Justia Banking Opinion SummariesArticles Posted in US Court of Appeals for the Eleventh Circuit
Fisher v. PNC Bank, N.A.
Plaintiff filed suit against PNC Bank and PNC Investments for mishandling an investment account that belonged to plaintiff and her deceased mother. The district court sua sponte ordered briefing on the probate exception to federal diversity jurisdiction, concluded that plaintiff was "attempting to circumvent the normal probate process by bringing an individual claim against PNC Bank," and dismissed the case. The district court also held that plaintiff had no standing to sue.The Eleventh Circuit reversed, concluding that neither the probate exception nor standing doctrine divests the district court of jurisdiction over this lawsuit. The court concluded that the district court erred in dismissing the case under the probate exception because it can adjudicate her claims for damages against PNC without probating her mother's will, administering the estate, or disposing of the estate's property. The court also concluded that plaintiff is the real party in interest and has standing to bring her claims. The court remanded for further proceedings. View "Fisher v. PNC Bank, N.A." on Justia Law
R&R International Consulting LLC v. Banco Do Brasil, S.A.
After R&R filed suit seeking to redeem bonds issued by Banco do Brasil, the district court dismissed for lack of subject-matter jurisdiction and decided, in the alternative, that the bonds were no longer redeemable under Brazilian law.The Eleventh Circuit concluded that the district court had subject-matter jurisdiction under the commercial-activity exception to the Foreign Sovereign Immunities Act (FSIA), because the issuance of the colonization bonds was a commercial activity and the Bank's refusal to honor those bonds caused a direct effect in the United States. However, the court concluded that the complaint is barred by the statute of limitations under Brazilian law. In this case, the statute of limitations ran in 1997, 20 years after maturity, and thus when R&R tried to redeem the colonization bonds in 2018, they were no longer enforceable. Accordingly, the court vacated in part and affirmed in part. View "R&R International Consulting LLC v. Banco Do Brasil, S.A." on Justia Law
BBX Capital v. Federal Deposit Insurance Corp.
BBX filed suit challenging the FDIC's determination that the severance payments BBX sought to make to five former executives of the Bank were golden parachute payments and that it would approve payments of only twelve months of salary to each executive. The FDIC also concluded that BBT was required to seek and receive approval before making the reimbursement payments to BBX. The FRB subsequently approved the same payment amounts but took no action with respect to approving any payments over 12 months of salary because the FDIC had already prohibited any additional payments.The Fifth Circuit affirmed the district court's dismissal of BBX's action against FRB for lack of standing because BBX has not shown any injury it has sustained is fairly traceable to an FRB action or inaction. The court also held that the FDIC's decision to classify the proposed payments as golden parachute payments was not arbitrary or capricious, because the golden parachute statute, 12 U.S.C. 1828(k), covers the stock purchase agreement (SPA) and the proposed payments included therein. Furthermore, earlier agreements, such as severance contracts, are irrelevant because the proposed payments are being made under the SPA. The court held that the FDIC's denial of any payments in excess of 12 months' salary for each executive was not arbitrary and capricious where the explanations the FDIC offered for denying additional payments were reasonable and did not run counter to the evidence. Finally, the court rejected BBX's argument that the FDIC's requirement that BBT seek approval before reimbursing BBX was arbitrary and capricious. View "BBX Capital v. Federal Deposit Insurance Corp." on Justia Law
Estate of David Bass v. Regions Bank, Inc.
The administrator brought separate actions against Regions and Fidelity, alleging claims arising from the decedent's transfer of his entire retirement savings account to his sister before his death.The Eleventh Circuit held that the district court properly granted Fidelity's Rule 12(b)(6) motion regarding the Count III breach of contract and Count IV breach of fiduciary duty claims; vacated the district court's Rule 12(b)(1) dismissals of the Count II Georgia UCC claims in both complaints because those rulings were incapable of meaningful review; and affirmed the district court's dismissal of the Count I common law conversion and Count II common law negligence claims because they were preempted by Georgia Code 11-3-420. View "Estate of David Bass v. Regions Bank, Inc." on Justia Law
Pinson v. JPMorgan Chase Bank, NA
Plaintiff filed suit against the Bank, asserting claims under the Fair Debt Collection Practices Act (FDCPA) and the Fair Credit Reporting Act (FCRA). The district court dismissed the complaint for failure to state a claim.Determining that plaintiff had Article III standing, the Eleventh Circuit held that plaintiff has stated three plausible claims for relief under the FCRA, where he alleged that the Bank willfully violated the FCRA by failing to investigate his dispute and unlawfully obtained his credit report. Accordingly, the court reversed in part and remanded for further proceedings. However, plaintiff did not plausibly state a claim under the FDCPA, because the least sophisticated consumer would not believe that Chase Home Finance was a third-party debt collector distinct from the Bank. Therefore, the court affirmed the district court's dismissal of the FDCPA claim. View "Pinson v. JPMorgan Chase Bank, NA" on Justia Law
Davis v. Oasis Legal Finance Operating Co.
Plaintiffs, a class of borrowers, filed suit in Georgia against their lenders, alleging that their loan agreements violated state usury laws. After removal to federal court, the district court concluded that the forum selection clause and class action waiver were unenforceable based on Georgia public policy. The Eleventh Circuit affirmed, holding that Georgia's Payday Lending Act and Industrial Loan Act articulate a clear public policy against enforcing forum selection clauses in payday loan agreements and in favor of preserving class actions as a remedy for those aggrieved by predatory lenders. View "Davis v. Oasis Legal Finance Operating Co." on Justia Law
Regions Bank v. Legal Outsource PA
After Legal Outsource defaulted on a loan from Regions Bank, which triggered the default of a loan and mortgage that Regions issued to Periwinkle, the obligors refused to cure the defaults. Regions filed suit to enforce its rights under the loans and mortgage and the obligors filed several counterclaims alleging that Regions violated the Equal Credit Opportunity Act by discriminating against Lisa and Charles based on their marital status when it demanded that they and Legal Outsource guarantee the Periwinkle loan.The Eleventh Circuit affirmed the district court's grant of summary judgment for Regions, holding that Lisa's counterclaims under the Equal Credit Opportunity Act failed because a guarantor does not qualify as an "applicant" under the Act. The court also explained that a limited remand was necessary to correct erroneous language from the amended judgment. View "Regions Bank v. Legal Outsource PA" on Justia Law
Tims v. LGE Community Credit Union
Plaintiff filed suit against LGE, alleging breach of contract, breach of the implied covenant of good faith and fair dealing, and violation of the Electronic Fund Transfer Act (EFTA). The district court dismissed plaintiff's claims under Federal Rule of Civil Procedure 12(b)(6) and held that the two parties' agreements unambiguously permitted LGE to assess overdraft fees using the available balance calculation method.The Eleventh Circuit reversed and held that the agreements were ambiguous as to whether LGE could rely on an account's available balance, rather than its ledger balance, to assess overdraft fees. Therefore, the court held that plaintiff properly pleaded a claim for breach of contract, and breach of the implied covenant of good faith and fair dealing. The court also held that plaintiff alleged a claim under the EFTA because the Opt-In Agreement could describe either the available or the ledger balance calculation method for unsettled debts; plaintiff had no reasonable opportunity to affirmatively consent to LGE's overdraft services; and LGE was not protected from liability by the safe harbor. Accordingly, the court remanded for further proceedings. View "Tims v. LGE Community Credit Union" on Justia Law
Federal Deposit Insurance Corporation v. Loudermilk
The FDIC, as receiver, filed suit against several of the Bank's former directors and officers, alleging that they were negligent and grossly negligent in approving ten risky loans. A jury found that the directors were negligent and the district court held that they were jointly and severally liable for the damages.The Eleventh Circuit held that Georgia's apportionment statute did not apply in this case, and the jury instructions neither misstated Georgia law nor misled the jury; there was an evidentiary basis for the jury to conclude that a director was negligent in his decision-making process for a loan even if he didn’t attend the approval meeting for that loan; and the district court did not abuse its discretion by excluding evidence related to the Great Recession because the district court was enforcing its earlier unchallenged ruling. View "Federal Deposit Insurance Corporation v. Loudermilk" on Justia Law
Pictet Overseas Inc. v. Helvetia Trust
The Trusts initiated before FINRA an arbitration proceeding against the eight individuals who had owned Banque Pictet as partners and others, including Pictet Overseas, seeking to recover losses from custodial accounts with Banque Pictet. Pictet Overseas and the Partners then filed an action in federal district court, seeking to enjoin the arbitration, contending that, even if Rule 12200 of the FINRA Code of Arbitration Procedure for Customer Disputes required Pictet Overseas to arbitrate certain claims before FINRA, it did not require Pictet Overseas or the Partners to arbitrate the Trusts' claims.The Eleventh Circuit affirmed the district court's ruling that the Trusts' claims were non-arbitrable and held that FINRA Rule 12200 did not require arbitration. In this case, the Trusts' claims did not arise in connection with Pictet Overseas' or the Partners' business activities. Therefore, the court affirmed the district court's order permanently enjoining the Trusts from arbitrating in a FINRA forum their claims against Pictet Overseas and the Partners. View "Pictet Overseas Inc. v. Helvetia Trust" on Justia Law