Justia U.S. 4th Circuit Court of Appeals Opinion Summaries

Despite having only a few hundred dollars in her checking account at SunTrust Bank, Appellant cut herself a check for nearly $10,000, resulting in a sizable overdraft. SunTrust hired a Maryland law firm, Mitchell Rubenstein & Associates (MR&A) to bring a debt collection suit. MR&A filed suit on SunTrust’s behalf in a general district court in Virginia. The general district court entered judgment in favor of MR&A. Appellant subsequently filed a complaint against SunTrust and MR&A (collectively, Appellees), alleging that Appellees violated Maryland consumer protection laws and that MR&A violated the Fair Debt Collection Practices Act. The federal district court dismissed Appellant’s suit for failure to state a claim. The Fourth Circuit affirmed, holding that the district court did not err in finding that the counts alleged in Appellant’s complaint failed to state a claim for relief. View "Elyazidi v. SunTrust Bank" on Justia Law

Five individuals (collectively, “Plaintiffs”) each filed a petition for individual bankruptcy under Chapter 13 in the Bankruptcy Court for the District of Maryland. LVNV Funding, LLC and its affiliated companies (collectively, “Defendants”) filed a proof of unsecured claim based on defaulted debts it had acquired against each plaintiff. Each Chapter 13 plan was approved. Defendants’ claims were allowed, and they received payments from the Chapter 13 trustees on these claims. Plaintiffs subsequently filed this putative class action lawsuit in the District of Maryland alleging that Defendants violated the federal Fair Debt Collection Practices Act (FDCPA) and various Maryland laws by filing proofs of claim without a Maryland debt collection license. The district court dismissed the action, concluding (1) the state common law claims were barred by res judicata, and (2) the federal and state statutory claims failed to state a claim. The Fourth Circuit affirmed but on res judicata grounds, holding (1) Plaintiffs’ claims were based on the same cause of action as Defendants’ claims in the confirmed bankruptcy plans and were thus barred by res judicata; and (2) Plaintiffs’ statutory claims were subject to the normal principles of res judicata and were thus precluded by the confirmation of the Chapter 13 plans. View "Covert v. LVNV Funding, LLC" on Justia Law

Plaintiff filed suit against Palisades, alleging violations of two provisions of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692e and 1692f, and related statutes. Plaintiff, a credit card debtor, claimed that after Palisades purportedly purchased a judgment that had been entered against her in state court, it filed an Assignment of Judgment in the action that falsely represented its ownership of the judgment and misrepresented the amount she owed. The court concluded that the filing of an assignment of judgment in a debt collection act qualifies as debt collection activity that triggers the protections of the FDCPA; that the Assignment of Judgment that Palisades filed against plaintiff did not falsey claim Palisades' ownership of the judgment; and that the misrepresentations in the Assignment of Judgment as to the amount of the judgment and the amount of plaintiff's payments on the judgment were material. Accordingly, the court vacated the judgment entered on plaintiff's FDCPA claim under section 1692e and remanded the claim. The court vacated the court's conditional ruling that the errors made in the Assignment of Judgment did not provide a basis for the "bona fide error defense" found in section 1692k(c). Finally, the court affirmed the judgment entered on plaintiff's section 1692f claim and her state-law claims. View "Powell v. Palisades Acquisition XVI, LLC" on Justia Law

Company Doe filed suit to enjoin the Commission from publishing in its online, publicly accessible database a "report of harm" that attributed the death of an infant to a product manufactured and sold by Company Doe. Consumer Groups filed a post-judgment motion to intervene for the purpose of appealing the district court's sealing order as well as its decision to allow Company Doe to proceed under a pseudonym. The court held that Consumer Groups' notice of appeal deprived the district court of jurisdiction to entertain Consumer Groups' motion to intervene, and, therefore, the court vacated the district court's order denying intervention; Consumer Groups were able to seek appellate review of the district court's orders because they met the requirements for nonparty appellate standing and have independent Article III standing to challenge the orders; and, on the merits, the district court's sealing order violated the public's right of access under the First Amendment and the district court abused its discretion in allowing Company Doe to litigate pseudonymously. Accordingly, the court vacated in part, reversed in part, and remanded with instructions.View "Company Doe v. Public Citizen" on Justia Law

Plaintiff filed suit against Absolute Collection, alleging that the collection agency's conduct violated the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692-1692p, and the North Carolina Collection Agency Act, N.C. Gen. Stat. 58-70-1 et seq. Plaintiff alleged that Absolute Collection falsely reported the status of a 2008 debt to credit bureaus as "past due." The district court granted plaintiff's motion for judgment as a matter of law with respect to certain claims under the FDCPA and allowed the state claims to go to the jury, which found in favor of plaintiff. Absolute Collection appealed. The court concluded that the district court did not err in denying Absolute Collection's motion for judgment as a matter of law and held that a debtor is not required to dispute his or her debt under section 1692g as a condition to filing suit under section 1692e. The court rejected Absolute Collection's remaining arguments and affirmed the judgment of the district court. View "Russell v. Absolute Collection Services" on Justia Law

Plaintiffs filed a class action suit against defendants, alleging that they violated Section 8 of the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. 2607, by creating a joint venture (Prosperity) to skirt RESPA's prohibition on kickbacks while failing to disclose this business arrangement to its customers. The court concluded that the district court did not abuse its discretion denying plaintiffs' claims because plaintiffs' failed to move for judgment as a matter of law before the jury reached its verdict and because of the highly deferential lenses through which the court must review the issues before it. Accordingly, the court affirmed the judgment of the district court. View "Minter v. Wells Fargo Bank, N.A." on Justia Law

The FTC filed suit against defendant for engaging in deceptive internet advertising practices involving the use of a "scareware" scheme that tricked consumers into purchasing computer security software. On appeal, defendant challenged the district court's judgment enjoining her from participating in the deceptive practices and holding her jointly and severally liable for equitable monetary consumer redress. The court concluded that the district court had sufficient statutory power to award "complete relief," including monetary consumer redress, which is a form of equitable relief; the court held that one may be found individually liable under the Federal Trade Commission Act, 15 U.S.C. 41 et seq., if she (1) participated directly in the deceptive practices or had authority to control those practices, and (2) had or should have had knowledge of the deceptive practices; the court rejected defendant's evidentiary challenges; the district court did not clearly err in finding that defendant had authority to control the deceptive acts within the meaning of the Act nor did the district court clearly err in finding that defendant directly participated in the deceptive marketing scheme; and the district court did not clearly err in finding that defendant had actual knowledge of the deceptive marketing scheme and/or that she was at the very least recklessly indifferent or intentionally avoided the truth. Accordingly, the court affirmed the judgment of the district court. View "FTC v. Ross" on Justia Law

Plaintiffs filed a putative class action against ACS, alleging that ACS's collection notice violated the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692 et seq. Plaintiffs argued that ACS's collection notice violated section 1692g(a)(3) by stating that debtors only could dispute the validity of their debt in writing. ACS argued that the collection notice complied with the FDCPA because section 1692g(a)(3) contained an inherent writing requirement. The court found, however, that section 1692g(a)(3) permitted consumers to dispute the validity of a debt orally, and it did not impose a writing requirement. Accordingly, the court reversed the district court's grant of ACS's motion to dismiss. View "Clark v. Absolute Collection Servs." on Justia Law

Plaintiffs filed suit in state court alleging that Quicken Loans originated unlawful loans in West Virginia and that Defendant Appraisers, which included both the named appraisers and the unnamed class of appraisers, were complicit in the scheme. Quicken Loans removed to federal court under the Class Action Fairness Act (CAFA), 28 U.S.C. 1332(d). The district court then granted plaintiffs' motion to remand to state court under the local controversy exception. Quicken Loans appealed. The court vacated and remanded for a determination by the district court as to whether the named defendant appraisers satisfied the "at least 1 defendant" requirement of the local controversy exception. View "Quicken Loans Inc. v. Alig" on Justia Law

Plaintiffs filed suit against RAC after entering into a rental agreement with RAC for a wooden trundle bed and mattress infested with bedbugs. On appeal, plaintiffs challenged the district court's order compelling arbitration of their breach of warranty claim under the Magnuson-Moss Warranty Act, 15 U.S.C. 2301 et seq. Relying on regulation promulgated by the FTC under its authority to interpret the Act, plaintiffs argued that RAC could not require binding arbitration as part of a consumer warranty. The court concluded that the district court erred in holding that the FTC regulations contained no ban on binding arbitration. However, the FTC arbitration ban simply did not apply to plaintiffs' rental agreement with RAC. Because plaintiffs have not linked RAC's warranty to any sale, they failed to establish the existence of a written warranty under FTC regulations. Accordingly, the binding arbitration clause was enforceable and the court affirmed the judgment of the district court. View "Seney v. Rent-a-Center, Inc." on Justia Law