Shared Flashcard Set


Consumer Law and Litigation
Widener Fall 2019 Professor Flitter Consumer Law

Additional Law Flashcards




FDCPA, 1978

A creditor may seek to collect an outstanding debt in several ways but collectors cannot use "any false deceptive or misleading representation of mean in connection with the collection of ANY debt." 


8am to 9pm only, debtors can demand right to terminate calls, collectors are required to notify debtor re their ability to challenge the validity of the debt. 


Gives debtor right to sue for damages and fees, 


Applies to 3rd party collectors, not original creditor. 



Tepper v Amos Fin, 2018

Tepper defaults on mortg, loan is sold to Amos, tepper sues under FDCPA.  Amos tries to argue that they are not 3rd party debt collector, but a debt buyer since the obligation was in default and that Amos is a Creditor.  


Henson defines debt collector as anyone who regularly collects debts to other as their principle purpose (original creditors collect debt, but its not their prin purpose). 


Amos Fin loses, they are clearly one involved with regularly collecting debts.    



Slenk vs Transworld Systems, 2001

Consumer vs commercial debt question.  Sleck was independent contractor/builder, got personal loan for backhoe to build his personal home, but bought and put the equipment under business entity - but used it only for personal home.  Defaults on loan, Transworld is collector, Slenk wants to sue under FDCPA abut TW says its a commercial not consumer dept. FDCPA applies to primary for personal family or household purposes.  


TW initially got sum judgement as sleck was consumer, reversed and remanded for further proceedings. 


Sole proprietor debts not necessarily consumer debts. TW contract with Slenk did not redefine the nature of his debt. There was a material question of fact and should not have been summary judgement. 


Go to NCLC website directly to get book at student rate. 




Brown vs Card Services 2006

Brown defaults on $1874 credit card debt, Card services is collector, says Brown "could" be sued.  Brown said "could" was deceptive because Card Services never did nor intend to open up lawsuit and therefore was "false misleading and deceptive" - "1692e violation"


"least sophisticated consumer/debtor" is lowest common denominator to protect all debtors.   As such, the language "could be sued" is deceptive as CSC NEVER sues or engages a lawyer to proceed.    


Deceptive/mislead means "two or more interpretations", one of which is false.  Something with the power to decieve- truth is not a defense to deception


Jensen vs pressler vs pressler

False statement to consumer must be material.  


Jensen defaults, pressler is collector, pressler said failure to comply may result in arrest and incarceration: which is true under NJ laws, but puts wrong clerk court name (Terrence D Lee) in the document.  Jensen sues for deceptive practices and false statement"


The word material does not appear in FDCPA, Terrance Lee wrong name is not material, not deceptive, would not affect the "least sophisticate debtor" to make an intelligent decision.   Materiality of falsehood required - not technical - still least sophisticated debtor standard.  Material means potential to affect decision makeing - process.  Must argue the materiality of the falsehood.  Always ADD WHY DOES IT MATTER.  

Notes from 19 August

Breach of the peace, UCC article 2, cannot have breach of peace, calling police to the scene is a breach of the peace if they are forcing the repo.  


Look at definitions in section a of the FDCPA


abuse of power and due process is the theory for FDCPA - credit companies, police assisting repo, etc. 



FDCPA Actual Damages not required

Under an FDCPA award, you can receive actual and statutory damages, but actual damages are not required (they are required for most tort claims). 


Actual damages are a factor for calculation of statutory damages but not a prerquisite. 


Same is true for truth in lending act, where actual damages not required to get statutory damages

Enhancing statutory damages under FDCPA

Egregiousness or aggravated nature of the violation is a factor in determining statutory damages


$1000 max statutory damages


Other factors include: if violator intended to violate FDCPA, intent to injure the consumer, collectors sophistication, collectors timely correction of violations, multiple violations, multiple victims, etc.  


relative easy to get $1000 max statutory damages

Factors for decreasing statutory damages under FDCPA
Single violation, was it a mistake of law rather than clear violation, cessation of the violation, collector's attempt to comply with violation, etc.
Supplemental Jurisdiction for FDCPA cases

When an initial FDCPA claim is opened, there may be counterclaims for the collection of the debt by the creditor.  


Courts do not provide supplemental jurisdiction for counterclaims because the debt collection does not involve the same controversy or evidence associated with the FDCPA violation.  


In addition, the parallel resolution of the debt counterclaim would slow the process and clog the system and thereby eliminate the speedy resolution of the FDCPA claim.  


FDCPA victim must submit dismissal of the debt counterclaim and it will likely be accepted.  

Lesher v. Law Office of Mitchell N. Kay, 650 F.3d 993 (3d Cir. 2011)

Only three lawyers sending out thousands of collection letters without any real review or involvement. 1692e5 does not allow false implication that letter is from from attorney.  


Letter indicated that no attorney at the firm personally reviewed the circumstances of the account.  Kay law firm said this mitigated the "meaningful involvement" requirement based on the least sophisticated debtor".  


Cour said it did violated FDCPA which requires that a lawyer have "meaningful involvement" in the sending the collection correspondence on law firm letterhead.  

Aug 26 Notes

Statutory damages are allowed if the law is breached, no damages or injuries are required.  Also have actual damage - someone loses job due to collection calls, get those also or emotional distress, Pain and suffering.  


Do not want to counterclaim in PA as a consumer linked to debt collector initial action as they may offset and get dismissed.  


Fair debt is a remedial statue - one that is not penal but intended to make plaitiff whole.  Remedial statues are read broadly, give the benefit of doubt.


Exams - take home mid term and final - mid term 45%, final 55%.  Written assignments, draft memo, petition for attonry fees, etc.  

TILA 1.5.1 Introduction

COmplicated because of muttiple sources of law:

TILA itself, Regulation Z, Official interpretations of Reg Z, regulatory, history and casee law


Pre and post simplication cases/law


Some acts are retroactive

TILA 1.7 Getting started quick reference checklist

TILA analysis takes three tasks -

1) evaluation thee accuracy of numbers on their face

2) determining if disclosures were made in accordance with TILA, and

3) evaluating the adequacy of non numerical disclosures


If mortgage related, need to look at HOEPA applies

IF credit card related, look at CARD act

If home equity related, have their own rules

Cards, mortg have diff docs - collect all that is needed

Do the math, may require software

Check numbers on their face

In summary, lots to collect and check and know




TILA COnsumer Defined

Consumer is a natural person, not an organization, 


Organization only for credit cared misuse


Land trusts are considered to be an extension of a natural person.  


Consumer is the one to whom the credit is extended, even if the person is an imposter applying for credit.  

TILA 2.2.3 Primarily for personal, family or household purposes
No precise test, discuss business purposes, similar to other discussions of personal vs business.
TILA 3.2.1 General Concepts Underlying TILA definitions

TILA "price tag" for credit aims to standardize the definition and cost of the credit for both interest rate and fees.  


The interest rate can be a misleading tag for credit as it can be calculated in a number of ways - with fees and other charges, can easily change 6% rate to an effective 10% rate


Must standardize so that market forces can work properly - both consumer and honest credit groups suffer when the credit rate is obscured.  

TILA 10.1 Recission Overview

Homeowners have right to rescind loans where home is collateral - HELOCs, refis, and home improvement/ DOES NOT APPLY for new purchase of home loans.    


Rescission right is absolute within 3 days, but may last up top 3 years.  


TILA rescission rights can be powerful for foreclosure if refi or heloc has wrong terms, the lien on the home is then void.  Only need a diif of $35 in the calc of fees.  


COnsumer must tender/repay loan but no penalties, interest, no foreclosure, etc - and may be allowed by court to pay over time.  but can also get fees and penalties paid to the homeowner

TILA 10.2.1 - Overview of the scope of recission

Must meet all of these criteria for recession: 

1) consumer credit transaction

2) not for purchase of home or construction loans and not for refi with original mort lender. 

3) must be for consumer primary dwelling


a CREDITOR may opt in by contract term or estoppel


recission right extended to all who have ownership interest, even if they are not the debtor


If TILA does not provide right to cancel, state law may



10.3.1 =- 3 day unconditional right, tigger times

no reason needed to cancel the transaction in these 3 days


three days allotted but if creditor does not meet TILA requirements, can be up to 3 years.  


Midnight of the 3rd business day (not sunday or specific holidays) following the latest of the following events: 1) consummation of the transaction, 3) deliver of a proper notice of the right to rescind, 3) dieliver of all the material disclosures correctly made.  

Cappuccio vs Prime Capital Funding 2011

Cappuccio E trade failure to properly notify cancellation of home refi with cash out. Loses trial because she did not have anything but her testimony that she did not recieve the notice even though her signature is on it. 


Cappuchio did standard closing with a notary who instructed to sign here, etc.  Included right to cancel but did not understand, was rushed and notary not helpful. Said 40 minutes of signing and did not leave with papers. SHould have been 1.5 hours for two complex loans.  Reeived some papers via mail after the 3 day period.  


Cappucio wins on appeal, her word alone is sufficient in absence of other evidence that she did not get TILA docs

Limtiaco vs auction cars llc 2012

Limtiaco buys crappy car for nearly $6K, puts 2500 down with biweekly payment of 191. Said that there was no finance charge.  


Ruled there were hidden finance charges because there is a difference of $1250 between KBB and what paid - was deniefd because can pay higher price than KBB


However, reg Z rules violated in a technical way because did not notify Limtiaco that there was a technical loan for the car.   

Regulation Z 12 cfr 1026



Applies to creditors defined as regularly extends consumer credit, in writing, with interest, finance charge, more than 25 per year or 5 if lending with home collateral. 


FInance charge - orignination fee or interest - must be due in a traditional cash trasnaction, title insurance require, transfer fee are not financing fees, PMI is covered. 


TILA disclosure required at or before the credit is consummated and signed. 


FCRA - General intro to the FCRA

Credit reporting agency must maintain reasonable procedures to avoid releasing reports for impermissible purposes


Only release report for permissable purposes, cannot release an unsolicited report


Resellers of credit reports also must abide by these rules.  


Must have reason to believe that request is valid before releasing report.  



FCRA Permissible purposes for Credit Report

A user how intends to use report for permissible purpose but is mistaken not likely liable for impermissible purposes


If original purpose is permissible, can use same report again for a permissible purpose, but not for another impermissible purpose.  


If report initially obtained under impermissible purpose, cannot then use same report for permissible purposes

FCRA User definition

User not defined, anyone using a consumer credit report for consumer situation must comply with the act.  


One who only reports the information is not a user.  


Key decision is if the SCORE was actually used - can get report and get info from it but if not related to score, may not be a user.  

FCRA 7.1.9 Discovering Impermissible Use

Look up inquiries from top 3 credit reports

See if client recalls approving of these inquiries


if not, the inquiry still may be valid as the client may not know the name of the company or may be a general inquiry for pre screening offers.  

FCRA 7.4.4 - Use in civil or criminal investigation

Credit report normally not allowed for civil or criminal cases unless an aspect of it involved credit reporting.  


Can be provided with court order

FCRA 7.7.1 - User Liability for Impermissible purposes

Liability to "any person" who fails to comply with any requirement of the act such as false pretenses


Government can get some basic information - name address, employment, etc


3 main areas of violation - failure to certify, obtain under false pretenses, impermissible purpose


if user thought they had permissible purpose but was incorrect, might be OK under "reasonable belief" standard

FCRA 7.7.2 Willful Noncompliance

Higher penalties for willful noncompliance - fairly low bar for willful noncompliance


Statutory damages, actual damages, attorney fees and punative damages can be awarded


knowling obtaining credit report in consious diregard of the targeted persons rights


knowlingly misleading a CRA to get a report is willful noncomplaince - if you know its wrong, willful

FCRA 7.7.4 - Liability for criminal false pretenses

any user who willfully and knowling obtains information on a consumer from a cra under false pretenses


even if someone collects the information for basic stuff like address, employment, and not associated with credit, still has criminal liability



FCRA Permissible Purposes
  1. In connection with extension of credit to a consumer
  2. Review or collection of account,
  3. employment purposes,
  4. underwriting insurance,
  5. issuance of a government license
  6. Legit business need in connection with business transaction 
FCRA Information prohibited from being reported
  1. Bankruptcy over 10 years old
  2. Suits and judgements more than 7 years old
  3. Paid tax liens more than 7 years old
  4. Arrest records more than 7 years old
  5. Any other adverse information more than 7 years old

EXCEPT for credit or insurance > $50K or employment > $20K

Disclosure rules for FCRA

CANNOT procure credit report (or CAUSE to be) unless:

  1. clearly and accurately disclosed
  2. in writing
  3. delivered to consumer within 3 days and
  4. includes statement to consumer with rights 

OR employment - even if did not specifically apply  


Upon request of consumer, must provide complete and accurate disclosure of the nature and scope of investigation


SUmmary of letter to Medine to Coffey, Feb 11 1988

legitimate business need for a credit transaction initiated by the consumer - initiation of transaction must be clearly done by consumer 0- not just asking questions about pricing and financing options - and needs written permission from consumer to get report.  


not needed if paying cash, but can if paying by personal check


if for employment reasons must also get disclosure



Lukens vs Dunphy Nissan, 2004

Williams applied at dunphy for employment, admitted and has known criminal fraud history, hired anyway.  Second day, williams has Lukens as customer, has minor errors on credit application (wrong middle initial), did not buy car.  Williams then applies for credit under lukens name with wrong initial.  Lukens sues Dunphy, dunphy requests summary judgement, denied. 

Permissable purpose was initially OK, but if williams intent was to steal credit info, then impermissable




Blumenfeld vs Regions bank

Mom owns house and mortgage, daughter pays for mortgage, tries to refi, bank pulls credit for daughter without her being there (mom called daughter and said they would pull credit, but daughter did not provide approval). 


Details banks "reasons to believe" that this was a permissive use of credit report, but was wrong - CRA has a "reason to believe" user must have legit purpose - the end user has to ACTUALLY HAVE A PERMISSIVE PURPOSE`.  Even though not done fraudulently and done for a valid reason, still no basis to pull credit report without approval from actual consumer.  bank KNEW they were pulling credit report


Facts taken in most favorable light of the plaintiff Blumenfeld (daughter)

Notes from 16 Sept

CRAgencies are more than just the big 3 experian, etc.  Rental background, insurance companies, broad definition in FCRA.  


CRAgencies get info from furnishers - credit card companies, et. banks, public record vendors, leins, bankrupties, judgements, divorce, etc. consumer can also be a furnisher, 


Consumer reports (credit report is one type, but also consumer reports are employment history company, etc.)- 


1672b - can only provide credit report to: 1) courts, 2) consumer upon written request, 3) employers (specific set of rules - , 4) intends to use it for credit review or collection of an account.  


User is one who uses the consumer report - needs to have permissible purpose - 

1681 e b

2 main duties from CRAs - 

1) 1681 e b - Reasonable procedure to assure max possible accuracy

2) 1681 i - Must investigate any dispute by consumer


1681 - Every consumer reporting agency must disclose sources - 


Mixed file is one where CRA has information from two different consumers - twin brothers co mingled credit info


first thing to show is that there is actually an inaccuracy in fact - next thing to show that you disputed, next show seriousness of harm, show how CRA could have corrected the inaccuracy - pick up the phone, if furnisher/CRA had notice that there are systematic errors - if furnisher is unreliable, if they have audited the furnisher, etc, the depth of the investigation, was it just a quick check and furnisher verified, etc.  


1681 i 2 - before the expiration of the 5 day notice period, the agency will provide notice of inaccuracy in the dispute - the notice includes all relevant information. Have 30 days to do investigation.  


difference between accuracy and technical accuracy - accuracte on the face but misleading - if incorrect reposession - would be accurate that is was repossessed, but is misleading.  or if amount is disputed and not paid in full, settled for less than full balance. 


Next week look at 1681s-2(b) Furnishers Responsibilities

Notes from 14 October - missed half of this class due to Incyte call at 5:00
  • Today is about Consumer fraud - its a term of art - 
  • misleading statment is actionable even if the def does not know it is misleading - speakers lack of falsity witll not be a defense
  • Gregg 
  • CL fraud - false statement, 2) material fact, 3) sciencter, 4) reliance, 5) damage
  • Sectopn 1026.2
Key take aways from 7 Oct class (which i missed)
  • Furnisher liability from last week - key take away was put it in writing paper form and don't put it online, write to credit bureaus, damages for failure to investigate not for actual inaccuracies - improvioe your case, increase value in case by dispute and give statutatory amount of time to for the providers to investigagte, if error continues you need to dispute it again, more chances to fix it and if they dont the damages go up - and makes the furnisher looks callous and more egregious and aggravated - 
  • dispute goes to CRA by statue - they must get the dispute - they then contacts the furnisher - CRA and furnisher cannot just parrot and say that its accurate more than once - cause of action is against both CRA and furnisher - statute says both have a duty to reinvestigagte - 
  • Sb2 (??) claims are claims for furnisher inaccuracy
  • 1681i is CRA duty to reinvestigate dispute
  • 1681e CRA duty to have maximun possible accuracy re info containted in thier files.  must show systemic liability to fail to use reasonable procecures to ensure max possible accuracy. 


Furnisher Liability 15 USC 1681 s2
  • 15 USC 1681s2a - furnishers have a duty to accurately report information - but no private action to sue for incorrect information, only goverment entity can sue furnisher if not reporting correctly. 
  • 1681s2b requires furnishers make a reasonable investigation in proportion to the quality of the dispute
  • SHould have 2 cycles of dispute before sue furnisher
  • Disputes should be OBJECTIVE b/c easier to prove



Johnson vs MBNA bank
  • Investigation by furnisher re incorrect information must be reasonable
  • Must show damages from the failure to remove inaccurate information
  • Damages start 30 days after failure to remove inaccurate information
  • 3 key requirements to establish furnisher liability:
  • 1) inaccuracy in fact
  • 2) Dispute by the consumer (normally >1 request)
  • 3) damages occur after dispute verified OR removed
  • If assignee of debt is furnisher, less duties because they have less information from original debt
Unfair and Deceptive Acts and Practices (UDAP) 1.1 What is UDAP

General applicability across different state statues against - just a guide, not even a restatment, but general summary


Summary of legislation that proscibes unfair, deceptive misleading or fraudulent practices.  

UDAP 1.2 Nature and strengths of UDAP statues

UDAP claim is a state statutory claim not a tort or contract action, although some states require classification of tort or contract type of claim


state statues are broad and flexible to capture new ways of fraud - does NOT require fraudulent INTENT or SCIENTER - much easier than common law fraud


many include attorney fees and punitive damages





UDAP 1.62 Look at all aspects of transaction

Look at advertising, sales presentation, consummation of sale, credit terms, sellers performance, and subsequent debt collection practices. 


If case is misrepresenation, look also at credit terms, if case is collection after repossession, look at warranty terms, how car performed, attempt to get car repaired


ask about oral deception vs what written documents provide - may not meet common contract law, but may meet UDAP requirements.  


If consumer is being sued, consider UDAP counterclaims

UDP 2.1.1 Determining a UDAP Statutes Scope

Varies state by state, 


Read statue carefully because terms may be specifically defined that help or hinder your case.  

UDAP comparison with common law fraud

Common law fraud requires: 1) false material fact, 2) knowledge of falsity, 3) intent to induce reliance on falsity, 4) justifiable reliance on falsity, 5) damages



UDAP General Standards/Examples for Deception

Failure to disclose is deceptive if material

Truths or half truths that avoid material facts are deceptive

Deceptive to disclose facts too late such as just before signature, etc. 


There are some limits on the duty to disclose -- sometimes state statues do require intent of defendant in omission




Valley Forge Towers v Ron Ike Foam - Definition of COnsumer Good

(1) condominium association qualified as “person” entitled to bring suit under unfair trade practices law; (2) condominium association's purchase of roof from contractor that was directly warranted by roofing membrane manufacturer constituted “purchase” and (3)  qualified as purchase primarily for personal, family, or household purposes, rather than for business purposes, so as to permit association to maintain action under the unfair trade practices law against manufacturer


Grimes vs Enterprise Leasing - ascertanable losss

attorney fees are not part of ascertable loss for a unfair trade practices and consumer protection law - UTPCPL


Must show ascertable loss  - defendants alleged collection efforts for damaged car combined with attorney fees is not an ascertainable loss

Gregg vs Ameriprise Fin - deceptive conduct

strict liability standard applies to a claim under the "catch-all" provision of the Pennsylvania Unfair Trade Practices and Consumer Protection Law, 73 P.S. §§ 201-1 et seq as amended in 1996, even though the provision expressly requires proof of "fraudulent or deceptive conduct."


If deceptive, then there are damages regardless of actual damages and regardless of actual intent


Read defending junk buer article


Comm Fin Syst vs Smith


PA rules of evidence sec 803(6)-1 hearsay and business records and 901 re authenticaing evidence


PA MDJ rule 321 - offer evidence a statement or account or other evidence to support a debt buer claim that a debt buyer clain htat a depbtor owes money or a defaculted credit card account



Commonwealth Fin Sys vs Smith 2011

Smith defaults on CC debt, Comm Fin Systems buys debt, sues, is denied because of inadequate authorization of computer business records under PA R Evid 803(6) (chain of custody) and 42 PA CS 6108 AND debt buyer did not show evidence of a contract.  


PA Rul Ev 802(6) says it is  NOT hearsay if there are records of regularly conducted activity - at or near the time, regular activity, testimony of the custodian of record, and the opponent does not show that information are not trustworthy

Penna Practice Evidence R 901 and PA MDJ rule 321

Penna Evidence rule 901 - authenticating evidence - is a data record in a condition that creates no suspicion about its authenticity - must be contemporaneously, which is almost never done for assignment of debt to a buyer


MDJ Rule 321 says records such as bill estimate, receipt or statement of account in regular course of business does not need affidativ. Must be contemporaneous during the assignment of debt to a buyer.  



Statutory Attorney Fee Awards Article

Settlements are not entitled to statutory fees, must ensure that it is a court ordered settlement, or that the settlement includes the fees. 


Always have a fee agreement with rates, expenses allowed, but expert expenses are not allowed. 


Keep detailed records.  Can even charge for the preparation and calculation of the fee amount.  

Piccinetti v. Clayton, Myrick

Both are lawyers, piccalilli 

$350 and $400 per hour were reasonable hourly rates, similar to other attny fees based on years (5 and 8) of experience in consumer law.  


Hours billed were reasonable because hours reflected work that was prompted by the defendants, requiring more hours billed.  Plaintiff non acceptance of settlement was not unreasonable, 


However, some hours booked were excessive, and administrative tasks such as mailing, documentation,etc and are not reimbursable for fees.  Some expenses also not allowed (service of suit expense)


Ended up allowing $22,825 in fees but did not have original amount.  

Rule 68 (d) offer of Judgement and prevailing party - prevailing party, successful action, when does attny fees stop based on settlement of afterwards if they have a better outcome, etc.
must get this
Also rule 54 or 56 for attoney fees erquest
Evidence of Hourly Rate

Prevailing market rates, plus evidence of all your credentials plus desirability of the case (if less desirable, then you can get more).  


Must prove it with evidence, years of experience, specialization in this limited field, affidativs from other attorneys, etc.  Other fee applications from cases, prior awards at $400+ rates are strong evidence. 


Make case bigger than this one incident, correct for fraud in the future, etx.  

NCLC Avoid claims that required proof or reliance or other individual issues

To satisfy rule 23 of class actions for traditional common law claims, the plaintiff must show CNOF


Tough to do if you need to prove that each person in class action RELIED upon an FRAUDULENT conduct for common law fraud. 


UDAP statues don't require reliance and therefore class actions are easier for UDAP laws.  


For FCRA, FDCPA and TILA are also good for class actions because also do not require reliance.  





NCLC 4.21 Class Defined by objective Criteria

Must be ASCERTAINABLE class - Ascertainable does not mean that every person is identified, but every person is identifiable.  


Ascertainable objective criteria for class members should include criteria that can be determined by def. records 


Don't say "all plaintiffs who received a similar letter", say "all plaintiff who received a demand letter from def..." or "all claims denied" v "all claims unfairly (subjtve) denied"


Canot be based on plaintiff state of mind.  

Harlan vs Transworld Systems - class action in FDCPA

Harlan recieved debt collection letter from transworld/North shore agency.  failed to comply with notice to debtor that they can challenge the claim and how to challenge (they put it in small text on the back of letter, not conspicuous)


  Class certification granted despite motion against because all ascertainable class is relatively identifiable because the def can find them through reasonable effort (check db for all similar letters) 

Daniels vs Hollister Co - $25 gift card without expiration date were cancelled within 2 months

The court affirmed the order granting class certification in a low-value consumer class action because the class-action device was created not only to allow compensation for small wrongs such as presented by plaintiff but also to deter future wrongdoing in the marketplace,


AND the court concluded that ascertainability must play no role in considering certification of a low-value consumer class action; 


Orders for class certification are not appealable.

FRCP Rule 23  Class Actions

Opt out cases - your are in the class unless you opt out

Generally no minimum; must demonstrate likely to be >40

At least one common question of law or fact across all

The claims and defenses are typical AND

Named plaintiff and counsel will protect interest of the class (adequacy of counsel must be shown)




FCRP Predominance and Superiority

Two other requirements in addition to CNOF:

Superiority - class action is superior if it makes sense in context of the case to bring the case as a class action - dependant on the facts and circumstances - class action money should not be below personal suit money. 



Predominance - proponent must show “that the issues in the class action are subject to generalized proof, - cannot have different proofs across class

Key Elements for Class Action

All are required to show judicial efficiency and economy


Numerosity - show likely to be >40

Typicality - claims and defenses are typical for the class

Commonality - all share CNOL&F

Predominance - questions common to the class predominate over individual questions (smokers start at different ages, different genetics - ergo not predominant)

Superiority-proposed settlement is superior to other remedies and calc of $ not too complex/individualized 

Ascertainability - objective criteria to ID class members - not required for initial certification, but will be req.

Class action suitability

All plaintiffs must have same type of damages (does not have to be same magnitude)


All plaintiff are in similar circumstnace


All plaintiffs mus have a CNOL&F that predominates

Considerations for repossessions

Can debt be refinanced with low rate lender

Does it make sense for debtor to sell car and repay, will creditor allow?

Is bankruptcy advisable

Is there likely to be breach of peace in repossession

If repossession unavoidable, can debtor surrender it and save repo fees

Can debtor remove personal property from the car/collateral


Debtor should not, 1) resist repossession, 2) have witnesses of reposession, 3) save all correspondence

Does the creditor have enforceable security interest?

Must have:

1) security agreement clearly giving creditor a security interest

2) Was the security interests granted by actual owner

3) security interest should no be for antecedent debt or future advance clause - may be unenforceable

4) is the security interest based on series of purchases - courts will require earlier items to be paid first and they may not be collateral anymore

5) if the debt was refinances or transferred, does current owner of debt have documentation of owning debt

Was the consumer actually in default

Check contract language - was consumer rightfully withholding payments because of breach


If creditor habitually allowed late payments, they need to announce that they will no longer all (change in contract assumptions)


Did creditor comply with local reposession laws for notice and opportunity to cure default before reposessions

Was the self-help repossession conducted properly

Is repossession restricted because of military duty


Were police involved in repossession - may have claims under due process clause or 4th amend. 


Was there a breach of peace, force, threats, trespassing, B&E, trickery or deception


Was a disabling device on car used?


Did creditor return perosnal property in the vehicle

Did creditor dispose of collateral properly

Did the sale get enough money


Did the creditor correctly compute the deficiency or surplus - all payments made, improper late fees, rebate of all unearned insurance premiums, excessive charges for reconditioning, etc 

What damages are availabile to plaintiff

Actual damages per UCC Article 9

If collateral is consumer goods, statutory damages - see part 6 or artcile 9

Class action relief

Injunctive orders



UCC Article 9 Overview

Signed agreement desribes the collateral, debtor must have rights to collateral, value of collateral must be given


If consumer goods (for personal use, not business, no other production required) cannot repossess if 60% of case price or principle.  

Hyman v. Capital One
Fliiter case where police officers assisted reposession - was a state action that violation of 4th and 14th amendment
Meyers v. Volvo Cars - Lemon Law

Summary judgement that was initially granted rejecting consumer/plaintiff claims was appealed and reversed.  


1) The car was a "new car" (was dealership loaner car with 9K miles)

2) was allowed to amend facts and show nonconformity manifesting in the car in first 12K miles - brought car back several times, eventually refused to fix


Remedial statute for consumer, should be read liberally in favor of the consumer.  

Pre Dispute BInding Arbitration Agreement - Forced Arbitration

Variety of ADR mechanisms, one is arbitration, sometimes arbitration is madatory, contractual provision for take it or leave it contracts such as credit cards.


Lots of arbitration clauses with very little arbitration going on - has a greater effect to actually suppress consumer rights because they dont know they can arbitrate or they dont bother.  

Arbitration Introduction

Consumer can challenge the enforceability of arbitration at any point - ways to challenge include:

1) consumer not required to arbitrate certain claims under federal law,

2) no arbitration agreement was formed (not signed or signed under duress or inducement),

3) arbitration agreement is unconscionable, or

4) arbitration is invalidated by state law

5) defendant waived right to compel arbitration

6) scope of arbitration falls out of scope of agrment

Mediation different than arbitration - mediation requires agreement ofboth parties, arbitration is forced agreement

State Law Regulating the formation of arbitration agreements
The purpose of the Federal Arbitration Act was to favor enforcing arbitration when a valid arbitration agreement was formed.
Bey v Citi Health Card

Bey alleged that Citi violated telephone consumer protection act when he was auto dialed to collect debt.  Citi moved to compel arbitration clause.


Courts grated motion to arbitrate because 1) there was a valid arbitration agreement with all contract elements present (both capable of contracting, consent provided, consideration.   2) dispute falls under the scope of arbitration agreement

Sacks vs DJA Auto 2013

Defendant car dealer waived right to arbitration by not asking courts to enforce arbitration agreement - arbitration was waived because dealership wanted more discovery and to pursue a Motion for summary judgement


Six factors guide a waiver of arbitration (not all need to be present), 1) lack of timelines to arbitrate, 2) the extend that def has contested the merits of the consumers case, 3) if def informed plantiff its intent to pursue arbitration, 4) defendants desire to move forward with court actions, 5) defendants acceptance of courts pretrial motions.  

  • Final class review - final is not cumulative 
  • UDAP - state specific, unfair deceptive practices, fraud, misleading, unfair in business an commerce - scope is broad - cover more than just fraud - easier to prove violate UDAP than common law fraud - asceteranable loss must be shown - consumer not commercial customer, deception can be half truth or misleading - can be true but misleading - UDAP must easier to prove
  • anatomy of a collection case - credit card, small bank loans, default, sell to debt buyer, they harras you - debt buyer dont have the proof of the loan, etc. must show every aspect of the debt such as business records rule, that debt buyer actually owns the rights to the debt - follow rules of evidence where standard records are kept and is not hearsay
  • Law of statutory attny fees - most consumer statues include attny fees - allows plaintiff to recoup fees if successful - prevailing party must be show (not sure how) - loadstar rule for how much you get for stat fee case - reasonable hours x reasonable rate - should have good time records, good fee arrangement with client, do not block bill, - must prove by timesheet, justify hourly rate, etc.. 
  • repossessions - debtor creidtor relationship - pledge of collateral, secured loans - security must be clearly defined in the agreement, must have a true default, must be commercially reasonable per state statures, without breach of peace (if there is a breach, then license to repossess is revoked)
  • arbitration forced contractual, consensual, agreement when there is any controversy arising from the agreement - make sure it is part of the agreement - was valid contract formed for arbitration - best way to attach - electronic signature good way - other reasons clauses are waived by merchant pursuing lawsuit or by not challenging the consumer initial lawsuit- arbitration get benefit of doubt when there is uncertainty if controversy it is covered by arbitration - 
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