Auto-Finance-Litigation

Case Developments January 23, 2018 – February 20, 2018

In this edition of our Vehicle Finance Litigation report, we summarize (i) a decision from the Northern District of California striking a class definition as a “fail-safe” in a lending discrimination case, (ii) a decision out of the Eastern District of California denying class certification on adequacy and typicality grounds because of a defense unique to the class representative’s claims, and (iii) a decision out of the Seventh Circuit Court of Appeals discussing the interplay of financing conditions subsequent and the accuracy of TILA disclosures.

Perez, et al. v. Wells Fargo Bank, N.A., Case No. 17-cv-00454-MMC, (N.D. Cal. Jan. 30, 2017).

  • Plaintiffs brought a discrimination in lending class action alleging that they were denied credit from Defendant across multiple lines of business, including student lending, small business loans, credit cards, mortgages, and auto financing, based on their immigration status as non-U.S. citizens, including as participants in the Deferred Action for Childhood Arrivals, or DACA, Program.
  • Defendant moved to strike the class allegations, as Plaintiffs’ proposed class definition was fail-safe in that it was defined in a way that required an individual determination of liability in order to decide who would be a member of the class.
  • The court struck the class allegations, finding that the proposed class definition was impermissibly fail-safe.  The court permitted Plaintiffs an opportunity to amend.
  • Defendant is represented by McGuireWoods.

Lindblom v. Santander Consumer USA, Inc., No. 15-cv-0990-BAM, 2018 WL 573356 (E.D. Cal. Jan. 26, 2018)

  • Plaintiff April Lindblom sued Santander Consumer USA Inc. under the FDCPA and a parallel state consumer protection statute, challenging the legality of Western Union Speedpay fees retained by Santander.
  • Lindblom proposed a single statewide California putative class comprising individuals who paid Speedpay convenience fees in connection with any consumer loan held or serviced by Santander since October 2013.
  • Lindblom herself last used the Speedpay service in 2012, but claimed that the delayed discovery rule tolled the statute of limitations as to her.
  • Santander made two arguments in opposing class certification: (1) that Lindblom is not an adequate representative because she is not a member of the class she seeks to represent; and (2) even if Lindblom met the class membership requirement, her claims are not typical of the class because she is subject to a unique defense.
  • The court denied Lindblom’s class certification motion, finding that statute of limitations issues precluded Lindblom from serving as an adequate class representative and rendered her claims atypical of the putative class.
  • Defendant is represented by McGuireWoods.

Case Developments December 15, 2017 – January 22, 2018

In this edition of our Vehicle Finance Litigation report, we summarize a decision from the Butler County Court of Appeals of Ohio denying arbitration due to waiver.

Patrick v. Dixie Imports, Inc., NO. CA2017-05-063, 2107 WL 6450683 (Ohio Ct. App. Dec. 18, 2017).

  • The Court affirmed the denial of defendant’s motion to compel arbitration, finding that defendant’s delay of pursuing arbitration by four months and initiation of discovery by noticing Plaintiff’s deposition twice, was inconsistent with its right to arbitrate constituting a waiver of the arbitration provision.
  • The Court specifically noted that a four-month delay was not exceedingly long, but when combined with defendant’s actions of participating in litigation, was a waiver of its right to arbitrate.
  • In the same opinion, the Court overruled the trial court’s holding that the arbitration provision was ambiguous because the retail sales agreement included an area where a separate arbitration agreement could be included in addition to the arbitration language within the five-page contract.