Justia Banking Opinion Summaries

The issue before the Eleventh Circuit concerned a private securities fraud class action suit brought against a bank holding company and its management. State-Boston Retirement System, a shareholder and lead plaintiff, sought to prove that the holding company had misrepresented the level of risk associated with commercial real estate loans held by its subsidiary. After the trial, the District Court submitted the case to the jury on a verdict form seeking general verdicts and answers to special interrogatories. When the jury returned a verdict partially in favor of State-Boston, the holding company moved for judgment as a matter of law. Perceiving an inconsistency between two of the jury's interrogatory answers, the District Court discarded one of them and granted the motion on the basis of the remaining findings. The Eleventh Circuit concluded that was error: "[w]hen a court considers a motion for judgment as a matter of law -even after the jury has rendered a verdict- only the sufficiency of the evidence matters. . . .The jury’s findings are irrelevant." Despite the District Court’s error, the Eleventh Circuit concluded that the evidence was insufficient to support a finding of loss causation, an element required to make out a securities fraud claim. The Court therefore affirmed. View "State-Boston Retirement System v. BankAtlantic Bancorp, Inc." on Justia Law

The Federal Deposit Insurance Corporation (FDIC), as receiver for Darby Bank & Trust Co., appealed an order of the district court that remanded the underlying case the action to state court. The district court determined that it did not have subject-matter jurisdiction because the FDIC had not been formally substituted as a party in the state court action prior to removal. After review, the Eleventh Circuit vacated the district court's remand order. The Court held that, as a matter of federal law, the FDIC is "substituted as a party" in a state court proceeding under 12 U.S.C. 1819(b)(2)(B) once it is appointed receiver and files a notice of substitution, and may at that point remove the action to federal court." View "North Savannah Properties, LLC, et al v. FDIC" on Justia Law

Defendant-Appellant Branch Banking & Trust Company (BB&T) appealed the denial of its motion to compel arbitration of a putative class action brought by Plaintiff-Appellee Lacy Baras, a customer of BB&T. Barras alleged in her complaint on behalf of herself and the class she sought to represent that BB&T charged her and others overdraft fees for payments from checking accounts even when the account contained sufficient funds to cover the payments. She also alleged that BB&T supplied inaccurate and misleading information about account balances, and failed to notify customers about changes to BB&T's policies for processing checking account transactions, thereby increasing overdraft charges assessed against customers. Barras asserted claims under the state Unfair Trade Practices Act for unfair and deceptive trade practices, breach of contract, breach of the covenant of good faith and fair dealing and unconscionability, and sought to certify a class of BB&T account holders who were likewise charged allegedly inflated overdraft fees. BB&T moved to compel arbitration of all of Barras's claims pursuant to a provision in its "Bank Services Agreement" (BSA). The district court denied BB&T's motion, holding that the arbitration agreement was unconscionable under state law, and could not be enforced. Before the Eleventh Circuit decided BB&T's appeal to that order, the Supreme Court decided "AT&T Mobility, LLC v. Concepcion" (131 S.Ct. 1740 (2011). The Eleventh Circuit remanded the case to the district court for reconsideration in light of that decision. On remand, BB&T renewed its motion to compel arbitration, and again the district court denied it. BB&T appealed that ruling, arguing that: (1) the question of whether the arbitration provision was enforceable must be resolved by an arbitrator; (2) the cost-and-fee shifting provision in the agreement that the district court held unconscionable did not apply to the arbitration provision; (3) "Concepcion" prohibited application of the state unconscionability doctrine to the arbitration provision; (4) the cost-and-fee shifting provision is not unconscionable; and (5) the cost-and-fee shifting privision was severable from the arbitration process. Taking each argument in turn, the Eleventh Circuit reversed the district court's decision and remanded the case with instructions to compel arbitration. View "Barras v. Branch Banking & Trust Co." on Justia Law

This bankruptcy appeal involved a transfer of liens by subsidiaries of TOUSA, Inc., to secure the payment of a debt owed only by their parent, TOUSA. This appeal by the Committee of Unsecured Creditors presented two issues: (1) whether the bankruptcy court clearly erred when it found that the Conveying Subsidiaries did not receive reasonably equivalent value in exchange for the liens to secure loans used to pay a debt owed only by TOUSA; and (2) whether the Transeastern Lenders were entities "for whose benefit" the Conveying Subsidiaries transferred the liens. The court held that the bankruptcy court did not clearly err when it found that the Conveying Subsidiaries did not receive reasonably equivalent value for the liens and that the bankruptcy court correctly ruled that the Transeastern Lenders were entities "for whose benefit" the liens were transferred. The court reversed the judgment of the district court, affirmed the liability findings of the bankruptcy court, and remanded for further proceedings. View "Senior Transeastern Lenders, et al. v. Official Committee of Unsecured Creditors" on Justia Law

This case arose when plaintiff filed suit against Chase, alleging that Chase failed to comply with its obligations under the federal Home Affordable Modification Program (HAMP) by declining to issue him a permanent loan modification. The district court dismissed his complaint for failure to state a claim, finding that HAMP did not provide a private cause of action and that, even if his claims were independent of HAMP, they failed as a matter of law. The court applied the factors under Hemispherx Biopharma, Inc. v. Johannesburg Consol. Inves. to Hamp and the Emergency Economic Stabilization Act of 2008 (EESA), 12 U.S.C. 5201-5261, holding that there was no implied right of action. Therefore, plaintiff lacked standing to pursue his claims. To the extent plaintiff's claims fell outside of HAMP, they failed as a matter of law. Rejecting plaintiff's remaining claim of promissory estoppel, the court affirmed the judgment. View "Miller v. Chase Home Finance, LLC" on Justia Law

Plaintiff appealed the district court's dismissal of his civil action under the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692. The district court concluded that plaintiff's claim was covered by the FDCPA but that he did not allege acts that violated the FDCPA. Accepting plaintiff's allegations as true and construing them in the light most favorable to plaintiff, the statement on the May 2009 notice that BAC was plaintiff's "creditor" was a false representation and was made by a "debt collector" as defined by section 1692a. Therefore, the complaint stated a claim upon which relief could be granted under the FDCPA and the judgment of the district court was vacated and remanded. View "Bourff v. Lublin, LLC" on Justia Law

Plaintiff filed a putative class action against M&T Bank, alleging that it improperly charged its checking account customers overdraft fees. The district court denied M&T Bank's renewed motion to compel arbitration, finding that plaintiff's claims were not within the scope of the parties' arbitration agreement. The court held that, under the delegation provision, the decision of whether plaintiff's claims were within the scope of the arbitration agreement was a decision for an arbitrator, and the district court erred in making the decision itself. Further, the court believed that it was prudent for the district court to reconsider its unconscionability determination in light of AT&T Mobility LLC v. Conception, so the court did not reach whether the arbitration agreement was unconscionable. Accordingly, the court vacated and remanded. View "Given v. M&T Bank Corp, et al." on Justia Law

Plaintiffs are personal investment holding corporations owned by two related Panamanian shareholders. Defendants, of who there are two distinct groups, are (1) a related group of banking corporations operating under the umbrella of Banco Santander, which provide banking, investment, and other financial management services; and (2) certain individual officers/employees of Santander. This dispute arose from plaintiff's investment of an undisclosed sum of money with defendants. At issue was whether a district court, having found a valid contract containing an arbitration clause existed, was also required to consider a further challenge to that contract's place within a broader, unexecuted agreement. Having considered those circumstances in light of Granite Rock Co. v. International Brotherhood of Teamsters and other relevant precedent, the court found that the district court properly construed the law regarding arbitrability in dismissing plaintiff's suit. Accordingly, the court affirmed the judgment. View "Solymar Investments, Ltd., et al. v. Banco Santander S.A., et al." on Justia Law

Defendant appealed the district court's order denying its motion to compel plaintiff to submit her claims to arbitration pursuant to an arbitration agreement governed by the Federal Arbitration Act (FAA), 9 U.S.C. 1 et seq. The district court held that defendant had, by participating in the litigation for nine months prior to requesting that the case be submitted to arbitration, waived its contractual right to compel arbitration. The court found that defendant's right to compel arbitration, even if waived with respect to the claims in the Original Complaint, was revived by plaintiff's filing of the Amended Complaint. Therefore, the court vacated the district court's order denying defendant's motion to compel arbitration and stay the proceedings, remanding for further proceedings.

This case arose when respondent obtained a month-long $200 loan from a storefront in Georgia in 2004. Respondent later sought relief from a Georgia state court, arguing that the loan was illegal and usurious under Georgia law because it carried a finance charge of $36, equivalent to an annual percentage rate of 253%. At issue on appeal was whether the district court had jurisdiction to entertain a petition to compel arbitration pursuant to section 4 of the Federal Arbitration Act (FAA), 9 U.S.C. 4. The court held that, looking through the section 4 arbitration petition to the underlying controversy, respondent's dispute with Community State Bank (Bank) could have arisen under federal law and, thus, provided a basis for federal jurisdiction over the FAA petition. Therefore, the court held that the district court had jurisdiction over the Bank's section 4 petition. The court held that because Cash America's arbitration defenses were struck by the Georgia state court as a statutorily authorized sanction for their willful and deliberate discovery abuses, Cash America could not relitigate the issue of the arbitration clauses' enforceability in federal court. Therefore, the court affirmed the district court's dismissal of the FAA petition, on the alternative ground of issue preclusion, as to Cash America. The court, however, vacated the order of dismissal as to the Bank and remanded to the district court to consider in the first instance the merits of the Bank's petition to compel arbitration.