Cruz v. TD Bank, N.A., Martinez v. Capital One Bank, N.A.
711 F.3d 261
2d Cir.2013Background
- Cruz and Pain sue TD Bank for alleged EIPA violations after their accounts were restrained by third-party notices; banks allegedly failed to provide required notices and forms, and charged fees.
- Martinez and Cummings sue Capital One for similar EIPA violations after their accounts were restrained; they allege missing notices/forms and fees were charged.
- District courts dismissed both actions under Rule 12(b)(6), holding EIPA creates no private right of action for damages against banks.
- The suits raise unsettled New York law on private relief against banks and whether Article 52 procedures can or must be used for such relief.
- The court notes EIPA requires exemptions, notice of exemptions, exemption forms, and prohibits certain fees; inadvertent notice failures do not by themselves create liability.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Do judgment debtors have a private right of action against banks for EIPA procedural violations? | Cruz/Martinez assert a private right exists by negative inference and statutory structure. | Banks contend no private damages remedy; enforcement is limited to special proceedings or actions by creditors. | Certified to NY Court of Appeals; unresolved. |
| Can judgment debtors seek damages or injunctive relief under CPLR Article 52 for EIPA violations, or is relief limited to special proceedings? | Plaintiffs argue Article 52 provides a remedy for EIPA violations beyond private suit. | Defendants argue Article 52 procedures do not authorize such damages or injunctions against banks. | Certified to NY Court of Appeals; unresolved. |
| If private relief is available, is Article 52 special proceeding the exclusive mechanism or may plenary actions also be used? | Special proceedings may not be exclusive; plaintiffs could pursue plenary actions. | Special proceedings likely exhaust the appropriate remedial track for EIPA-related disputes. | Certified to NY Court of Appeals; unresolved. |
Key Cases Cited
- Guardian Loan Co. v. Early, 47 N.Y.2d 515 (New York Court of Appeals 1979) (CPLR 5240 authority to regulate enforcement procedures)
- Barenboim v. Starbucks Corp., 698 F.3d 104 (2d Cir. 2012) ( certifying unsettled state-law questions of public policy)
- Georgitsi Realty, LLC v. Penn-Star Ins. Co., 702 F.3d 152 (2d Cir. 2012) (certification of unsettled state-law questions; public policy considerations)
- Windsor v. United States, 699 F.3d 169 (2d Cir. 2012) (certification appropriate for unsettled state-law issues)
- Pachter v. Bernard Hodes Grp., Inc., 505 F.3d 129 (2d Cir. 2007) (criteria for certifying unsettled state-law questions)
- Zakrzewska v. New Sch., 574 F.3d 24 (2d Cir. 2009) (factors supporting certification of state-law questions)