FYI: 7th Cir Finds Standing on FCRA Privacy Claim, Tosses Case for Lack of Willful Violation or Damages

Federal courts have recently dismissed a number of cases brought by consumers alleging violations of consumer protection law because they lack "standing." The trend has been hastened by the U.S. Supreme Court's ruling last year in TransUnion LLC v. Ramirez, a case involving the federal Fair Credit Reporting Act (FCRA).

 

In the months following the Ramirez decision a growing number of U.S. Courts of Appeals, including the Second and Seventh Circuits, have found plaintiffs lacked standing to assert typical claims under other consumer protection laws.

 

But a recent ruling from the Seventh Circuit concerning an alleged FCRA violation held that a certain privacy harm was enough to allow the federal courts to hear the claim. However, although that privacy harm was sufficient for standing, the result was not favorable for the plaintiff.

 

The Court's opinion also highlights the importance of having well-grounded procedures as part of a debt collector's operations to avoid FCRA liability.

 

The FCRA Claim

 

The consumer alleged in her complaint that a collection agency attempted to collect a debt from her that had been discharged in an earlier bankruptcy. As part of the collection agency's debt collection process, it performed a bankruptcy "scrub," which did not return consumer's bankruptcy discharge. The debt collector then obtained a "propensity‐to‐pay score" from a credit reporting agency. Unlike a full credit report, the propensity‐to‐pay score only reveals a person's "likelihood of repayment on a scale of 400 to 800."

 

The consumer filed a class action against the debt collector alleging it violated the FCRA.

 

Although the FCRA does permit access to credit files to collect a debt, the consumer alleged that in her case because the debt was subject to the earlier bankruptcy discharge order, the collection agency could not lawfully collect the debt and so it lacked a "permissible purpose" under FCRA to access her credit file.

 

The trial court granted summary judgment for the debt collector holding it met the FCRA's requirements. This appeal followed.

 

Standing and Privacy

 

The consumer testified in her deposition concerning various harms she alleged she suffered – financial, reputational and credit injuries - but her testimony revealed no suffered actual loss in any of these areas.

 

She also alleged she suffered a "dignitary harm." The consumer's deposition testimony described this as stress and a "privacy harm."

 

The Seventh Circuit ruled out the consumer's claim of stress as a concrete injury because it was not particularized, it was merely conclusory. It then turned to her privacy harm allegation, saying it "might be concrete."

 

Looking to the Supreme Court's analysis in Ramirez, the Seventh Circuit determined it could "pair" her claim – a violation of the FCRA by obtaining credit information – and the privacy harm she suffered, with a common law tort; namely invasion of privacy.

 

In particular the Seventh Circuit construed the privacy claim as close in kind to the common law tort of intrusion upon seclusion which arises when a person "intrudes . . . upon the solitude or seclusion of another or his private affairs or concerns" and the "intrusion would be highly offensive to a reasonable person." It likened the act of obtaining one's propensity-to-pay score without a permissible purpose as "analogous to the unlawful inspection of one's mail, wallet, or bank account."

 

And while the impermissible pull alleged here might not be enough to prevail as a common law claim for intrusion upon seclusion itself, that is "irrelevant," the Seventh Circuit said. "Ramirez make[s] clear our responsibility to look for a close relationship "in kind, not degree. . .. It is enough to say that the harm alleged in her complaint resembles the harm associated with intrusion upon seclusion."

 

The Seventh Circuit held that this closeness in kind, between what the FCRA prohibited – the privacy harm the consumer allegedly suffered -and what common law would recognize as a claim, is a sufficient concrete injury to confer her standing in a federal court.

 

The Court bolstered its reasoning by noting the Supreme Court's "recognition" of a person's "right to privacy" that includes the control over their own personal information and pointing to "Congress's decision to protect this right in the FCRA." In fact, Ramirez itself recognizes that "[v]arious intangible harms can also be concrete . . . providing a basis for lawsuits in American courts . . . for example, reputational harms, disclosure of private information, and intrusion upon seclusion."

 

Other Possibilities for Lawfully Accessing Credit Information Despite Bankruptcy

 

Finding that the consumer had standing, the Seventh Circuit then turned to the question of whether the debt collector violated the FCRA when it obtained the propensity-to-pay score.

 

Notably, the Court rejected the argument that a debt collector always lacks a FCRA permissible purpose when it accesses credit information concerning a debtor subject to a bankruptcy discharge. "[A] bankruptcy's effect on [FCRA] § 1681b(a)(3)(A) should not be read too broadly."

 

In dicta the Seventh Circuit left "open the possibility that, in some instances, the FCRA would still permit [the debt collector] to procure a consumer report notwithstanding an underlying bankruptcy." But here, the debt collector did not identify any other reason for accessing the consumer's credit information other than to collect the debt and, because the debt had been discharged in a prior bankruptcy case, it lacked a permissible purpose and so violated the FCRA when it obtained the propensity-to-pay score.

 

Actual Damages and Merits

 

Finding that the debt collector violated the FCRA when it accessed the consumer's credit information did not end the analysis.

 

Having alleged a concrete harm does not necessarily mean the plaintiff has, in fact, sustained damages and FCRA requires either actual damages (for a negligent violation) or evidence that the violation was willful.

 

To recover under FCRA for a negligent violation, the consumer was required to demonstrate a "causal relation" between the statutory violation and the alleged harm. These harms can take the form of pecuniary losses – loss of income, credit denials, increased cost of credit and the like.

 

They can also be non-pecuniary, such as emotional distress, but under Seventh Circuit law, non-pecuniary harms must be articulated with "reasonable detail."

 

Put another way, simply saying "I suffered stress and could not get a good night's sleep," is not enough. Nor is an allegation that one's privacy was invaded. It is here the consumer's "negligent FCRA violation" claim failed.

 

She could not point to any pecuniary loss occasioned by the impermissible pull. Although she alleged her privacy was invaded and that the invasion caused her "stress" and "anger," these are conclusory claims and non-pecuniary damages must be particularized.

 

Lesson in Having Robust FCRA and Bankruptcy Scrub Procedures

 

The FCRA also allows a consumer to recover if a willful violation occurred. This required the consumer to demonstrate that the debt collector accessed her credit information "with actual knowledge or reckless disregard for the FCRA's requirements."

 

The debt collector's procedures provided that it would perform bankruptcy investigations before collecting on an account and it did so here, but the scrub did not identify the consumer's bankruptcy. The Seventh Circuit noted that the account at issue was not scheduled in the consumer's bankruptcy petition "so the bankruptcy court did not send a notice to any creditor for that debt. Thus, any lapse in notification was attributable to [the consumer], not [the debt collector]."

 

In a footnote, the Court recognized that the consumer's bankruptcy was a "no-asset discharge." The footnote correctly points out that in a no-asset discharge even unscheduled debts are "[f]unctionally discharged." And although the decision never mentions which bankruptcy chapter the consumer's case was administered under, it was very likely a Chapter 7 case because this theory of "no-asset" discharges would otherwise usually be inapplicable.

 

However, after debt collection activity commenced on the consumer's account the collector received notice of the bankruptcy and the collector's procedures prohibited collection of bankruptcy-related accounts and so collection activity on the consumer's account ceased.

 

Thus, the Seventh Circuit affirmed the trial court's ruling, holding the violation was not willful because the debt collector "lacked actual knowledge of the bankruptcy," had procedures recognizing a bankruptcy discharge prohibited collection of an affected account, "had a reasonable basis for relying on its procedures," and, as a result, "did not recklessly disregard the possibility that debt had been discharged."

 

 

 

Ralph T. Wutscher
Maurice Wutscher LLP
The Loop Center Building
105 W. Madison Street, 6^th Floor
Chicago, Illinois 60602
Direct:  (312) 551-9320
Fax: (312) 284-4751

Mobile:  (312) 493-0874
Email: rwutscher@MauriceWutscher.com

 

Admitted to practice law in Illinois

 

 

 

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FYI: 2nd Cir Upholds Dismissal of TCPA "Unsolicited Advertisement" Putative Class Action

The U.S. Court of Appeals for the Second Circuit recently affirmed the dismissal of a putative class action alleging that an unsolicited faxed invitation to participate in a market research survey in exchange for money was an "unsolicited advertisement" under the federal Telephone Consumer Protection Act of 1991 ("TCPA").

 

A copy of the opinion is available at:  Link to Opinion

 

The named plaintiff, a medical services company, alleged that the defendant, a market research company, sent the plaintiff two unsolicited faxes seeking participants in market research surveys, in violation of the TCPA, as amended by the Junk Fax Prevention Act of 2005 ("JFPA").

 

Both faxes explained that the defendant was "currently conducting a market research study" and "offer[ed] an honorarium of $150 for [the recipient's] participation in a . . . telephone interview."

 

In response, the defendant filed a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), arguing that an unsolicited faxed invitation to participate in a market research survey in exchange for money does not constitute an "unsolicited advertisement" under 47 U.S.C. § 227(b)(1)(C). The trial court agreed and granted the motion to dismiss. This appeal followed.

 

As you may recall, the TCPA as amended by the JFPA prohibits the use of "any telephone facsimile machine, computer, or other device to send, to a telephone facsimile machine, an unsolicited advertisement." 47 U.S.C. § 227(b)(1)(C).

 

An "unsolicited advertisement" is defined by the statute as "any material advertising the commercial availability or quality of any property, goods, or services which is transmitted to any person without that person's prior express invitation or permission." Id. § 227(a)(5). The regulations of the Federal Communications Commission ("FCC") implementing the TCPA contain an identical definition of "unsolicited advertisement."47 C.F.R. § 64.1200(f)(16).

 

The Second Circuit here agreed with the defendant and the trial court, and held that faxes that seek a recipient's participation in a survey do not advertise the availability of any one of "property, goods, or services," and therefore cannot be "advertisements" under the plain meaning of the TCPA.

 

Furthermore, the Second Circuit noted that "[t]he text's plain meaning can best be understood by looking to the statutory scheme as a whole and placing the particular provision within the context of that statute." Saks v. Franklin Covey Co., 316 F.3d 337, 345 (2d Cir. 2003); see K Mart Corp. v. Cartier, Inc., 486 U.S. 281, 291 (1988)

 

The Second Circuit held that the word "property" does not appear to include money as the word is used in the TCPA. 47 U.S.C. § 227(a)(4). The word "property" occurs twice: once in the definition of "unsolicited advertisement" and once in the definition of "telephonic solicitation." A "telephone solicitation" is defined in the TCPA as "a telephone call or message for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services." 47 U.S.C. § 227(a)(4) (emphasis added).

 

The Second Circuit reasoned that it would be strange for the statute to speak of the "purchase or rental of, or investment in" money. The Court also noted that, although it is true that the "unsolicited advertisement" definition might allow a broader reading of the word "property" than the "telephone solicitation" definition, the Court observed that "identical words used in different parts of the same statute are generally presumed to have the same meaning." IBP, Inc. v. Alvarez, 546 U.S. 21, 34 (2005).

 

The Second Circuit also concluded that the faxes could not be construed as advertising the availability of a service because the faxes only sought participation in a survey from the fax recipient. The Court noted that the statute does not prohibit communications advertising the availability of such an opportunity, even if the opportunity is commercial in character.

 

On this point, the Second Circuit disagreed with the Third Circuit's holding in Fischbein v. Olson Research Group, 959 F.3d 559 (3d Cir. 2020), which relied on an encyclopedia definition of what constitutes a "commercial transaction" to conclude that "an offer of payment . . . transforms the . . . market surveys into advertisements," rather than focusing on the definition of "advertisement" that the TCPA and FCC regulations provide. Id. at 562. In doing so, the Second Circuit held that the Third Circuit's opinion effectively rewrote the TCPA.

 

Furthermore, the Second Circuit found that the legislative history of the TCPA and the FCC's implementation of that law support the position that the faxes in this case were not advertisements.

 

Specifically, before the JFPA extended the TCPA to include faxes, the House Committee on Energy and Commerce, in its recommendation that the TCPA be enacted, noted that "the Committee does not intend the term 'telephone solicitation' to include public opinion polling, consumer or market surveys, or other survey research conducted by telephone," and explained that "such research has generated relatively few complaints" from consumers. Moreover, in regulations implementing the TCPA the year after its enactment, the FCC excluded "research, market surveys, political polling or similar activities" from liability under the statute.

 

Accordingly, the Second Circuit held that the statutory text, legislative history, and FCC implementation of the TCPA all support the conclusion that faxed invitations to participate in a survey, without more, are not advertisements under the statute. Thus, the Court affirmed the trial court's judgment.

 

 

 

Ralph T. Wutscher
Maurice Wutscher LLP
The Loop Center Building
105 W. Madison Street, 6^th Floor
Chicago, Illinois 60602
Direct:  (312) 551-9320
Fax: (312) 284-4751

Mobile:  (312) 493-0874
Email: rwutscher@MauriceWutscher.com

 

Admitted to practice law in Illinois

 

 

 

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FYI: 4th Cir Reverses Dismissal of Claims that Mortgage Servicer's Pay-Online and Pay-By-Phone Fees Were Illegal

The U.S. Court of Appeals for the Fourth Circuit recently reversed the dismissal of a putative class action alleging that a mortgage servicer's fee to borrowers who paid monthly mortgage bills online or by phone was illegal.

 

A copy of the opinion is available at:  Link to Opinion

 

The appeal arose from a class action suit brought by two borrowers ("Borrowers") against a mortgage servicer ("Servicer") for charging a $5 convenience fee for payment of monthly mortgage bills online or by phone.  Borrowers alleged that the fees supposedly violated the Maryland Consumer Debt Collection Act (MCDCA) and the Maryland Consumer Protection Act (MCPA).

 

Borrowers' mortgage loans were both transferred to Servicer for servicing.   The loans provided the method of payment of paying by mail.  In addition to the free pay-by-mail option, Servicer also gave Borrowers the choice to make payments online or by phone for a $5 convenience fee.

 

Borrowers opting to pay online had to press an "I agree" button after reviewing the terms and conditions for the service, and then select "Continue" after manually inputting the payment amount and seeing the convenience fee displayed.  Borrowers both paid their mortgages online using this method, paying the convenience fee at least 9 times each.

 

Borrowers brought a class action suit against Servicer alleging two violations of the MCDCA:  supposedly engaging in conduct that violates the federal Fair Debt Collection Practices Act (FDCPA), Md. Code Ann., Com. Law § 14-202(11), and allegedly attempting to enforce a right with knowledge that the right does not exist, id. § 14-202(8).

 

Borrowers also alleged two violations of the MCPA; an unfair-and-deceptive practices claim and a derivative claim based on the supposed MCDCA violations.

 

Servicer moved to dismiss.  The trial court granted the motion and dismissed Borrowers' claims.  This appeal followed.

 

The Fourth Circuit first looked at Borrowers' allegations under MCDCA – that is, by charging its convenience fees, Servicer engaged in conduct in violation the FDCPA.

 

The Appellate Court reversed the trial court's dismissal of this MCDCA claim, finding that Servicer was a "collector" who charged an "amount" that was not "expressly authorized by the agreement creating the debt or permitted by law" in violation of the FDCPA.  See 15 U.S.C. § 1692f(1).

 

The Fourth Circuit first found that Servicer was a collector under the MCDCA, as Servicer was "a person collecting or attempting to collect an alleged debt arising out of a consumer transaction." MD. Code. Ann., Com. Law § 14-201(b).

 

Servicer offered three arguments against this position.  First, Servicer argued that there was a difference between passively accepting payments as a servicer and enforcing payment obligations of defaulting borrowers. However, the Fourth Circuit found that "[r]eading additional exemptions into a remedial statute limits the possibility of remedies beyond what the Legislature intended," Andrews & Lawrence Pro. Servs. v. Mills, 223 A.3d 947, 968 (Md. 2020), and declined to accept this argument.

 

Servicer next argued Borrowers were required to challenge a "method of collection" and not simply the validity of the fees. However, the Fourth Circuit held that, although "it is not inaccurate to say that [the MCDCA] deals with methods of debt collection, it is more accurate to describe the statute as regulating the conduct of a person while engaged in debt collection." Chavis v. Blibaum & Assocs., P.A., 2021 WL 3828655, at *11 (Md. Aug. 27, 2021). The Appellate Court found that as Servicer was collecting a debt, the means by which they choose to do that did not make them any less of a collector.

 

Servicer also argued that even if it were a collector under the MCDCA, Borrowers must also show that it was a "debt collector" under the FDCPA to establish a Statute 14-202(11) violation. However, the Fourth Circuit found the broader definition of the MCDCA controlling, finding that it was not displaced by the federal definition. The Appellate Court relied on the fact that the Maryland legislature in enacting the MCDCA specifically chose not to incorporate the FDCPA's narrow definition of "debt collector" but chose only to include the FDCPA's "substantive provisions."

 

The Fourth Circuit next held that Servicer's convenience fees qualified as an "amount" charged under the FDCPA, 15 U.S.C. § 1692f(1). Servicer argued that the FDCPA only prohibits fees that are "incidental" to the mortgage debt, and that the convenience fees at issue arose from a separate agreement to provide an easier way for Borrowers to make payments that was not addressed in the mortgage loan agreement.

 

The Fourth Circuit disagreed, ruling that the FDCPA's use of the term "any amount" was not limited to only charges that are incidental to the principal obligation. Thus, the Court found the convenience fees at issue an "amount" under the FDCPA, 15 U.S.C. § 1692f(1).

 

Finally, the Fourth Circuit concluded that Servicer's convenience fees were not "permitted by law", because this term in the FDCPA requires affirmative sanction or approval.  Servicer argued that because Borrowers manifested assent after full disclosure and in the separate online agreements, common principles of contract law applied rendering the fees "permitted by law." However, the Fourth Circuit disagreed, ruling that this reasoning would make the prong permitting amounts "expressly authorized by the agreement creating the debt" superfluous.

 

The Fourth Circuit thus held that Servicer was a collector who charged an amount not expressly authorized by the agreement creating the debt or prohibited by law, in violation of the MCDCA.

 

The Appellate Court also reversed the dismissal of Borrowers' derivative MCPA claim and vacated the dismissal of the § 14-202(8) claim because the dismissal was predicated on the trial court's view of the MCDCA's definition of "collector" and Borrowers' voluntary assent which the Appellate Court found was in error.

 

The Appellate Court remanded this claim to allow the trial court's further consideration of that claim.

 

However, the Fourth Circuit affirmed the trial court's dismissal of the standalone MCPA claim alleging "unfair, abusive, or deceptive trade practices" as Borrowers claim was a "threadbare recital[] of the elements of the cause of action" rather than a "plausible claim for relief." Aschcroft v. Iqbal, 556 U.S. 662, 678, 679 (2009).

 

 

 

 

Ralph T. Wutscher
Maurice Wutscher LLP
The Loop Center Building
105 W. Madison Street, 6^th Floor
Chicago, Illinois 60602
Direct:  (312) 551-9320

Fax: (312) 284-4751

Mobile:  (312) 493-0874

Email: rwutscher@MauriceWutscher.com

 

Admitted to practice law in Illinois

 

 

 

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FYI: Wisc Sup Ct Limits 'Unconscionability' Claims Regarding Consumer Credit Transactions

The Supreme Court of Wisconsin recently held that:

 

(1) In the Wisconsin statute regarding nonjudicial enforcement for consumer transactions (§ 425.206(2)(b)), the term "dwelling used by a customer as a residence" includes a garage attached to the residential building in which the customer lives; and

 

(2) Claims of unconscionability under the Wisconsin statute regarding remedies in consumer credit transactions (§ 425.107) are available only in "actions or other proceedings" brought by a creditor to enforce rights arising from consumer credit transactions and that a non-judicial repossession is not such an action or proceeding.

 

A link to the opinion is available at:  Link to Opinion

 

The matter arose out of a consumer's ("Consumer") default on her vehicle installment purchase contract, after which the assignee opted to conduct a non-judicial repossession under Wis. Stat. §§ 425.205(1g)(a) and 425.206(1)(d).

 

The assignee hired a recovery agency to repossess the vehicle. The recovery agency entered the garage of Consumer's apartment building and took possession of the car.

 

Consumer filed suit against the assignee and recovery agent alleging that they violated the Wisconsin Consumer Act by "[e]ntering a dwelling used by a customer as a residence except at the voluntary request of a customer" during the repossession. See Wis. Stat. § 425.206(2)(b) (2017-18). Consumer also brought claims for violation of Wis. Stat. § 425.107 alleging that the defendants' conduct during and after the repossession was unconscionable.

 

The trial court granted summary judgment for the defendants concluding that entering the garage to repossess the car did not violate Wis. Stat. § 425.206(2)(b) and the unconscionability claim failed as a result.

 

The Court of Appeals reversed and remanded to give the parties and the trial court the opportunity to address the unconscionability claim.  This appeal to the Wisconsin Supreme Court followed.

 

The question addressed by the Wisconsin Supreme Court was whether the assignee and recovery agent entered "a dwelling used by [Consumer] as a residence" when they repossessed her car from the first-floor parking garage of her apartment building.

 

The Wisconsin Supreme Court first determined the meaning of "dwelling" as it is used in § 425.206(2)(b).

 

The Court noted the common definition of dwelling is a building in which at least one person lives. The Wisconsin Supreme Court observed this definition consistent with the use of dwelling elsewhere in statutes that were in force at the time the Wisconsin Consumer Act was adopted.  The Court also held that the term referred to the entire building and not just the parts where residents might eat, sleep or shower.

 

The Wisconsin Supreme Court also observed that this definition of dwelling was consistent with its use elsewhere in the Wisconsin Consumer Act. Specifically, Wis. Admin. Code §  DFI-WCA 1.392, specifies that, for purposes of Wis. Stat § 426.419(1)(a), "dwelling" includes "any garage, shed, barn or other building on the premises whether attached or unattached." The Court noted that it did not adopt the administrative definition as the statutory definition under Wis. Stat. § 425.206(2)(b) but merely relied on it as further support for the conclusion that "dwelling" in § 425.206(2)(b) meant, at a minimum, a building in which at least one person lived.

 

The Wisconsin Supreme Court therefore held that the term "dwelling" in the Wisconsin Consumer Act included the garage from which Consumer's vehicle was repossessed as it was located in the building in which she lived.

 

The Court next turned to whether the phrase "used by the customer as a residence" nevertheless excluded the garage."

 

The Wisconsin Supreme Court concluded that this phrase distinguished the customer's dwelling from all other dwellings. The Court reasoned the modifier was best understood as limiting which dwelling was protected and not which parts of the dwelling were protected. The Court further noted that its interpretation of Wis. Stat. § 425.206(2)(b) furthered one of the legislatively expressed purposes of the Wisconsin Consumer Act, to "simplify, clarify, and modernize the law governing consumer transactions." See Wis. Stat. § 421.102(2)(a), see also § 421.102(1).

 

The Wisconsin Supreme Court therefore concluded that "dwelling used by the costumer as a residence" in Wis. Stat. § 425.206(2)(b) included a garage attached to the residential building in which the customer lives and thus ruled that the defendants violated § 425.206(2)(b) when they repossessed Consumer's vehicle.

 

The Court next turned to the question of unconscionability, answering the following two questions: (1) whether customers can bring claims of unconscionability under § 425.107 only in "actions or proceedings brought by a creditor to enforce rights arising from consumer credit transactions", and (2) whether a non-judicial repossession pursuant to Wis. Stat. § 425.206(1)(d) is such an action or proceeding.

 

Although the Wisconsin Supreme Court had not yet addressed the first question, it noted several federal trial court cases which held that a consumer may raise an unconscionability claim under Wis. Stat. § 425.107 only in response to an action or other proceeding brought by a creditor and not as an original action. See Riel v. Navient Sols., Inc., No. 16-CV-1191-JPS, 2017 WL 168900 (E.D. wis. Jan. 17, 2017); see also Gable v. Universal Acceptance Corp., 338 F. Supp. 3d 943, 956-57 (E.D. Wis. 2018); VanHuss v. Rausch, Sturm, Israel, Enerson &Hornik, No. 16-cv-372-slc, 2017 WL 1379402, at *10 (W.D. Wis. Apr. 14, 2017).

 

The Wisconsin Supreme Court agreed that the scope language of Wis. Stat. § 425.102 bars a customer from brining a claim of unconscionability under Wis. Stat. 425.106 except in response to "actions or other proceedings by a creditor."

 

As to the second question, the Court concluded that Wis. Stat. § 425.206(1)(d) was not one of the "actions or other proceedings brought by a creditor" contemplated by the statute.

 

The Wisconsin Supreme Court noted that  neither "actions" nor "other proceedings" are defined in the Wisconsin Consumer Act, but that the context revealed that the terms referred to creditor-initiated litigation or other legal proceedings akin to litigation pursued by a creditor.

 

The Court differentiated non-judicial repossession under Wis. Stat. § 425.206(1)(d) as it is an explicit alternative to litigation that does not require a creditor to assert its rights in court. The Court further stated that because non-judicial repossession pursuant to the statute is only available to the creditor if the customer fails to demand that the creditor file a replevin action, the non-judicial repossession is non an "action" described in § 425.102.

 

The Court found further contextual support to determine that "other proceedings" are formal processes similar to litigation that allow a creditor to enforce its rights.

 

Thus, the Wisconsin Supreme Court held that Consumer's unconscionability claim failed.

 

The Wisconsin Supreme Court therefore affirmed the Court of Appeals' ruling as modified by its conclusion on unconscionability and remanded to the trial court for further proceedings.

 

 

 

Ralph T. Wutscher
Maurice Wutscher LLP
The Loop Center Building
105 W. Madison Street, 6^th Floor
Chicago, Illinois 60602
Direct:  (312) 551-9320
Fax: (312) 284-4751

Mobile:  (312) 493-0874
Email: rwutscher@MauriceWutscher.com

 

Admitted to practice law in Illinois

 

 

 

Alabama   |   California   |   Florida   |   Illinois   |   Massachusetts   |   New Jersey   |   New York   |   Ohio   |   Pennsylvania   |   Tennessee   |   Texas   |   Washington, DC

 

 

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