The opinion of the court was delivered by: Hon. Anthony J. Battaglia U.S. District Judge
ORDER ON SUMMARY JUDGMENT MOTIONS
This is a consumer class action suit concerning payday lending practices as regulated by California law. Now before the Court are several motions that were pending prior to their transfer to the under-signed judge. (The Court has scheduled a hearing on Plaintiffs' motion to certify a class on the Spanish language claims for November 14, 2011.) The parties did not request oral argument on the motions for summary judgment and to add a class representative and the Court finds these motions suitable for decision on the written briefs. As explained below, the Court GRANTS Defendants' motion for partial summary judgment on Plaintiffs' claims that they were not given written notice of their rights before entering into the loan agreement as measured by the time the customer became contractually obligated. The Court DENIES Defendants' motion for partial summary judgment on the Spanish-language claims arising out of transactions prior to August 2005 because the amended pleading relates back to the original complaint. The Court DENIES Defendants' motion for partial summary judgment on the request for prospective injunctive relief on the Spanish language claims because there is a factual dispute as to whether Plaintiff Rodriguez has standing. Finally, the Court DENIES as moot Plaintiffs' motion to add a new class representative on the Spanish language claims request for an injunction.
Plaintiffs Kerrie Stone, Justina Rodriguez, and Frank Brightwell are customers of Defendants Advance America, Cash Advance Centers of California, LLC, and its parent, Advance America, Cash Advance Centers Inc.
Defendants are in the business of providing short-term cash advances -- commonly known as payday loans. In California, the Commissioner of the Department of Corporations oversees the industry and requires each business to obtain a license. Cal. Fin. Code § 23005. For example, the licensee must post a "complete, detailed, and unambiguous schedule of fees." Id. § 23019. The licensee is required to keep certain financial records and the Commissioner may audit the licensee. Id. §§ 23024, 23046; see id. § 23045 (authorizing suspension of license). The statute also regulates the content of the notice of rights and the terms of the agreement. For example, the agreement must be in writing and clearly describe the customer's obligations. Id. § 23035.
Plaintiffs allege that Defendants violated the California Deferred Deposit Transaction Law ("CDDTL") and that their misconduct constitutes unfair competition. Cal. Fin. Code § 23000; Cal. Bus. & Prof. Code § 17200.
One of Plaintiff Rodriguez's transactions illustrates the process. Defs.' Ex. A. On October 21, 2004, Rodriguez gave Defendants a personal check for $300, but Defendants agreed not to cash it until November 5, 2004. Defendants immediately gave Rodriguez $255 in cash and retained the $45 difference as a fee. Although the interest on her fourteen day loan exceeds an annual percentage rate of 460%, the high interest is exempt from the usury provisions of the California Constitution. Cal. Fin. Code § 23106 (Cal. Const. art. 15, § 1); id. § 23036(a) ("A fee for a deferred deposit transaction shall not exceed 15 percent of the face amount of the check."). The CDDTL protects the customer from the ordinary penalties of writing a check on insufficient funds, including treble damages and possible criminal prosecution. Id. § 23035; Cal. Civ. Code § 1719. Instead, the statute limits the fee to $15 for the return of a dishonored check. Cal. Fin. Code § 23036(e).
Remedies for violations include equitable relief (e.g., injunction, disgorgement, restitution); compensatory damages; treble damages; if willful, punitive damages; and attorney's fees. Id. § 23064.
Both parties have waived a jury so there will be a bench trial.
I. Defendants' Motions for Summary Judgment
Summary judgment is appropriate when the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
A. Motion on Written Notice of Rights
Each individual Plaintiff claims Defendants violated the CDDTL by failing to give written notice of the rights and duties before entering into the deferred deposit transaction. TAC ¶¶ 10, 12; Defs.' Ex. G (Rodriguez's responses to interrogatory no. 11).*fn1
The statute provides, in relevant part, "[b]efore entering into a deferred deposit transaction, licensees [Defendants] shall distribute to customers a notice" of their rights. Cal. Fin. Code § 23035(c) (emphasis added). This notice must contain information about the charges on the transaction, a warning of the possibility that a $15 additional fee will be charged if the check bounces, a toll-free number to call the Defendants with ...