Justia Government & Administrative Law Opinion Summaries

In cases consolidated for review, the issues presented for the Supreme Court involved the scope of the State’s authority to regulate so-called “payday loans” pursuant to OCGA 16-17-1, et seq., known as the Payday Lending Act. Pursuant to the statute, the State filed suit alleging that CashCall, Inc. (“CashCall”), Delbert Services Corporation (“Delbert Services”), Western Sky Financial, LLC (“Western Sky”), and Martin A. Webb (collectively “Defendants”) violated OCGA 16-17-2 (a) by engaging in a small-dollar lending enterprise that collected illegal usurious interest from Georgia borrowers. Defendants operated outside the State of Georgia and their dealings with Georgia borrowers occurred telephonically or over the Internet, and when a loan is funded, the funds are transferred to the borrower via electronic transfer to the borrower’s bank account. The State sought civil penalties and injunctive and other equitable relief. Defendants filed motions to compel arbitration and to dismiss the action. The trial court referred the case to a special master who recommended the case be dismissed, but the trial court rejected the special master’s recommendation and denied Defendants’ motion to dismiss, finding that the State’s claim was not barred by the language of OCGA 16-17-1 (d). Because the trial court found a substantial likelihood that the State would prevail on the merits of the claim at trial, and found a substantial threat existed that the State would suffer irreparable injury in that there might not be sufficient funds available to satisfy a judgment should the State prevail at trial, the trial court ordered Defendants to deposit a $15 million sum into the court’s registry and to make quarterly deposits of any additional amounts that could be collected from Georgia borrowers in the future. The trial court, however, agreed to stay the granted relief during an appeal, upon the Defendants’ deposit of an additional $1 million into the escrow account created following entry of the consent order requiring the deposit of $200,000. In a separate order, the trial court denied the State’s motion to add as defendants J. Paul Reddam and WS Funding, LLC (“WS Funding”). Defendants filed a notice of appeal and the State filed a notice of cross-appeal. After review, the Supreme Court affirmed the order denying Defendants’ motion to dismiss, affirmed the modification of the injunction order, and reversed the order denying the State’s motion to add defendants. View "Western Sky Financial, LLC v. Georgia" on Justia Law

In the Dodd-Frank Act of 2010, 12 U.S.C. 5491, Congress established a new independent agency, the Consumer Financial Protection Bureau (CFPB), an independent agency headed not by a multi-member commission but rather by a single Director. PHH is a mortgage lender that was the subject of a CFPB enforcement action that resulted in a $109 million order against it. PHH seeks to vacate the order, arguing that the CFPB’s status as an independent agency headed by a single Director violates Article II of the Constitution. The court concluded that CFPB’s concentration of enormous executive power in a single, unaccountable, unchecked Director not only departs from settled historical practice, but also poses a far greater risk of arbitrary decisionmaking and abuse of power, and a far greater threat to individual liberty, than does a multi-member independent agency. The court noted that this new agency lacks that critical check and structural constitutional protection, yet wields vast power over the U.S. economy. The court concluded that, in light of the consistent historical practice under which independent agencies have been headed by multiple commissioners or board members, and in light of the threat to individual liberty posed by a single-Director independent agency, Humphrey’s Executor v. United States cannot be stretched to cover this novel agency structure. Therefore, the court held that the CFPB is unconstitutionally structured. To remedy the constitutional flaw, the court followed the Supreme Court’s precedents and simply severed the statute’s unconstitutional for-cause provision from the remainder of the statute. With the for-cause provision severed, the court explained that the President now will have the power to remove the Director at will, and to supervise and direct the Director. Because the CFPB as remedied will continue operating, the court addressed the statutory issues raised by PHH and agreed with PHH that Section 8 of the Act allows captive reinsurance arrangements so long as the amount paid by the mortgage insurer for the reinsurance does not exceed the reasonable market value of the reinsurance; CFPB’s order against PHH violated bedrock principles of due process; and the CFPB on remand still will have an opportunity to demonstrate that the relevant mortgage insurers in fact paid more than reasonable market value to the PHH-affiliated reinsurer for reinsurance, thereby making disguised payments for referrals in contravention of Section 8. Accordingly, the court granted the petition for review, vacated the order, and remanded for further proceedings. View "PHH Corp. v. CFPB" on Justia Law

Meyers used his credit card to make purchases at the Green Bay are Oneida Travel Center and Oneida One Stop retail locations, owned and operated by the federally‐recognized Oneida Indian tribe. He received electronically printed receipts that included more than the last five digits of his credit card and the card’s expiration date. He alleged, in a putative class action, that the Tribe issued these receipts in violation of the Fair and Accurate Credit Transaction Act, which states: [n]o person that accepts credit cards or debit cards for the transaction of business shall print more than the last 5 digits of the card number or the expiration date upon any receipt provided to the cardholder at the point of the sale or transaction, 15 U.S.C. 1681c(g)(1). FACTA defines a person as “any individual, partnership, corporation, trust, estate, cooperative, association, government or governmental subdivision or agency, or other entity.” The district court concluded that the Tribe was immune from suit. The Seventh Circuit affirmed, noting that whether a tribe is subject to a statute and whether the tribe may be sued for violating the statute are two different questions. Any ambiguity must be resolved in favor of immunity; “government or governmental subdivision or agency” does not unambiguously refer to tribes. View "Meyers v. Oneida Tribe of Indians of Wis." on Justia Law

Brown, Brown & Brown, P.C. (BB&B), a Virginia law firm, entered into more than fifty agreements over a nine-month period with Maryland homeowners facing foreclosure. Under the agreements, in return for an advance payment of money, BB&B promised to attempt to renegotiate the mortgage loan so that the homeowner could avoid foreclosure. Ultimately, BB&B did not obtain loan modifications for any of the homeowners. The Commissioner of Financial Regulation (Commissioner) concluded that BB&B had violated the Maryland Credit Services Businesses Act (MCSBA) and directed BB&B to pay treble damages to the Maryland homeowners with whom they had agreements. The circuit court reversed, concluding that the MCSBA did not apply to BB&B because the agreements at issue were for legal services rather than credit services. The Court of Appeals reversed, holding (1) BB&B’s activities fell within the definition of “credit services business” under the MCSBA; and (2) BB&B did not qualify for the attorney exemption in the MCSBA. View "Comm'r of Fin. Regulation v. Brown, Brown & Brown, P.C." on Justia Law

Historically, sovereigns were not subject to statutes of limitations without their explicit consent. Washington State consented to some statutes of limitations but not to others. The issue this case presented for the Washington Supreme Court's review in this case was whether Washington consented to a statute of limitations that would bar this antitrust suit filed by the Washington State attorney general on behalf of the State against more than 20 foreign electronics manufacturing companies. The State alleged that between at least March 1, 1995, through at least November 25, 2007, the defendants violated RCW 19.86.030, which prohibited any "contract, combination ... or conspiracy in restraint of trade or commerce," by agreeing to raise prices and agreeing on production levels in the market for CRTs (cathode ray tubes) used in televisions and computer monitors before the advent of LCD (liquid crystal display) panels and plasma display technologies. Due to this unlawful conspiracy, the State alleges, Washington consumers and the State of Washington itself paid supracompetitive prices for CRT products. Ten of the defendants filed a motion to dismiss, arguing the claims were time barred because Washington's Consumer Protection Act (CPA) must be brought within four years. The State responded that RCW 19.86.120's statute of limitations did not apply to its claims under RCW 19.86.080. After review, the Supreme Court concluded the State's action for injunctive relief and restitution was exempt from the statute of limitations in RCW 19.86.120 and from the general statutes of limitations in chapter 4.16 RCW. View "Washington v. LG Elecs., Inc." on Justia Law

California’s Online Privacy Protection Act of 2003 (OPPA), under the unfair competition law (Bus. & Prof. Code 17200 et. seq.), addresses the obligations of an operator of a commercial Web site or online service regarding the posting of a privacy policy on the Internet. The state sought damages and injunctive relief under OPPA, alleging that Delta’s Fly Delta mobile application violated the privacy policy requirements. The trial court dismissed, finding the suit expressly preempted by the Airline Deregulation Act of 1978 (49 U.S.C. 41713 (b)(1)). The court of appeal affirmed. To compel Delta to comply with the OPPA would effectively interfere with the airline’s “selection and design” of its mobile application, a marketing mechanism “appropriate to the furnishing of air transportation service,” for which state enforcement has been held to be expressly preempted. View "Harris v. Delta Air Lines" on Justia Law

The Fair Debt Collection Practices Act prohibits “abusive debt collection practices,” 15 U.S.C. 1692(a)–(d), barring “false, deceptive, or misleading representation[s].” The definition of “debt collectors,” excludes “any officer . . . of . . . any State to the extent that collecting . . . any debt is in the performance of his official duties.” Under Ohio law, overdue debts owed to state-owned agencies and instrumentalities are certified to the State’s Attorney General, who may appoint, as independent contractors, private attorneys, as “special counsel” to act on the Attorney General’s behalf. Special counsel must use the Attorney General’s letterhead in communicating with debtors. Attorneys appointed as special counsel, sent debt collection letters on the Attorney General’s letterhead to debtors, with signature blocks containing the name and address of the signatory as well as the designation “special” or “outside” counsel to the Attorney General. Each letter identified the sender as a debt collector seeking payment for debts to a state institution. Debtors filed a putative class action, alleging violation of FDCPA. The district court granted defendants summary judgment. The Sixth Circuit vacated, concluding that special counsel, as independent contractors, are not entitled to the FDCPA’s state-officer exemption. The Supreme Court reversed. Even if special counsel are not “state officers” under the Act, their use of the Attorney General’s letterhead does not violate Section 1692e. The letterhead identifies the principal—Ohio’s Attorney General—and the signature block names the agent—a private lawyer. A debtor’s impression that a letter from special counsel is a letter from the Attorney General’s Office is “scarcely inaccurate.” View "Sheriff v. Gillie" on Justia Law

The Consumer Protection Division of Maryland’s Office of the Attorney General (CPD) concluded that Petitioner and his companies engaged in unfair and deceptive trade practices in violation of the Maryland Consumer Protection Act (CPA). The CPD issued sanctions, imposed civil penalties, and assessed costs. Thereafter, the Maryland State Board of Plumbing (the Board) opened a complaint against Petitioner alleging that Petitioner had violated the Maryland Plumbing act (MPA). The Board’s case largely consisted of the CPD’s findings and conclusions. The Board, by application of the doctrine of collateral estoppel, adopted the findings of fact made by the CPD and concluded that Petitioner violated the MPA. The Board revoked Petitioner’s master plumber license and imposed a civil penalty. The circuit court ruled that the Board properly invoked collateral estoppel in adopting the CPD’s findings of fact. The Court of Special Appeals affirmed. The Court of Appeals affirmed, holding (1) the doctrine of offensive non-mutual collateral estoppel is permissible in this State and can be invoked to grant preclusive effect to an administrative order; and (2) Petitioner’s double jeopardy protections were not violated when the Board and the CPD both fined him for the same conduct. View "Garrity v. State Bd. of Plumbing" on Justia Law

Chance Gordon, a licensed California attorney, appealed the district court's order of summary judgment for the CFPB on its enforcement action for violations of the Consumer Financial Protection Act, 12 U.S.C. 5531, 5536, and Regulation O, 12 C.F.R. 1015.1-11. On January 4, 2012, President Obama, relying on his recess-appointment power, named Richard Cordray as the CFPB’s initial Director. President Obama renominated Cordray as Director on January 24, 2013. The parties agree that while Cordray’s initial January 2012 recess appointment was invalid, his July 2013 confirmation was valid. The court concluded that, while the failure to have a properly confirmed director may raise Article II Appointments Clause issues, it does not implicate the court's Article III jurisdiction to hear this case. That its director was improperly appointed does not alter the Executive Branch’s interest or power in having federal law enforced. The subsequent valid appointment, coupled with Cordray’s August 30, 2013 ratification, cures any initial Article II deficiencies. Because the CFPB had the authority to bring the action at the time Gordon was charged, Cordray’s August 2013 ratification, done after he was properly appointed as Director, resolves any Appointments Clause deficiencies. On the merits, the court concluded that CFPB is entitled to summary judgment on all counts because there is no dispute as to material fact regarding Gordon's liability. Because the district court conscientiously tailored the injunction at issue, it did not abuse its discretion in granting equitable judgment. However, because the district court may have impermissibly entered a monetary judgment against Gordon for a time period prior to the enactment or effective date of the relevant provisions of the CFPA and Regulation O, the court vacated and remanded for further consideration. View "Consumer Fin. Prot. Bureau v. Gordon" on Justia Law

Plaintiffs Eckler and Engel filed separate actions against Neutrogena, alleging that their sunscreen products were misleadingly labeled and marketed in violation of California consumer protection statutes. Plaintiffs alleged that Neutrogena misleadingly labeled its products with the descriptions “sunblock,” “waterproof,” and “sweatproof” (Labeling Terms), terms that the FDA prohibited; Engel contends that Neutrogena is liable for marketing products that bore the Labeling Terms before the December 17, 2012 compliance date; the Eckler matter raises an additional product labeling issue with respect to sunscreen with a sun protection factor (SPF) value greater than 50; and, although Eckler does not contend that the SPF values on Neutrogena’s products were inaccurate, she believes that consumers will be misled about their benefits and seeks an order that Neutrogena modify its labels and alter its advertising. The superior court sustained Neutrogena’s demurrer to Eckler’s complaint without leave to amend, and granted its motion for judgment on the pleadings as to Engel’s complaint. The court agreed with the district court's conclusion that plaintiffs' claims were preempted by the federal Food, Drug, and Cosmetic Act (FDCA), 21 U.S.C. 379r, and implementing FDA regulations. Accordingly, the court affirmed the judgment. View "Eckler v. Neutrogena Corp." on Justia Law