On remand from the United States Court of Appeals for the Fourth Circuit, the United States District Court for the District of Maryland partially dismissed a putative class action alleging violations of the Maryland Credit Grantor Closed End Credit Provisions, the Maryland Consumer Protection Act, breach of contract and unjust enrichment, and seeking declaratory relief. Earlier, the Fourth Circuit reversed the federal court’s dismissal of the class action holding that repossession provisions in the CLEC were not subject to federal preemption under the National Bank Act (see April 17, 2012 Alert). To recap, after repossessing plaintiff’s vehicle, defendant sent plaintiff a notice that the vehicle would be sold at a private sale “sometime after 12/28/2009.” However, as required under the CLEC, defendant failed to provide the location of the car once repossessed or the date and location of the sale. After the Fourth Circuit remanded the case back to the federal district court, defendant moved to dismiss the action.
The Court held that similar to its decision in Bediako v. American Honda Finance Corp., 850 F. Supp. 574 (D. Md. 2012), plaintiff’s CLEC claim was damnum absque injuria—wrong without an injury. In particular, the Court held that nothing under the facts in plaintiff’s complaint entitled her to recover monetary damages. Under the CLEC, even a creditor who violates the repossession notice requirements may recover the principal of the loan. The CLEC only imposes a monetary penalty when the creditor knowingly collects interest and fees in excess of the principal. After the repossession sale, defendant initially sought to recoup the costs and expenses of the sale from plaintiff. However, defendant subsequently agreed not to seek the repossession sale costs and expenses and the remaining principal balance—despite having that ability under the CLEC. On this same ground, the Court also dismissed plaintiff’s CPA claims. The Court denied class certification on the remaining two claims—breach of contract and declaratory relief—for lack of commonality and typicality as required under the Federal Rules of Civil Procedure.