Although the RESPA issues were addressed in the briefs filed by the parties in the PHH case, at oral argument this week the parties and the en banc D.C. Circuit focused heavily on whether the president’s authority is unconstitutionally limited by the broad powers of the Consumer Financial Protection Bureau (“Bureau”) and the fact that the president may remove the Bureau’s single director only “for cause.” PHH is the first contested Bureau enforcement action to go through an administrative trial, appeal within the Bureau, and now full federal court review. Members of the real estate settlement services industry have spent the past two years hoping that the D.C. Circuit in PHH will reject the Bureau’s controversial RESPA interpretations to confirm that the anti-kickback provision in Section 8(a) of RESPA is subject to a statutory exemption in Section 8(c)(2). Yet RESPA was barely mentioned during this week’s oral argument, with the judges directing most of their questions to the constitutionality question. Nevertheless, sometimes that which is unsaid is significant.
On Monday, May 15, 2017, the Supreme Court issued its latest reminder to state and lower federal courts that they must treat arbitration agreements as equally valid as all other contracts. In Kindred Nursing Centers Limited Partnership v. Clark et al., 581 U.S. ___ (2017), the Court confronted a rule imposed by the Kentucky Supreme Court that barred contracts conferring broad “powers of attorney” — contracts that authorize individuals to act on behalf of, and legally bind, others—from entering into an arbitration agreement, on the principal’s behalf, absent a “clear statement” of authority that allows the agent to waive the principal’s right to a jury trial.
On April 26, 2017, the Consumer Financial Protection Bureau (“CFPB”) broke new ground by imposing a fine – in excess of a million dollars – against a consumer financial services company for allegedly violating the terms of its prior settlement with the CFPB.
Businesses across the country regularly bemoan the time and expense of litigation. Even when businesses are successful in defending non-meritorious consumer claims alleging unfair or deceptive practices, false advertising, technical violations of statutory rules, and so on, they nonetheless essentially suffer defeat because of the time and resources they expend to fend off such claims. There is a relatively proven way to ameliorate this situation that is often quicker and less expensive for everyone involved—and yet many companies do not understand or utilize pre-dispute arbitration provisions when they easily could do so.
Foley is restructuring its practice groups to bring our considerable consumer law and class action expertise together in a single forum. We are proud to announce the formation of our new Consumer Law, Finance & Class Action Practice Group. Consistent with our new focus, we are also expanding the scope of this blog to reach a broader array of consumer class action issues.