Justia Banking Opinion Summaries

Plaintiffs filed a class-action lawsuit in state court, alleging that the defendants had conducted non-judicial foreclosure sales that did not comply with Utah law. After removal, the district court dismissed the complaint for failure to state a claim, concluding that whether federal law “incorporates Utah or Texas law, Recon[Trust] had not operated beyond the law by acting as a foreclosure trustee in Utah.” On the limited record presented on appeal, the Tenth Circuit concluded that the district court erred in determining it had jurisdiction to hear this case. View "Dutcher, et al v. Matheson, et al" on Justia Law

African-American and Hispanic borrowers under National City Bank mortgages, 2006-2007, sued, alleging violation of the Fair Housing Act, 42 U.S.C. 3605, and the Equal Credit Opportunity Act, 15 U.S.C. 1691, by an established pattern or practice of racial discrimination in the financing of home purchases. They cited National’s “Discretionary Pricing Policy,” under which brokers and loan officers could add a subjective surcharge of points, fees, and credit costs to an otherwise objective, risk-based rate, so that minority applicants were “charged a disproportionately greater amount in non-risk-related charges than similarly-situated Caucasian persons.” During discovery, National provided data on more than two million loans issued from 2001 to 2008. After mediation, the parties reached a proposed settlement: National did not concede wrongdoing, but would pay $7,500 to each named plaintiff, $200 to each class payee, $75,000 to two organizations for counseling and other services for the class, and $2,100,000 in attorneys’ fees. After granting preliminary approval and certification of the proposed class, the district court considered the Supreme Court’s 2011 decision, Wal-Mart Stores, Inc. v. Dukes, and held that the class failed to meet Rule 23(a)’s commonality and typicality requirements and denied certification. The Third Circuit affirmed, noting that the proposed class is national, with 153,000 plaintiffs who obtained loans at more than 1,400 branches; significant disparity in one branch or region could skew the average, producing results indicating national disparity, when the problem may be more localized. View "Rodriguez v. Nat'l City Bank" on Justia Law

Plaintiff filed putative class actions under the Electronic Fund Transfer Act (EFTA), 15 U.S.C. 1693, alleging that Mutual First and First National violated the Act because defendants' ATM machines did not have "on machine" notice of a transaction fee. The district court dismissed for lack of standing. The court concluded, however, that plaintiff's claim of statutory damages was sufficiently related to his injury to confer standing where defendants did not provide him with the required "on machine" notice and then charged him a prohibited fee following an ATM transaction that he initiated and completed. Further, plaintiff's injury was fairly traceable to defendants' conduct where, if defendants had not violated the Act's notice requirement, plaintiff would not have been forced to choose between engaging in a transaction without the required notice and walking away. Accordingly, the court reversed and remanded for further proceedings. View "Charvat v. Mutual First Fed. Credit Union" on Justia Law

Hrivnak filed a purported class action under the Fair Debt Collection Practices Act, 15 U.S.C. 1692–1692p, and Ohio consumer-protection law, Ohio Rev. Code §§ 1345.01–.99, 4165.01–04, seeking statutory, compensatory, and punitive damages exceeding $25,000, and injunctive and declaratory relief. The suit was based on the conduct of debt management companies and a law firm in dunning hi on credit card debts. The defendants made an offer of judgment of $7,000 plus costs and attorney’s fees, under Civil Rule 68. Hrivnak rejected the offer. The district court rejected the defendants’ claim that the offer rendered the suit moot. The Sixth Circuit affirmed, characterizing defendants’ argument as asserting that claims with little to no chance of success should be dismissed as moot whenever they are mixed in with promising claims that a defendant offers to compensate in full. View "Hrivnak v. NCO Portfolio Mgmt., Inc." on Justia Law

Plaintiffs commenced this putative class action alleging that defendants participated in a global Internet conspiracy to sell illegal prescription drugs, in violation of the laws of the United States and Virginia. At issue on appeal was whether the district court erred in dismissing the complaint against four foreign banks for lack of personal jurisdiction. The court concluded that Rule 4(k)(2) did not justify the exercise of personal jurisdiction over the banks because exercising jurisdiction over them would not, in the circumstances here, be consistent with the United States Constitution and laws. Subjecting the banks to the coercive power of the court in the United States, in the absence of minimum contacts, would constitute a violation of the Due Process Clause. Accordingly, the court affirmed the district court's orders dismissing the complaint against the banks. View "Unspam Technologies v. Chernuk" on Justia Law

Plaintiffs and defendants obtained class certification and settlement approval for a nationwide class action involving three related lawsuits, alleging violations of the Fair Debt Collection Practices Act, 15 U.S.C. 1692-1692p and state law, based on the practice of “robo-signing” affidavits in debt collections. Eight individuals objected. The Sixth Circuit reversed, holding that the disparity in the relief afforded under the settlement to the named plaintiffs (exoneration of debts, $2000, and prospective injunctive relief) and the unnamed class members ($17 and prospective injunctive relief) made the settlement unfair. The class notice was inadequate and, although the class satisfies four of the six certification requirements (numerosity, commonality, typicality and predominance), the representation is not adequate under Rule 23(a) nor is the class action vehicle superior. View "Vassalle v. Midland Funding LLC" on Justia Law

Eleven plaintiffs who obtained home loans from Countrywide Bank, sought to challenge alleged racial disparities dating back to 2002 and resulting from Countrywide’s loan-pricing policy for home mortgages. The district court denied class certification, finding that the proposed class failed to satisfy Federal Rule of Civil Procedure 23(a)’s commonality requirement. The Sixth Circuit affirmed. Plaintiffs challenged policies that grant broad discretion to local agents; they do not claim that a uniform policy or practice guides how local actors exercise their discretion, such that the corporate guidance caused or contributed to the alleged disparate impacts. To justify certification, class members must unite acts of discretion under a single policy or practice, or through a single mode of exercising discretion; the mere presence of a range within which acts of discretion take place will not suffice to establish commonality. View "Miller v. Countrywide Fin. Corp." on Justia Law

Plaintiffs brought this civil enforcement action under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq., alleging that defendants, the Bank, and individual members of the Bank's Corporate Benefits Committee, engaged in prohibited transactions and breached their fiduciary duties by selecting and maintaining Bank-affiliated mutual funds in the investment menu for the Bank's 401(k) Plan and the Bank's separate but related Pension Plan (collectively, the Plans). The court affirmed the district court's dismissal of the Pension Plan claims in the Second Amended Complaint on the basis that plaintiffs lacked Article III standing. The district court correctly determined that plaintiffs' remaining claims were time-barred under the limitations period in 29 U.S.C. 1113(1)(A). Finally, the district court's dismissal of the Third Amended Complaint with prejudice did not constitute an abuse of discretion where plaintiffs failed to file a motion to amend and had already amended their original complaint three times. Accordingly, the court affirmed the judgment of the district court. View "David v. Alphin" on Justia Law

Plaintiffs in these five separate putative class actions alleged that Wells Fargo and Wachovia Bank unlawfully charged them overdraft fees for their checking accounts, which were governed by agreements that provided for arbitration of disputes on an individual basis. On appeal, Wells Fargo argued that it did not waive its right to compel arbitration because it would have been futile to move to compel arbitration before the Supreme Court decided AT&T Mobility LLC v. Concepcion. The court concluded that Concepcion established no new law. Because the court concluded that it would have been futile for Wells Fargo to argue that the Federal Arbitration Act, 9 U.S.C. 1 et seq., preempted any state laws that purported to make the classwide arbitration provisions unenforceable, the court affirmed the denial of its motion to compel arbitration. View "Garcia v. Wells Fargo Bank, N.A." on Justia Law

This putative class action was one of a number of breach-of-contract suits being brought against financial institutions nationwide by mortgagors who claimed that they were improperly forced to increase flood insurance coverage on their properties. The plaintiff in this case asserted that Bank of America's demand that he increase his flood coverage by $46,000 breached both the terms of his mortgage contract and the contract's implied covenant of good faith and fair dealing. The district court concluded that the pertinent provision of the mortgage unambiguously permitted the lender to require the increased flood coverage and, hence, it granted the defendants' motion to dismiss the complaint. The First Circuit Court of Appeals vacated the judgment of dismissal in favor of the Bank, holding that the mortgage was reasonably susceptible to an understanding that supported the plaintiff's breach of contract and implied covenant claims. Remanded. View "Kolbe v. BAC Home Loans Servicing, LP" on Justia Law