Court denies attorney’s move for summary judgment against CFPB as premature

Courts CFPB Structured Settlement UDAAP CFPA

On June 4, the U.S. District Court for the District of Maryland issued a Memorandum to Counsel denying defendants’ dispositive motions in a UDAAP action brought by the CFPB alleging the defendants employed abusive practices when purchasing structured settlements from consumers in exchange for lump-sum payments. As previously covered by InfoBytes, in September 2017, the court allowed the CFPB to move forward with its UDAAP claim against the company, its affiliates, and its officers but dismissed claims related to an attorney, finding that he satisfied the requirements for an exemption under the Maryland Consumer Financial Protection Act (MCFPA) for attorneys engaged in the practice of law. In December 2017, the CFPB filed an amended complaint, arguing that the consumers typically did not know the defendant was an attorney or acting as their attorney. The court agreed, holding that “it is logically impossible for a ‘client’ to form an attorney-client relationship with someone she does not know is an ‘attorney,’” and allowed the CFPB to resume the actions against the attorney.

The attorney again moved to dismiss the amended complaint, or in the alternative for summary judgment on the claims. The court denied the motion to dismiss because it was based on the attorney’s disagreement with the CFPB’s allegation that the consumers were never informed he was an attorney—an inappropriate ground for such a motion. As for the motion for summary judgment, the court agreed with the CFPB that the motion was premature because discovery was ongoing.