Justia U.S. 8th Circuit Court of Appeals Opinion Summaries

This case stemmed from the replevin actions filed by Klein Bank against debtors. Klein Bank appealed from the Orders of the Bankruptcy Court denying its motions to remand its replevin actions which had been removed from the state court to the bankruptcy court. In denying the motions, the Bankruptcy Court concluded that replevin actions were core proceedings. While this appeal was pending, the United States Supreme Court clarified that core proceedings were limited to those "arising under or arising in" a bankruptcy case. Based on that, the court now concluded that the matters involved in the replevin actions were not core proceedings. Accordingly, the court reversed and remanded to the Bankruptcy Court for further findings on the question of whether the court was required to abstain under 28 U.S.C. 1334(c)(2).

After appellant defaulted on her mortgage, Countrywide Home Loans (Countrywide) foreclosed on the property. Appellant filed suit, alleging that Countrywide violated Minnesota's Farmer-Lender Mediation Act (FMLA), Minnesota Statues 583.20-583.32, by failing to engage in mediation before foreclosure. At issue was whether the district court properly granted summary judgment in favor of Countrywide. The court affirmed the judgment and held that the record failed to create a genuine issue of material fact that the 6.21 acre parcel was "principally used for farming," as defined in the FMLA. The court also held that appellant failed to plead with particularity the circumstances constituting fraud, as required by Federal Rule of Civil Procedure 9(b) and thus, summary judgment in favor of Countrywide was appropriate.

Plaintiffs, on behalf of a putative class, sued defendant under the Missouri Second Mortgage Loan Act (MSMLA), Mo. Rev. Stat. 408.231-408.241, alleging that defendant charged them unauthorized interest and fees in violation of section 408.233.1 of the MSMLA. At issue was whether defendants violated the MSMLA by charging plaintiffs a loan discount, settlement/closing fee, document processing/delivery fee, and prepaid interest. The court held that plaintiffs did suffer a loss of money when defendant charged the loan discount, although plaintiffs received the loan discount amount two days later as part of a loan disbursement. The court also held that it could not decide whether the loan discount and the settlement/closing fee violated the MSMLA and remanded for further proceedings. The court further held that the document processing/delivery fee was not included in section 408.233's exclusive list of authorized charges and violated the MSMLA. The court finally held that because the processing/delivery free violated the MSMLA, the prepaid interest was an additional violation of the statute. Therefore, the court reversed and remanded to the district court for further proceedings.

TCF National Bank (TCF) sued to enjoin a portion of the Dodd-Frank Wall Street Reform Act (Act) of 2010, Pub. L. No. 111-203, 124 Stat. 1376, that would limit the rate some financial institutions could charge for processing debit-card transactions. Section 1075 of the Act, the Durbin Amendment, amended the Electronic Fund Transfer Act, 15 U.S.C. 1693, et seq., by adding several provisions regarding debit-card interchange fees. TCF alleged that section 1693o-2(a)(2), (a)(4), and (a)(6) of the Act were facially unconstitutional because these provisions would require the Board of Governors of the Federal Reserve Board (Board) to set an interchange rate below the cost of providing debit-card services. TCF also alleged that these provisions arbitrarily exempted smaller issuers from the Board's rate regulations and thus violated TCF's due process and equal-protection rights under the Fifth Amendment. The court held that the challenged provisions in the Durbin Amendment survived rational basis review where "Congress's decision to link interchange fees to issuing banks' actual costs was reasonably related to proper legislative purposes: (1) to ensure that such fees were reasonable and (2) to prevent retailers and consumers from having to bear a disproportionate amount of costs of the debit card system." The court also held that the Durbin Amendment's distinction between larger and smaller issuers of debit-cards was rationally related to the government's legitimate interests in protecting smaller banks, which did not enjoy the competitive advantage of their larger counterparts and which provided valuable diversity in the financial industry. Therefore, the court held that TCF was not likely to prevail on its equal-protection argument. Accordingly, the court affirmed the district court's denial of TCF's motion for a preliminary injunction.

Plaintiff, a former Nelnet, Inc. ("Nelnet") loan advisor, alleged that certain Nelnet marketing practices were continuing violations of the Federal Family Education Loan Program ("FFELP") established under Part B of the Higher Education Act of 1965, 20 U.S.C. 1071, that rendered Nelnet liable under the False Claims Act ("FCA"), 31 U.S.C. 3729(a). Plaintiff joined JPMorgan Chase & Co. and Citigroup, Inc. as defendants alleging they were knowing participants in a conspiracy to submit false claims. At issue was whether the district court properly dismissed plaintiff's third amended complaint. The court affirmed the dismissal and held that there was no abuse of discretion in dismissing plaintiff's claims where plaintiff failed to plead fraud with sufficient particularity and for failure to state a claim under Federal Rule of Civil Procedure 9(b).