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Monday, February 24, 2020

Second Circuit: Plaintiff lacks standing to bring two Truth in Lending Act claims

By Giovanni Whaley | Dec 15, 2016

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NEW YORK (Legal Newsline) - The U.S. Supreme Court's recent Spokeo decision has helped a defendant in a Truth in Lending Act lawsuit decided by the U.S. Court of Appeals for the Second Circuit.

On Nov. 23, the Second Circuit issued its opinion in Strubel v. Comenity Bank, which featured a plaintiff challenging the way Comenity issued disclosures on a retail store credit card.

The plaintiff, Abigail Strubel, filed a TILA lawsuit over four disclosures, arguing the bank failed to let consumers know they had limited time to stop payment on automatic payment plans and that there was a requirement to acknowledge alleged billing errors within a 30-day period and report if any corrections had been made, among other allegations.

The Second Circuit has issued an opinion that has substantive Truth in Lending Act implications, said John Raffetto, a senior associate in Goodwin Law’s Consumer Financial Services practice - "The court came to different conclusions on the standing questions on the first two (claims) and then on the second two," he said.

As part of the plaintiff’s appeal, she argued summary judgment was not applied properly to Comenity Bank because of failures listed in the initial argument and because the disclosures in question were not the same as those provided in the TILA implementing regulation, which is Regulation Z.

On appeal, Comenity cited Spokeo v. Robins as a reason the plaintiff did not have standing to sue. That 2016 U.S. Supreme Court decision requires plaintiffs to show a concrete harm has happened to them.

“The Spokeo argument came up on appeal. It was not raised at the district court level. The court took a look at these four different disclosures and considered using Spokeo,” Raffetto said.  

"(The court looked at) whether or not the plaintiff had standing to attack all four or any of these disclosures and the court concluded in two cases, the plaintiff did not have standing, and so the focus there was on the injury-in-fact element.”

The Second Circuit ruled that Strubel did not have standing to pursue TILA claims regarding two of Comenity's disclosures, and that her other two claims regarding disclosures failed as a matter of law, though she did have standing to pursue them.


She lacked standing in her argument that Comenity Bank failed to provide a timely stop-payment notice in an automatic-payment plan and that she never agreed to such a plan.

The court did say the plaintiff had standing to challenge Comenity’s disputed purchases and purchase dissatisfaction disclosures because those disclosures served to protect a consumer's concrete interest in avoiding the uniformed use of credit.

Raffetto said there were no surprises in this case but “people in the legal industry are very interested in how is that case going to be applied.”

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U.S. Second Circuit Court of Appeals