Summary
The Ninth Circuit affirmed the district court's order requiring CashCall, Inc. to pay over $134 million in legal restitution to the Consumer Financial Protection Bureau for engaging in unfair and deceptive lending practices. The panel held that although legal restitution may implicate a Seventh Amendment right to a jury trial, CashCall had expressly and voluntarily waived that right during the initial bench trial proceedings. Additionally, the court rejected arguments regarding judicial estoppel and upheld the district court's calculation of unjust gains based on net revenues without deducting uncollected loan principal.
Topics
Practice areas
Questions Presented
- Whether CashCall waived its Seventh Amendment right to a jury trial.
- Whether the district court abused its discretion in awarding legal restitution and measuring unjust gains.
- Whether the doctrines of judicial estoppel and waiver preclude the Bureau from seeking legal restitution.
- Whether the CFPB’s funding mechanism violates the Appropriations Clause.
Holdings
- CashCall made an express, knowing, and voluntary waiver of its right to a jury trial; the waiver is effective even if based on a mistaken understanding of the nature of the relief.
- The district court did not abuse its discretion; legal restitution may be measured by the defendant’s net revenues as a proxy for unjust gains, and the two‑step burden‑shifting framework was properly applied.
- The doctrines of judicial estoppel and waiver do not preclude the Bureau from seeking legal restitution because the Bureau’s position has been consistent and no inconsistency exists.
- The CFPB’s funding mechanism is consistent with the Appropriations Clause and does not violate it.
Key quotations
“A party waives a jury trial unless its demand is properly served and filed.” (5)
“Restitution may be measured by the ‘full amount lost by consumers rather than limiting damages to a defendant’s profits.’” (17)
Factual background
CashCall, a California consumer‑lender, made high‑interest loans using a tribal‑law entity to evade state usury limits. It collected interest and fees that were not legally owed. The CFPB brought an enforcement action alleging violations of the Consumer Financial Protection Act.
Procedural history
The CFPB sued CashCall under 12 U.S.C. §5536(a)(1)(B) for unfair, deceptive, or abusive acts. The district court granted partial summary judgment, held CashCall liable, and on remand ordered more than $134 million in legal restitution. CashCall appealed, arguing a Seventh Amendment jury‑trial right and other errors.