On April 24, the U.S. Court of Appeals for the Ninth Circuit denied a loan company’s petition for rehearing and or rehearing en banc. The lender contested that the $134 million legal restitution it was mandated to pay to the CFPB due to alleged unfair loan collection practices triggered its right to a jury trial. The court affirmed its January ruling, namely affirming the district court’s finding of liability, and determining that even if there were a right to a jury trial, the company made an “express, knowing, and voluntary waiver” of any right to a jury trial in a joint status report which stated that “[t]he parties have agreed to waive their right to a jury and proceed with a bench trial to determine the appropriate relief…” (covered by InfoBytes here). The court held that the district court did not abuse its discretion in allowing the CFPB to seek legal restitution and affirmed the restitution amount based on the company’s net revenues. The court also rejected the corporation’s argument that the CFPB’s funding mechanism violated the Appropriations Clause.

The CFPB had brought this 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).