Last month, the Eleventh Circuit affirmed the dismissal of a putative class action suit alleging violations of the Fair Credit Reporting Act thereby delivering an important victory to lenders and other entities that provide consumer information to credit reporting agencies. Under the FCRA, “furnishers” of consumer information are prohibited from providing inaccurate information to credit reporting agencies (“CRAs”) and must investigate when a consumer disputes such information.  In Hunt v. JP Morgan Chase Bank, Nat’l Ass’n, Case No. 18-11306, 2019 WL 1873419 (11th Cir. Apr. 25, 2019) (unpublished), a united panel held (in an unpublished opinion) that JP Morgan Chase had not violated its duties as a furnisher under the FCRA when it reported that a customer’s account was past due.  Not only was such information accurate when it was provided, but the bank was never even required to investigate its accuracy because the plaintiff’s complaint did not allege that JP Morgan received notice that he disputed the information with the CRAs. The Court did not decide, however, whether JP Morgan had an obligation to “refresh” information it had previously provided.

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Last week, the U.S. District Court for the Middle District of Alabama denied Southern Independent Bank’s (“Southern Independent’s”) motion for class certification following a data breach which allegedly affected over 2,000 financial institutions across the country. Southern Independent, a community bank located in south Alabama, brought a class action complaint against Fred’s in response to a data breach in which hackers, using malware installed on servers, harvested payment data from consumer debit cards used at Fred’s stores.

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Last month, the Eleventh Circuit revisited the U.S. Supreme Court’s controversial decision in Spokeo, Inc. v. Robins, and appears to have set a low bar for plaintiffs to clear in establishing standing.

The case, Muransky v. Godiva Chocolatier, Inc., Case No. 16-16486 (11th Cir. October 3, 2018) came before the Eleventh Circuit on appeal from the United States District Court for the Southern District of Florida after the district court approved a settlement plan between the class of plaintiffs and Godiva. The named plaintiff in the underlying suit, Dr. David Muransky, filed a class action lawsuit against Godiva, which had given Muransky a receipt showing the first six and last four digits of his credit card number. The complaint alleged violations of the Fair and Accurate Credit Transactions Act (“FACTA”), which prohibits merchants from including “more than the last 5 digits of the card number . . . upon any receipt provided to the cardholder at the point of the sale or transaction.” 15 U.S.C. § 1681c(g)(1). The District Court approved a class action settlement in the underlying case, over objections from appellants James Price and Eric Isaacson.


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Earlier this month, the United States Court of Appeals for the Eleventh Circuit issued a decision that could make it easier for manufacturers to force consumers into arbitration via “shrinkwrap” agreements—packaged contracts which bind consumers by merely opening and keeping a product.  In Dye v. Tamko Building Products, Inc., Case No. 17-14052 (11th Cir. Nov. 2, 2018), the Eleventh Circuit considered an appeal of a district court’s order compelling arbitration and dismissing a lawsuit by Florida homeowners against the manufacturer of allegedly defective roofing shingles.  The packaging of the shingles displayed the manufacturer’s entire product-purchase agreement, including a mandatory arbitration provision.  In taking up the case, the Eleventh Circuit considered not only whether this shrinkwrap agreement was enforceable under Florida law, but also whether the homeowners were bound to arbitration because their hired roofers ordered, opened, and installed the shingles.

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In a win for defendants, the Eleventh Circuit recently held that a party does not waive its right to compel arbitration for the claims of unnamed class members even if it has waived that right as to the named class representatives. In Gutierrez v. Wells Fargo Bank, NA, the plaintiffs filed a putative class action against Wells Fargo alleging it had committed certain unlawful practices related to the charging of overdraft fees. The plaintiffs were all former Wells Fargo customers who had accounts governed by customer agreements containing arbitration provisions with class action waivers. After the trial court consolidated similar cases in late 2009, it ordered the defendant banks to file all “merits and non-merits motions directed to the operative complaints,” including motions to compel arbitration, by December 2009. Wells Fargo replied to the trial court’s order stating it would not seek to compel arbitration as to the named plaintiffs but reserved its right to compel arbitration against any plaintiffs “who [might] later join, individually or as putative class members, in this litigation.” Wells Fargo then filed its answer and proceeded with discovery.

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In Dasher v. RBC Bank, the Eleventh Circuit held that a bank could not retroactively apply a newly-inserted arbitration provision in its customer account agreement to a dispute that was already in litigation unless the existence of the arbitration provision was communicated to counsel. Michael Dasher filed suit against RBC Bank arising out of certain practices implemented by RBC Bank related to overdraft fees. In 2012, PNC Bank acquired RBC Bank and issued a newer version of customer account agreements than those issued by RBC Bank in 2008. The PNC Bank agreement did not contain an arbitration provision, but PNC Bank moved to compel arbitration based on an arbitration provision in the 2008 RBC Bank agreement. The trial court denied this motion and the ruling was upheld on appeal.

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In Technology Training Associates, Inc. v. Buccaneers Limited Partnership, No. 17-11710 (October 26, 2017), the Eleventh Circuit axed an approved class action settlement due to plaintiffs’ counsel’s apparent “desire to grab attorney’s fees” at the expense of “the best possible settlement for the class.”  This case is a strong reminder that when defendants agree to a class action settlement they must take special care in ensure the settlement avoids even the appearance of being a “sweet heart” deal.

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Earlier this month, in Schweitzer v. Comenity Bank, the Eleventh Circuit held that a consumer can partially revoke consent to be called under the Telephone Consumer Protection Act (TCPA), This decision will only further complicate the already complex and treacherous net of liability cast by that statute.

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What to do now about the new CFPB rule on arbitration?  (1) begin planning now and (2) begin actual preparation after the 60 days runs.

Congress has 60 days after publication of the new CFPB rule to take action to stop the application of this rule.  Publication occurred on Wednesday (July 19th).  It is impossible to predict what Congress will do.  However, we can be virtually certain that absent such Congressional action, this new rule will apply 180 days after those 60 days expire.  While there are other possible hurdles for this rule (for instance, an expected lawsuit challenging the rule; a possible new CFPB Director in the future; a challenge to the CFPB’s structure, etc.), these other impacts are unlikely to prevent the rule from beginning to have application.

We suggest you use the next 60 days to plan but wait to make any substantial expenditures until it is certain what Congress will do.  Here are some key questions which financial institutions should consider during those 60 days:


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