Class Action Lawsuits – Proactive and Reactive Measures Compli Webinar Q&A Pt. 2 | Compli.com

Class Action Lawsuits – Proactive and Reactive Measures Compli Webinar Q&A Pt. 2

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Article: Class Action Lawsuits – Proactive and Reactive Measures Compli Webinar Q&A Pt. 2

Article Date: Tuesday, July 5, 2011

Author: Compli, AAS, Arent Fox, LLP

Article Source: Compli Webinar

compli_class_action_lawsuits_webinar_qa_2.pdf

Class Action Lawsuits –
Proactive and Reactive Measures Webinar Q&A Part 2

Moderated By Robert Miller, Esq., Co-Founder of Compli

Panel:
Rob Cohen, Esq. President of AAS
Aaron Jacoby, Esq., Partner at Arent Fox, LLP

To view the Webinar in entirety, Click Here

Legal Disclaimer: All the information provided in this document is intended for educational purposes.  It shouldn’t be interpreted as legal advice, and it’s always important to consult competent legal counsel before taking action on information of this nature.  

Q.  Not disclosing negative equity is still very common.  What are the truth in lending remedies, potential damages in a class action?  
A.  There are defenses and every case is different, but in the event of an unfavorable decision on liability, potential remedies include rescission, restitution of the negative equity element, penalties, punitive damages and government action through prosecution if the actions rise to the level of suspected, intentional consumer fraud.

Q.  What effect will the AT&T arbitration ruling have on class action suits against dealers.  
A.  The AT&T case should have the effect of allowing dealers to manage class action risk by using arbitration provisions with class action waivers.

Q.  Should repair orders for Service have arbitration clauses on the back of the repair order?  
A.  It doesn’t hurt, though this is not a priority and might strike a consumer as odd from a marketing point of view—particularly with regard to an oil change or something inexpensive.

Q.  When you need to rewrite a lease, how do you handle the date of the rewrite?
A.   The backdating issues that complicate a purchase contract are not relevant to leasing.  

Q.  We can insert an arbitration clause in our purchase order contract which may conflict with the language in the VISC form which comes from the manufacturer lender.  A plaintiff's attorney would likely raise this conflict in defending against an arbitration demand.  These are some of the issues which pop to mind as I re-work our arbitration language.  
A.  The arbitration language should not be inconsistent.  If the lender or manufacturer already has arbitration language, you may need to conform your own, or indicate in your own that in the event of lender or manufacturer contractual language that is different than your own, one or the other is controlling.

Q.  How, if at all, does insurance coverage differ with a class action situation vs. a single party suit?  
A.  Many insurance companies attempt to exclude class actions from coverage.

Q.  If you don’t back date a lease the DMV fee may become due after the third yr of a 36 mo lease?  
A.  True.

Q.  How do you overcome the issue of losing factory rebates when the contracts are dated after a rebate period?  
A.  By calling the factory and discovering that the delivery date can be used instead of the contract date.

Q.  In regards to backdating.. if we have to resign a contract as a result of an error it is acceptable in that case to use the original delivery date?  
A.   For purposes of the factory’s rebate program, yes.  Otherwise, no.

Q.  How about Finance Managers are they also considered commissioned workers only too?  
A.  Only if they backdate.  Yes, they are commissioned employees and all of the relevant employment rules must be followed.

Q.  Is it allowable to provide a grunted customer copies of the Repair Orders for a used car where he/she is asking to check on the work that has been and has not been authorized?  
A.  If customers grunt, show them the prior repair orders if you have them.  Do so even if they disgrunt.

Q.  How do you deal with a customer who refuses to sign an arbitration agreement?  
A.  If it is your policy to use arbitration agreements, I would refuse the sale.  Obviously, if there is a movement by a material number of consumers, you will need to adjust your policy as you see fit to maintain profitability.

Q.  Can suits be filed against dealers for non compliance of such issues like Risk Based Pricing and Adverse Action notices or Red Flag Compliance?  
A.  Yes.

Q.  Strictly talking about retail contracts as far as back dating is concerned ..correct? not leases..?  
A.  Yes—at least we have not seen a properly articulated theory to date.

Q.  There are recently-filed class actions in southern California alleging it is an unfair business practice for a dealer to rescind a retail sales contract after 10 days from signing the contract even when the dealer has sent out the 10-day rescission notice expressly provided for within the contract.  My question is: do the panelists have any insight about whether a dealer can rescind a contract pursuant to the 10-day notice language if the actual rescission takes place beyond 10 days after the contract execution date?  
A.  You can do so as long as your 10-day letter clearly states that the transaction is rescinded.  Many such letters are too soft, intending to urge the customer back to resign but not clearly indicating that the deal is rescinded.