litigation, many financial service providers – both traditional and non traditional – require that customer agreements contain an arbitration clause and a waiver of the customer’s right to bring a class action. However, recent court decisions and pending legislation suggest that certain types of these … Continue Reading

Fears of Future Identity Theft Generally Not Sufficient To Establish “Actual Damages” In A Lawsuit

Posted in Class Action, Data Security, Privacy
Over the last few years, incidents involving disclosures of personal information by consumer financial service providers have been big news, ranging from the theft of laptop computers containing social security numbers, to hacker attacks on computer networks containing confidential information, to the more "vanilla" theft of personal documents. Not surprisingly, the plaintiffs’ bar has been … Continue Reading

NAACP To File Subprime Suits Against Wells Fargo and HSBC

Posted in Class Action, Subprime
The latest class action complaints alleging improper subprime lending practices are due to be filed against two banks today. The NAACP plans to file separate class action lawsuits today against Wells Fargo and HSBC. According to news reports, the suits, which will be filed in district court in California, allege that those banks engaged in deliberate discriminatory … Continue Reading

Reminder! All California Businesses That Accept Credit And Debit Cards Now Must Truncate Credit Card Information On All Transaction Receipts

Posted in Class Action, Fair Credit Reporting Act (FCRA), Song-Beverly Credit Card Act
As of January 1, 2009, and in contrast to federal law, California Civil Code Section 1747.09 requires that no more than the last five digits of a credit or debit card number be printed on both the electronically-printed card receipt retained by the business as well as the receipt provided to customers. See CAL. CIVIL … Continue Reading