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Posts tagged as “Third Circuit”

3rd Cir. Holds Failure to Turn Over Collateral Repossessed Prior to Bankruptcy Does Not Violate Automatic Stay

The U.S. Court of Appeals for the Third Circuit recently held, in a case of first impression in that circuit, that a secured creditor’s failure to turn over collateral repossessed prior to the filing of the bankruptcy petition does not violate the automatic stay. A copy of the opinion in In re Denby-Peterson is available at:  Link to Opinion. The debtor’s automobile was repossessed after she defaulted on her installment loan. She then filed a voluntary petition under Chapter 13 of the Bankruptcy Code, notified her creditors and demanded the return of the automobile. The creditors did not comply, and the…

3rd Cir. Vacates Cy Pres Class Settlement Citing Trial Court’s Failure to Scrutinize Scope of Release

The U.S. Court of Appeals for the Third Circuit recently vacated an order approving the settlement of a class action certified under Rule 23(b)(2), where the only benefit to the class was the defendant’s payment of a cy pres award to organizations that promoted data privacy. In so ruling, the Third Circuit held that the trial court did not adequately scrutinize the settlement agreement’s broad release of claims for money damages, and the parties’ designation of cy pres recipients, as required by Rule 23(e). A copy of the opinion in In re Google Inc. Cookie Placement Consumer Privacy Litigation is…

3rd Cir. Holds QR Code on Envelope Violates FDCPA

The U.S. Court of Appeals for the Third Circuit recently held that a debt collector violated the federal Fair Debt Collection Practices Act (FDCPA) when the envelope it sent to a debtor displayed an unencrypted code that revealed the debtor’s account number when scanned. A copy of the opinion in DiNaples v. MRS BPO, LLC is available at:  Link to Opinion. A consumer defaulted on her credit card and the bank that issued it assigned the account to a debt collection agency. The debt collector sent the consumer “a collection letter as a pressure-sealed envelope that had a QR [or…

Bending the FDCPA to the Breaking Point: 3rd Cir. Broadens Scope in Ruling Creditor is a Debt Collector

An entity whose principal business is to purchase debt, but did not itself collect the debt it purchased, was found to be a debt collector subject to the federal Fair Debt Collection Practices Act (FDCPA), even though the collection activity was undertaken by other entities. The Third Circuit Court of Appeals reached this decision by expanding the scope of the statute’s liability so far that it now falls into conflict with itself. Put another way, a creditor can be a debt collector of its own performing debt which it assigned to a third party to collect. But the third party…

3rd Cir. Holds American Pipe Tolling Does Not Apply to Named Plaintiff in Failed Putative Class Action

The U.S. Court of Appeals for the Third Circuit recently held that the tolling doctrine set forth in American Pipe & Constr. Co. v. Utah does not apply where the named plaintiff in a failed class action commences a subsequent lawsuit outside the statute of limitations. In so ruling, the Court held that American Pipe only tolls the statute of limitations for unnamed members of the putative class. A copy of the opinion in Weitzner v. Sanofi Pasteur Inc. is available at:  Link to Opinion. In April 2004 and March 2005, a doctor received two unsolicited faxes from a pharmaceutical company and…

3rd Cir. Limits Title Insurer’s Duty to Defend

The U.S. Court of Appeals for the Third Circuit held that a title insurer under Pennsylvania state law only had a duty to defend its insured lender for the covered claims alleged in the four corners of a borrower’s complaint, not for all alleged claims under the “in for one, in for all” rule. A copy of the opinion in Lupu v. Loan City, LLC is available at:  Link to Opinion. A Pennsylvania borrower refinanced his home loan and mortgage with a lender.  The loan transferred several times finally ending up with the current holder.  A title insurer provided title…

3rd Cir. Finds Aspects of Collection Letter Susceptible to Multiple Interpretations

A debt collector sent a letter to a consumer stating: “We can’t change the past, but we can help with your future.”  The letter contained three payment options that were described as “discounts,” though one was merely a payment plan for the full balance.  The letter advised “[i]f you pay your full balance, we will report your account as Paid in Full. If you pay less than your full balance, we will report your account as Paid in Full for less than the full balance.” The consumer filed a complaint in the U.S. District Court for the Eastern District of…

3rd Cir. Holds Statement That Debt Forgiveness ‘Might’ Be Reported to IRS Might Violate FDCPA

The U.S. Court of Appeals for the Third Circuit held that a statement in a letter to the effect that forgiveness of the debt “might” be reported to the Internal Revenue Service may constitute a violation of the federal Fair Debt Collection Practices Act (FDCPA). In so ruling, the Court reiterated that “even if the language in a letter is true, it can still be deceptive where ‘it can be reasonably read to have two or more different meanings, one of which is inaccurate.’” Accordingly, the Third Circuit reversed the trial court’s dismissal of the action and remanded for further…

3rd Cir. Holds Debt Buyer Whose Principal Purpose is Collection of Any Debt is a ‘Debt Collector’ Regardless of Whether It Owns Debts It Collects

With a tip of the cap to Popeye the Sailor Man, the Third Circuit has decided that a purchaser of defaulted debt is a “debt collector” under the federal Fair Debt Collection Practices Act. A copy of the opinion in Tepper v. Amos Fin., LLC is available here:  Link to Opinion. The borrowers, a husband and wife, had a home equity line of credit with a bank secured by a mortgage on their home. They made timely payments until receiving notice that the bank was closing. The bank was taken over by the FDIC and the loan was eventually sold to a…

3rd Cir. Holds ATDS Must Have ‘Present Capacity’ to Autodial, Follows ACA Int’l

Following the D.C. Circuit’s ruling in ACA Int’l v. FCC, the U.S. Court of Appeals for the Third Circuit recently held that an “automatic telephone dialing system” under the federal Telephone Consumer Protection Act must have the present or current capacity to store or produce telephone numbers using a random or sequential number generator, and to dial those numbers. A copy of the opinion in Bill Dominguez v. Yahoo, Inc. is available at:  Link to Opinion.  The plaintiff purchased a cellphone with a reassigned telephone number.  The prior owner of the number subscribed to an email service provider’s “Email SMS Service,”…

3rd Cir. Reverses Dismissal of FCBA Billing Error, TILA Unauthorized Use Claims

The U.S. Court of Appeals for the Third Circuit recently reversed the dismissal of a consumer’s complaint for unauthorized use of his credit card, holding that he stated claims for relief under the federal Fair Credit Billing Act’s correction of billing errors provisions, and the federal Truth in Lending Act’s unauthorized-use provisions. In so ruling, the Court held that: When “a creditor removes a disputed charge from a billing statement and later reinstates that charge, the 60-day period in which a consumer must file a written dispute begins when the consumer receives the first statement reinstating the charge.” “A cardholder…