New York is Split on Whether Notice of Default Letters Trigger the Statute of Limitations

In Milone v. US Bank, N.A., a New York intermediate appellate court held that a letter to a borrower stating that the failure to cure a mortgage loan default "will result in acceleration" does not start the clock on the statute of limitations to foreclose and recover the entire debt. This ruling differs from that of another New York intermediate appellate court, which had ruled otherwise, setting up the possibility of the New York Court of Appeals weighing in on a key issue in New York foreclosure actions. More ›

Governor Cuomo Mandates Compliance by Credit Reporting Agencies with Sweeping New Cybersecurity Requirements

New York Governor Andrew Cuomo has issued a final regulation that requires credit reporting agencies doing business in New York to register annually with the Department of Financial Services (DFS) and also to comply with accompanying cybersecurity regulations, including the implementation of a cybersecurity program consistent with the requirements already in place for banks, insurance companies and other financial services institutions. The purpose of the new regulation is to protect New Yorkers from data breaches, such as the Equifax breach which exposed the private data of millions of individuals. More ›

Is CFPB's Constitutionality Headed for the U.S. Supreme Court?

At the close of a 108 page decision filed in response to motions to dismiss a CFPB enforcement action, Consumer Financial Protection Bureau v. RD Legal Funding, LLC, C.A. No. 17-cv-890, Judge Loretta Preska of the U.S. District for the Southern District of New York (within Second Circuit jurisdiction) granted the motions by concluding the CFPB's structure was unconstitutional. This is significant because the D.C. Circuit had determined en banc earlier this year that the CFPB was constitutional in PHH Corp. v. CFPB. More ›

Despite Acceleration of Debt Through Prior Dismissed Foreclosure Action, Bankruptcy Petition Tolls Statute of Limitations on Subsequent Action

In Lubonty v. U.S. Bank National Association, a mortgagor sought to void a mortgage loan claiming that the six-year statute of limitations to foreclose had expired. The mortgagor had commenced multiple bankruptcy proceedings that trigged automatic stays and prevented foreclosure from proceeding for approximately four and a half years. New York law, CPLR § 204, extends the statute of limitations "[w]here the commencement of an action has been stayed by a court or by statutory prohibition," and the trial court held that the six-year statute of limitations was extended by the time period during which the foreclosure was stalled through successive bankruptcy petitions. More ›

Invoking Bigfoot, the Eastern District of New York Highlights the Absurdity of New FDCPA Theories

Suggesting that the latest FDCPA plaintiff's theories in New York have morphed into something other than consumer protection, Judge Glasser of the Eastern District of New York ("EDNY") penned an extensive (and rather scathing) decision detailing the abuse by plaintiffs-consumers (or more precisely, their counsel) in filing lawsuits for non-existent harms. More ›

Northern District of New York Dismisses another Avila Claim Based on Accrual of New York Pre-Judgment Interest

One of the latest trends in the New York FDCPA space has been filing so called "Reverse Avila" cases, based on the Second Circuit's decision in Avila v. Riexinger and Assocs.. In Avila, the Second Circuit found that a debt collection letter violated the FDCPA because the letter failed to state that interest on the debt was accruing. Since Avila, new theories related to the accrual of interest claims have surfaced, including: (1) the "Reverse Avila" claim, and (2) claims requiring Avila safe harbor language in correspondence if there is any possibility (however small) that interest will accrue in the future--even if the debt was not actually increasing at the time of the correspondence. Courts have begun to deny these claims because they stretch the meaning of Avila into the realm of pure speculation. More ›

New York Federal Court Demands that FDCPA Plaintiffs Read Entire Debt Collection Letter to Determine Creditor's Identity

In Goldstein v. Diversified Adjustment Serv., the Eastern District of New York may have walked back one of the new favorite Fair Debt Collection Practices Act  (the "FDCPA") claims—namely that the creditor was not properly identified pursuant to § 1692g of the FDCPA. Although the debt collection letter at issue listed Sprint several times, Goldstein's complaint nonetheless alleged that the debt collection letter violated the FDCPA by failing to adequately identify to whom the debt was owed and what Sprint's role was. More ›

National Pharmacy Avoids TCPA Claim for Flu Shot Robocall under Health Care Rule Exemption

A judge in the Southern District of New York recently held that an automated, pre-recorded message sent on behalf of Rite Aid informing recipients to obtain a flu vaccine shot was exempted from the Telephone Consumer Protection Act (TCPA), by virtue of the FCC’s Health Care Rule exemption. The exemption permits health care providers to contact customers in order to convey important "health care messages" as defined and covered by HIPAA.

The case, Zani v. Rite Aid Headquarters Corp., 14-cv-9701, involved an automated, pre-recorded message sent on behalf of Rite Aid informing recipients to obtain a flu vaccine shot from their local Rite Aid Pharmacy. In 2013, the putative plaintiff went to his local Rite Aid pharmacy and received a flu shot. He provided Rite Aid with his cell phone number and signed a privacy notice consenting to receiving health related communications by Rite Aid. Roughly a year after receiving his flu shot, he received a voice message reminder to get another flu shot at Rite Aid, as did all previous customers who obtained a flu shot and signed the privacy notice. More ›