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Wednesday, April 16, 2008

Ind. Decisions - 7th Circuit decides one Indiana case today

The 7th Circuit today issues a combined opinion for three cases, including Darrell Bruce v. KeyBank (ND Ind., Judge Lozano). Judge Easterbrook:

We have grouped for decision three appeals under the Fair Credit Reporting Act presenting issues that have arisen in numerous suits throughout the circuit. Each of the appeals presents at least two issues, several of which recur in multiple appeals. We therefore organize the opinion around these issues rather than the facts of the cases, which we use to illustrate the problems.

1. Must an offer of credit be valuable to all or most recipients? * * *

2. Does a promise of “free” merchandise mean that an offer is not one “of credit"? * * *

3. Must the initial flyer contain all material terms? * * *

4. Does a power to vary the deal’s terms make the offer not “firm"? * * *

5. Is six-point type “conspicuous"? * * *

6. Is the use of 6-point type a “willful” violation of FCRA? * * *

To sum up:

In Murray, the offer of a free phone in connection with a service plan is an offer of credit. Although the disclosure required by 15 U.S.C. §1681m(d) was not conspicuous, Cingular did not wilfully violate FCRA because it was not reckless. The district court did not anticipate Safeco’s adoption of a recklessness standard but came to the same ultimate conclusion on each issue, 432 F. Supp. 2d 788 (N.D. Ill. 2006), and its judgment is affirmed.

In Bruce, the circular made a “firm offer of credit” despite the omission of some material terms and the reservation of a power to change terms. The district court erroneously held otherwise, see 2006 U.S. Dist. LEXIS 91371 (N.D. Ind. Dec. 15, 2006), but went on to conclude that the violation was not willful because KeyBank did not know that it was violating the Act. That approach, too, is erroneous in light of Safeco (which was released after the district court’s opinion). Neither of the district court’s missteps calls for a remand. Because we hold that there was no violation, the judgment is affirmed.

In Price, the district court held that the omission of a minimum line of credit is compatible with a “firm offer of credit” and entered judgment for Capital One Bank. 2007 U.S. Dist. LEXIS 37796 (E.D. Wis. May 22, 2007). We agree with this conclusion and affirm.

Posted by Marcia Oddi on April 16, 2008 03:21 PM
Posted to Ind. (7th Cir.) Decisions