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Litigation Byte (June Edition)

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The Litigation Byte is the new name and format for McGlinchey’s Commercial Law Bulletin. Our new format reflects McGlinchey’s national coverage and our expanded footprint while still serving up the digestible, insightful bites readers have come to expect, with timely coverage of financial services decisions and cases that impact you and your business. At the end of each month, our team will compile and send a round-up digest with all of our case summaries delivered to your inbox in one easy-to-reference place. Subscribe here.

Alabama Supreme Court Clarifies Hold-Over Tenant Foreclosure Payment Rules

On May 31, 2024, the Alabama Supreme Court held that a servicer and/or high bidder from a foreclosure sale can compel a hold-over tenant to make payments into court during the pendency of litigation over the propriety of foreclosure and/or ejectment. Keep reading.

TILA Disclosure Requirements Limited by New York District Court

On June 5, 2024, the United States District Court for the Southern District of New York held that under TILA, a creditor in an open-end consumer credit plan has no obligation to notify or disclose to consumers information that the creditor has or intends to verify with the Internal Revenue Service (IRS). Keep reading.

Court Excludes Class Members with Binding Arbitration Agreements

In an important decision regarding the size and potential scope of a putative class, the United States District Court for the Southern District of Ohio recently granted a defendant’s motion to exclude from a class action all individuals with binding arbitration agreements. Keep reading.

Court Rules Eviction Proceedings are Not Debt Collection under FDCPA

The United States Court for the Western District of Virginia recently granted a foreclosure firm’s motion to dismiss on the grounds that the firm’s representation of a lender did not violate the Fair Debt Collection Practices Act (FDCPA). Keep reading.

FCRA Claims Against Credit Reporting Agencies: NY Court Emphasizes Minimal Pleading Requirements

On June 6, 2024, the United States District Court for the Eastern District of New York dismissed claims for violations of the Fair Credit Reporting Act (FCRA)—15 U.S.C. §§ 1681e(b) and 1681i in particular—against a credit reporting agency. Keep reading.

New York’s Interest-On-Escrow Law May Not Be Preempted by the National Bank Act

On May 30, 2024, the Supreme Court reversed the Second Circuit’s holding that New York General Obligation Law § 5–601, which mandates banks to pay borrowers the interest accumulated on a balance held in an escrow account for residential mortgages on certain types of properties, was preempted by the National Bank Act (NBA). Keep reading.

New York Northern District Court Reminds That Only a “Called Party” May Bring a TCPA Claim

On June 10, 2024, the court reiterated that a claim for violation of the Telephone Consumer Protection Act cannot be maintained by a consumer who is neither a subscriber of the called telephone number that is billed for the call nor a non-subscriber customary user of the called telephone number which is included in a family or business cellular plan. Keep reading.

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District Court Dismisses FDCPA and TILA Claims Against Mortgage Servicer

November 20, 2024

On November 14, 2024, the United States Court for the District of Arizona dismissed a pro se litigant’s claims against Sun West Mortgage Company, Inc. (Sun West) and Cody N. Crosier, foreclosure counsel for Sun West (collectively, Defendants) for, inter alia, alleged violations of the Fair Debt Collections Practice Act (FDCPA), 15 U.S.C. § 1692 and the Truth in Lending Act (TILA), 15 U.S.C. § 1640(k). The court ruled that a third party could foreclose on a property after the original lender sold its interest in the promissory note and deed of trust associated with the property.

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Litigation Byte (October Edition)

October 31, 2024

Delivered in digestible, insightful bites, McGlinchey’s Litigation Byte is a monthly roundup of financial services decisions and cases nationwide that impact your business.

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Let SCOTUS Decide: Can an Amended Complaint ‘Remove’ Removal Jurisdiction?

October 25, 2024

On October 7, 2024, the Supreme Court heard arguments to answer two longstanding questions on removal jurisdiction: (1) Whether amending a complaint to eliminate the only federal questions destroys federal subject-matter jurisdiction under 28 U.S.C. § 1331 and (2) whether a post-removal amended complaint precludes a district court from exercising supplemental jurisdiction over state law claims under 28 U.S.C. § 1367.

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FCRA Claims Fail as Mortgagor Could Not Satisfy His Repayment Obligations by Tendering Another Promise to Pay

October 16, 2024

On September 19, 2024, the District Court for the Eastern District of New York dismissed claims against the mortgage lender, its mortgage servicer, and credit reporting agencies under the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681 et seq., New York Uniform Commercial Code § 9-210 et seq., and common law defamation for lack of standing because plaintiff’s self-inflicted injury was a result of his personal choices rather than defendant’s conduct.

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Supreme Court to Hear TCPA Class Action on Unsolicited Faxes and Online Fax Services

October 9, 2024

For the second time in five years, the U.S. Supreme Court will decide a case that arises out of the Telephone Consumer Protection Act’s (TCPA) ban on the sending of unsolicited faxes. On Friday, October 3, 2024, the Court said it would hear arguments about whether to reopen a class action lawsuit filed by a group of chiropractors, McLaughlin Chiropractic Associates, against medical tech company McKesson Corp.

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Separate Actions Against a Residential Tenant in Different Courts Could Constitute Abusive Collection Practices Under the FDCPA

October 9, 2024

On September 30, 2024, the District Court for the Eastern District of New York denied dismissal of plaintiff-tenant’s claim against her landlord’s counsel for abusive collection practices in violations of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692f, finding that the commencement of more than one suit against the same consumer in different courts could potentially violate the FDCPA prohibition on abusive acts or practices.

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4th Circuit Holds Rental Applicant Lacks Standing to Bring FCRA Claims Over Inaccurate OFAC Reporting

October 1, 2024

On September 11, 2024, the 4th Circuit held that a named plaintiff in a putative class action failed to establish a concrete injury that could satisfy the injury-in-fact requirement for Article III standing against consumer reporting agency, RentGrow, Inc. Plaintiff alleged that Defendant inaccurately reported on rental applications that Plaintiffs were on the Office of Foreign Assets Control’s (OFAC) list of individuals who threaten America’s national security. However, the 4th Circuit held that Plaintiff had no Article III standing when the undisputed evidence suggested that the inaccurate OFAC reports were never reviewed by a third party, and therefore, no concrete injury could be established.

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Litigation Byte (September Edition)

September 26, 2024

Delivered in digestible, insightful bites, McGlinchey’s Litigation Byte is a monthly roundup of financial services decisions and cases nationwide that impact your business.

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District Court Dismisses Truth in Lending and Regulation Z Action Against Corporate Executives

September 25, 2024

On September 13, 2024, the United States Court for the District of Massachusetts dismissed a pro se litigant’s claims against four executives of a bank for alleged violations of the Truth in Lending Act (TILA) and certain provisions of Regulation Z, 12 C.F.R. §§ 226.22, 1026.5 after Plaintiff alleges that he was inaccurately charged more than the Annual Percentage Rate (APR) reflected in a promissory note.

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Eighth Circuit Upholds Sanctions Against Defendant in FCRA Lawsuit for Demanding “Too Much” in Discovery

September 25, 2024

Recently, the U.S. Circuit Court of Appeals for the Eighth Circuit affirmed a discovery ruling, including an award of $93,243.50 in attorneys’ fees, against a defendant in a lawsuit arising under the Fair Credit Reporting Act (FCRA). The court found that the defendant “crossed the line when it demanded mostly irrelevant information” from the consumer’s law firm.

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Lack of Actual Knowledge and Prior Express Consent Defeats FDCPA and TCPA Claims

September 24, 2024

The U.S. District Court for the District of Nevada granted a defendant’s motion for summary judgment in a case arising under the Fair Debt Collection Practices Act (FDCPA) and the Telephone Consumer Protection Act (TCPA). It found that the evidence did not reasonably support an inference that the defendant had actual knowledge of the plaintiff’s legal representation regarding an account and that the plaintiff providing her phone number regarding the original transaction is consent to communications originating from that transaction, including efforts to collect on the debt.

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Court Finds Mass Arbitration Bellwether and Delegation Provisions Unconscionable

September 20, 2024

The district court for the Northern District of California recently denied a defendant's motion to compel arbitration and, in so ruling, found that a bellwether provision related to mass arbitrations was unconscionable. Avia involved various statutory claims challenging an online gaming company’s representations regarding gameplay. In response, the gaming company moved to compel arbitration. The plaintiff argued, among other things, that the arbitration agreement, and specifically, the bellwether provision, were unconscionable.

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Litigation Byte (August Edition)

August 29, 2024

The Litigation Byte is the new name and format for McGlinchey's Commercial Law Bulletin. Our new format reflects McGlinchey’s national coverage and our expanded footprint while still serving up the digestible, insightful bites readers have come to expect, with timely coverage of financial services decisions and cases that impact you and your business.

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Ohio Supreme Court Holds that Defamation Claim is Subject to Discovery Rule

August 26, 2024

In a hotly contested decision, a plurality of the Ohio Supreme Court held for the first time that a claim for defamation is subject to the discovery rule, greatly expanding the potential for businesses and individuals to find themselves subject to a defamation lawsuit in the Buckeye state.

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FCRA Action Dismissed for Lack of Standing and Failure to State a Claim

August 22, 2024

In July 2024, the United States Court for the District of Massachusetts dismissed a pro se litigant’s claims against Experian Information Services LLC (Experian), TransUnion LLC (TransUnion), and Equifax Information Solutions, Inc. (Equifax) (collectively, Credit Reporting Agencies) for alleged violations of the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681 et seq.

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The Court Sua Sponte Retroactively Applies FAPA to Dismiss Foreclosure

August 21, 2024

On July 31, 2024, the New York Supreme Court, Appellate Division: Second Department reversed the trial court’s denial of borrowers’ motion to dismiss a foreclosure action filed prior to the enactment of the Foreclosure Abuse Prevention Act (FAPA) because under the new “savings statute” for foreclosure actions under FAPA, plaintiff was precluded from recommencement since the first foreclosure was dismissed as abandoned under CPLR § 3215(c).

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Vexatious Litigant Laws Clarified by Texas Supreme Court

August 15, 2024

The recent decision in Serafine v. Crump by the Supreme Court of Texas primarily revolves around the interpretation of what constitutes "litigation" under Texas law, particularly in the context of determining whether someone is a "vexatious litigant." This case settled a growing inconsistency within some courts of appeals. 

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Under FAPA: Dismissal of Prior Foreclosure for Lack of Standing Does Not Estop Lender

August 9, 2024

On July 31, 2024, the New York Supreme Court, Appellate Division: Second Department affirmed the dismissal of a quiet title action, which sought to discharge a mortgage as time-barred under the Foreclosure Abuse Prevention Act (FAPA), because the prior foreclosure was dismissed upon the court’s finding that plaintiff lacked standing.

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Litigation Byte (July Edition)

August 2, 2024

The Litigation Byte is the new name and format for McGlinchey's Commercial Law Bulletin. Our new format reflects McGlinchey’s national coverage and our expanded footprint while still serving up the digestible, insightful bites readers have come to expect, with timely coverage of financial services decisions and cases that impact you and your business.

Alert

New York Northern District Court Reminds That Only a “Called Party” May Bring a TCPA Claim

June 27, 2024

On June 10, 2024, the United States District Court for the Northern District of New York reiterated that a claim for violation of the Telephone Consumer Protection Act (TCPA) cannot be maintained by a consumer who is neither a subscriber of the called telephone number that is billed for the call nor a non-subscriber customary user of the called telephone number which is included in a family or business cellular plan.

Alert

New York’s Interest-On-Escrow Law May Not Be Preempted by the National Bank Act

June 27, 2024

On May 30, 2024, the Supreme Court reversed the Second Circuit and found that the National Bank Act (NBA) does not preempt New York General Obligation Law § 5–601, which mandates banks to pay borrowers the interest accumulated on a balance held in an escrow account for residential mortgages on certain types of properties.

Alert

FCRA Claims Against Credit Reporting Agencies: NY Court Emphasizes Minimal Pleading Requirements

June 25, 2024

On June 6, 2024, the United States District Court for the Eastern District of New York dismissed claims for violations of the Fair Credit Reporting Act (FCRA) against a credit reporting agency where plaintiff “has not adequately pleaded an inaccuracy because she fails to specify what information in her credit report was incorrect and why” and has not alleged facts regarding the credit reporting agency’s procedures to ensure the accuracy of its reports or to investigate disputed information

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TILA Disclosure Requirements Limited by New York District Court

June 18, 2024

On June 5, 2024, the United States District Court for the Southern District of New York issued a decision adopting in its entirety the May 13, 2024 Report and Recommendation regarding the Truth in Lending Act (TILA). The court held that under TILA, a creditor in an open-end consumer credit plan has no obligation to notify or disclose to consumers information that the creditor has or intends to verify with the Internal Revenue Service (IRS) regarding the consumer’s taxes or income in the course of servicing the consumer’s debt.

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Alabama Supreme Court Clarifies Hold-Over Tenant Foreclosure Payment Rules

June 10, 2024

For the first time, the Alabama Supreme Court held that a servicer and/or high bidder from a foreclosure sale can compel a hold-over tenant to make payments into court during the pendency of litigation over the propriety of foreclosure and/or ejectment. Prior to this decision, many trial courts were hesitant to grant such motions, and there was no clear guidance on a movant’s burden of proof.

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Litigation Byte (May Edition)

May 30, 2024

The Litigation Byte is the new name and format for McGlinchey's Commercial Law Bulletin. Our new format will reflect McGlinchey’s national coverage and our expanded footprint while still serving up the digestible, insightful bites readers have come to expect, with timely coverage of financial services decisions and cases that impact you and your business. At the end of each month, our team will compile and send a round-up digest with all of our case summaries delivered to your inbox in one easy-to-reference place.