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On April 24, 2019, the U.S. Supreme Court ruled that an ambiguous arbitration agreement does not provide a sufficient basis to conclude that parties agreed to class arbitration. In Lamps Plus, Inc. v. Varela, the Supreme Court voted 5-4 to overturn the Ninth Circuit’s decision that the arbitration agreement between Lamps Plus and one of its employees allowed the employee to pursue class claims even though the agreement was vague as to class arbitration.…
On Nov. 13, 2018, the U.S. Supreme Court granted certiorari in Carlton & Harris Chiropractic, Inc. v. PDR Network, LLC, after the Fourth Circuit vacated a lower court ruling regarding what constitutes an “unsolicited advertisement” under the Telephone Consumer Protection Act (TCPA). No. 17-1705, 2018 WL 3127423, at *1 (2018). The Supreme Court is set to review whether the Hobbs Act requires district courts to accept the Federal Communication Commission’s (FCC) legal interpretations of the…
Officials at the U.S. Department of Justice (DOJ) and Federal Trade Commission (FTC) continue to scrutinize class settlements to ensure that neither defendants nor class action counsel are improperly benefiting at the expense of class members. As discussed below, at minimum, parties to class actions in federal court can expect federal authorities to increasingly monitor and review class actions and file amicus briefs or statements of interest in appropriate cases.…
In an email to CFPB staff on Wednesday, Director Richard Cordray announced that he will resign by the end of November. Although it is rumored that Director Cordray will run for governor of Ohio, he did not specify his future plans in the email. “[I]t has been a joy of my life to have the opportunity to serve our country as the first director of the Consumer Bureau by working alongside all of you here. …
On April 21, 2017, the Ninth Circuit affirmed the dismissal of two putative class actions against manufacturers of human growth hormone (HGH) supplements. The actions centered on allegations that the defendant falsely advertised the benefits of the supplements. Specifically, the plaintiffs alleged defendants falsely represented that their product, SeroVital, increased HGH levels, was clinically tested, and that ‘peak growth hormone levels’ are associated with various health benefits. Plaintiff also alleged that these claims were not…
On March 24, 2017, the Consumer Financial Protection Bureau (CFPB) proposed amendments to Regulation B to “provide additional flexibility for mortgage lenders concerning the collection of consumer demographic information.”  The amendments were also necessary to resolve the current rule and timing differences between Regulation B (Equal Credit Opportunity Act (ECOA)) and Regulation C (Home Mortgage Disclosure Act (HMDA)). Regulation B implements the ECOA, a federal civil rights law prohibiting lenders from discriminating against credit applicants…
On Jan. 31, 2017, the Consumer Financial Protection Bureau (CFPB) filed consent orders against one of the largest independent residential mortgage lenders, two real estate brokers and a mortgage servicer for their roles in an improper “kickback” scheme involving mortgage referrals. The fines here were notable given that the CFPB targeted realtors for accepting payments from the referral arrangements. Prospect Mortgage, a mortgage lender based in Sherman Oaks, California, was assessed a $3.5 million civil…
On Nov. 14, 2016, the Federal Trade Commission (FTC) announced it issued orders to eight unidentified claims administrators, requiring them to divulge information on class settlement notification procedures and the response rates for various notification methods.[1] Citing its investigative powers for consumer protection matters under Section 6(b) of the FTC Act, the FTC stated that it issued the orders to understand the effectiveness of class action settlement notice programs. The orders are part of the…
On Oct. 11, the U.S. Court of Appeals for the D.C. Circuit deemed the Consumer Financial Protection Bureau (CFPB) “unconstitutionally structured” and overturned its enforcement action, including a $109 million penalty, against PHH Corp., a New Jersey-based mortgage lender. Despite its rulings, the D.C. Circuit made clear that the CFPB will continue to operate and perform its duties. The CFPB originally fined PHH for an alleged kickback scheme whereby PHH referred customers to insurers who…
On August 16, Florida announced via the National Mortgage Licensing System (NMLS) Resource Center that it was adopting the Uniform State Test (UST) for mortgage loan originators. With this announcement, the Florida Office of Financial Regulation became the 53rd state agency to no longer require a second state-specific test component for mortgage originators seeking licensure. Although not mentioned in the announcement, BakerHostetler’s Financial Services Team has confirmed that, beginning in January 2017, Florida will require…