Justia U.S. 2nd Circuit Court of Appeals Opinion Summaries

The Second Circuit reversed the district court's dismissal of plaintiff's claims under the Real Estate Settlement Procedures Act (RESPA), alleging that Ocwen's failure to record her mortgage instruments and its actions in losing key mortgage documents constituted covered errors under the catch-all provision of Regulation X (RESPA's implementing regulation). In this case, plaintiff alleged that the errors committed by Ocwen in handling her loan modification documents were errors relating to servicing of a mortgage loan, and, consequently, were subject to the provisions of RESPA and Regulation X. The court concluded that plaintiffs' asserted errors are covered by the catch-all provision of Regulation X, which includes the terms "any other errors" and "relating to." Accordingly, the court remanded for further proceedings. View "Naimoli v. Ocwen Loan Servicing, LLC" on Justia Law

Soliman entered a California Subway sandwich shop. An employee showed her an in-store, hard-copy advertisement, on which Subway offered to send special offers if she texted a keyword. Soliman sent a text message to Subway. Subway began sending her, via text message, hyperlinks to electronic coupons. Soliman alleges that she later requested by text that Subway stop sending her messages, but her request was ignored. She filed suit under the Telephone Consumer Protection Act. Subway moved to compel arbitration, arguing that a contract was formed because the in-store advertisement, from which Soliman got the keyword and shortcode, included a reference to terms and conditions, including an arbitration requirement, located on Subway’s website and provided the URL.The Second Circuit affirmed the denial of the motion to compel arbitration. Under California law, Soliman was not bound by the arbitration provision because Subway did not provide reasonably conspicuous notice that she was agreeing to the terms on the website. Because of barriers relating to the design and content of the print advertisement, and the accessibility and language of the website itself, the terms and conditions were not reasonably conspicuous under the totality of the circumstances; a reasonable consumer would not realize she was being bound to such terms by sending a text message to Subway in order to receive promotional offers. View "Soliman v. Subway Franchisee Advert. Fund Trust, Ltd." on Justia Law

In Avila v. Riexinger & Associates, LLC, 817 F.3d 72, 76 (2d Cir. 2016), the Second Circuit held that the Fair Debt Collection Practices Act, 15 U.S.C. 1692e, requires "debt collectors, when they notify consumers of their account balance, to disclose that the balance may increase due to interest and fees."In this case, the Second Circuit held that Avila's disclosure requirement does not apply to collection notices that extend offers to settle outstanding debt. The court explained that such collection notices do not present the risk that a debtor might pay the listed balance only to find herself still owing more. Furthermore, payment of an amount that the collector indicates will fully satisfy a debt excludes the possibility of further debt to pay. Therefore, the court concluded that a settlement offer need not enumerate the consequences of failing to meet its deadline or rejecting it outright so long as it clearly and accurately informs a debtor that payment of a specified sum by a specified date will satisfy the debt. Applying these principles here, the court held that Forster & Garbus's notice to plaintiff did not violate section 1692e because it extended a settlement offer that, if accepted through payment of the specified amount(s) by the specified date(s), would have cleared plaintiff's account. Accordingly, the court reversed and remanded. View "Cortez v. Forster & Garbus, LLP" on Justia Law

The Second Circuit affirmed the district court's grant of summary judgment in favor of Lands' End in a putative class action brought by Gorss Motels under the Telephone Consumer Protection Act (TCPA), seeking compensation for faxes it received advertising the products of Lands' End.As a preliminary matter, although the parties do not raise the issue on appeal, the court concluded that Gorss has standing to proceed under the TCPA. The court concluded that Gorss gave prior express permission to receive the faxes at issue through its franchise agreements with Wyndham, and rejected plaintiff's contention that any permission to send fax advertisements was given to Wyndham and not to Lands' End. Therefore, the court concluded that Gorss agreed to the process that occurred here, in which Wyndham sent Gorss fax advertisements on behalf of a Wyndham approved supplier, Lands' End, advertising products that could be used in franchised motels. View "Gorss Motels, Inc. v. Lands' End, Inc." on Justia Law

After Asset Acceptance received a default judgment against plaintiff in a debt collection action, Asset Acceptance began garnishing plaintiff's wages. Plaintiff then appeared in the action, eventually entering into a stipulation of settlement. When plaintiff learned that Equifax was including the 2013 default judgment on his credit report, he filed suit alleging that, in reporting the judgment as "satisfied" and in its subsequent dealings with plaintiff, Equifax willfully and negligently violated the source-disclosure, accurate reporting, and reinvestigation provisions of the Fair Credit Reporting Act (FRCPA).The Second Circuit affirmed the district court's judgment in favor of Equifax, concluding that the district court correctly determined that Equifax's credit report was accurate; plaintiff could not establish damages arising from Equifax's allegedly negligent conduct; and that Equifax need not prove it actually interpreted the FCRA in line with its claimed reasonable interpretation to rely on the reasonable-interpretation defense established by Safeco Insurance Company of America v. Burr, 551 U.S. 47, 57 (2007). The court considered plaintiff's remaining arguments on appeal and found no basis for reversal. View "Shimon v. Equifax Information Services LLC" on Justia Law

The Second Circuit affirmed the district court's dismissal, based on Federal Rule of Civil Procedure 12(b)(6), of plaintiff's amended complaint alleging that defendants violated Connecticut and District of Columbia law in entering into a licensing agreement with respect to a group plan for Medicare supplement insurance. Plaintiff claimed that defendants' royalty fee arrangement constituted an unlawful "premium rebate" in violation of Connecticut and District of Columbia anti-rebating insurance laws.The court held that plaintiff did not state an unlawful rebate claim under Connecticut or D.C. law because he failed to plausibly allege any ascertainable loss or injury as a result of his purchase of Medicare supplement insurance ("Medigap") or the AARP royalty fee. Likewise, the court held that plaintiff failed to plausibly allege a cognizable claim based on his purchase of Medigap insurance through the AARP-UnitedHealthcare plan. In regard to plaintiff's consumer protection claims, he failed to show any concrete and particularized injury because he paid only the regulator-approved rate and received the Medigap insurance he contracted for. Finally, plaintiff failed to plausibly allege the requisite elements for his remaining common law claims and his statutory theft claim under Connecticut law. View "Dane v. UnitedHealthcare Insurance Co." on Justia Law

Plaintiff filed suit alleging that C&I violated various provisions of the Fair Debt Collection Practices Act (FDCPA) by sending him a debt collection notice, information subpoena, subpoena duces tecum, and restraining notices in connection with C&I's efforts to collect on a state court judgment for an unpaid debt, though plaintiff was not the debtor.The Second Circuit held that the district court erred in granting summary judgment to C&I as to the bona fide error defense under Section 1692k(c) of the FDCPA. In this case, a reasonable jury could find that C&I's error was not bona fide and that C&I did not maintain procedures reasonably adapted to avoid its error. Accordingly, the court vacated the order and judgment, remanding for further proceedings. However, the court otherwise affirmed the judgment, holding that C&I's conduct did not violate Sections 1692e(5) where C&I unintentionally sent otherwise valid and lawful debt collection communications to a non-debtor. Furthermore, C&I did not violate Section 1692f where its conduct did not constitute unfair or unconscionable means of debt collect. View "Wagner v. Chiari & Ilecki, LLP" on Justia Law

The Second Circuit affirmed the district court's dismissal of plaintiffs' amended complaint against Salisbury Bank for failure to state a claim. Plaintiffs alleged that the bank violated the Fair Credit Reporting Act and related state causes of action by failing to correct information contained in one of the plaintiff's credit reports after being notified that the information was not correct.The court agreed with the district court that plaintiffs' allegation that they notified Salisbury directly of their dispute, standing alone, is insufficient to state a claim under 15 U.S.C. 1681s–2(b). In this case, plaintiffs have not alleged facts indicating that Salisbury received notice from a consumer reporting agency regarding the inaccuracies in the credit report. Furthermore, the district court did not err in denying leave to amend and dismissing with prejudice where nothing in plaintiffs' proposed second amended complaint corrected the deficiency. View "Sprague v. Salisbury Bank & Trust Co." on Justia Law

Plaintiff filed suit alleging that LBD used Automatic Telephone Dialing Systems (ATDSs) in violation of the Telephone Consumer Protection Act of 1991 (TCPA). In this case, plaintiff received hundreds of unsolicited text messages from LBD over the course of more than a year and a half.The Second Circuit vacated the district court's grant of summary judgment to LBD, holding that LBD's systems qualified as ATDSs. The court held that LBD's systems met both statutory requirements by having both the capacity to store or produce telephone numbers to be called, using a random or sequential number generator, and the capacity to dial such numbers. Accordingly, the court remanded for further proceedings. View "Duran v. La Boom Disco, Inc." on Justia Law

Plaintiff, individually and on behalf of a class, filed suit under the Fair Debt Collection Practices Act, alleging that Credit Control, in an effort to collect the outstanding debt on plaintiff's Kohl's private label credit card account, sent him a letter that did not list the "creditor to whom the debt is owed," in violation of 15 U.S.C. 1692g. Plaintiff also alleged that Credit Control's letter constituted a false or misleading representation, in violation of 15 U.S.C. 1692e. The district court granted summary judgment on the pleadings to Credit Control.The Second Circuit held that the district court erred in finding that Credit Control disclosed the "name of the creditor to whom the debt is owed" by listing Kohl's, the servicer of the account, as the "client." Because the district court then relied on this erroneous finding in further holding that the letter did not constitute a false or misleading representation, the court did not reach the question of whether the letter violated Section 1692e. Accordingly, the court reversed as the Section 1692g claim and vacated as to the Section 1692e claim, remanding for further proceedings. View "Bryan v. Credit Control, LLC" on Justia Law