Cornelius Golden v. Rod Hatfield Chrysler Dodge Jeep Ram, LLC

Summary

The United States District Court for the Eastern District of Kentucky considered a motion to dismiss claims under the Equal Credit Opportunity Act and the Kentucky Consumer Protection Act. The court held that the plaintiff plausibly alleged that the automobile dealership acted as an arranger or gatekeeper in a credit transaction and denied the motion as to the ECOA claim. The court dismissed the KCPA claim with prejudice because the plaintiff completed no purchase, alleged no actionable deception, and suffered no qualifying injury.

Holdings

1. A dealership that refers a credit application to a lender and performs a gatekeeping or arranging function may qualify as a creditor under the ECOA's antidiscrimination and anti-discouragement provisions, even if it does not itself extend credit.
2. A party may take adverse action on a credit application by refusing to give approved credit any effect, even if a third-party lender approved the application and the party lacks authority independently to extend credit.
3. Golden plausibly stated an ECOA claim by alleging that he was a member of a protected class, applied for credit, was qualified, and was denied the practical benefit of the credit because of race and the source of his income.
4. Golden failed to state a KCPA claim because he alleged no deceptive conduct, did not complete a purchase or enter into privity with Rod Hatfield, and did not allege the consumer injury required for a private KCPA action.

Questions Presented

1. Whether Golden plausibly alleged that Rod Hatfield was an ECOA creditor or arranger subject to the Act's antidiscrimination and anti-discouragement provisions.
2. Whether Rod Hatfield's refusal to give effect to credit approved by a third-party lender plausibly constituted adverse action under the ECOA.
3. Whether Golden stated a Kentucky Consumer Protection Act claim when he did not complete a purchase or enter into a transaction with Rod Hatfield.

Disposition

other