A consumer lender was sued by the Consumer Financial Protection Bureau (CFPB) for predatory lending practices. The district court, via a bench trial, found the lender liable and imposed legal restitution. The lender appealed this judgment, arguing that the court had violated its Seventh Amendment right to a jury trial. However, the CFPB and the lender had agreed to waive their rights to a jury before the bench trial had been held. Nonetheless, the lender objected, claiming that it would not have waived its right to a jury trial had it known that the CFPB (and the court) would pursue legal restitution instead of equitable restitution. Legal restitution has commonly been treated as the more generous type of restitution, allowing monetary damages to be imposed past the amount the offender profited; unlike equitable restitution, which limits damages to the offender’s net profits. Thus, the lender asked that the case be remanded for a jury trial or, alternatively, that the damages be reduced.
In Consumer Financial Protection Bureau v. Cashcall, Inc., No. 23-55259, 2025 WL 22135, 2025 U.S. App. LEXIS 99 (9th Cir. Jan. 3, 2025) (opinion not yet released for publication), the court held that the lender’s waiver of a jury trial was valid and affirmed the lower court’s judgment. In coming to this conclusion, the court did not need to determine whether the lender had a right to a jury trial, but it found that even if the lender did have the right, it had waived that right. The court explained that the waiver had been valid even though the lender misunderstood the type of relief sought by the CFPB. Legal error does not make a waiver invalid. The court also refused to apply the equitable doctrine of judicial estoppel, ruling that the CFPB’s position was clear the entire time and never changed: it was pursuing damages for violation of its rules. Finally, the court refused to reduce the damages award because such a reduction would prevent victims from being made whole.
By Maycee Redfearn: [email protected]
Edited By Ashley Boyce: [email protected]
Edited By Hayden Mariott: [email protected]