Jordan v. Montgomery Ward & Co.
Decision Date | 20 May 1971 |
Docket Number | No. 20604.,20604. |
Citation | 442 F.2d 78 |
Parties | William F. JORDAN and William A. Rogers, on Behalf of Themselves and All Others Similarly Situated, Appellants, v. MONTGOMERY WARD & CO., Incorporated, Appellee. |
Court | U.S. Court of Appeals — Eighth Circuit |
Donald C. Savelkoul, Sigal & Savelkoul, Minneapolis, Minn., for appellants.
Kenneth W. Green, O'Connor, Green, Thomas, Walters & Kelly, Joe A. Walters, Frank J. Walz, Minneapolis, Minn., for appellee.
Before MATTHES, Chief Judge, and VAN OOSTERHOUT and LAY, Circuit Judges.
This interlocutory appeal, pursuant to 28 U.S.C. § 1292(b), is focused upon the recently enacted Federal Truth in Lending Act, 82 Stat. 146 et seq. (1968) (15 U.S.C. § 1601 et seq.). At issue is the propriety of the court's action in striking, on motion of the appellee, subparagraphs a, c, and d of paragraph 7 of. Count I of appellants' complaint.1
In September of 1969 appellant Rogers purchased a stereo from appellee through its catalogue which contained the statement, "NO MONTHLY PAYMENTS TILL FEBRUARY when you order stereo on Credit at Wards — see page 3." Page 3 of the catalogue set forth in large capital letters, "NO MONTHLY PAYMENT TILL FEBRUARY ON APPLIANCES AND HOME FURNISHINGS ORDERED ON CREDIT FROM ANY WARDS CATALOG OR STORE." In smaller type on the same page the following statement is found, "If your order is being added to an account that is already open, there will be no monthly payment increase till February 1970."
In January, 1970, appellant Jordan purchased merchandise from appellee's "Great 1970 Winter Sale" catalogue which contained this statement conspicuously located in circular presentation, "PRE-SEASON SPECIAL no monthly payments till June."
The appellants subsequently learned that the finance charges on these purchases were imposed from the date of the purchase rather than from the date payment was due, February and June respectively, as indicated by the catalogue. Appellants were thereby motivated to sue appellee on the theory that they were induced to make the purchases on credit because of the language of the alleged non-complying advertisement and were entitled to prosecute this private claim for relief pursuant to the civil liability provisions of the Truth in Lending Act.
The material part of Count I alleged that the jurisdiction of the court was founded on section 130 of the Act, 15 U.S.C. § 1640. The focal part of the complaint is paragraph 7:
Appellee challenged the complaint by motion and alleged that subparagraphs a, c and d of Paragraph 7 related only to credit advertising, were legally irrelevant to a private action, were not within the subject matter jurisdiction of the court, and should be stricken under Rule 12(f), Fed.R.Civ.P. The trial court granted the motion, and thereafter filed the requisite order for a § 1292(b) appeal, which we granted.
In its supporting memorandum opinion, 317 F.Supp. 948, the district court noted that the Truth in Lending Act deals separately with credit transactions and credit advertising. It concluded that the language and the legislative history of the Act supported the conclusion that Chapter 2, section 130 (15 U.S.C. § 1640) was not intended as a grant of jurisdiction to the courts for the purpose of granting relief for violations of the "Credit Advertising" provisions of the Act.
As we view this case in its present posture, the issue to be resolved is whether persons who plead that they were misled by and consummated credit transactions relying on advertisements not complying with the credit advertising provisions of the Act are entitled to maintain an action for civil liability as provided in Chapter 2 of the Act, specifically section 130. Appellants concede, as they must, that a person who merely sees a non-complying advertisement, but does nothing more, has no actionable claim. But they vigorously argue that where a purchase resulting in a credit transaction is made in reliance on the advertisement, the purchaser may maintain an action for civil liability under Chapter 2 of the Act. We disagree.
The Federal Truth in Lending Act is composed of three distinct Chapters:2 Chapter 1 — General Provisions, 15 U.S. C. §§ 1601-1613; Chapter 2 — Credit Transactions, 15 U.S.C. §§ 1631-1644; and Chapter 3 — Credit Advertising, 15 U.S.C. §§ 1661-1665. The language of section 108 (15 U.S.C. § 1607) and the legislative history evinces that Congress intended that the Act be enforced primarily by administrative agencies. However, provision is made for the institution of a civil action by an aggrieved debtor under specific circumstances. See H.R.Rep.No. 1040, 90th Cong., 2d Sess. (1968).3 Section 130, found in the Credit Transaction Chapter of the Act, provides:
There is no similar provision in the credit advertising chapter of the Act. In fact it appears that it was the intent of the Congress not to provide private civil relief for violations of the credit advertising provisions. In the section by section analysis of the bill as presented to the House Banking and Currency Committee, the comment on the private civil penalty provision reads as follows:
"This subsection sets forth civil penalties of double the finance charge with a minimum of $100 and a maximum of $1,000, for failure to comply with section 203 essentially the...
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...v. Hodgson, 359 F.Supp. 194 (S.D.W.Va.1973); Oldham v. Oldham, 337 F.Supp. 1039 (N.D.Iowa 1972) (court relied upon Jordan v. Montgomery Ward & Co., note 8, infra); Simpson v. Sperry Rand Corp., 350 F.Supp. 1057 (W.D.La.1972), vacated, 488 F.2d 450 (5th Cir. 1973). But see, Nunn v. City of P......
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McCabe v. City of Eureka, Mo.
...as Subchapter II. Subchapter I is also referred to by its short title as the Truth in Lending Act. This court in Jordan v. Montgomery Ward & Co., 442 F.2d 78, 81 (8th Cir.), cert. denied, 404 U.S. 870, 92 S.Ct. 78, 30 L.Ed.2d 114 (1971) found that the expressed right of private action provi......
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Garza v. Chicago Health Clubs, Inc., 71 C 643.
...supports its theory that a federal court has no jurisdiction to enjoin allegedly fraudulent credit advertising, Jordan v. Montgomery Ward & Co., 442 F.2d 78 (8th Cir. 1971). In the circumstances of this case, we need not, however, resolve this issue and we assume, without deciding, that we ......
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