Seventh Circuit Rejects Latest Attempt To Pick Off TCPA Plaintiffs

Seventh Circuit

Defense counsel facing potential multimillion-dollar judgments from the threat of class action proceedings—particularly class actions brought under statutes providing for treble damages and attorney’s fees, such as the Racketeer Influenced Corrupt Organizations (RICO) Act, the Real Estate Settlement Procedures Act (RESPA), and the Telephone Consumer Protection Act (TCPA) —have gotten creative in their attempts to end class litigation before certification. For example, in Campbell-Ewald Company v. Gomez, 136 S. Ct. 663 (2016), the Supreme Court considered whether an unaccepted offer to satisfy the named plaintiff’s individual TCPA claim, made pursuant to Federal Rule of Civil Procedure 68, renders the plaintiff’s (and the purported class’) case moot.  The Court held that it did not, reasoning that under basic principles of contract law, an unaccepted offer is a legal nullity, did not bind either party, and therefore did not moot the parties’ dispute. Id. at 670.  The Supreme Court held open, however, the question whether “the result would be different if a defendant deposits the full amount of the plaintiff’s individual claim in an account payable to the plaintiff, and the court then enters judgment for the plaintiff in that amount.” Id. at 672.

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A Cautionary Ruling for Website Accessibility

Websites may constitute “public accommodations” under the Americans with Disabilities Act (ADA), according to one court. On June 12, 2017, in a case of first impression, a federal district court in Gil v. Winn-Dixie Stores Inc. held that a website that is heavily integrated with physical store locations and operates as “a gateway to the physical store locations” constitutes a service of a public accommodation covered by the ADA.[1]  This decision comes in the midst of a trend, as we have previously reported, of increasing legal challenges to businesses on the theory that their websites are allegedly inaccessible to disabled persons, in violation of Title III of the ADA.  Although the Gil v. Winn-Dixie decision is not binding on courts in other jurisdictions, other courts may consider it and find it persuasive.  Businesses with consumer-facing websites should make web accessibility a priority.

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District Court Rebuffs CFPB’s RESPA “Continuing Violations” Theory

CFPB

On June 6, 2017, a federal district court in Menichino v. CitiBank[1] rejected an interpretation of the RESPA Section 8 statute of limitations espoused by the CFPB in captive reinsurance cases, instead concluding that RESPA’s limitations period runs from the date of the occurrence of the claimed violation, which is the date of the loan closing.  The Menichino decision is a welcome development because although the CFPB has asserted its “continuing violations” theory in the closely-watched PHH case, that issue is not among those taken up by the D.C. Circuit Court of Appeals as part of its en banc review in PHH.

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Utilizing California Civil Code Section 1542 Waivers in Class Action Settlement Agreements: Helpful or Harmful?

Seventh Circuit

A significant concern for any lawyer negotiating the settlement of a class action in California state court is crafting a settlement agreement that the court will ultimately approve. Under California law, a judge must approve of any proposed settlement agreement disposing of a class action.[i]  A judge will only approve a class action settlement that he/she determines is fair, adequate, and reasonable.[ii]  Courts have broad discretion in evaluating the fairness, adequacy, and reasonableness of class settlement agreements. [iii]

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Fleeting Glimpse of RESPA Issues in PHH Argument as Court Focuses on Bureau Constitutionality

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.

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