Jesinoski v. Countrywide Home Loans, Inc.

Last updated

Jesinoski v. Countrywide Home Loans, Inc.
Seal of the United States Supreme Court.svg
Supreme Court of the United States
Argued November 4, 2014
Decided January 13, 2015
Full case nameJesinoski et ux. v. Countrywide Home Loans, Inc., et al.
Docket no. 13–684
Citations574 U.S. 259 ( more )
135 S. Ct. 790; 190 L. Ed. 2d 650
Argument Oral argument
Opinion announcement Opinion announcement
Case history
Prior729 F.3d 1092 (8th Cir. 2013)
Holding
The Truth in Lending Act does not require borrowers to file a lawsuit to effectuate rescission
Court membership
Chief Justice
John Roberts
Associate Justices
Antonin Scalia  · Anthony Kennedy
Clarence Thomas  · Ruth Bader Ginsburg
Stephen Breyer  · Samuel Alito
Sonia Sotomayor  · Elena Kagan
Case opinion
MajorityScalia, joined by unanimous
Laws applied
Truth in Lending Act

Jesinoski v. Countrywide Home Loans, Inc., 574 U.S. 259 (2015), was a United States Supreme Court case in which the Court held that the Truth in Lending Act does not require borrowers to file a lawsuit to rescind loans and that sending written notice is sufficient to effectuate rescission. [1] Some commentators described Justice Antonin Scalia's unanimous majority opinion as "terse" and the "shortest opinion of the year". [2] Other analysts have described Jesinoski as a "landmark case" in Truth in Lending Act jurisprudence. [3]

Contents

Background

Truth in Lending Act rescission requirements

In 1968, Congress passed the Truth in Lending Act to help consumers "avoid the uninformed use of credit, and to protect the consumer against inaccurate and unfair credit billing." [4] The Act gives borrowers the unconditional right to rescind loans within three days of consummation of the loan, after which they may rescind only if the lender failed to satisfy the Act’s disclosure requirements. [5] However, even if lenders never provide the required disclosures, borrowers only retain the right to rescind loans up to three years after the loan's consummation. [6]

Initial lawsuit

On February 23, 2010, exactly three years after borrowing $611,000 from Countrywide Home Loans, Inc. [fn 1] to refinance the mortgage on their home, Larry and Cheryle Jesinoski mailed a letter to Countrywide to rescind the loan agreement. [7] On March 12, 2010, Bank of America Home Loans sent a reply letter in which they refused to acknowledge the validity of the rescission. [7] The Jesinoskis filed suit in federal district court on February 24, 2011 seeking a declaration of rescission and damages. [7] The district court ruled in favor of Bank of America and concluded that the Truth in Lending Act requires borrowers seeking rescission of a loan to file a lawsuit within three years of consummating the loan. [8] Because the Jesinoskis filed their lawsuit four years after the loan's consummation, they were not entitled to rescission of the loan. [5] The United States Court of Appeals for the Eighth Circuit upheld the decision of the district court. [9] The Jesinoskis appealed again, and the Supreme Court granted certiorari on April 28, 2014. [10]

Opinion of the Court

Commentators described Justice Antonin Scalia's unanimous opinion as the "shortest opinion of the year." Antonin Scalia Official SCOTUS Portrait.jpg
Commentators described Justice Antonin Scalia's unanimous opinion as the "shortest opinion of the year."

Writing for a unanimous court, Justice Antonin Scalia ruled that the Truth in Lending Act does not require borrowers to file a lawsuit to effectuate rescission. [11] Justice Scalia stated that the plain language of the act "leaves no doubt that rescission is effected when the borrower notifies the creditor of his intention to rescind," but the act "says nothing about how that right is exercised." [12] Although common law rules for rescission traditionally required "either that the rescinding party return what he received" or a court's "decree [of] rescission," Justice Scalia concluded that the Act did not adopt these common law requirements. [13] Instead, he argued that "[n]othing in our jurisprudence, and no tool of statutory interpretation, requires that a congressional Act must be construed as implementing its closest common-law analogue." [14] Consequently, the statute has effectively altered common law practice, and borrowers "need only provide written notice to a lender in order to exercise his right to rescind." [1]

Commentary and analysis

After the Supreme Court issued its opinion, analysts described Jesinoski as a "landmark case" in Truth in Lending Act jurisprudence. [15] Other commentators praised the court for "correctly read[ing]" the Truth in Lending Act "to mean what it says." [3] Some analysts also described Justice Scalia's opinion as "terse" and the "shortest opinion of the year" with "only six paragraphs of analysis." [2] Others predicted Justice Scalia's textualist approach in Jesinoski would foreshadow a similar analytic approach for the Court's decision in King v. Burwell . [16]

See also

Notes

  1. ↑ Countrywide was acquired by Bank of America in August 2007 and later changed its name to Bank of America Home Loans

Related Research Articles

<span class="mw-page-title-main">Truth in Lending Act</span> US federal law (1968)

The Truth in Lending Act (TILA) of 1968 is a United States federal law designed to promote the informed use of consumer credit, by requiring disclosures about its terms and cost to standardize the manner in which costs associated with borrowing are calculated and disclosed.

Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992), was a landmark Supreme Court of the United States decision, handed down on June 12, 1992, that heightened standing requirements under Article III of the United States Constitution. It is "one of the most influential cases in modern environmental standing jurisprudence." Lily Henning of the Legal Times stated that:

<span class="mw-page-title-main">Rescission (contract law)</span> Remedy which allows a contractual party to cancel the contract

In contract law, rescission is an equitable remedy which allows a contractual party to cancel the contract. Parties may rescind if they are the victims of a vitiating factor, such as misrepresentation, mistake, duress, or undue influence. Rescission is the unwinding of a transaction. This is done to bring the parties, as far as possible, back to the position in which they were before they entered into a contract.

Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (2006), is a United States Supreme Court case concerning contract law and arbitration. The case arose from a class action filed in Florida against a payday lender alleging the loan agreements the plaintiffs had signed were unenforceable because they essentially charged a higher interest rate than that permitted under Florida law.

Mortgage Electronic Registration Systems, Inc. (MERS) is an American privately held corporation. MERS is a separate and distinct corporation that serves as a nominee on mortgages after the turn of the century and is owned by holding company MERSCORP Holdings, Inc., which owns and operates an electronic registry known as the MERS system, which is designed to track servicing rights and ownership of mortgages in the United States. According to the Department of the Treasury, the Board of Governors of the Federal Reserve, The Federal Deposit Insurance Corporation and the Federal Housing Finance Agency, MERS is an agent for lenders without any reference to MERS as a principal. On October 5, 2018, Intercontinental Exchange and MERS announced that ICE had acquired all of MERS.

Bilski v. Kappos, 561 U.S. 593 (2010), was a case decided by the Supreme Court of the United States holding that the machine-or-transformation test is not the sole test for determining the patent eligibility of a process, but rather "a useful and important clue, an investigative tool, for determining whether some claimed inventions are processes under § 101." In so doing, the Supreme Court affirmed the rejection of an application for a patent on a method of hedging losses in one segment of the energy industry by making investments in other segments of that industry, on the basis that the abstract investment strategy set forth in the application was not patentable subject matter.

Stop the Beach Renourishment v. Florida Department of Environmental Protection, 560 U.S. 702 (2010), was a United States Supreme Court case in which the Court held that the Florida Supreme Court did not effect an unconstitutional taking of littoral property owners' rights to future accretions and to contact the water by upholding Florida's beach renourishment program.

Fisher v. University of Texas, 570 U.S. 297 (2013), also known as Fisher I, is a United States Supreme Court case concerning the affirmative action admissions policy of the University of Texas at Austin. The Supreme Court voided the lower appellate court's ruling in favor of the university and remanded the case, holding that the lower court had not applied the standard of strict scrutiny, articulated in Grutter v. Bollinger (2003) and Regents of the University of California v. Bakke (1978), to its admissions program. The Court's ruling in Fisher took Grutter and Bakke as given and did not directly revisit the constitutionality of using race as a factor in college admissions.

14 Penn Plaza LLC v. Pyett, 556 U.S. 247 (2009), is a United States labor law case decided by the United States Supreme Court on the rights of unionized workers to sue their employer for age discrimination. In this 2009 decision, the Court decided that whenever a union contract "clearly and unmistakably" requires that all age discrimination claims under the Age Discrimination in Employment Act of 1967 be decided through arbitration, then employees subject to that contract cannot have those claims heard in court.

<i>Florida v. Jardines</i> 2013 United States Supreme Court case

Florida v. Jardines, 569 U.S. 1 (2013), was a United States Supreme Court case which resulted in the decision that police use of a trained detection dog to sniff for narcotics on the front porch of a private home is a "search" within the meaning of the Fourth Amendment to the United States Constitution, and therefore, without consent, requires both probable cause and a search warrant.

United States v. Bormes, 568 U.S. 6 (2012), is a decision by the Supreme Court of the United States holding that the Little Tucker Act, which provides jurisdiction to federal courts for certain claims brought against the federal government, does not apply to lawsuits brought under the Fair Credit Reporting Act (FCRA).

Obergefell v. Hodges, 576 U.S. 644 (2015), is a landmark decision of the Supreme Court of the United States which ruled that the fundamental right to marry is guaranteed to same-sex couples by both the Due Process Clause and the Equal Protection Clause of the Fourteenth Amendment of the Constitution. The 5–4 ruling requires all fifty states, the District of Columbia, and the Insular Areas to perform and recognize the marriages of same-sex couples on the same terms and conditions as the marriages of opposite-sex couples, with all the accompanying rights and responsibilities. Prior to Obergefell, same-sex marriage had already been established by statute, court ruling, or voter initiative in thirty-six states, the District of Columbia, and Guam.

Kerry v. Din, 576 U.S. 86 (2015), was a United States Supreme Court case in which the Court analyzed whether there is a constitutional right to live in the United States with one's spouse and whether procedural due process requires consular officials to give notice of reasons for denying a visa application. In Justice Anthony Kennedy's concurring opinion, the controlling opinion in this case, he wrote that notice requirements “[do] not apply when, as in this case, a visa application is denied due to terrorism or national security concerns.” Because the consular officials satisfied notice requirements, there was no need for the Court to address the constitutional question about the right to live with one's spouse.

Michigan v. Environmental Protection Agency, 576 U.S. 743 (2015), is a landmark United States Supreme Court case in which the Court analyzed whether the Environmental Protection Agency must consider costs when deciding to regulate, rather than later in the process of issuing the regulation.

Dart Cherokee Basin Operating Co. v. Owens, 574 U.S. 81 (2015), was a case in which the Supreme Court of the United States clarified procedures for removing a class action lawsuit from state court to federal court. The case involved a dispute about revenue from oil and gas leases in which the defendant filed a motion to remove the case from a state court in Kansas to the United States District Court for the District of Kansas. However, the plaintiff argued that the defendant's motion was defective because the defendant's notice of removal did not include evidence demonstrating that the amount in controversy satisfied the jurisdictional threshold. The United States District Court for the District of Kansas ultimately ruled the case should be returned to the state court, and the United States Court of Appeals for the Tenth Circuit declined to review the district court's decision.

FERC v. Electric Power Supply Ass'n, 577 U.S. ___ (2016), was a case in which the Supreme Court of the United States held that the Federal Energy Regulatory Commission had the authority to regulate demand response transactions. Justice Scalia's dissenting opinion in this case was the last opinion he wrote before his death in February 2016.

Ocasio v. United States, 578 U.S. ___ (2016), was a United States Supreme Court case in which the Court clarified whether the Hobbs Act's definition of conspiracy to commit extortion only includes attempts to acquire property from someone who is not a member of the conspiracy. The case arose when Samuel Ocasio, a former Baltimore, Maryland police officer, was indicted for participating in a kickback scheme with an automobile repair shop where officers would refer drivers of damaged vehicles to the shop in exchange for cash payments. Ocasio argued that he should not be found guilty of conspiring to commit extortion because the only property that was exchanged in the scheme was transferred from one member of the conspiracy to another, and an individual cannot be found guilty of conspiring to extort a co-conspirator.

Campbell-Ewald Co. v. Gomez, 577 U.S. ___ (2016), was a case in which the Supreme Court of the United States clarified whether a case becomes moot when a party provides a settlement offer that satisfies a named plaintiff's claims in a class action suit and whether a government contractor is entitled to "derivative sovereign immunity".

Lightfoot v. Cendant Mortgage Corp., 580 U.S. ___ (2017), was a United States Supreme Court case that clarified whether Fannie Mae can be sued in state courts. In a unanimous opinion written by Justice Sonia Sotomayor, the Court held that plaintiffs may file lawsuits against Fannie Mae in any state or federal court that is "already endowed with subject-matter jurisdiction over the suit."

<i>Department of Homeland Security v. Regents of the University of California</i> 2020 United States Supreme Court case

Department of Homeland Security v. Regents of the University of California, 591 U.S. ___ (2020), was a United States Supreme Court case in which the Court held by a 5–4 vote that a 2017 U.S. Department of Homeland Security (DHS) order to rescind the Deferred Action for Childhood Arrivals (DACA) immigration program was "arbitrary and capricious" under the Administrative Procedure Act (APA) and reversed the order.

References

  1. 1 2 Jesinoski v. Countrywide Home Loans, Inc.,No. 13–684 , 574 U.S. 259 (2015), slip op. at 5.
  2. 1 2 3 Ronald Mann, Opinion Analysis: Shortest opinion of the year explains TILA rescission right SCOTUSblog, (Jan. 13, 2015, 4:22 PM).
  3. 1 2 Milan Prodanovic, Hiding in Plain Sight: Jesinoski and the Consumer's Right of Rescission, 10 Duke J. Const. L. & Pub. Pol'y 141 (2015).
  4. ↑ 82 Stat. 146, as amended, 15 U.S.C. § 1601(a).
  5. 1 2 Jesinoski, slip op. at 2.
  6. ↑ Jesinoski, slip op. at 1, 2; see also 15 U.S.C. § 1635(a), (f).
  7. 1 2 3 Jesinoski, slip op. at 1.
  8. ↑ Jesinoski, slip op. at 1–2.
  9. ↑ Jesinoski v. Countrywide Home Loans, Inc., 729 F. 3d 1092, 1093 (2013) (per curiam).
  10. ↑ Jesinoski v. Countrywide Home Loans, Inc., 134 S. Ct. 1935 (2014) (granting certiorari).
  11. ↑ Jesinoski, slip op. at 2–3.
  12. ↑ Jesinoski, slip op. at 2–3 (internal emphasis omitted).
  13. ↑ Jesinoski, slip op. at 4–5 (internal citations omitted).
  14. ↑ Jesinoski, slip op. at 4–5.
  15. ↑ Frank A. Hirsch Jr. & Richard A. McAvoy, Life After Jesinoski: The New "Wild West" of TILA Rescission, 18 Consumer Financial Services L. Rep. 4 (2015).
  16. ↑ Noah Feldman, BloombergView: How Scalia Could Kill Obamacare (Accessed July 1, 2015).

Further reading

This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.