Supreme Court Balks & Consumers Win in First American Financial v. Edwards

Consumers and their attorneys were waiting with baited breath today for the decision by the U.S. Supreme Court in First American Financial v. Edwards. All breathed a sigh of relief today, June 28, 2012, when the high court of the nation decided not to decide this case, rejecting the appeal to the Supreme Court. Although the court initially said it would hear and issue a decision in the case, and the court waited until the last day of its term, the court found that the original basis for choosing to hear the case was mistaken and withdrew the certification of the case to the court.

This is actually a victory for consumers. The Ninth Circuit Court of Appeals, the lower court from which the case came, made a favorable decision for consumers, rejecting First American’s claim that a statute that provides for presumptive damages, known in the law as “statutory damages,” is unconstitutional. Had the Supreme Court agreed with First American, massive amounts of consumers would lose their day in court and it would have changed the landscape of consumer protection laws throughout the country.

In many consumer protection cases, the law provides that a court can award these presumptive or statutory damages where the consumer cannot prove actual damages. Congress has provided for statutory damages in consumer protection laws because violations cause harm beyond that inflicted on the particular consumer, it is a deterrent to break the law and actual damages can simply be hard to quantify and prove sometimes, though it is recognized that these violations do cause harm.

Some Federal protections that this decision could have affected include claims under the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the Real Estate Servicing Protection Act, Truth-in-Lending violations and others.

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