Other Major Litigation and Class Action Highlights

Other Major Litigation and Class Action Highlights

Telephone Consumer Protection Act (TCPA)

TCPA suits have been on the rise up as much as by 70% since 2012.  Moreover, approximately 15% of the claims were filed are part of class actions.  The TCPA authorizes the FCC to assess fines of up to $16,000 per violation, and allows private rights of action with $500 in statutory damages per call, which can be trebled to $1500 per call in the case of willful conduct.  There is no statutory cap on damages for class actions, and liability may be imposed for each and every call made.

The TCPA Restricts calls to consumers on their cellular phones using “auto-dialers” or “pre-recorded” messages unless for emergency purpose, or with the consumer’s prior express consent.  IN 2008, the FCC issued a declaratory ruling clarifying that a consumer provides prior express consent if he/she knowingly releases his/her wireless telephone number to the party making the call during the transaction giving rise to the debt (i.e., a loan application).  As of January 2015, there are 22 pending petitions to the FCC for clarification of its declaratory ruling.

With this backdrop, several recent class actions yielded multimillion-dollar settlements for alleged TCPA violations:

  • Capital One $75 million
  • HSBC  $40 million
  • Bank of America $32 million
  • JP Morgan Chase $12 million
  • Discover Bank $8.7 million    

Jesinoski v. Countrywide Home Loans, 135 S.Ct. 790 (January 13, 2015): Rescission Under TILA

The Supreme Court held that written notice within three years after a loan transaction is consummated is all that is required to rescind under the Truth in Lending Act, 15 U.S.C. §1635.  In addition to the extraordinary length of time, the Court also confirmed that a borrower need not file a lawsuit to rescind the loan.  In the instant case, the Jesinoskis sent a letter purporting to rescind the loan exactly three years after loan closing, and sued seeking rescission and damages four years and one day after their loan closed.  Speaking for an unanimous Court, Justice Scalia stated that “[a]lthough section 1635(f) tells us when the right to rescind must be exercised, it says nothing about how that right is exercised.”

For more information on this session recap or to discuss your questions, please contact Donald A. Rea.