Antitrust Law Daily Wrap Up, CONSUMER PROTECTION—D. Nev.: Payday lenders denied immediate appeal in deceptive payday loan action, (Jan 23, 2015)

By Linda O’Brien, J.D., LL.M.

In an action against payday lenders affiliated with American Indian tribes regarding the offer and sale of high-fee, short-term payday loans, the federal district court in Las Vegas has denied the lenders’ motion to certify for an immediate appeal (FTC v. AMG Services, Inc., January 21, 2015, Navarro, G.).

Following an investigation into consumer complaints about the offer and sale of high-fee, short-term payday loans, the FTC filed a complaint against 18 payday lenders affiliated with American Indian tribes for engaging in deceptive collection practices in violation of the FTC Act. The FTC moved for summary judgment against all defendants. In October 2013, certain defendants agreed to settle the FTC charges in a settlement that was approved by the court. In March 2014, the court determined that the FTC Act applied to tribal-chartered corporations and, in May 2014, entered summary judgment in favor of the FTC on its claims that the lenders’ deceptive collection practices and failure to properly disclose certain loan information violated the FTC Act. Subsequently, the lenders moved for a certificate of appealability.

Certification of an interlocutory appeal under 28 U.S.C. §1292(b) requires that (1) there is a controlling question of law; (2) there are substantial grounds for difference of opinion, and (3) an immediate appeal may materially advance the ultimate termination of the litigation.

The lender defendants contended that the summary judgment order involved three controlling questions of law for which there were substantial grounds for difference of opinion: (1) if the truth in lending disclosure accurately reflected the borrower’s obligation, was it inaccurate or misleading because a borrower might fail to understand that future events might change that obligation?; (2) may a court disregard the non-moving party’s evidence as immaterial and rely solely on the moving party’s evidence in granting summary judgment?; and (3) although the language of the loan note was undisputed, did that mean there was no dispute about the inferences to be drawn from the loan note?

The court determined that the none of the questions of law presented by the defendants as grounds for an interlocutory appeal involved a circuit split, complicated issue of foreign law, or a novel question of first impression. Rather, the questions reflected the defendants’ disagreement with the court’s application of the relevant law. A party’s disagreement with the court’s findings did not constitute the substantial grounds for a difference of opinion necessary to obtain an appeal under §1292(b). Since the case did not involve the exceptional circumstances contemplated when §1292(b) was enacted, it was not suitable for interlocutory appeal, in the court’s view.

The case is No. 2:12-cv-00536-GMN-VCF.

Attorneys: Blaine T. Welsh, U.S. Attorney's Office, and Courtney Anne Estep for Federal Trade Commission. Andrew A. Kassof (Kirkland & Ellis LLP), Nicole Ducheneaux (Fredericks Peebles & Morgan LLP), and Joshua M. Dickey (Bailey Kennedy LLP) for AMG Services, Inc., Red Cedar Services, Inc., and SFS, Inc. Von S. Heinz (Lewis Roca Rothgerber LLP) for AMG Capital Management, LLC, Level 5 Motorsports, LLC, LeadFlash Consulting, LLC, Black Creek Capital Corp., and Broadmoor Capital Partners, LLC.

Companies: AMG Services, Inc.; Red Cedar Services, Inc.; SFS, Inc.; AMG Capital Management, LLC; Level 5 Motorsports, LLC; LeadFlash Consulting, LLC; Black Creek Capital Corp.; Broadmoor Capital Partners, LLC

Cases: ConsumerProtection FederalTradeCommissionNews