April 21, 2017

Ninth Circuit sends consumer loan/UCL question to Supreme Court [Updated]

Two days ago, the Supreme Court dismissed the request of one federal appeals court — the Second Circuit — for an answer to a state law question.  (The case settled after the Supreme Court had agreed to answer the question.)  Today, the Ninth Circuit sends a possible replacement.

The Ninth Circuit is asking the Supreme Court to answer a question regarding consumer loans and California’s Unfair Competition Law.  The issue in De La Torre v. CashCall, Inc., says the federal appeals court, “is whether the interest rates on consumer loans of $2500 or more that are governed by California Finance Code § 22303, which provides no interest rate limitations on such loans, can be deemed unconscionable under California Finance Code § 22302 and thus be the predicate for a private cause of action under the California Unfair Competition Law (‘UCL’).”  The case before the Ninth Circuit is a class action alleging consumer loans with interest rates of 90 percent or higher.

The Supreme Court should decide by mid-June — give or take — whether it will answer the Ninth Circuit’s question under rule 8.548.  The court isn’t required to answer, but it usually does.  Going back five years, it has turned down federal appellate courts just once in the last 16 requests (not including another pending request), and even then it wasn’t really a denial.

[April 24 update:  The Supreme Court today docketed the De La Torre case.]

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