On January 3, the U.S. Court of Appeals for the Ninth Circuit published an opinion in a case involving a consumer lending company’s appeal of the district court’s order to pay more than $134 million in legal restitution, arguing that the district court’s restitution order triggered the lending company’s Seventh Amendment right to a jury trial. The court found that the consumer lending company waived the right to a jury trial by voluntarily participating in a bench trial, and its other challenges to the district court’s order lacked merit, such that the court affirmed the district court decision.

The CFPB had brought an action against the company, alleging that it engaged in unfair, deceptive, or abusive practices by attempting to collect interest and fees to which it was not legally entitled. As previously covered by InfoBytes, the case came before the 9th Circuit in 2018 following a decision by a federal judge in California, who ordered a civil penalty of $10.3 million but determined the CFPB did not prove that restitution was appropriate. The judge had previously determined that the company was the “true lender” of payday loans distributed to borrowers under a tribal model (covered by a Buckley Sandler Special Alert here).

In addition to addressing the company’s Seventh Amendment right to a jury argument, the 9th Circuit addressed the company’s argument that the restitution order was overstated, contending that the district court had improperly calculated unjust gains. The court held that the district court had appropriately used the company’s net revenues as a basis for measuring unjust gains and had not abused its discretion in its calculations. Additionally, the court rejected the company’s contention that the CFPB’s statutory funding mechanism violated the Appropriations Clause, citing recent Supreme Court precedent affirming the legality of the CFPB’s funding structure (covered by InfoBytes here).